N-30B-2 1 a16-7781_1n30b2.htm N-30B-2

FIRST QUARTER REPORT

March 31, 2016

COLUMBIA ACORN FAMILY OF FUNDS

Class A, B, C, I, R, R4, R5, Y and Z Shares
Managed by Columbia Wanger Asset Management, LLC

Columbia Acorn® Fund

Columbia Acorn International®

Columbia Acorn USA®

Columbia Acorn International SelectSM

Columbia Acorn SelectSM

Columbia Thermostat FundSM

Columbia Acorn Emerging Markets FundSM

Columbia Acorn European FundSM



COLUMBIA ACORN FAMILY OF FUNDS

NET ASSET VALUE PER SHARE as of 3/31/16

  Columbia
Acorn® Fund
  Columbia
Acorn
International®
  Columbia
Acorn
USA®
  Columbia
Acorn
International
SelectSM
  Columbia
Acorn
SelectSM
  Columbia
Thermostat
FundSM
  Columbia
Acorn
Emerging
Markets
FundSM
  Columbia
Acorn
European
FundSM
 

Class A

 

$

17.14

   

$

39.10

   

$

19.01

   

$

20.90

   

$

13.89

   

$

14.56

   

$

10.18

   

$

14.91

   

Class B

 

$

13.28

   

$

37.71

   

$

14.57

   

$

19.65

   

$

10.76

   

$

14.65

     

N/A

     

N/A

   

Class C

 

$

12.77

   

$

37.60

   

$

15.00

   

$

19.53

   

$

10.45

   

$

14.64

   

$

10.12

   

$

14.77

   

Class I

 

$

18.91

   

$

39.22

   

$

21.05

   

$

21.17

   

$

15.31

     

N/A

   

$

10.21

   

$

14.91

   

Class R

   

N/A

   

$

39.06

     

N/A

     

N/A

     

N/A

     

N/A

     

N/A

     

N/A

   

Class R4

 

$

19.30

   

$

39.45

   

$

21.46

   

$

21.32

   

$

15.64

   

$

14.45

   

$

10.27

   

$

14.99

   

Class R5

 

$

19.38

   

$

39.16

   

$

21.51

   

$

21.31

   

$

15.69

   

$

14.47

   

$

10.27

   

$

15.06

   

Class Y

 

$

19.46

   

$

39.47

   

$

21.61

   

$

21.30

   

$

15.79

   

$

14.45

   

$

10.17

     

N/A

   

Class Z

 

$

18.82

   

$

39.17

   

$

20.85

   

$

21.17

   

$

15.19

   

$

14.38

   

$

10.20

   

$

14.92

   

                

Class I shares are available only to the Columbia funds, such as Columbia Thermostat Fund, and are not available to individual investors. Class R, R4, R5, Y and Z shares are sold at net asset value and have limited eligibility. Please see the Funds' prospectuses for details. The Columbia Acorn Family of Funds offer multiple share classes, not all necessarily available through all financial intermediaries, and the ratings assigned to the various share classes by mutual fund rating agencies may vary. Contact us for details.

2016 MID-YEAR CAPITAL GAIN DISTRIBUTION ESTIMATES1

Fund Name  

Record Date

  Ex-dividend/
Payable Date
  Range of
Estimated Total
Capital Gain
Distribution2
  Class A
4/29 NAV
  Range of Total
Capital Gain
Distribution as %
of Class A NAV
 

Columbia Acorn Fund

 

June 6, 2016

 

June 7, 2016

  $1.85 to $2.10  

$

17.33

    10.68% to 12.12%  

Columbia Acorn International

 

June 6, 2016

 

June 7, 2016

  $0.25 to $0.30  

$

39.29

    0.64% to 0.76%  

Columbia Acorn USA

 

June 6, 2016

 

June 7, 2016

  $2.50 to $3.00  

$

19.56

    12.78% to 15.34%  

Columbia Acorn International Select

 

June 6, 2016

 

June 7, 2016

 

None

 

$

21.00

   

 

Columbia Acorn Select

 

June 6, 2016

 

June 7, 2016

  $1.15 to $1.30  

$

13.69

    8.40% to 9.50%  

Columbia Thermostat Fund

 

June 6, 2016

 

June 7, 2016

  $0.27 to $0.32  

$

14.69

    1.84% to 2.18%  

Columbia Acorn Emerging Markets Fund

 

June 6, 2016

 

June 7, 2016

 

None

 

$

10.40

   

 

Columbia Acorn European Fund

 

June 6, 2016

 

June 7, 2016

 

None

 

$

14.92

   

 

          

1  Columbia Wanger Asset Management, LLC and Columbia Threadneedle Investments do not provide tax or legal advice. Please consult a tax advisor or tax attorney for specific tax or legal advice.

2  Estimated amounts shown include only long-term capital gains for all Funds.

The views expressed in the report commentaries reflect the current views of the respective authors. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective authors disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for a Columbia Acorn Fund are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any particular Columbia Acorn Fund. References to a specific company's securities should not be construed as a recommendation or investment advice and there can be no assurance that as of the date of publication of this report, the securities mentioned in each Fund's portfolio are still held or that the securities sold have not been repurchased.

Acorn®, Acorn USA® and Acorn International® are service marks owned and registered by Columbia Acorn Trust.




COLUMBIA ACORN FAMILY OF FUNDS

TABLE OF CONTENTS

Share Class Performance

   

2

   

Fund Performance vs. Benchmarks

   

3

   

Columbia Acorn® Fund

 

In a Nutshell

   

4

   

At a Glance

   

5

   

Major Portfolio Changes

   

25

   

Statement of Investments

   

27

   

Columbia Acorn International®

 

In a Nutshell

   

6

   

At a Glance

   

7

   

Major Portfolio Changes

   

34

   

Statement of Investments

   

37

   

Portfolio Diversification

   

43

   

Columbia Acorn USA®

 

In a Nutshell

   

8

   

At a Glance

   

9

   

Major Portfolio Changes

   

44

   

Statement of Investments

   

46

   

Columbia Acorn International SelectSM

 

In a Nutshell

   

10

   

At a Glance

   

11

   

Major Portfolio Changes

   

51

   

Statement of Investments

   

52

   

Portfolio Diversification

   

56

   

Columbia Acorn SelectSM

 

In a Nutshell

   

12

   

At a Glance

   

13

   

Major Portfolio Changes

   

57

   

Statement of Investments

   

58

   

Columbia Thermostat FundSM

 

In a Nutshell

   

14

   

At a Glance

   

15

   

Statement of Investments

   

62

   

Columbia Acorn Emerging Markets FundSM

 

In a Nutshell

   

16

   

At a Glance

   

17

   

Major Portfolio Changes

   

64

   

Statement of Investments

   

66

   

Portfolio Diversification

   

70

   

Columbia Acorn European FundSM

 

In a Nutshell

   

18

   

At a Glance

   

19

   

Major Portfolio Changes

   

71

   

Statement of Investments

   

73

   

Portfolio Diversification

   

77

   

Squirrel Chatter: Peak Everything

   

20

   

Descriptions of Indexes

   

24

   

Columbia Acorn Family of Funds

 

Expense Information

   

79

   


1



COLUMBIA ACORN FAMILY OF FUNDS

SHARE CLASS PERFORMANCE Average Annual Total Returns through 3/31/16

 

Class A

 

Class B

 

Class C

 

Class I

 

Class R

 

Class R4

 

Class R5

 

Class Y

 

Class Z

 

  Without
Sales
Charge
  With
Sales
Charge
  Without
Sales
Charge
  With
Sales
Charge
  Without
Sales
Charge
  With
Sales
Charge
                     

 

Columbia Acorn® Fund

 

Year to date*

   

-2.78

%

   

-8.39

%

   

-3.07

%

   

-7.91

%

   

-2.96

%

   

-3.93

%

   

-2.68

%

   

N/A

     

-2.72

%

   

-2.71

%

   

-2.70

%

   

-2.69

%

 
1 year    

-8.18

%

   

-13.45

%

   

-9.15

%

   

-11.56

%

   

-8.83

%

   

-9.31

%

   

-7.85

%

   

N/A

     

-8.07

%

   

-7.92

%

   

-7.87

%

   

-7.88

%

 
5 years    

5.81

%

   

4.57

%

   

5.08

%

   

4.93

%

   

5.05

%

   

5.05

%

   

6.19

%

   

N/A

     

6.06

%

   

6.13

%

   

6.17

%

   

6.12

%

 
10 years    

5.29

%

   

4.67

%

   

4.60

%

   

4.60

%

   

4.50

%

   

4.50

%

   

5.64

%

   

N/A

     

5.57

%

   

5.61

%

   

5.63

%

   

5.60

%

 

Columbia Acorn International®

 

Year to date*

   

0.05

%

   

-5.69

%

   

-0.24

%

   

-5.23

%

   

-0.13

%

   

-1.13

%

   

0.18

%

   

-0.03

%

   

0.10

%

   

0.15

%

   

0.15

%

   

0.13

%

 
1 year    

-5.58

%

   

-11.00

%

   

-6.56

%

   

-11.05

%

   

-6.28

%

   

-7.18

%

   

-5.21

%

   

-5.93

%

   

-5.41

%

   

-5.25

%

   

-5.23

%

   

-5.31

%

 
5 years    

3.28

%

   

2.07

%

   

2.46

%

   

2.12

%

   

2.51

%

   

2.51

%

   

3.68

%

   

2.92

%

   

3.55

%

   

3.63

%

   

3.66

%

   

3.60

%

 
10 years    

4.82

%

   

4.20

%

   

4.08

%

   

4.08

%

   

4.02

%

   

4.02

%

   

5.21

%

   

4.49

%

   

5.14

%

   

5.17

%

   

5.19

%

   

5.16

%

 

Columbia Acorn USA®

 

Year to date*

   

-6.12

%

   

-11.54

%

   

-9.22

%

   

-13.76

%

   

-6.25

%

   

-7.19

%

   

-6.03

%

   

N/A

     

-6.08

%

   

-6.07

%

   

-6.00

%

   

-6.04

%

 
1 year    

-12.09

%

   

-17.15

%

   

-16.19

%

   

-18.94

%

   

-12.66

%

   

-13.23

%

   

-11.70

%

   

N/A

     

-11.89

%

   

-11.79

%

   

-11.71

%

   

-11.83

%

 
5 years    

5.76

%

   

4.51

%

   

4.12

%

   

3.93

%

   

5.03

%

   

5.03

%

   

6.18

%

   

N/A

     

6.03

%

   

6.08

%

   

6.13

%

   

6.03

%

 
10 years    

4.53

%

   

3.91

%

   

3.37

%

   

3.37

%

   

3.76

%

   

3.76

%

   

4.89

%

   

N/A

     

4.81

%

   

4.84

%

   

4.86

%

   

4.81

%

 

Columbia Acorn International SelectSM

 

Year to date*

   

-2.02

%

   

-7.64

%

   

-2.19

%

   

-7.08

%

   

-2.15

%

   

-3.13

%

   

-1.85

%

   

N/A

     

-1.93

%

   

-1.89

%

   

-1.89

%

   

-1.90

%

 
1 year    

-4.63

%

   

-10.10

%

   

-5.28

%

   

-9.97

%

   

-5.35

%

   

-6.29

%

   

-4.22

%

   

N/A

     

-4.37

%

   

-4.27

%

   

-4.21

%

   

-4.32

%

 
5 years    

1.94

%

   

0.74

%

   

1.27

%

   

1.00

%

   

1.16

%

   

1.16

%

   

2.33

%

   

N/A

     

2.23

%

   

2.28

%

   

2.32

%

   

2.26

%

 
10 years    

4.30

%

   

3.69

%

   

3.62

%

   

3.62

%

   

3.49

%

   

3.49

%

   

4.68

%

   

N/A

     

4.63

%

   

4.66

%

   

4.67

%

   

4.64

%

 

Columbia Acorn SelectSM

 

Year to date*

   

-0.36

%

   

-6.09

%

   

-0.55

%

   

-5.53

%

   

-0.57

%

   

-1.57

%

   

-0.33

%

   

N/A

     

-0.32

%

   

-0.32

%

   

-0.25

%

   

-0.33

%

 
1 year    

-3.74

%

   

-9.28

%

   

-4.56

%

   

-7.47

%

   

-4.46

%

   

-5.03

%

   

