-------------------------------------------------------
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST ANNUAL REPORT
-------------------------------------------------------
NOVEMBER 30, 2001
[graphic omitted]
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
I want to take this opportunity to let you know that the sale of Liberty
Financial's asset management companies -- including Colonial Management
Associates -- to FleetBoston Financial was completed effective November 1, 2001.
In light of this change and recent turmoil in the markets, I think it is
important to assure you that only the ownership of Colonial has changed. Your
trust will continue to be guided by the same investment principles which
attracted you to the trust in the first place.
The past year has been an interesting time for US investment markets. At the
beginning of 2001, the Federal Reserve began lowering interest rates in hopes of
stimulating the sagging economy. In total, we saw ten rate cuts in the first 11
months of the year, bringing the short-term interest rate down from 6.5% to
2.0%. An additional cut in December brought rates to an historic low of 1.75%.
These aggressive rate cuts raised some concerns that inflationary pressures
could surface, but inflation has thus far been kept in check. At the same time,
economic weakness and stock market volatility has prompted investors to shift
assets into the bond market -- a move which has benefited municipal bond prices.
Thank you for choosing Colonial Investment Grade Municipal Trust. If you have
further questions, we encourage you to contact your financial advisor.
Sincerely,
/s/ Keith T. Banks
Keith T. Banks
President
--------------------------------------------------------------------------------
MEET THE NEW PRESIDENT
Effective November 1, 2001, Mr. Keith T. Banks became president of Liberty
Funds. Mr. Banks is currently chief investment officer and chief executive
officer of Fleet Asset Management, a position he has held since 2000. Prior to
joining Fleet, he was managing director and head of US equity for J.P. Morgan
Investment Management from 1996 to 2000. He began his investment career in 1981
as an equity analyst at Home Insurance. A chartered financial analyst, Mr. Banks
earned his BA from Rutgers University and his MBA from Columbia Business School.
--------------------------------------------------------------------------------
--------------------------- Economic and market conditions change
NOT FDIC MAY LOSE VALUE frequently. There is no assurance that trends
INSURED NO BANK GUARANTEE described herein will continue or commence.
--------------------------
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS' REPORT
--------------------------------------------------------------------------------
TRUST MAINTAINED DURATION IN THE FACE OF FALLING INTEREST RATES
Colonial Investment Grade Municipal Trust generated an 11.21% (based on net
asset value) return during the fiscal year ended November 30, 2001. The trust's
return was comparable to its peer group, the Lipper General Municipal Debt Funds
(Leveraged), which posted an average return of 10.46%. As the Federal Reserve
cut rates throughout 2001, short-term rates fell sharply, steepening the yield
curve. In the face of falling short-term rates, our primary strategy was to lock
in favorable long-term rates by maintaining a relatively long average maturity.
LONGER AVERAGE DURATION BOOSTED PERFORMANCE WHEN INTEREST RATES FELL
We were convinced interest rates would continue to fall as economic growth
slowed and the equity market continued to struggle. For this reason, we focused
on maintaining our average duration at the long end of the curve. This strategy
helped performance during the period, as the yield curve steepened in step with
falling interest rates.We also focused on noncallable bonds and zero-coupon
bonds, which pay interest only at maturity.Zeros sell at deep discounts and
typically perform well when interest rates fall.
Our exposure to air transportation debt, however, hurt performance during the
last three months of the period.Though this sector declined after the September
11 terrorist attacks, we believe that our holdings in this sector are
fundamentally sound and expect them to recover during the coming year.
LONG-TERM OUTLOOK REMAINS STEADY
With interest rates at historic lows, we feel the Fed may only have one or two
rate cuts left to help boost the economy. In our opinion, the economy will begin
to recover slowly after another quarter or two of negative economic growth. As a
result, we intend to maintain our strategy of locking in more favorable rates by
seeking opportunities for bonds of 10 years and longer.
/s/ William C.Loring, Jr. /s/ Brian M. Hartford,CFA
William C.Loring, Jr. Brian M. Hartford,CFA
Effective December 19, 2001, the Colonial Investment Grade Municipal Trust is
managed by Maureen G.Newman. Ms.Newman is a senior vice president of Colonial
Management Associates, Inc. (CMA). Prior to joining CMA, she worked at Fidelity
Investments for 11 years, managing several mutual funds. Ms.Newman received her
BA in economics from Boston College and her MBA from Babson College. She is a
chartered financial analyst, a member of the Boston Security Analysts Society
and former chairman of the National Federation of Municipal Analysts.
Tax-exempt investing offers current tax-free income, but it also involves
certain risks. The value of trust shares will be affected by interest rate
changes and the creditworthiness of issues held in the trust. Interest income
from certain tax-exempt bonds may be subject to the federal alternative minimum
tax for individuals and corporations.
PRICE PER SHARE AS OF 11/30/01 ($)
NAV 11.06
---------------------------------------------
Market price 10.87
---------------------------------------------
ONE-YEAR TOTAL RETURN (%)
NAV 11.21
---------------------------------------------
Market price 29.28
---------------------------------------------
DISTRIBUTIONS DECLARED
PER COMMON SHARE ($)
12/1/00-11/30/01 0.60
---------------------------------------------
A portion of the trust's income may be subject to the alternative minimum tax.
The trust may at times purchase tax-exempt securities at a discount from their
original issue price. Some or all of this discount may be included in the
trust's ordinary income, and any market discount is taxable when distributed.
QUALITY BREAKDOWN AS OF 11/30/01 (%)
AAA 61.5
---------------------------------------------
AA 16.7
---------------------------------------------
A 6.1
---------------------------------------------
BBB 7.2
---------------------------------------------
BB 0.4
---------------------------------------------
B 0.3
---------------------------------------------
Non-rated 7.7
---------------------------------------------
Cash equivalents 0.1
---------------------------------------------
Quality breakdowns are calculated as a percentage of total investments,including
short-term obligations. Ratings shown in the quality breakdown represent the
highest rating assigned to a particular bond by one of the following nationally
recognized rating agencies: Standard & Poor's Corporation, Moody's Investors
Service, Inc. or Fitch Investors Service, Inc. Sector breakdowns are calculated
as a percentage of net assets.
Because the trust is actively managed, there can be no guarantee that the trust
will continue to maintain this quality breakdown or invest in these sectors in
the future.
