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 811-6529
---------------------
Liberty Funds Trust VI
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, 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: 1-617-772-3698
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Date of fiscal year end: July 31, 2003
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Date of reporting period: July 31, 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 Growth
& Income Fund
Annual Report
July 31, 2003
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www.libertyfunds.com.
Liberty Growth
& Income Fund
Annual Report
July 31, 2003
ELIMINATE CLUTTER IN TWO EASY STEPS.
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PRESIDENT'S MESSAGE
Photo of: Joseph R. Palombo
Dear Shareholder:
Despite the uncertainty that hung over the markets as the economy languished and
the nation prepared to go to war in Iraq, the 13-month period covered by this
report ended on a high note. Many segments of the stock and bond markets posted
positive returns for the period. The economy, though still struggling, has made
some progress toward recovery. The major combat phase of the war was declared
over. And a new tax law intended to boost consumer spending power and make
investing more attractive was passed. The Jobs and Growth Tax Relief
Reconciliation Act of 2003 accelerates income tax rate cuts for virtually all
Americans and slashes the tax rates on dividends and long-term capital gains.
The government is counting on Americans to turn their good fortune into higher
spending. And the financial media has been full of advice on how to take
advantage of the new rate structure. As you debate what you will do if the lower
tax rate turns into a modest personal windfall, consider strategies that could
have a long-term impact on your portfolio. If your take-home pay increases as a
result of the tax break and any rebate check you are entitled to receive--and if
it's not eaten up by higher state taxes--consider investing at least one third
of it. Consider adding it to your retirement account, using it to start an
education account for your child, or setting it aside for an emergency. But make
a commitment and stick to it. Think of it as found money, because that is what
it is. You didn't have it before. But now that you've found it, you can put it
to work for a long-term goal.
And, before you take advice from a television pundit or a magazine cover story,
talk to your financial advisor. There may be tax-related strategies that make
sense for you. But there are no one-size-fits-all solutions. Keep in mind that
tax rates change, and many of the provisions of this law are set to expire in
just a few short years.
CONSOLIDATION AND A NEW NAME: COLUMBIA
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. 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.
The following report will provide you with more detailed information about fund
performance and the strategies used by portfolio managers Scott Davis and Greg
Miller. As always, we thank you for investing in Liberty funds and for giving us
the opportunity to help you build a strong financial future.
Sincerely,
/s/ Joseph R. Palombo
Joseph R. Palombo
President
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Not FDIC Insured
May Lose Value
No Bank Guarantee
- -----------------------
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
PERFORMANCE INFORMATION
Value of a $10,000 investment
7/31/93 - 7/31/03
PERFORMANCE OF A $10,000 INVESTMENT 7/31/93-7/31/03 ($)
without with
sales sales
charge charge
- -----------------------------------
Class A 28,692 27,042
- -----------------------------------
Class B 26,617 26,617
- -----------------------------------
Class C 26,627 26,627
- -----------------------------------
Class Z 28,925 n/a
- -----------------------------------
Line Chart:
CLASS A SHARES CLASS A SHARES S&P 500
WITH SALES CHARGE WITHOUT SALES CHARGE INDEX
9425 10000 10000
9778.44 10375 10379
9923.16 10528.5 10299.1
9987.66 10597 10512.3
9818.87 10417.9 10412.4
10003.5 10613.8 10538.4
10209.5 10832.4 10896.7
9970.63 10578.9 10601.4
9607.7 10193.9 10140.2
9624.03 10211.2 10270
9739.52 10333.7 10437.4
9510.64 10090.9 10181.7
9709.41 10301.8 10515.7
10140.5 10759.2 10945.8
10015.8 10626.8 10678.7
10149 10768.2 10917.9
9817.12 10416 10520.5
9969.29 10577.5 10676.2
10218.5 10841.9 10952.7
10698.8 11351.5 11378.8
10956.6 11625.1 11714.4
11196.6 11879.7 12058.8
11659 12370.3 12540
11873.5 12597.9 12830.9
12258.2 13006.1 13255.6
12187.1 12930.6 13288.8
12607.6 13376.8 13849.5
12526.9 13291.1 13799.7
12984.1 13776.3 14404.1
12910.1 13697.7 14682.1
13260 14069 15181.3
13473.5 14295.5 15322.5
13482.9 14305.5 15469.6
13977.7 14830.5 15697
14327.2 15201.2 16100.4
14110.8 14971.7 16161.6
13350.2 14164.7 15447.2
13769.5 14609.5 15773.2
14373.9 15250.9 16659.6
14744.8 15644.3 17119.4
15827 16792.6 18412
15450.4 16393 18047.4
16510.2 17517.5 19173.5
16541.6 17550.8 19325
15957.7 16931.2 18532.7
16923.2 17955.6 19637.2
17930.1 19024 20837.1
18643.7 19781.1 21764.3
20344 21585.1 23494.6
19579.1 20773.5 22178.9
20673.5 21934.8 23392.1
19685.3 20886.3 22610.8
20429.4 21675.8 23657.7
20885 22159.2 24064.6
21100.1 22387.4 24329.3
22634.1 24015 26083.4
23747.7 25196.5 27418.9
23735.8 25183.9 27698.6
23125.8 24536.7 27222.2
23988.4 25451.9 28327.4
23556.6 24993.8 28027.1
19747.5 20952.3 23977.2
20622.3 21880.5 25514.1
22323.7 23685.6 27585.9
23701 25147 29257.6
25073.3 26603 30942.8
25737.8 27308 32236.2
24662 26166.5 31233.7
25475.8 27030 32483
26176.4 27773.3 33740.1
25812.5 27387.3 32943.9
27340.6 29008.6 34765.7
26627 28251.5 33684.4
26326.2 27932.2 33516
25325.8 26870.8 32597.7
26389.4 27999.4 34661.1
26677.1 28304.6 35364.7
27933.6 29637.7 37444.2
26439.1 28052.1 35564.5
25415.9 26966.5 34892.3
28270.1 29994.8 38304.8
28270.1 29994.8 37151.8
28080.7 29793.9 36390.2
27729.7 29421.5 37285.4
27904.4 29606.8 36703.7
28939.7 30705.2 38983.1
29223.3 31006.1 36924.7
30716.6 32590.5 36769.7
30891.7 32776.3 33872.2
32470.2 34451.2 34038.2
32353.3 34327.2 35246.5
32039.5 33994.2 32035.6
30995 32886 30007.7
31608.7 33537.1 32336.3
32187.2 34150.8 32553
31424.3 33341.5 31761.9
32269.7 34238.4 31450.7
32037.3 33991.8 29485
30912.8 32798.7 27105.6
30863.3 32746.2 27623.3
32073.2 34029.9 29742
32294.5 34264.7 30003.7
31771.3 33709.6 29565.7
31374.2 33288.2 28995
32977.4 34989.3 30085.3
31664.9 33596.7 28262.1
31645.9 33576.6 28055.8
28209.2 29930.1 26058.2
25994.7 27580.6 24028.3
26210.5 27809.5 24184.5
22556.8 23932.9 21558
24537.2 26034.2 23453
26392.2 28002.4 24832
25273.2 26815.1 23374.4
24371 25857.8 22764.3
22991.6 24394.2 22422.8
22899.6 24296.7 22640.3
24518.6 26014.4 24503.6
26524.2 28142.4 25792.5
27150.2 28806.6 26122.7
27042 28691.8 26582.4
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. All results shown assume reinvestment of dividends and capital gains. The
Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large capitalization US stocks. Unlike mutual
funds, 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.
AVERAGE ANNUAL TOTAL RETURN AS OF 7/31/03 (%)
Share class A B C Z
Inception 7/1/92 7/1/92 7/1/94 2/7/01
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without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
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12-month 4.02 -1.96 3.19 -1.81 3.25 2.25 4.27
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13-month -3.83 -8.94 -4.53 -7.99 -4.50 -4.50 -3.55
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5-year 2.80 1.59 2.03 1.77 2.03 2.03 2.96
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10-year 11.12 10.46 10.28 10.28 10.29 10.29 11.21
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AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/03 (%)
Share class A B C Z
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without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
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12-month -3.75 -9.29 -4.50 -9.18 -4.47 -5.40 -3.52
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13-month -13.21 -17.83 -13.87 -17.00 -13.88 -13.88 -13.00
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5-year 2.51 1.30 1.73 1.47 1.72 1.72 2.66
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10-year 11.07 10.41 10.23 10.23 10.23 10.23 11.15
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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
table do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the 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 will vary based on differences in sales charges and fees
associated with each class.
