N-CSRS 1 a10-7730_11ncsrs.htm N-CSRS

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number

811-04367

 

Columbia Funds Series Trust I

(Exact name of registrant as specified in charter)

 

50606 Ameriprise Financial Center, Minneapolis, Minnesota

 

55474

(Address of principal executive offices)

 

(Zip code)

 

Scott R. Plummer

5228 Ameriprise Financial Center

One Financial Center

Minneapolis, MN 55474

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

1-612-671-1947

 

 

Date of fiscal year end:

September 30

 

 

Date of reporting period:

March 31, 2010

 

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 



 

Item 1. Reports to Stockholders.

 



Columbia Management®

Semiannual Report

March 31, 2010

Stock Funds

g  Columbia Asset Allocation Fund

g  Columbia Large Cap Growth Fund

g  Columbia Disciplined Value Fund

g  Columbia Contrarian Core Fund

g  Columbia Small Cap Core Fund

Not FDIC Insured n May Lose Value n No Bank Guarantee



Table of contents

Columbia Asset Allocation Fund     1    
Columbia Large Cap Growth Fund     5    
Columbia Disciplined Value Fund     9    
Columbia Contrarian Core Fund     13    
Columbia Small Cap Core Fund     17    
Financial Statements     21    
Board Consideration and
Approval of Advisory Agreements
    114    
Summary of Management Fee
Evaluation by Independent Fee
Consultant (Columbia
Management Advisors, LLC)
    121    
Summary of Management Fee
Evaluation by Independent Fee
Consultant (RiverSource
Investments, LLC)
    126    
Proxy Voting Results     128    
Important Information About
This Report
    133    

 

The views expressed in this report reflect the current views of the respective parties. 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 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 Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Fund. References to specific securities should not be construed as a recommendation or investment advice.

President's Message

Dear Shareholder:

On May 3, 2010, Ameriprise Financial, Inc. announced that it had completed the acquisition of the long-term asset management business of Columbia Management from Bank of America. This includes the business of managing its equity and fixed-income mutual funds. Ameriprise Financial has combined its current U.S. asset management business, RiverSource Investments, LLC, with Columbia Management. This transaction puts together two leading asset management firms to create one entity that ranks as the eighth largest manager of long-term mutual fund assets in the United States.1 This combined business will operate under the well-regarded Columbia Management brand, where we will build on the strengths of our combined investment capabilities and talent, our broad and diversified product lineup and exceptional service.

Our combined business has a new breadth and depth of investment choices. William "Ted" Truscott, CEO, U.S. asset management and president of annuities for Ameriprise Financial, leads the combined U.S. asset management business. Michael Jones serves as president, U.S. asset management. Colin Moore continues to serve as chief investment officer. I am also continuing in my role as head of mutual funds, responsible for the delivery of mutual fund products and services to investors. The Columbia funds' advisers, distributor and transfer agent are now subsidiaries of our parent company, Ameriprise Financial but operate under the Columbia Management name. You will begin to see these names used in communications and statements going forward.

    Service provider name  
Advisers   Columbia Management Investment Advisers, LLC
Columbia Wanger Asset Management, LLC
 
Distributor   Columbia Management Investment Distributors, Inc.  
Transfer Agent   Columbia Management Investment Services Corp.  

 

As a valued investor in Columbia funds, please know that our goal is to ensure a smooth transition and provide the highest quality products and services. Transition teams across the organization continue their efforts to build on best practices from both legacy organizations with integration efforts including rebranding, vendor and system consolidations and client communications. Additionally, we want to assure you that the funds' portfolio managers also continue to focus on providing uninterrupted service to all fund shareholders.

Although we have a lot of work ahead of us in 2010, Columbia Management and Ameriprise Financial are excited about the opportunities for our combined organization. I share this optimism and believe it positions us as a best-in-class asset management business with the ability to deliver more for our clients than ever before.

Sincerely,

J. Kevin Connaughton
President, Columbia Funds

1Source: Ameriprise Financial, Inc., based on March 31, 2010 data from the Investment Company Institute

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus, which contains this and other important information about the funds, visit columbiamanagement.com. Read the prospectus carefully before investing.

Securities products offered through Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), member FINRA. Advisory services provided by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC).

© 2010 Columbia Management Investment Advisers, LLC. All rights reserved.




Fund ProfileColumbia Asset Allocation Fund

Summary

g  For the six-month period that ended March 31, 2010, the fund's Class A shares returned 6.66% without sales charge. By comparison, the fund's benchmarks, the S&P 500 Index and the Barclays Capital Aggregate Bond Index1, returned 11.75% and 1.99%, respectively. The average return of the funds in its peer group, the Lipper Mixed–Asset Target Allocation Moderate Funds Classification2, was 7.05%. The fund's position in mid-cap growth stocks and investment-grade bonds aided performance as both outdid the benchmarks for their respective asset classes, the Russell Mid Cap Growth Index and the Barclays Capital Aggregate Bond Index. We believe that our decision to dial back risk exposure on the equity side of the portfolio generally accounted for the modest shortfall relative to its peer group.

g  Lower-quality, higher-risk assets continued to lead the market higher, thanks to an improving economy, stabilizing financial markets, low interest rates and renewed investor confidence. Mid-cap stocks were the top equity performers, beating small-cap stocks, which in turn outpaced large caps. On the fixed-income side, high-yield, lower-quality bonds outperformed investment-grade corporate issues, which came out ahead of government bonds.

g  Over the period, the fund's equity allocation rose to 52.3% of net assets, aiding performance as stocks outperformed fixed-income assets. Within the equity portfolio, however, our decision to add to the fund's stake in large-cap companies and reduce risk by paring back small-cap and international holdings hindered results. In addition, the fund's international holdings underperformed their benchmark, the MSCI EAFE Index. The fund's large-cap value and growth investments lagged their respective benchmarks during a low-quality rally because of our focus on higher-quality companies with strong balance sheets. The fund's position in mid-cap growth stocks was a bright spot during the period, as it came out modestly ahead of its benchmark, the Russell Mid Cap Growth Index. A position in investment-grade bonds, which accounted for one-third of the fund's assets, outperformed its benchmark, the Barclays Capital Aggregate Bond Index.

g  We are cautious about the prospects for the financial markets for the remainder of 2010. After a strong run over the past 12 months, both stocks and bonds appear to be fairly valued, suggesting that the market is unlikely to see a repeat of 2009's outsized gains. Looking ahead, we believe that the economy will recover at a relatively slow pace and that inflation should remain under control. To seek to protect the portfolio from another broad financial market downturn, we recently added new asset classes that are typically not closely correlated to stock and bond market returns. They include Treasury Inflation Protected securities (TIPs) and a position in commodities, using the

1The Standard & Poor's (S&P) 500 Index tracks the performance of 500 widely held, large capitalization U.S. stocks. The Barclays Capital 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. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

2Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

    +6.66%  
      Class A shares
(without sales charge)
 
        +11.75%  
      S&P 500 Index  
        +1.99%  
      Barclays Capital Aggregate
Bond Index
 

 


1



Fund Profile (continued)Columbia Asset Allocation Fund

energy and natural resources stocks as a proxy for commodities. Longer term, we remain optimistic, believing that the financial markets should benefit from the Federal Reserve Board's success in engineering economic growth that is self-sustaining.

Portfolio Management

Anwiti Bahuguna, PhD, has co-managed the fund since 2009 and has been associated with the advisor or its predecessors since 2002.

Colin Moore has co-managed the fund since February 2008 and has been associated with the advisor or its predecessors or affiliate organizations since 2002.

Kent M. Peterson, PhD has co-managed the fund since 2009 and has been associated with the advisor or its predecessors since 2006.

Marie M. Schofield, CFA has co-managed the fund since 2009 and has been associated with the advisor or its predecessors since 1990.

Effective as of May 1, 2010, Kent M. Bergene and David Joy will become co-managers of the fund.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund's prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

Portfolio characteristics and holdings are subject to change periodically and may not be representative of current characteristics and holdings. The outlook for this fund may differ from that presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Investments in high-yield bonds (sometimes referred to as "junk" bonds) offer the potential for high current income and attractive total return, but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a high-yield bond issuer's ability to make principal and interest payments. High-yield bonds issued by foreign entities have greater potential risks, including less regulation, currency fluctuations, economic instability and political developments.

The fund may be subject to the same types of risks associated with direct ownership of real estate, including the decline of property value due to general, local and regional economic conditions.

International investing involves special risks, including foreign taxation, currency fluctuations, risks associated with possible differences in financial standards and other risks associated with future political and economic developments.


2



Performance InformationColumbia Asset Allocation Fund

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)

Sales charge   without   with  
Class A     11,479       10,818    
Class B     10,662       10,662    
Class C     10,666       10,666    
Class T     11,422       10,763    
Class Z     11,800       n/a    

 

The table above shows the change in value of a hypothetical $10,000 investment in each share class of Columbia Asset Allocation Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Average annual total return as of 03/31/10 (%)

Share class   A   B   C   T   Z  
Inception   11/01/98   11/01/98   11/18/02   12/30/91   12/30/91  
Sales charge   without   with   without   with   without   with   without   with   without  
6 month
(cumulative)
    6.66       0.52       6.19       1.19       6.27       5.27       6.63       0.49       6.76    
1-year     34.53       26.75       33.22       28.22       33.32       32.32       34.20       26.45       34.68    
5-year     3.38       2.15       2.59       2.28       2.59       2.59       3.30       2.08       3.72    
10-year     1.39       0.79       0.64       0.64       0.65       0.65       1.34       0.74       1.67    

 

          

The "with sales charge" returns include the maximum initial sales charge of 5.75% for Class A and Class T shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The "without sales charge" returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund's prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Class A, Class B, Class C, Class T and Class Z share performance information includes returns of Prime A shares (for Class A shares), Prime B shares (for Class B and Class C shares), Retail A shares (for Class T shares) and Trust shares (for Class Z shares) of Galaxy Asset Allocation Fund, the predecessor to the Fund and a series of the Galaxy Fund (the "Predecessor Fund"), for periods prior to November 18, 2002, the date on which Class A, Class B, Class C, Class T and Class Z shares were initially offered by the Fund. These returns shown for all share classes reflect any differences in sales charges, but have not been restated to reflect any differences in expenses between the Predecessor Fund share classes and the corresponding newer share classes.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Annual operating expense ratio (%)*

Class A     1.52    
Class B     2.27    
Class C     2.27    
Class T     1.57    
Class Z     1.27    

 

*The annual operating expense ratio is as stated in the fund's prospectus that is current as of the date of this report. Differences in expense ratios disclosed elsewhere in this report may result from the inclusion of fee waivers and expense reimbursements as well as the use of different time periods used in calculating the ratios.

Net asset value per share

as of 03/31/10 ($)  

Class A     13.30    
Class B     13.28    
Class C     13.29    
Class T     13.30    
Class Z     13.35    

 

Distributions declared per share

10/01/09 – 03/31/10 ($)  

Class A     0.15    
Class B     0.10    
Class C     0.10    
Class T     0.14    
Class Z     0.16    

 


3



Understanding Your ExpensesColumbia Asset Allocation Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

g  For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

g  For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1.  Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.

2.  In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund's expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

10/01/09 – 03/31/10

    Account value at the
beginning of the period ($)
  Account value at the
end of the period ($)
  Expenses paid
during the period ($)
  Fund's annualized
expense ratio (%)
 
    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual  
Class A     1,000.00       1,000.00       1,066.60       1,018.95       6.18       6.04       1.20    
Class B     1,000.00       1,000.00       1,061.90       1,015.21       10.02       9.80       1.95    
Class C     1,000.00       1,000.00       1,062.70       1,015.21       10.03       9.80       1.95    
Class T     1,000.00       1,000.00       1,066.30       1,018.70       6.44       6.29       1.25    
Class Z     1,000.00       1,000.00       1,067.60       1,020.19       4.90       4.78       0.95    

 

        

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.


4



Fund ProfileColumbia Large Cap Growth Fund

Summary

g  For the six-month period that ended March 31, 2010, the fund's Class A shares returned 10.75% without sales charge. The fund's benchmark, the Russell 1000 Growth Index1, returned 12.96%, while the average return of the funds in its peer group, the Lipper Large-Cap Growth Funds Classification2, was 11.48%. We attribute this modest performance shortfall to stock selection in the financials and consumer discretionary sectors.

g  Positive stock selection in the telecommunication services, materials and energy sectors aided the fund's performance relative to its benchmark. In telecommunication services, NII Holdings (1.0% of net assets), a provider of wireless telecommunication services to businesses and individuals in Latin America, helped relative returns as the company reported strong growth from Brazil, its largest market. Other notable performers came from the materials sector, including industrial chemical producer Celanese and Walter Energy, a coal producer (0.9% and 0.5% of net assets, respectively). Exposure to coal producers, particularly Alpha Natural Resources, also strengthened relative performance in the energy sector. We sold Alpha before the end of the period. Separately, consumer staples company Estee Lauder and information technology company Akamai Technologies (0.5% and 0.8% of net assets, respectively) benefited relative returns. Earnings have improved for Estee Lauder as the result of cost-cutting measures and improved demand from Asian countries such as China. Business prospects improved for Akamai, a company that helps accelerate and improve the delivery of online content and applications, as online video viewing and content consumption continued to increase.

g  Stock selection in the financials and consumer discretionary sectors detracted from the fund's relative performance. In the financials sector, shares of Goldman Sachs and Morgan Stanley (1.0% and 0.6% of net assets, respectively) declined as merger and acquisitions activity and debt underwriting slowed in 2009. Consumer discretionary companies Gamestop (0.4% of net assets), a used video game retailer, and department store J.C. Penney also limited relative returns. Gamestop struggled in light of concerns that "big box" retailers would enter the high-margin used video game business that GameStop has dominated for years. J.C. Penney underperformed on weak same-store sales trends, and we sold the fund's position before the end of the reporting period.

g  Improved reports on consumer spending, consumer confidence and the housing market point to a stabilizing economy, and we have attempted to position the fund to benefit from the changing environment. Yet, we remain alert to industry and company

1Russell 1000 Growth Index measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

2Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

        +10.75%  
      Class A shares
(without sales charge)
 
        +12.96%  
      Russell 1000 Growth Index  

 

Morningstar Style BoxTM

The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend or growth). Information shown is based on the most recent data provided by Morningstar.


5



Fund Profile (continued)Columbia Large Cap Growth Fund

valuations in choosing stocks for the fund. As the economy improves, we believe that investors are likely to favor higher-quality companies with strong balance sheets and improving business prospects—the very same factors that we employ in stock selection. Another positive: Corporate profitability has been improving, and that should enable company managers to get a clearer picture of upcoming customer demand and revenue growth and lead to higher confidence among investors.

Portfolio Management

John T. Wilson, lead manager, has co-managed the fund since August 2005 and has been associated with the advisor or its predecessors since 2005.

Roger R. Sullivan has co-managed the fund since June 2005 and has been associated with the advisor or its predecessors since 2005.

Effective May 1, 2010, Peter R. Deininger will replace Roger R. Sullivan as co-manager of the fund.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund's prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

Portfolio characteristics and holdings are subject to change periodically and may not be representative of current characteristics and holdings. The outlook for the fund may differ from that presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

International investing involves special risks, including foreign taxation, currency fluctuations, risks associated with possible differences in financial standards and other risks associated with future political and economic developments.

Investing in growth stocks incurs the possibility of losses because their prices are sensitive to changes in current or expected earnings.


6



Performance InformationColumbia Large Cap Growth Fund

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)

Sales charge   without   with  
Class A     7,761       7,314    
Class B     7,177       7,177    
Class C     7,184       7,184    
Class E     7,733       7,386    
Class F     7,177       7,177    
Class T     7,675       7,234    
Class Y     7,953       n/a    
Class Z     7,944       n/a    

 

The table above shows the change in value of a hypothetical $10,000 investment in each share class of Columbia Large Cap Growth Fund during the stated time period and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Average annual total return as of 03/31/10 (%)

Share class   A   B   C   E  
Inception   11/01/98   11/01/98   11/18/02   09/22/06  
Sales charge   without   with   without   with   without   with   without   with  
6-month
(cumulative)
    10.75       4.36       10.29       5.29       10.34       9.34       10.73       5.76    
1-year     46.60       38.13       45.43       40.43       45.47       44.47       46.47       39.86    
5-year     2.64       1.43       1.88       1.51       1.87       1.87       2.57       1.63    
10-year     –2.50       –3.08       –3.26       –3.26       –3.25       –3.25       –2.54       –2.98    

 

          

Share class   F   T   Y   Z  
Inception   09/22/06   12/14/90   07/15/09   12/14/90  
Sales charge   without   with   without   with   without   without  
6-month
(cumulative)
    10.35       5.35       10.73       4.34       11.01       10.90    
1-year     45.43       40.43       46.48       38.06       47.10       46.95    
5-year     1.88       1.51       2.59       1.38       2.92       2.90    
10-year     –3.26       –3.26       –2.61       –3.19       –2.26       –2.27    

 

        

The "with sales charge" returns include the maximum initial sales charge of 5.75% for Class A and Class T shares, 4.50% for Class E shares, the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B and Class F shares and 1.00% for Class C shares for the first year only. The "without sales charge" returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class Y and Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Y and Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund's prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Class A, Class B, Class C, Class T and Class Z share performance information includes returns of Prime A shares (for Class A shares), Prime B shares (for Class B and Class C shares), Retail A shares (for Class T shares) and Trust shares (for Class Z shares) of Galaxy Equity Growth Fund, the predecessor to the Fund and a series of the Galaxy Fund (the "Predecessor Fund"), for periods prior to November 18, 2002, the date on which Class A, Class B, Class C, Class T and Class Z shares were initially offered by the Fund. Class E and Class F share performance information includes returns of Class A shares (for Class E shares) and Class B shares (for Class F shares) for the period from November 18, 2002 through September 21, 2006, and the returns of Prime A shares (for Class E shares) and Prime B shares (for Class F shares) for periods prior thereto. These returns shown for all share classes reflect any differences in sales charges, but have not been restated to reflect any differences in expenses between the Predecessor Fund share classes and the corresponding newer share classes. The returns for Class Y shares include the returns for Class Z shares for the period from November 18, 2002 until July 15, 2009, and Trust shares of the Predecessor Fund for periods prior thereto. The returns shown have not been adjusted to reflect any differences in expenses between Class Y shares and Class Z shares. Class Y shares were initially offered on July 15, 2009.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Annual operating expense ratio (%)*

Class A     1.17    
Class B     1.92    
Class C     1.92    
Class E     1.27    
Class F     1.92    
Class T     1.22    
Class Y     0.72    
Class Z     0.92    

 

*The annual operating expense ratio is as stated in the fund's prospectus that is current as of the date of this report and includes the expenses incurred by the investment companies in which the fund invests. Differences in expense ratios disclosed elsewhere in this report may result from including expenses incurred by the investment companies, fee waivers and expense reimbursements as well as the use of different time periods used in calculating the ratios.

Net asset value per share

as of 03/31/10 ($)  

Class A     20.69    
Class B     19.08    
Class C     19.10    
Class E     20.66    
Class F     19.08    
Class T     20.55    
Class Y     21.14    
Class Z     21.15    

 

Distributions declared per share

10/01/09 – 03/31/10 ($)  

Class A     0.09    
Class E     0.08    
Class T     0.08    
Class Y     0.16    
Class Z     0.13    

 


7



Understanding Your ExpensesColumbia Large Cap Growth Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

g  For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

g  For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1.  Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.

2.  In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund's expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

10/01/09 – 03/31/10

    Account value at the
beginning of the period ($)
  Account value at the
end of the period ($)
  Expenses paid
during the period ($)
  Fund's annualized
expense ratio (%)
 
    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual  
Class A     1,000.00       1,000.00       1,107.50       1,019.45       5.78       5.54       1.10    
Class B     1,000.00       1,000.00       1,102.90       1,015.71       9.70       9.30       1.85    
Class C     1,000.00       1,000.00       1,103.40       1,015.71       9.70       9.30       1.85    
Class E     1,000.00       1,000.00       1,107.30       1,018.95       6.30       6.04       1.20    
Class F     1,000.00       1,000.00       1,103.50       1,015.71       9.70       9.30       1.85    
Class T     1,000.00       1,000.00       1,107.30       1,019.20       6.04       5.79       1.15    
Class Y     1,000.00       1,000.00       1,110.10       1,021.74       3.37       3.23       0.64    
Class Z     1,000.00       1,000.00       1,109.00       1,020.69       4.47       4.28       0.85    

 

        

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.


8




Fund ProfileColumbia Disciplined Value Fund

Summary

g  For the six-month period that ended March 31, 2010, the fund's Class A shares returned 8.86% without sales charge. The fund underperformed its benchmark, the Russell 1000 Value Index1, which returned 11.28%. The fund also fell behind the average return of the funds in its peer group, the Lipper Large-Cap Value Funds Classification2, which was 10.56%. An emphasis on companies with solid business prospects worked against the fund during the period, in which the strongest performing stocks were lower-priced, more speculative names. However, we believe that the fund's long-term emphasis on these established companies has helped it generate competitive, and less volatile, returns. In particular, the fund's consumer discretionary holdings hampered relative returns.

g  Speculative names drove performance in the consumer discretionary sector. As a result, the fund's holdings in the sector underperformed those of the benchmark. We also sold several names on poor performance and, in doing so, missed their subsequent positive performance. Among these were J.C. Penney, CBS, and Carnival Cruise Lines. In financials, Goldman Sachs and Discover Financial Services had negative returns (2.1% and 1.1% of net assets, respectively). Other underperformers included Tesoro Petroleum, which we sold, and international generator and distributor of electricity AES (0.6% of net assets).

g  All market sectors posted positive returns for the period. Industrials led the pack, with General Electric and Raytheon contributing substantially to the fund's absolute returns (4.5% and 1.3% of net assets, respectively). Holdings in the highly cyclical chemicals industry, Ashland and Eastman Chemical, benefited from rising demand for raw materials (1.0% and 1.2% of net assets, respectively). Several energy names were also a boon, including Chevron, Apache and Oil States International (3.8%, 1.7% and 0.9% of net assets, respectively). Continuing uncertainty about health care helped Lincare Holdings. In health care and financials, Lincare Holdings and Genworth Financial delivered strong absolute and relative returns. The fund is overweight in both stocks (1.0% and 0.9% of net assets, respectively).

g  During the period, individual company characteristics were less important to stock prices than were market-wide factors. The speculative rally emphasized lower-priced, more volatile stocks, which our selection process tends to avoid or under-emphasize. Historically, periods like this have been followed by market environments that reward valuation-driven strategies such as ours. Accordingly, we continue to follow our valuation-driven selection process, positioning the portfolio to capitalize on a beneficial shift in the underlying market dynamics.

1The Russell 1000 Value Index measures the performance of those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

2Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

      +8.86%  
      Class A shares
(without sales charge)
 
      +11.28%  
      Russell 1000 Value Index  

 

Morningstar Style BoxTM

The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend or growth). Information shown is based on the most recent data provided by Morningstar.


9



Fund Profile (continued)Columbia Disciplined Value Fund

Portfolio Management

Brian Condon has managed the fund since 2009 and has been associated with the advisor or its predecessors since 1999.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund's prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

Portfolio characteristics and holdings are subject to change periodically and may not be representative of current characteristics and holdings. The outlook for the fund may differ from that presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Stocks of small- and mid-cap companies may pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies.

Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the manager's assessment of a company's prospects is wrong, the price of its stock may not approach the value the manager has placed on it.


10



Performance InformationColumbia Disciplined Value Fund

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)

Sales charge   without   with  
Class A     10,770       10,152    
Class B     9,976       9,976    
Class C     9,943       9,943    
Class T     10,713       10,098    
Class Z     11,086       n/a    

 

The table above shows the change in value of a hypothetical $10,000 investment in each share class of Columbia Disciplined Value Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Average annual total return as of 03/31/10 (%)

Share class   A   B   C   T   Z  
Inception   11/25/02   11/25/02   11/25/02   09/01/88   09/01/88  
Sales charge   without   with   without   with   without   with   without   with   without  
6-month
(cumulative)
    8.86       2.61       8.42       3.42       8.34       7.34       8.83       2.58       8.97    
1-year     52.88       44.01       51.64       46.64       51.49       50.49       52.58       43.74       52.95    
5-year     1.29       0.10       0.56       0.27       0.52       0.52       1.24       0.04       1.54    
10-year     0.74       0.15       –0.02       –0.02       –0.06       –0.06       0.69       0.10       1.04    

 

          

The "with sales charge" returns include the maximum initial sales charge of 5.75% for Class A and Class T shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The "without sales charge" returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund's prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Class A, Class B, Class C, Class T and Class Z share performance information includes returns of Retail A shares (for Class A and Class T shares), Retail B shares (for Class B and Class C shares) and Trust shares (for Class Z shares) of Galaxy Equity Value Fund, the predecessor to the Fund and a series of the Galaxy Fund (the "Predecessor Fund"), for periods prior to November 25, 2002, the date on which Class A, Class B, Class C, Class T and Class Z shares were initially offered by the Fund. These returns shown for all share classes reflect any differences in sales charges, but have not been restated to reflect any differences in expenses between the Predecessor Fund share classes and the corresponding newer share classes.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Annual operating expense ratio (%)*

Class A     1.25    
Class B     2.00    
Class C     2.00    
Class T     1.30    
Class Z     1.00    

 

*The annual operating expense ratio is as stated in the fund's prospectus that is current as of the date of this report. Differences in expense ratios disclosed elsewhere in this report may result from the inclusion of fee waivers and expense reimbursements as well as the use of different time periods used in calculating the ratios.

Net asset value per share

as of 03/31/10 ($)

Class A     10.30    
Class B     9.70    
Class C     9.66    
Class T     10.30    
Class Z     10.57    

 

Distributions declared per share

10/01/09 – 03/31/10 ($)

Class A     0.06    
Class B     0.02    
Class C     0.02    
Class T     0.06    
Class Z     0.07    

 


11



Understanding Your ExpensesColumbia Disciplined Value Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

g  For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

g  For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1.  Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.

2.  In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund's expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

10/01/09 – 03/31/10

    Account value at the
beginning of the period ($)
  Account value at the
end of the period ($)
  Expenses paid
during the period ($)
  Fund's annualized
expense ratio (%)
 
    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual  
Class A     1,000.00       1,000.00       1,088.60       1,018.70       6.51       6.29       1.25    
Class B     1,000.00       1,000.00       1,084.20       1,014.96       10.39       10.05       2.00    
Class C     1,000.00       1,000.00       1,083.40       1,014.96       10.39       10.05       2.00    
Class T     1,000.00       1,000.00       1,088.30       1,018.45       6.77       6.54       1.30    
Class Z     1,000.00       1,000.00       1,089.70       1,019.95       5.21       5.04       1.00    

 

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.


12



Fund ProfileColumbia Contrarian Core Fund

Summary

g  For the six-month period that ended March 31, 2010, the fund's Class A shares returned 11.34% without sales charge. The fund slightly lagged its benchmark, the Russell 1000 Index1, which returned 12.11%. The fund outpaced the average return of the funds in its peer group, the Lipper Large-Cap Core Funds Classification2, which was 10.80%. The fund's results were held back by stock selection in the consumer discretionary group, while holdings in the information technology, materials and telecommunications sectors aided returns.

g  Positions in two casino stocks produced disappointing results in the consumer discretionary group before we sold them. Shares of Melco Crown Entertainment and Penn National Gaming both declined as the casino business suffered the effects of a weakened economy. Other consumer discretionary stocks that held back results included household products company Newell Rubbermaid (1.2% of net assets) and GameStop (1.0% of net assets), a video game retailer.

g  Several information technology holdings boosted fund performance, led by Apple (3.0% of net assets), whose popular consumer products include the iPhone and Mac personal computers. Credit- and debit-card processor MasterCard (2.6% of net assets) and Corning (1.6% of net assets), a leading producer of LCD display screens for flat-panel television sets and computer monitors, also outperformed in the technology group. Among materials investments, leading contributors included coal producer Walter Energy and Brazilian iron ore miner Vale (1.4% and 1.0% of net assets, respectively). Elsewhere, the fund's overweight relative to the index in Millicom International Cellular (1.2% of net assets) helped substantially when that company delivered solid results while the general telecommunication services sector lagged.

g  Despite worries about challenges emanating from the nation's longer-term federal debt problems, we have seen clear investment opportunities when we look at individual companies. Going forward, we intend to remain faithful to our discipline and seek to uncover underappreciated value in companies whose share prices have suffered because of negative prevailing market sentiment.

1The Russell 1000 Index tracks the performance of 1,000 of the largest U.S. companies, based on market capitalization. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

2Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

      +11.34%  
      Class A shares
(without sales charge)
 
      +12.11%  
      Russell 1000 Index  

 

Morningstar Style BoxTM

The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend or growth). Information shown is based on the most recent data provided by Morningstar.


13



Fund Profile (continued)Columbia Contrarian Core Fund

Portfolio Management

Guy Pope has managed the fund since March 2005 and has been associated with the advisor or its predecessors since 1993.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund's prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

Portfolio characteristics and holdings are subject to change periodically and may not be representative of current characteristics and holdings. The outlook for this fund may differ from that presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.


14



Performance InformationColumbia Contrarian Core Fund

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)

Sales charge   without   with  
Class A     12,066       11,374    
Class B     11,176       11,176    
Class C     11,193       11,193    
Class T     11,972       11,284    
Class Z     12,362       n/a    

 

The table above shows the change in value of a hypothetical $10,000 investment in each share class of Columbia Contrarian Core Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Average annual total return as of 03/31/10 (%)

Share class   A   B   C   T   Z  
Inception   11/01/98   11/01/98   12/09/02   02/12/93   12/14/92  
Sales charge   without   with   without   with   without   with   without   with   without  
6-month
(cumulative)
    11.34       4.92       10.89       5.89       10.97       9.97       11.38       4.99       11.42    
1-year     55.50       46.62       54.29       49.29       54.35       53.35       55.48       46.54       55.80    
5-year     6.16       4.90       5.35       5.02       5.36       5.36       6.10       4.86       6.41    
10-year     1.90       1.30       1.12       1.12       1.13       1.13       1.82       1.21       2.14    

 

          

The "with sales charge" returns include the maximum initial sales charge of 5.75% for Class A and Class T shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The "without sales charge" returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund's prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Class A, Class B, Class C, Class T and Class Z share performance information includes returns of Prime A shares (for Class A shares), Prime B shares (for Class B and Class C shares), Retail A shares (for Class T shares) and Trust shares (for Class Z shares) of Galaxy Growth & Income Fund, the predecessor to the Fund and a series of the Galaxy Fund (the "Predecessor Fund"), for periods prior to December 9, 2002, the date on which Class A, Class B, Class C, Class T and Class Z shares were initially offered by the Fund. These returns shown for all share classes reflect any differences in sales charges, but have not been restated to reflect any differences in expenses between the Predecessor Fund share classes and the corresponding newer share classes. If differences in expenses had been reflected, the returns shown for periods prior to December 9, 2002 would be lower for Class A, Class B and Class C shares.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Annual operating expense ratio (%)*

Class A     1.31    
Class B     2.06    
Class C     2.06    
Class T     1.36    
Class Z     1.06    

 

*The annual operating expense ratio is as stated in the fund's prospectus that is current as of the date of this report. Differences in expense ratios disclosed elsewhere in this report may result from the inclusion of fee waivers and expense reimbursements as well as the use of different time periods used in calculating the ratios.

Net asset value per share

as of 03/31/10 ($)

Class A     13.03    
Class B     12.22    
Class C     12.24    
Class T     12.94    
Class Z     13.09    

 

Distributions declared per share

10/01/09 – 03/31/10 ($)

Class A     0.06    
Class T     0.05    
Class Z     0.08    

 


15



Understanding Your ExpensesColumbia Contrarian Core Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

g  For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

g  For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1.  Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.

2.  In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund's expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

10/01/09 – 03/31/10

    Account value at the
beginning of the period ($)
  Account value at the
end of the period ($)
  Expenses paid
during the period ($)
  Fund's annualized
expense ratio (%)
 
    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual  
Class A     1,000.00       1,000.00       1,113.40       1,019.00       6.27       5.99       1.19    
Class B     1,000.00       1,000.00       1,108.90       1,015.26       10.20       9.75       1.94    
Class C     1,000.00       1,000.00       1,109.70       1,015.26       10.20       9.75       1.94    
Class T     1,000.00       1,000.00       1,113.80       1,018.75       6.53       6.24       1.24    
Class Z     1,000.00       1,000.00       1,114.20       1,020.24       4.95       4.73       0.94    

 

        

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.


16



Fund ProfileColumbia Small Cap Core Fund

Summary

g  For the six-month period that ended March 31, 2010, the fund's Class A shares returned 12.87% without sales charge. The fund's benchmarks, the Russell 2000 Index1 and the S&P SmallCap 600 Composite Index2, returned 13.07% and 14.17%, respectively, for the period. The average return of the funds in its peer group, the Lipper Small-Cap Core Funds Classification3, was 12.90%. Strong-performing positions in financials and industrials helped the fund's results. However, an underweight in consumer discretionary, as well as stock selection in consumer staples and materials, held back performance relative to its benchmarks.

g  Within financials, Cash America International (0.7% of net assets) was a strong contributor to results. The company operates pawn-lending shops and finances cash advances called pay-day loans. As credit availability contracted during the recession, some consumers became more reliant on pawn shops and pay-day lending to meet short-term obligations. In industrials, Atlas Air Worldwide (0.8% of net assets), an international air freight carrier, benefited from an improvement in global commerce and the market's tight supply. By contrast, an underweight in consumer discretionary stocks, in general, and retailers, in particular, detracted from performance. Within consumer staples, a position in Pantry (0.3% of net assets) hurt results. The convenience store and gas pump operator suffered from a squeeze in profit margins as the cost of gas increased. The fund had less exposure than the benchmark to commodity-related stocks, which detracted from returns as the prices of crude oil, gold and copper rose.

g  Compared to the depressed valuations of a year ago, stocks now appear to be fairly priced, which makes the investment environment more challenging. Going forward, we believe that stock selection will likely be the key driver of performance. As a result, we have trimmed several small holdings that we believed offered limited future potential and re-deployed these assets into positions in which we had more conviction. We also have increased the fund's exposure to the metals industry, which we believe offers potential as the economy strengthens.

1The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.

2The Standard & Poor's (S&P) SmallCap 600 Composite Index tracks the performance of 600 domestic companies traded on the major stock exchanges. The S&P Small Cap 600 is heavily weighted with the stocks of companies with small market capitalizations.

Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

3Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

      +12.87%  
      Class A shares
(without sales charge)
 
      +13.07%  
      Russell 2000 Index  
        +14.17%  
      S&P SmallCap 600
Composite Index
 

 

Morningstar Style BoxTM

The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend or growth). Information shown is based on the most recent data provided by Morningstar.


17



Fund Profile (continued)Columbia Small Cap Core Fund

Portfolio Management

Richard D'Auteuil, lead manager, has co-managed the fund since 2005 and has been associated with the advisor or its predecessors since 1993.

Jeffrey Hershey has co-managed the fund since August 2009 and has been associated with the advisor or its predecessors since August 2009.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund's prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

Portfolio characteristics and holdings are subject to change periodically and may not be representative of current characteristics and holdings. The outlook for the fund may differ from those presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Stocks of small- and mid-cap companies may pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies.

Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the manager's assessment of a company's prospects is wrong, the price of its stock may not approach the value the manager has placed on it.


18



Performance InformationColumbia Small Cap Core Fund

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)

Sales charge   without   with  
Class A     23,110       21,788    
Class B     21,386       21,386    
Class C     21,386       21,386    
Class T     22,899       21,583    
Class Z     23,752       n/a    

 

The table above shows the change in value of a hypothetical $10,000 investment in each share class of Columbia Small Cap Core Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Average annual total return as of 03/31/10 (%)

Share class   A   B   C   T   Z  
Inception   11/01/98   11/01/98   11/18/02   02/12/93   12/14/92  
Sales charge   without   with   without   with   without   with   without   with   without  
6-month
(cumulative)
    12.87       6.35       12.48       7.48       12.46       11.46       12.82       6.37       12.97    
1-year     67.78       58.04       66.48       61.48       66.38       65.38       67.54       57.86       68.05    
5-year     3.88       2.65       3.11       2.88       3.10       3.10       3.83       2.60       4.14    
10-year     8.74       8.10       7.90       7.90       7.90       7.90       8.64       8.00       9.04    

 

          

The "with sales charge" returns include the maximum initial sales charge of 5.75% for Class A and Class T shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The "without sales charge" returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund's prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Class A, Class B, Class C, Class T and Class Z share performance information includes returns of Prime A shares (for Class A shares), Prime B shares (for Class B shares), Retail A shares (for Class C and Class T shares) and Trust shares (for Class Z shares) of Galaxy Small Cap Value Fund, the predecessor to the Fund and a series of the Galaxy Fund (the "Predecessor Fund"), for periods prior to November 18, 2002, the date on which Class A, Class B, Class C, Class T and Class Z shares were initially offered by the Fund. These returns shown for all share classes reflect any differences in sales charges, but have not been restated to reflect any differences in expenses between the Predecessor Fund share classes and the corresponding newer share classes.

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Annual operating expense ratio (%)*

Class A     1.36    
Class B     2.11    
Class C     2.11    
Class T     1.41    
Class Z     1.11    

 

*The annual operating expense ratio is as stated in the fund's prospectus that is current as of the date of this report. Differences in expense ratios disclosed elsewhere in this report may result from the inclusion of fee waivers and expense reimbursements as well as the use of different time periods used in calculating the ratios.

Net asset value per share

as of 03/31/10 ($)

Class A     13.07    
Class B     11.72    
Class C     11.73    
Class T     12.85    
Class Z     13.41    

 


19



Understanding Your ExpensesColumbia Small Cap Core Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

g  For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

g  For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1.  Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.

2.  In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund's expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

  10/01/09 – 03/31/10

    Account value at the
beginning of the period ($)
  Account value at the
end of the period ($)
  Expenses paid
during the period ($)
  Fund's annualized
expense ratio (%)
 
    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual  
Class A     1,000.00       1,000.00       1,128.70       1,018.45       6.90       6.54       1.30    
Class B     1,000.00       1,000.00       1,124.80       1,014.71       10.86       10.30       2.05    
Class C     1,000.00       1,000.00       1,124.60       1,014.71       10.86       10.30       2.05    
Class T     1,000.00       1,000.00       1,128.20       1,018.20       7.16       6.79       1.35    
Class Z     1,000.00       1,000.00       1,129.70       1,019.70       5.58       5.29       1.05    

 

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.


20




Investment PortfolioColumbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks – 52.0%  
    Shares   Value ($)  
Consumer Discretionary – 6.0%  
Auto Components – 0.3%  
Autoliv, Inc. (a)     3,100       159,743    
BorgWarner, Inc. (a)     4,130       157,684    
Denso Corp.     4,000       119,157    
Goodyear Tire & Rubber Co. (a)     2,500       31,600    
Stanley Electric Co., Ltd.     7,500       145,443    
Auto Components Total     613,627    
Automobiles – 0.1%  
Nissan Motor Co., Ltd. (a)     26,000       222,762    
Toyota Motor Corp.     3,800       152,219    
Automobiles Total     374,981    
Diversified Consumer Services – 0.1%  
Apollo Group, Inc., Class A (a)     530       32,484    
Capella Education Co. (a)     340       31,565    
Grand Canyon Education, Inc. (a)     1,040       27,186    
Regis Corp.     1,180       22,042    
Diversified Consumer Services Total     113,277    
Hotels, Restaurants & Leisure – 1.3%  
Benihana, Inc., Class A (a)     2,092       13,598    
BJ's Restaurants, Inc. (a)     980       22,834    
Bob Evans Farms, Inc.     730       22,564    
Buffalo Wild Wings, Inc. (a)     1,300       62,543    
California Pizza Kitchen, Inc. (a)     1,500       25,185    
Carnival Corp.     13,300       517,104    
CEC Entertainment, Inc. (a)     457       17,407    
Ctrip.com International Ltd.,
ADR (a)
    870       34,104    
Home Inns & Hotels
Management, Inc., ADR (a)
    720       23,573    
International Game Technology     2,374       43,800    
Jack in the Box, Inc. (a)     610       14,366    
Las Vegas Sands Corp. (a)     10,030       212,134    
McDonald's Corp.     8,970       598,478    
OPAP SA     6,040       137,053    
Red Robin Gourmet
Burgers, Inc. (a)
    690       16,864    
Royal Caribbean Cruises Ltd. (a)     3,500       115,465    
Starbucks Corp. (a)     15,600       378,612    
Starwood Hotels & Resorts
Worldwide, Inc.
    14,785       689,572    
WMS Industries, Inc. (a)     790       33,133    
Wynn Resorts Ltd.     500       37,915    
Hotels, Restaurants & Leisure Total     3,016,304    
Household Durables – 0.3%  
American Greetings Corp., Class A     670       13,963    
Cavco Industries, Inc. (a)     482       16,455    
CSS Industries, Inc.     799       16,060    

 

    Shares   Value ($)  
D.R. Horton, Inc.     16,100       202,860    
Foster Electric Co. Ltd.     3,200       88,856    
Harman International
Industries, Inc. (a)
    370       17,309    
Stanley Black & Decker, Inc.     1,225       70,327    
Tempur-Pedic International,
Inc. (a)
    5,955       179,603    
Tupperware Brands Corp.     595       28,691    
Household Durables Total     634,124    
Internet & Catalog Retail – 0.4%  
Amazon.com, Inc. (a)     4,475       607,392    
Blue Nile, Inc. (a)     500       27,510    
NetFlix, Inc. (a)     800       58,992    
Priceline.com, Inc. (a)     1,020       260,100    
Internet & Catalog Retail Total     953,994    
Leisure Equipment & Products – 0.1%  
Altek Corp.     48,000       84,489    
Brunswick Corp.     750       11,978    
Hasbro, Inc.     1,900       72,732    
Jakks Pacific, Inc. (a)     1,150       15,007    
Leisure Equipment & Products Total     184,206    
Media – 0.4%  
CBS Corp., Class B     2,410       33,595    
DISH Network Corp., Class A     2,400       49,968    
DreamWorks Animation SKG,
Inc., Class A (a)
    2,520       99,263    
Entercom Communications Corp.,
Class A (a)
    2,975       35,373    
Gannett Co., Inc.     2,076       34,296    
Imax Corp. (a)     2,525       45,425    
Knology, Inc. (a)     1,492       20,052    
Lamar Advertising Co., Class A (a)     2,060       70,761    
McGraw-Hill Companies, Inc.     1,590       56,683    
Publicis Groupe SA     2,954       126,398    
Scholastic Corp.     670       18,760    
Viacom, Inc., Class B (a)     10,300       354,114    
Media Total     944,688    
Multiline Retail – 0.8%  
Big Lots, Inc. (a)     1,100       40,062    
J.C. Penney Co., Inc.     14,500       466,465    
Nordstrom, Inc.     11,475       468,754    
Target Corp.     15,150       796,890    
Multiline Retail Total     1,772,171    
Specialty Retail – 1.6%  
America's Car-Mart, Inc. (a)     645       15,557    
American Eagle Outfitters, Inc.     3,000       55,560    
AnnTaylor Stores Corp. (a)     972       20,120    
Best Buy Co., Inc.     4,950       210,573    

 

See Accompanying Notes to Financial Statements.


21



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Christopher & Banks Corp.     2,080       16,640    
Dick's Sporting Goods, Inc. (a)     5,200       135,772    
Finish Line, Inc., Class A     1,560       25,459    
Foot Locker, Inc.     7,287       109,597    
Game Group PLC     97,011       144,638    
GameStop Corp., Class A (a)     9,063       198,570    
Guess ?, Inc.     1,070       50,269    
J Crew Group, Inc. (a)     620       28,458    
Jo-Ann Stores, Inc. (a)     1,195       50,166    
Lowe's Companies, Inc.     46,200       1,119,888    
Lumber Liquidators Holdings,
Inc. (a)
    1,280       34,138    
Men's Wearhouse, Inc.     884       21,163    
O'Reilly Automotive, Inc. (a)     10,700       446,297    
OfficeMax, Inc. (a)     1,450       23,809    
Pacific Sunwear of California,
Inc. (a)
    6,625       35,179    
Rent-A-Center, Inc. (a)     1,419       33,559    
Shoe Carnival, Inc. (a)     915       20,917    
Tiffany & Co.     1,160       55,088    
TJX Companies, Inc.     9,540       405,641    
Ulta Salon Cosmetics &
Fragrance, Inc. (a)
    1,450       32,799    
Urban Outfitters, Inc. (a)     1,920       73,018    
USS Co., Ltd.     2,240       152,145    
Yamada Denki Co., Ltd.     1,580       116,611    
Specialty Retail Total     3,631,631    
Textiles, Apparel & Luxury Goods – 0.6%  
Coach, Inc.     920       36,358    
Deckers Outdoor Corp. (a)     285       39,330    
Fossil, Inc. (a)     582       21,965    
Hanesbrands, Inc. (a)     3,770       104,881    
Jones Apparel Group, Inc.     3,100       58,962    
LG Fashion Corp.     5,580       137,102    
Lululemon Athletica, Inc. (a)     6,394       265,351    
Movado Group, Inc. (a)     1,290       14,551    
NIKE, Inc., Class B     5,200       382,200    
Polo Ralph Lauren Corp. (b)     1,414       120,247    
Warnaco Group, Inc. (a)     515       24,571    
Wolverine World Wide, Inc.     500       14,580    
Youngone Corp.     8,260       65,557    
Textiles, Apparel & Luxury Goods Total     1,285,655    
Consumer Discretionary Total     13,524,658    
Consumer Staples – 3.8%  
Beverages – 0.8%  
Carlsberg A/S, Class B     2,474       207,640    
Cott Corp. (a)     23,589       182,815    

 

    Shares   Value ($)  
Diageo PLC, ADR     7,951       536,295    
Fomento Economico Mexicano
SAB de CV, ADR
    1,000       47,530    
PepsiCo, Inc.     11,250       744,300    
Beverages Total     1,718,580    
Food & Staples Retailing – 0.7%  
Casey's General Stores, Inc.     770       24,178    
Costco Wholesale Corp.     7,350       438,869    
George Weston Ltd.     800       55,255    
Koninklijke Ahold NV     14,683       195,738    
Ruddick Corp.     530       16,769    
Seven & I Holdings Co., Ltd.     9,500       229,549    
Spartan Stores, Inc.     697       10,051    
Wal-Mart Stores, Inc.     9,437       524,697    
Food & Staples Retailing Total     1,495,106    
Food Products – 0.6%  
Balrampur Chini Mills Ltd.     17,630       36,030    
China Milk Products Group
Ltd. (a)(c)
    322,000       41,431    
Fresh Del Monte Produce, Inc. (a)     1,493       30,233    
Green Mountain Coffee
Roasters, Inc. (a)
    390       37,760    
H.J. Heinz Co.     1,930       88,027    
J.M. Smucker Co.     7,994       481,718    
Mead Johnson Nutrition Co.,
Class A
    3,150       163,895    
Nestle SA, Registered Shares     3,724       190,721    
Toyo Suisan Kaisha Ltd.     7,000       181,046    
Viterra, Inc. (a)     15,582       147,129    
Food Products Total     1,397,990    
Household Products – 0.6%  
Clorox Co.     1,660       106,472    
Procter & Gamble Co.     20,800       1,316,016    
Household Products Total     1,422,488    
Personal Products – 0.4%  
Avon Products, Inc.     18,286       619,347    
Elizabeth Arden, Inc. (a)     1,120       20,160    
Estee Lauder Companies, Inc.,
Class A
    4,025       261,101    
Herbalife Ltd.     1,240       57,189    
Personal Products Total     957,797    
Tobacco – 0.7%  
Japan Tobacco, Inc.     55       204,728    
Philip Morris International, Inc.     25,276       1,318,396    
Tobacco Total     1,523,124    
Consumer Staples Total     8,515,085    

 

See Accompanying Notes to Financial Statements.


22



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Energy – 5.8%  
Energy Equipment & Services – 1.4%  
Baker Hughes, Inc.     4,850       227,174    
Cameron International Corp. (a)     2,923       125,280    
Core Laboratories N.V.     1,033       135,116    
Dawson Geophysical Co. (a)     570       16,667    
Diamond Offshore Drilling, Inc.     630       55,950    
Ensco International PLC, ADR     1,100       49,258    
FMC Technologies, Inc. (a)     690       44,595    
Gulf Island Fabrication, Inc.     810       17,618    
Halliburton Co.     23,975       722,367    
Key Energy Services, Inc. (a)     8,390       80,124    
Lufkin Industries, Inc.     160       12,664    
Matrix Service Co. (a)     1,240       13,342    
Nabors Industries Ltd. (a)     30,234       593,493    
National-Oilwell Varco, Inc.     710       28,812    
Noble Corp. (a)     5,624       235,196    
Oceaneering International, Inc. (a)     1,420       90,156    
Patterson-UTI Energy, Inc.     940       13,132    
Pioneer Drilling Co. (a)     2,500       17,600    
Pride International, Inc. (a)     2,600       78,286    
Schlumberger Ltd.     2,093       132,822    
Shinko Plantech Co., Ltd.     15,300       135,505    
T-3 Energy Services, Inc. (a)     610       14,982    
Tecnicas Reunidas SA     1,191       74,881    
Tetra Technologies, Inc. (a)     2,115       25,845    
TGC Industries, Inc. (a)     1,673       6,759    
Tidewater, Inc.     450       21,271    
Transocean Ltd. (a)     2,871       247,997    
Union Drilling, Inc. (a)     2,495       15,369    
Willbros Group, Inc. (a)     1,671       20,069    
Energy Equipment & Services Total     3,252,330    
Oil, Gas & Consumable Fuels – 4.4%  
Alpha Natural Resources, Inc. (a)     9,120       454,997    
Anadarko Petroleum Corp.     8,856       644,982    
Apache Corp.     10,858       1,102,087    
Arena Resources, Inc. (a)     2,275       75,985    
AWE Ltd. (a)     65,290       162,964    
Berry Petroleum Co., Class A     490       13,798    
Bill Barrett Corp. (a)     500       15,355    
BP PLC     33,902       320,716    
Brigham Exploration Co. (a)     3,299       52,619    
Cabot Oil & Gas Corp.     6,500       239,200    
Callon Petroleum Co. (a)     4,175       22,378    
Canadian Natural Resources Ltd.     1,676       124,091    
Carrizo Oil & Gas, Inc. (a)     1,440       33,048    
Chevron Corp.     17,670       1,339,916    
Clean Energy Fuels Corp. (a)     1,385       31,550    
Concho Resources, Inc. (a)     2,907       146,397    
ConocoPhillips     1,676       85,761    

 

    Shares   Value ($)  
Continental Resources, Inc. (a)     7,343       312,445    
Denbury Resources, Inc. (a)     4,735       79,879    
Energy XXI Bermuda Ltd. (a)     2,580       46,208    
EOG Resources, Inc.     6,887       640,078    
EXCO Resources, Inc.     4,197       77,141    
Exxon Mobil Corp.     2,300       154,054    
Forest Oil Corp. (a)     2,565       66,228    
Green Plains Renewable
Energy, Inc. (a)
    4,176       59,592    
Hess Corp.     1,662       103,958    
Holly Corp.     640       17,862    
Mariner Energy, Inc. (a)     1,170       17,515    
Massey Energy Co.     744       38,904    
Newfield Exploration Co. (a)     2,977       154,953    
Noble Energy, Inc.     837       61,101    
Northern Oil & Gas, Inc. (a)     8,351       132,363    
Occidental Petroleum Corp.     11,155       943,044    
Oilsands Quest, Inc. (a)     20,890       15,442    
Overseas Shipholding Group, Inc.     1,680       65,906    
Peabody Energy Corp.     4,292       196,144    
PetroHawk Energy Corp. (a)     5,494       111,418    
Petroleo Brasileiro SA, ADR     6,197       275,705    
Pioneer Natural Resources Co.     2,493       140,406    
Plains Exploration &
Production Co. (a)
    843       25,282    
Range Resources Corp.     835       39,136    
Royal Dutch Shell PLC, Class B     6,664       183,595    
Southwestern Energy Co. (a)     1,877       76,431    
Spectra Energy Corp.     6,300       141,939    
Stone Energy Corp. (a)     1,191       21,140    
Suncor Energy, Inc.     2,931       95,375    
Swift Energy Co. (a)     840       25,822    
Total SA     3,798       220,478    
Williams Companies, Inc.     14,200       328,020    
World Fuel Services Corp.     755       20,113    
Yanzhou Coal Mining Co., Ltd.,
Class H
    50,000       119,909    
Oil, Gas & Consumable Fuels Total     9,873,430    
Energy Total     13,125,760    
Financials – 8.7%  
Capital Markets – 1.6%  
Affiliated Managers Group, Inc. (a)     690       54,510    
Ameriprise Financial, Inc.     1,200       54,432    
FBR Capital Markets Corp. (a)     3,937       17,913    
Federated Investors, Inc., Class B     513       13,533    
Franklin Resources, Inc.     4,250       471,325    
Goldman Sachs Group, Inc.     7,200       1,228,536    
ICAP PLC     20,331       115,326    

 

See Accompanying Notes to Financial Statements.


23



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Intermediate Capital Group PLC     30,814       126,720    
Investment Technology Group,
Inc. (a)
    1,418       23,666    
Janus Capital Group, Inc.     2,360       33,724    
Knight Capital Group, Inc.,
Class A (a)
    1,510       23,028    
Mass Financial Corp., Class A (a)     1,909       17,716    
Morgan Stanley     27,300       799,617    
optionsXpress Holdings, Inc. (a)     1,040       16,942    
Piper Jaffray Companies, Inc. (a)     438       17,651    
Raymond James Financial, Inc.     2,413       64,524    
T. Rowe Price Group, Inc.     5,160       283,439    
TD Ameritrade Holding Corp. (a)     6,530       124,462    
Tokai Tokyo Financial Holdings     23,000       95,946    
Waddell & Reed Financial, Inc.,
Class A
    4,703       169,496    
Capital Markets Total     3,752,506    
Commercial Banks – 3.2%  
Australia & New Zealand
Banking Group Ltd.
    11,855       275,885    
BancFirst Corp.     546       22,883    
Banco Bilbao Vizcaya
Argentaria SA
    16,236       222,142    
Banco Santander SA     26,223       348,514    
BancTrust Financial Group, Inc.     1,398       6,780    
Bank of China Ltd., Class H     201,000       106,917    
Barclays PLC     49,275       269,413    
BB&T Corp.     13,964       452,294    
BNP Paribas     2,894       222,253    
Bryn Mawr Bank Corp.     947       17,188    
Chemical Financial Corp.     1,340       31,651    
City National Corp.     1,500       80,955    
Columbia Banking System, Inc.     1,139       23,133    
Comerica, Inc.     2,600       98,904    
Commonwealth Bank of Australia     2,121       109,559    
Community Trust Bancorp, Inc.     718       19,451    
Cullen/Frost Bankers, Inc.     1,900       106,020    
DBS Group Holdings Ltd.     19,000       194,217    
East West Bancorp, Inc.     1,335       23,256    
Fifth Third Bancorp.     30,350       412,457    
First Citizens BancShares, Inc.,
Class A
    193       38,361    
First Commonwealth
Financial Corp.
    4,712       31,618    
First Financial Corp. of Indiana     879       25,456    
First National Bank of Alaska     9       16,020    
Governor & Co. of the Bank of
Ireland (a)(b)
    30,066       64,974    
HSBC Holdings PLC     19,908       201,805    
Investors Bancorp, Inc. (a)     1,382       18,242    

 

    Shares   Value ($)  
Merchants Bancshares, Inc.     814       17,672    
National Bank of Greece SA (a)     5,884       118,414    
Northfield Bancorp, Inc.     1,249       18,086    
Northrim BanCorp, Inc.     984       16,807    
PNC Financial Services Group, Inc.     10,846       647,506    
Signature Bank (a)     1,025       37,976    
Standard Chartered PLC     8,130       221,762    
Sumitomo Mitsui Financial
Group, Inc.
    4,800       158,648    
Sumitomo Trust & Banking
Co., Ltd.
    19,000       111,370    
SunTrust Banks, Inc.     7,750       207,623    
SVB Financial Group (a)     1,708       79,695    
Svenska Handelsbanken AB,
Class A
    3,127       91,637    
TCF Financial Corp.     6,800       108,392    
U.S. Bancorp     31,439       813,641    
Wells Fargo & Co.     28,566       888,974    
West Coast Bancorp     3,214       8,292    
Whitney Holding Corp.     1,161       16,010    
Zions Bancorporation     9,125       199,108    
Commercial Banks Total     7,201,961    
Consumer Finance – 0.5%  
American Express Co.     20,700       854,082    
Cash America International, Inc.     900       35,532    
Discover Financial Services     10,759       160,309    
Ezcorp, Inc., Class A (a)     1,215       25,029    
Consumer Finance Total     1,074,952    
Diversified Financial Services – 0.7%  
ING Groep NV (a)     18,170       181,409    
IntercontinentalExchange, Inc. (a)     320       35,898    
JPMorgan Chase & Co.     31,103       1,391,859    
Medallion Financial Corp.     1,534       12,211    
Moody's Corp.     1,210       35,997    
Pico Holdings, Inc. (a)     400       14,876    
Diversified Financial Services Total     1,672,250    
Insurance – 1.6%  
ACE Ltd.     6,620       346,226    
American Safety Insurance
Holdings Ltd. (a)
    1,150       19,079    
Amerisafe, Inc. (a)     1,075       17,598    
Argo Group International
Holdings Ltd.
    730       23,791    
Assured Guaranty Ltd.     1,600       35,152    
Axis Capital Holdings Ltd.     13,646       426,574    
Baldwin & Lyons, Inc., Class B     790       19,031    
Baloise Holding AG,
Registered Shares
    1,612       142,946    
Brit Insurance Holdings NV     11,673       133,296    

 

See Accompanying Notes to Financial Statements.


24



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
CNA Surety Corp. (a)     1,480       26,329    
EMC Insurance Group, Inc.     881       19,840    
FBL Financial Group, Inc., Class A     1,012       24,774    
First Mercury Financial Corp.     1,549       20,183    
Genworth Financial, Inc.,
Class A (a)
    3,400       62,356    
Harleysville Group, Inc.     540       18,230    
Horace Mann Educators Corp.     1,851       27,876    
Lincoln National Corp.     1,996       61,277    
National Western Life Insurance
Co., Class A
    97       17,882    
Navigators Group, Inc. (a)     644       25,329    
Old Republic International Corp.     1,090       13,821    
Primerica, Inc. (a)     275       4,125    
Prudential Financial, Inc.     18,219       1,102,249    
Reinsurance Group of America, Inc.     2,400       126,048    
RLI Corp.     346       19,729    
Safety Insurance Group, Inc.     860       32,396    
Sampo Oyj, Class A     6,909       183,273    
Stewart Information Services Corp.     1,210       16,698    
United America Indemnity Ltd.,
Class A (a)
    4,943       47,305    
United Fire & Casualty Co.     1,459       26,247    
XL Capital Ltd., Class A     16,163       305,481    
Zurich Financial Services AG,
Registered Shares
    727       186,370    
Insurance Total     3,531,511    
Real Estate Investment Trusts (REITs) – 0.8%  
Alexandria Real Estate
Equities, Inc.
    1,100       74,360    
Boston Properties, Inc.     1,050       79,212    
DCT Industrial Trust, Inc.     3,974       20,784    
DiamondRock Hospitality Co. (a)     3,128       31,624    
Digital Realty Trust, Inc.     850       46,070    
Equity Residential Property Trust     7,900       309,285    
FelCor Lodging Trust, Inc. (a)     5,405       30,809    
Franklin Street Properties Corp.     1,704       24,589    
Getty Realty Corp.     570       13,338    
Host Hotels & Resorts, Inc.     4,197       61,486    
Japan Retail Fund Investment Corp.     128       150,604    
National Health Investors, Inc.     753       29,186    
Nationwide Health Properties, Inc.     940       33,041    
Pebblebrook Hotel Trust (a)     990       20,820    
Plum Creek Timber Co., Inc.     950       36,965    
Potlatch Corp.     949       33,253    
ProLogis     3,700       48,840    
Rayonier, Inc.     7,500       340,725    
Simon Property Group, Inc.     3,827       321,085    
Starwood Property Trust, Inc.     1,110       21,423    

 

    Shares   Value ($)  
Sunstone Hotel Investors, Inc. (a)     2,336       26,093    
Taubman Centers, Inc.     1,300       51,896    
Universal Health Realty
Income Trust
    620       21,911    
Urstadt Biddle Properties, Inc.,
Class A
    1,290       20,395    
Vornado Realty Trust     802       60,711    
Real Estate Investment Trusts (REITs) Total     1,908,505    
Real Estate Management & Development – 0.2%  
Avatar Holdings, Inc. (a)     887       19,283    
Hongkong Land Holdings Ltd.     28,000       141,960    
Huaku Development Co., Ltd.     62,000       160,866    
Maui Land & Pineapple Co., Inc. (a)     620       3,863    
Swire Pacific Ltd., Class A     7,500       90,173    
Real Estate Management &
Development Total
    416,145    
Thrifts & Mortgage Finance – 0.1%  
Bank Mutual Corp.     3,685       23,952    
BankFinancial Corp.     2,029       18,606    
Beneficial Mutual Bancorp, Inc. (a)     2,381       22,572    
Brookline Bancorp, Inc.     2,400       25,536    
Clifton Savings Bancorp, Inc.     1,540       14,276    
ESSA Bancorp, Inc.     1,068       13,393    
Home Federal Bancorp, Inc.     1,947       28,251    
People's United Financial, Inc.     1,930       30,185    
TrustCo Bank Corp. NY     2,150       13,266    
United Financial Bancorp, Inc.     1,199       16,762    
Washington Federal, Inc.     1,270       25,806    
Westfield Financial, Inc.     2,583       23,738    
Thrifts & Mortgage Finance Total     256,343    
Financials Total     19,814,173    
Health Care – 5.6%  
Biotechnology – 0.7%  
Acorda Therapeutics, Inc. (a)     750       25,650    
Alexion Pharmaceuticals, Inc. (a)     1,628       88,514    
Amgen, Inc. (a)     2,234       133,504    
Celgene Corp. (a)     7,350       455,406    
Cubist Pharmaceuticals, Inc. (a)     1,125       25,358    
Dendreon Corp. (a)     6,695       244,167    
Gilead Sciences, Inc. (a)     4,050       184,194    
Halozyme Therapeutics, Inc. (a)     2,565       20,494    
Human Genome Sciences, Inc. (a)     1,823       55,055    
Ironwood Pharmaceuticals, Inc. (a)     835       11,289    
Isis Pharmaceuticals, Inc. (a)     2,605       28,447    
Momenta Pharmaceuticals, Inc. (a)     1,420       21,257    
Myriad Genetics, Inc. (a)     1,370       32,948    

 

See Accompanying Notes to Financial Statements.


