UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-9539
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Colonial New York Insured Municipal Fund
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(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: 11/30/2004
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Date of reporting period: 05/31/2004
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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.
COLONIAL NEW YORK INSURED MUNICIPAL FUND
[PHOTO OF BRIDGE]
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
SEMIANNUAL REPORT
MAY 31, 2004
PRESIDENT'S MESSAGE
July 21, 2004
Dear Shareholder:
We are pleased to let you know that FleetBoston Financial Corporation and Bank
of America Corporation have merged, effective April 1, 2004. As a result of the
merger, Columbia Management Group and your Colonial New York Insured Municipal
Fund became part of the Bank of America family of companies. Looking ahead, we
believe this merger will be a real benefit to our shareholders. Preserving and
leveraging our strengths, the combined organization intends to deliver
additional research and management capabilities, as well as new products. There
are no immediate changes planned for fund names, product lines, or customer
service contacts.
As you might know, on March 15, 2004, FleetBoston Financial announced an
agreement in principle with the staff of the Securities and Exchange Commission
("SEC") and the New York Attorney General ("NYAG")to settle charges involving
market timing in Columbia Management mutual funds. (You may also know that Bank
of America came to a similar settlement in principle at the same time.) The
agreement requires the final approval of the SEC and the NYAG. This settlement
in principle reflects our strong wish to put this regrettable situation behind
us. Columbia Management has taken and will continue to take steps to strengthen
policies, procedures and oversight to curb frequent trading of Columbia open-end
fund shares.
Both your fund's trustees and Columbia Management are committed to serving the
interests of our shareholders, and we will continue to work hard to help you
achieve your financial goals.
As always, thank you for choosing Colonial New York Insured Municipal Fund, and
for giving us the opportunity to help you build a strong financial future.
Sincerely,
/s/ Thomas C. Theobald /s/ J. Kevin Connaughton
Thomas C. Theobald J. Kevin Connaughton
Chairman, Board of Trustees President
J. Kevin Connaughton was named president of Colonial New York Insured Municipal
Fund on February 27, 2004.
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
PORTFOLIO MANAGER'S REPORT
[SIDEBAR DATA]:
PRICE PER SHARE AS OF 05/31/04 ($)
Net asset value 15.11
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Market price 13.85
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SIX-MONTH (CUMULATIVE) TOTAL
RETURN AS OF 05/31/04 (%)
Net asset value -1.82
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Market price -8.60
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Lipper New York Insured
Municipal Debt Funds
Category average -1.78
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All results shown assume reinvestment of distributions.
DISTRIBUTIONS DECLARED
PER COMMON SHARE
12/01/03-05/31/04 ($)
0.50
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A portion of the fund's income may be subject to the alternative minimum tax.
The fund 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 Fund's
ordinary income, and any market discount is taxable when distributed.
TOP 5 SECTORS AS OF 05/31/04 (%)
Education 17.9
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Refunded/escrowed 15.5
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Hospitals 9.8
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Airports 7.8
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Special non-property tax 7.4
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QUALITY BREAKDOWN
AS OF 05/31/04 (%)
AAA 87.3
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AA 5.8
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A 1.5
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BBB 2.4
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BB 0.3
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CCC 0.2
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Non-rated 2.5
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Sector breakdown is calculated as a percentage of net assets (including auction
preferred shares). Quality breakdown is calculated as a percentage of total
investments. 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 Ratings Ltd.
Because the fund is actively managed, there is no guarantee that the fund will
continue to invest in these sectors or maintain this quality breakdown in the
future.
For the six-month period ended May 31, 2004, Colonial New York Insured Municipal
Fund returned negative 1.82% based on investment at net asset value. In a period
that was generally unfavorable to all bond sectors, the fund's return was in
line with the average return of the fund's peer group, the Lipper New York
Insured Municipal Debt Funds Category, which was negative 1.78%.1
The fund's return was hampered by its large exposure to bonds maturing in 15 to
20 years. As interest rates rose in the spring, these bonds underperformed their
shorter-maturity counterparts. Rising rates also hurt the fund's position in
non-callable bonds, including zero-coupon bonds, most of which have a maturity
of 15 years or longer. Zero coupon bonds are also more sensitive to changes in
interest rates.
For the six-month period ended May 31, 2004, the fund had a return of negative
8.60%, based on its market price, as the discount to net asset value increased.
Fears that short-term interest rates would rise and hurt the fund's high
dividend yield put pressure on the stock's price. In addition, during the
period, the fund was trading at a reasonably large premium which may have
prompted holders to sell and capture some of that premium.
FUND MAINTAINED COMPETITIVE YIELD
We maintained a competitive yield for the fund because we did not buy many bonds
when interest rates were substantially lower. The fund also benefited from its
position in high-yield bonds. These bonds tend to be more sensitive to economic
activity and less sensitive to changes in interest rates. As a result, they held
up better than other types of bonds when interest rates rose. In addition, they
provided the fund with higher income than higher-quality bonds.
Leveraged positions also added to the fund's income during the period as
short-term rates remained low. We have, in effect, "borrowed against" the fund's
investment positions by issuing preferred shares, which pay out a short-term
variable rate. When those preferred shares were issued in 1999, we invested the
proceeds in bonds with longer maturities. During this reporting period, the
payout rate of preferred shares was lower than the yield the fund earned from
those longer-maturity bonds and that added to the fund's income. However, the
use of leverage also increases the likelihood of share price volatility and
market risk.
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.