Class C and Z share (newer class shares) performance information includes
returns of the fund's class B and A shares (older class shares), respectively,
as their expense structures more closely resemble those for the newer class
shares for periods prior to the inception date of the newer class shares. Total
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between the older class shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of the newer class shares would have been different.
1
TOP 10 HOLDINGS as of 7/31/03 (%)
Citigroup 5.3
American International
Group 3.4
Merck 2.8
SBC Communications 2.6
Bank of America 2.6
Textron 2.5
Verizon Communications 2.5
Exxon Mobil 2.4
ConocoPhillips 2.4
Office Depot 2.4
Portfolio holdings are calculated as a percentage of net assets. Because the
fund is actively managed, there can be no guarantee the fund will continue to
maintain these holdings in the future.
BOUGHT
- --------------------------------------------------------------------------------
We bought Bank of America Corp. (2.6% of net assets), a company with consistent
results and trading at 12 times its 2003 estimated earnings per share. We
believe its valuation is attractive relative to other regional banks. Its
earnings growth is being driven by improving credit quality.
SOLD
- --------------------------------------------------------------------------------
We sold Anadarko Petroleum Corp. because we believed the company would not be
able to reach its growth target and because the departure of the chief financial
officer was a cause for concern.
NET ASSET VALUE PER SHARE as of 7/31/03 ($)
Class A 14.69
Class B 13.78
Class C 13.88
Class Z 14.71
DISTRIBUTIONS PER SHARE 7/1/02-7/31/03 ($)
Class A 0.31
Class B 0.25
Class C 0.25
Class Z 0.34
PORTFOLIO MANAGERS' REPORT
The Board of Trustees for Liberty Growth & Income Fund approved the change of
the fund's fiscal year end from June 30 to July 31. As a result, this report
covers the 13-month period since the last annual report. The next report you
will receive will be a report for the six-month period through January 2004.
For the 13-month period that ended July 31, 2003, the class A shares of Liberty
Growth & Income Fund returned negative 3.83% without sales charge on an
annualized basis. This was lower than the fund's benchmark, the S&P 500 Index,
which returned 1.86%, and also less than the 3.53% average return of the fund's
peer group, the Lipper Multi-Cap Value Funds Category.1 Poor returns from
several large holdings hindered fund performance. However, the fund regained
much of its lost ground by the end of the period.
MARKET IMPROVED DURING THE YEAR
The period was characterized by uncertainty in many areas, from fraudulent
corporate reporting and a slow economy to fears of terrorism and growing concern
over the possibility of war. Stocks traded without a consistent trend until late
spring, after the major military battles in Iraq had ended. The market rallied
and remained strong into early July. The fund finished the period better than it
began, both on an absolute basis, and relative to its benchmarks.
DISAPPOINTING RETURNS FROM SEVERAL
LARGE HOLDINGS
Fund performance was hampered early in the year by its investment in WorldCom,
The Williams Companies, Inc. and El Paso Corp., all of which have since been
sold. Later in the year, three of the fund's largest holdings also had poor
returns: Sara Lee Corp., Safeway, Inc. and ConAgra Foods, Inc. We eliminated our
positions in Sara Lee and Safeway, but retained a small holding in ConAgra Foods
(1.8% of net assets).2 The number three food company in the world, ConAgra is
restructuring to emphasize packaged foods over its
- -----------------------
1 Lipper Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as the fund.
2 Holdings are disclosed as of July 31, 2003, and are subject to change.
2
poultry and beef business. We believe that the company's strong cash flow and
dividend give it a good chance for a successful turnaround.
The fund's best performing stock for the period, McDonald's Corp., was just such
a turnaround. Its price was depressed during the first quarter, but our research
showed that the company was in the process of making improvements in management
and menu offerings. By June, investor perception had become favorable, and
McDonald's gained strongly during the last four months of the period. During
July, we eliminated our position in McDonald's Corp. to realize, what we
believed to be, fair value.
FINE TUNING OUR STRATEGY
When fund management changed in April, the new managers carefully evaluated the
size and quality of fund holdings and trimmed or sold positions we felt were too
large. For example, we took gains and pared back our position in managed health
care provider Aetna Inc. (2.1% of net assets). Although this is a stock with
good performance, our holding had grown to almost 5% of the fund's portfolio. We
also eliminated our investments in AT&T Corp. and Motorola, Inc. Neither company
appeared to have the comeback potential the fund seeks to identify. We favored
the financial sector, adding U.S. Bancorp and State Street Corp. to the
portfolio (1.4% and 0.6% of net assets, respectively). These additions also
brought the fund's allocation more in line with the index.
LOOKING AHEAD
We believe the environment will become somewhat more difficult for value stocks
because market expectations have risen. Valuation is still important, but we
believe that quality will become a bigger factor in determining which companies
will succeed. As bottom-up, research-driven managers, we will continue to select
the companies we believe have the best prospects under a variety of economic and
market conditions.
/s/ Scott L. Davis /s/ Gregory M. Miller
Scott L. Davis and Gregory M. Miller have co-managed the Liberty Growth & Income
Fund since April 2003. They have been with Columbia Management Advisors, Inc. or
its predecessors since 1985. Prior to April 2003, the fund was managed by Scott
Schermerhorn.
An investment in the fund offers significant long-term growth potential, but
also involves certain risks. The fund may be affected by stock market
fluctuations that occur in response to economic and business developments.
Changes in interest rates, changes in financial strength of issuers of
lower-rated bonds and foreign, political and economic developments also may
affect the fund's performance.
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.
TOP 5 SECTORS AS OF 7/31/03 (%)
FINANCIALS 26.2
ENERGY 13.1
INDUSTRIALS 9.7
CONSUMER DISCRETIONARY 8.2
HEALTH CARE 7.9
Sector breakdowns are calculated as a percentage of net assets. Because the fund
is actively managed, there is no guarantee the fund will continue to maintain
the sector breakdowns listed.
