Columbia Acorn Trust – ‘PRES14A’ for 10/24/01

On:  Monday, 8/20/01   ·   For:  10/24/01   ·   Accession #:  950135-1-502596   ·   File #:  811-01829

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Preliminary Proxy Solicitation Material — Special Meeting   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Liberty Acorn Trust Fund                              52    153K 

Document Table of Contents

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UNITED STATES                                                                   
SECURITIES AND EXCHANGE COMMISSION                                              
Washington, D.C. 20549                                                          

SCHEDULE 14A

(RULE 14A-101)

 INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

 PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.          )

Filed by the Registrant [X]                                                     
Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      

[X]   Preliminary Proxy Statement                                               

[ ]   Definitive Proxy Statement                                                

[ ]   Definitive Additional Materials                                           

[ ]   Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12             

[ ]   CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY             
RULE 14a-6(e)(2))                                                   

 Liberty Acorn Trust
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

[X] No fee required.                                                            

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.    

1)   Title of each class of securities to which transaction applies:            

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2)   Aggregate number of securities to which transaction applies:               

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3)   Per unit price or other underlying value of transaction computed pursuant  
    to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):                          

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4)   Proposed maximum aggregate value of transaction:                           

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5)   Total fee paid:                                                            

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[ ]    Fee paid previously with preliminary materials.                          

[ ]    Check box if any part of the fee is offset as provided by Exchange Act   
      Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
     paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.       

1)   Amount Previously Paid:                                                    

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2)   Form, Schedule or Registration Statement No.:                              

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3)   Filing Party:                                                              

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4)   Date Filed:                                                                

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TWO CONVENIENT WAYS TO VOTE YOUR PROXY

The enclosed proxy statement provides details on important issues affecting your
Liberty Acorn Funds. The Board of Trustees recommends that you vote for all     
proposals.                                                                      

You can vote your proxies over the Internet or by telephone -- it's easy and    
confidential!                                                                   

If you are voting by Internet or telephone, you should NOT mail your proxy card.

Vote by Internet:                                                               

-- Read the proxy statement and have your proxy card available.         

-- Go to www.libertyfunds.com.                                          

-- Click on the proxy link and follow the instructions provided.        

Vote by telephone:                                                              

-- Read the proxy statement and have your proxy card available.         

-- When you are ready to vote, call toll free 877-779-8683.             

  -- Enter the voter control number located on the upper left corner of your
proxy card.                                                       

    -- Follow the instructions provided to cast your vote. A representative will
be available to answer questions regarding the meeting agenda and 
execution of proxies.                                             

INTERNET AND TELEPHONE VOTING ARE AVAILABLE 24 HOURS A DAY, SEVEN DAYS A WEEK.  
If you have any questions or concerns, please call 888-832-5694 from 9:00 a.m.  
to 11:00 p.m. EDT Monday through Friday, and Saturdays from 12:00 to 6:00 p.m.  

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LIBERTY ACORN TRUST 

September 12, 2001                                                              

Dear Shareholder:                                                               

On October 24, 2001, we will be holding a special meeting of shareholders of the
Liberty Acorn Family of Funds. The meeting will take place at 9:00 a.m., Central
time, in the Bank One Auditorium, Plaza Level, 38 South Dearborn Street in      
Chicago, Illinois.                                                              

As a Liberty Acorn shareholder, you are being asked to vote on a proposed new   
investment advisory agreement. In a nutshell, Liberty Financial Companies, Inc. 
has entered into an agreement to sell its asset management business to Fleet    
National Bank, part of FleetBoston Financial Corporation, a diversified         
financial services company. The sale will terminate the Funds' current advisory 
agreement but the proposed new advisory agreement is substantially the same as  
that currently in place. NO CHANGES IN ADVISORY FEE RATES OR SERVICES ARE BEING 
PROPOSED.                                                                       

Your vote is very important. The Board of Trustees has approved the new         
agreement and recommends that you vote "For" the proposal. Please complete, sign
and date the enclosed proxy card and return it in the enclosed postage-paid     
return envelope. This will ensure that your vote is counted, even if you cannot 
attend the meeting in person. It is important that you vote promptly.           

As always, we thank you for investing with us. If you have questions, please    
feel free to call 888-832-5694.                                                 

    Sincerely,

      RALPH WANGER
   President

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LIBERTY ACORN TRUST 

September 12, 2001                                                              

Dear Shareholder:                                                               

On October 24, 2001, we will be holding a special meeting of shareholders of the
Liberty Acorn Family of Funds. The meeting will take place at 9:00 a.m., Central
time, in the Bank One Auditorium, Plaza Level, 38 South Dearborn Street in      
Chicago, Illinois.                                                              

As a Liberty Acorn shareholder, you are being asked to vote on a proposed new   
investment advisory agreement. In a nutshell, Liberty Wanger Asset Management's 
parent company, Liberty Financial Companies, Inc., has entered into an agreement
to sell its asset management business to Fleet National Bank, part of           
FleetBoston Financial Corporation, a diversified financial services company. The
firm will become part of Fleet's asset management division.                     

The sale will terminate the Funds' current advisory agreement but the proposed  
new advisory agreement is substantially the same as that currently in place. NO 
CHANGES IN ADVISORY FEE RATES OR SERVICES ARE BEING PROPOSED. YOUR STATUS AS A  
NO-LOAD INVESTOR WILL NOT CHANGE.                                               

Your vote is very important. The Acorn Board of Trustees has approved the new   
agreement and recommends that you vote "For" the proposal. Please complete, sign
and date the enclosed proxy card and return it in the enclosed postage-paid     
return envelope. This will ensure that your vote is counted, even if you cannot 
attend the meeting in person. It is important that your vote be received by     
October 24, 2001 in order to be counted.                                        

As always, we thank you for investing with us. While the changes in ownership we
have experienced over the past two years may raise concerns, Fleet's management 
has assured us that the Liberty Acorn Family of Funds will maintain its         
independence and investment style. The proven process we have used in managing  
money for more than 30 years will not change. If you have questions, please feel
free to call us at 800-922-6769.                                                

    Sincerely,

      RALPH WANGER
   President

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IMPORTANT NEWS
FOR FUND SHAREHOLDERS 

WHILE WE ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT, 
HERE'S A BRIEF OVERVIEW OF MATTERS TO BE VOTED UPON.

QUESTIONS AND ANSWERS 

Q. What am I being asked to vote "For" in this proxy?                           

A. You are being asked to vote for a proposal to approve a new investment       
   advisory agreement for your Fund with your Fund's current investment advisor,
on substantially identical terms as the current investment advisory       
agreement. NO CHANGE IN ADVISORY FEE RATES OR SERVICES IS BEING PROPOSED. 

Q. Why am I being asked to vote on a new agreement?                             

A. Liberty Financial Companies, Inc. (Liberty Financial), the parent company of 
 the investment advisor to the Funds listed in the Notice of Special Meeting
 of Shareholders, has entered into an agreement to sell its asset management
business, including the Funds' investment advisor, to Fleet National Bank 
(Fleet), an indirect wholly owned subsidiary of FleetBoston Financial     
Corporation, a U.S. financial holding company. The sale will result in the
 termination of the current investment advisory agreement for the Funds. The
  sale will not be completed unless a number of conditions are met. One of the
  conditions of the sale is that shareholders of a percentage of the Funds and
other accounts managed by Liberty Financial affiliates must approve the   
 proposed new agreement. Your Board of Trustees has approved, and recommends
that you approve, the new agreement applicable to your Fund.              

Q. What prompted the sale of Liberty Financial's asset management business to   
Fleet?                                                                    

A. On November 1, 2000, Liberty Financial announced that it had retained CS     
 First Boston to help explore strategic alternatives, including the possible
sale of Liberty Financial. Liberty Financial ultimately determined to sell
its asset management business to Fleet.                                   

Q. How will the sale of Liberty Financial's asset management business           
potentially benefit me?                                                   

A. Your Board of Trustees believes that there may be benefits of scale from     
combining the asset management businesses of Fleet and Liberty Financial, 
  including the ability to attract and retain key personnel, greater access to
resources for investment professionals of                                 

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the advisors, enhanced technology and customer service, and the expected        
availability of additional investment options for shareholders of the Funds.    

Q. How does the proposed new agreement differ from the current agreement?       

A. The proposed agreement is substantially identical to the current agreement.  
It differs only in its beginning date and term and certain other minor    
provisions. A comparison of the proposed new agreement is included in the 
proxy statement under the heading "New Advisory Agreement."               

Q. Will this change the advisory fees on my fund?                               

A. No. Advisory fees will remain the same.                                      

Q. Will there be any advisor or Fund strategy changes?                          

A. No. Liberty Wanger Asset Management is expected to continue to manage the    
  Funds after the sale of Liberty Financial's asset management business, using
the same investment strategies and objectives currently in place.         

Q. How does the Board of Trustees recommend that I vote on the proposal?        

A. The Board of Trustees recommends that you vote "FOR" the proposal. The Board 
believes that the proposal is in the best interests of your Fund and its  
shareholders.                                                             

Q. How can I vote my proxy?                                                     

A. For your convenience, there are several ways you can vote:                   

- By Mail: vote, sign and return the enclosed proxy card                

  - In person: October 24, 2001, at 9:00 a.m., Central time, in the Bank One
 Auditorium, Plaza Level, 38 South Dearborn Street, Chicago, Illinois.

- By telephone or Internet                                              

IT IS IMPORTANT THAT YOU VOTE PROMPTLY.                                         

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IMPORTANT NEWS
FOR FUND SHAREHOLDERS 

WHILE WE ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT, 
HERE'S A BRIEF OVERVIEW OF MATTERS TO BE VOTED UPON.

QUESTIONS AND ANSWERS 

Q. What am I being asked to vote "For" in this proxy?                           

A. You are being asked to vote for a proposal to approve a new investment       
   advisory agreement for your Fund with your Fund's current investment advisor,
on substantially identical terms as the current investment advisory       
agreement. NO CHANGE IN ADVISORY FEE RATES OR SERVICES IS BEING PROPOSED. 

Q. Why am I being asked to vote on a new agreement?                             

A. Liberty Wanger Asset Management's parent company, Liberty Financial          
Companies, Inc. (Liberty Financial), has entered into an agreement to sell
its asset management business to Fleet National Bank (Fleet), part of     
 FleetBoston Financial Corporation. While the Fleet name is often associated
with banking, FleetBoston Financial is a large financial services company 
with many different business units. Liberty Wanger Asset Management will  
become part of Fleet's separate asset management division.                

  The sale will result in the termination of the current investment advisory
agreement for the Liberty Acorn Family of Funds. The sale will not be   
 completed unless a number of conditions are met. One of the conditions of
the sale is that shareholders of a percentage of the Funds and other    
  accounts managed by Liberty Financial affiliates must approve the proposed
   new agreement. Your Board of Trustees has approved, and recommends that you
approve, the new agreement applicable to your Fund.                     

Q. What prompted the sale of Liberty Financial's asset management business to   
Fleet?                                                                    

A. On November 1, 2000, Liberty Financial announced that it had retained CS     
 First Boston to help explore strategic alternatives, including the possible
sale of Liberty Financial, to ensure the continued success of the         
organization. Liberty Financial ultimately determined to sell its asset   
management business to Fleet.                                             

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Q. How will the sale of Liberty Financial's asset management business           
potentially benefit me?                                                   

A. Your Board of Trustees believes that there may be benefits of scale from     
combining the asset management businesses of Fleet and Liberty Financial, 
  including the ability to attract and retain key personnel, greater access to
 resources for investment professionals of the advisors, enhanced technology
  and customer service, and the expected availability of additional investment
options for shareholders of the Funds.                                    

Q. If I hold no-load shares of a Fund, will I still be able to make additional  
purchases of those shares without a sales load?                           

A. Yes. The sale will not affect your ability to purchase additional no-load    
shares.                                                                   

Q. How does the proposed new agreement differ from the current agreement?       

A. The proposed agreement is substantially identical to the current agreement.  
It differs only in its beginning date and term and certain other minor    
provisions. A comparison of the proposed new agreement is included in the 
proxy statement under the heading "New Advisory Agreement."               