25



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Onyx Pharmaceuticals, Inc. (a)     2,525       76,457    
Seattle Genetics, Inc. (a)     2,037       24,322    
Vertex Pharmaceuticals, Inc. (a)     5,200       212,524    
Biotechnology Total     1,639,586    
Health Care Equipment & Supplies – 0.9%  
Analogic Corp.     330       14,101    
Beckman Coulter, Inc.     538       33,786    
C.R. Bard, Inc.     3,500       303,170    
Cantel Medical Corp.     606       12,029    
CareFusion Corp. (a)     10,550       278,837    
Conceptus, Inc. (a)     1,055       21,058    
Cooper Companies, Inc.     900       34,992    
Cutera, Inc. (a)     1,235       12,807    
DexCom, Inc. (a)     2,565       24,957    
Edwards Lifesciences Corp. (a)     2,050       202,704    
Gen-Probe, Inc. (a)     950       47,500    
Hospira, Inc. (a)     8,050       456,033    
ICU Medical, Inc. (a)     605       20,842    
Insulet Corp. (a)     1,735       26,181    
Intuitive Surgical, Inc. (a)     170       59,182    
Kensey Nash Corp. (a)     524       12,361    
Masimo Corp. (a)     1,658       44,020    
NuVasive, Inc. (a)     1,341       60,613    
St. Jude Medical, Inc. (a)     3,750       153,938    
Symmetry Medical, Inc. (a)     1,480       14,859    
Syneron Medical Ltd. (a)     1,465       16,012    
Teleflex, Inc.     1,100       70,477    
Thoratec Corp. (a)     1,460       48,837    
Young Innovations, Inc.     466       13,123    
Health Care Equipment & Supplies Total     1,982,419    
Health Care Providers & Services – 1.4%  
AmerisourceBergen Corp.     2,100       60,732    
AmSurg Corp. (a)     609       13,148    
Brookdale Senior Living, Inc. (a)     2,805       58,428    
Cardinal Health, Inc.     10,700       385,521    
Catalyst Health Solutions, Inc. (a)     603       24,952    
CIGNA Corp.     910       33,288    
Community Health Systems, Inc. (a)     1,600       59,088    
Express Scripts, Inc. (a)     3,440       350,054    
Genoptix, Inc. (a)     530       18,810    
Healthspring, Inc. (a)     1,484       26,118    
HMS Holdings Corp. (a)     655       33,398    
IPC The Hospitalist Co., Inc. (a)     1,515       53,192    
Kindred Healthcare, Inc. (a)     1,160       20,938    
Laboratory Corp. of America
Holdings (a)
    1,370       103,723    
LHC Group, Inc. (a)     960       32,189    
Magellan Health Services, Inc. (a)     500       21,740    
Medcath Corp. (a)     1,510       15,810    

 

    Shares   Value ($)  
Medco Health Solutions, Inc. (a)     13,200       852,192    
Mednax, Inc. (a)     1,325       77,102    
Miraca Holdings, Inc.     5,200       158,520    
NovaMed, Inc. (a)     2,804       9,534    
Owens & Minor, Inc.     360       16,700    
Patterson Companies, Inc.     1,570       48,749    
PSS World Medical, Inc. (a)     1,365       32,091    
Res-Care, Inc. (a)     1,606       19,256    
Skilled Healthcare Group, Inc.,
Class A (a)
    2,525       15,579    
Triple-S Management Corp.,
Class B (a)
    820       14,555    
U.S. Physical Therapy, Inc. (a)     740       12,876    
UnitedHealth Group, Inc. (a)     8,400       274,428    
Universal Health Services, Inc.,
Class B
    4,750       166,677    
VCA Antech, Inc. (a)     1,680       47,090    
Health Care Providers & Services Total     3,056,478    
Health Care Technology – 0.1%  
Cerner Corp. (a)     420       35,725    
Medidata Solutions, Inc. (a)     1,310       19,912    
Omnicell, Inc. (a)     4,105       57,593    
Quality Systems, Inc.     370       22,733    
Health Care Technology Total     135,963    
Life Sciences Tools & Services – 0.9%  
ICON PLC, ADR (a)     4,515       119,196    
Illumina, Inc. (a)     2,802       108,998    
Life Technologies Corp. (a)     12,330       644,489    
Mettler-Toledo International, Inc. (a)     475       51,870    
Millipore Corp. (a)     1,000       105,600    
QIAGEN N.V. (a)     7,950       182,770    
Thermo Fisher Scientific, Inc. (a)     16,133       829,882    
Life Sciences Tools & Services Total     2,042,805    
Pharmaceuticals – 1.6%  
Abbott Laboratories     15,700       827,076    
Allergan, Inc.     6,300       411,516    
Ardea Biosciences, Inc. (a)     1,085       19,812    
Astellas Pharma, Inc.     2,800       101,380    
AstraZeneca PLC, ADR     5,855       261,836    
Impax Laboratories, Inc. (a)     2,010       35,939    
Merck & Co., Inc.     8,912       332,863    
Mylan, Inc. (a)     13,300       302,043    
Novartis AG, Registered Shares     1,729       93,386    
Perrigo Co.     1,155       67,822    
Pfizer, Inc.     28,100       481,915    
Roche Holding AG,
Genusschein Shares
    1,986       322,085    
Salix Pharmaceuticals Ltd. (a)     1,110       41,347    

 

See Accompanying Notes to Financial Statements.


26



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Sanofi-Aventis SA     3,874       288,777    
Santen Pharmaceutical Co., Ltd.     3,700       111,051    
Watson Pharmaceuticals, Inc. (a)     800       33,416    
Pharmaceuticals Total     3,732,264    
Health Care Total     12,589,515    
Industrials – 6.1%  
Aerospace & Defense – 1.4%  
AAR Corp. (a)     692       17,175    
AerCap Holdings NV (a)     5,178       59,651    
BAE Systems PLC     36,647       206,487    
BE Aerospace, Inc. (a)     1,710       52,069    
Ceradyne, Inc. (a)     865       19,627    
Esterline Technologies Corp. (a)     490       24,221    
General Dynamics Corp.     2,400       185,280    
Global Defense Technology &
Systems, Inc. (a)
    1,360       18,224    
Goodrich Corp.     2,500       176,300    
Honeywell International, Inc.     10,100       457,227    
ITT Corp.     650       34,847    
L-3 Communications Holdings, Inc.     3,775       345,903    
Ladish Co., Inc. (a)     1,130       22,781    
LMI Aerospace, Inc. (a)     1,745       32,422    
MTU Aero Engines Holding AG     2,901       168,778    
Precision Castparts Corp.     790       100,101    
Teledyne Technologies, Inc. (a)     579       23,895    
United Technologies Corp.     15,080       1,110,039    
Aerospace & Defense Total     3,055,027    
Air Freight & Logistics – 0.3%  
Atlas Air Worldwide Holdings,
Inc. (a)
    345       18,302    
FedEx Corp.     3,100       289,540    
Forward Air Corp.     900       23,670    
Pacer International, Inc. (a)     2,553       15,369    
United Parcel Service, Inc., Class B     5,750       370,358    
Air Freight & Logistics Total     717,239    
Airlines – 0.1%  
AMR Corp. (a)     4,750       43,272    
Delta Air Lines, Inc. (a)     5,690       83,017    
Skywest, Inc.     1,370       19,564    
Turk Hava Yollari A.O.     23,863       81,758    
UAL Corp. (a)     1,555       30,400    
Airlines Total     258,011    
Building Products – 0.2%  
Ameron International Corp.     287       18,050    
Lennox International, Inc.     350       15,512    
Masco Corp.     22,100       342,992    

 

    Shares   Value ($)  
NCI Building Systems, Inc. (a)     282       3,113    
Universal Forest Products, Inc.     510       19,645    
Building Products Total     399,312    
Commercial Services & Supplies – 0.1%  
ABM Industries, Inc.     740       15,688    
ACCO Brands Corp. (a)     3,025       23,172    
Aeon Delight Co., Ltd.     7,900       111,034    
ATC Technology Corp. (a)     740       12,698    
Consolidated Graphics, Inc. (a)     630       26,088    
Ennis, Inc.     943       15,343    
Stericycle, Inc. (a)     890       48,505    
Tetra Tech, Inc. (a)     1,180       27,187    
United Stationers, Inc. (a)     410       24,129    
Commercial Services & Supplies Total     303,844    
Construction & Engineering – 0.6%  
Comfort Systems USA, Inc.     1,212       15,138    
COMSYS Holdings Corp.     10,400       100,674    
CTCI Corp.     100,000       104,383    
Dycom Industries, Inc. (a)     1,950       17,101    
EMCOR Group, Inc. (a)     1,070       26,354    
Fluor Corp.     4,948       230,131    
Foster Wheeler AG (a)     9,520       258,373    
KBR, Inc.     960       21,274    
KHD Humboldt Wedag
International AG (d)
    272       2,000    
Layne Christensen Co. (a)     580       15,492    
Maire Tecnimont SpA     41,331       157,423    
Pike Electric Corp. (a)     4,277       39,862    
Sterling Construction Co., Inc. (a)     2,288       35,967    
Toyo Engineering Corp.     34,000       130,559    
Vinci SA     1,401       82,569    
Construction & Engineering Total     1,237,300    
Electrical Equipment – 0.3%  
A.O. Smith Corp.     500       26,285    
Acuity Brands, Inc.     460       19,417    
AMETEK, Inc.     840       34,826    
Baldor Electric Co.     900       33,660    
Belden, Inc.     730       20,046    
Cooper Industries PLC, Class A     1,300       62,322    
First Solar, Inc. (a)     310       38,022    
Fushi Copperweld, Inc. (a)     4,176       46,855    
GrafTech International Ltd. (a)     4,541       62,075    
Mitsubishi Electric Corp.     10,000       91,881    
Roper Industries, Inc.     750       43,380    
Schneider Electric SA     1,415       165,966    
Trina Solar Ltd., ADR (a)     4,870       118,877    
Electrical Equipment Total     763,612    

 

See Accompanying Notes to Financial Statements.


27



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Industrial Conglomerates – 0.7%  
DCC PLC     4,335       112,417    
General Electric Co.     48,562       883,829    
McDermott International, Inc. (a)     6,260       168,519    
Tyco International Ltd.     12,429       475,409    
Industrial Conglomerates Total     1,640,174    
Machinery – 1.6%  
Astec Industries, Inc. (a)     595       17,231    
Bucyrus International, Inc.     4,135       272,869    
CIRCOR International, Inc.     590       19,594    
Columbus McKinnon Corp. (a)     1,365       21,663    
Cummins, Inc.     3,410       211,249    
Demag Cranes AG (a)     2,923       102,469    
Eaton Corp.     3,100       234,887    
EnPro Industries, Inc. (a)     790       22,973    
Flowserve Corp.     2,450       270,161    
FreightCar America, Inc.     667       16,115    
Harsco Corp.     570       18,206    
Illinois Tool Works, Inc.     15,000       710,400    
Ingersoll-Rand PLC     18,100       631,147    
Kadant, Inc. (a)     948       13,661    
Kennametal, Inc.     5,900       165,908    
LB Foster Co., Class A (a)     497       14,358    
Mueller Industries, Inc.     900       24,111    
Mueller Water Products, Inc.,
Class A
    4,180       19,980    
Navistar International Corp. (a)     6,111       273,345    
PACCAR, Inc.     2,100       91,014    
Pall Corp.     1,030       41,705    
Parker Hannifin Corp.     6,350       411,099    
Robbins & Myers, Inc.     1,435       34,182    
Terex Corp. (a)     2,100       47,691    
Machinery Total     3,686,018    
Professional Services – 0.3%  
Advisory Board Co. (a)     725       22,837    
Atkins WS PLC     9,177       86,342    
CDI Corp.     981       14,381    
FTI Consulting, Inc. (a)     300       11,796    
Kforce, Inc. (a)     889       13,522    
Korn/Ferry International (a)     2,549       44,990    
LECG Corp. (a)     2,986       8,898    
Manpower, Inc.     7,510       428,971    
Navigant Consulting, Inc. (a)     970       11,766    
TrueBlue, Inc. (a)     1,285       19,918    
Professional Services Total     663,421    
Road & Rail – 0.3%  
Arkansas Best Corp.     540       16,135    
Canadian National Railway Co.     3,050       184,799    

 

    Shares   Value ($)  
Con-way, Inc.     4,200       147,504    
Dollar Thrifty Automotive Group,
Inc. (a)
    2,435       78,237    
Genesee & Wyoming, Inc.,
Class A (a)
    600       20,472    
Heartland Express, Inc.     870       14,355    
Knight Transportation, Inc.     2,000       42,180    
Landstar System, Inc.     1,300       54,574    
Old Dominion Freight Line, Inc. (a)     2,075       69,284    
Ryder System, Inc.     400       15,504    
Werner Enterprises, Inc.     1,780       41,243    
Road & Rail Total     684,287    
Trading Companies & Distributors – 0.2%  
Applied Industrial Technologies, Inc.     660       16,401    
Fastenal Co.     850       40,792    
ITOCHU Corp.     11,000       96,363    
Kaman Corp.     761       19,033    
Mitsui & Co., Ltd.     9,400       157,957    
RSC Holdings, Inc. (a)     3,390       26,984    
Trading Companies & Distributors Total     357,530    
Transportation Infrastructure – 0.0%  
Aegean Marine Petroleum
Network, Inc.
    1,664       47,224    
Transportation Infrastructure Total     47,224    
Industrials Total     13,812,999    
Information Technology – 8.7%  
Communications Equipment – 1.0%  
ADC Telecommunications, Inc. (a)     2,290       16,740    
Anaren, Inc. (a)     952       13,556    
Aruba Networks, Inc. (a)     3,385       46,239    
Bel Fuse, Inc., Class B     429       8,644    
Black Box Corp.     597       18,364    
Brocade Communications
Systems, Inc. (a)
    6,500       37,115    
Cisco Systems, Inc. (a)     41,645       1,084,019    
CommScope, Inc. (a)     9,620       269,552    
F5 Networks, Inc. (a)     610       37,521    
Finisar Corp. (a)     4,835       75,958    
Plantronics, Inc.     610       19,081    
Polycom, Inc. (a)     1,064       32,537    
QUALCOMM, Inc.     13,450       564,765    
Symmetricom, Inc. (a)     2,420       14,109    
Tandberg ASA     1,340       38,217    
Tekelec (a)     680       12,349    
Tellabs, Inc.     2,750       20,818    
Communications Equipment Total     2,309,584    

 

See Accompanying Notes to Financial Statements.


28



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Computers & Peripherals – 2.3%  
Adaptec, Inc. (a)     3,280       10,726    
Apple, Inc. (a)     6,600       1,550,538    
Diebold, Inc.     2,000       63,520    
EMC Corp. (a)     70,700       1,275,428    
Hewlett-Packard Co.     22,220       1,180,993    
International Business
Machines Corp.
    6,650       852,862    
NetApp, Inc. (a)     1,280       41,677    
SanDisk Corp. (a)     1,330       46,058    
Super Micro Computer, Inc. (a)     1,545       26,698    
Teradata Corp. (a)     5,950       171,895    
Western Digital Corp. (a)     785       30,607    
Computers & Peripherals Total     5,251,002    
Electronic Equipment, Instruments & Components – 0.3%  
Agilent Technologies, Inc. (a)     3,140       107,985    
Anixter International, Inc. (a)     580       27,173    
Arrow Electronics, Inc. (a)     2,000       60,260    
Benchmark Electronics, Inc. (a)     1,501       31,131    
Brightpoint, Inc. (a)     2,740       20,632    
CPI International, Inc. (a)     1,113       14,758    
CTS Corp.     1,653       15,571    
Dolby Laboratories, Inc.,
Class A (a)
    690       40,482    
DTS, Inc. (a)     1,265       43,061    
Electro Scientific Industries,
Inc. (a)
    1,080       13,835    
FUJIFILM Holdings Corp.     4,100       141,213    
Littelfuse, Inc. (a)     525       19,955    
Methode Electronics, Inc.     1,584       15,682    
Molex, Inc.     3,200       66,752    
MTS Systems Corp.     570       16,547    
NAM TAI Electronics, Inc. (a)     2,781       13,905    
TTM Technologies, Inc. (a)     2,341       20,788    
Electronic Equipment, Instruments &
Components Total
    669,730    
Internet Software & Services – 1.0%  
Akamai Technologies, Inc. (a)     10,840       340,484    
Constant Contact, Inc. (a)     1,155       26,819    
eBay, Inc. (a)     10,500       282,975    
Equinix, Inc. (a)     3,022       294,162    
Google, Inc., Class A (a)     1,972       1,118,144    
GSI Commerce, Inc. (a)     2,530       70,005    
InfoSpace, Inc. (a)     1,270       14,034    
United Online, Inc.     1,640       12,267    
VeriSign, Inc. (a)     1,000       26,010    
VistaPrint NV (a)     405       23,186    
Vocus, Inc. (a)     1,140       19,437    
Internet Software & Services Total     2,227,523    

 

    Shares   Value ($)  
IT Services – 0.7%  
Acxiom Corp. (a)     1,020       18,299    
Alliance Data Systems Corp. (a)     2,250       143,978    
CACI International, Inc.,
Class A (a)
    434       21,201    
Cognizant Technology Solutions
Corp., Class A (a)
    8,520       434,350    
CSG Systems International, Inc. (a)     841       17,627    
ExlService Holdings, Inc. (a)     1,365       22,768    
Gartner, Inc. (a)     1,590       35,362    
Global Payments, Inc.     1,300       59,215    
Hewitt Associates, Inc., Class A (a)     750       29,835    
MasterCard, Inc., Class A     190       48,260    
MAXIMUS, Inc.     310       18,888    
MoneyGram International, Inc. (a)     3,872       14,752    
Redecard SA     4,600       85,101    
RightNow Technologies, Inc. (a)     1,870       33,398    
TeleTech Holdings, Inc. (a)     1,486       25,381    
Visa, Inc., Class A     2,400       218,472    
Western Union Co.     12,700       215,392    
Wright Express Corp. (a)     630       18,976    
IT Services Total     1,461,255    
Office Electronics – 0.1%  
Canon, Inc.     5,300       245,470    
Office Electronics Total     245,470    
Semiconductors & Semiconductor Equipment – 1.7%  
Advanced Energy Industries,
Inc. (a)
    1,660       27,490    
Advanced Micro Devices, Inc. (a)     2,700       25,029    
Amkor Technology, Inc. (a)     1,920       13,574    
Analog Devices, Inc.     1,469       42,337    
Atheros Communications, Inc. (a)     645       24,968    
Atmel Corp. (a)     6,000       30,180    
ATMI, Inc. (a)     820       15,834    
Cavium Networks, Inc. (a)     3,215       79,925    
Cirrus Logic, Inc. (a)     2,190       18,374    
Disco Corp.     550       33,827    
Entegris, Inc. (a)     4,340       21,874    
EZchip Semiconductor Ltd. (a)     1,260       24,809    
Fairchild Semiconductor
International, Inc. (a)
    1,316       14,015    
Intel Corp.     16,300       362,838    
Kulicke & Soffa Industries, Inc. (a)     2,010       14,573    
Lam Research Corp. (a)     9,016       336,477    
Marvell Technology Group Ltd. (a)     20,490       417,586    
MediaTek, Inc.     6,000       104,100    
MEMC Electronic Materials,
Inc. (a)
    2,410       36,945    
Micron Technology, Inc. (a)     30,300       314,817    

 

See Accompanying Notes to Financial Statements.


29



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
MKS Instruments, Inc. (a)     693       13,576    
Monolithic Power Systems, Inc. (a)     1,011       22,545    
Nanometrics, Inc. (a)     2,245       21,283    
Netlogic Microsystems, Inc. (a)     7,024       206,716    
Novellus Systems, Inc. (a)     7,350       183,750    
OmniVision Technologies, Inc. (a)     1,355       23,279    
Power Integrations, Inc.     845       34,814    
Silicon Laboratories, Inc. (a)     1,340       63,878    
Skyworks Solutions, Inc. (a)     1,960       30,576    
Texas Instruments, Inc.     27,600       675,372    
United Microelectronics Corp.,
ADR (a)
    22,828       85,833    
Varian Semiconductor Equipment
Associates, Inc. (a)
    8,820       292,118    
Veeco Instruments, Inc. (a)     3,570       155,295    
Verigy Ltd. (a)     1,383       15,462    
Volterra Semiconductor Corp. (a)     990       24,849    
Zoran Corp. (a)     1,135       12,213    
Semiconductors & Semiconductor
Equipment Total
    3,821,131    
Software – 1.6%  
Adobe Systems, Inc. (a)     900       31,833    
Advent Software, Inc. (a)     575       25,731    
ANSYS, Inc. (a)     870       37,532    
ArcSight, Inc. (a)     815       22,942    
Autonomy Corp. PLC (a)     5,384       148,943    
Blackboard, Inc. (a)     980       40,827    
Citrix Systems, Inc. (a)     1,440       68,357    
Compuware Corp. (a)     1,590       13,356    
Concur Technologies, Inc. (a)     999       40,969    
Informatica Corp. (a)     835       22,428    
Jack Henry & Associates, Inc.     500       12,030    
McAfee, Inc. (a)     830       33,308    
Mentor Graphics Corp. (a)     2,041       16,369    
Micros Systems, Inc. (a)     980       32,222    
Microsoft Corp.     38,530       1,127,773    
Monotype Imaging Holdings,
Inc. (a)
    1,398       13,603    
Netscout Systems, Inc. (a)     1,724       25,498    
Nintendo Co. Ltd., ADR     4,700       195,755    
Nintendo Co., Ltd.     500       167,398    
Nuance Communications, Inc. (a)     22,300       371,072    
Oracle Corp.     13,650       350,669    
Parametric Technology Corp. (a)     780       14,079    
Progress Software Corp. (a)     570       17,915    
Red Hat, Inc. (a)     2,560       74,931    
Rovi Corp. (a)     1,046       38,838    
Salesforce.com, Inc. (a)     4,980       370,761    
Solera Holdings, Inc.     880       34,012    
SuccessFactors, Inc. (a)     1,800       34,272    

 

    Shares   Value ($)  
Sybase, Inc. (a)     2,115       98,601    
Taleo Corp., Class A (a)     1,410       36,533    
TIBCO Software, Inc. (a)     9,255       99,861    
TiVo, Inc. (a)     4,305       73,702    
VanceInfo Technologies,
Inc., ADR (a)
    925       20,618    
Software Total     3,712,738    
Information Technology Total     19,698,433    
Materials – 4.2%  
Chemicals – 1.2%  
Albemarle Corp.     1,825       77,800    
BASF SE     4,906       304,279    
Celanese Corp., Series A     24,130       768,541    
CF Industries Holdings, Inc.     830       75,679    
Clariant AG, Registered Shares (a)     14,315       182,060    
Cytec Industries, Inc.     430       20,098    
H.B. Fuller Co.     1,450       33,655    
International Flavors &
Fragrances, Inc.
    465       22,167    
Monsanto Co.     7,455       532,436    
OM Group, Inc. (a)     807       27,341    
Potash Corp. of Saskatchewan, Inc.     3,390       404,597    
PPG Industries, Inc.     1,400       91,560    
Rockwood Holdings, Inc. (a)     655       17,436    
Sociedad Quimica y Minera de
Chile SA, ADR
    1,870       69,919    
Solutia, Inc. (a)     5,847       94,195    
Syngenta AG, Registered Shares     385       106,912    
Chemicals Total     2,828,675    
Construction Materials – 0.1%  
Ciments Francais SA     812       77,857    
Eagle Materials, Inc.     532       14,119    
Martin Marietta Materials, Inc.     570       47,624    
Construction Materials Total     139,600    
Containers & Packaging – 0.4%  
Crown Holdings, Inc. (a)     4,860       131,026    
Greif, Inc., Class A     335       18,398    
Greif, Inc., Class B     741       38,406    
Owens-Illinois, Inc. (a)     7,700       273,658    
Packaging Corp. of America     18,012       443,275    
Containers & Packaging Total     904,763    
Metals & Mining – 2.2%  
Agnico-Eagle Mines Ltd.     650       36,186    
AK Steel Holding Corp.     4,175       95,440    
Allegheny Technologies, Inc.     13,345       720,497    
Anglo American PLC (a)     4,102       178,900    

 

See Accompanying Notes to Financial Statements.


30



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
BHP Billiton Ltd., ADR     1,460       117,267    
BHP Billiton PLC     10,346       354,821    
BlueScope Steel Ltd. (a)     33,310       88,950    
Carpenter Technology Corp.     550       20,130    
Cliffs Natural Resources, Inc.     370       26,252    
Eurasian Natural Resources
Corp. PLC
    8,647       156,412    
First Quantum Minerals Ltd.     1,068       87,877    
Freeport-McMoRan Copper &
Gold, Inc.
    2,292       191,474    
Gammon Gold, Inc. (a)     2,215       15,926    
Gold Fields Ltd., ADR     3,340       42,151    
Goldcorp, Inc.     2,929       109,017    
Harry Winston Diamond Corp. (a)     1,390       13,705    
Haynes International, Inc.     627       22,277    
Horsehead Holding Corp. (a)     2,360       27,942    
Ivanhoe Mines Ltd. (a)     4,177       72,722    
Jaguar Mining, Inc. (a)     4,179       38,447    
Novagold Resources, Inc. (a)     7,525       53,729    
Nucor Corp.     7,400       335,812    
Olympic Steel, Inc.     659       21,516    
Rio Tinto PLC, ADR     1,219       288,574    
RTI International Metals, Inc. (a)     870       26,387    
Salzgitter AG     1,345       124,857    
Silver Wheaton Corp. (a)     4,171       65,401    
Steel Dynamics, Inc.     11,850       207,019    
Teck Resources Ltd. (a)     3,358       146,274    
Terra Nova Royalty Corp. (a)     950       12,493    
Thompson Creek Metals Co.,
Inc. (a)(b)
    7,535       101,840    
Tokyo Steel Manufacturing Co., Ltd.     8,400       105,213    
United States Steel Corp.     8,786       558,087    
Vale SA, ADR     4,175       134,393    
Walter Energy, Inc.     4,243       391,502    
Metals & Mining Total     4,989,490    
Paper & Forest Products – 0.3%  
International Paper Co.     9,598       236,207    
Svenska Cellulosa AB, Class B     7,090       99,958    
Weyerhaeuser Co.     9,500       430,065    
Paper & Forest Products Total     766,230    
Materials Total     9,628,758    
Telecommunication Services – 1.3%  
Diversified Telecommunication Services – 0.7%  
AT&T, Inc.     25,052       647,344    
BCE, Inc.     4,200       123,438    
Bezeq Israeli Telecommunication
Corp., Ltd.
    54,875       155,757    

 

    Shares   Value ($)  
Nippon Telegraph & Telephone
Corp.
    2,600       109,573    
Qwest Communications
International, Inc.
    8,600       44,892    
Tele2 AB, Class B     9,327       155,652    
Telefonica O2 Czech Republic AS     6,348       148,245    
Telefonica SA     2,931       69,437    
Verizon Communications, Inc.     7,485       232,185    
Warwick Valley Telephone Co.     1,048       14,913    
Diversified Telecommunication Services Total     1,701,436    
Wireless Telecommunication Services – 0.6%  
American Tower Corp., Class A (a)     9,224       393,035    
Millicom International Cellular SA     1,482       132,120    
NII Holdings, Inc. (a)     10,205       425,140    
NTELOS Holdings Corp.     1,240       22,060    
SBA Communications Corp.,
Class A (a)
    3,080       111,095    
Shenandoah Telecommunications Co.     626       11,769    
Softbank Corp.     6,500       160,119    
Syniverse Holdings, Inc. (a)     1,292       25,155    
Vodafone Group PLC     31,860       73,488    
Wireless Telecommunication Services Total     1,353,981    
Telecommunication Services Total     3,055,417    
Utilities – 1.8%  
Electric Utilities – 0.6%  
ALLETE, Inc.     730       24,440    
American Electric Power Co., Inc.     25,000       854,500    
El Paso Electric Co. (a)     1,220       25,132    
Enel SpA     16,334       91,335    
Fortum OYJ     5,164       126,313    
Great Plains Energy, Inc.     780       14,485    
Hawaiian Electric Industries, Inc.     540       12,123    
MGE Energy, Inc.     610       21,570    
Northeast Utilities     6,824       188,615    
PPL Corp.     1,125       31,174    
UIL Holdings Corp.     670       18,425    
Electric Utilities Total     1,408,112    
Gas Utilities – 0.1%  
Laclede Group, Inc.     680       22,930    
Nicor, Inc.     710       29,763    
Perusahaan Gas Negara PT     221,500       103,453    
Questar Corp.     790       34,128    
Gas Utilities Total     190,274    

 

See Accompanying Notes to Financial Statements.


31



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Independent Power Producers & Energy Traders – 0.2%  
AES Corp. (a)     4,380       48,180    
Black Hills Corp.     990       30,047    
Drax Group PLC     21,522       122,016    
International Power PLC     34,581       167,348    
Independent Power Producers & Energy
Traders Total
    367,591    
Multi-Utilities – 0.9%  
AGL Energy Ltd.     12,176       167,935    
Avista Corp.     1,360       28,166    
CH Energy Group, Inc.     430       17,561    
NorthWestern Corp.     980       26,274    
PG&E Corp.     16,758       710,874    
Public Service Enterprise
Group, Inc.
    1,900       56,088    
RWE AG     2,664       236,037    
Sempra Energy     8,750       436,625    
Wisconsin Energy Corp.     5,900       291,519    
Xcel Energy, Inc.     4,980       105,576    
Multi-Utilities Total     2,076,655    
Utilities Total     4,042,632    
Total Common Stocks
(cost of $95,886,195)
    117,807,430    
Corporate Fixed-Income Bonds & Notes – 15.3%  
    Par ($)      
Basic Materials – 1.1%  
Chemicals – 0.3%  
EI Du Pont de Nemours & Co.  
5.000% 07/15/13     100,000       108,293    
Huntsman International LLC  
7.875% 11/15/14     555,000       560,550    
Chemicals Total     668,843    
Forest Products & Paper – 0.3%  
Georgia-Pacific Corp.  
8.000% 01/15/24     515,000       545,900    
Forest Products & Paper Total     545,900    
Iron/Steel – 0.4%  
ArcelorMittal USA, Inc.  
6.500% 04/15/14     225,000       243,892    
Nucor Corp.  
5.850% 06/01/18     215,000       233,389    
Steel Dynamics, Inc.  
7.750% 04/15/16
(04/07/10) (e)(f)
    365,000       381,425    
Iron/Steel Total     858,706    

 

    Par ($)   Value ($)  
Metals & Mining – 0.1%  
Vale Overseas Ltd.  
6.250% 01/23/17     275,000       298,152    
Metals & Mining Total     298,152    
Basic Materials Total     2,371,601    
Communications – 3.0%  
Media – 0.9%  
Cengage Learning Acquisitions, Inc.  
10.500% 01/15/15 (g)     580,000       556,800    
Comcast Corp.  
7.050% 03/15/33     275,000       295,742    
EchoStar DBS Corp.  
6.625% 10/01/14     540,000       544,050    
News America, Inc.  
6.550% 03/15/33     275,000       279,033    
Time Warner, Inc.  
6.200% 03/15/40     325,000       320,846    
Viacom, Inc.  
6.125% 10/05/17     110,000       118,921    
Media Total     2,115,392    
Telecommunication Services – 2.1%  
America Movil SAB de CV  
5.625% 11/15/17     250,000       264,096    
AT&T, Inc.  
4.950% 01/15/13     350,000       375,967    
British Telecommunications PLC  
5.150% 01/15/13     225,000       237,907    
Cellco Partnership/Verizon Wireless Capital LLC  
5.550% 02/01/14     365,000       398,887    
Cricket Communications, Inc.  
9.375% 11/01/14     565,000       574,888    
Intelsat Corp.  
9.250% 06/15/16     555,000       581,363    
Lucent Technologies, Inc.  
6.450% 03/15/29     540,000       380,700    
New Cingular Wireless Services, Inc.  
8.750% 03/01/31     175,000       225,962    
Nextel Communications, Inc.  
7.375% 08/01/15     610,000       579,500    
Qwest Communications International, Inc.  
7.500% 02/15/14     560,000       569,800    
Telefonica Emisiones SAU  
0.580% 02/04/13
(05/04/10) (e)(f)
    400,000       391,304    
Vodafone Group PLC  
5.750% 03/15/16     175,000       190,952    
Telecommunication Services Total     4,771,326    
Communications Total     6,886,718    

 

See Accompanying Notes to Financial Statements.


32



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Corporate Fixed-Income Bonds & Notes (continued)  
    Par ($)   Value ($)  
Consumer Cyclical – 0.7%  
Apparel – 0.2%  
Levi Strauss & Co.  
9.750% 01/15/15     515,000       539,463    
Apparel Total     539,463    
Leisure Time – 0.3%  
Royal Caribbean Cruises Ltd.  
7.500% 10/15/27     660,000       582,450    
Leisure Time Total     582,450    
Retail – 0.2%  
CVS Pass-Through Trust  
7.507% 01/10/32 (g)     349,268       388,393    
Retail Total     388,393    
Consumer Cyclical Total     1,510,306    
Consumer Non-Cyclical – 1.5%  
Beverages – 0.3%  
Anheuser-Busch InBev Worldwide, Inc.  
2.500% 03/26/13 (g)     275,000       275,530    
Bottling Group LLC  
6.950% 03/15/14     200,000       231,542    
Miller Brewing Co.  
5.500% 08/15/13 (g)     250,000       267,663    
Beverages Total     774,735    
Food – 0.6%  
Campbell Soup Co.  
4.500% 02/15/19     115,000       117,014    
ConAgra Foods, Inc.  
5.875% 04/15/14     250,000       274,471    
JBS USA LLC/JBS USA Finance, Inc.  
11.625% 05/01/14 (g)     490,000       558,600    
Kraft Foods, Inc.  
5.375% 02/10/20     290,000       294,743    
Food Total     1,244,828    
Healthcare Services – 0.2%  
HCA, Inc.  
PIK,
9.625% 11/15/16
    205,000       219,606    
Roche Holdings, Inc.  
6.000% 03/01/19 (g)     200,000       221,025    
Healthcare Services Total     440,631    
Pharmaceuticals – 0.4%  
Express Scripts, Inc.  
5.250% 06/15/12     200,000       213,251    

 

    Par ($)   Value ($)  
Omnicare, Inc.  
6.875% 12/15/15     445,000       436,656    
Wyeth  
5.500% 02/01/14     180,000       198,568    
Pharmaceuticals Total     848,475    
Consumer Non-Cyclical Total     3,308,669    
Energy – 1.9%  
Oil & Gas – 0.9%  
Canadian Natural Resources Ltd.  
5.700% 05/15/17     250,000       266,765    
Chesapeake Energy Corp.  
6.375% 06/15/15     550,000       540,375    
Chevron Corp.  
4.950% 03/03/19     175,000       184,931    
Nexen, Inc.  
5.875% 03/10/35     260,000       247,215    
PetroHawk Energy Corp.  
7.875% 06/01/15     435,000       443,156    
Talisman Energy, Inc.  
6.250% 02/01/38     255,000       259,480    
Oil & Gas Total     1,941,922    
Oil & Gas Services – 0.2%  
Halliburton Co.  
5.900% 09/15/18     200,000       219,774    
Weatherford International Ltd.  
5.150% 03/15/13     190,000       201,889    
Oil & Gas Services Total     421,663    
Pipelines – 0.8%  
El Paso Corp.  
6.875% 06/15/14     430,000       438,773    
Enterprise Products Operating LLC  
4.600% 08/01/12     190,000       200,419    
MarkWest Energy Partners LP  
8.500% 07/15/16     545,000       553,856    
Plains All American Pipeline LP/PAA Finance Corp.  
6.650% 01/15/37     200,000       207,388    
TransCanada Pipelines Ltd.  
6.350% 05/15/67
(05/15/17) (e)(f)
    320,000       304,479    
Williams Partners LP  
6.300% 04/15/40 (g)     210,000       208,678    
Pipelines Total     1,913,593    
Energy Total     4,277,178    

 

See Accompanying Notes to Financial Statements.


33



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Corporate Fixed-Income Bonds & Notes (continued)  
    Par ($)   Value ($)  
Financials – 5.0%  
Banks – 2.8%  
ANZ National International Ltd.  
6.200% 07/19/13 (g)     350,000       385,716    
Bank of New York Mellon Corp.  
5.125% 08/27/13     350,000       381,957    
Barclays Bank PLC  
6.750% 05/22/19     375,000       414,860    
Capital One Financial Corp.  
5.500% 06/01/15     300,000       315,459    
Citicorp Lease Pass-Through Trust  
8.040% 12/15/19 (g)     750,000       827,271    
Citigroup Funding, Inc.  
2.000% 03/30/12 (h)     800,000       811,417    
Commonwealth Bank of Australia  
3.750% 10/15/14 (g)     200,000       202,744    
Credit Suisse/New York NY  
6.000% 02/15/18     375,000       397,043    
Deutsche Bank AG London  
4.875% 05/20/13     300,000       321,487    
Goldman Sachs Group, Inc.  
5.350% 01/15/16     215,000       226,486    
HSBC Capital Funding LP  
9.547% 12/31/49
(06/30/10) (e)(f)(g)
    450,000       455,625    
Keycorp  
6.500% 05/14/13     290,000       309,694    
Merrill Lynch & Co., Inc.  
6.050% 08/15/12 (i)     350,000       373,802    
Morgan Stanley  
6.750% 04/15/11     150,000       158,347    
U.S. Bank N.A.  
6.300% 02/04/14     350,000       390,326    
Wachovia Corp.  
4.875% 02/15/14     375,000       388,488    
Banks Total     6,360,722    
Commercial Banks – 0.2%  
Rabobank Nederland NV  
4.750% 01/15/20 (g)     450,000       449,516    
Commercial Banks Total     449,516    
Diversified Financial Services – 0.9%  
Ameriprise Financial, Inc.  
7.300% 06/28/19     230,000       266,488    
Bear Stearns Cos. LLC  
7.250% 02/01/18     425,000       491,121    
General Electric Capital Corp.  
2.250% 03/12/12 (h)     800,000       817,014    
5.000% 01/08/16     430,000       450,970    

 

    Par ($)   Value ($)  
Lehman Brothers Holdings, Inc.  
5.750% 07/18/11 (c)(j)     350,000       82,687    
Diversified Financial Services Total     2,108,280    
Insurance – 0.9%  
Chubb Corp.  
5.750% 05/15/18     150,000       162,178    
CNA Financial Corp.  
5.850% 12/15/14     85,000       86,492    
7.350% 11/15/19     125,000       130,641    
Lincoln National Corp.  
8.750% 07/01/19     225,000       275,124    
MetLife, Inc.  
6.817% 08/15/18     285,000       316,150    
Principal Life Income Funding Trusts  
5.300% 04/24/13     225,000       241,528    
Prudential Financial, Inc.  
6.100% 06/15/17     275,000       290,832    
Transatlantic Holdings, Inc.  
8.000% 11/30/39     300,000       306,602    
UnitedHealth Group, Inc.  
5.250% 03/15/11     200,000       207,681    
Insurance Total     2,017,228    
Real Estate Investment Trusts (REITs) – 0.2%  
Duke Realty LP  
8.250% 08/15/19     275,000       306,705    
Simon Property Group LP  
6.750% 02/01/40     170,000       169,109    
Real Estate Investment Trusts (REITs) Total     475,814    
Financials Total     11,411,560    
Industrials – 0.8%  
Aerospace & Defense – 0.4%  
BE Aerospace, Inc.  
8.500% 07/01/18     520,000       555,100    
United Technologies Corp.  
5.375% 12/15/17     250,000       269,642    
Aerospace & Defense Total     824,742    
Miscellaneous Manufacturing – 0.2%  
Ingersoll-Rand Global Holding Co., Ltd.  
9.500% 04/15/14     230,000       278,883    
Tyco International Ltd./Tyco International
Finance SA
 
7.000% 12/15/19     255,000       292,651    
Miscellaneous Manufacturing Total     571,534    

 

See Accompanying Notes to Financial Statements.


34



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Corporate Fixed-Income Bonds & Notes (continued)  
    Par ($)   Value ($)  
Transportation – 0.2%  
Burlington Northern Santa Fe Corp.  
6.200% 08/15/36     225,000       231,506    
Norfolk Southern Corp.  
5.750% 04/01/18     175,000       187,839    
Transportation Total     419,345    
Industrials Total     1,815,621    
Technology – 0.2%  
Networking Products – 0.1%  
Cisco Systems, Inc.  
4.950% 02/15/19     245,000       254,784    
Networking Products Total     254,784    
Software – 0.1%  
Oracle Corp.  
6.500% 04/15/38     190,000       209,718    
Software Total     209,718    
Technology Total     464,502    
Utilities – 1.1%  
Electric – 0.9%  
Commonwealth Edison Co.  
5.950% 08/15/16     200,000       219,224    
Consolidated Edison Co. of New York  
5.850% 04/01/18     230,000       251,717    
Dominion Resources, Inc.  
5.200% 08/15/19     240,000       245,645    
Energy Future Holdings Corp.  
10.000% 01/15/20 (g)     550,000       573,375    
Indiana Michigan Power Co.  
5.650% 12/01/15     225,000       239,969    
Pacific Gas & Electric Co.  
5.800% 03/01/37     225,000       223,259    
Progress Energy, Inc.  
7.750% 03/01/31     200,000       235,845    
Electric Total     1,989,034    
Gas – 0.2%  
Atmos Energy Corp.  
6.350% 06/15/17     225,000       241,973    
Sempra Energy  
6.500% 06/01/16     230,000       256,953    
Gas Total     498,926    
Utilities Total     2,487,960    
Total Corporate Fixed-Income Bonds & Notes
(cost of $32,664,595)
    34,534,115    

 

Government & Agency Obligations – 11.2%  
    Par ($)   Value ($)  
Foreign Government Obligations – 0.6%  
Province of Ontario  
5.450% 04/27/16     500,000       551,080    
Province of Quebec  
4.625% 05/14/18     435,000       453,953    
United Mexican States  
7.500% 04/08/33     250,000       298,125    
Foreign Government Obligations Total     1,303,158    
U.S. Government Agencies – 0.7%  
Federal Home Loan Bank  
5.500% 08/13/14     165,000       185,680    
Federal Home Loan Mortgage Corp.  
3.125% 10/25/10 (k)     85,000       86,248    
5.500% 08/23/17     1,125,000       1,256,814    
U.S. Government Agencies Total     1,528,742    
U.S. Government Obligations – 9.9%  
U.S. Treasury Bonds  
5.375% 02/15/31     5,065,000       5,603,156    
U.S. Treasury Inflation Indexed Bonds  
1.625% 01/15/15     652,447       681,603    
2.000% 01/15/14     515,935       547,819    
2.375% 01/15/25     775,865       812,173    
3.875% 04/15/29     764,417       970,212    
U.S. Treasury Inflation Indexed Notes  
1.875% 07/15/13     430,580       455,573    
2.000% 01/15/16     447,568       474,842    
2.125% 01/15/19     504,575       531,499    
2.375% 04/15/11     218,316       225,377    
2.625% 07/15/17     365,887       402,132    
3.000% 07/15/12     1,849,706       1,992,481    
U.S. Treasury Notes  
0.875% 04/30/11     2,135,000       2,143,758    
1.375% 10/15/12     3,250,000       3,254,063    
2.125% 11/30/14     850,000       838,844    
2.375% 10/31/14     3,600,000       3,595,219    
U.S. Government Obligations Total     22,528,751    
Total Government & Agency Obligations
(cost of $25,113,170)
    25,360,651    
Mortgage-Backed Securities – 7.8%  
Federal Home Loan Mortgage Corp.  
4.500% 01/01/40     2,441,119       2,449,436    
5.000% 06/01/36     504,480       521,626    
5.000% 02/01/38     710,314       734,416    
5.500% 04/01/21     1,286,762       1,381,625    

 

See Accompanying Notes to Financial Statements.


35



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Mortgage-Backed Securities (continued)  
    Par ($)   Value ($)  
6.000% 12/01/37     1,287,031       1,383,176    
6.500% 02/01/11     3,545       3,573    
6.500% 04/01/11     10,003       10,391    
6.500% 05/01/11     6,241       6,516    
6.500% 10/01/11     7,035       7,343    
6.500% 07/01/16     8,208       8,876    
6.500% 04/01/26     21,469       23,626    
6.500% 06/01/26     27,419       30,172    
6.500% 02/01/27     23,281       25,658    
6.500% 06/01/31     30,362       33,493    
6.500% 07/01/31     11,359       12,538    
6.500% 01/01/38     471,302       513,137    
7.000% 07/01/28     34,403       38,711    
7.000% 04/01/29     21,147       23,795    
7.000% 01/01/30     4,443       4,998    
7.000% 06/01/31     6,383       7,156    
7.000% 08/01/31     73,579       82,487    
7.500% 08/01/15     339       369    
7.500% 01/01/30     43,603       49,819    
8.000% 09/01/15     18,511       20,284    
Federal National Mortgage Association  
4.000% 01/01/25     1,577,099       1,602,524    
5.000% 01/01/38     853,361       881,517    
5.500% 11/01/21     193,334       207,497    
5.500% 03/01/37     1,339,999       1,414,557    
6.000% 09/01/36     503,676       537,603    
6.000% 03/01/39     442,700       470,998    
6.500% 03/01/11     1,730       1,805    
7.000% 03/01/15     32,109       34,640    
7.000% 07/01/16     7,307       8,016    
7.000% 02/01/31     17,777       19,962    
7.000% 07/01/31     65,154       73,196    
7.000% 07/01/32     5,253       5,903    
7.500% 06/01/15     10,129       11,120    
7.500% 08/01/15     29,674       32,577    
7.500% 09/01/15     9,945       10,918    
7.500% 02/01/31     19,867       22,493    
7.500% 08/01/31     17,988       20,375    
8.000% 12/01/29     20,462       23,740    
8.000% 04/01/30     28,018       32,473    
8.000% 05/01/30     2,655       3,077    
8.000% 07/01/31     28,470       33,005    
TBA,  
5.500% 04/13/40 (d)     835,000       880,012    
Government National Mortgage Association  
5.000% 04/15/39     1,858,744       1,936,316    
5.500% 02/15/37     131,371       139,289    
5.500% 09/15/39     1,303,514       1,381,934    
6.000% 04/15/13     2,239       2,422    
6.500% 05/15/13     6,905       7,467    
6.500% 06/15/13     2,456       2,656    

 

    Par ($)   Value ($)  
6.500% 08/15/13     4,590       4,964    
6.500% 11/15/13     13,928       15,062    
6.500% 07/15/14     15,256       16,497    
6.500% 01/15/29     4,947       5,445    
6.500% 03/15/29     60,760       66,882    
6.500% 04/15/29     91,047       100,219    
6.500% 05/15/29     81,884       90,133    
6.500% 07/15/31     34,395       37,817    
7.000% 11/15/13     92,219       98,778    
7.000% 05/15/29     8,769       9,846    
7.000% 09/15/29     25,868       29,045    
7.000% 06/15/31     22,055       24,787    
7.500% 06/15/23     732       827    
7.500% 01/15/26     17,719       19,997    
7.500% 09/15/29     28,383       32,094    
8.000% 07/15/25     8,841       9,563    
8.500% 12/15/30     2,571       2,996    
9.000% 12/15/17     17,013       18,954    
Total Mortgage-Backed Securities
(cost of $17,295,995)
    17,755,219    
Commercial Mortgage-Backed Securities – 4.6%  
Bear Stearns Commercial Mortgage Securities  
4.804% 09/11/42     800,000       831,774    
5.742% 09/11/42
(04/01/10) (e)(f)
    1,000,000       1,029,964    
5.746% 09/11/42     707,000       752,666    
Commercial Mortgage Pass Through Certificates  
5.234% 07/10/37
(04/01/10) (e)(f)
    980,000       1,020,899    
GE Capital Commercial Mortgage Corp.  
4.819% 01/10/38     725,000       758,144    
Greenwich Capital Commercial Funding Corp.  
5.190% 04/10/37
(04/01/10) (e)(f)
    350,000       367,051    
JPMorgan Chase Commercial Mortgage Securities Corp.  
4.134% 10/15/37     301,781       310,990    
4.824% 10/15/42
(04/01/10) (e)(f)
    385,000       400,236    
5.201% 08/12/37
(04/01/10) (e)(f)
    546,368       570,179    
5.440% 06/12/47     1,020,000       996,943    
5.447% 06/12/47     509,000       521,169    
Morgan Stanley Capital I  
5.325% 12/15/43     800,000       847,258    
5.809% 12/12/49     1,500,000       1,475,255    
Nationslink Funding Corp.  
7.104% 01/22/26     419,270       456,503    
Total Commercial Mortgage-Backed Securities
(cost of $9,861,568)
    10,339,031    

 

See Accompanying Notes to Financial Statements.


36



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

Collateralized Mortgage Obligations – 1.8%  
    Par ($)   Value ($)  
Agency – 1.6%  
Federal Home Loan Mortgage Corp.  
4.500% 02/15/18     334,160       349,871    
5.000% 05/15/33     720,000       761,583    
6.000% 02/15/28     440,917       447,788    
Federal National Mortgage Association  
4.000% 12/25/20     942,180       976,879    
4.500% 11/25/23     775,061       812,350    
5.000% 12/25/15     232,786       234,872    
Agency Total     3,583,343    
Non-Agency – 0.2%  
American Mortgage Trust  
8.445% 09/27/22 (c)(f)     6,034       3,658    
Countrywide Alternative Loan Trust  
5.500% 10/25/35     522,154       432,742    
Non-Agency Total     436,400    
Total Collateralized Mortgage Obligations
(cost of $4,095,775)
    4,019,743    
Asset-Backed Securities – 0.9%  
Citicorp Residential Mortgage Securities, Inc.  
6.080% 06/25/37
(04/01/10) (e)(f)
    490,000       455,286    
Franklin Auto Trust  
5.360% 05/20/16     989,000       1,024,238    
Green Tree Financial Corp.  
6.870% 01/15/29     105,944       111,303    
Harley-Davidson Motorcycle Trust  
5.350% 03/15/13     497,934       510,692    
Total Asset-Backed Securities
(cost of $2,074,864)
    2,101,519    
Convertible Preferred Stocks – 0.3%  
    Shares      
Financials – 0.1%  
Commercial Banks – 0.0%  
Fifth Third Bancorp., 8.500%     800       108,944    
Commercial Banks Total     108,944    
Diversified Financial Services – 0.1%  
Citigroup, Inc., 7.500%     1,798       219,140    
Diversified Financial Services Total     219,140    
Financials Total     328,084    

 

    Shares   Value ($)  
Materials – 0.2%  
Metals & Mining – 0.2%  
Freeport-McMoRan Copper &
Gold, Inc., 6.750%
    3,100       359,507    
Metals & Mining Total     359,507    
Materials Total     359,507    
Total Convertible Preferred Stocks
(cost of $419,721)
    687,591    
Investment Companies – 2.1%  
iShares MSCI EAFE Index Fund     2,988       167,328    
iShares MSCI Japan Index Fund     443,000       4,624,920    
iShares Russell 2000 Value Index
Fund
    210       13,406    
Total Investment Companies
(cost of $4,542,427)
    4,805,654    
Short-Term Obligation – 3.9%  
    Par ($)      
Repurchase agreement with
Fixed Income Clearing Corp.,
dated 03/31/10, due on 04/01/10,
at 0.000%, collateralized by
U.S. Treasury obligations with
various maturities to 01/31/14,
market value $8,973,788
(repurchase proceeds
$8,775,000)
    8,775,000       8,775,000    
Total Short-Term Obligation
(cost of $8,775,000)
    8,775,000    
Total Investments – 99.9%
(cost of $200,729,310) (l)
    226,185,953    
Other Assets & Liabilities, Net – 0.1%     323,857    
Net Assets – 100.0%     226,509,810    

 

Notes to Investment Portfolio:

(a)  Non-income producing security.

(b)  All or a portion of this security is held as collateral for open written options contracts. At March 31, 2010, market value of these securities pledged amounted to $287,061.

(c)  Represents fair value as determined in good faith under procedures approved by the Board of Trustees. The value of these securities amounted to $127,776, which represents less than 0.1% of net assets.

(d)  Security purchased on a delayed delivery basis.

(e)  Parenthetical date represents the effective maturity date for the security.

(f)  The interest rate shown on floating rate or variable rate securities reflects the rate at March 31, 2010.

See Accompanying Notes to Financial Statements.


37



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

(g)  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2010, these securities, which are not illiquid, amounted to $5,370,936, which represents 2.4% of net assets.

(h)  Security is guaranteed by the Federal Deposit Insurance Corporation.

(i)  Investments in affiliates during the six months ended March 31, 2010:

Affiliate   Value,
beginning
of period
  Purchases   Sales
Proceeds
  Interest
Income
  Value,
end of
period
 
Merrill Lynch & Co.,
Inc. 6.050%
08/15/12
  $ 373,270     $     $     $ 10,588     $ 373,802    

 

(j)  The issuer has filed for bankruptcy protection under Chapter 11, and is in default of certain debt covenants. Income is not being accrued. At March 31, 2010, the value of these securities amounted to $82,687, which represents less than 0.1% of net assets.

(k)  All or a portion of this security is held as collateral for open futures contracts. At March 31, 2010, market value of the security pledged amounted to $71,028.

(l)  Cost for federal income tax purposes is $200,752,174.

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund's assets:

Description   Quoted Prices
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Total  
Common Stocks  
Consumer
Discretionary
  $ 11,832,228     $ 1,692,430     $     $ 13,524,658    
Consumer Staples     7,228,202       1,245,452       41,431       8,515,085    
Energy     11,907,712       1,218,048             13,125,760    
Financials     15,529,734       4,284,439             19,814,173    
Health Care     11,514,316       1,075,199             12,589,515    
Industrials     11,853,939       1,959,060             13,812,999    
Information
Technology
    18,819,265       879,168             19,698,433    
Materials     7,848,539       1,780,219             9,628,758    
Telecommunication
Services
    2,183,146       872,271             3,055,417    
Utilities     3,028,195       1,014,437             4,042,632    
Total Common
Stocks
    101,745,276       16,020,723       41,431       117,807,430    
Total Corporate
Fixed-Income
Bonds & Notes
          34,534,115             34,534,115    
Government &
Agency Obligations
 
Foreign Government
Obligations
          1,303,158             1,303,158    
U.S. Government
Agencies
          1,528,742             1,528,742    
U.S. Government
Obligations
    22,528,751                   22,528,751    
Total Government &
Agency Obligations
    22,528,751       2,831,900             25,360,651    
Total Mortgage-Backed
Securities
    880,012       16,875,207             17,755,219    
Total Commercial
Mortgage-Backed
Securities
          10,339,031             10,339,031    

 

Description   Quoted Prices
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Total  
Collateralized
Mortgage
Obligations
 
Agency   $     $ 3,583,343     $     $ 3,583,343    
Non-Agency           432,742       3,658       436,400    
Total Collateralized
Mortgage Obligations
          4,016,085       3,658       4,019,743    
Asset-Backed
Securities
          2,101,519             2,101,519    
Total Convertible
Preferred Stock
    687,591                   687,591    
Total Investment
Companies
    4,805,654                   4,805,654    
Total Short-Term
Obligation
          8,775,000             8,775,000    
Total Investments     130,647,284       95,493,580       45,089       226,185,953    
Unrealized
Appreciation on
Futures Contracts
    113,057                   113,057    
Unrealized Appreciation
(Depreciation) on
Forward Foreign
Currency Exchange
Contracts
          415             415    
Value of written
option contracts
    (541 )                 (541 )  
Total   $ 130,759,800     $ 95,493,995     $ 45,089     $ 226,298,884    

 

The Fund's assets assigned to the Level 2 input category include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation.

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to the Financial Statements.

See Accompanying Notes to Financial Statements.


38



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

The following table reconciles asset balances for the six month period ending March 31, 2010, in which significant unobservable inputs (Level 3) were used in determining value:

Investments
in Securities
  Balance as of
September 30,
2009
  Accrued
Discounts/
(Premiums)
  Realized
Gain/(Loss)
  Change in
Unrealized
Appreciation
(Depreciation)
  Purchases   (Sales)   Transfers
into
Level 3
  Transfers
(out of)
Level 3
  Balance
as of
March 31,
2010
 
Common Stock
Consumer Staples
  $     $     $     $ (73,527 )   $     $     $ 114,958     $     $ 41,431    
Collaterlaized Mortgage Obligations
Non Agency
                56       221             (705 )     4,086             3,658    
    $     $     $ 56     $ (73,306 )   $     $ (705 )   $ 119,044     $     $ 45,089    

 

The information in the above reconciliation represents fiscal year to date activity for any securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period.

The change in unrealized appreciation/(depreciation) attributable to this security owned at March 31, 2010 which are valued using significant unobservable imputs Level 3 amounted to $(73,306).

Financial Assets were transferred from Level 2 to Level 3 due to a security halt and/or due to pricing services discontinuing coverage of a security. As a result, management determined to fair value the securities under consistently applied procedures established by and under the general supervision of the Board of Trustees.

For more information on valuation inputs, and their aggregation into the levels used in the tables above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

At March 31, 2010, the Fund held the following open long futures contracts:

Risk
Exposure
  Number of
Contracts
  Value   Aggregate
Face Value
  Expiration
Date
  Unrealized
Appreciation
 
Equity Risk  
S&P 500 Index
Futures
    13     $ 3,786,900     $ 3,706,037     Jun-10   $ 80,863    

 

At March 31, 2010, the Fund held the following open short futures contracts:

Risk
Exposure
  Number of
Contracts
  Value   Aggregate
Face Value
  Expiration
Date
  Unrealized
Appreciation
 
Interest Rate
Risk/Foreign
Interest
Rate Risk
 
5-Year
U.S. Treasury
Notes
    38     $ 4,364,062     $ 4,393,325     June-2010   $ 29,263    
JPY Currency
Futures
    35       4,682,563       4,685,494     June-2010     2,931    
    $ 32,194    

 

At March 31, 2010, the Fund held the following written call option contracts:

Name of Issuer   Strike
Price
  Number of
Contracts
  Expiration
Date
  Premium   Value  
Governor & Co.
of the Bank of
Ireland
  $ 10.0       10     04/17/10   $ 150     $ (151 )  
Polo Ralph
Lauren Corp.
    90.0       14     04/17/10     395       (350 )  
Thompson Creek
Metals Co., Inc.
    15.0       4     04/17/10     36       (40 )  
Total written call options: (proceeds $581)   $ (541 )  

 

For the six months ended March 31, 2010 transactions in written call option contracts were as follows:

Equity Risk   Number of
contracts
  Premium
received
 
Options outstanding at September 30, 2009              
Options written     340     $ 11,489    
Options terminated in closing
purchase transactions
    (170 )     (4,765 )  
Options exercised     (70 )     (2,730 )  
Options expired     (72 )     (3,413 )  
Options outstanding at March 31, 2010     28     $ 581    

 

Forward foreign currency exchange contracts outstanding on March 31, 2010 are:

Foreign Exchange Rate Risk

Forward
Exchange
Contracts
to Buy
  Value   Aggregate
Face Value
  Foreign
Settlement
Date
  Currency
Unrealized
Appreciation
(Depreciation)
 
AUD $       797,055     $ 779,031     06/01/10   $ 18,024    
CHF       68,318       66,926     06/01/10     1,392    
CHF       73,062       72,751     06/01/10     311    
EUR       1,198,077       1,205,451     06/01/10     (7,374 )  
EUR       276,895       273,917     06/01/10     2,978    
GBP       433,860       430,087     06/01/10     3,773    
NOK       154,395       154,791     06/01/10     (396 )  
SEK       113,717       114,684     06/01/10     (967 )  
SGD       52,168       52,124     06/01/10     44    
    $ 17,785    
Forward
Foreign
Currency
Exchange
Contracts
to Sell
  Value   Aggregate
Face Value
  Settlement
Date
  Unrealized
Appreciation
(Depreciation)
 
CAD $       610,435     $ 599,909     06/01/10   $ (10,526 )  
CZK       186,908       184,658     06/01/10     (2,250 )  
DKK       35,181       35,383     06/01/10     202    
GBP       56,129       55,081     06/01/10     (1,048 )  
ILS       200,932       196,001     06/01/10     (4,931 )  
JPY       107,005       112,383     06/01/10     5,378    
JPY       125,591       126,925     06/01/10     1,334    
KRW       214,791       212,005     06/01/10     (2,786 )  
TWD       575,226       572,483     06/01/10     (2,743 )  
    $ (17,370 )  

 

See Accompanying Notes to Financial Statements.


39



Columbia Asset Allocation Fund

March 31, 2010 (Unaudited)

At March 31, 2010, the asset allocation of the Fund is as follows:

Asset Allocation   % of
Net Assets
 
Common Stocks     52.0    
Corporate Fixed-Income Bonds & Notes     15.3    
Government & Agency Obligations     11.2    
Mortgaged-Backed Securities     7.8    
Commercial Mortgage-Backed Securities     4.6    
Collateralized Mortgage Obligations     1.8    
Asset-Backed Securities     0.9    
Convertible Preferred Stocks     0.3    
      93.9    
Investment Companies     2.1    
Short-Term Obligation     3.9    
Other Assets & Liabilities, Net     0.1    
      100.0    

 

Acronym   Name  
ADR   American Depositary Receipt  
AUD   Australian Dollar  
CAD   Canadian Dollar  
CHF   Swiss Franc  
CZK   Czech Koruna  
DKK   Danish Krone  
EUR   Euro  
GBP   Pound Sterling  
ILS   Israeli Shekel  
JPY   Japanese Yen  
KRW   South Korean Won  
NOK   Norwegian Krone  
PIK   Payment-in-Kind  
SEK   Swedish Krona  
SGD   Singapore Dollar  
TBA   To Be Announced  
TWD   New Taiwan Dollar  

 

See Accompanying Notes to Financial Statements.


