LIBERTY VARIABLE INVESTMENT TRUST, 497, 1999-06-09

LIBERTY VARIABLE INVESTMENT TRUST
497, 1999-06-09

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LIBERTY VARIABLE INVESTMENT TRUST

PROSPECTUS DATED JUNE 1, 1999

Stein Roe Global Utilities Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
Colonial U.S. Growth & Income Fund, Variable Series
Colonial High Yield Securities Fund, Variable Series
Liberty All-Star Equity Fund, Variable Series
Colonial International Horizons Fund, Variable Series
Crabbe Huson Real Estate Investment Fund, Variable Series

Trust shares available only through variable annuity contracts and variable life
insurance policies of participating insurance companies.

* * * *

This Prospectus must be accompanied by a prospectus for your variable annuity
contract or variable life insurance policy. Retain both prospectuses for future
reference.

* * * *

Although trust shares have been registered with the Securities and Exchange
Commission (SEC), the SEC has not approved any shares offered in this prospectus
or determined whether this prospectus is accurate or complete.
Any representation to the contrary is a criminal offense.

NOT FDIC
INSURED

MAY LOSE VALUE
NO BANK GUARANTEE

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
THE TRUST 3

THE FUNDS 4

Each of these sections discusses the following
topics: Investment Goals, Primary Investment Strategies,
Primary Investment Risks and Performance History
Stein Roe Global Utilities Fund, Variable Series ............................. 4
Colonial Small Cap Value Fund, Variable Series ............................... 6
Colonial U.S. Growth & Income Fund, Variable Series .......................... 7
Colonial High Yield Securities Fund, Variable Series ......................... 9
Liberty All-Star Equity Fund, Variable Series ................................11
Colonial International Horizons Fund, Variable Series ........................14
Crabbe Huson Real Estate Investment Fund, Variable Series ....................15

TRUST MANAGEMENT ORGANIZATIONS 16

The Trustees .................................................................16
Investment Advisor: Liberty Advisory Services Corp ...........................16
Investment Sub-Advisors and Portfolio Managers ...............................17
Rule 12b-1 Plan ..............................................................19

OTHER INVESTMENT STRATEGIES AND RISKS 20

Temporary Defensive Measures .................................................20
Zero Coupon Bonds ............................................................20
Derivatives ..................................................................20
Year 2000 Compliance .........................................................20

FINANCIAL HIGHLIGHTS 21

SHAREHOLDER INFORMATION 26

Purchases and Redemptions ....................................................26
How the Funds Calculate Net Asset Value ......................................26
Dividends and Distributions ..................................................26
Tax Consequences .............................................................26
</TABLE>

<PAGE>
THE TRUST

Liberty Variable Investment Trust (Trust) includes twelve separate mutual funds,
each with its own investment goal and strategies. This Prospectus contains
information about seven of the Funds (Funds) in the Trust. Liberty Advisory
Services Corp. (LASC) is the investment advisor to each Fund. LASC has appointed
a Sub-Advisor for each Fund, all of which are affiliates of LASC. Each Fund is
sub-advised by the following Sub-Advisor:

<TABLE>
<CAPTION>
FUND SUB-ADVISOR
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Colonial U.S. Growth & Income Fund, Variable Series Colonial Management Associates, Inc. (Colonial)
(formerly U.S. Stock Fund, Variable Series) (U.S. Growth Fund)
Colonial Small Cap Value Fund, Variable Series (Small Cap Fund)
Colonial High Yield Securities Fund, Variable Series (High Yield Fund)
Colonial International Horizons Fund, Variable Series (International Fund)
- -----------------------------------------------------------------------------------------------------------------------------------
Stein Roe Global Utilities Fund, Variable Series (Global Utilities Fund) Stein Roe & Farnham Incorporated (Stein Roe)
- -----------------------------------------------------------------------------------------------------------------------------------
Liberty All-Star Equity Fund, Variable Series (All-Star Equity Fund) Liberty Asset Management Company (LAMCO)
- -----------------------------------------------------------------------------------------------------------------------------------
Crabbe Huson Real Estate Investment Fund, Variable Series (Real Estate Fund) Crabbe Huson Group, Inc. (Crabbe Huson)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Other Funds may be added to or deleted from the Trust from time to time.

The Trust's Funds are investment options under variable annuity contracts (VA
contracts) and variable life insurance policies (VLI policies) issued by life
insurance companies (Participating Insurance Companies). Some (but not all)
Participating Insurance Companies are affiliated with the investment advisor to
the Funds. Participating Insurance Companies invest in the Funds through
separate accounts that they set up for that purpose. Owners of VA contracts and
of VLI policies invest in sub-accounts of those separate accounts through
instructions they give to their insurance company. The principal underwriters of
the Fund are Keyport Financial Services Corp. (KFSC) and Liberty Funds
Distributor, Inc. (LFD). KFSC serves as principal underwriter of the shares of
the portfolios of the Trust with respect to the sale of shares to Participating
Insurance Companies that are affiliated with LASC and LFD serves as principal
underwriter with respect to the sale of shares to Participating Insurance
Companies that are not affiliated with LASC. KFSC and LFD are affiliates of
LASC.

The prospectuses of the Participating Insurance Companies' separate accounts
describe which Funds are available to the purchasers of their VA contracts and
VLI policies. The Trust assumes no responsibility for those prospectuses.

<PAGE>
THE FUNDS

STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES

INVESTMENT GOALS
The Fund seeks current income and long-term growth of capital and income.

PRIMARY INVESTMENT STRATEGIES
Under normal market conditions, the Fund invests primarily in U.S. and foreign
securities of utility companies. Stein Roe diversifies the Fund's investments
among a number of developed countries and market sectors and will have exposure
to at least three countries, including the U.S. In selecting investments for the
Fund, Stein Roe looks primarily for stocks of larger utility companies with
established records.

Utility companies in which the Fund may invest include companies engaged in the
manufacture, production, generation, transmission, sale or distribution of
electricity, natural gas or other types of energy, or water or other sanitary
services. They also include companies engaged in telecommunications, including
telephone, telegraph, satellite, microwave and other communications media (but
excluding companies primarily engaged in public broadcasting, print media, cable
television or the internet).

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS
The primary risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which
could cause you to lose money by investing in the Fund or prevent the Fund from
achieving its goals.

Utility company securities are subject to special risks. These securities are
especially affected by changes in prevailing interest rates (as interest rates
increase, the value of securities of utility companies tend to decrease, and
vice versa), as well as by general competitive and market forces in the
industry. In addition, utility companies are affected by changes in government
regulation. In particular, the profitability of utilities may in the future be
adversely affected by increased competition resulting from deregulation.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing economic, political or market conditions. Credit risk is the
risk that the price of a security will fall due to unfavorable changes in the
financial condition of the company which issued the security.

Foreign securities are subject to special risks. Foreign stock markets can be
extremely volatile. The liquidity of foreign securities may be more limited than
domestic securities, which means that the Fund may at times be unable to sell
foreign securities at desirable prices. Fluctuations in currency exchange rates
may impact the value of foreign securities. Brokerage commissions, custodial
fees and other fees are generally higher for foreign investments. In addition,
foreign governments may impose withholding taxes which would reduce the amount
of income available to distribute to shareholders. Other risks include the
following: possible delays in the settlement of transactions; less publicly
available information about companies; the impact of political, social or
diplomatic events; and possible seizure, expropriation or nationalization of the
company or its assets.

<PAGE>
THE FUNDS Stein Roe Global Utilities Fund, Variable Series

PERFORMANCE HISTORY
The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's total calendar-year returns. The performance table
following the bar chart shows how the Fund's average annual total returns
compare with those of a broad measure of market performance for 1 year, 5 years
and the life of the Fund. We compare the Fund to the Standard & Poor's Utilities
Index (S&P Index), Lipper Utilities - Annuities peer group average return
(Lipper Average) and Morgan Stanley Capital International World Index ND (MSCI
World Index). The S&P Index is an unmanaged index that tracks the performance of
domestic utilities stocks. The Lipper Average which is calculated by Lipper,
Inc. is composed of funds with similar investment objectives as the Fund. MSCI
World Index is an unmanaged index that tracks the performance of global stocks.
Unlike the Fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in an
index. The chart and table are intended to illustrate some of the risks of
investing in the Fund by showing the changes in the Fund's performance. All
returns include the reinvestment of dividends and distributions. As with all
mutual funds, past performance does not predict the Fund's future performance.
Performance results include the effect of any expense reduction arrangements. If
these arrangements were not in place, then the performance results would have
been lower. We may cease any reduction arrangements at any time. The Fund's
performance results do not reflect the cost of insurance and separate account
charges which are imposed under your VA contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was - 0.58%.

Best Quarter: 4th quarter 1997, +15.29%

Worst Quarter: 1st quarter 1994, -8.91%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE
INCEPTION
ON 7/1/93
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund (%) 18.33 14.50 12.73
- --------------------------------------------------------------------------------------
MSCI World Index (%) 24.34 15.68 N/A
- --------------------------------------------------------------------------------------
S&P Index (%) 14.77 13.90 N/A
- --------------------------------------------------------------------------------------
Lipper Average (%) 18.61 14.76 N/A
- --------------------------------------------------------------------------------------
</TABLE>

<PAGE>
COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES

INVESTMENT GOAL
The Fund seeks long-term growth.

PRIMARY INVESTMENT STRATEGIES
Under normal market conditions, the Fund invests primarily in small
capitalization stocks. These are stocks with market capitalizations of less than
the market capitalization of the stock in the Russell 2000 Index that has the
largest capitalization at the time of purchase. The remainder of the Fund's
assets may be invested in other stocks, or in bonds that are rated or considered
by the advisor to be investment grade. In managing the Fund, Colonial uses a
value investing strategy that focuses on buying stocks cheaply when they are
under valued or "out of favor." Colonial buys stocks that have attractive
current prices, consistent operating performance and/or favorable future growth
prospects. Colonial's strategy uses fact-based quantitative analysis supported
by fundamental business and financial analysis.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

Smaller companies are more likely than larger companies to have limited product
lines, markets or financial resources, and to depend on a small, inexperienced
management team. They are more likely to fail or prove unable to grow. Stocks of
smaller companies may trade less frequently and in limited volume and their
prices may fluctuate more than stocks of other companies. In addition, they may
not be widely followed by the investment community, which can lower the demand
for their stock. Stocks of smaller companies may, therefore, be more vulnerable
to adverse developments than those of larger companies.

PERFORMANCE HISTORY
We compare the Fund to the Russell 2000 Index, an unmanaged index that tracks
the performance of small capitalization stocks and the Lipper Small Cap -
Annuities peer group average return (Lipper Average). This Lipper Average which
is calculated by Lipper, Inc. is composed of funds with similar investment
objectives as the Fund. Unlike the Fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. The Fund commenced investment operations on May 19,
1998, and therefore does not have a full calendar year of investment
performance.

<PAGE>
COLONIAL U.S. GROWTH & INCOME FUND, VARIABLE SERIES

INVESTMENT GOALS
The Fund seeks long-term growth and income.

PRIMARY INVESTMENT STRATEGIES
Under normal market conditions, the Fund invests primarily in large
capitalization stocks. These are stocks with market capitalizations of greater
than $3 billion at the time of purchase. Up to 10% of the Fund's assets may be
invested in debt securities.

In selecting debt securities for the Fund, Colonial may invest in:

- debt securities that are convertible into common stock

- corporate debt securities noted investment grade by at least
two nationally recognized rating organizations; and

- debt securities issued or guaranteed by the U.S. Government

In managing the Fund, Colonial uses a value investing strategy that focuses on
buying stocks cheaply when they are under valued or "out of favor." Colonial
buys stocks that have attractive current prices, consistent operating
performance and/or favorable future growth prospects. Colonial's strategy uses
quantitative analysis supported by fundamental business and financial analyses.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS
The primary risk of investing in the Fund is described below. There are many
circumstances (including additional risks that are not described here) which
could cause you to lose money by investing in the Fund or prevent the Fund from
achieving its goal.