Q. Will this change the advisory fees on my fund?                               

A. No. Advisory fees will remain the same.                                      

Q. Will there be any advisor or Fund strategy changes?                          

A. No. Liberty Wanger Asset Management is expected to continue to manage the    
  Funds after the sale of Liberty Financial's asset management business, using
the same investment strategies and objectives currently in place.         

Q. How does the Board of Trustees recommend that I vote on the proposal?        

A. The Board of Trustees recommends that you vote "FOR" the proposal. The Board 
believes that the proposal is in the best interests of your Fund and its  
shareholders.                                                             

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Q. How can I vote my proxy?                                                     

A. For your convenience, there are several ways you can vote:                   

-  By Mail: vote, sign and return the enclosed proxy card               

   -  In person: October 24, 2001, at 9:00 a.m., Central time, in the Bank One
   Auditorium, Plaza Level, 38 South Dearborn Street, Chicago, Illinois.

-  By telephone or Internet                                             

IT IS IMPORTANT THAT YOU VOTE PROMPTLY.                                         

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LIBERTY ACORN TRUST 
227 WEST MONROE STREET
SUITE 3000
CHICAGO, ILLINOIS 60606 

Liberty Acorn Fund                                                              
Liberty Acorn International                                                     
Liberty Acorn USA                                                               
Liberty Acorn Twenty                                                            
Liberty Acorn Foreign Forty                                                     

(the "Funds") 

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 
OCTOBER 24, 2001

A Special Meeting of the shareholders of each Fund will be held on Wednesday,   
October 24, 2001 at 9:00 a.m., Central time, at Bank One Auditorium, Plaza      
Level, 38 South Dearborn Street, Chicago, Illinois 60602 for these purposes:    

1. To approve a new Investment Advisory Agreement for each of Liberty Acorn     
 Fund, Liberty Acorn International, Liberty Acorn USA, Liberty Acorn Twenty,
and Liberty Acorn Foreign Forty; and                                      

2. To consider and act upon any other matters that properly come before the     
meeting and any adjourned session of the meeting.                         

Shareholders of record at the close of business on August 23, 2001 are entitled 
to notice of and to vote at the meeting and any adjourned session.              

By order of the Board of Trustees,                                              

Bruce H. Lauer                                                                  
Secretary                                                                       
September 12, 2001                                                              

PLEASE RESPOND. YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU   
OWN. YOU CAN VOTE EASILY AND QUICKLY BY PHONE, BY MAIL, BY INTERNET OR IN       
PERSON.                                                                         

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PROXY STATEMENT 

LIBERTY ACORN TRUST 
227 WEST MONROE STREET
SUITE 3000
CHICAGO, ILLINOIS 60606 

LIBERTY ACORN FUND
LIBERTY ACORN INTERNATIONAL 
LIBERTY ACORN USA 
LIBERTY ACORN TWENTY
LIBERTY ACORN FOREIGN FORTY 
(THE "FUNDS") 

The Trustees of Liberty Acorn Trust (the "Trustees") are soliciting proxies from
the shareholders of each of the Funds in connection with a Special Meeting of   
Shareholders of each Fund (the "Meeting"). The Meeting has been called to be    
held on Wednesday, October 24, 2001 at 9:00 a.m., Central time, at Bank One     
Auditorium, Plaza Level, 38 South Dearborn Street, Chicago, Illinois 60602. The 
meeting notice, this Proxy Statement and proxy cards are being sent to          
shareholders beginning on or about September 12, 2001.                          

The only item of business that the Trustees expect will come before the Meeting 
is approval of a new Investment Advisory Agreement for each Fund (the "New      
Advisory Agreement") with Liberty Wanger Asset Management, L.P. (the "Advisor").

PROPOSAL 1

NEW ADVISORY AGREEMENT                                                          

As explained below, the proposed New Advisory Agreement for each Fund is        
substantially identical (except for its term and date and certain other         
non-material changes) to the Investment Advisory Agreement currently in effect  
for that Fund (the "Current Advisory Agreement").                               

The reason the Trustees are proposing a New Advisory Agreement for each Fund is 
that the Current Advisory Agreement will terminate when the Advisor's parent    
company, Liberty Financial Companies, Inc. ("LFC"), sells each of the advisors  
and its other subsidiaries that                                                 

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operate its asset management business (the "Asset Management Segment") to Fleet 
National Bank, a national banking association ("Fleet"). As a result of this    
acquisition, the advisors will become direct or indirect, wholly owned          
subsidiaries of Fleet. The Investment Company Act of 1940, as amended (the      
"Investment Company Act"), provides generally that the advisory agreement of an 
investment company must provide for automatic termination if assigned, such as  
when the investment advisor or its parent company undergoes a significant change
of ownership.                                                                   

In addition, LFC has agreed to sell, in a separate transaction, all of the      
issued and outstanding capital stock of the subsidiaries constituting the       
annuity segment of LFC's business to Sun Life Assurance Company of Canada, a    
Canadian corporation (the "Annuity Sale"). The sale of the Asset Management     
Segment to Fleet and the Annuity Sale are not conditioned on each other. LFC has
entered into a Merger Agreement with Liberty Mutual Insurance Company (the      
majority stockholder of LFC), which provides that, following the acquisition of 
the Asset Management Segment by Fleet and the Annuity Sale, LFC will merge with 
and into LFC Acquisition Corporation, a wholly owned subsidiary of Liberty      
Mutual Insurance Company, with LFC being the surviving corporation (the         
"Merger"). In connection with the Merger, holders of LFC common stock, other    
than LFC, Liberty Mutual and their respective direct and indirect subsidiaries  
and other than those holders of LFC common stock who validly perfect and        
exercise their appraisal rights under Massachusetts law, will be entitled to    
receive an amount of cash equal to $33.44, subject to adjustment, per share of  
common stock. Once such merger consideration is paid, such shares will be       
cancelled.                                                                      

The Trustees have carefully considered the matter and have concluded that it is 
appropriate to enter into the New Advisory Agreement for each Fund, so that the 
Advisor can continue, following the acquisition of the Asset Management Segment 
by Fleet, to manage each Fund on the same terms as are now in effect. The       
Trustees also have approved an interim advisory agreement for each Fund pursuant
to Rule 15a-4 under the Investment Company Act, which will be entered into      
immediately following the closing of the acquisition of the Asset Management    
Segment by Fleet if (i) the Meeting is not held until after the closing of the  
acquisition of the Asset Management Segment by Fleet or (ii) the Fund does not  
receive the requisite shareholder vote for the New Advisory Agreement at the    
Meeting. See "Basis for the Trustees'                                           

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Recommendations" below for further information on the interim agreement.        

The acquisition of the Asset Management Segment by Fleet will occur only if     
various conditions are satisfied (or waived by the parties, if permitted by     
law). Those conditions include, among others, the receipt of certain government 
approvals, approval or consent from investment advisory clients of the Advisor  
and other LFC affiliates (including mutual fund clients) which represent a      
specified percentage of LFC's total assets under management as of March 31,     
2001, the avoidance of a certain level of net redemptions from portfolios       
managed by the Advisor and certain of its affiliates that make up the Asset     
Management Segment and approval of the acquisition by the requisite vote of the 
shareholders of LFC. LFC currently expects that the acquisition will occur      
during the latter part of 2001, but the acquisition could be delayed. If the    
acquisition does not occur, the New Advisory Agreement would not be needed      
because the automatic termination of the Current Advisory Agreement would not   
occur.                                                                          

Under the Investment Company Act, a Fund cannot enter into a New Advisory       
Agreement unless the shareholders of that Fund vote to approve the New Advisory 
Agreement. The Meeting is being held to seek shareholder approval of the New    
Advisory Agreement for each Fund. NO CHANGE IN ADVISORY FEE RATES OR SERVICES IS
BEING PROPOSED.                                                                 

Shareholders of each Fund, regardless of class, will vote separately on the New 
Advisory Agreement for that Fund. Each share is entitled to cast one vote, and  
fractional shares are entitled to a proportionate fractional vote.              

THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE TO APPROVE THE   
NEW ADVISORY AGREEMENT FOR THEIR FUND.                                          

DESCRIPTION OF THE NEW ADVISORY AGREEMENT                                       

The New Advisory Agreement for each Fund is substantially identical (but for a  
few non-material changes) to the Current Advisory Agreement for that Fund. The  
date of the New Advisory Agreement for any Fund will be the date that Fleet     
acquires the Asset Management Segment, or such later date on which shareholders 
of the Fund approve the New Advisory Agreement, and the initial term of the New 
Advisory                                                                        

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Agreement expires on July 31, 2003. Appendix A to this Proxy Statement sets     
forth information about the Current Advisory Agreement, including the date of   
the Current Advisory Agreement and the advisory fee rates under both the New    
Advisory Agreement and the Current Advisory Agreement. Appendix B to this Proxy 
Statement contains the form of the New Advisory Agreement applicable to each    
Fund. The next several paragraphs briefly summarize some important provisions of
the New Advisory Agreement, but for a complete understanding of the Agreement,  
you should read Appendices A and B.                                             

The New Advisory Agreement for each Fund essentially provides that the Advisor, 
under the Trustees' supervision, will (1) decide what securities to buy and sell
for the Fund's portfolio; (2) select brokers and dealers to carry out portfolio 
transactions for the Fund and (3) provide officers, office space and certain    
administrative services to the Fund.                                            

The New Advisory Agreement for each Fund provides that it will continue in      
effect for an initial period beginning on the date Fleet acquires the Asset     
Management Segment, or such later date on which the shareholders of a Fund      
approve the New Advisory Agreement, and ending on July 31, 2003. After that, it 
will continue in effect from year to year as long as the continuation is        
approved at least annually (i) by the Trustees or by vote of a majority of the  
outstanding voting securities of the Fund and (ii) by vote of a majority of the 
Trustees who are not "interested persons," as that term is defined in the       
Investment Company Act, of the Trust or the Advisor (those Trustees who are not 
"interested persons" of the Trust or the Advisor are referred to below as the   
"Independent Trustees").                                                        

The New Advisory Agreement for each Fund may be terminated without penalty by   
vote of the Trustees or by vote of a majority of the outstanding voting         
securities of the Fund, on sixty days' written notice to the Advisor, or by the 
Advisor upon sixty days' written notice to the Trust, and each terminates       
automatically in the event of its "assignment" as defined in the Investment     
Company Act. The Investment Company Act defines "assignment" to include, in     
general, transactions in which a significant change in the ownership of an      
investment advisor or its parent company occurs (such as the acquisition of the 
Asset Management Segment by Fleet).                                             

The New Advisory Agreement for each Fund provides that the Advisor will not be  
liable to the Fund or its shareholders, except for liability                    

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arising from the Advisor's willful misfeasance, bad faith, gross negligence or  
reckless disregard of duty.                                                     

The Advisor currently provides administrative services to each Fund under a     
separate administration agreement. That agreement and the agreement discussed in
the following paragraph are not subject to the "assignment" provisions of the   
Investment Company Act and are not impacted by LFC's sale of the Asset          
Management Segment to Fleet. The aggregate administrative services fees paid by 
each Fund to the Advisor for the most recently completed fiscal year are set    
forth in Appendix E. Upon shareholder approval of the New Advisory Agreement,   
each Fund, under the administration agreement, will continue to pay to the      
Advisor the same fee rate under that agreement that it currently pays. Some or  
all of the administrative services required pursuant to the administration      
agreement are provided, at the Advisor's expense, by affiliates of the Advisor. 
The Advisor will continue to be responsible for the performance of services it  
delegates to others.                                                            

Liberty Funds Services, Inc. ("LFSI"), One Financial Center, Boston,            
Massachusetts 02111, is the transfer and shareholder servicing agent for the    
Funds. The aggregate transfer agency fees paid by each Fund to LFSI for the most
recently completed fiscal year are set forth in Appendix E. The transfer agency 
arrangements for each Fund will remain in effect if the proposed New Advisory   
Agreement is approved.                                                          

