-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HFyIlorSyViR3xbs2c60A65VrnSk+MbpaoI817y731H1g6MXwyNVcx+8aPGcqR85 YLdI67Iw9dQsaqLW6UUavQ== 0000891804-03-001482.txt : 20030703 0000891804-03-001482.hdr.sgml : 20030703 20030703120320 ACCESSION NUMBER: 0000891804-03-001482 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030703 EFFECTIVENESS DATE: 20030703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY FUNDS TRUST I CENTRAL INDEX KEY: 0000021832 IRS NUMBER: 046143403 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02214 FILM NUMBER: 03774349 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL TRUST I DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL HIGH YIELD SECURITIES TRUST DATE OF NAME CHANGE: 19910917 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL HIGH YIELD SECURITIES INC DATE OF NAME CHANGE: 19850909 N-CSR 1 file001.txt LIBERTY FUNDS TRUST I UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-2214 --------------------- Liberty Funds Trust I ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) One Financial Center, Boston, Massachusetts 02111 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Jean S. Loewenberg, Esq. Columbia Management Group, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 1-617-426-3750 ------------------- Date of fiscal year end: October 31, 2003 ------------------ Date of reporting period: April 30, 2003 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. LIBERTY TAX-MANAGED FUNDS Semiannual Report April 30, 2003 [photo of man and woman smiling] ELIMINATE CLUTTER IN TWO EASY STEPS. POINT. CLICK. LIBERTY EDELIVERY For more information about receiving your shareholder reports electronically, call us at 800-345-6611. To sign up for eDelivery, visit us online at www.libertyfunds.com. LIBERTY TAX-MANAGED FUNDS Semiannual Report April 30, 2003 [photo of man and woman smiling] ELIMINATE CLUTTER IN TWO EASY STEPS. POINT. CLICK. LIBERTY EDELIVERY To sign up for eDelivery, go to www.icsdelivery.com President's Message [photo of Joseph R. Palombo] Dear Shareholder: After three years of declining equity values, the stock market rallied over the past six months. All major stock market indices registered gains for the period, buoyed by a surge in trading activity in the final weeks of March. An apparent victory in Iraq and signs of economic stability--although tentative--encouraged investors to take on more risk. Attractive valuations and forecasts of improved corporate earnings also fed investor appetites for stocks. In spite of this positive activity, we encourage investors to temper their expectations for the stock market in the near term. The economy has yet to stage a convincing recovery and the employment outlook remains uncertain. These factors, plus ongoing geopolitical tensions, repeated acts of terrorism abroad and threats at home could again translate into a choppy market. That said, we believe in the long-term benefits of stock investing, especially as part of a comprehensive investment strategy and a balanced portfolio. The Portfolio Managers' report contains a more detailed analysis of the events of the period and factors that affected fund performance. CONSOLIDATION--AND A NEW NAME I am pleased to announce that, effective April 1, 2003, six of the asset management firms brought together when Columbia Management Group, Inc. was formed were consolidated and renamed Columbia Management Advisors, Inc. (Columbia Management). This consolidation does not affect the management or investment objectives of your fund and is the next step in our efforts to create a consistent identity and to streamline our organization. By consolidating these firms, we are able to create a more efficient organizational structure and strengthen certain key functions, such as research. Although the name of the asset manager familiar to you has changed, what hasn't changed is the commitment of our specialized investment teams to a multi-disciplined approach to investing, focused on our goal of offering shareholders the best products and services. During these challenging times, we thank you for your investment in Liberty funds. Sincerely, /s/ Joseph R. Palombo Joseph R. Palombo President MEET THE NEW PRESIDENT Joseph R. Palombo, president and chairman of the Board of Trustees for Liberty Funds, is also chief operating officer and executive vice president of Columbia Management. Mr. Palombo has over 19 years of experience in the financial services industry. Prior to joining Columbia Management, he was chief operating officer and chief compliance officer for Putnam Mutual Funds. Prior to that, he was a partner at Coopers & Lybrand. Mr. Palombo received his degree in economics/accounting from the College of the Holy Cross, where he was a member of Phi Beta Kappa. He earned his master's degree in taxation from Bentley College and participated in the Executive Program at the Amos B. Tuck School at Dartmouth College. o NOT FDIC INSURED o May lose value o No bank guarantee Economic and market conditions can change frequently. There is no assurance that the trends described in this report will continue or commence. No taxable income or capital gains distribution since inception AVERAGE ANNUAL TOTAL RETURNS, CLASS A SHARES WITH SALES CHARGE FOR THE PERIOD THAT ENDED 4/30/03 (%) 1-year 5-year Life - -------------------------------------------------------------------------------- Liberty Tax-Managed Aggressive Growth Fund (since 8/1/00) Returns before taxes -24.11 n/a -21.07 Returns after taxes on distributions -24.11 n/a -21.07 Returns after taxes on distributions and sale of fund shares -14.81 n/a -16.09 S&P MidCap 400 Index* -17.51 n/a -2.81 - -------------------------------------------------------------------------------- Liberty Tax-Managed Growth Fund (since 12/30/96) Returns before taxes -15.37 -5.07 1.31 Returns after taxes on distributions -15.37 -5.07 1.31 Returns after taxes on distributions and sale of fund shares -9.44 -3.96 1.05 S&P 500 Index* -13.30 -2.42 4.95 - -------------------------------------------------------------------------------- Liberty Tax-Managed Growth Fund II (since 3/7/00) Returns before taxes -15.45 n/a -15.87 Returns after taxes on distributions -15.45 n/a -15.87 Returns after taxes on distributions and sale of fund shares -9.48 n/a -12.18 S&P 500 Index* -13.30 n/a -10.57 - -------------------------------------------------------------------------------- Liberty Tax-Managed Value Fund (since 6/1/99) Returns before taxes -27.63 n/a -8.74 Returns after taxes on distributions -27.63 n/a -8.74 Returns after taxes on distributions and sale of fund shares -16.96 n/a -6.79 S&P 500 Index* -13.30 n/a -7.28 - -------------------------------------------------------------------------------- * Index performance in the "life" category begins on the last day of the month closest to inception. For example, if the inception date is March 7, 2000, then index performance is from February 29, 2000. Indices do not reflect any deduction for fees, expenses or taxes. After-tax returns are shown for class A shares only; after-tax returns for other share classes will vary. NO NEW TAXES In keeping with our funds' objective, we once again can report returns without passing taxable distributions to our shareholders. For those keeping track, this marks the thirteenth consecutive report -- covering the past six years for the Liberty Tax-Managed Growth Fund, the eldest in our tax-managed family -- in which we have been able to report that there has been no payment of taxable distributions. We want to remind you that while we can't guarantee this will always be the case, we are proud of our "non-taxing" track record and will strive to continue the streak. The chart on this page offers a comparison between pre-tax and after-tax returns for the Liberty family of tax-managed funds. As you can see, the returns after taxes on distributions retained the full percentage returns before taxes for the time periods shown, assuming that shares were held through the end of the period. In this case, total returns after taxes on distributions were the same as the pre-tax returns because none of the funds distributed taxable gains during the period. In the future, the funds may be required to distribute taxable income and capital gains from time to time. In addition, market conditions may limit the funds' ability to generate tax losses or to avoid dividend income. Excessive shareholder redemptions may also require the funds to sell securities and realize gains. Finally, the ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the historically highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and the after-tax returns shown may not be relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. LIBERTY TAX-MANAGED AGGRESSIVE GROWTH FUND NET ASSET VALUE PER SHARE as of 4/30/03 ($) Class A 6.42 Class B 6.29 Class C 6.29 Class Z 6.42 LIBERTY TAX-MANAGED GROWTH FUND NET ASSET VALUE PER SHARE as of 4/30/03 ($) Class A 11.61 Class B 11.06 Class C 11.06 Class E 11.55 Class F 11.07 Class Z 11.72 LIBERTY TAX-MANAGED GROWTH FUND II NET ASSET VALUE PER SHARE as of 4/30/03 ($) Class A 7.39 Class B 7.21 Class C 7.20 Class Z 7.44 LIBERTY TAX-MANAGED VALUE FUND NET ASSET VALUE PER SHARE as of 4/30/03 ($) Class A 8.90 Class B 8.66 Class C 8.66 Class Z 8.99 1 Portfolio Manager's Report - Liberty Tax-Managed Aggressive Growth Fund TOP 10 HOLDINGS as of 4/30/03 (%) Education Management 4.0 Caremark Rx 3.9 AmerisourceBergen 3.0 Ambac Financial Group 3.0 Barr Laboratories 2.1 Pogo Producing 2.0 Corporate Executive Board 2.0 BJ Services 2.0 Cox Radio, Class A 1.9 UnitedHealth Group 1.9 Portfolio holdings are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain the same portfolio holdings in the future. BOUGHT - -------------------------------------------------------------------------------- SCIENTIFIC-ATLANTA (1.0% of net assets) We invested in Scientific-Atlanta, a company that makes set-top boxes with built-in personal digital video recorders for cable television. The stock benefited from growing demand, an attractive stock price, strong cash flows, and the potential for increased earnings. REDUCED - -------------------------------------------------------------------------------- INTUIT (1.0% of net assets) We pared back on Intuit, which makes tax software, when weaker-than-expected tax season sales caused the company to revise earnings downward. For the six-month period ended April 30, 2003, Liberty Tax-Managed Aggressive Growth Fund class A shares returned negative 0.31% without sales charge. The fund trailed the S&P MidCap 400 Index, which returned 3.98%. Weak stock selection in the technology sector and a lower stake than the index in financial stocks, which did well, were the main reasons the fund trailed the S&P index. The fund underperformed the Russell Midcap Growth Index, which returned 8.19%. The fund's smaller technology weight relative to the Russell index hampered returns as did our preference for higher quality tech stocks. MARKET GAINS AMID CONTINUED VOLATILITY The stock market climbed higher, led by beaten-down technology and telecommunications names which rallied late in 2002. With no improvement in the business outlooks for many of these companies, however, they gave back much of their gains by year end. Stocks briefly moved higher early in 2003, but then slumped on worries related to the war with Iraq, SARS (Severe Acute Respiratory Syndrome) and a sluggish US economy. A quick end to the war renewed investor optimism, triggering a rebound in March and April. Small- and mid-cap growth stocks edged out their value counterparts for the six-month period. DISAPPOINTING RETURNS FROM HIGH-QUALITY TECH Lower-quality technology stocks did well during the period. However, the fund favored higher-quality technology names--companies with real earnings whose survival does not depend on an economic recovery. Our focus was on software stocks, which did not have the same overcapacity issues as hardware stocks. Although this emphasis hurt the fund during the period, we believe it is a sound long-term strategy. Relative returns also suffered as some of our bigger technology investments took hard hits. Among these was Intuit, the software company that makes TurboTax.1 The stock - -------------- 1 Holdings are disclosed as a percentage of net assets as of April 30, 2003 and are subject to change: Intuit (1.0%), HCA (0.8%) and Education Management (4.0%). 2 price sank when Intuit revised earnings downward, leading us to trim our investment. HAMPERED BY POSITIONS IN HEALTH CARE AND CONSUMER DISCRETIONARY The fund's biggest sector was health care, where we focused on hospitals and health maintenance organizations (HMOs). Hospitals faltered during the period because of a weak flu season, which hurt volumes, as well as concerns about Medicare reimbursements. We reduced our stake in certain names, including HCA, a for-profit hospital company. HMOs held up well, despite concerns about pricing power going forward. The fund also had a substantial stake in the consumer discretionary sector. We focused on economically sensitive media stocks. Several of our media holdings were weak performers for much of the period. HELP FROM ENERGY AND EDUCATION The fund's energy holdings did well, thanks to strong oil and natural gas commodity prices. Industrials also boosted performance. Most of our gains in this sector came from for-profit education companies, such as Education Management, which offer programs for working adults who want to upgrade their skills. Enrollment increased as unemployment rose and the economy remained weak. LOOKING AHEAD We are optimistic that one of the most painful bear markets in recent memory is over, but we remain cautious in our outlook for the period ahead. Valuations are no longer cheap. The summer is typically not a strong season for stocks. And potential threats from geopolitical unrest and other non-market-related events still exist. Nonetheless, we believe that investors are optimistic and have already factored an economic recovery into stock prices. We believe stocks can continue to climb if there is clear evidence that the economy is strengthening. The recovery depends on increased corporate spending, which we think will occur as companies start seeing better cash flows and improved earnings. /s/ Richard J. Johnson Richard J. Johnson, CFA, is a vice president of Columbia Management Advisors, Inc., the fund's adviser. He has managed various funds for the firm and its predecessors since 1995 and has managed Liberty Tax-Managed Aggressive Growth Fund since March 2002. TOP 5 SECTORS as of 4/30/03 (%) [bar chart data]: Health care 27.0 Consumer discretionary 17.2 Information technology 15.0 Industrials 13.9 Energy 11.2 Sector breakdowns are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain these breakdowns in the future. - ----------- Investing in small- and mid-cap stocks may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. The fund's approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. Certain active tax-reduction techniques are used only if the fund's advisor believes they will help the fund achieve its investment goals. The fund expects to distribute taxable income and capital gains from time to time. Market conditions may limit the fund's ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. 