TOP 10 INDUSTRY SECTORS AS OF 11/30/01 (%)
Local general obligations 17.6
---------------------------------------------
Hospitals 10.8
---------------------------------------------
Education 8.5
---------------------------------------------
State appropriated 8.2
---------------------------------------------
State general obligations 6.3
---------------------------------------------
Investor owned 5.1
---------------------------------------------
Toll facilities 4.8
---------------------------------------------
Special non-property tax 4.8
---------------------------------------------
Refunded/escrowed 4.4
---------------------------------------------
Water & sewer 4.1
---------------------------------------------
--------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
--------------------------------------------------------------------------------
NOVEMBER 30, 2001
MUNICIPAL BONDS - 98.7% PAR VALUE
----------------------------------------------------------------------------------------------------
EDUCATION - 9.4%
EDUCATION - 8.5%
AL University of South Alabama, Series 1999,
(a) 11/15/18 $ 2,500,000 $ 1,017,800
CA State Educational Facilities Authority, Santa Clara
University, Series 1996,
5.000% 09/01/15 800,000 885,744
IL Chicago, State University Auxiliary Facilities,
Series 1998,
5.500% 12/01/23 1,085,000 1,146,444
MA State College Building Authority, Series 1999 A,
(a) 05/01/23 2,710,000 854,815
MA State Health & Educational Facilities Authority, Brandeis
University, Series 1998 I,
4.750% 10/01/28 2,550,000 2,361,555
MA State Industrial Finance Agency:
Tabor Academy, Series 1998,
5.400% 12/01/28 1,000,000 971,100
Tufts University, Series 1998 H,
4.750% 02/15/28 1,500,000 1,391,550
MN Univeristy of Minnesota:
Series 1996 A,
5.750% 07/01/14 500,000 555,975
Series 1999 A,
5.500% 07/01/21 2,000,000 2,144,680
MO State Health & Educational Facilities Authority Central
Institute for the Deaf, Series 1999,
5.850% 01/01/22 600,000 629,646
NY St. Lawrence County Industrial Development Agency, St
Lawrence University, Series 1998 A,
5.500% 07/01/13 1,465,000 1,574,714
TX Texas Tech University,
Series 1999,
5.000% 02/15/29 2,500,000 2,416,850
------------
15,950,873
------------
STUDENT LOAN - 0.9%
NE Nebhelp, Inc., Series 1993 A-6,
6.450% 06/01/18 1,500,000 1,667,115
------------
----------------------------------------------------------------------------------------------------
HEALTHCARE - 13.4%
HOSPITALS - 10.8%
AZ Maricopa County Industrial Development Authority:
Mayo Clinic Hospital, Series 1998,
5.250% 11/15/37 2,000,000 2,001,440
National Health Facilities II Project,
5.100% 01/01/33 2,500,000 2,456,250
FL Orange County Health Facilities Authority, Orlando
Regional Healthcare System:
Series 1996 C,
6.250% 10/01/13 1,740,000 2,034,391
Series 1996 C,
6.250% 10/01/13 720,000 830,297
Series 1999,
6.000% 10/01/26 175,000 180,625
IL Southwestern Illinois Development Authority, Anderson
Hospital,
Series 1999,
5.375% 08/15/15 380,000 356,296
IL State Development Finance Authority, Adventist Health
System, Series 1999,
5.500% 11/15/20 1,000,000 957,990
IL State Health Facilities Authority, Swedish American
Hospital, Series 2000,
6.875% 11/15/30 500,000 537,185
LA Jefferson Parish Hospital Service District 2, Series 1998,
5.250% 07/01/12 1,000,000 1,052,870
LA State Public Facilities Authority, Touro Infirmary,
Series 1999,
5.625% 08/15/29 500,000 490,325
MA State Health & Educational Facilities Authority, South
Shore Hospital, Series 1999 F,
5.750% 07/01/29 1,000,000 1,000,670
MD State Health & Educational Facilities Authority, University
of Maryland Medical System,
6.750% 07/01/30 250,000 273,790
MI Flint Hospital Building Authority, Hurley Medical Center,
Series 1998 B,
5.375% 07/01/28 500,000 436,040
NC State Medical Care Commission, Gaston Health Care, Series
1998,
5.000% 02/15/29 3,000,000 2,797,350
NH Higher Educational and Health Facilities, Catholic Medical
Center, Series 1989,
6.000% 07/01/17 2,500,000 2,500,250
NV Henderson, Catholic Healthcare West, Series 1999 A,
6.750% 07/01/20 500,000 524,775
TN Metropolitan Government, Nashville & Davidson Counties,
Meharry Medical College,
Series 1996,
6.000% 12/01/16 1,575,000 1,775,482
------------
20,206,026
------------
INTERMEDIATE CARE FACILITIES - 0.2%
IL State Development Finance Authority, Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 480,000 420,600
------------
NURSING HOMES - 2.4%
CO Health Care Facilities Authority, Pioneer Health Care,
Series 1989,
10.500% 05/01/19 1,655,000 1,634,312
DE State Economic Development Authority, Churchman Village
Project, Series A,
10.000% 03/01/21 935,000 1,041,356
FL Escambia County, Beverly Enterprises-Florida, Inc.,
Series 1985,
9.800% 06/01/11 155,000 158,487
PA Chester County Industrial Development, Pennsylvania Nursing
Home, Inc., Series 1989,
10.125% 05/01/19 (b) 1,204,000 662,200
PA Delaware County Authority, Main Line and Haverford Nursing,
Series 1992,
9.000% 08/01/22 575,000 517,500
WI State Health & Educational Facilities Authority, Metro
Health Foundation, Inc., Series 1993,
10.000% 11/01/22 (b) 1,300,000 494,000
------------
4,507,855
------------
----------------------------------------------------------------------------------------------------
HOUSING - 2.8%
ASSISTED LIVING/SENIOR - 0.3%
TX Bell County Health Facilities Development Corp., Care
Institutions, Inc.,
9.000% 11/01/24 485,000 506,825
------------
MULTI-FAMILY - 1.9%
FL Broward County Housing Finance Authority, Chaves Lake
Apartment Project, Series 2000,
7.500% 07/01/40 500,000 511,875
FL Clay County Housing Finance Authority, Madison Commons
Apartments, Series 2000 A,
7.450% 07/01/40 250,000 255,938
MN White Bear Lake, Birch Lake Townhome Project:
Series 1989 A,
10.250% 07/15/19 775,000 800,188
Series 1989 B,
(a) 07/15/19 (h) 690,000 300,291
Resolution Trust Corp., Pass Through Certificates,
Series 1993 A,
8.750% 12/01/16 (c) 1,731,223 1,740,277
------------
3,608,569
------------
