UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09645
Columbia Funds Series Trust
(Exact name of registrant as specified in charter)
290 Congress Street
Boston, MA 02210
(Address of principal executive offices) (Zip code)
Daniel J. Beckman
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
Ryan C. Larrenaga, Esq.
c/o Columbia Management Investment Advisers, LLC
Boston, MA 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 345-6611
Date of fiscal year end: April 30
Date of reporting period: October 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Columbia Short
Duration Municipal Bond Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
If you elect to receive the
shareholder report for Columbia Short Duration Municipal Bond Fund (the Fund) in paper, mailed to you, the Fund mails one shareholder report to each shareholder address, unless such shareholder elects to receive
shareholder reports from the Fund electronically via e-mail or by having a paper notice mailed to you (Postcard Notice) that your Fund’s shareholder report is available at the Columbia funds’ website
(columbiathreadneedleus.com/investor/). If you would like more than one report in paper to be mailed to you, or would like to elect to receive reports via e-mail or access them through Postcard Notice, please call
shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s
complete schedule of portfolio holdings, as filed on Form N-PORT, is available on columbiathreadneedleus.com/investor/ or can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
290 Congress Street
Boston, MA 02210
Fund distributor
Columbia Management Investment Distributors,
Inc.
290 Congress Street
Boston, MA 02210
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia Short Duration Municipal Bond
Fund | Semiannual Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks current income exempt from federal income tax, consistent with minimal fluctuation of principal.
Portfolio management
Douglas Rangel, CFA
Lead Portfolio Manager
Managed the Fund since 2022
Catherine Stienstra
Portfolio Manager
Managed Fund since 2012
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
| 4 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| May 1, 2023 — October 31, 2023 | |||||||
| Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund’s annualized expense ratio (%) | ||||
| Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |
| Class A | 1,000.00 | 1,000.00 | 992.40 | 1,022.16 | 3.24 | 3.29 | 0.64 |
| Advisor Class | 1,000.00 | 1,000.00 | 993.70 | 1,023.43 | 1.98 | 2.01 | 0.39 |
| Class C | 1,000.00 | 1,000.00 | 988.60 | 1,018.35 | 7.02 | 7.13 | 1.39 |
| Institutional Class | 1,000.00 | 1,000.00 | 993.60 | 1,023.43 | 1.98 | 2.01 | 0.39 |
| Institutional 2 Class | 1,000.00 | 1,000.00 | 992.90 | 1,023.68 | 1.72 | 1.75 | 0.34 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 993.10 | 1,023.94 | 1.47 | 1.49 | 0.29 |
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 5 |
Portfolio of Investments
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
(Percentages represent value of
investments compared to net assets)
Investments in securities
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 6 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 7 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 9 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 11 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 13 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 14 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 15 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 16 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 17 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of October 31, 2023. |
| (c) | Variable rate security. The interest rate shown was the current rate as of October 31, 2023. |
| (d) | Income from this security may be subject to alternative minimum tax. |
| (e) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. At October 31, 2023, the total value of these securities amounted to $4,704,205, which represents 1.14% of total net assets. |
| (f) | Zero coupon bond. |
| (g) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At October 31, 2023, the total value of these securities amounted to $4,901,364, which represents 1.19% of total net assets. |
| (h) | Represents a variable rate security with a step coupon where the rate adjusts according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The interest rate shown was the current rate as of October 31, 2023. |
| (i) | Represents a variable rate security where the coupon adjusts periodically through an auction process. |
| (j) | Represents a security purchased on a when-issued basis. |
| (k) | The rate shown is the seven-day current annualized yield at October 31, 2023. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| BAM | Build America Mutual Assurance Co. |
| BAN | Bond Anticipation Note |
| FGIC | Financial Guaranty Insurance Corporation |
| FHA | Federal Housing Authority |
| GNMA | Government National Mortgage Association |
| HUD | U.S. Department of Housing and Urban Development |
| RAN | Revenue Anticipation Note |
| SOFR | Secured Overnight Financing Rate |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
The Fund’s Board of Trustees
(the Board) has designated the Investment Manager, through its Valuation Committee (the Committee), as valuation designee, responsible for determining the fair value of the assets of the Fund for which market
quotations are not readily available using valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization,
including operations and accounting, trading and investments, compliance, risk management and legal.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 18 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Fair value measurements (continued)
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. Representatives of Columbia Management Investment Advisers, LLC report to the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. Representatives of Columbia Management Investment Advisers, LLC report to the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at October 31, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 10,425,000 | — | 10,425,000 |
| Municipal Bonds | — | 388,456,685 | — | 388,456,685 |
| Municipal Short Term | — | 12,179,499 | — | 12,179,499 |
| Money Market Funds | 1,905,115 | — | — | 1,905,115 |
| Total Investments in Securities | 1,905,115 | 411,061,184 | — | 412,966,299 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 19 |
Statement of Assets and Liabilities
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $430,796,504) | $412,966,299 |
| Cash | 5,200 |
| Receivable for: | |
| Capital shares sold | 417,984 |
| Dividends | 5,777 |
| Interest | 4,828,124 |
| Expense reimbursement due from Investment Manager | 2,095 |
| Prepaid expenses | 8,774 |
| Total assets | 418,234,253 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 4,017,470 |
| Capital shares redeemed | 1,607,535 |
| Distributions to shareholders | 881,731 |
| Management services fees | 4,884 |
| Distribution and/or service fees | 457 |
| Transfer agent fees | 23,455 |
| Trustees’ fees | 165,257 |
| Compensation of chief compliance officer | 46 |
| Other expenses | 38,323 |
| Total liabilities | 6,739,158 |
| Net assets applicable to outstanding capital stock | $411,495,095 |
| Represented by | |
| Paid in capital | 448,608,444 |
| Total distributable earnings (loss) | (37,113,349) |
| Total - representing net assets applicable to outstanding capital stock | $411,495,095 |
| Class A | |
| Net assets | $60,770,273 |
| Shares outstanding | 6,171,914 |
| Net asset value per share | $9.85 |
| Maximum sales charge | 1.00% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $9.95 |
| Advisor Class | |
| Net assets | $43,121,904 |
| Shares outstanding | 4,375,357 |
| Net asset value per share | $9.86 |
| Class C | |
| Net assets | $1,416,720 |
| Shares outstanding | 144,184 |
| Net asset value per share | $9.83 |
| Institutional Class | |
| Net assets | $79,850,500 |
| Shares outstanding | 8,108,764 |
| Net asset value per share | $9.85 |
| Institutional 2 Class | |
| Net assets | $55,120,575 |
| Shares outstanding | 5,601,250 |
| Net asset value per share | $9.84 |
| Institutional 3 Class | |
| Net assets | $171,215,123 |
| Shares outstanding | 17,396,431 |
| Net asset value per share | $9.84 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 20 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Statement of Operations
Six Months Ended October 31, 2023 (Unaudited)
Six Months Ended October 31, 2023 (Unaudited)
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $57,193 |
| Interest | 6,191,293 |
| Total income | 6,248,486 |
| Expenses: | |
| Management services fees | 991,926 |
| Distribution and/or service fees | |
| Class A | 83,930 |
| Class C | 8,922 |
| Transfer agent fees | |
| Class A | 32,521 |
| Advisor Class | 23,197 |
| Class C | 864 |
| Institutional Class | 43,445 |
| Institutional 2 Class | 12,777 |
| Institutional 3 Class | 5,653 |
| Trustees’ fees | 14,479 |
| Custodian fees | 5,879 |
| Printing and postage fees | 10,834 |
| Registration fees | 55,343 |
| Accounting services fees | 20,770 |
| Legal fees | 9,003 |
| Compensation of chief compliance officer | 46 |
| Other | 10,056 |
| Total expenses | 1,329,645 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (444,084) |
| Fees waived by transfer agent | |
| Institutional 3 Class | (5,653) |
| Expense reduction | (40) |
| Total net expenses | 879,868 |
| Net investment income | 5,368,618 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (3,579,341) |
| Net realized loss | (3,579,341) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (4,635,332) |
| Net change in unrealized appreciation (depreciation) | (4,635,332) |
| Net realized and unrealized loss | (8,214,673) |
| Net decrease in net assets resulting from operations | $(2,846,055) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 21 |
Statement of Changes in Net Assets
| Six Months Ended October 31, 2023 (Unaudited) | Year Ended April 30, 2023 | |
| Operations | ||
| Net investment income | $5,368,618 | $10,896,166 |
| Net realized loss | (3,579,341) | (9,757,479) |
| Net change in unrealized appreciation (depreciation) | (4,635,332) | 10,999,980 |
| Net increase (decrease) in net assets resulting from operations | (2,846,055) | 12,138,667 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (687,116) | (1,082,213) |
| Advisor Class | (548,442) | (1,166,399) |
| Class C | (11,569) | (15,490) |
| Institutional Class | (1,028,257) | (1,802,650) |