3 Performance Information - Liberty Tax-Managed Aggressive Growth Fund VALUE OF A $10,000 INVESTMENT 8/1/00 - 4/30/03 Performance of a $10,000 investment 8/1/00 - 4/30/03 ($) without with sales sales charge charge - ----------------------------------- Class A 5,539 5,220 - ----------------------------------- Class B 5,427 5,264 - ----------------------------------- Class C 5,427 5,427 - ----------------------------------- Class Z 5,539 n/a - ----------------------------------- [mountain chart data]: Class A shares Class A shares S&P MidCap without sales charge with sales charge 400 Index 8/2000 $10,000 $ 9,425 $10,000 11,648 10,978 11,117 11,709 11,035 11,041 10,664 10,051 10,667 8,335 7,856 9,862 8,914 8,401 10,616 9,500 8,954 10,853 7,723 7,279 10,233 6,757 6,368 9,473 7,343 6,921 10,518 7,516 7,083 10,763 7,809 7,360 10,720 7,334 6,912 10,560 6,842 6,448 10,215 5,815 5,480 8,944 6,048 5,700 9,339 6,557 6,180 10,034 6,877 6,481 10,553 6,825 6,433 10,498 6,575 6,196 10,511 6,963 6,563 11,262 6,877 6,481 11,209 6,756 6,367 11,020 6,342 5,977 10,213 5,660 5,334 9,222 5,565 5,245 9,270 5,366 5,058 8,522 5,556 5,237 8,891 5,694 5,366 9,406 5,392 5,082 9,020 5,358 5,050 8,756 5,254 4,952 8,548 5,254 4,952 8,620 4/2003 5,539 5,220 9,245 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.LIBERTYFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. The S&P MidCap 400 Index tracks the performance of mid-capitalization US stocks. Unlike the fund, an index is not an investment, does not incur fees or expenses, and is not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from July 31, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 4/30/03 (%) Share class A B C Z Inception date 8/1/00 8/1/00 8/1/00 8/1/00 - ---------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge - ---------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) -0.31 -6.00 -0.63 -5.60 -0.63 -1.63 -0.16 - ---------------------------------------------------------------------------------------------------------------------- 1-year -19.45 -24.11 -20.08 -24.07 -19.97 -20.77 -19.75 - ---------------------------------------------------------------------------------------------------------------------- Life -19.34 -21.07 -19.94 -20.82 -19.94 -19.94 -19.34 - ---------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 3/31/03 (%) Share class A B C Z - ---------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge - ---------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) -2.09 -7.73 -2.45 -7.33 -2.61 -3.59 -1.93 - ---------------------------------------------------------------------------------------------------------------------- 1-year -24.54 -28.86 -25.09 -28.84 -25.13 -25.87 -24.72 - ---------------------------------------------------------------------------------------------------------------------- Life -21.45 -23.18 -22.03 -22.92 -22.08 -22.08 -21.45 - ----------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The graph and tables do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0% and the class C contingent deferred sales charge of 1% for the first year only. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. 4 Portfolio Managers' Report - Liberty Tax-Managed Growth Funds LIBERTY TAX-MANAGED GROWTH FUND TOP 10 HOLDINGS as of 4/30/03 (%) Microsoft 2.9 Pfizer 2.8 Comcast, Class A 2.8 Viacom, Class B 2.8 RenaissanceRe Holdings 2.7 Fannie Mae 2.7 Kohl's 2.6 Cisco Systems 2.6 St. Jude Medical 2.6 PepsiCo 2.6 LIBERTY TAX-MANAGED GROWTH FUND II TOP 10 HOLDINGS as of 4/30/03 (%) Microsoft 3.0 Comcast, Class A 2.8 Viacom, Class B 2.7 RenaissanceRe Holdings 2.7 Express Scripts, Class A 2.6 Kohl's 2.6 Fannie Mae 2.6 Wal-Mart Stores 2.6 PepsiCo 2.5 St. Jude Medical 2.5 Portfolio holdings are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain the same portfolio holdings in the future. For the six-month period ended April 30, 2003, Liberty Tax-Managed Growth Fund class A shares returned 6.81% without sales charge. Liberty Tax-Managed Growth Fund II class A shares returned 6.48% without sales charge. Both funds performed better than their benchmark, the S&P 500 Index, which returned 4.47%. The funds' favorable relative returns were broad-based, reflecting good stock selection by our investment team and a successful blend of quality growth stocks, economically sensitive stocks and selected defensive stocks. STOCKS RALLY AS INVESTOR SENTIMENT IMPROVES The stock market rallied from its depressed lows as investor sentiment improved beginning in mid-March. Investor confidence was bolstered by victory in Iraq, better-than-expected first quarter corporate profits and a shift in attitude about the economy. Fears of a double-dip recession were replaced by hopes for a postwar economic recovery. MEDIA, HEALTH CARE AND TECHNOLOGY SECTORS PACE GAINS Investors' expectations for a stronger economy boosted the funds' media and technology holdings. In the media area, particular strength in Comcast and Univision Communications more than offset slight weakness in Viacom.1 A recovery in tech nology stocks and our decision to increase our stake to a level matching that of our benchmark led to gains. Cisco Systems, - -------------- 1 Holdings are disclosed as a percentage of net assets as of April 30, 2003, and are subject to change: COMCAST (2.8% in Growth, 2.8% in Growth II), UNIVISION COMMUNICATIONS (2.2% in Growth, 2.3% in Growth II), VIACOM (2.8% in Growth, 2.7% in Growth II), CISCO SYSTEMS (2.6% in Growth, 2.3% in Growth II), TEXAS INSTRUMENTS (1.5% in Growth, 1.5% in Growth II), XILINX (1.9% in Growth, 1.9% in Growth II), VERITAS SOFTWARE (1.2% in Growth, 1.1% in Growth II), MICROCHIP TECHNOLOGY (2.1% in Growth, 1.9% in Growth II), ST. JUDE MEDICAL (2.6% in Growth, 2.5% in Growth II), MEDTRONIC (2.6% in Growth, 2.4% in Growth II), AMGEN (2.1% in Growth, 2.2% in Growth II), ABBOTT LABORATORIES (2.1% in Growth, 1.8% in Growth II), PFIZER (2.8% in Growth, 2.3% in Growth II) and KOHL'S (2.6% in Growth, 2.6% in Growth II). 5 BOUGHT - -------------------------------------------------------------------------------- ST. JUDE MEDICAL (2.6% of net assets in Growth, 2.5% of net assets in Growth II) This cardiac device maker's financial performance has improved dramatically with a better flow of new products, particularly in the rapidly growing implantable defibrillator market. The company is likely to experience superior earnings growth after 2003, which is expected to be a transition year for new products. SOLD - -------------------------------------------------------------------------------- JOHNSON & JOHNSON A standout performer for many years, the stock was sold. We became concerned that earnings growth could slow beyond 2003 as the result of a sparse new product pipeline and increasing competition for key existing drugs. Texas Instruments, Xilinx and Veritas Software (a new purchase) did particularly well. Microchip Technology, a semiconductor company, was a disappointing performer, however, as results fell short of expectations. We continue to own the stock because we think the company's long-term business prospects are sound. Health care stocks were another strong contributor to performance during the last six months. Our strategy of overweighting faster-growing subsectors and underweighting large pharmaceuticals, where growth has slowed, paid off nicely. Gains by health care equipment providers St. Jude Medical--a recent purchase--and Medtronic, as well as biotechnology leader Amgen, more than offset weakness in pharmaceutical holdings such as Abbott, Pfizer and Johnson & Johnson. We sold Johnson & Johnson near the end of the period. RETAILERS AND DEFENSIVE STOCKS DISAPPOINT Stocks in other traditional defensive sectors, such as consumer staples and insurance, were weak performers over the last six months as investors became less risk averse. Fortunately, we have been strategically underweight in defensive areas (except insurance) to take advantage of an economic recovery. We continue to own selected high-quality defensive stocks for diversification and as a hedge against persistent economic sluggishness. Kohl's, one of our core growth holdings, faltered in a weak apparel retailing environment. We retained our position because we believe that this will be one of the better growth stories in retailing over the next several years. 6 EXPECTATIONS FOR A MODEST ECONOMIC RECOVERY IN SECOND HALF AND BEYOND Although the economy remains sluggish, we expect a pick up during the second half of 2003 and into 2004. Both monetary and fiscal policy remain supportive of economic growth, with interest rates low and a tax cut likely by mid-year. Energy prices have fallen from their recent highs, and both consumer sentiment and investor psychology have improved. Weak employment and business investment trends are a continuing concern but we think that the economy, profits and the stock market all have the potential to trend upward. The combination of low interest rates, a growing (but not robust) economy, and a higher investor tolerance for risk is an attractive environment for growth stock investors. /s/ William M. Hughes /s/ Stephen Berman William M. Hughes and Stephen Berman are senior equity analysts at Stein Roe Investment Counsel, LLC, the sub-advisor to the funds. They are also members of the investment management team for Liberty Tax-Managed Growth Fund and Liberty Tax-Managed Growth Fund II. No single individual has primary management responsibility over the funds' portfolio securities. LIBERTY TAX-MANAGED GROWTH FUND TOP 5 SECTORS as of 4/30/03 (%) [bar chart data]: Financials 21.4 Consumer discretionary 17.6 Information technology 16.9 Health care 14.7 Industrials 9.2 LIBERTY TAX-MANAGED GROWTH FUND II TOP 5 SECTORS as of 4/30/03 (%) [bar chart data]: Financials 20.9 Consumer discretionary 17.8 Information technology 16.3 Health care 14.0 Industrials 9.7 Sector breakdowns are calculated as a percentage of net assets. Since each fund is actively managed, there can be no guarantee that a fund will continue to maintain these breakdowns in the future. - ---------------- The funds' approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. Certain active tax-reduction techniques are used only if the funds' advisor believes they will help the funds achieve their investment goals. The funds expect to distribute taxable income and capital gains from time to time. Market conditions may limit the funds' ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. 7 Performance Information - Liberty Tax-Managed Growth Fund VALUE OF A $10,000 INVESTMENT 12/30/96 - 4/30/03 Performance of a $10,000 investment 12/30/96 - 4/30/03 ($) without with sales sales charge charge - ---------------------------------- Class A 11,518 10,856 - ---------------------------------- Class B 10,972 10,972 - ---------------------------------- Class C 10,972 10,972 - ---------------------------------- Class E 11,458 10,943 - ---------------------------------- Class F 10,982 10,982 - ---------------------------------- Class Z 11,627 n/a - ---------------------------------- [mountain chart data]: Class A shares Class A shares without sales charge with sales charge S&P 500 Index 12/1996 $10,000 $ 9,425 $10,000 9,960 9,387 10,624 10,386 9,789 10,708 10,227 9,639 10,269 9,672 9,116 10,881 9,959 9,387 11,546 10,723 10,107 12,060 11,239 10,593 13,018 12,131 11,434 12,289 11,595 10,928 12,962 12,349 11,639 12,529 11,943 11,256 13,109 12,221 11,518 13,334 12,389 11,677 13,481 12,627 11,901 14,453 13,500 12,724 15,193 14,086 13,276 15,348 14,076 13,267 15,084 13,728 12,939 15,696 14,036 13,229 15,530 13,926 13,126 13,286 11,674 11,003 14,137 12,429 11,714 15,285 13,281 12,518 16,212 14,204 13,387 17,145 15,048 14,183 17,862 15,227 14,351 17,307 15,029 14,165 17,999 15,743 14,838 18,695 16,080 15,155 18,254 15,733 14,828 19,264 17,002 16,025 18,664 16,575 15,622 18,571 16,456 15,510 18,062 16,148 15,220 19,206 17,051 16,071 19,596 17,240 16,249 20,748 19,275 18,166 19,706 18,342 17,287 19,334 18,510 17,446 21,225 19,532 18,409 20,586 18,720 17,643 20,164 17,827 16,802 20,660 18,709 17,633 20,337 18,670 17,596 21,600 19,900 18,756 20,460 18,907 17,820 20,374 18,232 17,184 18,769 16,130 15,203 18,860 16,319 15,380 19,530 17,459 16,456 17,751 15,366 14,483 16,627 14,166 13,351 17,918 15,187 14,314 18,038 15,128 14,258 17,599 14,821 13,969 17,427 14,673 13,829 16,338 13,681 12,894 15,019 12,183 11,482 15,306 12,580 11,857 16,480 13,642 12,857 16,625 13,691 12,904 16,382 13,354 12,586 16,066 13,136 12,381 16,670 13,672 12,886 15,660 12,829 12,091 15,546 12,749 12,016 14,439 11,608 10,941 13,314 10,825 10,202 13,401 10,913 10,286 11,945 9,892 9,323 12,995 10,785 10,165 13,759 11,460 10,801 12,952 10,666 10,053 12,614 10,527 9,922 12,424 10,478 9,875 12,545 10,617 10,007 13,577 4/2003 11,518 10,856 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.LIBERTYFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance does not guarantee future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees, expenses, or taxes and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from December 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS AS OF 4/30/03 (%) Share class A B C E F Z Inception date 12/30/96 12/30/96 12/30/96 12/30/96 12/30/96 1/11/99 - ----------------------------------------------------------------------------------------------------------------------- without with without with without with without with without with without sales sales sales sales sales sales sales sales sales sales sales charge charge charge charge charge charge charge charge charge charge charge - ----------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 6.81 0.67 6.45 1.45 6.45 5.45 6.75 1.94 6.34 1.34 6.93 - ----------------------------------------------------------------------------------------------------------------------- 1-year -10.21 -15.37 -10.95 2.69 -10.88 6.69 -10.33 3.09 -10.94 2.68 -10.12 - ----------------------------------------------------------------------------------------------------------------------- 5-year -3.93 -5.07 -4.67 -5.06 -4.66 -4.66 -4.01 -4.89 -4.66 -5.04 -3.75 - ----------------------------------------------------------------------------------------------------------------------- Life 2.26 1.31 1.48 1.48 1.48 1.48 2.17 1.43 1.49 1.49 2.41 - ----------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS AS OF 3/31/03 (%) Share class A B C E F Z - ----------------------------------------------------------------------------------------------------------------------- without with without with without with without with without with without sales sales sales sales sales sales sales sales sales sales sales charge charge charge charge charge charge charge charge charge charge charge - ----------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 7.32 1.15 6.81 1.81 6.81 5.81 7.25 2.42 6.90 1.90 7.46 - ----------------------------------------------------------------------------------------------------------------------- 1-year -22.35 -26.82 -22.96 -26.81 -22.90 -23.67 -22.38 -25.87 -22.87 -26.72 -22.17 - ----------------------------------------------------------------------------------------------------------------------- 5-year -5.50 -6.62 -6.23 -6.61 -6.22 -6.22 -5.56 -6.43 -6.19 -6.57 -5.31 - ----------------------------------------------------------------------------------------------------------------------- Life 0.96 0.01 0.19 0.19 0.19 0.19 0.88 0.14 0.22 0.22 1.13 - -----------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, 4.50% for class E shares and the appropriate class B and class F contingent deferred sales charge for the holding period after purchase as follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - - 1%, thereafter - 0% and the class C contingent deferred sales charge of 1% for the first year only. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes vary based on differences in sales charges and fees associated with each class. Class Z share performance information includes returns for the fund's class A shares (as its expense structure more closely resembles that of the newer class) for periods prior to the inception of the newer class of shares. These class A share returns were not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class A and class Z shares. Had the expense differential been reflected, the returns for the periods prior to the inception of the class Z shares would have been higher. 8 Performance Information - Liberty Tax-Managed Growth Fund II VALUE OF A $10,000 INVESTMENT 3/7/00 - 4/30/03 Performance of a $10,000 investment 3/7/00 - 4/30/03 ($) without with sales sales charge charge - ----------------------------------- Class A 6,158 5,804 - ----------------------------------- Class B 6,000 5,828 - ----------------------------------- Class C 6,000 6,000 - ----------------------------------- Class Z 6,200 n/a - ----------------------------------- [mountain chart data]: Class A shares Class A shares without sales charge with sales charge S&P 500 Index 3/2000 $10,000 $ 9,425 $10,000 10,450 9,849 10,978 9,859 9,292 10,648 9,442 8,899 10,429 9,866 9,299 10,686 9,883 9,315 10,519 10,492 9,889 11,172 10,017 9,441 10,582 9,625 9,072 10,538 8,516 8,027 9,708 8,666 8,168 9,755 9,266 8,733 10,102 8,091 7,626 9,181 7,499 7,068 8,600 8,075 7,610 9,267 8,008 7,547 9,330 7,832 7,382 9,103 7,732 7,287 9,014 7,207 6,793 8,450 6,457 6,086 7,768 6,599 6,219 7,917 7,224 6,808 8,524 7,307 6,887 8,599 7,065 6,659 8,473 6,990 6,588 8,310 7,307 6,887 8,622 6,865 6,471 8,100 6,824 6,431 8,041 6,257 5,897 7,468 5,832 5,497 6,886 5,849 5,513 6,931 5,308 5,002 6,178 5,783 5,450 6,722 6,141 5,788 7,117 5,700 5,372 6,699 5,649 5,325 6,524 5,608 5,285 6,426 5,691 5,364 6,489 4/2003 6,158 5,804 7,023 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.LIBERTYFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of 500 widely held large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees or expenses, and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from February 29, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 4/30/03 (%) Share class A B C Z Inception date 3/7/00 3/7/00 3/7/00 3/7/00 - ---------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge - ---------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 6.48 0.41 6.03 1.03 6.19 5.19 6.74 - ---------------------------------------------------------------------------------------------------------------------- 1-year -10.32 -15.45 -10.99 -15.44 -11.00 -11.89 -10.04 - ---------------------------------------------------------------------------------------------------------------------- Life -14.27 -15.87 -14.94 -15.76 -14.98 -14.98 -14.09 - ---------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 3/31/03 (%) Share class A B C Z - ---------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge - ---------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 7.22 1.04 6.89 1.89 6.74 5.74 7.34 - ---------------------------------------------------------------------------------------------------------------------- 1-year -22.12 -26.64 -22.71 -26.58 -22.76 -23.54 -22.02 - ---------------------------------------------------------------------------------------------------------------------- Life -16.79 -18.38 -17.43 -18.25 -17.51 -17.51 -16.63 - ----------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year -1%, thereafter - 0% and the class C contingent deferred sales charge of 1% for the first year only. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. 9 Portfolio Manager's Report - Liberty Tax-Managed Value Fund TOP 10 EQUITY HOLDINGS as of 4/30/03 (%) Citigroup 5.4 Berkshire Hathaway, Class A 4.1 American International Group 3.1 Verizon Communications 3.1 SBC Communications 3.0 Merck & Co. 3.0 Aetna 3.0 JP Morgan Chase 2.8 McDonald's 2.8 BellSouth 2.7 Portfolio holdings are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain the same portfolio holdings in the future. BOUGHT - -------------------------------------------------------------------------------- TXU (1.0% of net assets) The collapse of Enron and ongoing concerns over industry deregulation made utility stocks attractive. During the period, we found opportunities in several companies including TXU. We believe these companies should benefit from their strong cash flows and levels of debt. SOLD - -------------------------------------------------------------------------------- DEUTSCHE TELEKOM AG AND NIPPON TELEGRAPH & TELEPHONE CORP. We eliminated these two foreign telecommunications firms from the portfolio during the period. Their weak balance sheets made them unattractive in this highly competitive industry. For the six-month period that ended April 30, 2003, class A shares of Liberty Tax-Managed Value Fund returned 0.11% without sales charge. The fund did not keep pace with the S&P 500 Index, which returned 4.47%, or the S&P 500/Barra Value Index, which returned 5.36% during the same period. The fund also trailed the Lipper Multi-Cap Value Category average, which returned 5.40%.1 Overweights in the consumer staples and telecommunications groups, as well as weak stock selection in the same areas, hurt the fund's relative performance. During the period, large-cap value stocks edged out their growth counterparts, while the reverse was true with small- and mid-cap stocks. Within the value universe, the best performers were companies with strong credit and earnings quality. In this environment, investments in companies with earnings that fell behind market expectations suffered disproportionately. CONSUMER STAPLES AND TELECOMMUNICATIONS STOCKS HURT PERFORMANCE MOST Three sizable holdings in the consumer staples group--ConAgra Foods, Sara Lee Corp. and Safeway--were hit particularly hard by poor earnings results.2 We reduced our holding in Sara Lee. An overweight in the lagging telecommunications group further reduced the fund's returns. During the period we eliminated two particularly poor performers, Deutsche Telekom AG and Nippon Telegraph & Telephone Corp. We also sold AT&T, whose earnings continued to deteri orate. Several holdings in the consumer discretionary area - ----------- 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 2 Holdings are disclosed as of April 30, 2003 as a percentage of net assets and are subject to change: ConAgra Foods (2.6%), Safeway (1.9%), Office Depot (2.4%), McDonald's Corp. (2.8%), AOL TimeWarner (1.1%), Interpublic Group of Companies (1.1%), Merck & Co. (3.0%), Aetna (3.0%), TXU Corp. (1.0%), American Electric Power (1.2%), Consolidated Edison (0.9%), Exxon Mobil (2.0%), ConocoPhillips (2.5%), Baker Hughes (1.0%) and Sara Lee Corp. (1.9%). 10 also turned in disappointing performances. Some stocks, such as Office Depot, were hurt by the slowdown in consumer and business spending. Other investments are turnaround situations that have yet to fulfill their potential. These include holdings such as McDonald's Corp., AOL Time Warner and Interpublic Group of Companies. BOOST FROM HEALTH CARE AND UTILITY STOCKS A sizable weighting in health care helped to offset these negatives. Many health care stocks posted good returns during a period when industry profit margins were improving. Among the fund's better performers were Merck & Co., which benefited from an attractive stock price, and Aetna, which did well as business turned around and earnings estimates increased. Boosting the fund's utility position from a sizable underweight to an overweight also made a positive contribution to performance. During the period, we initiated investments in TXU Corp., American Electric Power and Consolidated Edison. The addition of utility stocks also increased the fund's dividend yield. We made significant additions to the fund's energy position, as expectations that the price of oil would decline following a war with Iraq brought prices down on energy stocks. Energy stock prices became attractive in light of the collapse of Enron and ongoing concerns over industry deregulation. Our focus was on companies with strong cash flows and reasonable levels of debt. We initiated a position in Exxon Mobil and Baker Hughes, and increased our investment in ConocoPhillips. CONTINUED EMPHASIS ON INDIVIDUAL STOCKS In the months ahead we expect stock investors to become more focused on the earnings performance and business outlooks of individual companies rather than the relative prospects of different industry sectors. This emphasis on company fundamentals has the potential to benefit the fund's value-oriented holdings as we continue to emphasize companies whose current stock prices relative to their earnings outlooks and business prospects make them attractive. /s/ Scott L. Davis /s/ Gregory M. Miller Scott L. Davis, a vice president of Columbia Management Advisors, Inc., (Columbia Management) has co-managed the Liberty Tax-Managed Value Fund since November 2001. Gregory M. Miller, a senior vice president of Columbia Management, has co-managed the fund since April 2003. Both have managed investment portfolios for Columbia Management, and its predecessors, since 1985. Before April 29, 2003, Scott Schermerhorn was the fund's manager. The fund also is managed by a team of investment professionals assigned to it by Columbia Management. TOP 5 SECTORS as of 4/30/03 (%) [bar chart data]: Financials 22.2 Energy 13.0 Consumer staples 10.3 Consumer discretionary 10.2 Telecommunication services 8.7 Sector breakdowns are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain these breakdowns in the future. - ------------- Value stocks are securities of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the advisor's assessment of a company's prospects is wrong, the price of its stock may not approach the value the advisor has placed on it. Certain active tax-reduction techniques are used only if the fund's advisor believes they will help the fund achieve its investment goals. The fund expects to distribute taxable income and capital gains from time to time. Market conditions may limit the fund's ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. 11 Performance Information - Liberty Tax-Managed Value Fund VALUE OF A $10,000 INVESTMENT 6/1/99 - 4/30/03 Value of a $10,000 investment 6/1/99 - 4/30/03 ($) without with sales sales charge charge - ----------------------------------- Class A 7,417 6,990 - ----------------------------------- Class B 7,217 7,000 - ----------------------------------- Class C 7,217 7,217 - ----------------------------------- Class Z 7,492 n/a - -----------------------------------
[mountain chart data]: Class A shares Class A shares S&P 500/Barra without sales charge with sales charge S&P 500 Index Value Index 6/1999 $10,000 $ 9,425 $10,000 $10,000 10,200 9,614 10,553 10,384 9,733 9,173 10,225 10,065 9,358 8,820 10,174 9,811 8,641 8,144 9,895 9,427 8,866 8,356 10,521 9,960 8,799 8,294 10,735 9,901 8,749 8,246 11,366 10,273 8,357 7,877 10,796 9,946 7,741 7,295 10,592 9,325 8,624 8,128 11,627 10,297 8,774 8,269 11,277 10,228 9,215 8,685 11,046 10,260 8,724 8,222 11,318 9,855 8,607 8,112 11,141 10,052 9,090 8,567 11,833 10,726 9,124 8,599 11,208 10,724 9,507 8,960 11,161 10,925 9,440 8,897 10,282 10,365 9,982 9,408 10,332 10,899 9,940 9,369 10,699 11,359 9,906 9,337 9,724 10,606 9,565 9,015 9,109 10,187 9,698 9,140 9,816 10,878 9,881 9,313 9,881 10,992 9,614 9,061 9,641 10,636 9,864 9,297 9,547 10,452 9,814 9,249 8,950 9,848 9,447 8,903 8,228 8,912 9,497 8,951 8,385 8,912 9,863 9,296 9,028 9,478 9,938 9,367 9,108 9,622 9,722 9,163 8,975 9,359 9,596 9,044 8,801 9,275 10,088 9,508 9,132 9,750 9,655 9,100 8,579 9,262 9,621 9,068 8,516 9,299 8,530 8,039 7,910 8,712 7,822 7,372 7,294 7,770 7,897 7,443 7,341 7,824 6,780 6,391 6,544 6,930 7,405 6,979 7,119 7,505 7,997 7,537 7,538 8,032 7,630 7,192 7,095 7,615 7,347 6,925 6,910 7,406 6,923 6,525 6,806 7,205 6,898 6,501 6,872 7,195 4/2003 7,417 6,990 7,438 7,907
MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.LIBERTYFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of 500 widely held large-capitalization US stocks. The S&P 500/Barra Value Index is constructed by dividing the stocks in the S&P 500 Index by a single attribute: price-to-book ratio. The value index contains firms with lower price-to-book ratios. Unlike the fund, indices are not investments, do not incur fees, expenses or taxes, and are not professionally managed. Securities in the fund may not match those in an index. Index performance is from May 31, 1999. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 4/30/03 (%) Share class A B C Z Inception date 6/1/99 6/1/99 6/1/99 6/1/99 - ---------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge - ---------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 0.11 -5.64 -0.23 -5.22 -0.23 -1.23 0.33 - ---------------------------------------------------------------------------------------------------------------------- 1-year -23.21 -27.63 -23.77 -27.58 -23.77 -24.53 -22.96 - ---------------------------------------------------------------------------------------------------------------------- Life -7.35 -8.74 -7.99 -8.71 -7.99 -7.99 -7.11 - ---------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 3/31/03 (%) Share class A B C Z - ---------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge - ---------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 1.72 -4.13 1.51 -3.49 1.51 0.51 2.07 - ---------------------------------------------------------------------------------------------------------------------- 1-year -31.63 -35.56 -32.01 -35.41 -32.01 -32.69 -31.28 - ---------------------------------------------------------------------------------------------------------------------- Life -9.23 -10.62 -9.83 -10.55 -9.83 -9.83 -8.97 - ----------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, the appropriate class B contingent deferred sales charge (CDSC) maximum charge for the holding period after purchase as follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - - 0% and the class C contingent deferred sales charge of 1% for the first year only. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. 12 Investment Portfolio -- LTMAGF April 30, 2003 (Unaudited) COMMON STOCKS - 90.7% SHARES VALUE - ------------------------------------------------------- CONSUMER DISCRETIONARY - 17.2% AUTO COMPONENTS - 0.8% Gentex Corp. (a) 2,900 $ 87,580 ---------- HOTELS, RESTAURANTS & LEISURE - 4.1% Brinker International, Inc. (a) 5,200 165,100 California Pizza Kitchen, Inc. (a) 3,800 76,608 Darden Restaurants, Inc. 8,000 140,080 Starwood Hotels & Resorts Worldwide, Inc. 3,400 91,256 ---------- 473,044 ---------- INTERNET & CATALOG RETAIL - 0.5% USA Interactive (a) 2,000 59,900 ---------- MEDIA - 5.6% Cox Radio, Inc., Class A (a) 9,700 221,257 Knight-Ridder, Inc. 1,800 116,190 Radio One, Inc., Class D (a) 5,800 88,740 Univision Communications, Inc., Class A (a) 1,900 57,532 Westwood One, Inc. (a) 4,400 153,560 ---------- 637,279 ---------- MULTI-LINE RETAIL - 1.8% Dollar Tree Stores, Inc. (a) 3,200 81,440 Family Dollar Stores, Inc. 3,500 119,665 ---------- 201,105 ---------- SPECIALTY RETAIL - 4.4% Bed Bath & Beyond, Inc. (a) 4,700 185,697 CDW Computer Centers, Inc. (a) 2,700 115,128 Williams-Sonoma, Inc. (a) 7,800 201,864 ---------- 502,689 ---------- - ------------------------------------------------------- ENERGY - 11.2% ENERGY EQUIPMENT & SERVICES - 5.7% BJ Services Co. (a) 6,200 226,362 Nabors Industries Ltd. (a) 2,300 90,160 National-Oilwell, Inc. (a) 5,200 109,148 Noble Corp. (a) 3,300 102,135 Patterson-UTI Energy, Inc. (a) 3,600 119,124 ---------- 646,929 ---------- OIL & GAS - 5.5% Apache Corp. 3,020 172,895 Pogo Producing Co. 5,800 229,680 Valero Energy Corp. 3,900 143,325 XTO Energy, Inc. 4,200 81,900 ---------- 627,800 ---------- - ------------------------------------------------------- FINANCIALS - 6.4% DIVERSIFIED FINANCIALS - 1.1% Legg Mason, Inc. 1,100 59,730 Moody's Corp. 1,400 67,606 ---------- 127,336 ---------- SHARES VALUE - ------------------------------------------------------- INSURANCE - 5.3% Ambac Financial Group, Inc. 5,900 $ 344,265 Arthur J. Gallagher & Co. 3,500 87,465 StanCorp Financial Group, Inc. 3,200 171,840 ---------- 603,570 ---------- - ------------------------------------------------------- HEALTH CARE - 27.0% BIOTECHNOLOGY - 3.0% Biogen, Inc. (a) 2,300 87,377 Gilead Sciences, Inc. (a) 4,300 198,402 MedImmune, Inc. (a) 1,700 59,959 ---------- 345,738 ---------- HEALTH CARE EQUIPMENT & SUPPLIES - 4.5% Biomet, Inc. 2,700 82,242 Boston Scientific Corp. (a) 4,700 202,335 Hillenbrand Industries, Inc. 2,300 114,770 Varian Medical Systems, Inc. (a) 2,160 116,338 ---------- 515,685 ---------- HEALTH CARE PROVIDERS & SERVICES - 13.7% AmerisourceBergen Corp. 6,000 347,100 Anthem, Inc. (a) 1,700 116,688 Caremark Rx, Inc. (a) 22,200 442,002 Community Health Systems, Inc. (a) 4,900 93,100 Davita, Inc. (a) 3,600 74,232 HCA, Inc. 2,700 86,670 Laboratory Corporation of America Holdings (a) 3,500 103,110 Lincare Holdings, Inc. (a) 2,700 81,999 UnitedHealth Group, Inc. 2,300 211,899 ---------- 1,556,800 ---------- PHARMACEUTICALS - 5.8% Andrx Corp. (a) 7,900 127,506 Barr Laboratories, Inc. (a) 4,350 241,860 Biovail Corp. (a) 2,400 86,760 Millennium Pharmaceuticals, Inc. (a) 8,300 91,300 Teva Pharmaceutical Industries Ltd., ADR 2,400 112,080 ---------- 659,506 ---------- - ------------------------------------------------------- INDUSTRIALS - 13.9% AEROSPACE & DEFENSE - 1.1% Raytheon Co. 4,000 119,720 ---------- COMMERCIAL SERVICES & SUPPLIES - 10.4% BISYS Group, Inc. (a) 11,500 194,120 Corporate Executive Board Co. (a) 5,600 229,544 Education Management Corp. (a) 9,300 454,026 Robert Half International, Inc. (a) 8,500 138,380 Weight Watchers International, Inc. (a) 3,500 164,430 ---------- 1,180,500 ---------- See notes to investment portfolio. 13 Investment Portfolio -- LTMAGF (continued) April 30, 2003 (Unaudited) COMMON STOCKS (CONTINUED) SHARES VALUE - ------------------------------------------------------- INDUSTRIALS (CONTINUED) ELECTRICAL EQUIPMENT - 0.5% American Power Conversion Corp. (a) 3,800 $ 59,204 ---------- TRADING COMPANIES & DISTRIBUTORS - 1.9% Fastenal Co. 1,900 65,721 Grainger (W.W.), Inc. 3,300 152,295 ---------- 218,016 ---------- - ------------------------------------------------------- INFORMATION TECHNOLOGY - 15.0% COMMUNICATIONS EQUIPMENT - 1.0% Scientific-Atlanta, Inc. 7,100 115,375 ---------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.1% Jabil Circuit, Inc. (a) 9,100 170,170 Symbol Technologies, Inc. 6,100 66,673 ---------- 236,843 ---------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.1% Microchip Technology, Inc. 8,700 180,873 National Semiconductor Corp. (a) 3,100 58,063 Novellus Systems, Inc. (a) 4,100 114,964 ---------- 353,900 ---------- SOFTWARE - 8.8% Amdocs Ltd. (a) 6,400 113,024 BMC Software, Inc. (a) 5,800 86,536 Electronic Arts, Inc. (a) 2,400 142,248 Intuit, Inc. (a) 3,000 116,340 Mercury Interactive Corp. (a) 4,100 139,154 Network Associates, Inc. (a) 5,000 57,150 Siebel Systems, Inc. (a) 7,100 61,557 Symantec Corp. (a) 3,700 162,615 VERITAS Software Corp. (a) 5,900 129,859 ---------- 1,008,483 ---------- TOTAL COMMON STOCKS (Cost of $9,688,785) 10,337,002 ---------- SHORT-TERM OBLIGATION - 6.7% PAR VALUE - ------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 04/30/03, due 05/01/03 at 1.230% collateralized by a U.S. Treasury Note maturing 05/15/08, market value $786,894 (repurchase proceeds $767,026) (Cost of $767,000) $ 767,000 $ 767,000 ---------- TOTAL INVESTMENTS - 97.4% (Cost of $10,455,785)(b) 11,104,002 ---------- OTHER ASSETS & LIABILITIES, NET - 2.6% 295,807 - ------------------------------------------------------- NET ASSETS - 100.0% $11,399,809 =========== NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- --------------------------- ADR American Depositary Receipt See notes to financial statements. 14 Investment Portfolio -- LTMGF April 30, 2003 (Unaudited) COMMON STOCKS - 96.8% SHARES VALUE - ------------------------------------------------------- CONSUMER DISCRETIONARY - 17.6% INTERNET & CATALOG RETAIL - 1.3% eBay, Inc. (a) 43,000 $ 3,989,110 ----------- MEDIA - 9.9% Comcast Corp., Class A (a) 294,300 8,846,658 Fox Entertainment Group, Inc., Class A (a) 251,700 6,393,180 Univision Communications, Inc., Class A (a) 230,000 6,964,400 Viacom, Inc., Class B (a) 198,872 8,633,034 ----------- 30,837,272 ----------- MULTI-LINE RETAIL - 5.0% Kohl's Corp. (a) 145,000 8,236,000 Wal-Mart Stores, Inc. 132,800 7,479,296 ----------- 15,715,296 ----------- SPECIALTY RETAIL - 1.4% Lowe's Companies, Inc. 103,000 4,520,670 ----------- - ------------------------------------------------------- CONSUMER STAPLES - 7.3% BEVERAGES - 2.6% PepsiCo, Inc. 186,800 8,084,704 ----------- FOOD & DRUG RETAILING - 2.4% Walgreen Co. 250,000 7,715,000 ----------- HOUSEHOLD PRODUCTS - 2.3% Procter & Gamble Co. 79,000 7,098,150 ----------- - ------------------------------------------------------- ENERGY - 4.6% ENERGY EQUIPMENT & SERVICES - 2.2% Nabors Industries Ltd. (a) 175,000 6,860,000 ----------- OIL & GAS - 2.4% Exxon Mobil Corp. 211,000 7,427,200 ----------- - ------------------------------------------------------- FINANCIALS - 21.4% BANKS - 2.1% Bank of America Corp. 86,300 6,390,515 ----------- DIVERSIFIED FINANCIALS - 9.7% Citigroup, Inc. 181,155 7,110,334 Fannie Mae 116,200 8,411,718 Lehman Brothers Holdings, Inc. 116,275 7,321,837 Merrill Lynch & Co., Inc. 185,530 7,616,006 ----------- 30,459,895 ----------- INSURANCE - 9.6% American International Group, Inc. 121,854 7,061,439 Chubb Corp. 97,400 5,151,486 PMI Group, Inc. 55,000 1,695,100 RenaissanceRe Holdings Ltd. 189,980 8,414,214 XL Capital Ltd., Class A 94,810 7,802,863 ----------- 30,125,102 ----------- - ------------------------------------------------------- SHARES VALUE - ------------------------------------------------------- HEALTH CARE - 14.7% BIOTECHNOLOGY - 2.1% Amgen, Inc. (a) 105,200 $ 6,449,812 ----------- HEALTH CARE EQUIPMENT & SUPPLIES - 5.2% Medtronic, Inc. 168,500 8,044,190 St. Jude Medical, Inc. (a) 155,000 8,131,300 ----------- 16,175,490 ----------- HEALTH CARE PROVIDERS & SERVICE - 2.5% Express Scripts, Inc., Class A (a) 135,000 7,959,600 ----------- PHARMACEUTICALS - 4.9% Abbott Laboratories 161,417 6,558,373 Pfizer, Inc. 288,250 8,863,688 ----------- 15,422,061 ----------- - ------------------------------------------------------- INDUSTRIALS - 9.2% ELECTRICAL EQUIPMENT - 2.1% Emerson Electric Co. 128,300 6,504,810 ----------- INDUSTRIAL CONGLOMERATES - 1.7% General Electric Co. 180,910 5,327,799 ----------- MACHINERY - 5.4% Deere & Co. 123,000 5,415,690 Illinois Tool Works, Inc. 72,000 4,606,560 Navistar International Corp. (a) 250,200 6,980,580 ----------- 17,002,830 ----------- - ------------------------------------------------------- INFORMATION TECHNOLOGY - 16.9% COMMUNICATIONS EQUIPMENT - 2.6% Cisco Systems, Inc. (a) 544,700 8,192,288 ----------- COMPUTERS & PERIPHERALS - 3.1% Hewlett-Packard Co. 255,000 4,156,500 Lexmark International, Inc. (a) 75,000 5,588,250 ----------- 9,744,750 ----------- IT CONSULTING & SERVICES - 1.6% Affiliated Computer Services, Inc., Class A (a) 100,000 4,770,000 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 5.5% Microchip Technology, Inc. 311,000 6,465,690 Texas Instruments, Inc. 250,000 4,622,500 Xilinx, Inc. (a) 225,000 6,090,750 ----------- 17,178,940 ----------- SOFTWARE - 4.1% Microsoft Corp. 359,400 9,189,858 VERITAS Software Corp. (a) 165,000 3,631,650 ----------- 12,821,508 ----------- - ------------------------------------------------------- See notes to investment portfolio. 15 Investment Portfolio -- LTMGF (continued) April 30, 2003 (Unaudited) COMMON STOCKS (CONTINUED) SHARES VALUE - ------------------------------------------------------- MATERIALS - 5.1% CHEMICALS - 1.6% DuPont (E.I.) de Nemours & Co. 115,600 $ 4,916,468 ----------- METALS & MINING - 1.6% Phelps Dodge Corp. (a) 166,000 5,177,540 ----------- PAPER & FOREST PRODUCTS - 1.9% International Paper Co. 162,500 5,809,375 ----------- TOTAL COMMON STOCKS (Cost of $281,247,455) 302,676,185 ----------- SHORT-TERM OBLIGATION - 3.3% PAR - ------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 04/30/03, due 05/01/03 at 1.230% collateralized by a U.S. Treasury Bond maturing 11/15/21, market value $10,523,881 (repurchase proceeds $10,316,352) (Cost of $10,316,000) $ 10,316,000 10,316,000 ----------- TOTAL INVESTMENTS - 100.1% (Cost of $291,563,455)(b) 312,992,185 ----------- OTHER ASSETS & LIABILITIES, NET - (0.1)% (449,273) - ------------------------------------------------------- NET ASSETS - 100.0% $312,542,912 ============ NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. See notes to financial statements. 16 Investment Portfolio -- LTMGF II April 30, 2003 (Unaudited) COMMON STOCKS - 95.5% SHARES VALUE - ------------------------------------------------------- CONSUMER DISCRETIONARY - 17.8% INTERNET & CATALOG RETAIL - 1.3% eBay, Inc. (a) 6,000 $ 556,620 ----------- MEDIA - 9.9% Comcast Corp., Class A (a) 40,900 1,229,454 Fox Entertainment Group, Inc., Class A (a) 37,100 942,340 Univision Communications, Inc., Class A (a) 33,030 1,000,148 Viacom, Inc., Class B (a) 26,800 1,163,388 ----------- 4,335,330 ----------- MULTI-LINE RETAIL - 5.2% Kohl's Corp. (a) 20,000 1,136,000 Wal-Mart Stores, Inc. 19,970 1,124,710 ----------- 2,260,710 ----------- SPECIALTY RETAIL - 1.4% Lowe's Companies, Inc. 13,800 605,682 ----------- - ------------------------------------------------------- CONSUMER STAPLES - 7.2% BEVERAGES - 2.5% PepsiCo, Inc. 25,500 1,103,640 ----------- FOOD & DRUG RETAILING - 2.5% Walgreen Co. 35,000 1,080,100 ----------- HOUSEHOLD PRODUCTS - 2.2% Procter & Gamble Co. 10,600 952,410 ----------- - ------------------------------------------------------- ENERGY - 4.5% ENERGY EQUIPMENT & SERVICES - 2.1% Nabors Industries Ltd. (a) 23,700 929,040 ----------- OIL & GAS - 2.4% Exxon Mobil Corp. 30,000 1,056,000 ----------- - ------------------------------------------------------- FINANCIALS - 20.9% BANKS - 2.1% Bank of America Corp. 12,100 896,005 ----------- DIVERSIFIED FINANCIALS - 9.2% Citigroup, Inc. 24,795 973,204 Fannie Mae 15,585 1,128,198 Lehman Brothers Holdings, Inc. 13,625 857,966 Merrill Lynch & Co., Inc. 25,900 1,063,195 ----------- 4,022,563 ----------- INSURANCE - 9.6% American International Group, Inc. 17,463 1,011,981 Chubb Corp. 14,500 766,905 PMI Group, Inc. 7,500 231,150 RenaissanceRe Holdings Ltd. 26,200 1,160,398 XL Capital Ltd., Class A 12,400 1,020,520 ----------- 4,190,954 ----------- - ------------------------------------------------------- SHARES VALUE - ------------------------------------------------------- HEALTH CARE - 14.0% BIOTECHNOLOGY - 2.2% Amgen, Inc. (a) 16,000 $ 980,960 ----------- HEALTH CARE EQUIPMENT & SUPPLIES - 5.0% Medtronic, Inc. 22,400 1,069,376 St. Jude Medical, Inc. (a) 21,000 1,101,660 ----------- 2,171,036 ----------- HEALTH CARE PROVIDERS & SERVICES - 2.6% Express Scripts, Inc., Class A (a) 19,300 1,137,928 ----------- PHARMACEUTICALS - 4.2% Abbott Laboratories 19,800 804,474 Pfizer, Inc. 33,287 1,023,575 ----------- 1,828,049 ----------- - ------------------------------------------------------- INDUSTRIALS - 9.7% ELECTRICAL EQUIPMENT - 2.0% Emerson Electric Co. 17,700 897,390 ----------- INDUSTRIAL CONGLOMERATES - 2.3% General Electric Co. 33,355 982,305 ----------- MACHINERY - 5.4% Deere & Co. 17,500 770,525 Illinois Tool Works, Inc. 10,000 639,800 Navistar International Corp. (a) 33,541 935,794 ----------- 2,346,119 ----------- - ------------------------------------------------------- INFORMATION TECHNOLOGY - 16.3% COMMUNICATIONS EQUIPMENT - 2.3% Cisco Systems, Inc. (a) 68,495 1,030,165 ----------- COMPUTERS & PERIPHERALS - 3.1% Hewlett-Packard Co. 34,000 554,200 Lexmark International, Inc. (a) 10,500 782,355 ----------- 1,336,555 ----------- IT CONSULTING & SERVICES - 1.5% Affiliated Computer Services, Inc., Class A (a) 14,000 667,800 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 5.3% Microchip Technology, Inc. 39,700 825,363 Texas Instruments, Inc. 36,000 665,640 Xilinx, Inc. (a) 31,000 839,170 ----------- 2,330,173 ----------- SOFTWARE - 4.1% Microsoft Corp. 50,500 1,291,285 VERITAS Software Corp. (a) 22,000 484,221 ----------- 1,775,506 ----------- - ------------------------------------------------------- See notes to investment portfolio. 