SINGLE FAMILY - 0.6%
CO State Housing Finance Authority, Series 2000 B2,
7.250% 10/01/31 480,000 541,618
IL Chicago, Series 2000 A,
7.150% 09/01/31 415,000 472,365
LA Louisiana Housing Finance Agency, Residual Lien Mortgage,
Series 1992,
7.375% 09/01/13 70,000 70,948
------------
1,084,931
------------
----------------------------------------------------------------------------------------------------
INDUSTRIAL - 1.2%
FOREST PRODUCTS - 0.6%
MN International Falls, Boise Cascades Corp., Series 1999,
6.850% 12/01/29 1,000,000 1,032,490
------------
MANUFACTURING - 0.6%
MN Brooklyn Park, TL Systems Corp., Series 1991,
10.000% 09/01/16 835,000 920,587
MO State Development Finance Board, Proctor & Gamble Co.,
Series 1999,
5.200% 03/15/29 250,000 246,395
------------
1,166,982
------------
----------------------------------------------------------------------------------------------------
OTHER - 5.5%
OTHER - 0.4%
AR State Development Finance Authority, Tobacco Settlement,
Biosciences Institute College,
5.125% 12/01/28 400,000 386,056
SC Tobacco Settlement Revenue Management Authority,
Series 2001 B,
6.375% 05/15/28 400,000 421,040
------------
807,096
------------
POOL/BOND BANK - 0.7%
FL State Municipal Loan Council, Series 2000 A,
(a) 04/01/21 520,000 184,543
KS State Development Finance Authority, Water Pollution
Control,
5.500% 11/01/17 1,125,000 1,208,002
------------
1,392,545
------------
REFUNDED/ESCROWED (D) - 4.4%
CA Contra Costa County Public Financing Authority,
Series 1992 A,
7.100% 08/01/22 635,000 669,252
CA San Joaquin Hills Transportation Corridor Agency, Series
1993,
(a) 01/01/23 5,250,000 1,735,178
CA State, Series 1995,
5.750% 03/01/19 1,930,000 2,128,906
CO Denver City and County Airport, Series B,
7.250% 11/15/23 205,000 218,737
DE State Economic Development Authority, Riverside Hospital,
Series 1992 A,
9.500% 01/01/22 220,000 256,199
MN Mille Lacs Capital Improvement Authority, Mille Lacs Band
of Chippewa, Series 1992 A,
9.250% 11/01/12 225,000 245,115
NC Lincoln County, Lincoln County Hospital,
9.000% 05/01/07 120,000 138,900
NC State Municipal Power Agency, Catawba No. 1, Series 1986,
5.000% 01/02/20 1,670,000 1,695,835
TN Shelby County, Health, Education, & Housing Facilities
Board, Open Arms Development Center:
Series 1992 A,
9.750% 08/01/19 435,000 558,975
Series 1992 C,
9.750% 08/01/19 435,000 558,975
------------
8,206,072
------------
----------------------------------------------------------------------------------------------------
OTHER REVENUE - 0.5%
RECREATION - 0.5%
DC District of Columbia, Smithsonian Institute, Series 1997,
5.000% 02/01/28 1,000,000 964,440
------------
----------------------------------------------------------------------------------------------------
RESOURCE RECOVERY - 1.3%
DISPOSAL - 1.3%
IL Development Finance Authority, Waste Management, Inc.,
Series 1997,
5.050% 01/01/10 500,000 497,030
MA State Industrial Finance Agency, Peabody Monofill
Associates, Inc., Ogden Hill Project:
Series 1995,
9.000% 09/01/05 145,000 153,337
Series 1998 A,
5.450% 12/01/12 1,250,000 1,243,062
MI State Strategic Fund, United Waste Systems, Inc.,
Series 1995,
5.200% 04/01/10 500,000 495,300
------------
2,388,729
------------
----------------------------------------------------------------------------------------------------
TAX-BACKED - 38.8%
LOCAL APPROPRIATED - 1.6%
MN Hibbing Economic Development Authority,
6.400% 02/01/12 335,000 341,281
MO St. Louis Industrial Development Authority, St. Louis
Convention Center, Series 2000,
(a) 07/15/18 300,000 125,100
TX Houston Independent School District, Public Faclities
Corp., Series 1998 A,
(a) 09/15/13 2,500,000 1,409,400
TX Houston, Series 2000,
6.400% 06/01/27 1,000,000 1,109,400
------------
2,985,181
------------
LOCAL GENERAL OBLIGATIONS - 17.6%
AK North Slope, Boro, Series A,
(a) 06/30/12 2,000,000 1,206,900
CA Carlsbad Unified School District,
(a) 05/01/22 2,730,000 912,393
CA Las Virgenes Unified School District, Series C,
(a) 11/01/22 1,210,000 393,686
CA Los Angeles County,
Series 1999 A,
(a) 08/01/21 2,135,000 744,837
CA West Contra Costa Unified School District, Series B,
6.000% 08/01/24 250,000 288,500
CO El Paso County School District No. 11, Colorado Springs,
Series 1996,
7.125% 12/01/19 1,870,000 2,357,415
CO Highlands Ranch Metropolitan District, Series 1996,
6.500% 06/15/11 1,375,000 1,607,334
IL Chicago:
Series 1995 A-2,
6.250% 01/01/14 1,480,000 1,702,918
Series 1999,
5.500% 01/01/23 1,000,000 1,060,610
Series 2001 A,
(a) 01/01/15 3,000,000 1,544,160
IL Chicago Board of Education:
Series 1998 B-1:
(a) 12/01/11 1,000,000 628,940
(a) 12/01/21 2,000,000 678,240
IL St. Clair County, Series 1999,
(a) 10/01/16 2,000,000 935,180
IL St. Clair County Public Building Commision,
(a) 12/01/13 2,000,000 1,118,620
IL Will County School District No. 17, Series 2001,
8.500% 12/01/15 1,400,000 1,918,490
MI Chippewa Valley Schools,
Series 1998,
4.750% 05/01/23 2,000,000 1,878,080
MI Garden City School District,
Series 2001,
5.500% 05/01/16 325,000 341,812
MI St. Johns Public School,
Series 1998,
5.100% 05/01/25 1,000,000 1,010,900
NY New York City, Series 1997 A,
7.000% 08/01/07 2,000,000 2,311,400
OH Olmsted Falls School District, Series 1999:
5.500% 12/01/01 360,000 360,763
5.500% 12/01/02 380,000 390,347
PA Erie, Series 2001 C,
(a) 11/15/26 2,000,000 511,320
TX Brenham, Certificates Obligation,
5.375% 08/15/16 1,040,000 1,080,165
TX Houston Independent School District, Series 1999 A,
4.750% 02/15/22 5,000,000 4,684,600
TX Hurst Euless Bedford Independent School District,
Series 1998,
4.500% 08/15/25 2,500,000 2,214,700
TX La Joya Independent School District, Series 1998,
5.500% 02/15/12 1,000,000 1,050,810
------------
32,933,120
------------
SPECIAL NON-PROPERTY TAX - 4.8%
CA San Diego Redevelopment Agency, Capital Appreciation Tax
Allocation Center,
(a) 09/01/21 3,725,000 1,292,761
CT State Special Tax Obligation Infastructure, Series A,
5.375% 10/01/16 500,000 527,515