| Institutional 2 Class | (673,818) | (1,919,571) |
| Institutional 3 Class | (2,354,867) | (5,127,128) |
| Total distributions to shareholders | (5,304,069) | (11,113,451) |
| Decrease in net assets from capital stock activity | (74,782,207) | (279,514,603) |
| Total decrease in net assets | (82,932,331) | (278,489,387) |
| Net assets at beginning of period | 494,427,426 | 772,916,813 |
| Net assets at end of period | $411,495,095 | $494,427,426 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Statement of Changes in Net Assets (continued)
| Six Months Ended | Year Ended | |||
| October 31, 2023 (Unaudited) | April 30, 2023 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Shares sold | 513,633 | 5,126,199 | 4,585,621 | 45,834,971 |
| Distributions reinvested | 63,113 | 627,981 | 96,989 | 970,581 |
| Shares redeemed | (1,479,010) | (14,759,091) | (5,500,323) | (55,086,454) |
| Net decrease | (902,264) | (9,004,911) | (817,713) | (8,280,902) |
| Advisor Class | ||||
| Shares sold | 399,444 | 3,994,317 | 2,469,079 | 24,718,526 |
| Distributions reinvested | 19,475 | 193,884 | 37,417 | 374,803 |
| Shares redeemed | (1,334,443) | (13,340,744) | (4,874,214) | (48,813,606) |
| Net decrease | (915,524) | (9,152,543) | (2,367,718) | (23,720,277) |
| Class C | ||||
| Shares sold | 18,644 | 184,539 | 176,278 | 1,758,839 |
| Distributions reinvested | 1,165 | 11,567 | 1,550 | 15,472 |
| Shares redeemed | (79,782) | (792,524) | (134,605) | (1,349,669) |
| Net increase (decrease) | (59,973) | (596,418) | 43,223 | 424,642 |
| Institutional Class | ||||
| Shares sold | 666,503 | 6,656,175 | 8,779,942 | 88,100,889 |
| Distributions reinvested | 89,776 | 893,634 | 158,885 | 1,590,760 |
| Shares redeemed | (2,104,285) | (20,992,598) | (10,229,746) | (102,553,635) |
| Net decrease | (1,348,006) | (13,442,789) | (1,290,919) | (12,861,986) |
| Institutional 2 Class | ||||
| Shares sold | 889,402 | 8,861,721 | 3,513,896 | 35,210,315 |
| Distributions reinvested | 50,615 | 503,417 | 167,520 | 1,674,858 |
| Shares redeemed | (1,570,013) | (15,669,850) | (10,211,677) | (102,561,819) |
| Net decrease | (629,996) | (6,304,712) | (6,530,261) | (65,676,646) |
| Institutional 3 Class | ||||
| Shares sold | 318,204 | 3,164,022 | 1,365,780 | 13,631,656 |
| Distributions reinvested | 6,544 | 65,081 | 13,572 | 135,824 |
| Shares redeemed | (3,967,291) | (39,509,937) | (18,325,146) | (183,166,914) |
| Net decrease | (3,642,543) | (36,280,834) | (16,945,794) | (169,399,434) |
| Total net decrease | (7,498,306) | (74,782,207) | (27,909,182) | (279,514,603) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 23 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The ratios of expenses and net investment income are annualized for periods of less than one year. The portfolio turnover rate is
calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
| Net asset value, beginning of period | Net investment income (loss) | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Total distributions to shareholders | |
| Class A | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $10.03 | 0.11 | (0.19) | (0.08) | (0.10) | (0.10) |
| Year Ended 4/30/2023 | $10.01 | 0.14 | 0.03 | 0.17 | (0.15) | (0.15) |
| Year Ended 4/30/2022 | $10.46 | 0.07 | (0.45) | (0.38) | (0.07) | (0.07) |
| Year Ended 4/30/2021 | $10.26 | 0.11 | 0.20 | 0.31 | (0.11) | (0.11) |
| Year Ended 4/30/2020 | $10.35 | 0.15 | (0.08) | 0.07 | (0.16) | (0.16) |
| Year Ended 4/30/2019 | $10.26 | 0.15 | 0.09 | 0.24 | (0.15) | (0.15) |
| Advisor Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $10.04 | 0.12 | (0.18) | (0.06) | (0.12) | (0.12) |
| Year Ended 4/30/2023 | $10.02 | 0.16 | 0.03 | 0.19 | (0.17) | (0.17) |
| Year Ended 4/30/2022 | $10.48 | 0.10 | (0.47) | (0.37) | (0.09) | (0.09) |
| Year Ended 4/30/2021 | $10.27 | 0.13 | 0.21 | 0.34 | (0.13) | (0.13) |
| Year Ended 4/30/2020 | $10.36 | 0.18 | (0.09) | 0.09 | (0.18) | (0.18) |
| Year Ended 4/30/2019 | $10.27 | 0.18 | 0.09 | 0.27 | (0.18) | (0.18) |
| Class C | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $10.01 | 0.07 | (0.18) | (0.11) | (0.07) | (0.07) |
| Year Ended 4/30/2023 | $9.99 | 0.07 | 0.02 | 0.09 | (0.07) | (0.07) |
| Year Ended 4/30/2022 | $10.46 | (0.01) | (0.46) | (0.47) | (0.00)(e) | (0.00)(e) |
| Year Ended 4/30/2021 | $10.25 | 0.03 | 0.21 | 0.24 | (0.03) | (0.03) |
| Year Ended 4/30/2020 | $10.34 | 0.08 | (0.09) | (0.01) | (0.08) | (0.08) |
| Year Ended 4/30/2019 | $10.25 | 0.07 | 0.10 | 0.17 | (0.08) | (0.08) |
| Institutional Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $10.03 | 0.12 | (0.18) | (0.06) | (0.12) | (0.12) |
| Year Ended 4/30/2023 | $10.01 | 0.16 | 0.03 | 0.19 | (0.17) | (0.17) |
| Year Ended 4/30/2022 | $10.46 | 0.09 | (0.45) | (0.36) | (0.09) | (0.09) |
| Year Ended 4/30/2021 | $10.26 | 0.13 | 0.20 | 0.33 | (0.13) | (0.13) |
| Year Ended 4/30/2020 | $10.35 | 0.18 | (0.09) | 0.09 | (0.18) | (0.18) |
| Year Ended 4/30/2019 | $10.26 | 0.18 | 0.09 | 0.27 | (0.18) | (0.18) |
| Institutional 2 Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $10.03 | 0.12 | (0.19) | (0.07) | (0.12) | (0.12) |
| Year Ended 4/30/2023 | $10.01 | 0.17 | 0.03 | 0.20 | (0.18) | (0.18) |
| Year Ended 4/30/2022 | $10.46 | 0.09 | (0.44) | (0.35) | (0.10) | (0.10) |
| Year Ended 4/30/2021 | $10.25 | 0.14 | 0.21 | 0.35 | (0.14) | (0.14) |
| Year Ended 4/30/2020 | $10.35 | 0.18 | (0.09) | 0.09 | (0.19) | (0.19) |
| Year Ended 4/30/2019 | $10.26 | 0.18 | 0.09 | 0.27 | (0.18) | (0.18) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 24 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income (loss) ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Class A | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.85 | (0.76%) | 0.83% | 0.64%(c) | 2.08% | 15% | $60,770 |
| Year Ended 4/30/2023 | $10.03 | 1.67% | 0.83%(d) | 0.65%(c),(d) | 1.41% | 48% | $70,963 |
| Year Ended 4/30/2022 | $10.01 | (3.68%) | 0.81% | 0.66%(c) | 0.63% | 69% | $79,026 |
| Year Ended 4/30/2021 | $10.46 | 2.99% | 0.81% | 0.66%(c) | 1.02% | 46% | $72,327 |
| Year Ended 4/30/2020 | $10.26 | 0.63% | 0.80%(d) | 0.66%(c),(d) | 1.48% | 58% | $61,987 |
| Year Ended 4/30/2019 | $10.35 | 2.39% | 0.81% | 0.66%(c) | 1.44% | 55% | $68,355 |
| Advisor Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.86 | (0.63%) | 0.58% | 0.39%(c) | 2.33% | 15% | $43,122 |
| Year Ended 4/30/2023 | $10.04 | 1.92% | 0.58%(d) | 0.40%(c),(d) | 1.65% | 48% | $53,125 |
| Year Ended 4/30/2022 | $10.02 | (3.53%) | 0.57% | 0.41%(c) | 0.93% | 69% | $76,764 |
| Year Ended 4/30/2021 | $10.48 | 3.34% | 0.56% | 0.41%(c) | 1.26% | 46% | $1,899 |
| Year Ended 4/30/2020 | $10.27 | 0.89% | 0.55%(d) | 0.41%(c),(d) | 1.72% | 58% | $1,701 |
| Year Ended 4/30/2019 | $10.36 | 2.64% | 0.56% | 0.41%(c) | 1.74% | 55% | $2,027 |
| Class C | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.83 | (1.14%) | 1.59% | 1.39%(c) | 1.32% | 15% | $1,417 |
| Year Ended 4/30/2023 | $10.01 | 0.91% | 1.59%(d) | 1.40%(c),(d) | 0.70% | 48% | $2,044 |
| Year Ended 4/30/2022 | $9.99 | (4.48%) | 1.56% | 1.41%(c) | (0.11%) | 69% | $1,608 |
| Year Ended 4/30/2021 | $10.46 | 2.32% | 1.56% | 1.41%(c) | 0.30% | 46% | $1,775 |
| Year Ended 4/30/2020 | $10.25 | (0.12%) | 1.55%(d) | 1.41%(c),(d) | 0.74% | 58% | $3,464 |
| Year Ended 4/30/2019 | $10.34 | 1.62% | 1.55% | 1.41%(c) | 0.69% | 55% | $6,322 |
| Institutional Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.85 | (0.64%) | 0.58% | 0.39%(c) | 2.33% | 15% | $79,851 |
| Year Ended 4/30/2023 | $10.03 | 1.92% | 0.58%(d) | 0.40%(c),(d) | 1.64% | 48% | $94,875 |
| Year Ended 4/30/2022 | $10.01 | (3.44%) | 0.56% | 0.41%(c) | 0.88% | 69% | $107,620 |
| Year Ended 4/30/2021 | $10.46 | 3.25% | 0.56% | 0.41%(c) | 1.27% | 46% | $94,743 |
| Year Ended 4/30/2020 | $10.26 | 0.89% | 0.55%(d) | 0.41%(c),(d) | 1.72% | 58% | $86,870 |
| Year Ended 4/30/2019 | $10.35 | 2.64% | 0.56% | 0.41%(c) | 1.70% | 55% | $104,300 |
| Institutional 2 Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.84 | (0.71%) | 0.53% | 0.34% | 2.38% | 15% | $55,121 |
| Year Ended 4/30/2023 | $10.03 | 1.97% | 0.52%(d) | 0.35%(d) | 1.69% | 48% | $62,470 |
| Year Ended 4/30/2022 | $10.01 | (3.40%) | 0.51% | 0.37% | 0.92% | 69% | $127,702 |
| Year Ended 4/30/2021 | $10.46 | 3.39% | 0.53% | 0.37% | 1.31% | 46% | $86,120 |
| Year Ended 4/30/2020 | $10.25 | 0.83% | 0.51%(d) | 0.37%(d) | 1.77% | 58% | $71,372 |
| Year Ended 4/30/2019 | $10.35 | 2.69% | 0.51% | 0.36% | 1.76% | 55% | $27,329 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 25 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income (loss) | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Total distributions to shareholders | |
| Institutional 3 Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $10.03 | 0.12 | (0.19) | (0.07) | (0.12) | (0.12) |
| Year Ended 4/30/2023 | $10.01 | 0.17 | 0.03 | 0.20 | (0.18) | (0.18) |
| Year Ended 4/30/2022 | $10.46 | 0.10 | (0.45) | (0.35) | (0.10) | (0.10) |
| Year Ended 4/30/2021 | $10.25 | 0.14 | 0.21 | 0.35 | (0.14) | (0.14) |
| Year Ended 4/30/2020 | $10.35 | 0.19 | (0.10) | 0.09 | (0.19) | (0.19) |
| Year Ended 4/30/2019 | $10.25 | 0.18 | 0.11 | 0.29 | (0.19) | (0.19) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Ratios include interfund lending expense which is less than 0.01%. |
| (e) | Rounds to zero. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 26 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income (loss) ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Institutional 3 Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.84 | (0.69%) | 0.49% | 0.29% | 2.42% | 15% | $171,215 |
| Year Ended 4/30/2023 | $10.03 | 2.02% | 0.48%(d) | 0.30%(d) | 1.71% | 48% | $210,950 |
| Year Ended 4/30/2022 | $10.01 | (3.36%) | 0.47% | 0.32% | 0.97% | 69% | $380,197 |
| Year Ended 4/30/2021 | $10.46 | 3.44% | 0.48% | 0.32% | 1.37% | 46% | $448,774 |
| Year Ended 4/30/2020 | $10.25 | 0.88% | 0.46%(d) | 0.32%(d) | 1.82% | 58% | $511,085 |
| Year Ended 4/30/2019 | $10.35 | 2.84% | 0.46% | 0.32% | 1.78% | 55% | $670,432 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 27 |
Notes to Financial Statements
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Note 1. Organization
Columbia Short Duration Municipal
Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 8 years. Advisor Class, Institutional Class, Institutional 2 Class
and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the
Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are
valued based on prices obtained from pricing services, which are intended to reflect market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing
techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes.
Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities
maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security, if
available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
| 28 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Delayed delivery securities
The Fund may trade securities on
other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may
fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. The Fund may also adjust
accrual rates when it becomes probable the full interest will not be collected and a partial payment will be received. A defaulted debt security is removed from non-accrual status when the issuer resumes interest
payments or when collectability of interest is reasonably assured.
Dividend income is recorded on the
ex-dividend date.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its net tax-exempt and investment company taxable income and net capital
gain, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net
income and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment
income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 29 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncements and
regulatory updates
Tailored Shareholder Reports
In October 2022, the Securities and
Exchange Commission adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements. The rule and form amendments will,
among other things, require the Fund to transmit concise and visually engaging shareholder reports that highlight key information. The amendments will require that funds tag information in a structured data
format and that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month
transition period after the effective date of the amendments.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.43% to 0.28% as the Fund’s net assets increase. The annualized effective management services fee rate for the six months ended October 31, 2023 was 0.43% of the
Fund’s average daily net assets.
Compensation of Board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund. The expense for the Deferred Plan, which includes Trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Trustees’ fees" in the Statement of Operations.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with SS&C GIDS, Inc. (SS&C GIDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of SS&C GIDS for
services as sub-transfer agent and SS&C GIDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
| 30 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. In addition, effective through August 31, 2024, Institutional 2 Class shares are
subject to a contractual transfer agency fee annual limitation of not more than 0.05% and Institutional 3 Class shares are subject to a contractual transfer agency fee annual limitation of not more than 0.00% of the
average daily net assets attributable to each share class.
For the six months
ended October 31, 2023, the Fund’s annualized effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.10 |
| Advisor Class | 0.10 |
| Class C | 0.10 |
| Institutional Class | 0.10 |
| Institutional 2 Class | 0.04 |
| Institutional 3 Class | 0.00 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the six months ended October 31, 2023, these minimum account balance fees reduced total
expenses of the Fund by $40.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the six months ended October 31, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 1.00 | 0.50(a) | 17,006 |
| Class C | — | 1.00(b) | 60 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 31 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The Fund’s other share
classes are not subject to sales charges.
Expenses waived/reimbursed by the
Investment Manager and its affiliates
The Investment Manager and certain
of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s
custodian, do not exceed the following annual rate(s) as a percentage of the classes’ average daily net assets:
| September 1, 2023 through August 31, 2024 | Prior to September 1, 2023 | |
| Class A | 0.65% | 0.65% |
| Advisor Class | 0.40 | 0.40 |
| Class C | 1.40 | 1.40 |
| Institutional Class | 0.40 | 0.40 |
| Institutional 2 Class | 0.35 | 0.34 |
| Institutional 3 Class | 0.30 | 0.29 |
In addition, the Investment
Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) through August 31, 2024, so that the Fund’s net
operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, will not exceed the annual rates of 0.66% for Class A, 0.41%
for Advisor Class, 1.41% for Class C, 0.41% for Institutional Class, 0.37% for Institutional 2 Class and 0.32% for Institutional 3 Class as a percentage of the classes’ average daily net assets. Effective August
31, 2023, this arrangement was terminated.
Under the agreement governing these
fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including
foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage
commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money,
interest, costs associated with shareholder meetings, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified
or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have voluntarily agreed
to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share class) are waived
proportionately across all share classes. This arrangement may be revised or discontinued at any time. Reflected in the contractual cap commitment, effective through August 31, 2024, is the Transfer Agent’s
contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.05% for Institutional 2 Class and 0.00% for Institutional 3 Class of the average daily net assets attributable to each
share class, unless sooner terminated at the sole discretion of the Board of Trustees. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the
Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At October 31, 2023, the
approximate cost of all investments for federal income tax purposes and the aggregate gross approximate unrealized appreciation and depreciation based on that cost was:
| Federal tax cost ($) | Gross unrealized appreciation ($) | Gross unrealized (depreciation) ($) | Net unrealized (depreciation) ($) |
| 430,797,000 | 87,000 | (17,918,000) | (17,831,000) |
| 32 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 2023, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code.
| No expiration short-term ($) | No expiration long-term ($) | Total ($) |
| (8,542,874) | (7,100,125) | (15,642,999) |
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $64,127,898 and $131,289,902, respectively, for the six months ended October 31, 2023. The amount of purchase
and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend
money under the Interfund Program during the six months ended October 31, 2023.
Note 7. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. Pursuant to an October 26, 2023 amendment and restatement, the credit facility, which is an agreement between the Fund and certain other funds managed by the Investment Manager
or an affiliated investment manager, severally and not jointly, permits aggregate borrowings up to $900 million. Interest is currently charged to each participating fund based on its borrowings at a rate equal to the
higher of (i) the federal funds effective rate, (ii) the secured overnight financing rate plus 0.10% and (iii) the overnight bank funding rate plus, in each case, 1.00%. Each borrowing under the credit facility
matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee
is included in other expenses in the Statement of Operations. This agreement expires annually in October unless extended or renewed. Prior to the October 26, 2023 amendment and restatement, the Fund had access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. which permitted collective borrowings up to $950 million. Interest was charged to each
participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the secured overnight financing rate plus 0.10% and (iii) the overnight bank funding rate plus, in
each case, 1.00%.
The Fund had no borrowings during
the six months ended October 31, 2023.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 33 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Note 8. Significant
risks
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower-rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
Interest rate risk
Interest rate risk is the risk of
losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise. Actions by
governments and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Increasing interest rates may
negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt
security, the greater its sensitivity to changes in interest rates. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation.
Liquidity risk
Liquidity risk is the risk
associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another,
more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can
lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Market risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect the Fund’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, other conflicts, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events –
could have a significant negative impact on global economic and market conditions.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support,
| 34 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
such as letters of credit, guarantees or
insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors such as education, health care,
transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such issuers
which in turn, could affect the market values and marketability of many or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will be
negatively impacted to the extent it invests in such securities. The Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is
directly correlated to the Fund’s investment exposures.
Securities issued by a particular
state and its instrumentalities are subject to the risk of unfavorable developments in such state. A municipal security can be significantly affected by adverse tax, legislative, regulatory, demographic or political
changes as well as changes in a particular state’s (state and its instrumentalities’) financial, economic or other condition and prospects.
Shareholder concentration risk
At October 31, 2023, one
unaffiliated shareholder of record owned 42.2% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Fund shares
sold to or redeemed by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including
its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses
for non-redeeming Fund shareholders.
Note 9. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 10. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions concerning matters arising in connection
with the conduct of their activities as part of a diversified financial services firm. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its
affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to
perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and
regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial or one or more of its affiliates that provide services to
the Fund.
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 35 |
Approval of Management
Agreement
(Unaudited)
Columbia Management Investment
Advisers, LLC (the Investment Manager, and together with its domestic and global affiliates, Columbia Threadneedle Investments), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial), serves
as the investment manager to Columbia Short Duration Municipal Bond Fund (the Fund). Under a management agreement (the Management Agreement), the Investment Manager provides investment advice and other services to the Fund and other funds distributed
by Columbia Management Investment Distributors, Inc. (collectively, the Funds).
On an annual basis, the
Fund’s Board of Trustees (the Board), including the independent Board members (the Independent Trustees), considers renewal of the Management Agreement. The Investment Manager prepared detailed reports for
the Board and its Contracts Committee (including its Contracts Subcommittee) in February, March, April, May and June 2023, including reports providing the results of analyses performed by a third-party data provider,
Broadridge Financial Solutions, Inc. (Broadridge), and comprehensive responses by the Investment Manager to written requests for information by independent legal counsel to the Independent Trustees (Independent Legal
Counsel), to assist the Board in making this determination. In addition, throughout the year, the Board (or its committees or subcommittees) regularly meets with portfolio management teams and senior management
personnel and reviews information prepared by the Investment Manager addressing the services the Investment Manager provides and Fund performance. The Board also accords appropriate weight to the work,
deliberations and conclusions of the various committees (including their subcommittees), such as the Contracts Committee, the Investment Review Committee, the Audit Committee and the Compliance Committee in
determining whether to continue the Management Agreement.