17 Investment Portfolio -- LTMGF II (continued) April 30, 2003 (Unaudited) COMMON STOCKS (CONTINUED) SHARES VALUE - ------------------------------------------------------- MATERIALS - 5.1% CHEMICALS - 1.6% DuPont (E.I.) de Nemours & Co. 16,000 $ 680,480 ----------- METALS & MINING - 1.7% Phelps Dodge Corp. (a) 23,500 732,965 ----------- PAPER & FOREST PRODUCTS - 1.8% International Paper Co. 22,500 804,375 ----------- TOTAL COMMON STOCKS (Cost of $42,156,785) 41,690,860 ----------- SHORT-TERM OBLIGATION - 4.6% PAR - ------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 04/30/03, due 05/01/03 at 1.230% collateralized by a U.S. Treasury Bond maturing 11/15/21, market value $2,049,087 (repurchase proceeds $2,003,068) (Cost of $2,003,000) $2,003,000 2,003,000 ----------- TOTAL INVESTMENTS - 100.1% (Cost of $44,159,785)(b) 43,693,860 ----------- OTHER ASSETS & LIABILITIES, NET - (0.1)% (37,536) - ------------------------------------------------------- NET ASSETS - 100.0% $43,656,324 =========== NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. See notes to financial statements. 18 Investment Portfolio -- LTMVF April 30, 2003 (Unaudited) COMMON STOCKS - 95.1% SHARES VALUE - ------------------------------------------------------- CONSUMER DISCRETIONARY - 10.2% AUTO COMPONENTS - 1.7% Delphi Corp. 165,900 $ 1,393,560 ----------- HOTELS, RESTAURANTS & LEISURE - 2.8% McDonald's Corp. 132,200 2,260,620 ----------- HOUSEHOLD DURABLES - 1.0% Matsushita Electric Industrial Co., Ltd. 101,000 801,940 ----------- MEDIA - 2.3% AOL Time Warner, Inc. (a) 66,400 908,352 Interpublic Group of Companies, Inc. 80,700 919,980 ----------- 1,828,332 ----------- SPECIALTY RETAIL - 2.4% Office Depot, Inc. (a) 150,900 1,910,394 ----------- - ------------------------------------------------------- CONSUMER STAPLES - 10.3% BEVERAGES - 1.2% Coca-Cola Co. 22,900 925,160 ----------- FOOD & DRUG RETAILING - 1.9% Safeway, Inc. (a) 93,400 1,552,308 ----------- FOOD PRODUCTS - 6.4% Archer-Daniels-Midland Co. 43,700 484,196 ConAgra Foods, Inc. 100,600 2,112,600 Kraft Foods, Inc., Class A 33,900 1,047,510 Sara Lee Corp. 89,900 1,508,522 ----------- 5,152,828 ----------- TOBACCO - 0.8% Altria Group, Inc. 19,400 596,744 ----------- - ------------------------------------------------------- ENERGY - 13.0% ENERGY EQUIPMENT & SERVICES - 3.4% Baker Hughes, Inc. 28,600 800,800 Halliburton Co. 71,600 1,532,956 Transocean, Inc. (a) 19,500 371,475 ----------- 2,705,231 ----------- OIL & GAS - 9.6% Anadarko Petroleum Corp. 8,500 377,400 BP PLC 21,000 809,340 ConocoPhillips 40,030 2,013,509 Exxon Mobil Corp. 45,100 1,585,811 Marathon Oil Corp. 57,900 1,318,383 Royal Dutch Petroleum Co. 39,200 1,602,496 ----------- 7,706,939 ----------- - ------------------------------------------------------- FINANCIALS - 22.2% BANKS - 1.2% Bank of New York Co., Inc. 35,600 941,620 ----------- SHARES VALUE - ------------------------------------------------------- DIVERSIFIED FINANCIALS - 10.1% Citigroup, Inc. 109,900 $ 4,313,575 Freddie Mac 26,200 1,516,980 JP Morgan Chase & Co. 77,700 2,280,495 ----------- 8,111,050 ----------- INSURANCE - 10.9% Ambac Financial Group, Inc. 17,200 1,003,620 American International Group, Inc. 43,300 2,509,235 Berkshire Hathaway, Inc., Class A (a) 47 3,281,307 Lincoln National Corp. 42,200 1,348,712 St. Paul Companies, Inc. 16,400 563,176 ----------- 8,706,050 ----------- - ------------------------------------------------------- HEALTH CARE - 7.3% HEALTH CARE PROVIDERS & SERVICES - 3.0% Aetna, Inc. 47,600 2,370,480 ----------- PHARMACEUTICALS - 4.3% Bristol-Myers Squibb Co. 41,100 1,049,694 Merck & Co., Inc. 40,800 2,373,744 ----------- 3,423,438 ----------- - ------------------------------------------------------- INDUSTRIALS - 7.3% AEROSPACE & DEFENSE - 2.9% Honeywell International, Inc. 58,200 1,373,520 Raytheon Co. 31,300 936,809 ----------- 2,310,329 ----------- COMMERCIAL SERVICES & SUPPLIES - 1.8% Waste Management, Inc. 68,070 1,478,480 ----------- INDUSTRIAL CONGLOMERATES - 1.7% Textron, Inc. 47,200 1,391,928 ----------- MACHINERY - 0.9% Dover Corp. 24,500 704,130 ----------- - ------------------------------------------------------- INFORMATION TECHNOLOGY - 4.2% ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6% Celestica, Inc. (a) 45,400 524,824 ----------- IT CONSULTING & SERVICES - 1.7% Electronic Data Systems Corp. 75,800 1,375,770 ----------- OFFICE ELECTRONICS - 1.9% Xerox Corp. (a) 151,000 1,488,860 ----------- - ------------------------------------------------------- MATERIALS - 5.6% CHEMICALS - 1.3% Akzo Nobel N.V., ADR 45,900 1,021,275 ----------- METALS & MINING - 1.8% Barrick Gold Corp. 58,200 870,090 Nucor Corp. 14,400 588,240 ----------- 1,458,330 ----------- PAPER & FOREST PRODUCTS - 2.5% Bowater, Inc. 18,600 724,098 Georgia-Pacific Corp. 84,400 1,303,136 ----------- 2,027,234 ----------- - ------------------------------------------------------- See notes to investment portfolio. 19 Investment Portfolio -- LTMVF (continued) April 30, 2003 (Unaudited) COMMON STOCKS (CONTINUED) SHARES VALUE - ------------------------------------------------------- TELECOMMUNICATION SERVICES - 8.7% DIVERSIFIED TELECOMMUNICATION SERVICES - 8.7% BellSouth Corp. 84,000 $ 2,141,160 SBC Communications, Inc. 102,000 2,382,720 Verizon Communications, Inc. 65,600 2,452,128 ----------- 6,976,008 ----------- - ------------------------------------------------------- UTILITIES - 6.3% ELECTRIC UTILITIES - 4.3% American Electric Power Co., Inc. 35,300 931,214 Consolidated Edison, Inc. 19,000 738,530 PG&E Corp. (a) 66,000 988,680 TXU Corp. 39,400 784,848 ----------- 3,443,272 ----------- GAS UTILITIES - 0.2% El Paso Corp. 22,500 168,750 ----------- MULTI-UTILITIES & UNREGULATED POWER - 1.8% Duke Energy Corp. 80,600 1,417,754 ----------- TOTAL COMMON STOCKS (Cost of $82,896,369) 76,173,638 ----------- SHORT-TERM OBLIGATION - 2.5% PAR - ------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 04/30/03, due 05/01/03 at 1.230% collateralized by a U.S. Treasury Bond maturing 11/15/21, market value $2,063,366 (repurchase proceeds $2,022,069) (Cost of $2,022,000) $2,022,000 2,022,000 ----------- TOTAL INVESTMENTS - 97.6% (Cost of $84,918,369)(b) 78,195,638 ----------- OTHER ASSETS & LIABILITIES, NET - 2.4% 1,886,696 - ------------------------------------------------------- NET ASSETS - 100.0% $80,082,334 =========== NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- --------------------------- ADR American Depositary Receipt See notes to financial statements. 20
Statements of Assets & Liabilities April 30, 2003 (Unaudited) LTMAGF LTMGF - ------------------------------------------------------------------------------------------------------------------------ ASSETS: Investments, at cost $ 10,455,785 $291,563,455 ------------ ------------ Investments, at value 11,104,002 312,992,185 Cash $ 697 $ 570 Receivable for: Investments sold 493,300 -- Fund shares sold 480 191,155 Dividends 1,418 152,203 Interest 26 352 Expense reimbursement due from Advisor/Administrator 9,641 -- Deferred Trustees' compensation plan 380 9,695 Other assets 6,548 26,510 ------------ ----------- Total Assets 11,616,492 313,372,670 ------------ ------------ LIABILITIES: Payable for: Investments purchased 152,400 -- Fund shares repurchased 15,903 450,359 Management fee 7,556 154,992 Administration fee 1,793 66,791 Transfer agent fee 6,043 120,925 Pricing and bookkeeping fees -- 12,080 Audit fee 9,777 12,587 Legal fee 11,418 2,329 Deferred Trustees' fee 380 9,695 Other liabilities 11,413 -- ------------ ----------- Total Liabilities 216,683 829,758 ------------ ------------ NET ASSETS $ 11,399,809 $312,542,912 ============ ============ COMPOSITION OF NET ASSETS: Paid-in capital $ 25,821,362 $482,337,403 Accumulated net investment loss (100,907) (1,435,401) Accumulated net realized loss (14,968,863) (189,787,820) Net unrealized appreciation on investments 648,217 21,428,730 ------------ ------------ NET ASSETS $ 11,399,809 $312,542,912 ============ ============ CLASS A: Net assets $ 2,479,533 $ 63,469,030 Shares outstanding 386,263 5,468,513 ============ ============ Net asset value per share $ 6.42(a) $ 11.61(a) ============ ============ Maximum offering price per share (net asset value/0.9425) $ 6.81(b) $ 12.32(b) ============ ============ CLASS B: Net assets $ 7,503,612 $204,641,806 Shares outstanding 1,193,089 18,501,321 ============ ============ Net asset value and offering price per share $ 6.29(a) $ 11.06(a) ============ ============ CLASS C: Net assets $ 1,402,928 $ 29,001,952 Shares outstanding 223,139 2,622,482 ============ ============ Net asset value and offering price per share $ 6.29(a) $ 11.06(a) ============ ============ CLASS E: Net assets $ -- $ 6,090,183 Shares outstanding -- 527,323 ============ ============ Net asset value and redemption price per share $ -- $ 11.55 ============ ============ Maximum offering price per share (net asset value/0.9550) $ -- $ 12.09(b) ============ ============ CLASS F: Net assets $ -- $ 9,177,879 Shares outstanding -- 828,712 ============ ============ Net asset value and offering price per share $ -- $ 11.07(a) ============ ============ CLASS Z: Net assets $ 13,736 $ 162,062 Shares outstanding 2,138 13,822 ============ ============ Net asset value, offering and redemption price per share $ 6.42 $ 11.72 ============ ============ (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 notes to financial statements. 21
Statements of Assets & Liabilities (continued) April 30, 2003 (Unaudited) LTMGF II LTMVF - ------------------------------------------------------------------------------------------------------------------------ ASSETS: Investments, at cost $ 44,159,785 $ 84,918,369 ------------ ------------ Investments, at value 43,693,860 78,195,638 Cash $ 777 $ 646 Receivable for: Investments sold -- 4,013,499 Fund shares sold 50,319 77,164 Dividends 20,235 288,882 Interest 68 69 Expense reimbursement due from Advisor/Administrator 10,733 -- Deferred Trustees' compensation plan 1,108 1,923 Other assets 2,855 4,546 ------------ ----------- Total Assets 43,779,955 82,582,367 ------------ ------------ LIABILITIES: Payable for: Investments purchased -- 2,333,662 Fund shares repurchased 62,788 61,863 Management fee 28,562 52,539 Administration fee 7,386 13,611 Transfer agent fee 11,823 18,492 Pricing and bookkeeping fees 977 3,214 Audit fee 9,777 9,777 Legal fee 1,210 906 Deferred Trustees' fee 1,108 1,923 Other liabilities -- 4,046 ------------ ----------- Total Liabilities 123,631 2,500,033 ------------ ------------ NET ASSETS $ 43,656,324 $ 80,082,334 ============ ============ COMPOSITION OF NET ASSETS: Paid-in capital $ 76,916,103 $108,882,616 Undistributed net investment income (accumulated net investment loss) (199,367) 66,961 Accumulated net realized loss (32,594,487) (22,144,512) Net unrealized depreciation on investments (465,925) (6,722,731) ------------ ------------ NET ASSETS $ 43,656,324 $ 80,082,334 ============ ============ CLASS A: Net assets $ 6,968,631 $ 16,690,457 Shares outstanding 942,848 1,875,995 ============ ============ Net asset value per share $ 7.39(a) $ 8.90(a) ============ ============ Maximum offering price per share (net asset value/0.9425) $ 7.84(b) $ 9.44(b) ============ ============ CLASS B: Net assets $ 29,876,343 $ 47,873,484 Shares outstanding 4,142,233 5,526,654 ============ ============ Net asset value and offering price per share $ 7.21(a) $ 8.66(a) ============ ============ CLASS C: Net assets $ 6,049,635 $ 15,490,430 Shares outstanding 840,611 1,788,953 ============ ============ Net asset value and offering price per share $ 7.20(a) $ 8.66(a) ============ ============ CLASS Z: Net assets $ 761,715 $ 27,963 Shares outstanding 102,406 3,110 ============ ============ Net asset value, offering and redemption price per share $ 7.44 $ 8.99 ============ ============ (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 notes to financial statements. 22
Statements of Operations For the Six Months Ended April 30, 2003 (Unaudited) LTMAGF LTMGF - ------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME: Dividends $ 17,036 $ 1,716,023 Interest 3,400 35,766 ------------ ------------ Total Investment Income (net of foreign taxes withheld of $93 and $6,160, respectively) 20,436 1,751,789 ------------ ------------ EXPENSES: Management fee $ 46,034 $ 930,428 Administration fee 11,509 387,678 Service fee: Class A 3,077 78,409 Class B 9,494 254,855 Class C 1,811 36,211 Class E -- 7,188 Class F -- 10,793 Distribution fee: Class A 615 -- Class B 28,481 764,564 Class C 5,432 108,633 Class E -- 2,875 Class F -- 32,380 Transfer agent fee 24,251 412,306 Pricing and bookkeeping fees 6,067 63,626 Trustees' fee 2,516 7,769 Custody fee 2,439 6,661 Audit fee 9,918 10,137 Registration fee 27,407 35,705 Other expenses 2,407 23,139 ------------ ----------- Total Expenses 181,458 3,173,357 Fees and expenses waived or reimbursed by Advisor/Administrator (60,620) -- Custody earnings credit -- (16) ------------ ----------- Net Expenses 120,838 3,173,341 ------------ ------------ Net Investment Loss (100,402) (1,421,552) ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (419,548) (13,649,089) Net change in unrealized appreciation/depreciation on investments 416,441 34,060,701 ------------ ------------ Net Gain (Loss) (3,107) 20,411,612 ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (103,509) $ 18,990,060 ============ ============ See notes to financial statements.