Because the Fund may invest in fixed income securities issued by private
entities, including certain types of mortgage-backed securities and corporate
bonds, the Fund is subject to issuer risk. Issuer risk is the possibility that
changes in the financial condition of the issuer of a security, changes in
general economic conditions or changes in economic conditions that affect the
issuer's industry may impact the issuer's ability to make timely payment of
interest or principal. This could result in decreases in the price of the
security.

Interest rate risk is the risk of a decline or increase in the price of a bond
when interest rates increase or decline. In general, if interest rates rise,
bond prices fall, and if interest rates fall, bond prices rise. Changes in the
values of bonds usually will not affect the amount of income the Fund receives
from them but will affect the value of the Fund's shares. Interest rate risk is
generally greater for bonds with longer maturities.

<PAGE>
THE FUNDS Colonial U.S. Growth & Income Fund, Variable Series

PERFORMANCE HISTORY
The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's total calendar-year returns. The performance table
following the bar chart shows how the Fund's average annual total returns
compare with those of a broad measure of market performance for 1 year and the
life of the Fund. We compare the Fund to the Standard & Poor's 500 Index (S&P
Index), an unmanaged index that tracks the performance of a selection of widely
held common stocks and the Lipper Growth & Income - Annuities peer group average
return (Lipper Average). This Lipper Average which is calculated by Lipper, Inc.
is composed of funds with similar investment objectives as the Fund. Unlike the
Fund, indices are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index. The
chart and table are intended to illustrate some of the risks of investing in the
Fund by showing the changes in the Fund's performance. All returns include the
reinvestment of dividends and distributions. As with all mutual funds, past
performance does not predict the Fund's future performance. Performance results
include the effect of any expense reduction arrangements. If these arrangements
were not in place, then the performance results would have been lower. We may
cease any reduction arrangements at any time. The Fund's performance results do
not reflect the cost of insurance and separate account charges which are imposed
under your VA contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

<TABLE>

The Fund's year to date total return through March 31, 1999 was +1.70%.

Best Quarter: 4th quarter 1998, +21.79%

Worst Quarter: 3rd quarter 1998, -14.16%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<TABLE>
<CAPTION>
1 YEAR SINCE
INCEPTION ON
7/5/94
- ------------------------------------------------------------------------
<S> <C> <C>
Fund (%) 20.15 23.90
- ------------------------------------------------------------------------
S&P Index (%) 28.60 N/A
- ------------------------------------------------------------------------
Lipper Average (%) 16.37 N/A
- ------------------------------------------------------------------------
</TABLE>

<PAGE>
COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES

INVESTMENT GOALS
The Fund seeks current income and total return.

PRIMARY INVESTMENT STRATEGIES
The Fund pursues its investment goal by investing primarily in lower rated
corporate debt securities. These securities have the following ratings:

- BBB through C by Standard & Poor's Corporation;

- Baa through D by Moody's Investor Services, Inc.;

- a comparable rating by another nationally recognized rating
service; or

- the security is unrated and Colonial believes it to be
comparable in quality to securities having such ratings as
noted above.

Although the Fund will invest primarily in debt securities, the Fund may invest
in equity securities to seek capital appreciation. Equity securities include
common stocks, preferred stocks, warrants and debt securities convertible into
common stocks. Additionally, the Fund may invest in securities issued or
guaranteed by foreign governments or foreign companies, including securities
issued in emerging market countries.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

Lower rated debt securities are commonly referred to as "junk bonds" and are
considered speculative. Lower quality debt securities involve greater risk of
loss and are less liquid, especially during periods of economic uncertainty or
change, than higher quality debt securities.

Because the Fund may invest in fixed income securities issued by private
entities, including corporate bonds, the Fund is subject to issuer risk. Issuer
risk is the possibility that changes in the financial condition of the issuer of
a security, changes in general economic conditions, or changes in economic
conditions that affect the issuer's industry may impact the issuer's ability to
make timely payment of interest or principal. This could result in decreases in
the price of the security.

<PAGE>
THE FUNDS Colonial High Yield Securities Fund, Variable Series

Emerging markets are also subject to special risks. The risks of foreign
investments are typically increased in less developed and developing countries.
For example, political and economic structures in these countries may be new and
developing rapidly, which may cause instability. These countries are also more
likely to experience high levels of inflation, deflation or currency
devaluations, which could hurt their economies and securities markets.

PERFORMANCE HISTORY
We compare the Fund to the CS First Boston High Yield Index, an unmanaged index
that tracks the performance of high yield bond funds and the Lipper High Yield -
Annuities peer group average return (Lipper Average). This Lipper Average which
is calculated by Lipper, Inc. is composed of funds with similar investment
objectives as the Fund. Unlike the Fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. The Fund commenced investment operations on May 19,
1998, and therefore does not have a full calendar year of investment
performance.

<PAGE>
LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES

INVESTMENT GOALS
The Fund seeks total investment return, comprised of long-term capital
appreciation and current income, through investment primarily in a diversified
portfolio of equity securities.

PRIMARY INVESTMENT STRATEGIES
Under normal market conditions, the Fund invests primarily in equity and equity
related securities, which include common stocks, bonds convertible into stocks,
warrants and other rights to purchase stocks.

The Fund's sub-advisor, LAMCO, utilizes a multi-manager concept. LAMCO allocates
the Fund's portfolio assets on an approximately equal basis among a number of
independent investment management organizations (Portfolio Managers). There are
five Portfolio Managers as of the date of this prospectus each of which employs
a different investment style. LAMCO attempts to rebalance the portfolio among
the Portfolio Managers so as to maintain an approximately equal allocation of
the portfolio among them throughout all market cycles.

In LAMCO's opinion, the multi-manager concept provides advantages over the use
of a single manager for the following reasons:

- Most equity investment management firms consistently employ a
distinct investment "style" which causes them to emphasize
stocks with particular characteristics;

- Because of changing investor preferences, any given investment
style will move into and out of market favor and will result
in better investment performance under certain market
conditions, but less successful performance under other
conditions;

- Consequently, by allocating the Fund's portfolio on an
approximately equal basis among Portfolio Managers employing
different styles, the impact of any one style on investment
performance will be diluted, and the investment performance of
the total portfolio will be more consistent and less volatile
over the long term than if a single style were employed
throughout the entire period; and

- More consistent performance at a given annual rate of return
over time produces a higher rate of return for the long term
than more volatile performance having the same average annual
rate of return.

The Fund's current Portfolio Managers and investment styles are:

- J. P. Morgan Investment Management Inc. uses a value approach
by investing in companies that are diversified across all
sectors and that are undervalued relative to the firm's
projected growth rates.

- Oppenheimer Capital uses a value approach by investing in
companies that exhibit the ability to generate excess cash
flow while earning high returns on invested capital.

- Boston Partners Asset Management, L.P. uses a value approach
by investing in companies with low price-to-earnings and
price-to-book ratios where a catalyst for positive change has
been identified.

- Westwood Management Corporation uses a growth approach by
investing in growth companies selling at reasonable valuations
based on the firm's earnings projections which are not yet
reflected in consensus estimates.

- Wilke/Thompson Capital Management, Inc. uses a growth approach
by investing in companies that demonstrate the ability to
sustain strong secular growth across a broad range of market
capitalizations.

LAMCO continuously monitors the performance and investment styles of the Fund's
Portfolio Managers and from time to time may recommend changes of Portfolio
Managers based on factors such as:

- Changes in a Portfolio Manager's investment style or a
departure by a Portfolio Manager from the investment style for
which it had been selected;

- A deterioration in a Portfolio Manager's performance relative
to that of other investment management firms practicing a
similar style; or

- Adverse changes in its ownership or personnel.

<PAGE>
THE FUNDS Liberty All-Star Equity Fund, Variable Series

LAMCO also may recommend Portfolio Manager changes to change the mix of
investment styles employed by the Fund's Portfolio Managers. The Board of
Trustees must approve all Portfolio Manager changes. LAMCO is also the manager
of Liberty All-Star Equity Fund, a multi-managed, closed-end fund. This fund has
the same investment objective and investment program as the Fund, and currently
has the same Portfolio Managers. LAMCO expects that both funds will make
corresponding changes if and when Portfolio Managers are changed in the future.

The Fund will remain substantially fully invested during periods when stock
prices generally rise and also during periods when they generally decline. The
Fund is intended to be a long-term investment vehicle and is not designed to
provide a means of speculating on short-term stock market movements.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

<PAGE>
THE FUNDS Liberty All-Star Equity Fund, Variable Series

PERFORMANCE HISTORY
The bar chart below shows the Fund's performance by illustrating the Fund's
total calendar-year return. The performance table following the bar chart shows
how the Fund's average annual total returns compare with those of a broad
measure of market performance for one year and the life of the Fund. We compare
the Fund to the Standard & Poor's 500 Index (S&P Index), an unmanaged index that
tracks the performance of a selection of widely held common stocks and the
Lipper Growth & Income - Annuities peer group average return (Lipper Average).
This Lipper Average which is calculated by Lipper, Inc. is composed of funds
with similar investment objectives as the Fund. Unlike the Fund, indices are not
investments, do not incur fees or expenses and are not professionally managed.
It is not possible to invest directly in an index. The chart and table are
intended to illustrate some of the risks of investing in the Fund by showing the
changes in the Fund's performance. All returns include the reinvestment of
dividends and distributions. As with all mutual funds, past performance does not
predict the Fund's future performance. Performance results include the effect of
any expense reduction arrangements. If these arrangements were not in place,
then the performance results would have been lower. We may cease any reduction
arrangements at any time. The Fund's performance results do not reflect the cost
of insurance and separate account charges which are imposed under your VA
contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was 0.00%.

Best Quarter: 4th quarter 1998, +18.67%

Worst Quarter: 3rd quarter 1998, -12.05%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<TABLE>
<CAPTION>
1 YEAR SINCE
INCEPTION ON
11/17/97
- ------------------------------------------------------------------------
<S> <C> <C>
Fund (%) 18.67 17.29
- ------------------------------------------------------------------------
S&P Index (%) 28.60 N/A
- ------------------------------------------------------------------------
Lipper Average (%) 16.37 N/A
- ------------------------------------------------------------------------
</TABLE>

<PAGE>
COLONIAL INTERNATIONAL HORIZONS FUND, VARIABLE SERIES

INVESTMENT GOALS
The Fund seeks long-term growth and preservation of capital purchasing power.

PRIMARY INVESTMENT STRATEGIES
The Fund invests primarily in non-U.S. equity securities which Colonial believes
will provide superior long-term growth. Colonial generally selects stocks of
companies in industries and markets that it believes will react favorably to
inflation in the U.S. economy. Inflation sensitive companies in which the Fund
may invest include:

- companies engaged in the development and processing of natural
resources, and

- companies engaged in consumer oriented businesses.

The Fund is a non-diversified mutual fund and, although it generally will not,
it may invest more than 5% of its total assets in the securities of one company.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

Additionally, as a non-diversified mutual fund, the Fund is allowed to invest a
greater percentage of its total net assets in the securities of a single
company. Therefore, the Fund may have an increased risk of loss compared to a
similar diversified mutual fund.

<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND, VARIABLE SERIES

INVESTMENT GOALS
The Fund seeks to provide growth of capital and current income.

PRIMARY INVESTMENT STRATEGIES
Under normal market conditions, the Fund invests at least 75% of its total
assets in equity securities of real estate investment trusts (REITs) and other
real estate industry companies. In managing the Fund, the sub-advisor follows a
basic value contrarian approach in selecting securities for its portfolio.

The contrarian approach puts primary emphasis on security price, balance sheet
and cash flow analysis and on the relationship between the market price of a
security and its estimated intrinsic value as a share of an ongoing business.
The basic value contrarian approach is based on Crabbe Huson's belief that the
securities of many companies often sell at a discount from the securities'
estimated intrinsic value. The Fund attempts to identify and invest in such
undervalued securities in the hope that their market price will rise to their
estimated intrinsic value.

REITs are pooled investment vehicles that invest primarily in income producing
real estate or real estate related loans or interest. The Fund's REIT
investments will consist primarily of equity REITs which invest the majority of
their assets directly in real estate and derive income primarily from rents.

