N-30D 1 file001.txt LIBERTY ACORN FAMILY OF FUNDS -------------------------------------------------------------------------------- Liberty Acorn Family of Funds 2 Class Z Shares Semiannual Report June 30, 2001 [GRAPHIC OMITTED] Managed by Liberty Wanger Asset Management, L.P. -------------------------------------------------------------------------------- Liberty Acorn Family of Funds Semiannual Report 2001 Table of Contents The Liberty Acorn Family of Funds Performance At A Glance 1 Squirrel Chatter: A Decision that Shaped the World 2 -------------------------------------------------------------------------------- Liberty Acorn Fund -------------------------------------------------------------------------------- In a Nutshell 4 At a Glance 5 Major Portfolio Changes 14 Statement of Investments 16 -------------------------------------------------------------------------------- Liberty Acorn International -------------------------------------------------------------------------------- In a Nutshell 6 At a Glance 7 Major Portfolio Changes 24 Statement of Investments 26 Portfolio Diversification 30 -------------------------------------------------------------------------------- Liberty Acorn USA -------------------------------------------------------------------------------- In a Nutshell 8 At a Glance 9 Major Portfolio Changes 31 Statement of Investments 32 -------------------------------------------------------------------------------- Liberty Acorn Foreign Forty -------------------------------------------------------------------------------- In a Nutshell 10 At a Glance 11 Major Portfolio Changes 35 Statement of Investments 36 Portfolio Diversification 38 -------------------------------------------------------------------------------- Liberty Acorn Twenty -------------------------------------------------------------------------------- In a Nutshell 12 At a Glance 13 Major Portfolio Changes 39 Statement of Investments 40 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds -------------------------------------------------------------------------------- Statements of Assets and Liabilities 42 Statements of Operations 43 Statements of Changes in Net Assets 44 Financial Highlights 48 Notes to Financial Statements 51 Liberty Acorn Family of Funds Information 55 Trustees, Officers and Contact Information 56 >2001 Mid-Year Distributions The following table details the funds' mid-year distributions. The record date was June 12, 2001 and the payable date was June 19, 2001.
Liberty Liberty Acorn Liberty Liberty Acorn Liberty Acorn Fund International Acorn USA Foreign Forty Acorn Twenty ---------------------------------------------------------------------------------------------------- Long-term Capital Gains $0.28 $0.39 None $0.08 None ---------------------------------------------------------------------------------------------------- Short-term Capital Gains None None None None None ---------------------------------------------------------------------------------------------------- Ordinary Income $0.02 None None $0.01 None ----------------------------------------------------------------------------------------------------
Notes On After-tax Returns and Tax Efficiency Included on each individual fund's "At A Glance" page, after-tax returns show the fund's annualized after-tax total return for the time period specified. After-tax returns with shares sold shows the funds' annualized after-tax total return for the time period specified plus the tax-effects of selling your shares of the fund at the end of the period. To determine these figures, distributions are treated as taxed at the maximum tax rate in effect at the time they were paid with the balance reinvested. These rates are currently 39.6% for income and short-term capital gain distributions. Long-term capital gains are currently taxed at a 20% rate. The tax rate is applied to distributions prior to reinvestment and the after-tax portion is reinvested in the fund. State and local taxes are ignored. The returns provided by Morningstar, Inc. are calculated in a consistent manner. Tax Efficiency is derived by dividing after-tax returns by pretax returns. The highest possible percentage would be 100%, which would apply to a fund that had no taxable distributions. Because many interrelated factors effect tax efficiency, it is difficult to predict tax efficiency. The discussion in this report of portfolio companies are for illustration only and are not recommendations of individual stock. The information is believed to be accurate, but the information and the views of the portfolio managers may change. The Liberty Acorn Family of Funds >Performance At A Glance Class Z Average Annual Total Returns through 6/30/01
2nd* Year to* 1 3 5 10 Life Quarter Date year years years years of Fund ---------------------------------------------------------------------------------------------------------------- Liberty Acorn Fund (6/10/70) 15.03% 9.08% 21.76% 14.97% 17.69% 19.03% 16.95% ---------------------------------------------------------------------------------------------------------------- S&P 500 5.85% -6.70% -14.83% 3.89% 14.48% 15.10% 13.36% ---------------------------------------------------------------------------------------------------------------- Russell 2000 14.29% 6.85% 0.57% 5.28% 9.60% 13.49% NA ---------------------------------------------------------------------------------------------------------------- Lipper Small Cap Core Funds Index 15.36% 6.59% 5.00% 7.67% 10.93% NA NA ---------------------------------------------------------------------------------------------------------------- S&P MidCap 400 13.16% 0.97% 8.87% 14.28% 18.54% 17.60% NA ---------------------------------------------------------------------------------------------------------------- Liberty Acorn International (9/23/92) -1.84% -13.94% -28.44% 5.71% 7.97% -- 12.80% ---------------------------------------------------------------------------------------------------------------- EMI Global ex-US 2.72% -7.22% -18.31% -1.06% -0.69% -- 4.71% ---------------------------------------------------------------------------------------------------------------- EMI World ex-US 3.04% -7.94% -17.64% -0.70% 0.12% -- 5.47% ---------------------------------------------------------------------------------------------------------------- EAFE -1.04% -14.61% -23.74% -1.23% 2.89% -- 7.14% ---------------------------------------------------------------------------------------------------------------- IFCI Composite 7.19% 1.98% -23.48% 2.48% -5.49% -- 3.27% ---------------------------------------------------------------------------------------------------------------- Lipper Int'l Small Cap Funds Index 2.86% -8.32% -21.31% 5.33% 5.88% -- NA ---------------------------------------------------------------------------------------------------------------- Liberty Acorn USA (9/4/96) 21.71% 26.04% 36.68% 9.50% -- -- 18.86% ---------------------------------------------------------------------------------------------------------------- Russell 2000 14.29% 6.85% 0.57% 5.28% -- -- 10.71% ---------------------------------------------------------------------------------------------------------------- Lipper Small Cap Core Funds Index 15.36% 6.59% 5.00% 7.67% -- -- 12.25% ---------------------------------------------------------------------------------------------------------------- S&P MidCap 400 13.16% 0.97% 8.87% 14.28% -- -- 19.62% ---------------------------------------------------------------------------------------------------------------- S&P 500 5.85% -6.70% -14.83% 3.89% -- -- 15.49% ---------------------------------------------------------------------------------------------------------------- Liberty Acorn Foreign Forty (11/23/98) 0.42% -20.49% -30.67% -- -- -- 13.06% ---------------------------------------------------------------------------------------------------------------- EAFE -1.04% -14.61% -23.74% -- -- -- -1.19% ---------------------------------------------------------------------------------------------------------------- SSB World ex-US Cap Range $2-10B 3.69% -8.32% -12.78% -- -- -- 3.73% ---------------------------------------------------------------------------------------------------------------- Lipper Int'l Funds Index 0.59% -12.53% -22.21% -- -- -- 1.89% ---------------------------------------------------------------------------------------------------------------- Liberty Acorn Twenty (11/23/98) 11.25% 3.61% 11.90% -- -- -- 19.86% ---------------------------------------------------------------------------------------------------------------- S&P MidCap 400 13.16% 0.97% 8.87% -- -- -- 17.22% ---------------------------------------------------------------------------------------------------------------- Lipper Mid Cap Core Funds Index 12.56% -0.33% -4.29% -- -- -- 16.55% ---------------------------------------------------------------------------------------------------------------- Russell 2000 14.29% 6.85% 0.57% -- -- -- 12.10% ---------------------------------------------------------------------------------------------------------------- S&P 500 5.85% -6.70% -14.83% -- -- -- 3.23% ----------------------------------------------------------------------------------------------------------------
*Quarterly and year-to-date numbers are not annualized. Past performance does not guarantee future results. Mutual fund performance changes over time. Please visit acornfunds.com for daily performance updates. The investment return and principal value of an investment in any Liberty Acorn Fund will fluctuate so that fund shares, when redeemed, may be worth more or less than their original cost. Description of indexes: S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. S&P Mid Cap 400 is a broad market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. Russell 2000 is an unmanaged, market-weighted index of 2000 smaller U.S. companies, formed by taking the largest 3,000 companies and eliminating the largest 1,000. EMI Global ex-US is an index of the bottom 20% of institutionally investable capital of developed and emerging countries, selected by index sponsor, outside the U.S. EMI World ex-US is an index of the bottom 20% of institutionally investable capital of developed countries, selected by index sponsor, outside the U.S. EAFE is Morgan Stanley's Europe, Australasia and Far East Index, an unmanaged, widely recognized international benchmark that comprises 20 major markets in proportion to world stock market capitalization. SSB World Ex-US Cap Range $2-$10 billion is a subset of Salomon Smith Barney's Broad Market Index, representing a mid-cap developed market index excluding the U.S. IFCI Composite is an index of 31 emerging markets which weights securities according to their market capitalization after adjusting for shares held by other constituents in the index. Lipper Indexes include the largest funds tracked by Lipper, Inc. in the named category. Lipper Mid Cap Core Funds Index -- 30 mid-cap core funds; Lipper International Funds Index -- 30 largest non-U.S. funds, not including non-U.S. small cap funds; Lipper International Small Cap Funds Index -- 10 largest non-U.S. funds investing in small cap companies, including Liberty Acorn International; Lipper Small Cap Core Funds Index -- 30 largest small cap core funds, including Liberty Acorn Fund. All indexes are unmanaged and returns include reinvested distributions. A more complete description of each index is included in the Liberty Acorn Funds statement of additional information. It is not possible to invest directly in an index. 1 >Squirrel Chatter: A Decision that Shaped the World [PHOTO OMITTED] In investing, business and everyday life, one well-timed decision can make all the difference. One little-remembered decision made 57 years ago changed history. In July 1944, the Democratic Convention met in Chicago to choose its presidential and vice-presidential candidates. The presidential choice was very easy; Franklin D. Roosevelt had completed three terms as president and merely had to agree to run to get the nomination. FDR's vice-presidential choice in 1940 had been Henry A. Wallace, who had proved himself intelligent, honest, a committed New Dealer, and highly popular with most Democrats. Wallace expected to be renominated easily. However, seemingly as an afterthought, Senator Harry S. Truman won the nomination instead of Wallace. How did the Truman nomination happen? Henry A. Wallace, 53, was tall, athletic, intense, and ideological, a true believer in the New Deal, and spokesman for the left wing of the Democratic Party. He had strong support from organized labor. His position on civil rights was exemplary, 20 years ahead of his time. An Iowan, he had been an editor (Wallaces' Farmer), businessman (a founder of Pioneer Hi-Bred Corn), and Secretary of Agriculture from 1932-1940. He was considered the best Secretary of Agriculture ever. In 1940, FDR picked him to be vice president. Most Americans, and Wallace himself, expected he would run as Roosevelt's vice president again in 1944. Wallace had a number of defects as a candidate. He was apolitical, having never run in an election until 1940. As vice president, he chaired the Senate, but clearly disliked the job, so he had poor relations with Capitol Hill. His civil rights stance was anathema to the Solid South Democratic stronghold. Worst of all, his ultra-liberal ideas and his uncritical acceptance of Communist support (even though Wallace himself was not a Communist) made him unacceptable to the majority of the country that distrusted "Uncle Joe" Stalin. The professional leaders of the Democrats decided that Wallace would cost the ticket too many votes in November. This group met with Roosevelt in the White House on July 11, 1944, only a few days before the convention. FDR's health was failing rapidly; he only worked 20 hours per week, and was unable to stay fully alert through a long meeting. The anti-Wallace group was: Ed Flynn, boss of the Bronx, organizer of the meeting; Frank Walker, postmaster general; Bob Hannegan, new chairman of the national committee; George E. Allen, party secretary; Ed Pauley, oil tycoon, friend of FDR, party treasurer, big contributor; Ed Kelly, mayor of Chicago, the host city for the convention. The goal was to stop Wallace; the group had a number of replacements that they would have accepted. By the end of the evening, all agreed that Truman would be the best candidate. On the plus side, Truman was honest, bright, sensible, decisive, and hard working. His 10 years in the Senate ensured cordial relations with the legislative branch. He had few enemies. The Truman committee had investigated waste, corruption, and mismanagement in defense procurement, and got high marks for effectiveness and fairness, causing Time magazine to name him the most outstanding member of the Senate. There was still a lot of work to do to get Truman in. The next step was to eliminate other candidates who might split the anti-Wallace vote. That meant getting Jimmy Byrnes out of the race. Byrnes was a distinguished politician who had been congressman, senator, Supreme Court justice, and "assistant president" to FDR; in the future he would be Truman's secretary of state and governor of Byrnes' beloved South Carolina. Hannegan wrecked his candidacy by telling a meeting on July 16 that the president had said, "Clear it with Sidney." Sidney was Sidney Hillman, vice president of the CIO, a major contributor to the Democratic party. (He invented the PAC.) Hillman considered Byrnes anti-labor. Hillman also opposed the segregationist position of Byrnes and every Southern Democrat. Byrnes was forced to drop out. The next problem was getting Truman to run. He was reluctant to leave the Senate, and in fact was planning to make Byrnes' nominating speech. Roosevelt and Hannegan had a phone conversation with Truman listening, and Harry Truman followed FDR's decision to put him on the ticket. The convention vote was up for grabs. Wallace had a near majority of delegates in his favor, and his plan was to stampede the convention. After Roosevelt had been renominated, a formality, Wallace supporters packed the galleries, many using fake tickets. Their goal was to nominate and elect Wallace that night. The hall was in pandemonium, but before the Wallace forces could act, Hannegan's assistants adjourned the convention. The pros kept control. 2 The next morning was the vice-presidential ballot. To win, one needed 589 votes. The party bosses made sure that enough favorite sons were nominated to keep Wallace from a first-ballot victory, and the tactic worked. Wallace got an impressive but insufficient 429 1/2 votes to Truman's 319 1/2. On the second ballot, the favorite sons switched to Truman, and the nomination went to Harry S. Truman by a landslide. The party insiders had won. The Democrats won a solid victory in November, concealing the failing health of FDR. Party Chairman Robert Hannegan, for instance, insisted, "The President is very vigorous, the picture of health." FDR's doctor, Admiral Ross McIntire, told the New York Times: "The President's health is perfectly OK." In fact, the party leadership knew that FDR could not possibly live out a fourth term. It was obvious to many, but not all, of the delegates to the July convention that they were nominating two presidents, not just one. FDR died of a massive stroke only 82 days into his fourth term, making Truman the president. What would have happened if Wallace had converted his first ballot lead at the convention into a majority vote on the second ballot? As vice-presidential candidate, he would have been more controversial than Truman. The Democratic Party would have lost some votes, especially in the South, but few elections are changed by the vice-presidential nominee, so it is probable that Roosevelt still would have defeated Dewey. Therefore, Wallace would have become President in April 1945. At that time, Germany was within weeks of surrender. The Soviet Army had liberated Eastern Europe from the Nazis but Stalin was setting up Communist puppet regimes in Poland, Rumania, Bulgaria, and Czechoslovakia; the three Baltic states were made parts of the USSR. France and Italy were ruined by war and had large Communist parties that had hopes of taking over. Germany had had its factories and housing destroyed, and was divided into four zones of occupation. We don't know what Wallace would have done as President, but we do know how he reacted to Truman's foreign policy. When Harry Truman became president, he faced plenty of obstacles. He had been a dirt farmer in Missouri and had no college education at all. FDR never liked him, so Truman had had no briefings of any sort about American war plans, the atom bomb, or the Teheran and Yalta Conferences with Stalin. The Democratic Party was leaderless and factionalized, with an extreme left wing represented by Wallace, a conservative segregationist Southern wing, and a moderate center. The war was still on. The Japanese were militarily in a hopeless position but capable of inflicting heavy casualties on the planned American invasion. From the beginning, Truman listened to diplomats such as George Kennan and Chip Bohlen who counseled him to take a realistic, tough stance toward Stalin. Wallace was troubled by Truman's intransigence, which started in April 1945 in a conversation between Truman and Molotov. In December 1945, Britain asked for a $4 billion reconstruction loan; Wallace advocated an equal loan to Russia. In March 1946, Churchill made his "Iron Curtain" speech; Wallace opposed the USA and UK "ganging up." In March 1947, Truman called for $400 million in military aid to Greece and Turkey to fight Communist armed factions, a crucial step in keeping Greece in the Free World; Wallace opposed it. In June 1947, George Marshall suggested massive aid to Western Europe; Wallace, by then openly the leader of the Progressive Citizens of America, came out against the Marshall Plan. The American left split in early 1947, with the non-Communists forming Americans for Democratic Action; Wallace's Progressives became dominated by Communists. One might well conclude that Truman's common sense and decisiveness kept Western Europe in the Free World, so that 50 years later the Iron Curtain would disintegrate in favor of a peaceful, free Europe. If Wallace's soft line had prevailed, Soviet domination of all of Europe would have locked hundreds of millions in tyranny and put the United States in a position of military inferiority with unknowable consequences. /s/ Ralph Wanger Ralph Wanger Chief Investment Officer, Liberty Wanger Asset Management, L.P. Lead Portfolio Manager, Liberty Acorn Fund -------------------------------------------------------------------------------- Culver & Hyde, American Dreamer: A Life of Henry A. Wallace, W.W. Norton, New York, 2000. Ferrell, Choosing Truman: The Democratic Convention of 1944, University of Missouri, Columbia, MO, 1994. Fleming, The New Dealers War: FDR and the War Within World War II, Basic Books, New York, NY, 2001. McCullough, Truman, Touchstone, New York, NY, 1992. 3 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >In a Nutshell [PHOTO OMITTED] [PHOTO OMITTED] Liberty Acorn Fund jumped 15.03% in the second quarter. This return about matched the small-cap indexes and easily beat the large-cap S&P 500 Index. (See page 1 for performance data). Financial services stocks were the Fund's strongest sector in the quarter. Used car lender and Liberty Acorn Fund's largest holding, AmeriCredit, accelerated 60%. Excellent profit growth was driven by lower costs of funds, as short-term interest rates fell. In addition, loan prices strengthened as several competitors exited the business. Money management firms SEI and Affiliated Managers Group appreciated 52% and 31%, respectively, helped by the recovery in the stock market. Credit card processing companies Global Payments and Concord EFS were fine performers. Global Payments, which spun out from long-time Liberty Acorn holding National Data in January, surged 60%. Concord EFS, spurred by good earnings growth, rose 37%. National Data, now consisting of health claims processing and drug marketing databases, soared 39%. Liberty Acorn USA manager Rob Mohn has liked credit card processing companies for a long time because he believes they benefit from declining costs and improved performance of computers. Video game software companies Activision and THQ continued their winning streaks. Both premiered exciting new programs at the E3 trade show during the quarter. Activision's extreme sports line spurred an extremely good stock, up 62%, and THQ's shooting game, Red Faction, helped shoot its stock up 61% this quarter. ITT Educational Services posted a 66% gain on solid earnings and enrollment growth was better than expected. Monaco Coach rode 85% higher in the quarter, helped by market share gains and declining gasoline prices. We had some losers in the quarter, but they were generally small holdings. The biggest dollar loser, XTO Energy (formerly known as Cross Timbers Oil) gave up 13%, declining with natural gas prices. The stock has been an excellent long-term holding. Liberty Acorn Fund was ranked 1 of all funds in the Lipper Small-Cap Core Funds category for the 10-year period ended June 30, 2001.(1) Liberty Acorn's impressive long-term record is due to having strong stocks in many industries. As examples, financial service stocks have been wonderful this year, energy and biotech drove performance last year, and media, telecom and foreign stocks boosted the fund in 1999. We don't know which industry will be hot in the future, so we continue to look for what we believe to be excellent investments across many areas. /s/ Ralph Wanger /s/ Charles P. McQuaid Ralph Wanger Charles P. McQuaid Lead Portfolio Manager Co-Portfolio Manager ================================================================================ Expeditors International -------------------------------------------------------------------------------- Delivers Expeditors provides freight forwarding services through more than 100 offices worldwide. The company's broad, internally developed network allows it to service freight from pickup through delivery, unlike many competitors, who rely on other forwarders to complete the shipment. We believe Expeditors benefits from a few themes we've identified, including lower computer costs and outsourcing. Expeditors is well managed, and provides strong incentives to employees. When demand is strong, unit volumes drive profits. When demand is weak, the cost of purchased transportation tends to fall faster than Expeditors' rates, allowing margin gains. Expeditors was introduced to us by a regional broker over 10 years ago. The Fund has owned it ever since, adding to the position when startup costs or economic factors temporarily slowed earnings and depressed the stock, and trimming when the stock seemed to be ahead of itself. Expeditors is up over 10-fold from the Fund's average cost. ================================================================================ (1) For the period ended June 30, 2001, the Fund ranked 34 of 240 funds for the 1-year period, 10 of 82 funds for the 5-year period, and 1 of 19 funds for the 10-year period in the Lipper Small-Cap Core Funds category. Past performance does not guarantee future results. Small-cap stocks are often more volatile and less liquid than the stocks of larger companies. Small companies may have a shorter history of operations than larger companies and may have a less diversified product line, making them more susceptible to market pressure. Investments in foreign securities have special risks, including political or economic instability, higher costs, different regulations, accounting standards, trading practices and levels of information, and currency exchange rate fluctuations. As of 6/30/01 the Fund's positions in the holdings mentioned were: AmeriCredit, 4.3%; SEI Investments, 2.2%; Affiliated Managers Group, 1.5%; Global Payments, 0.9%; Concord EFS, 0.8%; National Data, 1.3%; Activision, 0.4%; THQ, 0.9%; ITT Educational Services, 1.3%; Monaco Coach, 0.4%; XTO Energy, 1.7%; Expeditors International, 1.9%. 4 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >At a Glance Ticker Symbol: ACRNX Pretax and After-tax Average Annual Total Returns (Class Z) -------------------------------------------------------------------------------- >Through June 30, 2001
