77D Policies with respect to security investments

On December 29, 2006, the section under the heading "THE FUND; PRINCIPAL
INVESTMENT STRATEGIES" was amended and revised in its entirety as follows:

The Fund invests mainly in the common stocks of small companies that the Fund's
investment advisor believes are undervalued. Under normal market conditions, the
Fund invests at least 80% of its net assets (plus any borrowings for investment
purposes) in stocks of companies that have market capitalizations similar in
size to those companies in the Russell 2000 Index. As of November 30, 2006, that
index included companies with capitalizations between approximately $200
thousand and $2.985 billion. All market capitalizations are determined at the
time of purchase. The Fund invests primarily in the common stock of U.S.
issuers, but may invest up to 20% of its total assets in foreign equity
securities.

Beginning January 2, 2007, Mr. Alfred F. Alley will be serving as a co-manager
of the Fund. Mr. Alley is a member of the Systematic Research Team. The Fund
anticipates that the portion of the Fund's assets managed by Mr. Alley will
increase over time and eventually represent a substantial minority of the Fund's
assets. Mr. Alley will employ a disciplined quantitative approach when
evaluating the investment potential of companies suitable for the Fund. The
quantitative process evaluates each security in terms of factors believed to
drive long-term returns. The factors incorporate financial and other information
about a company or security in order to judge its relative investment potential
along valuation, catalyst, and quality metrics. Portfolio holdings are evaluated
on a on-going basis. Mr. Alley will use the output of the quantitative process
and rigorous portfolio construction methodologies to determine final stock
selections for the Fund. Mr. Alley may sell securities experiencing a decline in
the quantitative ratings or for other reasons.

Messrs. Peter Larson, Richard G. D'Auteuil and Allyn Seymour, current managers
of the Fund, will continue to manage the remainder of the Fund's assets: In
selecting portfolio securities for the Fund, Messrs. Larson, D'Auteuil and
Seymour look at the underlying strength of companies, their products, their
competitive positions and the quality of their management. They also perform
research to attempt to identify companies likely to benefit from emerging
industry trends and potential market recoveries. A portfolio security may be
sold if it is determined that it is no longer undervalued or if there has been
a deterioration in the performance of the security or in the financial condition
of the issuer.

At times, the advisor may determine that adverse market conditions make it
desirable to suspend temporarily the Fund's normal investment activities. During
such times, the Fund may, but is not required to, invest in cash or
high-quality, short-term debt securities, without limit. Taking a temporary
defensive position may prevent the Fund from achieving its investment goal.

In seeking to achieve its investment goal, the Fund may invest in various types
of securities and engage in various investment techniques which are not the
principal focus of the Fund and, therefore, are not described in this
prospectus. These types of securities and investment practices are identified
and discussed in the Fund's Statement of Additional Information, which you may
obtain free of charge (see back cover). Approval by the Fund's shareholders is
not required to modify or change the Fund's investment goal or investment
strategies. As part of its investment strategy, the Fund may buy and sell
securities frequently. Such trading usually increases portfolio turnover rates,
which usually increases the chance that the Fund will pay investors
short-term capital gains (which are taxable at higher rates than long-term
capital gains). Such trading may also result in higher brokerage commissions and
other transaction costs and additional tax liability, which could reduce the
Fund's returns.


77E Legal Proceedings

On February 9, 2005, Columbia Management Advisors, Inc. (which has since merged
into Banc of America Capital Management, LLC (now named Columbia Management
Advisors, LLC)) ("Columbia") and Columbia Funds Distributor, Inc.
(which has been renamed Columbia Management Distributors, Inc.) (the
"Distributor") (collectively, the "Columbia Group") entered into an Assurance of
Discontinuance with the New York Attorney General ("NYAG") (the "NYAG
Settlement") and consented to the entry of a cease-and-desist order by the
Securities and Exchange Commission ("SEC") (the "SEC Order") on matters relating
to mutual fund trading. The SEC Order and the NYAG Settlement are referred to
collectively as the "Settlements".

Under the terms of the SEC Order, the Columbia Group agreed, among other things,
to: pay $70 million in disgorgement and $70 million in civil money penalties;
cease and desist from violations of the antifraud provisions and certain other
provisions of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review the
Columbia Group's applicable supervisory, compliance, control and other policies
and procedures; and retain an independent distribution consultant (see below).
The Columbia Funds have also voluntarily undertaken to implement certain
governance measures designed to maintain the independence of their boards of
trustees. The NYAG Settlement also, among other things, requires
Columbia and its affiliates to reduce management fees for certain
Columbia Funds (including the former Nations Funds) and other mutual funds
collectively by $32 million per year for five years, for a projected total of
$160 million in management fee reductions.