-3.47

%

   

N/A

     

-3.56

%

   

-3.50

%

   

-3.43

%

   

-3.49

%

 
5 years    

5.47

%

   

4.23

%

   

4.71

%

   

4.57

%

   

4.70

%

   

4.70

%

   

5.87

%

   

N/A

     

5.73

%

   

5.78

%

   

5.83

%

   

5.77

%

 
10 years    

5.03

%

   

4.41

%

   

4.32

%

   

4.32

%

   

4.22

%

   

4.22

%

   

5.39

%

   

N/A

     

5.31

%

   

5.34

%

   

5.36

%

   

5.33

%

 

Columbia Thermostat FundSM

 

Year to date*

   

1.75

%

   

-4.08

%

   

1.60

%

   

-3.40

%

   

1.60

%

   

0.60

%

   

N/A

     

N/A

     

1.83

%

   

1.90

%

   

1.90

%

   

1.84

%

 
1 year    

0.40

%

   

-5.38

%

   

-0.11

%

   

-4.94

%

   

-0.36

%

   

-1.33

%

   

N/A

     

N/A

     

0.66

%

   

0.74

%

   

0.73

%

   

0.67

%

 
5 years    

6.12

%

   

4.88

%

   

5.60

%

   

5.28

%

   

5.35

%

   

5.35

%

   

N/A

     

N/A

     

6.38

%

   

6.41

%

   

6.44

%

   

6.39

%

 
10 years    

5.62

%

   

4.99

%

   

5.09

%

   

5.09

%

   

4.83

%

   

4.83

%

   

N/A

     

N/A

     

5.88

%

   

5.90

%

   

5.91

%

   

5.88

%

 

Columbia Acorn Emerging Markets FundSM

 

Year to date*

   

-0.59

%

   

-6.26

%

   

N/A

     

N/A

     

-0.78

%

   

-1.78

%

   

-0.49

%

   

N/A

     

-0.48

%

   

-0.48

%

   

-0.59

%

   

-0.58

%

 
1 year    

-18.02

%

   

-22.74

%

   

N/A

     

N/A

     

-18.63

%

   

-19.44

%

   

-17.70

%

   

N/A

     

-17.73

%

   

-17.65

%

   

-17.67

%

   

-17.81

%

 

Life of Fund

   

1.13

%

   

-0.16

%

   

N/A

     

N/A

     

0.40

%

   

0.40

%

   

1.52

%

   

N/A

     

1.47

%

   

1.50

%

   

1.50

%

   

1.41

%

 

Columbia Acorn European FundSM

 

Year to date*

   

1.08

%

   

-4.73

%

   

N/A

     

N/A

     

0.96

%

   

-0.04

%

   

1.15

%

   

N/A

     

1.15

%

   

1.14

%

   

N/A

     

1.15

%

 
1 year    

0.93

%

   

-4.86

%

   

N/A

     

N/A

     

0.22

%

   

-0.78

%

   

1.26

%

   

N/A

     

1.25

%

   

1.19

%

   

N/A

     

1.18

%

 

Life of Fund

   

9.91

%

   

8.51

%

   

N/A

     

N/A

     

9.12

%

   

9.12

%

   

10.24

%

   

N/A

     

10.22

%

   

10.20

%

   

N/A

     

10.20

%

 

*Not annualized.

Returns for Class A shares are shown with and without the maximum initial sales charge of 5.75%. Returns for Class B shares are shown with and without the applicable contingent deferred sales charge (CDSC) of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter. Returns for Class C shares are shown with and without the maximum CDSC of 1.00% for the first year after purchase. The Funds' other classes are not subject to sales charges and have limited eligibility. Please see the Funds' prospectuses for details. Performance for different share classes will vary based on differences in sales charges and certain fees associated with each class.

All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results may reflect the effect of any fee waivers or reimbursements of Fund expenses by the investment manager and/or any of its affiliates. Absent these fee waivers and/or expense reimbursement arrangements, performance results may have been lower. Please see Page 79 of this report for information on contractual fee waiver and expense reimbursement agreements in place on March 31, 2016, for Columbia Thermostat Fund, Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund and voluntary fee waiver and expense reimbursement arrangements in place for Columbia Acorn International, Columbia Acorn International Select and Columbia Acorn Select.

The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting columbiathreadneedle.com/us or calling 800.922.6769.

The returns shown include the returns of each Fund's Class Z shares, each Fund's oldest share class, in cases where the inception date of the Fund is earlier than the inception date of the particular share class or where a period shown dates to before the inception date of the share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Continued on Page 3.


2



FUND PERFORMANCE VS. BENCHMARKS Class Z Average Annual Total Returns through 3/31/16

Class Z Shares   1st*
quarter
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Columbia Acorn® Fund (ACRNX) (6/10/70)    

-2.69

%

   

-7.88

%

   

6.12

%

   

5.60

%

   

14.06

%

 

Russell 2500 Index

   

0.39

%

   

-7.31

%

   

8.58

%

   

6.47

%

   

N/A

   

S&P 500 Index**

   

1.35

%

   

1.78

%

   

11.58

%

   

7.01

%

   

10.80

%

 
Columbia Acorn International® (ACINX) (9/23/92)    

0.13

%

   

-5.31

%

   

3.60

%

   

5.16

%

   

10.22

%

 

MSCI ACWI Ex USA SMID Cap Index (Net)

   

1.03

%

   

-2.46

%

   

2.05

%

   

3.37

%

   

N/A

   

S&P Global Ex-U.S. Between $500M and $5B Index

   

1.73

%

   

-2.83

%

   

2.58

%

   

4.49

%

   

7.94

%

 
Columbia Acorn USA® (AUSAX) (9/4/96)    

-6.04

%

   

-11.83

%

   

6.03

%

   

4.81

%

   

9.66

%

 

Russell 2000 Index

   

-1.52

%

   

-9.76

%

   

7.20

%

   

5.26

%

   

7.78

%

 
Columbia Acorn Int'l SelectSM (ACFFX) (11/23/98)    

-1.90

%

   

-4.32

%

   

2.26

%

   

4.64

%

   

7.95

%

 

MSCI ACWI Ex USA Index (Net)

   

-0.38

%

   

-9.19

%

   

0.31

%

   

1.94

%

   

N/A

   

S&P Developed Ex-U.S. Between $2B and $10B Index

   

0.84

%

   

-0.74

%

   

4.00

%

   

3.71

%

   

7.15

%

 
Columbia Acorn SelectSM (ACTWX) (11/23/98)    

-0.33

%

   

-3.49

%

   

5.77

%

   

5.33

%

   

9.46

%

 

S&P MidCap 400 Index

   

3.78

%

   

-3.60

%

   

9.52

%

   

7.78

%

   

9.91

%

 
Columbia Thermostat FundSM (COTZX) (9/25/02)    

1.84

%

   

0.67

%

   

6.39

%

   

5.88

%

   

7.40

%

 

S&P 500 Index

   

1.35

%

   

1.78

%

   

11.58

%

   

7.01

%

   

9.27

%

 

Barclays U.S. Aggregate Bond Index

   

3.03

%

   

1.96

%

   

3.78

%

   

4.90

%

   

4.51

%

 

50/50 Blended Benchmark

   

2.28

%

   

2.12

%

   

7.83

%

   

6.27

%

   

7.15

%

 
Columbia Acorn Emerging Markets FundSM (CEFZX) (8/19/11)    

-0.58

%

   

-17.81

%

   

     

     

1.41

%

 

MSCI Emerging Markets SMID Cap Index (Net)

   

3.06

%

   

-10.23

%

   

     

     

-1.46

%

 

S&P Emerging Markets Between $500M and $5B Index

   

4.73

%

   

-10.71

%

   

     

     

0.32

%

 
Columbia Acorn European FundSM (CAEZX) (8/19/11)    

1.15

%

   

1.18

%

   

     

     

10.20

%

 

MSCI AC Europe Small Cap Index (Net)

   

-0.87

%

   

4.60

%

   

     

     

11.88

%

 

S&P Europe Between $500M and $5B Index

   

-1.22

%

   

3.02

%

   

     

     

11.85

%

 

The inception dates for Class A, B and C shares (if offered) are as follows: Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select, 10/16/00; Columbia Thermostat Fund, 3/3/03; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11. The inception dates for Class I shares are as follows: Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select, 9/27/10; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11. The inception date for Class R shares for Columbia Acorn International is 8/2/11. The inception date for Class R4, R5 and Y shares (if offered) is as follows: Columbia Acorn Fund, Columbia Acorn USA, Columbia Acorn International Select, Columbia Acorn Select, Columbia Thermostat Fund, Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 11/8/12, except that Class Y shares of Columbia Acorn Emerging Markets Fund commenced operations on 6/13/13 and Class R4 shares of Columbia Acorn European Fund commenced operations on 6/25/14. The inception date for Class R5 shares of Columbia Acorn International is 8/2/11. The inception date for Class R4 and Y shares of Columbia Acorn International is 11/8/12. The inception date for Class Z shares is as follows: Columbia Acorn Fund, 6/10/70; Columbia Acorn International, 9/23/92; Columbia Acorn USA, 9/4/96; Columbia Acorn International Select and Columbia Acorn Select, 11/23/98; Columbia Thermostat Fund, 9/25/02; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11.

*Not annualized.

**Although the Fund typically invests in small- and mid-sized companies, the comparison to the S&P 500® Index is presented to show performance against a widely recognized market index over the life of the Fund.

Please see Page 24 for a description of the indexes listed above.


3




COLUMBIA ACORN® FUND

IN A NUTSHELL

 

 
P. Zachary Egan
Co-Portfolio Manager
  Fritz Kaegi
Co-Portfolio Manager
 

 
Matthew A. Litfin
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Foreign investments subject the Fund to political, economic, market, social and other risks within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn Fund Class Z shares fell 2.69% in the first quarter of 2016, underperforming the 0.39% gain of the Fund's primary benchmark, the Russell 2500 Index. Value names within the benchmark outperformed growth in the quarter, which hurt performance of the Fund's more growth-oriented portfolio.

The uptick in value stocks negatively impacted sectors that are more sensitive to growth expectations. These include the information technology (IT) and health care sectors, two areas that were weak for the Fund in the quarter. Within the IT sector, the Fund's overweight in the software and services industry was a significant relative detractor. Bankrate, a provider of internet advertising for the insurance, credit card and banking markets, fell 32% in the quarter on concerns around increased competition from Google. Given the increasingly uncertain competitive landscape for Bankrate, we opted to reduce the Fund's exposure to the stock during the quarter.

The health care sector in general suffered from concerns about the potential impact of the upcoming presidential election, and general fears that prices for drugs and other medical treatments will come under increased pressure going forward. While Fund holdings in the health care equipment and services industries performed in line with the benchmark, the Fund's overweight in the biotechnology sector was a detractor. Celldex Therapeutics, a biotechnology company developing drugs for cancer, reported that its brain cancer drug, Rintega, failed in a Phase III study, driving a 76% decline in its stock. Ultragenyx Pharmaceutical, a biotech focused on "ultra-orphan" drugs, declined 44%. Investors sold out of the stock primarily in sympathy with the broader biotech sell-off in the market. While the Fund held onto these stocks because we like the fundamentals of these companies and see value in their drug development pipeline, we do not expect to increase the Fund's weighting in the biotechnology sector.

Winners for the quarter came from various sectors. Quotient Technology (formerly Coupon.com), a company that allows consumer packaged goods companies to digitally distribute coupons, advertising and trade promotions, gained 55%. Quotient reported better-than-expected revenue and earnings for the fourth quarter and continued to show traction winning retailer partners. After a rough 2015, Generac, a manufacturer of standby power generators, rebounded in the first quarter, gaining 24%, as fourth quarter numbers topped expectations. Polaris Industries, a provider of leisure vehicles and related products, gained 17% as the market responded favorably to the company's

announcement of a large share repurchase program, and on fourth quarter results that exceeded marketplace estimates.

We have been working to reposition the Fund to provide improved performance. We added 25 new names to the Fund during the quarter and sold 52 positions, reflecting a pruning of lower-conviction, sub-scale positions. This is more new names added to the Fund in a quarter than in any other quarter in the past five years. We believe that our new idea generation is strong, and our analysts are busy.