3
INVESTMENT PORTFOLIO
July 31, 2003
COMMON STOCKS - 93.8% SHARES VALUE
- ----------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.2%
AUTO COMPONENTS - 1.5%
Delphi Corp. 3,446,682 $ 28,952,129
--------------
HOTELS, RESTAURANTS & LEISURE - 1.0%
Wendy's International, Inc. 659,600 19,385,644
--------------
MEDIA - 3.3%
AOL Time Warner, Inc. (a) 1,190,300 18,366,329
Interpublic Group
of Companies, Inc. 1,863,200 25,712,160
McGraw-Hill Companies, Inc. 280,400 17,042,712
--------------
61,121,201
--------------
SPECIALTY RETAIL - 2.4%
Office Depot, Inc. (a) 2,669,000 44,305,400
--------------
- ----------------------------------------------------------------------------------
CONSUMER STAPLES - 6.8%
Beverages - 1.5%
PepsiCo, Inc. 603,100 27,784,817
--------------
FOOD PRODUCTS - 3.0%
ConAgra Foods, Inc. 1,535,600 34,597,068
Kraft Foods, Inc., Class A 785,900 21,855,879
--------------
56,452,947
--------------
HOUSEHOLD PRODUCTS - 1.4%
Clorox Co. 204,700 8,881,933
Kimberly-Clark Corp. 352,500 17,061,000
--------------
25,942,933
--------------
TOBACCO - 0.9%
Altria Group, Inc. 410,020 16,404,900
--------------
- ----------------------------------------------------------------------------------
ENERGY - 13.1%
ENERGY EQUIPMENT & SERVICES - 2.7%
Baker Hughes, Inc. 621,500 19,521,315
Halliburton Co. 1,369,500 30,361,815
--------------
49,883,130
--------------
OIL & GAS - 10.4%
BP PLC, ADR 1,024,910 42,585,011
ConocoPhillips 863,968 45,220,085
Exxon Mobil Corp. 1,280,330 45,554,142
Marathon Oil Corp. 1,341,000 34,517,340
Royal Dutch Petroleum Co.,
NY Shares 631,300 27,512,054
--------------
195,388,632
--------------
- ----------------------------------------------------------------------------------
SHARES VALUE
- ----------------------------------------------------------------------------------
FINANCIALS - 26.2%
Banks - 7.4%
Bank of America Corp. 588,200 $ 48,567,674
Bank of New York Co., Inc. 810,800 24,421,296
Bank One Corp. 736,700 29,143,852
Fifth Third Bancorp 177,000 9,736,770
U.S. Bancorp 1,086,800 26,648,336
--------------
138,517,928
--------------
DIVERSIFIED FINANCIALS - 9.4%
Citigroup, Inc. 2,199,900 98,555,520
Freddie Mac 517,971 25,302,883
J.P. Morgan Chase & Co. 1,169,300 40,983,965
State Street Corp. 250,400 11,493,360
--------------
176,335,728
--------------
INSURANCE - 9.4%
Ambac Financial Group, Inc. 398,700 26,262,369
American International Group, Inc. 978,900 62,845,380
Berkshire Hathaway, Inc.,
Class A (a) 487 35,068,870
Lincoln National Corp. 897,300 33,505,182
MGIC Investment Corp. 327,300 18,165,150
Travelers Property Casualty Corp.,
Class A 1 16
--------------
175,846,967
--------------
- ----------------------------------------------------------------------------------
HEALTH CARE - 7.9%
Health Care Providers & Services - 2.9%
Aetna, Inc. 640,900 39,492,258
McKesson Corp. 489,000 15,775,140
--------------
55,267,398
--------------
PHARMACEUTICALS - 5.0%
Bristol-Myers Squibb Co. 789,400 20,682,280
Merck & Co., Inc. 951,600 52,604,448
Pfizer, Inc. 602,820 20,110,075
--------------
93,396,803
--------------
- ----------------------------------------------------------------------------------
INDUSTRIALS - 9.7%
Aerospace & Defense - 4.4%
General Dynamics Corp. 309,100 24,523,994
Honeywell International, Inc. 1,353,200 38,268,496
Raytheon Co. 663,400 20,366,380
--------------
83,158,870
--------------
Commercial Services & Supplies - 1.8%
Waste Management, Inc. 1,382,510 33,028,164
--------------
See notes to investment portfolio.
4
INVESTMENT PORTFOLIO (CONTINUED)
July 31, 2003
COMMON STOCKS (CONTINUED) SHARES VALUE
- ----------------------------------------------------------------------------------
INDUSTRIALS (continued)
Industrial Conglomerates - 2.5%
Textron, Inc. 1,092,500 $ 47,436,350
--------------
MACHINERY - 1.0%
Dover Corp. 495,100 18,125,611
--------------
- ----------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 5.4%
COMMUNICATIONS EQUIPMENT - 0.8%
Nokia Oyj, ADR 1,037,200 15,869,160
- ----------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.9%
Celestica, Inc. (a) 1,100,900 16,876,797
- ----------------------------------------------------------------------------------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES - 2.2%
Accenture, Ltd., Class A (a) 941,600 18,285,872
Electronic Data Systems Corp. 998,900 22,245,503
--------------
40,531,375
--------------
OFFICE ELECTRONICS - 1.5%
Xerox Corp. (a) 2,618,700 28,281,960
--------------
SOFTWARE - 0.0%
MicroStrategy, Inc., Class A (a) 44 1,907
--------------
- ----------------------------------------------------------------------------------
MATERIALS - 3.1%
Chemicals - 1.1%
Air Products & Chemicals, Inc. 431,600 20,060,768
--------------
METALS & MINING - 0.7%
Barrick Gold Corp. 731,600 12,524,992
--------------
PAPER & FOREST PRODUCTS - 1.3%
Bowater, Inc. 396,400 15,269,328
Weyerhaeuser Co. 173,800 9,783,202
--------------
25,052,530
--------------
- ----------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 7.5%
Diversified Telecommunication Services - 7.5%
BellSouth Corp. 1,733,800 44,159,886
SBC Communications, Inc. 2,099,700 49,048,992
Verizon Communications, Inc. 1,343,200 46,823,952
--------------
140,032,830
--------------
- ----------------------------------------------------------------------------------
SHARES VALUE
- ----------------------------------------------------------------------------------
UTILITIES - 5.9%
ELECTRIC UTILITIES - 4.1%
American Electric Power Co., Inc. 788,040 $ 22,112,402
Consolidated Edison, Inc. 650,000 25,811,500
PG&E Corp. (a) 587,900 12,610,455
TXU Corp. 838,200 16,906,494
--------------
77,440,851
--------------
MULTI-UTILITIES & UNREGULATED POWER - 1.8%
Duke Energy Corp. 1,853,300 32,525,415
--------------
TOTAL COMMON STOCKS
(cost of $1,670,883,834) 1,755,934,137
--------------
SHORT-TERM
OBLIGATION - 6.1% PAR
- ----------------------------------------------------------------------------------
Repurchase agreement with
State Street Bank & Trust Co.,
dated 07/31/03, due 08/01/03 at
1.000%, collateralized by a U.S.
Treasury Bond maturing 05/15/20,
market value of $116,875,238
(repurchase proceeds $114,570,182)
(cost of $114,567,000) $114,567,000 114,567,000
--------------
TOTAL INVESTMENTS - 99.9%
(cost of $1,785,450,834)(b) 1,870,501,137
--------------
OTHER ASSETS & LIABILITIES, NEt - 0.1% 1,281,536
- ----------------------------------------------------------------------------------
Net Assets - 100.0% $1,871,782,673
==============
NOTES TO INVESTMENT PORTFOLIO:
- ----------------------------------------------------------------------------------
(a) Non-income producing.
(b) Cost for federal income tax purposes is $1,785,662,569.
ACRONYM NAME
--------- -------
ADR American Depositary Receipt
See notes to financial statements.