Other real estate industry companies in which the Fund may invest are companies
that derive at least 50% of their revenues or profits from either (a) the
ownership, development, construction, financing, management or sale of
commercial, industrial or residential real estate or (b) products or services
related to the real estate industry, such as building supplies or mortgage
servicing.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

Investing in REITs involves certain unique risks in addition to those risks
associated with the real estate industry in general. The prices of equity REITs
are affected by changes in the value of the underlying property owned by the
REITs. REITs are subject to heavy cash flow dependency and default by borrowers.
A REIT must distribute 95% of its taxable income to qualify for beneficial
federal tax treatment. If a REIT is unable to qualify, then it would be taxed as
a corporation and distributions to shareholders would be reduced. In addition,
although the Fund does not invest directly in real estate, an investment in the
Fund is subject to certain of the risks associated with the ownership of real
estate. These risks include possible declines in the value of real estate, risks
related to general and local economic conditions, possible lack of availability
of mortgage funds, and changes in interest rates.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

THE TRUSTEES

The business of the Trust and the Funds is supervised by the Trust's Board of
Trustees. The Statement of Additional Information (SAI) contains names of and
biographical information on the Trustees.

INVESTMENT ADVISOR: LIBERTY ADVISORY SERVICES CORP.

LASC, located at 125 High Street, Boston Massachusetts 02110, is the investment
advisor to the Trust. LASC is an indirect wholly-owned subsidiary of Liberty
Financial Companies, Inc. (LFC). LASC has been an investment advisor since 1993.
As of March 31, 1999, LASC managed over $727 million in assets. LASC designates
the Trust's Sub-Advisors, evaluates and monitors Sub-Advisors' performance and
investment programs and recommends to the Board of Trustees whether
Sub-Advisors' contracts should be continued or modified and the addition or
deletion of Sub-Advisors. LASC also has the responsibility of administering the
Trust's operations, which it may delegate, at its own expense, to certain
affiliates. LASC has delegated its administrative responsibilities to Colonial
in accordance with this authority.

For the 1998 fiscal year, the Trust paid LASC management fees at the following
annual rates of the average daily net assets of each specified Fund:

<TABLE>
<CAPTION>
<S> <C>
Stein Roe Global Utilities Fund, Variable Series 0.65%
Colonial Small Cap Value Fund, Variable Series 0.80% (1)
Colonial U.S. Growth & Income Fund, Variable Series 0.80%
Colonial High Yield Securities Fund, Variable Series 0.60% (2)
Liberty All-Star Equity Fund, Variable Series 0.80% (3)
</TABLE>

(1) The Small Cap Fund's advisor has voluntarily agreed to waive its
management fee so that total expenses of the Fund do not exceed 1.00%.
As a result the actual management fee paid to the advisor for the 1998
fiscal year was 0.00%
(2) The High Yield Fund's advisor has voluntarily agreed to waive its
management fee so that total expenses of the Fund do not exceed 0.80%.
As a result the actual management fee paid to the advisor for the 1998
fiscal year was 0.00%
(3) The All-Star Equity Fund's advisor has voluntarily agreed to waive a
portion of its management fee. As a result the actual management fee
paid to the advisor for the 1998 fiscal year was 0.76%

For its services as investment advisor, the Trust will pay LASC a management fee
at the following annual rates of the average daily net assets of each specified
Fund:

<TABLE>
<CAPTION>
<S> <C>
Colonial International Horizons Fund, Variable Series 0.95%(4)
Crabbe Huson Real Estate Investment Fund, Variable Series 1.00%(5)
</TABLE>

(4) The International Fund's advisor has voluntarily agreed to waive a
portion of its management fee so that total expenses of the Fund do not
exceed 1.15%.
(5) The Real Estate Fund's advisor has voluntarily agreed to waive a
portion of its management fee so that total expenses of the Fund do not
exceed 1.20%.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

INVESTMENT SUB-ADVISORS AND PORTFOLIO MANAGERS

The Sub-Advisors manage the assets of the Funds under the supervision of LASC
and the Board of Trustees. Each Sub-Advisor determines which securities and
other instruments are purchased and sold for the Fund(s) it sub-advises. Each
Sub-Advisor is an indirect wholly-owned subsidiary of LFC.

COLONIAL
Colonial, an investment advisor since 1931, is the Sub-Advisor of each of the
Small Cap Fund, U.S. Growth Fund, High Yield Fund and International Fund.
Colonial's principal business address is One Financial Center, Boston,
Massachusetts 02111. As of March 31, 1999, Colonial managed over $16.7 billion
in assets.

LASC, out of the management fees it receives from the Trust, pays Colonial
sub-advisory fees at the following annual rates of the average daily net assets
of each specified Fund:

<TABLE>
<CAPTION>
<S> <C>
Colonial Small Cap Value Fund, Variable Series 0.60%
Colonial U.S. Growth & Income Fund, Variable Series 0.60%
Colonial High Yield Securities Fund, Variable Series 0.40%
Colonial International Horizons Fund, Variable Series 0.75%
</TABLE>

Colonial also provides transfer agency, pricing and record keeping services for
the Funds under separate agreements.

John E. Lennon, Senior Vice President of Colonial, has managed the Growth &
Income Fund since 1997 and has managed various other Colonial equity funds since
1982.

Mark Stoeckle has managed the U.S. Growth Fund since December, 1996. Mr.
Stoeckle is a Senior Vice President of Colonial. Prior to joining Colonial in
1996, Mr. Stoeckle was a portfolio manager at Massachusetts Financial Services
Company and an investment banker at Bear, Stearns & Co., Inc.

James P. Haynie, Senior Vice President of Colonial, has co-managed the Colonial
Small Cap Fund since 1993.

Michael Rega, Vice President of Colonial, has co-managed the Colonial Small Cap
Fund since 1996. He was an analyst at Colonial from 1993 to 1996.

Gita Rao, a Senior Vice President of Colonial, manages the International Fund.
Ms. Rao has managed various other Colonial funds since 1995. Prior to joining
Colonial, she was a global equity analyst at Fidelity Management & Research
Company from 1994 to 1995 and a Vice President in the domestic equity research
group at Kidder, Peabody and Company from 1991 to 1994.

STEIN ROE
Stein Roe, an investment advisor since 1932, is the Sub-Advisor of the Global
Utilities Fund. Stein Roe's principal address is One South Wacker Drive,
Chicago, Illinois 60606. As of March 31, 1999, Stein Roe managed over $30.1
billion in assets.

LASC, out of the management fees it receives from the Trust, pays Stein Roe a
sub-advisory fee at the annual rate of 0.45% of the average daily net assets of
the Global Utilities Fund.

Ophelia Barsketis, Senior Vice President of Stein Roe, co-manages the Global
Utilities Fund. Ms. Barsketis joined Stein Roe in 1983 and progressed through a
variety of equity analyst positions before assuming her current
responsibilities, which include managing other Stein Roe and Colonial funds.
Deborah A. Jansen, Vice President and Senior Research Analyst for global and
domestic equities and global economic forecasting for Stein Roe, co-manages the
Global Utilities Fund. Ms. Jansen joined Stein Roe in 1987 and served as an
associate economist and senior economist before assuming her current
responsibilities. Ms. Jansen left Stein Roe in January, 1995 and returned to her
position as Vice President in March, 1996. From June 5, 1995 through June 30,
1995, Ms. Jansen was a Senior Equity Research Analyst for BancOne Investment
Advisers Corporation.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

The mutual funds and institutional investment advisory business of both Stein
Roe and Colonial are managed together by a combined management team of employees
from both companies. Colonial also shares personnel, facilities and systems with
Stein Roe that may be used in providing administrative services to the Fund.

LAMCO AND LAMCO'S PORTFOLIO MANAGERS
LAMCO, an investment advisor since 1985, is the Sub-Advisor of the All-Star
Equity Fund. LAMCO's principal address is 600 Atlantic Avenue, 23rd Floor,
Boston, Massachusetts 02210. As of March 31, 1999, LAMCO managed over $1.6
billion in assets.

LASC, out of the management fees it receives from the Trust, pays LAMCO a
sub-advisory fee at the annual rate of 0.60% of the average daily net assets of
the All-Star Equity Fund.

LAMCO is a manager of other investment managers which LAMCO recommends to the
Board of Trustees for appointment pursuant to a portfolio management agreement
among the Trust, LAMCO and the Portfolio Manager. That management agreement
permits each Portfolio Manager to have full investment discretion and authority
over investment of a portion of the Fund's assets.

Out of the management fees it receives from LASC, LAMCO pays each Portfolio
Manager a fee at the annual rate of 0.30% of the average daily net assets of the
portion of the Fund's assets assigned to that Portfolio Manager.

No one individual at LAMCO is responsible for LAMCO's investment management of
the All-Star Equity Fund. The following individuals who work for the indicated
Portfolio Managers manage a portion of All-Star Equity Fund's assets:

- - Henry D. Cavanna, Managing Director of J.P. Morgan Investment
Management, Inc.

- - John Lindenthal, Managing Director of Oppenheimer Capital

- - Mark Donovan, Chairman, Equity Strategy Committee, of Boston Partners
Asset Management, L.P.

- - Susan M. Byrne, President and Chief Executive Officer of Westwood
Management Corp.

- - Mark A. Thompson, Chairman and Chief Investment Officer of
Wilke/Thompson Capital Management, Inc.

A more complete description of each Portfolio Manager is included in the SAI.
The Trust and LAMCO have received an exemptive order from the SEC that permits
the All-Star Equity Fund to change Portfolio Managers without a vote of the
shareholders. Information regarding any new Portfolio Manager is sent to holders
of VA contracts and VLI policies within 90 days following the effective date of
the change.

CRABBE HUSON
Crabbe Huson, an investment advisor since 1980, is the Sub-Advisor of the Real
Estate Fund. Crabbe Huson's principal address is 121 S.W. Morrison, Suite 1400,
Portland, Oregon 97204. Crabbe Huson as of March 31, 1999, Crabbe Huson managed
over $434 million in assets.

LASC, out of the management fees it receives from the Trust, pays Crabbe Huson a
sub-advisory fee at the annual rate of 0.80% of the average daily net assets of
the Real Estate Fund.

John E. Maack has co-managed the Real Estate Fund since its inception. Mr. Maack
has been employed by Crabbe Huson as a portfolio manager and securities analyst
since 1988.

Michael B. Stokes has co-managed the Real Estate Fund since its inception. Mr.
Stokes joined Crabbe Huson in August, 1996. Prior to joining Crabbe Huson, he
was a financial analyst for Salomon Brothers from July, 1994 to June, 1996.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

AFFILIATED BROKER/DEALER
Stein Roe and Colonial can use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for a fund's portfolio,
pursuant to procedures adopted by the Board of Trustees.

RULE 12B-1 PLAN
The Trust has adopted a plan for and on behalf of the International Fund and
Real Estate Fund in accordance with Rule 12b-1 (Plan) under the Investment
Company Act of 1940. Under the plan, the Trust pays the distributor a service
fee of 0.25% of the average daily net assets attributable to these Funds'
shares. Because these fees are an ongoing expense, over time they increase the
cost of an investment and the shares may cost more than shares that are not
subject to a service fee.

<PAGE>
OTHER INVESTMENT STRATEGIES AND RISKS

Each Fund's primary investments and its risks are described above in its
individual description. This section describes other investments a Fund may make
and the risks associated with them. In seeking to achieve its goal, each Fund
may invest in various types of securities and engage in various investment
techniques which are not the principle focus of the Fund and therefore are not
described in this prospectus. These types of securities and investment practices
are identified and discussed in the Funds' SAI, which you may obtain free of
charge (see back cover). Approval by the Funds' shareholders is not required to
modify or change any of the Funds' investment goals or investment strategies.

TEMPORARY DEFENSIVE MEASURES
With the exception of the All-Star Equity Fund, each Fund's Sub-Advisor may
determine that adverse market conditions make it desirable to temporarily
suspend the Fund's normal investment activities. During such times, as a
temporary defensive strategy, a Fund may, but is not required to, invest in cash
or high quality, short-term debt securities, without limit.