What are we focusing on as we consider new stocks? In a market where many companies' base businesses are highly priced given low interest rates, we think one of the best sources of relative value in the market today is the ability to reinvest capital at high rates of return, and this is a characteristic of many of the stocks that we've added. The average estimated return on equity (ROE)* of the 25 stocks that we added in the quarter was 22% for 2016, which compares favorably to the Fund's 14% average estimated ROE prior to the addition of the new names. In addition to looking for companies that have high rates of return, we are also focusing on industry leaders that have shown consistent track records over time and that have future growth potential. We believe the higher quality portfolio that has resulted from our repositioning efforts should bring improved results going forward.

*Return on Equity measures a corporation's profitability by revealing how much profit it generates with the money shareholders have invested.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


4



COLUMBIA ACORN® FUND

AT A GLANCE

Total Net Assets of the Fund:
$6.4 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn® Fund Class Z Shares

June 10, 1970 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period. A $10,000 investment in Columbia Acorn Fund at inception appreciated to $31,777 on December 31, 1978, the inception date of the Russell 2500 Index. For comparison with the Russell 2500 Index, we assigned the index the same value as the Fund at index inception. Although the Fund typically invests in small- and mid-sized companies, the comparison to the S&P 500 Index is presented to show performance against a widely recognized market index over the life of the Fund.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

5 years

 

10 years

 

Life of Fund

 
Class Z (6/10/70 inception)    

-2.69

%

   

-7.88

%

   

6.12

%

   

5.60

%

   

14.06

%

 
Class A (10/16/00 inception)  

without sales charge

   

-2.78

     

-8.18

     

5.81

     

5.29

     

13.69

   

with sales charge

   

-8.39

     

-13.45

     

4.57

     

4.67

     

13.54

   

Russell 2500 Index*

   

0.39

     

-7.31

     

8.58

     

6.47

     

N/A

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.79% for Class Z shares and 1.08% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.

  Align Technology
Invisalign System to Correct Malocclusion
(Crooked Teeth)
  2.8

%

 

2.

  Expeditors International of Washington
International Freight Forwarder
  2.2

%

 

3.

  Ansys
Simulation Software for Engineers & Designers
  1.6

%

 

4.

  Ultimate Software
Human Capital Management Systems
  1.6

%

 

5.

  Robert Half International
Temporary & Permanent Staffing in Finance,
Accounting & other Professions
  1.6

%

 

6.

  Vail Resorts
Ski Resort Operator & Developer
  1.6

%

 

7.

  EdR
Student Housing
  1.5

%

 

8.

  Jones Lang LaSalle
Real Estate Services
  1.5

%

 

9.

  Polaris Industries
Leisure Vehicles & Related Products
  1.5

%

 
10.   VWR
Distributor of Lab Supplies
  1.4

%

 

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


5



COLUMBIA ACORN INTERNATIONAL®

IN A NUTSHELL

 

 
P. Zachary Egan
Co-Portfolio Manager
  Louis J. Mendes
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different, potentially less stringent, financial and accounting standards than those generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies.

Columbia Acorn International Class Z shares ended the first quarter of 2016 up 0.13%, while the Fund's new primary benchmark, the MSCI ACWI Ex USA SMID Cap Index (Net), gained 1.03%. The Fund's underweight position and stock selection in the materials sector detracted from relative performance, as did underperformance of Fund stocks in the Asia ex Japan region.

International equities displayed a similar level of volatility as the U.S. equity markets in the first quarter. Divergent central bank policy, geopolitical risk and terrorist attacks, declining oil prices, and concerns about emerging markets were key themes, especially in January. In February, however, the investment backdrop began to shift in a more positive direction, as the U.S. Federal Reserve indicated that it would take a more gradual approach to raising rates, while both the European Central Bank (ECB) and the Bank of Japan announced negative interest rate policies designed to spur growth.

The Bank of Japan's move to negative rates was a surprise and put downward pressure on Japanese government bond yields. As a result, Japanese real estate investment trusts (REITs) outperformed substantially, driven by demand from yield-hungry investors, while banks and insurers underperformed due to fears of significant compression of net interest spreads (i.e., the difference in their borrowing and lending rates). As we've seen in Europe over the past year, negative interest rates depress the profitability of many financial institutions, since they are unable to pass these costs onto depositors already earning close to 0%. At the end of the quarter, the Fund's main exposure to financials in Europe was through Spanish stock exchange Bolsas y Mercados Españoles and Swiss private markets asset management company Partners Group, neither of which operate spread lending business models. We see a particular opportunity in Japan, where the financials sell-off fails to adequately discount differences in business models. We believe high-yield consumer lending companies, such as Japanese regional bank Suruga Bank and Aeon Financial Service, a diversified consumer-related finance company in Japan, should be less affected by or even benefit from negative rates, as their borrowers are less rate sensitive and funding costs could decline along with overall interest rates. Japanese ATM operator Seven Bank, which collects transaction fees from ATMs installed in convenience stores, does not have a large lending operation, instead using deposits to fund working capital needs. We expect Seven Bank to be a beneficiary as funding costs decline. During the quarter, we added to select positions in Japanese financial stocks as valuations became very attractive,

focusing on names that should benefit or see limited downside from the negative interest rate policy.

We continued to focus the Fund in the quarter by reducing the number of holdings from 179 to 141. As part of this effort, we are also concentrating Fund assets in our highest conviction names to increase the impact these larger positions will have on overall portfolio performance. At quarter end, the top 15 names represented over 20% of the value of the Fund, while a year ago that number was 14%. As an example, we increased the Fund's position in Novozymes, a Danish maker of industrial enzymes, from 1.2% at the beginning of the period to 2.1% at quarter end, making it the Fund's second largest position. We have owned Novozymes for many years and hold it as part of our "game changers" theme, which includes companies that have the potential to transform an industry through innovation, in this case, the long-term substitution of chemicals with enzymes.

The Fund's top-contributing stock in the quarter was Canada's CCL Industries, a global label converter, which gained 18% following its acquisition of U.S.-based Checkpoint Solutions, a maker of anti-theft label systems. We believe the market expects that CCL will be able to extract significant cost and revenue synergies from this move, and that management guidance may be conservative. Rona, a Canadian home improvement retailer, was also strong in the quarter, gaining 90% following the February announcement that it was being acquired by Lowe's. We sold the Fund's position in the stock on the news. On the downside, Wirecard, a German provider of online payment processing and risk management services, fell 24% on allegations of criminal misconduct published by an anonymous and previously unheard of research organization. We believe the allegations are without merit and added to the position on the downturn. IHI, a Japanese industrial conglomerate, fell 49% in the quarter, as word reached the market that several of its projects in shipbuilding and overseas plant construction were exceeding budget estimates, and IHI's profitability drastically deteriorated. We sold the Fund's position in the stock.

In the first quarter, many of the faster growing, momentum-driven stocks that led the market during 2015 were laggards. We welcome the return of volatility to the marketplace, as we believe deep fundamental research can add more value when there is greater price dispersion and attentiveness to valuation.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


6



COLUMBIA ACORN INTERNATIONAL®

AT A GLANCE

Total Net Assets of the Fund:
$6.2 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn International® Class Z Shares

September 23, 1992 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period. A $10,000 investment in Columbia Acorn International at inception appreciated to $15,870 on May 31, 1994, the inception date of the MSCI ACWI Ex USA SMID Cap Index (Net). For comparison with the MSCI ACWI Ex USA SMID Cap Index (Net), we assigned the index the same value as the Fund at index inception.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

5 years

 

10 years

 

Life of Fund

 
Class Z (9/23/92 inception)    

0.13

%

   

-5.31

%

   

3.60

%

   

5.16

%

   

10.22

%

 
Class A (10/16/00 inception)  

without sales charge

   

0.05

     

-5.58

     

3.28

     

4.82

     

9.80

   

with sales charge

   

-5.69

     

-11.00

     

2.07

     

4.20

     

9.53

   
MSCI ACWI Ex USA
SMID Cap Index (Net)*
   

1.03

     

-2.46

     

2.05

     

3.37

     

N/A

   
S&P Global Ex-U.S.
Between $500M® and $5B
   

1.73

     

-2.83

     

2.58

     

4.49

     

7.94

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark effective January 1, 2016. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.93% for Class Z shares and 1.26% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.   CCL Industries (Canada)
Global Label Converter
  2.2

%

 

2.

  Novozymes (Denmark)
Industrial Enzymes
  2.1

%

 

3.

  Rightmove (United Kingdom)
Internet Real Estate Listings
  1.7

%

 

4.

  Partners Group (Switzerland)
Private Markets Asset Management
  1.6

%

 

5.

  Trelleborg (Sweden)
Manufacturer of Sealing, Dampening & Protective
Solutions for Industry
  1.5

%

 

6.

  Wirecard (Germany)
Online Payment Processing & Risk Management
  1.4

%

 

7.

  Unibet (Sweden)
European Online Gaming Operator
  1.4

%

 

8.

  Geberit (Switzerland)
Plumbing Systems
  1.4

%

 

9.

  Hexagon (Sweden)
Design, Measurement & Visualization Software &
Equipment
  1.3

%

 

10.

  Aalberts Industries (Netherlands)
Flow Control & Heat Treatment
  1.2

%

 

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


7



COLUMBIA ACORN USA®

IN A NUTSHELL

 

 
Matthew A. Litfin
Lead Portfolio Manager
  William J. Doyle
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn USA Class Z shares fell 6.04% in the first quarter of 2016, underperforming the 1.52% decline of its primary benchmark, the Russell 2000 Index. Poor stock selection, especially in software and some biotechnology names, was the main reason for the Fund's relative underperformance. The Fund was overweight versus the benchmark in both of these industry sub-sectors. In general, stocks rebounded in the final month of the quarter after a weak start to the year. Within the Russell 2000, utilities and telecommunication services stocks led returns, while health care and energy stocks had the biggest declines. Value stocks solidly outpaced growth stocks across all three major market cap ranges, and mid- and large-cap stocks outperformed small-cap stocks.

The worst detractor from performance in the quarter was SPS Commerce, a provider of supply chain management software that is delivered via the web. A disruption in its sales force caused SPS to set 2016 growth guidance below market expectations, and led to a 40% decline in its stock. We will continue to monitor their results.

In the biotechnology sector, Celldex Therapeutics, a cancer drug developer, fell 78% after its brain cancer drug, Rintega, failed in a Phase III trial. Orphan drug developer Ultragenyx Pharmaceutical fell 44%, declining with the general sell-off in biotechnology stocks in the quarter. Understanding that volatility is inherent in the sector, we roughly maintained the Fund's weight in biotechnology names. This is one of a decreasing number of industries in which the United States has a comparative advantage over other nations, and the Fund has enjoyed significant upside from exposure to biotechnology names in the past.

Among the Fund's top contributors in the quarter, Toro, a manufacturer of turf maintenance equipment, gained 18% on positive earnings news. ExlService Holdings, a provider of business process outsourcing services, gained 14% on quarterly results that beat expectations and on a favorable outlook for 2016. Our third strongest contributor to performance was Zoës Kitchen, a restaurant chain that offers fast, fresh Mediterranean-inspired food. Up 36% in the quarter, the company reported an increase in the number of customers coming to its restaurants, which are growing rapidly in the Southeast and beyond.

Zoës was one of 30 new names added to the portfolio in the quarter, a new-name total matched in only one other quarter during the life of the Fund. We sold 45 positions over the three-month period, reflecting a pruning of lower-conviction, sub-scale positions. As we considered new

names for the Fund, we focused on companies with high rates of return, that are industry leaders with significant future growth potential, and that can reinvest new capital at above-average rates of return. Together, the average estimated return on equity (ROE)* of the Fund's new names was 17% for 2016, which tops the 14% average ROE of the Fund's portfolio prior to the addition of these new holdings. We believe this focus on adding higher quality names to the Fund will improve relative returns as we move forward. We intend to continue finding interesting new ideas for the Fund and are optimistic about the outlook for small-cap stocks. Small caps today are as inexpensive as they have been relative to large caps in the last decade, and we believe they offer better growth potential in an environment where profitable growth can be hard to find.

*Return on Equity measures a corporation's profitability by revealing how much profit it generates with the money shareholders have invested.