5
INVESTMENT PORTFOLIO (CONTINUED)
June 30, 2003
COMMON STOCKS - 93.0% SHARES VALUE
- ----------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.6%
AUTO COMPONENTS - 1.6%
Delphi Corp. 3,446,682 $ 29,744,866
--------------
HOTELS, RESTAURANTS & LEISURE - 2.6%
McDonald's Corp. 2,200,200 48,536,412
--------------
MEDIA - 2.3%
AOL Time Warner, Inc. (a) 1,190,300 19,151,927
Interpublic Group
of Companies, Inc. (a) 1,863,200 24,929,616
--------------
44,081,543
--------------
SPECIALTY RETAIL - 2.1%
Office Depot, Inc. (a) 2,756,500 39,996,815
--------------
- ----------------------------------------------------------------------------------
CONSUMER STAPLES - 7.1%
Beverages - 1.3%
Coca-Cola, Inc. 517,400 24,012,534
--------------
FOOD PRODUCTS - 3.8%
ConAgra Foods, Inc. 1,977,300 46,664,280
Kraft Foods, Inc., Class A 785,900 25,581,045
--------------
72,245,325
--------------
HOUSEHOLD PRODUCTS - 1.0%
Kimberly-Clark Corp. 352,500 18,379,350
--------------
TOBACCO - 1.0%
Altria Group, Inc. 410,020 18,631,309
--------------
- ----------------------------------------------------------------------------------
ENERGY - 13.4%
Energy Equipment & Services - 2.7%
Baker Hughes, Inc. 621,500 20,863,755
Halliburton Co. 1,369,500 31,498,500
--------------
52,362,255
--------------
OIL & GAS - 10.7%
BP PLC, ADR 1,024,910 43,066,718
ConocoPhillips 863,968 47,345,446
Exxon Mobil Corp. 1,280,330 45,976,650
Marathon Oil Corp. 1,341,000 35,335,350
Royal Dutch Petroleum Co.,
NY Shares 631,300 29,431,206
--------------
201,155,370
--------------
- ----------------------------------------------------------------------------------
SHARES VALUE
- ----------------------------------------------------------------------------------
FINANCIALS - 24.8%
BANKS - 7.1%
Bank of America Corp. 588,200 $ 46,485,446
Bank of New York Co., Inc. 810,800 23,310,500
Bank One Corp. 736,700 27,390,506
Fifth Third Bancorp 177,000 10,149,180
U.S. Bancorp 1,086,800 26,626,600
--------------
133,962,232
--------------
DIVERSIFIED FINANCIALS - 9.0%
Citigroup, Inc. 2,199,900 94,155,720
Freddie Mac 517,971 26,297,388
J.P. Morgan Chase & Co. 1,169,300 39,966,674
State Street Corp. 250,400 9,865,760
--------------
170,285,542
--------------
INSURANCE - 8.7%
Ambac Financial Group, Inc. 398,700 26,413,875
American International Group, Inc. 978,900 54,015,702
Berkshire Hathaway, Inc.,
Class A (a) 487 35,307,500
Lincoln National Corp. 897,300 31,970,799
MGIC Investment Corp. 327,300 15,265,272
Travelers Property Casualty Corp.,
Class A 1 16
--------------
162,973,164
--------------
- ----------------------------------------------------------------------------------
HEALTH CARE - 8.7%
Health Care Providers & Services - 3.4%
Aetna, Inc. 769,900 46,347,980
McKesson Corp. 489,000 17,476,860
--------------
63,824,840
--------------
PHARMACEUTICALS - 5.3%
Bristol-Myers Squibb Co. 789,400 21,432,210
Merck & Co., Inc. 951,600 57,619,380
Pfizer, Inc. 602,820 20,586,303
--------------
99,637,893
--------------
- ----------------------------------------------------------------------------------
INDUSTRIALS - 9.1%
Aerospace & Defense - 4.3%
General Dynamics Corp. 309,100 22,409,750
Honeywell International, Inc. 1,353,200 36,333,420
Raytheon Co. 663,400 21,786,056
--------------
80,529,226
--------------
COMMERCIAL SERVICES & SUPPLIES - 1.8%
Waste Management, Inc. 1,382,510 33,304,666
--------------
INDUSTRIAL CONGLOMERATES - 2.2%
Textron, Inc. 1,092,500 42,629,350
--------------
See notes to investment portfolio.
6
INVESTMENT PORTFOLIO (CONTINUED)
June 30, 2003
COMMON STOCKS (CONTINUED) SHARES VALUE
- ----------------------------------------------------------------------------------
INDUSTRIALS (continued)
MACHINERY - 0.8%
Dover Corp. 495,100 $ 14,833,196
--------------
- ----------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 3.5%
Electronic Equipment & Instruments - 0.9%
Celestica, Inc. (a) 1,100,900 17,350,184
--------------
INTERNET TECHNOLOGY
CONSULTING & SERVICES - 1.1%
Electronic Data Systems Corp. 998,900 21,426,405
--------------
OFFICE ELECTRONICS - 1.5%
Xerox Corp. (a) 2,618,700 27,732,033
--------------
- ----------------------------------------------------------------------------------
MATERIALS - 3.4%
Chemicals - 1.0%
Air Products & Chemicals, Inc. 431,600 17,954,560
--------------
Metals & Mining - 1.2%
Barrick Gold Corp. 1,229,600 22,009,840
--------------
Paper & Forest Products - 1.2%
Bowater, Inc. 396,400 14,845,180
Weyerhaeuser Co. 173,800 9,385,200
--------------
24,230,380
--------------
- ----------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 8.1%
DIVERSIFIED TELECOMMUNICATION SERVICES - 8.1%
BellSouth Corp. 1,733,800 46,171,094
SBC Communications, Inc. 2,099,700 53,647,335
Verizon Communications, Inc. 1,343,200 52,989,240
--------------
152,807,669
--------------
- ----------------------------------------------------------------------------------
UTILITIES - 6.3%
ELECTRIC UTILITIES - 4.4%
American Electric Power Co., Inc. 788,040 23,507,233
Consolidated Edison, Inc. 650,000 28,132,000
PG&E Corp. (a) 587,900 12,434,085
TXU Corp. 838,200 18,817,590
--------------
82,890,908
--------------
MULTI-UTILITIES & UNREGULATED POWER - 1.9%
Duke Energy Corp. 1,853,300 36,973,335
--------------
TOTAL COMMON STOCKS
(cost of $1,651,266,253) 1,754,501,202
--------------
CONVERTIBLE BOND - 0.0% PAR VALUE
- ----------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 0.0%
SOFTWARE - 0.0%
MicroStrategy, Inc., Series A
7.500% 06/24/07
(cost of $0) $ 1,400 $ 1,624
--------------
SHORT-TERM
OBLIGATION - 5.3%
Repurchase agreement with
State Street Bank & Trust Co.,
dated 06/30/03, due 07/01/03 at
1.000%, collateralized by U.S.
Treasury Bonds and Notes with
various maturities to 08/15/19,
market value of $102,013,644
(repurchase proceeds $100,004,778)
(cost of $100,002,000) 100,002,000 100,002,000
--------------
TOTAL INVESTMENTS - 98.3%
(cost of $1,751,268,253) (b) 1,854,504,826
--------------
Other Assets & Liabilities, Net - 1.7% 31,978,966
- ----------------------------------------------------------------------------------
Net Assets - 100.0% $1,886,483,792
==============
NOTES TO INVESTMENT PORTFOLIO:
- ----------------------------------------------------------------------------------
(a) Non-income producing.
(b) Cost for federal income tax purposes is $1,751,478,519.
ACRONYM NAME
--------- -------
ADR American Depositary Receipt
See notes to financial statements.
7
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, JUNE 30,
2003 2003
- ---------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at cost $1,785,450,834 $1,751,268,253
-------------- --------------
Investments, at value $1,870,501,137 $1,854,504,826
Cash 609 782
Receivable for:
Investments sold -- 35,700,769
Fund shares sold 2,283,164 3,383,337
Interest 3,182 2,780
Dividends 4,764,433 2,647,405
Expense reimbursement due from Advisor 1,263 1,263
Deferred Trustees' compensation plan 31,836 31,836
-------------- --------------
Total Assets 1,877,585,624 1,896,272,998
-------------- --------------
LIABILITIES:
Payable for:
Investments purchased -- 4,148,172
Fund shares repurchased 2,997,047 3,219,512
Management fee 1,145,545 1,118,748
Transfer agent fee 1,429,379 1,062,041
Pricing and bookkeeping fees 88,683 81,777
Deferred Trustees' fee 31,836 31,836
Other liabilities 110,461 127,120
-------------- --------------
Total Liabilities 5,802,951 9,789,206
-------------- --------------
NET ASSETS $1,871,782,673 $1,886,483,792
============== ==============
COMPOSITION OF NET ASSETS:
Paid-in capital $2,133,329,617 $2,140,861,124
Undistributed net investment income 7,425,317 4,789,588
Accumulated net realized loss (354,022,564) (362,403,493)
Net unrealized appreciation on investments 85,050,303 103,236,573
-------------- --------------
NET ASSETS $1,871,782,673 $1,886,483,792
============== ==============
CLASS A:
Net assets $ 628,680,201 $ 635,414,890
Shares outstanding 42,782,596 43,087,778
-------------- --------------
Net asset value per share (a) $ 14.69 $ 14.75
============== ==============
Maximum offering price per share (Net asset value per share/0.9425) (b) $ 15.59 $ 15.65
============== ==============
CLASS B:
Net assets $ 745,122,483 $ 752,604,801
Shares outstanding 54,053,683 54,373,550
-------------- --------------
Net asset value and offering price per share (a) $ 13.78 $ 13.84
============== ==============
CLASS C:
Net assets $ 113,541,564 $ 115,314,488
Shares outstanding 8,179,231 8,272,640
-------------- --------------
Net asset value and offering price per share (a) $ 13.88 $ 13.94
============== ==============
CLASS Z:
Net assets $ 384,438,425 $ 383,149,613
Shares outstanding 26,140,038 25,956,346
-------------- --------------
Net asset value, offering and redemption price per share $ 14.71 $ 14.76
============== ==============
(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.