BASIS FOR THE TRUSTEES' RECOMMENDATIONS                                         

The Trustees initially met on June 25, 2001 to discuss the proposed acquisition 
of the Asset Management Segment by Fleet. At that meeting, the Trustees         
discussed the terms of the proposed acquisition, the general corporate structure
of Fleet and the background of certain key employees of Fleet, and the views of 
the Advisor on the proposed acquisition. The Trustees discussed items that they 
wanted to raise with Fleet and authorized their counsel to create a list of     
discussion items. At a meeting of the Independent Trustees held on July 2, 2001,
the Independent Trustees reviewed and revised the list of discussion items to be
presented to representatives of Fleet, and were updated on the status of        
discussions between the Advisor and Fleet.                                      

At a meeting of the Board held on July 10, 2001, representatives of LFC made a  
presentation regarding the terms of the proposed acquisition and representatives
of Fleet made a presentation regarding Fleet's structure                        

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and asset management business and their plans as they existed at that time for  
the Asset Management Segment. In addition, the representatives of Fleet         
responded to the list of discussion items furnished to them in advance of the   
meeting. The Trustees asked numerous questions relating to the autonomy of      
Liberty Acorn Trust and the Advisor, Fleet's process to transition the Asset    
Management Segment, including the Advisor, into its business operations and     
Fleet's commitment to the asset management business. At that meeting, the       
Trustees met in executive session and determined to request that Fleet enter    
into a side agreement with Liberty Acorn Trust setting forth certain of the     
items discussed at the meeting. The Trustees authorized their counsel to prepare
a memorandum to Fleet setting forth the principal terms of the proposed         
agreement. The Trustees also discussed the various alternatives available if    
they should determine not to approve the New Advisory Agreement. At a meeting of
the Independent Trustees held on July 16, 2001, the Independent Trustees        
reviewed the draft memorandum and requested that their counsel incorporate into 
the memorandum suggestions made at the meeting, and forward the memorandum to   
representatives of Fleet.                                                       

At a meeting held on July 31, 2001, the Independent Trustees met in executive   
session to discuss Fleet's proposed agreement responding to the Trustees'       
memorandum. Thereafter, the Trustees met with representatives of Fleet and a    
representative of LFC, all of whom answered various questions posed by the      
Trustees, particularly relating to the status of negotiations concerning the    
retention of key employees of the Advisor. The Trustees and Fleet finalized the 
terms of the agreement (the "Fleet Agreement") by which Fleet agreed that during
the initial term of the New Advisory Agreement, except as otherwise authorized  
by the Trustees, it will:                                                       

- preserve the autonomy of Liberty Acorn Trust;                                 

- preserve the independence of the Advisor, including its investment philosophy 
and approach to investment operations, research and talent;                 

- allow the Advisor considerable latitude to recruit and compensate (on         
competitive terms) investment management personnel;                         

- not interfere with the Advisor's relationships with regional brokers unless   
regulatory or compliance concerns dictate and will permit the Advisor to    
  continue to allocate the commissions and soft dollar payments as it has in the
past;                                                                       

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- maintain the trading desk at the Advisor for domestic and international       
trading activities; and                                                     

- not add to the current management responsibilities of any portfolio manager of
a Fund the responsibility to manage additional funds from the Fleet         
organization without the consent of the Trustees.                           

The Trustees requested that Fleet and the Advisor continue to negotiate the     
terms of the retention arrangements with key employees of the Advisor, and      
agreed to meet on August 15, 2001 to consider approval of the New Advisory      
Agreement.                                                                      

At a meeting of the Board held on August 15, 2001, the representatives of Fleet 
and the Advisor updated the Board on the status of the negotiations between     
Fleet and key employees of the Advisor. After further discussion and            
consideration, the Trustees approved the New Advisory Agreement and determined  
to recommend that each Fund's shareholders vote to approve the New Advisory     
Agreement for their Fund. At a meeting held on __________, 2001, the Trustees   
gave further consideration to the proposed acquisition and reaffirmed their     
recommendation that shareholders vote to approve the New Advisory Agreement.    

In coming to that determination, the Trustees gave particular consideration to  
matters relating to the possible effects on the Advisor and the Funds of the    
acquisition of the Asset Management Segment by Fleet. Among other things, the   
Trustees considered:                                                            

- the terms of the Fleet Agreement as described above;                          

- certain actions taken by LFC and the Advisor to help retain and incent their  
key personnel;                                                              

- the general reputation, financial resources and business activities of Fleet  
and its parent organization;                                                

- the potential benefits of scale from combining the asset management businesses
of Fleet and LFC, including the ability to attract and retain key personnel 
and enhance technology and customer service;                                

- the stated intention of Fleet to consult with the Board of the Funds prior to 
removing or reducing any voluntary fee waivers or expense limitations; and  

- the stated intention of Fleet to provide investment professionals of the      
Advisor with access to greater resources as a result of the acquisition.    

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In addition, the Trustees considered a wide range of information of the type    
they regularly consider when determining whether to continue a Fund's advisory  
agreement as in effect from year to year. The Trustees considered information   
about, among other things:                                                      

- the Advisor and its respective personnel (including particularly those        
personnel with responsibilities for providing services to the Funds),       
resources and investment process;                                           

- the terms of the New Advisory Agreement;                                      

- the scope and quality of the services that the Advisor has been providing to  
the Funds;                                                                  

- the investment performance of each Fund and of similar funds managed by other 
advisors;                                                                   

- the advisory fee rates payable to the Advisor by the Funds and by other funds 
and client accounts managed by the Advisor, and payable by similar funds    
managed by other advisors (Appendix C to this Proxy Statement contains      
information comparing each Fund's advisory fee schedule to the fee schedule 
  for other funds managed by the Advisor that have investment objectives similar
to the particular Fund);                                                    

- the total expense ratios of the Funds and of similar funds managed by other   
advisors; and                                                               

- compensation payable by the Funds to affiliates of the Advisor for other      
services (see Appendix E to this Proxy Statement for more information about 
that compensation).                                                         

In addition, the Trustees considered that the agreement relating to the         
acquisition by Fleet provides that Fleet will (subject to certain               
qualifications) use all reasonable efforts to assure compliance with Section    
15(f) of the Investment Company Act. Section 15(f) provides that a mutual fund  
investment advisor or its affiliates may receive benefits or compensation in    
connection with a change of control of the investment advisor (such as Fleet's  
acquisition of the Asset Management Segment) if two conditions are satisfied.   
First, for three years after the change of control, at least 75% of the members 
of the board of any registered investment company advised by the advisor must   
consist of persons who are not "interested persons," as defined in the          
Investment Company Act, of the advisor. (No changes in the current composition  
of the Trustees are required to satisfy that condition.) Second, no "unfair     

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burden" may be imposed on any such registered investment company as a result of 
the change of control transaction or any express or implied terms, conditions or
understandings applicable to the transaction. "Unfair burden" means any         
arrangement, during the two years after the transaction, by which the investment
advisor or any "interested person" of the advisor receives or is entitled to    
receive any compensation, directly or indirectly, from such investment company  
or its security holders (other than fees for bona fide investment advisory or   
other services) or from any other person in connection with the purchase or sale
of securities or other property to, from or on behalf of such investment        
company.                                                                        

After carefully considering the information described above, the Trustees,      
including the Independent Trustees, unanimously voted to approve the New        
Advisory Agreement for each Fund and to recommend that each Fund's shareholders 
vote to approve the New Advisory Agreement for their Fund.                      

In the event that the shareholders have not approved the New Advisory Agreement 
at the time of the acquisition of the Asset Management Segment by Fleet, the    
Advisor will enter into an interim advisory agreement pursuant to Rule 15a-4    
under the Investment Company Act, which will take effect immediately following  
the acquisition of the Asset Management Segment by Fleet (at which time the     
Current Advisory Agreement will terminate due to an assignment). This interim   
advisory agreement will be in substantially the form set forth in Appendix B but
also will include certain provisions required by Rule 15a-4 (such as a maximum  
term of 150 days, a provision that the Board of Trustees of Liberty Acorn Trust 
or a majority of the Fund's shareholders may terminate the agreement at any time
without penalty on not more than 10 days' written notice, and a provision that  
the compensation earned by the Advisor thereunder will be held in an            
interest-bearing escrow account until shareholder approval of the New Advisory  
Agreement is obtained, after which the amount in the escrow account (together   
with any interest) will be paid to the Advisor). If a Fund has not received the 
requisite shareholder approval for the New Advisory Agreement within 150 days   
after the closing of the acquisition, the Trustees will consider other          
appropriate arrangements subject to approval in accordance with the Investment  
Company Act.                                                                    

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INFORMATION ABOUT THE ADVISOR AND THE FLEET/LFC TRANSACTION                     

LIBERTY WANGER ASSET MANAGEMENT, L.P.                                           

Liberty Wanger Asset Management, L.P. (formerly named Wanger Asset Management,  
L.P. ("WAM")), located at 227 West Monroe Street, Suite 3000, Chicago, Illinois 
60606, is the Funds' advisor. WAM was renamed Liberty Wanger Asset Management,  
L.P. on September 29, 2000, when it became a wholly owned subsidiary of LFC (the
"WAM Merger"). The Advisor and its predecessor have managed mutual funds since  
1992. On September 29, 2000, the former investment advisory agreement for each  
Fund with WAM terminated and the Current Advisory Agreement became effective. As
of July 31, 2001, the Advisor managed over $ 8.9 billion in assets.             

LFC is a direct majority-owned subsidiary of LFC Management Corporation, which  
in turn is a direct wholly owned subsidiary of Liberty Corporate Holdings, Inc.,
which in turn is a direct wholly owned subsidiary of LFC Holdings, Inc., which  
in turn is a direct wholly owned subsidiary of Liberty Mutual Equity            
Corporation, which in turn is a direct wholly owned subsidiary of Liberty Mutual
Insurance Company ("Liberty Mutual"). As of June 30, 2001, LFC Management       
Corporation owned approximately 70.46% of the common stock of LFC and the       
balance is held by the public and listed on the New York Stock Exchange. LFC is 
a diversified and integrated asset management organization which provides       
insurance and investment products to individuals and institutions. The principal
executive offices of LFS and LFC are located at 600 Atlantic Avenue, 24th Floor,
Boston, Massachusetts 02210. Liberty Mutual is an underwriter of workers'       
compensation insurance and a property and casualty insurer in the United States,
organized under the laws of Massachusetts in 1912. The principal business       
activities of Liberty Mutual's subsidiaries other than LFC are property-casualty
insurance, insurance services and life insurance (including group life and      
health insurance products) marketed through its own sales force. The principal  
executive offices of LFC Management Corporation, Liberty Corporate Holdings,    
Inc., LFC Holdings, Inc., Liberty Mutual and Liberty Mutual Equity Corporation  
are located at 175 Berkeley Street, Boston, Massachusetts 02117.                