1
PORTFOLIO MANAGER'S REPORT (CONTINUED)
NEW YORK STANDS TO BENEFIT FROM AN IMPROVING ECONOMY, BUT STILL FACES CHALLENGES
Although the state of New York ended its last fiscal year with a $345 million
surplus, a major part of this surplus was the product of non-recurring items. Of
the spending cuts proposed by the governor for the next fiscal year, the vast
majority are one-time, non-recurring items. As a result, New York still faces
significant challenges. While the state should continue to benefit from an
improving economy, its budget problems and heavy debt load leave it with an
uncertain future.
Against this backdrop, we plan to focus on bonds with dedicated revenue streams
that continue to offer good value and tend to be less affected by the state's
fiscal problems. For example, we expect essential services bonds, such as those
issued by water and sewer authorities, to continue to make up an important part
of the portfolio. Along the same lines, we will most likely continue to avoid
issues that depend on state appropriations.
/s/ Kimberly A. Campbell
Kimberly Campbell has managed the Colonial New York Insured Municipal Fund since
October 2003. During the period March 2004 to April 2004, Ms. Campbell was on a
leave of absence. In addition to serving as portfolio manager of the fund, Ms.
Campbell was chief trader for municipal investments of Columbia Management
Advisors, Inc. or its predecessors since 1995.
Past performance is no guarantee of future investment results. Current
performance may be higher or lower than the performance data quoted.
Tax-exempt investing offers current tax-free income, but it also involves
certain risks. The value of the fund shares will be affected by interest rate
changes and the creditworthiness of issues held in the fund. Investing in high
yield securities offers the potential for high current income and attractive
total return, but involves certain risks. Lower-rated bond risks include default
of the issuer and rising interest rates.
Single-state municipal bond funds pose additional risks due to limited
geographical diversification. Interest income from certain tax-exempt bonds may
be subject to the federal alternative minimum tax for individuals and
corporations.
2
INVESTMENT PORTFOLIO
May 31, 2004 (New York unless otherwise stated) (Unaudited)
MUNICIPAL BONDS - 98.3% PAR ($) VALUE ($)
---------------------------------------------------------
EDUCATION - 17.9%
Niagara County Industrial Development
Agency, Niagara University,
Series 2001 A,
5.350% 11/01/23 1,000,000 1,025,300
Schenectady Industrial Development
Agency, Union College,
Series 1999 A,
5.450% 12/01/29 1,000,000 1,032,220
St. Lawrence County Industrial
Development Agency, St. Lawrence
University, Series 1998 A,
5.375% 07/01/18 700,000 746,767
State Dormitory Authority:
Cooper Union, Series 1999,
6.000% 07/01/19 1,000,000 1,113,120
New York University:
Series 1998 A,
5.750% 07/01/27 1,500,000 1,675,050
Series 2001,
5.500% 07/01/22 690,000 761,187
Pratt Institute, Series 1999,
6.000% 07/01/28 500,000 529,325
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EDUCATION TOTAL 6,882,969
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HEALTH CARE - 13.9%
CONGREGATE CARE RETIREMENT - 1.4%
State Dormitory Authority,
Miriam Osborn Memorial Home,
Series 2000 B,
6.875% 07/01/19 300,000 332,814
Suffolk County Industrial Development
Agency, Jefferson Ferry,
Series 1999 A,
7.200% 11/01/19 200,000 207,972
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Congregate Care Retirement Total 540,786
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HOSPITALS - 9.8%
State Dormitory Authority:
Memorial Sloan Center,
Series 2003 1,
(a) 07/01/25 1,000,000 330,410
New Island Hospital,
Series 1999 B,
5.750% 07/01/19 1,000,000 1,064,710
New York Methodist Hospital,
5.250% 07/01/18 250,000 254,695
Sloan Kettering Cancer Center,
Series 1998,
5.500% 07/01/23 1,000,000 1,086,820
St. Francis Hospital,
Series 1999 A,
5.500% 07/01/29 1,000,000 1,030,340
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Hospitals Total 3,766,975
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PAR ($) VALUE ($)
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NURSING HOMES - 2.7%
Syracuse Housing Authority,
Loretto Rest, Series 1997 A,
5.700% 08/01/27 1,000,000 1,051,560
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Nursing Homes Total 1,051,560
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HEALTH CARE TOTAL 5,359,321
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HOUSING - 3.8%
ASSISTED LIVING/SENIOR - 2.1%
Huntington Housing Authority,
Gurwin Jewish Senior Center,
Series 1999,
6.000% 05/01/29 200,000 181,738
State Dormitory Authority,
Willow Towers, Inc., Series 2002,
5.250% 02/01/22 500,000 513,050
Suffolk County Industrial Development
Agency, Gurwin Jewish Phase II,
6.700% 05/01/39 100,000 99,986
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Assisted Living/Senior Total 794,774
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SINGLE FAMILY - 1.7%
State Mortgage Agency,
Series 1999 8-2, AMT,
5.650% 04/01/30 650,000 668,772
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Single Family Total 668,772
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HOUSING TOTAL 1,463,546
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OTHER - 17.0%
POOL/BOND BANK - 1.5%
State Environmental Facilities Corp.,
Series 2000 B,
5.700% 07/15/22 525,000 568,312
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Pool/Bond Bank Total 568,312
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REFUNDED/ESCROWED (b) - 15.5%
Albany Municipal Water Finance Authority,
Series 2000 A,
6.375% 12/01/17 200,000 232,886
Metropolitan Transportation Authority,
Series 1998 A,
5.250% 07/01/28 (c) 1,000,000 1,103,410
PR Commonwealth of Puerto Rico,
Series 1997,
5.375% 07/01/25 500,000 541,880
State Dormitory Authority,
State University of New York,
Series 1999 C,
5.500% 07/01/29 1,200,000 1,340,100
State Environmental Facilities Corp.,
Series 2000 B,
5.700% 07/15/22 15,000 16,913
State Urban Development Corp.,
Series 1999 C,
5.000% 03/15/23 1,000,000 1,130,960
See notes to investment portfolio.
