COLONIAL U.S. STOCK FUND, VARIABLE SERIES
Supplement to Prospectus dated May 1, 1999
1. Effective June 1, 1999, the Fund will change its name to Colonial U.S.
Growth & Income Fund, Variable Series.
2. Effective June 1, 1999, the Fund's investment goal will be changed
to seek long-term growth and income.
3. The section "The Funds" - "Colonial U.S. Stock Fund, Variable Series" -
"Primary Investment Strategies", is changed in its entirety as follows:
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:
o debt securities that are convertible into common stock
o corporate debt securities noted investment grade by at least two
nationally recognized rating organizations; and
o 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.
4. Under the section "The Funds" - "Colonial U.S. Stock Fund, Variable
Series" - "Primary Investment Risks", the second paragraph is changed
in its entirety as follows:
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.
5. Under the section "The Funds" - "Colonial U.S. Stock Fund, Variable
Series" - "Primary Investment Risks", two new paragraphs are added as
follows:
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.
June 1, 1999