The Advisor is a limited partnership managed by its general partner, WAM        
Acquisition GP, Inc. ("WAM GP"). WAM GP is a wholly owned subsidiary of LFC.    
Ralph Wanger is the president of WAM GP.                                        

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The business address of WAM GP and of Mr. Wanger is 227 West Monroe Street,     
Suite 3000, Chicago, Illinois 60606.                                            

In addition, the following individuals who are officers or Trustees of the Funds
are also officers or directors of the Advisor: Bruce H. Lauer, Kenneth A. Kalina
and Ralph Wanger.                                                               

DESCRIPTION OF THE TRANSACTION                                                  

On June 4, 2001, LFC announced that it had entered into a Stock Purchase        
Agreement with Fleet (the "Purchase Agreement"). Under the Purchase Agreement,  
Fleet would acquire the Asset Management Segment for a purchase price of $900   
million, plus the assumption of approximately $110 million in debt. This price  
may be adjusted:                                                                

- upward or downward based on increases or decreases in the amount of portfolios
managed by the subsidiaries that make up the Asset Management Segment       
(excluding the effects of market action) from December 31, 2000 until a date
prior to the closing as the result of purchases of and exchanges into and   
withdrawals from and exchanges out of those portfolios. The maximum purchase
price adjustment under this provision would be $180 million;                

- upward or downward based on increases or decreases in the tangible net worth  
  of the Asset Management Segment from April 1, 2001 through a date prior to the
closing;                                                                    

- downward based on decreases of more than 20% (excluding the effects of sales  
and redemptions) in the market values of the assets under management of the 
Asset Management Segment between March 31, 2001 and a date prior to the     
closing; and                                                                

- upward or downward based on the estimated value of amounts owing to or by LFC 
at the time of closing in respect of taxes with respect to the income of the
  Asset Management Segment and the settlement of certain inter-company accounts,
 agreements and arrangements between LFC and the subsidiaries that make up the
Asset Management Segment.                                                   

The transaction will not occur unless various conditions are satisfied (or      
waived by the parties, if permitted by law). One of these conditions is         
obtaining approval or consent from investment advisory clients of the Advisor   
and other LFC affiliates that constitute the Asset Management Segment (including
fund clients) whose accounts represented 80% of the                             

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Asset Management Segment's assets under management as of March 31, 2001. Because
of these conditions, approval or disapproval by a Fund's shareholders of the New
Advisory Agreement for their Fund, taken together with other clients' consents  
or approvals, could affect whether or not the transaction occurs. As described  
below, certain trustees and officers of Liberty Acorn Trust will receive certain
material payments or benefits if the transaction occurs. The transaction will   
result in the automatic termination of the Current Advisory Agreement. If for   
some reason the transaction does not occur, the automatic termination of the    
Current Advisory Agreement will not occur, and the New Advisory Agreement will  
not be entered into, even if it has been approved by the Funds' shareholders. If
shareholder approval is not obtained at the time the transaction occurs, a Fund 
will enter into an interim advisory agreement with the Advisor. See "Basis for  
the Trustees' Recommendations" above for further information on the interim     
agreement.                                                                      

Simultaneously with the signing of the Purchase Agreement, at Fleet's request,  
Liberty Mutual and LFC entered into a license agreement with Fleet which        
provides that upon the closing of the acquisition of the Asset Management       
Segment, Fleet will have a perpetual, royalty free, non-transferable,           
non-sublicensable, non-exclusive license to use the Liberty mark and trade name,
the Statue of Liberty design and other associated marks and trade names used in 
connection with the Asset Management Segment's business. The license agreement  
also contains other covenants and provisions more fully set forth in the Fleet  
license agreement. Neither Liberty Mutual nor LFC will receive compensation or  
other consideration under the Fleet license agreement.                          

As a result of the acquisition, the Advisor and certain of its affiliates that  
constitute the Asset Management Segment would become wholly owned, direct or    
indirect subsidiaries of Fleet. Fleet is a wholly owned subsidiary of           
FleetBoston Financial Corporation, a Boston, Massachusetts-based financial      
holding company. Fleet and its affiliates offer a comprehensive array of        
financial solutions to approximately 20 million customers in more than 20       
countries. Their key lines of business include:                                 

- CONSUMER AND INVESTMENT SERVICES -- includes domestic retail banking to       
consumer and small business customers, community banking, student loan      
processing, credit card services, and investment services, including mutual 
funds and investments, retirement planning, large institutional asset       
management and brokerage;                                                   

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- CORPORATE AND GLOBAL BANKING -- includes commercial finance, including        
asset-based lending and leasing; international banking in key Latin American
markets; corporate banking, including specialized industry and institutional
lending; and middle market lending, including commercial lending, government
banking services, trade services and cash management; and                   

- CAPITAL MARKETS -- includes investment banking services, brokerage,           
market-making and principal investing.                                      

CERTAIN INTERESTS OF FUND TRUSTEES AND OFFICERS.  Substantially all full-time   
employees of LFC and its subsidiaries (including certain officers of Liberty    
Acorn Trust) participate in the Liberty Financial Companies, Inc. and           
Subsidiaries Non-Commissioned Employee Severance and Retention Plan or the      
Liberty Financial Companies, Inc. and Subsidiaries Commissioned Employees       
Severance and Retention Plan (the "Retention Plans"). The Retention Plans       
provide for cash retention bonuses and the full vesting upon a change of control
of all outstanding options to purchase shares of stock of LFC ("LFC Options")   
and shares of restricted stock of LFC ("Restricted Stock") for which the target 
price in the applicable restricted stock agreement is less than the value of LFC
common stock on the date of the change of control, even though some of these LFC
Options and Restricted Stock would not otherwise have vested or become fully    
exercisable prior to the change of control. The Retention Plans also provide for
enhanced severance benefits to substantially all employees upon a change of     
control and additional payments to cover excise tax obligations. With respect to
employees of the subsidiaries that constitute the Asset Management Segment, a   
change of control will be deemed to occur under the Retention Plans upon the    
completion of the Fleet transaction.                                            

Pursuant to the WAM Merger, in addition to the fixed amount of the purchase     
price paid by LFC to the principals of WAM (including Ralph Wanger and Charles  
McQuaid, members of the Board of Trustees of Liberty Acorn Trust), additional   
purchase price amounts would have been payable by LFC if the Advisor's earnings 
met certain targets for the 36 and 60 month periods beginning with the month    
following the closing of the WAM Merger. ______ has agreed that[, if Fleet      
acquires the Asset Management Segment,] those targets will be reduced and the   
additional payments will be reduced to a maximum of $______ million. In         
addition, ______ has offered [agreed] to increase the compensation of           

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certain employees of the Advisor, including Messrs. Wanger and McQuaid and the  
other portfolio managers of the Funds.                                          

CERTAIN BROKERAGE MATTERS                                                       

In their consideration of the New Advisory Agreement, the Trustees took account 
of the Advisor's practices regarding the selection and compensation of brokers  
and dealers that execute portfolio transactions for the Funds, and the brokers' 
and dealers' provision of brokerage and research services to the Advisor. The   
Advisor has informed the Trustees that it does not expect to change these       
practices as a result of Fleet's acquisition of the Asset Management Segment. A 
summary of these brokerage and soft-dollar practices is set forth in Appendix D.

OTHER INFORMATION 

PRINCIPAL UNDERWRITER'S AND ADMINISTRATOR'S ADDRESS.  The address of the Funds' 
principal underwriter, Liberty Funds Distributor, Inc., is One Financial Center,
Boston, Massachusetts 02111. The address of the Funds' administrator, Liberty   
Wanger Asset Management, L.P., is 227 West Monroe Street, Suite 3000, Chicago,  
Illinois 60606.                                                                 

FUND ANNUAL AND SEMIANNUAL REPORTS.  THE FUNDS HAVE PREVIOUSLY SENT THEIR ANNUAL
REPORT AND ANY SUBSEQUENT SEMIANNUAL REPORTS TO THEIR SHAREHOLDERS. YOU CAN     
OBTAIN A COPY OF THESE REPORTS WITHOUT CHARGE BY WRITING TO LIBERTY FUNDS       
DISTRIBUTOR, INC., ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111-2621 OR BY 
CALLING 800-426-3750.                                                           

OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS.  Shareholders of record at the 
close of business on August 23, 2001 are entitled to notice of and to vote at   
the Meeting and any adjourned session. Appendix F to this Proxy Statement lists 
for each Fund the total number of shares outstanding as of August 23, 2001 for  
each class of the Fund's shares entitled to vote at the Meeting. It also        
identifies holders of more than 5% of any class of shares of each Fund and      
contains information about the shareholdings in the Funds by the Trustees and   
the executive officers of the Funds.                                            

INFORMATION ABOUT PROXIES AND THE CONDUCT OF THE MEETING                        

SOLICITATION OF PROXIES.  Proxies will be solicited primarily by mailing this   
Proxy Statement and its enclosures, but proxies may also be solicited through   
further mailings, telephone calls, personal interviews or e-mail                

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by officers of the Funds or by employees or agents of the Advisor or of LFC and 
its affiliated companies. In addition, D.F. King, with respect to Class Z shares
of the Funds, and Georgeson Shareholder Communications Inc., with respect to    
Class A, B and C shares of the Funds, have been engaged to assist in the        
solicitation of proxies at an estimated cost of $17,500 and $39,082,            
respectively.                                                                   

COSTS OF SOLICITATION.  All of the costs of the Meeting, including the costs of 
soliciting proxies, will be paid by LFC or Fleet. None of these costs will be   
borne by the Funds or their shareholders.                                       

VOTING AND TABULATION OF PROXIES.  Shares represented by duly executed proxies  
will be voted as instructed on the proxy. If no instructions are given, the     
proxy will be voted in favor of the New Advisory Agreement. You may vote by any 
one of the three following methods: (1) by mailing the enclosed proxy card; (2) 
through use of the Internet or (3) by telephone. If you mail the enclosed proxy 
and no choice is indicated for a proposal listed in the attached Notice of      
Meeting, your proxy will be voted in favor of that proposal. Votes made through 
use of the Internet or by telephone must have an indicated choice in order to be
accepted. Please see the enclosed proxy insert for information on how to vote by
Internet or telephone. At any time before it has been voted, your proxy may be  
revoked in one of the following ways: (i) by sending a signed, written letter of
revocation to the Secretary of the Trust; (ii) by properly executing a          
later-dated proxy (by any of the methods of voting described above) or (iii) by 
attending the Meeting, requesting return of any previously delivered proxy and  
voting in person.                                                               

Votes cast in person or by proxy at the Meeting will be counted by persons      
appointed by the Funds as tellers for the Meeting (the "Tellers"). Thirty       
percent of the shares of any Fund outstanding on the record date, present in    
person or represented by proxy, constitutes a quorum for the transaction of     
business by the shareholders of that Fund at the Meeting. In determining whether
a quorum is present, the Tellers will count shares represented by proxies that  
reflect abstentions and "broker non-votes" as shares that are present and       
entitled to vote. Since these shares will be counted as present, but not as     
voting in-favor of any proposal, these shares will have the same effect as if   
they cast votes against the proposal. "Broker non-votes" are shares held by     
brokers or nominees as to which (i) the broker or nominee does not have         
discretionary voting power and (ii) the broker or nominee has not received      
instructions from the beneficial owner or other person who is entitled to       
instruct how the shares will be voted.                                          
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REQUIRED VOTE.  For each Fund, the vote required to approve the New Advisory    
Agreement is the lesser of (1) 67% of the shares of that Fund that are present  
at the Meeting, if the holders of more than 50% of the shares of the Fund       
outstanding as of the record date are present or represented by proxy at the    
Meeting, or (2) more than 50% of the shares of the Fund outstanding on the      
record date. If the required vote is not obtained for any Fund, the Trustees    
will consider what other actions to take in the best interests of the Fund.     

ADJOURNMENTS; OTHER BUSINESS.  If any Fund has not received enough votes by the 
time of the Meeting to approve that Fund's New Advisory Agreement, the persons  
named as proxies may propose that the Meeting be adjourned one or more times as 
to that Fund to permit further solicitation of proxies. Any adjournment requires
the affirmative vote of a majority of the total number of shares of that Fund   
that are present in person or by proxy when the adjournment is being voted on.  
The persons named as proxies will vote in favor of any such adjournment all     
proxies that they are entitled to vote in favor of the relevant Fund's New      
Advisory Agreement. They will vote against any such adjournment any proxy that  
directs them to vote against the New Advisory Agreement. They will not vote any 
proxy that directs them to abstain from voting on the New Advisory Agreement.   