23
Statements of Operations (continued) For the Six Months Ended April 30, 2003 (Unaudited) LTMGF II LTMVF - ------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME: Dividends $ 236,442 $ 1,009,950 Interest 5,902 4,685 Other income 13,974 -- ------------ ------------ Total Investment Income (net of foreign taxes withheld of $960 and $17,381, respectively) 256,318 1,014,635 ------------ ------------ EXPENSES: Management fee $ 172,089 $ 335,168 Administration fee 43,022 83,792 Service fee: Class A 8,756 22,562 Class B 36,579 61,948 Class C 7,494 20,211 Distribution fee: Class A -- 4,512 Class B 109,737 185,845 Class C 22,481 60,633 Transfer agent fee 58,614 97,476 Pricing and bookkeeping fees 5,762 21,269 Trustees' fee 2,616 3,516 Custody fee 2,243 4,110 Audit fee 9,918 7,326 Registration fee 32,122 29,738 Other expenses 4,127 6,515 ------------ ----------- Total Expenses 515,560 944,621 Fees and expenses waived or reimbursed by Advisor/Administrator (61,471) -- Custody earnings credit (94) -- ------------ ------------ Net Expenses 453,995 944,621 ------------ ------------ Net Investment Income (Loss) (197,677) 70,014 ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (2,841,809) (6,461,294) Net change in unrealized appreciation/depreciation on investments 5,550,925 6,163,773 ------------ ------------ Net Gain (Loss) 2,709,116 (297,521) ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 2,511,439 $ (227,507) ============ ============ See notes to financial statements.
24
Statements of Changes in Net Assets LTMAGF LTMGF - ------------------------------------------------------------------------------------------------------------------------ (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2003 2002 2003 2002 - ------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment loss $ (100,402) $ (308,001) $ (1,421,552) $ (3,370,720) Net realized loss on investments (419,548) (2,855,344) (13,649,089) (56,235,239) Net change in unrealized appreciation/depreciation on investments 416,441 1,853,314 34,060,701 (3,638,348) ----------- ----------- ------------ ------------ Net Increase (Decrease) from Operations (103,509) (1,310,031) 18,990,060 (63,244,307) ----------- ----------- ------------ ------------ SHARE TRANSACTIONS: Class A: Subscriptions 661,728 918,229 2,260,331 8,721,673 Redemptions (998,623) (1,895,664) (9,623,660) (32,084,446) ----------- ----------- ------------ ------------ Net Decrease (336,895) (977,435) (7,363,329) (23,362,773) ----------- ----------- ------------ ------------ Class B: Subscriptions 473,271 1,187,026 3,579,508 13,151,957 Redemptions (1,128,236) (3,112,236) (27,961,921) (81,597,675) ----------- ----------- ------------ ------------ Net Decrease (654,965) (1,925,210) (24,382,413) (68,445,718) ----------- ----------- ------------ ------------ Class C: Subscriptions 27,306 529,404 1,123,957 5,562,656 Redemptions (308,125) (1,152,931) (4,715,161) (15,790,888) ----------- ----------- ------------ ------------ Net Decrease (280,819) (623,527) (3,591,204) (10,228,232) ----------- ----------- ------------ ------------ Class E: Subscriptions -- -- 22,292 224,389 Redemptions -- -- (109,549) (238,932) ----------- ----------- ------------ ------------ Net Decrease -- -- (87,257) (14,543) ----------- ----------- ------------ ------------ Class F: Subscriptions -- -- 82,286 527,180 Redemptions -- -- (169,727) (353,318) ----------- ----------- ------------ ------------ Net Increase (Decrease) -- -- (87,441) 173,862 ----------- ----------- ------------ ------------ Class Z: Subscriptions 10,500 408,190 232,339 -- Redemptions -- (397,190) (149,430) (850,740) ----------- ----------- ------------ ------------ Net Increase (Decrease) 10,500 11,000 82,909 (850,740) ----------- ----------- ------------ ------------ Net Decrease from Share Transactions (1,262,179) (3,515,172) (35,428,735) (102,728,144) ----------- ----------- ------------ ------------ Total Decrease in Net Assets (1,365,688) (4,825,203) (16,438,675) (165,972,451) NET ASSETS: Beginning of period 12,765,497 17,590,700 328,981,587 494,954,038 ----------- ----------- ------------ ------------ End of period $11,399,809 $12,765,497 $312,542,912 $328,981,587 =========== =========== ============ ============ Accumulated net investment loss $ (100,907) $ (505) $ (1,435,401) $ (13,849) =========== =========== ============ ============ See notes to financial statements.
25
Statements of Changes in Net Assets (continued) LTMAGF LTMGF - ---------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2003 2002 2003 2002 - ---------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES: Class A: Subscriptions 108,474 120,292 208,407 680,896 Redemptions (160,786) (258,069) (884,350) (2,614,841) ----------- ----------- ------------ ------------ Net Decrease (52,312) (137,777) (675,943) (1,933,945) ----------- ----------- ------------ ------------ Class B: Subscriptions 77,106 161,551 357,412 1,049,853 Redemptions (184,598) (440,359) (2,715,353) (7,007,740) ----------- ----------- ------------ ------------ Net Decrease (107,492) (278,808) (2,357,941) (5,957,887) ----------- ----------- ------------ ------------ Class C: Subscriptions 4,377 70,516 117,235 455,735 Redemptions (49,567) (163,218) (462,335) (1,341,588) ----------- ----------- ------------ ------------ Net Decrease (45,190) (92,702) (345,100) (885,853) ----------- ----------- ------------ ------------ Class E: Subscriptions -- -- 2,051 17,655 Redemptions -- -- (10,359) (21,839) ----------- ----------- ------------ ------------ Net Decrease -- -- (8,308) (4,184) ----------- ----------- ------------ ------------ Class F: Subscriptions -- -- 7,867 42,623 Redemptions -- -- (16,088) (31,434) ----------- ----------- ------------ ------------ Net Increase (Decrease) -- -- (8,221) 11,189 ----------- ----------- ------------ ------------ Class Z: Subscriptions 1,674 51,745 20,899 -- Redemptions -- (59,967) (14,411) (64,379) ----------- ----------- ------------ ------------ Net Increase (Decrease) 1,674 (8,222) 6,488 (64,379) ----------- ----------- ------------ ------------ See notes to financial statements.
26
Statements of Changes in Net Assets (continued) LTMGF II LTMVF - ---------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2003 2002 2003 2002 - ---------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) $ (197,677) $ (530,798) $ 70,014 $ (248,818) Net realized loss on investments (2,841,809) (9,333,607) (6,461,294) (15,507,933) Net change in unrealized appreciation/depreciation on investments 5,550,925 2,290,838 6,163,773 (14,402,670) ----------- ----------- ------------ ------------ Net Increase (Decrease) from Operations 2,511,439 (7,573,567) (227,507) (30,159,421) ----------- ----------- ------------ ------------ SHARE TRANSACTIONS: Class A: Subscriptions 1,036,961 2,585,072 2,389,937 10,989,897 Redemptions (2,166,473) (3,053,453) (5,394,407) (10,381,631) ----------- ----------- ------------ ------------ Net Increase (Decrease) (1,129,512) (468,381) (3,004,470) 608,266 ----------- ----------- ------------ ------------ Class B: Subscriptions 1,335,666 5,060,865 2,099,800 17,390,433 Redemptions (4,048,943) (11,451,939) (6,825,840) (16,719,891) ----------- ----------- ------------ ------------ Net Increase (Decrease) (2,713,277) (6,391,074) (4,726,040) 670,542 ----------- ----------- ------------ ------------ Class C: Subscriptions 472,884 2,105,388 802,166 9,058,575 Redemptions (1,243,008) (3,549,281) (2,723,073) (7,028,058) ----------- ----------- ------------ ------------ Net Increase (Decrease) (770,124) (1,443,893) (1,920,907) 2,030,517 ----------- ----------- ------------ ------------ Class Z: Subscriptions 33,541 434,351 28,950 -- Redemptions (213,762) (700,801) -- -- ----------- ----------- ------------ ------------ Net Increase (Decrease) (180,221) (266,450) 28,950 -- ----------- ----------- ------------ ------------ Net Increase (Decrease) from Share Transactions (4,793,134) (8,569,798) (9,622,467) 3,309,325 ----------- ----------- ------------ ------------ Total Decrease in Net Assets (2,281,695) (16,143,365) (9,849,974) (26,850,096) NET ASSETS: Beginning of period 45,938,019 62,081,384 89,932,308 116,782,404 ----------- ----------- ------------ ------------ End of period $43,656,324 $45,938,019 $ 80,082,334 $ 89,932,308 =========== =========== ============ ============ Undistributed net investment income (accumulated net investment loss) $ (199,367) $ (1,690) $ 66,961 $ (3,053) =========== =========== ============ ============ See notes to financial statements.
27
Statements of Changes in Net Assets (continued) LTMGF II LTMVF - ---------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2003 2002 2003 2002 - ---------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES: Class A: Subscriptions 149,975 307,872 272,517 962,625 Redemptions (315,638) (396,592) (621,057) (990,919) ----------- ----------- ------------ ------------ Net Decrease (165,663) (88,720) (348,540) (28,294) ----------- ----------- ------------ ------------ Class B: Subscriptions 195,470 618,499 240,958 1,548,507 Redemptions (595,397) (1,495,782) (786,477) (1,691,536) ----------- ----------- ------------ ------------ Net Decrease (399,927) (877,283) (545,519) (143,029) ----------- ----------- ------------ ------------ Class C: Subscriptions 68,717 257,090 90,553 809,984 Redemptions (183,709) (453,851) (313,644) (702,641) ----------- ----------- ------------ ------------ Net Increase (Decrease) (114,992) (196,761) (223,091) 107,343 ----------- ----------- ------------ ------------ Class Z: Subscriptions 4,805 59,549 3,006 -- Redemptions (30,618) (83,691) -- -- ----------- ----------- ------------ ------------ Net Increase (Decrease) (25,813) (24,142) 3,006 -- ----------- ----------- ------------ ------------ See notes to financial statements.