8
STATEMENTS OF OPERATIONS
PERIOD YEAR
ENDED ENDED
JULY 31, JUNE 30,
2003 (a) 2003
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 5,209,266 $ 38,688,113
Interest 92,357 865,308
------------- -------------
Total Investment Income (net of foreign taxes withheld of $80,249 and
$482,405, respectively) 5,301,623 39,553,421
------------- -------------
EXPENSES:
Management fee 1,207,317 13,420,620
Distribution fee:
Class B 479,460 5,535,313
Class C 73,219 851,994
Service fee:
Class A 135,258 1,737,863
Class B 159,820 1,845,104
Class C 24,406 283,998
Transfer agent fee 554,449 6,549,506
Pricing and bookkeeping fees 48,567 624,107
Trustees' fee 5,140 60,746
Custody fee 3,885 53,495
Other expenses 49,202 365,985
------------- -------------
Total Expenses 2,740,723 31,328,731
Fees and expenses waived or reimbursed by Advisor (74,829) (768,944)
Custody earnings credit -- (335)
------------- -------------
Net Expenses 2,665,894 30,559,452
------------- -------------
Net Investment Income 2,635,729 8,993,969
------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 8,380,929 (361,181,251)
Net change in unrealized appreciation/depreciation on investments (18,186,270) 275,599,753
------------- -------------
Net Loss (9,805,341) (85,581,498)
------------- -------------
Net Decrease in Net Assets from Operations $ (7,169,612) $ (76,587,529)
------------- -------------
(a) The Fund has changed its fiscal year end from June 30 to July 31.
See notes to financial statements.
9
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED YEAR ENDED YEAR ENDED
JULY 31, JUNE 30, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS: 2003 (a) 2003 2002
- -------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 2,635,729 $ 8,993,969 $ 4,614,346
Net realized gain (loss) on investments 8,380,929 (361,181,251) 39,232,656
Net change in unrealized appreciation/depreciation on investments (18,186,270) 275,599,753 (286,301,630)
------------- ------------- -------------
Net Decrease from Operations (7,169,612) (76,587,529) (242,454,628)
------------- ------------- -------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income:
Class A -- (3,173,507) (3,083,001)
Class B -- -- (333,608)
Class C -- -- (37,557)
Class Z (formerly Class S) (b) -- -- (2,181,373)
Class Z (through 07/29/02) (b) -- (1,132,336) (122,512)
From net realized gains:
Class A -- (13,113,326) (45,108,951)
Class B -- (14,310,343) (71,771,631)
Class C -- (2,195,247) (8,079,873)
Class Z (formerly Class S) (b) -- -- (18,494,024)
Class Z (through 07/29/02) (b) -- (3,001,953) (1,038,672)
------------- ------------- -------------
Total Distributions Declared to Shareholders -- (36,926,712) (150,251,202)
------------- ------------- -------------
SHARE TRANSACTIONS:
Class A:
Subscriptions 10,998,695 275,649,995 476,829,219
Distributions reinvested -- 12,464,817 44,869,372
Redemptions (15,465,282) (355,987,815) (123,405,546)
------------- ------------- -------------
Net Increase (Decrease) (4,466,587) (67,873,003) 398,293,045
------------- ------------- -------------
Class B:
Subscriptions 7,719,841 130,400,340 365,068,658
Distributions reinvested -- 13,082,827 66,398,432
Redemptions (12,183,503) (222,419,817) (236,139,284)
------------- ------------- -------------
Net Increase (Decrease) (4,463,662) (78,936,650) 195,327,806
------------- ------------- -------------
Class C:
Subscriptions 1,520,993 35,645,799 91,823,294
Distributions reinvested -- 1,967,464 7,567,694
Redemptions (2,834,558) (42,869,122) (22,766,049)
------------- ------------- -------------
Net Increase (Decrease) (1,313,565) (5,255,859) 76,624,939
------------- ------------- -------------
Class Z (formerly Class S) (b):
Subscriptions 8,461,262 217,927,301 14,452,660
Proceeds received in combination with original Class Z -- 4,557,863 --
Distributions reinvested -- 3,886,208 19,537,013
Redemptions (5,748,955) (62,646,371) (54,836,368)
------------- ------------- -------------
Net Increase (Decrease) 2,712,307 163,725,001 (20,846,695)
------------- ------------- -------------
(a) The Fund has changed its fiscal year end from June 30 to July 31.
(b) On July 29, 2002, the Fund's existing Class Z shares were combined into the
Fund's Class S shares, which were subsequently redesignated as Class Z
shares.
See notes to financial statements.
10
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
PERIOD ENDED YEAR ENDED YEAR ENDED
JULY 31, JUNE 30, JUNE 30,
2003 (a) 2003 2002
- ---------------------------------------------------------------------------------------------------------------------
Class Z (through 07/29/02) (b):
Subscriptions $ -- $ 387,731 $ 6,298,656
Proceeds combined into former Class S -- (4,557,863) --
Distributions reinvested -- -- 1,161,184
Redemptions -- (170,835) (15,512,619)
-------------- -------------- --------------
Net Decrease -- (4,340,967) (8,052,779)
-------------- -------------- --------------
Net Increase (Decrease) from Share Transactions (7,531,507) 7,318,522 641,346,316
-------------- -------------- --------------
Total Increase (Decrease) in Net Assets (14,701,119) (106,195,719) 248,640,486
Net Assets:
Beginning of period 1,886,483,792 1,992,679,511 1,744,039,025
-------------- -------------- --------------
End of period (undistributed net investment income of $7,425,317,
$4,789,588 and $814,252, respectively) $1,871,782,673 $1,886,483,792 $1,992,679,511
============== ============== ==============
CHANGES IN SHARES:
Class A:
Subscriptions 740,289 19,938,430 26,313,275
Issued for distributions reinvested -- 902,615 2,553,792
Redemptions (1,045,471) (26,325,791) (6,836,253)
-------------- -------------- --------------
Net Increase (Decrease) (305,182) (5,484,746) 22,030,814
-------------- -------------- --------------
Class B:
Subscriptions 554,962 10,058,691 21,256,273
Issued for distributions reinvested -- 1,005,610 3,992,812
Redemptions (874,829) (17,345,105) (13,671,579)
-------------- -------------- --------------
Net Increase (Decrease) (319,867) (6,280,804) 11,577,506
-------------- -------------- --------------
Class C:
Subscriptions 108,591 2,739,448 5,299,834
Issued for distributions reinvested -- 150,057 452,073
Redemptions (202,000) (3,334,540) (1,314,188)
-------------- -------------- --------------
Net Increase (Decrease) (93,409) (445,035) 4,437,719
-------------- -------------- --------------
Class Z (formerly Class S) (b):
Subscriptions 571,033 17,134,572 789,325
Issued for combination with original Class Z -- 336,309 --
Issued for distributions reinvested -- 281,607 1,113,220
Redemptions (387,341) (4,606,424) (3,005,780)
-------------- -------------- --------------
Net Increase (Decrease) 183,692 13,146,064 (1,103,235)
-------------- -------------- --------------
Class Z (through 07/29/02) (b):
Subscriptions -- 26,431 343,742
Shares combined into former Class S -- (336,309) --
Issued for distributions reinvested -- -- 65,641
Redemptions -- (11,978) (852,601)
-------------- -------------- --------------
Net Decrease -- (321,856) (443,218)
-------------- -------------- --------------
(a) The Fund has changed its fiscal year end from June 30 to July 31.
(b) On July 29, 2002, the Fund's existing Class Z shares were combined into the
Fund's Class S shares, which were subsequently redesignated as Class Z
shares.
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
July 31, 2003
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Liberty Growth & Income Fund (the "Fund"), a series of Liberty Funds Trust VI,
is a diversified portfolio of a Massachusetts business trust, registered under
the Investment Company Act of 1940, as amended, as an open-ended management
company. The Fund's investment goal is to seek long-term growth and income. The
Fund may issue an unlimited number of shares. The Fund offers four classes of
shares: Class A, Class B, Class C and Class Z. On July 29, 2002, the Fund's
existing Class Z shares were combined into the Fund's Class S shares, which were
subsequently redesignated as Class Z shares. Class A shares are sold with a
front-end sales charge. A 1.00% contingent deferred sales charge ("CDSC") is
assessed to Class A shares purchased without an initial sales charge on
redemptions made within eighteen months on an original purchase of $1 million to
$25 million. Class B shares are subject to 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 Z shares are
offered continuously at net asset value. There are certain restrictions on the
purchase of Class Z shares, as described in the Fund's prospectus.