============================================================================================== 1 Year 5 Years ============================================================================================== After-tax w/ Tax After-tax w/ Tax Pretax After-tax shares sold Efficiency Pretax After-tax shares sold Efficiency ------------------------------------------------------------------------------------------------------------------ Liberty Acorn Fund 21.76% 18.56% 15.25% 85.3% 17.69% 14.36% 13.71% 81.2% ------------------------------------------------------------------------------------------------------------------ Small Blend Category Avg.* 13.54% 10.84% NA 80.0%+ 12.55% 10.09% NA 80.4%+ ------------------------------------------------------------------------------------------------------------------ Small Growth Category Avg.* -16.05% -19.29% NA NM 10.20% 7.15% NA 70.0%+ ------------------------------------------------------------------------------------------------------------------ ============================================= 10 Years ============================================= After-tax w/ Tax Pretax After-tax shares sold Efficiency ----------------------------------------------------------------- Liberty Acorn Fund 19.03% 16.46% 15.58% 86.5% ----------------------------------------------------------------- Small Blend Category Avg.* 14.54% 11.75% NA 80.8%+ ----------------------------------------------------------------- Small Growth Category Avg.* 14.32% 11.56% NA 80.7%+ -----------------------------------------------------------------
* Source: Morningstar, Inc. The Fund has regularly appeared in either Morningstar category shown. + Calculated by Liberty Wanger Asset Management using Morningstar data. "NA" indicates information not available from Morningstar. Morningstar does not provide after-tax w/ shares sold returns. "NM" means data is not meaningful because returns were negative. If you own the Fund in a tax-deferred account such as an IRA or a 401(k), this information does not apply to you. Your actual after-tax returns depend on your tax situation and will differ from those shown. After-tax returns reflect past tax-effects and are not predictive of future tax effects. See inside front cover of this report for further explanation. -------------------------------------------------------------------------------- Liberty Acorn Fund Portfolio Diversification -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2001 [The following table was depicted as a pie chart in the printed material.] 24.8% Information Software & Services 12.8% Computer Related Hardware 7.3% Media 2.7% Telecommunications 2.0% 9.3% Other* 5.5% Real Estate 7.4% Industrial Goods/Services 7.5% Health Care 17.6% Finance 16.4% Consumer Goods/Services 11.5% Energy/Minerals * Other includes cash and other assets less liabilities of 8.2%. Foreign equities within the portfolio were 7.5% diversified by country as follows: 4.2% Europe; 2.0% Canada; 0.7% Asia without Japan; 0.5% Australia; 0.07% Japan and 0.05% Latin America. -------------------------------------------------------------------------------- The Value of a $10,000 Investment in Liberty Acorn Fund -------------------------------------------------------------------------------- >June 10, 1970 through June 30, 2001 This graph compares the results of $10,000 invested in the Liberty Acorn Fund on June 10, 1970 (the date the Fund shares were first offered to the public) to the S&P 500 Stock Index. The S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Performance changes over time. Visit libertyfunds.com for daily updates. Liberty Acorn Fund NAV on 6/30/01: $18.47 Total Net Assets: $4,620.4 million Average Annual Total Return -------------------------------------------------------------------------------- 6 months 1 Year 5 Years 10 Years Life of Fund 9.08% 21.76% 17.60% 19.03% 16.95% [The following table was depicted as a mountain chart in the printed material.] Plot points to come Liberty Acorn Fund $1,293,236 S&P 500 $491,427 *Not Annualized -------------------------------------------------------------------------------- Liberty Acorn Fund Top 10 Holdings -------------------------------------------------------------------------------- 1. AmeriCredit 4.3% Auto Lending 2. International Game Technology 2.8% Slot Machines & Progressive Jackpots 3. SEI Investments 2.2% Mutual Fund Administration & Investment Management 4. Expeditors International of Washington 1.9% International Freight Forwarder 5. First Health Group 1.7% PPO Network 6. XTO Energy 1.7% Natural Gas Products 7. Harley-Davidson 1.5% Motorcycles & Related Merchandise 8. Affiliated Managers Group 1.5% Mutual Fund Administration & Investment Management 9. Dynegy 1.4% Natural Gas & Electric Processing, Production and Marketing 10. Anchor Gaming 1.3% Slot Machines & Casinos The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. -------------------------------------------------------------------------------- 5 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Liberty Acorn International >In a Nutshell [PHOTO OMITTED] Liberty Acorn International lost 1.84% in the second quarter, slightly worse than its peers, which were on average flat for the period. Year-to-date, the Fund is down 13.94%. By comparison, the Lipper International Small-Cap Funds Index slid 8.32% in the first half, and the EAFE Index declined 14.61%. Obviously, it has been difficult this year to make money with international stocks. The strong dollar has been a major handicap. Adverse currency moves account for 56% of Liberty Acorn International's losses this quarter, and 40% of losses year-to-date. Because so much of the Fund is invested in Europe, the weakness of the Euro has been key. The standard measures of economic performance -- interest rate differentials, money supply, the trade balance -- led many experts to predict that the dollar would have weakened by now. But sentiment has strongly favored the dollar as the world's ultimate reserve currency in times of economic uncertainty. The other leading problem has been profit warnings. Technology company earnings continue to disappoint analysts, despite lowered expectations. The latest casualties have been so-called 'safe haven stocks' in sectors extending well beyond technology. The Fund's worst performing holding this quarter was the Dutch office supplies distributor Buhrmann, profiled on this page in the year-end report. Its Corporate Express division is still #1 in the world, but its share price could not withstand two consecutive profit warnings. Hays, a respected UK logistics and staffing company, also collapsed after guiding earnings expectations downward. Anyone who owns stocks has to expect some blow-ups. But the frequency and magnitude of profit shortfalls in the current environment is usually associated with recessions. The U.S. economy came off sharply. Growth has slowed from over 6% a year ago to near zero today. The rest of the world is not immune to this reversal under conditions of globalization. We believe two patterns of market behavior are worth remembering in this context. First, stock prices generally turn around ahead of economic fundamentals. Second, periods of poor performance have historically been followed by the opposite. We believe international funds should be beneficiaries of a turnaround in profits and currency values. The Fund owns many of the same companies that produced strong returns in the past. Prices have been marked down a lot, but the strengths that attracted us to the companies haven't changed. When possible, we take advantage of opportunities to upgrade the quality of our holdings. /s/ Leah Joy Zell Leah Joy Zell Lead Portfolio Manager ================================================================================ Kempen & Co. -------------------------------------------------------------------------------- Part II Back in 1998, in our second quarter letter to shareholders, we profiled Kempen & Co, a promising Dutch merchant bank. Established as a securities brokerage firm in 1903, Kempen specialized in providing brokerage services, corporate finance and asset management. A relatively small player in a market dominated by larger international banks, the firm grew by remaining focused on core strengths, eventually becoming the leading Dutch broker in small- and mid-cap mutual funds. Originally purchased for Liberty Acorn International in 1995, the position grew to become the fourth largest holding in the Fund. By mid-1998, the Fund's investment had appreciated six-fold. In this sequel, we are happy to report that on May 22, Dexia Group, a French-Belgian bank, agreed to acquire Kempen for a 36% premium. The deal enables Kempen to add to its position in European securities and capital markets, and also gives them a great opportunity to grow and become a European equity specialist. This was a great stock for Liberty Acorn International. Since the Fund's initial position in 1995, it appreciated 45% annually. The Fund received cash for its Kempen shares. ================================================================================ Investments in foreign securities have special risks, including political or economic instability, higher costs, different regulations, accounting standards, trading practices and levels of information, and currency exchange rate fluctuations. Small-cap stocks are often more volatile and less liquid than the stocks of larger companies. Small companies may have a shorter history of operations than larger companies and may have a less diversified product line, making them more susceptible to market pressure. As of 6/30/01 the Fund's positions in the holdings mentioned were: Buhrmann, 0.4%; Hays, 0.6%; Kempen & Co., 0.0%; Dexia, 0.0%. 6 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Liberty Acorn International >At a Glance Ticker Symbol: ACINX Pretax and After-tax Average Annual Total Returns (Class Z) -------------------------------------------------------------------------------- >Through June 30, 2001
---------------------------------------------------------------------------------------------- 1 Year 5 Years ---------------------------------------------------------------------------------------------- After-tax w/ Tax After-tax w/ Tax Pretax After-tax shares sold Efficiency Pretax After-tax shares sold Efficiency ------------------------------------------------------------------------------------------------------------------ Liberty Acorn International -28.44% -30.50% -14.54% NM 7.97% 6.20% 6.43% 77.8% ------------------------------------------------------------------------------------------------------------------- Foreign Stock Category Avg.* -24.40% -26.16% NA NM 4.68% 2.82% NA 60.3%+ ------------------------------------------------------------------------------------------------------------------- --------------------------------------------- Life of Fund --------------------------------------------- After-tax w/ Tax Pretax After-tax shares sold Efficiency ----------------------------------------------------------------- Liberty Acorn International 12.80% 11.71% 10.91% 91.5% ----------------------------------------------------------------- Foreign Stock Category Avg.* NA NA NA NA -----------------------------------------------------------------
* Source: Morningstar, Inc. + Calculated by Liberty Wanger Asset Management using Morningstar data. "NA" indicates information not available from Morningstar. Morningstar does not provide Life of Fund data or after-tax w/ shares sold returns. "NM" means data is not meaningful because returns were negative. If you own the Fund in a tax-deferred account such as an IRA or a 401(k), this information does not apply to you. Your actual after-tax returns depend on your tax situation and will differ from those shown. After-tax returns reflect past tax-effects and are not predictive of future tax effects. See inside front cover of this report for further explanation. -------------------------------------------------------------------------------- Liberty Acorn International Portfolio Diversification -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2001 [The following table was depicted as a pie chart in the printed material.] 16.3% Business Services 14.3% Other* 4.6% Other Industries 1.3% Telecommunications 1.6% Computer Software 0.9% Computer Hardware 2.5% Technology Services 6.4% Energy 14.8% Consumer Goods & Services 10.6% Financials 10.5% Industrials 8.0% Broadcasting & Media Content 8.2% Health Care *Cash and other assets less liabilities. -------------------------------------------------------------------------------- The Value of a $10,000 Investment in Liberty Acorn International -------------------------------------------------------------------------------- >September 23, 1992 through June 30, 2001 This graph compares the results of $10,000 invested in Liberty Acorn International on September 23, 1992 (the date Fund shares were first offered to the public) with the EMI Global ex-U.S. and the EMI World ex-U.S. The EMI Global ex-U.S. is Salomon Smith Barney's index of the bottom 20% of institutionally investable capital of developed and emerging countries, as selected by Salomon, excluding the U.S. The EMI World ex-U.S. is Salomon's index of the bottom 20% of institutionally investable capital of developed countries outside the U.S. The indexes are unmanaged and returns for the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Performance changes over time. Visit libertyfunds.com for daily updates. Liberty Acorn International NAV as of 6/30/01: $20.15 Total Net Assets: $2,062.5 million Average Annual Total Return -------------------------------------------------------------------------------- 6 months* 1 Year 5 Years Life of Fund -13.94% -28.44% 7.97% 12.80% [The following table was depicted as a mountain chart in the printed material.] Plot points to come Liberty Acorn International $28,747 EMI World ex-US $15.957 EMI Global ex-US $14,974 *Not Annualized -------------------------------------------------------------------------------- Liberty Acorn International Top 10 Holdings -------------------------------------------------------------------------------- 1. Rhoen-Klinikum (Germany) 2.5% Hospital Management 2. Li & Fung (Hong Kong) 2.4% Sourcing of Consumer Goods 3. Autogrill (Italy) 2.4% Restaurants & Catering for Travelers 4. Serco Group (United Kingdom) 2.1% Facilities Management 5. Irish Life & Permanent (Ireland) 1.7% Life Insurance & Savings Products 6. Orix (Japan) 1.7% Leasing & Other Financial Services 7. Capita Group (United Kingdom) 1.6% Outsourcing Services 8. Amdocs (Israel) 1.6% Telecommunications Billing & Customer Care Software 9. Cie Fin Richemont (Switzerland) 1.6% Luxury Goods 10. Star Cruises (Singapore) 1.3% Cruise Line The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. -------------------------------------------------------------------------------- 7 -------------------------------------------------------------------------------- U -------------------------------------------------------------------------------- Liberty Acorn USA >In a Nutshell [PHOTO OMITTED] Liberty Acorn USA gained 21.71% over the three months ended June 30, 2001, outpacing the 14.29% gain of the Russell 2000 and the 15.36% return of the Lipper Small-cap Core Index. For the one-year period ended June 30, the Fund was up 36.68% while the Russell 2000 was nearly flat, up 0.57%. The big winners for the quarter came from among the largest positions in the Fund. In March, auto lender AmeriCredit announced its eleventh straight quarter of earnings growth over 20% and, for this most recent quarter, earnings growth topped 70%. ITT Educational Services is a newer name to the portfolio and has been a significant contributor. The stock saw strong gains as enrollment growth nearly doubled expectations. Magellan Health Services, a home health-care service provider, benefited from increased profits that led this highly leveraged company to a healthy 38% gain over the three month period. The Fund's outperformance also can be attributed to a bottom-up investment approach that has led the investment team to niche companies that have been able to withstand sector volatility. We look for companies that are not impacted by industry factors; companies that operate to some extent in their own individual industries. For example, CACI International is a technology services company stock. IT consulting companies like CACI have been hammered as contracts slowed post-Y2K and after the technology bubble burst. But CACI was relatively unaffected by all of this. Why? Because the majority of its business is with the Department of Defense, a consistent provider of business for a company that specializes in defense-oriented technology needs. CACI's 10%-a-year earnings growth was not enough to catch the markets' attention during the technology glory days but now that the tides have turned, the stock has more than doubled in price as investors have begun to take notice. While it was a strong quarter for the Fund, the portfolio did have a few laggards. They included Gadzooks, a teen clothing retailer that declined on news of same-store sales weakness. Maverick Tube, a manufacturer of steel pipes used in oil and gas wells, was also down, falling with the energy sector as oil prices declined. Small caps were once again well ahead of large caps in the quarter. The S&P 500 was up 5.85% while the Russell 2000 Index returned 14.29%. We are only three quarters into what appears to be an up-cycle for small caps. Historically these cycles have tended to last for multi-year periods. We believe small-cap stock valuations are still cheap compared to large caps. With these factors in place, we believe the future of small-cap stocks continues to be very promising. /s/ Robert A. Mohn Robert A. Mohn Lead Portfolio Manager ================================================================================ Salem Communications -------------------------------------------------------------------------------- Tunes In Gains Salem Communications operates 80 radio stations in the United States. Salem is unique, however, in that it is the only top radio company that focuses on religious programming, the third most popular format in the industry. While other radio stations pay for programming, Salem is paid by over 100 religious organizations to broadcast their programs. Such payments account for half of Salem's revenues, and are highly recurring as over 95% of programming contracts are renewed. As with most radio stations, Salem's other major source of revenue is advertising. During the Internet stock boom, many radio stations benefited from the influx of Internet company advertising dollars. Because of this, radio stocks traded like tech stocks as a "downstream" beneficiary of the Internet run-up. Salem's format did not appeal to Internet advertisers, however, so earnings at Salem were not helped -- or later hurt -- by the dot-com ad spending. The Fund started buying the stock early last year when it was cast aside with the other radio stations now hurt by the technology bust. As the market has begun to recognize the value in this niche leader, the stock price is on the rise, up nearly 44% in the first half of this year. ================================================================================ Small-cap stocks are often more volatile and less liquid than the stocks of larger companies. Small companies may have a shorter history of operations than larger companies and may have a less diversified product line, making them more susceptible to market pressure. As of 6/30/01 the Fund's positions in the holdings mentioned were: AmeriCredit, 8.4%; ITT Educational Services, 4.9%; Magellan Health Services, 3.9%; CACI International, 2.0%; Salem Communications, 2.6%; Gadzooks, 1.6%; Maverick Tube, 0.8%. 8 -------------------------------------------------------------------------------- U -------------------------------------------------------------------------------- Liberty Acorn USA >At a Glance Ticker Symbol: AUSAX Pretax and After-tax Average Annual Total Returns (Class Z) -------------------------------------------------------------------------------- >Through June 30, 2001
---------------------------------------------------------------------------------------------- 1 Year 3 Years ---------------------------------------------------------------------------------------------- After-tax w/ Tax After-tax w/ Tax Pretax After-tax shares sold Efficiency Pretax After-tax shares sold Efficiency ------------------------------------------------------------------------------------------------------------------ Liberty Acorn USA 36.68% 36.68% 22.16% 100.0% 9.50% 8.11% 7.34% 85.4% ------------------------------------------------------------------------------------------------------------------- Small Blend Category Avg.* 13.54% 10.84% NA 80.0%+ 8.46% 6.67% NA 78.8%+ ------------------------------------------------------------------------------------------------------------------- --------------------------------------------- Life of Fund --------------------------------------------- After-tax w/ Tax Pretax After-tax shares sold Efficiency ----------------------------------------------------------------- Liberty Acorn USA 18.86% 17.70% 15.53% 93.9% ----------------------------------------------------------------- Small Blend Category Avg.* NA NA NA NA -----------------------------------------------------------------