FL Tampa Sports Authority, Tampa Bay Arena Project, Series
1995,
5.750% 10/01/25 1,000,000 1,108,160
NM Dona Ana County, Series 1998,
5.500% 06/01/15 1,000,000 1,086,620
NY New York City Transitional Finance Authority,
Series 1998 C,
4.750% 05/01/23 2,000,000 1,869,780
NY State Local Government Assistance Corp., Series 1993 E,
5.000% 04/01/21 3,000,000 3,010,890
------------
8,895,726
------------
SPECIAL PROPERTY TAX - 0.3%
CA Contra Costa County Public Financing Authority,
Series 1992 A,
7.100% 08/01/22 365,000 375,559
FL Indigo Community Development District, Series 1999 B,
6.400% 05/01/06 195,000 198,656
FL Lexington Oaks Community Development District,
Series 1998 B,
5.500% 05/01/05 20,000 20,050
------------
594,265
------------
STATE APPROPRIATED - 8.2%
IN State Office Building Commission, Women's Prison, Series B,
6.250% 07/01/16 2,820,000 3,258,115
KY State Property & Buildings Commission, Project No. 73,
5.500% 11/01/14 455,000 488,051
NY New York State Dormitory Authority:
Consolidation City University,
Series 1993 A,
5.750% 07/01/18 5,000,000 5,496,500
Mental Health Services:
Series 1998 C,
5.000% 02/15/11 1,485,000 1,545,737
Series 2000 C,
5.750% 05/15/17 1,000,000 1,109,770
NY State Urban Development Corp.,
5.600% 04/01/15 1,000,000 1,091,480
UT State Building Ownership Authority, Facilities Master
Lease, Series 1998 C,
5.500% 05/15/19 1,750,000 1,865,833
WV State Building Commission,
Series 1998 A,
5.375% 07/01/18 500,000 526,240
------------
15,381,726
------------
STATE GENERAL OBLIGATIONS - 6.3%
CA State, Series 1995,
5.750% 03/01/19 70,000 72,467
DC District of Columbia,
Series 1999 A,
5.375% 06/01/18 1,250,000 1,283,212
MA State, Series 1998 C,
5.250% 08/01/17 1,000,000 1,051,350
NJ New Jersey General Obligation,
5.250% 07/01/16 2,000,000 2,121,620
PR Commonwealth of Puerto Rico:
Aqueduct & Sewer Authority:
6.250% 07/01/12 1,000,000 1,170,900
6.250% 07/01/13 750,000 881,573
Series 2001,
5.500% 07/01/17 1,000,000 1,094,620
TX State, Series 1999 ABC,
5.500% 08/01/35 2,000,000 2,047,800
WA State, Series 1998 A,
4.500% 07/01/23 2,340,000 2,116,507
------------
11,840,049
------------
----------------------------------------------------------------------------------------------------
TRANSPORTATION - 12.3%
AIR TRANSPORTATION - 1.4%
IL Chicago O'Hare International Airport, United Airlines,
Inc.,
Series 2000 A,
6.750% 11/01/11 800,000 538,992
KY Kenton County Airport Board, Delta Airlines, Inc., Series
1992 A,
7.500% 02/01/20 200,000 194,380
MN Minneaplois & St. Paul Metropolitan Airports Commission,
Northwest Airlines, Series 2001 A,
7.000% 04/01/25 350,000 275,188
NC Charlotte, US Airways, Inc.:
Series 1998,
5.600% 07/01/27 500,000 208,750
Series 2000,
7.750% 02/01/28 500,000 218,750
NY Port Authority of New York & New Jersey, JFK International
Air Terminal, Series 6,
6.250% 12/01/08 1,000,000 1,113,640
------------
2,549,700
------------
AIRPORTS - 3.0%
CO Denver City & County Airport:
Series 1997 E,
5.250% 11/15/23 110,000 110,210
Series B,
7.250% 11/15/23 795,000 837,055
MA State Port Authority:
Series 1998 D,
5.000% 07/01/28 2,500,000 2,398,750
Series 1999,
9.790% 07/01/29 (c) 1,000,000 1,032,410
MN Minneapolis-St. Paul Metropolitan Aiports Commission,
Series 1998 13,
5.250% 01/01/13 1,000,000 1,039,360
MO St. Louis Airport, Airport Development Program, Series A,
5.000% 07/01/26 250,000 242,420
------------
5,660,205
------------
PORTS - 1.0%
FL Gulf Breeze, Series 1998 B,
4.500% 10/01/27 2,000,000 1,784,640
------------
TOLL FACILITIES - 4.8%
CA Foothill/Eastern Transportation Corridor Agency, Series
1995 A,
5.000% 01/01/35 1,000,000 949,940
CA San Joaquin Hills Transportation Corridor Agency, Series A,
(a) 01/15/15 2,000,000 1,047,340
CO State Public Highway Authority, E-470, Series B,
(a) 09/01/11 2,000,000 1,276,200
MA State Turnpike Authority,
Series 1999 A:
4.750% 01/01/34 1,850,000 1,683,204
5.000% 01/01/39 2,000,000 1,909,200
NH State Turnpike Systems,
Series 1991 C,
IFRN (variable rate),
11.410% 11/01/17 1,000,000 1,265,000
PA State Turnpike Commission,
Oil Franchise Tax Revenue,
Series 1998 A,
4.750% 12/01/27 1,000,000 929,640
------------
9,060,524
------------
TRANSPORTATION - 2.1%
CA San Mateo County Transportation District, Series 1998 A,
4.500% 06/01/18 1,000,000 962,760
IL Regional Transportation Authority, Series C,
7.750% 06/01/20 1,000,000 1,333,830
NV State Department of Business & Industry, Las Vegas Monorail
Project, Series 2000:
7.375% 01/01/40 250,000 253,125
7.380% 01/20/30 250,000 254,062
OH Toledo-Lucas County Port Authority, CSX Transportation,
Inc., Series 1992,
6.450% 12/15/21 1,000,000 1,071,460
------------
3,875,237
------------
UTILITY - 13.5%
INDEPENDENT POWER PRODUCER - 0.6%
MI Midland County Economic Development Corp., Series 2000,
6.875% 07/23/09 500,000 521,250
NY New York City Industrial Development Agency, Brooklyn Navy
Yard Partners, Series 1997,
5.650% 10/01/28 200,000 195,128
PR Commonwealth of Puerto Rico Industrial, Educational,
Medical & Environmental Cogeneration Facilities, AES
Project, Series 2000,
6.625% 06/01/26 325,000 352,768
------------
1,069,146
------------
INVESTOR OWNED - 5.1%
IN Petersburg, Indiana Power & Light Co., Series 1993 B,
5.400% 08/01/17 3,000,000 3,182,820
MI State Strategic Fund, Detroit Edison Co., Series 1998 A,
5.550% 09/01/29 3,000,000 3,056,730
MS State Business Finance Corp., Systems Energy Resouces
Project, Series 1998,
5.875% 04/01/22 1,000,000 977,500
TX Brazos River Authority, Pollution Control,
5.750% 05/01/36 500,000 499,600
TX Matagorda County Navigation District No.1, Houston Light &
Power Co., Series 1997,
5.125% 11/01/28 2,000,000 1,941,940
------------
9,658,590
------------
JOINT POWER AUTHORITY - 2.4%
IN State Municipal Power Agency, Series B,
6.000% 01/01/12 2,000,000 2,246,180
MA Municipal Wholesale Electric Co., Power Supply System,
Project 6-A,
5.250% 07/01/14 1,000,000 1,044,420
NC State Municipal Power Agency, Catawba Electric No. 1,