Effective February 11, 2003, the Board of Trustees had approved a change in the
fiscal year end of the Fund from June 30 to July 31. Accordingly, the Fund's
2003 fiscal year ended on July 31, 2003.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 Fund in the preparation of its 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:
All income, expenses (other than Class A, Class B and Class C service fees and
Class B and Class C distribution 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.
FEDERAL INCOME TAXES:
Consistent with the 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.
INTEREST INCOME:
Interest income is recorded on the accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are recorded on the ex-date.
OTHER:
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 Fund
becomes 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 Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-market
daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
12
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2. FEDERAL TAX INFORMATION
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from accounting principles generally accepted
in the United States of America. These differences are primarily due to
differing treatments for deferral of losses from wash sales, capital loss
carryforwards and non-deductible expenses. Reclassifications are made to the
Fund's capital accounts to reflect income and gains available for distribution
(or available capital loss carryforwards) under income tax regulations.
For the period ended July 31, 2003 and the fiscal year ended June 30, 2003,
permanent items identified and reclassified among the components of net assets
are as follows:
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT REALIZED PAID-IN
INCOME LOSS CAPITAL
- ----------------------------------------------------------
July 31, 2003 $ -- $ -- $--
June 30, 2003 (712,790) 712,790 --
Net investment income, net realized gains (losses) and net assets were not
affected by this reclassification.
The tax character of distributions paid was as follows:
PERIOD YEAR ENDED
ENDED JUNE 30,
-------------------------
JULY 31, 2003 2003 2002
- ----------------------------------------------------------
Distributions
paid from:
Ordinary income $-- $ 5,091,397 $ 64,563,669
Long-term
capital gains -- 31,835,315 85,687,533
---- ----------- -----------
$-- $36,926,712 $150,251,202
==== =========== ============
As of July 31, 2003 and June 30, 2003, the components of distributable earnings
on a tax basis were as follows:
JULY 31, 2003 JUNE 30, 2003
- ----------------------------------------------------------
Undistributed
ordinary income $ 7,470,086 $ 4,833,681
Unrealized appreciation* 84,838,568 103,026,307
* The difference between book-basis and tax-basis unrealized appreciation is
attributable primarily to the tax deferral of losses on wash sales.
The following capital loss carryforwards 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:
JULY 31, 2003
- ----------------------------------------------------------
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
- ----------------------------------------------------------
2010 $241,549,397
2011 112,261,432
------------
$353,810,829
============
JUNE 30, 2003
- ----------------------------------------------------------
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
- ----------------------------------------------------------
2011 $241,549,397
Under current tax rules, certain capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal year.
As of June 30, 2003 for federal income tax purposes, post-October losses of
$120,643,830 attributable to security transactions, were deferred to July 1,
2003.
NOTE 3. FEES AND COMPENSATION PAID
TO AFFILIATES
On April 1, 2003, Colonial Management Associates Inc. ("Colonial"), the
investment advisor and pricing and bookkeeping agent to the Fund, merged into
Columbia Management Advisors, Inc. ("Columbia"), formerly known as Columbia
Management Co., an indirect, wholly-owned subsidiary of FleetBoston Financial
Corporation. At the time of the merger, Columbia assumed the obligations of
Colonial with respect to the Fund. The merger did not change the way the Fund is
managed, the investment personnel assigned to manage the Fund or the fees paid
by the Fund.
MANAGEMENT FEE:
Columbia is the investment advisor of the Fund and furnishes accounting and
other services and office facilities for a monthly fee based on the Fund's
average daily net assets as follows:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
------------------------ ---------------
First $1 billion 0.80%
Over $1 billion 0.70%
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Columbia has voluntarily agreed, until further notice, to waive a portion of the
0.70% management fee in excess of $1 billion so that it does not exceed 0.60%
annually.
PRICING AND BOOKKEEPING FEES:
Columbia is responsible for providing pricing and bookkeeping services to the
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 Fund, Columbia receives
from the Fund an annual flat fee of $10,000, paid monthly, and in any month that
the 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 period ended July 31, 2003 and
the fiscal year ended June 30, 2003, the net asset based fee rates were 0.029%
and 0.034%, respectively. The Fund also pays 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 the
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 Fund's principal underwriter. For the period ended July 31, 2003 and the
fiscal year ended June 30, 2003, the Fund has been advised that the Distributor
retained CDSC fees as follows:
FRONT-END
SALES CONTINGENT DEFERRED
LOAD SALES CHARGE
CLASS A CLASS A CLASS B CLASS C
- ----------------------------------------------------------
July 31, 2003 $10,401 $ 179 $ 142,492 $ 1,109
June 30, 2003 13,937 8,798 2,438,732 43,031
The Fund 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. 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 only.
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.
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund's 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 Fund's assets.
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. If applicable, the Fund could have invested a
portion of the assets utilized in connection with the expense offset arrangement
in an income-producing asset if it had not entered into such an agreement. For
the period ended July 31, 2003 and the fiscal year ended June 30, 2003, there
were credits of $0 and $335, respectively.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the period ended July 31, 2003 and the fiscal year ended June 30, 2003,
purchases and sales of investments, other than short-term obligations, were as
follows:
PURCHASES SALES
- ----------------------------------------------------------
July 31, 2003 $ 108,833,139 $ 97,645,711
June 30, 2003 1,088,805,116 1,183,769,451
Unrealized appreciation (depreciation) at July 31, 2003 and June 30, 2003, based
on cost of investments for federal income tax purposes, was:
JULY 31, 2003 JUNE 30, 2003
- ----------------------------------------------------------
Gross unrealized
appreciation $183,221,402 $195,811,016
Gross unrealized
depreciation (98,382,834) (92,784,709)
------------ ------------
Net unrealized
appreciation $ 84,838,568 $103,026,307
============ ============
14
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5. LINE OF CREDIT
The 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 the Fund based on its borrowings. In
addition, the Fund has 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 Fund participated in a
separate credit agreement with similar terms to its existing agreement. For the
period ended July 31, 2003 and the fiscal year ended June 30, 2003, the Fund did
not borrow under these agreements.
15
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period is as follows:
PERIOD ENDED YEAR ENDED JUNE 30,
JULY 31, ------------------------------------------------------------
CLASS A SHARES 2003 (a) 2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 14.75 $ 15.67 $ 18.98 $ 20.60 $ 21.84 $ 20.02
------- ------- ------- ------- ------- -------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income (b) 0.02 0.11 0.11 0.12 0.01 0.04
Net realized and unrealized gain (loss)
on investments (0.08) (0.72) (1.89) 2.59 0.25 2.65
------- ------- ------- ------- ------- -------
Total from Investment Operations (0.06) (0.61) (1.78) 2.71 0.26 2.69
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income -- (0.06) (0.10) -- -- --
From net realized gains -- (0.25) (1.43) (4.33) (1.50) (0.87)
------- ------- ------- ------- ------- -------
Total Distributions Declared
to Shareholders -- (0.31) (1.53) (4.33) (1.50) (0.87)
------- ------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 14.69 $ 14.75 $ 15.67 $ 18.98 $ 20.60 $ 21.84
======= ======= ======= ======= ======= =======
Total return (c) (0.41)%(d)(e) (3.75)%(e) (10.24)%(e) 13.34%(e) 1.43%(e) 13.97%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.36%(g) 1.40% 1.31% 1.32% 1.35% 1.41%
Net investment income (f) 1.93%(g) 0.83% 0.60% 0.62% 0.06% 0.19%
Waiver/reimbursement 0.05%(g) 0.04% 0.05% 0.03% 0.10% --
Portfolio turnover rate 6%(d) 63% 47% 104% 81% 79%
Net assets, end of period (000's) $628,680 $635,415 $761,122 $503,647 $309,129 $351,972
(a) The Fund has changed its fiscal year end from June 30 to July 31.