40




Investment PortfolioColumbia Large Cap Growth Fund

March 31, 2010 (Unaudited)

Common Stocks – 98.9%  
    Shares   Value ($)  
Consumer Discretionary – 11.9%  
Auto Components – 0.4%  
Autoliv, Inc. (a)     113,100       5,828,043    
Auto Components Total     5,828,043    
Hotels, Restaurants & Leisure – 2.8%  
Las Vegas Sands Corp. (a)     298,600       6,315,390    
McDonald's Corp.     153,300       10,228,176    
Starbucks Corp. (a)     581,800       14,120,286    
Starwood Hotels & Resorts
Worldwide, Inc.
    142,600       6,650,864    
Hotels, Restaurants & Leisure Total     37,314,716    
Household Durables – 0.1%  
Harman International
Industries, Inc. (a)
    13,913       650,850    
Household Durables Total     650,850    
Internet & Catalog Retail – 2.1%  
Amazon.com, Inc. (a)     167,300       22,707,629    
Priceline.com, Inc. (a)     19,100       4,870,500    
Internet & Catalog Retail Total     27,578,129    
Media – 1.0%  
Viacom, Inc., Class B (a)     384,800       13,229,424    
Media Total     13,229,424    
Multiline Retail – 1.7%  
Target Corp.     440,800       23,186,080    
Multiline Retail Total     23,186,080    
Specialty Retail – 3.4%  
Best Buy Co., Inc.     185,700       7,899,678    
Dick's Sporting Goods, Inc. (a)     192,000       5,013,120    
GameStop Corp., Class A (a)     235,600       5,161,996    
Lowe's Companies, Inc.     624,900       15,147,576    
TJX Companies, Inc.     286,100       12,164,972    
Specialty Retail Total     45,387,342    
Textiles, Apparel & Luxury Goods – 0.4%  
Lululemon Athletica, Inc. (a)     133,744       5,550,376    
Textiles, Apparel & Luxury Goods Total     5,550,376    
Consumer Discretionary Total     158,724,960    
Consumer Staples – 10.9%  
Beverages – 2.0%  
PepsiCo, Inc.     388,500       25,703,160    
Beverages Total     25,703,160    

 

    Shares   Value ($)  
Food & Staples Retailing – 2.3%  
Costco Wholesale Corp.     272,300       16,259,033    
Wal-Mart Stores, Inc.     261,800       14,556,080    
Food & Staples Retailing Total     30,815,113    
Food Products – 0.5%  
Mead Johnson Nutrition Co.,
Class A
    118,000       6,139,540    
Food Products Total     6,139,540    
Household Products – 2.6%  
Procter & Gamble Co.     551,200       34,874,424    
Household Products Total     34,874,424    
Personal Products – 1.3%  
Avon Products, Inc.     305,600       10,350,672    
Estee Lauder Companies, Inc.,
Class A
    109,600       7,109,752    
Personal Products Total     17,460,424    
Tobacco – 2.2%  
Philip Morris International, Inc.     568,400       29,647,744    
Tobacco Total     29,647,744    
Consumer Staples Total     144,640,405    
Energy – 4.1%  
Energy Equipment & Services – 1.8%  
Baker Hughes, Inc.     180,500       8,454,620    
Nabors Industries Ltd. (a)     439,400       8,625,422    
Transocean Ltd. (a)     76,662       6,622,064    
Energy Equipment & Services Total     23,702,106    
Oil, Gas & Consumable Fuels – 2.3%  
Apache Corp.     85,400       8,668,100    
Cabot Oil & Gas Corp.     159,900       5,884,320    
Continental Resources, Inc. (a)     163,300       6,948,415    
EOG Resources, Inc.     102,100       9,489,174    
Oil, Gas & Consumable Fuels Total     30,990,009    
Energy Total     54,692,115    
Financials – 5.4%  
Capital Markets – 3.4%  
Franklin Resources, Inc.     155,200       17,211,680    
Goldman Sachs Group, Inc.     76,900       13,121,447    
Morgan Stanley     272,900       7,993,241    
T. Rowe Price Group, Inc.     134,200       7,371,606    
Capital Markets Total     45,697,974    

 

See Accompanying Notes to Financial Statements.


41



Columbia Large Cap Growth Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Commercial Banks – 0.3%  
Fifth Third Bancorp.     306,900       4,170,771    
Commercial Banks Total     4,170,771    
Insurance – 1.7%  
Prudential Financial, Inc.     227,500       13,763,750    
XL Capital Ltd., Class A     450,300       8,510,670    
Insurance Total     22,274,420    
Financials Total     72,143,165    
Health Care – 16.3%  
Biotechnology – 2.8%  
Celgene Corp. (a)     275,800       17,088,568    
Dendreon Corp. (a)     153,000       5,579,910    
Gilead Sciences, Inc. (a)     147,200       6,694,656    
Vertex Pharmaceuticals,
Inc. (a)
    197,600       8,075,912    
Biotechnology Total     37,439,046    
Health Care Equipment & Supplies – 3.8%  
C.R. Bard, Inc.     129,500       11,217,290    
CareFusion Corp. (a)     391,900       10,357,917    
Edwards Lifesciences Corp. (a)     76,500       7,564,320    
Hospira, Inc. (a)     280,200       15,873,330    
St. Jude Medical, Inc. (a)     139,000       5,705,950    
Health Care Equipment & Supplies Total     50,718,807    
Health Care Providers & Services – 4.2%  
Cardinal Health, Inc.     397,900       14,336,337    
Express Scripts, Inc. (a)     100,700       10,247,232    
Medco Health Solutions,
Inc. (a)
    228,500       14,751,960    
UnitedHealth Group, Inc. (a)     311,700       10,183,239    
Universal Health Services, Inc.,
Class B
    175,600       6,161,804    
Health Care Providers & Services Total     55,680,572    
Life Sciences Tools & Services – 1.2%  
QIAGEN N.V. (a)     288,800       6,639,512    
Thermo Fisher Scientific,
Inc. (a)
    176,569       9,082,709    
Life Sciences Tools & Services Total     15,722,221    
Pharmaceuticals – 4.3%  
Abbott Laboratories     590,900       31,128,612    
Allergan, Inc.     228,800       14,945,216    
Mylan, Inc. (a)     494,400       11,227,824    
Pharmaceuticals Total     57,301,652    
Health Care Total     216,862,298    

 

    Shares   Value ($)  
Industrials – 9.8%  
Aerospace & Defense – 1.3%  
United Technologies Corp.     234,200       17,239,462    
Aerospace & Defense Total     17,239,462    
Air Freight & Logistics – 1.0%  
United Parcel Service, Inc.,
Class B
    209,200       13,474,572    
Air Freight & Logistics Total     13,474,572    
Building Products – 0.3%  
Masco Corp.     258,400       4,010,368    
Building Products Total     4,010,368    
Industrial Conglomerates – 1.6%  
General Electric Co.     591,600       10,767,120    
Tyco International Ltd.     272,100       10,407,825    
Industrial Conglomerates Total     21,174,945    
Machinery – 4.7%  
Bucyrus International, Inc.     104,300       6,882,757    
Cummins, Inc.     90,100       5,581,695    
Flowserve Corp.     92,400       10,188,948    
Illinois Tool Works, Inc.     346,700       16,419,712    
Ingersoll-Rand PLC     320,600       11,179,322    
Parker Hannifin Corp.     185,000       11,976,900    
Machinery Total     62,229,334    
Road & Rail – 0.9%  
Canadian National Railway Co.     111,100       6,731,549    
Con-way, Inc.     157,900       5,545,448    
Road & Rail Total     12,276,997    
Industrials Total     130,405,678    
Information Technology – 33.4%  
Communications Equipment – 5.1%  
Cisco Systems, Inc. (a)     1,540,123       40,089,402    
CommScope, Inc. (a)     246,600       6,909,732    
QUALCOMM, Inc.     499,400       20,969,806    
Communications Equipment Total     67,968,940    
Computers & Peripherals – 9.8%  
Apple, Inc. (a)     250,317       58,806,973    
EMC Corp. (a)     919,100       16,580,564    
Hewlett-Packard Co.     628,449       33,402,064    
International Business
Machines Corp.
    113,800       14,594,850    
Teradata Corp. (a)     222,700       6,433,803    
Computers & Peripherals Total     129,818,254    

 

See Accompanying Notes to Financial Statements.


42



Columbia Large Cap Growth Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Internet Software & Services – 5.5%  
Akamai Technologies, Inc. (a)     353,900       11,115,999    
eBay, Inc. (a)     395,700       10,664,115    
Equinix, Inc. (a)     100,800       9,811,872    
Google, Inc., Class A (a)     72,966       41,372,452    
Internet Software & Services Total     72,964,438    
IT Services – 1.6%  
Cognizant Technology
Solutions Corp., Class A (a)
    259,800       13,244,604    
Visa, Inc., Class A     90,000       8,192,700    
IT Services Total     21,437,304    
Semiconductors & Semiconductor Equipment – 5.6%  
Intel Corp.     604,744       13,461,601    
Marvell Technology Group
Ltd. (a)
    643,400       13,112,492    
Micron Technology, Inc. (a)     825,500       8,576,945    
Netlogic Microsystems, Inc. (a)     159,100       4,682,313    
Novellus Systems, Inc. (a)     273,400       6,835,000    
Texas Instruments, Inc.     750,000       18,352,500    
Varian Semiconductor
Equipment Associates, Inc. (a)
    293,100       9,707,472    
Semiconductors & Semiconductor
Equipment Total
    74,728,323    
Software – 5.8%  
Microsoft Corp.     1,433,998       41,973,121    
Nintendo Co. Ltd., ADR     174,500       7,267,925    
Nuance Communications,
Inc. (a)
    193,400       3,218,176    
Oracle Corp.     507,736       13,043,738    
Salesforce.com, Inc. (a)     161,700       12,038,565    
Software Total     77,541,525    
Information Technology Total     444,458,784    
Materials – 4.7%  
Chemicals – 0.9%  
Celanese Corp., Series A     365,400       11,637,990    
Chemicals Total     11,637,990    
Containers & Packaging – 1.7%  
Owens-Illinois, Inc. (a)     287,900       10,231,966    
Packaging Corp. of America     492,800       12,127,808    
Containers & Packaging Total     22,359,774    
Metals & Mining – 2.1%  
Allegheny Technologies, Inc.     124,900       6,743,351    
Rio Tinto PLC, ADR     30,100       7,125,573    

 

    Shares   Value ($)  
Steel Dynamics, Inc.     445,500       7,782,885    
Walter Energy, Inc.     76,500       7,058,655    
Metals & Mining Total     28,710,464    
Materials Total     62,708,228    
Telecommunication Services – 2.4%  
Wireless Telecommunication Services – 2.4%  
American Tower Corp.,
Class A (a)
    285,300       12,156,633    
Millicom International
Cellular SA
    71,151       6,343,112    
NII Holdings, Inc. (a)     321,206       13,381,442    
Wireless Telecommunication
Services Total
    31,881,187    
Telecommunication Services Total     31,881,187    
Total Common Stocks
(cost of $1,043,351,429)
    1,316,516,820    
Short-Term Obligation – 1.2%  
    Par ($)      
Repurchase agreement with
Fixed Income Clearing Corp.,
dated 03/31/10, due 04/01/10,
at 0.000%, collateralized by a
U.S. Treasury obligation
maturing 03/31/17, market
value $16,472,225 (repurchase
proceeds $16,145,000)
    16,145,000       16,145,000    
Total Short-Term Obligation
(cost of $16,145,000)
    16,145,000    
Total Investments – 100.1%
(cost of $1,059,496,429) (b)
    1,332,661,820    
Other Assets & Liabilities, Net – (0.1)%     (1,721,495 )  
Net Assets – 100.0%     1,330,940,325    

 

Notes to Investment Portfolio:

(a)  Non-income producing security.

(b)  Cost for federal income tax purposes is $1,059,496,429.

See Accompanying Notes to Financial Statements.


43



Columbia Large Cap Growth Fund

March 31, 2010 (Unaudited)

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund's assets:

Description   Quoted Prices
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Total  
Total Common Stocks   $ 1,316,516,820     $     $     $ 1,316,516,820    
Total Short-Term
Obligation
          16,145,000             16,145,000    
Total Investments   $ 1,316,516,820     $ 16,145,000     $     $ 1,332,661,820    

 

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

At March 31, 2010, the Fund held investments in the following sectors:

Sector   % of
Net Assets
 
Information Technology     33.4    
Health Care     16.3    
Consumer Discretionary     11.9    
Consumer Staples     10.9    
Industrials     9.8    
Financials     5.4    
Materials     4.7    
Energy     4.1    
Telecommunication Services     2.4    
      98.9    
Short-Term Obligation     1.2    
Other Assets & Liabilities, Net     (0.1 )  
      100.0    

 

Acronym   Name  
ADR   American Depositary Receipt  

 

See Accompanying Notes to Financial Statements.


44



Investment PortfolioColumbia Disciplined Value Fund

March 31, 2010 (Unaudited)

Common Stocks – 97.5%  
    Shares   Value ($)  
Consumer Discretionary – 10.4%  
Automobiles – 0.7%  
Ford Motor Co. (a)     148,400       1,865,388    
Automobiles Total     1,865,388    
Household Durables – 1.5%  
Garmin Ltd.     74,400       2,862,912    
Leggett & Platt, Inc.     49,100       1,062,524    
Whirlpool Corp.     3,500       305,375    
Household Durables Total     4,230,811    
Media – 5.4%  
Comcast Corp., Class A     185,300       3,487,346    
DIRECTV, Class A (a)     62,800       2,123,268    
DISH Network Corp., Class A     25,800       537,156    
News Corp., Class A     128,100       1,845,921    
Time Warner, Inc.     121,700       3,805,559    
Viacom, Inc., Class B (a)     18,100       622,278    
Walt Disney Co.     75,300       2,628,723    
Media Total     15,050,251    
Multiline Retail – 0.8%  
Dollar General Corp. (a)     64,100       1,618,525    
Macy's, Inc.     20,000       435,400    
Sears Holdings Corp. (a)     2,400       260,232    
Multiline Retail Total     2,314,157    
Specialty Retail – 2.0%  
Chico's FAS, Inc.     46,400       669,088    
Gap, Inc.     97,700       2,257,847    
Home Depot, Inc.     76,200       2,465,070    
Limited Brands, Inc.     4,100       100,942    
Specialty Retail Total     5,492,947    
Consumer Discretionary Total     28,953,554    
Consumer Staples – 5.2%  
Beverages – 0.3%  
Coca-Cola Co.     12,900       709,500    
Beverages Total     709,500    
Food Products – 2.0%  
Campbell Soup Co.     3,000       106,050    
Del Monte Foods Co.     173,700       2,536,020    
General Mills, Inc.     16,300       1,153,877    
Hershey Co.     2,000       85,620    
Kraft Foods, Inc., Class A     27,800       840,672    
Sara Lee Corp.     63,000       877,590    
Food Products Total     5,599,829    

 

    Shares   Value ($)  
Household Products – 2.0%  
Kimberly-Clark Corp.     2,600       163,488    
Procter & Gamble Co.     85,900       5,434,893    
Household Products Total     5,598,381    
Tobacco – 0.9%  
Lorillard, Inc.     32,000       2,407,680    
Tobacco Total     2,407,680    
Consumer Staples Total     14,315,390    
Energy – 17.1%  
Energy Equipment & Services – 2.0%  
National-Oilwell Varco, Inc.     19,900       807,542    
Oil States International, Inc. (a)     54,400       2,466,496    
Rowan Companies, Inc. (a)     77,100       2,244,381    
Energy Equipment & Services Total     5,518,419    
Oil, Gas & Consumable Fuels – 15.1%  
Anadarko Petroleum Corp.     17,800       1,296,374    
Apache Corp.     45,500       4,618,250    
Chevron Corp.     140,000       10,616,200    
ConocoPhillips     97,400       4,983,958    
EOG Resources, Inc.     12,200       1,133,868    
Exxon Mobil Corp. (b)     173,600       11,627,728    
Marathon Oil Corp.     33,600       1,063,104    
Massey Energy Co.     12,400       648,396    
Pioneer Natural Resources Co.     5,400       304,128    
Valero Energy Corp.     27,200       535,840    
Whiting Petroleum Corp. (a)     14,300       1,156,012    
XTO Energy, Inc.     85,400       4,029,172    
Oil, Gas & Consumable Fuels Total     42,013,030    
Energy Total     47,531,449    
Financials – 25.8%  
Capital Markets – 3.2%  
Ameriprise Financial, Inc.     17,000       771,120    
Franklin Resources, Inc.     7,100       787,390    
Goldman Sachs Group, Inc.     34,800       5,937,924    
Morgan Stanley     39,800       1,165,742    
Raymond James Financial, Inc.     7,000       187,180    
Capital Markets Total     8,849,356    
Commercial Banks – 4.0%  
Comerica, Inc.     7,200       273,888    
Fifth Third Bancorp.     42,000       570,780    
Fulton Financial Corp.     57,500       585,925    
PNC Financial Services Group, Inc.     17,400       1,038,780    

 

See Accompanying Notes to Financial Statements.


45



Columbia Disciplined Value Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
U.S. Bancorp     67,300       1,741,724    
Wells Fargo & Co.     219,000       6,815,280    
Commercial Banks Total     11,026,377    
Consumer Finance – 3.0%  
American Express Co.     26,600       1,097,516    
AmeriCredit Corp. (a)     24,700       586,872    
Capital One Financial Corp.     15,400       637,714    
Discover Financial Services     208,400       3,105,160    
SLM Corp. (a)     222,600       2,786,952    
Consumer Finance Total     8,214,214    
Diversified Financial Services – 5.0%  
Citigroup, Inc. (a)     1,122,200       4,544,910    
JPMorgan Chase & Co.     210,000       9,397,500    
Diversified Financial Services Total     13,942,410    
Insurance – 6.2%  
Allied World Assurance Holdings
Ltd.
    61,500       2,758,275    
Allstate Corp.     34,000       1,098,540    
Aspen Insurance Holdings Ltd.     3,900       112,476    
Genworth Financial, Inc.,
Class A (a)
    124,600       2,285,164    
Hartford Financial Services
Group, Inc.
    18,200       517,244    
Loews Corp.     11,300       421,264    
MetLife, Inc.     27,400       1,187,516    
Protective Life Corp.     58,400       1,284,216    
Prudential Financial, Inc.     52,400       3,170,200    
Reinsurance Group of America, Inc.     46,300       2,431,676    
Transatlantic Holdings, Inc.     9,900       522,720    
Travelers Companies, Inc.     24,400       1,316,136    
Unum Group     700       17,339    
Insurance Total     17,122,766    
Real Estate Investment Trusts (REITs) – 4.1%  
Annaly Capital Management, Inc.     77,500       1,331,450    
Brandywine Realty Trust     37,600       459,096    
Chimera Investment Corp.     112,200       436,458    
Hospitality Properties Trust     71,200       1,705,240    
Host Hotels & Resorts, Inc.     15,400       225,610    
HRPT Properties Trust     589,400       4,585,532    
Simon Property Group, Inc.     30,100       2,525,390    
SL Green Realty Corp.     3,600       206,172    
Real Estate Investment Trusts (REITs) Total     11,474,948    
Thrifts & Mortgage Finance – 0.3%  
Hudson City Bancorp, Inc.     65,800       931,728    
Thrifts & Mortgage Finance Total     931,728    
Financials Total     71,561,799    

 

    Shares   Value ($)  
Health Care – 8.5%  
Health Care Equipment & Supplies – 0.2%  
Kinetic Concepts, Inc. (a)     10,400       497,224    
Health Care Equipment & Supplies Total     497,224    
Health Care Providers & Services – 3.9%  
AmerisourceBergen Corp.     39,300       1,136,556    
Cardinal Health, Inc.     65,100       2,345,553    
Humana, Inc. (a)     19,000       888,630    
Lincare Holdings, Inc. (a)     63,100       2,831,928    
McKesson Corp.     6,700       440,324    
Tenet Healthcare Corp. (a)     2,400       13,728    
UnitedHealth Group, Inc. (a)     61,600       2,012,472    
WellPoint, Inc. (a)     17,600       1,133,088    
Health Care Providers & Services Total     10,802,279    
Pharmaceuticals – 4.4%  
Bristol-Myers Squibb Co.     36,200       966,540    
Eli Lilly & Co.     21,100       764,242    
Endo Pharmaceuticals Holdings,
Inc. (a)
    11,400       270,066    
Johnson & Johnson     29,600       1,929,920    
Merck & Co., Inc.     73,900       2,760,165    
Pfizer, Inc.     319,800       5,484,570    
Pharmaceuticals Total     12,175,503    
Health Care Total     23,475,006    
Industrials – 10.7%  
Aerospace & Defense – 2.7%  
General Dynamics Corp.     2,100       162,120    
Northrop Grumman Corp.     12,700       832,739    
Raytheon Co.     64,600       3,689,952    
United Technologies Corp.     39,500       2,907,595    
Aerospace & Defense Total     7,592,406    
Commercial Services & Supplies – 0.8%  
R.R. Donnelley & Sons Co.     110,500       2,359,175    
Commercial Services & Supplies Total     2,359,175    
Electrical Equipment – 0.7%  
Hubbell, Inc., Class B     20,900       1,053,987    
Thomas & Betts Corp. (a)     22,500       882,900    
Electrical Equipment Total     1,936,887    
Industrial Conglomerates – 4.8%  
Carlisle Companies, Inc.     24,700       941,070    
General Electric Co.     677,600       12,332,320    
Industrial Conglomerates Total     13,273,390    

 

See Accompanying Notes to Financial Statements.


46



Columbia Disciplined Value Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Machinery – 1.2%  
Dover Corp.     9,400       439,450    
Eaton Corp.     7,900       598,583    
Harsco Corp.     6,000       191,640    
Illinois Tool Works, Inc.     24,000       1,136,640    
Joy Global, Inc.     11,800       667,880    
Parker Hannifin Corp.     3,200       207,168    
Machinery Total     3,241,361    
Road & Rail – 0.5%  
Ryder System, Inc.     33,400       1,294,584    
Road & Rail Total     1,294,584    
Industrials Total     29,697,803    
Information Technology – 4.9%  
Computers & Peripherals – 2.6%  
EMC Corp. (a)     70,100       1,264,604    
Hewlett-Packard Co.     92,800       4,932,320    
Teradata Corp. (a)     29,700       858,033    
Western Digital Corp. (a)     1,000       38,990    
Computers & Peripherals Total     7,093,947    
Electronic Equipment, Instruments & Components – 0.1%  
Tech Data Corp. (a)     2,400       100,560    
Vishay Intertechnology, Inc. (a)     3,500       35,805    
Electronic Equipment, Instruments &
Components Total
    136,365    
Internet Software & Services – 0.5%  
eBay, Inc. (a)     52,000       1,401,400    
Internet Software & Services Total     1,401,400    
IT Services – 0.1%  
Computer Sciences Corp. (a)     7,200       392,328    
IT Services Total     392,328    
Office Electronics – 0.2%  
Xerox Corp.     58,900       574,275    
Office Electronics Total     574,275    
Semiconductors & Semiconductor Equipment – 1.4%  
Intel Corp.     172,900       3,848,754    
Micron Technology, Inc. (a)     5,800       60,262    
Semiconductors & Semiconductor
Equipment Total
    3,909,016    
Information Technology Total     13,507,331    

 

    Shares   Value ($)  
Materials – 4.1%  
Chemicals – 2.9%  
Ashland, Inc.     53,100       2,802,087    
Cabot Corp.     58,100       1,766,240    
Eastman Chemical Co.     50,400       3,209,472    
Lubrizol Corp.     3,900       357,708    
Chemicals Total     8,135,507    
Metals & Mining – 0.1%  
Freeport-McMoRan Copper &
Gold, Inc.
    2,700       225,558    
Metals & Mining Total     225,558    
Paper & Forest Products – 1.1%  
International Paper Co.     122,600       3,017,186    
Paper & Forest Products Total     3,017,186    
Materials Total     11,378,251    
Telecommunication Services – 5.0%  
Diversified Telecommunication Services – 4.5%  
AT&T, Inc.     268,100       6,927,704    
Qwest Communications
International, Inc.
    202,800       1,058,616    
Verizon Communications, Inc.     142,000       4,404,840    
Diversified Telecommunication
Services Total
    12,391,160    
Wireless Telecommunication Services – 0.5%  
Sprint Nextel Corp. (a)     403,900       1,534,820    
Wireless Telecommunication Services Total     1,534,820    
Telecommunication Services Total     13,925,980    
Utilities – 5.8%  
Electric Utilities – 1.9%  
DPL, Inc.     66,500       1,808,135    
Edison International     28,100       960,177    
Entergy Corp.     9,300       756,555    
Exelon Corp.     28,600       1,252,966    
Pinnacle West Capital Corp.     12,600       475,398    
Electric Utilities Total     5,253,231    
Gas Utilities – 1.5%  
Energen Corp.     3,400       158,202    
Questar Corp.     89,300       3,857,760    
UGI Corp.     5,600       148,624    
Gas Utilities Total     4,164,586    

 

See Accompanying Notes to Financial Statements.


47



Columbia Disciplined Value Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Independent Power Producers & Energy Traders – 0.7%  
AES Corp. (a)     153,300       1,686,300    
Mirant Corp. (a)     6,800       73,848    
Independent Power Producers & Energy
Traders Total
    1,760,148    
Multi-Utilities – 1.7%  
Dominion Resources, Inc.     3,400       139,774    
DTE Energy Co.     6,600       294,360    
MDU Resources Group, Inc.     22,200       479,076    
NiSource, Inc.     49,800       786,840    
NSTAR     5,100       180,642    
PG&E Corp.     1,700       72,114    
Public Service Enterprise
Group, Inc.
    95,000       2,804,400    
Multi-Utilities Total     4,757,206    
Utilities Total     15,935,171    
Total Common Stocks
(cost of $217,855,676)
    270,281,734    
Short-Term Obligation – 2.6%  
    Par ($)      
Repurchase agreement with
Fixed Income Clearing Corp.,
dated 03/31/10, due 04/01/10
at 0.00%, collateralized by a
U.S. Treasury obligation
maturing 11/30/16, market
value $7,399,350 (repurchase
proceeds $7,252,000)
    7,252,000       7,252,000    
Total Short-Term Obligation
(cost of $7,252,000)
    7,252,000    
Total Investments – 100.1%
(cost of $225,107,676) (c)
    277,533,734    
Other Assets & Liabilities, Net – (0.1)%     (263,896 )  
Net Assets – 100.0%     277,269,838    

 

Notes to Investment Portfolio:

(a)  Non-income producing security.

(b)  A portion of this security with a market value of $1,691,245 is pledged as collateral for open futures contracts.

(c)  Cost for federal income tax purposes is $225,107,676.

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund's assets:

Description   Quoted Prices
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Total  
Total Common Stocks   $ 270,281,734     $     $     $ 270,281,734    
Total Short-Term
Obligation
          7,252,000             7,252,000    
Total Investments     270,281,734       7,252,000             277,533,734    
Unrealized Depreciation
on Futures Contracts
    (3,593 )                 (3,593 )  
Total   $ 270,278,141     $ 7,252,000     $     $ 277,530,141    

 

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

At March 31, 2010, the Fund held the following open long futures contracts:

Risk
Exposure
  Number of
Contracts
  Value   Aggregate
Face Value
  Expiration
Date
  Unrealized
Depreciation
 
Equity Risk  
S&P 500 Index
Futures
    25     $ 7,282,500     $ 7,286,093     Jun-10   $ (3,593 )  

 

At March 31, 2010, the Fund held investments in the following sectors:

Sector   % of
Net Assets
 
Financials     25.8    
Energy     17.1    
Industrials     10.7    
Consumer Discretionary     10.4    
Health Care     8.5    
Utilities     5.8    
Consumer Staples     5.2    
Telecommunication Services     5.0    
Information Technology     4.9    
Materials     4.1    
      97.5    
Short-Term Obligation     2.6    
Other Assets & Liabilities, Net     (0.1 )  
      100.0    

 

See Accompanying Notes to Financial Statements.


48




Investment PortfolioColumbia Contrarian Core Fund

March 31, 2010 (Unaudited)

Common Stocks – 99.7%  
    Shares   Value ($)  
Consumer Discretionary – 10.7%  
Auto Components – 0.8%  
Lear Corp. (a)     55,500       4,403,925    
Auto Components Total     4,403,925    
Hotels, Restaurants & Leisure – 0.6%  
Las Vegas Sands Corp. (a)     146,000       3,087,900    
Hotels, Restaurants & Leisure Total     3,087,900    
Household Durables – 1.2%  
Newell Rubbermaid, Inc.     417,500       6,346,000    
Household Durables Total     6,346,000    
Media – 2.3%  
Comcast Corp., Class A     462,600       8,706,132    
News Corp., Class A     258,400       3,723,544    
Media Total     12,429,676    
Multiline Retail – 2.9%  
Dollar General Corp. (a)     202,700       5,118,175    
Target Corp.     204,100       10,735,660    
Multiline Retail Total     15,853,835    
Specialty Retail – 2.1%  
GameStop Corp., Class A (a)     236,000       5,170,760    
Lowe's Companies, Inc.     247,900       6,009,096    
Specialty Retail Total     11,179,856    
Textiles, Apparel & Luxury Goods – 0.8%  
NIKE, Inc., Class B     60,900       4,476,150    
Textiles, Apparel & Luxury Goods Total     4,476,150    
Consumer Discretionary Total     57,777,342    
Consumer Staples – 7.7%  
Beverages – 2.0%  
PepsiCo, Inc.     160,200       10,598,832    
Beverages Total     10,598,832    
Food & Staples Retailing – 1.9%  
CVS Caremark Corp.     288,300       10,540,248    
Food & Staples Retailing Total     10,540,248    
Personal Products – 1.4%  
Avon Products, Inc.     123,900       4,196,493    
Herbalife Ltd.     67,700       3,122,324    
Personal Products Total     7,318,817    
Tobacco – 2.4%  
Philip Morris International, Inc.     252,100       13,149,536    
Tobacco Total     13,149,536    
Consumer Staples Total     41,607,433    

 

    Shares   Value ($)  
Energy – 11.5%  
Energy Equipment & Services – 2.0%  
Transocean Ltd. (a)     60,700       5,243,266    
Weatherford International Ltd. (a)     348,300       5,524,038    
Energy Equipment & Services Total     10,767,304    
Oil, Gas & Consumable Fuels – 9.5%  
Alpha Natural Resources, Inc. (a)     73,500       3,666,915    
Apache Corp.     76,100       7,724,150    
Chevron Corp.     166,700       12,640,861    
ConocoPhillips     188,900       9,666,013    
Devon Energy Corp.     83,200       5,360,576    
Petroleo Brasileiro SA, ADR     198,200       7,846,738    
Suncor Energy, Inc.     130,600       4,249,724    
Oil, Gas & Consumable Fuels Total     51,154,977    
Energy Total     61,922,281    
Financials – 16.7%  
Capital Markets – 6.2%  
Bank of New York Mellon Corp.     266,500       8,229,520    
Goldman Sachs Group, Inc.     78,900       13,462,707    
Morgan Stanley     184,700       5,409,863    
State Street Corp.     140,800       6,355,712    
Capital Markets Total     33,457,802    
Commercial Banks – 2.3%  
PNC Financial Services Group, Inc.     86,000       5,134,200    
Wells Fargo & Co.     231,922       7,217,413    
Commercial Banks Total     12,351,613    
Diversified Financial Services – 2.8%  
JPMorgan Chase & Co.     337,272       15,092,922    
Diversified Financial Services Total     15,092,922    
Insurance – 4.9%  
Berkshire Hathaway, Inc.,
Class B (a)
    62,050       5,042,803    
MetLife, Inc.     193,600       8,390,624    
Prudential Financial, Inc.     58,936       3,565,628    
Unum Group     371,900       9,211,963    
Insurance Total     26,211,018    
Real Estate Management & Development – 0.5%  
CB Richard Ellis Group, Inc.,
Class A (a)
    176,700       2,800,695    
Real Estate Management &
Development Total
    2,800,695    
Financials Total     89,914,050    

 

See Accompanying Notes to Financial Statements.


49



Columbia Contrarian Core Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Health Care – 13.7%  
Biotechnology – 2.6%  
Amgen, Inc. (a)     116,700       6,973,992    
Cephalon, Inc. (a)     47,900       3,246,662    
Myriad Genetics, Inc. (a)     164,400       3,953,820    
Biotechnology Total     14,174,474    
Health Care Equipment & Supplies – 2.3%  
Baxter International, Inc.     171,700       9,992,940    
St. Jude Medical, Inc. (a)     52,800       2,167,440    
Health Care Equipment & Supplies Total     12,160,380    
Health Care Providers & Services – 2.9%  
Cardinal Health, Inc.     202,500       7,296,075    
Medco Health Solutions, Inc. (a)     54,300       3,505,608    
VCA Antech, Inc. (a)     162,300       4,549,269    
Health Care Providers & Services Total     15,350,952    
Life Sciences Tools & Services – 1.6%  
Thermo Fisher Scientific, Inc. (a)     164,350       8,454,164    
Life Sciences Tools & Services Total     8,454,164    
Pharmaceuticals – 4.3%  
Abbott Laboratories     229,687       12,099,911    
Pfizer, Inc.     652,600       11,192,090    
Pharmaceuticals Total     23,292,001    
Health Care Total     73,431,971    
Industrials – 10.9%  
Aerospace & Defense – 3.0%  
Honeywell International, Inc.     167,950       7,603,097    
United Technologies Corp.     113,400       8,347,374    
Aerospace & Defense Total     15,950,471    
Construction & Engineering – 0.9%  
Fluor Corp.     101,000       4,697,510    
Construction & Engineering Total     4,697,510    
Electrical Equipment – 0.7%  
Sensata Technologies
Holding NV (a)
    216,000       3,879,360    
Electrical Equipment Total     3,879,360    
Industrial Conglomerates – 2.5%  
General Electric Co.     153,240       2,788,968    
Tyco International Ltd.     284,900       10,897,425    
Industrial Conglomerates Total     13,686,393    
Machinery – 2.5%  
Illinois Tool Works, Inc.     180,900       8,567,424    
Navistar International Corp. (a)     103,300       4,620,609    
Machinery Total     13,188,033    

 

    Shares   Value ($)  
Road & Rail – 1.3%  
Union Pacific Corp.     97,220       7,126,226    
Road & Rail Total     7,126,226    
Industrials Total     58,527,993    
Information Technology – 22.1%  
Communications Equipment – 1.4%  
QUALCOMM, Inc.     184,000       7,726,160    
Communications Equipment Total     7,726,160    
Computers & Peripherals – 6.9%  
Apple, Inc. (a)     69,200       16,257,156    
EMC Corp. (a)     377,400       6,808,296    
Hewlett-Packard Co.     260,600       13,850,890    
Computers & Peripherals Total     36,916,342    
Electronic Equipment, Instruments & Components – 1.6%  
Corning, Inc.     430,200       8,694,342    
Electronic Equipment, Instruments &
Components Total
    8,694,342    
Internet Software & Services – 5.3%  
eBay, Inc. (a)     439,800       11,852,610    
Google, Inc., Class A (a)     17,600       9,979,376    
IAC/InterActiveCorp (a)     284,600       6,471,804    
Internet Software & Services Total     28,303,790    
IT Services – 2.6%  
MasterCard, Inc., Class A     54,200       13,766,800    
IT Services Total     13,766,800    
Semiconductors & Semiconductor Equipment – 1.6%  
Atmel Corp. (a)     893,900       4,496,317    
Marvell Technology Group Ltd. (a)     214,000       4,361,320    
Semiconductors & Semiconductor
Equipment Total
    8,857,637    
Software – 2.7%  
Microsoft Corp.     497,220       14,553,629    
Software Total     14,553,629    
Information Technology Total     118,818,700    
Materials – 3.3%  
Metals & Mining – 3.3%  
ArcelorMittal, NY Registered
Shares
    115,187       5,057,861    
Vale SA, ADR     163,800       5,272,722    
Walter Energy, Inc.     79,200       7,307,784    
Metals & Mining Total     17,638,367    
Materials Total     17,638,367    

 

See Accompanying Notes to Financial Statements.


50



Columbia Contrarian Core Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Telecommunication Services – 3.1%  
Diversified Telecommunication Services – 0.4%  
Verizon Communications, Inc.     78,600       2,438,172    
Diversified Telecommunication Services Total     2,438,172    
Wireless Telecommunication Services – 2.7%  
Millicom International Cellular SA     72,000       6,418,800    
Sprint Nextel Corp. (a)     890,000       3,382,000    
Vodafone Group PLC, ADR     197,500       4,599,775    
Wireless Telecommunication Services Total     14,400,575    
Telecommunication Services Total     16,838,747    
Total Common Stocks
(cost of $422,742,394)
    536,476,884    
Short-Term Obligation – 0.8%  
    Par ($)      
Repurchase agreement with
Fixed Income Clearing Corp.,
dated 03/31/10, due 04/01/10
at 0.000%, collateralized by a
U.S. Treasury obligation
maturing 03/31/17, market
value $4,586,950 (repurchase
proceeds $4,497,000)
    4,497,000       4,497,000    
Total Short-Term Obligation
(cost of $4,497,000)
    4,497,000    
Total Investments – 100.5%
(cost of $427,239,394) (b)
    540,973,884    
Other Assets & Liabilities, Net – (0.5)%     (2,714,271 )  
Net Assets – 100.0%     538,259,613    

 

Notes to Investment Portfolio:

(a)  Non-income producing security.

(b)  Cost for federal income tax purposes is $427,239,394.

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund's assets:

Description   Quoted Prices
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Total  
Total Common Stocks   $ 536,476,884     $     $     $ 536,476,884    
Total Short-Term Obligation           4,497,000             4,497,000    
Total Investments   $ 536,476,884     $ 4,497,000     $     $ 540,973,884    

 

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

At March 31, 2010, the Fund held investments in the following sectors:

Sector   % of
Net Assets
 
Information Technology     22.1    
Financials     16.7    
Health Care     13.7    
Energy     11.5    
Industrials     10.9    
Consumer Discretionary     10.7    
Consumer Staples     7.7    
Materials     3.3    
Telecommunication Services     3.1    
      99.7    
Short-Term Obligation     0.8    
Other Assets & Liabilities, Net     (0.5 )  
      100.0    

 

Acronym   Name  
ADR   American Depositary Receipt  

 

See Accompanying Notes to Financial Statements.


51



Investment PortfolioColumbia Small Cap Core Fund

March 31, 2010 (Unaudited)

Common Stocks – 97.1%  
    Shares   Value ($)  
Consumer Discretionary – 11.7%  
Auto Components – 1.1%  
Cooper Tire & Rubber Co.     131,096       2,493,446    
Dorman Products, Inc. (a)     219,075       4,160,234    
Auto Components Total     6,653,680    
Diversified Consumer Services – 0.2%  
Nobel Learning Communities,
Inc. (a)
    165,966       1,301,173    
Diversified Consumer Services Total     1,301,173    
Hotels, Restaurants & Leisure – 1.6%  
CEC Entertainment, Inc. (a)     166,007       6,323,207    
Morgans Hotel Group Co. (a)     204,831       1,312,967    
O'Charleys, Inc. (a)     240,062       2,146,154    
Hotels, Restaurants & Leisure Total     9,782,328    
Household Durables – 0.3%  
Jarden Corp.     64,092       2,133,623    
Household Durables Total     2,133,623    
Leisure Equipment & Products – 1.2%  
Callaway Golf Co.     222,847       1,965,510    
RC2 Corp. (a)     172,447       2,581,532    
Steinway Musical Instruments,
Inc. (a)
    147,764       2,782,396    
Leisure Equipment & Products Total     7,329,438    
Media – 1.4%  
Arbitron, Inc.     131,300       3,500,458    
John Wiley & Sons, Inc., Class A     69,500       3,007,960    
Scholastic Corp.     83,986       2,351,608    
Media Total     8,860,026    
Specialty Retail – 4.5%  
Buckle, Inc.     91,331       3,357,328    
Collective Brands, Inc. (a)     280,307       6,374,181    
Foot Locker, Inc.     151,100       2,272,544    
HOT Topic, Inc. (a)     125,400       815,100    
Monro Muffler Brake, Inc.     77,305       2,764,427    
Penske Auto Group, Inc. (a)     114,000       1,643,880    
Rent-A-Center, Inc. (a)     260,682       6,165,129    
Stage Stores, Inc.     302,028       4,648,211    
Specialty Retail Total     28,040,800    
Textiles, Apparel & Luxury Goods – 1.4%  
Rocky Brands, Inc. (a)     107,199       1,022,678    
Unifirst Corp.     151,319       7,792,929    
Textiles, Apparel & Luxury Goods Total     8,815,607    
Consumer Discretionary Total     72,916,675    

 

    Shares   Value ($)  
Consumer Staples – 1.3%  
Food & Staples Retailing – 0.7%  
Casey's General Stores, Inc.     82,451       2,588,961    
Pantry, Inc. (a)     141,116       1,762,539    
Food & Staples Retailing Total     4,351,500    
Food Products – 0.6%  
Corn Products International, Inc.     115,401       3,999,799    
Food Products Total     3,999,799    
Consumer Staples Total     8,351,299    
Energy – 3.0%  
Energy Equipment & Services – 2.4%  
Gulfmark Offshore, Inc.,
Class A (a)
    114,691       3,045,046    
Newpark Resources, Inc. (a)     435,058       2,284,055    
Oceaneering International,
Inc. (a)
    36,570       2,321,829    
Superior Well Services, Inc. (a)     82,380       1,102,244    
Tetra Technologies, Inc. (a)     508,281       6,211,194    
Energy Equipment & Services Total     14,964,368    
Oil, Gas & Consumable Fuels – 0.6%  
EXCO Resources, Inc.     181,687       3,339,407    
Oil, Gas & Consumable Fuels Total     3,339,407    
Energy Total     18,303,775    
Financials – 13.6%  
Capital Markets – 1.1%  
Investment Technology Group,
Inc. (a)
    255,650       4,266,799    
Waddell & Reed Financial, Inc.,
Class A
    71,607       2,580,716    
Capital Markets Total     6,847,515    
Commercial Banks – 4.2%  
Centerstate Banks, Inc.     189,660       2,323,335    
Hancock Holding Co.     71,806       3,002,209    
Iberiabank Corp.     56,535       3,392,665    
Oriental Financial Group     477,759       6,449,747    
SCBT Financial Corp.     62,036       2,297,814    
Simmons First National Corp.,
Class A
    71,400       1,968,498    
Taylor Capital Group, Inc. (a)     195,582       2,538,654    
Union First Market Bankshares
Corp.
    121,924       1,841,052    
Webster Financial Corp.     137,970       2,413,095    
Commercial Banks Total     26,227,069    

 

See Accompanying Notes to Financial Statements.


52



Columbia Small Cap Core Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Consumer Finance – 0.8%  
Cash America International, Inc.     104,900       4,141,452    
QC Holdings, Inc.     177,170       915,969    
Consumer Finance Total     5,057,421    
Insurance – 3.3%  
Arthur J. Gallagher & Co.     49,900       1,225,045    
Conseco, Inc. (a)     434,450       2,702,279    
Delphi Financial Group, Inc.,
Class A
    94,100       2,367,556    
eHealth, Inc. (a)     181,500       2,858,625    
First Mercury Financial Corp.     206,217       2,687,007    
Horace Mann Educators Corp.     208,017       3,132,736    
National Interstate Corp.     72,821       1,508,123    
NYMAGIC, Inc.     79,543       1,688,698    
State Auto Financial Corp.     143,254       2,571,409    
Insurance Total     20,741,478    
Real Estate Investment Trusts (REITs) – 2.8%  
Acadia Realty Trust     150,596       2,689,645    
American Campus Communities,
Inc.
    127,932       3,538,599    
DiamondRock Hospitality Co. (a)     266,733       2,696,671    
DuPont Fabros Technology, Inc.     139,800       3,018,282    
First Potomac Realty Trust     239,848       3,604,915    
Mack-Cali Realty Corp.     52,200       1,840,050    
Real Estate Investment Trusts (REITs) Total     17,388,162    
Thrifts & Mortgage Finance – 1.4%  
Abington Bancorp, Inc.     176,921       1,397,676    
Dime Community Bancshares     163,167       2,060,799    
First Niagara Financial Group,
Inc.
    100,759       1,432,793    
Jefferson Bancshares, Inc.     219,422       1,002,759    
NewAlliance Bancshares, Inc.     196,389       2,478,429    
Thrifts & Mortgage Finance Total     8,372,456    
Financials Total     84,634,101    
Health Care – 15.5%  
Biotechnology – 0.7%  
BioMarin Pharmaceuticals,
Inc. (a)
    81,841       1,912,624    
Genta, Inc. (a)     2          
Myriad Genetics, Inc. (a)     90,800       2,183,740    
Biotechnology Total     4,096,364    
Health Care Equipment & Supplies – 5.5%  
Analogic Corp.     133,106       5,687,620    
Cooper Companies, Inc.     142,174       5,527,725    
Greatbatch, Inc. (a)     149,953       3,177,504    

 

    Shares   Value ($)  
Invacare Corp.     258,151       6,851,328    
STAAR Surgical Co. (a)     1,061,667       4,055,568    
Symmetry Medical, Inc. (a)     320,508       3,217,900    
Thoratec Corp. (a)     62,287       2,083,500    
West Pharmaceutical Services, Inc.     84,740       3,554,843    
Health Care Equipment & Supplies Total     34,155,988    
Health Care Providers & Services – 7.0%  
Air Methods Corp. (a)     260,436       8,854,824    
LifePoint Hospitals, Inc. (a)     149,095       5,483,714    
Magellan Health Services, Inc. (a)     81,426       3,540,403    
Owens & Minor, Inc.     70,752       3,282,185    
Providence Service Corp. (a)     314,005       4,769,736    
PSS World Medical, Inc. (a)     143,202       3,366,679    
Psychiatric Solutions, Inc. (a)     112,745       3,359,801    
Res-Care, Inc. (a)     739,384       8,865,214    
U.S. Physical Therapy, Inc. (a)     132,207       2,300,402    
Health Care Providers & Services Total     43,822,958    
Life Sciences Tools & Services – 0.3%  
Cambrex Corp. (a)     498,303       2,018,127    
Life Sciences Tools & Services Total     2,018,127    
Pharmaceuticals – 2.0%  
Hi-Tech Pharmacal Co., Inc. (a)     69,765       1,544,597    
Obagi Medical Products, Inc. (a)     395,931       4,822,440    
Valeant Pharmaceuticals
International (a)
    142,910       6,132,268    
Pharmaceuticals Total     12,499,305    
Health Care Total     96,592,742    
Industrials – 19.9%  
Aerospace & Defense – 4.3%  
AAR Corp. (a)     290,494       7,210,061    
American Science & Engineering,
Inc.
    51,300       3,843,396    
Argon ST, Inc. (a)     189,831       5,051,403    
Global Defense Technology &
Systems, Inc. (a)
    186,369       2,497,345    
Ladish Co., Inc. (a)     87,637       1,766,762    
LMI Aerospace, Inc. (a)     71,907       1,336,032    
Moog, Inc., Class A (a)     151,441       5,364,040    
Aerospace & Defense Total     27,069,039    
Air Freight & Logistics – 1.0%  
Atlas Air Worldwide Holdings,
Inc. (a)
    95,183       5,049,458    
Pacer International, Inc. (a)     169,838       1,022,425    
Air Freight & Logistics Total     6,071,883    

 

See Accompanying Notes to Financial Statements.


53



Columbia Small Cap Core Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
Commercial Services & Supplies – 1.3%  
Consolidated Graphics, Inc. (a)     88,044       3,645,902    
McGrath Rentcorp     180,268       4,367,894    
Commercial Services & Supplies Total     8,013,796    
Construction & Engineering – 2.1%  
EMCOR Group, Inc. (a)     293,068       7,218,265    
MasTec, Inc. (a)     133,628       1,685,049    
Northwest Pipe Co. (a)     93,981       2,053,485    
Sterling Construction Co., Inc. (a)     148,162       2,329,106    
Construction & Engineering Total     13,285,905    
Electrical Equipment – 3.0%  
Baldor Electric Co.     36,193       1,353,618    
Belden, Inc.     203,200       5,579,872    
BTU International, Inc. (a)     277,842       1,697,615    
GrafTech International Ltd. (a)     201,646       2,756,501    
LaBarge, Inc. (a)     130,900       1,446,445    
LSI Industries, Inc.     471,588       3,216,230    
Powell Industries, Inc. (a)     72,500       2,358,425    
Electrical Equipment Total     18,408,706    
Machinery – 2.7%  
Albany International Corp., Class A     162,464       3,497,850    
Flanders Corp. (a)     702,426       2,669,219    
Key Technology, Inc. (a)     175,917       2,418,859    
Miller Industries, Inc.     150,482       1,870,491    
PMFG, Inc. (a)     201,500       2,665,845    
Tennant Co.     138,539       3,794,583    
Machinery Total     16,916,847    
Professional Services – 2.8%  
FTI Consulting, Inc. (a)     120,562       4,740,498    
Hill International, Inc. (a)     26,967       157,218    
Kforce, Inc. (a)     438,537       6,670,148    
Navigant Consulting, Inc. (a)     180,378       2,187,985    
SFN Group, Inc. (a)     427,145       3,421,431    
Professional Services Total     17,177,280    
Road & Rail – 1.3%  
Arkansas Best Corp.     63,992       1,912,081    
Kansas City Southern (a)     92,015       3,328,183    
Werner Enterprises, Inc.     120,809       2,799,144    
Road & Rail Total     8,039,408    
Trading Companies & Distributors – 1.4%  
Kaman Corp.     130,695       3,268,682    
Rush Enterprises, Inc., Class A (a)     120,130       1,586,917    
Rush Enterprises, Inc., Class B (a)     159,851       1,966,167    
Titan Machinery, Inc. (a)     140,400       1,922,076    
Trading Companies & Distributors Total     8,743,842    
Industrials Total     123,726,706    

 

    Shares   Value ($)  
Information Technology – 25.2%  
Communications Equipment – 1.7%  
ADC Telecommunications, Inc. (a)     269,170       1,967,633    
Adtran, Inc.     146,346       3,856,217    
EMS Technologies, Inc. (a)     82,349       1,366,993    
Globecomm Systems, Inc. (a)     217,539       1,672,875    
Performance Technologies,
Inc. (a)(b)
    619,141       1,646,915    
Communications Equipment Total     10,510,633    
Computers & Peripherals – 2.0%  
Avid Technology, Inc. (a)     89,028       1,226,806    
Hypercom Corp. (a)     541,615       2,090,634    
Imation Corp. (a)     220,204       2,424,446    
Presstek, Inc. (a)     396,137       1,774,694    
Rimage Corp. (a)     235,461       3,404,766    
STEC, Inc. (a)     114,749       1,374,693    
Computers & Peripherals Total     12,296,039    
Electronic Equipment, Instruments & Components – 6.9%  
Benchmark Electronics, Inc. (a)     926,000       19,205,240    
FARO Technologies, Inc. (a)     270,406       6,962,955    
Keithley Instruments, Inc.     392,562       2,590,909    
LeCroy Corp. (a)     122,148       607,076    
Newport Corp. (a)     270,756       3,384,450    
Plexus Corp. (a)     220,132       7,931,356    
Rogers Corp. (a)     19,900       577,299    
Technitrol, Inc.     357,423       1,887,193    
Electronic Equipment, Instruments &
Components Total
    43,146,478    
Internet Software & Services – 1.7%  
Digital River, Inc. (a)     129,500       3,923,850    
EarthLink, Inc.     708,940       6,054,348    
Selectica, Inc. (a)     71,573       354,286    
Internet Software & Services Total     10,332,484    
IT Services – 2.6%  
Analysts International Corp. (a)     171,353       464,367    
Computer Task Group, Inc. (a)     672,176       4,873,276    
infoGROUP, Inc. (a)     394,307       3,075,594    
Integral Systems, Inc. (a)     330,055       3,178,430    
Startek, Inc. (a)     114,054       792,675    
TNS, Inc. (a)     186,801       4,165,662    
IT Services Total     16,550,004    
Semiconductors & Semiconductor Equipment – 4.3%  
ATMI, Inc. (a)     204,551       3,949,880    
Cirrus Logic, Inc. (a)     468,092       3,927,292    
Exar Corp. (a)     302,013       2,129,192    
Fairchild Semiconductor
International, Inc. (a)
    436,187       4,645,391    

 

See Accompanying Notes to Financial Statements.


54



Columbia Small Cap Core Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)  
    Shares   Value ($)  
IXYS Corp. (a)     193,929       1,656,154    
ON Semiconductor Corp. (a)     639,506       5,116,048    
Pericom Semiconductor Corp. (a)     246,157       2,636,341    
Ultratech, Inc. (a)     194,130       2,640,168    
Semiconductors & Semiconductor
Equipment Total
    26,700,466    
Software – 6.0%  
Bottomline Technologies, Inc. (a)     184,412       3,103,654    
Epicor Software Corp. (a)     310,023       2,963,820    
Lawson Software, Inc. (a)     520,925       3,443,314    
Mentor Graphics Corp. (a)     396,924       3,183,330    
PLATO Learning, Inc. (a)     262,046       1,456,976    
Progress Software Corp. (a)     388,290       12,203,955    
S1 Corp. (a)     324,260       1,913,134    
Sonic Solutions (a)     216,244       2,026,206    
Sybase, Inc. (a)     132,887       6,195,192    
Symyx Technologies, Inc. (a)     156,020       700,530    
Software Total     37,190,111    
Information Technology Total     156,726,215    
Materials – 4.4%  
Chemicals – 3.2%  
H.B. Fuller Co.     366,114       8,497,506    
Sensient Technologies Corp.     206,086       5,988,859    
Spartech Corp. (a)     446,607       5,225,302    
Chemicals Total     19,711,667    
Containers & Packaging – 0.6%  
Greif, Inc., Class A     73,190       4,019,595    
Containers & Packaging Total     4,019,595    
Metals & Mining – 0.0%  
A.M. Castle & Co. (a)     15,637       204,532    
Metals & Mining Total     204,532    
Paper & Forest Products – 0.6%  
Glatfelter Co.     237,822       3,446,041    
Paper & Forest Products Total     3,446,041    
Materials Total     27,381,835    
Telecommunication Services – 0.2%  
Diversified Telecommunication Services – 0.2%  
General Communication, Inc.,
Class A (a)
    197,142       1,137,509    
Diversified Telecommunication
Services Total
    1,137,509    
Telecommunication Services Total     1,137,509    

 

    Shares   Value ($)  
Utilities – 2.3%  
Gas Utilities – 1.3%  
New Jersey Resources Corp.     96,499       3,624,502    
South Jersey Industries, Inc.     108,890       4,572,291    
Gas Utilities Total     8,196,793    
Water Utilities – 1.0%  
American States Water Co.     114,859       3,985,607    
California Water Service Group     52,873       1,988,554    
Water Utilities Total     5,974,161    
Utilities Total     14,170,954    
Total Common Stocks
(cost of $549,547,797)
    603,941,811    
Short-Term Obligation – 3.0%  
    Par ($)      
Repurchase agreement with
Fixed Income Clearing Corp.,
dated 03/31/10, due 04/01/10
at 0.000%, collateralized by a
U.S. Treasury obligation
maturing 03/31/17, market
value $18,790,575 (repurchase
proceeds $18,418,000)
    18,418,000       18,418,000    
Total Short-Term Obligation
(cost of $18,418,000)
    18,418,000    
Total Investments – 100.1%
(cost of $567,965,797) (c)
    622,359,811    
Other Assets & Liabilities, Net – (0.1)%     (626,177 )  
Net Assets – 100.0%     621,733,634    

 

Notes to Investment Portfolio:

(a)  Non-income producing security.

(b)  An affiliate may include any company in which the Fund owns five percent or more of its outstanding voting shares. Transactions in this affiliated company during the six months ended March 31, 2010, are as follows:

Affiliate   Value,
beginning
of period
  Purchases   Sales
Proceeds
  Dividend
Income
  Value,
end of
period
 
Performance
Technologies,
Inc.
  $ 1,776,935     $     $     $     $ 1,646,915    

 

(c)  Cost for federal income tax purposes is $567,965,797.

See Accompanying Notes to Financial Statements.


55



Columbia Small Cap Core Fund

March 31, 2010 (Unaudited)

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund's assets:

Description   Quoted Prices
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
  Total  
Total Common Stocks   $ 603,941,811     $     $     $ 603,941,811    
Total Short-Term
Obligation
          18,418,000             18,418,000    
Total Investments   $ 603,941,811     $ 18,418,000     $     $ 622,359,811    

 

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

At March 31, 2010, the Fund held investments in the following sectors:

Sector   % of
Net Assets
 
Information Technology     25.2    
Industrials     19.9    
Health Care     15.5    
Financials     13.6    
Consumer Discretionary     11.7    
Materials     4.4    
Energy     3.0    
Utilities     2.3    
Consumer Staples     1.3    
Telecommunication Services     0.2    
      97.1    
Short-Term Obligation     3.0    
Other Assets & Liabilities, Net     (0.1 )  
      100.0    

 

See Accompanying Notes to Financial Statements.


56




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Statements of Assets and LiabilitiesStock Funds
March 31, 2010 (Unaudited)

    ($)   ($)   ($)   ($)   ($)  
    Columbia
Asset
Allocation Fund
  Columbia
Large Cap
Growth Fund
  Columbia
Disciplined
Value Fund
  Columbia
Contrarian
Core Fund
  Columbia
Small Cap
Core Fund
 
Assets  
Unaffiliated investments, at identified cost     200,379,800       1,059,496,429       225,107,676       427,239,394       562,552,565    
Affiliated investments, at identified cost     349,510                         5,413,232    
Total investments, at identified cost     200,729,310       1,059,496,429       225,107,676       427,239,394       567,965,797    
Unaffiliated investments, at value     225,812,151       1,332,661,820       277,533,734       540,973,884       620,712,896    
Affiliated investments, at value     373,802                         1,646,915    
Total investments, at value     226,185,953       1,332,661,820       277,533,734       540,973,884       622,359,811    
Cash     229,230       744       822       769       814    
Cash collateral for open futures contracts     965,000                            
Foreign currency (cost of $20,216,
$—, $—, $— and $—, respectively)
    20,223                            
Unrealized appreciation on forward foreign
currency exchange contracts
    33,436                            
Receivable for:  
Investments sold     1,466,013       5,356,723             562,998          
Fund shares sold     109,591       214,534       77,359       1,545,673       952,154    
Dividends     169,824       1,125,258       362,566       387,180       356,530    
Interest     876,718                            
Foreign tax reclaims     35,968                            
Expense reimbursement due
from investment advisor
    65,250             15,993       6,046          
Trustees' deferred compensation plan     45,483       183,827       44,973       48,675       80,639    
Prepaid expenses     4,207       27,047       5,841       8,906       9,963    
Other assets           203,615             49,772          
Total Assets     230,206,896       1,339,773,568       278,041,288       543,583,903       623,759,911    
Liabilities  
Written options, at value (premium of
$581, $—, $—, $— and $—, respectively)
    541                            
Unrealized depreciation on forward foreign
currency exchange contracts
    33,021                            
Payable for:  
Investments purchased     2,259,397       5,406,811             4,427,070       418,681    
Investments purchased on a delayed
delivery basis
    885,299                            
Fund shares repurchased     121,753       2,042,623       434,891       391,214       822,163    
Futures variation margin     19,328             27,355                
Investment advisory fee     127,018       581,338       163,679       306,990       401,001    
Administration fee     13,092       56,314       15,681       29,472       36,636    
Pricing and bookkeeping fees     12,931       11,704       5,860       5,988       5,603    
Transfer agent fee     30,957       278,297       20,456       25,354       81,763    
Trustees' fees     3,452       1,966       590       297       3,038    
Custody fee     42,999       2,735       1,414       4,857       1,151    
Distribution and service fees     37,328       108,251       24,406       59,010       75,512    
Chief compliance officer expenses     183       187       155       124       136    
Reports to shareholders     21,784       85,743       9,272       10,710       72,725    
Interest payable           578                      
Trustees' deferred compensation plan     45,483       183,827       44,973       48,675       80,639    
Other liabilities     42,520       72,869       22,718       14,529       27,229    
Total Liabilities     3,697,086       8,833,243       771,450       5,324,290       2,026,277    
Net Assets     226,509,810       1,330,940,325       277,269,838       538,259,613       621,733,634    
Net Assets Consist of  
Paid-in capital     238,924,732       1,454,222,111       356,526,091       449,477,404       609,930,463    
Undistributed (Overdistributed)
net investment income
    (194,431 )     1,127,726       37,754       126,635       (239,855 )  
Accumulated net realized loss     (37,793,163 )     (397,574,903 )     (131,716,472 )     (25,078,916 )     (42,350,988 )  
Net unrealized appreciation (depreciation) on:  
Investments     25,456,643       273,165,391       52,426,058       113,734,490       54,394,014    
Foreign currency translations and forward
foreign currency exchange contracts
    2,932                            
Futures contracts     113,057             (3,593 )              
Written options     40                            
Net Assets     226,509,810       1,330,940,325       277,269,838       538,259,613       621,733,634    

 

See Accompanying Notes to Financial Statements.