Series 1998 A,
5.500% 01/01/15 640,000 689,594
OH Municipal Electricity Generation Agency:
Series 2001,
(a) 02/15/25 1,000,000 283,870
Series 2001,
(a) 02/15/30 1,000,000 214,650
------------
4,478,714
------------
MUNICIPAL ELECTRIC - 1.3%
NC University of North Carolina at Chapel Hill,
(a) 08/01/14 1,000,000 540,210
NE Public Power District,
Series 1998 A,
5.250% 01/01/11 500,000 528,215
TN Metropolitan Government, Nashville & Davidson Counties,
Series 1996 A,
(a) 05/15/09 1,825,000 1,312,412
------------
2,380,837
------------
WATER & SEWER - 4.1%
GA Atlanta, Series 1993,
5.500% 11/01/22 (e) 1,000,000 1,073,830
MA State Water Resources Authority:
Series 1998 A,
4.750% 08/01/27 3,000,000 2,784,030
Series 1998 B,
4.500% 08/01/22 500,000 454,305
MS Five Lakes Utility District,
8.250% 07/15/24 140,000 129,675
NY NYC Municipal Water Finance Authority Water & Sewer System,
Capital Appreciation, Series D,
(a) 06/15/20 4,000,000 1,516,480
WA King County, Series 1999,
5.250% 01/01/30 1,750,000 1,747,358
------------
7,705,678
------------
TOTAL MUNICIPAL BONDS
(cost of $177,630,274) 184,764,486
------------
MUNICIPAL PREFERRED SHARES - 0.3% SHARES
----------------------------------------------------------------------------------------------------
HOUSING - 0.3%
MULTI-FAMILY - 0.3%
Charter Municipal Mortgage Acceptance Co.,
7.600% 11/30/50 (c)
(cost of $500,000) 500,000 533,750
------------
See notes to investment portfolio.
SHORT-TERM OBLIGATION - 0.1% PAR
----------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTE - 0.1% (f)
MN Minneapolis, Series 1996,
1.400% 12/01/06 (cost of $300,000) $ 300,000 300,000
------------
TOTAL INVESTMENTS - 99.1%
(cost of $178,430,274) (g) 185,598,236
------------
OTHER ASSETS & LIABILITIES, NET - 0.9%
1,674,957
------------
NET ASSETS - 100.0% $187,273,193
------------
NOTES TO INVESTMENT PORTFOLIO:
----------------------------------------------------------------------------------------------------
(a) Zero coupon bond.
(b) This issuer is in default of certain debt covenants. Income is not being accrued.
(c) These securities are exempt from registration under Rule 144A of the Securities Act of 1933 and
may be resold in transactions exempt from registration, normally to qualified institutional
buyers. At November 30, 2001, the value of these securities amounted to $3,306,437, which
represented 1.8% of net assets.
(d) The Trust has been informed that each issuer has placed direct obligations of the U.S. Government
in an irrevocable trust, solely for the payment of principal and interest.
(e) This security, or a portion thereof, with a market value of $316,780, is being used to
collateralize open futures contracts.
(f) Variable rate demand notes are considered short-term obligations. Interest rates change
periodically on specified dates. This security is payable on demand and is secured by either
letters of credit or other credit support agreements from banks. The rate listed is as of
November 30, 2001.
(g) Cost for federal income tax purposes is the same.
(h) Accrued interest accumulates in the value of the security and is payable at redemption.
Short futures contracts open at November 30, 2001:
PAR VALUE UNREALIZED
COVERED BY EXPIRATION APPRECIATION
TYPE CONTRACTS MONTH AT 11/30/01
---------------------------------------------------------------------------
Municipal Bond Index $5,700,000 March $118,364
Treasury Bond 6,700,000 March 325,731
--------
$444,095
--------
ACRONYM NAME
-----------------------------------------------------------------------------
IFRN Inverse Floating Rate Note
See notes to financial statements.
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
November 30, 2001
ASSETS:
Investments, at cost $178,430,274
------------
Investments, at value $185,598,236
Cash 42,363
Receivable for:
Investments sold 885,760
Interest 2,924,447
Deferred Trustees' compensation plan 5,580
Futures variation margin 11,094
------------
Total Assets 189,467,480
------------
LIABILITIES:
Payable for:
Investments purchased 1,281,735
Distributions -- common shares 644,504
Distributions -- preferred shares 10,849
Management fee 101,634
Bookkeeping fee 6,425
Trustees' fee 299
Deferred Trustees' fee 5,580
Other liabilities 143,261
------------
Total Liabilities 2,194,287
------------
$187,273,193
------------
COMPOSITION OF NET ASSETS:
Auction Preferred Shares (2,400 shares issued and
outstanding at $25,000 per share) $ 60,000,000
Paid-in capital -- common shares 126,993,094
Undistributed net investment income 44,867
Accumulated net realized loss (7,376,825)
Net unrealized appreciation on:
Investments 7,167,962
Futures contracts 444,095
------------
------------
Net Assets at value including undeclared dividends
applicable to 2,400 preferred shares outstanding $ 60,000,000
------------
Net Assets at value applicable to 11,509,000 common
shares of beneficial interest outstanding $127,273,193
------------
Net asset value per common share $ 11.06
------------
See notes to financial statements.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended November 30, 2001
INVESTMENT INCOME:
Interest $ 10,319,967
------------
EXPENSES:
Management fee 1,219,075
Bookkeeping fee 60,747
Trustees' fee 10,162
Preferred shares remarketing commissions 150,000
Other expenses 197,877
------------
Total Expenses 1,637,861
Custodian earnings credit (609)
------------
Net Expenses 1,637,252
------------
Net Investment Income 8,682,715
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES CONTRACTS:
Net realized gain (loss) on:
Investments 3,192,015
Futures contracts (1,577,962)
------------
Net realized gain 1,614,053
------------
Net change in unrealized appreciation/depreciation on:
Investments 3,388,215
Futures contracts 916,193
------------
Net change in unrealized appreciation/depreciation 4,304,408
------------
Net Gain 5,918,461
------------
Increase in Net Assets from Operations $ 14,601,176
------------
See notes to financial statements.