(High Yield Fund) If necessary, the Fund has the ability to invest 100% of its
assets in higher rated securities, if, in Colonial's opinion, economic
conditions create a situation where yield spreads narrow between lower and
higher rated securities.

Taking a temporary defensive position may prevent a Fund from achieving its
investment objective.

ZERO COUPON BONDS
(Global Utilities Fund, High Yield Fund) Zero coupon bonds are issued at less
than their fair value and do not make any payments of interest. As a result,
these bonds involve greater credit risk and are subject to greater volatility
than bonds that pay cash interest on a current basis.

DERIVATIVES
Each Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies may involve the use of financial instruments,
commonly referred to as derivatives, whose values depend on, or are derived
from, the value of an underlying security, an index or a currency. A Fund may
use derivatives for hedging purposes (attempting to offset a potential loss in
one position by establishing an interest in an opposite position). Derivatives
involve the risk that they may exaggerate a loss, potentially losing more money
than the actual cost of the security, or limit a potential gain. Also, with some
derivatives there is the risk that the other party to the transaction may fail
to honor its contract terms, causing a loss to a Fund.

YEAR 2000 COMPLIANCE
Like other investment companies, financial and business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by LASC, the Sub-Advisors and other service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." LASC,
the Sub-Advisors, the Funds' distributors and transfer agent (Liberty Companies)
are taking steps that they believe are reasonably designed to address the Year
2000 Problem, including communicating with vendors who furnish services,
software and systems to the Funds, to provide that date-related information and
data can be properly processed after January 1, 2000. Many Fund service
providers and vendors, including the Liberty Companies, are in the process of
making Year 2000 modifications to their software and systems and believe that
such modifications will be completed on a timely basis prior to January 1, 2000.
However, no assurances can be given that all modifications required to ensure
proper data processing and calculation on and after January 1, 2000 will be
timely made or that services to the Fund will not be adversely affected. Some of
the Funds invest in emerging markets in developing countries and some reports
indicate that developing countries may be behind other countries with respect to
Year 2000 Compliance.

<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights tables that follow are intended to help you understand
the Funds' financial performance. Information is shown for the Funds' last five
fiscal years, (or shorter period if a Fund commenced operations less than five
years ago) which run from January 1 to December 31. Certain information reflects
financial results for a single fund share. This information has been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report, along with
the Funds' financial statements, is included in the Trust's annual report. The
Funds' total returns presented below do not reflect the cost of insurance and
other insurance company separate account charges which vary with the VA
contracts and VLI policies. You can request a free annual report by writing
Keyport Financial Services Corp. (see back cover for address) or by calling or
writing the Participating Insurance Company which issued your VA contract or VLI
policy.

STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES

<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 11.92 10.70 10.50 8.11 9.65
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (a) 0.24 0.46 0.46 0.46 0.54
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments 1.93 2.62 0.23 2.39 (1.53)
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.17 3.08 0.69 2.85 (0.99)
- -------------------------------------------------------------------------------------------------------------------------
Less distributions:
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.21) (0.48) (0.49) (0.46) (0.55)
- -------------------------------------------------------------------------------------------------------------------------
In excess of net investment income (0.01) --- --- --- ---
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gains (0.11) (1.38) --- --- ---
- -------------------------------------------------------------------------------------------------------------------------
Total distributions (0.33) (1.86) (0.49) (0.46) (0.55)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 13.76 11.92 10.70 10.50 8.11
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
Total investment return (%)(b) 18.33 28.75 6.53 35.15 (10.27)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 71,186 54,603 47,907 51,597 38,156
- -------------------------------------------------------------------------------------------------------------------------
Ratio of net expenses to average net assets (%) 0.82(c) 0.83(c) 0.81(c) 0.83(c) 0.86
- -------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to 1.90(c) 3.96(c) 4.36(c) 4.98(c) 5.80
average net assets (%)
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover ratio (%) 53 89 14 18 16
</TABLE>

(a) Per share data was calculated using average shares outstanding during the
period.

(b) Total return at net asset value assuming all distributions reinvested.

(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.

<PAGE>
FINANCIAL HIGHLIGHTS

COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES

<TABLE>
<CAPTION>
Year Ended December 31,
1998***
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ($) 10.00
- --------------------------------------------------------------------------------------------
Net investment income (a) 0.08
- --------------------------------------------------------------------------------------------
Net realized and unrealized losses on investments (1.41)
- --------------------------------------------------------------------------------------------
Total from investment operations (1.33)
- --------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------
Dividends from net investment income (0.07)
- --------------------------------------------------------------------------------------------
In excess of net investment income (0.01)
- --------------------------------------------------------------------------------------------
Total distributions (0.08)
- --------------------------------------------------------------------------------------------
Net asset value, end of period 8.59
- --------------------------------------------------------------------------------------------
TOTAL RETURN
Total investment return (%)(b)(c) (13.25)**
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 1,782
- --------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) (d)(e) 1.00*
- --------------------------------------------------------------------------------------------
Ratio of net investment income to 1.41*
average net assets (%) (c)(e)
- --------------------------------------------------------------------------------------------
Portfolio turnover ratio (%) 51**
</TABLE>

* Annualized.

** Not Annualized.

*** For the period from the commencement of operations May 19, 1998 to
December 31, 1998.

(a) Per share data was calculated using average shares outstanding during the
period.

(b) Total return at net asset value assuming all distributions reinvested.

(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 4.34%
(annualized).

(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
FINANCIAL HIGHLIGHTS

COLONIAL U.S. GROWTH & INCOME FUND, VARIABLE SERIES

<TABLE>
<CAPTION>
Period Ended
Years Ended December 31, December 31,
1998 1997 1996 1995 1994***
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 16.29 14.22 12.36 10.27 10.00
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) 0.16 0.20 0.19 0.21 0.09
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains on investments 3.12 4.37 2.52 2.84 0.35
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.28 4.57 2.71 3.05 0.44
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.12) (0.18) (0.17) (0.16) (0.11)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income --- (0.01) --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gains (0.64) (2.30) (0.68) (0.80) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gains (0.02) (0.01) --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.78) (2.50) (0.85) (0.96) (0.17)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 18.79 16.29 14.22 12.36 10.27
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
Total investment return (%) (b) 20.15 32.23 21.84 29.70(c) 4.40(c)**
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 146,239 96,715 60,855 43,017 15,373
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net expenses to average net assets (%) 0.90(e) 0.94(e) 0.95(e) 1.00(d)(e) 1.00(d)*
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%) 0.88(e) 1.19(e) 1.39(e) 1.72(c)(e) 2.16(c)*
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover ratio (%) 64 63 77 115 52**
</TABLE>

* Annualized.

** Not Annualized.

*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.

(a) Per share data was calculated using average shares outstanding during the
period.

(b) Total return at net asset value assuming all distributions reinvested.

(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 1.07% and
1.64% (annualized), respectively.

(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.

<PAGE>
FINANCIAL HIGHLIGHTS

COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES

<TABLE>
<CAPTION>
Period Ended
December 31,
1998***
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ($) 10.00
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) 0.48
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized losses on investments (0.74)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.26)
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.43)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income (0.00)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.43)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 9.31
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
Total investment return (%) (b)(c) (2.57)**
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 5,915
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) (d)(e) 0.80*
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) (c)(e) 7.93*
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover ratio (%) 23**
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Annualized.

** Not Annualized.

*** For the period from the commencement of operations May 19, 1998 to
December 31, 1998.

(a) Per share data was calculated using average shares outstanding during the
period.

(b) Total return at net asset value assuming all distributions reinvested.

(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.84%
(annualized).

(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
FINANCIAL HIGHLIGHTS

LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES

<TABLE>
<CAPTION>
Year Ended Period Ended
December 31, December 31,
1998 1997***
---- -------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 10.07 10.00
- -----------------------------------------------------------------------------------------------------
Net investment income (a) 0.06 0.01
- -----------------------------------------------------------------------------------------------------
Net realized and unrealized gains on investments 1.82 0.07
- -----------------------------------------------------------------------------------------------------
Total from investment operations 1.88 0.08
- -----------------------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------------------
Dividends from net investment income (0.05) (0.01)
- -----------------------------------------------------------------------------------------------------
In excess of net investment income (0.00) ---
- -----------------------------------------------------------------------------------------------------
Total distributions (0.05) (0.01)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 11.90 10.07
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN:
Total investment return (%)(b)(c) 18.67 0.80**
- -----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 44,870 22,228
- -----------------------------------------------------------------------------------------------------
Ratio of net expenses to average net assets (%) (d)(e) 1.00 1.00*
- -----------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%)(c)(e) 0.54 0.83*
- -----------------------------------------------------------------------------------------------------
Portfolio turnover ratio (%) 70 1**
</TABLE>

* Annualized.

** Not Annualized.

*** For the period from the commencement of operations November 17, 1997 to
December 31, 1997.

(a) Per share data was calculated using average shares outstanding during the
period.

(b) Total return at net asset value assuming all distributions reinvested.

(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.04% and 1.45%
(annualized), respectively.

(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
SHAREHOLDER INFORMATION

PURCHASE AND REDEMPTIONS The Participating Insurance Companies place daily
orders to purchase and redeem shares of the Funds. These orders generally
reflect the net effect of instructions they receive from holders of their VA
contracts and VLI policies and certain other terms of those contracts and
policies. The Trust issues and redeems shares at NAV without imposing any
selling commissions, sales charge or redemption charge. Shares generally are
sold and redeemed at their NAV next determined after receipt of purchase or
redemption requests from Participating Insurance Companies. The right of
redemption may be suspended or payment postponed whenever permitted by
applicable law and regulations.

HOW THE FUNDS CALCULATE NET ASSET VALUE NAV is the difference between the value
of a fund's assets and liabilities divided by the number of shares outstanding.
The NAV is determined at the close of the New York Stock Exchange (NYSE),
usually 4:00 p.m. Eastern time, on each business day that the NYSE is open
(typically Monday through Friday).

To calculate NAV on a given day, we value each stock listed or traded on a stock
exchange at its latest sale price on that day. If there are no sales on that
day, we value the security at the most recent quoted bid price. We value each
over-the-counter security or National Association of Securities Dealers
Automated Quotation (Nasdaq) security as of the last sales price of that day. We
value other over-the-counter securities that have reliable quotes at the latest
quoted bid price.

We value long-term debt obligations and securities convertible into common stock
at fair value. Pricing services provide the Funds with the value of the
securities. When the price of a security is not available, including days when
we determine that the sale or bid price of the security does not reflect that
security's market value, we will value the security at a fair value determined
in good faith under procedures established by the Board of Trustees.

We value a security at fair value when events have occurred after the last
available market price and before the close of the NYSE that materially affect
the security's price. In the case of foreign securities, this could include
events occurring after the close of the foreign market and before the close of
the NYSE.

A Fund's foreign securities may trade on days when the NYSE is closed for
trading and Participating Insurance Companies may not purchase or redeem shares.

DIVIDENDS AND DISTRIBUTIONS Each Fund intends to declare and distribute, as
dividends or capital gain distributions, at least annually, substantially all of
its net investment income and net profits realized from the sale of portfolio
securities, if any, to its shareholders (Participating Insurance Companies'
separate accounts). The net investment income of each Fund consists of all
dividends or interest received by such Fund, less estimated expenses (including
investment advisory and administrative fees). Income dividends will be declared
and distributed annually. All net short-term and long-term capital gains of each
Fund realized during the fiscal year are declared and distributed periodically,
no less frequently than annually. All dividends and distributions are reinvested
in additional shares of the Fund at NAV, as of the record date for the
distributions.

TAX CONSEQUENCES Each Fund is treated as a separate entity for federal income
tax purposes and has elected or intends to elect to be treated, and intends to
qualify each year as a "regulated investment company" under Subchapter M of the
Internal Revenue Code (the Code). Each Fund must satisfy certain requirements
relating to the sources of its income, diversification of its assets and
distribution of its income to shareholders to qualify as a regulated investment
company. As a regulated investment company, a Fund will not be subject to
federal income tax on any net investment income and net realized capital gains
that are distributed to its shareholders as required under the Code.