The Board, at its June 22, 2023
Board meeting (the June Meeting), considered the renewal of the Management Agreement for an additional one-year term. At the June Meeting, Independent Legal Counsel reviewed with the Independent Trustees various
factors relevant to the Board’s consideration of advisory agreements and the Board’s legal responsibilities related to such consideration. The Independent Trustees considered all information that
they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to approve the continuation of the Management Agreement. Among other things, the information and factors
considered included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by Broadridge, as well as performance relative to one or more benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by Broadridge; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | Terms of the Management Agreement; |
| • | Descriptions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of transfer agency and shareholder services to the Fund; |
| • | Descriptions of various services performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services; |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund; and |
| • | Report provided by the Board’s independent fee consultant, JDL Consultants, LLC (JDL). |
| 36 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Approval of Management Agreement (continued)
(Unaudited)
Following an analysis and discussion of the foregoing, and the factors identified below, the Board, including all of the Independent Trustees, approved the renewal of the Management Agreement.
(Unaudited)
Following an analysis and discussion of the foregoing, and the factors identified below, the Board, including all of the Independent Trustees, approved the renewal of the Management Agreement.
Nature, extent and quality of
services provided by the Investment Manager
The Board analyzed various reports
and presentations it had received detailing the services performed by the Investment Manager, as well as its history, expertise, resources and relative capabilities, and the qualifications of its personnel.The Board
specifically considered the many developments during recent years concerning the services provided by the Investment Manager. Among other things, the Board noted the organization and depth of the equity and credit
research departments. The Board further observed the enhancements to the investment risk management department’s processes, systems and oversight over the past several years. The Board also took into
account the broad scope of services provided by the Investment Manager to the Fund, including, among other services, investment, risk and compliance oversight. The Board also took into account the information it
received concerning the Investment Manager’s ability to attract and retain key portfolio management personnel and that it has sufficient resources to provide competitive and adequate compensation to investment
personnel.
In connection with the
Board’s evaluation of the overall package of services provided by the Investment Manager, the Board also considered the nature, quality and range of administrative services provided to the Fund by the Investment
Manager, as well as the achievements in 2022 in the performance of administrative services, and noted the various enhancements anticipated for 2023. In evaluating the quality of services provided under the
Management Agreement, the Board also took into account the organization and strength of the Fund’s and its service providers’ compliance programs. The Board also reviewed the financial condition of
the Investment Manager and its affiliates and each entity’s ability to carry out its responsibilities under the Management Agreement and the Fund’s other service agreements.
In addition, the Board discussed
the acceptability of the terms of the Management Agreement, noting that no changes were proposed from the form of agreement previously approved. The Board also noted the wide array of legal and compliance
services provided to the Fund under the Management Agreement.
After reviewing these and related
factors (including investment performance as discussed below), the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the
Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Board carefully reviewed the
investment performance of the Fund, including detailed reports providing the results of analyses performed by each of the Investment Manager, Broadridge and JDL collectively showing, for various periods (including
since manager inception): (i) the performance of the Fund, (ii) the Fund’s performance relative to peers and benchmarks and (iii) the net assets of the Fund. The Board observed that the Fund’s performance
for certain periods ranked above median based on information provided by Broadridge.
The Board also reviewed a
description of the third-party data provider’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Board also considered the
Investment Manager’s performance and reputation generally. After reviewing these and related factors, the Board concluded, within the context of their overall conclusions, that the performance of the Fund
and the Investment Manager, in light of other considerations, supported the continuation of the Management Agreement.
Comparative fees, costs of
services provided and the profits realized by the Investment Manager and its affiliates from their relationships with the Fund
The Board reviewed comparative
fees and the costs of services provided under the Management Agreement. The Board members considered detailed comparative information set forth in an annual report on fees and expenses, including, among other
things, data (based on analyses conducted by Broadridge and JDL) showing a comparison of the Fund’s expenses with median expenses paid by funds in its comparative peer universe, as well as data showing the
Fund’s contribution to the
| Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 | 37 |
Approval of Management Agreement (continued)
(Unaudited)
Investment Manager’s profitability. The Board reviewed the fees charged to comparable institutional or other accounts/vehicles managed by the Investment Manager and discussed differences in how the products are managed and operated, thus explaining many of the differences in fees.
(Unaudited)
Investment Manager’s profitability. The Board reviewed the fees charged to comparable institutional or other accounts/vehicles managed by the Investment Manager and discussed differences in how the products are managed and operated, thus explaining many of the differences in fees.
The Board considered the reports of
JDL, which assisted in the Board’s analysis of the Funds’ performance and expenses and the reasonableness of the Funds’ fee rates. The Board accorded particular weight to the notion that a
primary objective of the level of fees is to achieve a rational pricing model applied consistently across the various product lines in the Fund family, while assuring that the overall fees for each Fund (with certain
exceptions) are generally in line with the current “pricing philosophy” such that Fund total expense ratios, in general, approximate or are lower than the median expense ratios of funds in the same Lipper
comparison universe. The Board took into account that the Fund’s total expense ratio (after considering proposed expense caps/waivers) approximated the peer universe’s median expense
ratio.
After reviewing these and related
factors, the Board concluded, within the context of their overall conclusions, that the levels of management fees and expenses of the Fund, in light of other considerations, supported the continuation of the
Management Agreement.
The Board also considered the
profitability of the Investment Manager and its affiliates in connection with the Investment Manager providing management services to the Fund. With respect to the profitability of the Investment Manager and its
affiliates, the Independent Trustees referred to information discussing the profitability to the Investment Manager and Ameriprise Financial from managing, operating and distributing the Funds. The Board
considered that the profitability generated by the Investment Manager in 2022 had declined from 2021 levels, due to a variety of factors, including the decreased assets under management of the Funds. It also
took into account the indirect economic benefits flowing to the Investment Manager or its affiliates in connection with managing or distributing the Funds, such as the enhanced ability to offer various other financial
products to Ameriprise Financial customers, soft dollar benefits and overall reputational advantages. The Board noted that the fees paid by the Fund should permit the Investment Manager to offer competitive
compensation to its personnel, make necessary investments in its business and earn an appropriate profit. After reviewing these and related factors, the Board concluded, within the context of their overall
conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Board considered the
potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, and whether those economies of scale were shared with the Fund through breakpoints in investment management
fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources. The Board considered the economies of scale
that might be realized as the Fund’s net asset level grows and took note of the extent to which Fund shareholders might also benefit from such growth. In this regard, the Board took into account that
management fees decline as Fund assets exceed various breakpoints, all of which have not been surpassed. The Board observed that the Management Agreement provided for breakpoints in the management fee rate schedule that allow opportunities for shareholders to realize lower fees as
Fund assets grow and that there are additional opportunities through other means for sharing economies of scale with shareholders.
Conclusion
The Board reviewed all of the
above considerations in reaching its decision to approve the continuation of the Management Agreement. In reaching its conclusions, no single factor was determinative.
On June 22, 2023, the Board,
including all of the Independent Trustees, determined that fees payable under the Management Agreement were fair and reasonable in light of the extent and quality of services provided and approved the renewal of the
Management Agreement.
| 38 | Columbia Short Duration Municipal Bond Fund | Semiannual Report 2023 |
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2023 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
SAR223_04_N01_(12/23)
Columbia California
Intermediate Municipal Bond Fund
Not FDIC or NCUA Insured •
No Financial Institution Guarantee • May Lose Value
Table of Contents
If you elect to receive the
shareholder report for Columbia California Intermediate Municipal Bond Fund (the Fund) in paper, mailed to you, the Fund mails one shareholder report to each shareholder address, unless such shareholder elects to
receive shareholder reports from the Fund electronically via e-mail or by having a paper notice mailed to you (Postcard Notice) that your Fund’s shareholder report is available at the Columbia funds’
website (columbiathreadneedleus.com/investor/). If you would like more than one report in paper to be mailed to you, or would like to elect to receive reports via e-mail or access them through Postcard Notice, please
call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and
procedures
The policy of the Board of Trustees
is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by
calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/investor/; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding
how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting
columbiathreadneedleus.com/investor/, or searching the website of the SEC at sec.gov.
Quarterly schedule of
investments
The Fund files a complete schedule
of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s
complete schedule of portfolio holdings, as filed on Form N-PORT, is available on columbiathreadneedleus.com/investor/ or can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the
Fund, please visit columbiathreadneedleus.com/investor/ or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
290 Congress Street
Boston, MA 02210
Fund distributor
Columbia Management Investment Distributors,
Inc.
290 Congress Street
Boston, MA 02210
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 219104
Kansas City, MO 64121-9104
Columbia California Intermediate Municipal Bond
Fund | Semiannual Report 2023
Fund at a Glance
(Unaudited)
(Unaudited)
Investment objective
The Fund
seeks current income exempt from U.S. federal income tax and California individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Paul Fuchs, CFA
Co-Portfolio Manager
Managed Fund since 2012
Douglas Rangel, CFA
Co-Portfolio Manager
Managed the Fund since 2022
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 3 |
Fund at a Glance (continued)
(Unaudited)
(Unaudited)
| Quality breakdown (%) (at October 31, 2023) | |
| AAA rating | 1.1 |
| AA rating | 48.7 |
| A rating | 27.7 |
| BBB rating | 13.7 |
| BB rating | 2.3 |
| Not rated | 6.5 |
| Total | 100.0 |
Percentages indicated are based
upon total fixed income investments.
Bond ratings apply to the underlying
holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the
highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. If a security is
not rated but has a rating by Kroll and/or DBRS, the same methodology is applied to those bonds that would otherwise be not rated. When a bond is not rated by any rating agency, it is designated as “Not
rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one
of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and
leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g.,
interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Understanding Your Fund’s
Expenses
(Unaudited)
(Unaudited)
As an investor, you incur two types
of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund costs, which generally include management fees,
distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with
the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s
expenses
To illustrate these ongoing
costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment
of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the
“Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the
expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under
the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the
Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or
the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are
required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the
hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are
meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in
comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| May 1, 2023 — October 31, 2023 | |||||||
| Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund’s annualized expense ratio (%) | ||||
| Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |
| Class A | 1,000.00 | 1,000.00 | 971.10 | 1,021.70 | 3.66 | 3.75 | 0.73 |
| Advisor Class | 1,000.00 | 1,000.00 | 972.20 | 1,022.97 | 2.41 | 2.47 | 0.48 |
| Class C | 1,000.00 | 1,000.00 | 967.40 | 1,017.89 | 7.40 | 7.59 | 1.48 |
| Institutional Class | 1,000.00 | 1,000.00 | 973.30 | 1,022.97 | 2.41 | 2.47 | 0.48 |
| Institutional 2 Class | 1,000.00 | 1,000.00 | 972.20 | 1,023.02 | 2.36 | 2.42 | 0.47 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 973.60 | 1,023.28 | 2.11 | 2.16 | 0.42 |
Expenses paid during the period
are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal
half year and divided by 366.