(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) Not annualized.
(e) Had the Advisor 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.
16
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period is as follows:
PERIOD ENDED YEAR ENDED JUNE 30,
JULY 31, ------------------------------------------------------------
CLASS B SHARES 2003 (a) 2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 13.84 $ 14.77 $ 18.01 $ 19.88 $ 21.29 $ 19.68
------- ------- ------- ------- ------- -------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.01 0.01 (0.03) (0.03) (0.14) (0.11)
Net realized and unrealized gain (loss)
on investments (0.07) (0.69) (1.77) 2.49 0.23 2.59
------- ------- ------- ------- ------- -------
Total from Investment Operations (0.06) (0.68) (1.80) 2.46 0.09 2.48
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income -- -- (0.01) -- -- --
From net realized gains -- (0.25) (1.43) (4.33) (1.50) (0.87)
------- ------- ------- ------- ------- -------
Total Distributions Declared
to Shareholders -- (0.25) (1.44) (4.33) (1.50) (0.87)
------- ------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 13.78 $ 13.84 $ 14.77 $ 18.01 $ 19.88 $ 21.29
======= ======= ======= ======= ======= =======
Total return (c) (0.43)%(d)(e) (4.50)%(e) (10.89)%(e) 12.46%(e) 0.64%(e) 13.12%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.11%(g) 2.15% 2.06% 2.07% 2.10% 2.16%
Net investment income (loss) (f) 1.18%(g) 0.07% (0.15)% (0.13)% (0.69)% (0.56)%
Waiver/reimbursement 0.05%(g) 0.04% 0.05% 0.03% 0.10% --
Portfolio turnover rate 6%(d) 63% 47% 104% 81% 79%
Net assets, end of period (000's) $745,122 $752,605 $895,904 $883,754 $822,017 $919,542
(a) The Fund has changed its fiscal year end from June 30 to July 31.
(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 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.
17
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period is as follows:
PERIOD ENDED YEAR ENDED JUNE 30,
JULY 31, ------------------------------------------------------------
CLASS C SHARES 2003 (a) 2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 13.94 $ 14.87 $ 18.12 $ 19.99 $ 21.39 $ 19.78
------- ------- ------- ------- ------- -------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.01 0.01 (0.03) (0.02) (0.14) (0.11)
Net realized and unrealized gain (loss)
on investments (0.07) (0.69) (1.78) 2.48 0.24 2.59
------- ------- ------- ------- ------- -------
Total from Investment Operations (0.06) (0.68) (1.81) 2.46 0.10 2.48
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income -- -- (0.01) -- -- --
From net realized gains -- (0.25) (1.43) (4.33) (1.50) (0.87)
------- ------- ------- ------- ------- -------
Total Distributions Declared
to Shareholders -- (0.25) (1.44) (4.33) (1.50) (0.87)
------- ------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 13.88 $ 13.94 $ 14.87 $ 18.12 $ 19.99 $ 21.39
======= ======= ======= ======= ======= =======
Total return (c) (0.43)%(d)(e) (4.47)%(e) (10.88)%(e) 12.38%(e) 0.68%(e) 13.05%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.11%(g) 2.15% 2.06% 2.06% 2.10% 2.16%
Net investment income (loss) (f) 1.19%(g) 0.08% (0.15)% (0.13)% (0.69)% (0.56)%
Waiver/reimbursement 0.05%(g) 0.04% 0.05% 0.03% 0.10% --
Portfolio turnover rate 6%(d) 63% 47% 104% 81% 79%
Net assets, end of period (000's) $113,542 $115,314 $129,661 $ 77,565 $ 29,303 $ 35,317
(a) The Fund has changed its fiscal year end from June 30 to July 31.
(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 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.
18
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period is as follows:
PERIOD PERIOD
ENDED YEAR ENDED JUNE 30, ENDED
JULY 31, -------------------------- JUNE 30,
CLASS Z SHARES 2003 (a) 2003 (b) 2002 2001 (c)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.76 $ 15.68 $ 19.00 $ 19.64
------- ------- ------- -------
Income from Investment Operations:
Net investment income (d) 0.03 0.16 0.16 0.06
Net realized and unrealized loss on investments (0.08) (0.74) (1.88) (0.70)
------- ------- ------- -------
Total from Investment Operations (0.05) (0.58) (1.72) (0.64)
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income -- (0.09) (0.17) --
From net realized gains -- (0.25) (1.43) --
------- ------- ------- -------
Total Distributions Declared to Shareholders -- (0.34) (1.60) --
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 14.71 $ 14.76 $ 15.68 $ 19.00
======= ======= ======= =======
Total return (e)(f) (0.34)%(g) (3.52)% (9.94)% (3.26)%(g)
======= ======= ======= =======
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.11%(i) 1.15% 1.06% 1.08%(i)
Net investment income (h) 2.18%(i) 1.13% 0.85% 0.86%(i)
Waiver/reimbursement 0.05%(i) 0.04% 0.05% 0.03%(i)
Portfolio turnover rate 6%(g) 63% 47% 104%
Net assets, end of period (000's) $384,438 $383,150 $200,908 $264,425
(a) The Fund has changed its fiscal year end from June 30 to July 31.
(b) On July 29, 2002, the Fund's existing Class Z shares were combined into the
Fund's Class S shares, which were subsequently redesignated as Class Z
shares.
(c) Class Z shares were initially offered on February 7, 2001. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Had the Advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
19
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF LIBERTY FUNDS TRUST VI AND
THE SHAREHOLDERS OF LIBERTY GROWTH & INCOME FUND
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Liberty Growth & Income Fund (the
"Fund") (a series of Liberty Funds Trust VI) at July 31, 2003 and June 30, 2003,
and the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at July 31, 2003 and June 30, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 9, 2003
20
UNAUDITED INFORMATION
FEDERAL INCOME TAX INFORMATION:
100% of the ordinary income distributed by the Fund, in the year ended June 30,
2003, qualifies for the corporate dividends received deduction.
21
TRUSTEES AND OFFICERS
The Trustees serve terms of indefinite duration. The names, addresses and ages
of the Trustees and officers of the Liberty Funds, the year each was first
elected or appointed to office, their principal business occupations during at
least the last five years, the number of portfolios overseen by each Trustee and
other directorships they hold are shown below. Each officer listed below serves
as an officer of each of the Liberty Funds. The Statement of Additional
Information (SAI) contains additional information about the Trustees and is
available without charge upon request by calling the fund's distributor at
800-345-6611.
Number of
Year First Portfolios in
Elected or Liberty Funds Other
Position with Appointed Principal Occupation(s) Complex Overseen Directorships
Name, Address and Age Liberty Funds to Office(1) During Past Five Years by Trustee Held
- ------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
Douglas A. Hacker (Age 47) Trustee 1996 Executive Vice President - Strategy of United 92 None
P.O. Box 66100 Airlines (airline) since December 2002 (formerly
Chicago, IL 60666 President of UAL Loyalty Services (airline) from
September 2001 to December 2002; Executive
Vice President and Chief Financial Officer of United
Airlines from March 1993 to September 2001; Senior
Vice President and Chief Financial Officer of UAL,
Inc. prior thereto).
Janet Langford Kelly (Age 45) Trustee 1996 Executive Vice President-Corporate Development 92 None
One Kellogg Square and Administration, General Counsel and Secretary,
Battle Creek, MI 49016 Kellogg Company (food manufacturer), since
September 1999; Senior Vice President, Secretary and
General Counsel, Sara Lee Corporation (branded,
packaged, consumer-products manufacturer) from
January 1995 to September 1999.
Richard W. Lowry (Age 67) Trustee 1995 Private Investor since August 1987 (formerly 94(4) None
10701 Charleston Drive Chairman and Chief Executive Officer, U.S. Plywood
Vero Beach, FL 32963 Corporation (building products manufacturer)).
Charles R. Nelson (Age 60) Trustee 1981 Professor of Economics, University of Washington, 107(2) None
Department of Economics since January 1976; Ford and Louisa Van Voorhis
University of Washington Professor of Political Economy, University of
Seattle, WA 98195 Washington, since September 1993; Director,
Institute for Economic Research, University of
Washington, since September 2001; Adjunct Professor
of Statistics, University of Washington, since
September 1980; Associate Editor, Journal of
Money Credit and Banking, since September 1993;
consultant on econometric and statistical matters.