In addition, each Fund follows certain portfolio diversification requirements
imposed by the Code on separate accounts of insurance companies relating to the
tax-deferred status of VA contracts and VLI policies. More specific information
on these diversification requirements is contained in the prospectus that
describes a particular VA contract or VLI policy.

<PAGE>
FOR MORE INFORMATION
You can get more information about the Funds' investments in the Funds'
semi-annual and annual reports to shareholders. The annual report contains a
discussion of the market conditions and investment strategies that significantly
affected the Funds' performance over their last fiscal year.

You may wish to read the SAI for more information on the Funds and the
securities in which they invest. The SAI is incorporated into this prospectus by
reference, which means that it is considered to be part of this prospectus.

You can get free copies of reports and the SAI, request other information and
discuss your questions about the Funds by writing or calling:

Keyport Financial Services Corp.
125 High Street
Boston, MA 02111
1-800-437-4466

or by calling or writing the Participating Insurance Company which issued your
VA contract or VLI policy.

Text-only versions of all Fund documents can be viewed online or downloaded from
the SEC at www.sec.gov.

You can review and copy information about the Funds by visiting the following
location, and you can obtain copies upon payment of a duplicating fee, by
writing the:

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-6009

Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.

INVESTMENT COMPANY ACT FILE NUMBER:
Liberty Variable Investment Trust: 811-07556

<PAGE>

LIBERTY VARIABLE INVESTMENT TRUST

PROSPECTUS DATED JUNE 1, 1999

Stein Roe Global Utilities Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
Colonial U.S. Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial High Yield Securities Fund, Variable Series
Liberty All-Star Equity Fund, Variable Series
Newport Tiger Fund, Variable Series
Colonial International Horizons Fund, Variable Series
Colonial Global Equity Fund, Variable Series
Crabbe Huson Real Estate Investment Fund, Variable Series

Trust shares available only through variable annuity contracts and variable life
insurance policies of participating insurance companies.

* * * *

This Prospectus must be accompanied by a prospectus for your variable annuity
contract or variable life insurance policy. Retain both prospectuses for future
reference.

* * * *

Although trust shares have been registered with the Securities and Exchange
Commission (SEC), the SEC has not approved any shares offered in this prospectus
or determined whether this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.

- -----------------------------------------

NOT FDIC MAY LOSE VALUE
INSURED NO BANK GUARANTEE

- -----------------------------------------

<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
THE TRUST 3
- ------------------------------------------------------------------------------------

THE FUNDS 4
- ------------------------------------------------------------------------------------
Each of these sections discusses the following
topics: Investment Goals, Primary Investment Strategies,
Primary Investment Risks and Performance History
Stein Roe Global Utilities Fund, Variable Series................................ 4
Colonial Small Cap Value Fund, Variable Series.................................. 6
Colonial U.S. Growth & Income Fund, Variable Series............................. 7
Colonial Strategic Income Fund, Variable Series................................. 9
Colonial High Yield Securities Fund, Variable Series............................ 12
Liberty All-Star Equity Fund, Variable Series................................... 14
Newport Tiger Fund, Variable Series............................................. 17
Colonial International Horizons Fund, Variable Series........................... 19
Colonial Global Equity Fund, Variable Series.................................... 20
Crabbe Huson Real Estate Investment Fund, Variable Series....................... 21

TRUST MANAGEMENT ORGANIZATIONS 22
- ------------------------------------------------------------------------------------
The Trustees.................................................................... 22
Investment Advisor: Liberty Advisory Services Corp.............................. 22
Investment Sub-Advisors and Portfolio Managers.................................. 23
Rule 12b-1 Plan................................................................. 25

OTHER INVESTMENT STRATEGIES AND RISKS 26
- ------------------------------------------------------------------------------------
Temporary Defensive Measures.................................................... 26
U.S. Government Securities...................................................... 26
Structure Risk.................................................................. 26
Zero Coupon Bonds............................................................... 26
Derivatives..................................................................... 27
Year 2000 Compliance............................................................ 27

FINANCIAL HIGHLIGHTS 28
- ------------------------------------------------------------------------------------

SHAREHOLDER INFORMATION 35
- ------------------------------------------------------------------------------------
Purchases and Redemptions....................................................... 35
How the Funds Calculate Net Asset Value......................................... 35
Dividends and Distributions..................................................... 35
Tax Consequences................................................................ 35
</TABLE>

<PAGE>
THE TRUST

Liberty Variable Investment Trust (Trust) includes twelve separate mutual funds,
each with its own investment goal and strategies. This Prospectus contains
information about ten of the Funds (Funds) in the Trust. Liberty Advisory
Services Corp. (LASC) is the investment advisor to each Fund. LASC has appointed
a Sub-Advisor for each Fund, all of which are affiliates of LASC. Each Fund is
sub-advised by the following Sub-Advisor:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FUND SUB-ADVISOR

- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Colonial U.S. Growth & Income Fund, Variable Series Colonial Management Associates, Inc. (Colonial)
(formerly U.S. Stock Fund, Variable Series) (U.S. Growth Fund)
Colonial Small Cap Value Fund, Variable Series (Small Cap Fund)
Colonial Strategic Income Fund, Variable Series (Strategic Income Fund)
Colonial High Yield Securities Fund, Variable Series (High Yield Fund)
Colonial International Horizons Fund, Variable Series (International Fund)
Colonial Global Equity Fund, Variable Series (Global Equity Fund)

- -----------------------------------------------------------------------------------------------------------------------------------
Stein Roe Global Utilities Fund, Variable Series (Global Utilities Fund) Stein Roe & Farnham Incorporated (Stein Roe)

- -----------------------------------------------------------------------------------------------------------------------------------
Liberty All-Star Equity Fund, Variable Series (All-Star Equity Fund) Liberty Asset Management Company (LAMCO)

- -----------------------------------------------------------------------------------------------------------------------------------
Newport Tiger Fund, Variable Series (Tiger Fund) Newport Fund Management, Inc. (Newport)

- -----------------------------------------------------------------------------------------------------------------------------------
Crabbe Huson Real Estate Investment Fund, Variable Series (Real Estate Fund) Crabbe Huson Group, Inc. (Crabbe Huson)

- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Other Funds may be added to or deleted from the Trust from time to time.

<PAGE>
THE FUNDS

STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks current income and long-term growth of capital and income.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests primarily in U.S. and foreign
securities of utility companies. Stein Roe diversifies the Fund's investments
among a number of developed countries and market sectors and will have exposure
to at least three countries, including the U.S. In selecting investments for the
Fund, Stein Roe looks primarily for stocks of larger utility companies with
established records.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

The primary risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which
could cause you to lose money by investing in the Fund or prevent the Fund from
achieving its goals.

<PAGE>
THE FUND Stein Roe Global Utilities Fund, Variable Series

PERFORMANCE HISTORY

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's total calendar-year returns. The performance table
following the bar chart shows how the Fund's average annual total returns
compare with those of a broad measure of market performance for 1 year, 5 years
and the life of the Fund. We compare the Fund to the Standard & Poor's Utilities
Index (S&P Index), Lipper Utilities - Annuities peer group average return
(Lipper Average) and Morgan Stanley Capital International World Index ND (MSCI
World Index). The S&P Index is an unmanaged index that tracks the performance of
domestic utilities stocks. The Lipper Average which is calculated by Lipper,
Inc. is composed of funds with similar investment objectives as the Fund. MSCI
World Index is an unmanaged index that tracks the performance of global stocks.
Unlike the Fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in an
index. The chart and table are intended to illustrate some of the risks of
investing in the Fund by showing the changes in the Fund's performance. All
returns include the reinvestment of dividends and distributions. As with all
mutual funds, past performance does not predict the Fund's future performance.
Performance results include the effect of any expense reduction arrangements. If
these arrangements were not in place, then the performance results would have
been lower. We may cease any reduction arrangements at any time. The Fund's
performance results do not reflect the cost of insurance and separate account
charges which are imposed under your VA contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was - 0.58%.

Best Quarter: 4th quarter 1997, +15.29%

Worst Quarter: 1st quarter 1994, -8.91%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<PAGE>
COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES

INVESTMENT GOAL

The Fund seeks long-term growth.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests primarily in small
capitalization stocks. These are stocks with market capitalizations of less than
the market capitalization of the stock in the Russell 2000 Index that has the
largest capitalization at the time of purchase. The remainder of the Fund's
assets may be invested in other stocks, or in bonds that are rated or considered
by the advisor to be investment grade. In managing the Fund, Colonial uses a
value investing strategy that focuses on buying stocks cheaply when they are
under valued or "out of favor." Colonial buys stocks that have attractive
current prices, consistent operating performance and/or favorable future growth
prospects. Colonial's strategy uses fact-based quantitative analysis supported
by fundamental business and financial analysis.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

PERFORMANCE HISTORY

We compare the Fund to the Russell 2000 Index, an unmanaged index that tracks
the performance of small capitalization stocks and the Lipper Small Cap --
Annuities peer group average return (Lipper Average). This Lipper Average which
is calculated by Lipper, Inc. is composed of funds with similar investment
objectives as the Fund. Unlike the Fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. The Fund commenced investment operations on May 19,
1998, and therefore does not have a full calendar year of investment
performance.

<PAGE>
COLONIAL U.S. GROWTH & INCOME FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks long-term growth and income.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests primarily in large
capitalization stocks. These are stocks with market capitalizations of greater
than $3 billion at the time of purchase. Up to 10% of the Fund's assets may be
invested in debt securities.

In selecting debt securities for the Fund, Colonial may invest in:

- debt securities that are convertible into common stock

- corporate debt securities noted investment grade by at least two
nationally recognized rating organizations; and

- debt securities issued or guaranteed by the U.S. Government

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

The primary risk of investing in the Fund is described below. There are many
circumstances (including additional risks that are not described here) which
could cause you to lose money by investing in the Fund or prevent the Fund from
achieving its goal.

<PAGE>
THE FUNDS Colonial U.S. Growth & Income Fund, Variable Series

PERFORMANCE HISTORY

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's total calendar-year returns. The performance table
following the bar chart shows how the Fund's average annual total returns
compare with those of a broad measure of market performance for 1 year and the
life of the Fund. We compare the Fund to the Standard & Poor's 500 Index (S&P
Index), an unmanaged index that tracks the performance of a selection of widely
held common stocks and the Lipper Growth & Income -- Annuities peer group
average return (Lipper Average). This Lipper Average which is calculated by
Lipper, Inc. is composed of funds with similar investment objectives as the
Fund. Unlike the Fund, indices are not investments, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in an index. The chart and table are intended to illustrate some of the
risks of investing in the Fund by showing the changes in the Fund's performance.
All returns include the reinvestment of dividends and distributions. As with all
mutual funds, past performance does not predict the Fund's future performance.
Performance results include the effect of any expense reduction arrangements. If
these arrangements were not in place, then the performance results would have
been lower. We may cease any reduction arrangements at any time. The Fund's
performance results do not reflect the cost of insurance and separate account
charges which are imposed under your VA contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was +1.70%.

Best Quarter: 4th quarter 1998, +21.79%

Worst Quarter: 3rd quarter 1998, -14.16%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<PAGE>
COLONIAL STRATEGIC INCOME FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks as high a level of current income as is consistent with prudent
risk and maximizing total return.

PRIMARY INVESTMENT STRATEGIES

The Fund seeks to achieve its investment goal by investing in:

- - debt securities issued by the U.S. government;

- - debt securities issued by foreign governments; and

- - lower rated corporate debt securities.

Colonial allocates the Fund's investments among these types of securities at any
given time based on its estimate of the expected performance and risk of each
type of investment.

The Fund pursues its investment goal by investing a portion of its assets in
lower rated corporate debt securities. These securities have the following
ratings:

- - BBB through C by Standard & Poor's Corporation;

- - Baa through D by Moody's Investor Services, Inc.;

- - a comparable rating by another nationally recognized rating service; or

- - the security is unrated and Colonial believes it to be comparable in
quality to securities having such ratings as noted above.