28 Notes to Financial Statements April 30, 2003 (Unaudited) NOTE 1. ACCOUNTING POLICIES ORGANIZATION: Liberty Tax-Managed Aggressive Growth Fund ("LTMAGF"), Liberty Tax-Managed Growth Fund ("LTMGF"), Liberty Tax-Managed Growth Fund II ("LTMGF II") and Liberty Tax-Managed Value Fund ("LTMVF") are each a series of Liberty Funds Trust I (individually referred to as a "Fund", collectively referred to as the "Funds") and are diversified portfolios. Liberty Funds Trust I is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Each Fund's investment goal is to seek long-term capital growth while reducing shareholder exposure to taxes. The Funds may issue an unlimited number of shares. LTMGF offers six classes of shares: Class A, Class B, Class C, Class E, Class F and Class Z. LTMAGF, LTMGF II and LTMVF each 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 1.00% contingent deferred sales charge ("CDSC") is assessed on 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 a CDSC. Class B shares will convert to Class A shares in three, four or eight years after purchase depending on the program under which shares were purchased. Class C shares are subject to a CDSC on redemptions made within one year after purchase. Class E and Class F shares are trust shares. Class E shares are sold with a front-end sales charge and Class F shares are subject to a CDSC. Class F shares will convert into Class E shares after eight years. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in each Fund's prospectus. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. SECURITY VALUATION AND TRANSACTIONS: Equity securities generally are valued at the last sale price or, in the case of unlisted or listed securities for which there were no sales during the day, at the current quoted bid price. Short-term obligations with a maturity of 60 days or less are valued at amortized cost. Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value under procedures approved by the Board of Trustees. Security transactions are accounted for on the date the securities are purchased, sold or mature. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All income, expenses (other than applicable 12b-1 fees) and realized and unrealized gains (losses) are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. Per share data and ratios are calculated by adjusting the expenses and net investment income (loss) per share data and ratios for the Funds for the entire period by the service and distribution fees applicable to each class of shares. FEDERAL INCOME TAXES: Consistent with each Fund's policy to qualify as a regulated investment company and to distribute all of its taxable income, no federal income tax has been accrued. DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded on the ex-date. OTHER: Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date (except for certain foreign securities which are recorded as soon after ex-date as the Funds become aware of such), net of non-reclaimable tax withholdings. Where a high level of uncertainty as to collection exists, income on securities is recorded net of all tax withholdings with any rebates recorded when received. The Funds' custodian takes possession through the federal book-entry system of securities collateralizing repurchase agreements. Collateral is marked-to-market 29 Notes to Financial Statements (continued) April 30, 2003 (Unaudited) daily to ensure that the market value of the underlying assets remains sufficient to protect the Funds. The Funds may experience costs and delays in liquidating the collateral if the issuer defaults or enters bankruptcy. NOTE 2. FEDERAL TAX INFORMATION Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Funds' capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. The following capital loss carryforwards, determined as of October 31, 2002, are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: EXPIRING IN: LTMAGF LTMGF LTMGF II LTMVF - ----------- ---------- ---------- --------- --------- 2005 $ -- $ 559,490 $ -- $ -- 2006 -- 9,583,819 -- -- 2007 -- 1,695,876 -- -- 2008 648,743 16,678,334 1,602,453 96,769 2009 11,034,417 90,676,212 18,063,082 -- 2010 2,819,769 55,723,138 9,577,005 15,493,033 ---------- ----------- ---------- ---------- Total $14,502,929 $174,916,869 $29,242,540 $15,589,802 ========== ============ =========== =========== Expired capital loss carryforwards, if any, are recorded as a reduction of paid-in capital. NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES MANAGEMENT FEE: Columbia Management Advisors, Inc., ("Columbia"), an indirect, wholly-owned subsidiary of FleetBoston Financial Corporation, is the investment advisor of each Fund and receives a monthly fee based on each Fund's average daily net assets as follows: LTMAGF 0.80% annually LTMGF 0.60% annually LTMVF 0.80% annually For LTMGF II, Columbia receives a monthly fee as follows: LTMAGF 0.80% annually LTMGF 0.60% annually LTMVF 0.80% annually For LTMGF II, Columbia receives a monthly fee as follows: ANNUAL AVERAGE DAILY NET ASSETS FEE RATE - ------------------------- ---------- First $500 million 0.80% Over $500 million 0.75% On April 1, 2003, Stein Roe & Farnham Incorporated, the previous advisor to each Fund, and Colonial Management Associates Inc., the previous administrator to each Fund, merged into Columbia. At the time of the merger, Columbia assumed the obligations of those companies with respect to the Funds. The merger did not change the way each Fund is managed, the investment personnel assigned to manage each Fund or the fees paid by each Fund to Columbia. Stein Roe Investment Counsel LLC ("SRIC"), an unrelated investment advisor, was retained by Columbia as sub-advisor to LTMGF and LTMGF II. As sub-advisor, SRIC runs the day-to-day business, including placing all orders for the purchase and sale of portfolio securities for the two funds. Columbia, out of the advisory fee it receives, pays SRIC a monthly sub-advisory fee equal to a base rate of 0.20% annually of the average daily net assets for each of the two funds. This base fee of 0.20% can be adjusted quarterly to an annual rate as high as 0.25% or to an annual rate as low as 0.15% depending on the investment performance of the Fund over a specified period of time as measured by Morningstar, Inc.'s Large Blend category for domestic equity funds. In addition, Columbia's contract with SRIC provides that SRIC shall not receive a fee less than $350,000 per annum in the aggregate for managing both LTMGF and LTMGF II. ADMINISTRATION FEE: Columbia also provides accounting and other services and office facilities for a monthly fee based on each Fund's average daily net assets as follows: LTMAGF 0.20% annually LTMGF 0.25% annually LTMGF II 0.20% annually LTMVF 0.20% annually PRICING AND BOOKKEEPING FEES: Columbia is responsible for providing pricing and bookkeeping services to each Fund under a Pricing and Bookkeeping Agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Bank and Trust Company ("State Street"). Columbia pays fees to State Street under the Outsourcing Agreement. Under its pricing and bookkeeping agreement with the Funds, Columbia receives from each Fund an annual flat fee of $10,000, paid monthly, and in any month 30 Notes to Financial Statements (continued) April 30, 2003 (Unaudited) that a Fund's average daily net assets are more than $50 million, a monthly fee equal to the average daily net assets of the Fund for that month multiplied by a fee rate that is calculated by taking into account the fees payable to State Street under the Outsourcing Agreement. For the six months ended April 30, 2003, the annualized net asset based fee rates were 0.036% and 0.037% respectively for LTMGF and LTMVF. The Funds also pay out-of-pocket costs for pricing services. TRANSFER AGENT FEE: Liberty Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia, provides shareholder services for a monthly fee equal to 0.06% annually of each Fund's average daily net assets plus charges based on the number of shareholder accounts and transactions. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Liberty Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia, is the Funds' principal underwriter. During the six months ended April 30, 2003, the Distributor retained net underwriting discounts of $529, $5,040, $774 and $1,431, respectively, for LTMAGF, LTMGF, LTMGF II and LTMVF sales of the Funds' Class A shares. For LTMAGF, the Distributor received CDSC of $24,746 and $27 for Class B and Class C redemptions, respectively. For LTMGF, the Distributor received CDSC of $419,363 and $634 for Class B and Class C redemptions, respectively. For LTMGF II, the Distributor received CDSC of $27, $62,121 and $66 for Class A, Class B, and Class C redemptions, respectively. For LTMVF, the Distributor received CDSC of $1,250, $107,989 and $1,530 on Class A, Class B and Class C redemptions, respectively. For LTMGF, the Distributor did not retain any net underwriting discounts on sales of the Fund's Class E shares and did not receive any CDSC on Class F share redemptions. LTMGF has adopted a 12b-1 plan (the "Plan"), which requires the payment of a monthly service fee to the Distributor equal to 0.25% annually of the average daily net assets attributable to Class A, Class B, Class C, Class E and Class F shares as of the 20th of each month. The Plan also requires the payment of a monthly distribution fee to the Distributor equal to 0.75% annually of the average daily net assets attributable to Class B, Class C and Class F shares; and up to 0.10% annually of the average daily net assets attributable to Class E shares. LTMGF II has adopted a 12b-1 plan (the "Plan"), which requires the payment of a monthly service fee to the Distributor equal to 0.25% annually of the average daily net assets attributable to Class A, Class B and Class C shares as of the 20th of each month. The Plan also requires the payment of a monthly distribution fee to the Distributor equal to 0.75% annually of the average daily net assets attributable to Class B and Class C shares. LTMAGF and LTMVF have each adopted a 12b-1 plan (the "Plan"), which requires the payment of a monthly service fee to the Distributor equal to 0.25% annually of the average daily net assets attributable to Class A, Class B and Class C shares as of the 20th of each month. The Plan also requires the payment of a monthly distribution fee to the Distributor equal to 0.05% annually of the average daily net assets attributable to Class A shares and 0.75% annually of the average daily net assets attributable to Class B and Class C shares. The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. EXPENSE LIMITS: Columbia has voluntarily agreed, until further notice, to waive fees and bear certain Fund expenses to the extent that total expenses (exclusive of service and distribution fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) exceed 1.25% annually of the first $100 million of average daily net assets and 1.50% annually thereafter on LTMGF II and 1.25% annually of the Fund's average daily net assets on LTMAGF. OTHER: Each Fund pays no compensation to its officers, all of whom are employees of Columbia or its affiliates. The Funds' Independent 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 Funds' assets. 31 Notes to Financial Statements (continued) April 30, 2003 (Unaudited) LTMAGF, LTMGF, LTMGF II and LTMVF each have an agreement with its custodian bank under which $0, $16, $94 and $0, respectively, of custody fees were reduced by balance credits for the six months ended April 30, 2003. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such arrangement. NOTE 4. PORTFOLIO INFORMATION INVESTMENT ACTIVITY: For the six months ended April 30, 2003, purchases and sales of investments, other than short term obligations, were as follows: PURCHASES SALES ----------- ----------- LTMAGF ............ $ 5,228,856 $ 7,367,871 LTMGF ............. 62,854,640 99,758,122 LTMGF II .......... 7,320,901 12,930,481 LTMVF ............. 21,471,782 33,363,276 Unrealized appreciation (depreciation) at April 30, 2003, based on cost of investments for both financial statement and federal income tax purposes, was: NET GROSS GROSS UNREALIZED UNREALIZED UNREALIZED APPRECIATION APPRECIATION DEPRECIATION (DEPRECIATION) ------------- ------------- -------------- LTMAGF ..... $ 1,191,455 $ (543,238) $ 648,217 LTMGF ...... 44,177,175 (22,748,445) 21,428,730 LTMGF II ... 4,127,088 (4,593,013) (465,925) LTMVF ...... 5,040,122 (11,762,853) (6,722,731) OTHER: The Funds may focus their investments in certain industries, subjecting them to greater risk than funds that are more diversified. NOTE 5. LINE OF CREDIT Each Fund and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to each Fund based on its borrowings. In addition each Fund agreed to pay commitment fees on its pro-rata portion of the line of credit. The commitment fee is included in "Other expenses" on the Statements of Operations. Prior to April 26, 2003, the Funds participated in a separate credit agreement with similar terms to their existing agreement. No amounts were borrowed under this facility for the six months ended April 30, 2003. 32 Financial Highlights - LTMAGF Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS A SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.44 $ 7.01 $ 12.36 $ 11.59 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.04) (0.09) (0.09) (0.04) Net realized and unrealized gain (loss) on investments 0.02 (0.48) (5.26) 0.81 ------- ------- ------- ------- Total from Investment Operations (0.02) (0.57) (5.35) 0.77 ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 6.42 $ 6.44 $ 7.01 $ 12.36 ======= ======= ======= ======= Total return (c)(d) (0.31)%(e) (8.13)% (43.28)% 6.64%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.55%(g) 1.55% 1.55% 1.55%(g) Net investment loss (f) (1.20)%(g) (1.27)% (1.05)% (1.19)%(g) Waiver/reimbursement 1.05%(g) 0.69% 0.85% 1.82%(g) Portfolio turnover rate 46%(e) 121% 188% 47%(e) Net assets, end of period (000's) $ 2,480 $ 2,825 $ 4,043 $ 5,227
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS B SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.33 $ 6.95 $ 12.34 $ 11.59 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.06) (0.14) (0.15) (0.06) Net realized and unrealized gain (loss) on investments 0.02 (0.48) (5.24) 0.81 ------- ------- ------- ------- Total from Investment Operations (0.04) (0.62) (5.39) 0.75 ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 6.29 $ 6.33 $ 6.95 $ 12.34 ======= ======= ======= ======= Total return (c)(d) (0.63)%(e) (8.92)% (43.68)% 6.47%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.90)%(g) (1.97)% (1.75)% (1.89)%(g) Waiver/reimbursement 1.05%(g) 0.69% 0.85% 1.82%(g) Portfolio turnover rate 46%(e) 121% 188% 47%(e) Net assets, end of period (000's) $ 7,504 $ 8,238 $ 10,979 $ 18,080
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 33 Financial Highlights -- LTMAGF (continued) Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS C SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.33 $ 6.95 $ 12.34 $ 11.59 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.06) (0.14) (0.15) (0.06) Net realized and unrealized gain (loss) on investments 0.02 (0.48) (5.24) 0.81 ------- ------- ------- ------- Total from Investment Operations (0.04) (0.62) (5.39) 0.75 ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 6.29 $ 6.33 $ 6.95 $ 12.34 ======= ======= ======= ======= Total return (c)(d) (0.63)%(e) (8.92)% (43.68)% 6.47%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.90)%(g) (1.97)% (1.75)% (1.89)%(g) Waiver/reimbursement 1.05%(g) 0.69% 0.85% 1.82%(g) Portfolio turnover rate 46%(e) 121% 188% 47%(e) Net assets, end of period (000's) $ 1,403 $ 1,699 $ 2,508 $ 1,567
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS Z SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.43 $ 7.03 $ 12.37 $ 11.59 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.03) (0.07) (0.07) (0.03) Net realized and unrealized gain (loss) on investments 0.02 (0.53) (5.27) 0.81 ------- ------- ------- ------- Total from Investment Operations (0.01) (0.60) (5.34) 0.78 ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 6.42 $ 6.43 $ 7.03 $ 12.37 ======= ======= ======= ======= Total return (c)(d) (0.16)%(e) (8.53)% (43.17)% 6.73%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.25%(g) 1.25% 1.25% 1.25%(g) Net investment loss (f) (0.90)%(g) (0.97)% (0.75)% (0.89)%(g) Waiver/reimbursement 1.05%(g) 0.69% 0.85% 1.82%(g) Portfolio turnover rate 46%(e) 121% 188% 47%(e) Net assets, end of period (000's) $ 14 $ 3 $ 61 $ 128
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 34 Financial Highlights -- LTMGF
Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------ CLASS A SHARES 2003 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.87 $ 12.68 $ 18.38 $ 17.19 $ 13.39 $ 12.04 ------- ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (a) (0.02) (0.02) (0.06) (0.12) (0.03) 0.03 Net realized and unrealized gain (loss) on investments 0.76 (1.79) (5.64) 1.31 3.83 1.32 ------- ------- ------- ------- ------- ------- Total from Investment Operations 0.74 (1.81) (5.70) 1.19 3.80 1.35 ------- ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 11.61 $ 10.87 $ 12.68 $ 18.38 $ 17.19 $ 13.39 ======= ======= ======= ======= ======= ======= Total return (b) 6.81%(c) (14.27)% (31.01)% 6.92% 28.38% 11.21%(d) ======= ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 1.46%(f) 1.41% 1.39% 1.44% 1.64% 1.56% Net investment income (loss) (e) (0.33)%(f) (0.18)% (0.38)% (0.67)% (0.21)% 0.22% Waiver/reimbursement -- -- -- -- -- 0.12% Portfolio turnover rate 21%(c) 42% 82% 69% 80% 91% Net assets, end of period (000's) $ 63,469 $ 66,760 $102,403 $163,502 $ 97,531 $ 45,472