* Source: Morningstar, Inc. + Calculated by Liberty Wanger Asset Management using Morningstar data. "NA" indicates information not available from Morningstar. Morningstar does not provide Life of Fund data or after-tax w/ shares sold returns. If you own the Fund in a tax-deferred account such as an IRA or a 401(k), this information does not apply to you. Your actual after-tax returns depend on your tax situation and will differ from those shown. After-tax returns reflect past tax-effects and are not predictive of future tax effects. See inside front cover of this report for further explanation. -------------------------------------------------------------------------------- Liberty Acorn USA Portfolio Diversification -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2001 [The following table was depicted as a pie chart in the printed material.] 33.4% Information Software & Services 19.5% Telecommunications 6.5% Media 4.6% Computer Related Hardware 2.8% 14.1% Other* 5.4% Industrial Goods/Services 15.6% Health Care 12.5% Finance 9.7% Consumer Goods/Services 9.3% Energy/Minerals *Other includes cash and other assets less liabilities of 9.6%. -------------------------------------------------------------------------------- The Value of a $10,000 Investment in Liberty Acorn USA -------------------------------------------------------------------------------- >September 4, 1996 through June 30, 2001 This graph compares the results of $10,000 invested in Liberty Acorn USA on September 4, 1996 (the date Fund shares were first offered to the public) to the Russell 2000 Index. The Russell 2000 is a market-weighted index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S. companies and eliminating the largest 1,000. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Performance changes over time. Visit libertyfunds.com for daily updates. Liberty Acorn USA NAV as of 6/30/01: $18.78 Total Net Assets: $279.7 million Average Annual Total Return -------------------------------------------------------------------------------- 6 months* 1 Year 5 Year Life of Fund 26.04% 36.68% 9.50% 18.86% [The following table was depicted as a mountain chart in the printed material.] Plot points to come Liberty Acorn USA $23,009 Rusell 2000 $16,331 *Not Annualized -------------------------------------------------------------------------------- Liberty Acorn USA Top 10 Holdings -------------------------------------------------------------------------------- 1. AmeriCredit 8.4% Auto Lending 2. ITT Educational Services 4.9% Technology-oriented Postsecondary Degree Programs 3. TDS 4.3% Cellular & Telephone Services 4. Conectiv 4.0% Electric Utility in New Jersey, Delaware & Maryland 5. Micros Systems 4.0% Information Systems for Restaurants & Hotels 6. Magellan Health Services 3.9% Mental Health Services 7. JDA Software 3.5% Applications/Software & Services for Retailers 8. National Data 3.1% Credit Card & Health Claims Processor 9. Lincare Holdings 2.9% Home Health Care Services 10. Edwards Lifesciences 2.6% Heart Valves The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. -------------------------------------------------------------------------------- 9 -------------------------------------------------------------------------------- F40 -------------------------------------------------------------------------------- Liberty Acorn Foreign Forty >In a Nutshell [PHOTO OMITTED] During the quarter, international markets rallied briefly in April before continuing their downward trek in May and June. Declines of international currencies, relative to the U.S. dollar, also reduced international returns for U.S. investors. Liberty Acorn Foreign Forty ended the quarter virtually unchanged, up 0.42%. By comparison, large-cap international stocks were down slightly (EAFE was off 1.04%), while mid-cap international stocks saw modest gains (SSB World ex US increased 3.69%) for the three months. Individual stock news, as opposed to sector activity, drove share prices causing the Fund to have both winners and losers in the same market segments. For example, Canadian oil and gas company Talisman rallied in the quarter while Canada's Precision Drilling fell. Both energy companies continued to report record earnings. Precision Drilling, however, declined because investors thought that drilling for natural gas might slow down. In technology, Canadian electronic manufacturing services company Celestica performed well after announcing strong first quarter results in a weak market environment. On the negative side, Gemplus, a French smart card company, declined due to slowing sales. In health care, UK's Smith & Nephew, a medical equipment supplier, increased on continued earnings strength. On the other hand, German hospital management company Rhoen-Klinikum came off sharply due to concerns about Germany's plans to reduce health care funding. Among our financial stocks, Irish Life & Permanent rallied while Fortis in the Netherlands declined. So far this year, international markets have been difficult. Going forward, we see reasons for optimism as we believe international markets now represent excellent bargains for investors. In many cases, company share prices are back to where they were three to four years ago. However, because many of these same companies have grown their profits over that same time period, the price-to-earnings ratios are now lower than they were several years ago. Furthermore, interest rates are lower than they were a few years back. We are starting to increase some positions in the Fund and are buying new names that we believe are good values and have the potential to grow. /s/ Marcel P. Houtzager Marcel P. Houtzager Lead Portfolio Manager ================================================================================ Synthes Stratec's -------------------------------------------------------------------------------- Strategy Synthes Stratec commands a leading global position in developing and manufacturing implants used in orthopedic trauma surgery. As we live longer and subject our aging bones to pursuits that used to be off limits to folks with a few gray hairs, demand for Synthes Stratec's products increases. Moreover, the Swiss company's focus on designing implants that facilitate faster surgical procedures and post-operation recovery is appreciated by cost-conscious hospitals. This helps explain why Synthes Stratec continues to take market share from its competitors. We also like the fact that in the first half of the year over a quarter of its revenues were generated by products introduced in the last three years. We are believers in Synthes Stratec's ability to maintain its innovative edge, and correspondingly high margins. While the stock was up more than 16% during the second quarter, it still trades at a discount to slower growing, less profitable U.S. orthopedic companies. ================================================================================ Liberty Acorn Foreign Forty is a non-diversified fund. The performance of its holdings will have a greater impact on the Fund's total return, and may make the Fund's returns more volatile than a more diversified fund. Mid-cap stocks tend to be more volatile and may be less liquid than the stocks of larger companies. Investments in foreign securities have special risks, including political or economic instability, higher costs, different regulations, accounting standards, trading practices and levels of information, and currency exchange rate fluctuations. As of 6/30/01 the Fund's positions in the holdings mentioned were: Talisman, 3.1%; Precision Drilling, 2.9%; Celestica, 0.7%; Gemplus, 0.0%; Smith & Nephew, 2.2%; Rhoen-Klinikum, 3.4%; Irish Life & Permanent, 4.0%; Fortis, 2.9%; Synthes Stratec, 3.4%. 10 -------------------------------------------------------------------------------- F40 -------------------------------------------------------------------------------- Liberty Acorn Foreign Forty >At a Glance Ticker Symbol: ACFFX Pretax and After-tax Average Annual Total Returns (Class Z) -------------------------------------------------------------------------------- >Through June 30, 2001
============================================================================================== 1 Year Life of Fund ============================================================================================== After-tax w/ Tax After-tax w/ Tax Pretax After-tax shares sold Efficiency Pretax After-tax shares sold Efficiency ---------------------------------------------------------------------------------------------------------------------------- Liberty Acorn Foreign Forty -30.67% -30.77% -18.44% NM 13.06% 12.84% 10.57% 98.3% ---------------------------------------------------------------------------------------------------------------------------- Foreign Stock Category Avg.* -24.40% -26.16% NA NM NA NA NA NA ----------------------------------------------------------------------------------------------------------------------------
*Source: Morningstar, Inc. "NA" indicates information not available from Morningstar. Morningstar does not provide Life of Fund data or after-tax w/redemption returns. "NM" means data is not meaningful because returns were negative. If you own the Fund in a tax-deferred account such as an IRA or a 401(k), this information does not apply to you. Your actual after-tax returns depend on your tax situation and will differ from those shown. After-tax returns reflect past tax-effects and are not predictive of future tax effects. See inside front cover of this report for further explanation. Liberty Acorn Foreign Forty Portfolio Diversification -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2001 [The following table was depicted as a pie chart in the printed material.] 20.8% Consumer Goods/Services 21.2% Finance 12.6% Software & Services 11.1% Industrial Goods 9.0% Health Care 8.6% Other* 3.8% Media 9.0% Energy & Minerals 3.9% Computer Related Hardware *Other includes cash and other assets less liabilities of 7.7%. The Value of a $10,000 Investment in Liberty Acorn Foreign Forty -------------------------------------------------------------------------------- >November 23, 1998 through June 30, 2001 This graph compares the results of $10,000 invested in Liberty Acorn Foreign Forty on November 23, 1998 (the date Fund shares were first offered to the public) to the EAFE Index. EAFE is Morgan Stanley's Europe, Australasia and Far East Index, an unmanaged, widely recognized international benchmark that comprises 20 major markets in Europe, Australia, and the Far East in proportion to world stock market capitalizations. The index and Fund returns include reinvested dividends and capital gains. It is not possible to invest directly in an index. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Performance changes over time. Visit libertyfunds.com for daily updates. Liberty Acorn Foreign Forty NAV on 6/30/01: $13.55 Total Net Assets: $85.3 million Average Annual Total Return -------------------------------------------------------------------------------- 6 Months* 1 Year Life of Fund -20.49% -30.67% 13.06% [The following table was depicted as a mountain chart in the printed material.] Plot points to come Liberty Acorn Foreign Forty $13,763 EAFE $9,962 *Not Annualized Liberty Acorn Foreign Forty Top 10 Holdings -------------------------------------------------------------------------------- 1. Irish Life & Permanent (Ireland) 4.0% Life Insurance & Savings Products 2. Rhoen-Klinikum (Germany) 3.5% Hospital Management 3. Henkel (Germany) 3.4% Chemicals, Detergents & Non-food Consumer Brands 4. Synthes Stratec (Switzerland) 3.4% Products for Orthopedic Surgery 5. Amdocs (Israel) 3.3% Telecommunications Billing & Customer Care Software 6. Rolls Royce (United Kingdom) 3.3% Turbines 7. RTL Group (Belgium) 3.2% TV & Radio Broadcaster 8. Nintendo (Japan) 3.1% Video Game Software & Hardware 9. Talisman Energy (Canada) 3.1% Oil & Gas Producer 10. Star Cruises (Singapore) 3.0% Cruise Line The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. -------------------------------------------------------------------------------- 11 -------------------------------------------------------------------------------- 20 -------------------------------------------------------------------------------- Liberty Acorn Twenty -------------------------------------------------------------------------------- >In a Nutshell [PHOTO OMITTED] Liberty Acorn Twenty returned 11.25% during the second quarter. This trailed the 13.16% gain for the S&P MidCap 400, but was ahead of the S&P 500's 5.85% increase. For the six-month period, the Fund is up 3.61%, ahead of its mid-cap benchmarks. (See page 1 for performance data.) Nova Corp was the biggest winner for the quarter, up 71%. The company announced on May 7 that U.S. Bancorp was acquiring it for $31 per share, a 32% premium to the market price at that time. We expect the deal to close in the third quarter of this year and the Fund will receive either cash or stock of U.S. Bancorp. Thanks to Liberty Acorn USA's Robert Mohn who followed Nova internally. Other winners included Getty Images, up 64%, and JD Edwards, up 45%. Both stocks increased as technology stocks bounced back during the quarter. In addition, SEI Investments gained 51% as the stock market rebound eased concerns regarding prospects for investment management companies. Losers during the quarter included Waters, down 40% and Callaway Golf, off 29%, both due to profit warnings. We believe long-term prospects remain strong for Waters and Callaway and we have added to the Fund's investments. During the quarter the Fund swapped its energy stocks, selling Dynegy and Devon for Aquila and XTO Energy believing the latter two represent better values. As energy stocks ran out of gas, XTO fell 30%. We took advantage of the dip, increasing the Fund's position in the stock. Last quarter we mentioned that we were being patient with losing stocks Getty Images and JD Edwards. Both were off almost 50%. Our patience paid off this quarter as both stocks made the winner's list for the three months. We believe Waters, Callaway and XTO may also rebound at some point in the future. /s/ John H. Park John H. Park Lead Portfolio Manager ================================================================================ Nova Discovered -------------------------------------------------------------------------------- Nova is the fourth largest credit card processor in the country, primarily to small merchant clients. The acquisition of a poorly managed company in 1998 led to bad operating performance in 2000 and Nova's stock fell from a high of $34.87 in January 2000 to a low of $10.50 in July 2000. Earlier this year we purchased the stock believing most of the bad news associated with the past acquisition was behind the company. Nova's core business is now growing nicely. We also thought Nova was an attractive acquisition candidate based on its free cash flow generation and its future growth prospects. Apparently, U.S. Bancorp agreed with our analysis - they offered $31 per share on May 7, 2001. The deal is expected to close in the third quarter of this year. The stock has gained 63% since the Fund's initial purchase. ================================================================================ Liberty Acorn Twenty is a non-diversified fund. The performance of each of its holdings will have a greater impact on the Fund's total return, and may make the Fund's returns more volatile than a more diversified fund. Mid-cap stocks tend to be more volatile and may be less liquid than the stocks of larger companies. As of 6/30/01 the Fund's positions in the holdings mentioned were: Nova, 6.9%; U.S. Bancorp, 0.0%; Getty Images, 2.5%; JD Edwards, 7.1%; SEI Investments, 3.2%; Waters Group, 1.1%; Callaway Golf, 2.5%; Dynegy, 0.0%; Devon, 0.0%; Aquila, 4.1%; XTO Energy, 3.6%. 12 -------------------------------------------------------------------------------- 20 -------------------------------------------------------------------------------- Liberty Acorn Twenty >At a Glance Ticker Symbol: ACTWX Pretax and After-tax Average Annual Total Returns (Class Z) -------------------------------------------------------------------------------- >Through June 30, 2001
============================================================================================== 1 Year Life of Fund ============================================================================================== After-tax w/ Tax After-tax w/ Tax Pretax After-tax shares sold Efficiency Pretax After-tax shares sold Efficiency ---------------------------------------------------------------------------------------------------------------------------- Liberty Acorn Twenty 11.90% 11.58% 7.47% 97.3% 19.86% 18.78% 15.96% 94.5% ---------------------------------------------------------------------------------------------------------------------------- Mid Cap Blend Category Avg.* -1.68% -4.37% NA NM NA NA NA NA ----------------------------------------------------------------------------------------------------------------------------
*Source: Morningstar, Inc. "NA" indicates information not available from Morningstar. Morningstar does not provide Life of Fund data or after-tax w/ redemption returns. "NM" means data is not meaningful because returns were negative. If you own the Fund in a tax-deferred account such as an IRA or a 401(k), this information does not apply to you. Your actual after-tax returns depend on your tax situation and will differ from those shown. After-tax returns reflect past tax-effects and are not predictive of future tax effects. See inside front cover of this report for further explanation. -------------------------------------------------------------------------------- Liberty Acorn Twenty Portfolio Diversification -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2001 [The following table was depicted as a pie chart in the printed material.] 5.7% Industrial Goods/Services 7.8% Energy/Minerals 9.6% Other* 14.9% Health Care 33.3% Information Software & Services 21.7% Computer Related Hardware 5.3% Telecommunications 3.4% Media 2.9% 16.1% Consumer Goods/Services 12.6% Finance *Cash and other assets less liabilities. -------------------------------------------------------------------------------- The Value of a $10,000 Investment in Liberty Acorn Twenty -------------------------------------------------------------------------------- >November 23, 1998 through June 30, 2001 This graph compares the results of $10,000 invested in Liberty Acorn Twenty on November 23, 1998 (the date Fund shares were first offered to the public) to the S&P MidCap 400. The S&P MidCap 400 is a broad, market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. The Index is unmanaged and returns for the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Performance changes over time. Visit libertyfunds.com for daily updates. Liberty Acorn Twenty NAV on 6/30/01: $14.64 Total Net Assets: $89.3 million Average Annual Total Return -------------------------------------------------------------------------------- 6 Months* 1 Year Life of Fund 3.61% 11.90% 19.86% [The following table was depicted as a mountain chart in the printed material.] Plot points to come Liberty Acorn Twenty $16,023 S&P MidCap 400 $15,120 *Not Annualized -------------------------------------------------------------------------------- Liberty Acorn Twenty Top 10 Holdings -------------------------------------------------------------------------------- 1. Boston Scientific 7.6% Stents & Catheters 2. JD Edwards 7.1% Mid-Market ERP Software 3. Nova 6.9% Credit Card Processor 4. Associated Banc-Corp 5.8% Midwest Bank 5. H&R Block 5.3% Tax Preparation 6. Jones Apparel 5.1% Women's Apparel 7. Herman Miller 4.6% Office Furniture 8. First Health 4.5% PPO Network 9. Aquila 4.1% Energy Trading 10. Harley-Davidson 3.9% Motorcycles & Related Merchandise The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. -------------------------------------------------------------------------------- 13 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >Major portfolio changes in the Second Quarter (Unaudited) Number of Shares --------------------------- 03/31/01 06/30/01 Additions -------------------------------------------------------------------------------- Information Activision 150,000 470,000 Acxiom 475,000 600,000 Avnet 0 540,000 Avocent 150,000 270,000 Axcelis Technologies 282,000 680,000 Cambridge Technology 2,400,000 3,494,012 Ciber 1,000,000 1,450,000 Cumulus Media, Cl. A 39,000 92,000 Deutsche Boerse (Germany) 12,600 210,000 Getty Images 1,010,000 1,050,000 Igate Capital 0 389,000 Integrated Circuit Systems 0 530,000 JD Edwards 1,900,000 2,150,000 Konami (Japan) 0 70,000 MRO Software 401,000 460,000 Pemstar 300,000 415,000 PRIMEDIA 1,200,000 1,400,000 Proquest 238,000 240,000 (formerly known as Bell & Howell) Seachange International 300,000 400,000 Shuffle Master 0 325,000 SPSS 0 86,000 Systems & Computer Technology 1,100,000 1,668,000 -------------------------------------------------------------------------------- Healthcare Beverly Enterprises 0 1,100,000 First Health Group 1,668,000 3,006,000 Lincare Holdings 730,000 1,060,000 Novoste 0 181,000 Rosetta Inpharmatics 0 115,000 Smith & Nephew (United Kingdom) 0 1,450,000 Steris 950,000 953,000 -------------------------------------------------------------------------------- Consumer Goods/Services Airtours (United Kingdom) 2,200,000 3,567,000 Autogrill (Italy) 0 960,000 Callaway Golf 900,000 1,000,000 Christopher & Banks 518,000 689,000 Coach 200,000 457,000 Furniture Brands International 280,000 430,000 Gadzooks 720,000 750,000 Hunter Douglas (Netherlands) 440,000 467,000 Intrawest (Canada) 500,000 736,600 Jones Apparel 1,100,000 1,230,000 Kenneth Cole Productions 0 210,000 Kuoni Reisen (Switzerland) 0 40,000 Mohawk Industries 333,000 383,000 Nutreco Holdings (Netherlands) 134,000 214,000 Steiner Leisure 300,000 640,000 Steve Madden 0 300,000 Whole Foods Market 450,000 900,000 -------------------------------------------------------------------------------- Finance Affiliated Managers Group 1,000,000 1,100,000 Anglo Irish Bank (Ireland) 0 500,000 Associated Banc-Corp 370,000 600,000 Eaton Vance 9,000 83,000 Glacier Bancorp 70,000 155,000 Julius Baer (Switzerland) 0 2,300 Neuberger Berman 650,000 700,000 Republic 226,000 613,000 -------------------------------------------------------------------------------- Industrial Goods/Services Ametek 130,000 375,000 Intermagnetics General 0 200,000 Li & Fung (Hong Kong) 0 5,300,000 Northwest Pipe Company 0 70,000 Spartech 865,000 975,000 USX - US Steel Group 0 250,000 -------------------------------------------------------------------------------- Energy/Minerals Aquila 0 275,000 Atmos Energy 700,000 761,000 Cadiz 255,000 600,000 Carbo Ceramics 450,000 500,000 Chiles Offshore 450,000 600,000 Covanta Energy 750,000 1,000,000 FMC Technologies 0 409,000 Louis Dreyfus Natural Gas 51,000 500,000 Maverick Tube 1,100,000 1,200,000 Millennium Cell 250,000 420,000 Orion Power 254,000 400,000 Parker Drilling 0 1,000,000 Saipem (Italy) 3,310,000 3,710,000 Stone Energy 150,000 200,000 Waste Recycling Group (United Kingdom) 400,000 1,275,000 XTO Energy 3,700,000 5,550,000 (formerly known as Cross Timbers Oil) -------------------------------------------------------------------------------- Other Industries SL Green Realty 775,000 875,000 Tetra Tech 0 232,000 14 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Principal Amount or Number of Shares ------------------------- 03/31/01 06/30/01 Sales -------------------------------------------------------------------------------- Information Activision, 6.7% Note Due 1/10/05 $4,983,000 0 APW 400,000 0 Atos (France) 120,000 0 Citadel Communications 350,000 0 Concord EFS 776,000 664,000 Corus Entertainment (Canada) 1,000,000 907,000 DSP Group 400,000 0 Global Payments 1,450,000 1,422,000 Gemplus International (France) 720,000 688,900 International Game Technology 2,200,000 2,100,000 Kent Electronics 625,000 0 Liberty Media Group, AT&T 2,600,000 2,500,000 Mettler Toledo 480,000 381,000 Microsemi 150,000 100,000 Micros Systems 975,000 875,000 Nova 300,000 0 Price Communications 250,000 0 Profit Recovery Group 350,000 0 Solectron 500,000 340,000 WM Data Nordic (Sweden) 2,500,000 1,750,000 Young Broadcasting 650,000 550,000 -------------------------------------------------------------------------------- Consumer Goods/Services Education Management 300,000 171,000 Fairfield Communities 400,000 0 McNaughton Apparel Group 250,000 0 Pier 1 Imports 1,200,000 1,000,000 -------------------------------------------------------------------------------- Finance Ace Cash Express 146,000 0 Banca Fideuram (Italy) 1,500,000 1,000,000 Eldorado Bancshares 400,000 0 Kempen (Netherlands) 140,000 0 The Investment Company of China (China) 200,000 0 -------------------------------------------------------------------------------- Industrial Goods/Services EGL 200,000 0 -------------------------------------------------------------------------------- Energy/Minerals Devon Energy 550,000 300,000 Dynegy 1,456,000 1,356,000 Equitable Resources 1,500,000 1,400,000 (includes the effect of a 2 for 1 stocksplit) Newpark Resources 3,090,000 3,000,000 US Aggregates 950,000 860,000 Western Gas Resources 100,000 0 -------------------------------------------------------------------------------- Other Industries Macerich Company 625,000 0 Utilicorp United 800,000 0 15 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >Statement of Investments (Unaudited) June 30, 2001 Number of Shares Value (000) -------------------------------------------------------------------------------- Common Stocks and Other Equity-Like Securities: 91.8% -------------------------------------------------------------------------------- Information: 24.8% Media >Broadcasting: 0.4% 550,000 Young Broadcasting (b) $ 18,469 Television Stations -------------------------------------------------------------------------------- >Radio: 0.4% 850,000 Salem Communications (b) 18,318 Radio Stations for Religious Programming 92,000 Cumulus Media, Cl. A (b) 1,137 Radio Stations in Small Cities -------------------------------------------------------------------------------- 19,455 >Television Programming/CATV: 1.9% 2,500,000 Liberty Media Group, AT&T (b) 43,725 CATV Programming & Media Company Holdings 907,000 Corus Entertainment (Canada) (b) 20,784 CATV Programming & Radio Stations 1,000,000 Mediacom Communications (b) 17,710 Cable Television Franchises 200,000 Insight Communications (b) 5,192 CATV Franchises in MidWest 371,000 Cinar (Canada) (b) 1,688 Children's TV Programming 300,000 Classic Communications (b) 267 CATV Franchises in Rural Areas -------------------------------------------------------------------------------- 89,366 Telecommunications >Telecommunications/Wireline Communications: 0.6% 600,000 Commonwealth Telephone (b) 25,272 Rural Phone Franchises & CLEC 250,000 NTL (United Kingdom) (b) 3,013 Voice, Video & Data Services 176,000 Startec Global Communications 26 International Telecommunications -------------------------------------------------------------------------------- 28,311 >Mobile Communications: 1.4% 450,000 TDS 48,938 Cellular & Telephone Services 533,000 COMARCO (b) (c) 7,899 Wireless Network Testing 1,100,000 Pinnacle Holdings (b) 5,995 Towers for Wireless Communications -------------------------------------------------------------------------------- 62,832 Computer Related Hardware >Computer Hardware/Related Systems: 0.9% 400,000 Seachange International (b) 7,212 Video on Demand Servers 270,000 Avocent (b) 6,075 Computer Control Switches 370,000 American Power Conversion (b) 5,502 Uninterruptable Power Systems 208,000 Neopost (France) (b) 5,344 Postage Meter Machines Principal Amount or Number of Shares Value (000) -------------------------------------------------------------------------------- 100,000 Zebra Technologies (b) 4,911 Bar Code Printing Hardware, Supplies & Software 200,000 Excel Technologies (b) 4,336 Laser Systems & Electro-Optical Components $3,000,000 Tidel Technologies, 6.0% Note (b) Due 9/8/04 3,000 913,158 Tidel Technologies 1,003 ATM Machines 688,900 Gemplus International (France) (b) 2,077 Smart Cards Products & Solutions -------------------------------------------------------------------------------- 39,460 >Gaming Equipment: 4.7% 2,100,000 International Game Technology (b) 131,439 Slot Machines & Progressive Jackpots 1,000,000 Anchor Gaming (b) (c) 59,050 Slot Machines & Casinos 6,250,000 Aristocrat Leisure (Australia) 22,488 Slot Machines 325,000 Shuffle Master (b) 6,568 Card, Shufflers, Casino Games & Slot Machines -------------------------------------------------------------------------------- 219,545 >Contract Manufacturing: 0.5% 320,000 Jabil Circuit (b) 9,875 Electronic Manufacturing Services 340,000 Solectron (b) 6,222 Electronic Manufacturing Services 415,000 Pemstar (b) 5,607 Electronic Manufacturing Services -------------------------------------------------------------------------------- 21,704 >Instrumentation: 0.7% 381,000 Mettler Toledo (b) 16,173 Laboratory Equipment 351,000 Dionex (b) 11,502 Ion & Liquid Chromatography 227,000 Varian (b) 7,271 Analytical Instruments -------------------------------------------------------------------------------- 34,946 >Semiconductors/Related Equipment: 0.6% 680,000 Axcelis Technologies (b) 10,370 Ion Implantation Tools 530,000 Integrated Circuit Systems (b) 10,123 Silicon Timing Devices 100,000 Microsemi (b) 7,034 Analog/Mixed Signal Semiconductors -------------------------------------------------------------------------------- 27,527 Software/Services >Business Software: 3.2% 2,150,000 JD Edwards (b) 30,422 Mid Market ERP & Supply Chain Software 737,000 Kronos (b) (c) 28,006 Labor Management Solutions 1,100,000 JDA Software Group (b) 18,700 Applications/Software & Services for Retailers 875,000 Micros Systems (b) (c) 18,445 Information System for Restaurants & Hotels 16 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Number of Shares Value (000) -------------------------------------------------------------------------------- >Business Software--continued 1,668,000 Systems & Computer Technology (b) (c) $ 15,162 Enterprise Software & Services 650,000 Hyperion Solutions (b) 9,737 Analytical Application Software 1,200,000 Indus International (b) 9,504 Enterprise Asset Management Software 1,500,000 Mapics (b) (c) 9,000 Mid Market ERP Software 460,000 MRO Software (b) 7,314 Enterprise Management Software 1,400,000 ClickSoftware Technologies (b) (c) 1,876 Service Chain Optimization Software 86,000 SPSS (b) 1,359 Statistical Analysis Software -------------------------------------------------------------------------------- 149,525 >Consumer Software: 1.4% 700,000 THQ (b) 42,826 Entertainment Software 470,000 Activision (b) 18,509 Entertainment Software 70,000 Konami (Japan) 3,194 Entertainment Software -------------------------------------------------------------------------------- 64,529 >Computer Services: 1.4% 1,450,000 Ciber 13,775 Software Services & Staffing 580,000 American Management Systems (b) 12,760 Software Development Services 3,494,012 Cambridge Technology (b) (c) 12,194 Software Implementation Services 500,000 Pomeroy Computer Resources (b) 6,410 Network Integration Services 1,750,000 WM Data Nordic (Sweden) 5,207 Computer Services/Consulting 1,000,000 RCM Technologies (b) (c) 4,850 Technology Staffing Services 300,000 New Horizons Worldwide (b) 4,185 Computer Training Services 389,000 Igate Capital (b) 1,249 Technology Staffing Services 140,000 Vitalstream (b) 1,147 Streaming Services for the Internet 254,000 Analysts International 1,105 Technology Staffing Services -------------------------------------------------------------------------------- 62,882 >Business Information/Marketing Services/Publishing: 2.7% 1,050,000 Getty Images (b) 27,694 Photographs for Publications & Electronic Media 624,000 Choicepoint (b) 26,239 Fraud Protection Information 2,100,000 Navigant Consulting (b) (c) 17,220 Consulting Firm 500,000 Information Holdings (b) 16,150 Scientific & Medical Publications, Patent Information 2,500,000 InfoUSA (b) 14,575 Business Data for Sales Leads 1,400,000 PRIMEDIA 9,506 Specialty Magazines & Other Publications 600,000 Acxiom (b) 7,620 Database Marketing Services 240,000 Proquest (formerly known as Bell & Howell) (b) 7,438 Information Services for Education & Automotive Markets -------------------------------------------------------------------------------- 126,442 >Internet: 0.2% 150,000 RSA Security (b) 4,650 Enterprise Security Software 2,683 Bigfoot International, Series A (b) (c) 1,476 778,294 Bigfoot International (b) (c) 526 Internet Direct Marketing 189,000 Online Resources (b) 454 Internet Banking Technology 250,000 NeoPlanet, Series A (b) 250 53,376 NeoPlanet, Series B (b) 53 Web Browser -------------------------------------------------------------------------------- 7,409 >Electronics Distribution: 0.5% 540,000 Avnet 12,107 Electronic Components Distribution 890,000 Pioneer-Standard Electronics 11,383 Component & Computer Distribution -------------------------------------------------------------------------------- 23,490 >Transaction Processors: 3.3% 1,812,000 National Data (c) 58,709 Credit Card & Health Claims Processor 1,422,000 Global Payments (c) 42,802 Credit Card Processor 664,000 Concord EFS (b) 37,084 Credit Card Processor 210,000 Deutsche Boerse (Germany) 7,402 Trading, Clearing & Settlement Services for Financial Markets 200,000 Cubic 6,250 Smart Card Systems for Public Transportation -------------------------------------------------------------------------------- 152,247 ---------- Information: Total 1,148,139 -------------------------------------------------------------------------------- Health Care: 7.5% >Biotechnology/Drug Delivery: 2.0% 426,000 NPS Pharmaceuticals (b) 16,657 Small Molecule Drugs 1,258,000 Corvas International (b) 15,146 Rational Drug Design 500,000 Inhale Therapeutic Systems (b) 11,995 Pulmonary Drug Delivery 160,000 Myriad Genetics (b) 10,054 Gene Discovery & Diagnostic Products 109,000 Protein Design Labs (b) 9,156 Computer Designed Monoclonal Antibodies 316,000 Guilford Pharmaceuticals (b) 8,481 Drug Delivery & Neurology Drugs 17 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >Statement of Investments (Unaudited), continued Number of Shares Value (000) -------------------------------------------------------------------------------- >Biotechnology/Drug Delivery--continued 1,249,999 Perlegen Sciences (b) $ 4,500 Large Scale Gene Sequencing 325,000 Genzyme Molecular Oncology Division (b) 4,469 Gene Expression Technology & Cancer Drugs 823,000 Microcide Pharmaceuticals (b) (c) 3,210 Antibiotics 150,000 Gene Logic (b) 3,174 Gene Expression Database 461,000 Syrrx, Series C (b) 2,997 X-Ray Crystallography 7,503,000 Nadro, Series L (Mexico) (b) 2,484 Pharmaceutical Distributor 115,000 Rosetta Inpharmatic (b) 1,738 Computer Software for Drug Development 326,000 Microdose (b) 601 Drug Inhalers -------------------------------------------------------------------------------- 94,662 >Medical Equipment: 1.6% 953,000 Steris (b) 19,108 Sterilization Devices 670,000 Edwards Lifesciences (b) 17,661 Heart Valves 583,000 Orthofix International (b) 15,642 Bone Fixation & Stimulation Devices 350,000 Haemonetics (b) 10,675 Blood & Plasma Collection Equipment 1,450,000 Smith & Nephew (United Kingdom) 7,568 Medical Equipment & Supplies 181,000 Novoste (b) 4,652 Radiation Catheters or In-stent Restenosis -------------------------------------------------------------------------------- 75,306 >Medical Supplies: 0.3% 650,000 Owens & Minor 12,350 Distribution of Medical Supplies -------------------------------------------------------------------------------- >Services: 3.6% 3,006,000 First Health Group (b) 80,831 PPO Network 1,060,000 Lincare Holdings (b) 34,450 Home Health Care Services 1,100,000 Serologicals (b) 23,419 Blood Collection & Antibody Production 472,000 Syncor International (b) 14,490 Nuclear Pharmacy for Radiopharmaceuticals 1,100,000 Beverly Enterprises (b) 11,770 Nursing Homes -------------------------------------------------------------------------------- 164,960 -------- Health Care: Total 347,278 -------------------------------------------------------------------------------- Consumer Goods/Services: 16.4% Goods >Leisure Vehicles: 2.1% 1,500,000 Harley-Davidson 70,620 Motorcycles & Related Merchandise 534,000 Monaco Coach (b) 17,729 Recreational Vehicles 5,000,000 Ducati Motor (Italy) 7,516 Motorcycles & Related Merchandise -------------------------------------------------------------------------------- 95,865 >Furniture/Textiles: 1.2% 660,000 Herman Miller 17,015 Office Furniture 383,000 Mohawk Industries (b) 13,482 Carpet & Flooring Manufacturer 500,000 Hon Industries 12,110 Office Furniture & Fireplaces 430,000 Furniture Brands International (b) 12,040 Furniture Manufacturer -------------------------------------------------------------------------------- 54,647 >Food & Beverages: 0.3% 214,000 Nutreco Holdings (Netherlands) 9,078 Salmon, Animal Feeds 23,000 Binding-Brauerei (Germany) 3,360 Brewery -------------------------------------------------------------------------------- 12,438 >Nondurables: 0.6% 2,300,000 Helen of Troy (b) (c) 20,332 Personal Care Products 601,000 First Years (c) 6,731 Infant & Toddler Products -------------------------------------------------------------------------------- 27,063 >Durable Goods: 0.6% 1,000,000 Callaway Golf 15,800 Premium Golf Clubs & Balls 467,000 Hunter Douglas (Netherlands) 13,128 Decorative Window Coverings -------------------------------------------------------------------------------- 28,928 >Apparel: 2.1% 1,230,000 Jones Apparel (b) 53,136 Women's Apparel 880,000 Nautica Enterprises (b) 17,908 Casual Apparel 457,000 Coach (b) 17,389 Designer & Retailer of Branded Leather Accessories 300,000 Steven Madden (b) 5,505 Wholesaler/Retailer of Fashion Footware 210,000 Kenneth Cole Productions (b) 4,230 Wholesaler/Retailer of Men's/Women's Shoes/Apparel -------------------------------------------------------------------------------- 98,168 18 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Number of Shares Value (000) -------------------------------------------------------------------------------- Services >Retail: 3.2% 1,700,000 Borders Group (b) $ 38,080 Bookstores 900,000 Whole Foods Market (b) 24,498 Natural Food Supermarkets 689,000 Christopher & Banks (b) 21,462 Specialty Women's Retailer at Moderate Price Levels 400,000 Michaels Stores (b) 15,740 Craft & Hobby Specialty Retailer 400,000 Zale (b) 13,480 Specialty Retailer of Jewelry 1,000,000 Pier 1 Imports 11,500 Imported Furniture & Tchotchkes 960,000 Autogrill (Italy) 10,379 Tollway Restaurants 750,000 Gadzooks (b) (c) 9,817 Teen Apparel Retailer 140,000 Gaiam (b) 2,100 Healthy Living Catalog & E-Commerce -------------------------------------------------------------------------------- 147,056 >Travel: 1.0% 40,000 Kuoni Reisen (Switzerland) 15,518 Tour Operator 736,600 Intrawest (Canada) 14,593 Owner/Operator of Ski Resorts 3,567,000 Airtours (United Kingdom) 14,582 Tour Operator -------------------------------------------------------------------------------- 44,693 >Consumer Services: 2.4% 1,300,000 ITT Educational Services (b) (c) 58,500 Technology Oriented Postsecondary Degree Programs 1,580,000 Bally Total Fitness (b) (c) 46,784 National Chain of Fitness Centers 171,000 Education Management (b) 7,001 Postsecondary Education -------------------------------------------------------------------------------- 112,285 >Casinos: 1.2% 2,250,000 Station Casinos (b) 36,000 Casinos & Riverboats 1,170,000 Isle of Capri Casinos (b) 11,045 Five Casinos in Secondary Markets 700,000 Pinnacle Entertainment (b) 5,145 Casinos in Secondary Markets & Card Clubs 535,000 Monarch Casino & Resort (b) (c) 2,996 Casino/Hotel in Reno 113,000 Lakes Gaming (b) 836 Hotel & Casino in Biloxi & Gulfport -------------------------------------------------------------------------------- 56,022 >Cruise Lines: 1.7% 1,400,000 Carnival 42,980 Largest Cruise Line 39,995,000 Star Cruises (Singapore) (b) 21,597 Cruising/Casino Operations 640,000 Steiner Leisure (b) 12,800 Spas & Hair/Skin Products on Cruise Ships 410,000 Royal Olympic Cruise (b) 1,025 Cruises in Mediterranean -------------------------------------------------------------------------------- 78,402 -------- Consumer Goods/Services: Total 755,567 -------------------------------------------------------------------------------- Finance: 17.6% >Banks: 2.8% 1,026,000 TCF Financial 47,514 Great Lakes Bank 803,000 Texas Regional Bancshares (c) 32,176 TexMex Bank 600,000 Associated Banc-Corp 20,826 Midwest Bank 484,000 Chittenden 16,287 Vermont & Western Massachusetts Bank 613,000 Republic 8,398 Michigan Bank 155,000 Glacier Bancorp 2,802 Montana & Idaho Banks 500,000 Anglo Irish Bank (Ireland) 1,907 Small Corporate Lending & Private Banking -------------------------------------------------------------------------------- 129,910 >Savings & Loans: 1.2% 1,717,000 Peoples Bank Bridgeport 40,418 Connecticut Savings & Loan 824,000 Commonwealth Bancorp (c) 15,895 Philadelphia Savings & Loan -------------------------------------------------------------------------------- 56,313 >Insurance: 2.8% 765,000 Protective Life 26,293 Life/Dental Insurance 675,000 Philadelphia Consolidated Holding (c) 23,524 Specialty Insurance 820,000 HCC Insurance Holdings 20,090 Aviation Insurance 100,000 Markel (b) 19,650 Specialty Insurance 486,000 Leucadia National 15,771 Insurance Holding Company 300,000 RLI 13,476 Specialty Insurance 210,000 StanCorp Financial 9,952 Group Life, Disability & 401K -------------------------------------------------------------------------------- 128,756 >Money Management: 5.6% 2,170,000 SEI Investments 102,533 Mutual Fund Administration & Investment Management 1,100,000 Affiliated Managers Group (b) 67,650 Mutual Fund & Pension Manager 700,000 Neuberger Berman 47,600 Major Asset Management Company 1,250,000 Edinburgh Fund Managers (United Kingdom) 10,582 Investment Management 19 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >Statement of Investments (Unaudited), continued Number of Shares Value (000) -------------------------------------------------------------------------------- >Money Management--continued 1,000,000 Banca Fideuram (Italy) $ 9,529 Life Insurance & Mutual Funds 2,300 Julius Baer (Switzerland) 8,865 Private Banking, Brokerage & Mutual Funds 240,000 BKF Capital Group (b) 7,968 Institutional Money Manager 83,000 Eaton Vance 2,888 Mutual Funds 200,000 The Investment Company of China (China) 844 Closed-End Fund -------------------------------------------------------------------------------- 258,459 >Finance Companies: 5.2% 3,853,000 AmeriCredit (b) 200,163 Auto Lending 1,820,000 World Acceptance (b) (c) 17,053 Personal Loans 850,000 DVI Health Services (b) (c) 14,960 Leases for Big Medical Equipment 1,375,000 Capital Trust (b) (c) 8,869 Mortgage Loans -------------------------------------------------------------------------------- 241,045 -------- Finance: Total 814,483 -------------------------------------------------------------------------------- Industrial Goods/Services: 7.4% >Steel: 0.5% 840,000 Gibraltar Steel (c) 16,036 Steel Processing 250,000 USX- US Steel 5,038 Steel Producer 420,000 Atchison Casting (b) (c) 1,218 Steel Foundries -------------------------------------------------------------------------------- 22,292 >Industrial Goods: 1.2% 1,300,000 Clarcor (c) 34,905 Mobile & Industrial Filters 560,000 Applied Industrial Technologies 10,612 Industrial Components Distribution 200,000 Intermagnetics General (b) 6,480 Superconducting Wire Manufacturer 680,000 Advanced Lighting Technologies (b) 3,060 Metal Halide Lighting & Fiber Optic Coatings 70,000 Northwest Pipe Company (b) 1,113 Water Transmission Pipe -------------------------------------------------------------------------------- 56,170 >Specialty Chemicals & Industrial Materials: 0.7% 975,000 Spartech 23,546 Plastics Distribution & Compounding 347,000 SYMYX (b) 8,460 Materials & Chemicals -------------------------------------------------------------------------------- 32,006 >Machinery: 0.2% 375,000 Ametek 11,456 Aerospace/Industrial Instruments >Outsourcing Services & Training: 0.6% 2,700,000 Labor Ready (b) (c) 14,148 Temporary Manual Labor 5,300,000 Li & Fung (Hong Kong) 8,698 Sourcing of Consumer Goods 600,000 GP Strategies (b) 2,832 Training Programs 150,000 International Total Services (b) 33 Aviation Services -------------------------------------------------------------------------------- 25,711 >Logistics: 2.6% 1,400,000 Expeditors International of Washington 86,072 International Freight Forwarder 700,000 Forward Air (b) (c) 19,796 Freight Transportation Between Airports 759,000 Hub Group (b) 9,867 Truck & Rail Freight Forwarder 600,000 Airnet Systems (b) (c) 4,020 Check & Other Small Package Shipment -------------------------------------------------------------------------------- 119,755 >Other Industrial Services: 1.6% 6,100,000 Serco Group (United Kingdom) 33,651 Facilities Management 1,526,000 Wackenhut, Cl. B (b) 20,983 31,000 Wackenhut, Cl. A (b) 535 Prison Management 520,000 Mobile Mini (b) 16,999 Leases Portable Storage Units -------------------------------------------------------------------------------- 72,168 -------- Industrial Goods/Services: Total 339,558 -------------------------------------------------------------------------------- Energy/Minerals: 11.5% >Independent Power: 0.7% 1,000,000 Covanta Energy 18,460 Electric Power Developer 400,000 Orion Power (b) 9,524 Wholesale Electric Generator 420,000 Millennium Cell (b) 4,225 Fuel Cell Technology -------------------------------------------------------------------------------- 32,209 >Oil/Gas Producers: 4.9% 5,550,000 XTO Energy (formerly known as Cross Timbers Oil) 79,643 Natural Gas Producer 730,000 Evergreen Resources (b) 27,740 Coal Seam Gas Producer 800,000 Precision Drilling (Canada (b)) 25,015 Oil & Gas Well Driller 1,850,000 Tesoro Petroleum (c) 23,310 Oil Refinery/Gas Producer 20 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Number of Shares Value (000) -------------------------------------------------------------------------------- >Oil/Gas Producers--continued 500,000 Louis Dreyfus Natural Gas (b) $ 17,425 Natural Gas Producer 685,000 Canadian Hunter Exploration (Canada) (b) 16,737 Natural Gas Producer 300,000 Devon Energy 15,750 Oil & Gas Producer 200,000 Stone Energy (b) 8,860 Oil & Gas Producer 240,000 Penn West Petroleum (Canada) (b) 6,181 Oil & Gas Producer 1,000,000 Tipperary (b) 2,450 Coal Seam Gas Producer -------------------------------------------------------------------------------- 223,111 >Distribution/Marketing/Refining: 2.9% 1,356,000 Dynegy 63,054 Natural Gas & Electric Processing, Production & Marketing 1,400,000 Equitable Resources 46,634 Natural Gas Utility & Producer 761,000 Atmos Energy 18,614 Natural Gas Utility 275,000 Aquila (b) 6,779 Energy Trading -------------------------------------------------------------------------------- 135,081 >Other Resources: 0.3% 1,275,000 Waste Recycling Group (United Kingdom) 7,557 Landfills 600,000 Cadiz (b) 5,928 Farming & Water Resources in California 860,000 US Aggregates (c) 1,161 Aggregates, Ready Mix & Asphalt -------------------------------------------------------------------------------- 14,646 >Oil Services: 2.7% 3,000,000 Newpark Resources (b) 33,300 Oilfield Fluid Management & Equipment Rental 3,710,000 Saipem (Italy) 20,386 Offshore Construction & Drilling 1,200,000 Maverick Tube (b) 20,340 Steel Pipes for Oil & Gas Wells 500,000 Carbo Ceramics 18,525 Natural Gas Well Stimulants 600,000 Chiles Offshore (b) 11,556 Oil & Gas Driller 409,000 FMC Technologies (b) 8,446 Deep Water Oil & Gas Well Head Manufacturer 1,000,000 Parker Drilling (b) 6,500 Oil & Gas Driller 327,000 Enerflex Systems (Canada) 6,100 Natural Gas Compressor Manufacturer -------------------------------------------------------------------------------- 125,153 ---------- Energy/Minerals: Total 530,200 -------------------------------------------------------------------------------- Other Industries : 6.6% >Real Estate: 5.5% 1,000,000 The Rouse Company 28,650 Regional Shopping Malls 875,000 SL Green Realty 26,521 Manhattan Office Buildings 466,000 Forest City Enterprises, Cl. B 24,791 Shopping Malls 675,000 First Industrial Realty Trust 21,674 Industrial Properties 700,000 Manufactured Home Communities 19,670 Manufactured Home Communities 1,099,000 LaSalle Hotel Properties (c) 19,584 Upscale/Full Service Hotels 450,000 General Growth Properties 17,307 Regional Shopping Malls 903,125 Security Capital European Realty 16,256 Strategic Real Estate Investments 650,000 Amli Residential 15,990 Midwestern Apartments 625,000 Macerich Company 15,500 Regional Shopping Malls 770,000 Vail Resorts (b) 14,630 Great Ski Resorts 520,000 Summit Properties 13,952 Southeastern Apartments 450,000 BRE Properties 13,635 Apartments 190,000 Consolidated Tomoka 2,888 16,000 Acres of Florida Land -------------------------------------------------------------------------------- 251,048 >Waste Management: 0.1% 232,000 Tetra Tech (b) 6,206 Resource Management & Infrastructure Consulting -------------------------------------------------------------------------------- >Regulated Utilities: 1.0% 1,000,000 Unisource Energy 22,970 Electric Utility in Arizona 700,000 Conectiv 15,120 Electric Utility in New Jersey, Delaware & Maryland 200,000 CH Energy (b) 8,790 Electric Utility in New York -------------------------------------------------------------------------------- 46,880 ---------- Other Industries: Total 304,134 Total Common Stocks and Other Equity-Like Securities: 91.8% ---------- (Cost: $2,592,930) 4,239,359 21 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- Liberty Acorn Fund >Statement of Investments (Unaudited), continued Principal Amount Value (000) -------------------------------------------------------------------------------- Short-Term Obligations: 8.5% Yield 3.43% - 3.93% Due 7/02 - 8/02/01 $ 100,434 Aon $ 100,337 65,227 Household Finance 65,153 44,627 Weyerheuser 44,569 42,016 John Deere 42,007 41,902 Abbot Labs 41,885 37,398 American Express 37,394 26,727 Equillon 26,705 25,866 Quest Capital 25,836 10,000 US Treasury Bills 9,969 ------------------------------------------------------------------------------- (Amortized Cost: $393,855) 393,855 Total Investments: 100.3% ---------- (Cost: $2,986,785)(a) 4,633,214 Cash and Other Assets Less Liabilities: (0.3%) (12,764) ---------- Total Net Assets: 100% $4,620,450 ================================================================================ -------------------------------------------------------------------------------- >Notes to Statement of Investments (a) At June 30, 2001, for federal income tax purposes cost of investments is the same and net unrealized appreciation was $1,646,429, consisting of gross unrealized appreciation of $1,887,273 and gross unrealized depreciation of $240,844. (b) Non-income producing security. (c) On June 30, 2001, the fund held the following percentages of the outstanding voting shares of the companies listed below: Hub Group 9.84% RCM Technologies 9.52% World Acceptance 9.43% Mapics 8.74% Gadzooks 8.37% Helen of Troy 8.20% Comarco 7.57% Microcide Pharmaceuticals 7.21% Commonwealth Bancorp 7.21% Capital Trust 7.02% Anchor Gaming 6.74% Gibraltar Steel 6.68% Bigfoot 6.53% Labor Ready 6.53% Bally Total Fitness 6.50% La Salle Hotel Properties 6.47% First Years 6.42% Tesoro Petroleum 6.00% DVI Health Services 5.95% Kronos 5.90% Texas Regional Banks 5.88% Philadelphia Consolidated 5.73% Monarch Casino & Resort 5.67% Cambridge Technology 5.56% National Data 5.50% AirNet Systems 5.50% Atchison Casting 5.47% ITT Educational Services 5.45% Global Payments 5.41% US Aggregates 5.39% Clicksoftware 5.38% Clarcor 5.34% Navigant Consulting 5.28% Systems & Computers 5.13% Micros Systems 5.04% The aggregate cost and value of these companies at June 30 ,2001, was $531,733,000 and $641,240,000, respectively. Investments in affiliate companies represent 13.9% of total net assets at June 30 ,2001. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2001 were as follows: Dollar % of Total Amount Fund Activity ------ ------------- Dividend Income $ 1,872 10.8% Net realized gain or loss $ 14,081 14.1% Change in unrealized gain or loss $ 9,818 3.7% Purchases $ 17,308 3.1% Proceeds from sales $106,116 21.8% In addition, additional purchases of existing portfolio holdings that were not considered affiliates in prior years, resulted in the fund owning more than 5% of the outstanding shares of certain issues at June 30 ,2001. Therefore, the cost and market value affiliate disclosure amounts include both acquisitions of new investments in affiliates during the year, as well as prior year investment holdings that became affiliates during the current year. 22 -------------------------------------------------------------------------------- A -------------------------------------------------------------------------------- (d) On June 30 ,2001, the market value of foreign securities (in thousands) represents 7.51 % of total net assets. The Fund's foreign portfolio was diversified as follows: Canada $ 91,098 1.97% United Kingdom $ 73,940 1.60% Italy $ 47,811 1.04% Switzerland $ 24,384 0.53% Australia $ 22,487 0.49% Netherlands $ 22,207 0.48% Singapore $ 21,597 0.47% Germany $ 10,761 0.23% Hong Kong $ 8,698 0.19% France $ 7,421 0.16% Sweden $ 5,207 0.11% Japan $ 3,194 0.07% Mexico $ 2,484 0.05% Ireland $ 1,907 0.04% Israel $ 1,876 0.04% Greece $ 1,025 0.02% China $ 844 0.02% -------- ---- Total $346,940 7.51% ======== ==== 23 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Liberty Acorn International >Major Portfolio changes in the Second Quarter (Unaudited) Number of Shares ------------------------------- 03/31/01 06/30/01 Additions -------------------------------------------------------------------------------- Europe >Germany/Austria Deutsche Boerse 25,000 350,000 Flughafen Wien (Austria) 300,000 360,000 Jenoptik 0 450,000 Techem 0 150,000 Teleplan International 500,000 600,000 >Finland Amer Group 0 300,000 KCI Konecranes International 20,000 65,000 >Sweden Epsilon 0 250,000 >France/Belgium Coface 0 83,000 Euler 145,000 230,000 Neopost 0 400,000 RTL Group (Belgium) 300,000 320,000 Technip 80,000 100,000 >United Kingdom/Ireland Alliance Unichem 225,000 1,000,000 Amey 0 1,000,000 Anglo Irish Bank (Ireland) 0 4,720,000 Dimension Data 0 1,200,000 First Choice Holidays 3,500,000 5,000,000 First Technology 0 775,000 FKI 4,350,000 5,000,000 Hit Entertainment 0 414,045 Incepta 7,500,000 8,000,000 NTL 500,000 600,000 Spectris 0 1,550,000 Torex 0 500,000 Waste Recycling Group 550,000 1,000,000 >Switzerland Bachem 10,000 200,000 Card Guard Scientific (Surviv) 0 130,000 Julius Baer 6,250 6,730 Synthes-Stratec 8,700 10,000 >Italy Interpump Group 21,000 1,000,000 >Spain Abengoa 200,000 300,000 Transportes Azkar 766,000 1,000,000 >Netherlands Buhrmann 700,000 775,000 Furgo 0 100,000 Hunter Douglas 600,000 622,222 Nutreco Holdings 163,000 220,000 Pinkroccade 100,000 200,000 Vopak 170,000 400,000 -------------------------------------------------------------------------------- Asia >Japan Aeon Credit Service 210,000 250,000 Banyu Pharmaceutical 590,000 700,000 Hokuto 0 120,000 Misumi 130,000 165,000 Olympus Optical 800,000 1,000,000 Shimano 40,000 630,000 Toppan Forms 0 600,000 Uni-Charm 215,000 317,000 >Taiwan ASE Test 0 400,000 Procomp Informatics 0 2,100,000 Systex 5,000,000 6,500,000 >Singapore Sembcorp Logistics 950,000 3,800,000 -------------------------------------------------------------------------------- Latin America >Mexico Grupo Aeroportuario 134,700 475,000 >Brazil Banco Itau 0 150,000,000 Embraer Empresa Brasileira 0 100,000 -------------------------------------------------------------------------------- Other Countries >Australia/New Zealand Perpetual Trustees 500,000 520,000 United Networks Limited (New Zealand) 0 750,000 >Canada Canadian Natural Resources 370,000 450,000 >United States MIH 500,000 810,000 24 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Number of Shares ----------------------------- 03/31/01 06/30/01 Sales -------------------------------------------------------------------------------- Europe >Germany/Austria Austria Technologies & Systemtechnik 125,000 0 Dialog Semiconductor 1,185,000 400,000 United GlobalCom 650,000 0 >Finland TietoEnator 500,000 400,000 >Sweden Teleca 1,000,000 782,100 (formerly known as Sigma) WM Data Nordic 2,500,000 1,750,000 >France/Belgium NRJ 800,000 650,000 >United Kingdom Enterprise Oil 750,000 0 Exel 1,300,000 500,000 Fairey Group 1,400,000 0 Hays 6,000,000 5,000,000 Orchestream Holdings 550,000 0 >Switzerland Phoenix Mecano 20,000 0 Sarasin & Cie Bank 6,500 4,000 Selecta Group 100,000 0 >Italy Banca Fideuram 2,500,000 1,675,000 Grupo Coin 900,000 0 >Netherlands Kempen 500,000 0 -------------------------------------------------------------------------------- Asia >Japan Hirose Electric 125,000 50,000 Rohm 60,000 0 >South Korea Samsung 2,250,000 0 >Singapore Venture Manufacturing 5,000,000 1,500,000 -------------------------------------------------------------------------------- Latin America >Mexico Grupo Industrial Bimbo 9,000,000 4,766,000 Wal-Mart de Mexico 5,000,000 0 >Argentina Siderca 1,000,000 375,000 -------------------------------------------------------------------------------- Other Countries >Australia KeyCorp 2,500,000 1,400,000 >Canada Canadian Hunter 500,000 400,000 Celestica 250,000 200,000 Corus Entertainment 1,000,000 906,000 Mosaic 1,315,000 0 >Israel Comverse Technology 220,000 0 DSP Group 600,000 0 25 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Liberty Acorn International >Statement of Investments (Unaudited) June 30, 2001 Number of Shares Value (000) -------------------------------------------------------------------------------- Common Stocks and Other Equity-Like Securities: 85.7% -------------------------------------------------------------------------------- Europe: 52.8% >Germany/Austria: 8.6% 600,000 Rhoen-Klinikum Pfd. (b) $ 27,772 500,000 Rhoen-Klinikum (b) 23,356 Hospital Management 1,000,000 Stinnes 20,808 Logistics 600,000 Teleplan International (b) 14,217 After-Sale Warranty Repair Services 150,000 Fresenius, Pfd. 14,205 Dialysis Equipment & Solutions 350,000 Deutsche Boerse 12,336 Trading, Clearing & Settlement Services for Financial Markets 360,000 Flughafen Wien (Austria) 11,695 Vienna Airport Authority 200,000 Henkel 11,635 Chemicals, Detergents & Non-Food Consumer Brands 450,000 Jenoptik 9,899 Clean Room Construction & Electrical Components 250,000 Pfeiffer Vacuum Technologies 8,068 Vacuum Pump Manufacturer 1,000,000 Takkt 6,200 Mail Order Retailer of Office & Warehouse Durables 240,000 GFK 5,809 Market Research Services 100,000 Beru 3,898 Auto Parts & Electronics 150,000 Techem (b) 3,822 Utility Meter Reading 100,000 Lion Bioscience (b) 2,794 Bioinformatics 400,000 Dialog Semiconductor (b) 1,529 Custom Semiconductors for Cell Phones -------------------------------------------------------------------------------- 178,043 >Denmark: 1.1% 250,000 ISS International Service Systems (b) 14,654 Cleaning Services 100,000 Kobenhavns Lufthavne 7,796 Airport Management -------------------------------------------------------------------------------- 22,450 >Finland: 1.7% 400,000 TietoEnator 8,918 Computer Services/Consulting 300,000 Amer Group 6,879 Branded Outdoor Sporting Goods 350,000 Jaakko Poyry 5,502 Engineering Consultants in Forestry, Energy 900,000 Talentum 5,198 Trade Journals 625,000 Fiskars, Series A 4,565 Scissors & Gardening Tools 65,000 KCI Konecranes International 1,822 Crane Manufacturer & Service Provider 89,000 Spar Finland 1,323 Grocery/Convenience Stores -------------------------------------------------------------------------------- 34,207 >Sweden: 1.5% 500,000 Autoliv 8,640 Seatbelts & Airbags 600,000 Poolia 5,251 Temporary Employment Agency 1,750,000 WM Data Nordic 5,208 Computer Services/Consulting 782,100 Teleca (formerly known as Sigma) 4,143 Technical Consulting 555,000 Metro International, Series B (b) 3,170 160,000 Metro International, Series A (b) 847 Free Subway Newspapers 100,000 Micronic Laser Systems (b) 1,916 Video Display Manufacturing Equipment 250,000 Epsilon (b) 1,175 Computer Simulation & Industrial Design 148,000 Observer 927 Media Monitoring & Communications -------------------------------------------------------------------------------- 31,277 >France/Belgium: 5.4% 320,000 RTL Group (Belgium) 19,527 TV & Radio Broadcaster 500,000 Fininfo 13,801 Data Feeds for French Banks & Brokers 100,000 Technip 12,740 Global Engineering & Construction 200,000 Penauille Polyservice 11,381 Industrial Cleaning/Airport Services 230,000 Euler 10,753 Insurance of Accounts Receivable 400,000 Neopost (b) 10,277 Postage Meter Machines 650,000 NRJ 9,826 Radio Network 30,000 Essilor International 8,612 Eyeglass Lenses 750,000 Telindus Group (Belgium) 6,211 Network Integration Services 83,000 Coface 5,569 Credit Insurance 620,000 Gemplus International (b) 1,869 Smart Card Products & Solutions -------------------------------------------------------------------------------- 110,566 >United Kingdom/Ireland: 15.9% 7,800,000 Serco Group 43,029 Facilities Management 3,000,000 Irish Life & Permanent (Ireland) 35,161 Life Insurance & Savings Products 5,000,000 Capita Group 32,710 Outsourcing Services 5,000,000 Smith & Nephew 26,098 Medical Equipment & Supplies 26 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Number of Shares Value (000) -------------------------------------------------------------------------------- >United Kingdom/Ireland - continued 3,000,000 SSL International $ 21,218 Medical & Footcare Products 5,000,000 FKI 19,874 Materials Handling Equipment 4,720,000 Anglo Irish Bank (Ireland) 17,999 Corporate Lending & Private Banking 5,000,000 Hays 12,960 Outsourcing Services Conglomerate 3,075,000 Holmes Place 12,266 Health Clubs 1,550,000 Spectris 11,160 Electronic Instruments & Controls 5,000,000 First Choice Holidays 10,538 Tour Operator 1,000,000 Expro International 8,346 Offshore Oil Field Services 1,600,000 Euro Money Publications 8,148 Financial Publications 1,000,000 Alliance Unichem 7,638 Pharamaceutical Distribution 2,500,000 Taylor Nelson 7,232 Market Research Services 600,000 NTL (b) 7,230 Voice, Video & Data Services Via Cable Networks 8,000,000 Incepta 6,563 Business Information & Marketing Services 1,500,000 Informa Group 6,471 Trade Shows & Magazines 1,000,000 Waste Recycling Group 5,927 Landfills 500,000 Exel 5,372 Freight Forwarding & Logistics 775,000 First Technology 5,130 Auto Electronic Sensors 1,000,000 Amey 4,930 Facilities Management 1,200,000 Dimension Data (b) 4,583 Networks & Computer Services 500,000 Torex 4,562 Application Software for Hospital Management & Retail 414,045 Hit Entertainment 2,138 Children Television Shows -------------------------------------------------------------------------------- 327,283 >Switzerland: 7.3% 12,500 Cie Fin Richemont 32,051 Luxury Goods 6,730 Julius Baer 25,941 Private Banking, Brokerage & Mutual Funds 60,000 Givaudan 16,672 Industrial Fragrances & Flavors 40,000 Kuoni Reisen 15,518 Tour Operator 6,000 Pargesa 13,712 Industrial & Media Conglomerate 200,000 Bachem 11,371 Peptides 4,000 Sarasin & Cie Bank 9,476 Private Banking 130,000 Card Guard Scientific Surviv (b) 7,246 Telemedicine Devices 35,000 Kaba Holdings 6,926 Building Security Systems 15,000 Bon Appetit 6,605 Wholesale Food Distributor and Speciality Restaurant/Retailer 10,000 Synthes-Stratec 6,148 Products for Orthpaedic Surgery -------------------------------------------------------------------------------- 151,666 >Italy: 4.5% 4,500,000 Autogrill 48,652 Restaurants & Catering for Travelers 3,500,000 Saipem 19,232 Offshore Construction & Drilling 1,675,000 Banca Fideuram 15,961 Life Insurance & Mutual Funds 850,000 Class Editori 4,765 Newspapers & On-Line Financial Data 1,000,000 Interpump Group 3,423 HIGH Pressure Pumps & Pistons -------------------------------------------------------------------------------- 92,033 >Spain: 3.7% 1,000,000 Aguas de Barcelona 13,818 8,500 Aguas de Barcelona, New Shares 120 Water Utility 1,500,000 Red Electrica 13,440 Spanish Power Grid 875,000 Prosegur 11,333 Security Guards 300,000 Abengoa 8,365 Engineering & Construction 700,000 NH Hoteles (b) 8,305 Business Hotel 500,000 Cortefiel 7,049 Apparel Retailer 1,000,000 Transportes Azkar 5,852 Package Delivery & Logistics 500,000 Zardoya Otis 4,501 Elevator Manufacturer & Service Provider 200,000 Aldeasa 4,156 Airport Retail Management -------------------------------------------------------------------------------- 76,939 >Netherlands: 3.1% 622,222 Hunter Douglas 17,492 Decorative Window Coverings 220,000 Nutreco Holdings 9,333 Salmon, Animal Feeds 400,000 Vopak 8,238 Oil Storage & Chemical Distribution 775,000 Buhrmann 7,332 Office Supplies 200,000 Pinkroccade 7,304 Computer Services/Outsourcing 100,000 Furgo 5,588 Survey & GPS services 500,000 OCE 5,266 Manufacturer of High Speed Copiers 27 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Liberty Acorn International >Statement of Investments (Unaudited), continued Number of Shares Value (000) -------------------------------------------------------------------------------- >Netherlands--continued 200,000 United Services Group $ 3,448 Temporary Staffing Services -------------------------------------------------------------------------------- 64,001 ---------- Europe: Total 1,088,465 -------------------------------------------------------------------------------- Asia: 18.7% >Hong Kong: 3.6% 30,000,000 Li & Fung 49,231 Sourcing of Consumer Goods 6,000,000 TVB 25,231 Television Broadcasting -------------------------------------------------------------------------------- 74,462 >Japan: 9.9% 350,000 Orix 34,040 Leasing & Other Financial Services 135,000 Nintendo 24,571 Video Game Software & Hardware 1,000,000 Olympus Optical 16,020 Medical Equipment & Cameras 215,000 Funai Electric 15,222 Consumer Electronics 250,000 Aeon Credit Service 14,833 Credit Card Issuer 40,000 Bellsystem24 13,246 Call Centers 700,000 Banyu Pharmaceutical 12,825 Ethical Drug Producer 260,000 Konami 11,862 Entertainment Software 317,000 Uni-Charm 10,268 Infant Hygiene & Feminine Care Products 600,000 Toppan Forms 10,079 Business Forms & Printing Services 630,000 Shimano 9,284 Bicycle Components & Fishing Tackle 150,000 Otsuka Kagu 8,900 Furniture Retailer 165,000 Misumi 8,030 Distributor of Capital Goods Components 120,000 Hokuto 4,676 Mushroom Production 200,000 Wilson Learning 4,217 Corporate Training 50,000 Hirose Electric 3,809 Electrical Connectors 75,000 Fujitsu Support & Services 2,610 Systems Integration -------------------------------------------------------------------------------- 204,492 >Taiwan: 1.7% 3,750,000 Advantech (b) 12,707 Computer Based Industrial Automation 6,500,000 Systex (b) 7,449 Systems Integrator & Internet Services 5,000,000 Chroma Ate (b) 5,875 Test & Measurement Instruments 400,000 Ase Test (b) 5,108 Semiconductor Packaging & Test Services 2,100,000 Procomp Informatics (b) 4,154 Gallium Arsenide EPI Wafers & Other Electronics -------------------------------------------------------------------------------- 35,293 >South Korea: 1.4% 1,500,000 S1 Corporation 16,641 Security Services 140,000 Cheil Communications 12,188 Advertising -------------------------------------------------------------------------------- 28,829 >Singapore: 2.1% 50,000,000 Star Cruises (b) 27,000 Cruise Line 1,500,000 Venture Manufacturing 9,953 Electronic Manufacturing Services 3,800,000 Sembcorp Logistics 4,855 Logistic Services for Marine Transport -------------------------------------------------------------------------------- 41,808 ---------- Asia: Total 384,884 -------------------------------------------------------------------------------- Latin America: 3.1% >Mexico: 1.9% 5,500,000 Corp Interamericana de Entretenimiento (b) 22,810 Special Events & Live Entertainment 475,000 Grupo Aeroportuario (b) 8,883 Airport Management 4,766,000 Grupo Industrial Bimbo 8,445 Bread, Baked Goods & Snacks -------------------------------------------------------------------------------- 40,138 >Brazil: 0.8% 150,000,000 Banco Itau 12,979 Universal Bank 100,000 Embraer Empresa Brasileira 3,905 Mid Size Jets for Regional Airlines -------------------------------------------------------------------------------- 16,884 >Argentina: 0.4% 375,000 Siderca 7,256 Seamless Pipes for Oil Wells ---------- Latin America: Total 64,278 -------------------------------------------------------------------------------- Other Countries: 11.1% >Australia/New Zealand: 2.3% 7,000,000 Computershare 21,971 180,000 Computershare Warrants 0 Financial Software/Services 520,000 Perpetual Trustees 10,858 Investment Management 12,800,000 ERG 9,407 Smart Card Systems for Public Transportation 750,000 United Networks Limited (New Zealand) 2,710 New Zealand Electric Grid 1,400,000 KeyCorp (b) 1,650 Smart Card Technology -------------------------------------------------------------------------------- 46,596 28 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Number of Shares or Principal Amount Value (000) -------------------------------------------------------------------------------- >Canada: 6.4% 1,150,000 Power Financial $ 24,302 Life Insurance & Mutual Funds 906,000 Corus Entertainment (b) 20,761 CATV Programming & Radio Stations 500,000 Precision Drilling (b) 15,634 Oil & Gas Well Driller 400,000 Talisman Energy 15,255 Oil & Gas Producer 450,000 Canadian Natural Resources 13,328 Oil & Gas Producer 500,000 Penn West Petroleum (b) 12,877 Oil & Gas Producer 200,000 Celestica (b) 10,291 Electronic Manufacturing Services 400,000 Canadian Hunter 9,773 Natural Gas Producer 450,000 Intrawest 8,915 Owner/Operator of Ski Resorts 262,000 Cinar (b) 1,192 Children's TV Programming -------------------------------------------------------------------------------- 132,328 >Israel: 1.6% 600,000 Amdocs (b) 32,310 Telecommunications Billing & Customer Care Software -------------------------------------------------------------------------------- >Russia: 0.3% 11,416 Khanty Mansiysk (b) 4,244 $1,500,000 Khanty Mansiysk 1% Notes (b) Due 10/14/02 1,500 Oil Production in Russia -------------------------------------------------------------------------------- 5,744 >United States: 0.5% 810,000 MIH (b) 11,543 Pay-TV & Interactive TV Technology -------------------------------------------------------------------------------- Other: Total 228,521 Total Common Stocks and Other Equity-Like Securities: 85.7% (Cost: $1,635,090) ---------- 1,766,148 Short-Term Obligations: 5.3% Yield 3.70% - 3.85% Due 7/02 - 7/05/01% $ 41,521 Exxon 41,512 35,458 American Express 35,443 32,920 Wal-Mart 32,917 -------------------------------------------------------------------------------- (Amortized Cost: $109,872) 109,872 ---------- Total Investments (Cost: $1,744,962)(a): 91.0% 1,876,020 Cash and Other Assets Less Liabilities: 9.0% 186,511 ---------- Total Net Assets: 100% $2,062,531 ================================================================================ -------------------------------------------------------------------------------- >Notes to Statement of Investments (a) At June 30, 2001, for federal income tax purposes cost of investments is $1,752,988 and net unrealized appreciation was $123,032 consisting of gross unrealized appreciation of $387,310 and gross unrealized depreciation of $264,278 (b) Non-income producing security. (c) On June 30, 2001, $561,962 or 27.2% of the Fund's net assets was denominated in the Euro currency. 29 -------------------------------------------------------------------------------- I -------------------------------------------------------------------------------- Liberty Acorn International >Portfolio Diversification At June 30, 2001, the Fund's portfolio of investments as a percent of net assets was diversified as follows: Value (000) Percent -------------------------------------------------------------------------------- >Computer Hardware Semiconductors $ 12,706 0.6 Telephone Equipment 3,809 0.2 PCs and Peripherals and other 1,650 0.1 -------------------------------------------------------------------------------- 18,165 0.9 >Computer Software Telephone Related 32,310 1.6 -------------------------------------------------------------------------------- 32,310 1.6 >Technology Services Full Service 27,165 1.3 Network/ SI 14,642 0.7 Internet/ Web Consulting 5,198 0.3 Embedded Systems 4,143 0.2 -------------------------------------------------------------------------------- 51,148 2.5 >Telecommunications Internet Service Providers (ISP) 11,543 0.6 Alternative Provider 6,210 0.3 Cable 7,230 0.4 -------------------------------------------------------------------------------- 24,983 1.3 >Broadcasting & Media Content Media Content Providers 64,857 3.1 Radio & TV Broadcasting 56,722 2.8 Hybrid Internet 30,731 1.5 Market Research 13,041 0.6 -------------------------------------------------------------------------------- 165,351 8.0 >Health Care Devices & Consumable 80,493 3.9 Services 66,986 3.2 Biotech 14,165 0.7 Drugs 7,638 0.4 -------------------------------------------------------------------------------- 169,282 8.2 >Business Services Business Services 148,462 7.2 Business Process Outsourcing 132,699 6.4 Logistics 51,104 2.5 Consumer Services 4,217 0.2 -------------------------------------------------------------------------------- 336,482 16.3 >Financials Lending Institutions 85,420 4.2 Insurance 70,216 3.4 Asset Management 62,236 3.0 -------------------------------------------------------------------------------- 217,872 10.6 >Consumer Goods & Services Branded Goods 123,770 6.0 Leisure 98,917 4.8 Retail Outlets 76,686 3.7 Distribution/ E-Commerce 6,200 0.3 -------------------------------------------------------------------------------- 305,573 14.8 >Industrials Goods 130,032 6.3 Electronic Manufacturing Services 35,466 1.7 Electronic Manufacturing 20,452 1.0 Construction 12,263 0.6 R&D Design Firms 11,160 0.5 Distribution 8,030 0.4 -------------------------------------------------------------------------------- 217,403 10.5 >Other Industries Energy 132,258 6.4 Utilities 64,389 3.1 Real Estate 17,220 0.8 Conglomerate 13,712 0.7 -------------------------------------------------------------------------------- 227,579 11.0 Total Common Stock: ---------------------- 1,766,148 85.7 Short-term Obligations: 109,872 5.3 ---------------------- Total Investments: 1,876,020 91.0 Cash and Other Assets less Liabilities: 186,511 9.0 ---------------------- Net Assets: $2,062,531 100.0% ================================================================================ 30 -------------------------------------------------------------------------------- U -------------------------------------------------------------------------------- Liberty Acorn USA >Major portfolio changes in the Second Quarter (Unaudited) Number of Shares -------------------------- 3/31/01 09/30/01 Additions -------------------------------------------------------------------------------- Information Axcelis Technologies 0 80,000 Euronet Services 0 227,000 Integrated Circuit Systems 0 60,000 -------------------------------------------------------------------------------- Health Care Beverly Enterprises 0 100,000 Novoste 0 89,000 -------------------------------------------------------------------------------- Consumer Goods/Services Gadzooks 327,000 347,000 Steve Madden 0 133,000 -------------------------------------------------------------------------------- Energy/Minerals Maverick Tube 0 134,000 Sales -------------------------------------------------------------------------------- Information CACI International 144,700 127,700 DSP Group 76,100 0 TDS 174,000 110,000 -------------------------------------------------------------------------------- Finance AmeriCredit 486,500 450,500 -------------------------------------------------------------------------------- Energy/Minerals Dynegy 110,400 80,400 31 -------------------------------------------------------------------------------- U -------------------------------------------------------------------------------- Liberty Acorn USA >Statement of Investments (Unaudited) June 30, 2001 Number of Shares Value (000) -------------------------------------------------------------------------------- Common Stocks: 90.4% -------------------------------------------------------------------------------- Information: 33.4% >Broadcasting: 2.6% 333,100 Salem Communications (b) $ 7,178 Radio Stations for Religious Programming -------------------------------------------------------------------------------- >Radio: 0.2% 42,500 Cumulus Media, Cl. A (b) 525 Radio Stations in Small Cities -------------------------------------------------------------------------------- >Television Programmimg: 1.8% 285,000 Mediacom Communications (b) 5,047 Cable Television Franchises -------------------------------------------------------------------------------- >Telecommunications/Wireline Communications: 1.0% 66,000 Commonwealth Telephone (b) 2,780 Rural Phone Franchises & CLEC -------------------------------------------------------------------------------- >Mobile Communications: 5.3% 110,000 TDS 11,962 Cellular & Telephone Services 182,700 Comarco (b) 2,708 Wireless Network Testing 35,000 Pinnacle Holdings (b) 191 Towers for Wireless Communications -------------------------------------------------------------------------------- 14,861 >Telecommunications Equipment: 0.2% 97,200 Aspect Communications (b) 604 Call Center Software -------------------------------------------------------------------------------- >Computer Services: 1.3% 155,000 Pomeroy Computer Resources (b) 1,987 Network Integration Services 301,000 RCM Technologies (b) 1,460 Technology Staffing Services 13,400 New Horizons Worldwide (b) 187 Computer Training Services -------------------------------------------------------------------------------- 3,634 >Business Software: 8.8% 527,600 Micros Systems (b) 11,122 Information Systems for Restaurants & Hotels 578,000 JDA Software (b) 9,826 Applications/Software & Services for Retailers 132,000 MRO Software (b) 2,099 Enterprise Management Software 50,000 Group 1 Software (b) 912 Address Verification Software 45,700 SPSS (b) 722 Statistical Analysis Software -------------------------------------------------------------------------------- 24,681 >Transaction Processors: 6.1% 268,300 National Data 8,693 Credit Card & Health Claims Processor 214,640 Global Payments 6,461 Credit Card Processor 227,000 Euronet Services (b) 2,043 ATM Processor -------------------------------------------------------------------------------- 17,197 >Internet: 0.1% 65,900 Online Resources (b) 158 Internet Banking Technology -------------------------------------------------------------------------------- >Business Information/Marketing Services: 3.2% 127,700 CACI International (b) 5,497 Technology Services for Government 102,800 Getty Images (b) 2,711 Photographs for Publications & Electronic Media 95,000 PRIMEDIA 645 Specialty Magazines & Other Publications -------------------------------------------------------------------------------- 8,853 >Instrumentation: 2.0% 205,000 Tektronix (b) 5,566 Analytical Instruments -------------------------------------------------------------------------------- >Semiconductors/Related Equipment: 0.8% 80,000 Axcelis Technologies (b) 1,220 Ion Implantation Tools 60,000 Integrated Circuit Systems (b) 1,146 Silicon Timing Devices -------------------------------------------------------------------------------- 2,366 ------- Information: Total 93,450 -------------------------------------------------------------------------------- Health Care: 15.6% >Biotechnology/Drug Delivery: 0.6% 154,000 SYRRX, Series C (b) 1,001 X-Ray Crystallography 363,636 Metabolex, Series F (b) 582 Drugs for Diabetes -------------------------------------------------------------------------------- 1,583 >Medical Equipment: 4.1% 274,000 Edwards Lifesciences (b) 7,223 Heart Valves 89,000 Novoste (b) 2,287 Radiation Catheters for In-stent Restenosis 100,000 Steris (b) 2,005 Sterilization Devices -------------------------------------------------------------------------------- 11,515 >Services: 10.9% 856,100 Magellan Health Services (b) 10,958 Mental Health Services 246,800 Lincare Holdings (b) 8,021 Home Health Care Services 184,000 First Health (b) 4,948 PPO Network 148,900 Serologicals (b) 3,170 Blood Collection & Antibody Production 80,000 Syncor International (b) 2,456 Nuclear Pharmacy for Radiopharmaceuticals 32 -------------------------------------------------------------------------------- U -------------------------------------------------------------------------------- Number of Shares Value (000) -------------------------------------------------------------------------------- >Services - continued 100,000 Beverly Enterprises $ 1,070 Nursing Homes -------------------------------------------------------------------------------- 30,623 -------- Health Care: Total 43,721 -------------------------------------------------------------------------------- Consumer Goods/Services: 9.7% >Consumer Services: 5.3% 303,000 ITT Educational Services (b) 13,635 Technology Oriented Postsecondary Degree Programs 43,000 Bally Total Fitness (b) 1,273 National Chain of Fitness Centers -------------------------------------------------------------------------------- 14,908 >Apparel: 0.2% 35,000 Kenneth Cole Productions (b) 705 Wholesaler/Retailer of Men's/Women's Shoes/Apparel -------------------------------------------------------------------------------- >Retail: 4.2% 347,000 Gadzooks (b) 4,542 Teen Apparel Retailer 105,000 Whole Foods Market (b) 2,858 Natural Food Supermarkets 133,000 Steven Madden (b) 2,441 Wholesaler/Retailer of Fashion Footware 65,000 Borders Group (b) 1,456 Bookstores 20,000 Calloway Golf 316 Premium Golf Clubs & Balls -------------------------------------------------------------------------------- 11,613 -------- Consumer Goods/Services: Total 27,226 -------------------------------------------------------------------------------- Finance: 12.5% >Banks: 1.6% 126,500 Chittenden 4,257 Vermont & West Massachusetts Bank 7,750 Texas Regional Bancshares 311 TexMex Bank -------------------------------------------------------------------------------- 4,568 >Finance Companies: 10.4% 450,500 AmeriCredit (b) 23,403 Auto Lending 590,000 World Acceptance (b) 5,528 Personal Loans -------------------------------------------------------------------------------- 28,931 >Insurance: 0.5% 40,000 Leucadia National 1,298 Insurance Holding Company -------- Finance: Total 34,797 -------------------------------------------------------------------------------- Industrial Goods/Services: 5.4% >Industrial Goods: 0.2% 111,400 Advanced Lighting Technologies (b) 501 Metal Halide Lighting & Fiber Optic Coatings -------------------------------------------------------------------------------- >Industrial Materials: 0.4% 40,000 Clarcor 1,074 Mobile & Industrial Filters -------------------------------------------------------------------------------- >Industrial Services: 4.8% 422,500 Wackenhut, Cl. B (b) 5,809 Prison Management 346,000 Hub Group (b) 4,498 Truck & Rail Freight Forwarder 206,900 Insurance Auto Auctions (b) 3,197 Auto Salvage Services -------------------------------------------------------------------------------- 13,504 -------- Industrial Goods/Services: Total 15,079 -------------------------------------------------------------------------------- Energy/Minerals: 9.3% >Oil Services: 2.3% 371,000 Newpark Resources (b) 4,118 Oilfield Fluid Management 134,000 Maverick Tube (b) 2,271 Steel Pipes for Oil & Gas Wells -------------------------------------------------------------------------------- 6,389 >Independent Power: 0.3% 45,000 Covanta Energy 831 Electric Power Developer -------------------------------------------------------------------------------- >Oil/Gas Producers: 2.0% 435,800 Tesoro Petroleum 5,491 Oil Refinery/Gas Reserves -------------------------------------------------------------------------------- >Distribution/Marketing/Refining: 4.7% 142,600 Equitable Resources 4,750 Natural Gas Utility & Producer 193,000 Atmos Energy 4,721 Natural Gas Utility 80,400 Dynegy 3,739 Natural Gas & Electric Processing, Production & Marketing -------------------------------------------------------------------------------- 13,210 -------- Energy/Minerals: Total 25,921 -------------------------------------------------------------------------------- Other Industries: 4.5% >Real Estate: 0.5% 47,000 The Rouse Company 1,347 Regional Shopping Malls -------------------------------------------------------------------------------- >Regulated Utilities: 4.0% 523,000 Conectiv 11,297 Electric Utility in New Jersey, Delaware & Maryland -------- Other Industries: Total 12,644 Total Common Stocks (Cost: $197,876): 90.4% 252,838 -------------------------------------------------------------------------------- 33 -------------------------------------------------------------------------------- U -------------------------------------------------------------------------------- Liberty Acorn USA >Statement of Investments (Unaudited), continued Principal Amount Value (000) -------------------------------------------------------------------------------- Short-Term Obligations: 8.6% Yield 3.78% - 3.80% Due 7/02 - 7/03/01 $ 12,694 American General Finance $ 12,691 11,420 Prudential Funding 11,419 -------------------------------------------------------------------------------- (Amortized Cost: $24,110) 24,110 Total Investments (Cost: $221,986)(a): 99.0% 276,948 Cash and Other Assets Less Liabilities: 1.0% 2,746 -------- Total Net Assets: 100% $279,694 ================================================================================ -------------------------------------------------------------------------------- >Notes to Statement of Investments (a) At June 30, 2001, for federal Income tax purposes cost of investments is the same and net unrealized appreciation was $54,962 consisting of gross unrealized appreciation of $81,964 and gross unrealized depreciation of $27,002. (b) Non-income producing security. 34 -------------------------------------------------------------------------------- F40 -------------------------------------------------------------------------------- Liberty Acorn Foreign Forty >Major Portfolio Changes in the Second Quarter (Unaudited) Number of Shares --------------------------- 03/31/01 06/30/01 Additions -------------------------------------------------------------------------------- Asia >Japan Nintendo 9,000 14,700 -------------------------------------------------------------------------------- Other Countries >Canada Investors Group 0 160,000 Precision Drilling 0 80,000 Sales -------------------------------------------------------------------------------- Europe >France/Belgium Gemplus International 300,000 0 RTL Group (Belgium) 70,000 45,000 >Sweden Tele2 AB (formerly known as Netcom) 95,200 0 >United Kingdom / Ireland BG Group 900,000 630,000 Capita Group 506,000 350,000 Enterprise Oil 400,000 0 Excel 200,000 70,200 Hays 550,000 220,000 Irish Life & Permanent (Ireland) 500,000 288,000 Serco Group 500,000 400,000 >Switzerland Cie Fin Richemont 800 300 Julius Baer Holdings 800 480 >Italy Autogrill 400,000 200,000 Banca Fideuram 350,000 190,000 Saipem 800,000 0 >Netherlands Fortis 170,000 100,000 -------------------------------------------------------------------------------- Asia >Hong Kong Li & Fung 2,000,000 1,000,000 >Japan Sky Perfect Communications 1,300 450 >Singapore Venture Manufacturing 700,000 60,000 -------------------------------------------------------------------------------- Other Countries >Australia Computershare 1,200,000 642,000 >Canada Celestica 120,000 12,000 Talisman Energy 170,000 70,000 >Israel Comverse Technology 60,000 0 35 -------------------------------------------------------------------------------- F40 -------------------------------------------------------------------------------- Liberty Acorn Foreign Forty >Statement of Investments (Unaudited) June 30, 2001 Number of Shares Value (000) -------------------------------------------------------------------------------- Common Stocks: 92.3% -------------------------------------------------------------------------------- Europe: 56.8% >Germany: 9.9% 63,000 Rhoen Klinikum $ 2,943 Hospital Management 50,000 Henkel 2,909 Chemicals, Detergents & Non-Food Consumer Brands 73,000 Deutsche Boerse 2,573 Trading, Clearing & Settlement Services for Financial Markets -------------------------------------------------------------------------------- 8,425 >France/Belgium: 5.2% 45,000 RTL Group (Belgium) 2,746 TV & Radio Broadcaster 30,000 AGF 1,674 Life & Health Insurance -------------------------------------------------------------------------------- 4,420 >United Kingdom/Ireland: 22.1% 288,000 Irish Life & Permanent (Ireland) 3,376 Life Insurance & Savings Products 840,000 Rolls Royce 2,786 Turbines 656,000 Dimension Data (b) 2,505 Network Integration 630,000 BG Group 2,497 Natural Gas Producer & Distributor 350,000 Capita Group 2,290 Outsourcing Services 400,000 Serco Group 2,207 Facilities Management 360,000 Smith & Nephew 1,879 Medical Equipment & Supplies 70,200 Exel 754 Freight Forwarding Logistics 220,000 Hays 570 Outsourcing Services -------------------------------------------------------------------------------- 18,864 >Switzerland: 9.1% 4,700 Synthes Stratec 2,890 Products for Orthopedic Surgery 1,000 Pargesa Holdings 2,285 Industrial & Media Conglomerate 480 Julius Baer Holding 1,850 Private Banking, Brokerage & Mutual Funds 300 Cie Fin Richemont 769 Luxury Goods, Tobacco & Pay TV -------------------------------------------------------------------------------- 7,794 >Italy: 4.7% 200,000 Autogrill 2,162 Restaurants & Catering for Travelers 190,000 Banca Fideuram 1,811 Life Insurance & Mutual Funds -------------------------------------------------------------------------------- 3,973 >Netherlands: 5.8% 100,000 Fortis 2,439 Financial Services Conglomerate 121,034 TNT Post Group 2,534 Postal Service & Parcel Delivery -------------------------------------------------------------------------------- 4,973 ------- Europe: Total 48,449 -------------------------------------------------------------------------------- Asia: 19.4% >Hong Kong: 1.9% 1,000,000 Li & Fung 1,641 Sourcing of Consumer Goods -------------------------------------------------------------------------------- >Japan: 11.2% 14,700 Nintendo 2,676 Video Game Software & Hardware 24,300 Orix 2,363 Finance Leasing 29,700 Oriental Land 2,205 Disney Theme Park Operator 75,000 KAO 1,864 Consumer Products 450 Sky Perfect Communications (b) 458 Satellite TV Subscriptions -------------------------------------------------------------------------------- 9,566 >Tawain: 2.8% 262,500 United Microelectronics (b) 2,336 Semiconductor Foundry -------------------------------------------------------------------------------- >Singapore: 3.5% 4,800,000 Star Cruises (b) 2,592 Cruise Line 60,000 Venture Manufacturing 398 Electronic Manufacturing Services -------------------------------------------------------------------------------- 2,990 ------- Asia: Total 16,533 -------------------------------------------------------------------------------- Other Countries: 16.1% >Australia: 3.4% 642,000 Computershare 2,015 Financial Software/Services 1,215,000 ERG 893 Smart Card Systems for Public Transportation -------------------------------------------------------------------------------- 2,908 >Canada: 9.4% 70,000 Talisman Energy 2,670 Oil & Gas Producer 80,000 Precision Drilling (b) 2,502 Oil & Gas Well Driller 160,000 Investors Group 2,261 Mutual Funds 36 -------------------------------------------------------------------------------- F40 -------------------------------------------------------------------------------- Principal Amount or Number of Shares Value (000) -------------------------------------------------------------------------------- >Canada - continued 12,000 Celestica (b) $ 618 Electronic Manufacturing Services -------------------------------------------------------------------------------- 8,051 >Israel: 3.3% 52,000 Amdocs (b) 2,800 Telecommunications Billing & Customer Care Software ------- Other: Total 13,759 ------- Total Common Stocks (Cost: $85,193): 92.3% 78,741 Short-Term Obligations: 7.6% Yield 3.78% - 3.80% Due 7/02 - 7/03/01 $3,925 American General Finance 3,924 2,567 Prudential Funding 2,567 -------------------------------------------------------------------------------- (Amortized Cost: $6,491) 6,491 ------- Total Investments (Cost: $91,684)(a): 99.9% 85,232 Cash and Other Assets Less Liabilities: 0.1% 60 ------- Total Net Assets - 100% $85,292 ================================================================================ -------------------------------------------------------------------------------- >Notes to Statement of Investments (a) At June 30, 2001, for federal income tax purposes cost of investments is $92,069 and net unrealized depreciation was $6,837, consisting of gross unrealized appreciation of $8,104 and gross unrealized depreciation of $14,941. (b) Non-income producing security. (c) At June 30, 2001, $22,593 or 26.5% of the Fund's net assets was denominated in Euro currency. 37 -------------------------------------------------------------------------------- F40 -------------------------------------------------------------------------------- Liberty Acorn Foreign Forty >Portfolio Diversification At June 30, 2001, the Fund's portfolio of investments as a percent of net assets was diversified as follows: Including Cash Value (000) Percent -------------------------------------------------------------------------------- >Consumer Goods & Services Nondurables $ 5,542 6.5% Intl Consumer Software 2,676 3.1 Cruise Lines 2,592 3.0 Other Consumer Services 2,534 3.0 Other Entertainment 2,205 2.6 Restaurants 2,162 2.5 -------------------------------------------------------------------------------- 17,711 20.7 >Energy & Minerals Oil & Gas Producers 5,167 6.1 Oil Services 2,501 2.9 -------------------------------------------------------------------------------- 7,668 9.0 >Finance Insurance 7,489 8.8 Money Management 5,922 6.9 Other Finance Companies 2,363 2.8 Closed End Funds 2,285 2.7 -------------------------------------------------------------------------------- 18,059 21.2 >Healthcare Medical Equipment 4,769 5.6 Hospital Management 2,943 3.4 -------------------------------------------------------------------------------- 7,712 9.0 >Industrial Goods Outsourcing Services 6,708 7.9 Machinery 2,786 3.3 -------------------------------------------------------------------------------- 9,494 11.2 >Computer Related Hardware Semiconductors and Related Equipment 2,336 2.7 Contract Manufacturing 1,016 1.2 -------------------------------------------------------------------------------- 3,352 3.9 >Software & Services Transaction Processors 5,481 6.4 Business Software 2,800 3.3 Computer Services 2,506 2.9 -------------------------------------------------------------------------------- 10,787 12.6 >Media TV Broadcasting 2,746 3.3 Satellite Broadcasting and Services 458 0.5 -------------------------------------------------------------------------------- 3,204 3.8 >Other Transportation 754 0.9 -------------------------------------------------------------------------------- 754 0.9 ---------------------- Total Equities 78,741 92.3 Short Term Obligations 6,491 7.6 ---------------------- Total Investments 85,232 99.9 Cash and Other Assets less Liabilities: 60 0.1 ---------------------- Total Net Assets: 100% 85,292 100.0% ================================================================================ 38 -------------------------------------------------------------------------------- 20 -------------------------------------------------------------------------------- Liberty Acorn Twenty >Major Portfolio Changes in the Second Quarter (Unaudited) Number of Shares ------------------------- 03/31/00 06/30/01 Additions -------------------------------------------------------------------------------- Information JD Edwards 236,000 450,000 -------------------------------------------------------------------------------- Finance Associated Banc-Corp 72,000 150,000 -------------------------------------------------------------------------------- Industrial Goods/Service Pall 0 100,000 -------------------------------------------------------------------------------- Energy/Minerals Aquila 0 150,000 XTO Energy 0 225,000 (formerly known as Cross Timbers Oil) Sales -------------------------------------------------------------------------------- Information TDS 48,000 20,000 -------------------------------------------------------------------------------- Health Care Bausch & Lomb 50,000 0 -------------------------------------------------------------------------------- Energy/Minerals Devon Energy 48,000 0 Dynegy 65,000 0 39 -------------------------------------------------------------------------------- 20 -------------------------------------------------------------------------------- Liberty Acorn Twenty >Statement of Investments (Unaudited) June 30, 2001 Number of Shares Value (000) -------------------------------------------------------------------------------- Common Stocks: 90.4% -------------------------------------------------------------------------------- Information: 33.3% >Television Programming: 2.9% 150,000 Liberty Media Group, AT&T (b) $ 2,624 CATV Programming & Media Company Holdings -------------------------------------------------------------------------------- >Instrumentation: 3.9% 90,000 Tektronix (b) 2,443 Analytical Instruments 36,500 Waters Corp (b) 1,008 Chromatography, Mass Spectrometry, Thermal Analysis -------------------------------------------------------------------------------- 3,451 >Mobile Communications: 3.4% 20,000 TDS 2,175 Cellular & Telephone Services 40,000 American Tower (b) 827 Towers for Wireless Communications -------------------------------------------------------------------------------- 3,002 >Contract Manufacturing: 1.4% 40,000 Jabil Circuit (b) 1,234 Electronic Manufacturing Services -------------------------------------------------------------------------------- >Business Software: 7.1% 450,000 JD Edwards (b) 6,367 Mid Market ERP Software -------------------------------------------------------------------------------- >Transaction Processors: 6.9% 195,000 Nova (b) 6,133 Credit Card Processor -------------------------------------------------------------------------------- >Business Information: 7.7% 73,000 H & R Block 4,712 Tax Preparation 83,000 Getty Images (b) 2,189 Photographs for Publications & Electronic Media -------------------------------------------------------------------------------- 6,901 ------- Information: Total 29,712 -------------------------------------------------------------------------------- Health Care: 14.9% >Medical Equipment: 7.6% 400,000 Boston Scientific (b) 6,800 Stents & Catheters -------------------------------------------------------------------------------- >Hospital/Laboratory Supplies: 2.8% 82,500 Techne (b) 2,483 Cytokines, Antibodies, Other Reagents for Life Sciences -------------------------------------------------------------------------------- >Services: 4.5% 150,000 First Health (b) 4,033 PPO Network ------- Health Care: Total 13,316 -------------------------------------------------------------------------------- Consumer Goods/Services: 16.1% >Leisure Vehicles: 3.9% 74,000 Harley-Davidson 3,484 Motorcycles & Related Merchandise -------------------------------------------------------------------------------- >Retail: 2.5% 140,000 Calloway Golf 2,212 Premium Golf Clubs & Balls -------------------------------------------------------------------------------- >Furniture & Manufacturers: 9.7% 105,000 Jones Apparel (b) 4,536 Women's Apparel 160,000 Herman Miller 4,125 Office Furniture -------------------------------------------------------------------------------- 8,661 ------- Consumer Goods/Services: Total 14,357 -------------------------------------------------------------------------------- Finance: 12.6% >Banks: 9.4% 150,000 Associated Banc-Corp 5,206 Midwest Bank 70,000 TCF Financial 3,242 Great Lakes Bank -------------------------------------------------------------------------------- 8,448 >Money Management: 3.2% 60,000 SEI Investments 2,835 Mutual Fund Administration & Investment Management ------- Finance: Total 11,283 -------------------------------------------------------------------------------- Industrial Goods/Services: 5.7% >Logistics: 3.1% 45,000 Expeditors International of Washington 2,767 International Freight Forwarder -------------------------------------------------------------------------------- >Machinery: 2.6% 100,000 Pall 2,353 Filtration & Fluids Clarification ------- Industrial Goods/Services: Total 5,120 -------------------------------------------------------------------------------- Energy/Minerals: 7.8% >Distribution/Marketing/Refining: 4.2% 150,000 Aquila (b) 3,698 Energy Trading -------------------------------------------------------------------------------- >Oil & Gas Producers: 3.6% 225,000 XTO Energy (formerly known as Cross Timber Oil) 3,229 Natural Gas Producer ------- Energy/Minerals: Total 6,927 Total Common Stocks (Cost: $68,660): 90.4% 80,715 40 -------------------------------------------------------------------------------- 20 -------------------------------------------------------------------------------- Principal Amount Value (000) -------------------------------------------------------------------------------- Short-Term Obligations: 9.0% Yield 3.70% - 3.85% Due 7/02 - 7/05/01 $3,288 Exxon $ 3,287 2,356 American Express 2,354 2,339 GE Capital 2,339 -------------------------------------------------------------------------------- (Amortized Cost: $7,980) 7,980 ------- Total Investments (Cost: $76,640)(a): 99.4% 88,695 Cash and Other Assets Less Liabilities: 0.6% 557 ------- Total Net Assets: 100% $89,252 ================================================================================ -------------------------------------------------------------------------------- >Notes to Statement of Investments (a) At June 30, 2001, for federal income tax purposes cost of investments is the same and net unrealized appreciation was $12,055, consisting of gross unrealized appreciation of $16,908 and gross unrealized depreciation of $4,853. (b) Non-income producing security. 41 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Statements of Assets and Liabilities (Unaudited)