The Fund may invest in securities issued or guaranteed by foreign governments or
foreign companies, including securities issued in emerging market countries.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

Because the Fund may invest in fixed income securities issued by private
entities, including certain types of mortgage-backed securities and corporate
bonds, the Fund is subject to issuer risk. Issuer risk is the possibility that
changes in the financial condition of the issuer of a security, changes in
general economic conditions, or changes in economic conditions that affect the
issuer's industry may impact the issuer's ability to make timely payment of
interest or principal. This could result in decreases in the price of the
security.

<PAGE>
THE FUNDS Colonial Strategic Income Fund, Variable Series

PERFORMANCE HISTORY

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's total calendar-year returns. The performance table
following the bar chart shows how the Fund's average annual total returns
compare with those of a broad measure of market performance for 1 year and the
life of the Fund. We compare the Fund to the Lehman Brothers
Government/Corporate Bond Index (Lehman Index), an unmanaged index that tracks
the performance of a selection of U.S. government agency, treasury and
investment grade corporate bonds and the Lipper Corporate Bonds - Annuities peer
group average return (Lipper Average). This Lipper Average which is calculated
by Lipper, Inc. is composed of funds with similar investment objectives as the
Fund. Unlike the Fund, indices are not investments, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in an index. The chart and table are intended to illustrate some of the
risks of investing in the Fund by showing the changes in the Fund's performance.
All returns include the reinvestment of dividends and distributions. As with all
mutual funds, past performance does not predict the Fund's future performance.
Performance results include the effect of any expense reduction arrangements. If
these arrangements were not in place, then the performance results would have
been lower. We may cease any reduction arrangements at any time. The Fund's
performance results do not reflect the cost of insurance and separate account
charges which are imposed under your VA contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was +0.99%.

Best Quarter: 1st quarter 1995, +5.62%

Worst Quarter: 1st quarter 1997, -1.00%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<TABLE>
<CAPTION>
1 YEAR SINCE
INCEPTION ON
7/5/94
- ------------------------------------------------------------------------
<S> <C> <C>
Fund (%) 6.03 9.75
- ------------------------------------------------------------------------
Lehman Index (%) 9.47 N/A
- ------------------------------------------------------------------------
Lipper Average (%) 4.82 N/A
- ------------------------------------------------------------------------
</TABLE>

<PAGE>
COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks current income and total return.

PRIMARY INVESTMENT STRATEGIES

The Fund pursues its investment goal by investing primarily in lower rated
corporate debt securities. These securities have the following ratings:

- - BBB through C by Standard & Poor's Corporation;

- - Baa through D by Moody's Investor Services, Inc.;

- - a comparable rating by another nationally recognized rating service; or

- - the security is unrated and Colonial believes it to be comparable in
quality to securities having such ratings as noted above.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

<PAGE>
THE FUNDS Colonial High Yield Securities Fund, Variable Series

PERFORMANCE HISTORY

We compare the Fund to the CS First Boston High Yield Index, an unmanaged index
that tracks the performance of high yield bond funds and the Lipper High Yield -
Annuities peer group average return (Lipper Average). This Lipper Average which
is calculated by Lipper, Inc. is composed of funds with similar investment
objectives as the Fund. Unlike the Fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. The Fund commenced investment operations on May 19,
1998, and therefore does not have a full calendar year of investment
performance.

<PAGE>
LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks total investment return, comprised of long-term capital
appreciation and current income, through investment primarily in a diversified
portfolio of equity securities.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests primarily in equity and equity
related securities, which include common stocks, bonds convertible into stocks,
warrants and other rights to purchase stocks.

In LAMCO's opinion, the multi-manager concept provides advantages over the use
of a single manager for the following reasons:

- Most equity investment management firms consistently employ a
distinct investment "style" which causes them to emphasize stocks
with particular characteristics;

- Because of changing investor preferences, any given investment style
will move into and out of market favor and will result in better
investment performance under certain market conditions, but less
successful performance under other conditions;

- Consequently, by allocating the Fund's portfolio on an approximately
equal basis among Portfolio Managers employing different styles, the
impact of any one style on investment performance will be diluted,
and the investment performance of the total portfolio will be more
consistent and less volatile over the long term than if a single
style were employed throughout the entire period; and

- More consistent performance at a given annual rate of return over
time produces a higher rate of return for the long term than more
volatile performance having the same average annual rate of return.

The Fund's current Portfolio Managers and investment styles are:

- J. P. Morgan Investment Management Inc. uses a value approach by
investing in companies that are diversified across all sectors and
that are undervalued relative to the firm's projected growth rates.

- Oppenheimer Capital uses a value approach by investing in companies
that exhibit the ability to generate excess cash flow while earning
high returns on invested capital.

- Boston Partners Asset Management, L.P. uses a value approach by
investing in companies with low price-to-earnings and price-to-book
ratios where a catalyst for positive change has been identified.

- Westwood Management Corporation uses a growth approach by investing
in growth companies selling at reasonable valuations based on the
firm's earnings projections which are not yet reflected in consensus
estimates.

- Wilke/Thompson Capital Management, Inc. uses a growth approach by
investing in companies that demonstrate the ability to sustain
strong secular growth across a broad range of market
capitalizations.

LAMCO continuously monitors the performance and investment styles of the Fund's
Portfolio Managers and from time to time may recommend changes of Portfolio
Managers based on factors such as:

- Changes in a Portfolio Manager's investment style or a departure by
a Portfolio Manager from the investment style for which it had been
selected;

- A deterioration in a Portfolio Manager's performance relative to
that of other investment management firms practicing a similar
style; or

- Adverse changes in its ownership or personnel.

<PAGE>
THE FUNDS Liberty All-Star Equity Fund, Variable Series

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

<PAGE>
THE FUNDS Liberty All-Star Equity Fund, Variable Series

PERFORMANCE HISTORY

The bar chart below shows the Fund's performance by illustrating the Fund's
total calendar-year return. The performance table following the bar chart shows
how the Fund's average annual total returns compare with those of a broad
measure of market performance for one year and the life of the Fund. We compare
the Fund to the Standard & Poor's 500 Index (S&P Index), an unmanaged index that
tracks the performance of a selection of widely held common stocks and the
Lipper Growth & Income - Annuities peer group average return (Lipper Average).
This Lipper Average which is calculated by Lipper, Inc. is composed of funds
with similar investment objectives as the Fund. Unlike the Fund, indices are not
investments, do not incur fees or expenses and are not professionally managed.
It is not possible to invest directly in an index. The chart and table are
intended to illustrate some of the risks of investing in the Fund by showing the
changes in the Fund's performance. All returns include the reinvestment of
dividends and distributions. As with all mutual funds, past performance does not
predict the Fund's future performance. Performance results include the effect of
any expense reduction arrangements. If these arrangements were not in place,
then the performance results would have been lower. We may cease any reduction
arrangements at any time. The Fund's performance results do not reflect the cost
of insurance and separate account charges which are imposed under your VA
contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was 0.00%.

Best Quarter: 4th quarter 1998, +18.67%

Worst Quarter: 3rd quarter 1998, -12.05%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<PAGE>
NEWPORT TIGER FUND, VARIABLE SERIES

INVESTMENT GOAL

The Fund seeks long-term capital appreciation.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests primarily in stocks of
companies located in the nine Tiger countries of Asia. The Tigers of Asia are
Hong Kong, Singapore, South Korea, Taiwan, Malaysia, Thailand, Indonesia, The
People's Republic of China and the Philippines. In selecting investments for the
Fund, Newport typically purchases stocks of larger, well-established companies.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

Because the Fund's investments are concentrated in the nine Tiger countries of
Asia, the Fund is particularly susceptible to regional risks. Events in any one
Tiger country may impact the other countries in the Southeast Asian region as a
whole. As a result events in the region will generally have a greater effect on
the Fund than if it were more geographically diversified, which may result in
greater losses and volatility.

<PAGE>
THE FUNDS Newport Tiger Fund, Variable Series

PERFORMANCE HISTORY

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's total calendar-year returns. The performance table
following the bar chart shows how the Fund's average annual total returns
compare with those of a broad measure of market performance for 1 year and the
life of the Fund. We compare the Fund to the Morgan Stanley Capital
International EAFE Index GDP (Morgan Stanley Index), an unmanaged index that
tracks the performance of foreign stocks and the Lipper Pacific Region -
Annuities peer group average return (Lipper Average). This Lipper Average which
is calculated by Lipper, Inc. is composed of funds with similar investment
objectives as the Fund. Unlike the Fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. The chart and table are intended to illustrate some
of the risks of investing in the Fund by showing the changes in the Fund's
performance. All returns include the reinvestment of dividends and
distributions. As with all mutual funds, past performance does not predict the
Fund's future performance. Performance results include the effect of any expense
reduction arrangements. If these arrangements were not in place, then the
performance results would have been lower. We may cease any reduction
arrangements at any time. The Fund's performance results do not reflect the cost
of insurance and separate account charges which are imposed under your VA
contract or VLI policy.

CALENDAR-YEAR TOTAL RETURNS

The Fund's year to date total return through March 31, 1999 was +2.55%.

Best Quarter: 4th quarter 1998, +37.93%

Worst Quarter: 2nd quarter 1998, -28.81%

AVERAGE ANNUAL TOTAL RETURN - FOR PERIODS ENDED 12/31/98

<TABLE>
<CAPTION>
1 YEAR SINCE
INCEPTION ON
5/1/95
- ------------------------------------------------------------------------
<S> <C> <C>
Fund (%) -6.43 -5.01
- ------------------------------------------------------------------------
Morgan Stanley Index (%) 26.71 N/A
- ------------------------------------------------------------------------
Lipper Average (%) -6.46 N/A
- ------------------------------------------------------------------------
</TABLE>

<PAGE>
COLONIAL INTERNATIONAL HORIZONS FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks long-term growth and preservation of capital purchasing power.

PRIMARY INVESTMENT STRATEGIES

The Fund invests primarily in non-U.S. equity securities which Colonial believes
will provide superior long-term growth. Colonial generally selects stocks of
companies in industries and markets that it believes will react favorably to
inflation in the U.S. economy. Inflation sensitive companies in which the Fund
may invest include:

- - companies engaged in the development and processing of natural resources,
and

- - companies engaged in consumer oriented businesses.

The Fund is a non-diversified mutual fund and, although it generally will not,
it may invest more than 5% of its total assets in the securities of one company.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

<PAGE>
COLONIAL GLOBAL EQUITY FUND, VARIABLE SERIES

INVESTMENT GOAL

The Fund seeks long-term growth by investing primarily in global equity
securities.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests primarily in both U.S. and
foreign equity securities. The Fund may invest in companies of any size,
including small capitalization stocks. The Fund may also invest in high quality
U.S. and foreign government debt securities. The Fund generally diversifies its
holdings across several different countries and regions.

The Fund may invest up to 10% of its assets in shares of other investment
companies. Investing in investment companies may involve payment of duplicate
fees because the Fund, as a shareholder, will indirectly pay a portion of the
other investment company's expenses.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

Interest rate risk is the risk of a decline or increase in the price of a bond
when interest rates increase or decline. In general, if interest rates rise,
bond prices fall; and if interest rates fall, bond prices rise. Changes in the
values of bonds usually will not affect the amount of income the Fund receives
from them but will affect the value of the Fund's shares. Interest rate risk is
generally greater for bonds with longer maturities.

<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND, VARIABLE SERIES

INVESTMENT GOALS

The Fund seeks to provide growth of capital and current income.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests at least 75% of its total
assets in equity securities of real estate investment trusts (REITs) and other
real estate industry companies. In managing the Fund, the sub-advisor follows a
basic value contrarian approach in selecting securities for its portfolio.

Additional strategies that are not primary investment strategies and the risks
associated with them are described below under "Other Investment Strategies and
Risks."

PRIMARY INVESTMENT RISKS

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

THE TRUSTEES

The business of the Trust and the Funds is supervised by the Trust's Board of
Trustees. The Statement of Additional Information (SAI) contains names of and
biographical information on the Trustees.

INVESTMENT ADVISOR: LIBERTY ADVISORY SERVICES CORP.