Small cap versus large cap data based on Russell 2000 Index and S&P 500 Index performance.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


8



COLUMBIA ACORN USA®

AT A GLANCE

Total Net Assets of the Fund:
$689.7 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn USA® Class Z Shares

September 4, 1996 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

5 years

 

10 years

 

Life of Fund

 
Class Z (9/4/96 inception)    

-6.04

%

   

-11.83

%

   

6.03

%

   

4.81

%

   

9.66

%

 
Class A (10/16/00 inception)  

without sales charge

   

-6.12

     

-12.09

     

5.76

     

4.53

     

9.30

   

with sales charge

   

-11.54

     

-17.15

     

4.51

     

3.91

     

8.97

   

Russell 2000 Index*

   

-1.52

     

-9.76

     

7.20

     

5.26

     

7.78

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.08% for Class Z shares and 1.34% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.

  Toro
Turf Maintenance Equipment
  2.6

%

 

2.

  Drew Industries
RV & Manufactured Home Components
  2.3

%

 

3.

  Cavco Industries
Manufactured Homes
  2.0

%

 

4.

  Mettler-Toledo International
Laboratory Equipment
  2.0

%

 

5.

  VWR
Distributor of Lab Supplies
  1.7

%

 

6.

  HealthSouth
Inpatient Rehabilitation Facilities &
Home Health Care
  1.6

%

 

7.

  ExlService Holdings
Business Process Outsourcing
  1.5

%

 

8.

  Ansys
Simulation Software for Engineers & Designers
  1.5

%

 

9.

  Colliers International Group
Real Estate Services
  1.5

%

 

10.

  AMN Healthcare Services
Temporary Healthcare Staffing
  1.5

%

 

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


9



COLUMBIA ACORN INTERNATIONAL SELECTSM

IN A NUTSHELL

 

 
Stephen Kusmierczak
Co-Portfolio Manager
  Andreas Waldburg-Wolfegg
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Foreign investments subject the Fund to political, economic, market, social and other risks within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn International Select Class Z shares fell 1.90% in the first quarter of 2016, underperforming the 0.38% decline of the Fund's new primary benchmark, the MSCI ACWI Ex USA Index (Net). Within this select Fund, the underperformance of two of its larger positions was the primary cause of the relative lag in the quarter. In general, international markets had a volatile start to 2016. January saw significant declines on concerns around diverging central bank policies, declining oil prices and the outlook for emerging markets. In February, the market took a more positive turn on news that the U.S. Federal Reserve would take a gradual approach to raising U.S. interest rates, while both the European Central Bank (ECB) and the Bank of Japan announced negative interest rate policies designed to spur growth.

On the upside in the quarter, Canadian label maker CCL Industries announced the acquisition of U.S.-based Checkpoint Solutions, a maker of anti-theft label systems. We believe the market expects that CCL will be able to extract significant cost and revenue synergies from this acquisition, and that guidance may be conservative. Its stock gained 17% in the quarter. Partners Group, a Swiss investment manager focused on private equity, infrastructure, and real estate, gained 12% in the quarter after reporting a strong finish to the year. Fundraising from new and existing clients continues to exceed expectations, and margins have been buoyed by performance fees and good cost control.

The Fund's worst detractors in the quarter included Wirecard, a German provider of online payment processing and risk management services. Wirecard fell 23% in the quarter on allegations of criminal misconduct published by an anonymous and previously unheard of research organization. We believe the allegations are without merit and added to the position on the downturn. Sony Financial Holdings, a Japanese company offering life insurance, assurance and internet banking services, fell 26% in the quarter. The Bank of Japan's negative interest rate policy put downward pressure on Japanese government bond yields. As a result, banks and insurers underperformed due to fears of significant compression of net interest spreads (i.e., the difference in their borrowing and lending rates). Sony Financial Holdings fell victim to this decline, as a majority of its earnings come from the life insurance business. However, because Sony's investment portfolio has very long maturity periods, we believe that short-term volatility caused by the interest rate change should not have a significant impact. We added to Sony Financial's position on the decline, as we believe that the stock is attractively valued. Together, these two stocks represented more than

6% of Fund assets at quarter end and took nearly 2% away from the Fund's performance. In a portfolio of only 39 names, the impact of a single holding's performance is much greater, as we saw this quarter.

During the quarter, we completed the majority of the repositioning that we have been doing in the Fund. We sold out of 11 positions in the quarter and added five new names. The new names were mainly names we've covered and held in other Columbia Acorn Funds. Two of the larger positions were Rightmove, a UK provider of real estate listings, and Airports of Thailand, an airport operator in Thailand. In both cases, we believe the superior returns on capital they achieve to be sustainable. Rightmove's very asset-light business model is feeding on network effects, generating high operating margins, cash-flow conversion and shareholder returns. Airports of Thailand is benefiting from sustained double-digit growth in air travel from Asia, boosting revenues, margins and the return on capital.

Across the international funds that we manage at Columbia Wanger Asset Management, we have also added exposure to the budget airline space. We believe that the superior operating mechanics of budget airlines will continue to disrupt air travel in Europe, as the incumbent airlines deal with a restive labor force, inflexible route planning and overcapacity. Ryanair, the Irish market leader in the sector, was added in the quarter and gives the Fund exposure to this disruptive dynamic.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


10



COLUMBIA ACORN INTERNATIONAL SELECTSM

AT A GLANCE

Total Net Assets of the Fund:
$119.6 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn International SelectSM Class Z Shares

November 23, 1998 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period. A $10,000 investment in Columbia Acorn International Select at inception appreciated to $17,309 on December 31, 2000, the month-end of the inception date of the MSCI ACWI Ex USA Index (Net). For comparison with the MSCI ACWI Ex USA Index (Net), we assigned the index the same value as the Fund at month-end of the index inception date.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

5 years

 

10 years

 

Life of Fund

 
Class Z (11/23/98 inception)    

-1.90

%

   

-4.32

%

   

2.26

%

   

4.64

%

   

7.95

%

 
Class A (10/16/00 inception)  

without sales charge

   

-2.02

     

-4.63

     

1.94

     

4.30

     

7.60

   

with sales charge

   

-7.64

     

-10.10

     

0.74

     

3.69

     

7.23

   

MSCI ACWI Ex USA Index (Net)*

   

-0.38

     

-9.19

     

0.31

     

1.94

     

N/A

   
S&P Developed Ex-U.S.
Between $2B and $10B® Index
   

0.84

     

-0.74

     

4.00

     

3.71

     

7.15

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark effective January 1, 2016. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.18% for Class Z shares and 1.47% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.

  CCL Industries (Canada)
Global Label Converter
  5.5

%

 

2.

  Novozymes (Denmark)
Industrial Enzymes
  5.0

%

 

3.

  Partners Group (Switzerland)
Private Markets Asset Management
  4.4

%

 

4.

  Wirecard (Germany)
Online Payment Processing & Risk Management
  3.6

%

 

5.

  Telefonica Deutschland (Germany)
Mobile & Fixed-line Communications in Germany
  3.2

%

 

6.

  Aeon Mall (Japan)
Suburban Shopping Mall Developer, Owner &
Operator
  3.0

%

 

7.

  Eutelsat (France)
Fixed Satellite Services
  3.0

%

 

8.

  KDDI (Japan)
Mobile & Fixed Line Communication Service
Provider in Japan
  3.0

%

 

9.

  Amcor (Australia)
Global Leader in Flexible & Rigid Packaging
  2.8

%

 

10.

  IAG (Australia)
General Insurance Provider
  2.8

%

 

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


11



COLUMBIA ACORN SELECTSM

IN A NUTSHELL

 

 
David L. Frank
Co-Portfolio Manager
  Matthew S. Szafranski
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Foreign investments subject the Fund to risks, including political, economic, market, social and other risks, within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn Select Class Z shares ended the first quarter of 2016 down 0.33%, underperforming the 3.78% gain of the Fund's primary benchmark, the S&P MidCap 400 Index. Within this select Fund, stock-specific declines were largely to blame for the quarter's lag versus the benchmark. We also saw investors move toward more defensive, high-yielding sectors like utilities in the quarter, which is an area we do not have exposure to in the Fund, but that performed well in the benchmark.

Two of the Fund's industrial names rebounded in the quarter. Up 24%, Generac, a manufacturer of standby power generators, reported better-than-expected earnings numbers and offered a positive outlook for 2016. Nordson, a maker of dispensing systems for adhesives and coatings, has struggled against U.S. dollar strength, as 80% of its business is in non-U.S. markets. A weaker dollar and company reports of increased orders in the first months of the year drove an 18% gain in the stock in the quarter. Polaris Industries, a maker of leisure vehicles and related products, gained 15% in the Fund, as the market responded favorably to the company's announcement of a large share repurchase program, and on fourth quarter results that exceeded marketplace estimates.

On the downside, Bankrate, a provider of internet advertising for the insurance, credit card and banking markets, retraced fourth quarter gains, falling over 30% in the first quarter on concerns around increased competition from Google. Given the uncertain competitive environment for Bankrate, we sold the stock. Blackhawk Network, a third-party distributor of prepaid content like gift cards, fell 26%. The company announced an earnings miss driven by changes at the retailer level that have negatively impacted its business. We sold the Fund's position in the stock. SEI Investments, a provider of mutual fund administration and investment management services, was a strong performer in 2015 but fell 24% in the first quarter. SEI has been a long-term holding in the Fund but reports of slower growth and increasing expenses, as well as lowered 2016 expectations, led us to sell the stock in the quarter. Union Agriculture Group, a farmland operator in Uruguay, continued its downward trend, falling 30% in the quarter.

We added eight new stocks to the Fund in the quarter and sold 12 positions, three of which are mentioned above. Among the new names, HRG, a holding company primarily consisting of two publicly traded companies (Spectrum Brands and Fidelity & Guaranty Life) ranked as the Fund's fifth largest position at quarter end. We like Spectrum Brands' operational strategy and view growth prospects favorably, and we feel HRG provides a better value than Spectrum Brands. Liberty Global, an owner of cable TV franchises outside the United States, was also added to the

Fund's top 10 positions in the quarter. Liberty Global boasts a strong and expanding cable infrastructure in Europe and the United Kingdom, where cable adoption is lower than in the United States. As we made adjustments to the portfolio in the quarter, we added some more defensive names and moved away from more speculative positions.

As a relatively new management team for the Fund, we actively refashioned holdings in the first quarter. We view these moves as consistent with the Fund's high-quality, growth-at-a-reasonable-price strategy and with our goal of bolstering long-term portfolio results.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


12



COLUMBIA ACORN SELECTSM

AT A GLANCE

Total Net Assets of the Fund:
$369.6 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn SelectSM Class Z Shares

November 23, 1998 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

5 years

 

10 years

 

Life of Fund

 
Class Z (11/23/98 inception)    

-0.33

%

   

-3.49

%

   

5.77

%

   

5.33

%

   

9.46

%

 
Class A (10/16/00 inception)  

without sales charge

   

-0.36

     

-3.74

     

5.47

     

5.03

     

9.12

   

with sales charge

   

-6.09

     

-9.28

     

4.23

     

4.41

     

8.75

   

S&P MidCap 400® Index*

   

3.78

     

-3.60

     

9.52

     

7.78

     

9.91

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.84% for Class Z shares and 1.12% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.

  LKQ
Alternative Auto Parts Distribution
  5.1

%

 

2.

  EdR
Student Housing
  4.2

%

 

3.

  Nordson
Dispensing Systems for Adhesives & Coatings
  4.2

%

 

4.

  Align Technology
Invisalign System to Correct Malocclusion
(Crooked Teeth)
  4.1

%

 

5.

  HRG Group
Holding Company
  4.1

%

 

6.

  Ametek
Aerospace/Industrial Instruments
  4.0

%

 

7.

  Crown Castle International
Communications Towers
  4.0

%

 

8.

  Generac
Standby Power Generators
  3.7

%

 

9.

  Liberty Global Series A
Cable TV Franchises Outside of the United States
  3.7

%

 

10.

  Vail Resorts
Ski Resort Operator & Developer
  3.6

%

 

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


13



COLUMBIA THERMOSTAT FUNDSM

IN A NUTSHELL

 

 
David L. Frank
Co-Portfolio Manager*
  Christopher J. Olson
Co-Portfolio Manager
 

A "fund of fund" bears its allocable share of the costs and expenses of the underlying funds in which it invests. Such funds are thus subject to two levels of fees and potentially higher expense ratios than would be associated with a fund that invests and trades directly in financial instruments under the direction of a single manager.