Expenses do not include fees and
expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment
Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 5 |
Portfolio of Investments
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
(Percentages represent value of
investments compared to net assets)
Investments in securities
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 6 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 7 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 8 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 9 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 10 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 11 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 12 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 13 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Notes to Portfolio of
Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of October 31, 2023. |
| (c) | Income from this security may be subject to alternative minimum tax. |
| (d) | Represents a security purchased on a when-issued basis. |
| (e) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. At October 31, 2023, the total value of these securities amounted to $18,162,248, which represents 6.41% of total net assets. |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 14 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Portfolio of Investments (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Notes to Portfolio of Investments (continued)
| (f) | Represents a variable rate security with a step coupon where the rate adjusts according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The interest rate shown was the current rate as of October 31, 2023. |
| (g) | Zero coupon bond. |
| (h) | The rate shown is the seven-day current annualized yield at October 31, 2023. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| NPFGC | National Public Finance Guarantee Corporation |
Fair value measurements
The Fund categorizes its fair
value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available.
Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the
Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example,
certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in
the three broad levels listed below:
| ■ | Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| ■ | Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| ■ | Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining
fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary
between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered
by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include
periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels
within the hierarchy.
Investments falling into the Level 3
category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency
and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant
unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
The Fund’s Board of Trustees
(the Board) has designated the Investment Manager, through its Valuation Committee (the Committee), as valuation designee, responsible for determining the fair value of the assets of the Fund for which market
quotations are not readily available using valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization,
including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly
to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of
Board-approved valuation policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party
pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing,
including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss
additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. Representatives of Columbia Management Investment
Advisers, LLC report to the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of
the inputs used to value the Fund’s investments at October 31, 2023:
| Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | |
| Investments in Securities | ||||
| Floating Rate Notes | — | 3,545,000 | — | 3,545,000 |
| Municipal Bonds | — | 281,686,097 | — | 281,686,097 |
| Money Market Funds | 2,911,546 | — | — | 2,911,546 |
| Total Investments in Securities | 2,911,546 | 285,231,097 | — | 288,142,643 |
See the Portfolio of Investments for
all investment classifications not indicated in the table.
The Fund’s assets assigned to
the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical
assets.
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 15 |
Statement of Assets and Liabilities
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $301,087,581) | $288,142,643 |
| Cash | 1,124 |
| Receivable for: | |
| Capital shares sold | 853,146 |
| Dividends | 11,055 |
| Interest | 3,736,130 |
| Expense reimbursement due from Investment Manager | 765 |
| Prepaid expenses | 7,633 |
| Other assets | 2,494 |
| Total assets | 292,754,990 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 8,267,453 |
| Capital shares redeemed | 437,782 |
| Distributions to shareholders | 677,953 |
| Management services fees | 3,638 |
| Distribution and/or service fees | 268 |
| Transfer agent fees | 13,065 |
| Trustees’ fees | 92,903 |
| Compensation of chief compliance officer | 30 |
| Other expenses | 23,798 |
| Total liabilities | 9,516,890 |
| Net assets applicable to outstanding capital stock | $283,238,100 |
| Represented by | |
| Paid in capital | 308,745,312 |
| Total distributable earnings (loss) | (25,507,212) |
| Total - representing net assets applicable to outstanding capital stock | $283,238,100 |
| Class A | |
| Net assets | $31,004,013 |
| Shares outstanding | 3,294,800 |
| Net asset value per share | $9.41 |
| Maximum sales charge | 3.00% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $9.70 |
| Advisor Class | |
| Net assets | $12,224,667 |
| Shares outstanding | 1,302,898 |
| Net asset value per share | $9.38 |
| Class C | |
| Net assets | $2,368,566 |
| Shares outstanding | 251,853 |
| Net asset value per share | $9.40 |
| Institutional Class | |
| Net assets | $145,552,243 |
| Shares outstanding | 15,490,375 |
| Net asset value per share | $9.40 |
| Institutional 2 Class | |
| Net assets | $8,085,144 |
| Shares outstanding | 863,796 |
| Net asset value per share | $9.36 |
| Institutional 3 Class | |
| Net assets | $84,003,467 |
| Shares outstanding | 8,949,450 |
| Net asset value per share | $9.39 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 16 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Statement of Operations
Six Months Ended October 31, 2023 (Unaudited)
Six Months Ended October 31, 2023 (Unaudited)
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $38,792 |
| Interest | 4,916,749 |
| Total income | 4,955,541 |
| Expenses: | |
| Management services fees | 733,365 |
| Distribution and/or service fees | |
| Class A | 52,307 |
| Class C | 13,825 |
| Transfer agent fees | |
| Class A | 14,334 |
| Advisor Class | 4,288 |
| Class C | 946 |
| Institutional Class | 51,283 |
| Institutional 2 Class | 3,109 |
| Institutional 3 Class | 2,814 |
| Trustees’ fees | 11,464 |
| Custodian fees | 1,154 |
| Printing and postage fees | 6,984 |
| Registration fees | 9,048 |
| Accounting services fees | 15,512 |
| Legal fees | 7,924 |
| Interest on interfund lending | 420 |
| Compensation of chief compliance officer | 30 |
| Other | 7,913 |
| Total expenses | 936,720 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (154,146) |
| Expense reduction | (20) |
| Total net expenses | 782,554 |
| Net investment income | 4,172,987 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (1,492,238) |
| Net realized loss | (1,492,238) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (11,124,531) |
| Net change in unrealized appreciation (depreciation) | (11,124,531) |
| Net realized and unrealized loss | (12,616,769) |
| Net decrease in net assets resulting from operations | $(8,443,782) |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 17 |
Statement of Changes in Net Assets
| Six Months Ended October 31, 2023 (Unaudited) | Year Ended April 30, 2023 | |
| Operations | ||
| Net investment income | $4,172,987 | $8,642,866 |
| Net realized loss | (1,492,238) | (6,312,604) |
| Net change in unrealized appreciation (depreciation) | (11,124,531) | 7,873,119 |
| Net increase (decrease) in net assets resulting from operations | (8,443,782) | 10,203,381 |
| Distributions to shareholders | ||
| Net investment income and net realized gains | ||
| Class A | (503,080) | (1,020,973) |
| Advisor Class | (166,417) | (187,364) |
| Class C | (22,991) | (61,373) |
| Institutional Class | (1,990,328) | (4,812,440) |
| Institutional 2 Class | (146,224) | (208,125) |
| Institutional 3 Class | (1,287,880) | (2,371,668) |
| Total distributions to shareholders | (4,116,920) | (8,661,943) |
| Decrease in net assets from capital stock activity | (17,914,377) | (100,881,238) |
| Total decrease in net assets | (30,475,079) | (99,339,800) |
| Net assets at beginning of period | 313,713,179 | 413,052,979 |
| Net assets at end of period | $283,238,100 | $313,713,179 |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 18 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Statement of Changes in Net Assets (continued)
| Six Months Ended | Year Ended | |||
| October 31, 2023 (Unaudited) | April 30, 2023 | |||
| Shares | Dollars ($) | Shares | Dollars ($) | |
| Capital stock activity | ||||
| Class A | ||||
| Shares sold | 468,189 | 4,499,809 | 1,388,101 | 13,484,325 |
| Distributions reinvested | 48,760 | 470,360 | 96,307 | 938,350 |
| Shares redeemed | (1,682,339) | (16,071,759) | (1,570,463) | (15,256,743) |
| Net decrease | (1,165,390) | (11,101,590) | (86,055) | (834,068) |
| Advisor Class | ||||
| Shares sold | 153,848 | 1,497,537 | 1,127,065 | 10,749,141 |
| Distributions reinvested | 17,299 | 166,186 | 19,271 | 187,120 |
| Shares redeemed | (75,462) | (727,079) | (114,264) | (1,106,916) |
| Net increase | 95,685 | 936,644 | 1,032,072 | 9,829,345 |
| Class C | ||||
| Shares sold | 9,763 | 95,266 | 61,305 | 594,796 |
| Distributions reinvested | 2,172 | 20,935 | 5,920 | 57,628 |
| Shares redeemed | (85,253) | (829,160) | (188,806) | (1,846,248) |
| Net decrease | (73,318) | (712,959) | (121,581) | (1,193,824) |