For the 1998 fiscal year, the Trust paid LASC management fees at the following
annual rates of the average daily net assets of each specified Fund:

<TABLE>
<S> <C>
Stein Roe Global Utilities Fund, Variable Series 0.65%
Colonial Small Cap Value Fund, Variable Series 0.80%(1)
Colonial U.S. Growth & Income Fund, Variable Series 0.80%
Colonial Strategic Income Fund, Variable Series 0.65%
Colonial High Yield Securities Fund, Variable Series 0.60%(2)
Liberty All-Star Equity Fund, Variable Series 0.80%(3)
Newport Tiger Fund, Variable Series 0.90%
</TABLE>

(2) The High Yield Fund's advisor has voluntarily agreed to waive its
management fee so that total expenses of the Fund do not exceed 0.80%. As
a result the actual management fee paid to the advisor for the 1998 fiscal
year was 0.00%

(3) The All-Star Equity Fund's advisor has voluntarily agreed to waive a
portion of its management fee. As a result the actual management fee paid
to the advisor for the 1998 fiscal year was 0.76%

For its services as investment advisor, the Trust will pay LASC a management fee
at the following annual rates of the average daily net assets of each specified
Fund:

<TABLE>
<S> <C>
Colonial International Horizons Fund, Variable Series 0.95%(4)
Colonial Global Equity Fund, Variable Series 0.95%(4)
Crabbe Huson Real Estate Investment Fund, Variable Series 1.00%(5)
</TABLE>

(4) The International Fund and Global Equity Fund's advisor has voluntarily
agreed to waive a portion of its management fee so that total expenses of
the Fund do not exceed 1.15%.

(5) The Real Estate Fund's advisor has voluntarily agreed to waive a portion
of its management fee so that total expenses of the Fund do not exceed
1.20%.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

INVESTMENT SUB-ADVISORS AND PORTFOLIO MANAGERS

COLONIAL

Colonial, an investment advisor since 1931, is the Sub-Advisor of each of the
Small Cap Fund, U.S. Growth Fund, Strategic Income Fund, High Yield Fund,
International Fund and Global Equity Fund. Colonial's principal business address
is One Financial Center, Boston, Massachusetts 02111. As of March 31, 1999,
Colonial managed over $16.7 billion in assets.

LASC, out of the management fees it receives from the Trust, pays Colonial
sub-advisory fees at the following annual rates of the average daily net assets
of each specified Fund:

<TABLE>
<S> <C>
Colonial Small Cap Value Fund, Variable Series 0.60%
Colonial U.S. Growth & Income Fund, Variable Series 0.60%
Colonial Strategic Income Fund, Variable Series 0.45%
Colonial High Yield Securities Fund, Variable Series 0.40%
Colonial International Horizons Fund, Variable Series 0.75%
Colonial Global Equity Fund, Variable Series 0.75%
</TABLE>

Colonial also provides transfer agency, pricing and record keeping services for
the Funds under separate agreements.

John E. Lennon, Senior Vice President of Colonial, has managed the Growth &
Income Fund since 1997 and has managed various other Colonial equity funds since
1982.

Mark Stoeckle has managed the U.S. Growth Fund since December, 1996. Mr.
Stoeckle is a Senior Vice President of Colonial. Prior to joining Colonial
in 1996, Mr. Stoeckle was a portfolio manager at Massachusetts Financial
Services Company and an investment banker at Bear, Stearns & Co., Inc.

Carl C. Ericson has managed the Strategic Income Fund since its inception. He
also has managed the High Yield Fund since January, 1999. Mr. Ericson, a Senior
Vice President of Colonial and director of Colonial's Taxable Fixed Income
Group, has managed various Colonial taxable income funds since 1985.

James P. Haynie, Senior Vice President of Colonial, has co-managed the Colonial
Small Cap Fund since 1993.

Michael Rega, Vice President of Colonial, has co-managed the Colonial Small Cap
Fund since 1996. He was an analyst at Colonial from 1993 to 1996.

Gita Rao, a Senior Vice President of Colonial, manages both the International
Fund and Global Equity Fund. Ms. Rao has managed various other Colonial funds
since 1995. Prior to joining Colonial, she was a global equity analyst at
Fidelity Management & Research Company from 1994 to 1995 and a Vice President in
the domestic equity research group at Kidder, Peabody and Company from 1991 to
1994.

STEIN ROE

Stein Roe, an investment advisor since 1932, is the Sub-Advisor of the Global
Utilities Fund. Stein Roe's principal address is One South Wacker Drive,
Chicago, Illinois 60606. As of March 31, 1999, Stein Roe managed over $30.1
billion in assets.

LASC, out of the management fees it receives from the Trust, pays Stein Roe a
sub-advisory fee at the annual rate of 0.45% of the average daily net assets of
the Global Utilities Fund.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

other Stein Roe and Colonial funds.

Deborah A. Jansen, Vice President and Senior Research Analyst for global and
domestic equities and global economic forecasting for Stein Roe, co-manages the
Global Utilities Fund. Ms. Jansen joined Stein Roe in 1987 and served as an
associate economist and senior economist before assuming her current
responsibilities. Ms. Jansen left Stein Roe in January, 1995 and returned to her
position as Vice President in March, 1996. From June 5, 1995 through June 30,
1995, Ms. Jansen was a Senior Equity Research Analyst for BancOne Investment
Advisers Corporation.

LAMCO AND LAMCO'S PORTFOLIO MANAGERS

LAMCO, an investment advisor since 1985, is the Sub-Advisor of the All-Star
Equity Fund. LAMCO's principal address is 600 Atlantic Avenue, 23rd Floor,
Boston, Massachusetts 02210. As of March 31, 1999, LAMCO managed over $1.6
billion in assets.

LASC, out of the management fees it receives from the Trust, pays LAMCO a
sub-advisory fee at the annual rate of 0.60% of the average daily net assets of
the All-Star Equity Fund.

- - Henry D. Cavanna, Managing Director of J.P. Morgan Investment Management,
Inc.

- - John Lindenthal, Managing Director of Oppenheimer Capital

- - Mark Donovan, Chairman, Equity Strategy Committee, of Boston Partners
Asset Management, L.P.

- - Susan M. Byrne, President and Chief Executive Officer of Westwood
Management Corp.

- - Mark A. Thompson, Chairman and Chief Investment Officer of Wilke/Thompson
Capital Management, Inc.

NEWPORT

Newport, an investment advisor since 1987, is the Sub-Advisor of the Tiger Fund.
Newport's principal address is 580 California Street, Suite 1960, San Francisco,
California 94104. As of March 31, 1999, Newport managed over $843.1 million in
assets.

LASC, out of the management fees it receives from the Trust, pays Newport a
sub-advisory fee at the annual rate of 0.70% of the average daily net assets of
the Tiger Fund.

Thomas R. Tuttle and Lynda Couch, Senior Vice President and Vice President,
respectively, of Newport, co-manage the Fund. Mr. Tuttle has co-managed
other Newport Funds since November, 1995. Mr. Tuttle has been an officer of
Newport since 1984. Ms.

<PAGE>
TRUST MANAGEMENT ORGANIZATIONS

Couch has managed other Newport Funds since April, 1995. Ms. Couch has been an
officer of Newport since 1994.

CRABBE HUSON

Crabbe Huson, an investment advisor since 1980, is the Sub-Advisor of the Real
Estate Fund. Crabbe Huson's principal address is 121 S.W. Morrison, Suite 1400,
Portland, Oregon 97204. Crabbe Huson as of March 31, 1999, Crabbe Huson managed
over $434 million in assets.

LASC, out of the management fees it receives from the Trust, pays Crabbe Huson a
sub-advisory fee at the annual rate of 0.80% of the average daily net assets of
the Real Estate Fund.

John E. Maack has co-managed the Real Estate Fund since its inception. Mr.
Maack has been employed by Crabbe Huson as a portfolio manager and securities
analyst since 1988.

Michael B. Stokes has co-managed the Real Estate Fund since its inception.
Mr. Stokes joined Crabbe Huson in August, 1996. Prior to joining Crabbe
Huson, he was a financial analyst for Salomon Brothers from July, 1994 to
June, 1996.

AFFILIATED BROKER/DEALER

Stein Roe and Colonial can use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for a fund's portfolio,
pursuant to procedures adopted by the Board of Trustees.

RULE 12B-1 PLAN

The Trust has adopted a plan for and on behalf of the International Fund, Global
Equity Fund and Real Estate Fund in accordance with Rule 12b-1 (Plan) under the
Investment Company Act of 1940. Under the plan, the Trust pays the distributor a
service fee of 0.25% of the average daily net assets attributable to these
Funds' shares. Because these fees are an ongoing expense, over time they
increase the cost of an investment and the shares may cost more than shares that
are not subject to a service fee.

<PAGE>
OTHER INVESTMENT STRATEGIES AND RISKS

TEMPORARY DEFENSIVE MEASURES

With the exception of the All-Star Equity Fund, each Fund's Sub-Advisor may
determine that adverse market conditions make it desirable to temporarily
suspend the Fund's normal investment activities. During such times, as a
temporary defensive strategy, a Fund may, but is not required to, invest in cash
or high quality, short-term debt securities, without limit.

Taking a temporary defensive position may prevent a Fund from achieving its
investment objective.

U.S. GOVERNMENT SECURITIES

(Strategic Income Fund) The Fund will invest in U.S. Government securities,
including U.S. Treasuries and securities of various U.S. government agencies.
Agency securities include mortgage-backed securities, which represent interests
in pools of mortgages. The Fund has flexibility to vary its allocation among
different types of U.S. Government securities based upon the Sub-Advisor's
judgement of which types of securities will outperform others. In selecting
investments for the Fund, the Sub-Advisor considers a security's expected
income, together with its potential to rise or fall in price.

STRUCTURE RISK

(Strategic Income Fund) Structure risk is the risk that an event will occur
(such as a security being prepaid or called) that alters the security's cash
flows. Prepayment risk is a particular type of risk that involves both
mortgage-backed securities (which are guaranteed by a U.S. Government agency)
and asset-backed securities (which are interests in pools of debt securities).
Prepayment risk is the possibility that asset-backed securities may be prepaid
if the underlying debt securities are prepaid. Prepayment risk for
mortgage-backed securities is the possibility that, as interest rates fall,
homeowners are more likely to refinance their home mortgages. When mortgages are
refinanced, the principal on mortgage-backed securities is paid earlier than
expected. In an environment of declining interest rates, asset-backed securities
and mortgage-backed securities may offer less potential for gain than other debt
securities. During periods of rising interest rates, these securities have a
high risk of declining in price because the declining prepayment rates
effectively increase the maturity of the securities. In addition, the potential
impact of prepayment on the price of a security may be difficult to predict and
result in greater volatility.

ZERO COUPON BONDS

(Global Utilities Fund, Strategic Income Fund, High Yield Fund) Zero coupon
bonds are issued at less than their fair value and do not make any payments of
interest. As a result, these bonds involve greater credit risk and are subject
to greater volatility than bonds that pay cash interest on a current basis.

<PAGE>
OTHER INVESTMENT STRATEGIES AND RISKS

DERIVATIVES

Each Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies may involve the use of financial instruments,
commonly referred to as derivatives, whose values depend on, or are derived
from, the value of an underlying security, an index or a currency. A Fund may
use derivatives for hedging purposes (attempting to offset a potential loss in
one position by establishing an interest in an opposite position). Derivatives
involve the risk that they may exaggerate a loss, potentially losing more money
than the actual cost of the security, or limit a potential gain. Also, with some
derivatives there is the risk that the other party to the transaction may fail
to honor its contract terms, causing a loss to a Fund.

YEAR 2000 COMPLIANCE

Like other investment companies, financial and business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by LASC, the Sub-Advisors and other service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." LASC,
the Sub-Advisors, the Funds' distributors and transfer agent (Liberty Companies)
are taking steps that they believe are reasonably designed to address the Year
2000 Problem, including communicating with vendors who furnish services,
software and systems to the Funds, to provide that date-related information and
data can be properly processed after January 1, 2000. Many Fund service
providers and vendors, including the Liberty Companies, are in the process of
making Year 2000 modifications to their software and systems and believe that
such modifications will be completed on a timely basis prior to January 1, 2000.
However, no assurances can be given that all modifications required to ensure
proper data processing and calculation on and after January 1, 2000 will be
timely made or that services to the Fund will not be adversely affected. Some of
the Funds invest in emerging markets in developing countries and some reports
indicate that developing countries may be behind other countries with respect to
Year 2000 Compliance.