The value of an investment in the Fund is based primarily on the performance of the underlying funds in which it invests. The Fund is subject to the risk that the Investment Manager's decisions regarding asset classes and underlying funds will not anticipate market trends successfully, resulting in a failure to preserve capital or lower total return. The Investment Manager may prefer an underlying fund in the Columbia Acorn Family of Funds over alternative investments. There can be no assurance that the Columbia Acorn Funds will outperform similar funds managed by the Investment Manager's affiliates. This is not an offer of the shares of any other mutual fund mentioned herein.

Class Z shares of Columbia Thermostat Fund, our fund of funds, ended the first quarter of 2016 up 1.84%. This compares to a 1.35% gain of the Fund's primary equity benchmark, the S&P 500® Index, and a 3.03% gain of the Fund's primary debt benchmark, the Barclays U.S. Aggregate Bond Index. The Fund's custom 50/50 Blended Benchmark gained 2.28% in the quarter.

The Fund's equity portfolio had a weighted average loss of 0.62% in the first quarter, due largely to the 11.69% decline of Columbia Select Large Cap Growth Fund. The leading equity performer in the quarter was Columbia Dividend Income Fund, which gained 3.35%. The bond portion of the Fund had a weighted average gain of 1.83% for the period, led by the 2.92% gain of Columbia Total Return Bond Fund. All of the underlying bond funds offered positive performance in the quarter.

The Fund hit four reallocation triggers in the first quarter. The Fund increased stock exposure in January and February, as the markets lagged, and decreased exposure in March, as equity markets came back.

During the first quarter of 2016, we conducted the periodic review of underlying funds called for by Columbia Thermostat Fund's prospectus. As a result, the following changes will be effective with the Fund's May 1, 2016 prospectus:

•  Columbia Income Opportunities Fund's weighting will decrease from 20% to 10% of the bond portfolio.

•  Columbia U.S. Treasury Index Fund, a U.S. Treasury notes/bonds fund, will be added with a 10% weight in the bond portfolio.

•  The stock/bond allocation table levels will be revised up 25 points. For example, the Fund will move to 10% stocks at an S&P 500 level over 2,250, up from 2,225. The Fund will move to 90% stocks at a level of 1,125 or less, up from 1,100.

We applaud the managers of Columbia Income Opportunities Fund for generating good historical returns while assuming only moderate risks. However, the Fund tends to correlate with stocks somewhat more than we would prefer. Replacing half of that position with Columbia U.S. Treasury Index Fund should result in less risk in Columbia Thermostat Fund.

*  After 38 years at Columbia Wanger Asset Management, Charles P. McQuaid retired on April 29, 2016. Effective May 1, 2016, David L. Frank became a co-portfolio manager of the Fund, joining current co-portfolio manager Christopher J. Olson.

Results of the Funds Owned in Columbia Thermostat Fund

as of March 31, 2016

Stock Funds

Fund   Weightings
in category
  1st
quarter
performance
 

Columbia Acorn International, Class I

   

20

%

   

0.18

%

 
Columbia Contrarian Core Fund,
Class I
   

20

%

   

0.62

%

 
Columbia Dividend Income Fund,
Class I
   

20

%

   

3.35

%

 

Columbia Acorn Fund, Class I

   

10

%

   

-2.68

%

 

Columbia Acorn Select, Class I

   

10

%

   

-0.33

%

 
Columbia Large Cap Enhanced Core
Fund, Class I
   

10

%

   

0.38

%

 
Columbia Select Large Cap Growth
Fund, Class I
   

10

%

   

-11.69

%

 

Weighted Average Equity Loss

   

100

%

   

-0.62

%

 

Bond Funds

Fund   Weightings
in category
  1st
quarter
performance
 
Columbia Short Term Bond Fund,
Class I
   

40

%

   

1.01

%

 
Columbia Total Return Bond Fund,
Class I**
   

20

%

   

2.92

%

 
Columbia Income Opportunities Fund,
Class I
   

20

%

   

2.77

%

 
Columbia U.S. Government Mortgage
Fund, Class I
   

20

%

   

1.39

%

 

Weighted Average Income Gain

   

100

%

   

1.83

%

 

**Effective February 19, 2016, Columbia Intermediate Bond Fund changed its name to Columbia Total Return Bond Fund.

Columbia Thermostat Fund Rebalancing in the First Quarter

January 7, 2016

 

30% stocks, 70% bonds

 

January 11, 2016

 

35% stocks, 65% bonds

 

February 12, 2016

 

40% stocks, 60% bonds

 

March 14, 2016

 

25% stocks, 75% bonds

 

The Fund's investments in the underlying funds may present certain risks, including the following. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The Fund's investment in other funds subjects it to the investment performance (positive or negative), risks and expenses of these underlying funds. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than in investments in larger, more established companies. There are risks associated with fixed income investments, including credit risk, market risk, interest rate risk and prepayment and extension risk. In general, bond prices fall when interest rates rise and vice versa. This effect is more pronounced for longer term securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Foreign investments subject the Fund to political, economic, market, social and other risks within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers.


14



COLUMBIA THERMOSTAT FUNDSM

AT A GLANCE

Total Net Assets of the Fund:
$1.1 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Thermostat FundSM Class Z Shares

September 25, 2002 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

5 years

 

10 years

 

Life of Fund

 
Class Z (9/25/02 inception)    

1.84

%

   

0.67

%

   

6.39

%

   

5.88

%

   

7.40

%

 
Class A (3/3/03 inception)  

without sales charge

   

1.75

     

0.40

     

6.12

     

5.62

     

7.12

   

with sales charge

   

-4.08

     

-5.38

     

4.88

     

4.99

     

6.65

   

S&P 500® Index*

   

1.35

     

1.78

     

11.58

     

7.01

     

9.27

   

Barclays U.S. Aggregate Bond Index*

   

3.03

     

1.96

     

3.78

     

4.90

     

4.51

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmarks. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.77% for Class Z shares and 1.02% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Asset Allocation

as a percentage of net assets, as of 3/31/16

Portfolio Weightings

as a percentage of assets in each investment category, as of 3/31/16

Stock Mutual Funds

Columbia Acorn International, Class I

   

20

%

 

Columbia Contrarian Core Fund, Class I

   

20

%

 

Columbia Dividend Income Fund, Class I

   

20

%

 

Columbia Acorn Fund, Class I

   

10

%

 

Columbia Acorn Select, Class I

   

10

%

 
Columbia Large Cap Enhanced Core Fund,
Class I
   

10

%

 
Columbia Select Large Cap Growth Fund,
Class I
   

10

%

 

Bond Mutual Funds

Columbia Short Term Bond Fund, Class I

   

40

%

 

Columbia Total Return Bond Fund, Class I*

   

20

%

 
Columbia Income Opportunities Fund,
Class I
   

20

%

 
Columbia U.S. Government Mortgage Fund,
Class I
   

20

%

 

*Effective February 19, 2016, Columbia Intermediate Bond Fund changed its name to Columbia Total Return Bond Fund.


15



COLUMBIA ACORN EMERGING MARKETS FUNDSM

IN A NUTSHELL

 

 
Fritz Kaegi
Co-Portfolio Manager
  Stephen Kusmierczak
Co-Portfolio Manager
 

 

 
Louis J. Mendes
Co-Portfolio Manager
  Satoshi Matsunaga
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different, potentially less stringent, financial and accounting standards than those generally applicable to U.S. issuers. Risks are enhanced for emerging and frontier market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies.

Columbia Acorn Emerging Markets Fund Class Z shares fell 0.58% in the first quarter of 2016, underperforming the Fund's new benchmark, the MSCI Emerging Markets SMID Cap Index (Net), which gained 3.06%. As global concerns about China continued into 2016, the Fund's underweight in this market was a plus, but our Chinese stocks underperformed, hurting relative returns. Other heavily weighted markets in the Fund, including India and Korea, were overall detractors, while the Fund's underweight and stock selection in Taiwan benefited performance.

The Fund's lesser exposure to rebounding, commodity-driven markets also detracted from relative performance, as most of these markets saw their currencies strengthen against the U.S. dollar (USD) in the quarter. The Brazilian real, for example, strengthened 9% on positive rate news coming from the United States, the improved prospects for commodity prices, and on positive local reaction to the likely impeachment of Brazilian President Rousseff. The Brazilian stock market reacted favorably, and the Brazilian portion of the Fund's benchmark gained 25% during the quarter in USD. The South African rand and Malaysian ringgit also rebounded in the quarter, helping to boost returns for USD-based investors. While we were pleased to see the positive turn in these markets, we see little evidence of improvements in their structural issues, such as high dependency on commodity exports and weaker domestic manufacturing industries.

Fund performance benefited from our stock selection in the telecommunications space, where the Fund holds an eclectic mix of names. The Fund's five telecom stocks come from four different markets with varying industry focus, such as communications towers, mobile operations, and broadband and cable television service. During the quarter, we saw a strong rally in commodities as investors increased speculation on a possible recovery in Chinese demand, but we have historically been underweight this sector because of its largely undifferentiated business models and low returns on capital. The Fund's underweight in materials and utilities detracted from performance, and the positive impact of the Fund's overweight in energy was diluted by poor stock performance in the sector.

China continues to be an important area of investment for the Fund. Stock valuations in China are compelling and appear to be pricing in slower growth and a devaluation of the renminbi. We are maintaining our focus on unique businesses supported by structural tailwinds in China. For example, Silergy is a provider of analog and mixed digital integrated circuits operating in China. Silergy is uniquely

positioned—through a combination of western trained management, technical expertise and local relationships—to capitalize on the secular trends of increased information technology product manufacturing and consumption in China, and the Chinese government's strong desire to build a self-sufficient local semiconductor ecosystem. Silergy's stock, which is listed in Taiwan, was a top contributor to performance in the quarter, gaining 33%.

Another top-contributing stock in the quarter was South African asset manager Coronation Fund Managers. Its stock rose 47%, recovering from multi-year lows after fears of fund outflows moderated, and investors became attracted to the company's relatively high dividend yield. On the downside, Zee Entertainment Enterprises, an Indian programmer of pay television content, fell 11%, cooling after significantly outpacing the Indian market in 2015 even though advertising and subscription revenue growth remained robust. Ginko International, a contact lens maker in China that is also listed in Taiwan, fell 25% in the quarter, as investors sold Taiwanese stocks with large Chinese exposure due to concerns about the outlook for China's growth.

While growth rates in the global economy decelerate, many emerging countries are still delivering faster growth. In particular, disposable income growth should exceed that of GDP in key emerging countries due to favorable demographics and middle class growth, as a result of productivity improvements. Our emphasis on companies benefiting from such structural tailwinds remains unchanged. We believe that long-term investors should benefit from investing in high-quality businesses with good growth prospects at reasonable valuations, which can be found within our emerging market universe.

Effective February 1, 2016, Columbia Acorn Emerging Markets Fund re-opened to new investors and new accounts. While size will always be monitored closely in this Fund, we believe that we have capacity to add assets. We also believe the opportunities and current investment environment in most emerging markets provide a compelling entry point for new investors.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


16



COLUMBIA ACORN EMERGING MARKETS FUNDSM

AT A GLANCE

Total Net Assets of the Fund:
$184.0 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn Emerging Markets FundSM Class Z Shares

August 19, 2011 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

Life of Fund

 
Class Z (8/19/11 inception)    

-0.58

%

   

-17.81

%

   

1.41

%

 
Class A (8/19/11 inception)              

without sales charge

   

-0.59

     

-18.02

     

1.13

   

with sales charge

   

-6.26

     

-22.74

     

-0.16

   

MSCI Emerging Markets SMID Cap Index (Net)*

   

3.06

     

-10.23

     

-1.46

   

S&P Emerging Markets Between $500M and $5B® Index

   

4.73

     

-10.71

     

0.32

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark effective January 1, 2016. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.33% for Class Z shares and 1.57% for Class A shares.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.

  Zee Entertainment Enterprises (India)
Indian Programmer of Pay Television Content
  4.0

%

 
2.   ModeTour Network (Korea)
Travel Services
  2.8
%  
3.   Link Net (Indonesia)
Fixed Broadband & Cable TV Service Provider
  2.8

%

 
4.   Far EasTone Telecom (Taiwan)
Mobile Operator in Taiwan
  2.7

%

 

5.