3
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2004 (New York unless otherwise stated) (Unaudited)
MUNICIPAL BONDS (CONTINUED) PAR ($) VALUE ($)
----------------------------------------------------------
OTHER (CONTINUED)
REFUNDED/ESCROWED (b) (CONTINUED)
Triborough Bridge & Tunnel Authority,
Series 1992 Y,
6.125% 01/01/21 1,390,000 1,620,504
-----------
Refunded/Escrowed Total 5,986,653
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OTHER TOTAL 6,554,965
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OTHER REVENUE - 1.4%
RECREATION - 1.4%
New York City Cultural Trust,
American Museum of Natural History,
Series 1997 A,
5.650% 04/01/22 500,000 531,635
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Recreation Total 531,635
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OTHER REVENUE TOTAL 531,635
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TAX-BACKED - 14.0%
LOCAL GENERAL OBLIGATIONS - 5.2%
New York City:
Series 1996 G,
6.750% 02/01/09 1,000,000 1,149,350
Series 1998 D,
5.250% 08/01/21 500,000 520,720
PR Commonwealth of Puerto Rico,
Municipal Finance Agency,
Series 1999 A,
5.500% 08/01/23 300,000 317,577
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Local General Obligations Total 1,987,647
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SPECIAL NON-PROPERTY TAX - 7.4%
Metropolitan Transportation Authority,
Series A,
5.250% 11/15/18 400,000 436,092
PR Commonwealth of Puerto Rico,
Public Building Authority,
Series 1997 B,
5.000% 07/01/27 1,000,000 1,002,180
State Urban Development Corp.,
Personal Income Tax,
5.000% 03/15/23 1,000,000 1,013,430
VI Virgin Islands Public Finance
Authority, Series 1999,
6.500% 10/01/24 350,000 389,837
-----------
Special Non-Property Tax Total 2,841,539
-----------
STATE APPROPRIATED - 1.4%
Metropolitan Transportation Authority,
Series 2002,
5.500% 07/01/17 500,000 555,325
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State Appropriated Total 555,325
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TAX-BACKED TOTAL 5,384,511
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PAR ($) VALUE ($)
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TRANSPORTATION - 19.1%
AIR TRANSPORTATION - 0.4%
New York City Industrial
Development Agency:
British Airways PLC, Series 2002, AMT,
7.625% 12/01/32 100,000 97,202
JFK International Airport, American
Airlines, Series 2002 B, AMT,
8.500% 08/01/28 100,000 75,805
-----------
Air Transportation Total 173,007
-----------
AIRPORTS - 7.8%
Albany County Airport Authority,
Series 1997, AMT,
5.500% 12/15/19 1,500,000 1,592,055
Niagara Frontier Transportation Authority,
Series 1999 A, AMT,
5.625% 04/01/29 1,350,000 1,393,051
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Airports Total 2,985,106
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TOLL FACILITIES - 5.5%
New York Thruway Authority,
Second General Highway & Bridge,
Series A,
5.000% 04/01/21 1,000,000 1,023,360
Triborough Bridge & Tunnel Authority,
Series 2002:
5.500% 11/15/18 480,000 536,050
5.500% 11/15/20 500,000 555,845
-----------
Toll Facilities Total 2,115,255
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TRANSPORTATION - 5.4%
Metropolitan Transportation Authority:
Series 2002 A,
5.000% 11/15/30 500,000 493,485
Series 2002 E,
5.500% 11/15/15 500,000 558,170
New York City Transportation Authority,
Series 1999 A,
5.250% 01/01/29 1,000,000 1,010,490
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Transportation Total 2,062,145
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TRANSPORTATION TOTAL 7,335,513
-----------
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UTILITY - 11.2%
INDEPENDENT POWER PRODUCERS - 1.9%
New York City Industrial Development
Agency, Brooklyn Navy Yard Partners,
Series 1997, AMT,
5.650% 10/01/28 300,000 266,340
Port Authority of New York & New Jersey,
KIAC Partners, Series 1996 IV, AMT,
6.750% 10/01/19 200,000 202,336
See notes to investment portfolio.
4
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2004 (New York unless otherwise stated) (Unaudited)
MUNICIPAL BONDS (CONTINUED) PAR ($) VALUE ($)
----------------------------------------------------------
UTILITY (CONTINUED)
INDEPENDENT POWER PRODUCERS (CONTINUED)
PR Commonwealth of Puerto Rico
Industrial, Educational, Medical
& Environmental Cogeneration
Facilities, AES Project,
Series 2000, AMT,
6.625% 06/01/26 250,000 259,048
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Independent Power Producers Total 727,724
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MUNICIPAL ELECTRIC - 5.2%
Long Island Power Authority:
Series 1998 A,
5.250% 12/01/26 1,000,000 1,010,770
Series 2000 A,
(a) 06/01/19 2,000,000 972,840
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Municipal Electric Total 1,983,610
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WATER & SEWER - 4.1%
Buffalo Municipal Water Finance
Authority, Series 1999,
6.000% 07/01/29 1,450,000 1,589,881
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Water & Sewer Total 1,589,881
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UTILITY TOTAL 4,301,215
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TOTAL MUNICIPAL BONDS - 98.3%
(cost of $34,973,120) (d) 37,813,675
-----------
OTHER ASSETS & LIABILITIES, NET - 1.7% 667,875
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NET ASSETS* - 100.0% 38,481,550
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NOTES TO INVESTMENT PORTFOLIO:
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* Net assets represent both Common Shares and Auction Preferred Shares.