58



Statements of Assets and Liabilities (continued)Stock Funds
March 31, 2010 (Unaudited)

    Columbia
Asset
Allocation Fund
  Columbia
Large Cap
Growth Fund
  Columbia
Disciplined
Value Fund
  Columbia
Contrarian
Core Fund
  Columbia
Small Cap
Core Fund
 
Class A  
Net assets   $ 9,422,120     $ 157,853,300     $ 10,153,017     $ 66,115,153     $ 105,346,400    
Shares outstanding     708,693       7,631,203       986,080       5,073,478       8,059,710    
Net asset value per share (a)   $ 13.30     $ 20.69     $ 10.30     $ 13.03     $ 13.07    
Maximum sales charge     5.75 %     5.75 %     5.75 %     5.75 %     5.75 %  
Maximum offering price per share (b)   $ 14.11     $ 21.95     $ 10.93     $ 13.82     $ 13.87    
Class B  
Net assets   $ 3,457,295     $ 19,717,439     $ 1,998,599     $ 4,379,456     $ 17,426,295    
Shares outstanding     260,367       1,033,196       206,143       358,260       1,487,519    
Net asset value and offering
price per share (a)
  $ 13.28     $ 19.08     $ 9.70     $ 12.22     $ 11.72    
Class C  
Net assets   $ 1,504,799     $ 17,502,222     $ 2,079,199     $ 14,493,048     $ 19,842,917    
Shares outstanding     113,266       916,573       215,174       1,184,305       1,691,526    
Net asset value and offering
price per share (a)
  $ 13.29     $ 19.10     $ 9.66     $ 12.24     $ 11.73    
Class E  
Net assets         $ 13,547,011                      
Shares outstanding           655,814                      
Net asset value per share (a)         $ 20.66                      
Maximum sales charge           4.50 %                    
Maximum offering price per share (b)         $ 21.63                      
Class F  
Net assets         $ 452,014                      
Shares outstanding           23,695                      
Net asset value and offering
price per share (a)
        $ 19.08                      
Class T  
Net assets   $ 114,681,254     $ 152,554,842     $ 74,376,508     $ 123,128,870     $ 78,439,270    
Shares outstanding     8,624,959       7,424,669       7,223,818       9,518,758       6,103,007    
Net asset value per share (a)   $ 13.30     $ 20.55     $ 10.30     $ 12.94     $ 12.85    
Maximum sales charge     5.75 %     5.75 %     5.75 %     5.75 %     5.75 %  
Maximum offering price per share (b)   $ 14.11     $ 21.80     $ 10.93     $ 13.73     $ 13.63    
Class Y  
Net assets         $ 17,991,642                      
Shares outstanding           851,141                      
Net asset value, offering
and redemption price per share
        $ 21.14                      
Class Z  
Net assets   $ 97,444,342     $ 951,321,855     $ 188,662,515     $ 330,143,086     $ 400,678,752    
Shares outstanding     7,301,153       44,988,049       17,848,800       25,216,705       29,873,409    
Net asset value, offering
and redemption price per share
  $ 13.35     $ 21.15     $ 10.57     $ 13.09     $ 13.41    

 

(a)  Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

(b)  On sales of $50,000 or more the offering price is reduced.

See Accompanying Notes to Financial Statements.


59



Statements of OperationsStock Funds
For the Six Months Ended March 31, 2010 (Unaudited)

    ($)   ($)   ($)   ($)   ($)  
    Columbia
Asset
Allocation Fund
  Columbia
Large Cap
Growth Fund
  Columbia
Disciplined
Value Fund
  Columbia
Contrarian
Core Fund
  Columbia
Small Cap
Core Fund
 
Investment Income  
Dividends     955,762       8,620,745       3,431,410       3,282,759       3,200,798    
Interest     2,434,540       209,948       31,881       986       2,851    
Interest from affiliates     10,588                            
Foreign taxes withheld     (15,061 )     (10,797 )           (47,739 )     (3,020 )  
Total Investment Income     3,385,829       8,819,896       3,463,291       3,236,006       3,200,629    
Expenses  
Investment advisory fee     726,174       3,386,793       989,448       1,610,890       2,100,418    
Administration fee     74,852       327,832       94,700       154,274       189,108    
Distribution fee:  
Class B     13,789       84,169       7,769       13,859       63,748    
Class C     5,475       64,942       8,123       40,755       70,146    
Class E           6,633                      
Class F           1,392                      
Service fee:  
Class A     10,417       186,974       12,696       57,922       113,726    
Class B     4,596       28,056       2,590       4,620       21,249    
Class C     1,825       21,647       2,708       13,585       23,382    
Class E           16,583                      
Class F           464                      
Shareholder service fee—Class T     170,262       221,516       108,557       177,783       111,600    
Transfer agent fee—  
Class A, Class B, Class C, Class E, Class F,
Class T and Class Z
    179,976       1,361,454       149,254       251,473       437,399    
Transfer agent fee—Class Y           20                      
Pricing and bookkeeping fees     66,684       70,582       40,293       51,283       58,180    
Trustees' fees     13,578       35,778       14,236       13,837       16,749    
Custody fee     115,206       17,163       9,455       11,480       8,027    
Chief compliance officer expenses     349       554       357       348       394    
Other expenses     130,330       344,217       131,822       135,773       140,806    
Expenses before interest expense     1,513,513       6,176,769       1,572,008       2,537,882       3,354,932    
Interest expense           4,983       732                
Total Expenses     1,513,513       6,181,752       1,572,740       2,537,882       3,354,932    
Fees waived or expenses reimbursed by
Investment Advisor
    (245,812 )           (16,778 )     (63,103 )        
Expense reductions     (6 )           (3 )     (12 )     (6 )  
Net Expenses     1,267,695       6,181,752       1,555,959       2,474,767       3,354,926    
Net Investment Income (Loss)     2,118,134       2,638,144       1,907,332       761,239       (154,297 )  

 

See Accompanying Notes to Financial Statements.


60



Statements of Operations (continued)Stock Funds
For the Six Months Ended March 31, 2010 (Unaudited)

    ($)   ($)   ($)   ($)   ($)  
    Columbia
Asset
Allocation Fund
  Columbia
Large Cap
Growth Fund
  Columbia
Disciplined
Value Fund
  Columbia
Contrarian
Core Fund
  Columbia
Small Cap
Core Fund
 
Net Realized and Unrealized Gain (Loss)
on Investments, Foreign Currency,
Futures Contracts and Written Options
 
Net realized gain (loss) on:  
Unaffiliated investments     7,228,775       81,657,365       17,686,107       12,172,453       (10,679,971 )  
Foreign currency transactions and
forward foreign currency exchange  
contracts
    (32,526 )                 184          
Futures contracts     537,851             517,875                
Written options     7,661                            
Net realized gain (loss)     7,741,761       81,657,365       18,203,982       12,172,637       (10,679,971 )  
Net change in unrealized appreciation
(depreciation) on:
 
Investments     4,593,862       50,914,337       3,349,563       38,557,600       81,967,792    
Foreign currency translations
and forward foreign currency  
exchange contracts
    (86,097 )                 (37 )        
Futures contracts     60,182             (31,511 )              
Written options     40                            
Net change in unrealized appreciation
(depreciation)
    4,567,987       50,914,337       3,318,052       38,557,563       81,967,792    
Net Gain     12,309,748       132,571,702       21,522,034       50,730,200       71,287,821    
Net Increase Resulting from Operations     14,427,882       135,209,846       23,429,366       51,491,439       71,133,524    

 

See Accompanying Notes to Financial Statements.


61



Statements of Changes in Net AssetsStock Funds

Increase (Decrease) in Net Assets   Columbia Asset Allocation Fund   Columbia Large Cap Growth Fund   Columbia Disciplined Value Fund  
    (Unaudited)
Six Months
Ended
March 31,
2010 ($)
  Year
Ended
September 30,
2009 ($)
  (Unaudited)
Six Months
Ended
March 31,
2010 ($)
  Year
Ended
September 30,
2009 ($)
  (Unaudited)
Six Months
Ended
March 31,
2010 ($)
  Year
Ended
September 30,
2009 ($)
 
Operations  
Net investment income (loss)     2,118,134       4,898,776       2,638,144       6,338,320       1,907,332       5,566,376    
Net realized gain (loss) on investments,
foreign currency transactions, forward foreign  
currency exchange contracts, futures contracts  
and written options
    7,741,761       (35,320,273 )     81,657,365       (338,092,454 )     18,203,982       (103,097,904 )  
Net change in unrealized appreciation
(depreciation) on investments, foreign  
currency translations, forward foreign currency 
exchange contracts, futures contracts and  
written options
    4,567,987       31,491,817       50,914,337       266,910,172       3,318,052       71,099,837    
Net increase (decrease) resulting from operations     14,427,882       1,070,320       135,209,846       (64,843,962 )     23,429,366       (26,431,691 )  
Distributions to Shareholders  
From net investment income:  
Class A     (95,527 )     (150,796 )     (706,751 )     (140,147 )     (63,397 )     (209,449 )  
Class B     (27,478 )     (55,722 )                 (5,654 )     (31,603 )  
Class C     (10,808 )     (18,706 )                 (6,141 )     (24,079 )  
Class E                 (52,446 )     (1,130 )              
Class T     (1,249,073 )     (2,288,522 )     (644,779 )           (434,599 )     (1,247,692 )  
Class Y                 (144,925 )                    
Class Z     (1,196,653 )     (2,159,589 )     (6,417,493 )     (2,956,052 )     (1,413,624 )     (4,279,319 )  
From net realized gains:  
Class A                                      
Class B                                      
Class C                                      
Class T                                      
Class Z                                      
Total distributions to shareholders     (2,579,539 )     (4,673,335 )     (7,966,394 )     (3,097,329 )     (1,923,415 )     (5,792,142 )  
Net Capital Stock Transactions     (9,177,368 )     (24,306,040 )     (100,330,866 )     (28,921,925 )     (50,214,302 )     3,409,644    
Increase from regulatory settlements     39             14,273       663,170       4          
Total increase (decrease) in net assets     2,671,014       (27,909,055 )     26,926,859       (96,200,046 )     (28,708,347 )     (28,814,189 )  
Net Assets  
Beginning of period     223,838,796       251,747,851       1,304,013,466       1,400,213,512       305,978,185       334,792,374    
End of period     226,509,810       223,838,796       1,330,940,325       1,304,013,466       277,269,838       305,978,185    
Undistributed (Overdistributed) net investment
income at end of period
    (194,431 )     266,974       1,127,726       6,455,976       37,754       53,837    

 

See Accompanying Notes to Financial Statements.


62



Increase (Decrease) in Net Assets   Columbia Contrarian Core Fund   Columbia Small Cap Core Fund  
    (Unaudited)
Six Months
Ended
March 31,
2010 ($)
  Year
Ended
September 30,
2009 ($)
  (Unaudited)
Six Months
Ended
March 31,
2010 ($)
  Year
Ended
September 30,
2009 ($)
 
Operations  
Net investment income (loss)     761,239       2,909,706       (154,297 )     (854,945 )  
Net realized gain (loss) on investments,
foreign currency transactions, forward foreign  
currency exchange contracts, futures contracts  
and written options
    12,172,637       (34,481,649 )     (10,679,971 )     (30,320,543 )  
Net change in unrealized appreciation
(depreciation) on investments, foreign  
currency translations, forward foreign currency 
exchange contracts, futures contracts and  
written options
    38,557,563       50,682,774       81,967,792       (37,219,629 )  
Net increase (decrease) resulting from operations     51,491,439       19,110,831       71,133,524       (68,395,117 )  
Distributions to Shareholders  
From net investment income:  
Class A     (201,274 )     (87,616 )              
Class B                          
Class C                          
Class E                          
Class T     (531,782 )     (717,940 )              
Class Y                          
Class Z     (1,864,759 )     (2,057,319 )              
From net realized gains:  
Class A                       (8,907,282 )  
Class B                       (1,940,780 )  
Class C                       (1,989,757 )  
Class T                       (7,421,795 )  
Class Z                       (31,170,222 )  
Total distributions to shareholders     (2,597,815 )     (2,862,875 )           (51,429,836 )  
Net Capital Stock Transactions     85,966,593       64,862,004       5,509,473       (10,237,809 )  
Increase from regulatory settlements           5,432             5,313    
Total increase (decrease) in net assets     134,860,217       81,115,392       76,642,997       (130,057,449 )  
Net Assets  
Beginning of period     403,399,396       322,284,004       545,090,637       675,148,086    
End of period     538,259,613       403,399,396       621,733,634       545,090,637    
Undistributed (Overdistributed) net investment
income at end of period
    126,635       1,963,211       (239,855 )     (85,558 )  

 

See Accompanying Notes to Financial Statements.


63



Statements of Changes in Net Assets (continued)Capital Stock Activity

    Columbia Asset Allocation Fund  
    (Unaudited)
Six Months Ended
March 31, 2010
  Year Ended
September 30, 2009
 
    Shares   Dollars ($)   Shares   Dollars ($)  
Class A  
Subscriptions     137,937       1,785,025       242,754       2,594,996    
Distributions reinvested     6,750       87,641       12,955       141,198    
Redemptions     (57,186 )     (744,117 )     (212,773 )     (2,318,316 )  
Net increase     87,501       1,128,549       42,936       417,878    
Class B  
Subscriptions     13,513       173,394       63,535       696,944    
Distributions reinvested     1,890       24,397       4,637       49,933    
Redemptions     (59,533 )     (769,229 )     (137,489 )     (1,481,838 )  
Net decrease     (44,130 )     (571,438 )     (69,317 )     (734,961 )  
Class C  
Subscriptions     9,273       118,999       40,293       442,888    
Distributions reinvested     738       9,535       1,489       16,136    
Redemptions     (13,257 )     (171,136 )     (44,295 )     (486,881 )  
Net decrease     (3,246 )     (42,602 )     (2,513 )     (27,857 )  
Class T  
Subscriptions     23,166       365,259       47,805       517,944    
Distributions reinvested     93,227       1,209,036       203,820       2,211,059    
Redemptions     (521,671 )     (6,788,142 )     (1,620,242 )     (17,373,997 )  
Net decrease     (405,278 )     (5,213,847 )     (1,368,617 )     (14,644,994 )  
Class Z  
Subscriptions     144,304       1,870,802       268,237       3,235,752    
Distributions reinvested     67,424       876,580       167,719       1,827,162    
Redemptions     (557,949 )     (7,225,412 )     (1,324,767 )     (14,379,020 )  
Net decrease     (346,221 )     (4,478,030 )     (888,811 )     (9,316,106 )  

 

See Accompanying Notes to Financial Statements.


64



Statements of Changes in Net Assets (continued)Capital Stock Activity

    Columbia Large Cap Growth Fund  
    (Unaudited)
Six Months Ended
March 31, 2010
  Year Ended
September 30, 2009
 
    Shares   Dollars ($)   Shares   Dollars ($)  
Class A  
Subscriptions     539,420       10,629,208       1,591,508       24,021,794    
Distributions reinvested     32,869       640,940       8,857       126,318    
Redemptions     (711,366 )     (13,948,286 )     (1,831,457 )     (28,061,174 )  
Net decrease     (139,077 )     (2,678,138 )     (231,092 )     (3,913,062 )  
Class B  
Subscriptions     12,918       235,332       107,673       1,522,097    
Redemptions     (422,211 )     (7,691,227 )     (1,894,336 )     (26,316,082 )  
Net decrease     (409,293 )     (7,455,895 )     (1,786,663 )     (24,793,985 )  
Class C  
Subscriptions     33,899       615,706       345,304       4,759,197    
Redemptions     (115,908 )     (2,103,460 )     (514,603 )     (7,172,499 )  
Net decrease     (82,009 )     (1,487,754 )     (169,299 )     (2,413,302 )  
Class E  
Subscriptions     707       13,889       4,972       74,331    
Distributions reinvested     2,687       52,351       79       1,128    
Redemptions     (49,160 )     (969,030 )     (60,277 )     (935,864 )  
Net decrease     (45,766 )     (902,790 )     (55,226 )     (860,405 )  
Class F  
Subscriptions     6,919       120,003       23       354    
Redemptions     (97 )     (1,749 )     (4,123 )     (57,722 )  
Net increase (decrease)     6,822       118,254       (4,100 )     (57,368 )  
Class T  
Subscriptions     37,543       735,423       97,232       1,472,114    
Distributions reinvested     32,478       629,102                
Redemptions     (425,429 )     (8,298,864 )     (1,034,974 )     (15,755,361 )  
Net decrease     (355,408 )     (6,934,339 )     (937,742 )     (14,283,247 )  
Class Y  
Subscriptions     12,152       234,778       1,566,787       28,038,000    
Distributions reinvested     5       97                
Redemptions     (29,869 )     (595,000 )     (697,934 )     (12,618,649 )  
Net increase (decrease)     (17,712 )     (360,125 )     868,853       15,419,351    
Class Z  
Subscriptions     1,767,293       35,031,235       9,868,328       157,965,419    
Distributions reinvested     184,404       3,673,328       119,365       1,738,022    
Redemptions     (5,966,331 )     (119,334,642 )     (9,894,536 )     (157,723,348 )  
Net increase (decrease)     (4,014,634 )     (80,630,079 )     93,157       1,980,093    

 

See Accompanying Notes to Financial Statements.


65



Statements of Changes in Net Assets (continued)Capital Stock Activity

    Columbia Disciplined Value Fund  
    (Unaudited)
Six Months Ended
March 31, 2010
  Year Ended
September 30, 2009
 
    Shares   Dollars ($)   Shares   Dollars ($)  
Class A  
Subscriptions     89,919       886,117       288,028       2,281,055    
Distributions reinvested     5,617       55,584       23,100       179,703    
Redemptions     (217,536 )     (2,130,775 )     (739,426 )     (5,805,700 )  
Net decrease     (122,000 )     (1,189,074 )     (428,298 )     (3,344,942 )  
Class B  
Subscriptions     9,285       86,012       17,707       131,169    
Distributions reinvested     538       4,937       3,913       28,225    
Redemptions     (45,613 )     (420,766 )     (174,185 )     (1,255,003 )  
Net decrease     (35,790 )     (329,817 )     (152,565 )     (1,095,609 )  
Class C  
Subscriptions     110,411       1,005,891       67,614       542,251    
Distributions reinvested     534       4,901       2,863       20,584    
Redemptions     (121,754 )     (1,138,963 )     (127,694 )     (912,243 )  
Net decrease     (10,809 )     (128,171 )     (57,217 )     (349,408 )  
Class T  
Subscriptions     26,721       259,818       65,624       514,004    
Distributions reinvested     42,798       423,905       157,011       1,221,118    
Redemptions     (467,086 )     (4,574,278 )     (1,123,058 )     (8,716,795 )  
Net decrease     (397,567 )     (3,890,555 )     (900,423 )     (6,981,673 )  
Class Z  
Subscriptions     877,068       8,755,046       8,733,478       71,166,602    
Distributions reinvested     51,101       517,451       206,897       1,660,628    
Redemptions     (5,459,902 )     (53,949,182 )     (7,144,516 )     (57,645,954 )  
Net increase (decrease)     (4,531,733 )     (44,676,685 )     1,795,859       15,181,276    

 

See Accompanying Notes to Financial Statements.


66



Statements of Changes in Net Assets (continued)Capital Stock Activity

    Columbia Contrarian Core Fund  
    (Unaudited)
Six Months Ended
March 31, 2010
  Year Ended
September 30, 2009
 
    Shares   Dollars ($)   Shares   Dollars ($)  
Class A  
Subscriptions     3,177,951       38,910,093       1,851,140       18,894,886    
Distributions reinvested     15,560       189,054       8,794       77,084    
Redemptions     (478,536 )     (5,935,465 )     (442,332 )     (4,101,888 )  
Net increase     2,714,975       33,163,682       1,417,602       14,870,082    
Class B  
Subscriptions     103,244       1,185,827       107,507       1,009,446    
Redemptions     (56,004 )     (643,890 )     (122,331 )     (1,037,793 )  
Net increase (decrease)     47,240       541,937       (14,824 )     (28,347 )  
Class C  
Subscriptions     619,797       7,127,887       604,409       5,864,349    
Redemptions     (78,560 )     (921,094 )     (115,428 )     (1,028,223 )  
Net increase     541,237       6,206,793       488,981       4,836,126    
Class T  
Subscriptions     24,294       294,400       57,531       530,596    
Distributions reinvested     38,796       469,356       77,542       675,392    
Redemptions     (580,325 )     (7,086,376 )     (1,305,440 )     (11,973,025 )  
Net decrease     (517,235 )     (6,322,620 )     (1,170,367 )     (10,767,037 )  
Class Z  
Subscriptions     6,488,170       80,113,675       11,481,253       103,217,377    
Distributions reinvested     94,601       1,154,130       178,491       1,572,554    
Redemptions     (2,333,439 )     (28,891,004 )     (5,182,054 )     (48,838,751 )  
Net increase     4,249,332       52,376,801       6,477,690       55,951,180    

 

See Accompanying Notes to Financial Statements.


67



Statements of Changes in Net Assets (continued)Capital Stock Activity

    Columbia Small Cap Core Fund  
    (Unaudited)
Six Months Ended
March 31, 2010
  Year Ended
September 30, 2009
 
    Shares   Dollars ($)   Shares   Dollars ($)  
Class A  
Subscriptions     1,982,537       23,564,914       2,080,374       19,805,781    
Distributions reinvested                 980,677       8,610,346    
Redemptions     (956,733 )     (11,498,652 )     (4,177,022 )     (38,542,843 )  
Net increase (decrease)     1,025,804       12,066,262       (1,115,971 )     (10,126,716 )  
Class B  
Subscriptions     24,732       261,909       96,693       842,189    
Distributions reinvested                 228,050       1,813,000    
Redemptions     (199,020 )     (2,157,940 )     (442,312 )     (3,691,488 )  
Net decrease     (174,288 )     (1,896,031 )     (117,569 )     (1,036,299 )  
Class C  
Subscriptions     157,033       1,686,470       271,949       2,444,023    
Distributions reinvested                 226,347       1,801,724    
Redemptions     (234,751 )     (2,537,652 )     (635,154 )     (5,307,813 )  
Net decrease     (77,718 )     (851,182 )     (136,858 )     (1,062,066 )  
Class T  
Subscriptions     24,397       288,334       81,099       725,579    
Distributions reinvested                 800,276       6,914,381    
Redemptions     (480,267 )     (5,666,193 )     (1,373,498 )     (13,187,203 )  
Net decrease     (455,870 )     (5,377,859 )     (492,123 )     (5,547,243 )  
Class Z  
Subscriptions     4,427,225       54,215,415       9,744,342       94,177,339    
Distributions reinvested                 2,513,202       22,568,553    
Redemptions     (4,299,808 )     (52,647,132 )     (11,209,503 )     (109,211,377 )  
Net increase     127,417       1,568,283       1,048,041       7,534,515    

 

See Accompanying Notes to Financial Statements.


68




Financial HighlightsColumbia Asset Allocation Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class A Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 12.61     $ 12.57     $ 16.80     $ 16.06     $ 16.47     $ 15.06    
Income from Investment Operations:  
Net investment income (a)     0.12       0.26       0.31       0.32       0.22       0.27 (b)  
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts, foreign capital gains
tax and written options
    0.72       0.03       (2.76 )     1.86       0.92       1.41    
Total from investment operations     0.84       0.29       (2.45 )     2.18       1.14       1.68    
Less Distributions to Shareholders:  
From net investment income     (0.15 )     (0.25 )     (0.34 )     (0.33 )     (0.31 )     (0.27 )  
From net realized gains                 (1.44 )     (1.11 )     (1.24 )        
Total distributions to shareholders     (0.15 )     (0.25 )     (1.78 )     (1.44 )     (1.55 )     (0.27 )  
Increase from regulatory settlements     (k)                                
Net Asset Value, End of Period   $ 13.30     $ 12.61     $ 12.57     $ 16.80     $ 16.06     $ 16.47    
Total return (c)     6.66 %(d)(e)     2.63 %(e)     (16.23 )%     14.24 %     7.39 %(e)(f)     11.20 %(e)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.20 %(g)(h)     1.25 %(h)     1.29 %(i)     1.32 %(h)     1.31 %(h)     1.35 %(h)  
Interest expense           %(j)                          
Net expenses     1.20 %(g)(h)     1.25 %(h)     1.29 %(i)     1.32 %(h)     1.31 %(h)     1.35 %(h)  
Waiver/Reimbursement     0.22 %(g)     0.22 %                 0.01 %     0.01 %  
Net investment income     1.84 %(g)(h)     2.35 %(h)     2.17 %(i)     1.98 %(h)     1.38 %(h)     1.66 %(h)  
Portfolio turnover rate     50 %(d)     107 %     94 %     100 %     98 %     86 %  
Net assets, end of period (000s)   $ 9,422     $ 7,833     $ 7,266     $ 8,314     $ 5,863     $ 4,206    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(d)  Not annualized.

(e)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(f)  Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively.

(g)  Annualized.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

(k)  Rounds to less than $0.01 per share.

See Accompanying Notes to Financial Statements.


69



Financial HighlightsColumbia Asset Allocation Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class B Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 12.60     $ 12.57     $ 16.80     $ 16.06     $ 16.47     $ 15.06    
Income from Investment Operations:  
Net investment income (a)     0.07       0.18       0.20       0.20       0.17       0.15 (b)  
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts, foreign capital gains
tax and written options
    0.71       0.02       (2.76 )     1.86       0.85       1.41    
Total from investment operations     0.78       0.20       (2.56 )     2.06       1.02       1.56    
Less Distributions to Shareholders:  
From net investment income     (0.10 )     (0.17 )     (0.23 )     (0.21 )     (0.19 )     (0.15 )  
From net realized gains                 (1.44 )     (1.11 )     (1.24 )        
Total distributions to shareholders     (0.10 )     (0.17 )     (1.67 )     (1.32 )     (1.43 )     (0.15 )  
Increase from regulatory settlements     (k)                                
Net Asset Value, End of Period   $ 13.28     $ 12.60     $ 12.57     $ 16.80     $ 16.06     $ 16.47    
Total return (c)     6.19 %(d)(e)     1.79 %(e)     (16.88 )%     13.40 %     6.59 %(e)(f)     10.37 %(e)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.95 %(g)(h)     2.00 %(h)     2.04 %(i)     2.07 %(h)     2.06 %(h)     2.10 %(h)  
Interest expense           %(j)                          
Net expenses     1.95 %(g)(h)     2.00 %(h)     2.04 %(i)     2.07 %(h)     2.06 %(h)     2.10 %(h)  
Waiver/Reimbursement     0.22 %(g)     0.22 %                 0.01 %     0.01 %  
Net investment income     1.08 %(g)(h)     1.61 %(h)     1.40 %(i)     1.21 %(h)     1.08 %(h)     0.91 %(h)  
Portfolio turnover rate     50 %(d)     107 %     94 %     100 %     98 %     86 %  
Net assets, end of period (000s)   $ 3,457     $ 3,835     $ 4,699     $ 6,219     $ 6,788     $ 7,166    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(d)  Not annualized.

(e)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(f)  Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively.

(g)  Annualized.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

(k)  Rounds to less than $0.01 per share.

See Accompanying Notes to Financial Statements.


70



Financial HighlightsColumbia Asset Allocation Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class C Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 12.60     $ 12.57     $ 16.81     $ 16.06     $ 16.47     $ 15.06    
Income from Investment Operations:  
Net investment income (a)     0.07       0.17       0.21       0.20       0.16       0.14 (b)  
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts, foreign capital gains
tax and written options
    0.72       0.03       (2.78 )     1.87       0.86       1.42    
Total from investment operations     0.79       0.20       (2.57 )     2.07       1.02       1.56    
Less Distributions to Shareholders:  
From net investment income     (0.10 )     (0.17 )     (0.23 )     (0.21 )     (0.19 )     (0.15 )  
From net realized gains                 (1.44 )     (1.11 )     (1.24 )        
Total distributions to shareholders     (0.10 )     (0.17 )     (1.67 )     (1.32 )     (1.43 )     (0.15 )  
Increase from regulatory settlements     (k)                                
Net Asset Value, End of Period   $ 13.29     $ 12.60     $ 12.57     $ 16.81     $ 16.06     $ 16.47    
Total return (c)     6.27 %(d)(e)     1.79 %(e)     (16.93 )%     13.46 %     6.59 %(e)(f)     10.37 %(e)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.95 %(g)(h)     2.00 %(h)     2.04 %(i)     2.07 %(h)     2.06 %(h)     2.10 %(h)  
Interest expense           %(j)                          
Net expenses     1.95 %(g)(h)     2.00 %(h)     2.04 %(i)     2.07 %(h)     2.06 %(h)     2.10 %(h)  
Waiver/Reimbursement     0.22 %(g)     0.22 %                 0.01 %     0.01 %  
Net investment income     1.08 %(g)(h)     1.60 %(h)     1.41 %(i)     1.23 %(h)     0.98 %(h)     0.91 %(h)  
Portfolio turnover rate     50 %(d)     107 %     94 %     100 %     98 %     86 %  
Net assets, end of period (000s)   $ 1,505     $ 1,468     $ 1,496     $ 1,806     $ 1,281     $ 704    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(d)  Not annualized.

(e)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(f)  Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively.

(g)  Annualized.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

(k)  Rounds to less than $0.01 per share.

See Accompanying Notes to Financial Statements.


71



Financial HighlightsColumbia Asset Allocation Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class T Shares   2010   2009   2008   2007 (a)   2006   2005  
Net Asset Value, Beginning of Period   $ 12.61     $ 12.58     $ 16.82     $ 16.08     $ 16.48     $ 15.07    
Income from Investment Operations:  
Net investment income (b)     0.11       0.25       0.31       0.31       0.28       0.26 (c)  
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts, foreign capital gains
tax and written options
    0.72       0.02       (2.78 )     1.86       0.87       1.41    
Total from investment operations     0.83       0.27       (2.47 )     2.17       1.15       1.67    
Less Distributions to Shareholders:  
From net investment income     (0.14 )     (0.24 )     (0.33 )     (0.32 )     (0.31 )     (0.26 )  
From net realized gains                 (1.44 )     (1.11 )     (1.24 )        
Total distributions to shareholders     (0.14 )     (0.24 )     (1.77 )     (1.43 )     (1.55 )     (0.26 )  
Increase from regulatory settlements     (l)                                
Net Asset Value, End of Period   $ 13.30     $ 12.61     $ 12.58     $ 16.82     $ 16.08     $ 16.48    
Total return (d)     6.63 %(e)(f)     2.50 %(e)     (16.32 )%     14.17 %     7.39 %(e)(g)     11.14 %(e)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.25 %(h)(i)     1.30 %(i)     1.34 %(j)     1.37 %(i)     1.36 %(i)     1.40 %(i)  
Interest expense           %(k)                          
Net expenses     1.25 %(h)(i)     1.30 %(i)     1.34 %(j)     1.37 %(i)     1.36 %(i)     1.40 %(i)  
Waiver/Reimbursement     0.22 %(h)     0.22 %                 0.01 %     0.01 %  
Net investment income     1.78 %(h)(i)     2.31 %(i)     2.10 %(j)     1.92 %(i)     1.78 %(i)     1.62 %(i)  
Portfolio turnover rate     50 %(f)     107 %     94 %     100 %     98 %     86 %  
Net assets, end of period (000s)   $ 114,681     $ 113,895     $ 130,863     $ 180,757     $ 175,348     $ 184,795    

 

(a)  On August 8, 2007, Class G shares were converted to Class T shares.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(e)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(f)  Not annualized.

(g)  Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of less than 0.01%.

(j)  The benefits derived from expense reductions had an impact of 0.01%.

(k)  Rounds to less than 0.01%.

(l)  Rounds to less than $0.01 per share.

See Accompanying Notes to Financial Statements.


72



Financial HighlightsColumbia Asset Allocation Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class Z Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 12.66     $ 12.58     $ 16.82     $ 16.07     $ 16.48     $ 15.06    
Income from Investment Operations:  
Net investment income (a)     0.13       0.29       0.35       0.36       0.33       0.31 (b)  
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts, foreign capital gains
tax and written options
    0.72       0.07       (2.77 )     1.87       0.85       1.42    
Total from investment operations     0.85       0.36       (2.42 )     2.23       1.18       1.73    
Less Distributions to Shareholders:  
From net investment income     (0.16 )     (0.28 )     (0.38 )     (0.37 )     (0.35 )     (0.31 )  
From net realized gains                 (1.44 )     (1.11 )     (1.24 )        
Total distributions to shareholders     (0.16 )     (0.28 )     (1.82 )     (1.48 )     (1.59 )     (0.31 )  
Increase from regulatory settlements     (k)                                
Net Asset Value, End of Period   $ 13.35     $ 12.66     $ 12.58     $ 16.82     $ 16.07     $ 16.48    
Total return (c)     6.76 %(d)(e)     3.21 %(e)     (16.06 )%     14.58 %     7.65 %(e)(f)     11.54 %(e)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     0.95 %(g)(h)     1.00 %(h)     1.04 %(i)     1.07 %(h)     1.06 %(h)     1.10 %(h)  
Interest expense           %(j)                          
Net expenses     0.95 %(g)(h)     1.00 %(h)     1.04 %(i)     1.07 %(h)     1.06 %(h)     1.10 %(h)  
Waiver/Reimbursement     0.22 %(g)     0.22 %                 0.01 %     0.01 %  
Net investment income     2.08 %(g)(h)     2.60 %(h)     2.40 %(i)     2.21 %(h)     2.09 %(h)     1.92 %(h)  
Portfolio turnover rate     50 %(d)     107 %     94 %     100 %     98 %     86 %  
Net assets, end of period (000s)   $ 97,444     $ 96,807     $ 107,424     $ 144,513     $ 151,703     $ 167,278    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Total return at net asset value assuming all distributions reinvested.

(d)  Not annualized.

(e)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(f)  Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively.

(g)  Annualized.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

(k)  Rounds to less than $0.01 per share.

See Accompanying Notes to Financial Statements.


73




Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class A Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 18.77     $ 19.57     $ 26.76     $ 22.27     $ 21.11     $ 18.57    
Income from Investment Operations:  
Net investment income (a)     0.02       0.07       0.01       0.02       0.01       0.05 (b)  
Net realized and unrealized gain (loss)
on investments
    1.99       (0.86 )     (5.40 )     4.87       1.19       2.51    
Total from investment operations     2.01       (0.79 )     (5.39 )     4.89       1.20       2.56    
Less Distributions to Shareholders:  
From net investment income     (0.09 )     (0.02 )           (0.03 )     (0.04 )     (0.02 )  
From net realized gains                 (1.81 )     (0.37 )              
Total distributions to shareholders     (0.09 )     (0.02 )     (1.81 )     (0.40 )     (0.04 )     (0.02 )  
Increase from regulatory settlements     (c)     0.01       0.01                      
Net Asset Value, End of Period   $ 20.69     $ 18.77     $ 19.57     $ 26.76     $ 22.27     $ 21.11    
Total return (d)     10.75 %(e)     (3.97 )%     (21.73 )%     22.19 %     5.69 %(f)     13.80 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.10 %(h)     1.13 %(g)     1.02 %(i)     1.00 %(g)     1.01 %(g)     1.11 %(g)  
Interest expense     %(h)(j)     %(j)           %(j)     %(j)        
Net expenses     1.10 %(h)     1.13 %(g)     1.02 %(i)     1.00 %(g)     1.01 %(g)     1.11 %(g)  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment income     0.25 %(h)     0.43 %(g)     0.01 %(i)     0.07 %(g)     0.07 %(g)     0.25 %(g)  
Portfolio turnover rate     61 %(e)     146 %     164 %     151 %     171 %     113 %  
Net assets, end of period (000s)   $ 157,853     $ 145,825     $ 156,585     $ 167,408     $ 125,124     $ 10,422    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.09 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


74



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class B Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 17.30     $ 18.15     $ 25.12     $ 21.05     $ 20.07     $ 17.76    
Income from Investment Operations:  
Net investment loss (a)     (0.05 )     (0.04 )     (0.17 )     (0.16 )     (0.13 )     (0.09 )(b)  
Net realized and unrealized gain (loss)
on investments
    1.83       (0.82 )     (5.00 )     4.60       1.11       2.40    
Total from investment operations     1.78       (0.86 )     (5.17 )     4.44       0.98       2.31    
Less Distributions to Shareholders:  
From net realized gains                 (1.81 )     (0.37 )              
Increase from regulatory settlements     (c)     0.01       0.01                      
Net Asset Value, End of Period   $ 19.08     $ 17.30     $ 18.15     $ 25.12     $ 21.05     $ 20.07    
Total return (d)     10.29 %(e)     (4.68 )%     (22.31 )%     21.31 %     4.88 %(f)     13.01 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.85 %(h)     1.88 % (g)     1.77 %(i)     1.75 %(g)     1.76 %(g)     1.86 %(g)  
Interest expense     %(h)(j)     %(j)           %(j)     %(j)        
Net expenses     1.85 %(h)     1.88 %(g)     1.77 %(i)     1.75 %(g)     1.76 %(g)     1.86 %(g)  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment loss     (0.51 )%(h)     (0.30 )%(g)     (0.77 )%(i)     (0.69 )%(g)     (0.72 )%(g)     (0.48 )%(g)  
Portfolio turnover rate     61 %(e)     146 %     164 %     151 %     171 %     113 %  
Net assets, end of period (000s)   $ 19,717     $ 24,951     $ 58,609     $ 168,284     $ 227,160     $ 7,799    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.09 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


75



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class C Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 17.31     $ 18.16     $ 25.14     $ 21.06     $ 20.10     $ 17.79    
Income from Investment Operations:  
Net investment loss (a)     (0.05 )     (0.05 )     (0.16 )     (0.16 )     (0.13 )     (0.09 )(b)  
Net realized and unrealized gain (loss)
on investments
    1.84       (0.81 )     (5.02 )     4.61       1.09       2.40    
Total from investment operations     1.79       (0.86 )     (5.18 )     4.45       0.96       2.31    
Less Distributions to Shareholders:  
From net realized gains                 (1.81 )     (0.37 )              
Increase from regulatory settlements     (c)     0.01       0.01                      
Net Asset Value, End of Period   $ 19.10     $ 17.31     $ 18.16     $ 25.14     $ 21.06     $ 20.10    
Total return (d)     10.34 %(e)     (4.68 )%     (22.33 )%     21.34 %     4.78 %(f)     12.98 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.85 %(h)     1.88 %(g)     1.77 %(i)     1.75 %(g)     1.76 %(g)     1.86 %(g)  
Interest expense     %(h)(j)     %(j)           %(j)     %(j)        
Net expenses     1.85 %(h)     1.88 %(g)     1.77 %(i)     1.75 %(g)     1.76 %(g)     1.86 %(g)  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment loss     (0.50 )%(h)     (0.33 )%(g)     (0.75 )%(i)     (0.68 )%(g)     (0.69 )%(g)     (0.45 )%(g)  
Portfolio turnover rate     61 %(e)     146 %     164 %     151 %     171 %     113 %  
Net assets, end of period (000s)   $ 17,502     $ 17,283     $ 21,208     $ 31,834     $ 31,046     $ 1,419    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.09 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


76



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,   Period
Ended
September 30,
 
Class E Shares   2010   2009   2008   2007   2006 (a)  
Net Asset Value, Beginning of Period   $ 18.73     $ 19.53     $ 26.74     $ 22.27     $ 22.13    
Income from Investment Operations:  
Net investment income (loss) (b)     0.01       0.05       (0.02 )     (0.01 )     (c)  
Net realized and unrealized gain (loss)
on investments
    2.00       (0.86 )     (5.39 )     4.87       0.14    
Total from investment operations     2.01       (0.81 )     (5.41 )     4.86       0.14    
Less Distributions Declared to Shareholders:  
From net investment income     (0.08 )     (c)           (0.02 )        
From net realized gains                 (1.81 )     (0.37 )        
Total distributions to shareholders     (0.08 )     (c)     (1.81 )     (0.39 )        
Increase from regulatory settlements     (c)     0.01       0.01                
Net Asset Value, End of Period   $ 20.66     $ 18.73     $ 19.53     $ 26.74     $ 22.27    
Total return (d)     10.73 %(e)     (4.09 )%     (21.82 )%     22.07 %     0.63 %(e)(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.20 %(h)     1.23 %(g)     1.12 %(i)     1.10 %(g)     1.12 %(g)(h)  
Interest expense     %(h)(j)     %(j)           %(j)     %(h)(j)  
Net expenses     1.20 %(h)     1.23 %(g)     1.12 %(i)     1.10 %(g)     1.12 %(g)(h)  
Waiver/Reimbursement                             %(h)(j)  
Net investment income (loss)     0.15 %(h)     0.33 %(g)     (0.09 )%(i)     (0.03 )%(g)     (0.23 )%(g)(h)  
Portfolio turnover rate     61 %(e)     146 %     164 %     151 %     171 %(e)  
Net assets, end of period (000s)   $ 13,547     $ 13,144     $ 14,782     $ 18,185     $ 13,071    

 

(a)  Class E shares commenced operations on September 22, 2006. Per share data and total return reflect activity from that date.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


77



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,   Period
Ended
September 30,
 
Class F Shares   2010   2009   2008   2007   2006 (a)  
Net Asset Value, Beginning of Period   $ 17.29     $ 18.14     $ 25.11     $ 21.05     $ 20.93    
Income from Investment Operations:  
Net investment loss (b)     (0.04 )     (0.05 )     (0.18 )     (0.16 )     (c)  
Net realized and unrealized gain (loss)
on investments
    1.83       (0.81 )     (4.99 )     4.59       0.12    
Total from investment operations     1.79       (0.86 )     (5.17 )     4.43       0.12    
Less Distributions Declared to Shareholders:  
From net realized gains                 (1.81 )     (0.37 )        
Increase from regulatory settlements     (c)     0.01       0.01                
Net Asset Value, End of Period   $ 19.08     $ 17.29     $ 18.14     $ 25.11     $ 21.05    
Total return (d)     10.35 %(e)     (4.69 )%     (22.31 )%     21.26 %     0.57 %(e)(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.85 %(h)     1.88 %(g)     1.77 %(i)     1.75 %(g)     1.77 %(g)(h)  
Interest expense     %(h)(j)     %(j)           %(j)     %(h)(j)  
Net expenses     1.85 %(h)     1.88 %(g)     1.77 %(i)     1.75 %(g)     1.77 %(g)(h)  
Waiver/Reimbursement                             %(h)(j)  
Net investment loss     (0.49 )%(h)     (0.32 )%(g)     (0.80 )%(i)     (0.70 )%(g)     (0.88 )%(g)(h)  
Portfolio turnover rate     61 %(e)     146 %     164 %     151 %     171 %(e)  
Net assets, end of period (000s)   $ 452     $ 292     $ 380     $ 2,915     $ 5,319    

 

(a)  Class F shares commenced operations on September 22, 2006. Per share data and total return reflect activity from that date.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


78



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class T Shares   2010   2009   2008   2007 (a)   2006   2005  
Net Asset Value, Beginning of Period   $ 18.64     $ 19.42     $ 26.58     $ 22.13     $ 20.98     $ 18.46    
Income from Investment Operations:  
Net investment income (loss) (b)     0.02       0.06       (0.01 )     0.01       0.01       0.07 (c)  
Net realized and unrealized gain (loss)
on investments
    1.97       (0.85 )     (5.35 )     4.84       1.17       2.47    
Total from investment operations     1.99       (0.79 )     (5.36 )     4.85       1.18       2.54    
Less Distributions to Shareholders:  
From net investment income     (0.08 )                 (0.03 )     (0.03 )     (0.02 )  
From net realized gains                 (1.81 )     (0.37 )              
Total distributions to shareholders     (0.08 )           (1.81 )     (0.40 )     (0.03 )     (0.02 )  
Increase from regulatory settlements     (d)     0.01       0.01                      
Net Asset Value, End of Period   $ 20.55     $ 18.64     $ 19.42     $ 26.58     $ 22.13     $ 20.98    
Total return (e)     10.73 %(f)     (4.02 )%     (21.76 )%     22.14 %     5.63 %(g)     13.76 %(g)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.15 %(i)     1.18 %(h)     1.07 %(j)     1.05 %(h)     1.06 %(h)     1.16 %(h)  
Interest expense     %(i)(k)     %(k)           %(k)     %(k)        
Net expenses     1.15 %(i)     1.18 %(h)     1.07 %(j)     1.05 %(h)     1.06 %(h)     1.16 %(h)  
Waiver/Reimbursement                             %(k)     %(k)  
Net investment income (loss)     0.20 %(i)     0.38 %(h)     (0.05 )%(j)     0.02 %(h)     0.06 %(h)     0.33 %(h)  
Portfolio turnover rate     61 %(f)     146 %     164 %     151 %     171 %     113 %  
Net assets, end of period (000s)   $ 152,555     $ 145,011     $ 169,295     $ 244,901     $ 209,952     $ 218,095    

 

(a)  On August 8, 2007, Class G shares were converted to Class T shares.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.09 per share.

(d)  Rounds to less than $0.01 per share.

(e)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(f)  Not annualized.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  Annualized.

(j)  The benefits derived from expense reductions had an impact of 0.01%.

(k)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


79



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)      
    Six Months      
    Ended   Period Ended  
    March 31,   September 30,  
Class Y Shares   2010   2009 (a)  
Net Asset Value, Beginning of Period   $ 19.20     $ 17.02    
Income from Investment Operations:  
Net investment income (b)     0.07       0.03    
Net realized and unrealized gain on investments     2.03       2.15    
Total from investment operations     2.10       2.18    
Less Distributions to Shareholders:  
From net investment income     (0.16 )        
Increase from regulatory settlements     (c)        
Net Asset Value, End of Period   $ 21.14     $ 19.20    
Total return (d)(e)     11.01 %     12.81 %  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (g)     0.64 %     0.63 %(f)  
Interest expense (g)(h)     %     %  
Net expenses (g)     0.64 %     0.63 %(f)  
Net investment income (g)     0.71 %     0.78 %(f)  
Portfolio turnover rate (e)     61 %     146 %  
Net assets, end of period (000s)   $ 17,992     $ 16,686    

 

(a)  Class Y shares commenced operations on July 15, 2009. Per share data and total return reflect activity from that date.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested.

(e)  Not annualized.

(f)  The benefits derived from expense reductions had an impact of less than 0.01%.

(g)  Annualized.

(h)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


80



Financial HighlightsColumbia Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class Z Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 19.20     $ 20.02     $ 27.32     $ 22.68     $ 21.50     $ 18.87    
Income from Investment Operations:  
Net investment income (a)     0.05       0.11       0.06       0.08       0.08       0.11 (b)  
Net realized and unrealized gain (loss)
on investments
    2.03       (0.88 )     (5.51 )     4.97       1.19       2.55    
Total from investment operations     2.08       (0.77 )     (5.45 )     5.05       1.27       2.66    
Less Distributions to Shareholders:  
From net investment income     (0.13 )     (0.06 )     (0.05 )     (0.04 )     (0.09 )     (0.03 )  
From net realized gains                 (1.81 )     (0.37 )              
Total distributions to shareholders     (0.13 )     (0.06 )     (1.86 )     (0.41 )     (0.09 )     (0.03 )  
Increase from regulatory settlements     (c)     0.01       0.01                      
Net Asset Value, End of Period   $ 21.15     $ 19.20     $ 20.02     $ 27.32     $ 22.68     $ 21.50    
Total return (d)     10.90 %(e)     (3.71 )%     (21.55 )%     22.53 %     5.92 %(f)     14.12 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     0.85 %(h)     0.88 %(g)     0.77 %(i)     0.75 %(g)     0.76 %(g)     0.86 %(g)  
Interest expense     %(h)(j)     %(j)           %(j)     %(j)        
Net expenses     0.85 %(h)     0.88 %(g)     0.77 %(i)     0.75 %(g)     0.76 %(g)     0.86 %(g)  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment income     0.50 %(h)     0.67 %(g)     0.25 %(i)     0.32 %(g)     0.35 %(g)     0.53 %(g)  
Portfolio turnover rate     61 %(e)     146 %     164 %     151 %     171 %     113 %  
Net assets, end of period (000s)   $ 951,322     $ 940,823     $ 979,353     $ 1,302,932     $ 1,169,103     $ 1,242,736    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.09 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  The benefits derived from expense reductions had an impact of 0.01%.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


81



Financial HighlightsColumbia Disciplined Value Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class A Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 9.52     $ 10.53     $ 16.32     $ 15.70     $ 14.60     $ 12.71    
Income from Investment Operations:  
Net investment income (a)     0.06       0.15       0.17       0.14       0.17       0.17 (b)  
Net realized and unrealized gain (loss)
on investments and futures contracts
    0.78       (1.00 )     (3.96 )     2.10       2.18       1.88    
Total from investment operations     0.84       (0.85 )     (3.79 )     2.24       2.35       2.05    
Less Distributions to Shareholders:  
From net investment income     (0.06 )     (0.16 )     (0.17 )     (0.16 )     (0.18 )     (0.16 )  
From net realized gains                 (1.83 )     (1.46 )     (1.07 )        
Total distributions to shareholders     (0.06 )     (0.16 )     (2.00 )     (1.62 )     (1.25 )     (0.16 )  
Increase from regulatory settlements     (c)                                
Net Asset Value, End of Period   $ 10.30     $ 9.52     $ 10.53     $ 16.32     $ 15.70     $ 14.60    
Total return (d)     8.86 %(e)(f)     (7.72 )%     (26.09 )%     15.00 %     17.19 %(f)     16.21 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (g)     1.25 %(h)     1.29 %     1.28 %     1.24 %     1.21 %     1.23 %  
Interest expense     %(h)(i)     %(i)     %(i)           %(i)        
Net expenses (g)     1.25 %(h)     1.29 %     1.28 %     1.24 %     1.21 %     1.23 %  
Waiver/Reimbursement     0.01 %(h)                       %(i)     0.01 %  
Net investment income (g)     1.20 %(h)     1.94 %     1.32 %     0.89 %     1.15 %     1.21 %  
Portfolio turnover rate     33 %(e)     170 %     78 %     91 %     81 %     94 %  
Net assets, end of period (000s)   $ 10,153     $ 10,543     $ 16,171     $ 34,706     $ 12,717     $ 4,269    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


82



Financial HighlightsColumbia Disciplined Value Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class B Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 8.97     $ 9.92     $ 15.47     $ 14.96     $ 13.96     $ 12.16    
Income from Investment Operations:  
Net investment income (a)     0.02       0.09       0.07       0.03       0.06       0.06 (b)  
Net realized and unrealized gain (loss)
on investments and futures contracts
    0.73       (0.94 )     (3.72 )     1.98       2.08       1.80    
Total from investment operations     0.75       (0.85 )     (3.65 )     2.01       2.14       1.86    
Less Distributions to Shareholders:  
From net investment income     (0.02 )     (0.10 )     (0.07 )     (0.04 )     (0.07 )     (0.06 )  
From net realized gains                 (1.83 )     (1.46 )     (1.07 )        
Total distributions to shareholders     (0.02 )     (0.10 )     (1.90 )     (1.50 )     (1.14 )     (0.06 )  
Increase from regulatory settlements     (c)                                
Net Asset Value, End of Period   $ 9.70     $ 8.97     $ 9.92     $ 15.47     $ 14.96     $ 13.96    
Total return (d)     8.42 %(e)(f)     (8.33 )%     (26.59 )%     14.12 %     16.35 %(f)     15.30 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (g)     2.00 %(h)     2.04 %     2.03 %     1.99 %     1.96 %     1.98 %  
Interest expense     %(h)(i)     %(i)     %(i)           %(i)        
Net expenses (g)     2.00 %(h)     2.04 %     2.03 %     1.99 %     1.96 %     1.98 %  
Waiver/Reimbursement     0.01 %(h)                       %(i)     0.01 %  
Net investment income (g)     0.46 %(h)     1.22 %     0.56 %     0.19 %     0.43 %     0.46 %  
Portfolio turnover rate     33 %(e)     170 %     78 %     91 %     81 %     94 %  
Net assets, end of period (000s)   $ 1,999     $ 2,169     $ 3,914     $ 7,690     $ 5,332     $ 3,974    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


83



Financial HighlightsColumbia Disciplined Value Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class C Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 8.94     $ 9.89     $ 15.44     $ 14.93     $ 13.94     $ 12.14    
Income from Investment Operations:  
Net investment income (a)     0.02       0.09       0.07       0.02       0.05       0.06 (b)  
Net realized and unrealized gain (loss)
on investments and futures contracts
    0.72       (0.94 )     (3.72 )     1.99       2.08       1.80    
Total from investment operations     0.74       (0.85 )     (3.65 )     2.01       2.13       1.86    
Less Distributions to Shareholders:  
From net investment income     (0.02 )     (0.10 )     (0.07 )     (0.04 )     (0.07 )     (0.06 )  
From net realized gains                 (1.83 )     (1.46 )     (1.07 )        
Total distributions to shareholders     (0.02 )     (0.10 )     (1.90 )     (1.50 )     (1.14 )     (0.06 )  
Increase from regulatory settlements     (c)                                
Net Asset Value, End of Period   $ 9.66     $ 8.94     $ 9.89     $ 15.44     $ 14.93     $ 13.94    
Total return (d)     8.34 %(e)(f)     (8.35 )%     (26.64 )%     14.15 %     16.30 %(f)     15.33 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (g)     2.00 %(h)     2.04 %     2.03 %     1.99 %     1.96 %     1.98 %  
Interest expense     %(h)(i)     %(i)     %(i)           %(i)        
Net expenses (g)     2.00 %(h)     2.04 %     2.03 %     1.99 %     1.96 %     1.98 %  
Waiver/Reimbursement     0.01 %(h)                       %(i)     0.01 %  
Net investment income (g)     0.46 %(h)     1.18 %     0.55 %     0.14 %     0.39 %     0.49 %  
Portfolio turnover rate     33 %(e)     170 %     78 %     91 %     81 %     94 %  
Net assets, end of period (000s)   $ 2,079     $ 2,020     $ 2,801     $ 5,650     $ 1,801     $ 453    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


84



Financial HighlightsColumbia Disciplined Value Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class T Shares   2010   2009   2008   2007 (a)   2006   2005  
Net Asset Value, Beginning of Period   $ 9.52     $ 10.53     $ 16.33     $ 15.70     $ 14.60     $ 12.72    
Income from Investment Operations:  
Net investment income (b)     0.06       0.15       0.16       0.15       0.17       0.17 (c)  
Net realized and unrealized gain (loss)
on investments and futures contracts
    0.78       (1.00 )     (3.97 )     2.09       2.18       1.86    
Total from investment operations     0.84       (0.85 )     (3.81 )     2.24       2.35       2.03    
Less Distributions to Shareholders:  
From net investment income     (0.06 )     (0.16 )     (0.16 )     (0.15 )     (0.18 )     (0.15 )  
From net realized gains                 (1.83 )     (1.46 )     (1.07 )        
Total distributions to shareholders     (0.06 )     (0.16 )     (1.99 )     (1.61 )     (1.25 )     (0.15 )  
Increase from regulatory settlements     (d)                                
Net Asset Value, End of Period   $ 10.30     $ 9.52     $ 10.53     $ 16.33     $ 15.70     $ 14.60    
Total return (e)     8.83 %(f)(g)     (7.77 )%     (26.18 )%     15.01 %     17.13 %(g)     16.06 %(g)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (h)     1.30 %(i)     1.34 %     1.33 %     1.29 %     1.26 %     1.28 %  
Interest expense     %(i)(j)     %(j)     %(j)           %(j)        
Net expenses (h)     1.30 %(i)     1.34 %     1.33 %     1.29 %     1.26 %     1.28 %  
Waiver/Reimbursement     0.01 %(i)                       %(j)     0.01 %  
Net investment income (h)     1.15 %(i)     1.84 %     1.27 %     0.91 %     1.15 %     1.22 %  
Portfolio turnover rate     33 %(f)     170 %     78 %     91 %     81 %     94 %  
Net assets, end of period (000s)   $ 74,377     $ 72,555     $ 89,694     $ 140,443     $ 137,595     $ 134,792    

 

(a)  On August 8, 2007, Class G shares were converted to Class T shares.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(d)  Rounds to less than $0.01 per share.

(e)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(f)  Not annualized.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  Annualized.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


85



Financial HighlightsColumbia Disciplined Value Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class Z Shares   2010   2009   2008   2007   2006   2005  
Net Asset Value, Beginning of Period   $ 9.77     $ 10.80     $ 16.69     $ 16.02     $ 14.87     $ 12.95    
Income from Investment Operations:  
Net investment income (a)     0.07       0.17       0.21       0.20       0.22       0.21 (b)  
Net realized and unrealized gain (loss)
on investments and futures contracts
    0.80       (1.02 )     (4.07 )     2.13       2.22       1.91    
Total from investment operations     0.87       (0.85 )     (3.86 )     2.33       2.44       2.12    
Less Distributions to Shareholders:  
From net investment income     (0.07 )     (0.18 )     (0.20 )     (0.20 )     (0.22 )     (0.20 )  
From net realized gains                 (1.83 )     (1.46 )     (1.07 )        
Total distributions to shareholders     (0.07 )     (0.18 )     (2.03 )     (1.66 )     (1.29 )     (0.20 )  
Increase from regulatory settlements     (c)                                
Net Asset Value, End of Period   $ 10.57     $ 9.77     $ 10.80     $ 16.69     $ 16.02     $ 14.87    
Total return (d)     8.97 %(e)(f)     (7.49 )%     (25.92 )%     15.29 %     17.50 %(f)     16.43 %(f)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (g)     1.00 %(h)     1.04 %     1.03 %     0.99 %     0.96 %     0.98 %  
Interest expense     %(h)(i)     %(i)     %(i)           %(i)        
Net expenses (g)     1.00 %(h)     1.04 %     1.03 %     0.99 %     0.96 %     0.98 %  
Waiver/Reimbursement     0.01 %(h)                       %(i)     0.01 %  
Net investment income (g)     1.45 %(h)     2.13 %     1.58 %     1.20 %     1.45 %     1.53 %  
Portfolio turnover rate     33 %(e)     170 %     78 %     91 %     81 %     94 %  
Net assets, end of period (000s)   $ 188,663     $ 218,691     $ 222,212     $ 341,612     $ 285,941     $ 283,187    

 

(a)  Per share data was calculated using the average shares outstanding during the period.

(b)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.02 per share.

(c)  Rounds to less than $0.01 per share.

(d)  Total return at net asset value assuming all distributions reinvested.

(e)  Not annualized.

(f)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(g)  The benefits derived from expense reductions had an impact of less than 0.01%.

(h)  Annualized.

(i)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


86




Financial HighlightsColumbia Contrarian Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class A Shares   2010   2009 (a)   2008   2007   2006   2005 (b)  
Net Asset Value, Beginning of Period   $ 11.76     $ 11.89     $ 15.51     $ 14.03     $ 13.59     $ 12.01    
Income from Investment Operations:  
Net investment income (c)     0.01       0.08       0.07       0.05       (d)     0.07 (e)  
Net realized and unrealized gain (loss)
on investments and foreign currency
    1.32       (0.14 )     (2.17 )     2.60       1.21       1.93    
Total from investment operations     1.33       (0.06 )     (2.10 )     2.65       1.21       2.00    
Less Distributions to Shareholders:  
From net investment income     (0.06 )     (0.07 )     (0.05 )           (0.01 )     (0.07 )  
From net realized gains                 (1.47 )     (1.17 )     (0.76 )     (0.35 )  
Total distributions to shareholders     (0.06 )     (0.07 )     (1.52 )     (1.17 )     (0.77 )     (0.42 )  
Increase from regulatory settlements           (d)                          
Net Asset Value, End of Period   $ 13.03     $ 11.76     $ 11.89     $ 15.51     $ 14.03     $ 13.59    
Total return (f)(g)     11.34 %(h)     (0.28 )%     (15.35 )%     19.82 %     9.24 %     16.98 %  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.19 %(i)(j)     1.17 %(i)     1.14 %(k)     1.14 %(i)     1.14 %(i)     1.14 %(i)  
Interest expense           %(l)     %(l)                    
Net expenses     1.19 %(i)(j)     1.17 %(i)     1.14 %(k)     1.14 %(i)     1.14 %(i)     1.24 %(i)  
Waiver/Reimbursement     0.03 %(j)     0.11 %     0.10 %     0.10 %     0.12 %     0.09 %  
Net investment income     0.20 %(i)(j)     0.77 %(i)     0.53 %(k)     0.32 %(i)     %(i)(l)     0.59 %(i)  
Portfolio turnover rate     28 %(h)     131 %     106 %     88 %     63 %     105 %  
Net assets, end of period (000s)   $ 66,115     $ 27,742     $ 11,187     $ 12,054     $ 10,578     $ 10,393    

 

(a)  On November 14, 2008, the Columbia Common Stock Fund was renamed the Columbia Contrarian Core Fund.

(b)  On September 23, 2005, the Columbia Large Cap Core Fund was renamed the Columbia Common Stock Fund.

(c)  Per share data was calculated using the average shares outstanding during the period.

(d)  Rounds to less than $0.01 per share.

(e)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.05 per share.

(f)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  Not annualized.

(i)  The benefits derived from expense reductions had an impact of less than 0.01%.

(j)  Annualized.

(k)  The benefits derived from expense reductions had an impact of 0.01%.

(l)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


87



Financial HighlightsColumbia Contrarian Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class B Shares   2010   2009 (a)   2008   2007   2006   2005 (b)  
Net Asset Value, Beginning of Period   $ 11.02     $ 11.14     $ 14.67     $ 13.42     $ 13.12     $ 11.68    
Income from Investment Operations:  
Net investment income (loss) (c)     (0.03 )     0.01       (0.03 )     (0.06 )     (0.10 )     (0.04 )(d)  
Net realized and unrealized gain (loss)
on investments and foreign currency
    1.23       (0.13 )     (2.03 )     2.48       1.16       1.88    
Total from investment operations     1.20       (0.12 )     (2.06 )     2.42       1.06       1.84    
Less Distributions to Shareholders:  
From net investment income                                   (0.05 )  
From net realized gains                 (1.47 )     (1.17 )     (0.76 )     (0.35 )  
Total distributions to shareholders                 (1.47 )     (1.17 )     (0.76 )     (0.40 )  
Increase from regulatory settlements           (e)                          
Net Asset Value, End of Period   $ 12.22     $ 11.02     $ 11.14     $ 14.67     $ 13.42     $ 13.12    
Total return (f)(g)     10.89 %(h)     (1.08 )%     (15.96 )%     18.94 %     8.40 %     16.02 %  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.94 %(i)(j)     1.92 %(i)     1.89 %(k)     1.89 %(i)     1.89 %(i)     1.99 %(i)  
Interest expense           %(l)     %(l)                    
Net expenses     1.94 %(i)(j)     1.92 %(i)     1.89 %(k)     1.89 %(i)     1.89 %(i)     1.99 %(i)  
Waiver/Reimbursement     0.03 %(j)     0.11 %     0.10 %     0.10 %     0.12 %     0.09 %  
Net investment income (loss)     (0.54 )%(i)(j)     0.12 %(i)     (0.22 )%(k)     (0.44 )%(i)     (0.75 )%(i)     (0.31 )%(i)  
Portfolio turnover rate     28 %(h)     131 %     106 %     88 %     63 %     105 %  
Net assets, end of period (000s)   $ 4,379     $ 3,428     $ 3,629     $ 4,796     $ 5,637     $ 6,628    

 

(a)  On November 14, 2008, the Columbia Common Stock Fund was renamed the Columbia Contrarian Core Fund.

(b)  On September 23, 2005, the Columbia Large Cap Core Fund was renamed the Columbia Common Stock Fund.

(c)  Per share data was calculated using the average shares outstanding during the period.

(d)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.05 per share.

(e)  Rounds to less than $0.01 per share.

(f)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  Not annualized.

(i)  The benefits derived from expense reductions had an impact of less than 0.01%.

(j)  Annualized.

(k)  The benefits derived from expense reductions had an impact of 0.01%.