Pursuant to the procedures set forth in the SEC Order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan that was developed by an independent distribution consultant
and approved by the SEC on April 6, 2007.

A copy of the SEC Order is available on the SEC website at http://www.sec.gov. A
copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.

In connection with the events described above, various parties have filed suit
against certain funds, the Trustees of the Columbia Funds, FleetBoston Financial
Corporation and its affiliated entities and/or Bank of America and its
affiliated entities.

On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred
these cases and cases against other mutual fund companies based on similar
allegations to the United States District Court in Maryland for consolidated or
coordinated pretrial proceedings (the "MDL"). Subsequently, additional related
cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the
MDL filed amended and consolidated complaints. One of these amended complaints
is a putative class action that includes claims under the federal securities
laws and state common law, and that names Columbia, the Distributor,
the Trustees of the Columbia Funds, Bank of America Corporation and others as
defendants. Another of the amended complaints is a derivative action purportedly
on behalf of the Columbia Funds that asserts claims under federal securities
laws and state common law.

On February 25, 2005, Columbia and other defendants filed motions to
dismiss the claims in the pending cases. On March 1, 2006, for reasons stated in
the court's memoranda dated November 3, 2005, the U.S. District Court for the
District of Maryland granted in part and denied in part the defendants' motions
to dismiss. The court dismissed all of the class action claims pending against
the Columbia Funds Trusts. As to Columbia and the Distributor, the claims under
the Securities Act of 1933, the claims under Sections 34(b) and 36(a) of the
Investment Company Act of 1940 ("ICA") and the state law claims were dismissed.
The claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and claims under Section 36(b) of the ICA were not dismissed.

On March 21, 2005, a purported class action was filed in Massachusetts
state court alleging that certain conduct, including market timing, entitled
Class B shareholders in certain Columbia funds to an exemption from
contingent deferred sales charges upon early redemption ("the CDSC Lawsuit").
The CDSC Lawsuit was removed to federal court in Massachusetts and the
federal Judicial Panel transferred the CDSC Lawsuit to the MDL.

On April 4, 2006, the plaintiffs and the Columbia defendants named in
the MDL, including the Columbia Funds, entered into a term sheet containing the
principal terms of a stipulation of settlement that would settle all
Columbia-related claims in the MDL described above, including the CDSC Lawsuit.
On April 6, 2006, the U.S. District Court for the District of Maryland stayed
all actions with respect to these Columbia-related claims. The settlement is
subject to court approval.

In 2004, the Columbia Funds' adviser and distributor and certain affiliated
entities and individuals were named as defendants in certain purported
shareholder class and derivative actions making claims, including claims under
the Investment Company and the Investment Advisers Acts of 1940 and state law.
Certain Columbia Funds were named as nominal defendants. The suits allege, inter
alia, that the fees and expenses paid by the funds are excessive and that the
advisers and their affiliates inappropriately used fund assets to distribute the
funds and for other improper purposes. On March 2, 2005, the actions were
consolidated in the Massachusetts federal court as In re Columbia
Entities Litigation. The plaintiffs filed a consolidated amended complaint on
June 9, 2005. On November 30, 2005, the judge dismissed all claims by plaintiffs
and entered final judgment in favor of the defendants. The plaintiffs appealed
to the United States Court of Appeals for the First Circuit on December 30,
2005. A stipulation and settlement agreement dated January 19, 2007 was filed in
the First Circuit on February 14, 2007, with a joint stipulation of dismissal
and motion for remand to obtain district court approval of the settlement. That
joint motion was granted and the appeal was dismissed. On March 6, 2007, the
case was remanded to the District Court. On May 11, 2007, the District Court
entered a preliminary approval order which granted preliminary approval of the
settlement. A final settlement hearing, at which the District Court will
determine whether the proposed settlement should be finally approved and the
action dismissed on the merits with prejudice, is scheduled for September 18,
2007. The terms of the settlement, if finally approved, will require payments by
the funds' adviser and/or its affiliates, including payment of plaintiffs'
attorneys' fees and notice to class members. In the event that the settlement is
not finally approved, the plaintiffs may elect to go forward with their appeal
and no opinion is expressed regarding the likely outcome or financial impact of
such an appeal on any fund.