(a) Zero coupon bond.
(b) The Fund 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.
(c) A portion of this security with a market value of $1,059,724 pledged as
collateral for open futures contracts.
(d) Cost for federal income tax purposes is $34,906,693.
At May 31, 2004, the Fund held the following open short futures contracts:
Aggregate Expiration Unrealized
Type Value Face Value Date Appreciation
-----------------------------------------------------------
10-Year U.S.
Treasury
Note $5,713,496 $5,915,932 Jun-2004 $202,436
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The Fund holds investments that are insured by private insurers who guarantee
the payment of principal and interest in the event of default. A list of these
insurers at May 31, 2004 is as follows:
% of Total
Insurer Investments
-----------------------------------------------------------
MBIA Insurance Corp. 41.4
Ambac Assurance Corp. 15.7
Financial Security Assurance, Inc. 14.6
Financial Guaranty Insurance Corp. 6.1
Radian Asset Assurance, Inc. 4.1
Federal Housing Administration 2.8
GNMA Collateralized 1.4
ACA Financial Guaranty Corp. 0.9
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87.0
------
ACRONYM NAME
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AMT Alternative Minimum Tax
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2004 (Unaudited)
ASSETS:
Investments, at cost $ 34,973,120
------------
Investments, at value $ 37,813,675
Cash 31,625
Receivable for:
Interest 653,643
Futures variation margin 26,813
Expense reimbursement due from
Investment Advisor 15,075
Deferred Trustees' compensation plan 2,956
Other assets 1,110
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Total Assets 38,544,897
------------
LIABILITIES:
Payable for:
Distributions-- preferred shares 1,626
Preferred shares remarketing commissions 386
Investment advisory fee 11,508
Pricing and bookkeeping fees 1,759
Custody fee 3,006
Audit fee 25,512
Transfer agent fee 2,814
Legal fee 13,780
Deferred Trustees' fees 2,956
------------
Total Liabilities 63,347
------------
Auction Preferred Shares (564 shares issued
and outstanding at $25,000 per share) 14,100,000
------------
COMPOSITION OF NET ASSETS
APPLICABLE TO COMMON SHARES:
Paid-in capital-- common shares $ 22,796,431
Undistributed net investment income 70,901
Accumulated net realized loss (1,528,773)
Net unrealized appreciation on:
Investments 2,840,555
Futures contracts 202,436
------------
Net assets at value applicable to 1,613,722
common shares of beneficial interest
outstanding $ 24,381,550
============
Net asset value per common share $ 15.11
============
STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 2004 (Unaudited)
INVESTMENT INCOME:
Interest $ 972,585
------------
EXPENSES:
Investment advisory fee 128,590
Transfer agent fee 16,350
Pricing and bookkeeping fees 26,434
Trustees' fees 2,311
Preferred shares remarketing commissions 17,693
Custody fee 5,282
Audit fee 18,311
Other expenses 23,493
------------
Total Expenses 238,464
Fees and expenses waived or reimbursed
by Investment Advisor (127,591)
Custody earnings credit (1,702)
------------
Net Expenses 109,171
------------
Net Investment Income 863,414
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FUTURES CONTRACTS:
Net realized gain (loss) on:
Investments 387,525
Futures contracts (170,913)
------------
Net realized gain 216,612
------------
Net change in unrealized appreciation/depreciation on:
Investments (1,672,751)
Futures contracts 194,443
------------
Net change in unrealized
appreciation/depreciation (1,478,308)
------------
Net Loss (1,261,696)
------------
Net Decrease in Net Assets from Operations (398,282)
------------
LESS DISTRIBUTIONS DECLARED TO
PREFERRED SHAREHOLDERS:
From net investment income (62,058)
------------
Net Decrease in Net Assets from Operations
Applicable to Common Shares $ (460,340)
------------
See notes to financial statements.
6
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
INCREASE (DECREASE) IN NET ASSETS: 2004 2003
-----------------------------------------------------------
OPERATIONS:
Net investment income $ 863,414 $ 1,791,101
Net realized gain (loss) on
investments, futures contracts
and written options 216,612 (724,866)
Net change in unrealized
appreciation/depreciation
on investments and
futures contracts (1,478,308) 1,187,599
----------- -----------
Net Increase (Decrease)
from Operations (398,282) 2,253,834
----------- -----------
LESS DISTRIBUTIONS DECLARED TO
PREFERRED SHAREHOLDERS:
From net investment income (62,058) (131,449)
----------- -----------
Net Increase (Decrease) in
Net Assets from Operations
Applicable to Common Shares (460,340) 2,122,385
----------- -----------
LESS DISTRIBUTIONS DECLARED TO
COMMON SHAREHOLDERS:
From net investment income (806,646) (1,711,933)
----------- -----------
SHARE TRANSACTIONS:
Distributions reinvested -
common shares 15,217 48,187
----------- -----------
Total Increase (Decrease) in
Net Assets Applicable
to Common Shares (1,251,769) 458,639
NET ASSETS APPLICABLE TO
COMMON SHARES:
Beginning of period 25,633,319 25,174,680
----------- -----------
End of period (including
undistributed net investment
income of $70,901 and
$76,191, respectively) $24,381,550 $25,633,319
----------- -----------
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
NUMBER OF FUND SHARES: 2004 2003
------------------------------------------------------------
Common Shares:
Issued for distributions reinvested 943 3,036
Outstanding at:
Beginning of period 1,612,779 1,609,743
----------- -----------
End of period 1,613,722 1,612,779
----------- -----------
Preferred Shares:
Outstanding at end of period 564 564
----------- -----------
See notes to financial statements.