(l)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


88



Financial HighlightsColumbia Contrarian Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class C Shares   2010   2009 (a)   2008   2007   2006   2005 (b)  
Net Asset Value, Beginning of Period   $ 11.03     $ 11.15     $ 14.68     $ 13.43     $ 13.13     $ 11.68    
Income from Investment Operations:  
Net investment income (loss) (c)     (0.03 )     0.01       (0.03 )     (0.06 )     (0.10 )     (0.03 )(d)  
Net realized and unrealized gain (loss)
on investments and foreign currency
    1.24       (0.13 )     (2.03 )     2.48       1.16       1.88    
Total from investment operations     1.21       (0.12 )     (2.06 )     2.42       1.06       1.85    
Less Distributions to Shareholders:  
From net investment income                                   (0.05 )  
From net realized gains                 (1.47 )     (1.17 )     (0.76 )     (0.35 )  
Total distributions to shareholders                 (1.47 )     (1.17 )     (0.76 )     (0.40 )  
Increase from regulatory settlements           (e)                          
Net Asset Value, End of Period   $ 12.24     $ 11.03     $ 11.15     $ 14.68     $ 13.43     $ 13.13    
Total return (f)(g)     10.97 %(h)     (1.08 )%     (15.95 )%     18.93 %     8.40 %     16.10 %  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.94 %(i)(j)     1.92 %(i)     1.89 %(k)     1.89 %(i)     1.89 %(i)     1.99 %(i)  
Interest expense           %(l)     %(l)                    
Net expenses     1.94 %(i)(j)     1.92 %(i)     1.89 %(k)     1.89 %(i)     1.89 %(i)     1.99 %(i)  
Waiver/Reimbursement     0.03 %(j)     0.11 %     0.10 %     0.10 %     0.12 %     0.09 %  
Net investment income (loss)     (0.54 )%(i)(j)     0.03 %(i)     (0.21 )%(k)     (0.41 )%(i)     (0.75 )%(i)     (0.25 )%(i)  
Portfolio turnover rate     28 %(h)     131 %     106 %     88 %     63 %     105 %  
Net assets, end of period (000s)   $ 14,493     $ 7,094     $ 1,718     $ 1,428     $ 906     $ 605    

 

(a)  On November 14, 2008, the Columbia Common Stock Fund was renamed the Columbia Contrarian Core Fund.

(b)  On September 23, 2005, the Columbia Large Cap Core Fund was renamed the Columbia Common Stock Fund.

(c)  Per share data was calculated using the average shares outstanding during the period.

(d)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.05 per share.

(e)  Rounds to less than $0.01 per share.

(f)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  Not annualized.

(i)  The benefits derived from expense reductions had an impact of less than 0.01%.

(j)  Annualized.

(k)  The benefits derived from expense reductions had an impact of 0.01%.

(l)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


89



Financial HighlightsColumbia Contrarian Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class T Shares   2010   2009 (a)   2008   2007 (b)   2006   2005 (c)  
Net Asset Value, Beginning of Period   $ 11.67     $ 11.80     $ 15.40     $ 13.95     $ 13.52     $ 11.95    
Income from Investment Operations:  
Net investment income (loss) (d)     0.01       0.08       0.06       0.04       (0.01 )     0.07 (e)  
Net realized and unrealized gain (loss)
on investments and foreign currency
    1.31       (0.14 )     (2.15 )     2.58       1.21       1.92    
Total from investment operations     1.32       (0.06 )     (2.09 )     2.62       1.20       1.99    
Less Distributions to Shareholders:  
From net investment income     (0.05 )     (0.07 )     (0.04 )     (f)     (0.01 )     (0.07 )  
From net realized gains                 (1.47 )     (1.17 )     (0.76 )     (0.35 )  
Total distributions to shareholders     (0.05 )     (0.07 )     (1.51 )     (1.17 )     (0.77 )     (0.42 )  
Increase from regulatory settlements           (f)                          
Net Asset Value, End of Period   $ 12.94     $ 11.67     $ 11.80     $ 15.40     $ 13.95     $ 13.52    
Total return (g)(h)     11.38 %(i)     (0.35 )%     (15.37 )%     19.70 %     9.16 %     16.97 %  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     1.24 %(j)(k)     1.22 %(j)     1.19 %(l)     1.19 %(j)     1.19 %(j)     1.29 %(j)  
Interest expense           %(m)     %(m)                    
Net expenses     1.24 %(j)(k)     1.22 %(j)     1.19 %(l)     1.19 %(j)     1.19 %(j)     1.29 %(j)  
Waiver/Reimbursement     0.03 %(k)     0.11 %     0.10 %     0.10 %     0.12 %     0.09 %  
Net investment income (loss)     0.17 %(j)(k)     0.81 %(j)     0.48 %(l)     0.27 %(j)     (0.05 )%(j)     0.57 %(j)  
Portfolio turnover rate     28 %(i)     131 %     106 %     88 %     63 %     105 %  
Net assets, end of period (000s)   $ 123,129     $ 117,161     $ 132,272     $ 177,345     $ 168,506     $ 180,345    

 

(a)  On November 14, 2008, the Columbia Common Stock Fund was renamed the Columbia Contrarian Core Fund.

(b)  On August 8, 2007, Class G shares were converted to Class T shares.

(c)  On September 23, 2005, the Columbia Large Cap Core Fund was renamed the Columbia Common Stock Fund.

(d)  Per share data was calculated using the average shares outstanding during the period.

(e)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.05 per share.

(f)  Rounds to less than $0.01 per share.

(g)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(h)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(i)  Not annualized.

(j)  The benefits derived from expense reductions had an impact of less than 0.01%.

(k)  Annualized.

(l)  The benefits derived from expense reductions had an impact of 0.01%.

(m)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


90



Financial HighlightsColumbia Contrarian Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class Z Shares   2010   2009 (a)   2008   2007   2006   2005 (b)  
Net Asset Value, Beginning of Period   $ 11.83     $ 11.97     $ 15.60     $ 14.10     $ 13.66     $ 12.05    
Income from Investment Operations:  
Net investment income (c)     0.03       0.11       0.11       0.08       0.03       0.09 (d)  
Net realized and unrealized gain (loss)
on investments and foreign currency
    1.31       (0.15 )     (2.18 )     2.62       1.21       1.95    
Total from investment operations     1.34       (0.04 )     (2.07 )     2.70       1.24       2.04    
Less Distributions to Shareholders:  
From net investment income     (0.08 )     (0.10 )     (0.09 )     (0.03 )     (0.04 )     (0.08 )  
From net realized gains                 (1.47 )     (1.17 )     (0.76 )     (0.35 )  
Total distributions to shareholders     (0.08 )     (0.10 )     (1.56 )     (1.20 )     (0.80 )     (0.43 )  
Increase from regulatory settlements           (e)                          
Net Asset Value, End of Period   $ 13.09     $ 11.83     $ 11.97     $ 15.60     $ 14.10     $ 13.66    
Total return (f)(g)     11.42 %(h)     (0.01 )%     (15.11 )%     20.13 %     9.45 %     17.25 %  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense     0.94 %(i)(j)     0.92 %(i)     0.89 %(k)     0.89 %(i)     0.89 %(i)     0.99 %(i)  
Interest expense           %(l)     %(l)                    
Net expenses     0.94 %(i)(j)     0.92 %(i)     0.89 %(k)     0.89 %(i)     0.89 %(i)     0.99 %(i)  
Waiver/Reimbursement     0.03 %(j)     0.11 %     0.10 %     0.10 %     0.12 %     0.09 %  
Net investment income     0.46 %(i)(j)     1.09 %(i)     0.77 %(k)     0.57 %(i)     0.25 %(i)     0.67 %(i)  
Portfolio turnover rate     28 %(h)     131 %     106 %     88 %     63 %     105 %  
Net assets, end of period (000s)   $ 330,143     $ 247,974     $ 173,479     $ 245,529     $ 256,039     $ 310,472    

 

(a)  On November 14, 2008, the Columbia Common Stock Fund was renamed the Columbia Contrarian Core Fund.

(b)  On September 23, 2005, the Columbia Large Cap Core Fund was renamed the Columbia Common Stock Fund.

(c)  Per share data was calculated using the average shares outstanding during the period.

(d)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.05 per share.

(e)  Rounds to less than $0.01 per share.

(f)  Total return at net asset value assuming all distributions reinvested.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  Not annualized.

(i)  The benefits derived from expense reductions had an impact of less than 0.01%.

(j)  Annualized.

(k)  The benefits derived from expense reductions had an impact of 0.01%.

(l)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


91



Financial HighlightsColumbia Small Cap Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class A Shares   2010   2009   2008   2007   2006   2005 (a)  
Net Asset Value, Beginning of Period   $ 11.58     $ 14.14     $ 20.01     $ 19.72     $ 19.32     $ 17.54    
Income from Investment Operations:  
Net investment income (loss) (b)     (0.01 )     (0.02 )     (0.09 )     0.04 (c)     (0.06 )     (0.06 )  
Net realized and unrealized gain (loss)
on investments
    1.50       (1.39 )     (2.11 )     2.46       1.91       2.91    
Total from investment operations     1.49       (1.41 )     (2.20 )     2.50       1.85       2.85    
Less Distributions to Shareholders:  
From net investment income                 (0.03 )                    
From net realized gains           (1.15 )     (3.64 )     (2.21 )     (1.45 )     (1.07 )  
Total distributions to shareholders           (1.15 )     (3.67 )     (2.21 )     (1.45 )     (1.07 )  
Increase from regulatory settlements           (d)                          
Net Asset Value, End of Period   $ 13.07     $ 11.58     $ 14.14     $ 20.01     $ 19.72     $ 19.32    
Total return (e)     12.87 %(f)     (7.41 )%     (12.86 )%     13.30 %     10.08 %(g)     16.69 %(g)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (h)     1.30 %(i)     1.33 %     1.25 %     1.21 %     1.16 %     1.13 %  
Interest expense                             %(j)        
Net expenses (h)     1.30 %(i)     1.33 %     1.25 %     1.21 %     1.16 %     1.13 %  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment income (loss) (h)     (0.16 )%(i)     (0.28 )%     (0.56 )%     0.22 %     (0.30 )%     (0.31 )%  
Portfolio turnover rate     11 %(f)     11 %     25 %     44 %     14 %     16 %  
Net assets, end of period (000s)   $ 105,346     $ 81,474     $ 115,246     $ 176,504     $ 190,390     $ 211,527    

 

(a)  On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia Small Cap Core Fund.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.07 per share.

(d)  Rounds to less than $0.01 per share.

(e)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(f)  Not annualized.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  Annualized.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


92



Financial HighlightsColumbia Small Cap Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class B Shares   2010   2009   2008   2007   2006   2005 (a)  
Net Asset Value, Beginning of Period   $ 10.42     $ 12.97     $ 18.75     $ 18.73     $ 18.56     $ 16.89    
Income from Investment Operations:  
Net investment loss (b)     (0.05 )     (0.09 )     (0.19 )     (0.10 )(c)     (0.19 )     (0.19 )  
Net realized and unrealized gain (loss)
on investments
    1.35       (1.31 )     (1.95 )     2.33       1.81       2.81    
Total from investment operations     1.30       (1.40 )     (2.14 )     2.23       1.62       2.62    
Less Distributions to Shareholders:  
From net realized gains           (1.15 )     (3.64 )     (2.21 )     (1.45 )     (0.95 )  
Increase from regulatory settlements           (d)                          
Net Asset Value, End of Period   $ 11.72     $ 10.42     $ 12.97     $ 18.75     $ 18.73     $ 18.56    
Total return (e)     12.48 %(f)     (8.08 )%     (13.53 )%     12.49 %     9.17 %(g)     15.87 %(g)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (h)     2.05 %(i)     2.08 %     2.00 %     1.96 %     1.91 %     1.88 %  
Interest expense                             %(j)        
Net expenses (h)     2.05 %(i)     2.08 %     2.00 %     1.96 %     1.91 %     1.88 %  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment loss (h)     (0.92 )%(i)     (1.03 )%     (1.31 )%     (0.53 )%     (1.05 )%     (1.06 )%  
Portfolio turnover rate     11 %(f)     11 %     25 %     44 %     14 %     16 %  
Net assets, end of period (000s)   $ 17,426     $ 17,317     $ 23,085     $ 35.918     $ 39,109     $ 42,439    

 

(a)  On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia Small Cap Core Fund.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Net investment loss per share reflects a special dividend. The effect of this dividend amounted to $0.06 per share.

(d)  Rounds to less than $0.01 per share.

(e)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(f)  Not annualized.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  Annualized.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


93



Financial HighlightsColumbia Small Cap Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class C Shares   2010   2009   2008   2007   2006   2005 (a)  
Net Asset Value, Beginning of Period   $ 10.43     $ 12.99     $ 18.76     $ 18.75     $ 18.57     $ 16.91    
Income from Investment Operations:  
Net investment loss (b)     (0.05 )     (0.09 )     (0.19 )     (0.10 )(c)     (0.19 )     (0.19 )  
Net realized and unrealized gain (loss)
on investments
    1.35       (1.32 )     (1.94 )     2.32       1.82       2.80    
Total from investment operations     1.30       (1.41 )     (2.13 )     2.22       1.63       2.61    
Less Distributions to Shareholders:  
From net realized gains           (1.15 )     (3.64 )     (2.21 )     (1.45 )     (0.95 )  
Increase from regulatory settlements           (d)                          
Net Asset Value, End of Period   $ 11.73     $ 10.43     $ 12.99     $ 18.76     $ 18.75     $ 18.57    
Total return (e)     12.46 %(f)     (8.15 )%     (13.46 )%     12.41 %     9.23 %(g)     15.79 %(g)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (h)     2.05 %(i)     2.08 %     2.00 %     1.96 %     1.91 %     1.88 %  
Interest expense                             %(j)        
Net expenses (h)     2.05 %(i)     2.08 %     2.00 %     1.96 %     1.91 %     1.88 %  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment loss (h)     (0.92 )%(i)     (1.03 )%     (1.29 )%     (0.53 )%     (1.05 )%     (1.06 )%  
Portfolio turnover rate     11 %(f)     11 %     25 %     44 %     14 %     16 %  
Net assets, end of period (000s)   $ 19,843     $ 18,461     $ 24,756     $ 42,312     $ 46.241     $ 56,163    

 

(a)  On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia Small Cap Core Fund.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Net investment loss per share reflects a special dividend. The effect of this dividend amounted to $0.06 per share.

(d)  Rounds to less than $0.01 per share.

(e)  Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

(f)  Not annualized.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  Annualized.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


94



Financial HighlightsColumbia Small Cap Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class T Shares   2010   2009   2008   2007 (a)   2006   2005 (b)  
Net Asset Value, Beginning of Period   $ 11.39     $ 13.94     $ 19.78     $ 19.53     $ 19.15     $ 17.40    
Income from Investment Operations:  
Net investment income (loss) (c)     (0.01 )     (0.03 )     (0.10 )     0.03 (d)     (0.07 )     (0.07 )  
Net realized and unrealized gain (loss)
on investments
    1.47       (1.37 )     (2.08 )     2.43       1.90       2.88    
Total from investment operations     1.46       (1.40 )     (2.18 )     2.46       1.83       2.81    
Less Distributions to Shareholders:  
From net investment income                 (0.02 )                    
From net realized gains           (1.15 )     (3.64 )     (2.21 )     (1.45 )     (1.06 )  
Total distributions to shareholders           (1.15 )     (3.66 )     (2.21 )     (1.45 )     (1.06 )  
Increase from regulatory settlements           (e)                          
Net Asset Value, End of Period   $ 12.85     $ 11.39     $ 13.94     $ 19.78     $ 19.53     $ 19.15    
Total return (f)     12.82 %(g)     (7.45 )%     (12.90 )%     13.22 %     10.04 %(h)     16.58 %(h)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (i)     1.35 %(j)     1.38 %     1.30 %     1.26 %     1.21 %     1.18 %  
Interest expense                             %(k)        
Net expenses (i)     1.35 %(j)     1.38 %     1.30 %     1.26 %     1.21 %     1.18 %  
Waiver/Reimbursement                             %(k)     %(k)  
Net investment income (loss) (i)     (0.22 )%(j)     (0.34 )%     (0.63 )%     0.17 %     (0.35 )%     (0.36 )%  
Portfolio turnover rate     11 %(g)     11 %     25 %     44 %     14 %     16 %  
Net assets, end of period (000s)   $ 78,439     $ 74,722     $ 98,299     $ 136,381     $ 135,538     $ 150,042    

 

(a)  On August 8, 2007, Class G shares were converted to Class T shares.

(b)  On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia Small Cap Core Fund.

(c)  Per share data was calculated using the average shares outstanding during the period.

(d)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.07 per share.

(e)  Rounds to less than $0.01 per share.

(f)  Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

(g)  Not annualized.

(h)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(i)  The benefits derived from expense reductions had an impact of less than 0.01%.

(j)  Annualized.

(k)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


95



Financial HighlightsColumbia Small Cap Core Fund

Selected data for a share outstanding throughout each period is as follows:

    (Unaudited)
Six Months
Ended
March 31,
  Year Ended September 30,  
Class Z Shares   2010   2009   2008   2007   2006   2005 (a)  
Net Asset Value, Beginning of Period   $ 11.87     $ 14.42     $ 20.33     $ 19.96     $ 19.54     $ 17.73    
Income from Investment Operations:  
Net investment income (loss) (b)     0.01       (c)     (0.04 )     0.09 (d)     (0.01 )     (0.01 )  
Net realized and unrealized gain (loss)
on investments
    1.53       (1.40 )     (2.15 )     2.49       1.93       2.94    
Total from investment operations     1.54       (1.40 )     (2.19 )     2.58       1.92       2.93    
Less Distributions to Shareholders:  
From net investment income                 (0.08 )                    
From net realized gains           (1.15 )     (3.64 )     (2.21 )     (1.50 )     (1.12 )  
Total distributions to shareholders           (1.15 )     (3.72 )     (2.21 )     (1.50 )     (1.12 )  
Increase from regulatory settlements           (c)                          
Net Asset Value, End of Period   $ 13.41     $ 11.87     $ 14.42     $ 20.33     $ 19.96     $ 19.54    
Total return (e)     12.97 %(f)     (7.18 )%     (12.60 )%     13.56 %     10.32 %(g)     16.96 %(g)  
Ratios to Average Net Assets/Supplemental Data:  
Net expenses before interest expense (h)     1.05 %(i)     1.08 %     1.00 %     0.96 %     0.91 %     0.88 %  
Interest expense                             %(j)        
Net expenses (h)     1.05 %(i)     1.08 %     1.00 %     0.96 %     0.91 %     0.88 %  
Waiver/Reimbursement                             %(j)     %(j)  
Net investment income (loss) (h)     0.09 %(i)     (0.04 )%     (0.27 )%     0.46 %     (0.05 )%     (0.06 )%  
Portfolio turnover rate     11 %(f)     11 %     25 %     44 %     14 %     16 %  
Net assets, end of period (000s)   $ 400,679     $ 353,117     $ 413,763     $ 834,537     $ 929,791     $ 1,058,362    

 

(a)  On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia Small Cap Core Fund.

(b)  Per share data was calculated using the average shares outstanding during the period.

(c)  Rounds to less than $0.01 per share.

(d)  Net investment income per share reflects a special dividend. The effect of this dividend amounted to $0.07 per share.

(e)  Total return at net asset value assuming all distributions reinvested.

(f)  Not annualized.

(g)  Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(h)  The benefits derived from expense reductions had an impact of less than 0.01%.

(i)  Annualized.

(j)  Rounds to less than 0.01%.

See Accompanying Notes to Financial Statements.


96




Notes to Financial StatementsStock Funds
March 31, 2010 (Unaudited)

Note 1. Organization

Columbia Funds Series Trust I (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust. Information presented in these financial statements pertains to the following diversified series of the Trust (each, a "Fund" and collectively, the "Funds"):

Columbia Asset Allocation Fund

Columbia Large Cap Growth Fund

Columbia Disciplined Value Fund

Columbia Contrarian Core Fund

Columbia Small Cap Core Fund

Investment Objectives

Columbia Asset Allocation Fund seeks total return, consisting of current income and long-term capital appreciation. Columbia Large Cap Growth Fund and Columbia Small Cap Core Fund each seek long-term capital appreciation. Columbia Disciplined Value Fund seeks total return, consisting primarily of long-term capital appreciation and secondarily of current income. Columbia Contrarian Core Fund seeks total return, consisting of long-term capital appreciation and current income.

Fund Shares

The Trust may issue an unlimited number of shares, and each Fund offers the following classes of shares: Class A, Class B, Class C, Class T and Class Z. Columbia Large Cap Growth Fund also offers Class E, Class F and Class Y shares. Each share class has its own expense structure and sales charges, as applicable. Columbia Large Cap Growth Fund's Class E and Class F shares are closed to new investors and new accounts. The Funds no longer accept investments from new or existing investors in the Funds' Class B shares, except in connection with the reinvestment of any dividend and/or capital gain distributions in Class B shares of each Fund and exchanges by existing Class B shareholders of the other Columbia Funds.

Class A, Class E and Class T shares are subject to a front-end sales charge based on the amount of initial investment. Class A and Class T shares purchased without an initial sales charge in accounts aggregating between $1 million to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") if the shares are sold within one year after purchase. Class E shares purchased without an initial sales charge in accounts aggregating $1 million to $5 million at the time of purchase are subject to a 1.00% CDSC if the shares are sold within one year after purchase. Class B and Class F shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B and Class F shares will generally convert to Class A and Class E shares, respectively, eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Y and Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Y and Class Z shares, as described in each Fund's prospectus.

Note 2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.

Security Valuation

Debt securities generally are valued by pricing services approved by the Trust's Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available may also be valued based upon an over-the-counter or exchange bid quotation.

Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis.


97



Stock Funds, March 31, 2010 (Unaudited) (continued)

Equity securities, exchange-traded funds and securities of certain investment companies are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Short-term investments maturing in 60 days or less are valued at amortized cost, which approximates market value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Purchased options are valued at the last reported sale price, or in the absence of a sale, at the last quoted bid price. Written options are valued at the last reported sale price, or in the absence of a sale, at the last quoted ask price.

Forward foreign currency exchange contracts are valued at the prevailing forward exchange rate of the underlying currencies.

Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.

Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange ("NYSE"). The values of such securities used in computing the net asset value of the Funds' shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds' net asset values. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Trustees. The Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation.

Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. If a security is valued at fair value, such value is likely to be different from the last quoted market price for the security. The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine value.

GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical securities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:

•  Level 1 – quoted prices in active markets for identical securities

•  Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others)

•  Level 3 – prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

On January 21, 2010, the FASB issued an Accounting Standards Update (the amendment), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, which provides guidance on how investment assets and liabilities are to be valued and disclosed. Specifically, the amendment requires reporting entities to disclose the input and valuation techniques used to


98



Stock Funds, March 31, 2010 (Unaudited) (continued)

measure fair value for both recurring and nonrecurring fair value measurements for Level 2 or Level 3 positions. The amendment also requires that transfers between all levels (including Level 1 and Level 2) be disclosed on a gross basis (i.e., transfers out must be disclosed separately from transfers in), and the reason(s) for the transfer. Additionally purchases, sales, issuances and settlements must be disclosed on a gross basis in the Level 3 rollforward. The effective date of the amendment is for interim and annual periods beginning after December 15, 2009, however, the requirement to provide the Level 3 activity for purchases, sales, issuances and settlements on a gross basis will be effective for interim and annual periods beginning after December 15, 2010. At this time, management is evaluating the implications of the amendment and the impact to the financial statements.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

Derivatives

The Funds may invest in derivative instruments. For additional information on derivative instruments, please see Note 6.

Repurchase Agreements

Each Fund may engage in repurchase agreement transactions with institutions that Columbia Management Advisors, LLC ("Columbia"), the Funds' investment advisor, has determined are creditworthy. Each Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement. Columbia is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on each Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights.

Delayed Delivery Securities

Each Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a "when-issued" basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Funds to subsequently invest at less advantageous prices. Each Fund identifies within its portfolio of investments cash or liquid securities in an amount equal to the delayed delivery commitment.

Treasury Inflation Protected Securities

Columbia Asset Allocation Fund may invest in treasury inflation protected securities ("TIPS"). The principal amount of TIPS is adjusted periodically and is increased for inflation or decreased for deflation based on a monthly published index. Interest payments are based on the adjusted principal at the time the interest is paid. These adjustments are recorded as interest income on the Statements of Operations.

Foreign Currency Transactions and Translations

The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.

For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments on the Statements of Operations.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.

Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Funds become aware of such, net of any non-reclaimable tax withholdings.


99



Stock Funds, March 31, 2010 (Unaudited) (continued)

Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments. If the Funds no longer own the applicable securities, any distributions received in excess of income are recorded as realized gains.

Awards from class action litigation are recorded as a reduction of cost if the Funds still own the applicable securities on the payment date. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains.

Expenses

General expenses of the Trust are allocated to the Funds and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a specific class of shares are charged to that share class. Expenses directly attributable to a Fund are charged to such Fund.

Determination of Class Net Asset Value

All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of the Funds on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

Federal Income Tax Status

Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

Distributions to Shareholders

Distributions from net investment income for Columbia Asset Allocation Fund and Columbia Disciplined Value Fund, if any, are declared and paid quarterly. Distributions from net investment income for Columbia Large Cap Growth Fund, Columbia Contrarian Core Fund and Columbia Small Cap Core Fund, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually for all Funds. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.

Indemnification

In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund's maximum exposure under these arrangements is unknown because this would involve future claims against a Fund. Also, under the Trust's organizational documents and by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.

Note 3. Federal Tax Information

The tax character of distributions paid during the year ended September 30, 2009 was as follows:

    Ordinary
Income*
  Long-term
Capital Gains
 
Columbia Asset
Allocation Fund
  $ 4,673,335     $    
Columbia Large Cap
Growth Fund
    3,097,329          
Columbia Disciplined
Value Fund
    5,792,142          
Contrarian Core Fund     2,862,875          
Columbia Small Cap
Core Fund
          51,429,836    

 

*  For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.


100



Stock Funds, March 31, 2010 (Unaudited) (continued)

Unrealized appreciation and depreciation at March 31, 2010, based on cost of investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates, were:

    Unrealized
Appreciation
  Unrealized
Depreciation
  Net
Unrealized
Appreciation
(Depreciation)
 
Columbia Asset Allocation Fund   $ 28,505,682     $ (3,071,903 )   $ 25,433,779    
Columbia Large Cap Growth Fund     279,631,771       (6,466,380 )     273,165,391    
Columbia Disciplined Value Fund     60,887,147       (8,461,089 )     52,426,058    
Columbia Contrarian Core Fund     119,158,438       (5,423,948 )     113,734,490    
Columbia Small Cap Core Fund     151,944,637       (97,550,623 )     54,394,014    

 

The following capital loss carryforwards, determined as of September 30, 2009, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:

    Year of Expiration  
    2010   2011   2017   Total  
Columbia Asset Allocation Fund   $     $     $ 15,394,963     $ 15,394,963    
Columbia Large Cap Growth Fund     92,626,019       5,529,590       101,274,621       199,430,230    
Columbia Disciplined Value Fund                 57,648,687       57,648,687    
Columbia Contrarian Core Fund     1,963,275             13,558,761       15,522,036    
Columbia Small Cap Core Fund                 6,883,381       6,883,381    

 

Of the capital loss carryforwards attributable to Columbia Contrarian Core Fund, $1,963,275 (expiring September 30, 2010) remains from the Columbia Large Cap Core Fund merger with Columbia Contrarian Core Fund.

Of the capital loss carryforwards attributable to Columbia Large Cap Growth Fund, $43,705,919 (expiring September 30, 2010) remain from the merger with Columbia Growth Fund. The availability of a portion of the remaining capital loss carryforwards from the Columbia Growth Fund may be limited in a given year.

Of the capital loss carryforwards attributable to Columbia Large Cap Growth Fund, $12,700,626 (expiring September 30, 2010) remain from the merger with Columbia Tax Managed Growth Fund. The availability of a portion of the remaining capital loss carryforwards from the Columbia Tax Managed Fund may be limited in a given year.

Of the capital loss carryforwards attributable to Columbia Large Cap Growth Fund, $41,749,064 ($36,219,474 expiring September 30, 2010, and $5,529,590 expiring September 30, 2011) remain from the merger with Columbia Growth Stock Fund. The availability of a portion of the remaining capital loss carryforwards from the Columbia Growth Stock Fund may be limited in a given year.

Management is required to determine whether a tax position of the Funds is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by each Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total


101



Stock Funds, March 31, 2010 (Unaudited) (continued)

amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Funds' federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.

Note 4. Fees and Compensation Paid to Affiliates

Investment Advisory Fee

Columbia, an indirect, wholly owned subsidiary of Bank of America Corporation ("BOA"), provides investment advisory services to the Funds. Columbia receives a monthly investment advisory fee based on each Fund's average daily net assets at the following annual rates:

    First
$200
Million
  $200 Million
to $500
Million
  $500 Million
to $1
Billion
  $1 Billion
to $1.5
Billion
  $1.5 Billion
to $2
Billion
  $2 Billion
to $3
Billion
  $3 Billion
to $6
Billion
  Over
$6 Billion
 
Columbia Asset
Allocation Fund
  0.650%   0.650%   0.600%   0.550%   0.500%   0.500%   0.480%   0.460%  
Columbia Large Cap
Growth Fund
  0.700%   0.575%   0.450%   0.450%   0.450%   0.450%   0.450%   0.450%  
Columbia Disciplined
Value Fund
  0.700%   0.700%   0.650%   0.600%   0.550%   0.550%   0.530%   0.510%  
Columbia Contrarian
Core Fund
  0.700%   0.700%   0.650%   0.600%   0.550%   0.550%   0.530%   0.510%  
Columbia Small Cap
Core Fund
  0.750%   0.750%   0.700%   0.650%   0.600%   0.550%   0.550%   0.550%  

 

For the six month period ended March 31, 2010, the annualized effective investment advisory fee rates for the Funds, as a percentage of each Fund's average daily net assets, were as follows:

    Annualized
Effective
Fee Rate
 
Columbia Asset Allocation Fund     0.65 %  
Columbia Large Cap Growth Fund     0.52 %  
Columbia Disciplined Value Fund     0.70 %  
Columbia Contrarian Core Fund     0.70 %  
Columbia Small Cap Core Fund     0.74 %  

 

Bank of America, N.A., an indirect parent company of Columbia, entered into an agreement dated September 29, 2009, to sell a portion of the asset management business of Columbia Management Group, LLC to Ameriprise Financial, Inc. ("Ameriprise Financial"). The transaction ("Transaction") includes the sale of the part of the asset management business that advises long-term mutual funds, including the Funds. The Transaction is subject to certain approvals and other conditions to closing, and is currently expected to close on or about April 30, 2010 (the "Closing").

In connection with the Closing, certain changes will occur, including a change in the entities serving as the investment advisor, administrator, distributor and transfer agent of the Funds. RiverSource Investments, LLC (the "New Advisor"), a subsidiary of Ameriprise Financial, will become the investment advisor of the Funds upon the Closing. On March 3, 2010, the Funds' shareholders approved, among other matters, the proposed investment management services agreement with the New Advisor. The New Advisor will serve as investment advisor under a new investment management services agreement effective upon the Closing. The New Advisor will change its name to Columbia Management Investment Advisers, LLC upon or shortly after the Closing. Effective upon


102



Stock Funds, March 31, 2010 (Unaudited) (continued)

the closing, as the context requires, references to Columbia shall be deemed to refer to the New Advisor.

Administration Fee

Columbia provides administrative and other services to the Funds. Columbia receives a monthly administration fee from each Fund, except Columbia Large Cap Growth Fund, at the annual rate of 0.067% of each Fund's average daily net assets. Columbia receives a monthly administration fee from Columbia Large Cap Growth Fund at the annual rate of 0.050% of the Fund's average daily net assets.

The New Advisor will become the administrator of the Funds under a new administrative services agreement effective upon the Closing.

Pricing and Bookkeeping Fees

The Funds have entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street Bank and Trust Company ("State Street") and Columbia pursuant to which State Street provides financial reporting services to the Funds. The Funds have also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and Columbia pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee per Fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.

Among other updates to the State Street Agreements, Columbia will assign and delegate its rights and obligations thereunder to the New Advisor upon the Closing.

The Funds have entered into a Pricing and Bookkeeping Oversight and Services Agreement (the "Services Agreement") with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, the Funds reimburse Columbia for out-of-pocket expenses.

The Services Agreement will be terminated upon the Closing, and the services provided thereunder will be covered under the administrative services agreement with the New Advisor.

Transfer Agent Fee

Columbia Management Services, Inc. (the "Transfer Agent"), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services ("BFDS") to serve as sub-transfer agent.

The Funds pay monthly fees to the Transfer Agent for its services. All share classes with the exception of Class Y shares (the "Other Share Classes") pay a monthly service fee (the "aggregate fee") based on the following:

(i)  Effective November 1, 2009, an annual rate of $22.36 is applied to the aggregate number of accounts for the Other Share Classes. Prior to November 1, 2009, the annual rate was $17.34 per account.

(ii)  An allocated portion of fees for wire, telephone and redemption orders, Individual Retirement Account ("IRA") trustee agent fees and account transcript fees due to the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

The aggregate fee is allocated to the Other Share Classes based on the relative average daily net assets of each share class.

The Class Y shares of Columbia Large Cap Growth Fund pay a monthly service fee based on the following:

(i)  Effective November 1, 2009, an annual rate of $22.36 is applied to the aggregate number of accounts for Class Y shares. Prior to November 1, 2009, the annual rate was $17.34 per account.

(ii)  An allocated portion of fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due to the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts


103



Stock Funds, March 31, 2010 (Unaudited) (continued)

the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

The Transfer Agent is also entitled to receive reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on the combined assets held in the Other Share Classes in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. Such fees are allocated to the Other Share Classes based on the relative average daily net assets of each share class. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds.

RiverSource Service Corporation (the "New Transfer Agent"), a subsidiary of Ameriprise Financial, will become the transfer agent of the Funds upon the Closing. The New Transfer Agent will change its name to Columbia Management Investment Services Corp. upon or shortly after the Closing.

An annual minimum account balance fee of $20 may apply to certain accounts with a value below each Fund's initial minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statements of Operations. For the six month period ended March 31, 2010, no minimum account balance fees were charged by the Funds.

Underwriting Discounts, Service and Distribution Fees

Columbia Management Distributors, Inc. (the "Distributor"), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Funds' shares. For the six month period ended March 31, 2010, the Distributor has retained net underwriting discounts and received net CDSC fees as follows:

    Front-End Sales Charge   CDSC  
    Class A   Class E   Class T   Class A   Class B   Class C  
Columbia Asset Allocation Fund   $ 2,443     $     $ 1,197     $     $ 1,592     $ 10    
Columbia Large Cap Growth Fund     6,154       71       2,557       403       12,426       1,024    
Columbia Disciplined Value Fund     909             570             830       255    
Columbia Contrarian Core Fund     19,004             1,035       4       1,943       1,838    
Columbia Small Cap Core Fund     9,337             665             4,435       1,045    

 

RiverSource Fund Distributors, Inc. (the "New Distributor"), a subsidiary of Ameriprise Financial, will become the distributor of the Funds upon the Closing. The New Distributor will change its name to Columbia Management Investment Distributors, Inc. upon or shortly after the Closing.

The Funds have adopted plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans") which require the payment of monthly distribution and service fees to the Distributor based on the average daily net assets of each Fund at the following annual rates:

    Distribution Fee  
    Class A   Class B   Class C   Class E   Class F  
Columbia Asset Allocation Fund     0.10 %     0.75 %     0.75 %              
Columbia Large Cap Growth Fund     0.10 %     0.75 %     0.75 %     0.10 %     0.75 %  
Columbia Disciplined Value Fund     0.10 %     0.75 %     0.75 %              
Columbia Contrarian Core Fund     0.10 %     0.75 %     0.75 %              
Columbia Small Cap Core Fund     0.10 %     0.75 %     0.75 %              

 


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Stock Funds, March 31, 2010 (Unaudited) (continued)

    Service Fee  
    Class A   Class B   Class C   Class E   Class F  
Columbia Asset Allocation Fund     0.25 %     0.25 %     0.25 %              
Columbia Large Cap Growth Fund     0.25 %     0.25 %     0.25 %     0.25 %     0.25 %  
Columbia Disciplined Value Fund     0.25 %     0.25 %     0.25 %              
Columbia Contrarian Core Fund     0.25 %     0.25 %     0.25 %              
Columbia Small Cap Core Fund     0.25 %     0.25 %     0.25 %              

 

The Funds may pay distribution and service (Rule 12b-1) fees at the maximum annual rate of 0.35% of each Fund's average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder services), but limited such fees to an aggregate of not more than 0.25% for Class A shares during the current fiscal year. For the six month period ended March 31, 2010, the distribution and service fees were 0.00% and 0.25%, respectively, of each Fund's average daily net assets attributable to Class A shares.

The CDSC and the distribution fees received from the Plans are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares.

Shareholder Services Fees

The Funds have adopted a shareholder services plan that permits them to pay for certain services provided to Class T shareholders by service organizations. The Funds may pay shareholder services fees of up to 0.25% of each Fund's average daily net assets attributable to Class T shares for shareholder liaison services and up to 0.25% of each Fund's average daily net assets attributable to Class T shares for administrative support services, provided, however, that the aggregate fee shall not exceed 0.30% of each Fund's average daily net assets attributable to Class T shares. For the six month period ended March 31, 2010, the shareholder services fee was 0.30% of each Fund's average daily net assets attributable to Class T shares.

Fee Waivers and Expense Reimbursements

Columbia has voluntarily agreed to reimburse a portion of the Funds' expenses so that the Funds' ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Funds' custodian, do not exceed the following annual rates, based on each Fund's average daily net assets:

    Annual Rate  
Columbia Asset Allocation Fund     0.95 %  
Columbia Large Cap Growth Fund     1.00 %  
Columbia Disciplined Value Fund     1.00 %  
Columbia Contrarian Core Fund     0.94 %  
Columbia Small Cap Core Fund     1.10 %  

 

Columbia, in its discretion, may revise or discontinue this arrangement at any time.

Fees Paid to Officers and Trustees

All officers of the Funds are employees of Columbia or its affiliates and, with the exception of the Funds' Chief Compliance Officer, receive no compensation from the Funds. The Board of Trustees has appointed a Chief Compliance Officer to the Funds in accordance with federal securities regulations. The Funds, along with other affiliated funds, pay their pro-rata share of the expenses associated with the Chief Compliance Officer. Each Fund's expenses for the Chief Compliance Officer will not exceed $15,000 per year.

Trustees are compensated for their services to the Funds, as set forth on the Statements of Operations. The Trust's eligible Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Funds' assets.


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Stock Funds, March 31, 2010 (Unaudited) (continued)

Other Related Party Transactions

In connection with the purchase and sale of their securities during the period, the Funds used one or more brokers that are affiliates of BOA. Total brokerage commissions paid to affiliated brokers for the six month period ended March 31, 2010 were as follows:

    Amount  
Columbia Asset Allocation Fund   $ 314    
Columbia Contrarian Core Fund     5,007    
Columbia Small Cap Core Fund     2,576    

 

Note 5. Custody Credits

Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. For the six month period ended March 31, 2010, these custody credits reduced total expenses for the Funds as follows:

    Custody
Credits
 
Columbia Asset Allocation Fund   $ 6    
Columbia Disciplined Value Fund     3    
Columbia Contrarian Core Fund     12    
Columbia Small Cap Core Fund     6    

 

Note 6. Objectives and Strategies for Investing in Derivative Instruments

Columbia Asset Allocation Fund and Columbia Disciplined Value Fund use derivatives instruments including futures contracts, options and forward contracts in order to meet their investment objectives. Each Fund employs strategies in differing combinations to permit it to increase, decrease or change the level of exposure to market risk factors. The achievement of any strategy relating to derivatives depends on an analysis of various risk factors, and if the strategies for the use of derivatives do not work as intended, each Fund may not achieve its investment objectives.

In pursuit of the Funds' investment objectives, the Funds are exposed to the following market risks:

Equity Risk

Equity risk relates to changes in value of equity securities such as common stocks due to general market conditions such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, or adverse investor sentiment. Equity securities generally have greater price volatility than fixed income securities.

Foreign Exchange Rate Risk

Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign-currency-denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.

Interest Rate Risk

Interest rate risk relates to the fluctuation in value of fixed income securities because of the inverse relationship of price and yield. Fixed income securities generally will decline in value upon an increase in general interest rates and their value generally will increase upon a decline in general interest rates. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations.

The following notes provide more detailed information about each derivative type held by the Funds:

Forward Foreign Currency Exchange Contracts—Columbia Asset Allocation Fund entered into forward foreign currency exchange contracts to shift its investment exposure from one currency to another. The Fund used forward contracts to shift its U.S. dollar exposure in order to achieve a representative weighted mix of major currencies in its benchmarks and/or to recover an underweight country exposure in its portfolio.

Forward foreign currency exchange contracts are agreements to exchange one currency for another at a future date at a specified price. These contracts are used to minimize the exposure to foreign exchange rate fluctuations during the period between the trade and settlement dates of the contract. The Fund may utilize forward foreign currency exchange contracts in connection with the settlement of purchases and


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Stock Funds, March 31, 2010 (Unaudited) (continued)

sales of securities. The Fund may also enter into these contracts to reduce the exposure to adverse price movements in certain other foreign-currency-denominated assets. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are generally used to reduce the exposure to foreign exchange rate fluctuations. Forward foreign currency exchange contracts are valued daily at the current exchange rate of the underlying currency, resulting in unrealized gains (losses) which become realized at the time the forward foreign currency exchange contracts are closed or mature. Realized and unrealized gains (losses) arising from such transactions are included in net realized and unrealized gains (losses) on foreign currency transactions. The use of forward foreign currency exchange contracts does not eliminate fluctuations in the prices of the Fund's portfolio securities. While the maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened, exposure is typically limited to the change in value of the contract (in U.S. dollars) over the period it remains open. The Fund could also be exposed to the risk that counterparties of the contracts may be unable to fulfill the terms of the contracts.

During the six month period ended March 31, 2010, Columbia Asset Allocation Fund entered into 209 forward foreign currency exchange contracts.

Futures Contracts—Columbia Asset Allocation Fund and Columbia Disciplined Value Fund entered into stock index futures contracts to equitize cash in order to maintain appropriate equity market exposure while keeping sufficient cash to accommodate daily redemptions. Columbia Asset Allocation Fund entered into interest rate futures contracts to manage the duration and yield curve exposure of the Fund versus the benchmark.

The use of futures contracts involves certain risks, which include, among these: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instruments or the underlying securities, and (3) an inaccurate prediction of the future direction of interest rates by Columbia.

Upon entering into a futures contract, a Fund identifies within its portfolio of investments cash or securities in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by a Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. A Fund recognizes a realized gain or loss when the contract is closed or expires.

Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statements of Assets and Liabilities.

During the six month period ended March 31, 2010, Columbia Asset Allocation Fund entered into 86 futures contracts and Columbia Disciplined Value Fund entered into 25 futures contracts.

Options—Columbia Asset Allocation Fund had written covered call and purchased put options to decrease the Fund's exposure to equity risk and to increase return on instruments. Written covered call and purchased put options become more profitable as the price of the underlying instruments depreciates relative to the strike price.

Writing put options tends to increase the Fund's exposure to the underlying instrument. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying security transaction to determine the realized gain or loss. The Fund, as a writer of an option, has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid market. The Fund identifies within its portfolio of investments cash or liquid portfolio securities equal to the amount of the written options contract commitment.

The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying instrument. The Fund may pay a premium, which is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for


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Stock Funds, March 31, 2010 (Unaudited) (continued)

purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised are added to the amounts paid (call) or offset against the proceeds (put) on the underlying security to determine the realized gain or loss. If the Fund enters into a closing transaction, the Fund will realize a gain or loss, depending on whether the proceeds from the closing transaction are greater or less than the cost of the option.

During the six month period ended March 31, 2010, Columbia Asset Allocation Fund entered into 28 written options contracts.

The following table is a summary of the value of the Funds' derivative instruments as of March 31, 2010:

        Statement of Assets and Liabilities  
        Fair Value of Derivative Instruments  
        Assets   Liabilities  
Funds   Risk
Exposure
  Futures
Variation
Margin*
  Purchased
Options
  Unrealized
Appreciation
on Forward
Foreign
Currency
Exchange
Contracts
  Futures
Variation
Margin*
  Written
Options
  Unrealized
Depreciation
on Forward
Foreign
Currency
Exchange
Contracts
 
Columbia Asset   Equity,            
 
Allocation Fund   Interest            
 
    Rate and            
 
    Foreign            
 
    Exchange            
 
    Rate   $     $     $ 33,436     $ (19,328 )   $ (541 )   $ (33,021 )  
Columbia Disciplined
Value Fund
  Equity                       (27,355 )              

 

* Includes only current day's variation margin.

The effect of derivative instruments on the Statements of Operations for the six month period ended March 31, 2010:

        Amount of Realized Gain or (Loss)
on Derivatives Recognized in
Income
  Change in Unrealized Appreciation
(Depreciation) on Derivatives
Recognized in Income
 
Funds   Risk
Exposure
  Futures
Contracts
  Written
Options
  Realized
Loss
on Forward
Foreign
Currency
Exchange
Contracts
  Futures
Contracts
  Written
Options
  Unrealized
(Depreciation)
on Forward
Foreign
Currency
Exchange
Contracts
 
Columbia Asset   Equity,            
 
Allocation Fund   Interest            
 
    Rate and            
 
    Foreign            
 
    Exchange            
 
    Rate   $ 537,851     $ 7,661     $ (28,915 )   $ 60,182     $ 40     $ (86,097 )  
Columbia Disciplined
Value Fund
  Equity     517,875                   (31,511 )              

 


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Stock Funds, March 31, 2010 (Unaudited) (continued)

Note 7. Portfolio Information

For the six month period ended March 31, 2010, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, for the Funds were as follows:

    U.S Government Securities   Other Investment Securities  
    Purchases   Sales   Purchases   Sales  
Columbia Asset Allocation Fund   $ 23,978,809     $ 26,312,249     $ 80,944,551     $ 86,698,971    
Columbia Large Cap Growth Fund                 785,307,830       901,879,126    
Columbia Disciplined Value Fund                 91,006,908       145,544,527    
Columbia Contrarian Core Fund                 215,796,404       126,346,753    
Columbia Small Cap Core Fund                 67,439,442       58,412,364    

 

Note 8. Regulatory Settlements

During the six months ended March 31, 2010, Columbia Asset Allocation Fund, Columbia Large Cap Growth Fund and Columbia Disciplined Value Fund received payments totaling $39, $14,273 and $4, respectively, relating to certain regulatory settlements that the Funds had participated in during the period. The payments have been included in "Increase from regulatory settlements" on the Statements of Changes in Net Assets.

Note 9. Line of Credit

The Funds and other affiliated funds participate in a $280,000,000 committed, unsecured revolving line of credit provided by State Street. The maximum amount that may be borrowed by any fund is limited to the lesser of $200,000,000 and the Fund's borrowing limit set forth in the Fund's registration statement. Borrowings are available for short-term liquidity or temporary or emergency purposes.

Effective October 15, 2009, interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. In addition, a commitment fee of 0.15% per annum is accrued and apportioned among the participating funds pro rata based on their relative net assets.

Prior to October 15, 2009, interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 0.50% or the overnight LIBOR Rate plus 0.50%. In addition, an annual operations agency fee of $20,000, an amendment fee of 0.02% and a commitment fee of 0.12% per annum were accrued and apportioned among the participating funds pro rata based on their relative net assets.

For the six month period ended March 31, 2010, the average daily loan balance outstanding on days where borrowing existed, and the weighted average interest rate of each Fund that borrowed were as follows:

Fund   Average Daily
Loan Balance
Outstanding on
Days Were
Borrowing
Existed
  Weighted
Average
Interest Rate
 
Columbia Large Cap
Growth Fund
  $ 4,434,615       1.437 %  
Columbia Disciplined
Value Fund
  $ 3,400,000       1.424 %  

 

Note 10. Securities Lending

Each Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of collateral. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Funds on the next business day. The collateral received is invested and the income generated by the investment of the


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Stock Funds, March 31, 2010 (Unaudited) (continued)

collateral, net of any fees remitted to State Street as the lending agent and borrower rebates, is paid to the Funds. Generally, in the event of borrower default, the Funds have the right to use the collateral to offset any losses incurred. In the event the Funds are delayed or prevented from exercising their right to dispose of the collateral, there may be a potential loss to the Funds. The Funds bear the risk of loss with respect to the investment of collateral.

For the six months ended March 31, 2010, the Funds did not participate in the securities lending program.

Note 11. Shares of Beneficial Interest

As of March 31, 2010, the Funds had shareholders that held greater than 5% of the shares outstanding of a Fund, whose shares were beneficially owned by participant accounts over which BOA and/or any of its affiliates had either sole or joint investment discretion. The percentages of shares of beneficial interest outstanding held therein are as follows:

    % of Shares
Outstanding
Held
 
Columbia Asset Allocation Fund     13.0    
Columbia Large Cap Growth Fund     30.0    
Columbia Disciplined Value Fund     54.6    
Columbia Contrarian Core Fund     25.5    
Columbia Small Cap Core Fund     38.1    

 

As of March 31, 2010, the Funds had shareholders that held greater than 5% of the shares outstanding of a Fund, over which BOA and/or any of its affiliates did not have investment discretion. The number of accounts and the percentages of shares of beneficial interest outstanding held therein are as follows:

    Number of
Shareholders
  % of Shares
Outstanding
Held
 
Columbia Disciplined
Value Fund
    1       10.0    
Columbia Contrarian
Core Fund
    1       10.3    
Columbia Small Cap
Core Fund
    1       9.4    

 

As of March 31, 2010, no other shareholders owned more than 5% of the outstanding shares of each Fund. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds.

Note 12. Significant Risks and Contingencies

Sector Focus Risk

Certain Funds may focus their investments in certain sectors, subjecting them to greater risk than a fund that is less focused.

High Yield Securities Risk

Columbia Asset Allocation Fund invests in high-yield securities. Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as "junk" bonds. Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid to the extent that there is no established secondary market.

Foreign Securities Risk

There are certain additional risks involved when investing in foreign securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities.

Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets.

Asset-Backed Securities Risk

Columbia Asset Allocation Fund invests in asset-backed securities. The value of asset-backed securities may be affected by, among other factors, changes in interest rates, the


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Stock Funds, March 31, 2010 (Unaudited) (continued)

market's assessment of the quality of underlying assets, the creditworthiness of the servicer for the underlying assets, factors concerning the interests in and structure of the issuer or the originator of the underlying assets, or the creditworthiness or rating of the entities that provide any supporting letters of credit, surety bonds, derivative instruments, or other credit enhancement. The value of asset-backed securities also will be affected by the exhaustion, termination or expiration of any credit enhancement. Most asset-backed securities are subject to prepayment risk, which is the possibility that the underlying debt may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of asset-backed securities may be difficult to predict and may result in greater volatility.

Mortgage-Backed Securities Risk

The value of mortgage-backed securities may be affected by, among other things, changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgages, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements or the quality of underlying assets or the market's assessment thereof. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility.

Information Regarding Pending and Settled Legal Proceedings

In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc. was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company (now known as RiverSource) mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota (the District Court). In response to defendants' motion to dismiss the complaint, the District Court dismissed one of plaintiffs' four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit) on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary judgment and remanded to the District Court for further proceedings. On August 6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the Supreme Court), asking the Supreme Court to stay the District Court proceedings while the Supreme Court considers and rules in a case captioned Jones v. Harris Associates, which involves issues of law similar to those presented in the Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v. Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth Circuit's decision in the Gallus case and remanded the case to the Eighth Circuit for further consideration in light of the Supreme Court's decision in Jones v. Harris Associates.

In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have


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Stock Funds, March 31, 2010 (Unaudited) (continued)

made regular reports to the RiverSource Funds' Boards of Directors/Trustees.

On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In late 2003, Seligman conducted an extensive internal review concerning mutual fund trading practices. Seligman's review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by Seligman (the Seligman Funds); this arrangement was in the process of being closed down by Seligman before September 2003. Seligman identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. Seligman also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (NYAG).

In September 2006, the NYAG commenced a civil action in New York State Supreme Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the Seligman Parties), alleging, in substance, that the Seligman Parties permitted various persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies then managed by Seligman was and had been misleading. The NYAG included other related claims and also claimed that the fees charged by Seligman to the Seligman Funds were excessive. On March 13, 2009, without admitting or denying any violations of law or wrongdoing, the Seligman Parties entered into a stipulation of settlement with the NYAG and settled the claims made by the NYAG. Under the terms of the settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement resolved all outstanding matters between the Seligman Parties and the NYAG. In addition to the foregoing matter, the New York staff of the SEC indicated in September 2005 that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. There have been no further developments with the SEC on this matter.

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.

Note 13. Subsequent Events

In connection with the preparation of the financial statements of the Funds as of and for the six months ended March 31, 2010, events and transactions through the date the financial statements were issued have been evaluated by the Funds' management for possible adjustment and/or disclosure. No subsequent events or transactions have occurred that would


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Stock Funds, March 31, 2010 (Unaudited) (continued)

require adjustment of the financial statements as presented. On April 30, 2010, the Transaction disclosed in Note 4 closed. Effective May 1, 2010, the New Advisor became the investment advisor and administrator of the Funds and subsequently changed its name to Columbia Management Investment Advisers, LLC. On that date, the New Transfer Agent became the transfer agent of the Funds and changed its name to Columbia Management Investment Services Corp. Also on that date, the New Distributor became the distributor of the Funds and changed its name to Columbia Management Investment Distributors, Inc.


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Board Consideration and Approval of Advisory Agreements

Columbia Asset Allocation Fund, Columbia Large Cap Growth Fund, Columbia Disciplined Value Fund, Columbia Contrarian Core Fund and Columbia Small Cap Core Fund

The Advisory Fees and Expenses Committee of the Board of Trustees meets several times annually to review the current advisory agreements (collectively, the "Agreements") of the funds for which the Trustees serve as trustees (each a "fund") and to determine whether to recommend that the full Board approve the continuation of the Agreements for an additional one-year period. After the Committee has made its recommendation, the full Board, including the Independent Trustees, determines whether to approve the continuation of the Agreements. In addition, the full Board, including the Independent Trustees, considers matters bearing on the Agreements at most of its other meetings throughout the year and meets regularly with senior management of the funds and Columbia, the funds' investment adviser, including the senior manager of each investment area within Columbia. Through the Board's Investment Oversight Committees, Trustees also meet with selected fund portfolio managers, research analysts and traders at various times throughout the year.

The Trustees receive and review all materials that they, their legal counsel or Columbia believe to be reasonably necessary for the Trustees to evaluate the Agreements and to determine whether to approve the continuation of the Agreements. Those materials generally include, among other items, (i) information on the investment performance of each fund relative to the performance of peer groups of mutual funds and the fund's performance benchmarks, and additional information assessing performance on a risk-adjusted basis, (ii) information on each fund's advisory fees and other expenses, including information comparing the fund's expenses to those of peer groups of mutual funds and information about any applicable expense caps and fee "breakpoints," (iii) information about the profitability of the Agreements to Columbia, including potential "fall-out" or ancillary benefits that Columbia and its affiliates may receive as a result of their relationships with the funds and (iv) information obtained through Columbia's response to a questionnaire prepared at the request of the Trustees by counsel to the funds and independent legal counsel to the Independent Trustees. The Trustees also consider other information such as (i) Columbia's financial results and financial condition, (ii) each fund's investment objective and strategies and the size, education and experience of Columbia's investment staffs and their use of technology, external research and trading cost measurement tools, (iii) the allocation of the funds' brokerage and the use of "soft" commission dollars to pay for research products and services, (iv) Columbia's resources devoted to, and its record of compliance with, the funds' investment policies and restrictions, policies on personal securities transactions and other compliance policies and legal and regulatory requirements, (v) Columbia's response to various legal and regulatory proceedings since 2003 and to the recent period of volatility in the securities markets and (xi) the economic outlook generally and for the mutual fund industry in particular. In addition, the Advisory Fees and Expenses Committee confers with the independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees pursuant to an assurance of discontinuance entered into by Columbia with the New York Attorney General ("NYAG") to settle a civil complaint filed by the NYAG relating to trading in mutual fund shares (the "NYAG Settlement") and reviews materials relating to the funds' relationships with Columbia provided by the Fee Consultant. Under the NYAG Settlement, the Fee Consultant's role is to manage the process by which management fees are negotiated so that they are negotiated in a manner that is at arms' length and reasonable. Throughout the process, the Trustees have the opportunity to ask questions of and to request additional materials from Columbia and to consult with the Fee Consultant and independent legal counsel to the Independent Trustees.

The Board of Trustees most recently approved the continuation of the Agreements at its October, 2009 meeting, following meetings of the Advisory Fees and Expenses Committee held in December, 2008 and February, May, June, August, September and October, 2009.

The Board of Trustees also unanimously approved new advisory agreements (the "New Agreements") for the funds with RiverSource Investments, LLC (to be renamed Columbia Management Investment Advisers, LLC) ("RiverSource") at a meeting held on December 17, 2009. The New Agreements have since been approved by shareholders of the funds and are expected to take effect upon the closing of the acquisition of the long-term asset management business of Columbia by


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Ameriprise Financial, Inc. ("Ameriprise"), the parent company of RiverSource Investments, LLC (the "Transaction").

The Advisory Fees and Expenses Committee met on multiple occasions to review the New Agreements for the funds. On December 14, 2009, the Advisory Fees and Expenses Committee recommended that the full Board approve the New Agreements. On December 17, 2009, the full Board, including a majority of the Independent Trustees, approved the New Agreements. Prior to their approval of the New Agreements, the Advisory Fees and Expenses Committee and the Independent Trustees requested and evaluated materials from, and were provided materials and information about the Transaction and matters related to the proposals by, Bank of America Corp., Columbia, RiverSource and Ameriprise. In connection with their most recent approval of the Agreements (as discussed above) on October 28, 2009, the Advisory Fees and Expenses Committee and the Trustees requested and evaluated materials from Columbia, and discussed such materials with representatives of Columbia. The Advisory Fees and Expenses Committee, at meetings held on August 11, 2009, September 23, 2009, October 27, 2009, November 30, 2009, December 7, 2009 and December 14, 2009, and the Independent Trustees, at meetings held on August 12, 2009, August 20, 2009, October 28, 2009, December 8, 2009, December 14, 2009 and December 17, 2009, discussed the materials provided in connection with the October 28, 2009 approvals and the materials provided in connection with their consideration of the New Agreements and other matters relating to the Transaction with representatives of Bank of America Corp., Columbia, RiverSource and Ameriprise. The Trustees consulted with experienced legal counsel, who advised on the legal standards for consideration by the Trustees. The Independent Trustees also discussed the proposed approvals with independent legal counsel in private sessions.

The Trustees reviewed each New Agreement, as well as certain information obtained through RiverSource's responses to initial and supplemental questionnaires prepared at the request of the Trustees by counsel to the funds and independent legal counsel to the Independent Trustees. The Advisory Fees and Expenses Committee and the Trustees also met with, and reviewed and considered a report prepared and provided by, the Fee Consultant (as discussed above).

In considering whether to approve the New Agreements and to approve the continuation of the Agreements, the Trustees, including the Independent Trustees, did not identify any single factor as determinative, and each weighed various factors as he or she deemed appropriate. In particular, the Trustees considered the following matters:

Matters Relating to the Agreements and the New Agreements

The nature, extent and quality of the services provided or to be provided to the funds under the Agreements and the New Agreements. The Trustees considered the nature, extent and quality of the services provided and the resources dedicated by Columbia and its affiliates (or to be provided and dedicated by RiverSource and its affiliates) to the funds.

Among other things, the Trustees considered, with respect to Columbia and its affiliates, (i) Columbia's ability (including its personnel and other resources, compensation programs for personnel involved in fund management, reputation and other attributes) to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals; (ii) the portfolio management services provided by those investment professionals; and (iii) the trade execution services provided on behalf of the funds. For each fund, the Trustees also considered the benefits to shareholders of investing in a mutual fund that is part of a family of funds offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.

Among other things, the Trustees considered, with respect to RiverSource and its affiliates, (i) the expected effect of the Transaction on the operations of the funds, (ii) the information provided by RiverSource with respect to the nature, extent and quality of services to be provided by it, (iii) RiverSource's compliance program and compliance record, (iv) the ability of RiverSource (including personnel and other resources, compensation programs for personnel involved in fund management, reputation and other attributes) to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals, (v) the trade execution services to be provided on behalf of the funds and (vi) the quality of RiverSource's investment research capabilities and the other resources that it indicated it would devote to each fund. As noted above, the Trustees also considered


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RiverSource's representations that the Chief Investment Officer of Columbia would serve as the Chief Investment Officer of RiverSource following the Transaction, and that the process for determining the portfolio management team for each Fund would be substantially the same process as has customarily been followed by Columbia, and reported to the Trustees, in evaluating the performance of Columbia's portfolio management teams. The Trustees also noted the professional experience and qualifications of the senior personnel of RiverSource. The Trustees also considered the compliance programs of and the compliance-related resources proposed to be provided to the funds by RiverSource and its affiliates, including discussions with the funds' Chief Compliance Officer regarding RiverSource's compliance program. The Trustees also discussed RiverSource's compliance program with the Chief Compliance Officer for the RiverSource funds. The Trustees also considered RiverSource's representation that the funds' Chief Compliance Officer would serve as the Chief Compliance Officer of RiverSource following the Transaction. The Trustees considered RiverSource's ability to provide administrative services to the funds, noting that while some Agreements contemplated the provision of certain administrative services, following the Transaction, all administrative services were anticipated to be provided pursuant to a new administrative services agreement. The Trustees also considered RiverSource's ability to coordinate the activities of each fund's other service providers. The Trustees considered performance information provided by RiverSource with respect to other mutual funds advised by RiverSource, and discussed with senior executives of RiverSource its process for identifying which portfolio management teams of the legacy Columbia and RiverSource organizations would be responsible for the management of the funds following the Transaction.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the nature, extent and quality of services provided by Columbia supported the continuation of the Agreements, and that the nature, extent and quality of services expected to be provided by RiverSource supported approval of the New Agreements.