  MNC Sky Vision (Indonesia)
Satellite Pay TV Operator in Indonesia
  2.7

%

 

6.

  Samui Airport Property Fund (Thailand)
Thai Airport Operator
  2.5

%

 

7.

  Koh Young Technology (Korea)
Inspection Systems for Printed Circuit Boards
  2.5

%

 

8.

  NewOcean Energy (China)
Southern China Liquefied Petroleum Gas Distributor
  2.4

%

 

9.

  Grupo Aeroportuario del Sureste (Mexico)
Mexican Airport Operator
  2.4

%

 
10.   Hoteles City Express (Mexico)
Budget Hotel Operator in Mexico
  2.3

%

 

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


17



COLUMBIA ACORN EUROPEAN FUNDSM

IN A NUTSHELL

 

 
Andreas Waldburg-Wolfegg
Co-Portfolio Manager
  Stephen
Kusmierczak
Co-Portfolio Manager
 

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different, potentially less stringent, financial and accounting standards than those generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies.

Columbia Acorn European Fund Class Z shares gained 1.15% in the first quarter of 2016, outperforming the 0.87% decline of the Fund's new primary benchmark, the MSCI AC Europe Small Cap Index (Net). Strong stock selection contributed to the outperformance in most regions, with the Fund's overweight position in the Nordic region helping the most. In the Mediterranean region, the Fund's underweight versus the benchmark and good stock performance also boosted gains.

Within the Nordic region, Recipharm, a Swedish contract developer and manufacturer of pharmaceuticals, was a top contributor to performance, gaining 25% in the quarter. The company has been an aggressive consolidator in Europe and has recently expanded to India and the United States. Management and the company founders remain large owners and have strong incentives to build a sustainable and profitable business. In Finland, specialty paper manufacturer Munksjo gained 16% after it reported solid results in its core décor and release liner businesses, and raised its dividend 20%. Munksjo was the Fund's largest position at quarter end and a strong contributor to performance.

In the Mediterranean region, Prosegur, a Spanish company that provides guarding and cash-in-transit security in Europe and Latin America, enjoyed a recovery in the first quarter, gaining 24%. Last year, the company's exposure to Latin America was a drag on performance, but the stock came back in the period on solid results, strong revenue growth and a positive outlook for 2016.

On the downside, Wirecard, a German online payment processing and risk management company, fell 23% in the quarter and was the Fund's largest detractor. The company faced allegations of criminal misconduct that were published by an anonymous and previously unheard of research organization. We believe the allegations are without merit and added to the position on the downturn. Reversing direction in the quarter, SimCorp, a Danish developer of software for investment managers, fell 20%. SimCorp was one of the best-performing stocks in Denmark last year and suffered from profit-taking in the first quarter. We continue to like the stock and added to the position in the quarter. Based in the Netherlands, Arcadis, a provider of engineering consulting services, fell 32%. We sold the Fund's position in the stock on concerns around new writedowns on a previous acquisition, continued deterioration in its U.S. and emerging markets businesses, and our perception of poor risk controls within the company.

During the quarter, the Fund's underweight exposure to financials, specifically banks, was a positive for performance. We have maintained an underweight in

banks because European Central Bank (ECB) policies have been detrimental to the banking industry. This underweight, specifically in Italian banks, has hurt Fund performance in the past. For example, in Italy in 2015, expectations of bank consolidations enticed investors but failed to materialize because of continued interest rate declines and other macroeconomic concerns. We have been and continue to be bearish on the quality to be found in Italian banks, and were pleased to see our concerns acknowledged by the market in the first quarter. The Fund's overweight in the information technology sector was also a positive in the quarter, but declines in large holdings Wirecard and SimCorp hurt relative stock performance in the sector.

As we consider the European landscape at quarter end, some very large challenges face the continent. We have witnessed three deadly terrorist attacks taking place over 15 months, revealing systemic failures in Europe's security coordination. A British exit from the European Union is a growing possibility, and we believe would be negative for the United Kingdom and the European Union. There is rising anti-EU sentiment across Europe, as seen in recent elections in Scandinavia, Poland, Hungary, the Netherlands, Austria and France. European industry has benefitted enormously from free trade and travel following implementation of the 1985 Schengen accord. Recent terrorist attacks and worries about uncontrolled immigration have caused several states to restrict free personal movement across their borders, while still maintaining the free movement of goods. Long-term and tighter restrictions could eventually increase the costs of trade and travel in Europe.

As we noted last quarter, crisis is not new to Europe, and we have been able to find what we consider to be excellent investment opportunities during periods of uncertainty. Moreover, European small-caps were one of the strongest-performing areas of global equity markets last year and that strength has continued into 2016. We are seeing a generally positive outlook for earnings from companies poised to benefit from a weaker euro and ECB easing, and an overall increase in economic growth that should boost company profits. We remain focused on investing in companies with strong fundamentals, that we believe are industry leaders and that are good stewards of shareholder capital.

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.


18



COLUMBIA ACORN EUROPEAN FUNDSM

AT A GLANCE

Total Net Assets of the Fund:
$65.5 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn European FundSM Class Z Shares

August 19, 2011 (Fund inception) through March 31, 2016

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended March 31, 2016

   

1st quarter

 

1 year

 

Life of Fund

 
Class Z (8/19/11 inception)    

1.15

%

   

1.18

%

   

10.20

%

 
Class A (8/19/11 inception)              

without sales charge

   

1.08

     

0.93

     

9.91

   

with sales charge

   

-4.73

     

-4.86

     

8.51

   

MSCI AC Europe Small Cap Index (Net)*

   

-0.87

     

4.60

     

11.88

   

S&P Europe Between $500M and $5B® Index

   

-1.22

     

3.02

     

11.85

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark effective January 1, 2016. Please see Page 24 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.50% for Class Z shares and 1.75% for Class A shares.

Portfolio Diversification

as a percentage of net assets, as of 3/31/16

Top 10 Holdings

as a percentage of net assets, as of 3/31/16

1.

  Munksjo (Finland)†
Specialty Paper Maker
  3.5

%

 

2.

  Assura (United Kingdom)
UK Primary Health Care Property Developer
  3.4

%

 

3.

  Rightmove (United Kingdom)
Internet Real Estate Listings
  3.3

%

 

4.

  Trelleborg (Sweden)
Manufacturer of Sealing, Dampening & Protective
Solutions for Industry
  2.6

%

 

5.

  Wirecard (Germany)
Online Payment Processing & Risk Management
  2.6

%

 

6.

  Unibet (Sweden)
European Online Gaming Operator
  2.6

%

 

7.

  Aurelius (Germany)
European Turnaround Investor
  2.5

%

 

8.

  Recipharm (Sweden)
Contract Development Manufacturing Organization
  2.5

%

 

9.

  Tikkurila (Finland)
Decorative & Industrial Paint in Scandinavia,
Central & Eastern Europe
  2.5

%

 

10.

  SimCorp (Denmark)
Software for Investment Managers
  2.3

%

 

†The Fund holds shares traded on both the Swedish and Finnish exchanges.

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


19



SQUIRREL CHATTER: PEAK EVERYTHING

Doom caused by depletion of natural resources

There have always been doomsayers. Richard Heinberg's Peak Everything, published in 2007, was a gloom-and-doom book primarily based on the premise that petroleum production was peaking. Heinberg noted that fossil fuels accounted for 85% of the world's energy supply and facilitated much of food production and extraction of other resources.1

Due to an anticipated drop in oil production and depletion of other resources, Heinberg predicted that worldwide economic activity would begin to decline in 2008 and would not return to 2007 levels anytime soon, if ever. Heinberg advocated for an "enormous collective effort...coordinated presumably by government...educating and motivating" people to respond with "many years of hard sacrifice."2

Stating that "technology cannot solve the underlying dilemma we face as a result of our application of fossil fuels...," Heinberg advocated "a radical reduction of fossil fuel inputs to agriculture, accompanied by an increase in labor inputs..." He wrote that Cuba in the early 1990s serves as an example, as it switched to a labor-intensive, organic mode of production when the Soviet Union collapsed and no longer provided cheap oil. Cubans involuntarily adopted a largely vegetarian diet and some were forced to work on farms. He added that a minimum of 40 million additional farmers will be needed in America, as oil and gas availability decline.3

Prosperity while nature rebounds due to demographics and technology

Two thought leaders rebut Heinberg, painting a vastly different and much more prosperous future. In The End of Doom: Environmental Renewal in the Twenty-first Century, Ronald Bailey lists numerous previous depletion scares. The most recent, Hubbert's Peak, was based on the timing and size of oilfield discoveries and calculations of their combined decline rates. Production was to peak in late 2005 and decline forever. Yet cumulative production has far exceeded previous estimates of known oil reserves, and known reserves have actually been growing! With hydraulic fracturing and horizontal drilling, recovery rates are up in

conventional fields and shale oil and gas technology substantially increases reserves. Experts now see oil production plateauing at 110 million barrels per day in 2035, far above Heinberg's 82 million "peak" of 2005, and production at that rate for 40 years.4

Jesse Ausubel, in his essay titled "Nature Rebounds," notes that per capita petroleum usage in the United States peaked around 1970, and he charts data from the U.S. Energy Information Administration suggesting that crude oil consumption in the United States peaked in 2005. Vehicles are more efficient and more people live in cities. Self-driving cars will likely be shared and used more than personal vehicles, resulting in a drop in demand for vehicles. Commercial jets are about 70% more fuel efficient than jets of the 1960s, and further improvements are being introduced.5 It will likely take a while for world consumption to peak, but peak oil could be caused by peaking demand rather than supply.

Bailey also writes about changes in preferences when societies become wealthier and technology advances. He notes that high mortality drives high fertility as an offset, resulting in slow population growth. With improved medicine, sanitation and nutrition, population numbers can begin to explode. However, once people believe virtually all their children will survive, and families move to cities where children don't work and women become educated and have access to contraception, birth rates plunge. Since 1970, worldwide fertility has fallen from 4.7 children to 2.45 in 2013 and is continuing to drop. Bailey quotes research concluding that world population will reach about nine billion people by 2050, and will likely stabilize and then decline in the second half of the 21st century.6 Peak population seems likely.

Bailey advocates technology-intensive agriculture, including the use of genetically modified organisms (GMOs). GMO plants began about 80 years ago when seeds were exposed to radiation, chemicals or ultraviolet light in order to change plant DNA. A small percentage of those seeds yielded attractive crops, such as the seedless watermelon, the Ruby Red grapefruit and 3,000 other crops. Some are now marketed as organic. More precise, gene-spliced GMOs were planted beginning in 1996. By 2013, 18 million farmers in 27 countries planted 433 million acres of what are considered biotechnology crops. Yield gains from 1996 to


20



2012 alone saved 300 million acres from being farmed. Pesticide usage dropped nearly 9% and conservation tillage was adopted, reducing topsoil erosion by 1 billion tons annually.7

Bailey takes on the anti-GMO crowd head on. He quotes numerous scientific sources who have determined that GMO foods are safe, including researchers who reviewed 1,700 GMO studies. One study that attempted to prove otherwise was retracted. Contrary to accusations by opponents of GMOs, biotech plants don't cause "superweeds" (weeds that become resistant to herbicides). Applying the same herbicide and failing to rotate crops for years allows weeds immune from that herbicide to emerge, whether the crop is biotech or not.8 However, Bailey fails to mention risks of biotech foods containing allergens, which are mitigated by approval processes that prevent allergens from being in GMO products approved for human consumption.9

Bailey has special wrath for third-world activists who apparently would prefer their countrymen starve rather than eat donated GMO food. For example, Indian activist Vandana Shiva claimed that such donations resulted in Indian disaster victims being used as "guinea pigs" despite the fact that Americans have been eating such food for years. Shiva also blamed farmer suicides on biotech cotton, which nearly doubled production and slashed pesticide use.10

Emerging technologies are also likely to boost crop yields. Plants are dependent on naturally occurring microbes in soil, and tests indicate that coating seeds with favorable microbes enhances yields.11 Biotech scientists are also exploring ways of activating existing genes in plants that would make them better utilize water and nutrients.

Ausubel agrees that productivity of farmland has skyrocketed. Also, tastes have shifted from beef to chicken and farmed fish, which produce far more protein per pound of feed. And if food waste, currently at about a third of production, can be cut via better technology, further savings would occur. Ausubel argues that these factors, plus slowing population growth, suggest that peak farmland will occur despite improved nutrition. An area the size of India could revert back to nature in about 50 years.