The Meeting has been called to transact any business that properly comes before 
it. The only business that management of the Funds intends to present or knows  
that others will present is the approval of the New Advisory Agreement. If any  
other matters properly come before the Meeting, and on all matters incidental to
the conduct of the Meeting, the persons named as proxies intend to vote the     
proxies in accordance with their judgment, unless the Secretary of the Funds has
previously received written contrary instructions from the shareholder entitled 
to vote the shares.                                                             

SHAREHOLDER PROPOSALS AT FUTURE MEETINGS.  The Funds do not hold annual or other
regular meetings of shareholders. Shareholder proposals to be presented at any  
future meeting of shareholders of the Funds must be received by the applicable  
Fund in writing a reasonable time before the Trust begins to print and mail     
proxies for that meeting, in order to be considered for inclusion in the proxy  
materials for that meeting. You may submit shareholder proposals to the         
Secretary of the Funds, 227 West Monroe Street, Suite 3000, Chicago, Illinois   
60606.                                                                          

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                                                                      APPENDIX A

ADVISORY AGREEMENT

                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------------
                                                 DESCRIPTION OF          DATE OF LAST      
                                                 TRUSTEE ACTION      SUBMISSION OF CURRENT 
               ADVISORY FEE                     REGARDING CURRENT     INVESTMENT ADVISORY  
               RATE SCHEDULE  DATE OF CURRENT  INVESTMENT ADVISORY       AGREEMENT FOR     
                (AS A % OF      INVESTMENT       AGREEMENT SINCE     SHAREHOLDER APPROVAL  
               AVERAGE DAILY     ADVISORY      BEGINNING OF FUND'S      AND REASON FOR     
NAME OF FUND    NET ASSETS)      AGREEMENT      LAST FISCAL YEAR          SUBMISSION       
-------------------------------------------------------------------------------------------
                                                                                           
 Liberty       0.75% on       September 29,    On July 6, 2000,     On September 26, 2000, 
 Acorn Fund    first $700     2000             the Trustees         shareholders approved  
               million;                        approved the         the current investment 
               0.70% over                      current investment   advisory agreement in  
               $700 million                    advisory agreement   connection with LFC's  
               to $2                           in connection with   acquisition of the     
               billion;                        LFC's acquisition    Advisor                
               0.65% over $2                   of the Advisor.                             
               billion                                                                     
-------------------------------------------------------------------------------------------
 Liberty       1.20% on       September 29,    On July 6, 2000,     On September 26, 2000, 
 Acorn         first $100     2000             the Trustees         shareholders approved  
International  million;                        approved the         the current investment 
               0.95% on next                   current investment   advisory agreement in  
               $400 million;                   advisory agreement   connection with LFC's  
               0.75% over                      in connection with   acquisition of the     
               $500 million                    LFC's acquisition    Advisor                
                                               of the Advisor.                             
-------------------------------------------------------------------------------------------
 Liberty       0.95% on       September 29,    On July 6, 2000,     On September 26, 2000, 
 Acorn USA     first $200     2000             the Trustees         shareholders approved  
               million;                        approved the         the current investment 
               0.90% over                      current investment   advisory agreement in  
               $200 million                    advisory agreement   connection with LFC's  
                                               in connection with   acquisition of the     
                                               LFC's acquisition    Advisor                
                                               of the Advisor.                             
-------------------------------------------------------------------------------------------
 Liberty       0.90%(1)       September 29,    On July 6, 2000,     On September 26, 2000, 
 Acorn Twenty                 2000             the Trustees         shareholders approved  
                                               approved the         the current investment 
                                               current investment   advisory agreement in  
                                               advisory agreement   connection with LFC's  
                                               in connection with   acquisition of the     
                                               LFC's acquisition    Advisor                
                                               of the Advisor.                             
-------------------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------------
                                                 DESCRIPTION OF          DATE OF LAST      
                                                 TRUSTEE ACTION      SUBMISSION OF CURRENT 
               ADVISORY FEE                     REGARDING CURRENT     INVESTMENT ADVISORY  
               RATE SCHEDULE  DATE OF CURRENT  INVESTMENT ADVISORY       AGREEMENT FOR     
                (AS A % OF      INVESTMENT       AGREEMENT SINCE     SHAREHOLDER APPROVAL  
               AVERAGE DAILY     ADVISORY      BEGINNING OF FUND'S      AND REASON FOR     
NAME OF FUND    NET ASSETS)      AGREEMENT      LAST FISCAL YEAR          SUBMISSION       
-------------------------------------------------------------------------------------------
                                                                                           
 Liberty       0.95%(2)       September 29,    On July 6, 2000,     On September 26, 2000, 
 Acorn                        2000             the Trustees         shareholders approved  
 Foreign                                       approved the         the current investment 
 Forty                                         current investment   advisory agreement in  
                                               advisory agreement   connection with LFC's  
                                               in connection with   acquisition of the     
                                               LFC's acquisition    Advisor                
                                               of the Advisor.                             
-------------------------------------------------------------------------------------------

(1) The Advisor has voluntarily agreed to reimburse Liberty Acorn Twenty to the 
    extent the ordinary operating expenses exceed 1.35% of the average daily net
 assets for Class Z, Class A, Class B and Class C shares. This arrangement
   may be modified or terminated by either Liberty WAM or the Fund on 30 days'
notice to the other.                                                    

(2) The Advisor has voluntarily agreed to reimburse Liberty Acorn Foreign Forty 
 to the extent the ordinary operating expenses exceed 1.45% of the average
daily net assets for Class Z, Class A, Class B and Class C shares. This 
   arrangement may be modified or terminated by either Liberty WAM or the Fund
on 30 days' notice to the other.                                        

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                                                                      APPENDIX B

FORM OF INVESTMENT ADVISORY AGREEMENT 

INVESTMENT ADVISORY AGREEMENT 

LIBERTY ACORN TRUST, a Massachusetts business trust registered under the        
Investment Company Act of 1940 (the "1940 Act") as an open-end diversified      
management investment company ("Liberty Acorn"), and LIBERTY WANGER ASSET       
MANAGEMENT, L.P., a Delaware limited partnership registered under the Investment
Advisers Act of 1940 as an investment adviser ("Liberty WAM"), agree that:      

1.  ENGAGEMENT OF LIBERTY WAM.  Liberty Acorn appoints Liberty WAM to furnish   
investment advisory and other services to Liberty Acorn for its series          
designated Liberty Acorn Fund, Liberty Acorn International, Liberty Acorn USA,  
Liberty Acorn Twenty and Liberty Acorn Foreign Forty (each, a "Fund," and       
collectively, the "Funds")), and Liberty WAM accepts that appointment, for the  
period and on the terms set forth in this agreement.                            

If Liberty Acorn establishes one or more series in addition to the Funds named  
above with respect to which it desires to retain Liberty WAM as investment      
adviser hereunder, and if Liberty WAM is willing to provide such services under 
this agreement, Liberty Acorn and Liberty WAM may add such new series to this   
agreement, by written supplement to this agreement. Such supplement shall       
include a schedule of compensation to be paid to Liberty WAM by Liberty Acorn   
with respect to such series and such other modifications of the terms of this   
agreement with respect to such series as Liberty Acorn and Liberty WAM may      
agree. Upon execution of such a supplement by Liberty Acorn and Liberty WAM,    
that series will become a Fund hereunder and shall be subject to the provisions 
of this agreement to the same extent as the Funds named above, except as        
modified by the supplement.                                                     

2.  SERVICES OF LIBERTY WAM.                                                    

(a)  INVESTMENT MANAGEMENT.  Subject to the overall supervision and control of  
Liberty Acorn's board of trustees (the "Board"), Liberty WAM shall have         
supervisory responsibility for the general management and investment of the     
Funds' assets. Liberty WAM shall comply with the 1940 Act and with all          
applicable rules and regulations of the Securities and Exchange Commission, the 
provisions of the Internal                                                      

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Revenue Code applicable to the Funds as regulated investment companies, the     
investment policies and restrictions, portfolio transaction policies and the    
other statements concerning the Funds in Liberty Acorn's agreement and          
declaration of trust, bylaws, and registration statements under the 1940 Act and
the Securities Act of 1933 (the "1933 Act"), and policy decisions and procedures
adopted by the Board from time to time.                                         

Liberty WAM is authorized to make the decisions to buy and sell securities and  
other assets for the Funds, to place the Funds' portfolio transactions with     
broker-dealers, and to negotiate the terms of such transactions including       
brokerage commissions on brokerage transactions, on behalf of the Funds. Liberty
WAM is authorized to exercise discretion within the Funds' policy concerning    
allocation of its portfolio brokerage, as permitted by law, including but not   
limited to section 28(e) of the Securities Exchange Act of 1934, and in so doing
shall not be required to make any reduction in its investment advisory fees.    
Liberty Acorn hereby authorizes any entity or person associated with Liberty WAM
that is a member of a national securities exchange to effect any transaction on 
the exchange for the account of a Fund to the extent permitted by and in        
accordance with Section 11(a) of the Securities Exchange Act of 1934 and Rule   
11a2-2(T) thereunder. Liberty Acorn hereby consents to the retention by such    
entity or person of compensation for such transactions in accordance with Rule  
11a-2(T)(a)(iv).                                                                

Liberty WAM may, where it deems it to be advisable, aggregate orders with other 
securities of the same type to be sold or purchased by one or more Funds with   
like orders on behalf of other clients of Liberty WAM (as well as clients of    
other investment advisers affiliated with Liberty WAM, in the event that Liberty
WAM and such affiliated investment advisers share common trading facilities). In
such event, Liberty WAM (or Liberty WAM and its affiliated advisers, as the case
may be) will allocate the shares so sold or purchased, as well as the expenses  
incurred in the transaction, in a manner it (or it and they) consider to be     
equitable and fair and consistent with its (or its or their) fiduciary          
obligations to clients.                                                         

(b)  REPORTS AND INFORMATION.  Liberty WAM shall furnish to the Board periodic  
reports on the investment strategy and performance of the Funds and such        
additional reports and information as the Board or the officers of Liberty Acorn
may reasonably request. Liberty Acorn shall                                     

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furnish or otherwise make available to Liberty WAM such copies of financial     
statements, proxy statements, reports, and other information relating to the    
business and affairs of each Fund as Liberty WAM may, at any time or from time  
to time, reasonably require in order to discharge its obligations under this    
agreement.                                                                      

(c)  CUSTOMERS OF FINANCIAL INSTITUTIONS.  It is understood that Liberty WAM    
may, but shall not be obligated to, make payments from its own resources to     
financial institutions (which may include banks, broker-dealers, recordkeepers, 
administrators and others) that provide, either directly or through agents,     
administrative and other services with respect to shareholders who are customers
of such institutions, including establishing shareholder accounts, assisting    
Liberty Acorn's transfer agent with respect to recording purchase and redemption
transactions, advising shareholders about the status of their accounts, current 
yield and dividends declared and such related services as the shareholders or   
the Funds may request.                                                          

(d)  BOOKS AND RECORDS.  In compliance with the requirements of Rule 31a-3 under
the 1940 Act, Liberty WAM agrees to maintain records relating to its services   
under this agreement, and further agrees that all records that it maintains for 
Liberty Acorn are the property of Liberty Acorn and to surrender promptly to    
Liberty Acorn any of such records upon Liberty Acorn's request; provided that   
Liberty WAM may at its own expense make and retain copies of any such records.  
Liberty WAM further agrees to preserve for the periods prescribed by Rule 31a-2 
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.                                                                       

(e)  STATUS OF LIBERTY WAM.  Liberty WAM shall for all purposes herein be deemed
to be an independent contractor and not an agent of Liberty Acorn and shall,    
unless otherwise expressly provided or authorized, have no authority to act for 
or represent Liberty Acorn in any way. Liberty WAM agrees to notify the Trust   
promptly of any change in the identity of Liberty WAM's general partner.        

3.  ADMINISTRATIVE SERVICES.  Liberty WAM shall supervise the business and      
affairs of Liberty Acorn and each Fund and shall provide such services and      
facilities as may be required for effective administration of Liberty Acorn and 
the Funds as are not provided by employees or other agents engaged by Liberty   
Acorn; provided that Liberty WAM shall not have any obligation to provide under 
this agreement any such services                                                

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which are the subject of a separate agreement or arrangement between Liberty    
Acorn and Liberty WAM, any affiliate of Liberty WAM, or any third party         
administrator.                                                                  

4.  USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS.  In connection with the     
services to be provided by Liberty WAM under this agreement, Liberty WAM may, to
the extent it deems appropriate, and subject to compliance with the requirements
of applicable laws and regulations and upon receipt of approval of the Trustees,
make use of (i) its affiliated companies and their directors, trustees,         
officers, and employees and (ii) subcontractors selected by Liberty WAM,        
provided that Liberty WAM shall supervise and remain fully responsible for the  
services of all such third parties in accordance with and to the extent provided
by this agreement. All costs and expenses associated with services provided by  
any such third parties shall be borne by Liberty WAM or such parties.           