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
-------------------------------
INCREASE (DECREASE) IN NET ASSETS 2001 2000
-----------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 8,682,715 $ 9,318,843
Net realized gain (loss) on investments and futures
contracts 1,614,053 (4,088,825)
Net change in unrealized appreciation/depreciation
on investments and futures contracts 4,304,408 7,100,950
------------- -------------
Net Increase from Operations 14,601,176 12,330,968
------------- -------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income:
Common Shareholders (6,882,385) (6,951,437)
Preferred Shareholders (1,811,142) (2,489,908)
------------- -------------
Total Distributions Declared to Shareholders (8,693,527) (9,441,345)
------------- -------------
SHARE TRANSACTIONS:
Preferred share offering costs -- (190,094)
------------- -------------
Total Increase in Net Assets 5,907,649 2,699,529
NET ASSETS:
Beginning of period 181,365,544 178,666,015
------------- -------------
End of period (including undistributed net investment
income and overdistributed net investment income of
$44,867 and ($40,955), respectively) $ 187,273,193 $ 181,365,544
------------- -------------
NUMBER OF FUND SHARES:
Common Shares:
Outstanding at
End of period 11,509,000 11,509,000
------------- -------------
Preferred Shares:
Outstanding at
End of period 2,400 2,400
------------- -------------
See notes to financial statements.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
November 30, 2001
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Colonial Investment Grade Municipal Trust (the "Trust"), is a Massachusetts
business trust registered under the Investment Company Act of 1940 (the "Act"),
as amended, as a diversified, closed-end, management investment company. The
Trust's investment objective is to seek as high a level of after- tax total
return as is consistent with prudent risk, by pursuing current income generally
exempt from ordinary federal income tax and opportunities for long-term
appreciation from a portfolio primarily invested in investment grade municipal
bonds. The Trust authorized an unlimited number of common shares of beneficial
interest and 2,400 Auction Preferred Shares ("APS").
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 revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Trust in
the preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
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 are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Trust may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Trust to subsequently invest at less advantageous prices.
FEDERAL INCOME TAXES:
Consistent with the Trust's policy to qualify as a regulated investment company
and to distribute all of its taxable and tax-exempt income, no federal income
tax has been accrued.
At November 30, 2001, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
------------------ -------------------------
2003 $ 172,808
2004 1,454,485
2008 3,464,384
----------
$5,091,677
----------
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM:
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of the security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
Effective December 1, 2001, the Trust will adopt the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and will be required to
amortize premium and discount on all debt securities. Upon the effective date,
this accounting principle change will not have an impact on total net assets,
but will result in a reclassification between cost of securities held and net
unrealized appreciation/depreciation. Management of the Trust believes that the
impact of adopting this principle will not be material to the financial
statements.
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to common and preferred shareholders are recorded on the ex- date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Trust's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
The following reclassifications have been made to the financial statements.
INCREASE (DECREASE)
-----------------------------------------------------------------------
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED
PAID-IN CAPITAL INCOME LOSS
--------------- -------------- ------------
$62,788 $14,724 $(77,512)
These differences are primarily due to market discount reclassification. Net
investment income, net realized gains (losses) and net assets were not affected
by this reclassification.
Distributions to preferred shareholders are recorded daily and are payable at
the end of each dividend period. Each dividend payment period for the APS is
generally seven days. The applicable dividend rate for the APS on November 30,
2001 was 1.60%. For the year ended November 30, 2001, the Trust declared
dividends to Auction Preferred shareholders amounting to $1,811,142 representing
an average APS dividend rate for such period of 3.02%.
NOTE 2. FEE AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Colonial Management Associates, Inc. (the "Advisor") is the investment advisor
of the Trust and furnishes accounting and other services and office facilities
for a monthly fee equal to 0.65% annually of the Trust's average weekly net
assets.
On November 1, 2001, Liberty Financial Companies, Inc., the former parent of the
Advisor, completed the sale of its asset management business, including the
Advisor, to Fleet National Bank ("Fleet"). This transaction resulted in a change
of control of the Advisor and, therefore, an assignment of the Advisor's
investment advisory contract with the Trust to Fleet. The Trust had obtained
approval of a new investment advisory contract by the Trust's Board of Trustees
and trust shareholders, which became effective upon completion of the sale. The
new contract is identical to the prior contract in all material respects except
for its effective and termination dates.
BOOKKEEPING FEE:
The Advisor is responsible for providing pricing and bookkeeping services to the
Trust under a Pricing and Bookkeeping Agreement. Under a separate agreement (the
"Outsourcing Agreement"), the Advisor has delegated those functions to State
Street Bank and Trust Company ("State Street"). The Advisor pays fees to State
Street under the Outsourcing Agreement.
During the period December 1, 2000 to June 30, 2001, the Advisor provided
bookkeeping and pricing services to the Trust for a monthly fee equal to $18,000
annually plus 0.0233% annually of the Trust's average net assets over $50
million. Effective July 1, 2001, under its pricing and bookkeeping agreement
with the Trust, the Advisor receives from the Trust an annual flat fee of
$10,000, paid monthly, and in any month that the Trust's average net assets are
more than $50 million, a monthly fee equal to the average net assets of the
Trust 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.
OTHER:
The Trust pays no compensation to its officers, all of whom are employees of the
Advisor.
The Trust's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Trust's assets.
The Trust has an agreement with its custodian bank under which $609 of custodian
fees were reduced by balance credits applied for the year ended November 30,
2001. The Trust could have invested a portion of the assets utilized in
connection with the expense offset arrangements in an income producing asset if
it had not entered into such agreements.
NOTE 3. PREFERRED SHARE OFFERING
On August 26, 1999, the Trust offered and currently has outstanding 2,400 APS.
The APS are redeemable at the option of the Trust on any dividend payment date
at the redemption price of $25,000 per share, plus an amount equal to any
dividends accumulated on a daily basis unpaid through the redemption date
(whether or not such dividends have been declared). Total proceeds, net of
commissions, of $59,250,000, were received upon completion of the offering.
APS commissions of $750,000 from the offering and costs incurred by the Trust in
connection with the offering of the APS totaling $190,094 and $59,649 for the
fiscal years 2000 and 1999, respectively, were recorded as a reduction of
capital paid in excess of par applicable to common shares.
Under the Act, the Trust is required to maintain asset coverage of at least 200%
with respect to the APS as of the last business day of each month in which any
APS are outstanding.
Additionally, the Trust is required to meet more stringent asset coverage
requirements under the terms of the APS and in accordance with the guidelines
prescribed by the rating agencies. Should these requirements not be met, or
should dividends accrued on the APS not be paid, the Trust may be restricted in
its ability to declare dividends to common shareholders or may be required to
redeem certain of the APS. At November 30, 2001, there were no such restrictions
on the Trust.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the year ended November 30, 2001, purchases and sales of investments,
other than short-term obligations, were $57,275,578 and $57,511,277,
respectively.