Meanwhile, harvests of trees are shifting from slow growing northern forests to fast growing southern tree plantations. Ausubel wrote that Brazilian eucalyptus plantations annually provide 40 cubic meters of timber, compared with

7.4 in the U.S. southeast and 3.6 in northern areas. Assuming only that plantations in general are twice as productive as natural forests, if 75% of wood were to come from plantations rather than the current 33%, logging of natural forests would halve. In addition, paper is being displaced by technology, as mail, newspapers, magazines and books are delivered to electronic devices. These factors point to peak timberland.

The combination of some farmland reverting back to nature and increasing use of tree plantations has already resulted in reforestation in many parts of the world. Bailey notes that, excluding Brazil and Indonesia, forests of the world have increased about 2% since 1990.12

Bailey adds that known mineral reserves are defined as ores currently economically and technically practical to extract, while resources are ores eventually likely to be extracted.13 Reserves usually cover a few decades of consumption, spurring some to say that the minerals would subsequently be depleted. Yet miners have no incentive to find new supplies and develop new technologies for production that might be 20 or more years away. The United States Geological Survey estimates resources at well over 100 years of production for most minerals.

Production efficiency has also surged. Bailey cites data from University of Manitoba's Vacliv Smil showing that energy used to produce a ton of steel or synthetic nitrogen fertilizer dropped 80% since the year 1900 and to produce aluminum or cement, fell 70%. Energy to desalinate a gallon of water plunged 90% since 1970, and LED bulbs use about 90% less energy than incandescent bulbs producing the same amount of light. Bailey quotes a study calculating that material intensity per unit GDP in the United States dropped 75% since 1920.14

Ausubel notes that the economy is becoming dematerialized. A smartphone displaces a camera, film, a photo album, a radio, a tape or CD player, an alarm clock, a compass, a personal navigation device, a Rolodex, a calendar, maps, snail mail, newspapers, magazines, encyclopedias and of course a wired telephone. Also, people moving into cities consume less housing and transportation resources.

Ausubel refers to a study he conducted with Iddo Wernick and Paul Waggoner, which tracked usage of 100 commodities in the United States between 1900 and 2010. Some 36 have peaked in absolute use, with nasty


21



commodities like asbestos and cadmium leading the way. The authors believe another 53 commodities are poised to peak, including electricity, petroleum, cropland and water. Only 11 commodities are likely to see growing demand, including chickens and special metals used in electronics or alloys.

Poor countries tend to tolerate pollution, but Bailey writes that once per capita GDP hits about $10,000, people demand a cleaner environment. China has reached that level and its sulfur dioxide emissions likely peaked in 2006,15 while its coal consumption may be peaking this year.16 Peak pollution occurred in the United States decades ago. Bailey cites U.S. Environmental Protection Agency data from 1980 and 2011, which states that GDP rose 128%, vehicle miles 94%, population 37% and energy consumption 26%, while total emissions of six principal air pollutants dropped 63%.17 As more countries reach middle and upper income status, worldwide pollution should drop. Output of carbon dioxide, which not long ago was labelled a pollutant, more recently peaked in the United States, largely due to plateauing electricity production and a shift from coal to natural gas fired production.18 Wind and solar power have helped a little and are ramping up quickly.

Oceans are the primary exception to these favorable trends, as fish biomass continues to be depleted. Ausubel notes that 40% of seafood is now raised by aquaculture, and if the upward trend continues oceans can rebound. Bailey believes that almost all environmental problems center in areas that no one owns or has direct responsibility for maintaining, like our oceans. Self-interest drives exploitation of common resources—catch the fish before someone else does, or pollute if there is no direct cost of doing so.19 Extensions of property rights and responsibilities can solve these sorts of problems.

Bailey agrees that climate change could become a significant problem, though so far the climate has warmed less than 97% of what the Intergovernmental Panel on Climate Change's (IPCC) models predicted. Also, given improvements in efficiency and dematerialization, carbon emissions will increase at predicted rates only if mankind continues to get rich. An IPCC-commissioned study created five scenarios for the year 2100, the middle scenario had the world population peak at 9.6 billion in 2065 and fall to 9.0 billion in 2100. Average income per person would hit $60,000, far above U.S. and world per capita income of

$42,000 and $10,000, respectively, achieved in 2010.20 Bailey notes that much of the world will be more able to afford the cost of climate change mitigation as time goes on.

Bailey also believes that clean energy will become less costly than fossil fuels. He notes that global photovoltaic capacity has grown 10-fold from 2008 to 2016. Levelized cost of solar fell from $323 per megawatt-hour to $72 now, and if current trends continue, will fall to $24 in 10 years. That's cheaper than natural gas powered electricity currently at $33 and coal at $62, but does not cover costs to store solar power when the sun isn't shining. Batteries and other storage methods are improving, and breakthroughs are possible.

In the meantime, Bailey advocates ending government subsidies for fossil fuels, which he wrote cost $544 billion worldwide in 2012. Since nitrogen fertilizers account for most greenhouse gas nitrous oxide emissions, Bailey also advocates ending subsidies for agriculture and fertilizers in order to reduce overuse of fertilizers. Finally, Bailey advocates deployment of nuclear reactors that are impossible to melt down and research on fast-breeder reactors.21 Geoengineering should be researched to counteract climate change, should the need arise.

Conclusions and farewell

Long-time readers may remember that past "Squirrel Chatters" have covered many of the issues discussed above. Over the past 11 years, I've written on demographics, agriculture, natural gas from shale, photovoltaic energy and batteries. Population is in fact in a peaking process. Existing technologies are improving at moderate rates, which over time compound into huge gains. Technology breakthroughs have happened occasionally, and the scientific press suggests more are on the horizon.22

I believe that the biggest risk to the rosy outlook is political. The public's knowledge of science is poor, and media and internet sources are often slanted. A recent editorial in Science magazine lamented the large opinion gap between scientists and the public on such issues as GMOs, vaccinations and global warming. Pressure groups could induce politicians to pass laws prohibiting or inhibiting progress. As I mentioned in my fourth quarter 2015 "Squirrel Chatter," the precautionary principle, which bans anything that might cause harm, would have stopped many of mankind's greatest innovations. Subject to these


22



caveats, I agree with Bailey's statement, "[H]umanity can look hopefully forward in the twenty-first century to an age of environmental renewal."23

After 38 years, I will have fully retired from Columbia Wanger Asset Management by the time this essay is published. I've enjoyed being a security analyst and portfolio manager, and helping people achieve their financial goals. An additional benefit was being a witness to history, closely monitoring lots of favorable technological advancements and economic developments. I've also enjoyed writing "Squirrel Chatter," as it was a great excuse to do deep dives into interesting subjects and share the knowledge I gained. Thank you for reading and farewell.

Charles P. McQuaid

Portfolio Manager, Analyst and Advisor
Columbia Wanger Asset Management, LLC

The information and data provided in this analysis are derived from sources that we deem to be reliable and accurate. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. The views/opinions expressed here are those of the author and not of the Columbia Acorn Trust Board of Trustees, are subject to change at any time based upon economic, market or other conditions, may differ from views expressed by other Columbia Management associates and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia Acorn Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Acorn Fund.

1  Richard Heinberg, Peak Everything, Waking Up to the Century of Declines, (British Columbia, Canada, New Society Publishers, 2007), p. 3 & 7.

2  Ibid., p. xv, xxii.

3  Ibid., p. 18, 44 & 55.

4  Ronald Bailey, The End of Doom: Environmental Renewal in the Twenty-first Century, (New York, St. Martin's Press, 2015), p. 40-42.

5  David P. Hess, "Green Aviation Reality Check," Aviation Week & Space Technology, April 10, 2016.

6  Bailey, op. cit., p. 2, 14 & 16.

7  Ibid., p. 134-135, 147 & 150.

8  Ibid., p. 139, 142, 155-156.

9  Charles Xu, "Nothing to Sneeze at: the Allergenicity of GMOs," Science in the News, Harvard University, August 10, 2015. http://sitn.hms.harvard.edu/flash/2015/
allergies-and-gmos/. Accessed on April 20, 2016.

10  Bailey, op. cit., p. 164.

11  "The BioAg Alliance Readies New Microbial Solution to Improve Corn Harvests," BusinessWire, January 6, 2016. http://www.businesswire.com/news/home/
20160106005940/en/BioAg-Alliance-Readies-Microbial-Solution-Improve-Corn. Accessed on March 18, 2016.

12  Bailey, op. cit., xvii.

13  Ibid., p. 53.

14  Ibid., p. 61 & xv.

15  ibid., p. 60.

16  "Gluts for punishment, China's industrial excess goes beyond steel," The Economist, April 9, 2016, p. 66.

17  Bailey, op. cit., p. 60.

18  Jesse H. Ausubel, "Nature Rebounds," Long Now Foundation Seminar, San Francisco, January 13, 2015, p. 10. http://phe.rockefeller.edu/docs/ Nature_Rebounds.pdf. Accessed on April 19, 2016.

19  Bailey, op. cit., p. xv.

20  Ibid., p. 180 & 193.

21  Ibid., p. 211, 222-223.

22  Robert F. Service, "Synthetic microbe has fewest genes, but many mysteries," Science, March 25, 2016, p. 1380-1381.

23  Bailey, op. cit., p. xix.


23



COLUMBIA ACORN FAMILY OF FUNDS

DESCRIPTIONS OF INDEXES INCLUDED IN THIS REPORT

•  50/50 Blended Benchmark, established by the Fund's investment manager, is an equally weighted custom composite of Columbia Thermostat Fund's primary equity and primary debt benchmarks, the S&P 500® Index and the Barclays U.S. Aggregate Bond Index, respectively. The percentage of the Fund's assets allocated to underlying stock and bond portfolio funds will vary, and accordingly the composition of the Fund's portfolio will not always reflect the composition of the 50/50 Blended Benchmark.

•  Barclays U.S. Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs and total return performance of fixed-rate, publicly placed, dollar-denominated and non-convertible investment grade debt issues with at least $250 million par amount outstanding and with at least one year to final maturity.

•  MSCI AC Europe Small Cap Index (Net) captures a small-cap representation across 21 markets in Europe. The index covers approximately 14% of the free float-adjusted market capitalization across each market country in Europe.

•  MSCI ACWI ex USA Index (Net) captures a large- and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 23 emerging market countries. The index covers approximately 85% of the global equity opportunity set outside the United States.

•  MSCI ACWI ex USA SMID Cap Index (Net) captures a mid- and small-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 23 emerging market countries. The index covers approximately 28% of the free float-adjusted market capitalization in each country.

•  MSCI Emerging Markets SMID Cap Index (Net) captures a mid- and small-cap representation across 23 emerging market countries. The index covers approximately 29% of the free float-adjusted market capitalization in each country.

•  Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

•  Russell 2500 Index measures the performance of the 2,500 smallest companies in the Russell 3000 Index, which represents approximately 17% of the total market capitalization of the Russell 3000 Index.

•  Standard & Poor's (S&P) 500® Index tracks the performance of 500 widely held, large-capitalization U.S. stocks.

•  S&P Developed Ex-U.S. Between $2B and $10B® Index is a subset of the broad market selected by the index sponsor that represents the mid-cap developed market, excluding the United States.

•  S&P Emerging Markets Between $500M and $5B® Index represents the institutionally investable capital of 22 emerging market countries, as determined by S&P, with market caps ranging between $500 million to $5 billion. The index currently consists of the following emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

•  S&P Europe Between $500M and $5B® Index represents the institutionally investable capital of 16 European countries, as determined by S&P, with market caps ranging between $500 million to $5 billion. The index consists of the following European countries: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

•  S&P Global Ex-U.S. Between $500M and $5B® Index is a subset of the broad market selected by the index sponsor that represents the mid- and small-cap developed and emerging markets, excluding the United States.

•  S&P MidCap 400® Index is a market value-weighted index that tracks the performance of 400 mid-cap U.S. companies.

Unlike mutual funds, indexes are not managed and do not incur fees or expenses. It is not possible to invest directly in an index.