The costs of the services provided and profits realized by Columbia and its affiliates, and the expected costs of the services to be provided and the profits expected to be realized by RiverSource and its affiliates, from their relationships with the funds. With respect to Columbia and its affiliates, the Trustees considered the fees charged to the funds for advisory services as well as the total expense levels of the funds. That information included comparisons (provided by management and by an independent third-party data provider) of each fund's advisory fees and total expense levels to those of the fund's peer groups and information about the advisory fees charged by Columbia to comparable institutional accounts. In considering the fees charged to those accounts, the Trustees took into account, among other things, management's representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for Columbia, and the additional resources required to manage mutual funds effectively. In evaluating each fund's advisory fees, the Trustees also took into account the demands, complexity and quality of the investment management of the fund. The Trustees considered existing advisory fee breakpoints, and Columbia's use of advisory fee waivers and expense caps, which benefited a number of the funds. The Trustees also noted management's stated justification for the fees charged to the funds, which included information about the investment performance of the funds and the services provided to the funds.

The Trustees considered each fund's total expenses and actual management fees relative to those of a peer group selected by an independent third-party data provider for the purposes of expense comparisons. Specifically, Columbia Asset Allocation Fund's total expenses were in the fourth quintile and actual management fees were in the third quintile (where the lowest fees and expenses would be in the first quintile); Columbia Large Cap Growth Fund's total expenses and actual management fees were in the first quintile; Columbia Disciplined Value Fund's total expenses and actual management fees were in the fourth quintile; Columbia Contrarian Core Fund's total expenses and actual management fees were in the third quintile; and Columbia Small Cap Core Fund's total expenses and actual management fees were in the second quintile.

The Trustees also considered the compensation directly or indirectly received by Columbia and its affiliates from their relationships with the funds. The Trustees reviewed information provided by management as to the profitability to Columbia and its affiliates of their relationships with each


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fund, and information about the allocation of expenses used to calculate profitability. When reviewing profitability, the Trustees also considered court cases in which adviser profitability was an issue in whole or in part, the performance of the relevant funds, the expense level of each fund, and whether Columbia had implemented breakpoints and/or expense caps with respect to the fund.

In connection with the integration of the legacy Columbia and RiverSource organizations, the Trustees considered, among other things, RiverSource's projected annual net expense synergies (reductions in the cost of providing services to the funds), the timetable over which such synergies are expected to be realized and the extent to which any such synergies are expected to be shared with the funds. The Trustees also considered information provided by RiverSource regarding their respective financial conditions. The Trustees considered that RiverSource proposed to continue voluntary expense caps currently in effect for the funds and that RiverSource had undertaken not to change these caps without further discussion with the Independent Trustees.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the advisory fees charged to each fund, and the related profitability to Columbia and its affiliates of their relationships with the fund, supported the continuation of the Agreement pertaining to that fund, and that the expected profitability to RiverSource and its affiliates from its relationship with each fund supported the approval of the New Agreements.

Economies of Scale. With respect to Columbia and its affiliates, the Trustees considered the existence of any economies of scale in the provision by Columbia of services to each fund, to groups of related funds, and to Columbia's investment advisory clients as a whole and whether those economies were shared with the funds through breakpoints in the investment advisory fees or other means, such as fee waivers/expense reductions and additional investments by Columbia in investment, trading and compliance resources. The Trustees noted that many of the funds benefited from breakpoints, fee waivers/expense caps, or both. In considering those issues, the Trustees also took note of the costs of the services provided (both on an absolute and a relative basis) and the profitability to Columbia and its affiliates of their relationships with the funds, as discussed above.

With respect to RiverSource and its affiliates, the Trustees considered the existence of any anticipated economies of scale in the provision by RiverSource of services to each fund, to groups of related funds and to RiverSource's investment advisory clients as a whole, and whether those economies of scale were expected to be shared with the funds. The Trustees considered Ameriprise's anticipated net expense synergies resulting from the Transaction, and considered the possibility that the funds might benefit from economies of scale over time as part of the larger, combined fund complex. The Trustees considered how expected synergies and potential economies of scale might benefit the funds and their shareholders. The Trustees considered the potential effect of the Transaction on the distribution of the funds, and noted that the proposed management fee schedules for the funds generally contained breakpoints that would reduce the fee rate on assets above specified threshold levels.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the extent to which economies of scale were shared or expected to be shared with the funds supported the continuation of the Agreements and the approval of the New Agreements.

Matters Relating to the Agreements

Investment performance of the funds and Columbia. The Trustees reviewed information about the performance of each fund over various time periods, including information prepared by an independent third-party data provider that compared the performance of each fund to the performance of peer groups of mutual funds and performance benchmarks. The Trustees also reviewed a description of the third party's methodology for identifying each fund's peer group for purposes of performance and expense comparisons. The Trustees also considered additional information that the Advisory Fees and Expenses Committee requested from Columbia relating to funds that presented relatively weaker performance and/or relatively higher fees or expenses. In the case of each fund whose performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Trustees concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the fund's Agreements. Those factors varied from fund to fund, but included one or more of the following: (i) that the fund's performance, although


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lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the fund's investment strategy and policies and that the fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the fund's investment strategy; (iii) that the fund's performance was competitive when compared to other relevant performance benchmarks or peer groups; (iv) that Columbia had taken or was taking steps designed to help improve the fund's investment performance, including, but not limited to, replacing portfolio managers or modifying investment strategies; and (v) that Columbia proposed to waive advisory fees or cap the expenses of the fund.

The Trustees noted the performance of each fund through April 30, 2009 relative to that of a peer group selected by an independent third-party data provider for purposes of performance comparisons. Specifically, Columbia Asset Allocation Fund's performance was in the second quintile (where the best performance would be in the first quintile) for the one-, three- and five-year periods, and in the fourth quintile for the ten-year period; Columbia Large Cap Growth Fund's performance was in the fourth quintile for the one-year period and in the third quintile for the three-, five- and ten-year periods; Columbia Disciplined Value Fund's performance was in the third quintile for the one-year period, in the fourth quintile for the three-year period and in the second quintile for the five- and ten-year periods; Columbia Contrarian Core Fund's performance was in the second quintile for the one-and ten-year periods, and in the first quintile for the three- and five-year periods; and Columbia Small Cap Core Fund's performance was in the second quintile for the one-, three- and ten-year periods, and in the third quintile for the five-year period.

The Trustees also considered Columbia's performance and reputation generally, the funds' performance as a fund family generally, and Columbia's historical responsiveness to Trustee concerns about performance and Columbia's willingness to take steps intended to improve performance. After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions regarding each of the Agreements, that the performance of each fund and Columbia was sufficient, in light of other considerations, to warrant the continuation of the Agreement pertaining to that fund.

Other Factors. The Trustees also considered other factors with respect to Columbia and its affiliates, which included but were not limited to the following:

•  the extent to which each fund had operated in accordance with its investment objective and investment restrictions, the nature and scope of the compliance programs of the funds and Columbia and the compliance-related resources that Columbia and its affiliates were providing to the funds;

•  the nature, quality, cost and extent of administrative and shareholder services overseen and performed by Columbia and its affiliates, both under the Agreements and under separate agreements for the provision of transfer agency and administrative services;

•  so-called "fall-out benefits" to Columbia and its affiliates, such as the engagement of its affiliates to provide distribution, brokerage and transfer agency services to the funds, and the benefits of research made available to Columbia by reason of brokerage commissions generated by the funds' securities transactions, as well as possible conflicts of interest associated with those fall-out and other benefits, and the reporting, disclosure and other processes in place to disclose and monitor those possible conflicts of interest; and

•  the report provided by the Fee Consultant, which included information about and analysis of the funds' fees, expenses and performance.

Matters Relating to the New Agreements

The Trustees considered all materials that they, their legal counsel or RiverSource believed reasonably necessary to evaluate and to determine whether to approve the New Agreements. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. The material factors that formed the basis for the Trustees' approvals included the factors set forth below:

(i)  the reputation, financial strength, regulatory histories and resources of RiverSource and its parent, Ameriprise;


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(ii)  the capabilities of RiverSource with respect to compliance, including an assessment of RiverSource's compliance system by the funds' Chief Compliance Officer;

(iii)  the qualifications of the personnel of RiverSource that would be expected to provide advisory services to each fund, including RiverSource's representations that the Chief Investment Officer of Columbia would serve as the Chief Investment Officer of RiverSource, and that the process for determining the portfolio management team for each fund would be substantially the same process as has customarily been followed by Columbia, and reported to the Trustees, in evaluating the performance of Columbia's portfolio management teams;

(iv)  the terms and conditions of the New Agreements, including the differences between the New Agreements and the Agreements;

(v)  the terms and conditions of other agreements and arrangements relating to the future operations of the funds, including an administrative services agreement and a Master Services and Distribution Agreement;

(vi)  the commitment of RiverSource and Ameriprise that there would not be any diminution in the nature, quality and extent of services provided to each fund or its shareholders following closing of the Transaction;

(vii)  that the Trustees recently had completed a full annual review of the Agreements, as required by the 1940 Act, for each fund and had determined that they were satisfied with the nature, extent and quality of services provided thereunder and that the management fee rate for each fund were sufficient to warrant their approval;

(viii)  that the advisory fee rates payable by each fund would not change;

(ix)  that RiverSource and Bank of America, and not any fund, would bear the costs of obtaining approvals of the New Agreement;

(x)  that Ameriprise and RiverSource had agreed to exercise reasonable best efforts to assure that, for a period of two years after the closing of the Transaction, there would not be imposed on any fund any "unfair burden" (within the meaning of Section 15(f) of 1940 Act) with respect to the Transaction; and

(xi)  that certain members of RiverSource's management have a significant amount of experience integrating other fund families; that certain current Columbia personnel that would be integrated into RiverSource and its affiliates as a result of the Transaction also have experience in integrating fund families; and that the senior management of RiverSource following the Transaction would include certain senior executives of Columbia who are currently responsible for oversight of services provided to the funds.

Investment Advisory Fee Rates and Other Expenses. The Trustees considered the fact that the advisory fee rates payable by each fund to RiverSource under the New Agreements are the same as those currently paid by each fund to Columbia under the Agreements. The Trustees noted that in connection with their October 28, 2009 approval of the continuance of the Agreements, they had concluded, within the context of their overall conclusions regarding each such agreement, that the advisory fees charged to each fund supported the continuation of the agreement pertaining to that fund.

The Trustees noted that in certain cases the effective advisory fee rate for a RiverSource fund was lower than the proposed investment advisory fee rate for a fund with generally similar investment objectives and strategies. The Trustees also noted that RiverSource's investment advisory fee rates for equity and balanced funds generally are subject to adjustments based on investment performance, whereas the proposed investment advisory fee rates for the funds, consistent with those in the Agreements, do not reflect performance adjustments. The Trustees considered existing advisory fee breakpoints and RiverSource's undertaking not to change expense caps previously implemented by Columbia with respect to the funds without further discussion with the Independent Trustees.

The Trustees received and considered information about the advisory fees charged by RiverSource to institutional accounts. In considering the fees charged to those accounts, the Trustees took into account, among other things, RiverSource's representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for RiverSource and the additional resources required to manage mutual funds


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effectively. In evaluating each fund's expected advisory fees, the Trustees also took into account the demands, complexity and quality of the investment management of the fund.

The Trustees also considered that for certain funds, certain administrative services that are provided under the Agreements would not be provided under the New Agreements, but under a separate administrative services agreement. The Trustees noted that, unlike fees under an advisory agreement, fees under the administrative services agreement could be changed without shareholder approval, although RiverSource had not proposed any increase in such administrative fees and any such increase would require Board approval. The Trustees also noted Ameriprise's and RiverSource's covenants regarding compliance with Section 15(f) of the 1940 Act.

After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions, that the expected advisory fee rates and expenses of each fund supported the approval of the New Agreements.

Other Benefits to RiverSource. The Trustees received and considered information regarding any expected "fall-out" or ancillary benefits to be received by RiverSource and its affiliates as a result of their relationships with the funds, such as the engagement of RiverSource to provide administrative services to the funds and the engagement of RiverSource's affiliates to provide distribution and transfer agency services to the funds. The Trustees considered that the funds' distributor, which would be an affiliate of RiverSource, retains a portion of the distribution fees from the funds and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the funds. The Trustees also considered the benefits of research made available to RiverSource by reason of brokerage commissions generated by the funds' securities transactions, and reviewed information about RiverSource's practices with respect to allocating portfolio brokerage for brokerage and research services. The Trustees considered the possible conflicts of interest associated with certain fall-out or other ancillary benefits and the reporting, disclosure and other processes that would be in place to disclose and to monitor such possible conflicts of interest. The Trustees recognized that RiverSource's profitability would be somewhat lower without these benefits.

Conclusions

Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent counsel and the Fee Consultant, the Trustees, including the Independent Trustees, (i) approved the continuance of each of the Agreements through October 31, 2010 and (ii) approved each New Agreement.


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Summary of Management Fee Evaluation by Independent Fee Consultant (Columbia Management Advisors, LLC)

REPORT OF INDEPENDENT FEE CONSULTANT TO THE FUNDS SUPERVISED BY THE COLUMBIA ATLANTIC BOARD

Prepared Pursuant to the February 9, 2005
Assurance of Discontinuance among the
Office of Attorney General of New York State,
Columbia Management Advisors, LLC, and
Columbia Management Distributors, Inc.

November 6, 2009

I. Overview

On February 9, 2005, Columbia Management Advisors, LLC ("CMA") and Columbia Management Distributors, Inc.1 ("CMDI") agreed to the New York Attorney General's Assurance of Discontinuance ("AOD"). Among other things, the AOD stipulates that CMA may manage or advise a Columbia Fund ("Columbia Fund" and, together with some or all of such funds, the "Columbia Funds") only if the Independent Members of the Columbia Fund's Board of Trustees appoint a Senior Officer or retain an Independent Fee Consultant ("IFC") who is to manage the process by which proposed management fees are negotiated. The AOD further stipulates that the Senior Officer or IFC is to prepare a written annual evaluation of the fee negotiation process.

With effect from January 1, 2007, the Independent Members of the Board of Trustees for certain Columbia Funds known collectively as the "Atlantic Funds" (together with the other members of that Board, the "Trustees") retained me as IFC for the Atlantic Funds.2 In this capacity, I have prepared the fifth annual written evaluation of the fee negotiation process. As was the case with the 2007 and 2008 reports, my immediate predecessor as IFC, John Rea, provided invaluable assistance in the preparation of this year's report.

A. Role of the Independent Fee Consultant

The AOD charges the IFC with "managing the process by which proposed management fees ... to be charged the Columbia Fund are negotiated so that they are negotiated in a manner which is at arms' length and reasonable and consistent with this Assurance of Discontinuance." The AOD also provides that CMA "may manage or advise a Columbia Fund only if the reasonableness of the proposed management fees is determined by the Board of Trustees ... using ... an annual independent written evaluation prepared by or under the direction of ... the Independent Fee Consultant." Therefore, the AOD makes clear that the IFC does not supplant the Trustees in negotiating management fees with CMA, nor does the IFC substitute his or her judgment for that of the Trustees with respect to the reasonableness of proposed fees or any other matter that is committed to the business judgment of the Trustees.

B. Elements Involved in Managing the Fee Negotiation Process

In preparing the report required by the AOD, the IFC must consider at least the following six factors set forth in the AOD:

1.  The nature and quality of CMA's services, including the Fund's performance;

2.  Management fees (including any components thereof) charged by other mutual fund companies for like services;

3.  Possible economies of scale as the Fund grows larger;

4.  Management fees (including any components thereof) charged to institutional and other clients of CMA for like services;

5.  Costs to CMA and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; and

6.  Profit margins of CMA and its affiliates from supplying such services.

C. Organization of the Annual Evaluation

This report, like last year's, focuses on the six factors and contains a section for each factor except that CMA's costs and profits from managing the Funds are treated in a single section. In addition to a discussion of these factors, the report offers recommendations to improve the fee review process in future years. A review of the status of recommendations made in the 2008 Report is being provided separately with the materials for the October meeting.

1  CMA and CMDI are subsidiaries of Columbia Management Group, LLC ("CMG"), and are the successors to the entities named in the AOD.

2  I have no material relationship with Bank of America, CMG or any of its affiliates, aside from serving as IFC, and I am aware of no material relationship with any of their affiliates. I retained John Rea, an independent economic consultant, to assist me with this report.

  Unless otherwise stated or required by the context, this report covers only the Atlantic Funds, which are also referred as the "Funds."


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II. Summary of Findings

A. General

1.  Based upon my examination of the information supplied by CMG in the light of the six factors set forth in the AOD, I conclude that the Trustees have the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Atlantic Fund.

2.  In my view, the process by which the proposed management fees of the Funds have been negotiated in 2009 thus far has been, to the extent practicable, at arms' length and reasonable and consistent with the AOD.

B. Nature and Quality of Services, Including Performance

3.  The performance of the Funds has been relatively strong in recent years, although the one-year record was weaker than longer-term records. Based upon 1-, 3-, 5-, and 10-year returns through April 30, 2009, at least half of all the Funds were in the first and second performance quintiles in each of the three longest performance periods; for the one-year period, 40% of the Funds were in the top two quintiles. No more than 13% of the Funds were in the fifth quintile in any one performance period. Domestic equity, quantitative equity, and taxable fixed-income Funds were the strongest performers in 2009, while most foreign equity Funds lagged behind their competitors.

4.  Performance rankings were similar in 2008 and 2009: the 1- and 3-year rankings declined slightly over the previous year, while the 5-year rankings improved modestly. Year over year, for the 1- and 3-year periods, the performance of equity Funds, both domestic and international, declined, while that of fixed-income Funds improved. Between three-fifths to two-thirds of the Funds changed quintile rankings in 2009 in the 1-, 3-, and 5-year performance periods.

5.  The performance of the domestic equity Funds against their benchmarks was good for the 3- and 5-year performance periods. In contrast, gross returns of international equity and fixed-income Funds typically fell short of their benchmarks. The performance of equity Funds against their benchmarks was highly correlated to performance versus their peers; no such correlation was observed for fixed-income Funds.

6.  The Atlantic equity Funds' overall performance adjusted for risk was solid. Based upon 3-year returns, nearly 57% of the equity Funds had a combination of risk-adjusted and unadjusted returns that placed them in the top half of their performance universes. About one quarter of the fixed-income Funds posted high returns and low risk relative to comparable funds. Just over half of the fixed-income Funds, primarily tax-exempt Funds, took on more risk than the typical fund in their performance universes.

7.  The industry-standard procedure used by Lipper that includes all share classes in the performance universe tends to bias a Fund's ranking upward within that universe. The bias occurs because either no-12b-1 fee or low-12b-1 fee share classes of the Atlantic Funds are compared with funds in performance universes that include all share classes of multi-class funds with 12b-1 fees of up to 100 basis points. Correcting this bias by limiting the performance universe to classes of comparable funds with low or no 12b-1 fees (a "filtered universe") lowers the relative performance for the Funds, but not to a material extent. The filtering process, however, did identify one Fund for further review that had not been identified as a review fund using unfiltered universes. Conversely, two Funds that had been identified as review funds in the unfiltered universe lost that status in filtered universes.

8.  A small number of Funds have consistently underperformed over the past five years. The exact number depends on the criteria used to evaluate longer-term performance. For example, only three Funds had below-median performance in each 1- and 3-year period from 2005 to 2009.

9.  The services performed by CMG professionals beyond portfolio management, such as compliance, legal, information technology, risk management, finance, and fund administration, are critical to the success of the Funds and appear to be of high quality.

C. Management Fees Charged by Other Mutual Fund Companies

10.  The Funds' management fees and total expenses are generally low relative to those of their peers, with over half of the Funds in the most favorable two quintiles. Only 26% of the Funds ranked in the two most expensive quintiles for actual management fees, and 18% in those quintiles for


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total expenses. Two Funds are in the fifth quintile for total expenses; four Funds are in the fifth quintile for actual management fees.

11.  The highest concentration of low-expense Funds is found among the foreign equity Funds. The 12 former Excelsior Funds have relatively high fees and expenses, with two-thirds ranking in either the fourth or fifth quintiles for actual management fees. The higher actual management fee rankings of certain former Excelsior Funds are due in part to fee schedules that are higher than standard Columbia Fund fee schedules at current asset levels.

12.  The distribution of total expense and management fee rankings has improved over the prior two years. The implementation of the voluntary standardized cap system has contributed significantly to the improved rankings in 2009.

13.  The management fees of the Atlantic Funds are generally in line with those of Columbia Funds supervised by the Nations Board of Trustees (the "Nations Funds"). To the extent that Atlantic Funds have higher average fees in certain investment categories than Nations Funds, the difference reflects either differences in asset size, different fee structures of the former Excelsior Funds, or special circumstances of the Funds included in the investment categories.

D. Trustees' Advisory Contract Review Process

14.  The Trustees' evaluation process identified 16 Funds in 2009 for further review based upon long-standing criteria relating to their relative performance or expenses or both. When compared in filtered universes, one additional Fund met the criteria for further review. CMG provided further information about each of those Funds to assist the Trustees in their evaluation.

E. Potential Economies of Scale

15.  CMG presented to the Trustees its analysis of the sources and sharing of potential economies of scale. CMG views economies of scale as arising at the complex level and would regard estimates of scale economies for individual funds as unreliable. In its analysis, CMG did not identify specific sources of economies of scale or provide any estimates of any economies of scale that might arise from future asset growth. CMG's analysis included measures taken by the Trustees and CMG that seek to share any potential economies of scale through breakpoints in management fee schedules, the establishment of expense limits for each Fund, enhanced shareholder services, fund mergers, and operational consolidation.

16.  An examination of the contractual fee schedules for five Atlantic Funds shows that those with standard fee structures are generally in line with those of their competitors. The fee schedules of the former Excelsior Funds, however, have high initial fees relative to competitors but otherwise have comparable breakpoint structures.

F. Management Fees Charged to Institutional Clients

17.  CMG has provided Trustees with comparisons of mutual fund management fees and institutional fees based upon standardized fee schedules and upon actual fees. The results show that, consistent with industry practice, actual and scheduled institutional fees are generally lower than the Funds' management fees. CMG provided additional data this year demonstrating that at small asset levels, the effective fee of certain Funds may be equal to or less than institutional fee levels at those asset levels, due to the effect of expense limits on small funds with high gross expenses. CMG also analyzed the differences between the services provided and risks borne on the one hand by a manager of mutual funds and on the other by institutional advisers, and suggested that these differences should be kept in mind when Trustees review the reasonableness of the Funds' management fees.

G. Revenues, Expenses, and Profits

18.  The activity-based cost allocation methodology employed by CMG to allocate costs, both direct and indirect, for purposes of calculating Fund profitability is thoughtful and detailed. This year, CMG further refined the technique by allocating additional indirect expenses on an activity basis.

19.  The materials provided on CMG's revenues and expenses with respect to the Funds and the methodology underlying their construction form a sufficient basis for Trustees to evaluate the expenses of and profitability to CMG arising out of its relationships with the Funds.

20.  CMG provided a firm-wide pro forma 2009 income statement demonstrating the effect of market events


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beginning in the fourth quarter of 2008 on its revenues and profitability to provide an additional perspective on calendar 2008 profitability data. In particular, 2008 revenues reflected the higher market prices prevailing during the first three quarters of that year, while expenses dropped due to cost cutting in the wake of the market downturn late in 2008. The continuing effects of this downturn are expected to produce a significant decline in profitability this year.

21.  In 2008, CMG's pre-tax post-distribution margin on the Atlantic Fund complex was above industry medians, based on the limited data available for publicly held mutual fund managers. However, as is to be expected in a large fund complex, some Atlantic Funds had relatively high pre-tax profit margins in 2008, when calculated solely with respect to management revenues and expenses, while other Atlantic Funds operated at a loss. There is a positive relationship between Fund size and profitability to CMG, with smaller Funds generally operating at a loss to CMG.

22.  CMG pays a fixed percentage of its management fee revenues to an affiliate, U.S. Trust, Bank of America Private Wealth Management, with respect to assets of its clients invested in Atlantic Funds to compensate it for services it performs with respect to those client assets and for the effect of state law limitations on affiliates charging multiple fees. Based on our analysis of the services provided by this affiliate, we have concluded that all payments other than those for sub-transfer agent or sub-accounting services should be treated as a distribution expense.

III. Recommendations

1)  Criteria for review. The Trustees may wish to consider modifying the criteria for identifying a Fund for further review (a "Review Fund") to include criteria that focus exclusively on performance. The Trustees' supplementary data request included one such criterion. They may also wish to consider whether it would be useful to apply CMG's own internal monitoring standards for Fund performance to the contract review process, or whether such criteria are more relevant to their ongoing investment oversight.

2)  Presentation of Review Fund discussion. CMG should consider whether it could more systematically present in one discussion all relevant information regarding each Review Fund, which is now split into several different portions of the 15(c) materials. For any Fund that has been a Review Fund in consecutive years, CMG should address under what circumstances it could reasonably be anticipated that the Fund would lose that status.

3)  Refinement of tax-exempt performance data. Certain single-state tax-exempt Funds compete in extremely small universes and are compared to a multi-state benchmark of uncertain relevance. Notwithstanding the difficulties, CMG should work to improve the reliability of the calculation of relative performance of these Funds. If that is not possible, CMG should provide guidance on how the Trustees should judge the quality of CMG's management of these Funds.

4)  Development of risk metrics for asset-allocation, tax-exempt, and money market funds. CMG has developed and shared with the Trustees quantitative risk metrics comparing equity and taxable fixed-income Funds against their peers. However, reliable risk metrics have not been developed for asset-allocation, tax-exempt fixed income, and money market funds. We urge CMG to continue its efforts to provide reliable risk measures for these categories of Funds, especially in the cases of asset-allocation and money market funds, because their investors are likely to be motivated at least in part by a desire to manage risk.

5)  Profitability data. For any period during which CMG is an affiliate of U.S. Trust, Bank of America Private Wealth Management, CMG should continue to present to the Trustees the profitability of each Fund, each investment style and each complex (of which Atlantic is one) calculated as follows:

a.  Management-only profitability should be calculated without reference to any Private Bank expense.

b.  Profitability excluding distribution (which essentially covers the management and transfer agency functions) should be adjusted by removing from the expense calculation any portion of the Private Bank payment not attributable to the performance by the Private Bank of sub-transfer agency or sub-accounting functions.

c.  Total profitability, including distribution: No adjustment for Private Bank expenses should be made, because all such expenses represent legitimate fund expenses to be taken into account in calculating CMG's profit margin including distribution.

d.  Distribution only: This should include all Private Bank expenses other than those attributable to sub-transfer agency services.


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6)  Contractual fee analysis. This year CMG presented a new Lipper report comparing the contractual management fees of Funds with those of competitors in similar investment styles. However, the reliability of the conclusion—that Fund management fee breakpoints compared favorably with competitive fee rates—was limited by the use of competitive funds at all asset levels. The sponsors of a $100 million mutual fund may not have given much thought to breakpoints at $5 billion; therefore, that fund's contractual fee at that level is unlikely to compare favorably with that of a $5 billion Fund. Limiting the competitors to the Lipper expense group, whose constituents are similar in size to the relevant Fund, would make the results more meaningful. In addition, the breakpoints of a select group of Atlantic Funds (which would differ each year) should continue to be compared to those of industry rivals to ensure that the Funds' breakpoint schedules remain within industry norms. As breakpoint schedules change relatively little each year, performing such a comparison for each Atlantic Fund each year would not be an efficient use of Trustee and CMG resources.

7)  Pro forma profitability data. In any year in which CMG or the Trustees believe that the prior year's profitability is unlikely to be representative of current business results due to changes in markets or for any other reason, CMG should, consistent with this year's practice, prepare a pro forma income statement based on year-to-date actual data and reasonable projections used for its own business planning purposes.

8)  Additional institutional data and analysis. While CMG provided a substantial amount of information on its institutional business, including a virtually complete database of all institutional accounts, we suggest some additional items for future years: (a) profitability data for the institutional business in the format, and based upon the same allocation methodologies, used to present Fund profitability, (b) an explanation of how CMA sets institutional fee breakpoints, which normally begin at asset levels far lower than those found in Fund management fee breakpoints, and (c) an analysis of differences in actual fees within specific investment categories, with special attention given to accounts established before and after the implementation of the standardized institutional fee schedules in 2005.

9)  Management fee disparities. In any future study of management fees, CMG and the Atlantic Trustees should analyze the differences in management fee schedules, including those arising out of the reorganization of the former Excelsior Funds as Atlantic Funds. As part of that analysis, CMG should provide an explanation for any significant fee differences among comparable funds across fund families sponsored by CMG, such as differences in the management styles of different Funds included the same Lipper category. Finally, if CMG proposes a management fee change or an expense cap for any mutual fund managed by CMA that is comparable to any Atlantic Fund, CMG should provide the Trustees with sufficient information about the proposal to allow the Trustees to assess the applicability of the proposed change to the relevant Atlantic Fund or Funds.

10)  Explanation of data supplied to Lipper. Each year, as part of the 15(c) process, CMG retains Lipper to compare the fees and expenses of each Fund to a group of competitors. In many cases, CMG, with the approval of the Trustees, adjusts the actual expense data, which is based on the most recent full fiscal year of the Fund (and each competitive fund) to reflect changes in fees or expense limits that occurred during or after the relevant fiscal year. This improves the reliability and usefulness of the comparison. However, to ensure that the Trustees know when and how CMG adjusted the data, we recommend that CMG prepare a table listing for each Fund what adjustments were made, e.g., to reflect a new expense limitation of x basis points that commenced on y date.

  Reduction of volume of paper documents submitted. The effort to streamline and better organize the data presented to the Trustees and the process by which that data was prepared and organized continued to be well-received by all parties. Notwithstanding past success, it is always appropriate to look for opportunities to reduce and simplify the presentation of 15(c) data. One possibility would be to remove the 124 pages of biographical data, most if not all of which the Trustees have previously seen as part of their ongoing investment oversight duties, from the paper volume and post it on the Internet-based document storage and retrieval system used by the Funds to provide reference data to Trustees.

Respectfully Submitted,
Steven E. Asher


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Summary of Management Fee Evaluation by Independent Fee Consultant (RiverSource Investments, LLC)

REPORT OF INDEPENDENT FEE CONSULTANT TO THE FUNDS SUPERVISED BY THE COLUMBIA ATLANTIC BOARD

Prepared Pursuant to the February 9, 2005
Assurance of Discontinuance among the
Office of Attorney General of New York State,
Columbia Management Advisors, LLC, and
Columbia Management Distributors, Inc.

December 21, 2009

I. Overview

On February 9, 2005, Columbia Management Advisors, LLC ("CMA") and Columbia Management Distributors, Inc.1 ("CMD") agreed to the New York Attorney General's Assurance of Discontinuance ("AOD"). Among other things, the AOD stipulates that CMA may manage or advise a Columbia Fund ("Columbia Fund" and, together with some or all of such funds, the "Columbia Funds") only if the Independent Members of the Columbia Fund's Board of Trustees appoint a Senior Officer or retain an Independent Fee Consultant ("IFC") who is to manage the process by which proposed management fees are negotiated. The AOD further stipulates that the Senior Officer or IFC is to prepare a written annual evaluation of the fee negotiation process.

With effect from January 1, 2007, the Independent Members of the Board of Trustees for certain Columbia Funds known collectively as the "Atlantic Funds" (together with the other members of that Board, the "Trustees") retained me as IFC for the Atlantic Funds.2 In this capacity, I have prepared this written evaluation of the fee negotiation process. As was the case with the last three annual reports, my immediate predecessor as IFC, John Rea, provided invaluable assistance in the preparation of this report.

On September 29, 2009, Ameriprise entered into an asset purchase agreement with Bank of America, N.A. and its parent, Bank of America Corporation (together, the "Bank") pursuant to which the Bank agreed to sell certain CMG assets relating to Columbia's long-term asset management business, including management of the Atlantic Funds (the "Transaction").3 The Transaction if completed would result in the termination of the existing Investment Management Agreements with CMA. Therefore, the Trustees have been requested to approve and recommend to the shareholders of each Atlantic Fund new Investment Management and Sub-Advisory Agreements (together, the "Management Agreements") with RiverSource Investments, LLC ("RI"),4 investment manager of the RiverSource Funds and a subsidiary of Ameriprise. This report is intended to fulfill the requirements of the AOD with respect to the Trustees' consideration of the new Management Agreements.

A. Role of the Independent Fee Consultant

The AOD charges the IFC with "managing the process by which proposed management fees ... to be charged the Columbia Fund are negotiated so that they are negotiated in a manner which is at arms' length and reasonable and consistent with this Assurance of Discontinuance." The AOD also provides that CMA "may manage or advise a Columbia Fund only if the reasonableness of the proposed management fees is determined by the Board of Trustees ... using ... an annual independent written evaluation prepared by or under the direction of ... the Independent Fee Consultant." Therefore, the AOD makes clear that the IFC does not supplant the Trustees in negotiating management fees with CMA (or RI), nor does the IFC substitute his or her judgment for that of the Trustees with respect to the reasonableness of proposed fees or any other matter that is committed to the business judgment of the Trustees.

B. Elements Involved in Managing the Fee Negotiation Process

In preparing the report required by the AOD, the IFC must consider at least the following six factors set forth in the AOD:

1.  The nature and quality of the adviser's services, including the Fund's performance;

1  CMA and CMD are subsidiaries of Columbia Management Group, LLC ("CMG"), and are the successors to the entities named in the AOD.

2  I have no material relationship with Bank of America, CMG or Ameriprise Financial, Inc. ("Ameriprise"), aside from serving as IFC, and I am aware of no material relationship with any of their affiliates. I retained John Rea, an independent economic consultant, to assist me with this report.

  Unless otherwise stated or required by the context, this report covers only the Atlantic Funds.

3  Preliminary Response of Ameriprise to Information Request of Columbia Atlantic Board dated October 21, 2009 (hereafter, the "Preliminary Response"), p. 1. The one money market Atlantic Fund, Money Market Fund VS, was included in the Transaction because it was an integral part of CMG's array of Funds used as investment vehicles by variable annuity and similar insurance products.

4  Ameriprise intends to re-brand RI with the "Columbia" name (which is one of the assets being sold in the Transaction). Preliminary Response, pp. 4-5. In the case of new Sub-Advisory Agreements, the current sub-adviser would also be a party.


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2.  Management fees (including any components thereof) charged by other mutual fund companies for like services;

3.  Possible economies of scale as the Fund grows larger;

4.  Management fees (including any components thereof) charged to institutional and other clients of the adviser for like services;

5.  Costs to the adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; and

6.  Profit margins of the adviser and its affiliates from supplying such services.

C. Data Presented to the Trustees

In considering the proposed new Management Agreements with RI, the Trustees relied in part on the data that had been prepared as part of their annual contract review process, which concluded in late October. This data remained relevant because the fees in the proposed Management Agreements were identical to the fees approved at that time. The annual review materials included a Lipper report on the performance of each Atlantic Fund compared to its peers and its benchmark, comparisons of the fees and expenses of each Atlantic Fund to similar CMG-sponsored Funds, comparable competitive funds chosen by Lipper, and institutional accounts advised by CMA, revenues, expenses, and profits of CMG from managing the Atlantic Funds, calculated both by Fund and collectively, and CMG's views on the existence and sharing of economies of scale.

In addition, the Trustees reviewed materials specific to the proposed new Management Agreements with RI in response to requests for information made on behalf of the Trustees, including the following:

•  Performance data for the RiverSource Funds showing percentile and quartile rankings of each fund within its Lipper performance universe for periods up to five years and net returns of each fund relative to its benchmark returns. This data was arguably relevant due to the possibility that some RiverSource investment teams would be providing investment management services to certain Columbia Funds.5

•  tables comparing the fee schedules and effective fee rates of funds managed by CMA and RI and institutional accounts advised by the two firms.

•  extensive discussion of the process by which the various components of the two asset management businesses would be integrated including investment management, compliance, transfer agency, custody, fund accounting, and distribution.

•  information about the financial condition of Ameriprise, including its most recent annual report on Form 10-K, RI's profit margins from managing the RiverSource Funds in 2007 and 2008, and pro forma income statements for the combined Columbia and RiverSource fund complex.

•  disclosure that certain senior CMG executives, including President Michael Jones, Chief Investment Officer Colin Moore, Head of Mutual Funds J. Kevin Connaughton, and Chief Compliance Officer Linda Wondrack would continue in analogous capacities following the consummation of the Transaction, and

•  a breakdown of the synergies RI expects to realize in the two years following the Transaction and the extent to which those potential synergies are expected to be shared with shareholders of funds advised by RI.

II. Findings

1.  Based upon my examination of the information supplied by CMG and Ameriprise in the light of the six factors set forth in the AOD, I conclude that the Trustees have the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Atlantic Fund.

2.  In my view, the process by which the proposed management fees of the Atlantic Funds have been negotiated with RI thus far has been, to the extent practicable, at arms' length and reasonable and consistent with the AOD.

Respectfully submitted,
Steven E. Asher

5  On page 20 of its Supplemental Response to the Atlantic Trustees (undated but delivered November 24, 2009), Ameriprise said that "most personnel decisions, including with respect to the portfolio management teams for the Atlantic Funds . . . will be made primarily by [current CMA CIO] Colin Moore using the Columbia 5P process."


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Proxy Voting Results

Columbia Asset Allocation Fund, Columbia Large Cap Growth Fund, Columbia Disciplined Value Fund, Columbia Contrarian Core Fund and Columbia Small Cap Core Fund

On March 3, 2010, a special meeting of shareholders of Columbia Funds Series Trust I was held to consider the approval of several proposals listed in the proxy statement for the meeting. Proposal 1 and Proposal 2 were voted on at the March 3, 2010 meeting of shareholders and Proposal 3 was voted on at an adjourned meeting of shareholders held on March 31, 2010. The shareholder meeting results are as follows:

Proposal 1: A proposed Investment Management Services Agreement with Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (CMIA) was approved for each Fund as follows:

Fund   Votes For   Votes Against   Abstentions   Broker
Non-Votes
 
Columbia Asset Allocation Fund     117,303,227       7,626,208       5,376,045       20,337,535    
Columbia Large Cap Growth Fund     864,533,101       30,984,318       23,239,588       111,972,270    
Columbia Disciplined Value Fund     218,351,185       2,153,444       2,661,523       17,534,697    
Columbia Contrarian Core Fund     296,548,716       6,382,231       6,483,346       59,569,594    
Columbia Small Cap Core Fund     360,302,219       4,668,156       4,322,786       71,018,154    

 

Proposal 2: A proposal authorizing CMIA to enter into and materially amend subadvisory agreements for the Fund in the future, with the approval of the Trust's Board of Trustees, but without obtaining additional shareholder approval, was approved for each Fund as follows:

Fund   Votes For   Votes Against   Abstentions   Broker
Non-Votes
 
Columbia Asset Allocation Fund     113,101,948       11,598,134       5,605,423       20,337,510    
Columbia Large Cap Growth Fund     846,899,665       49,405,160       22,452,062       111,972,391    
Columbia Disciplined Value Fund     216,352,427       4,148,222       2,665,463       17,534,737    
Columbia Contrarian Core Fund     290,651,348       11,942,405       6,820,492       59,569,643    
Columbia Small Cap Core Fund     317,739,848       47,220,729       4,332,442       71,018,294    

 


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Proposal 3: Each of the nominees for trustees was elected to the Trust's Board of Trustees, as follows:

Trustee   Votes For   Votes Withheld   Abstentions  
John D. Collins     30,977,072,412       859,827,038       0    
Rodman L. Drake     30,951,179,004       885,720,446       0    
Douglas A. Hacker     30,989,793,279       847,106,171       0    
Janet Langford Kelly     30,999,020,814       837,878,636       0    
William E. Mayer     16,291,139,483       15,545,759,967       0    
Charles R. Nelson     30,997,700,700       839,198,750       0    
John J. Neuhauser     30,988,095,661       848,803,789       0    
Jonathon Piel     30,968,801,048       868,098,402       0    
Patrick J. Simpson     30,999,065,030       837,834,420       0    
Anne-Lee Verville     30,996,227,913       840,671,537       0    

 


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Important Information About This Report

The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of the Stock Funds.

A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.columbiamanagement.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website, www.columbiamanagement.com.

Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus, which contains this and other important information about the funds, visit columbiamanagement.com. Read the prospectus carefully before investing.

On April 30, 2010, Ameriprise Financial, Inc., the parent company of RiverSource Investments, LLC, acquired the long-term asset management business of Columbia Management Group, LLC, including certain of its affiliates, which were, prior to this acquisition, part of Bank of America. In connection with the acquisition of the long-term assets, the Columbia Funds have a new investment adviser, RiverSource Investments, LLC, which is now known as Columbia Management Investment Advisers, LLC. For those clients that use the services of a subadviser, those arrangements are continuing unless notified otherwise. RiverSource Fund Distributors, Inc., now known as Columbia Management Investment Distributors, Inc., member FINRA, will act as the principal distributor of the Columbia Funds.

Transfer Agent*

Columbia Management Investment
Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
1-800-345-6611

Distributor*

Columbia Management Investment
Distributors, Inc.
One Financial Center
Boston, MA 02111

Investment Advisor*

Columbia Management Investment Advisers, LLC
100 Federal Street
Boston, MA 02110

*As of May 1, 2010  

 


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Columbia Management®

One Financial Center
Boston, MA 02111-2621

PRSRT STD
U.S. Postage
PAID
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Permit NO. 20

Columbia Management®

Stock Funds

Semiannual Report, March 31, 2010

©2010 Columbia Management Investment Advisers, LLC. All rights reserved.

One Financial Center, Boston, MA 02111-2621

800-345-6611 www.columbiafunds.com

SHC-44/44513-0310 (05/10) 10/91D417




LOGO

Semiannual Report

March 31, 2010

 

Columbia Dividend Income Fund

 

Not FDIC Insured   Ÿ   May Lose Value   Ÿ   No Bank Guarantee

 


 

Table of Contents

 

Fund Profile   1
Performance Information   3
Understanding Your Expenses   4
Financial Statements   5
Board Consideration and Approval of Advisory Agreements   28
Summary of Management Fee Evaluation by Independent Fee Consultant (Columbia Management Advisors, LLC)   35
Summary of Management Fee Evaluation by Independent Fee Consultant (RiverSource Investments, LLC)   41
Proxy Voting Results   43
Important Information About This Report   45

 

The views expressed in this report reflect the current views of the respective parties. 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 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 Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Fund. References to specific securities should not be construed as a recommendation or investment advice.

 

President’s Message

LOGO

 

Dear Shareholder:

On May 3, 2010, Ameriprise Financial, Inc. announced that it had completed the acquisition of the long-term asset management business of Columbia Management from Bank of America. This includes the business of managing its equity and fixed-income mutual funds. Ameriprise Financial has combined its current U.S. asset management business, RiverSource Investments, LLC, with Columbia Management. This transaction puts together two leading asset management firms to create one entity that ranks as the eighth largest manager of long-term mutual fund assets in the United States.1 This combined business will operate under the well-regarded Columbia Management brand, where we will build on the strengths of our combined investment capabilities and

 

talent, our broad and diversified product lineup and exceptional service.

Our combined business has a new breadth and depth of investment choices. William “Ted” Truscott, CEO, U.S. asset management and president of annuities for Ameriprise Financial, leads the combined U.S. asset management business. Michael Jones serves as president, U.S. asset management. Colin Moore continues to serve as chief investment officer. I am also continuing in my role as head of mutual funds, responsible for the delivery of mutual fund products and services to investors. The Columbia funds’ advisers, distributor and transfer agent are now subsidiaries of our parent company, Ameriprise Financial but operate under the Columbia Management name. You will begin to see these names used in communications and statements going forward.

 

    Service provider name
Advisers  

Columbia Management Investment Advisers, LLC

Columbia Wanger Asset Management, LLC

Distributor   Columbia Management Investment Distributors, Inc.
Transfer Agent   Columbia Management Investment Services Corp.

As a valued investor in Columbia funds, please know that our goal is to ensure a smooth transition and provide the highest quality products and services. Transition teams across the organization continue their efforts to build on best practices from both legacy organizations with integration efforts including rebranding, vendor and system consolidations and client communications. Additionally, we want to assure you that the funds’ portfolio managers also continue to focus on providing uninterrupted service to all fund shareholders.

Although we have a lot of work ahead of us in 2010, Columbia Management and Ameriprise Financial are excited about the opportunities for our combined organization. I share this optimism and believe it positions us as a best-in-class asset management business with the ability to deliver more for our clients than ever before.

Sincerely,

LOGO

J. Kevin Connaughton

President, Columbia Funds

 

1

Source: Ameriprise Financial, Inc., based on March 31, 2010 data from the Investment Company Institute

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus, which contains this and other important information about the funds, visit columbiamanagement.com. Read the prospectus carefully before investing.

Securities products offered through Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), member FINRA. Advisory services provided by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC).

© 2010 Columbia Management Investment Advisers, LLC. All rights reserved.

 


Fund Profile – Columbia Dividend Income Fund

 

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

 

LOGO  

+11.42%

Class A shares

    (without sales charge)

LOGO  

+12.11%

Russell 1000 Index

 

Morningstar Style Box

Equity Style

LOGO

The Morningstar Style Box reveals a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend or growth). Information shown is based on the most recent data provided by Morningstar.

Summary

 

n  

For the six-month period that ended March 31, 2010, the fund’s Class A shares returned 11.42% without sales charge. The fund underperformed its benchmark, the Russell 1000 Index1, which returned 12.11% for the same period. It outperformed the average return of funds in its peer group, the Lipper Equity Income Funds Classification2, which returned 10.73%. The fund’s dividend distributions increased by 6.2% over this period, versus a decline for dividends in the S&P 500 Index3 .

 

n  

Industrials were the fund’s best-performing sector over the period, with Deere, Emerson Electric and United Technologies (0.9%, 0.8% and 1.3% of net assets, respectively) leading the way. In materials, specialty steel maker Allegheny Technologies (0.7% of net assets) rose sharply in anticipation of a better economic recovery and a comeback in aerospace sales. Several energy holdings benefited from recovering oil prices. Smith International (1.0% of net assets), an oil field service company, was the fund’s strongest performer, thanks to its pending acquisition by a leading competitor. Results among consumer discretionary companies trailed the benchmark slightly. In financials, mutual fund manager T. Rowe Price Group (0.6% of net assets) enjoyed strong net sales, boosting its shares. MetLife (0.9% of net assets) saw assets under management expand, while Unum Group (0.8% of net assets), which sells insurance products in workplaces, rose on hopes of better employment trends. Utilities and telecom were the areas of greatest weakness. We continue to overweight AT&T and Verizon Communications (2.9% and 2.5% of net assets, respectively) despite their sluggish performance; both pay generous dividends and enjoy solid cash flows. Investor indifference to defensive sectors, plus possible legislative constraints on their returns, hurt utility holdings, including FPL Group and FirstEnergy (0.4% and 0.6% of net assets, respectively). JPMorgan Chase and Morgan Stanley (2.4% and 0.8% of net assets, respectively) in the financial sector and drug maker Pfizer (1.9% of net assets) also turned in subpar performances.

 

n  

Cost-cutting has helped fuel a surprising rebound in corporate earnings, but the focus on costs has made companies hesitant to add to payrolls. Although capital expenditures are accelerating, corporations are flush with cash, leaving room for dividend increases and other moves that may benefit shareholders. Meanwhile, the U.S. economy continues to recover, aided by low interest rates and a range of government programs. However, a swollen federal deficit remains a serious threat to continued growth.

 

1

The Russell 1000 Index tracks the performance of 1000 of the largest U.S. companies, based on market capitalization.

 

2

Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

 

3

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

Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

 

1

Fund Profile (continued) – Columbia Dividend Income Fund

 

Portfolio Management

Scott L. Davis has co-managed the fund since November 2001 and has been associated with the advisor or its predecessors since 1985.

Richard E. Dahlberg has co-managed the fund since October 2003 and has been associated with the advisor or its predecessors since 2003.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund’s prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

 

 

Portfolio holdings and characteristics are subject to change periodically and may not be representative of current holdings and characteristics. The outlook for the fund may differ from those presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time.

Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the manager’s assessment of a company’s prospects is wrong, the price of its stock may not approach the value the manager has placed on it.

 

2

Performance Information – Columbia Dividend Income Fund

 

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

 

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)
Sales charge    without      with

Class A

   16,267      15,330

Class B

   15,069      15,069

Class C

   15,058      15,058

Class R

   16,186      n/a

Class T

   16,202      15,269

Class Z

   16,801      n/a

The table above shows the change in the value of a hypothetical $10,000 investment in each share class of Columbia Dividend Income Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Annual operating expense ratio (%)*

Class A

   1.13

Class B

   1.88

Class C

   1.88

Class R

   1.38

Class T

   1.18

Class Z

   0.88

 

* The annual operating expense ratio is as stated in the fund’s prospectus that is current as of the date of this report and includes the expenses incurred by the underlying funds in which the portfolio invests. Differences in expense ratios disclosed elsewhere in this report may result from including expenses incurred by the underlying funds, fee waivers and expense reimbursements as well as different time periods used in calculating the ratios.

 

Net asset value per share

as of 03/31/10 ($)

  

Class A

   12.30

Class B

   12.03

Class C

   12.02

Class R

   12.30

Class T

   12.30

Class Z

   12.30
Distributions declared per share

10/01/09 – 03/31/10 ($)

  

Class A

   0.15

Class B

   0.11

Class C

   0.11

Class R

   0.14

Class T

   0.15

Class Z

   0.17

 

 

Average annual total return as of 03/31/10 (%)                            
Share class   A   B   C   R   T   Z
Inception   11/25/02   11/25/02   11/25/02   03/28/08   03/04/98   03/04/98
Sales charge   without   with   without   with   without   with   without   without   with   without

6–month (cumulative)

  11.42   5.03   10.99   5.99   11.00   10.00   11.29   11.40   5.01   11.56

1-year

  39.96   31.90   39.03   34.03   38.92   37.92   39.62   39.89   31.84   40.29

5-year

  3.76   2.54   2.99   2.63   2.99   2.99   3.66   3.71   2.49   4.02

10-year

  4.99   4.36   4.19   4.19   4.18   4.18   4.93   4.94   4.32   5.33

The “with sales charge” returns include the maximum initial sales charge of 5.75% for Class A and Class T shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The “without sales charge” returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class R shares are sold at net asset value with distribution (Rule 12b-1) fees. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class R and Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

Class A, Class B, Class C, Class T and Class Z shares performance information includes returns of Retail A shares (for Class A and Class T shares), Retail B shares (for Class B and Class C shares) and Trust shares (for Class Z shares) of Galaxy Strategic Equity Fund, the predecessor to the Fund and a series of the Galaxy Fund (the “Predecessor Fund”), for periods prior to November 25, 2002, the date on which Class A, Class B, Class C, Class T and Class Z shares were initially offered by the Fund. Class R share performance information includes returns of Class A shares for the period from November 25, 2002 through March 27, 2008, and the returns of Retail A shares for periods prior thereto. These returns shown for all share classes reflect any differences in sales charges, but have not been restated to reflect any differences in expenses between the Predecessor Fund share classes (and, in the case of Class R shares, Class A shares) and the corresponding newer share classes. If differences in expenses had been reflected, the returns shown for periods prior to November 25, 2002 would be lower for Class B and Class C, and the returns shown for periods prior to March 28, 2008 would be lower for Class R shares.

 

3

Understanding Your Expenses – Columbia Dividend Income Fund

 

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

 

  n  

For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

 

 

  n  

For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

 

 

  1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.  

 

  2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “Actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.  

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee.

This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “Hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

10/01/09 – 03/31/10     
    

Account value at the

beginning of the period ($)

 

Account value at the

end of the period ($)

 

Expenses paid

during the period ($)

 

Fund’s annualized

expense ratio (%)

    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual

Class A

  1,000.00   1,000.00   1,114.20   1,019.70   5.53   5.29   1.05

Class B

  1,000.00   1,000.00   1,109.90   1,015.96   9.47   9.05   1.80

Class C

  1,000.00   1,000.00   1,110.00   1,015.96   9.47   9.05   1.80

Class R

  1,000.00   1,000.00   1,112.90   1,018.45   6.85   6.54   1.30

Class T

  1,000.00   1,000.00   1,114.00   1,019.45   5.80   5.54   1.10

Class Z

  1,000.00   1,000.00   1,115.60   1,020.94   4.22   4.03   0.80

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 365.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

 

4

Investment Portfolio – Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

Common Stocks – 94.3%

 

      Shares    Value ($)
Consumer Discretionary – 10.1%   
Hotels, Restaurants & Leisure – 1.8%   

McDonald’s Corp.

   592,500    39,531,600
       

Hotels, Restaurants & Leisure Total

   39,531,600
Media – 2.6%      

McGraw-Hill Companies, Inc.

   360,000    12,834,000

Meredith Corp.

   510,000    17,549,100

Time Warner, Inc.

   865,000    27,048,550
       

Media Total

      57,431,650
Multiline Retail – 0.5%      

Nordstrom, Inc.

   306,500    12,520,525
       

Multiline Retail Total

      12,520,525
Specialty Retail – 5.2%      

Foot Locker, Inc.

   940,000    14,137,600

Gap, Inc.

   560,000    12,941,600

Home Depot, Inc.

   940,000    30,409,000

Sherwin-Williams Co.

   560,000    37,900,800

Staples, Inc.

   430,000    10,057,700

TJX Companies, Inc.

   272,500    11,586,700
       

Specialty Retail Total

      117,033,400
       

Consumer Discretionary Total

      226,517,175
     
Consumer Staples – 12.1%      
Beverages – 1.9%      

Coca-Cola Co.

   165,000    9,075,000

Diageo PLC, ADR

   320,000    21,584,000

PepsiCo, Inc.

   160,000    10,585,600
       

Beverages Total

      41,244,600
Food & Staples Retailing – 1.2%      

Wal-Mart Stores, Inc.

   500,000    27,800,000
       

Food & Staples Retailing Total

      27,800,000
Food Products – 2.7%      

General Mills, Inc.

   200,000    14,158,000

H.J. Heinz Co.

   600,000    27,366,000

J.M. Smucker Co.

   146,500    8,828,090

Kraft Foods, Inc., Class A

   360,000    10,886,400
       

Food Products Total

      61,238,490
Household Products – 2.5%      

Kimberly-Clark Corp.

   400,000    25,152,000

Procter & Gamble Co.

   480,000    30,369,600
       

Household Products Total

      55,521,600

 

      Shares    Value ($)
Personal Products – 0.5%      

Avon Products, Inc.

   325,000    11,007,750
       

Personal Products Total

      11,007,750
Tobacco – 3.3%      

Altria Group, Inc.

   1,020,000    20,930,400

Philip Morris International, Inc.

   1,015,000    52,942,400
       

Tobacco Total

      73,872,800
       

Consumer Staples Total

   270,685,240
  
Energy – 11.4%      
Energy Equipment & Services – 2.0%   

Smith International, Inc.

   500,000    21,410,000

Transocean Ltd. (a)

   260,000    22,458,800
       

Energy Equipment & Services Total

   43,868,800
Oil, Gas & Consumable Fuels – 9.4%   

Chevron Corp.

   540,000    40,948,200

ConocoPhillips

   285,000    14,583,450

EnCana Corp.

   710,000    22,031,300

Exxon Mobil Corp.

   910,000    60,951,800

Murphy Oil Corp.

   166,000    9,327,540

Occidental Petroleum Corp.

   245,000    20,712,300

Royal Dutch Shell PLC, ADR

   740,000    42,816,400
       

Oil, Gas & Consumable Fuels Total

   211,370,990
       

Energy Total

      255,239,790
     
Financials – 14.5%      
Capital Markets – 4.1%      

Eaton Vance Corp.

   600,000    20,124,000

Federated Investors, Inc., Class B

   625,000    16,487,500

Morgan Stanley

   600,000    17,574,000

Northern Trust Corp.

   445,000    24,590,700

T. Rowe Price Group, Inc.

   250,500    13,759,965
       

Capital Markets Total

      92,536,165
Commercial Banks – 2.9%      

PNC Financial Services Group, Inc.

   310,000    18,507,000

U.S. Bancorp

   782,500    20,251,100

Wells Fargo & Co.

   850,000    26,452,000
       

Commercial Banks Total

      65,210,100
Consumer Finance – 1.2%      

American Express Co.

   680,000    28,056,800
       

Consumer Finance Total

      28,056,800

 

See Accompanying Notes to Financial Statements.

 

5

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)

 

      Shares    Value ($)
Financials (continued)      
Diversified Financial Services – 2.4%   

JPMorgan Chase & Co.

   1,180,000    52,805,000
       

Diversified Financial Services Total

   52,805,000
Insurance – 3.3%      

Arthur J. Gallagher & Co.

   622,500    15,282,375

Chubb Corp.

   260,000    13,481,000

MetLife, Inc.

   486,500    21,084,910

RenaissanceRe Holdings Ltd.

   100,000    5,676,000

Unum Group

   740,000    18,329,800
       

Insurance Total

      73,854,085
Thrifts & Mortgage Finance – 0.6%   

People’s United Financial, Inc.

   810,000    12,668,400
       

Thrifts & Mortgage Finance Total

   12,668,400
       

Financials Total

      325,130,550
     
Health Care – 10.0%      
Pharmaceuticals – 10.0%      

Abbott Laboratories

   660,000    34,768,800

Bristol-Myers Squibb Co.

   1,690,000    45,123,000

Johnson & Johnson

   585,000    38,142,000

Merck & Co., Inc.

   1,700,000    63,495,000

Pfizer, Inc.

   2,500,000    42,875,000
       

Pharmaceuticals Total

      224,403,800
       

Health Care Total

      224,403,800
     
Industrials – 10.2%      
Aerospace & Defense – 3.9%      

Honeywell International, Inc.

   645,000    29,199,150

Raytheon Co.

   525,000    29,988,000

United Technologies Corp.

   395,000    29,075,950
       

Aerospace & Defense Total

      88,263,100
Commercial Services & Supplies – 0.9%   

Waste Management, Inc.

   582,500    20,055,475
       

Commercial Services & Supplies Total

   20,055,475
Electrical Equipment – 0.8%      

Emerson Electric Co.

   360,000    18,122,400
       

Electrical Equipment Total

      18,122,400
Industrial Conglomerates – 1.4%   

General Electric Co.

   1,715,000    31,213,000
       

Industrial Conglomerates Total

   31,213,000

 

      Shares    Value ($)
Machinery – 2.5%      

Deere & Co.

   322,500    19,175,850

Dover Corp.

   391,500    18,302,625

Parker Hannifin Corp.

   275,000    17,803,500
       

Machinery Total

      55,281,975
Road & Rail – 0.7%      

Norfolk Southern Corp.

   292,500    16,347,825
       

Road & Rail Total

      16,347,825
       

Industrials Total

      229,283,775
     
Information Technology – 10.5%   
Computers & Peripherals – 3.6%   

Hewlett-Packard Co.

   480,000    25,512,000

International Business Machines Corp.

   441,500    56,622,375
       

Computers & Peripherals Total

   82,134,375
IT Services – 1.0%      

Automatic Data Processing, Inc.

   495,000    22,012,650
       

IT Services Total

      22,012,650
Office Electronics – 0.6%      

Canon, Inc., ADR

   290,000    13,400,900
       

Office Electronics Total

      13,400,900
Semiconductors & Semiconductor Equipment – 3.0%   

Intel Corp.

   2,065,000    45,966,900

Linear Technology Corp.

   190,000    5,373,200

Texas Instruments, Inc.

   630,000    15,416,100
       

Semiconductors & Semiconductor Equipment Total

   66,756,200
Software – 2.3%      

Microsoft Corp.

   1,750,000    51,222,500
       

Software Total

      51,222,500
       

Information Technology Total

      235,526,625
     
Materials – 4.7%      
Chemicals – 1.6%      

E.I. Du Pont de Nemours & Co.

   340,000    12,661,600

International Flavors & Fragrances, Inc.

   280,000    13,347,600

RPM International, Inc.

   420,000    8,962,800
       

Chemicals Total

      34,972,000

 

See Accompanying Notes to Financial Statements.

 

6

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)

 

      Shares    Value ($)
Materials (continued)      
Containers & Packaging – 0.6%   

Sonoco Products Co.

   465,000    14,317,350
       

Containers & Packaging Total

   14,317,350
Metals & Mining – 2.5%      

Allegheny Technologies, Inc.

   307,500    16,601,925

BHP Billiton Ltd., ADR

   195,000    15,662,400

Nucor Corp.

   500,000    22,690,000
       

Metals & Mining Total

      54,954,325
       

Materials Total

      104,243,675
     
Telecommunication Services – 5.8%   
Diversified Telecommunication Services – 5.8%

AT&T, Inc.

   2,540,000    65,633,600

Verizon Communications, Inc.

   1,840,000    57,076,800

Windstream Corp.

   540,000    5,880,600
       

Diversified Telecommunication
Services Total

   128,591,000
       

Telecommunication Services Total

   128,591,000
  
Utilities – 5.0%      
Electric Utilities – 2.6%      

American Electric Power Co., Inc.

   310,000    10,595,800

Entergy Corp.

   85,000    6,914,750

Exelon Corp.

   165,000    7,228,650

FirstEnergy Corp.

   340,000    13,290,600

FPL Group, Inc.

   175,000    8,457,750

PPL Corp.

   450,000    12,469,500
       

Electric Utilities Total

      58,957,050
Gas Utilities – 0.7%      

National Fuel Gas Co.

   310,000    15,670,500
       

Gas Utilities Total

      15,670,500
Multi-Utilities – 1.7%      

Alliant Energy Corp.

   440,000    14,634,400

PG&E Corp.

   260,000    11,029,200

Public Service Enterprise Group, Inc.

   405,000    11,955,600
       

Multi-Utilities Total

      37,619,200
       

Utilities Total

      112,246,750
       

Total Common Stocks
(cost of $1,831,749,370)

   2,111,868,380

 

Convertible Preferred Stock – 0.5%

 

      Shares    Value ($)
Consumer Staples – 0.5%      
Food Products – 0.5%      

Archer-Daniels-Midland Co., 6.250%

   280,000    11,443,600
       

Food Products Total

      11,443,600
       

Consumer Staples Total

      11,443,600
       

Total Convertible Preferred Stock
(cost of $10,489,122)

   11,443,600
Investment Company – 2.0%      

SPDR Trust Series 1

   375,000    43,871,250
       

Total Investment Company
(cost of $42,495,502)

   43,871,250
     

Short-Term Obligation – 1.9%

  
      Par ($)      

Repurchase agreement with Fixed Income Clearing Corp., dated 03/31/10, due on 04/01/10 at 0.000%, collateralized by U.S. Treasury obligation maturing 11/30/16, market value $44,273,756 (repurchase proceeds $43,403,000)

   43,403,000    43,403,000
       

Total Short-Term Obligation

(cost of $43,403,000)

   43,403,000
       

Total Investments – 98.7% (cost of $1,928,136,994) (b)

   2,210,586,230
       

Other Assets & Liabilities, Net – 1.3%

   29,071,470
       

Net Assets – 100.0%

      2,239,657,700

Notes to Investment Portfolio:

 

(a) Non-income producing security.