Liberty Liberty Liberty Acorn Acorn Acorn June 30, 2001 Fund International USA ---------------------------------------------------------------------------------------------------------------- (in thousands) Assets Investments, at value (cost: Liberty Acorn Fund $2,986,785; Liberty Acorn International $1,744,962; Liberty Acorn USA $221,986; Liberty Acorn Foreign Forty $91,684; Liberty Acorn Twenty $76,640) $ 4,633,214 $ 1,876,020 $ 276,948 Cash -- -- 1 Foreign currency (cost: Liberty Acorn Fund $14,036; Liberty Acorn International $175,030; Liberty Acorn Foreign Forty $1,477) 14,050 169,104 -- Net unrealized appreciation on forward foreign currency contracts -- 557 -- Receivable for: Investments sold 11,388 6,582 -- Fund shares sold 12,949 18,519 6,447 Dividends and interest 1,887 2,789 1 Expense reimbursement due for Class A, B and C from Advisor -- -- -- Deferred Trustees' compensation plan 568 325 42 Other assets 27 27 4 ---------------------------------------------------------------------------------------------------------------- Total Assets 4,674,083 2,073,923 283,443 Liabilities Payable for: Investments purchased 48,332 4,526 3,102 Fund shares redeemed 1,206 3,638 285 Management fees 2,470 1,645 200 Administration fee 200 112 17 Deferred Trustees' Fees 568 325 42 Registration 9 76 9 Professional 100 53 22 Custody fees 65 396 3 Reports to shareholders 169 264 5 Trustees' fee 2 46 9 Transfer agent fee 252 192 19 Other liabilities 260 119 36 ---------------------------------------------------------------------------------------------------------------- Total Liabilities 53,633 11,392 3,749 ---------------------------------------------------------------------------------------------------------------- Net Assets $ 4,620,450 $ 2,062,531 $ 279,694 ================================================================================================================ Composition of Net Assets Paid in capital $ 2,874,606 $ 1,968,322 $ 218,528 Undistributed net investment income (Accumulated net investment loss) 3,434 10,053 (602) Accumulated net realized gain (loss) 95,995 (33,296) 6,806 Net unrealized appreciation (depreciation) of investments and other assets (net of unrealized PFIC gains of $8,026 for Liberty Acorn International and $385 for Liberty Acorn Foreign Forty) 1,646,415 117,452 54,962 ---------------------------------------------------------------------------------------------------------------- Net Assets $ 4,620,450 $ 2,062,531 $ 279,694 ================================================================================================================ Net assets value and redemption price per share -- Class A (a) $ 18.41 $ 20.09 $ 18.72 $ (127,790/6,942) $ (24,126/1,201) $ (9,135/488) Maximum offering price per share (5.75%) -- Class A (b) $ 19.53 $ 21.32 $ 19.86 $ (18.41/.9425) $ (20.09/.9425) $ (18.72/.9425) Net asset value and offering price per share -- Class B (a) $ 18.34 $ 20.01 $ 18.65 $ (125,057/6,819) $ (15,233/761) $ (7,585/407) Net asset value and offering price per share -- Class C (a) $ 18.34 $ 20.00 $ 18.66 $ (58,863/3,210) $ (12,627/632) $ (3,676/197) Net asset value, offering price and redemption price per share -- Class Z $ 18.47 $ 20.15 $ 18.78 $(4,308,740/233,302) $(2,010,545/99,787) $(259,298/13,804) Liberty Liberty Acorn Acorn June 30, 2001 Foreign Forty Twenty ---------------------------------------------------------------------------------------- (in thousands) Assets Investments, at value (cost: Liberty Acorn Fund $2,986,785; Liberty Acorn International $1,744,962; Liberty Acorn USA $221,986; Liberty Acorn Foreign Forty $91,684; Liberty Acorn Twenty $76,640) $ 85,232 $ 88,695 Cash 1 -- Foreign currency (cost: Liberty Acorn Fund $14,036; Liberty Acorn International $175,030; Liberty Acorn Foreign Forty $1,477) 1,475 -- Net unrealized appreciation on forward foreign currency contracts -- -- Receivable for: Investments sold -- -- Fund shares sold 1,674 746 Dividends and interest 111 43 Expense reimbursement due for Class A, B and C from Advisor 1 6 Deferred Trustees' compensation plan -- -- Other assets 1 10 ---------------------------------------------------------------------------------------- Total Assets 88,495 89,500 Liabilities Payable for: Investments purchased 2,944 42 Fund shares redeemed 91 117 Management fees 70 59 Administration fee 6 3 Deferred Trustees' Fees -- -- Registration 20 -- Professional 15 5 Custody fees 11 -- Reports to shareholders 20 5 Trustees' fee -- -- Transfer agent fee 18 10 Other liabilities 8 7 ---------------------------------------------------------------------------------------- Total Liabilities 3,203 248 ---------------------------------------------------------------------------------------- Net Assets $ 85,292 $ 89,252 ======================================================================================== Composition of Net Assets Paid in capital $ 109,797 $ 69,405 Undistributed net investment income (Accumulated net investment loss) (85) (206) Accumulated net realized gain (loss) (17,766) 7,998 Net unrealized appreciation (depreciation) of investments and other assets (net of unrealized PFIC gains of $8,026 for Liberty Acorn International and $385 for Liberty Acorn Foreign Forty) (6,654) 12,055 ---------------------------------------------------------------------------------------- Net Assets $ 85,292 $ 89,252 ======================================================================================== Net assets value and redemption price per share -- Class A (a) $ 13.55 $ 14.61 $ (5,635/416) $ (8,883/608) Maximum offering price per share (5.75%) -- Class A (b) $ 14.38 $ 15.50 $ (13.55/.9425) $ (14.61/.9425) Net asset value and offering price per share -- Class B (a) $ 13.47 $ 14.55 $(2,308/171) $ (8,465/582) Net asset value and offering price per share -- Class C (a) $ 13.48 $ 14.54 $ (5,111/379) $ (2,812/193) Net asset value, offering price and redemption price per share -- Class Z $ 13.55 $ 14.64 $ (72,238/5,329) $(69,092/4,721)
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See accompanying notes to financial statements 42 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Statements of Operations (Unaudited) For the Six Months Ended June 30, 2001
Liberty Liberty Liberty Liberty Liberty Acorn Acorn Acorn Acorn Acorn (in thousands) Fund International USA Foreign Forty Twenty -------------------------------------------------------------------------------------------------------------------------- Investment Income: Dividend income $ 17,321 $ 18,202 $ 586 $ 676 $ 235 Interest income 8,540 7,012 251 195 149 -------------------------------------------------------------------------------------------------------------------------- 25,861 25,214 837 871 384 Foreign taxes withheld (270) (2,038) -- (79) -- -------------------------------------------------------------------------------------------------------------------------- Total Investment Income 25,591 23,176 837 792 384 Expenses: Management fees 14,007 9,139 1,086 582 354 Administration fee 1,026 568 57 31 20 12b-1 Service & Distribution fees 551 134 22 44 52 Custody fees 517 1,738 20 96 1 Transfer agent fee 784 656 74 56 77 Trustees' fee 146 114 13 2 2 Reports to shareholders 242 204 35 17 35 Other expenses 309 250 91 63 49 -------------------------------------------------------------------------------------------------------------------------- Total expenses 17,582 12,803 1,398 891 590 Less custody fees paid indirectly (16) (12) (1) (2) -- Less reimbursement of expenses by advisor -- -- -- (1) (6) -------------------------------------------------------------------------------------------------------------------------- Net Expenses 17,566 12,791 1,397 888 584 -------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 8,025 10,385 (560) (96) (200) Net Realized and Unrealized Gain (Loss) on Portfolio Positions: Net realized gain (loss) on: Investments 99,665 (29,039) 10,064 (17,319) 8,000 Closed forward foreign currency contracts -- 6,932 -- -- -- Closed futures contracts 1,131 -- -- -- -- Foreign currency transactions (58) (8,089) -- (74) -- -------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) 100,738 (30,196) 10,064 (17,393) 8,000 ========================================================================================================================== Net change in net unrealized appreciation/ depreciation of: Investments 267,640 (309,999) 44,712 (14,332) (4,881) Forward foreign currency contracts -- (481) -- -- -- Foreign currency transactions (25) (4,859) -- 59 -- -------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation/depreciation 267,615 (315,339) 44,712 (14,273) (4,881) ========================================================================================================================== Net realized and unrealized gain (loss) 368,353 (345,535) 54,776 (31,666) 3,119 -------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets resulting from Operations $ 376,378 $(335,150) $ 54,216 $(31,762) $ 2,919 ==========================================================================================================================
See accompanying notes to financial statements 43 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Statements of Changes in Net Assets
Liberty Liberty Acorn Acorn Fund International (Unaudited) (Unaudited) Six months Year ended Six months Year ended Increase/Decrease ended June 30, December 31, ended June 30, December 31, -------------------------------------------------------------------------------------------------------------------------------- (in thousands) 2001 2000 (a) 2001 2000 (a) Operations: Net investment income (loss) $ 8,025 $ 21,303 $ 10,385 $ 516 Net realized gain (loss) on sales of investments, forward foreign currency contracts, futures contracts and foreign currency transactions 100,738 509,888 (30,196) 496,680 Change in net unrealized appreciation/depreciation of investments, forward foreign currency contracts and foreign currency transactions 267,615 (159,291) (315,339) (1,142,570) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 376,378 371,900 (335,150) (645,374) Distribution to Shareholders From: Net investment income - Class A -- (13) -- -- Net realized gain - Class A (1,789) (386) (398) (293) Net investment income - Class B -- (16) -- -- Net realized gain - Class B (1,621) (470) (273) (212) Net investment income - Class C -- (7) -- -- Net realized gain - Class C (770) (207) (230) (135) Net investment income - Class Z (4,591) (23,731) -- (57,949) Net realized gain - Class Z (64,271) (604,477) (38,229) (377,896) In excess of net investment income - Class Z -- -- -- -- -------------------------------------------------------------------------------------------------------------------------------- Total distribution to shareholders (73,042) (629,307) (39,130) (436,485) Share Transactions: Subscriptions - Class A 117,108 18,736 85,627 22,009 Reinvestment of dividends and capital gain distributions - Class A 1,654 386 333 281 Redemptions - Class A (17,483) (1,351) (69,207) (11,648) -------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class A 101,279 17,771 16,753 10,642 Subscriptions - Class B 105,260 15,388 12,784 5,846 Reinvestment of dividends and capital gain distributions - Class B 1,473 424 231 193 Redemptions - Class B (3,558) (224) (1,296) (53) -------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class B 103,175 15,588 11,719 5,986 Subscriptions - Class C 54,339 8,646 25,759 6,240 Reinvestment of dividends and capital gain distributions - Class C 727 186 199 105 Redemptions - Class C (7,727) (588) (15,715) (2,205) -------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class C 47,339 8,244 10,243 4,140 Subscriptions - Class Z 308,538 679,209 478,178 1,638,922 Reinvestment of dividends and capital gain distributions - Class Z 62,420 570,322 35,672 402,800 Redemptions - Class Z (331,765) (928,438) (594,866) (1,369,722) -------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) - Class Z 39,193 321,093 (81,016) 672,000 -------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in net assets from Share transactions 290,986 362,696 (42,301) 692,768 -------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 594,322 105,289 (416,581) (389,091) Net Assets: Beginning of period 4,026,128 3,920,839 2,479,112 2,868,203 -------------------------------------------------------------------------------------------------------------------------------- End of period $ 4,620,450 $ 4,026,128 $ 2,062,531 $ 2,479,112 ================================================================================================================================ Undistributed Net Investment Income (Accumulated Net Investment Loss or Overdistributed Net Investment Income) $ 3,434 -- $ 10,053 $ (332) ================================================================================================================================ Liberty Liberty Acorn Acorn USA Foreign Forty (Unaudited) (Unaudited) Six months Year ended Six months Year ended Increase/Decrease ended June 30, December 31, ended June 30, December 31, ------------------------------------------------------------------------------------------------------------------------ (in thousands) 2001 2000 (a) 2001 2000 (a) Operations: Net investment income (loss) $ (560) $ (968) $ (96) $ (595) Net realized gain (loss) on sales of investments, forward foreign currency contracts, futures contracts and foreign currency transactions 10,064 (2,868) (17,393) 5,790 Change in net unrealized appreciation/depreciation of investments, forward foreign currency contracts and foreign currency transactions 44,712 (37,432) (14,273) (30,276) ------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 54,216 (41,268) (31,762) (25,081) Distribution to Shareholders From: Net investment income - Class A -- -- (3) -- Net realized gain - Class A -- -- (23) -- Net investment income - Class B -- -- (2) -- Net realized gain - Class B -- -- (13) -- Net investment income - Class C -- -- (4) -- Net realized gain - Class C -- -- (31) -- Net investment income - Class Z -- (150) (56) (221) Net realized gain - Class Z -- (7,066) (451) (765) In excess of net investment income - Class Z -- -- -- (43) ------------------------------------------------------------------------------------------------------------------------ Total distribution to shareholders -- (7,216) (583) (1,029) Share Transactions: Subscriptions - Class A 10,068 824 19,254 3,394 Reinvestment of dividends and capital gain distributions - Class A -- -- 23 -- Redemptions - Class A (2,429) (81) (15,638) (142) ------------------------------------------------------------------------------------------------------------------------ Net Increase - Class A 7,639 743 3,639 3,252 Subscriptions - Class B 6,521 1,145 1,390 1,583 Reinvestment of dividends and capital gain distributions - Class B -- -- 13 -- Redemptions - Class B (183) (474) (166) (24) ------------------------------------------------------------------------------------------------------------------------ Net Increase - Class B 6,338 671 1,237 1,559 Subscriptions - Class C 3,190 670 3,587 3,545 Reinvestment of dividends and capital gain distributions - Class C -- -- 11 -- Redemptions - Class C (95) (352) (732) (201) ------------------------------------------------------------------------------------------------------------------------ Net Increase - Class C 3,095 318 2,866 3,344 Subscriptions - Class Z 49,733 92,331 114,865 258,241 Reinvestment of dividends and capital gain distributions - Class Z -- 7,066 450 971 Redemptions - Class Z (65,575) (199,825) (143,066) (210,962) ------------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) - Class Z (15,842) (100,428) (27,751) 48,250 ------------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in net assets from Share transactions 1,230 (98,696) (20,009) 56,405 ------------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets 55,446 (147,180) (52,354) 30,295 Net Assets: Beginning of period 224,248 371,428 137,646 107,351 ------------------------------------------------------------------------------------------------------------------------ End of period $ 279,694 $ 224,248 $ 85,292 $ 137,646 ======================================================================================================================== Undistributed Net Investment Income (Accumulated Net Investment Loss or Overdistributed Net Investment Income) $ (602) $ (42) $ (85) $ 76 ======================================================================================================================== Liberty Acorn Twenty (Unaudited) Six months Year ended Increase/Decrease ended June 30, December 31, ------------------------------------------------------------------------------------- (in thousands) 2001 2000 (a) Operations: Net investment income (loss) $ (200) $ (344) Net realized gain (loss) on sales of investments, forward foreign currency contracts, futures contracts and foreign currency transactions 8,000 1,280 Change in net unrealized appreciation/depreciation of investments, forward foreign currency contracts and foreign currency transactions (4,881) 5,498 ------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 2,919 6,434 Distribution to Shareholders From: Net investment income - Class A -- -- Net realized gain - Class A -- (11) Net investment income - Class B -- -- Net realized gain - Class B -- (18) Net investment income - Class C -- -- Net realized gain - Class C -- (6) Net investment income - Class Z -- -- Net realized gain - Class Z -- (4,826) In excess of net investment income - Class Z -- -- ------------------------------------------------------------------------------------- Total distribution to shareholders -- (4,861) Share Transactions: Subscriptions - Class A 6,258 3,774 Reinvestment of dividends and capital gain distributions - Class A -- 9 Redemptions - Class A (928) (585) ------------------------------------------------------------------------------------- Net Increase - Class A 5,330 3,198 Subscriptions - Class B 4,949 4,172 Reinvestment of dividends and capital gain distributions - Class B -- 19 Redemptions - Class B (1,020) (16) ------------------------------------------------------------------------------------- Net Increase - Class B 3,929 4,175 Subscriptions - Class C 1,637 1,053 Reinvestment of dividends and capital gain distributions - Class C -- 5 Redemptions - Class C (18) (3) ------------------------------------------------------------------------------------- Net Increase - Class C 1,619 1,055 Subscriptions - Class Z 7,003 16,851 Reinvestment of dividends and capital gain distributions - Class Z -- 4,613 Redemptions - Class Z (6,684) (24,799) ------------------------------------------------------------------------------------- Net Increase (Decrease) - Class Z 319 (3,335) ------------------------------------------------------------------------------------- Net Increase (Decrease) in net assets from Share transactions 11,197 5,093 ------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 14,116 6,666 Net Assets: Beginning of period 75,136 68,470 ------------------------------------------------------------------------------------- End of period $ 89,252 $ 75,136 ===================================================================================== Undistributed Net Investment Income (Accumulated Net Investment Loss or Overdistributed Net Investment Income) $ (206) $ (6) =====================================================================================
(a) Class A, Class B and Class C shares were initially offered on October 16, 2000. See accompanying notes to financial statements 44 & 45 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Statements of Changes in Net Assets continued
Liberty Liberty Acorn Acorn Fund International (Unaudited) (Unaudited) Six months Year ended Six months Year ended (in thousands) ended June 30, December 31, ended June 30, December 31, ------------------------------------------------------------------------------------------------------------------------------- 2001 2000 (a) 2001 2000 (a) Changes in Shares of Beneficial Interest: Subscriptions - Class A 6,798 1,120 3,855 903 Shares issued in reinvestment of distributions - Class A 91 24 16 11 Less shares redeemed - Class A (1,009) (82) (3,103) (481) ------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class A 5,880 1,062 768 433 Subscriptions - Class B 6,018 916 570 232 Shares issued in reinvestment of distributions - Class B 81 27 11 8 Less shares redeemed - Class B (209) (14) (58) (2) ------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class B 5,890 929 523 238 Subscriptions - Class C 3,118 519 1,151 249 Shares issued in reinvestment of distributions - Class C 40 13 10 5 Less shares redeemed - Class C (444) (36) (696) (87) ------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class C 2,714 496 465 167 Subscriptions - Class Z 17,679 37,462 21,755 49,035 Shares issued in reinvestment of distributions - Class Z 3,405 34,165 1,705 15,422 Less shares redeemed - Class Z (19,205) (51,822) (26,785) (42,523) ------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) - Class Z 1,879 19,805 (3,325) 21,934 ------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 16,363 22,292 (1,569) 22,772 ------------------------------------------------------------------------------------------------------------------------------- Liberty Liberty Acorn Acorn USA Foreign Forty (Unaudited) (Unaudited) Six months Year ended Six months Year ended (in thousands) ended June 30, December 31, ended June 30, December 31, ---------------------------------------------------------------------------------------------------------------------------------- 2001 2000 (a) 2001 2000 (a) Changes in Shares of Beneficial Interest: Subscriptions - Class A 586 59 1,307 193 Shares issued in reinvestment of distributions - Class A -- -- 2 -- Less shares redeemed - Class A (152) (5) (1,078) (8) ---------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class A 434 54 231 185 Subscriptions - Class B 372 81 91 92 Shares issued in reinvestment of distributions - Class B -- -- -- -- Less shares redeemed - Class B (11) (35) (11) (1) ---------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class B 361 46 80 91 Subscriptions - Class C 179 48 231 210 Shares issued in reinvestment of distributions - Class C -- -- 1 -- Less shares redeemed - Class C (5) (25) (51) (12) ---------------------------------------------------------------------------------------------------------------------------------- Net Increase - Class C 174 23 181 198 Subscriptions - Class Z 2,900 6,133 7,430 12,956 Shares issued in reinvestment of distributions - Class Z -- 509 32 48 Less shares redeemed - Class Z (4,026) (13,882) (9,685) (10,839) ---------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) - Class Z (1,126) (7,240) (2,223) 2,165 ---------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest (157) (7,117) (1,731) 2,639 ---------------------------------------------------------------------------------------------------------------------------------- Liberty Acorn Twenty (Unaudited) Six months Year ended (in thousands) ended June 30, December 31, -------------------------------------------------------------------------------------------- 2001 2000 (a) Changes in Shares of Beneficial Interest: Subscriptions - Class A 444 272 Shares issued in reinvestment of distributions - Class A -- 1 Less shares redeemed - Class A (67) (42) -------------------------------------------------------------------------------------------- Net Increase - Class A 377 231 Subscriptions - Class B 354 301 Shares issued in reinvestment of distributions - Class B -- 1 Less shares redeemed - Class B (73) (1) -------------------------------------------------------------------------------------------- Net Increase - Class B 281 301 Subscriptions - Class C 118 76 Shares issued in reinvestment of distributions - Class C -- 1 Less shares redeemed - Class C (1) (1) -------------------------------------------------------------------------------------------- Net Increase - Class C 117 76 Subscriptions - Class Z 503 1,239 Shares issued in reinvestment of distributions - Class Z -- 346 Less shares redeemed - Class Z (492) (1,871) -------------------------------------------------------------------------------------------- Net Increase (Decrease) - Class Z 11 (286) -------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 786 322 --------------------------------------------------------------------------------------------
(a) Class A, Class B and Class C shares were initially offered on October 16, 2000. See accompanying notes to financial statements 46 & 47 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Financial Highlights
(Unaudited) Six Months Liberty Acorn Fund Class Z ended June 30, Years ended December 31, ---------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period 2001 2000 1999 1998 1997 1996 Net Asset Value, Beginning of Period $ 17.21 $ 18.53 $ 16.85 $ 16.99 $ 15.04 $ 13.60 Income from Investment Operations Net investment income (a) .04 .10 .09 .04 .15 .09 Net realized and unrealized gain 1.52 1.55 5.22 .91 3.57 2.93 ---------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 1.56 1.65 5.31 .95 3.72 3.02 Less Distributions Declared to Shareholders From net investment income (.02) (.11) (.09) (.03) (.16) (.11) From net realized gains (.28) (2.86) (3.54) (1.06) (1.61) (1.47) ---------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (.30) (2.97) (3.63) (1.09) (1.77) (1.58) ================================================================================================================================== Net Asset Value, End of Period $ 18.47(c) $ 17.21 $ 18.53 $ 16.85 $ 16.99 $ 15.04 ================================================================================================================================== Total Return (b) 9.08% 10.06% 33.40% 6.00% 25.00% 22.60% ================================================================================================================================== Ratios to Average Net Assets Net Expenses (e) .82%(d) .83% .85% .84% .56% .57% Net investment income (e) .42%(d) .55% .49% .30% .75% .53% Portfolio turnover rate 26%(d) 29% 34% 24% 32% 33% Net assets at end of period (in millions) $ 4,309 $ 3,983 $ 3,921 $ 3,549 $ 3,681 $ 2,842
(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) Not annualized. (d) Annualized. (e) The benefits derived from custody fees paid indirectly had no impact.