5.  EXPENSES TO BE PAID BY LIBERTY ACORN.  Except as otherwise provided in this 
agreement or any other contract to which Liberty Acorn is a party, Liberty Acorn
shall pay all expenses incidental to its organization, operations and business, 
including, without limitation:                                                  

(a)  all charges of depositories, custodians, sub-custodians and other agencies 
for the safekeeping and servicing of its cash, securities and other property and
of its transfer agents and registrars and its dividend disbursing and redemption
agents, if any;                                                                 

(b)  all charges of its administrator, if any;                                  

(c)  all charges of legal counsel and of independent auditors;                  

(d)  all compensation of trustees other than those affiliated with Liberty WAM  
or Liberty Acorn's administrator, if any, and all expenses incurred in          
connection with their services to Liberty Acorn;                                

(e)  all expenses of preparing, printing and distributing notices, proxy        
solicitation materials and reports to shareholders of the Funds;                

(f)  all expenses of meetings of shareholders of the Funds;                     

(g)  all expenses of registering and maintaining the registration of Liberty    
Acorn under the 1940 Act and of shares of the Funds under the 1933 Act,         
including all expenses of preparation, filing and printing of annual or more    
frequent revisions of the Funds' registration statements under the 1940 Act and 
1933 Act, and of supplying each then existing shareholder or beneficial owner of
shares of the Funds of a copy of each                                           

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revised prospectus or supplement thereto, and of supplying a copy of the        
statement of additional information upon request to any then existing           
shareholder;                                                                    

(h)  all costs of borrowing money;                                              

(i)  all expenses of publication of notices and reports to shareholders and to  
governmental bodies or regulatory agencies;                                     

(j)  all taxes and fees payable to federal, state or other governmental         
agencies, domestic or foreign, and all stamp or other taxes;                    

(k)  all expenses of printing and mailing certificates for shares of a Fund;    

(l)  all expenses of bond and insurance coverage required by law or deemed      
advisable by the Board;                                                         

(m)  all expenses of qualifying and maintaining qualification of, or providing  
appropriate notification of intention to sell relating to, shares of the Funds  
under the securities laws of the various states and other jurisdictions, and of 
registration and qualification of Liberty Acorn under any other laws applicable 
to Liberty Acorn or its business activities;                                    

(n)  all fees, dues and other expenses related to membership of Liberty Acorn in
any trade association or other investment company organization; and             

(o)  any extraordinary expenses.                                                

In addition to the payment of expenses, Liberty Acorn shall also pay all        
brokers' commissions and other charges relating to the purchase and sale of     
portfolio securities for each Fund.                                             

6.  ALLOCATION OF EXPENSES PAID BY LIBERTY ACORN.  Any expenses paid by Liberty 
Acorn that are attributable solely to the organization, operation or business of
a Fund or Funds shall be paid solely out of the assets of that Fund or Funds.   
Any expense paid by Liberty Acorn that is not solely attributable to a Fund or  
Funds, nor solely to any other series of Liberty Acorn, shall be apportioned in 
such manner as Liberty Acorn or Liberty Acorn's administrator determines is fair
and appropriate, or as otherwise specified by the Board.                        

7.  EXPENSES TO BE PAID BY LIBERTY WAM.  Liberty WAM shall furnish to Liberty   
Acorn, at Liberty WAM's own expense, office space and all necessary office      
facilities, equipment and personnel required to provide its                     

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services pursuant to this agreement. Liberty WAM shall also assume and pay all  
expenses of placement of securities orders and related bookkeeping.             

8.  COMPENSATION OF LIBERTY WAM.  For the services to be rendered and the       
expenses to be assumed and to be paid by Liberty WAM under this agreement,      
Liberty Acorn on behalf of the respective Funds shall pay to Liberty WAM fees   
accrued daily and paid monthly at the annual rates (as a percentage of the      
Fund's net assets) shown below:                                                 

LIBERTY ACORN FUND                                                              

                                                                [Download Table]

ASSETS                                        RATE OF FEE
------                                        -----------
                                                         
First $700 million                             0.75%     
$700 million to $2 billion                     0.70%     
In excess of $2 billion                        0.65%     

LIBERTY ACORN INTERNATIONAL                                                     

                                                                [Download Table]

ASSETS                                        RATE OF FEE
------                                        -----------
                                                         
First $100 million                             1.20%     
$100 million to $500 million                   0.95%     
In excess of $500 million                      0.75%     

LIBERTY ACORN USA                                                               

                                                                [Download Table]

ASSETS                                        RATE OF FEE
------                                        -----------
                                                         
First $200 million                             0.95%     
In excess of $200 million                      0.90%     

LIBERTY ACORN TWENTY                                                            

                                                                [Download Table]
                                                       
All Assets                                        0.90%

LIBERTY ACORN FOREIGN FORTY                                                     

                                                                [Download Table]
                                                       
All Assets                                        0.95%

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The fees attributable to each Fund shall be a separate charge to such Fund and  
shall be the several (and not joint or joint and several) obligation of each    
such Fund.                                                                      

9.  SERVICES OF LIBERTY WAM NOT EXCLUSIVE.  The services of Liberty WAM to      
Liberty Acorn under this agreement are not exclusive, and Liberty WAM shall be  
free to render similar services to others so long as its services under this    
agreement are not impaired by such other activities.                            

10.  SERVICES OTHER THAN AS ADVISER.  Within the limits permitted by law,       
Liberty WAM or an affiliate of Liberty WAM may receive compensation from Liberty
Acorn for other services performed by it for Liberty Acorn which are not within 
the scope of the duties of Liberty WAM under this agreement, including the      
provision of brokerage services.                                                

11.  STANDARD OF CARE.  To the extent permitted by applicable law, neither      
Liberty WAM nor any of its partners, officers, agents, employees or affiliates  
shall be liable to Liberty Acorn or its shareholders for any loss suffered by   
Liberty Acorn or its shareholders as a result of any error of judgment, or any  
loss arising out of any investment, or as a consequence of any other act or     
omission of Liberty WAM or any of its affiliates in the performance of Liberty  
WAM's duties under this agreement, except for liability resulting from willful  
misfeasance, bad faith or gross negligence on the part of Liberty WAM or such   
affiliate, or by reason of reckless disregard by Liberty WAM or such affiliate  
of the obligations and duties of Liberty WAM under this agreement.              

12.  EFFECTIVE DATE, DURATION AND RENEWAL.  This agreement shall become         
effective on               . Unless terminated as provided in Section 13, this  
agreement shall continue in effect as to a Fund until July 31, 2003 and         
thereafter from year to year only so long as such continuance is specifically   
approved at least annually (a) by a majority of those trustees who are not      
interested persons of Liberty Acorn or of Liberty WAM, voting in person at a    
meeting called for the purpose of voting on such approval, and (b) by either the
Board or vote of the holders of a "majority of the outstanding shares" of that  
Fund (which term as used throughout this agreement shall be construed in        
accordance with the definition of "vote of a majority of the outstanding voting 
securities of a company" in section 2(a)(42) of the 1940 Act).                  

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13.  TERMINATION.  This agreement may be terminated as to a Fund at any time,   
without payment of any penalty, by the Board, or by a vote of the holders of a  
majority of the outstanding shares of that Fund, upon 60 days' written notice to
Liberty WAM. This agreement may be terminated by Liberty WAM at any time upon 60
days' written notice to Liberty Acorn. This agreement shall terminate           
automatically in the event of its assignment (as defined in Section 2(a)(4) of  
the 1940 Act).                                                                  

14.  AMENDMENT.  This agreement may be amended in accordance with the 1940 Act. 

15.  NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS.  A copy of the declaration of  
trust of Liberty Acorn is on file with the Secretary of The Commonwealth of     
Massachusetts, and notice is hereby given that this instrument is executed on   
behalf of Liberty Acorn by its officers as officers and not individually. All   
obligations of Liberty Acorn hereunder shall be binding only upon the assets of 
Liberty Acorn (or the appropriate Fund) and shall not be binding upon any       
trustee, officer, employee, agent or shareholder of Liberty Acorn. Neither the  
authorization of any action by the trustees or shareholders of Liberty Acorn nor
the execution of this agreement on behalf of Liberty Acorn shall impose any     
liability upon any trustee, officer or shareholder of Liberty Acorn.            

16.  USE OF MANAGER'S NAME.  Liberty Acorn may use the name "Liberty" or any    
other name derived from the name "Liberty" only for so long as this agreement or
any extension, renewal or amendment hereof remains in effect, including any     
similar agreement with any organization that shall remain affiliated with       
Liberty Financial Companies, Inc. and shall have succeeded to the business of   
Liberty WAM as investment adviser. At such time as this agreement or any        
extension, renewal or amendment hereof, or such other similar agreement shall no
longer be in effect, Liberty Acorn will (by amendment of its agreement and      
declaration of trust if necessary) cease to use any name derived from the name  
"Liberty" or otherwise connected with Liberty WAM, or with any organization that
shall have succeeded to Liberty WAM's business as investment adviser.           

17.  NOTICES.  Any notice, demand, change of address or other communication to  
be given in connection with this agreement shall be given in writing and shall  
be given by personal delivery, by registered or certified mail or by transmittal
by facsimile or other electronic medium addressed                               

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to the recipient as follows (or at such other address or addresses as a party   
may provide to the other from time to time, by notice):                         

                                                                [Download Table]
                                                                    
If to Liberty WAM:                       Liberty Wanger Asset       
                                         Management, L.P.           
                                         Attention: Bruce H. Lauer  
                                         227 West Monroe Street,    
                                         Suite 3000                 
                                         Chicago, Illinois 60606    
                                         Telephone: 312 634-9200    
                                         Facsimile: 312 634-0016    
                                         with a copy to:            
If to Liberty Acorn:                     Liberty Acorn Trust        
                                         227 West Monroe Street,    
                                         Suite 3000                 
                                         Chicago, Illinois 60606    
                                         Telephone: 312 634-9200    
                                         Facsimile: 312 634-1919    
                                         with a copy to:            
                                         Bell, Boyd & Lloyd LLC     
                                         Attention: Cameron S. Avery
                                         Three First National Plaza,
                                         Suite 3300                 
                                         Chicago, Illinois 60602    
                                         Telephone: 312/372-1121    
                                         Facsimile: 312/372-2098    

All notices shall be conclusively deemed to have been given on the day of actual
delivery thereof and, if given by registered or certified mail, on the fifth    
business day following the deposit thereof in the mail and, if given by         
facsimile or other electronic medium, on the day of transmittal thereof (upon   
electronic confirmation of receipt thereof).                                    

18.  GOVERNING LAW.  This agreement shall be construed and interpreted in       
accordance with the laws of the State of Illinois and the laws of the           

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United States of America applicable to contracts executed and to be performed   
therein.                                                                        

Dated as of               , 2001                                                

                 LIBERTY ACORN TRUST

By
                                        ----------------------------------------

                                   LIBERTY WANGER ASSET MANAGEMENT, L.P.
                         By WAM Acquisition GP, Inc.
                  Its  General Partner

By
                                        ----------------------------------------

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                                                                      APPENDIX C

CERTAIN OTHER MUTUAL FUNDS ADVISED/SUB-ADVISED BY THE ADVISOR 

The Advisor acts as investment advisor or sub-advisor to the following other    
mutual funds that have investment objectives similar to those of the Funds for  
compensation at the annual percentage rates of the corresponding average net    
asset levels of those funds set forth below.                                    