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (c) Not annualized. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 35 Financial Highlights -- LTMGF (continued)
Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------ CLASS B SHARES 2003 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 12.22 $ 17.85 $ 16.82 $ 13.20 $ 11.96 ------- ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.06) (0.11) (0.17) (0.26) (0.15) (0.07) Net realized and unrealized gain (loss) on investments 0.73 (1.72) (5.46) 1.29 3.77 1.31 ------- ------- ------- ------- ------- ------- Total from Investment Operations 0.67 (1.83) (5.63) 1.03 3.62 1.24 ------- ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 11.06 $ 10.39 $ 12.22 $ 17.85 $ 16.82 $ 13.20 ======= ======= ======= ======= ======= ======= Total return (b) 6.45%(c) (14.98)% (31.54)% 6.12% 27.42% 10.37%(d) ======= ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 2.21%(f) 2.16% 2.14% 2.19% 2.39% 2.31% Net investment loss (e) (1.08)%(f) (0.93)% (1.13)% (1.42)% (0.96)% (0.53)% Waiver/reimbursement -- -- -- -- -- 0.12% Portfolio turnover rate 21%(c) 42% 82% 69% 80% 91% Net assets, end of period (000's) $204,642 $216,801 $327,645 $532,082 $303,726 $124,829
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (c) Not annualized. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 36 Financial Highlights -- LTMGF (continued)
Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------ CLASS C SHARES 2003 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 12.21 $ 17.85 $ 16.82 $ 13.20 $ 11.96 ------- ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.06) (0.11) (0.17) (0.26) (0.15) (0.07) Net realized and unrealized gain (loss) on investments 0.73 (1.71) (5.47) 1.29 3.77 1.31 ------- ------- ------- ------- ------- ------- Total from Investment Operations 0.67 (1.82) (5.64) 1.03 3.62 1.24 ------- ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 11.06 $ 10.39 $ 12.21 $ 17.85 $ 16.82 $ 13.20 ======= ======= ======= ======= ======= ======= Total return (b) 6.45%(c) (14.91)% (31.60)% 6.12% 27.42% 10.37%(d) ======= ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 2.21%(f) 2.16% 2.14% 2.19% 2.39% 2.31% Net investment loss (e) (1.08)%(f) (0.93)% (1.13)% (1.42)% (0.96)% (0.53)% Waiver/reimbursement -- -- -- -- -- 0.12% Portfolio turnover rate 21%(c) 42% 82% 69% 80% 91% Net assets, end of period (000's) $ 29,002 $ 30,837 $ 47,069 $ 80,232 $ 46,869 $ 18,786
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (c) Not annualized. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 37 Financial Highlights -- LTMGF (continued)
Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------ CLASS E SHARES 2003 2002 2001 2000(a) 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.82 $ 12.63 $ 18.34 $ 17.17 $ 13.36 $ 12.02 ------- ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) (0.02) (0.03) (0.07) (0.14) (0.05) 0.02 Net realized and unrealized gain (loss) on investments 0.75 (1.78) (5.64) 1.31 3.83 1.32 ------- ------- ------- ------- ------- ------- Total from Investment Operations 0.73 (1.81) (5.71) 1.17 3.78 1.34 ------- ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 11.55 $ 10.82 $ 12.63 $ 18.34 $ 17.14 $ 13.36 ======= ======= ======= ======= ======= ======= Total return (c) 6.75%(d) (14.33)% (31.13)% 6.81% 28.29% 11.15%(e) ======= ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.56%(g) 1.51% 1.49% 1.54% 1.74% 1.66% Net investment income (loss) (f) (0.43)%(g) (0.28)% (0.48)% (0.77)% (0.31)% 0.12% Waiver/reimbursement -- -- -- -- -- 0.12% Portfolio turnover rate 21%(d) 42% 82% 69% 80% 91% Net assets, end of period (000's) $ 6,090 $ 5,794 $ 6,820 $ 9,171 $ 1,089 $ 680
(a) Class E shares were collapsed into Class G shares on February 28, 2000, which were then redesignated Class E shares. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge. (d) Not annualized. (e) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 38 Financial Highlights -- LTMGF (continued) Selected data for a share outstanding throughout each period is as follows:
Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------ CLASS F SHARES 2003 2002 2001 2000(a) 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.41 $ 12.23 $ 17.87 $ 16.83 $ 13.21 $ 11.97 ------- ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.06) (0.11) (0.17) (0.26) (0.15) (0.07) Net realized and unrealized gain (loss) on investments 0.72 (1.71) (5.47) 1.30 3.71 1.31 ------- ------- ------- ------- ------- ------- Total from Investment Operations 0.66 (1.82) (5.64) 1.04 3.56 1.24 ------- ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 11.07 $ 10.41 $ 12.23 $ 17.87 $ 16.77 $ 13.21 ======= ======= ======= ======= ======= ======= Total return (c) 6.34%(d) (14.88)% (31.56)% 6.18% 26.95% 10.36%(e) ======= ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.21%(g) 2.16% 2.14% 2.19% 2.39% 2.31% Net investment loss (f) (1.08)%(g) (0.93)% (1.13)% (1.42)% (0.96)% (0.53)% Waiver/reimbursement -- -- -- -- -- 0.12% Portfolio turnover rate 21%(d) 42% 82% 69% 80% 91% Net assets, end of period (000's) $ 9,178 $ 8,709 $ 10,101 $ 13,368 $ 2,025 $ 1,105
(a) Class F shares were collapsed into Class H shares on February 28, 2000, which were then redesignated Class F shares. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 39 Financial Highlights -- LTMGF (continued)
Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------- CLASS Z SHARES 2003 2002 2001 2000 1999(a) - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.96 $ 12.76 $ 18.46 $ 17.23 $ 15.56 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) (0.01) 0.01 (0.02) (0.08) (0.02) Net realized and unrealized gain (loss) on investments 0.77 (1.81) (5.68) 1.31 1.69 ------- ------- ------- ------- ------- Total from Investment Operations 0.76 (1.80) (5.70) 1.23 1.67 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 11.72 $ 10.96 $ 12.76 $ 18.46 $ 17.23 ======= ======= ======= ======= ======= Total return (c) 6.93%(d) (14.11)% (30.88)% 7.14% 10.73%(d) ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 1.21%(f) 1.16% 1.14% 1.19% 0.79%(f) Net investment income (loss) (e) (0.08)%(f) 0.07% (0.13)% (0.42)% (0.13)%(f) Portfolio turnover rate 21%(d) 42% 82% 69% 80% Net assets, end of period (000's) $ 162 $ 80 $ 915 $ 1,941 $ 1
(a) Class Z shares were initially offered on January 11, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 40 Financial Highlights -- LTMGF II Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS A SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.94 $ 7.92 $ 11.55 $ 12.00 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.01) (0.02) (0.04) (0.07) Net realized and unrealized gain (loss) on investments 0.46 (0.96) (3.59) (0.38) ------- ------- ------- ------- Total from Investment Operations 0.45 (0.98) (3.63) (0.45) ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 7.39 $ 6.94 $ 7.92 $ 11.55 ======= ======= ======= ======= Total return (c)(d) 6.48%(e) (12.37)% (31.43)% (3.75)%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.50%(g) 1.50% 1.50% 1.50%(g) Net investment loss (f) (0.31)%(g) (0.29)% (0.42)% (0.84)%(g) Waiver/reimbursement 0.29%(g) 0.20% 0.16% 0.62%(g) Portfolio turnover rate 17%(e) 49% 90% 32%(e) Net assets, end of period (000's) $ 6,969 $ 7,692 $ 9,486 $ 6,769
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS B SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.80 $ 7.82 $ 11.51 $ 12.00 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.04) (0.08) (0.11) (0.12) Net realized and unrealized gain (loss) on investments 0.45 (0.94) (3.58) (0.37) ------- ------- ------- ------- Total from Investment Operations 0.41 (1.02) (3.69) (0.49) ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 7.21 $ 6.80 $ 7.82 $ 11.51 ======= ======= ======= ======= Total return (c)(d) 6.03%(e) (13.04)% (32.06)% (4.08)%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.06)%(g) (1.04)% (1.17)% (1.59)%(g) Waiver/reimbursement 0.29%(g) 0.20% 0.16% 0.62%(g) Portfolio turnover rate 17%(e) 49% 90% 32%(e) Net assets, end of period (000's) $ 29,876 $ 30,871 $ 42,391 $ 50,859
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 41 Financial Highlights -- LTMGF II (continued) Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS C SHARES 2003 2002 2001 2000(a) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.78 $ 7.80 $ 11.50 $ 12.00 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.04) (0.08) (0.11) (0.12) Net realized and unrealized gain (loss) on investments 0.46 (0.94) (3.59) (0.38) ------- ------- ------- ------- Total from Investment Operations 0.42 (1.02) (3.70) (0.50) ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 7.20 $ 6.78 $ 7.80 $ 11.50 ======= ======= ======= ======= Total return (c)(d) 6.19%(e) (13.08)% (32.17)% (4.17)%(e) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.06)%(g) (1.04)% (1.17)% (1.59)%(g) Waiver/reimbursement 0.29%(g) 0.20% 0.16% 0.62%(g) Portfolio turnover rate 17%(e) 49% 90% 32%(e) Net assets, end of period (000's) $ 6,050 $ 6,481 $ 8,994 $ 5,801 (a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------ CLASS Z SHARES 2003 2002 2001 2000(a) ======================================================================================================================== NET ASSET VALUE, BEGINNING OF PERIOD $ 6.97 $ 7.95 $ 11.58 $ 12.00 ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) --(c) --(c) (0.02) (0.05) Net realized and unrealized gain (loss) on investments 0.47 (0.98) (3.61) (0.37) ------- ------- ------- ------- Total from Investment Operations 0.47 (0.98) (3.63) (0.42) ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 7.44 $ 6.97 $ 7.95 $ 11.58 ======= ======= ======= ======= Total return (e) 6.74%(f) (12.33)% (31.35)% (3.50)%(f) ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (g) 1.25%(h) 1.25% 1.25% 1.25%(h) Net investment loss (g) (0.06)%(h) (0.04)% (0.17)% (0.59)%(h) Waiver/reimbursement 0.29%(h) 0.20% 0.16% 0.62%(h) Portfolio turnover rate 17%(f) 49% 90% 32%(f) Net assets, end of period (000's) $ 762 $ 894 $ 1,211 $ 4,740
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming all distributions reinvested. (e) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 42 Financial Highlights -- LTMVF Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------- CLASS A SHARES 2003 2002 2001 2000 1999(a) - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.89 $ 11.40 $ 11.41 $ 10.64 $ 12.00 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.03 0.04 0.04 0.04 --(c) Net realized and unrealized gain (loss) on investments (0.02) (2.55) (0.05) 0.73 (1.36) ------- ------- ------- ------- ------- Total from Investment Operations 0.01 (2.51) (0.01) 0.77 (1.36) ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 8.90 $ 8.89 $ 11.40 $ 11.41 $ 10.64 ======= ======= ======= ======= ======= Total return (d) 0.11%(e) (22.02)% (0.09)% 7.24% (11.33)%(e) ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.71%(g) 1.61% 1.71% 1.80% 1.77%(g) Net investment income (f) 0.72%(g) 0.34% 0.32% 0.39% --%(g)(h) Portfolio turnover rate 26%(e) 72% 47% 76% 19%(e) Net assets, end of period (000's) $16,690 $19,767 $25,694 $14,017 $ 7,528 (a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Rounds to less than 0.01%. Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------- CLASS B SHARES 2003 2002 2001 2000 1999(a) - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) --(c) (0.04) (0.04) (0.03) (0.04) Net realized and unrealized gain (loss) on investments (0.02) (2.50) (0.04) 0.72 (1.35) ------- ------- ------- ------- ------- Total from Investment Operations (0.02) (2.54) (0.08) 0.69 (1.39) ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 8.66 $ 8.68 $ 11.22 $ 11.30 $ 10.61 ======= ======= ======= ======= ======= Total return (d) (0.23)%(e) (22.64)% (0.71)% 6.50% (11.58)%(e) ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.41%(g) 2.31% 2.41% 2.50% 2.60%(g) Net investment income (loss) (f) 0.02%(g) (0.36)% (0.38)% (0.31)% (0.83)%(g) Portfolio turnover rate 26%(e) 72% 47% 76% 19%(e) Net assets, end of period (000's) $47,873 52,701 $69,720 $49,112 $14,622
(a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 43 Financial Highlights -- LTMVF (continued) Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------- CLASS C SHARES 2003 2002 2001 2000 1999(a) - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) --(c) (0.04) (0.04) (0.03) (0.04) Net realized and unrealized gain (loss) on investments (0.02) (2.50) (0.04) 0.72 (1.35) ------- ------- ------- ------- ------- Total from Investment Operations (0.02) (2.54) (0.08) 0.69 (1.39) ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 8.66 $ 8.68 $ 11.22 $ 11.30 $ 10.61 ======= ======= ======= ======= ======= Total return (d) (0.23)%(e) (22.64)% (0.71)% 6.50% (11.58)%(e) ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.41%(g) 2.31% 2.41% 2.50% 2.60%(g) Net investment income (loss) (f) 0.02%(g) (0.36)% (0.38)% (0.31)% (0.83)%(g) Portfolio turnover rate 26%(e) 72% 47% 76% 19%(e) Net assets, end of period (000's) $15,490 $17,463 $21,367 $10,331 $ 4,137 (a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. Selected data for a share outstanding throughout each period is as follows: (UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------- CLASS Z SHARES 2003 2002 2001 2000 1999(a) - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.96 $ 11.46 $ 11.43 $ 10.65 $ 12.00 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.05 0.07 0.07 0.07 0.01 Net realized and unrealized gain (loss) on investments (0.02) (2.57) (0.04) 0.71 (1.36) ------- ------- ------- ------- ------- Total from Investment Operations 0.03 (2.50) 0.03 0.78 (1.35) ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 8.99 $ 8.96 $ 11.46 $ 11.43 $ 10.65 ======= ======= ======= ======= ======= Total return (c) 0.33%(d) (21.82)% 0.26% 7.32% (11.25)%(d) ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 1.41%(f) 1.31% 1.41% 1.50% 1.50%(f) Net investment income (e) 1.02%(f) 0.64% 0.62% 0.69% 0.27%(f) Portfolio turnover rate 26%(d) 72% 47% 76% 19%(d) Net assets, end of period (000's) $ 28 $ 1 $ 1 $ 1 $ 2,396 (a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
44 Transfer Agent IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Liberty Tax-Managed Funds is: Liberty Funds Services, Inc. P.O. Box 8081 Boston, MA 02266-8081 The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Liberty Tax-Managed Funds. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the fund and with the most recent copy of the Liberty Funds Performance Update. Semiannual Report: Liberty Tax-Managed Funds Liberty Tax-Managed Funds SEMIANNUAL REPORT, APRIL 30, 2003 PRSRT STD U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 [eagle head logo] LibertyFunds A Member of Columbia Managment Group (C)2003 Liberty Funds Distributor, Inc. A Member of Columbia Management Group One Financial Center, Boston, MA 02111-2621 TM-03/981N-0503 (06/03) 03/1592 ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEMS 5-6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable at this time. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The Registrant's Chief Executive Officer and Chief Financial Officer, based on their evaluation of the Registrant's disclosure controls and procedures as of June 20, 2003, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Registrant's management, including the Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. (b) There were no significant changes in the registrant's internal controls or in other factors that could affect these controls subsequent to the date of our evaluation. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable at this time. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) in the exact form set forth below: Attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Liberty Funds Trust I ----------------------------------------------------------- By (Signature and Title)* /s/ Joseph R. Palombo ---------------------------------------------- Joseph R. Palombo, President Date June 20, 2003 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Joseph R. Palombo ---------------------------------------------- Joseph R. Palombo, President Date June 20, 2003 ------------------------------------------------------------------- By (Signature and Title)* /s/ J. Kevin Connaughton ---------------------------------------------- J. Kevin Connaughton, Treasurer Date June 20, 2003 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 3 file002.txt CERTIFICATIONS LIBERTY FUNDS TRUST I I, Joseph R. Palombo, certify that: 1. I have reviewed this report on Form N-CSR of Liberty Funds Trust I; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 20, 2003 /s/ Joseph R. Palombo ---------------------------- Joseph R. Palombo, President LIBERTY FUNDS TRUST I I, J. Kevin Connaughton, certify that: 1. I have reviewed this report on Form N-CSR of Liberty Funds Trust I; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 20, 2003 /s/ J. Kevin Connaughton ------------------------------- J. Kevin Connaughton, Treasurer EX-99.906CERT 4 file003.txt CERTIFICATIONS LIBERTY FUNDS TRUST I I, Joseph R. Palombo, certify that: 1. The Form N-CSR (the "Report") of Liberty Funds Trust I (the "Fund") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Date: June 20, 2003 /s/ Joseph R. Palombo ---------------------------- Joseph R. Palombo, President I, J. Kevin Connaughton, certify that: 1. The Form N-CSR (the "Report") of Liberty Funds Trust I (the "Fund") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Date: June 20, 2003 /s/ J. Kevin Connaughton ------------------------------- J. Kevin Connaughton, Treasurer -----END PRIVACY-ENHANCED MESSAGE-----