 

(b) Cost for federal income tax purposes is $1,928,136,994.

 

See Accompanying Notes to Financial Statements.

 

7

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund’s assets:

 

Description

 

Quoted

Prices

(Level 1)

 

Other
Significant
Observable
Inputs

(Level 2)

 

Significant
Unobservable
Inputs

(Level 3)

 

Total

Total Common Stocks

  $ 2,111,868,380   $   $   $ 2,111,868,380
                       

Total Convertible Preferred Stock

    11,443,600             11,443,600
                       

Total Investment Company

    43,871,250             43,871,250
                       

Total Short-Term Obligation

        43,403,000         43,403,000
                       

Total Investments

  $ 2,167,183,230   $ 43,403,000   $   $ 2,210,586,230
                       

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

 

At March 31, 2010, the Fund held investments in the following sectors:

 

Sector

  

% of Net Assets

Financials

   14.5

Consumer Staples

   12.6

Energy

   11.4

Information Technology

   10.5

Industrials

   10.2

Consumer Discretionary

   10.1

Health Care

   10.0

Telecommunication Services

   5.8

Utilities

   5.0

Materials

   4.7
    
   94.8

Investment Company

   2.0

Short-Term Obligation

   1.9

Other Assets & Liabilities, Net

   1.3
    
   100.0
    

 

Acronym

  

Name

ADR    American Depositary Receipt

 

See Accompanying Notes to Financial Statements.

 

8

Statement of Assets and Liabilities – Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

          ($)  
Assets   

Investments, at identified cost

   1,928,136,994   
         
  

Investments, at value

   2,210,586,230   
  

Cash

   579   
  

Receivable for:

  
  

Fund shares sold

   28,662,899   
  

Dividends

   5,542,133   
  

Expense reimbursement due from investment advisor

   24,644   
  

Trustees’ deferred compensation plan

   95,122   
  

Prepaid expenses

   38,305   
      
  

Total Assets

   2,244,949,912   
Liabilities   

Payable for:

  
  

Fund shares repurchased

   3,619,334   
  

Distributions

   46   
  

Investment advisory fee

   1,140,854   
  

Administration fee

   122,949   
  

Pricing and bookkeeping fees

   11,715   
  

Transfer agent fee

   33,749   
  

Trustees’ fees

   1,011   
  

Custody fee

   3,705   
  

Distribution and service fees

   234,948   
  

Chief compliance officer expenses

   195   
  

Trustees’ deferred compensation plan

   95,122   
  

Other liabilities

   28,584   
      
  

Total Liabilities

   5,292,212   
      
  

Net Assets

   2,239,657,700   
Net Assets Consist of   

Paid-in capital

   2,146,034,200   
  

Undistributed net investment income

   124,710   
  

Accumulated net realized loss

   (188,950,446
  

Net unrealized appreciation on investments

   282,449,236   
      
  

Net Assets

   2,239,657,700   

 

See Accompanying Notes to Financial Statements.

 

9

Statement of Assets and Liabilities (continued) – Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

             
Class A   

Net assets

   $ 653,989,240   
  

Shares outstanding

     53,172,219   
  

Net asset value per share

   $ 12.30 (a) 
  

Maximum sales charge

     5.75
  

Maximum offering price per share ($12.30/0.9425)

   $ 13.05 (b) 
Class B   

Net assets

   $ 25,765,813   
  

Shares outstanding

     2,141,833   
  

Net asset value and offering price per share

   $ 12.03 (a) 
Class C   

Net assets

   $ 75,408,640   
  

Shares outstanding

     6,273,067   
  

Net asset value and offering price per share

   $ 12.02 (a) 
Class R   

Net assets

   $ 1,741,137   
  

Shares outstanding

     141,523   
  

Net asset value, offering and redemption price per share

   $ 12.30   
Class T   

Net assets

   $ 84,936,851   
  

Shares outstanding

     6,904,465   
  

Net asset value per share

   $ 12.30 (a) 
  

Maximum sales charge

     5.75
  

Maximum offering price per share ($12.30/0.9425)

   $ 13.05 (b) 
Class Z   

Net assets

   $ 1,397,816,019   
  

Shares outstanding

     113,600,813   
  

Net asset value, offering and redemption price per share

   $ 12.30   

 

 

(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

 

(b) On sales of $50,000 or more the offering price is reduced.

 

See Accompanying Notes to Financial Statements.

 

10

Statement of Operations – Columbia Dividend Income Fund

For the Six Months Ended March 31, 2010 (Unaudited)

 

          ($)  
Investment Income   

Dividends

   34,669,048   
  

Interest

   420,292   
  

Foreign taxes withheld

   (234,870
      
  

Total Investment Income

   34,854,470   
Expenses   

Investment advisory fee

   6,120,575   
  

Administration fee

   654,484   
  

Distribution fee:

  
  

Class B

   100,908   
  

Class C

   225,262   
  

Class R

   2,882   
  

Service fee:

  
  

Class A

   702,438   
  

Class B

   33,636   
  

Class C

   75,087   
  

Shareholder services fee – Class T

   118,129   
  

Transfer agent fee

   660,290   
  

Pricing and bookkeeping fees

   70,558   
  

Trustees’ fees

   38,561   
  

Custody fee

   21,821   
  

Chief compliance officer expenses

   597   
  

Other expenses

   287,543   
      
  

Total Expenses

   9,112,771   
  

Fees waived or expenses reimbursed by investment advisor

   (29,387
  

Expense reductions

   (25
      
  

Net Expenses

   9,083,359   
      
  

Net Investment Income

   25,771,111   
Net Realized and Unrealized Gain (Loss) on Investments   

Net realized gain investments

   25,923,076   
  

Net change in unrealized appreciation (depreciation) on investments

   159,764,880   
      
  

Net Gain

   185,687,956   
      
  

Net Increase Resulting from Operations

   211,459,067   

 

See Accompanying Notes to Financial Statements.

 

11

Statement of Changes in Net Assets – Columbia Dividend Income Fund

 

Increase (Decrease) in Net Assets         (Unaudited)
Six Months
Ended
March 31,
2010 ($)
     Year
Ended
September 30,
2009 ($)
 
Operations   

Net investment income

   25,771,111       37,742,177   
  

Net realized gain (loss) on investments

   25,923,076       (97,509,148
  

Net change in unrealized appreciation (depreciation) on investments

   159,764,880       103,911,886   
      
  

Net increase resulting from operations

   211,459,067       44,144,915   
Distributions to Shareholders   

From net investment income:

     
  

Class A

   (7,432,448    (9,328,760
  

Class B

   (249,536    (520,145
  

Class C

   (598,123    (572,360
  

Class R

   (14,282    (3,846
  

Class T

   (1,008,024    (1,630,665
  

Class Z

   (17,702,508    (25,318,495
      
  

Total distributions to shareholders

   (27,004,921    (37,374,271
  

Net Capital Stock Transactions

   360,146,059       621,633,779   
  

Increase from regulatory settlements

         665,701   
      
  

Total increase in net assets

   544,600,205       629,070,124   
Net Assets   

Beginning of period

   1,695,057,495       1,065,987,371   
  

End of period

   2,239,657,700       1,695,057,495   
  

Undistributed net investment income at end of period

   124,710       1,358,520   

 

 

 

See Accompanying Notes to Financial Statements.

 

12

Statement of Changes in Net Assets (continued) – Columbia Dividend Income Fund

 

     Capital Stock Activity  
     (Unaudited)
Six Months Ended
March 31, 2010
    Year Ended
September 30, 2009
 
      Shares     Dollars ($)     Shares     Dollars ($)  

Class A

        

Subscriptions

   15,698,192      184,900,691      27,895,461      276,099,772   

Distributions reinvested

   546,998      6,554,192      778,447      7,861,416   

Redemptions

   (6,358,628   (75,044,509   (8,547,450   (85,291,578
                        

Net increase

   9,886,562      116,410,374      20,126,458      198,669,610   

Class B

        

Subscriptions

   151,921      1,756,311      1,129,813      10,598,969   

Distributions reinvested

   17,538      204,930      44,163      430,960   

Redemptions

   (588,243   (6,794,148   (1,277,029   (12,135,167
                        

Net decrease

   (418,784   (4,832,907   (103,053   (1,105,238

Class C

        

Subscriptions

   2,127,570      24,528,842      3,828,234      36,845,519   

Distributions reinvested

   38,200      447,648      43,574      432,821   

Redemptions

   (324,365   (3,726,743   (515,925   (5,019,427
                        

Net increase

   1,841,405      21,249,747      3,355,883      32,258,913   

Class R

        

Subscriptions

   92,575      1,093,472      57,996      584,229   

Distributions reinvested

   1,065      12,817      346      3,834   

Redemptions

   (10,868   (127,832   (503   (5,468
                        

Net increase

   82,772      978,457      57,839      582,595   

Class T

        

Subscriptions

   637,579      7,486,040      1,258,177      12,683,562   

Distributions reinvested

   81,369      974,452      156,696      1,572,896   

Redemptions

   (412,199   (4,845,583   (830,271   (8,164,564
                        

Net increase

   306,749      3,614,909      584,602      6,091,894   

Class Z

        

Subscriptions

   32,487,032      383,991,958      71,665,405      704,770,708   

Distributions reinvested

   419,994      5,049,047      524,210      5,276,709   

Redemptions

   (14,109,793   (166,315,526   (33,309,318   (324,911,412
                        

Net increase

   18,797,233      222,725,479      38,880,297      385,136,005   

 

See Accompanying Notes to Financial Statements.

 

13

Financial Highlights – Columbia Dividend Income Fund

Selected data for a share outstanding throughout each period is as follows:

 

   

(Unaudited)

Six Months
Ended
March 31,

    Year Ended September 30,  
Class A Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 11.18      $ 12.01      $ 15.35      $ 13.45      $ 12.01      $ 10.80   

Income from Investment Operations:

           

Net investment income (a)

    0.15        0.29        0.31        0.28        0.26        0.25   

Net realized and unrealized gain (loss) on
investments

    1.12        (0.86     (3.18     2.02        1.45        1.16   
                                               

Total from investment operations

    1.27        (0.57     (2.87     2.30        1.71        1.41   

Less Distributions to Shareholders:

           

From net investment income

    (0.15     (0.27     (0.31     (0.27     (0.27     (0.20

From net realized gains

                  (0.16     (0.13              
                                               

Total distributions to shareholders

    (0.15     (0.27     (0.47     (0.40     (0.27     (0.20

Increase from regulatory settlements

           0.01                               

Net Asset Value, End of Period

  $ 12.30      $ 11.18      $ 12.01      $ 15.35      $ 13.45      $ 12.01   

Total return (b)(c)

    11.42 %(d)      (4.33 )%      (19.06 )%      17.31     14.45     13.10

Ratios to Average Net Assets/Supplemental Data:

           

Net expenses (e)

    1.05 %(f)      1.05     1.05     1.05     1.05     1.05

Waiver/Reimbursement

    %(f)(g)      0.06     0.06     0.07     0.12     0.18

Net investment income (e)

    2.52 %(f)      2.88     2.24     1.90     2.19     2.11

Portfolio turnover rate

    6 %(d)      23     16     21     52     18

Net assets, end of period (000s)

  $ 653,989      $ 483,916      $ 278,122      $ 370,358      $ 345,595      $ 27,534   

 

 

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

 

(d) Not annualized.

 

(e) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(f) Annualized.

 

(g) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

14

Financial Highlights – Columbia Dividend Income Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class B Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 10.94      $ 11.75      $ 15.03      $ 13.17      $ 11.77      $ 10.59   

Income from Investment Operations:

           

Net investment income (a)

    0.10        0.21        0.20        0.16        0.16        0.16   

Net realized and unrealized gain (loss) on
investments

    1.10        (0.82     (3.11     1.99        1.42        1.13   
                                               

Total from investment operations

    1.20        (0.61     (2.91     2.15        1.58        1.29   

Less Distributions to Shareholders:

           

From net investment income

    (0.11     (0.20     (0.21     (0.16     (0.18     (0.11

From net realized gains

                  (0.16     (0.13              
                                               

Total distributions to shareholders

    (0.11     (0.20     (0.37     (0.29     (0.18     (0.11

Increase from regulatory settlements

           (b)                             

Net Asset Value, End of Period

  $ 12.03      $ 10.94      $ 11.75      $ 15.03      $ 13.17      $ 11.77   

Total return (c)(d)

    10.99 %(e)      (4.97 )%      (19.71 )%      16.49     13.55     12.23

Ratios to Average Net Assets/Supplemental Data:

           

Net expenses (f)

    1.80 %(g)      1.80     1.80     1.80     1.80     1.80

Waiver/Reimbursement

    %(g)(h)      0.06     0.06     0.07     0.12     0.18

Net investment income (f)

    1.77 %(g)      2.18     1.48     1.16     1.30     1.36

Portfolio turnover rate

    6 %(e)      23     16     21     52     18

Net assets, end of period (000s)

  $ 25,766      $ 28,006      $ 31,307      $ 52,937      $ 57,644      $ 17,359   

 

 

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Rounds to less than $0.01 per share.

 

(c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

 

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(e) Not annualized.

 

(f) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(g) Annualized.

 

(h) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

15

Financial Highlights – Columbia Dividend Income Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class C Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 10.93      $ 11.74      $ 15.02      $ 13.17      $ 11.76      $ 10.58   

Income from Investment Operations:

           

Net investment income (a)

    0.10        0.20        0.20        0.16        0.16        0.16   

Net realized and unrealized gain (loss) on
investments

    1.10        (0.82     (3.11     1.98        1.43        1.13   
                                               

Total from investment operations

    1.20        (0.62     (2.91     2.14        1.59        1.29   

Less Distributions to Shareholders:

           

From net investment income

    (0.11     (0.20     (0.21     (0.16     (0.18     (0.11

From net realized gains

                  (0.16     (0.13              
                                               

Total distributions to shareholders

    (0.11     (0.20     (0.37     (0.29     (0.18     (0.11

Increase from regulatory settlements

           0.01                               

Net Asset Value, End of Period

  $ 12.02      $ 10.93      $ 11.74      $ 15.02      $ 13.17      $ 11.76   

Total return (b)(c)

    11.00 %(d)      (4.98 )%      (19.72 )%      16.42     13.64     12.24

Ratios to Average Net Assets/Supplemental Data:

           

Net expenses (e)

    1.80 %(f)      1.80     1.80     1.80     1.80     1.80

Waiver/Reimbursement

    %(f)(g)      0.06     0.06     0.07     0.12     0.18

Net investment income (e)

    1.77 %(f)      2.08     1.48     1.14     1.29     1.36

Portfolio turnover rate

    6 %(d)      23     16     21     52     18

Net assets, end of period (000s)

  $ 75,409      $ 48,438      $ 12,635      $ 20,622      $ 12,950      $ 3,959   

 

 

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

 

(d) Not annualized.

 

(e) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(f) Annualized.

 

(g) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

16

Financial Highlights – Columbia Dividend Income Fund

Selected data for a share outstanding throughout each period is as follows:

 

Class R Shares   (Unaudited)
Six Months
Ended
March 31,
2010
    Year Ended
September 30,
2009
    Period Ended
September 30,
2008 (a)
 

Net Asset Value, Beginning of Period

  $ 11.18      $ 12.01      $ 13.39   

Income from Investment Operations:

     

Net investment income (b)

    0.13        0.28        0.14   

Net realized and unrealized gain (loss) on investments

    1.13        (0.86     (1.38
                       

Total from investment operations

    1.26        (0.58     (1.24

Less Distributions to Shareholders:

     

From net investment income

    (0.14     (0.25     (0.14

Increase from regulatory settlements

           (c)        

Net Asset Value, End of Period

  $ 12.30      $ 11.18      $ 12.01   

Total return (d)(e)

    11.29 %(f)      (4.57 )%      (9.28 )%(f) 

Ratios to Average Net Assets/Supplemental Data:

     

Net expenses (g)

    1.30 %(h)      1.30     1.30 %(h) 

Waiver/Reimbursement

    %(h)(i)      0.06     0.06 %(h) 

Net investment income (g)

    2.28 %(h)      2.59     2.10 %(h) 

Portfolio turnover rate

    6 %(f)      23     16 %(f) 

Net assets, end of period (000s)

  $ 1,741      $ 657      $ 11   

 

 

 

(a) Class R shares commenced operations on March 28, 2008. Per share data and total return reflect activity from that date.

 

(b) Per share data was calculated using the average shares outstanding during the period.

 

(c) Rounds to less than $0.01 per share.

 

(d) Total return at net asset value assuming all distributions reinvested.

 

(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(f) Not annualized.

 

(g) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(h) Annualized.

 

(i) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

17

Financial Highlights – Columbia Dividend Income Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class T Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 11.18      $ 12.01      $ 15.35      $ 13.45      $ 12.01      $ 10.80   

Income from Investment Operations:

           

Net investment income (a)

    0.14        0.29        0.30        0.27        0.25        0.24   

Net realized and unrealized gain (loss) on
investments

    1.13        (0.85     (3.18     2.02        1.46        1.16   
                                               

Total from investment operations

    1.27        (0.56     (2.88     2.29        1.71        1.40   

Less Distributions to Shareholders:

           

From net investment income

    (0.15     (0.27     (0.30     (0.26     (0.27     (0.19

From net realized gains

                  (0.16     (0.13              
                                               

Total distributions to shareholders

    (0.15     (0.27     (0.46     (0.39     (0.27     (0.19

Increase from regulatory settlements

           (b)                             

Net Asset Value, End of Period

  $ 12.30      $ 11.18      $ 12.01      $ 15.35      $ 13.45      $ 12.01   

Total return (c)(d)

    11.40 %(e)      (4.38 )%      (19.10 )%      17.25     14.39     13.04

Ratios to Average Net Assets/Supplemental Data:

           

Net expenses (f)

    1.10 %(g)      1.10     1.10     1.10     1.10     1.10

Waiver/Reimbursement

    %(g)(h)      0.06     0.06     0.07     0.12     0.18

Net investment income (f)

    2.47 %(g)      2.87     2.19     1.85     1.96     2.06

Portfolio turnover rate

    6 %(e)      23     16     21     52     18

Net assets, end of period (000s)

  $ 84,937      $ 73,773      $ 72,213      $ 100,932      $ 96,651      $ 99,148   

 

 

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Rounds to less than $0.01 per share.

 

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

 

(e) Not annualized.

 

(f) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(g) Annualized.

 

(h) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

18

Financial Highlights – Columbia Dividend Income Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class Z Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 11.18      $ 12.01      $ 15.36      $ 13.45      $ 12.01      $ 10.80   

Income from Investment Operations:

           

Net investment income (a)

    0.16        0.31        0.34        0.31        0.28        0.28   

Net realized and unrealized gain (loss) on investments

    1.13        (0.85     (3.19     2.04        1.47        1.16   
                                               

Total from investment operations

    1.29        (0.54     (2.85     2.35        1.75        1.44   

Less Distributions to Shareholders:

           

From net investment income

    (0.17     (0.30     (0.34     (0.31     (0.31     (0.23

From net realized gains

                  (0.16     (0.13              
                                               

Total distributions to shareholders

    (0.17     (0.30     (0.50     (0.44     (0.31     (0.23

Increase from regulatory settlements

           0.01                               

Net Asset Value, End of Period

  $ 12.30      $ 11.18      $ 12.01      $ 15.36      $ 13.45      $ 12.01   

Total return (b)(c)

    11.56 %(d)      (4.10 ) %      (18.90 )%      17.67     14.73     13.38

Ratios to Average Net Assets/Supplemental Data:

           

Net expenses (e)

    0.80 %(f)      0.80     0.80     0.80     0.80     0.80

Waiver/Reimbursement

    %(f)(g)      0.06     0.06     0.07     0.12     0.18

Net investment income (e)

    2.76 %(f)      3.15     2.51     2.15     2.27     2.37

Portfolio turnover rate

    6 %(d)      23     16     21     52     18

Net assets, end of period (000s)

  $ 1,397,816      $ 1,060,268      $ 671,700      $ 594,859      $ 471,876      $ 358,125   

 

 

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(c) Total return at net asset value assuming all distributions reinvested.

 

(d) Not annualized.

 

(e) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(f) Annualized.

 

(g) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

19

Notes to Financial Statements – Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

Note 1. Organization

Columbia Dividend Income Fund (the “Fund”), a series of Columbia Funds Series Trust I (the “Trust”), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company organized as a Massachusetts business trust.

Investment Objective

The Fund seeks total return, consisting of current income and capital appreciation.

Fund Shares

The Trust may issue an unlimited number of shares, and the Fund offers six classes of shares: Class A, Class B, Class C, Class R, Class T and Class Z. Each share class has its own expense structure and sales charges, as applicable. The Fund no longer accepts investments from new or existing investors in the Fund’s Class B shares, except in connection with the reinvestment of any dividend and/or capital gain distributions in Class B shares of the Fund and exchanges by existing Class B shareholders of other Columbia Funds.

Class A and Class T shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A and Class T shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within one year after purchase. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will generally convert to Class A shares eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class R and Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class R and Class Z shares, as described in the Fund’s prospectus.

Note 2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

Security Valuation

Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Short-term investments maturing in 60 days or less are valued at amortized cost, which approximates market value.

Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. If a security is valued at fair value, such value is likely to be different from the last quoted market price for the security. The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine value.

GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical securities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:

 

n  

Level 1 – quoted prices in active markets for identical securities

 

n  

Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others)

 

20

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

n  

Level 3 – prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management’s own assumptions about the factors market participants would use in pricing an investment.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

On January 21, 2010, the FASB issued an Accounting Standards Update (the amendment), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, which provides guidance on how investment assets and liabilities are to be valued and disclosed. Specifically, the amendment requires reporting entities to disclose the input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements for Level 2 or Level 3 positions. The amendment also requires that transfers between all levels (including Level 1 and Level 2) be disclosed on a gross basis (i.e., transfers out must be disclosed separately from transfers in), and the reason(s) for the transfer. Additionally purchases, sales, issuances and settlements must be disclosed on a gross basis in the Level 3 rollforward. The effective date of the amendment is for interim and annual periods beginning after December 15, 2009, however, the requirement to provide the Level 3 activity for purchases, sales, issuances and settlements on a gross basis will be effective for interim and annual periods beginning after December 15, 2010. At this time, management is evaluating the implications of the amendment and the impact to the financial statements.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

Repurchase Agreements

The Fund may engage in repurchase agreement transactions with institutions that Columbia Management Advisors, LLC (“Columbia”), the Fund’s investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement. Columbia is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.

Income Recognition

Interest income is recorded on the accrual basis.

Corporate actions and dividend income are recorded on the ex-date.

Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.

Awards from class action litigation are recorded as a reduction of cost if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains.

Expenses

General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.

Determination of Class Net Asset Value

All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

Federal Income Tax Status

The Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially

 

21

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

all of its tax exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

Distributions to Shareholders

Distributions from net investment income are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.

Indemnification

In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust’s organizational documents and by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.

Note 3. Federal Tax Information

The tax character of distributions paid during the year ended September 30, 2009 was as follows:

 

     
Distributions paid from:    
Ordinary Income*   $37,374,271
* For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions.

Unrealized appreciation and depreciation at March 31, 2010, based on cost of investments for federal income tax purposes were:

 

   

Unrealized appreciation

  $ 358,233,342   

Unrealized depreciation

    (75,784,106
       

Net unrealized appreciation

  $ 282,449,236   

The following capital loss carryforwards, determined as of September 30, 2009, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:

 

     
Year of
Expiration
  Capital Loss
Carryforward
2010   $ 74,425,965
2011     1,266,110
2013     990,327
2014     2,808,003
2017     65,052,409
     
  $ 144,542,814
     

Of the capital loss carryforwards attributable to the Fund, $79,490,405 ($74,425,965 of which expires on September 30, 2010, $1,266,110 of which expires on September 30, 2011, $990,327 of which expires on September 30, 2013 and $2,808,003 of which expires on September 30, 2014) was acquired from Fund mergers. The availability of a portion of the remaining capital loss carryforwards acquired as part of a fund merger may be limited in a given year.

Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.

Note 4. Fees and Compensation Paid to Affiliates

Investment Advisory Fee

Columbia, an indirect, wholly owned subsidiary of Bank of America Corporation (“BOA”), provides investment advisory

 

22

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

services to the Fund. In rendering investment advisory services to the Fund, Columbia may use the portfolio management and research resources of Columbia Management Pte. Ltd., an affiliate of Columbia. Columbia receives a monthly investment advisory fee based on the Fund’s average daily net assets at the following annual rates:

 

       
Average Daily Net Assets   Annual Fee Rate  

First $500 million

  0.70

$500 million to $1 billion

  0.65

$1 billion to $1.5 billion

  0.60

$1.5 billion to $3 billion

  0.55

$3 billion to $6 billion

  0.53

Over $6 billion

  0.51

For the six month period ended March 31, 2010, the Fund’s annualized effective investment advisory fee rate was 0.63% of the Fund’s average daily net assets.

Bank of America, N.A., an indirect parent company of Columbia, entered into an agreement dated September 29, 2009, to sell a portion of the asset management business of Columbia Management Group, LLC to Ameriprise Financial, Inc. (“Ameriprise Financial”). The transaction (“Transaction”) includes the sale of the part of the asset management business that advises long-term mutual funds, including the Fund. The Transaction is subject to certain approvals and other conditions to closing, and is currently expected to close on or about April 30, 2010 (the “Closing”).

In connection with the Closing, certain changes will occur, including a change in the entities serving as the investment advisor, administrator, distributor and transfer agent of the Fund. RiverSource Investments, LLC (the “New Advisor”), a subsidiary of Ameriprise Financial, will become the investment advisor of the Fund upon the Closing. On March 3, 2010, the Fund’s shareholders approved, among other matters, the proposed investment management services agreement with the New Advisor. The New Advisor will serve as investment advisor under a new investment management services agreement effective upon the Closing. The New Advisor will change its name to Columbia Management Investment Advisers, LLC upon or shortly after the Closing. Effective upon the Closing, as the context requires, references to Columbia shall be deemed to refer to the New Advisor.

 

Administration Fee

Columbia provides administrative and other services to the Fund for a monthly administration fee at the annual rate of 0.067% of the Fund’s average daily net assets.

The New Advisor will become the administrator of the Fund under a new administrative services agreement effective upon the Closing.

Pricing and Bookkeeping Fees

The Fund has entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank and Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Fund. The Fund has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) with State Street and Columbia pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Fund also reimburses State Street for certain out-of-pocket expenses and charges.

Among other updates to the State Street Agreements, Columbia will assign and delegate its rights and obligations thereunder to the New Advisor upon the Closing.

The Fund has entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, the Fund reimburses Columbia for out-of-pocket expenses.

The Services Agreement will be terminated upon the Closing, and the services provided thereunder will be covered under the administrative services agreement with the New Advisor.

Transfer Agent Fee

Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned

 

23

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

subsidiary of BOA, provides shareholder services to the Fund and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Effective November 1, 2009, the Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $22.36 per account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. Prior to November 1, 2009, the annual rate was $17.34 per account. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Fund.

The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, Individual Retirement Account (“IRA”) trustee agent fees and account transcript fees due to the Transfer Agent from shareholders of the Fund and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Fund. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

RiverSource Service Corporation (the “New Transfer Agent”), a subsidiary of Ameriprise Financial, will become the transfer agent of the Fund upon the Closing. The New Transfer Agent will change its name to Columbia Management Investment Services Corp. upon or shortly after the Closing.

An annual minimum account balance fee of $20 may apply to certain accounts with a value below the Fund’s initial minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the six month period ended March 31, 2010, no minimum account balance fees were charged by the Fund.

Underwriting Discounts, Service and Distribution Fees

Columbia Management Distributors, Inc. (the “Distributor”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Fund’s shares. For the six month period ended March 31, 2010, the Distributor has retained net underwriting discounts of $74,989 and $367 on sales of the Fund’s Class A and Class T shares, respectively. For the same period, the Distributor received net CDSC fees of $7,333, $17,481 and $5,043 on Class A, Class B and Class C share redemptions, respectively.

RiverSource Fund Distributors, Inc. (the “New Distributor”), a subsidiary of Ameriprise Financial, will become the distributor of the Fund upon the Closing. The New Distributor will change its name to Columbia Management Investment Distributors, Inc. upon or shortly after the Closing.

The Fund has adopted plans pursuant to Rule 12b-1 under the 1940 Act (the “Plans”) which require the payment of monthly distribution and service fees to the Distributor based on the average daily net assets of the applicable class of the Fund at the following annual rates:

 

Distribution Fee
Class A   Class B   Class C   Class R
0.10%   0.75%   0.75%   0.50%

 

Service Fee    
Class A   Class B   Class C    
0.25%   0.25%   0.25%  

The Fund may pay distribution and service fees up to a maximum annual rate of 0.35% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder services), but limited such fees to an aggregate of not more than 0.25% for Class A shares during the current fiscal year. For the six month period ended March 31, 2010, the distribution and service fees were 0.00% and 0.25%, respectively, of the Fund’s average daily net assets.

The CDSC and the distribution fees received from the Plans are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares.

Shareholder Services Fees

The Fund has adopted a shareholder services plan that permits it to pay for certain services provided to Class T shareholders by service organizations. The Fund may pay shareholder services fees of up to 0.25% of the Fund’s average daily net assets attributable to Class T shares for shareholder liaison services and up to 0.25% of the Fund’s average daily net assets attributable to Class T shares for administrative support services, provided, however, that the

 

24

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

aggregate fee shall not exceed 0.30% of the Fund’s average daily net assets attributable to Class T shares. For the six month period ended March 31, 2010, the shareholder services fee was 0.30% of the Fund’s average daily net assets attributable to Class T shares.

Fee Waivers and Expense Reimbursements

Columbia has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.80% of the Fund’s average daily net assets on an annualized basis. Columbia, in its discretion, may revise or discontinue this arrangement at any time.

Fees Paid to Officers and Trustees

All officers of the Fund are employees of Columbia or its affiliates and, with the exception of the Fund’s Chief Compliance Officer, receive no compensation from the Fund. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer. The Fund’s expenses for the Chief Compliance Officer will not exceed $15,000 per year.

Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. The Trust’s eligible Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund’s assets.

Other Related Party Transactions

In connection with the purchase and sale of its securities during the period, the Fund used one or more brokers that are affiliates of BOA. Total brokerage commissions paid to affiliated brokers for the six month period ended March 31, 2010 were $11,250.

Note 5. Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. For the six month period ended March 31, 2010, these custody credits reduced total expenses by $25 for the Fund.

Note 6. Portfolio Information

For the six month period ended March 31, 2010, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, for the Fund were $487,647,428 and $118,366,548, respectively.

Note 7. Line of Credit

The Fund and other affiliated funds participate in a $280,000,000 committed, unsecured revolving line of credit provided by State Street. The maximum amount that may be borrowed by any fund is limited to the lesser of $200,000,000 and the Fund’s borrowing limit set forth in the Fund’s registration statement. Borrowings are available for short-term liquidity or temporary or emergency purposes.

Effective October 15, 2009, interest is charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. In addition, a commitment fee of 0.15% per annum is accrued and apportioned among the participating funds pro rata based on their relative net assets.

Prior to October 15, 2009, interest was charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 0.50% or the overnight LIBOR Rate plus 0.50%. In addition, an annual operations agency fee of $20,000, an amendment fee of 0.02% and a commitment fee of 0.12% per annum were accrued and apportioned among the participating funds pro rata based on their relative net assets.

For the six month period ended March 31, 2010, the Fund did not borrow under these arrangements.

Note 8. Shares of Beneficial Interest

As of March 31, 2010, 40.2% of the Fund’s shares outstanding were beneficially owned by two participant accounts over which BOA and/or any of its affiliates had either sole or joint investment discretion.

 

25

Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

As of March 31, 2010, the Fund had one shareholder that held 10.0% of the shares outstanding, over which BOA and/or any of its affiliates did not have investment discretion.

As of March 31, 2010, no other shareholders owned more than 5% of the outstanding shares of the Fund. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.

Note 9. Significant Risks and Contingencies

Information Regarding Pending and Settled Legal Proceedings

In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc. was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company (now known as RiverSource) mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota (the District Court). In response to defendants’ motion to dismiss the complaint, the District Court dismissed one of plaintiffs’ four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants’ favor on July 9, 2007. The plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit) on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary judgment and remanded to the District Court for further proceedings. On August 6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the Supreme Court), asking the Supreme Court to stay the District Court proceedings while the Supreme Court considers and rules in a case captioned Jones v. Harris Associates, which involves issues of law similar to those presented in the Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v. Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth Circuit’s decision in the Gallus case and remanded the case to the Eighth Circuit for further consideration in light of the Supreme Court’s decision in Jones v. Harris Associates.

In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have made regular reports to the RiverSource Funds’ Boards of Directors/Trustees.

On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In late 2003, Seligman conducted an extensive internal review concerning mutual fund trading practices. Seligman’s review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by Seligman (the Seligman Funds); this arrangement was in the process of being closed down by Seligman before September 2003. Seligman identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. Seligman also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (NYAG).

In September 2006, the NYAG commenced a civil action in New York State Supreme Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the

 

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Columbia Dividend Income Fund

March 31, 2010 (Unaudited)

 

Seligman Parties), alleging, in substance, that the Seligman Parties permitted various persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies then managed by Seligman was and had been misleading. The NYAG included other related claims and also claimed that the fees charged by Seligman to the Seligman Funds were excessive. On March 13, 2009, without admitting or denying any violations of law or wrongdoing, the Seligman Parties entered into a stipulation of settlement with the NYAG and settled the claims made by the NYAG. Under the terms of the settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement resolved all outstanding matters between the Seligman Parties and the NYAG. In addition to the foregoing matter, the New York staff of the SEC indicated in September 2005 that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. There have been no further developments with the SEC on this matter.

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.

Note 10. Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the six month period ended March 31, 2010, events and transactions through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events or transactions have occurred that would require adjustment of the financial statements as presented. On April 30, 2010, the Transaction disclosed in Note 4 closed. Effective May 1, 2010, the New Advisor became the investment advisor and administrator of the Fund and subsequently changed its name to Columbia Management Investment Advisers, LLC. On that date, the New Transfer Agent became the transfer agent of the Fund and changed its name to Columbia Management Investment Services Corp. Also on that date, the New Distributor became the distributor of the Fund and changed its name to Columbia Management Investment Distributors, Inc.

 

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Board Consideration and Approval of Advisory Agreements

 

The Advisory Fees and Expenses Committee of the Board of Trustees meets several times annually to review the current advisory agreements (collectively, the “Agreements”) of the funds for which the Trustees serve as trustees (each a “fund”) and to determine whether to recommend that the full Board approve the continuation of the Agreements for an additional one-year period. After the Committee has made its recommendation, the full Board, including the Independent Trustees, determines whether to approve the continuation of the Agreements. In addition, the full Board, including the Independent Trustees, considers matters bearing on the Agreements at most of its other meetings throughout the year and meets regularly with senior management of the funds and Columbia, the funds’ investment adviser, including the senior manager of each investment area within Columbia. Through the Board’s Investment Oversight Committees, Trustees also meet with selected fund portfolio managers, research analysts and traders at various times throughout the year.

The Trustees receive and review all materials that they, their legal counsel or Columbia believe to be reasonably necessary for the Trustees to evaluate the Agreements and to determine whether to approve the continuation of the Agreements. Those materials generally include, among other items, (i) information on the investment performance of each fund relative to the performance of peer groups of mutual funds and the fund’s performance benchmarks, and additional information assessing performance on a risk-adjusted basis, (ii) information on each fund’s advisory fees and other expenses, including information comparing the fund’s expenses to those of peer groups of mutual funds and information about any applicable expense caps and fee “breakpoints,” (iii) information about the profitability of the Agreements to Columbia, including potential “fall-out” or ancillary benefits that Columbia and its affiliates may receive as a result of their relationships with the funds and (iv) information obtained through Columbia’s response to a questionnaire prepared at the request of the Trustees by counsel to the funds and independent legal counsel to the Independent Trustees. The Trustees also consider other information such as (v) Columbia’s financial results and financial condition, (vi) each fund’s investment objective and strategies and the size, education and experience of Columbia’s investment staffs and their use of technology, external research and trading cost measurement tools, (vii) the allocation of the funds’ brokerage and the use of “soft” commission dollars to pay for research products and services, (viii) Columbia’s resources devoted to, and its record of compliance with, the funds’ investment policies and restrictions, policies on personal securities transactions and other compliance policies and legal and regulatory requirements, (ix) Columbia’s response to various legal and regulatory proceedings since 2003 and to the recent period of volatility in the securities markets and (x) the economic outlook generally and for the mutual fund industry in particular. In addition, the Advisory Fees and Expenses Committee confers with the independent fee consultant (the “Fee Consultant”) appointed by the Independent Trustees pursuant to an assurance of discontinuance entered into by Columbia with the New York Attorney General (“NYAG”) to settle a civil complaint filed by the NYAG relating to trading in mutual fund shares (the “NYAG Settlement”) and reviews materials relating to the funds’ relationships with Columbia provided by the Fee Consultant. Under the NYAG Settlement, the Fee Consultant’s role is to manage the process by which management fees are negotiated so that they are negotiated in a manner that is at arms’ length and reasonable. Throughout the process, the Trustees have the opportunity to ask questions of and to request additional materials from Columbia and to consult with the Fee Consultant and independent legal counsel to the Independent Trustees.

The Board of Trustees most recently approved the continuation of the Agreements at its October, 2009 meeting, following meetings of the Advisory Fees and Expenses Committee held in December, 2008 and February, May, June, August, September and October, 2009.

The Board of Trustees also unanimously approved new advisory agreements (the “New Agreements”) for the funds with RiverSource Investments, LLC (to be renamed Columbia Management Investment Advisers, LLC) (“RiverSource”) at a meeting held on December 17, 2009. The New Agreements have since been approved by shareholders of the funds and are expected to take effect upon the closing of the acquisition of the long-term asset management business of Columbia by Ameriprise Financial, Inc. (“Ameriprise”), the parent company of RiverSource Investments, LLC (the “Transaction”).

The Advisory Fees and Expenses Committee met on multiple occasions to review the New Agreements for the funds. On December 14, 2009, the Advisory Fees and Expenses Committee recommended that the full Board approve the New

 

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Agreements. On December 17, 2009, the full Board, including a majority of the Independent Trustees, approved the New Agreements. Prior to their approval of the New Agreements, the Advisory Fees and Expenses Committee and the Independent Trustees requested and evaluated materials from, and were provided materials and information about the Transaction and matters related to the proposals by, Bank of America Corp., Columbia, RiverSource and Ameriprise. In connection with their most recent approval of the Agreements (as discussed above) on October 28, 2009, the Advisory Fees and Expenses Committee and the Trustees requested and evaluated materials from Columbia, and discussed such materials with representatives of Columbia. The Advisory Fees and Expenses Committee, at meetings held on August 11, 2009, September 23, 2009, October 27, 2009, November 30, 2009, December 7, 2009 and December 14, 2009, and the Independent Trustees, at meetings held on August 12, 2009, August 20, 2009, October 28, 2009, December 8, 2009, December 14, 2009 and December 17, 2009, discussed the materials provided in connection with the October 28, 2009 approvals and the materials provided in connection with their consideration of the New Agreements and other matters relating to the Transaction with representatives of Bank of America Corp., Columbia, RiverSource and Ameriprise. The Trustees consulted with experienced legal counsel, who advised on the legal standards for consideration by the Trustees. The Independent Trustees also discussed the proposed approvals with independent legal counsel in private sessions.

The Trustees reviewed each New Agreement, as well as certain information obtained through RiverSource’s responses to initial and supplemental questionnaires prepared at the request of the Trustees by counsel to the funds and independent legal counsel to the Independent Trustees. The Advisory Fees and Expenses Committee and the Trustees also met with, and reviewed and considered a report prepared and provided by, the Fee Consultant (as discussed above).

In considering whether to approve the New Agreements and to approve the continuation of the Agreements, the Trustees, including the Independent Trustees, did not identify any single factor as determinative, and each weighed various factors as he or she deemed appropriate. In particular, the Trustees considered the following matters:

 

Matters Relating to the Agreements and the New Agreements

The nature, extent and quality of the services provided or to be provided to the funds under the Agreements and the New Agreements. The Trustees considered the nature, extent and quality of the services provided and the resources dedicated by Columbia and its affiliates (or to be provided and dedicated by RiverSource and its affiliates) to the funds.

Among other things, the Trustees considered, with respect to Columbia and its affiliates, (i) Columbia’s ability (including its personnel and other resources, compensation programs for personnel involved in fund management, reputation and other attributes) to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals; (ii) the portfolio management services provided by those investment professionals; and (iii) the trade execution services provided on behalf of the funds. For each fund, the Trustees also considered the benefits to shareholders of investing in a mutual fund that is part of a family of funds offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.

Among other things, the Trustees considered, with respect to RiverSource and its affiliates, (i) the expected effect of the Transaction on the operations of the funds, (ii) the information provided by RiverSource with respect to the nature, extent and quality of services to be provided by it, (iii) RiverSource’s compliance program and compliance record, (iv) the ability of RiverSource (including personnel and other resources, compensation programs for personnel involved in fund management, reputation and other attributes) to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals, (v) the trade execution services to be provided on behalf of the funds and (vi) the quality of RiverSource’s investment research capabilities and the other resources that it indicated it would devote to each fund. As noted above, the Trustees also considered RiverSource’s representations that the Chief Investment Officer of Columbia would serve as the Chief Investment Officer of RiverSource following the Transaction, and that the process for determining the portfolio management team for each Fund would be substantially the same process as has customarily been followed by Columbia, and reported to the Trustees, in evaluating the performance of Columbia’s portfolio management teams. The Trustees

 

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also noted the professional experience and qualifications of the senior personnel of RiverSource. The Trustees also considered the compliance programs of and the compliance-related resources proposed to be provided to the funds by RiverSource and its affiliates, including discussions with the funds’ Chief Compliance Officer regarding RiverSource’s compliance program. The Trustees also discussed RiverSource’s compliance program with the Chief Compliance Officer for the RiverSource funds. The Trustees also considered RiverSource’s representation that the funds’ Chief Compliance Officer would serve as the Chief Compliance Officer of RiverSource following the Transaction. The Trustees considered RiverSource’s ability to provide administrative services to the funds, noting that while some Agreements contemplated the provision of certain administrative services, following the Transaction, all administrative services were anticipated to be provided pursuant to a new administrative services agreement. The Trustees also considered RiverSource’s ability to coordinate the activities of each fund’s other service providers. The Trustees considered performance information provided by RiverSource with respect to other mutual funds advised by RiverSource, and discussed with senior executives of RiverSource its process for identifying which portfolio management teams of the legacy Columbia and RiverSource organizations would be responsible for the management of the funds following the Transaction.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the nature, extent and quality of services provided by Columbia supported the continuation of the Agreements, and that the nature, extent and quality of services expected to be provided by RiverSource supported approval of the New Agreements.

The costs of the services provided and profits realized by Columbia and its affiliates, and the expected costs of the services to be provided and the profits expected to be realized by RiverSource and its affiliates, from their relationships with the funds. With respect to Columbia and its affiliates, the Trustees considered the fees charged to the funds for advisory services as well as the total expense levels of the funds. That information included comparisons (provided by management and by an independent third-party data provider) of each fund’s advisory fees and total expense levels to those of the fund’s peer groups and information about the advisory fees charged by Columbia to comparable institutional accounts. In considering the fees charged to those accounts, the Trustees took into account, among other things, management’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for Columbia, and the additional resources required to manage mutual funds effectively. In evaluating each fund’s advisory fees, the Trustees also took into account the demands, complexity and quality of the investment management of the fund. The Trustees considered existing advisory fee breakpoints, and Columbia’s use of advisory fee waivers and expense caps, which benefited a number of the funds. The Trustees also noted management’s stated justification for the fees charged to the funds, which included information about the investment performance of the funds and the services provided to the funds.

The Trustees considered that Columbia Dividend Income Fund’s total expenses were in the first quintile and actual management fees were in the third quintile (where the lowest fees and expenses would be in the first quintile) of the peer group selected by an independent third-party data provider for purposes of expense comparisons.

The Trustees also considered the compensation directly or indirectly received by Columbia and its affiliates from their relationships with the funds. The Trustees reviewed information provided by management as to the profitability to Columbia and its affiliates of their relationships with each fund, and information about the allocation of expenses used to calculate profitability. When reviewing profitability, the Trustees also considered court cases in which adviser profitability was an issue in whole or in part, the performance of the relevant funds, the expense level of each fund, and whether Columbia had implemented breakpoints and/or expense caps with respect to the fund.

In connection with the integration of the legacy Columbia and RiverSource organizations, the Trustees considered, among other things, RiverSource’s projected annual net expense synergies (reductions in the cost of providing services to the funds), the timetable over which such synergies are expected to be realized and the extent to which any such synergies are expected to be shared with the funds. The Trustees also considered information provided by RiverSource regarding

 

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their respective financial conditions. The Trustees considered that RiverSource proposed to continue voluntary expense caps currently in effect for the funds and that RiverSource had undertaken not to change these caps without further discussion with the Independent Trustees.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the advisory fees charged to each fund, and the related profitability to Columbia and its affiliates of their relationships with the fund, supported the continuation of the Agreement pertaining to that fund, and that the expected profitability to RiverSource and its affiliates from its relationship with each fund supported the approval of the New Agreements.

Economies of Scale. With respect to Columbia and its affiliates, the Trustees considered the existence of any economies of scale in the provision by Columbia of services to each fund, to groups of related funds, and to Columbia’s investment advisory clients as a whole and whether those economies were shared with the funds through breakpoints in the investment advisory fees or other means, such as fee waivers/expense reductions and additional investments by Columbia in investment, trading and compliance resources. The Trustees noted that many of the funds benefited from breakpoints, fee waivers/expense caps, or both. In considering those issues, the Trustees also took note of the costs of the services provided (both on an absolute and a relative basis) and the profitability to Columbia and its affiliates of their relationships with the funds, as discussed above.

With respect to RiverSource and its affiliates, the Trustees considered the existence of any anticipated economies of scale in the provision by RiverSource of services to each fund, to groups of related funds and to RiverSource’s investment advisory clients as a whole, and whether those economies of scale were expected to be shared with the funds. The Trustees considered Ameriprise’s anticipated net expense synergies resulting from the Transaction, and considered the possibility that the funds might benefit from economies of scale over time as part of the larger, combined fund complex. The Trustees considered how expected synergies and potential economies of scale might benefit the funds and their shareholders. The Trustees considered the potential effect of the Transaction on the distribution of the funds, and noted that the proposed management fee schedules for the funds generally contained breakpoints that would reduce the fee rate on assets above specified threshold levels.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the extent to which economies of scale were shared or expected to be shared with the funds supported the continuation of the Agreements and the approval of the New Agreements.

Matters Relating to the Agreements

Investment performance of the funds and Columbia. The Trustees reviewed information about the performance of each fund over various time periods, including information prepared by an independent third-party data provider that compared the performance of each fund to the performance of peer groups of mutual funds and performance benchmarks. The Trustees also reviewed a description of the third party’s methodology for identifying each fund’s peer group for purposes of performance and expense comparisons. The Trustees also considered additional information that the Advisory Fees and Expenses Committee requested from Columbia relating to funds that presented relatively weaker performance and/or relatively higher fees or expenses. In the case of each fund whose performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Trustees concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the fund’s Agreements. Those factors varied from fund to fund, but included one or more of the following: (i) that the fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the fund’s investment strategy and policies and that the fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the fund’s investment strategy; (iii) that the fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; (iv) that Columbia had taken or was taking steps designed to help improve the fund’s investment performance, including, but not limited to, replacing portfolio managers or modifying investment strategies; and (v) that Columbia proposed to waive advisory fees or cap the expenses of the fund.

 

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The Trustees noted that, through April 30, 2009, Columbia Dividend Income Fund’s performance was in the first quintile (where the best performance would be in the first quintile) for the one-, three-, five- and ten-year periods, of the peer group selected by an independent third-party data provider for purposes of performance comparisons.

The Trustees also considered Columbia’s performance and reputation generally, the funds’ performance as a fund family generally, and Columbia’s historical responsiveness to Trustee concerns about performance and Columbia’s willingness to take steps intended to improve performance. After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions regarding each of the Agreements, that the performance of each fund and Columbia was sufficient, in light of other considerations, to warrant the continuation of the Agreement pertaining to that fund.

Other Factors. The Trustees also considered other factors with respect to Columbia and its affiliates, which included but were not limited to the following:

 

n  

the extent to which each fund had operated in accordance with its investment objective and investment restrictions, the nature and scope of the compliance programs of the funds and Columbia and the compliance-related resources that Columbia and its affiliates were providing to the funds;

 

n  

the nature, quality, cost and extent of administrative and shareholder services overseen and performed by Columbia and its affiliates, both under the Agreements and under separate agreements for the provision of transfer agency and administrative services;

 

n  

so-called “fall-out benefits” to Columbia and its affiliates, such as the engagement of its affiliates to provide distribution, brokerage and transfer agency services to the funds, and the benefits of research made available to Columbia by reason of brokerage commissions generated by the funds’ securities transactions, as well as possible conflicts of interest associated with those fall-out and other benefits, and the reporting, disclosure and other processes in place to disclose and monitor those possible conflicts of interest; and

 

n  

the report provided by the Fee Consultant, which included information about and analysis of the funds’ fees, expenses and performance.

 

Matters Relating to the New Agreements

The Trustees considered all materials that they, their legal counsel or RiverSource believed reasonably necessary to evaluate and to determine whether to approve the New Agreements. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. The material factors that formed the basis for the Trustees’ approvals included the factors set forth below:

 

(i) the reputation, financial strength, regulatory histories and resources of RiverSource and its parent, Ameriprise;

 

(ii) the capabilities of RiverSource with respect to compliance, including an assessment of RiverSource’s compliance system by the funds’ Chief Compliance Officer;

 

(iii) the qualifications of the personnel of RiverSource that would be expected to provide advisory services to each fund, including RiverSource’s representations that the Chief Investment Officer of Columbia would serve as the Chief Investment Officer of RiverSource, and that the process for determining the portfolio management team for each fund would be substantially the same process as has customarily been followed by Columbia, and reported to the Trustees, in evaluating the performance of Columbia’s portfolio management teams;

 

(iv) the terms and conditions of the New Agreements, including the differences between the New Agreements and the Agreements;

 

(v) the terms and conditions of other agreements and arrangements relating to the future operations of the funds, including an administrative services agreement and a Master Services and Distribution Agreement;

 

(vi) the commitment of RiverSource and Ameriprise that there would not be any diminution in the nature, quality and extent of services provided to each fund or its shareholders following closing of the Transaction;

 

(vii) that the Trustees recently had completed a full annual review of the Agreements, as required by the 1940 Act, for each fund and had determined that they were satisfied with the nature, extent and quality of services provided thereunder and that the management fee rate for each fund were sufficient to warrant their approval;

 

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(viii) that the advisory fee rates payable by each fund would not change;

 

(ix) that RiverSource and Bank of America, and not any fund, would bear the costs of obtaining approvals of the New Agreement;

 

(x) that Ameriprise and RiverSource had agreed to exercise reasonable best efforts to assure that, for a period of two years after the closing of the Transaction, there would not be imposed on any fund any “unfair burden” (within the meaning of Section 15(f) of 1940 Act) with respect to the Transaction; and

 

(xi) that certain members of RiverSource’s management have a significant amount of experience integrating other fund families; that certain current Columbia personnel that would be integrated into RiverSource and its affiliates as a result of the Transaction also have experience in integrating fund families; and that the senior management of RiverSource following the Transaction would include certain senior executives of Columbia who are currently responsible for oversight of services provided to the funds.

Investment Advisory Fee Rates and Other Expenses. The Trustees considered the fact that the advisory fee rates payable by each fund to RiverSource under the New Agreements are the same as those currently paid by each fund to Columbia under the Agreements. The Trustees noted that in connection with their October 28, 2009 approval of the continuance of the Agreements, they had concluded, within the context of their overall conclusions regarding each such agreement, that the advisory fees charged to each fund supported the continuation of the agreement pertaining to that fund.

The Trustees noted that in certain cases the effective advisory fee rate for a RiverSource fund was lower than the proposed investment advisory fee rate for a fund with generally similar investment objectives and strategies. The Trustees also noted that RiverSource’s investment advisory fee rates for equity and balanced funds generally are subject to adjustments based on investment performance, whereas the proposed investment advisory fee rates for the funds, consistent with those in the Agreements, do not reflect performance adjustments. The Trustees considered existing advisory fee breakpoints and RiverSource’s undertaking not to change expense caps previously implemented by Columbia with respect to the funds without further discussion with the Independent Trustees.

 

The Trustees received and considered information about the advisory fees charged by RiverSource to institutional accounts. In considering the fees charged to those accounts, the Trustees took into account, among other things, RiverSource’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for RiverSource and the additional resources required to manage mutual funds effectively. In evaluating each fund’s expected advisory fees, the Trustees also took into account the demands, complexity and quality of the investment management of the fund.

The Trustees also considered that for certain funds, certain administrative services that are provided under the Agreements would not be provided under the New Agreements, but under a separate administrative services agreement. The Trustees noted that, unlike fees under an advisory agreement, fees under the administrative services agreement could be changed without shareholder approval, although RiverSource had not proposed any increase in such administrative fees and any such increase would require Board approval. The Trustees also noted Ameriprise’s and RiverSource’s covenants regarding compliance with Section 15(f) of the 1940 Act.

After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions, that the expected advisory fee rates and expenses of each fund supported the approval of the New Agreements.

Other Benefits to RiverSource. The Trustees received and considered information regarding any expected “fall-out” or ancillary benefits to be received by RiverSource and its affiliates as a result of their relationships with the funds, such as the engagement of RiverSource to provide administrative services to the funds and the engagement of RiverSource’s affiliates to provide distribution and transfer agency services to the funds. The Trustees considered that the funds’ distributor, which would be an affiliate of RiverSource, retains a portion of the distribution fees from the funds and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the funds. The Trustees also considered the benefits of research made available to RiverSource by reason of brokerage commissions generated by the funds’ securities transactions, and reviewed

 

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information about RiverSource’s practices with respect to allocating portfolio brokerage for brokerage and research services. The Trustees considered the possible conflicts of interest associated with certain fall-out or other ancillary benefits and the reporting, disclosure and other processes that would be in place to disclose and to monitor such possible conflicts of interest. The Trustees recognized that RiverSource’s profitability would be somewhat lower without these benefits.

 

Conclusions

Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent counsel and the Fee Consultant, the Trustees, including the Independent Trustees, (i) approved the continuance of each of the Agreements through October 31, 2010 and (ii) approved each New Agreement.

 

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Summary of Management Fee Evaluation by Independent Fee Consultant (Columbia Management Advisors, LLC)

 

EXCERPTS FROM REPORT OF INDEPENDENT FEE CONSULTANT TO THE FUNDS SUPERVISED BY THE COLUMBIA ATLANTIC BOARD

Prepared Pursuant to the February 9, 2005 Assurance of Discontinuance among the Office of Attorney General of New York State, Columbia Management Advisors, LLC, and Columbia Management Distributors, Inc. November 6, 2009

I. Overview

On February 9, 2005, Columbia Management Advisors, LLC (“CMA”) and Columbia Management Distributors, Inc.1 (“CMDI”) agreed to the New York Attorney General’s Assurance of Discontinuance (“AOD”). Among other things, the AOD stipulates that CMA may manage or advise a Columbia Fund (“Columbia Fund” and, together with some or all of such funds, the “Columbia Funds”) only if the Independent Members of the Columbia Fund’s Board of Trustees appoint a Senior Officer or retain an Independent Fee Consultant (“IFC”) who is to manage the process by which proposed management fees are negotiated. The AOD further stipulates that the Senior Officer or IFC is to prepare a written annual evaluation of the fee negotiation process.

With effect from January 1, 2007, the Independent Members of the Board of Trustees for certain Columbia Funds known collectively as the “Atlantic Funds” (together with the other members of that Board, the “Trustees”) retained me as IFC for the Atlantic Funds.2 In this capacity, I have prepared the fifth annual written evaluation of the fee negotiation process. As was the case with the 2007 and 2008 reports, my immediate predecessor as IFC, John Rea, provided invaluable assistance in the preparation of this year’s report.

A. Role of the Independent Fee Consultant

The AOD charges the IFC with “managing the process by which proposed management fees … to be charged the Columbia Fund are negotiated so that they are negotiated in a manner which is at arms’ length and reasonable and consistent with this Assurance of Discontinuance.” The AOD also provides that CMA “may manage or advise a Columbia Fund only if the reasonableness of the proposed management fees is determined by the Board of Trustees … using … an annual independent written evaluation prepared by or under the direction of … the Independent Fee Consultant.” Therefore, the AOD makes clear that the IFC does not supplant the Trustees in negotiating management fees with CMA, nor does the IFC substitute his or her judgment for that of the Trustees with respect to the reasonableness of proposed fees or any other matter that is committed to the business judgment of the Trustees.

B. Elements Involved in Managing the Fee Negotiation Process

In preparing the report required by the AOD, the IFC must consider at least the following six factors set forth in the AOD:

 

1. The nature and quality of CMA’s services, including the Fund’s performance;

 

2. Management fees (including any components thereof) charged by other mutual fund companies for like services;

 

3. Possible economies of scale as the Fund grows larger;

 

4. Management fees (including any components thereof) charged to institutional and other clients of CMA for like services;

 

5. Costs to CMA and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; and

 

6. Profit margins of CMA and its affiliates from supplying such services.

C. Organization of the Annual Evaluation

This report, like last year’s, focuses on the six factors and contains a section for each factor except that CMA’s costs and profits from managing the Funds are treated in a single section. In addition to a discussion of these factors, the report offers recommendations to improve the fee review process in future years. A review of the status of recommendations made in the 2008 Report is being provided separately with the materials for the October meeting.

 

1

CMA and CMDI are subsidiaries of Columbia Management Group, LLC (“CMG”), and are the successors to the entities named in the AOD.

 

2

I have no material relationship with Bank of America, CMG or any of its affiliates, aside from serving as IFC, and I am aware of no material relationship with any of their affiliates. I retained John Rea, an independent economic consultant, to assist me with this report.

 

   Unless otherwise stated or required by the context, this report covers only the Atlantic Funds, which are also referred as the “Funds.”

 

35

 

II. Summary of Findings

A. General

 

1. Based upon my examination of the information supplied by CMG in the light of the six factors set forth in the AOD, I conclude that the Trustees have the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Atlantic Fund.

 

2. In my view, the process by which the proposed management fees of the Funds have been negotiated in 2009 thus far has been, to the extent practicable, at arms’ length and reasonable and consistent with the AOD.

B. Nature and Quality of Services, Including Performance

 

3. The performance of the Funds has been relatively strong in recent years, although the one-year record was weaker than longer-term records. Based upon 1-, 3-, 5-, and 10-year returns through April 30, 2009, at least half of all the Funds were in the first and second performance quintiles in each of the three longest performance periods; for the one-year period, 40% of the Funds were in the top two quintiles. No more than 13% of the Funds were in the fifth quintile in any one performance period. Domestic equity, quantitative equity, and taxable fixed-income Funds were the strongest performers in 2009, while most foreign equity Funds lagged behind their competitors.

 

4. Performance rankings were similar in 2008 and 2009: the 1- and 3-year rankings declined slightly over the previous year, while the 5-year rankings improved modestly. Year over year, for the 1- and 3-year periods, the performance of equity Funds, both domestic and international, declined, while that of fixed-income Funds improved. Between three-fifths to two-thirds of the Funds changed quintile rankings in 2009 in the 1-, 3-, and 5-year performance periods.

 

5. The performance of the domestic equity Funds against their benchmarks was good for the 3- and 5-year performance periods. In contrast, gross returns of international equity and fixed-income Funds typically fell short of their benchmarks. The performance of equity Funds against their benchmarks was highly correlated to performance versus their peers; no such correlation was observed for fixed-income Funds.

 

6. The Atlantic equity Funds’ overall performance adjusted for risk was solid. Based upon 3-year returns, nearly 57% of the equity Funds had a combination of risk-adjusted and unadjusted returns that placed them in the top half of their performance universes. About one quarter of the fixed-income Funds posted high returns and low risk relative to comparable funds. Just over half of the fixed-income Funds, primarily tax-exempt Funds, took on more risk than the typical fund in their performance universes.

 

7. The industry-standard procedure used by Lipper that includes all share classes in the performance universe tends to bias a Fund’s ranking upward within that universe. The bias occurs because either no-12b-1 fee or low-12b-1 fee share classes of the Atlantic Funds are compared with funds in performance universes that include all share classes of multi-class funds with 12b-1 fees of up to 100 basis points. Correcting this bias by limiting the performance universe to classes of comparable funds with low or no 12b-1 fees (a “filtered universe”) lowers the relative performance for the Funds, but not to a material extent. The filtering process, however, did identify one Fund for further review that had not been identified as a review fund using unfiltered universes. Conversely, two Funds that had been identified as review funds in the unfiltered universe lost that status in filtered universes.

 

8. A small number of Funds have consistently underperformed over the past five years. The exact number depends on the criteria used to evaluate longer-term performance. For example, only three Funds had below-median performance in each 1- and 3-year period from 2005 to 2009.

 

9. The services performed by CMG professionals beyond portfolio management, such as compliance, legal, information technology, risk management, finance, and fund administration, are critical to the success of the Funds and appear to be of high quality.

C. Management Fees Charged by Other Mutual Fund Companies

 

10.

The Funds’ management fees and total expenses are generally low relative to those of their peers, with over half of the Funds in the most favorable two quintiles. Only 26% of the Funds ranked in the two most expensive quintiles for actual management fees, and 18% in those quintiles for total expenses. Two Funds are in the fifth quintile for total

 

36

 

 

expenses; four Funds are in the fifth quintile for actual management fees.

 

11. The highest concentration of low-expense Funds is found among the foreign equity Funds. The 12 former Excelsior Funds have relatively high fees and expenses, with two-thirds ranking in either the fourth or fifth quintiles for actual management fees. The higher actual management fee rankings of certain former Excelsior Funds are due in part to fee schedules that are higher than standard Columbia Fund fee schedules at current asset levels.

 

12. The distribution of total expense and management fee rankings has improved over the prior two years. The implementation of the voluntary standardized cap system has contributed significantly to the improved rankings in 2009.