7
NOTES TO FINANCIAL STATEMENTS
May 31, 2004 (Unaudited)
NOTE 1. ORGANIZATION
Colonial New York Insured Municipal Fund (the "Fund") is a Massachusetts
business trust registered under the Investment Company Act of 1940 (the "Act"),
as amended, as a non-diversified, closed-end management investment company.
INVESTMENT GOAL
The Fund seeks to provide current income generally exempt from ordinary federal
income tax and New York State and City personal income tax.
FUND SHARES
The Fund may issue an unlimited number of common shares. On December 20, 1999,
the Fund issued 564 Auction Preferred Shares ("APS").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the 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
Debt securities generally are valued by a pricing service approved by the Fund's
Board of Trustees, based upon market transactions for normal, institutional-size
trading units of similar securities. The services may use various pricing
techniques which take into account appropriate factors such as yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other data, as
well as broker quotes. Debt securities for which quotations are readily
available are valued at an over-the-counter or exchange bid quotation. Certain
debt securities, which tend to be more thinly traded and of lesser quality, are
priced based on fundamental analysis of the financial condition of the issuer
and the estimated value of any collateral. Valuations developed through pricing
techniques may vary from the actual amounts realized upon sale of the
securities, and the potential variation may be greater for those securities
valued using fundamental analysis.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
Investments for which market quotations are not readily available, or quotations
which management believes are not appropriate, are valued at fair value as
determined in good faith under consistently applied procedures established by
and under the general supervision of the Board of Trustees.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
FUTURES CONTRACTS
The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund
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 Fund and not for trading purposes. The use of futures contracts 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 differing trading hours, or the temporary absence of
a liquid market, for either the instrument or the underlying securities, or (3)
an inaccurate prediction by Columbia Management Advisors, Inc. of the future
direction of interest rates. Any of these risks may involve amounts exceeding
the variation margin recorded on the Fund's Statement of Assets and Liabilities
at any given time.
Upon entering into a futures contract, the Fund deposits cash or securities with
the broker in an amount sufficient to meet the initial margin requirement.
Subsequent payments are made or received by the Fund equal to the daily change
in the contract value and are recorded as variation margin payable or receivable
and offset in unrealized gains or losses. The Fund also identifies portfolio
securities as segregated with the custodian in a separate account in an amount
equal to the futures contract. The Fund recognizes a realized gain or loss when
the contract is closed or expires.
INCOME RECOGNITION
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. Premium and discount are amortized and accreted,
respectively, on all debt securities.
8
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
May 31, 2004 (Unaudited)
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable or tax-exempt income, if any, for its tax year,
and as such will not be subject to federal income taxes. In addition, the Fund
intends to distribute in each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, such that
the Fund should not be subject to federal excise tax. Therefore, no federal
income or excise tax provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to common shareholders are recorded on ex-date. Distributions to
Auction Preferred shareholders are recorded daily and 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 May 31, 2004, was 1.05%. For
the six months ended May 31, 2004, the Fund declared dividends to Auction
Preferred shareholders amounting to $62,058, representing an average APS
dividend rate of 0.88%.
NOTE 3. FEDERAL TAX INFORMATION
The tax character of distributions paid during the year ended November 30, 2003
was as follows:
Distributions paid from:
Tax-Exempt Income $1,843,382
Ordinary Income* --
Long-Term Capital Gains --
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
Unrealized appreciation and depreciation at May 31, 2004, based on cost of
investments for federal income tax purposes was:
Unrealized appreciation $3,311,426
Unrealized depreciation (404,444)
----------
Net unrealized appreciation $2,906,982
==========
The following capital loss carryforwards, determined as of November 30, 2003,
may be available to reduce taxable income arising from future net realized gains
on investments, if any, to the extent permitted by the Internal Revenue Code:
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
--------- ------------
2008 $265,521
2011 450,279
--------
$715,800
--------
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary
of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004,
FleetBoston, including the Fund's investment advisor, was acquired by Bank of
America Corporation ("BOA"). The acquisition did not change the way the Fund is
managed, the investment personnel assigned to manage the Fund or the fees paid
by the Fund.
INVESTMENT ADVISORY FEE
Columbia provides administrative and other services to the Fund in addition to
investment advisory services. Columbia receives a monthly investment advisory
fee at the annual rate of 0.65% of the Fund's average weekly net assets,
including assets applicable to the APS. Through November 30, 2004, Columbia has
contractually agreed to waive a portion of its investment advisory fee so that
such fees will not exceed 0.35% 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
Corporation ("State Street"). As a result, Columbia pays the total fees received
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 weekly net assets, including assets applicable to APS, exceed
$50 million, an additional monthly fee. The additional fee rate is calculated by
taking into account the fees payable to State Street under the Outsourcing
Agreement. This rate is applied to the average weekly net assets, including
assets applicable to APS, of the Fund for that month. The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund. For the six months ended May 31, 2004, the Fund's annualized effective
pricing and bookkeeping fee rate was 0.134%.