| Institutional Class | ||||
| Shares sold | 2,559,803 | 24,684,627 | 11,042,139 | 107,049,493 |
| Distributions reinvested | 190,427 | 1,832,280 | 311,400 | 3,032,847 |
| Shares redeemed | (2,137,142) | (20,581,957) | (32,069,479) | (313,176,375) |
| Net increase (decrease) | 613,088 | 5,934,950 | (20,715,940) | (203,094,035) |
| Institutional 2 Class | ||||
| Shares sold | 335,738 | 3,278,789 | 679,936 | 6,601,469 |
| Distributions reinvested | 15,166 | 145,562 | 21,332 | 206,883 |
| Shares redeemed | (360,595) | (3,410,996) | (730,653) | (7,065,394) |
| Net increase (decrease) | (9,691) | 13,355 | (29,385) | (257,042) |
| Institutional 3 Class | ||||
| Shares sold | 292,720 | 2,821,696 | 17,610,722 | 172,173,489 |
| Distributions reinvested | 9,359 | 89,950 | 17,727 | 172,176 |
| Shares redeemed | (1,648,647) | (15,896,423) | (8,020,896) | (77,677,279) |
| Net increase (decrease) | (1,346,568) | (12,984,777) | 9,607,553 | 94,668,386 |
| Total net decrease | (1,886,194) | (17,914,377) | (10,313,336) | (100,881,238) |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 19 |
Financial Highlights
The following table is intended to
help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are
calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total
return and portfolio turnover are not annualized for periods of less than one year. The ratios of expenses and net investment income are annualized for periods of less than one year. The portfolio turnover rate is
calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Total distributions to shareholders | |
| Class A | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.81 | 0.12 | (0.40) | (0.28) | (0.12) | (0.12) |
| Year Ended 4/30/2023 | $9.77 | 0.23 | 0.04 | 0.27 | (0.23) | (0.23) |
| Year Ended 4/30/2022 | $10.71 | 0.21 | (0.94) | (0.73) | (0.21) | (0.21) |
| Year Ended 4/30/2021 | $10.24 | 0.22 | 0.47 | 0.69 | (0.22) | (0.22) |
| Year Ended 4/30/2020 | $10.46 | 0.24 | (0.22) | 0.02 | (0.24) | (0.24) |
| Year Ended 4/30/2019 | $10.23 | 0.27 | 0.23 | 0.50 | (0.27) | (0.27) |
| Advisor Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.78 | 0.13 | (0.40) | (0.27) | (0.13) | (0.13) |
| Year Ended 4/30/2023 | $9.75 | 0.25 | 0.03 | 0.28 | (0.25) | (0.25) |
| Year Ended 4/30/2022 | $10.68 | 0.23 | (0.93) | (0.70) | (0.23) | (0.23) |
| Year Ended 4/30/2021 | $10.21 | 0.25 | 0.47 | 0.72 | (0.25) | (0.25) |
| Year Ended 4/30/2020 | $10.43 | 0.27 | (0.22) | 0.05 | (0.27) | (0.27) |
| Year Ended 4/30/2019 | $10.20 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
| Class C | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.80 | 0.08 | (0.40) | (0.32) | (0.08) | (0.08) |
| Year Ended 4/30/2023 | $9.77 | 0.15 | 0.03 | 0.18 | (0.15) | (0.15) |
| Year Ended 4/30/2022 | $10.71 | 0.13 | (0.94) | (0.81) | (0.13) | (0.13) |
| Year Ended 4/30/2021 | $10.23 | 0.14 | 0.48 | 0.62 | (0.14) | (0.14) |
| Year Ended 4/30/2020 | $10.46 | 0.16 | (0.23) | (0.07) | (0.16) | (0.16) |
| Year Ended 4/30/2019 | $10.22 | 0.20 | 0.24 | 0.44 | (0.20) | (0.20) |
| Institutional Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.79 | 0.13 | (0.39) | (0.26) | (0.13) | (0.13) |
| Year Ended 4/30/2023 | $9.75 | 0.25 | 0.04 | 0.29 | (0.25) | (0.25) |
| Year Ended 4/30/2022 | $10.69 | 0.23 | (0.94) | (0.71) | (0.23) | (0.23) |
| Year Ended 4/30/2021 | $10.21 | 0.25 | 0.48 | 0.73 | (0.25) | (0.25) |
| Year Ended 4/30/2020 | $10.44 | 0.27 | (0.23) | 0.04 | (0.27) | (0.27) |
| Year Ended 4/30/2019 | $10.21 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
| Institutional 2 Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.76 | 0.13 | (0.40) | (0.27) | (0.13) | (0.13) |
| Year Ended 4/30/2023 | $9.72 | 0.25 | 0.04 | 0.29 | (0.25) | (0.25) |
| Year Ended 4/30/2022 | $10.66 | 0.24 | (0.94) | (0.70) | (0.24) | (0.24) |
| Year Ended 4/30/2021 | $10.18 | 0.26 | 0.48 | 0.74 | (0.26) | (0.26) |
| Year Ended 4/30/2020 | $10.41 | 0.27 | (0.22) | 0.05 | (0.28) | (0.28) |
| Year Ended 4/30/2019 | $10.18 | 0.30 | 0.23 | 0.53 | (0.30) | (0.30) |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 20 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Class A | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.41 | (2.89%) | 0.83%(c) | 0.73%(c),(d) | 2.44% | 9% | $31,004 |
| Year Ended 4/30/2023 | $9.81 | 2.76% | 0.83%(c) | 0.73%(c),(d) | 2.31% | 12% | $43,752 |
| Year Ended 4/30/2022 | $9.77 | (6.96%) | 0.85% | 0.74%(d) | 1.96% | 8% | $44,427 |
| Year Ended 4/30/2021 | $10.71 | 6.80% | 0.87% | 0.75%(d) | 2.09% | 5% | $34,289 |
| Year Ended 4/30/2020 | $10.24 | 0.17% | 0.86% | 0.75%(d) | 2.30% | 6% | $31,402 |
| Year Ended 4/30/2019 | $10.46 | 5.00% | 0.87% | 0.74%(d) | 2.67% | 17% | $31,998 |
| Advisor Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.38 | (2.78%) | 0.58%(c) | 0.48%(c),(d) | 2.70% | 9% | $12,225 |
| Year Ended 4/30/2023 | $9.78 | 2.92% | 0.58%(c) | 0.48%(c),(d) | 2.63% | 12% | $11,806 |
| Year Ended 4/30/2022 | $9.75 | (6.65%) | 0.60% | 0.49%(d) | 2.21% | 8% | $1,707 |
| Year Ended 4/30/2021 | $10.68 | 7.08% | 0.62% | 0.50%(d) | 2.34% | 5% | $2,961 |
| Year Ended 4/30/2020 | $10.21 | 0.41% | 0.61% | 0.50%(d) | 2.54% | 6% | $2,354 |
| Year Ended 4/30/2019 | $10.43 | 5.28% | 0.62% | 0.49%(d) | 2.92% | 17% | $2,254 |
| Class C | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.40 | (3.26%) | 1.58%(c) | 1.48%(c),(d) | 1.70% | 9% | $2,369 |
| Year Ended 4/30/2023 | $9.80 | 1.89% | 1.58%(c) | 1.48%(c),(d) | 1.56% | 12% | $3,188 |
| Year Ended 4/30/2022 | $9.77 | (7.65%) | 1.60% | 1.49%(d) | 1.20% | 8% | $4,363 |
| Year Ended 4/30/2021 | $10.71 | 6.11% | 1.62% | 1.50%(d) | 1.35% | 5% | $7,658 |
| Year Ended 4/30/2020 | $10.23 | (0.68%) | 1.61% | 1.50%(d) | 1.54% | 6% | $10,387 |
| Year Ended 4/30/2019 | $10.46 | 4.32% | 1.62% | 1.49%(d) | 1.92% | 17% | $11,161 |
| Institutional Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.40 | (2.67%) | 0.58%(c) | 0.48%(c),(d) | 2.70% | 9% | $145,552 |
| Year Ended 4/30/2023 | $9.79 | 3.02% | 0.58%(c) | 0.48%(c),(d) | 2.52% | 12% | $145,710 |
| Year Ended 4/30/2022 | $9.75 | (6.74%) | 0.60% | 0.49%(d) | 2.21% | 8% | $347,070 |
| Year Ended 4/30/2021 | $10.69 | 7.18% | 0.62% | 0.50%(d) | 2.34% | 5% | $388,017 |
| Year Ended 4/30/2020 | $10.21 | 0.31% | 0.61% | 0.50%(d) | 2.54% | 6% | $382,665 |
| Year Ended 4/30/2019 | $10.44 | 5.27% | 0.62% | 0.49%(d) | 2.92% | 17% | $343,276 |
| Institutional 2 Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.36 | (2.78%) | 0.57%(c) | 0.47%(c) | 2.72% | 9% | $8,085 |
| Year Ended 4/30/2023 | $9.76 | 3.03% | 0.56%(c) | 0.46%(c) | 2.58% | 12% | $8,524 |
| Year Ended 4/30/2022 | $9.72 | (6.72%) | 0.55% | 0.44% | 2.25% | 8% | $8,777 |
| Year Ended 4/30/2021 | $10.66 | 7.26% | 0.56% | 0.44% | 2.40% | 5% | $13,265 |
| Year Ended 4/30/2020 | $10.18 | 0.37% | 0.55% | 0.44% | 2.60% | 6% | $10,846 |
| Year Ended 4/30/2019 | $10.41 | 5.34% | 0.56% | 0.43% | 2.98% | 17% | $10,662 |
The accompanying Notes to Financial
Statements are an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 21 |
Financial Highlights (continued)
| Net asset value, beginning of period | Net investment income | Net realized and unrealized gain (loss) | Total from investment operations | Distributions from net investment income | Total distributions to shareholders | |
| Institutional 3 Class | ||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.78 | 0.14 | (0.40) | (0.26) | (0.13) | (0.13) |
| Year Ended 4/30/2023 | $9.74 | 0.26 | 0.04 | 0.30 | (0.26) | (0.26) |
| Year Ended 4/30/2022 | $10.68 | 0.24 | (0.94) | (0.70) | (0.24) | (0.24) |
| Year Ended 4/30/2021 | $10.21 | 0.26 | 0.47 | 0.73 | (0.26) | (0.26) |
| Year Ended 4/30/2020 | $10.43 | 0.28 | (0.22) | 0.06 | (0.28) | (0.28) |
| Year Ended 4/30/2019 | $10.20 | 0.31 | 0.23 | 0.54 | (0.31) | (0.31) |
| Notes to Financial Highlights | |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Ratios include interfund lending expense which is less than 0.01%. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
The accompanying Notes to
Financial Statements are an integral part of this statement.
| 22 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Financial Highlights (continued)
| Net asset value, end of period | Total return | Total gross expense ratio to average net assets(a) | Total net expense ratio to average net assets(a),(b) | Net investment income ratio to average net assets | Portfolio turnover | Net assets, end of period (000’s) | |
| Institutional 3 Class | |||||||
| Six Months Ended 10/31/2023 (Unaudited) | $9.39 | (2.64%) | 0.51%(c) | 0.42%(c) | 2.76% | 9% | $84,003 |
| Year Ended 4/30/2023 | $9.78 | 3.09% | 0.52%(c) | 0.42%(c) | 2.68% | 12% | $100,733 |
| Year Ended 4/30/2022 | $9.74 | (6.66%) | 0.50% | 0.39% | 2.31% | 8% | $6,708 |
| Year Ended 4/30/2021 | $10.68 | 7.19% | 0.51% | 0.39% | 2.45% | 5% | $5,348 |
| Year Ended 4/30/2020 | $10.21 | 0.52% | 0.50% | 0.39% | 2.64% | 6% | $5,307 |
| Year Ended 4/30/2019 | $10.43 | 5.39% | 0.51% | 0.38% | 3.02% | 17% | $3,231 |
The accompanying Notes to Financial Statements are
an integral part of this statement.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 23 |
Notes to Financial Statements
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Note 1. Organization
Columbia California Intermediate
Municipal Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited
number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. Although all share classes generally have identical voting, dividend and liquidation
rights, each share class votes separately when required by the Trust’s organizational documents or by law. Each share class has its own expense and sales charge structure. Different share classes may have
different minimum initial investment amounts and pay different net investment income distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a
liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s
prospectus, Class A and Class C shares are offered to the general public for investment. Class C shares automatically convert to Class A shares after 8 years. Advisor Class, Institutional Class, Institutional 2 Class
and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional investors and to certain other investors as also described in the
Fund’s prospectus.
