LIBERTY VARIABLE INVESTMENT TRUST, 497, 1999-11-05

LIBERTY VARIABLE INVESTMENT TRUST
497, 1999-11-05

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LIBERTY VARIABLE INVESTMENT TRUST

PROSPECTUS DATED MAY 1, 1999, REVISED NOVEMBER 8, 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

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

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

TRUST MANAGEMENT ORGANIZATIONS 19
- --------------------------------------------------------------------------------

Trustees................................................................... 19
Investment Advisor......................................................... 19
Investment Sub-Advisors and Portfolio Managers............................. 19

OTHER INVESTMENT STRATEGIES AND RISKS 22
- --------------------------------------------------------------------------------

Temporary Defensive Measures............................................... 22
U.S. Government Securities................................................. 22
Structure Risk............................................................. 22
Zero Coupon Bonds.......................................................... 22
Hedging Strategies......................................................... 23
Year 2000 Compliance....................................................... 23

FINANCIAL HIGHLIGHTS 24
- --------------------------------------------------------------------------------

SHAREHOLDER INFORMATION 31
- --------------------------------------------------------------------------------

Purchases and Redemptions.................................................. 31
How a Fund's Share Price is Determined..................................... 31
Dividends and Distributions................................................ 31
Tax Consequences........................................................... 31

<PAGE>
THE TRUST
---------

Liberty Variable Investment Trust ("Trust") includes twelve separate mutual
funds ("Funds"), each with its own investment goal and strategies. This
Prospectus contains information about seven of the 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 (Growth & Income Fund) Colonial Management Associates, Inc. (Colonial)
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)

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

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

Liberty All-Star Equity Fund, Variable Series (All-Star Equity Fund) Liberty Asset Management Company (LAMCO)
</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 underwriter of
the Funds is Liberty Funds Distributor, Inc. ("LFD"). LFD is an affiliate 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).

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 prevent the Fund from achieving its goals. It is possible to lose money by
investing in the Fund.

Utility company securities are subject to special risks. These securities are
especially affected by changes in interest rates, as well as by general
competitive and market forces in the industry. As interest rates increase, the
value of securities of utility companies tends to decrease, and vice versa. 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 market, economic or political conditions.

Foreign securities are subject to special risks. Foreign stock markets can be
extremely volatile. Fluctuations in currency exchange rates may impact the value
of foreign securities. 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. 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>
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
[GRAPHIC OF BAR CHART]

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.

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 prevent the Fund from achieving its goal. It is possible to lose money by
investing in the Fund.

Smaller companies are more likely than larger companies to have limited product
lines, operating histories, markets or financial resources. They may depend
heavily on a small management team. Stocks of smaller companies may trade less
frequently, in smaller volumes and fluctuate more sharply in price than stocks
of larger companies. In addition, they may not be widely followed by the
investment community, which can lower the demand for their stock.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions.

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.

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.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions. Market risk includes
interest rate risk.

Interest rate risk is the risk of a change 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.

Because the Fund may invest in debt securities issued by private entities,
including corporate bonds and privately issued mortgage-backed and asset-backed
securities, 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 may impact its ability to make timely payments of interest or principal.
This could result in a decrease in the price of the security.

<PAGE>
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
[GRAPHIC OF BAR CHART]

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 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.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions. Market risk includes
interest rate risk.

<PAGE>
Foreign securities are subject to special risks. Foreign stock markets can be
extremely volatile. Fluctuations in currency exchange rates may impact the value
of foreign securities. 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. 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.

Emerging markets are subject to additional risk. The risks of foreign
investments are typically increased in less developed countries, which are
sometimes referred to as emerging markets. 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.

Lower-rated debt securities involve greater risk of loss due to credit
deterioration and are less liquid, especially during periods of economic
uncertainty or change, than higher quality debt securities. Lower-rated debt
securities have the added risk that the issuer of the security may default and
not make payment of interest or principal.

<PAGE>
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

[GRAPHIC OF BAR CHART]

1995...........18.30%
1996........... 9.83%
1997........... 9.11%
1998........... 6.03%

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.

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.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions. Market risk includes
interest rate risk.

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.

- - TCW Funds Management, Inc. uses a "bottom-up" approach by investing in
primarily large-cap companies that have distinct business model advantages
and incorporates secular growth trends.

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>
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.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions. Market risk includes
interest rate risk.

<PAGE>
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

[graphic OF BAR CHART]

1998.......................18.67%

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>
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.

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 prevent the Fund from achieving its goal. It is possible to lose money by
investing in the Fund.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions. Market risk includes
interest rate risk.

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>
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

[graphic OF BAR CHART]

1996..........11.73%
1997.........-31.14%
1998......... -6.43%

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>
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>
<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>

(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%

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, Growth & Income Fund, Strategic Income Fund and High Yield 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.

<PAGE>
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%
</TABLE>

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

Mark Stoeckle has managed the Growth & Income 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 co-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.

Scott B. Richards has co-managed the High Yield Fund since May, 1999. Mr.
Richards is a Senior Vice President of Colonial. Prior to joining Colonial in
May, 1999, Mr. Richards was a Vice President and portfolio manager at State
Street Research & Management Company since 1994.

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.

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.

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.

<PAGE>
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.

- - Glen E. Bickerstaff, Managing Director of TCW Funds 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.

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

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.

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.

<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, the 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.

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>
HEDGING STRATEGIES
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, which are commonly referred to as derivatives, may
involve the use of financial instruments whose values depend on, or are derived
from the value of an underlying security, an index or a currency. A Fund may use
these strategies for hedging purposes (attempting to offset a potential loss in
one position by establishing an interest in an opposite position) or to adjust
the Fund's duration. Hedging strategies 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 hedging strategies 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

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>
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>
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>
COLONIAL STRATEGIC 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 ($) 11.15 11.04 10.99 9.79 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) 0.91 0.90 0.92 0.55 0.30
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments (0.24) 0.11 0.16 1.24 (0.19)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.67 1.01 1.08 1.79 0.11
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.72) (0.79) (0.96) (0.56) (0.31)
- ----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income (0.02) (0.05) --- --- ---
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gains --- (0.05) (0.07) (0.03) (0.01)
- ----------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gains --- (0.01) --- --- ---
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.74) (0.90) (1.03) (0.59) (0.32)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 11.08 11.15 11.04 10.99 9.79
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
Total investment return (%)(b) 6.03 9.11(c) 9.83(c) 18.30(c) 1.10(c)**
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) ($) 118,985 73,175 53,393 48,334 13,342
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net expenses to average net assets (%) 0.78(e) 0.80(d)(e) 0.80(d)(e) 0.84(d)(e) 1.00(d)*
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%) 7.92(e) 7.86(c)(e) 8.13(c)(e) 8.08(c)(e) 7.33(c)*
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover ratio (%) 50 94 114 281 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.

(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>
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>
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>
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 ($) 1.71 2.52 2.28 2.00
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) 0.03 0.03 0.03 0.01
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses) on investments
and foreign currency transactions (0.14) (0.81) 0.24 0.29
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.11) (0.78) 0.27 0.30
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income (0.03) (0.02) (0.02) (0.01)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income --- (0.01) --- (0.01)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gains --- --- (0.01) ---
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gains --- (0.00) --- ---
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.03) (0.03) (0.03) (0.02)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 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

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 A FUND'S SHARE PRICE IS DETERMINED Each share price is its NAV next
determined. 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