24




COLUMBIA ACORN® FUND

MAJOR PORTFOLIO CHANGES IN THE FIRST QUARTER (UNAUDITED)

   

Number of Shares

 
   

12/31/15

 

3/31/16

 

Purchases

 

Information

 

Ansys

   

912,317

     

1,138,317

   

Booz Allen Hamilton

   

0

     

2,290,000

   

Cadence Design Systems

   

2,722,087

     

3,476,086

   

CDW

   

0

     

1,233,000

   

CoreLogic

   

952,683

     

1,261,683

   

Cvent

   

1,364,000

     

1,849,000

   

ExlService Holdings

   

573,858

     

629,558

   

Factset Research Systems

   

0

     

319,000

   

FLIR Systems

   

1,095,634

     

1,582,634

   

Gartner

   

0

     

566,000

   

Global Eagle Entertainment

   

1,625,994

     

2,512,994

   
MA-COM Technology Solutions
Holdings
   

565,500

     

795,500

   

Manhattan Associates

   

0

     

892,000

   

Ultimate Software

   

259,073

     

524,073

   

Vantiv

   

0

     

1,567,000

   

Verisign

   

521,885

     

782,885

   

Industrial Goods & Services

 

Acuity Brands

   

0

     

329,000

   

Axalta Coating Systems

   

802,000

     

1,172,000

   

Celanese

   

0

     

734,000

   
Expeditors International of
Washington
   

1,959,000

     

2,874,000

   
International Flavors &
Fragrances
   

0

     

260,000

   

Manpower

   

0

     

636,000

   

Stericycle

   

0

     

548,000

   

Toro

   

620,084

     

891,230

   

WABCO Holdings

   

204,681

     

326,681

   

Health Care

 

Align Technology

   

2,420,173

     

2,461,778

   

Celldex Therapeutics

   

2,428,687

     

2,640,414

   

Dentsply Sirona

   

519,314

     

791,444

   

Fluidigm

   

879,013

     

1,806,125

   

HealthSouth

   

1,270,314

     

2,059,989

   

IDEXX Laboratories

   

0

     

927,000

   

Medivation

   

0

     

1,569,000

   

Mednax

   

0

     

661,000

   

Quintiles Transnational Holdings

   

0

     

1,216,000

   

VWR

   

1,459,114

     

3,255,114

   

West Pharmaceutical Services

   

0

     

70,767

   

Consumer Goods & Services

 

Choice Hotels

   

502,751

     

1,007,751

   

Domino's Pizza

   

266,216

     

370,216

   

Five Below

   

333,020

     

620,000

   
Liberty TripAdvisor Holdings
Class A
   

1,230,078

     

1,617,678

   
   

Number of Shares

 
   

12/31/15

 

3/31/16

 

Polaris Industries

   

377,600

     

973,600

   

Popeyes Louisiana Kitchen

   

350,835

     

534,835

   

Rollins

   

0

     

1,175,000

   

Tenneco

   

649,825

     

939,825

   

Ulta Salon Cosmetics & Fragrance

   

0

     

359,000

   

Under Armour

   

0

     

319,000

   

Williams-Sonoma

   

322,873

     

1,242,873

   

Finance

 

Affiliated Managers Group

   

0

     

332,000

   

CBOE Holdings

   

0

     

963,000

   

Lazard

   

0

     

1,036,000

   

Signature Bank

   

0

     

346,000

   

Other Industries

 

EdR

   

1,645,545

     

2,349,545

   

Jones Lang LaSalle

   

371,057

     

820,057

   

Old Dominion Freight Lines

   

0

     

636,000

   

Energy & Minerals

 

Diamondback Energy

   

0

     

462,000

   


25



COLUMBIA ACORN® FUND

MAJOR PORTFOLIO CHANGES IN THE FIRST QUARTER (UNAUDITED), CONTINUED

   

Number of Shares

 
   

12/31/15

 

3/31/16

 

Sales

 

Information

 

Amphenol

   

2,088,490

     

973,208

   

Bankrate

   

7,126,562

     

3,729,361

   

Crown Castle International

   

580,000

     

550,215

   

Dun & Bradstreet

   

199,170

     

0

   

F5 Networks

   

608,935

     

411,935

   

Globalstar

   

32,426,846

     

0

   

GTT Communications

   

1,627,005

     

1,455,841

   

Hackett Group

   

1,899,313

     

0

   

IMAX (Canada)

   

377,557

     

0

   

inContact

   

977,714

     

0

   

Infinera

   

1,190,676

     

0

   

IPG Photonics

   

718,595

     

392,226

   

Lamar Advertising

   

494,476

     

427,214

   

Liberty Global Series A

   

496,525

     

0

   

Liberty Global Series C

   

172,695

     

0

   

RetailMeNot

   

2,317,245

     

0

   
RPX    

1,489,073

     

0

   

Sanmina

   

2,665,548

     

0

   

Towerstream

   

3,160,830

     

0

   

Trimble Navigation

   

1,025,328

     

0

   

VeriFone Holdings

   

764,958

     

0

   

Verint Systems

   

970,045

     

0

   

Verisk Analytics

   

725,363

     

483,363

   

Vonage

   

13,576,409

     

7,493,505

   

Zebra Technologies

   

305,828

     

0

   

Industrial Goods & Services

 

Allegion

   

413,275

     

0

   

Ametek

   

2,175,776

     

1,077,776

   

Donaldson

   

4,224,911

     

2,619,091

   

Dorman Products

   

644,535

     

0

   

ESCO Technologies

   

580,773

     

0

   

Generac

   

1,984,598

     

1,178,508

   

HEICO

   

1,752,993

     

1,085,754

   

LKQ

   

4,828,531

     

2,039,347

   

Moog

   

233,031

     

0

   

Nordson

   

1,231,500

     

409,747

   

Quanta Services

   

3,817,357

     

0

   

Thermon

   

885,915

     

0

   

WESCO International

   

532,911

     

0

   

Heath Care

 

Abaxis

   

432,548

     

0

   

Akorn

   

1,848,388

     

1,518,879

   

Cepheid

   

3,554,970

     

1,953,970

   

Envision Healthcare Holdings

   

989,102

     

0

   

Ultragenyx Pharmaceutical

   

737,622

     

700,940

   

Wright Medical Group

   

1,522,425

     

0

   
   

Number of Shares

 
   

12/31/15

 

3/31/16

 

Consumer Goods & Services

 

Avis Budget Group

   

1,689,192

     

0

   

Blackhawk Network

   

782,952

     

0

   

Casey's General Stores

   

168,680

     

0

   

Expedia

   

150,700

     

0

   

Fossil

   

955,020

     

0

   

Gaiam

   

1,893,824

     

0

   

Gentex

   

3,816,287

     

3,647,910

   

Hertz

   

3,043,059

     

0

   

Knoll

   

1,703,440

     

0

   

Quotient Technology

   

4,634,954

     

3,599,977

   

Select Comfort

   

1,607,263

     

1,255,859

   

The Chefs' Warehouse

   

481,337

     

0

   

The Fresh Market

   

1,858,484

     

0

   

Finance

 

Associated Banc-Corp

   

3,607,174

     

1,651,174

   

CNO Financial Group

   

4,070,959

     

2,245,695

   

First Busey

   

881,185

     

0

   

Leucadia National

   

2,816,479

     

0

   

MB Financial

   

1,333,074

     

923,074

   

McGrath Rentcorp

   

679,077

     

0

   

Sandy Spring Bancorp

   

666,576

     

0

   

Sprott (Canada)

   

10,694,100

     

0

   

WEX

   

570,235

     

0

   

Other Industries

 

Eversource Energy

   

812,774

     

0

   

Heartland Express

   

2,832,071

     

2,152,113

   

JB Hunt Transport Services

   

518,731

     

362,731

   

Post Properties

   

504,991

     

0

   

Rush Enterprises, Class A

   

1,006,783

     

0

   

Energy & Minerals

 

Alamos Gold (Canada)

   

2,200,000

     

0

   

Argonaut Gold (Canada)

   

3,868,000

     

0

   

Core Labs (Netherlands)

   

260,478

     

0

   

First Majestic (Canada)

   

2,148,000

     

0

   

Kaminak Gold

   

2,511,500

     

0

   

Kirkland Lake Gold (Canada)

   

5,119,843

     

0

   

ShaMaran Petroleum (Iraq)

   

90,046,000

     

0

   


26



COLUMBIA ACORN® FUND

STATEMENT OF INVESTMENTS (UNAUDITED), MARCH 31, 2016

Number of Shares

     

Value

 
           

Equities: 98.7%

 

Information 28.2%

     
    > Business Software 7.5%  
 

1,138,317

   

Ansys (a)

 

$

101,833,839

   
        Simulation Software for
Engineers & Designers
         
 

524,073

   

Ultimate Software (a)

   

101,408,126

   
        Human Capital Management
Systems
         
 

3,476,086

   

Cadence Design Systems (a)

   

81,966,131

   
        Electronic Design Automation
Software
         
 

892,000

   

Manhattan Associates (a)

   

50,728,040

   
        Supply Chain Management
Software & Services
         
 

1,849,000

   

Cvent (a)

   

39,568,600

   
        Software for Corporate Event
Planners & Marketing Platform
for Hotels
         
 

459,465

   

NetSuite (a)

   

31,468,758

   
        Enterprise Software Delivered via
the Web
         
 

611,961

   

DemandWare (a)

   

23,927,675

   
        E-Commerce Website Platform for
Retailers & Apparel Manufacturers
         
 

499,178

   

SPS Commerce (a)

   

21,434,703

   
        Supply Chain Management Software
Delivered via the Web
         
 

1,136,747

   

Textura (a)(b)

   

21,177,597

   
        Construction Vendor Management
Software
         
     

473,513,469

   
    > Computer Services 4.2%  
 

2,290,000

   

Booz Allen Hamilton

   

69,341,200

   
       

IT Consulting for U.S. Government

         
 

566,000

   

Gartner (a)

   

50,572,100

   
       

IT Research & Consulting Services

         
 

1,642,586

   

WNS - ADR (a)

   

50,328,835

   
        Offshore Business Process
Outsourcing Services
         
 

1,418,272

   

Genpact (a)

   

38,562,816

   
       

Business Process Outsourcing

         
 

629,558

   

ExlService Holdings (a)

   

32,611,104

   
       

Business Process Outsourcing

         
 

691,671

   

Virtusa (a)

   

25,909,996

   
       

Offshore IT Outsourcing

         
     

267,326,051

   
    > Financial Processors 2.5%  
 

1,567,000

   

Vantiv (a)

   

84,429,960

   
       

Credit Card Processor

         
 

1,261,683

   

CoreLogic (a)

   

43,780,400

   
        Data Processing Services for Real
Estate, Insurance & Mortgages
         
 

468,625

   

Global Payments

   

30,601,213

   
       

Credit Card Processor

         
     

158,811,573

   
    > Business Information &
Marketing Services 2.5%
 
 

319,000

   

Factset Research Systems

   

48,338,070

   
       

Securities Data Purveyor

         

Number of Shares

     

Value

 
  483,363    

Verisk Analytics (a)

 

$

38,630,371

   
       

Risk & Decision Analytics

         
 

2,370,162

   

Navigant Consulting (a)(c)

   

37,472,261

   
       

Financial Consulting Firm

         
 

3,729,361

   

Bankrate (a)

   

34,198,240

   
        Internet Advertising for Credit
Cards, Banking/Mortgages/
Loans & Senior Living
         
     

158,638,942

   
    > Instrumentation 2.3%  
 

170,447

   

Mettler-Toledo International (a)

   

58,763,308

   
       

Laboratory Equipment

         
 

1,582,634

   

FLIR Systems

   

52,147,790

   
       

Infrared Cameras

         
 

392,226

   

IPG Photonics (a)

   

37,685,074

   
       

Fiber Lasers

         
     

148,596,172

   
    > Internet Related 1.6%  
 

782,885

   

Verisign (a)

   

69,316,638

   
        Internet Domain Registry
for .COM/.NET
         
 

7,493,505

   

Vonage (a)

   

34,245,318

   
        Business & Consumer Internet
Telephony
         
     

103,561,956

   
    > Mobile Communications 1.6%  
 

550,215

   

Crown Castle International

   

47,593,597

   
       

Communications Towers

         
 

2,512,994

   

Global Eagle Entertainment (a)

   

21,410,709

   
        Provider of Entertainment &
Wi-Fi on Airplanes
         
 

185,000

   

SBA Communications (a)

   

18,531,450