FEE WAIVERS
Columbia has voluntarily agreed to reimburse the Fund for certain expenses so
that total expenses (exclusive of investment advisory fees, brokerage
commissions, interest, taxes and extraordinary expenses, if any) would not
exceed 0.20% annually of the Fund's average weekly net assets, including assets
applicable to APS. Columbia, at its discretion, may revise or discontinue this
arrangement any time.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
May 31, 2004 (Unaudited)
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. 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.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund'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
Fund's assets.
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the six months ended May 31, 2004, the Fund paid $663 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended May 31, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $3,495,788 and
$3,147,219, respectively.
NOTE 6. PREFERRED SHARES
The Fund currently has outstanding 564 APS. The APS are redeemable at the option
of the Fund 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).
Under the Act, the Fund 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 Fund is required to meet more stringent
asset coverage requirements under the terms of the APS Agreement and in
accordance with the guidelines prescribed by the APS' rating agencies. Should
these requirements not be met, or should dividends accrued on the APS not be
paid, the Fund may be restricted in its ability to declare dividends to common
shareholders or may be required to redeem certain APS. At May 31, 2004, there
were no such restrictions on the Fund.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
CONCENTRATION OF CREDIT RISK
The Fund holds investments that are insured by private insurers who guarantee
the payment of principal and interest in the event of default or that are
supported by a letter of credit. Each of the Fund's insurers is rated AAA by
Moody's Investors Service, Inc. At May 31, 2004, investments supported by
private insurers that represent greater than 5% of the total investments of the
Fund were as follows:
% OF TOTAL
INSURER INVESTMENT
-------------------------------------------------------
MBIA Insurance Corp. 41.4
Ambac Assurance Corp. 15.7
Financial Security Assurance, Inc. 14.6
Financial Guaranty Insurance Corp. 6.1
GEOGRAPHIC CONCENTRATION
The Fund has greater than 5% of its total investments at May 31, 2004 invested
in debt obligations issued by the state of New York and its respective political
subdivisions, agencies and public authorities. The Fund is more susceptible to
economic and political factors adversely affecting issuers of the specific
state's municipal securities than are municipal bond funds that are not
concentrated to the same extent in these issuers.
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
ISSUER FOCUS
As a non-diversified fund, the Fund may invest a greater percentage of its total
assets in the securities of fewer issuers than a diversified fund. The Fund may,
therefore, have a greater risk of loss from a few issuers than a similar fund
that invests more broadly.
LEGAL PROCEEDINGS
Columbia and Columbia Funds Distributor, Inc. ("CFDI"), and certain of their
affiliates (collectively, "the Columbia Group") have received information
requests and subpoenas from various regulatory and law enforcement authorities
in connection with their investigations of late trading and market timing in
mutual funds, as well as other industry wide issues. The Columbia Group has not
uncovered any instances where Columbia or CFDI were knowingly involved in late
trading of mutual fund shares.
10
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
May 31, 2004 (Unaudited)
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and CFDI, alleging that they had violated certain
provisions of the federal securities laws in connection with trading activity in
mutual fund shares. Also on February 24, 2004, the New York Attorney General
("NYAG") filed a civil complaint in New York Supreme Court, County of New York
against Columbia and CFDI alleging that Columbia and CFDI had violated certain
New York anti-fraud statutes. If either Columbia or CFDI is unsuccessful in its
defense of these proceedings, it could be barred from serving as an investment
advisor or distributor for any investment company registered under the
Investment Company Act of 1940, as amended (a "registered investment company").
Such results could prevent Columbia, CFDI or any company that is an affiliated
person of Columbia and CFDI from serving as an investment advisor or distributor
for any registered investment company, including your fund. Your fund has been
informed by Columbia and CFDI that, if these results occur, they will seek
exemptive relief from the SEC to permit them to continue to serve as your fund's
investment advisor and distributor. There is no assurance that such exemptive
relief will be granted. On March 15, 2004, Columbia and CFDI entered into
agreements in principle with the SEC Division of Enforcement and NYAG in
settlement of the charges. Under the agreements, Columbia and CFDI agreed, among
other things, to the following conditions: payment of $70 million in
disgorgement; payment of $70 million in civil penalties; an order requiring
Columbia and CFDI to cease and desist from violations of the antifraud
provisions and other provisions of the federal securities laws; governance
changes designed to maintain the independence of the mutual fund boards of
trustees and ensure compliance with securities laws and their fiduciary duties;
and retention of an independent consultant to review Columbia's and CFDI's
compliance policies and procedures. The agreement requires the final approval of
the SEC. In a separate agreement with the NYAG, the Columbia Group has agreed to
reduce mutual fund fees by $80 million over a five-year period.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of fund
shares, which could increase transaction costs or operating expenses, or have
other adverse consequences for the funds.
In connection with the events described in detail above, various parties have
filed suit against certain funds, their Boards and/or FleetBoston (and
affiliated entities). These suits and certain regulatory investigations are
ongoing. Accordingly, an estimate of the financial impact of this litigation on
any fund, if any, cannot currently be made.