John J. Neuhauser (Age 60) Trustee 1985 Academic Vice President and Dean of Faculties 94(4,5) Saucony, Inc.
84 College Road since August 1999, Boston College (formerly Dean, (athletic
Chestnut Hill, MA 02467-3838 Boston College School of Management from September footwear);
1977 to September 1999. SkillSoft
Corp.
(E-Learning)
Thomas E. Stitzel (Age 67) Trustee 1998 Business Consultant since 1999 (formerly Professor 92 None
2208 Tawny Woods Place of Finance from 1975 to 1999 and Dean from 1977
Boise, ID 83706 to 1991, College of Business, Boise State
University); Chartered Financial Analyst.
22
TRUSTEES AND OFFICERS (CONTINUED)
Number of
Year First Portfolios in
Elected or Liberty Funds Other
Position with Appointed Principal Occupation(s) Complex Overseen Directorships
Name, Address and Age Liberty Funds to Office(1) During Past Five Years by Trustee Held
- ------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
Thomas C. Theobald (Age 66) Trustee 1996 Managing Director, William Blair Capital Partners 92 Anixter
27 West Monroe Street, Suite 3500 (private equity investing) since September 1994 International
Chicago, IL 60606 (formerly Chief Executive Officer and Chairman (network
of the Board of Directors, Continental Bank support
Corporation prior thereto). equipment
distributor),
Jones Lang
LaSalle
(real estate
management
services)
and MONY
Group (life
insurance).
Anne-Lee Verville (Age 58) Trustee 1998 Author and speaker on educational systems needs 92(5) Chairman of
359 Stickney Hill Road (formerly General Manager, Global Education the Board
Hopkinton, NH 03229 Industry from 1994 to 1997, and President, of Directors,
Applications Solutions Division from 1991 to 1994, Enesco
IBM Corporation (global education and Group,
global applications)). Inc. (designer,
importer and
distributor
of giftware and
collectibles).
INTERESTED TRUSTEES
William E. Mayer3 (Age 63) Trustee 1994 Managing Partner, Park Avenue Equity Partners 94(4) Lee
399 Park Avenue (private equity) since February 1999 (formerly Enterprises
Suite 3204 Founding Partner, Development Capital LLC (print media),
New York, NY 10022 from November 1996 to February 1999; Dean and WR Hambrecht
Professor, College of Business and Management, + Co.
University of Maryland from October 1992 to (financial
November 1996). service
provider) and
First Health
(healthcare).
Joseph R. Palombo3 (Age 50) Trustee, 2000 Executive Vice President and Chief Operating 94(6) None
One Financial Center Chairman of Officer of Columbia Management Group, Inc. (Columbia
Boston, MA 02111 the Board and Management) since December 2001 and Director,
President Executive Vice President and Chief Operating
Officer of the Advisor since April 2003
(formerly Chief Operations Officer of Mutual
Funds, Liberty Financial Companies, Inc. from
August 2000 to November 2001; Executive
Vice President of Stein Roe & Farnham
Incorporated (Stein Roe) from April 1999
to April 2003; Director of Colonial
Management Associates, Inc. (Colonial)
from April 1999 to April 2003; Director of
Stein Roe from September 2000 to April
2003) President of Liberty Funds and
Galaxy Funds since February 2003 (formerly
Vice President from September 2002 to
February 2003); Manager of Stein Roe
Floating Rate Limited Liability Company
since October 2000; (formerly Vice
President of the Liberty Funds from April
1999 to August 2000; Chief Operating
Officer and Chief Compliance Officer,
Putnam Mutual Funds from December 1993
to March 1999).
1 In December, 2000, the boards of each of the Liberty Funds and former Stein
Roe funds were combined into one board of trustees with common membership.
The date shown is the earliest date on which a trustee was elected to
either the Liberty Funds board or the former Stein Roe funds board.
2 In addition to serving as a disinterested Trustee of the Liberty Funds, Mr.
Nelson serves as a disinterested Director or Trustee of the Columbia Funds
and CMG Funds, currently consisting of 15 funds and 20 funds, respectively,
which are advised by the Advisor.
3 Mr. Mayer is an "interested person" (as defined in the Investment Company
Act of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht +
Co. Mr. Palombo is an interested person as an employee of the Advisor.
4 In addition to serving as trustees of Liberty Funds, Messrs. Lowry,
Neuhauser and Mayer each serve as a director/trustee of the Liberty
All-Star Funds, currently consisting of 2 funds, which are advised by an
affiliate of the Advisor.
5 In addition to serving as disinterested trustees of the Liberty Funds, Mr.
Neuhauser and Ms. Verville serve as disinterested directors of Columbia
Management Multi-Strategy Hedge Fund, LLC, which is advised by the Advisor.
6 In addition to serving as an interested trustee of the Liberty Funds, Mr.
Palombo serves as an interested director of Columbia Management
Multi-Strategy Hedge Fund, LLC, which is advised by the Advisor.
23
[THIS PAGE INTENTIONALLY LEFT BLANK]
OFFICERS AND TRANSFER AGENT
Year First
Elected or
Position with Appointed
Name, Address and Age Liberty Funds to Office Principal Occupation(s) During Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
Vicki L. Benjamin (Age 41) Chief 2001 Controller of the Liberty Funds and of the Liberty All-Star Funds since
One Financial Center Accounting May 2002; Chief Accounting Officer of the Liberty Funds and Liberty
Boston, MA 02111 Officer and All-Star Funds since June 2001; Controller and Chief Accounting Officer
Controller of the Galaxy Funds since September 2002 (formerly Vice President,
Corporate Audit, State Street Bank and Trust Company from May 1998 to
April 2001; Audit Manager from July 1994 to June 1997; Senior Audit
Manager from July 1997 to May 1998, Coopers & Lybrand, LLP).
J. Kevin Connaughton (Age 39) Treasurer 2000 Treasurer of the Liberty Funds and of the Liberty All-Star Funds since
One Financial Center December 2000; Vice President of the Advisor since April 2003 (formerly
Boston, MA 02111 Controller of the Liberty Funds and of the Liberty All-Star Funds from
February 1998 to October 2000); Treasurer of the Galaxy Funds since
September 2002; Treasurer, Columbia Management Multi-Strategy Hedge
Fund, LLC since December 2002 (formerly Vice President of Colonial from
February 1998 to October 2000 and Senior Tax Manager, Coopers & Lybrand,
LLP from April 1996 to January 1998).
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Liberty Growth & Income Fund 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 Growth & Income Fund.
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.
Annual Report:
Liberty Growth & Income Fund
Liberty Growth & Income Fund Annual Report, July 31, 2003
Logo: Eagle head
LibertyFunds
A Member of Columbia Management Group
(C)2003 Liberty Funds Distributor, Inc.
A Member of Columbia Management Group
One Financial Center, Boston, MA 02111-2621
---------------
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
---------------
779-02/847O-0703 (09/03) 03/2470
ITEM 2. CODE OF ETHICS.
(a) The Registrant has adopted a code of ethics that applies to the Registrant's
principal executive officer, principal financial officer and principal
accounting officer.
(b) During the period covered by this report, there were not any amendments to
the provisions of the code of ethics adopted in 2.(a) above.
(c) During the period covered by this report, there were not any implicit or
explicit waivers to the provisions of the code of ethics adopted in 2.(a) above.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) The Registrant's board of directors has determined that independent trustees
Douglas A. Hacker and Anne-Lee Verville each qualify as audit committee
financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable at this time.
ITEM 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
a date within 90 days of the filing date of this report, 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 was no change in the registrant's internal control over financial
reporting that occurred during the registrant's last fiscal half-year that has
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 10. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR
attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
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 VI
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By (Signature and Title) /s/ Joseph R. Palombo
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Joseph R. Palombo, President
Date September 12, 2003
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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
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Joseph R. Palombo, President
Date September 12, 2003
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By (Signature and Title) /s/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date September 12, 2003
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