(Unaudited) Six Months Liberty Acorn International Class Z ended June 30, Years ended December 31, ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period 2001 2000 1999 1998 1997 1996 Net Asset Value, Beginning of Period $ 23.85 $ 35.33 $ 20.82 $ 18.39 $ 19.61 $ 16.59 Income from Investment Operations Net investment income (a) .10 .01 .83 .17 .40 .13 Net realized and unrealized gain (loss) (3.41) (6.73) 15.45 2.68 (.34) 3.29 ----------------------------------------------------------------------------------------------------------------------------------- Total from investment operations (3.31) (6.72) 16.28 2.85 .06 3.42 Less Distributions Declared to Shareholders From net investment income -- (.66) (.22) (.15) (.38) (.12) From net realized gains (.39) (4.10) (1.55) (.27) (.90) (.28) ----------------------------------------------------------------------------------------------------------------------------------- Total distributions declared to shareholders (.39) (4.76) (1.77) (.42) (1.28) (.40) =================================================================================================================================== Net Asset Value, End of Period $ 20.15 $ 23.85 $ 35.33 $ 20.82 $ 18.39 $ 19.61 =================================================================================================================================== Total Return (b) (13.94%)(c) (20.02%) 79.20% 15.40% .20% 20.70% =================================================================================================================================== Ratios to Average Net Assets Net Expenses (e) 1.11%(d) 1.05% 1.11% 1.12% 1.19% 1.17% Net investment income (e) .93%(d) .02% .12% .86% .58% .51% Portfolio turnover rate 48%(d) 63% 46% 37% 39% 34% Net assets at end of period (in millions) $ 2,011 $ 2,459 $ 2,868 $ 1,725 $ 1,623 $ 1,773
(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) Not annualized. (d) Annualized. (e) The benefits derived from custody fees paid indirectly had no impact.
(Unaudited) Six Months Inception September 4 Liberty Acorn USA Class Z ended June 30, Years ended December 31, through December 31, ------------------------------------------------------------------------------------------------------------------------------------ For a share outstanding throughout each period 2001 2000 1999 1998 1997 1996 Net Asset Value, Beginning of Period $ 14.90 $ 16.75 $ 14.80 $15.12 $ 11.65 $ 10.00 Income from Investment Operations Net investment income (loss) (a) (.04) (.05) .00(g) (.07) (.07) (.02) Net realized and unrealized gain (loss) 3.92 (1.48) 3.32 .87 3.83 1.67 ------------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 3.88 (1.53) 3.32 .80 3.76 1.65 Less Distributions Declared to Shareholders From net investment income -- (.00)(g) -- -- -- -- From net realized gains -- (.32) (1.37) (1.12) (.29) -- ------------------------------------------------------------------------------------------------------------------------------------ Total distributions declared to shareholders -- (.32) (1.37) (1.12) (.29) -- ==================================================================================================================================== Net Asset Value, End of Period $ 18.78 $ 14.90 $ 16.75 $14.80 $ 15.12 $ 11.65 ==================================================================================================================================== Total Return (b) 26.04%(c) (8.99%) 23.00% 5.80% 32.30% 16.50%(c) ==================================================================================================================================== Ratios to Average Net Assets Net Expenses 1.19%(d)(e) 1.15%(e) 1.15%(e) 1.20%(e) 1.35%(e) 1.85%(d)(f) Net investment income (loss) (.46%)(d)(e) (.32%)(e) .00%(e)(h) (.42%)(e) (.49%)(e) (.99%)(d)(f) Portfolio turnover rate 19%(d) 45% 49% 42% 33% 20%(c) Net assets at end of period (in millions) $ 259 $ 222 $ 371 $ 281 $ 185 $ 53
(a) Per share was based upon the average shares outstanding during each period. (b) Total return at net asset value assuming all distributions reinvested. (c) Not annualized. (d) Annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) In accordance with a requirement by the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian. The ratio of expenses to average net assets and the ratio of net investment income to average net assets net of custody fees paid indirectly would have been 1.79% and (0.93%), respectively for the period ended December 31, 1996. (g) Rounds to less than $0.01 per share. (h) Rounds to less than 0.01%. See accompanying notes to financial statements 48 & 49 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Financial Highlights
Inception (Unaudited) November 23 Six Months through Liberty Acorn Foreign Forty Class Z ended June 30, Year ended December 31, December 31, ---------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period 2001 2000 1999 1998 Net Asset Value, Beginning of Period $ 17.15 $ 19.93 $ 11.00 $ 10.00 Income from Investment Operations Net investment loss (a) (.01) (.11) (.02) (.01) Net realized and unrealized gain (loss) (3.50) (2.53) 8.98 1.01 ---------------------------------------------------------------------------------------------------------------------------- Total from investment operations (3.51) (2.64) 8.96 1.00 ---------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders From net investment income (.01) (.04) -- -- From net realized gains (.08) (.10) (.03) -- ---------------------------------------------------------------------------------------------------------------------------- Total distributions declared to shareholders (.09) (.14) (.03) -- ---------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 13.55 $ 17.15 $ 19.93 $ 11.00 ============================================================================================================================ Total Return (b) (20.49%)(d) (13.35%) 81.60%(c) 10.00%(c)(d) ============================================================================================================================ Ratios to Average Net Assets Net Expenses 1.37%(e)(f) 1.33%(f) 1.48%(g) 1.73%(e)(g) Net investment loss (.08%)(e)(f) (.42%)(f) (.17%)(g) (.78%)(e)(g) Reimbursement -- -- .09% .97%(e) Portfolio turnover rate 101%(e) 79% 60% 90%(e) Net assets at end of period (in millions) $ 72 $ 130 $ 107 $ 16
(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) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) Annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) In accordance with a requirement by the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian. The ratio of expenses to average net assets and the ratio of net investment income to average net assets net of custody fees paid indirectly would have been 1.45% and (0.14%), respectively for the year ended December 31, 1999, and 1.45% and (0.50%), respectively for the period ended December 31, 1998.
Inception (Unaudited) November 23 Six Months through Liberty Acorn Twenty Class Z ended June 30, Year ended December 31, December 31, ---------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period 2001 2000 1999 1998 Net Asset Value, Beginning of Period $ 14.13 $ 13.70 $ 10.71 $ 10.00 Income from Investment Operations Net investment income (loss) (a) (.03) (.07) (.08) -- Net realized and unrealized gain .54 1.59 3.21 .71 ---------------------------------------------------------------------------------------------------------------------------- Total from investment operations .51 1.52 3.13 .71 ---------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders From net investment income -- (.01) -- -- From net realized gains -- (1.08) (.14) -- ---------------------------------------------------------------------------------------------------------------------------- Total distributions declared to shareholders -- (1.09) (.14) -- ---------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 14.64 $ 14.13 $ 13.70 $ 10.71 ============================================================================================================================ Total Return (b) 3.61%(d) 11.68% 29.30%(c) 7.10%(c)(d) ============================================================================================================================ Ratios to Average Net Assets Net Expenses 1.35%(e)(f) 1.34%(g) 1.37%(g) 1.41%(e)(g) Net investment income (loss) (.38%)(e)(f) (.52%)(g) (.62%)(g) .22%(e)(g) Reimbursement -- -- .04 .42%(e) Portfolio turnover rate 84%(e) 116% 101% 173%(e) Net assets at end of period (in millions) $ 69 $ 67 $ 68 $ 34
(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) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) Annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) In accordance with a requirement by the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian. The ratio of expenses to average net assets and the ratio of net investment income to average net assets net of custody fees paid indirectly would have been 1.32% and (0.50%), respectively for the year ended December 31, 2000, 1.35% and (0.60%), respectively for the year ended December 31, 1999, 1.35% and 0.28%, respectively for the period ended December 31, 1998. See accompanying notes to financial statements 50 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Fund >Notes to Financial Statements (Unaudited) 1. Nature of Operations Liberty Acorn Fund (formerly Acorn Fund), Liberty Acorn International (formerly Acorn International), Liberty Acorn USA (formerly Acorn USA), Liberty Acorn Foreign Forty (formerly Acorn Foreign Forty) and Liberty Acorn Twenty (formerly Acorn Twenty) (the "Funds") are series of Liberty Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of each Fund is to seek long-term growth of capital. The Funds may issue an unlimited number of shares. Effective October 16, 2000, the Funds began offering Class A, Class B and Class C shares. The Funds offer four classes of shares: Class A, Class B, Class C and Class Z. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge is assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to an annual distribution fee and a contingent deferred sales charge. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a contingent deferred sales charge on redemptions made within one year after purchase and an annual distribution fee. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares. The financial highlights for Class A, Class B and Class C shares are presented in a separate semiannual report. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are borne pro rata on the basis of the relative net assets of all classes, except each class bears certain expenses unique to that class such as distribution services, transfer agent, and certain other class specific expenses. Differences in class expenses may result in payment of different dividend distributions for each class. All the share classes of the Trust have equal rights with respect to voting subject to class specific arrangements. 2. Significant Accounting Policies >Security valuation Investments are stated at current value. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation. Securities for which there are no reported sales on the valuation date are valued at the latest bid quotation. Money market instruments having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis. Securities for which quotations are not available and any other assets are valued at a fair value as determined in good faith by the Board of Trustees. >Foreign currency translations Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gain or loss resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate. >Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Funds. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and long-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Financial instruments Each Fund may purchase or sell exchange-traded financial futures contracts, which are contracts that obligate that Fund to make or take delivery of a financial instrument or the cash value of a securities index at a specified future date at a specified price. The Funds enter into such contracts to hedge a portion of their portfolio. Gains and losses are reflected as "Net Realized Gain (Loss) on Futures" in the Statements of Operations. Additionally, each Fund may engage in portfolio hedging with respect to changes in foreign currency exchange rates by entering into forward foreign currency contracts to purchase or sell foreign currencies. The Statements of Operations reflect gains and losses as realized for closed forward foreign currency contracts and unrealized for open contracts. The Funds bear the market risk that arises from changes in the value 51 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Notes to Financial Statements (Unaudited), continued of financial instruments and securities indices (futures contracts) or from changes in foreign currency rates (forward foreign currency contracts) and the credit risk should a counterparty fail to perform under such contracts. None of the Funds had futures contracts open at June 30, 2001. Liberty Acorn International entered into forward contracts to sell foreign currency as described below: Liberty Acorn International Foreign Settlement U.S. Dollar Unrealized Amount (000) Currency Date Proceeds (000) Gain (000) -------------------------------------------------------------------------------- 6,960,000 Japanese Yen 9/21/01 $56,863 $557 ==== Liberty Acorn USA, Liberty Acorn Foreign Forty and Liberty Acorn Twenty did not enter into any futures or forward foreign currency contracts during the six months ended June 30, 2001. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than class specific expenses such as the Class A, Class B and Class C 12b-1 service and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fee) and realized and unrealized gains (losses) are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. >Federal income taxes, dividends and distributions to shareholders The Funds have complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distribute all their taxable income, as well as any net realized gain on sales of investments and foreign currency transactions reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. Dividends and distributions payable to each Fund's shareholders are recorded by the respective Fund on the ex-dividend date. The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These differences primarily relate to investment securities sold at a loss, certain foreign currency and foreign security transactions. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ from distributions during such period. Accordingly, the Funds may periodically make reclassifications among certain of their capital accounts to reflect differences between financial reporting and federal income tax basis distributions. These reclassifications have no impact on the total net assets or the net asset values of the Funds. The Liberty Acorn International and Liberty Acorn Foreign Forty have elected to mark-to-market their investments in Passive Foreign Investment Companies ("PFIC's") for federal income tax purposes. Gains and losses relating to PFIC's are treated as ordinary income for federal income tax purposes. A summary of transactions relating to PFIC's is as follows (in thousands): Liberty Acorn International -------------------------------------------------------------------------------- Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 1999 $ 65,710 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2000 (18,277) Unrealized appreciation recognized in prior years on PFIC's sold during 2000 (39,407) -------- Cumulative unrealized appreciation on PFIC's recognized at December 31, 2000 $ 8,026 -------- Liberty Acorn Foreign Forty -------------------------------------------------------------------------------- Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 1999 $ 305 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2000 198 Unrealized appreciation recognized in prior years on PFIC's sold during 2000 (118) ----- Cumulative unrealized appreciation on PFIC's recognized at December 31, 2000 $ 385 ----- Dividends payable to shareholders are recorded by the Funds on the ex-dividend date. 3. Transactions with Affiliates The Funds' investment advisor, Liberty Wanger Asset Management, L.P. ("WAM") furnishes continuing investment supervision to the Funds and is responsible for the overall management of the Funds' business affairs. Under the Funds' investment management agreement, fees are accrued daily and paid monthly to WAM at the annual rates shown in the table below for each fund. 52 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Fund -------------------------------------------------------------------------------- Net asset value: For the first $700 million .75% Next $1.300 billion .70% Net assets in excess of $2 billion .65% Liberty Acorn International -------------------------------------------------------------------------------- Net asset value: For the first $100 million 1.20% Next $400 million .95% Net assets in excess of $500 million .75% Liberty Acorn USA -------------------------------------------------------------------------------- Net asset value: For the first $200 million .95% Net assets in excess of $200 million .90% Liberty Acorn Foreign Forty -------------------------------------------------------------------------------- On average daily net assets: .95% Liberty Acorn Twenty -------------------------------------------------------------------------------- On average daily net assets: .90% >Expense Limit The Advisor has voluntarily agreed to reimburse the Funds to the extent that annual expenses exceed 1.45% for Liberty Acorn Foreign Forty and 1.35% for Liberty Acorn Twenty of average daily net assets. For the period ended June 30, 2001, the Funds' Class Z shares did not exceed the expense limit. WAM has also contracted to provide administrative services to each Fund at an annual rate of .05% of average daily net assets. Liberty Funds Distributor, Inc. (the Distributor), an affiliate of the Advisor, is each Fund's principal underwriter and receives no compensation on the sale of Class Z shares. Each Fund has adopted a 12b-1 plan which requires it to pay the Distributor a service and distribution fee on the net assets attributable to Class A, Class B and Class C shares. Certain officers and trustees of the Trust are also principals of WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with WAM. The Funds' Trustees' fees and expenses for trustees not affiliated with WAM are as follows: Six months Year ended ended June 30, December 31, -------------------------------------------------------------------------------- (in thousands) 2001 2000 Liberty Acorn Fund $146 $335 Liberty Acorn International 114 252 Liberty Acorn USA 13 30 Liberty Acorn Foreign Forty 2 12 Liberty Acorn Twenty 2 7 ---------------------- $277 $636 ====================== The Trust's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Trust's assets. WAM advanced Liberty Acorn USA $107,000 in connection with the organization and initial registration of the Fund. These costs are being amortized and reimbursed to WAM over the period September 1996 though August 2001. During the six months ended June 30, 2001, the Funds engaged in purchases and sales transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Investment Company Act of 1940 and were as follows: Funds Purchases Sales -------------------------------------------------------------------------------- (in thousands) Liberty Acorn Fund $11,286 $ -- Liberty Acorn International Fund 2,047 -- Liberty Acorn USA Fund -- 22 Liberty Acorn Twenty Fund -- 66 Liberty Acorn Foreign Forty Fund -- 12,982 4. Borrowing Arrangements The trust participates in a $250,000,000 credit facility which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility. 5. Investment Transactions Investment Transactions (excluding money market instruments) for each of the Funds are as follows. Six months ended Year ended Liberty Acorn Fund June 30, December 31, -------------------------------------------------------------------------------- (in thousands) 2001 2000 Investment securities Purchases $556,555 $1,045,117 Proceeds from sales 487,420 1,208,458 ================================================================================ Six months ended Year ended Liberty Acorn International June 30, December 31, -------------------------------------------------------------------------------- (in thousands) 2001 2000 Investment securities Purchases $471,938 $1,772,765 Proceeds from sales 550,821 1,704,811 ================================================================================ Six months ended Year ended Liberty Acorn USA June 30, December 31, -------------------------------------------------------------------------------- (in thousands) 2001 2000 Investment securities Purchases $ 21,481 $ 127,624 Proceeds from sales 31,375 214,498 ================================================================================ Six months ended Year ended Liberty Acorn Foreign Forty June 30, December 31, -------------------------------------------------------------------------------- (in thousands) 2001 2000 Investment securities Purchases $ 57,070 $ 160,219 Proceeds from sales 79,462 104,921 ================================================================================ 53 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- Liberty Acorn Family of Funds >Notes to Financial Statements (Unaudited), continued Six months ended Year ended Liberty Acorn Twenty June 30, December 31, -------------------------------------------------------------------------------- (in thousands) 2001 2000 Investment securities Purchases $ 37,872 $ 71,917 Proceeds from sales 30,812 71,661 ================================================================================ 6. Capital Loss Carryforwards At December 31, 2000, capital loss carryforwards available (to the extent provided in regulations) to offset future realized gains were as follows: Year of Capital Loss Expiration Carryforward Liberty Acorn USA 2008 $528,000 54 Liberty Acorn Family of Funds Class Z Share Information Minimum Initial Investment For All Funds $1,000 $1,000 for an IRA Minimum Subsequent Investment $100 Exchange Fee None Liberty Acorn Fund ACRNX Management Fee 0.68% 12b-1 Fee None Other Expenses 0.15% ---- Expense Ratio 0.83% Liberty Acorn International ACINX Management Fee 0.79% 12b-1 Fee None Other Expenses 0.26% ---- Expense Ratio 1.05% Liberty Acorn USA AUSAX Management Fee 0.93% 12b-1 Fee None Other Expenses 0.22% ---- Expense Ratio 1.15% Liberty Acorn Foreign Forty ACFFX Management Fee 0.95% 12b-1 Fee None Other Expenses 0.38% ---- Net Expense Ratio 1.33% Liberty Acorn Twenty ACTWX Management Fee 0.90% 12b-1 Fee None Other Expenses 0.44% ---- Net Expense Ratio 1.34%* Fees and expenses are for the fiscal year ended December 31, 2000 and for Liberty Acorn Foreign Forty and Liberty Acorn Twenty, include the effect of Liberty Wanger Asset Management's undertaking to reimburse those funds for any ordinary operating expenses, net of custodian fees paid indirectly, exceeding 1.45% and 1.35% of their average net assets, respectively. These expense limitations are voluntary and can be terminated by either the Funds or Liberty Wanger Asset Management on 30 days' notice to the other. * Includes custodian fees paid indirectly. Net of those fees, the net expense ratio of Liberty Acorn Twenty would have been 1.32%. 55 -------------------------------------------------------------------------------- A I U F40 20 -------------------------------------------------------------------------------- The Liberty Acorn --------------------- Family of Funds Trustees Irving B. Harris Chairman Robert E. Nason Vice Chairman Leo A. Guthart Jerome Kahn, Jr. Steven N. Kaplan David C. Kleinman Charles P. McQuaid Roger S. Meier Allan B. Muchin Ralph Wanger Officers Irving B. Harris Chairman Ralph Wanger President Charles P. McQuaid Senior Vice President Marcel P. Houtzager Vice President Bruce H. Lauer Vice President, Treasurer and Secretary Robert A. Mohn Vice President John H. Park Vice President Leah J. Zell Vice President Kenneth A. Kalina Assistant Treasurer J. Kevin Connaughton Assistant Treasurer Diane M. Dustin Assistant Secretary Maureen E. Dustin Assistant Secretary Kevin S. Jacobs Assistant Secretary Vincent P. Pietropaolo Assistant Secretary Investment Advisor Liberty Wanger Asset Management, L.P. 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606 1-800-922-6769 Distributor Liberty Funds Distributor, Inc. One Financial Center Boston, Massachusetts 02111-2621 Transfer Agent, Dividend Disbursing Agent and Custodian Liberty Funds Services, Inc. P.O. Box 1722 Boston, Massachusetts 02105-1722 1-800-962-1585 Outside Legal Counsel Bell, Boyd & Lloyd LLC Chicago, Illinois This report, including the schedules of investments, is submitted for the general information of the shareholders of Liberty Acorn Trust. This report is not authorized for distribution unless preceded or accompanied by a prospectus. Our e-mail address is: acorn@wanger.com Find out what's new - visit our web site at: www.acornfunds.com 56 [GRAPHIC OMITTED] The Liberty Acorn PRESORTED --------------------- FIRST-CLASS MAIL Family of Funds U.S. POSTAGE PAID HOLLISTON, MA Liberty Funds Distributor, Inc. PERMIT NO. 20 One Financial Center Boston, MA 02111-2621 ACN-03/712G-0701 (08/01) 01/1587