<PAGE>
FINANCIAL HIGHLIGHTS

STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES
<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 11.92 10.70 10.50

Net investment income (a) 0.24 0.46 0.46
Net realized and unrealized gains (losses) 1.93 2.62 0.23
on investments
Total from investment operations 2.17 3.08 0.69
Less distributions:
Dividends from net investment income (0.21) (0.48) (0.49)
In excess of net investment income (0.01) -- --
Dividends from net realized gains (0.11) (1.38) --
Total distributions (0.33) (1.86) (0.49)
Net asset value, end of year ($) 13.76 11.92 10.70

TOTAL RETURN:
Total investment return (%)(b) 18.33 28.75 6.53
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 71,186 54,603 47,907
Ratio of net expenses to average net assets (%) 0.82(c) 0.83(c) 0.81(c)
Ratio of net investment income to 1.90(c) 3.96(c) 4.36(c)
average net assets (%)
Portfolio turnover ratio (%) 53 89 14

<CAPTION>
1995 1994
---- ----
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 8.11 9.65

Net investment income (a) 0.46 0.54
Net realized and unrealized gains (losses) 2.39 (1.53)
on investments
Total from investment operations 2.85 (0.99)
Less distributions:
Dividends from net investment income (0.46) (0.55)
In excess of net investment income -- --
Dividends from net realized gains -- --
Total distributions (0.46) (0.55)
Net asset value, end of year ($) 10.50 8.11

TOTAL RETURN:
Total investment return (%)(b) 35.15 (10.27)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 51,597 38,156
Ratio of net expenses to average net assets (%) 0.83(c) 0.86
Ratio of net investment income to 4.98(c) 5.80
average net assets (%)
Portfolio turnover ratio (%) 18 16
</TABLE>

(a) Per share data was calculated using average shares outstanding during
the period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.

<PAGE>
FINANCIAL HIGHLIGHTS
COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES
<TABLE>
<CAPTION>
Year Ended December 31,
1998***
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ($) 10.00
Net investment income (a) 0.08
Net realized and unrealized losses on investments (1.41)
Total from investment operations (1.33)
Less distributions:
Dividends from net investment income (0.07)
In excess of net investment income (0.01)
Total distributions (0.08)
Net asset value, end of period 8.59
TOTAL RETURN
Total investment return (%)(b)(c) (13.25)**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 1,782
Ratio of expenses to average net assets (%) (d)(e) 1.00*
Ratio of net investment income to 1.41*
average net assets (%) (c)(e)
Portfolio turnover ratio (%) 51**
</TABLE>

* Annualized.
** Not Annualized.
*** For the period from the commencement of operations May 19, 1998 to
December 31, 1998.
(a) Per share data was calculated using average shares outstanding during
the period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 4.34%
(annualized).
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
FINANCIAL HIGHLIGHTS

COLONIAL U.S. GROWTH & INCOME FUND, VARIABLE SERIES
<TABLE>
<CAPTION>
Period Ended
Years Ended December 31, December 31,
1998 1997 1996 1995 1994***
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 16.29 14.22 12.36 10.27 10.00
Net investment income (a) 0.16 0.20 0.19 0.21 0.09
Net realized and unrealized gains on investments 3.12 4.37 2.52 2.84 0.35
Total from investment operations 3.28 4.57 2.71 3.05 0.44
Less distributions:
Dividends from net investment income (0.12) (0.18) (0.17) (0.16) (0.11)
In excess of net investment income -- (0.01) -- -- --
Dividends from net realized gains (0.64) (2.30) (0.68) (0.80) (0.06)
In excess of net realized gains (0.02) (0.01) -- -- --
Total distributions (0.78) (2.50) (0.85) (0.96) (0.17)
Net asset value, end of year ($) 18.79 16.29 14.22 12.36 10.27
TOTAL RETURN:
Total investment return (%) (b) 20.15 32.23 21.84 29.70(c) 4.40(c)**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 146,239 96,715 60,855 43,017 15,373
Ratio of net expenses to average net assets (%) 0.90(e) 0.94(e) 0.95(e) 1.00(d)(e) 1.00(d)*
Ratio of net investment income to 0.88(e) 1.19(e) 1.39(e) 1.72(c)(e) 2.16(c)*
average net assets (%)
Portfolio turnover ratio (%) 64 63 77 115 52**
</TABLE>

* Annualized.
** Not Annualized.
*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during
the period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 1.07% and
1.64% (annualized), respectively.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.

<PAGE>
FINANCIAL HIGHLIGHTS

COLONIAL STRATEGIC INCOME FUND, VARIABLE SERIES

Years Ended December 31,
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 11.15 11.04 10.99 9.79
Net investment income (a) 0.91 0.90 0.92 0.55
Net realized and unrealized
gains (losses) on investments (0.24) 0.11 0.16 1.24

Total from investment operations 0.67 1.01 1.08 1.79
Less distributions:
Dividends from net investment income (0.72) (0.79) (0.96) (0.56)
In excess of net investment income (0.02) (0.05) -- --
Dividends from net realized gains -- (0.05) (0.07) (0.03)
In excess of net realized gains -- (0.01) -- --
Total distributions (0.74) (0.90) (1.03) (0.59)
Net asset value, end of year ($) 11.08 11.15 11.04 10.99
TOTAL RETURN:
Total investment return (%)(b) 6.03 9.11(c) 9.83(c) 18.30(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 118,985 73,175 53,393 48,334
Ratio of net expenses to average
net assets (%) 0.78(e) 0.80(d)(e) 0.80(d)(e) 0.84(d)(e)
Ratio of net investment income to 7.92(e) 7.86(c)(e) 8.13(c)(e) 8.08(c)(e)
average net assets (%)
Portfolio turnover ratio (%) 50 94 114 281

<CAPTION>
Period Ended
December 31,
1994***
-------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 10.00
Net investment income (a) 0.30
Net realized and unrealized
gains (losses) on investments (0.19)

Total from investment operations 0.11
Less distributions:
Dividends from net investment income (0.31)
In excess of net investment income --
Dividends from net realized gains (0.01)
In excess of net realized gains --
Total distributions (0.32)
Net asset value, end of year ($) 9.79
TOTAL RETURN:
Total investment return (%)(b) 1.10(c)**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 13,342
Ratio of net expenses to average
net assets (%) 1.00(d)*
Ratio of net investment income to 7.33(c)*
average net assets (%)
Portfolio turnover ratio (%) 94**
</TABLE>

* Annualized.
** Not Annualized.
*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during
the period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 0.82%,
0.86%, 0.94% and 1.60% (annualized), respectively.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.

<PAGE>
FINANCIAL HIGHLIGHTS

COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES
<TABLE>
<CAPTION>
Period Ended
December 31,
1998***
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ($) 10.00
Net investment income (a) 0.48
Net realized and unrealized losses on investments (0.74)
Total from investment operations (0.26)
Less distributions:
Dividends from net investment income (0.43)
In excess of net investment income (0.00)
Total distributions (0.43)
Net asset value, end of period ($) 9.31
TOTAL RETURN:
Total investment return (%) (b)(c) (2.57)**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 5,915
Ratio of expenses to average net assets (%) (d)(e) 0.80*
Ratio of net investment income to average net assets (%) (c)(e) 7.93*
Portfolio turnover ratio (%) 23**
</TABLE>

* Annualized.
** Not Annualized.
*** For the period from the commencement of operations May 19, 1998 to
December 31, 1998.
(a) Per share data was calculated using average shares outstanding during
the period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.84%
(annualized).
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
FINANCIAL HIGHLIGHTS

LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES

<TABLE>
<CAPTION>
Year Ended Period Ended
December 31, December 31,
1998 1997***
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 10.07 10.00
Net investment income (a) 0.06 0.01
Net realized and unrealized gains on investments 1.82 0.07
Total from investment operations 1.88 0.08
Less distributions:
Dividends from net investment income (0.05) (0.01)
In excess of net investment income (0.00) --
Total distributions (0.05) (0.01)
Net asset value, end of year ($) 11.90 10.07
TOTAL RETURN:
Total investment return (%)(b)(c) 18.67 0.80**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 44,870 22,228
Ratio of net expenses to average net assets (%) (d)(e) 1.00 1.00*
Ratio of net investment income to 0.54 0.83*
average net assets (%)(c)(e)
Portfolio turnover ratio (%) 70 1**
</TABLE>

* Annualized.
** Not Annualized.
*** For the period from the commencement of operations November 17, 1997 to
December 31, 1997.
(a) Per share data was calculated using average shares outstanding during
the period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.04% and
1.45% (annualized), respectively.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
FINANCIAL HIGHLIGHTS

NEWPORT TIGER FUND, VARIABLE SERIES
<TABLE>
<CAPTION>
Years Ended December 31, Period Ended
December 31,
1998 1997 1996 1995***
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ($) 1.71 2.52 2.28 2.00
Net investment income (a) 0.03 0.03 0.03 0.01
Net realized and unrealized gains (losses) on investments (0.14) (0.81) 0.24 0.29
and foreign currency transactions
Total from investment operations (0.11) (0.78) 0.27 0.30
Less distributions:
Distributions from net investment income (0.03) (0.02) (0.02) (0.01)
In excess of net investment income --- (0.01) --- (0.01)
Dividends from net realized gains --- --- (0.01) ---
In excess of net realized gains --- (0.00) --- ---
Total distributions (0.03) (0.03) (0.03) (0.02)
Net asset value, end of year ($) 1.57 1.71 2.52 2.28
TOTAL RETURN:
Total investment return (%)(b) (6.43) (31.14) 11.73 15.00**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ($) 23,655 24,934 34,642 18,977
Ratio of net expenses to average net assets (%)(c) 1.30 1.25 1.27 1.75*
Ratio of net investment income to average net assets (%)(c) 2.16 1.14 1.20 0.89*
Portfolio turnover ratio (%) 16 27 7 12**
</TABLE>

* Annualized.

** Not Annualized.

*** For the period from the commencement of operations May 1, 1995 to
December 31, 1995.

(a) Per share data was calculated using average shares outstanding during
the period.

(b) Total return at net asset value assuming all distributions reinvested.

<PAGE>
SHAREHOLDER INFORMATION

A Fund's foreign securities may trade on days when the NYSE is closed for
trading and Participating Insurance Companies may not purchase or redeem shares.

<PAGE>
FOR MORE INFORMATION
- -------------------------------------------------------------------------------
You can get more information about the Funds' investments in the Funds'
semi-annual and annual reports to shareholders. The annual report contains a
discussion of the market conditions and investment strategies that significantly
affected the Funds' performance over their last fiscal year.

You can get free copies of reports and the SAI, request other information and
discuss your questions about the Funds by writing or calling:

Keyport Financial Services Corp.
125 High Street
Boston, MA 02111
1-800-437-4466

or by calling or writing the Participating Insurance Company which issued your
VA contract or VLI policy.

Text-only versions of all Fund documents can be viewed online or downloaded from
the SEC at www.sec.gov.

You can review and copy information about the Funds by visiting the following
location, and you can obtain copies upon payment of a duplicating fee, by
writing the:

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-6009

Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.

INVESTMENT COMPANY ACT FILE NUMBER:

Liberty Variable Investment Trust: 811-07556

Stein Roe Global Utilities Fund, Variable Series

Colonial Small Cap Value Fund, Variable Series

Colonial U.S. Growth & Income Fund, Variable Series

Colonial Strategic Income Fund, Variable Series

Colonial High Yield Securities Fund, Variable Series

Liberty All-Star Equity Fund, Variable Series

Newport Tiger Fund, Variable Series

Colonial International Horizons Fund, Variable Series

Colonial Global Equity Fund, Variable Series

Crabbe Huson Real Estate Investment Fund, Variable Series