11
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period is as follows
(common shares unless otherwise noted):
(UNAUDITED)
SIX MONTHS PERIOD
ENDED YEAR ENDED NOVEMBER 30, ENDED
MAY 31, --------------------------------------------------- NOVEMBER 30,
2004 2003 2002 2001 2000 1999 (a)
----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.89 $ 15.64 $ 15.78 $ 14.93 $ 14.24 $ 14.33
----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.54(b) 1.11(b) 1.16(b)(c) 1.18(b) 1.27(d) 0.02
Net realized and unrealized gain (loss) on investments,
futures contracts and written options (0.78) 0.28 (0.07)(c) 0.75 0.86 (0.08)
----------- ----------- ----------- ----------- ----------- -----------
Total from Investment Operations (0.24) 1.39 1.09 1.93 2.13 (0.06)
----------- ----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO PREFERRED SHAREHOLDERS:
From net investment income (0.04) (0.08) (0.12) (0.25) (0.33) --
----------- ----------- ----------- ----------- ----------- -----------
Total from Investment Operations Applicable
to Common Shareholders (0.28) 1.31 0.97 1.68 1.80 (0.06)
----------- ----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO COMMON SHAREHOLDERS:
From net investment income (0.50) (1.06) (1.11) (0.83) (0.93) --
----------- ----------- ----------- ----------- ----------- -----------
LESS SHARE TRANSACTIONS:
Offering costs--common shares -- -- -- -- -- (0.03)
Commission and offering costs--preferred shares -- -- -- -- (0.18) --
----------- ----------- ----------- ----------- ----------- -----------
Total Share Transactions -- -- -- -- (0.18) (0.03)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 15.11 $ 15.89 $ 15.64 $ 15.78 $ 14.93 $ 14.24
----------- ----------- ----------- ----------- ----------- -----------
Market price per share-- common shares $ 13.85 $ 15.65 $ 15.86 $ 14.60 $ 14.63 $ 15.06
----------- ----------- ----------- ----------- ----------- -----------
Total return-- based on market value--
common shares (e) (8.60)%(f)(g) 5.52%(f) 16.79%(f) 5.63%(f) 3.58%(f) 0.41%(g)
----------- ----------- ----------- ----------- ----------- -----------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h)(i) 0.86%(j)(k) 0.87%(j) 0.85%(j) 0.81%(j) 0.32%(j) 0.20%(k)
Net investment income before preferred
stock dividend (h)(i) 6.78%(k) 7.03% 7.38%(c) 7.49% 8.86% 5.20%(k)
Net investment income after preferred stock
dividend (h)(i) 6.29%(k) 6.51% 6.62%(c) 5.91% 6.53% 5.20%(k)
Voluntary waiver/reimbursement (i) 0.54%(k) 0.42% 0.39% 0.57% 0.18% --
Portfolio turnover rate 8%(g) 5% 16% 4% 32% 0%(g)
Net assets, end of period
(000's)--common shares $ 24,382 $ 25,633 $ 25,17 $ 25,363 $ 23,996 $ 22,873
(a)The Fund commenced investment operations on November 19, 1999. Per share
data and total return reflect activity from that date.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Effective December 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began accreting
market discount on all debt securities. The effect of this change for the
year ended November 30, 2002 was to increase the net investment income per
share by $0.01, increase the net realized and unrealized loss per share by
$0.01, increase the ratio of net investment income to average net assets from
7.30% to 7.38% and increase the ratio of net investment income (adjusted for
dividend payments to preferred shareholders) from 6.54% to 6.62%. Per share
data and ratios for periods prior to November 30, 2002 have not been restated
to reflect this change in presentation.
(d)The per share net investment income amount does not reflect the period's
reclassifications of differences between book and tax basis net investment
income.
(e)Total return at market value assuming all distributions reinvested at prices
calculated in accordance with the Dividend Reinvestment Plan.
(f)Had the Investment 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%, except for the
six months ended May 31, 2004 which had an impact of 0.01% and the year ended
November 30, 2003 which had an impact of 0.02%.
(i)Ratios reflect average net assets available to common shares only.
(j)Ratios calculated using average net assets of the Fund, including the effect
of custody credits, equals 0.55%, 0.55%, 0.55%, 0.52% and 0.20% for the six
months ended May 31, 2004 and the years ended November 30, 2003, November 30,
2002, November 30, 2001 and November 30, 2000, respectively.
(k)Annualized.
12
FINANCIAL HIGHLIGHTS (CONTINUED)
ASSET COVERAGE REQUIREMENTS
INVOLUNTARY
ASSET LIQUIDATING AVERAGE
TOTAL AMOUNT COVERAGE PREFERENCE MARKET VALUE
OUTSTANDING PER SHARE PER SHARE PER SHARE
----------------------------------------------------------------------
05/31/04 * $14,100,000 $68,230 $25,002 $25,000
11/30/03 14,100,000 70,449 25,002 25,000
11/30/02 14,100,000 69,636 25,003 25,000
11/30/01 14,100,000 69,970 25,003 25,000
11/30/00 ** 14,100,000 67,545 25,014 25,000
* Unaudited.
** On December 20, 1999, the Fund began offering Auction Preferred Shares.
13
SHAREHOLDER MEETING RESULTS
RESULTS OF THE ANNUAL MEETING OF SHAREHOLDERS
On May 26, 2004, the Annual Meeting of Shareholders of the Fund was held to
conduct a vote for or against the approval of the following Items listed on the
Fund's Proxy Statement for said Meeting. On March 10, 2004, the record date for
the Meeting, the Fund had 1,613,722 common shares outstanding. The votes cast
were as follows:
PROPOSAL 1.
ELECTION OF TRUSTEES: FOR WITHHELD
-----------------------------------------------------------------------------
John J. Neuhauser 1,512,958 27,825
Patrick J. Simpson 1,513,958 26,825
Thomas C. Theobald 1,513,958 26,825
Anne-Lee Verville 1,514,958 25,825
Richard L. Woolworth 1,514,976 25,807
On March 10, 2004, the record date of the Meeting, the Fund had 564 preferred
shares outstanding. The votes cast were as follows:
PROPOSAL 2.