LIBERTY ACORN INTERNATIONAL                                                     

                                                                [Download Table]

---------------------------------------------------------------------------
                                                          ADVISOR'S        
                        NET ASSETS OF                     RELATIONSHIP TO  
                        OTHER FUNDS AT                    OTHER FUNDS      
OTHER FUNDS WITH        JULY 31, 2001                     (ADVISOR OR      
SIMILAR OBJECTIVES      (IN THOUSANDS)   FEE RATE         SUB-ADVISOR)     
---------------------------------------------------------------------------
                                                                           
 Liberty Global Young   $1,955           0.85% of the      Sub-Advisor     
 Investor Fund                           average daily                     
                                         net assets of                     
                                         the portion                       
                                         managed by the                    
                                         Advisor                           
---------------------------------------------------------------------------
 Wanger International   $242,640         1.30% on first    Advisor         
 Small Cap                               $100 million;                     
                                         1.20% on next                     
                                         $400 million;                     
                                         1.10% over $250                   
                                         million                           
---------------------------------------------------------------------------

LIBERTY ACORN FOREIGN FORTY                                                     

                                                                [Download Table]

----------------------------------------------------------------------------
                                                           ADVISOR'S        
                        NET ASSETS OF                      RELATIONSHIP TO  
                        OTHER FUNDS AT                     OTHER FUNDS      
OTHER FUNDS WITH        JULY 31, 2001                      (ADVISOR OR      
SIMILAR OBJECTIVES      (IN THOUSANDS)   FEE RATE          SUB-ADVISOR)     
----------------------------------------------------------------------------
                                                                            
 Liberty Global Young   $1,955           0.85% of the       Sub-Advisor     
 Investor Fund                           average daily                      
                                         net assets of                      
                                         the portion                        
                                         managed by the                     
                                         Advisor                            
----------------------------------------------------------------------------
 Wanger Foreign Forty   $16,366          1.00%(1)           Advisor         
----------------------------------------------------------------------------

(1) The Advisor has undertaken to limit Wanger Foreign Forty's annual expenses  
(excluding taxes, interest, extraordinary litigation expenses and       
   incremental foreign custody costs) to 1.45% of its average net assets. This
   expense limitation is contractual and will terminate on September 30, 2002.

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LIBERTY ACORN USA                                                               

                                                                [Download Table]

----------------------------------------------------------------------------
                                                           ADVISOR'S        
                        NET ASSETS OF                      RELATIONSHIP TO  
                        OTHER FUND AT                      OTHER FUND       
OTHER FUND WITH         JULY 31, 2001                      (ADVISOR OR      
SIMILAR OBJECTIVES      (IN THOUSANDS)   FEE RATE          SUB-ADVISOR)     
----------------------------------------------------------------------------
                                                                            
 Wanger U.S. Small Cap  $487,160         1.00% on first     Advisor         
                                         $100 million;                      
                                         0.95% on next                      
                                         $150 million;                      
                                         0.90% over $250                    
                                         million                            
----------------------------------------------------------------------------

LIBERTY ACORN TWENTY                                                            

                                                                [Download Table]

----------------------------------------------------------------------------
                                                           ADVISOR'S        
                        NET ASSETS OF                      RELATIONSHIP TO  
                        OTHER FUND AT                      OTHER FUND       
OTHER FUND WITH         JULY 31, 2001                      (ADVISOR OR      
SIMILAR OBJECTIVES      (IN THOUSANDS)   FEE RATE          SUB-ADVISOR)     
----------------------------------------------------------------------------
                                                                            
 Wanger Twenty          $17,160          0.95%(2)           Advisor         
----------------------------------------------------------------------------

LIBERTY ACORN FUND                                                              

                                                                [Download Table]

----------------------------------------------------------------------------
                                                           ADVISOR'S        
                        NET ASSETS OF                      RELATIONSHIP TO  
                        OTHER FUND AT                      OTHER FUND       
OTHER FUND WITH         JULY 31, 2001                      (ADVISOR OR      
SIMILAR OBJECTIVES      (IN THOUSANDS)   FEE RATE          SUB-ADVISOR)     
----------------------------------------------------------------------------
                                                                            
 Wanger U.S. Small Cap  $487,160         1.00% on first     Advisor         
                                         $100 million;                      
                                         0.95% on next                      
                                         $150 million;                      
                                         0.90% over $250                    
                                         million                            
----------------------------------------------------------------------------

(2) The Advisor has undertaken to limit Wanger Twenty's annual expenses         
(excluding taxes, interest, extraordinary litigation expenses and       
   incremental foreign custody costs) to 1.35% of its average net assets. This
   expense limitation is contractual and will terminate on September 30, 2002.

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                                                                      APPENDIX D

BROKERAGE PRACTICES 

The following is a summary of the brokerage practices of Liberty Wanger Asset   
Management, L.P.:                                                               

PORTFOLIO TRANSACTIONS                                                          

Liberty Wanger Asset Management, L.P. (Liberty WAM) places the orders for the   
purchase and sale of portfolio securities and options and futures contracts for 
the Funds. Liberty WAM's overriding objective in selecting brokers and dealers  
to effect portfolio transactions is to seek the best combination of net price   
and execution. The best net price, giving effect to brokerage commissions, if   
any, is an important factor in this decision; however, a number of other        
subjective factors may also enter into the decision. These factors include      
Liberty WAM's knowledge of negotiated commission rates currently available and  
other current transaction costs; the nature of the security being purchased or  
sold; the size of the transaction; the desired timing of the transaction; the   
activity existing and expected in the market for the particular security;       
confidentiality; the execution, clearance and settlement capabilities of the    
broker or dealer selected and others considered; Liberty WAM's knowledge of the 
financial condition of the broker or dealer selected and such other brokers and 
dealers; and Liberty WAM's knowledge of actual or apparent operation problems of
any broker or dealer.                                                           

Recognizing the value of these factors, Liberty WAM may cause a Fund to pay a   
brokerage commission in excess of that which another broker may have charged for
effecting the same transaction. Liberty WAM has established internal policies   
for the guidance of its trading personnel, specifying minimum and maximum       
commissions to be paid for various types and sizes of transactions effected for 
the Funds. Liberty WAM has discretion for all trades of the Funds. Transactions 
which vary from the guidelines are subject to periodic supervisory review. These
guidelines are reviewed and periodically adjusted, and the general level of     
brokerage commissions paid is periodically reviewed by Liberty WAM. Evaluations 
of the reasonableness of brokerage commissions, based on the factors described  
in the preceding paragraph, are made by Liberty WAM's trading personnel while   
effecting portfolio transactions. The general level                             

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of brokerage commissions paid is reviewed by Liberty WAM, and reports are made  
annually to the Board of Trustees.                                              

Liberty WAM maintains and periodically updates a list of approved brokers and   
dealers which, in Liberty WAM's judgment, are generally capable of providing    
best price and execution and are financially stable. Liberty WAM's traders are  
directed to use only brokers and dealers on the approved list.                  

Beginning October 2002, Liberty WAM may place certain trades for the Funds      
through its affiliate AlphaTrade Inc. (ATI), pursuant to procedures adopted by  
the Board of Trustees. ATI is a wholly owned subsidiary of Colonial Management  
Associates, Inc. ATI is a fully disclosed introducing broker that limits its    
activities to electronic execution of transactions in listed equity securities. 
The Funds will pay ATI a commission for these transactions. The Funds have      
adopted procedures consistent with Investment Company Act Rule 17e-1 governing  
such transactions.                                                              

CONSISTENT WITH THE CONDUCT RULES OF THE NATIONAL ASSOCIATION OF SECURITIES     
DEALERS, INC. AND SUBJECT TO SEEKING BEST COMBINATION OF NET PRICE AND EXECUTION
AND SUCH OTHER POLICIES AS THE TRUSTEES OF THE FUNDS MAY DETERMINE, LIBERTY WAM 
MAY CONSIDER SALES OF SHARES OF EACH OF THE FUNDS AS A FACTOR IN THE SELECTION  
OF BROKER-DEALERS TO EXECUTE SUCH MUTUAL FUND SECURITIES TRANSACTIONS.          

INVESTMENT RESEARCH PRODUCTS AND SERVICES FURNISHED 
BY BROKERS AND DEALERS

Liberty WAM engages in the long-standing practice in the money management       
industry of acquiring research and brokerage products and services ("research   
products") from broker-dealer firms in return for directing trades for the Funds
to those firms. In effect, Liberty WAM is using the commission dollars generated
from the Funds to pay for these research products. The money management industry
uses the term "soft dollars" to refer to this industry practice.                

Liberty WAM has a duty to seek the best combination of net price and execution. 
Liberty WAM faces a potential conflict of interest with this duty when it uses  
Fund trades to obtain soft dollar products. This conflict exists because Liberty
WAM is able to use the soft dollar products in managing its Funds without paying
cash ("hard dollars") for the product. This reduces Liberty WAM's expenses.     

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Moreover, under a provision of the federal securities laws applicable to soft   
dollars, Liberty WAM is not required to use the soft dollar product in managing 
those accounts that generate the trade. Thus, the Funds that generate the       
brokerage commission used to acquire the soft dollar product may not benefit    
directly from that product. In effect, those Funds are cross subsidizing Liberty
WAM's management of the other Funds that do benefit directly from the product.  
This practice is explicitly sanctioned by a provision of the Securities Exchange
Act of 1934, which creates a "safe harbor" for soft dollar transactions         
conducted in a specified manner. Although it is inherently difficult if not     
impossible to document, Liberty WAM believes that over time most, if not all,   
Funds benefit from soft dollar products such that cross subsidizations even out.

Liberty WAM attempts to reduce or eliminate this conflict by directing Fund     
trades for soft dollar products only if Liberty WAM concludes that the          
broker-dealer supplying the product is capable of providing a combination of the
best net price and execution on the trade. As noted above, the best net price,  
while significant, is one of a number of judgmental factors Liberty WAM         
considers in determining whether a particular broker is capable of providing the
best net price and execution. Liberty WAM may cause a Fund to pay a brokerage   
commission in a soft dollar trade in excess of that which another broker-dealer 
might have charged for the same transaction.                                    

Liberty WAM acquires two types of soft dollar research products: (i) proprietary
research created by the broker-dealer firm executing the trade and (ii) other   
products created by third parties that are supplied to Liberty WAM through the  
broker-dealer firm executing the trade.                                         

Proprietary research consists primarily of traditional research reports,        
recommendations and similar materials produced by the in house research staffs  
of broker-dealer firms. This research includes evaluations and recommendations  
of specific companies or industry groups, as well as analyses of general        
economic and market conditions and trends, market data, contacts and other      
related information and assistance. Liberty WAM's research analysts periodically
rate the quality of proprietary research produced by various broker-dealer      
firms. Based on these evaluations, Liberty WAM develops target levels of        
commission dollars on a firm-by-firm basis. Liberty WAM attempts to direct      
trades to each firm to meet these targets.                                      

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Liberty WAM also uses soft dollars to acquire products created by third parties 
that are supplied to Liberty WAM through broker-dealers executing the trade (or 
other broker-dealers who "step in" to a transaction and receive a portion of the
brokerage commission for the trade). These products include the following:      

- DATABASE SERVICES -- comprehensive databases containing current and/or        
historical information on companies and industries. Examples include        
historical securities prices, earnings estimates, and SEC filings. These    
  services may include software tools that allow the user to search the database
 or to prepare value-added analyses related to the investment process (such as
forecasts and models used in the portfolio management process).             

- QUOTATION/TRADING/NEWS SYSTEMS -- products that provide real time market data 
information, such as pricing of individual securities and information on    
current trading, as well as a variety of news services.                     

- ECONOMIC DATA/FORECASTING TOOLS -- various macro economic forecasting tools,  
such as economic data and economic and political forecasts for various      
countries or regions.                                                       

- QUANTITATIVE/TECHNICAL ANALYSIS -- software tools that assist in quantitative 
and technical analysis of investment data.                                  

- FUNDAMENTAL INDUSTRY ANALYSIS -- industry-specific fundamental investment     
research.                                                                   

- OTHER SPECIALIZED TOOLS -- other specialized products, such as specialized    
economic consulting analyses and attendance at investment-oriented          
conferences.                                                                

Many third-party products include computer software or on-line data feeds.      
Certain products also include computer hardware necessary to use the product.   