Note 2. Summary of
significant accounting policies
Basis of preparation
The Fund is an investment company
that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of
significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are
valued based on prices obtained from pricing services, which are intended to reflect market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing
techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes.
Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities
maturing in 60 days or less are valued primarily at amortized market value, unless this method results in a valuation that management believes does not approximate fair value.
Investments in open-end investment
companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset value reported by those companies as of the valuation time.
Investments for which market
quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by
the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security, if
available.
The determination of fair value
often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used
to determine fair value.
| 24 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
GAAP requires disclosure regarding
the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following
the Fund’s Portfolio of Investments.
Delayed delivery securities
The Fund may trade securities on
other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may
fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted
for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an
accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security
on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. The Fund may also adjust
accrual rates when it becomes probable the full interest will not be collected and a partial payment will be received. A defaulted debt security is removed from non-accrual status when the issuer resumes interest
payments or when collectability of interest is reasonably assured.
Dividend income is recorded on the
ex-dividend date.
Expenses
General expenses of the Trust are
allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are
charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset
value
All income, expenses (other than
class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on
the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its net tax-exempt and investment company taxable income and net capital
gain, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net
income and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment
income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 25 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Guarantees and indemnifications
Under the Trust’s
organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition,
certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims
that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncements and
regulatory updates
Tailored Shareholder Reports
In October 2022, the Securities and
Exchange Commission adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements. The rule and form amendments will,
among other things, require the Fund to transmit concise and visually engaging shareholder reports that highlight key information. The amendments will require that funds tag information in a structured data
format and that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month
transition period after the effective date of the amendments.
Note 3. Fees and other
transactions with affiliates
Management services fees
The Fund has entered into a
Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the
Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the
Fund’s daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The annualized effective management services fee rate for the six months ended October 31, 2023 was 0.47% of the
Fund’s average daily net assets.
Compensation of Board members
Members of the Board of Trustees
who are not officers or employees of the Investment Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the
Deferred Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of
certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All
amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund. The expense for the Deferred Plan, which includes Trustees’ fees deferred during the current period as well as any
gains or losses on the Trustees’ deferred compensation balances as a result of market fluctuations, is included in "Trustees’ fees" in the Statement of Operations.
Compensation of Chief Compliance
Officer
The Board of Trustees has appointed
a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated
to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transfer agency fees
Under a Transfer and Dividend
Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for
providing transfer agency services to the Fund. The Transfer Agent has contracted with SS&C GIDS, Inc. (SS&C GIDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of SS&C GIDS for
services as sub-transfer agent and SS&C GIDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
| 26 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
The Fund pays the Transfer Agent a
monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, the Fund pays the Transfer Agent a fee for shareholder services based on the number of
accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the
Board of Trustees from time to time.
The Transfer Agent also receives
compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class shares are subject to an
annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class.
For the six months ended October
31, 2023, the Fund’s annualized effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| Effective rate (%) | |
| Class A | 0.07 |
| Advisor Class | 0.07 |
| Class C | 0.07 |
| Institutional Class | 0.07 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
An annual minimum account balance
fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum
account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the six months ended October 31, 2023, these minimum account balance fees reduced total
expenses of the Fund by $20.
Distribution and service fees
The Fund has entered into an
agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder
services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the
Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a
monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a
monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class C shares of the Fund and a monthly distribution fee to the Distributor at the maximum
annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges
Sales charges, including front-end
charges and contingent deferred sales charges (CDSCs), received by the Distributor for distributing Fund shares for the six months ended October 31, 2023, if any, are listed below:
| Front End (%) | CDSC (%) | Amount ($) | |
| Class A | 3.00 | 0.75(a) | 1,504 |
| Class C | — | 1.00(b) | — |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share
classes are not subject to sales charges.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 27 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Expenses waived/reimbursed by the
Investment Manager and its affiliates
The Investment Manager and certain
of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole
discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s
custodian, do not exceed the following annual rate(s) as a percentage of the classes’ average daily net assets:
| September 1, 2023 through August 31, 2024 | Prior to September 1, 2023 | |
| Class A | 0.73% | 0.75% |
| Advisor Class | 0.48 | 0.50 |
| Class C | 1.48 | 1.50 |
| Institutional Class | 0.48 | 0.50 |
| Institutional 2 Class | 0.47 | 0.47 |
| Institutional 3 Class | 0.42 | 0.42 |
Under the agreement governing
these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes
(including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and
brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed
money, interest, costs associated with shareholder meetings, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be
modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have
voluntarily agreed to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share
class) are waived proportionately across all share classes. This arrangement may be revised or discontinued at any time. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements
described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax
information
The timing and character of
income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At October 31, 2023, the
approximate cost of all investments for federal income tax purposes and the aggregate gross approximate unrealized appreciation and depreciation based on that cost was:
| Federal tax cost ($) | Gross unrealized appreciation ($) | Gross unrealized (depreciation) ($) | Net unrealized (depreciation) ($) |
| 301,088,000 | 373,000 | (13,318,000) | (12,945,000) |
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss
carryforwards, determined at April 30, 2023, may be available to reduce future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code.
| No expiration short-term ($) | No expiration long-term ($) | Total ($) |
| (5,259,899) | (5,748,828) | (11,008,727) |
| 28 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Management of the Fund has
concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at
a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the
prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio
information
The cost of purchases and
proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $26,608,849 and $41,836,955, respectively, for the six months ended October 31, 2023. The amount of purchase
and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund
lending
Pursuant to an exemptive order
granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and,
except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject
to certain restrictions.
Interfund loans are subject to the
risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject
to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the
Interfund Program during the six months ended October 31, 2023 was as follows:
| Borrower or lender | Average loan balance ($) | Weighted average interest rate (%) | Number of days with outstanding loans |
| Borrower | 2,700,000 | 5.61 | 1 |
Interest expense incurred by the
Fund is recorded as interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at October 31, 2023.
Note 7. Line of credit
The Fund has access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. Pursuant to an October 26, 2023 amendment and restatement, the credit facility, which is an agreement between the Fund and certain other funds managed by the Investment Manager
or an affiliated investment manager, severally and not jointly, permits aggregate borrowings up to $900 million. Interest is currently charged to each participating fund based on its borrowings at a rate equal to the
higher of (i) the federal funds effective rate, (ii) the secured overnight financing rate plus 0.10% and (iii) the overnight bank funding rate plus, in each case, 1.00%. Each borrowing under the credit facility
matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the unused amount of the credit facility at a rate of 0.15% per annum. The commitment fee
is included in other expenses in the Statement of Operations. This agreement expires annually in October unless extended or renewed. Prior to the October 26, 2023 amendment and restatement, the Fund had access to a
revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. which permitted collective borrowings up to $950 million. Interest was charged to each
participating fund based on its borrowings at a rate equal to the higher of (i) the federal funds effective rate, (ii) the secured overnight financing rate plus 0.10% and (iii) the overnight bank funding rate plus, in
each case, 1.00%.
The Fund had no borrowings during
the six months ended October 31, 2023.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 29 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
Note 8. Significant
risks
Credit risk
Credit risk is the risk that the
value of debt instruments in the Fund’s portfolio may decline because the issuer defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations,
such as making payments to the Fund when due. Credit rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower-rated or unrated debt instruments held by the Fund may
present increased credit risk as compared to higher-rated debt instruments.
Interest rate risk
Interest rate risk is the risk of
losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise. Actions by
governments and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Increasing interest rates may
negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt
security, the greater its sensitivity to changes in interest rates. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation.
Liquidity risk
Liquidity risk is the risk
associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the
interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another,
more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can
lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Market risk
The Fund may incur losses due to
declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic or
social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers,
which could adversely affect the Fund’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause significant redemptions and operational challenges. Global economies and
financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may
be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events
such as terrorism, war, other conflicts, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions, depressions or other events – or the potential for such events –
could have a significant negative impact on global economic and market conditions.
Municipal securities risk
Municipal securities are debt
obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility, and include obligations of
the governments of the U.S. territories, commonwealths and possessions such as Guam, Puerto Rico and the U.S. Virgin Islands to the extent such obligations are exempt from state and U.S. federal income taxes. The
value of municipal securities can be significantly affected by actual or expected political and legislative changes at the federal or state level. Municipal securities may be fully or partially backed by the taxing
authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support,
| 30 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
such as letters of credit, guarantees or
insurance, and are generally classified into general obligation bonds and special revenue obligations. Because many municipal securities are issued to finance projects in sectors such as education, health care,
transportation and utilities, conditions in those sectors can affect the overall municipal market.
Issuers in a state, territory,
commonwealth or possession in which the Fund invests may experience significant financial difficulties for various reasons, including as the result of events that cannot be reasonably anticipated or controlled such as
economic downturns or similar periods of economic stress, social conflict or unrest, labor disruption and natural disasters. Such financial difficulties may lead to credit rating downgrades or defaults of such issuers
which in turn, could affect the market values and marketability of many or all municipal obligations of issuers in such state, territory, commonwealth or possession. The value of the Fund’s shares will be
negatively impacted to the extent it invests in such securities. The Fund’s annual and semiannual reports show the Fund’s investment exposures at a point in time. The risk of investing in the Fund is
directly correlated to the Fund’s investment exposures.
Because the Fund invests
substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory,
demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt
securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other
securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Shareholder concentration risk
At October 31, 2023, one
unaffiliated shareholder of record owned 31.9% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated
shareholders of record owned 26.2% of the outstanding shares of the Fund in one or more accounts. Fund shares sold to or redeemed by concentrated accounts may have a significant effect on the operations of the Fund.