ELECTION OF TRUSTEES: FOR WITHHELD
-----------------------------------------------------------------------------
Douglas A. Hacker 564 0
John J. Neuhauser 564 0
Patrick J. Simpson 564 0
Thomas E. Stitzel 564 0
Thomas C. Theobald 564 0
Anne-Lee Verville 564 0
Richard L.Woolworth 564 0
14
DIVIDEND REINVESTMENT PLAN
COLONIAL NEW YORK INSURED MUNICIPAL FUND
Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"), all Common
Shareholders whose shares are registered in their own names will have all
distributions reinvested automatically in additional Common Shares of the Fund
by EquiServe (the "Plan Agent"), as agent under the Plan, unless a Common
Shareholder elects to receive cash. An election to receive cash may be revoked
or reinstated at the option of the Common Shareholder. Shareholders whose shares
are held in the name of a broker or nominee will have distributions reinvested
automatically by the broker or nominee in additional shares under the Plan,
unless the service is not provided by the broker or nominee, or unless the
shareholder elects to receive distributions in cash. If the service is not
available, such distributions will be paid in cash. Shareholders whose shares
are held in the name of a broker or nominee should contact the broker or nominee
for details. All distributions to investors who elect not to participate (or
whose broker or nominee elects not to participate) in the Plan will be paid by
check mailed directly to the record holder by the Plan Agent, as dividend paying
agent.
The Plan Agent will furnish each person who buys shares in the offering with
written information relating to the Plan. Included in such information will be
procedures for electing to receive distributions in cash (or, in the case of
shares held in the name of a broker or nominee who does not participate in the
Plan, procedures for having such shares registered in the name of the
shareholder so that such shareholder may participate in the Plan).
If the Trustees of the Fund declare a dividend (including a capital gain
dividend) payable either in shares or in cash, as holders of shares may have
elected, then nonparticipants in the Plan will receive cash and participants in
the Plan will receive the equivalent in shares valued as set forth below.
Whenever a market price is equal to or exceeds net asset value at the time
shares are valued for the purpose of determining the number of shares equivalent
to the distribution, participants will be issued shares at the net asset value
most recently determined as provided under "Net Asset Value" in the Fund's
prospectus and its Statement of Additional Information, but in no event less
than 95% of the market price. If the net asset value of the shares at such time
exceeds the market price of shares at such time, or if the Fund should declare a
dividend (including a capital gain dividend) payable only in cash, the Plan
Agent will, as agent for the participants, use the cash that the shareholders
would have received as a dividend to buy shares in the open market, the New York
Stock Exchange or elsewhere, for the participants' accounts. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
of the shares, the average per share purchase price paid by the Plan Agent may
exceed the net asset value of the shares, resulting in the acquisition of fewer
shares than if the dividend (including a capital gain dividend) had been paid in
shares issued by the Fund. The Plan Agent will apply all cash received as a
dividend (including a capital gain dividend) to purchase shares on the open
market as soon as practicable after the payment date of such dividend, but in no
event later than 30 days after such date, except where necessary to comply with
applicable provisions of the federal securities laws.
There is no charge to participants for reinvesting dividends (including capital
gain dividends). The Plan Agent's fees for handling the reinvestment of
dividends (including capital gain dividends) will be paid by the Fund. There
will be no brokerage charges with respect to shares issued directly by the Fund
as a result of dividends or capital gains distributions payable either in stock
or in cash. However, each participant will pay a pro rata share of brokerage
commissions incurred with respect to the Plan Agent's open market purchases in
connection with the reinvestment of dividends (including capital gain
dividends).
The automatic reinvestment of dividends (including capital gain dividends) will
not relieve participants of any income tax which may be payable on such
dividends. The amount of the dividend for tax purposes may vary depending on
whether the Fund issues new Common Shares or purchases them on the open market.
The Plan may be amended or terminated on 30 days' written notice to Plan
participants. All correspondence concerning the Plan should be directed to
EquiServe, by mail at P.O. Box 43010, Providence, RI 02940-3010, or by phone at
1-800-730-6001.
15
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TRANSFER AGENT
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial New York Insured Municipal Fund is:
EquiServe
P.O. Box 43010
Providence, RI 02940-3010
The fund mails one shareholder report to each shareholder address. Shareholders
can order additional reports by calling 800-730-6001. In addition,
representatives at that number can provide shareholders information about the
fund.
Financial advisors who want additional information about the fund may speak to a
representative at 800-426-3750.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to its portfolio securities is available (i) without
charge, upon request, by calling 800-730-6001 and (ii) on the Securities and
Exchange Commission's website at http://www.sec.gov.
This report has been prepared for shareholders of Colonial New York Insured
Municipal Fund.
COLONIAL NEW YORK INSURED MUNICIPAL FUND SEMIANNUAL REPORT
IY-03/059S-0504 (07/04) 04/1525
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable at this time.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable at this time.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable at this time.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have not been any material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees/Directors since
those procedures were last disclosed in response to Item 7(d)(2)(ii)(G) of
Schedule 14A.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer, based on his evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, has concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications 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.
(a)(3) Not applicable at this time.
(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) Colonial New York Insured Municipal Fund
------------------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date August 3, 2004
--------------------------------------------------------------------------
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/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date August 3, 2004
--------------------------------------------------------------------------