Unrealized appreciation (depreciation) at November 30, 2001, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $11,997,281
Gross unrealized depreciation (4,829,319)
-----------
Net unrealized appreciation $ 7,167,962
-----------
OTHER:
The Trust had greater than 10% of its net assets at November 30, 2001, invested
in New York, Texas and Massachusetts, collectively.
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Trust may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Trust may invest in municipal and Treasury bond futures contracts and
purchase and write options on futures. The Trust may invest in these instruments
to hedge against the effects of changes in the value of portfolio securities due
to anticipated changes in interest rates and/or market conditions, for duration
management, or when the transactions are economically appropriate to the
reduction of risk inherent in the management of the Trust and not for trading
purposes. The use of futures contracts and options involves certain risks, which
include (1) imperfect correlation between the price movement of the instruments
and the underlying securities, (2) inability to close out positions due to
different trading hours, or the temporary absence of a liquid market, for either
the instrument or the underlying securities or (3) an inaccurate prediction by
the Advisor of the future direction of interest rates. Any of these risks may
involve amounts exceeding the amount recognized in the Trust's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data throughout each period is as follows
(common shares unless otherwise noted):
PERIOD
YEAR ENDED NOVEMBER 30, ENDED YEAR ENDED DECEMBER 31,
------------------------------- NOVEMBER 30, -------------------------------------------
2001 2000 1999(a) 1998 1997 1996
-------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.55 $ 10.31 $ 11.49 $ 11.43 $ 10.87 $ 11.05
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.75(j) 0.81(b) 0.58 0.60 0.62 0.63
Net realized and
unrealized gain (loss)
on investments and
futures contracts 0.52 0.27 (1.12) 0.07 0.58 (0.19)
-------- -------- -------- -------- -------- --------
Total from Investment
Operations 1.27 1.08 (0.54) 0.67 1.20 0.44
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income to
common shareholders (0.60) (0.60) (0.52) (0.61) (0.64) (0.62)
From net investment income to
preferred shareholders (0.16) (0.22) (0.05) -- -- --
In excess of net
investment income -- -- -- (0.00)(c) -- --
-------- -------- -------- -------- -------- --------
Total Distributions
Declared to
Shareholders (0.76) (0.82) (0.57) (0.61) (0.64) (0.62)
-------- -------- -------- -------- -------- --------
LESS CAPITAL TRANSACTIONS:
Commissions and offering
costs -- preferred shares -- (0.02) (0.07) -- -- --
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD $ 11.06 $ 10.55 $ 10.31 $ 11.49 $ 11.43 $ 10.87
-------- -------- -------- -------- -------- --------
Market price per share --
common shares $ 10.87 $ 8.92 $ 9.06 $ 11.19 $ 10.56 $ 10.13
-------- -------- -------- -------- -------- --------
Total return -- based on
market value --
common shares (d) 29.28% 5.20% (14.64)%(e) 11.94% 10.76% 9.06%
-------- -------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Expenses (f)(g) 1.28% 1.31% 1.03%(h) 0.77% 0.83% 0.88%
Net investment income
(f)(g) 6.80% 7.91% 5.75%(h) 5.24% 5.63% 5.80%
Net investment income
(f)(g) 5.38%(i) 5.80%(i) 5.26%(h)(i) 5.24% 5.63% 5.80%
Portfolio turnover rate 31% 23% 25%(e) 24% 21% 20%
Net assets, at end of
period (000's) --
common shares $127,273 $121,366 $118,660 $132,242 $131,503 $ 125,125
(a) The Fund changed its fiscal year end from December 31 to November 30.
(b) The per share net investment income amount does not reflect the period's reclassification of differences between book and tax
basis net investment income.
(c) Rounds to less than $0.01 per share.
(d) Total return at market value assuming all distributions reinvested at prices obtained by the Dividend Reinvestment Plan.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had no impact.
(g) Ratios reflect average net assets available to common shares only.
(h) Annualized.
(i) Ratios reflect reduction for dividend payments to preferred shareholders.
(j) Per share data was calculated using average shares outstanding during the period.
ASSET COVERAGE REQUIREMENTS
INVOLUNTARY AVERAGE
LIQUIDATING MARKET
TOTAL AMOUNT ASSET COVERAGE PREFERENCE VALUE
NOVEMBER 30, OUTSTANDING PER SHARE PER SHARE PER SHARE
------------------------------------------------------------------------------------------------------------------------
2001 $60,000,000 $78,030 $25,005 $25,000
2000 60,000,000 75,569 25,009 25,000
1999* 60,000,000 74,444 25,003 25,000
* On August 26, 1999, the Fund began offering Auction Preferred Shares.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data throughout each period is as follows
(common shares unless otherwise noted):
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
1995 1994 1993 1992
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.93 $ 11.05 $ 10.96 $ 11.09
------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.64 0.67 0.79 0.85
Net realized and unrealized gain (loss) on
investments and futures contracts 1.11 (1.12) 0.09 (0.13)
------- -------- -------- --------
Total from Investment Operations 1.75 (0.45) 0.88 0.72
------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.63) (0.67) (0.79) (0.85)
------- -------- -------- --------
Total Distributions Declared to
Shareholders (0.63) (0.67) (0.79) (0.85)
------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 11.05 $ 9.93 $ 11.05 $ 10.96
------- -------- -------- --------
Market price per share -- common shares $ 9.88 $ 9.25 $ 10.75 $ 11.75
------- -------- -------- --------
Total return -- based on market value (a) 13.87% (8.12)% (2.16)% 7.43%
------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Expenses (b) 1.08%(b) 0.94% 0.87% 0.86%
Net investment income (b) 6.08%(b) 6.46% 7.08% 7.76%
Portfolio turnover rate 37% 34% 35% 18%
Net assets, at end of period (000's) --
common shares $127,118 $114,260 $127,213 $126,169
(a) Total return at market value assuming all distributions reinvested at prices obtained by the Dividend Reinvestment Plan.
(b) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had no impact.