Certain of these third-party services may be available directly from the vendor 
on a hard-dollar basis. Others are available only through broker-dealer firms   
for soft dollars. Liberty WAM evaluates each product to determine a cash ("hard 
dollars") value of the product to Liberty WAM. Liberty WAM then on a            
product-by-product basis targets commission dollars in an amount equal to a     
specified multiple of the hard dollar value to the broker-dealer that supplies  
the product to Liberty WAM. In general, these multiples range from 1.25 to 1.85 
times                                                                           

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the hard dollar value. Liberty WAM attempts to direct trades to each firm to    
meet these targets. (For example, if the multiple is 1.5:1.0, assuming a hard   
dollar value of $10,000, Liberty WAM will target to the broker-dealer providing 
the product trades generating $15,000 in total commissions.)                    

The targets that Liberty WAM establishes for both proprietary and for third     
party research products typically will reflect discussions that Liberty WAM has 
with the broker-dealer providing the product regarding the level of commissions 
it expects to receive for the product. However, these targets are not binding   
commitments, and Liberty WAM does not agree to direct a minimum amount of       
commissions to any broker-dealer for soft dollar products. In setting these     
targets, Liberty WAM makes a determination that the value of the product is     
reasonably commensurate with the cost of acquiring it. These targets are        
established on a calendar year basis. Liberty WAM will receive the product      
whether or not commissions directed to the applicable broker-dealer are less    
than, equal to or in excess of the target. Liberty WAM generally will carry over
target shortages and excesses to the next year's target. Liberty WAM believes   
that this practice reduces the conflicts of interest associated with soft dollar
transactions, since Liberty WAM can meet the non-binding expectations of        
broker-dealers providing soft dollar products over flexible time periods. In the
case of third party products, the third party is paid by the broker-dealer and  
not by Liberty WAM. Liberty WAM may enter into a contract with the third party  
vendor to use the product. (For example, if the product includes software,      
Liberty WAM will enter into a license to use the software from the vendor.)     

In certain cases, Liberty WAM may use soft dollars to obtain products that have 
both research and non-research purposes. Examples of non-research uses are      
administrative and marketing functions. These are referred to as "mixed use"    
products. In each case, Liberty WAM makes a good faith evaluation of the        
research and non-research uses of these services. These evaluations are based   
upon the time spent by Firm personnel for research and non-research uses.       
Liberty WAM pays the provider in cash ("hard dollars") for the non-research     
portion of its use of these products.                                           

Consistent with industry practice, Liberty WAM does not require that the Fund   
that generates the trade receive any benefit from the soft dollar product       
obtained through the trade. As noted above, this may result in cross            
subsidization of soft dollar products among Funds. As noted                     

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therein, this practice is explicitly sanctioned by a provision of the Securities
Exchange Act of 1934, which creates a "safe harbor" for soft dollar transactions
conducted in a specified manner.                                                

In certain cases, Liberty WAM will direct a trade to one broker-dealer with the 
instruction that it execute the trade and pay over a portion of the commission  
from the trade to another broker-dealer who provides Liberty WAM with a soft    
dollar research product. The broker-dealer executing the trade "steps out" of a 
portion of the commission in favor of the other broker-dealer providing the soft
dollar product. Liberty WAM may engage in step out transactions in order to     
direct soft dollar commissions to a broker-dealer which provides research but   
may not be able to provide best execution. Brokers who receive step out         
commissions typically are brokers providing a third-party soft dollar product   
that is not available on a hard-dollars basis. Liberty WAM has not engaged in   
step out transactions as a manner of compensating broker-dealers that sell      
shares of investment companies managed by Liberty WAM.                          

The Trust's purchases and sales of securities not traded on securities exchanges
generally are placed by Liberty WAM with market makers for these securities on a
net basis, without any brokerage commissions being paid by the Trust. Net       
trading does involve, however, transaction costs. Included in prices paid to    
underwriters of portfolio securities is the spread between the price paid by the
underwriter to the issuer and the price paid by the purchasers. Each Fund's     
purchases and sales of portfolio securities in the over-the-counter market      
usually are transacted with a broker-dealer on a net basis without any brokerage
commission being paid by such Fund, but do reflect the spread between the bid   
and asked prices. Liberty WAM may also transact purchases of some portfolio     
securities directly with the issuers.                                           

With respect to a Fund's purchases and sales of portfolio securities transacted 
with a broker or dealer on a net basis, Liberty WAM may also consider the part, 
if any, played by the broker or dealer in bringing the security involved to     
Liberty WAM's attention, including investment research related to the security  
and provided to the Fund.                                                       

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                                                                      APPENDIX E

COMPENSATION PAID BY A FUND TO THE ADVISOR AND AFFILIATES 
FOR EACH FUND'S LAST FISCAL YEAR
($ IN THOUSANDS)

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------------

                                                                                           NET                                     
                                                                                        TRANSFER          NET             NET      
                                                                                         AGENCY        FEES FOR      DISTRIBUTION  
                                                                                           AND          PRICING           AND      
                                                                          NET          SHAREHOLDER        AND           SERVICE    
                                                          NET        ADMINISTRATIVE     SERVICING     BOOKKEEPING       (12b-1)    
                                                        ADVISORY       FEES PAID          FEES         SERVICES        FEES PAID   
                                                          FEE              TO            PAID TO        PAID TO           TO       
                                                        PAID TO        ADVISORS'        ADVISORS'      ADVISORS'       ADVISORS'   
NAME OF FUND                                            ADVISOR        AFFILIATES     AFFILIATES(a)   AFFILIATES      AFFILIATES   
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   

 Liberty Acorn Fund                                    $   26,750        $1,958          $1,339         $     0           $26      
-----------------------------------------------------------------------------------------------------------------------------------

 Liberty Acorn International                               23,515         1,484           1,344               0            12      
-----------------------------------------------------------------------------------------------------------------------------------

 Liberty Acorn USA                                          2,844           152             189               0             2      
-----------------------------------------------------------------------------------------------------------------------------------

 Liberty Acorn Twenty                                         585            33             123               0             6      
-----------------------------------------------------------------------------------------------------------------------------------

 Liberty Acorn Foreign Forty                                1,334            70             113               0             5      
-----------------------------------------------------------------------------------------------------------------------------------


-----------------------------------------------------  ---------------------------------                                           
                                                             NET                                                                   
                                                          BROKERAGE         PERCENTAGE                                             
                                                         COMMISSIONS            OF                                                 
                                                              ON              FUND'S                                               
                                                            FUND'S            TOTAL                                                
                                                          PORTFOLIO         BROKERAGE                                              
                                                         TRANSACTIONS      COMMISSIONS                                             
                                                           PAID TO           PAID TO                                               
                                                          ADVISORS'         ADVISORS'                                              
                                                          BROKERAGE         BROKERAGE                                              
NAME OF FUND                                              AFFILIATES        AFFILIATES                                             
-----------------------------------------------------  ---------------------------------                                           
                                                                                                                                   
 Liberty Acorn Fund                                        $      0              0                                                 
-------------------------------------------------------------------------------------------------------                            
 Liberty Acorn International                                      0              0                                                 
-----------------------------------------------------------------------------------------------------------------------            
 Liberty Acorn USA                                                0              0                                                 
-----------------------------------------------------------------------------------------------------------------------------------
 Liberty Acorn Twenty                                             0              0                                                 
-----------------------------------------------------------------------------------------------------------------------------------
 Liberty Acorn Foreign Forty                                      0              0                                                 
-----------------------------------------------------------------------------------------------------------------------------------

(a) Liberty Funds Services, Inc. served as transfer agent for only a short      
period during fiscal year 2000; therefore, this figure partly represents
<-> payments made to an unaffiliated transfer agent.                            

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                                                                      APPENDIX F

SHARES OUTSTANDING AND ENTITLED TO VOTE 

For each class of the Fund's shares entitled to vote at the Meeting, the number 
of shares outstanding as of August 23, 2001 was as follows:                     

                                                                [Download Table]

                                    NUMBER OF SHARES OUTSTANDING AND 
NAME OF FUND                           ENTITLED TO VOTE PER CLASS    
------------                        ---------------------------------
                                                                     
Liberty Acorn Fund                                                   
Liberty Acorn International                                          
Liberty Acorn USA                                                    
Liberty Acorn Twenty                                                 
Liberty Acorn Foreign Forty                                          

OWNERSHIP OF SHARES                                                             

As of August 23, 2001, the Trust believes that the Trustees and officers of the 
Trust, as a group, owned less than one percent of each class of shares of the   
Fund and of the Trust as a whole, except as shown below.                        

As of August 23, 2001, the following persons owned of record or beneficially 5% 
or more of the noted class of shares of the noted Fund:                         

                                                                [Download Table]

                          SHARES BENEFICIALLY   PERCENTAGE OF OUTSTANDING
FUND AND CLASS                   OWNED            SHARES OF CLASS OWNED  
--------------            -------------------   -------------------------
                                                                         
FUND A                                                                   
CLASS                                                                    
  [name and address of                                                   
  beneficial owner.](*)                                                  
  (**)..................        [    ]                   [    ]          

(*)  Entity owned 25% or more of the outstanding shares of beneficial interest  
   of the Fund, and therefore may be presumed to "control" the Fund, as that
term is defined in the Investment Company Act.                        

(**) Shares are believed to be held only as nominee.                            

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PLEASE VOTE PROMPTLY

 *********************************

Your vote is important, no matter how many shares you own. Please vote on the   
reverse side of this proxy card and sign in the space(s) provided. Return your  
completed proxy card in the enclosed envelope today.                            

You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be        
counted.                                                                        

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The signers of this 
proxy hereby appoint Ralph Wanger, Bruce H. Lauer, Charles P. McQuaid and       
Kenneth A. Kalina each of them proxies of the signers, with power of            
substitution to vote at the Special Meeting of Shareholders to be held at       
Chicago, Illinois, on Wednesday, October 24, 2001, and at any adjournments, as  
specified herein, and in accordance with their best judgement, on any other     
business that may properly come before this meeting.                            

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE  
"FOR" ALL MATTERS.                                                              

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Liberty Acorn Fund                                                              
Liberty Acorn Foreign Forty                                                     
Liberty Acorn International                                                     
Liberty Acorn USA                                                               
Liberty Acorn Twenty                                                            

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN 
AND, ABSENT DIRECTION, WILL BE VOTED FOR EACH ITEM BELOW. THIS PROXY WILL BE    
VOTED IN ACCORDANCE WITH THE HOLDER'S BEST JUDGEMENT AS TO ANY OTHER MATTER.    

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEM:                 

1. Proposal to approve a new investment advisory agreement. [Item 1 of the      
Notice.]                                                                        

For               Against                 Abstain                               

[X]                 [X]                     [X]                                 

MARK BOX AT RIGHT FOR ADDRESS CHANGE AND NOTE NEW ADDRESS AT LEFT               

           [X]

PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED        
ENVELOPE.                                                                       

Please sign exactly as name or names appear hereon. Joint owners should each    
sign personally. When signing as attorney, executor, administrator, trustee or  
guardian, please give full title as such. If a corporation, please sign in      
corporate name by President or other authorized officer. If a partnership,      
please sign in partnership name by authorized person.                           

Please be sure to sign and date this proxy.                                     

  Date________________________

___________________________   _________________________                         
Shareholder sign here         Co-owner sign here                                

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRES14A’ Filing		Date		First		Last			Other Filings
		7/31/03		16		37			497
		9/30/02		41		42			13F-HR
For Period End:		10/24/01		4		51			DEFS14A
		9/12/01		4		13
		8/23/01		12		50
Filed on:		8/20/01
		8/15/01		19
		7/31/01		18		42
		7/16/01		18
		7/10/01		17
		7/2/01		17
		6/30/01		22					N-30D,  NSAR-A
		6/25/01		17
		6/4/01		23
		4/1/01		23
		3/31/01		15		24
		12/31/00		23					24F-2NT,  N-30D,  NSAR-B
		11/1/00		6		8
		9/29/00		22					485BPOS
		9/26/00		29		30			DEFS14A,  PRES14A
		7/6/00		29		30
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