In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less
liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 9. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 10. Information
regarding pending and settled legal proceedings
Ameriprise Financial and certain
of its affiliates are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions concerning matters arising in connection
with the conduct of their activities as part of a diversified financial services firm. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its
affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to
perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and
regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe
proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 31 |
Notes to Financial Statements (continued)
October 31, 2023 (Unaudited)
October 31, 2023 (Unaudited)
result in adverse judgments, settlements, fines,
penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial or one or more of its affiliates that provide services to
the Fund.
| 32 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Approval of Management
Agreement
(Unaudited)
Columbia Management Investment
Advisers, LLC (the Investment Manager, and together with its domestic and global affiliates, Columbia Threadneedle Investments), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial), serves
as the investment manager to Columbia California Intermediate Municipal Bond Fund (the Fund). Under a management agreement (the Management Agreement), the Investment Manager provides investment advice and other
services to the Fund and other funds distributed by Columbia Management Investment Distributors, Inc. (collectively, the Funds).
On an annual basis, the
Fund’s Board of Trustees (the Board), including the independent Board members (the Independent Trustees), considers renewal of the Management Agreement. The Investment Manager prepared detailed reports for
the Board and its Contracts Committee (including its Contracts Subcommittee) in February, March, April, May and June 2023, including reports providing the results of analyses performed by a third-party data provider,
Broadridge Financial Solutions, Inc. (Broadridge), and comprehensive responses by the Investment Manager to written requests for information by independent legal counsel to the Independent Trustees (Independent Legal
Counsel), to assist the Board in making this determination. In addition, throughout the year, the Board (or its committees or subcommittees) regularly meets with portfolio management teams and senior management
personnel and reviews information prepared by the Investment Manager addressing the services the Investment Manager provides and Fund performance. The Board also accords appropriate weight to the work,
deliberations and conclusions of the various committees (including their subcommittees), such as the Contracts Committee, the Investment Review Committee, the Audit Committee and the Compliance Committee in
determining whether to continue the Management Agreement.
The Board, at its June 22, 2023
Board meeting (the June Meeting), considered the renewal of the Management Agreement for an additional one-year term. At the June Meeting, Independent Legal Counsel reviewed with the Independent Trustees various
factors relevant to the Board’s consideration of advisory agreements and the Board’s legal responsibilities related to such consideration. The Independent Trustees considered all information that
they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to approve the continuation of the Management Agreement. Among other things, the information and factors
considered included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by Broadridge, as well as performance relative to one or more benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by Broadridge; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | Terms of the Management Agreement; |
| • | Descriptions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of transfer agency and shareholder services to the Fund; |
| • | Descriptions of various services performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding any recently negotiated management fees of similarly-managed portfolios of other institutional clients of the Investment Manager; |
| • | Information regarding the resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services; |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund; and |
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 33 |
Approval of Management Agreement (continued)
(Unaudited)
(Unaudited)
| • | Report provided by the Board’s independent fee consultant, JDL Consultants, LLC (JDL). |
Following an analysis and
discussion of the foregoing, and the factors identified below, the Board, including all of the Independent Trustees, approved the renewal of the Management Agreement.
Nature, extent and quality of
services provided by the Investment Manager
The Board analyzed various
reports and presentations it had received detailing the services performed by the Investment Manager, as well as its history, expertise, resources and relative capabilities, and the qualifications of its personnel.
The Board specifically considered
the many developments during recent years concerning the services provided by the Investment Manager. Among other things, the Board noted the organization and depth of the equity and credit research departments. The
Board further observed the enhancements to the investment risk management department’s processes, systems and oversight over the past several years. The Board also took into account the broad scope of
services provided by the Investment Manager to the Fund, including, among other services, investment, risk and compliance oversight. The Board also took into account the information it received concerning the
Investment Manager’s ability to attract and retain key portfolio management personnel and that it has sufficient resources to provide competitive and adequate compensation to investment personnel.
In connection with the
Board’s evaluation of the overall package of services provided by the Investment Manager, the Board also considered the nature, quality and range of administrative services provided to the Fund by the Investment
Manager, as well as the achievements in 2022 in the performance of administrative services, and noted the various enhancements anticipated for 2023. In evaluating the quality of services provided under the
Management Agreement, the Board also took into account the organization and strength of the Fund’s and its service providers’ compliance programs. The Board also reviewed the financial condition of
the Investment Manager and its affiliates and each entity’s ability to carry out its responsibilities under the Management Agreement and the Fund’s other service agreements.
In addition, the Board discussed
the acceptability of the terms of the Management Agreement, noting that no changes were proposed from the form of agreement previously approved. The Board also noted the wide array of legal and compliance
services provided to the Fund under the Management Agreement.
After reviewing these and related
factors (including investment performance as discussed below), the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the
Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Board carefully reviewed the
investment performance of the Fund, including detailed reports providing the results of analyses performed by each of the Investment Manager, Broadridge and JDL collectively showing, for various periods (including
since manager inception): (i) the performance of the Fund, (ii) the Fund’s performance relative to peers and benchmarks and (iii) the net assets of the Fund. The Board observed that the Fund’s
performance for certain periods ranked above median based on information provided by Broadridge.
The Board also reviewed a
description of the third-party data provider’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Board also considered the
Investment Manager’s performance and reputation generally. After reviewing these and related factors, the Board concluded, within the context of their overall conclusions, that the performance of the Fund
and the Investment Manager, in light of other considerations, supported the continuation of the Management Agreement.
| 34 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Approval of Management Agreement (continued)
(Unaudited)
Comparative fees, costs of services provided and the profits realized by the Investment Manager and its affiliates from their relationships with the Fund
(Unaudited)
Comparative fees, costs of services provided and the profits realized by the Investment Manager and its affiliates from their relationships with the Fund
The Board reviewed comparative
fees and the costs of services provided under the Management Agreement. The Board members considered detailed comparative information set forth in an annual report on fees and expenses, including, among other
things, data (based on analyses conducted by Broadridge and JDL) showing a comparison of the Fund’s expenses with median expenses paid by funds in its comparative peer universe, as well as data showing the
Fund’s contribution to the Investment Manager’s profitability.
The Board considered the reports of
JDL, which assisted in the Board’s analysis of the Funds’ performance and expenses and the reasonableness of the Funds’ fee rates. The Board accorded particular weight to the notion that a
primary objective of the level of fees is to achieve a rational pricing model applied consistently across the various product lines in the Fund family, while assuring that the overall fees for each Fund (with certain
exceptions) are generally in line with the current “pricing philosophy” such that Fund total expense ratios, in general, approximate or are lower than the median expense ratios of funds in the same Lipper
comparison universe. The Board took into account that the Fund’s total expense ratio (after considering proposed expense caps/waivers) approximated the peer universe’s median expense ratio.
After reviewing these and related
factors, the Board concluded, within the context of their overall conclusions, that the levels of management fees and expenses of the Fund, in light of other considerations, supported the continuation of the
Management Agreement.
The Board also considered the
profitability of the Investment Manager and its affiliates in connection with the Investment Manager providing management services to the Fund. With respect to the profitability of the Investment Manager and its
affiliates, the Independent Trustees referred to information discussing the profitability to the Investment Manager and Ameriprise Financial from managing, operating and distributing the Funds. The Board
considered that the profitability generated by the Investment Manager in 2022 had declined from 2021 levels, due to a variety of factors, including the decreased assets under management of the Funds. It also
took into account the indirect economic benefits flowing to the Investment Manager or its affiliates in connection with managing or distributing the Funds, such as the enhanced ability to offer various other financial
products to Ameriprise Financial customers, soft dollar benefits and overall reputational advantages. The Board noted that the fees paid by the Fund should permit the Investment Manager to offer competitive
compensation to its personnel, make necessary investments in its business and earn an appropriate profit. After reviewing these and related factors, the Board concluded, within the context of their overall
conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Board considered the
potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, and whether those economies of scale were shared with the Fund through breakpoints in investment management
fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources. The Board considered the economies of scale
that might be realized as the Fund’s net asset level grows and took note of the extent to which Fund shareholders might also benefit from such growth. In this regard, the Board took into account that
management fees decline as Fund assets exceed various breakpoints, all of which have not been surpassed. The Board observed that the Management Agreement provided for breakpoints in the management fee rate schedule that allow opportunities for shareholders to realize lower fees as
Fund assets grow and that there are additional opportunities through other means for sharing economies of scale with shareholders.
Conclusion
The Board reviewed all of the
above considerations in reaching its decision to approve the continuation of the Management Agreement. In reaching its conclusions, no single factor was determinative.
| Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 | 35 |
Approval of Management Agreement (continued)
(Unaudited)
On June 22, 2023, the Board, including all of the Independent Trustees, determined that fees payable under the Management Agreement were fair and reasonable in light of the extent and quality of services provided and approved the renewal of the Management Agreement.
(Unaudited)
On June 22, 2023, the Board, including all of the Independent Trustees, determined that fees payable under the Management Agreement were fair and reasonable in light of the extent and quality of services provided and approved the renewal of the Management Agreement.
| 36 | Columbia California Intermediate Municipal Bond Fund | Semiannual Report 2023 |
Please read and consider the
investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments
(Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved.
© 2023 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
SAR122_04_N01_(12/23)
Item 2. Code of Ethics.
Not applicable for semiannual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semiannual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semiannual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
|
(a) |
The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. |
|
(b) |
Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
|
(a) |
The registrant’s principal executive officer and principal financial officer, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. |
|
(b) |
There was no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable for semiannual reports.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
(registrant) |
Columbia Funds Series Trust |
|
|
|
|
By (Signature and Title) |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal Executive Officer |
|
|
|
|
Date |
December 20, 2023 |
|
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
By (Signature and Title) |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal Executive Officer |
|
|
|
|
Date |
December 20, 2023 |
|
By (Signature and Title) |
/s/ Michael G. Clarke |
|
|
Michael G. Clarke, Chief Financial Officer, |
|
|
Principal Financial Officer and Senior Vice President |
|
|
|
|
Date |
December 20, 2023 |
|
By (Signature and Title) |
/s/ Joseph Beranek |
|
|
Joseph Beranek, Treasurer, Chief Accounting |
|
|
Officer and Principal Financial Officer |
|
|
|
|
Date |
December 20, 2023 |