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE TRUSTEES OF COLONIAL INVESTMENT GRADE MUNICIPAL
TRUST
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, 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 Colonial Investment Grade Municipal
Trust (the "Trust") at November 30, 2001, 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 the financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust'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 portfolio positions
at November 30, 2001 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 10, 2002
--------------------------------------------------------------------------------
UNAUDITED INFORMATION
--------------------------------------------------------------------------------
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS
On September 26, 2001, a Annual Meeting of Shareholders of the Colonial
Investment Grade Municipal Trust was held to conduct a vote for or against the
approval of the following items listed on the Trust's Proxy Statement for said
Meeting. On July 16, 2001, the record date for the Meeting, the Trust had
11,509,000 common shares outstanding. The votes cast were as follows:
PROPOSAL 1: % OF SHARES TO % OF SHARES TO
TO APPROVE A NEW INVESTMENT TOTAL OUTSTANDING TOTAL SHARES
ADVISORY AGREEMENT: SHARES SHARES VOTED
--------------------------------------------------------------------------------
For 10,333,571.983 89.79% 96.56%
Against 157,283.318 1.37% 1.47%
Abstain 210,398.586 1.83% 1.97%
PROPOSAL 2:
ELECTION OF DIRECTORS: FOR WITHHELD
--------------------------------------------------------------------------------
Douglas A. Hacker 10,571,754.826 129,499.061
Janet Langford Kelly 10,568,163.106 133,090.781
Richard W. Lowry 10,570,916.200 130,337.687
William E. Mayer 10,571,979.826 129,274.061
Charles R. Nelson 10,573,269.942 127,983.945
John J. Neuhauser 10,569,810.200 131,443.687
Joseph R. Palombo 10,571,754.826 129,499.061
Thomas C. Theobald 10,573,085.826 128,168.061
Anne-Lee Verville 10,569,137.101 132,116.786
On July 16, 2001, the record date for the Meeting, the Fund had 2,400
preferred shares outstanding. The votes cast were as follows:
PROPOSAL 1: % OF SHARES TO % OF SHARES TO
TO APPROVE A NEW INVESTMENT TOTAL OUTSTANDING TOTAL SHARES
ADVISORY AGREEMENT: SHARES SHARES VOTED
--------------------------------------------------------------------------------
For 2,192 91.33% 99.59%
Against 9 0.38% 0.41%
Abstain 0 0.00% 0.00%
PROPOSAL 2:
ELECTION OF DIRECTORS: FOR WITHHELD
--------------------------------------------------------------------------------
Douglas A. Hacker 2,194 7
Janet Langford Kelly 2,194 7
Richard W. Lowry 2,194 7
Salvatore Macera 2,194 7
William E. Mayer 2,194 7
Charles R. Nelson 2,194 7
John J. Neuhauser 2,194 7
Joseph R. Palombo 2,194 7
Thomas E. Stitzel 2,194 7
Thomas C. Theobald 2,194 7
Anne-Lee Verville 2,194 7
--------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
99.35% of the distributions from net investment income will be treated as exempt
income for federal income tax purposes.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
As a shareholder in the Trust you are eligible to participate in the Dividend
Reinvestment Plan.
The Trust generally distributes net investment income monthly and capital gains
annually. Under the Trust's Dividend Reinvestment Plan (the "Plan") all
distributions will be reinvested automatically in additional shares of the
Trust, unless the shareholder elects to receive cash or the shares are held in
broker or nominee name and a reinvestment service is not provided by the broker
or nominee. All cash distributions will be mailed by check directly to the
record holder by the dividend paying agent.
If the market price of the shares on the distribution payment date is equal to
or greater than the net asset value, Plan participants will be issued shares at
the higher of net asset value or 95% of the market price. The aggregate market
value of the shares may constitute income to shareholders for federal income tax
purposes. However, if the market price of the shares is less than the net asset
value, shares will be bought as soon as practicable (but no more than 30 days
after the distribution, except as may be required to comply with federal
securities laws) in the open market for the accounts of Plan participants. If,
during this purchase period, the market price surpasses the net asset value, the
average per share price paid may exceed the net asset value of the shares,
resulting in the acquisition of fewer shares than if the distribution had been
in newly-issued shares.
All Plan accounts receive written confirmations of all transactions. Shares
purchased under the Plan are held in uncertificated form. Each shareholder's
proxy includes shares purchased pursuant to the Plan. The automatic reinvestment
of distributions does not relieve participants of any income tax payable on the
distributions.
Fees and expenses of the Plan other than brokerage charges are incurred on
shares issued directly by the Trust. Participants will bear a pro-rata share of
brokerage charges incurred on open market purchases.
A Plan participant may terminate his or her participation by written notice to
the Plan agent. The Plan may be amended or terminated on 30 days written notice
to the Plan participants. All correspondence concerning the Plan should be
directed to State Street Bank and Trust Company, the Plan agent, by mail at P.O.
Box 8200, Boston, MA 02266-8200 or by phone at 1-800-426-5523.
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TRANSFER AGENT
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Investment Grade Municipal Trust is:
EquiServe Trust Company, N.A.
150 Royall Street
Canton, MA 02021
1-800-730-6001
The Colonial Investment Grade Municipal Trust mails one shareholder report to
each shareholder address. If you would like more than one report, please call
1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Investment Grade
Municipal Trust.
TRUSTEES
DOUGLAS A. HACKER
President of UAL Loyalty Services and Executive Vice President of United
Airlines (formerly Executive Vice President, Senior Vice President and Chief
Financial Officer of UAL, Inc.)
JANET LANGFORD KELLY
Executive Vice President--Corporate Development and Administration, General
Counsel and Secretary, Kellogg Company (formerly Senior Vice President,
Secretary and General Counsel, Sara Lee Corporation)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President and Director of Itek Corp.)
WILLIAM E. MAYER
Managing Partner, Park Avenue Equity Partners (formerly Founding Partner,
Development Capital LLC; Dean and Professor, College of Business and Management,
University of Maryland)
CHARLES R. NELSON
Van Voorhis Professor, Department of Economics, University of Washington;
consultant on econometric and statistical matters (formerly Department Chairman
and Director of the Institute for Economic Research)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
JOSEPH R. PALOMBO
Chief Operating Officer, Fleet Asset Management; Executive Vice President and
Director of Colonial Management Associates, Inc. and Stein Roe & Farnham
Incorporated; Executive Vice President and Chief Administrative Officer of
Liberty Funds Group LLC (formerly Chief Operations Officer, Mutual Funds,
Liberty Financial Companies, Inc.; Vice President of Liberty Mutual Funds, Stein
Roe Mutual Funds and All-Star Funds, and Chief Operating Officer, Putnam Mutual
Funds)
THOMAS E. STITZEL
Business Consultant and Chartered Financial Analyst (formerly Professor of
Finance, College of Business, Boise State University)
THOMAS C. THEOBALD
Managing Director, William Blair Capital Partners (formerly Chief Executive
Officer and Chairman of the Board of Directors, Continental Bank Corporation)
ANNE-LEE VERVILLE
Chairman of the Board of Directors, Enesco Group, Inc. and author and speaker on
educational systems needs (formerly General Manager, Global Education Industry,
and President, Applications Solutions Division, IBM Corporation)
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COLONIAL INVESTMENT GRADE MUNICIPAL TRUST ANNUAL REPORT
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[logo] L I B E R T Y
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F U N D S
Liberty Funds Distributor, Inc. (C)2001
One Financial Center, Boston, MA 02111-2621, 800-426-3750
www.libertyfunds.com
130-02/216I-1201 (1/02) 01/2491