 

13. The management fees of the Atlantic Funds are generally in line with those of Columbia Funds supervised by the Nations Board of Trustees (the “Nations Funds”). To the extent that Atlantic Funds have higher average fees in certain investment categories than Nations Funds, the difference reflects either differences in asset size, different fee structures of the former Excelsior Funds, or special circumstances of the Funds included in the investment categories.

D. Trustees’ Advisory Contract Review Process

 

14. The Trustees’ evaluation process identified 16 Funds in 2009 for further review based upon long-standing criteria relating to their relative performance or expenses or both. When compared in filtered universes, one additional Fund met the criteria for further review. CMG provided further information about each of those Funds to assist the Trustees in their evaluation.

E. Potential Economies of Scale

 

15. CMG presented to the Trustees its analysis of the sources and sharing of potential economies of scale. CMG views economies of scale as arising at the complex level and would regard estimates of scale economies for individual funds as unreliable. In its analysis, CMG did not identify specific sources of economies of scale or provide any estimates of any economies of scale that might arise from future asset growth. CMG’s analysis included measures taken by the Trustees and CMG that seek to share any potential economies of scale through breakpoints in management fee schedules, the establishment of expense limits for each Fund, enhanced shareholder services, fund mergers, and operational consolidation.

 

16. An examination of the contractual fee schedules for five Atlantic Funds shows that those with standard fee structures are generally in line with those of their competitors. The fee schedules of the former Excelsior Funds, however, have high initial fees relative to competitors but otherwise have comparable breakpoint structures.

F. Management Fees Charged to Institutional Clients

 

17. CMG has provided Trustees with comparisons of mutual fund management fees and institutional fees based upon standardized fee schedules and upon actual fees. The results show that, consistent with industry practice, actual and scheduled institutional fees are generally lower than the Funds’ management fees. CMG provided additional data this year demonstrating that at small asset levels, the effective fee of certain Funds may be equal to or less than institutional fee levels at those asset levels, due to the effect of expense limits on small funds with high gross expenses. CMG also analyzed the differences between the services provided and risks borne on the one hand by a manager of mutual funds and on the other by institutional advisers, and suggested that these differences should be kept in mind when Trustees review the reasonableness of the Funds’ management fees.

G. Revenues, Expenses, and Profits

 

18. The activity-based cost allocation methodology employed by CMG to allocate costs, both direct and indirect, for purposes of calculating Fund profitability is thoughtful and detailed. This year, CMG further refined the technique by allocating additional indirect expenses on an activity basis.

 

19. The materials provided on CMG’s revenues and expenses with respect to the Funds and the methodology underlying their construction form a sufficient basis for Trustees to evaluate the expenses of and profitability to CMG arising out of its relationships with the Funds.

 

37

 

20. CMG provided a firm-wide pro forma 2009 income statement demonstrating the effect of market events beginning in the fourth quarter of 2008 on its revenues and profitability to provide an additional perspective on calendar 2008 profitability data. In particular, 2008 revenues reflected the higher market prices prevailing during the first three quarters of that year, while expenses dropped due to cost cutting in the wake of the market downturn late in 2008. The continuing effects of this downturn are expected to produce a significant decline in profitability this year.

 

21. In 2008, CMG’s pre-tax post-distribution margin on the Atlantic Fund complex was above industry medians, based on the limited data available for publicly held mutual fund managers. However, as is to be expected in a large fund complex, some Atlantic Funds had relatively high pre-tax profit margins in 2008, when calculated solely with respect to management revenues and expenses, while other Atlantic Funds operated at a loss. There is a positive relationship between Fund size and profitability to CMG, with smaller Funds generally operating at a loss to CMG.

 

22. CMG pays a fixed percentage of its management fee revenues to an affiliate, U.S. Trust, Bank of America Private Wealth Management, with respect to assets of its clients invested in Atlantic Funds to compensate it for services it performs with respect to those client assets and for the effect of state law limitations on affiliates charging multiple fees. Based on our analysis of the services provided by this affiliate, we have concluded that all payments other than those for sub-transfer agent or sub-accounting services should be treated as a distribution expense.

III. Recommendations

 

1) Criteria for review. The Trustees may wish to consider modifying the criteria for identifying a Fund for further review (a “Review Fund”) to include criteria that focus exclusively on performance. The Trustees’ supplementary data request included one such criterion. They may also wish to consider whether it would be useful to apply CMG’s own internal monitoring standards for Fund performance to the contract review process, or whether such criteria are more relevant to their ongoing investment oversight.

 

2) Presentation of Review Fund discussion. CMG should consider whether it could more systematically present in one discussion all relevant information regarding each Review Fund, which is now split into several different portions of the 15(c) materials. For any Fund that has been a Review Fund in consecutive years, CMG should address under what circumstances it could reasonably be anticipated that the Fund would lose that status.

 

3) Refinement of tax-exempt performance data. Certain single-state tax-exempt Funds compete in extremely small universes and are compared to a multi-state benchmark of uncertain relevance. Notwithstanding the difficulties, CMG should work to improve the reliability of the calculation of relative performance of these Funds. If that is not possible, CMG should provide guidance on how the Trustees should judge the quality of CMG’s management of these Funds.

 

4) Development of risk metrics for asset-allocation, tax-exempt, and money market funds. CMG has developed and shared with the Trustees quantitative risk metrics comparing equity and taxable fixed-income Funds against their peers. However, reliable risk metrics have not been developed for asset-allocation, tax-exempt fixed income, and money market funds. We urge CMG to continue its efforts to provide reliable risk measures for these categories of Funds, especially in the cases of asset-allocation and money market funds, because their investors are likely to be motivated at least in part by a desire to manage risk.

 

5) Profitability data. For any period during which CMG is an affiliate of U.S. Trust, Bank of America Private Wealth Management, CMG should continue to present to the Trustees the profitability of each Fund, each investment style and each complex (of which Atlantic is one) calculated as follows:

 

  a. Management-only profitability should be calculated without reference to any Private Bank expense.

 

  b. Profitability excluding distribution (which essentially covers the management and transfer agency functions) should be adjusted by removing from the expense calculation any portion of the Private Bank payment not attributable to the performance by the Private Bank of sub-transfer agency or sub-accounting functions.

 

  c.

Total profitability, including distribution: No adjustment for Private Bank expenses should be made, because all such expenses represent legitimate fund

 

38

 

 

expenses to be taken into account in calculating CMG’s profit margin including distribution.

 

  d. Distribution only: This should include all Private Bank expenses other than those attributable to sub-transfer agency services.

 

6) Contractual fee analysis. This year CMG presented a new Lipper report comparing the contractual management fees of Funds with those of competitors in similar investment styles. However, the reliability of the conclusion – that Fund management fee breakpoints compared favorably with competitive fee rates – was limited by the use of competitive funds at all asset levels. The sponsors of a $100 million mutual fund may not have given much thought to breakpoints at $5 billion; therefore, that fund’s contractual fee at that level is unlikely to compare favorably with that of a $5 billion Fund. Limiting the competitors to the Lipper expense group, whose constituents are similar in size to the relevant Fund, would make the results more meaningful. In addition, the breakpoints of a select group of Atlantic Funds (which would differ each year) should continue to be compared to those of industry rivals to ensure that the Funds’ breakpoint schedules remain within industry norms. As breakpoint schedules change relatively little each year, performing such a comparison for each Atlantic Fund each year would not be an efficient use of Trustee and CMG resources.

 

7) Pro forma profitability data. In any year in which CMG or the Trustees believe that the prior year’s profitability is unlikely to be representative of current business results due to changes in markets or for any other reason, CMG should, consistent with this year’s practice, prepare a pro forma income statement based on year-to-date actual data and reasonable projections used for its own business planning purposes.

 

8) Additional institutional data and analysis. While CMG provided a substantial amount of information on its institutional business, including a virtually complete database of all institutional accounts, we suggest some additional items for future years: (a) profitability data for the institutional business in the format, and based upon the same allocation methodologies, used to present Fund profitability, (b) an explanation of how CMA sets institutional fee breakpoints, which normally begin at asset levels far lower than those found in Fund management fee breakpoints, and (c) an analysis of differences in actual fees within specific investment categories, with special attention given to accounts established before and after the implementation of the standardized institutional fee schedules in 2005.

 

9) Management fee disparities. In any future study of management fees, CMG and the Atlantic Trustees should analyze the differences in management fee schedules, including those arising out of the reorganization of the former Excelsior Funds as Atlantic Funds. As part of that analysis, CMG should provide an explanation for any significant fee differences among comparable funds across fund families sponsored by CMG, such as differences in the management styles of different Funds included the same Lipper category. Finally, if CMG proposes a management fee change or an expense cap for any mutual fund managed by CMA that is comparable to any Atlantic Fund, CMG should provide the Trustees with sufficient information about the proposal to allow the Trustees to assess the applicability of the proposed change to the relevant Atlantic Fund or Funds.

 

10) Explanation of data supplied to Lipper. Each year, as part of the 15(c) process, CMG retains Lipper to compare the fees and expenses of each Fund to a group of competitors. In many cases, CMG, with the approval of the Trustees, adjusts the actual expense data, which is based on the most recent full fiscal year of the Fund (and each competitive fund) to reflect changes in fees or expense limits that occurred during or after the relevant fiscal year. This improves the reliability and usefulness of the comparison. However, to ensure that the Trustees know when and how CMG adjusted the data, we recommend that CMG prepare a table listing for each Fund what adjustments were made, e.g., to reflect a new expense limitation of x basis points that commenced on y date.

Reduction of volume of paper documents submitted. The effort to streamline and better organize the data presented to the Trustees and the process by which that data was prepared and organized continued to be well-received by all parties. Notwithstanding past success, it is always appropriate to look for opportunities to reduce and simplify the presentation of 15(c) data. One possibility would be to remove the 124 pages of biographical data, most if not all of which the Trustees have

 

39

 

previously seen as part of their ongoing investment oversight duties, from the paper volume and post it on the Internet-based document storage and retrieval system used by the Funds to provide reference data to Trustees.

Respectfully Submitted,

Steven E. Asher

 

40

Summary of Management Fee Evaluation by Independent Fee Consultant (RiverSource Investments, LLC)

 

EXCERPTS FROM REPORT OF

INDEPENDENT FEE CONSULTANT TO

THE FUNDS SUPERVISED BY THE

COLUMBIA ATLANTIC BOARD

Prepared Pursuant to the February 9, 2005

Assurance of Discontinuance among the

Office of Attorney General of New York State, Columbia Management Advisors, LLC, and Columbia Management Distributors, Inc.

December 21, 2009

I. Overview

On February 9, 2005, Columbia Management Advisors, LLC (“CMA”) and Columbia Management Distributors, Inc. 1 (“CMD”) agreed to the New York Attorney General’s Assurance of Discontinuance (“AOD”). Among other things, the AOD stipulates that CMA may manage or advise a Columbia Fund (“Columbia Fund” and, together with some or all of such funds, the “Columbia Funds”) only if the Independent Members of the Columbia Fund’s Board of Trustees appoint a Senior Officer or retain an Independent Fee Consultant (“IFC”) who is to manage the process by which proposed management fees are negotiated. The AOD further stipulates that the Senior Officer or IFC is to prepare a written annual evaluation of the fee negotiation process.

With effect from January 1, 2007, the Independent Members of the Board of Trustees for certain Columbia Funds known collectively as the “Atlantic Funds” (together with the other members of that Board, the “Trustees”) retained me as IFC for the Atlantic Funds.2 In this capacity, I have prepared this written evaluation of the fee negotiation process. As was the case with the last three annual reports, my immediate predecessor as IFC, John Rea, provided invaluable assistance in the preparation of this report.

 

On September 29, 2009, Ameriprise entered into an asset purchase agreement with Bank of America, N.A. and its parent, Bank of America Corporation (together, the “Bank”) pursuant to which the Bank agreed to sell certain CMG assets relating to Columbia’s long-term asset management business, including management of the Atlantic Funds (the “Transaction”).3 The Transaction if completed would result in the termination of the existing Investment Management Agreements with CMA. Therefore, the Trustees have been requested to approve and recommend to the shareholders of each Atlantic Fund new Investment Management and Sub-Advisory Agreements (together, the “Management Agreements”) with RiverSource Investments, LLC (“RI”),4 investment manager of the RiverSource Funds and a subsidiary of Ameriprise. This report is intended to fulfill the requirements of the AOD with respect to the Trustees’ consideration of the new Management Agreements.

A. Role of the Independent Fee Consultant

The AOD charges the IFC with “managing the process by which proposed management fees … to be charged the Columbia Fund are negotiated so that they are negotiated in a manner which is at arms’ length and reasonable and consistent with this Assurance of Discontinuance.” The AOD also provides that CMA “may manage or advise a Columbia Fund only if the reasonableness of the proposed management fees is determined by the Board of Trustees … using … an annual independent written evaluation prepared by or under the direction of … the Independent Fee Consultant.” Therefore, the AOD makes clear that the IFC does not supplant the Trustees in negotiating management fees with CMA (or RI), nor does the IFC substitute his or her judgment for that of the Trustees with respect to the reasonableness of proposed fees or any other matter that is committed to the business judgment of the Trustees.

 

1

CMA and CMD are subsidiaries of Columbia Management Group, LLC (“CMG”), and are the successors to the entities named in the AOD.

2

I have no material relationship with Bank of America, CMG or Ameriprise Financial, Inc. (“Ameriprise”), aside from serving as IFC, and I am aware of no material relationship with any of their affiliates. I retained John Rea, an independent economic consultant, to assist me with this report.

 

   Unless otherwise stated or required by the context, this report covers only the Atlantic Funds.

 

3

Preliminary Response of Ameriprise to Information Request of Columbia Atlantic Board dated October 21, 2009 (hereafter, the “Preliminary Response”), p. 1. The one money market Atlantic Fund, Money Market Fund VS, was included in the Transaction because it was an integral part of CMG's array of Funds used as investment vehicles by variable annuity and similar insurance products.

 

4

Ameriprise intends to re-brand RI with the “Columbia” name (which is one of the assets being sold in the Transaction). Preliminary Response, pp. 4-5. In the case of new Sub-Advisory Agreements, the current sub-adviser would also be a party.

 

41

 

B. Elements Involved in Managing the Fee Negotiation Process

In preparing the report required by the AOD, the IFC must consider at least the following six factors set forth in the AOD:

 

1. The nature and quality of the adviser’s services, including the Fund’s performance;

 

2. Management fees (including any components thereof) charged by other mutual fund companies for like services;

 

3. Possible economies of scale as the Fund grows larger;

 

4. Management fees (including any components thereof) charged to institutional and other clients of the adviser for like services;

 

5. Costs to the adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; and

 

6. Profit margins of the adviser and its affiliates from supplying such services.

C. Data Presented to the Trustees

In considering the proposed new Management Agreements with RI, the Trustees relied in part on the data that had been prepared as part of their annual contract review process, which concluded in late October. This data remained relevant because the fees in the proposed Management Agreements were identical to the fees approved at that time. The annual review materials included a Lipper report on the performance of each Atlantic Fund compared to its peers and its benchmark, comparisons of the fees and expenses of each Atlantic Fund to similar CMG-sponsored Funds, comparable competitive funds chosen by Lipper, and institutional accounts advised by CMA, revenues, expenses, and profits of CMG from managing the Atlantic Funds, calculated both by Fund and collectively, and CMG’s views on the existence and sharing of economies of scale.

In addition, the Trustees reviewed materials specific to the proposed new Management Agreements with RI in response to requests for information made on behalf of the Trustees, including the following:

 

n  

Performance data for the RiverSource Funds showing percentile and quartile rankings of each fund within its Lipper performance universe for periods up to five years and net returns of each fund relative to its benchmark returns. This data was arguably relevant due to the possibility that some RiverSource investment teams would be providing investment management services to certain Columbia Funds. 5

 

n  

tables comparing the fee schedules and effective fee rates of funds managed by CMA and RI and institutional accounts advised by the two firms.

 

n  

extensive discussion of the process by which the various components of the two asset management businesses would be integrated including investment management, compliance, transfer agency, custody, fund accounting, and distribution.

 

n  

information about the financial condition of Ameriprise, including its most recent annual report on Form 10-K, RI’s profit margins from managing the RiverSource Funds in 2007 and 2008, and pro forma income statements for the combined Columbia and RiverSource fund complex.

 

n  

disclosure that certain senior CMG executives, including President Michael Jones, Chief Investment Officer Colin Moore, Head of Mutual Funds J. Kevin Connaughton, and Chief Compliance Officer Linda Wondrack would continue in analogous capacities following the consummation of the Transaction, and

 

n  

a breakdown of the synergies RI expects to realize in the two years following the Transaction and the extent to which those potential synergies are expected to be shared with shareholders of funds advised by RI.

II. Findings

 

1. Based upon my examination of the information supplied by CMG and Ameriprise in the light of the six factors set forth in the AOD, I conclude that the Trustees have the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Atlantic Fund.

 

2. In my view, the process by which the proposed management fees of the Atlantic Funds have been negotiated with RI thus far has been, to the extent practicable, at arms’ length and reasonable and consistent with the AOD.

Respectfully submitted,

Steven E. Asher

 

5

On page 20 of its Supplemental Response to the Atlantic Trustees (undated but delivered November 24, 2009), Ameriprise said that “most personnel decisions, including with respect to the portfolio management teams for the Atlantic Funds . . . will be made primarily by [current CMA CIO] Colin Moore using the Columbia 5P process.”

 

42

Proxy Voting Results

 

 

Columbia Dividend Income Fund

On March 3, 2010, a special meeting of shareholders of Columbia Funds Series Trust I was held to consider the approval of several proposals listed in the proxy statement for the meeting. Proposal 1 and Proposal 2 were voted on at the March 3, 2010 meeting of shareholders and Proposal 3 was voted on at an adjourned meeting of shareholders held on March 31, 2010. The shareholder meeting results are as follows:

Proposal 1: A proposed Investment Management Services Agreement with Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (CMIA) was approved as follows:

 

             
Votes For   Votes Against   Abstentions   Broker Non-Votes
1,272,244,420   20,580,207   16,146,578   196,540,953

Proposal 2: A proposal authorizing CMIA to enter into and materially amend subadvisory agreements for the Fund in the future, with the approval of the Trust’s Board of Trustees, but without obtaining additional shareholder approval, was approved as follows:

 

             
Votes For   Votes Against   Abstentions   Broker Non-Votes
1,211,848,905   80,862,712   16,259,470   196,541,071

Proposal 3: Each of the nominees for trustees was elected to the Trust’s Board of Trustees, as follows:

 

                      
Trustee      Votes For      Votes Withheld      Abstentions
John D. Collins      30,977,072,412      859,827,038      0

Rodman L. Drake

     30,951,179,004      885,720,446      0
Douglas A. Hacker      30,989,793,279      847,106,171      0

Janet Langford Kelly

     30,999,020,814      837,878,636      0
William E. Mayer      16,291,139,483      15,545,759,967      0

Charles R. Nelson

     30,997,700,700      839,198,750      0
John J. Neuhauser      30,988,095,661      848,803,789      0

Jonathon Piel

     30,968,801,048      868,098,402      0
Patrick J. Simpson      30,999,065,030      837,834,420      0

Anne-Lee Verville

     30,996,227,913      840,671,537      0

 

43

 

 

[THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

44

Important Information About This Report

 

The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Dividend Income Fund.

A description of the policies and procedures that the fund uses to determine how to vote proxies and a copy of the fund’s voting records are available (i) at www.columbiamanagement.com, (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) without charge, upon request, by calling 1-800-368-0346. Information regarding how the fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how the fund voted proxies relating to portfolio securities is also available from the fund’s website, www.columbiamanagement.com.

The fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus, which contains this and other important information about the funds, visit columbiamanagement.com. Read the prospectus carefully before investing.

On April 30, 2010, Ameriprise Financial, Inc., the parent company of RiverSource Investments, LLC, acquired the long-term asset management business of Columbia Management Group, LLC, including certain of its affiliates, which were, prior to this acquisition, part of Bank of America. In connection with the acquisition of the long-term assets, the Columbia Funds have a new investment adviser, RiverSource Investments, LLC, which is now known as Columbia Management Investment Advisers, LLC. For those clients that use the services of a subadviser, those arrangements are continuing unless notified otherwise. RiverSource Fund Distributors, Inc., now known as Columbia Management Investment Distributors, Inc., member FINRA, will act as the principal distributor of the Columbia Funds.

Transfer Agent*

Columbia Management Investment Services Corp.

P.O. Box 8081

Boston, MA 02266-8081

1-800-345-6611

Distributor*

Columbia Management Investment

Distributors, Inc.

One Financial Center

Boston, MA 02111

Investment Advisor*

Columbia Management Investment Advisers, LLC

100 Federal Street

Boston, MA 02110

* As of May 1, 2010

 

45


LOGO

One Financial Center

Boston, MA 02111-2621

 

LOGO

Columbia Dividend Income Fund

Semiannual Report, March 31, 2010

©2010 Columbia Management Investment Advisers, LLC. All rights reserved.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

SHC-44/44511-0310 (05/10) 10/K1H181


LOGO

Semiannual Report

March 31, 2010

 

Columbia Liberty Fund

Not FDIC Insured   Ÿ   May Lose Value   Ÿ   No Bank Guarantee

 


 

Table of Contents

 

Fund Profile   1
Performance Information   3
Understanding Your Expenses   4
Financial Statements   5
Board Consideration and Approval of Advisory Agreements   36
Summary of Management Fee Evaluation by Independent Fee Consultant (Columbia Management Advisors, LLC)   43
Summary of Management Fee Evaluation by Independent Fee Consultant (RiverSource Investments, LLC)  

49

Proxy Voting Results   51
Important Information About This Report   53

The views expressed in this report reflect the current views of the respective parties. 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 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 Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Fund. References to specific securities should not be construed as a recommendation or investment advice.

 

President’s Message

LOGO

 

Dear Shareholder:

On May 3, 2010, Ameriprise Financial, Inc. announced that it had completed the acquisition of the long-term asset management business of Columbia Management from Bank of America. This includes the business of managing its equity and fixed-income mutual funds. Ameriprise Financial has combined its current U.S. asset management business, RiverSource Investments, LLC, with Columbia Management. This transaction puts together two leading asset management firms to create one entity that ranks as the eighth largest manager of long-term mutual fund assets in the United States.1 This combined business will operate under the well-regarded Columbia Management brand, where we will build on the strengths of our combined investment capabilities and

talent, our broad and diversified product lineup and exceptional service.

Our combined business has a new breadth and depth of investment choices. William “Ted” Truscott, CEO, U.S. asset management and president of annuities for Ameriprise Financial, leads the combined U.S. asset management business. Michael Jones serves as president, U.S. asset management. Colin Moore continues to serve as chief investment officer. I am also continuing in my role as head of mutual funds, responsible for the delivery of mutual fund products and services to investors. The Columbia funds’ advisers, distributor and transfer agent are now subsidiaries of our parent company, Ameriprise Financial but operate under the Columbia Management name. You will begin to see these names used in communications and statements going forward.

 

    Service provider name
Advisers  

Columbia Management Investment Advisers, LLC

Columbia Wanger Asset Management, LLC

Distributor   Columbia Management Investment Distributors, Inc.
Transfer Agent   Columbia Management Investment Services Corp.

As a valued investor in Columbia funds, please know that our goal is to ensure a smooth transition and provide the highest quality products and services. Transition teams across the organization continue their efforts to build on best practices from both legacy organizations with integration efforts including rebranding, vendor and system consolidations and client communications. Additionally, we want to assure you that the funds’ portfolio managers also continue to focus on providing uninterrupted service to all fund shareholders.

Although we have a lot of work ahead of us in 2010, Columbia Management and Ameriprise Financial are excited about the opportunities for our combined organization. I share this optimism and believe it positions us as a best-in-class asset management business with the ability to deliver more for our clients than ever before.

Sincerely,

LOGO

J. Kevin Connaughton

President, Columbia Funds

 

1

Source: Ameriprise Financial, Inc., based on March 31, 2010 data from the Investment Company Institute

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus, which contains this and other important information about the funds, visit columbiamanagement.com. Read the prospectus carefully before investing.

Securities products offered through Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), member FINRA. Advisory services provided by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC).

© 2010 Columbia Management Investment Advisers, LLC. All rights reserved.


Fund Profile – Columbia Liberty Fund

 

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

Summary

6-month (cumulative) return as of 03/31/10

 

LOGO  

+6.94%

Class A shares

(without sales charge)

LOGO  

+11.75%

S&P 500 Index

LOGO  

+1.99%

Barclays Capital Aggregate Bond Index

Summary

 

n  

For the six-month period that ended March 31, 2010, the fund’s class A shares returned 6.94% without sales charge. The fund’s two benchmarks, the S&P 500 Index and the Barclays Capital Aggregate Bond Index1, returned 11.75% and 1.99%, respectively. The fund’s performance was in line with the average return of funds in its peer group, the Lipper Mixed-Asset Target Allocation Moderate Funds Classification2, which returned 7.05%. An emphasis on equities during the period aided performance as did the fund’s positions in international stocks and investment-grade bonds, which outperformed their respective benchmarks. A focus on quality within the fund’s large-cap equity holdings hampered returns as lower-quality assets outperformed.

 

n  

Stocks continued to climb, buoyed by encouraging economic data, the easing of the financial crisis, low interest rates and improving investor confidence. U.S. stocks outdid returns from most foreign developed markets but lagged riskier emerging markets. Within the fund, performance benefited from our decision to increase the fund’s equity stake and pare back its fixed-income exposure. At period end, the fund was fairly neutrally allocated with 60% in stocks and 40% in bonds and cash. The fund lost ground from its positions in large-cap growth and value stocks, which together represented about 50% of assets and trailed their respective Russell benchmarks. Within these segments, we believe our focus on higher-quality companies with stronger balance sheets hindered results as lower-quality stocks led the market rally. Elsewhere, a roughly 10% weight in international developed market equities handily beat its benchmark, the MSCI EAFE Index3, which returned 3.06%. On the fixed-income side, the investment-grade bond portfolio nicely outpaced the Barclays index.

 

n  

After a strong run over the past year, both stocks and bonds appear to be fairly valued. The unusual nature of the recent recession — driven by a financial crisis — leads us to believe that the economy will recover at a relatively slow pace. We think inflation is likely to remain under control, at least in the near term, as the gap between output and consumption remains. Against this backdrop, our decision to bring equities and fixed-income holdings in line with their neutral allocation targets reflects our cautious outlook for 2010. Going forward, we expect investors to become more discriminating, pushing returns on higher-quality, more stable market segments ahead of riskier assets. Longer term, we are optimistic about the market’s prospects, believing that the Federal Reserve has successfully engineered economic growth that is self-sustaining.

 

1

The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks. The Barclays Capital 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.

 

2

Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads.

 

3

The Morgan Stanley Capital International Europe, Australasia, Far East (MSCI EAFE) Index is a capitalization- weighted index that tracks the total return of common stocks in 21 developed-market countries within Europe, Australasia and the Far East.

Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.

 

1

Fund Profile (continued) – Columbia Liberty Fund

 

Portfolio Management

Anwiti Bahuguna, PhD has co-managed the fund since 2009 and has been associated with the advisor or its predecessors since 2002.

Colin Moore has co-managed the fund since 2008 and has been associated with the advisor or its predecessors since 2002.

Kent M. Peterson, PhD has co-managed the fund since 2009 and has been associated with the advisor or its predecessors since 2006.

Marie M. Schofield has co-managed the fund since 2009 and has been associated with the advisor or its predecessors since 1990.

Effective May 1, 2010, Kent M. Bergene and David Joy were added as co-managers of the fund. Mr. Bergene has been associated with the advisor or its predecessors since 1981. Mr. Joy has been associated with the advisor or its predecessors since 2003.

Effective May 1, 2010, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., became the investment advisor to the fund and changed its name to Columbia Management Investment Advisers, LLC. Please see the fund’s prospectus, as supplemented, for more information regarding the change in investment advisor and certain other changes.

 

 

Portfolio holdings and characteristics are subject to change periodically and may not be representative of current holdings and characteristics. The outlook for the fund may differ from that presented for other Columbia Funds.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yield and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa.

International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards and other risks associated with future political and economic developments.

 

2

Performance Information – Columbia Liberty Fund

 

Annual operating expense ratio (%)*

Class A

   1.20

Class B

   1.95

Class C

   1.95

Class Z

   0.96

 

* The annual operating expense ratio is as stated in the fund’s prospectus that is current as of the date of this report. Differences in expense ratios disclosed elsewhere in this report may result from including fee waivers and expense reimbursements as well as different time periods used in calculating the ratios.

 

 

Net asset value per share

as of 03/31/10 ($)

  

Class A

   7.47

Class B

   7.50

Class C

   7.48

Class Z

   8.04

 

Distributions declared per share

10/01/09 – 03/31/10 ($)

  

Class A

   0.07

Class B

   0.04

Class C

   0.04

Class Z

   0.08

Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.

 

Performance of a $10,000 investment 04/01/00 – 03/31/10 ($)
Sales charge    without      with

Class A

   11,377      10,723

Class B

   10,550      10,550

Class C

   10,541      10,541

Class Z

   11,642      n/a

The table above shows the change in value of a hypothetical $10,000 investment in each share class of Columbia Liberty Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

 

Average annual total return as of 03/31/10 (%)                
Share class   A   B   C   Z
Inception   04/30/82   05/05/92   08/01/97   07/31/95
Sales charge   without   with   without   with   without   with   without

6 month (cumulative)

  6.94   0.79   6.52   1.52   6.54   5.54   6.95

1-year

  32.23   24.63   31.33   26.33   31.22   30.22   32.53

5-year

  3.39   2.17   2.58   2.25   2.59   2.59   3.63

10-year

  1.30   0.70   0.54   0.54   0.53   0.53   1.53

The “with sales charge” returns include the maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The “without sales charge” returns do not include the effect of sales charges. If they had, returns would be lower.

Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.

All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.

The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.

 

3

Understanding Your Expenses – Columbia Liberty Fund

 

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

 

  n  

For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

 
  n  

For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

 
  1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.  
  2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “Actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.  

If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee.

This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “Hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

 

10/01/09 – 03/31/10                    
     Account value at the
beginning of the period ($)
 

Account value at the

end of the period ($)

 

Expenses paid

during the period ($)

  Fund’s annualized
expense ratio (%)
    Actual   Hypothetical   Actual   Hypothetical   Actual   Hypothetical   Actual

Class A

  1,000.00   1,000.00   1,069.40   1,019.30   5.83   5.69   1.13

Class B

  1,000.00   1,000.00   1,065.20   1,015.56   9.68   9.45   1.88

Class C

  1,000.00   1,000.00   1,065.40   1,015.56   9.68   9.45   1.88

Class Z

  1,000.00   1,000.00   1,069.50   1,020.49   4.59   4.48   0.89

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 365.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

 

4

Investment Portfolio – Columbia Liberty Fund

March 31, 2010 (Unaudited)

Common Stocks – 56.6%

 

      Shares    Value ($)
Consumer Discretionary – 7.0%   
Auto Components – 0.4%      

Autoliv, Inc. (a)

   7,410    381,838

Bridgestone Corp.

   58,900    1,005,502
         

Auto Components Total

      1,387,340
Automobiles – 0.1%      

Suzuki Motor Corp.

   23,700    522,977
         

Automobiles Total

      522,977
Distributors – 0.3%      

CFAO SA (a)

   8,745    325,877

Li & Fung Ltd.

   170,000    835,303
         

Distributors Total

      1,161,180
Hotels, Restaurants & Leisure – 1.8%   

Carnival Corp.

   31,700    1,232,496

Carnival PLC

   16,490    676,887

Ctrip.com International Ltd., ADR (a)

   18,700    733,040

Las Vegas Sands Corp. (a)

   19,180    405,657

McDonald’s Corp.

   20,316    1,355,484

Starbucks Corp. (a)

   37,360    906,727

Starwood Hotels & Resorts Worldwide, Inc.

   27,995    1,305,687
         

Hotels, Restaurants & Leisure Total

   6,615,978
Household Durables – 0.1%      

D.R. Horton, Inc.

   27,100    341,460

Harman International Industries, Inc. (a)

   897    41,962
         

Household Durables Total

      383,422
Internet & Catalog Retail – 0.6%      

Amazon.com, Inc. (a)

   10,750    1,459,097

Priceline.com, Inc. (a)

   1,230    313,650

Rakuten, Inc.

   319    230,660
         

Internet & Catalog Retail Total

      2,003,407
Media – 0.5%      

Reed Elsevier NV

   78,676    956,161

Viacom, Inc., Class B (a)

   24,710    849,530
         

Media Total

      1,805,691
Multiline Retail – 1.0%      

J.C. Penney Co., Inc.

   28,600    920,062

Nordstrom, Inc.

   20,900    853,765

Target Corp.

   36,490    1,919,374
         

Multiline Retail Total

      3,693,201
Specialty Retail – 1.5%      

Best Buy Co., Inc.

   12,090    514,309

Dick’s Sporting Goods, Inc. (a)

   12,400    323,764

 

      Shares    Value ($)

GameStop Corp., Class A (a)

   15,040    329,526

Lowe’s Companies, Inc.

   109,860    2,663,006

O’Reilly Automotive, Inc. (a)

   22,700    946,817

TJX Companies, Inc.

   18,440    784,069
       

Specialty Retail Total

      5,561,491
Textiles, Apparel & Luxury Goods – 0.7%   

Lululemon Athletica, Inc. (a)

   8,642    358,643

LVMH Moet Hennessy Louis Vuitton SA

   5,187    606,284

NIKE, Inc., Class B

   12,400    911,400

Swatch Group AG

   1,689    538,545
       

Textiles, Apparel & Luxury Goods Total

   2,414,872
       

Consumer Discretionary Total

      25,549,559
     
Consumer Staples – 4.8%      
Beverages – 0.8%      

Diageo PLC, ADR

   16,526    1,114,679

PepsiCo, Inc.

   27,220    1,800,875
       

Beverages Total

      2,915,554
Food & Staples Retailing – 0.6%      

Costco Wholesale Corp.

   17,600    1,050,896

Wal-Mart Stores, Inc.

   16,820    935,192
       

Food & Staples Retailing Total

      1,986,088
Food Products – 0.7%      

J.M. Smucker Co.

   15,636    942,225

Mead Johnson Nutrition Co., Class A

   7,580    394,388

Nestle SA, Registered Shares

   21,121    1,081,690
       

Food Products Total

      2,418,303
Household Products – 1.0%      

Procter & Gamble Co.

   50,150    3,172,991

Reckitt Benckiser Group PLC

   10,672    585,764
       

Household Products Total

      3,758,755
Personal Products – 0.4%      

Avon Products, Inc.

   33,513    1,135,085

Estee Lauder Companies, Inc., Class A

   7,040    456,685
       

Personal Products Total

      1,591,770
Tobacco – 1.3%      

Japan Tobacco, Inc.

   420    1,563,376

Philip Morris International, Inc.

   60,754    3,168,928
       

Tobacco Total

      4,732,304
       

Consumer Staples Total

      17,402,774
     

 

See Accompanying Notes to Financial Statements.

 

5

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)

 

      Shares    Value ($)
Energy – 5.1%      
Energy Equipment & Services – 1.1%   

Baker Hughes, Inc.

   11,670    546,623

Halliburton Co.

   44,634    1,344,822

John Wood Group PLC

   90,300    497,968

Nabors Industries Ltd. (a)

   68,483    1,344,321

Transocean Ltd. (a)

   4,941    426,804
       

Energy Equipment & Services Total

   4,160,538
Oil, Gas & Consumable Fuels – 4.0%   

Alpha Natural Resources, Inc. (a)

   17,000    848,130

Anadarko Petroleum Corp.

   18,100    1,318,223

Apache Corp.

   22,910    2,325,365

BG Group PLC

   58,901    1,019,404

Cabot Oil & Gas Corp.

   10,310    379,408

Cairn Energy PLC (a)

   106,398    673,283

Chevron Corp.

   38,200    2,896,706

Continental Resources, Inc. (a)

   10,530    448,051

EOG Resources, Inc.

   13,990    1,300,231

Karoon Gas Australia Ltd. (a)

   37,459    288,744

Occidental Petroleum Corp.

   23,600    1,995,144

Petroleo Brasileiro SA, ADR

   9,600    427,104

Williams Companies, Inc.

   28,400    656,040
       

Oil, Gas & Consumable Fuels Total

   14,575,833
       

Energy Total

      18,736,371
     
Financials – 8.7%      
Capital Markets – 2.0%      

Credit Suisse Group AG, Registered Shares

   16,002    824,838

Franklin Resources, Inc.

   10,170    1,127,853

Goldman Sachs Group, Inc.

   17,245    2,942,514

Morgan Stanley

   65,140    1,907,951

T. Rowe Price Group, Inc.

   8,680    476,792
       

Capital Markets Total

      7,279,948
Commercial Banks – 2.9%      

Banco Santander SA

   54,805    728,380

BB&T Corp.

   31,500    1,020,285

Fifth Third Bancorp.

   59,940    814,585

Mitsubishi UFJ Financial Group, Inc.

   183,900    963,857

National Bank of Greece SA (a)

   17,318    348,519

PNC Financial Services Group, Inc.

   25,729    1,536,021

Raiffeisen International Bank Holding AG

   30    1,426

Societe Generale

   11,435    719,182

U.S. Bancorp

   77,013    1,993,097

 

      Shares    Value ($)

Wells Fargo & Co.

   68,196    2,122,260

Zions Bancorporation

   16,700    364,394
       

Commercial Banks Total

      10,612,006
Consumer Finance – 0.6%      

American Express Co.

   49,400    2,038,244

Shriram Transport Finance Co. Ltd.

   16,782    196,248
       

Consumer Finance Total

      2,234,492
Diversified Financial Services – 0.9%   

JPMorgan Chase & Co.

   74,328    3,326,178
       

Diversified Financial Services Total

   3,326,178
Insurance – 1.4%      

ACE Ltd.

   11,799    617,087

Axis Capital Holdings Ltd.

   20,300    634,578

Catlin Group Ltd.

   55,692    304,414

Prudential Financial, Inc.

   43,640    2,640,220

Prudential PLC

   47,987    398,691

XL Capital Ltd., Class A

   29,260    553,014
       

Insurance Total

      5,148,004
Real Estate Investment Trusts (REITs) – 0.5%

Equity Residential Property Trust

   13,500    528,525

Rayonier, Inc.

   13,700    622,391

Simon Property Group, Inc.

   9,078    761,644
       

Real Estate Investment Trusts (REITs) Total

      1,912,560
Thrifts & Mortgage Finance – 0.4%      

Housing Development Finance Corp., Ltd.

   22,033    1,332,679
       

Thrifts & Mortgage Finance Total

      1,332,679
       

Financials Total

      31,845,867
     
Health Care – 6.6%      
Biotechnology – 0.9%      

Celgene Corp. (a)

   17,710    1,097,311

CSL Ltd.

   17,940    599,734

Dendreon Corp. (a)

   9,870    359,959

Gilead Sciences, Inc. (a)

   9,650    438,882

NeuroSearch AS (a)

   3,782    115,962

Vertex Pharmaceuticals, Inc. (a)

   12,640    516,597
       

Biotechnology Total

      3,128,445
Health Care Equipment & Supplies – 1.1%   

C.R. Bard, Inc.

   8,350    723,277

CareFusion Corp. (a)

   25,340    669,736

Edwards Lifesciences Corp. (a)

   4,930    487,478

 

See Accompanying Notes to Financial Statements.

 

6

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)

 

      Shares    Value ($)
Health Care (continued)      

Hospira, Inc. (a)

   17,970    1,018,000

Mindray Medical International Ltd., ADR

   21,830    795,049

St. Jude Medical, Inc. (a)

   8,990    369,040
       

Health Care Equipment & Supplies Total

      4,062,580
Health Care Providers & Services – 1.3%

Cardinal Health, Inc.

   25,650    924,170

Express Scripts, Inc. (a)

   6,490    660,422

Medco Health Solutions, Inc. (a)

   31,870    2,057,527

UnitedHealth Group, Inc. (a)

   20,100    656,667

Universal Health Services, Inc., Class B

   11,350    398,272
       

Health Care Providers & Services Total

      4,697,058
Life Sciences Tools & Services – 1.3%

Life Technologies Corp. (a)

   25,300    1,322,431

Millipore Corp. (a)

   2,400    253,440

Qiagen N.V. (a)

   52,369    1,205,254

Thermo Fisher Scientific, Inc. (a)

   38,576    1,984,349
       

Life Sciences Tools & Services Total

   4,765,474
Pharmaceuticals – 2.0%

Abbott Laboratories

   37,960    1,999,733

Allergan, Inc.

   15,000    979,800

Merck & Co., Inc.

   21,028    785,396

Mylan, Inc. (a)

   31,870    723,767

Novo-Nordisk A/S, Class B

   11,553    896,480

Pfizer, Inc.

   68,900    1,181,635

Roche Holding AG, Genusschein Shares

   4,129    669,631
       

Pharmaceuticals Total

      7,236,442
       

Health Care Total

      23,889,999
     
Industrials – 7.2%      
Aerospace & Defense – 1.4%      

General Dynamics Corp.

   5,700    440,040

Goodrich Corp.

   6,000    423,120

Honeywell International, Inc.

   24,100    1,091,007

L-3 Communications Holdings, Inc.

   6,850    627,666

United Technologies Corp.

   34,246    2,520,848
       

Aerospace & Defense Total

      5,102,681

Air Freight & Logistics – 0.4%

     

FedEx Corp.

   7,500    700,500

 

      Shares    Value ($)

United Parcel Service, Inc., Class B

   13,710    883,061
       

Air Freight & Logistics Total

      1,583,561

Building Products – 0.2%

     

Masco Corp.

   47,500    737,200
       

Building Products Total

      737,200

Construction & Engineering – 0.2%

     

Fluor Corp.

   8,900    413,939

Foster Wheeler AG (a)

   13,000    352,820
       

Construction & Engineering Total

      766,759

Electrical Equipment – 0.7%

     

ABB Ltd., Registered Shares (a)

   38,826    848,030

Dongfang Electrical Machinery Co., Ltd., Class H

   115    646

Prysmian SpA

   35,471    697,075

Vestas Wind Systems A/S (a)

   15,485    841,423
       

Electrical Equipment Total

      2,387,174

Industrial Conglomerates – 0.9%

     

General Electric Co.

   108,195    1,969,149

MAX India Ltd. (a)

   168,455    777,081

Tyco International Ltd.

   17,610    673,582
       

Industrial Conglomerates Total

      3,419,812

Machinery – 2.4%

     

Bucyrus International, Inc.

   6,710    442,793

Cummins, Inc.

   5,810    359,929

Eaton Corp.

   7,600    575,852

Flowserve Corp.

   5,980    659,415

GEA Group AG

   22,369    518,450

Illinois Tool Works, Inc.

   35,870    1,698,803

Ingersoll-Rand PLC

   45,970    1,602,974

Kennametal, Inc.

   8,000    224,960

Navistar International Corp. (a)

   11,467    512,919

PACCAR, Inc.

   5,100    221,034

Parker Hannifin Corp.

   11,920    771,701

Sandvik AB

   51,575    644,634

Vallourec

   3,037    612,417
       

Machinery Total

      8,845,881

Professional Services – 0.2%

     

Manpower, Inc.

   12,700    725,424
       

Professional Services Total

      725,424

Road & Rail – 0.2%

     

Canadian National Railway Co.

   7,290    441,701

Con-way, Inc.

   10,150    356,468
       

Road & Rail Total

      798,169

 

See Accompanying Notes to Financial Statements.

 

7

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)

 

      Shares    Value ($)
Industrials (continued)      
Trading Companies & Distributors – 0.4%   

Mitsui & Co., Ltd.

   78,800    1,324,150
       

Trading Companies & Distributors Total

      1,324,150

Transportation Infrastructure – 0.2%

  

Koninklijke Vopak NV (a)

   7,060    556,021
       

Transportation Infrastructure Total

   556,021
       

Industrials Total

      26,246,832
     
Information Technology – 10.3%      
Communications Equipment – 1.4%      

Cisco Systems, Inc. (a)

   99,565    2,591,677

CommScope, Inc. (a)

   15,630    437,953

Nokia Oyj

   36,538    569,006

QUALCOMM, Inc.

   32,260    1,354,597
       

Communications Equipment Total

      4,953,233

Computers & Peripherals – 3.3%

     

Apple, Inc. (a)

   15,980    3,754,181

EMC Corp. (a)

   169,150    3,051,466

Hewlett-Packard Co.

   53,110    2,822,797

International Business Machines Corp.

   16,260    2,085,345

Teradata Corp. (a)

   14,300    413,127
       

Computers & Peripherals Total

      12,126,916
Electronic Equipment, Instruments & Components – 0.2%   

Nippon Electric Glass Co., Ltd.

   51,000    718,440
       

Electronic Equipment, Instruments & Components Total

   718,440
Internet Software & Services – 1.3%   

Akamai Technologies, Inc. (a)

   22,880    718,661

eBay, Inc. (a)

   25,420    685,069

Equinix, Inc. (a)

   6,470    629,790

Google, Inc., Class A (a)

   4,731    2,682,524
       

Internet Software & Services Total

      4,716,044
IT Services – 0.5%      

Cognizant Technology Solutions Corp., Class A (a)

   16,760    854,425

Visa, Inc., Class A

   5,810    528,884

Western Union Co.

   23,400    396,864
       

IT Services Total

      1,780,173

Semiconductors & Semiconductor Equipment – 1.7%

  

Intel Corp.

   38,960    867,249

Lam Research Corp. (a)

   19,119    713,521

 

      Shares    Value ($)

Marvell Technology Group Ltd. (a)

   41,510    845,974

Micron Technology, Inc. (a)

   53,230    553,060

Netlogic Microsystems, Inc. (a)

   10,430    306,955

Novellus Systems, Inc. (a)

   17,550    438,750

Texas Instruments, Inc.

   66,540    1,628,234

Varian Semiconductor Equipment Associates, Inc. (a)

   18,940    627,293
       

Semiconductors & Semiconductor Equipment Total

   5,981,036
Software – 1.9%      

Autonomy Corp. PLC (a)

   32,745    905,858

Microsoft Corp.

   92,455    2,706,158

Nintendo Co. Ltd., ADR

   11,300    470,645

Nuance Communications, Inc. (a)

   47,330    787,571

Oracle Corp.

   32,560    836,467

Salesforce.com, Inc. (a)

   10,420    775,769

Temenos Group AG (a)

   19,071    561,603
       

Software Total

      7,044,071
       

Information Technology Total

      37,319,913
     
Materials – 4.0%      
Chemicals – 1.6%      

Celanese Corp., Series A

   50,090    1,595,367

Linde AG

   4,852    578,924

Monsanto Co.

   14,800    1,057,016

Potash Corp. of Saskatchewan, Inc.

   7,300    871,255

Shin-Etsu Chemical Co., Ltd.

   9,300    540,154

Syngenta AG, Registered Shares

   2,149    596,763

Umicore

   47    1,641

Yara International ASA

   13,315    578,017
       

Chemicals Total

      5,819,137

Containers & Packaging – 0.4%

     

Owens-Illinois, Inc. (a)

   18,480    656,779

Packaging Corp. of America

   31,770    781,860
       

Containers & Packaging Total

      1,438,639

Metals & Mining – 1.6%

     

Allegheny Technologies, Inc.

   26,090    1,408,599

BHP Billiton Ltd.

   20,117    804,687

Nucor Corp.

   18,300    830,454

Rio Tinto PLC, ADR

   1,950    461,624

Steel Dynamics, Inc.

   28,560    498,943

United States Steel Corp.

   12,900    819,408

Walter Energy, Inc.

   4,920    453,968

Xstrata PLC (a)

   36,024    682,510
       

Metals & Mining Total

      5,960,193

 

See Accompanying Notes to Financial Statements.

 

8

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Common Stocks (continued)

 

      Shares    Value ($)
Materials (continued)      
Paper & Forest Products – 0.4%      

International Paper Co.

   17,000    418,370

Weyerhaeuser Co.

   18,400    832,968
       

Paper & Forest Products Total

      1,251,338
       

Materials Total

      14,469,307
     
Telecommunication Services – 1.4%   
Diversified Telecommunication Services – 0.6%

AT&T, Inc.

   61,715    1,594,716

Verizon Communications, Inc.

   17,802    552,218
       

Diversified Telecommunication Services Total

   2,146,934
Wireless Telecommunication Services – 0.8%

American Tower Corp.,
Class A (a)

   18,270    778,485

Millicom International Cellular SA

   4,609    410,892

NII Holdings, Inc. (a)

   22,142    922,436

Vodafone Group PLC

   324,625    748,779
       

Wireless Telecommunication Services Total

   2,860,592
       

Telecommunication Services Total

   5,007,526
     
Utilities – 1.5%      
Electric Utilities – 0.6%      

American Electric Power Co., Inc.

   52,800    1,804,704

Northeast Utilities

   12,821    354,372
       

Electric Utilities Total

      2,159,076
     
Independent Power Producers & Energy Traders – 0.1%

Iberdrola Renovables SA

   103,312    429,081
       

Independent Power Producers & Energy Traders Total

      429,081
Multi-Utilities – 0.8%      

PG&E Corp.

   34,048    1,444,316

Sempra Energy

   16,300    813,370

Wisconsin Energy Corp.

   10,200    503,982
       

Multi-Utilities Total

      2,761,668
       

Utilities Total

      5,349,825
       

Total Common Stocks
(cost of $166,086,867)

      205,817,973

 

Corporate Fixed-Income Bonds & Notes – 11.2%

 

     Par ($)    Value ($)
Basic Materials – 0.4%     
Chemicals – 0.1%     
EI Du Pont de Nemours & Co.     

5.000% 07/15/13

  230,000    249,074
      

Chemicals Total

     249,074
Iron/Steel – 0.2%     
ArcelorMittal USA, Inc.     

6.500% 04/15/14

  425,000    460,684
Nucor Corp.     

5.850% 06/01/18

  380,000    412,502
      

Iron/Steel Total

     873,186
Metals & Mining – 0.1%     
Vale Overseas Ltd.     

6.250% 01/23/17

  500,000    542,095
      

Metals & Mining Total

     542,095
      

Basic Materials Total

     1,664,355
    
Communications – 1.6%     
Media – 0.5%     
Comcast Corp.     

7.050% 03/15/33

  475,000    510,827
News America, Inc.     

6.550% 03/15/33

  495,000    502,259
Time Warner, Inc.     

6.200% 03/15/40

  600,000    592,331
Viacom, Inc.     

6.125% 10/05/17

  225,000    243,248
      

Media Total

     1,848,665

Telecommunication Services – 1.1%

    
America Movil SAB de CV     

5.625% 11/15/17

  460,000    485,936
AT&T, Inc.     

4.950% 01/15/13

  650,000    698,225
British Telecommunications PLC     

5.150% 01/15/13

  400,000    422,946
Cellco Partnership/Verizon Wireless Capital LLC     

5.550% 02/01/14

  625,000    683,026
New Cingular Wireless Services, Inc.     

8.750% 03/01/31

  315,000    406,732
Telefonica Emisiones SAU     

0.580% 02/04/13 (05/04/10) (b)(c)

  750,000    733,696

 

See Accompanying Notes to Financial Statements.

 

9

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Corporate Fixed-Income Bonds & Notes (continued)

 

     Par ($)    Value ($)
Communications (continued)     
Vodafone Group PLC     

5.750% 03/15/16

  370,000    403,727
      

Telecommunication Services Total

     3,834,288
      

Communications Total

     5,682,953
    
Consumer Cyclical – 0.2%     
Retail – 0.2%     
CVS Pass-Through Trust     

7.507% 01/10/32 (d)

  618,704    688,011
      

Retail Total

     688,011
      

Consumer Cyclical Total

     688,011
    
Consumer Non-Cyclical – 1.0%     
Beverages – 0.4%     
Anheuser-Busch InBev Worldwide, Inc.   

2.500% 03/26/13 (d)

  500,000    500,964
Bottling Group LLC     

6.950% 03/15/14

  300,000    347,313
Miller Brewing Co.     

5.500% 08/15/13 (d)(e)

  441,000    472,158
      

Beverages Total

     1,320,435

Food – 0.3%

    
Campbell Soup Co.     

4.500% 02/15/19

  205,000    208,589
ConAgra Foods, Inc.     

5.875% 04/15/14

  450,000    494,048
Kraft Foods, Inc.     

5.375% 02/10/20

  540,000    548,832
      

Food Total

     1,251,469

Healthcare Services – 0.1%

    
Roche Holdings, Inc.     

6.000% 03/01/19 (d)(e)

  325,000    359,166
      

Healthcare Services Total

     359,166

Pharmaceuticals – 0.2%

    
Express Scripts, Inc.     

5.250% 06/15/12

  385,000    410,508
Wyeth     

5.500% 02/01/14

  325,000    358,524
      

Pharmaceuticals Total

     769,032
      

Consumer Non-cyclical Total

     3,700,102
    

 

     Par ($)    Value ($)
Energy – 1.2%     
Oil & Gas – 0.5%     
Canadian Natural Resources Ltd.     

5.700% 05/15/17

  400,000    426,824
Chevron Corp.     

4.950% 03/03/19

  400,000    422,698
Nexen, Inc.     

5.875% 03/10/35

  475,000    451,643
Talisman Energy, Inc.     

6.250% 02/01/38

  465,000    473,169
      

Oil & Gas Total

     1,774,334
Oil & Gas Services – 0.2%     
Halliburton Co.     

5.900% 09/15/18

  325,000    357,132
Weatherford International Ltd.     

5.150% 03/15/13

  340,000    361,276
      

Oil & Gas Services Total

     718,408

Pipelines – 0.5%

    
Enterprise Products Operating LLC     

4.600% 08/01/12

  350,000    369,193
Plains All American Pipeline LP/PAA Finance Corp.   

6.650% 01/15/37

  365,000    378,483
TransCanada Pipelines Ltd.     

6.350% 05/15/67 (05/15/17) (b)(c)

  640,000    608,957
Williams Partners LP     

6.300% 04/15/40 (d)

  370,000    367,671
      

Pipelines Total

     1,724,304
      

Energy Total

     4,217,046
    
Financials – 5.0%     
Banks – 3.3%     
ANZ National International Ltd.     

6.200% 07/19/13 (d)(e)

  650,000    716,329
Bank of New York Mellon Corp.     

5.125% 08/27/13

  650,000    709,349
Barclays Bank PLC     

6.750% 05/22/19

  700,000    774,405
Bear Stearns Cos. LLC     

7.250% 02/01/18

  750,000    866,683
Capital One Financial Corp.     

5.500% 06/01/15

  675,000    709,783

 

See Accompanying Notes to Financial Statements.

 

10

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Corporate Fixed-Income Bonds & Notes (continued)

 

     Par ($)    Value ($)
Financials (continued)     
Citicorp Lease Pass-Through Trust     

8.040% 12/15/19 (d)(e)

  1,360,000    1,500,118
Commonwealth Bank of Australia     

3.750% 10/15/14 (d)

  350,000    354,802
Credit Suisse/New York NY     

6.000% 02/15/18

  700,000    741,147
Deutsche Bank AG London     

4.875% 05/20/13

  475,000    509,022
Goldman Sachs Group, Inc.     

5.350% 01/15/16

  400,000    421,369
HSBC Capital Funding LP     

9.547% 12/31/49 (06/01/10) (b)(c)(d)(e)

  765,000    774,562
Keycorp     

6.500% 05/14/13

  520,000    555,313
Merrill Lynch & Co., Inc.     

6.050% 08/15/12 (f)

  725,000    774,304
Morgan Stanley     

6.750% 04/15/11

  310,000    327,251
Rabobank Nederland NV     

4.750% 01/15/20 (d)

  800,000    799,139
U.S. Bank N.A.     

6.300% 02/04/14

  650,000    724,892
Wachovia Corp.     

4.875% 02/15/14

  650,000    673,379
      

Banks Total

     11,931,847
Diversified Financial Services – 0.4%   
Ameriprise Financial, Inc.     

7.300% 06/28/19

  435,000    504,011
General Electric Capital Corp.     

5.000% 01/08/16

  755,000    791,820
Lehman Brothers Holdings, Inc.     

5.750% 07/18/11 (g)(h)

  750,000    177,188
      

Diversified Financial Services Total

   1,473,019
Insurance – 1.1%     
Chubb Corp.     

5.750% 05/15/18

  375,000    405,445
CNA Financial Corp.     

5.850% 12/15/14

  155,000    157,722

7.350% 11/15/19

  225,000    235,154

 

     Par ($)    Value ($)
Lincoln National Corp.     

8.750% 07/01/19

  485,000    593,044
MetLife, Inc.     

6.817% 08/15/18

  515,000    571,288
Principal Life Income Funding Trusts   

5.300% 04/24/13

  500,000    536,730
Prudential Financial, Inc.     

6.100% 06/15/17

  485,000    512,922
Transatlantic Holdings, Inc.     

8.000% 11/30/39

  550,000    562,104
UnitedHealth Group, Inc.     

5.25081% 03/15/11

  376,000    390,440
      

Insurance Total

     3,964,849
Real Estate Investment Trusts (REITs) – 0.2%
Duke Realty LP     

8.250% 08/15/19

  500,000    557,644
Simon Property Group LP     

6.750% 02/01/40

  300,000    298,428
      

Real Estate Investment Trusts (REITs) Total

   856,072
      

Financials Total

     18,225,787
    
Industrials – 0.6%     
Aerospace & Defense – 0.1%     
United Technologies Corp.     

5.375% 12/15/17

  350,000    377,499
      

Aerospace & Defense Total

     377,499
Miscellaneous Manufacturing – 0.3%   
Ingersoll-Rand Global Holding Co., Ltd.   

9.500% 04/15/14

  425,000    515,328
Tyco International Ltd./Tyco International Finance SA     

7.000% 12/15/19

  465,000    533,657
      

Miscellaneous Manufacturing Total

     1,048,985
Transportation – 0.2%     
Burlington Northern Santa Fe Corp.     

6.200% 08/15/36

  390,000    401,276
Norfolk Southern Corp.     

5.750% 04/01/18

  325,000    348,845
      

Transportation Total

     750,121
      

Industrials Total

     2,176,605
    

 

See Accompanying Notes to Financial Statements.

 

11

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Corporate Fixed-Income Bonds & Notes (continued)

 

     Par ($)    Value ($)
Technology – 0.2%     
Networking Products – 0.1%     
Cisco Systems, Inc.     

4.950% 02/15/19

  525,000    545,966
      

Networking Products Total

     545,966
Software – 0.1%     
Oracle Corp.     

6.500% 04/15/38

  325,000    358,728
      

Software Total

     358,728
      

Technology Total

     904,694
    
Utilities – 1.0%     
Electric – 0.7%     
Commonwealth Edison Co.     

5.950% 08/15/16

  350,000    383,643
Consolidated Edison Co. of New York   

5.850% 04/01/18

  350,000    383,048
Dominion Resources, Inc.     

5.200% 08/15/19

  460,000    470,820
Indiana Michigan Power Co.     

5.650% 12/01/15

  523,000    557,795
Pacific Gas & Electric Co.     

5.800% 03/01/37

  510,000    506,054
Progress Energy, Inc.     

7.750% 03/01/31

  325,000    383,247
      

Electric Total

     2,684,607
Gas – 0.3%     
Atmos Energy Corp.     

6.350% 06/15/17

  400,000    430,174
Sempra Energy     

6.500% 06/01/16

  450,000    502,734
      

Gas Total

     932,908
      

Utilities Total

     3,617,515
      

Total Corporate Fixed-Income Bonds & Notes
(cost of $39,467,704)

   40,877,068

Government & Agency Obligations – 11.0%

  
    
Foreign Government Obligations – 0.7%   
Province of Ontario     

5.450% 04/27/16

  900,000    991,943
Province of Quebec     

4.625% 05/14/18

  760,000    793,114

 

     Par ($)    Value ($)
United Mexican States     

7.500% 04/08/33

  575,000    685,688
      

Foreign Government Obligations Total

     2,470,745
    
U.S. Government Agencies – 1.1%     
Federal Home Loan Bank     

5.500% 08/13/14

  2,055,000    2,312,561
Federal Home Loan Mortgage Corp.   

3.125% 10/25/10 (i)

  95,000    96,395

5.500% 08/23/17

  1,300,000    1,452,318
      

U.S. Government Agencies Total

     3,861,274
    
U.S. Government Obligations – 9.2%   
U.S. Treasury Bonds     

5.375% 02/15/31

  10,096,000    11,168,700
U.S. Treasury Inflation Indexed Notes   

3.000% 07/15/12

  2,771,546    2,985,476
U.S. Treasury Notes     

0.875% 04/30/11

  3,920,000    3,936,080

1.375% 10/15/12

  9,750,000    9,762,188

2.375% 10/31/14

  5,700,000    5,692,430
      

U.S. Government Obligations Total

   33,544,874
    

Total Government & Agency Obligations
(cost of $39,453,730)

   39,876,893

Mortgage-Backed Securities – 9.1%

  
Federal Home Loan Mortgage Corp.   

4.500% 02/01/39

  386,698    388,055

4.500% 04/01/39

  700,554    702,941

4.500% 10/01/39

  873,871    876,848

4.500% 01/01/40

  4,316,874    4,331,582

5.000% 06/01/36

  934,771    966,541

5.000% 07/01/38

  1,547,633    1,600,145

5.000% 11/01/38

  2,248,910    2,325,217

5.000% 08/01/39

  1,290,902    1,334,574

5.500% 07/01/21

  1,486,044    1,595,599

6.500% 07/01/14

  20,749    22,462

6.500% 12/01/14

  19,022    20,593

6.500% 06/01/29

  25,997    28,694

6.500% 01/01/30

  62,806    69,323

6.500% 11/01/37

  1,122,345    1,221,970

7.000% 11/01/29

  41,822    47,039

7.000% 01/01/30

  2,666    2,999

8.000% 07/01/20

  16,178    17,752

 

See Accompanying Notes to Financial Statements.

 

12

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Mortgage-Backed Securities (continued)

 

     Par ($)    Value ($)
Federal National Mortgage Association   

4.000% 01/01/25

  2,888,062    2,934,622

5.500% 03/01/37

  2,320,000    2,449,085

6.000% 11/01/35

  295,183    315,896

6.000% 09/01/36

  704,648    752,112

6.000% 06/01/38

  1,930,428    2,052,919

6.000% 03/01/39

  2,087,960    2,221,425

6.500% 04/01/11

  36,762    38,368

6.500% 05/01/11

  131,593    137,343

6.500% 11/01/25

  2    3

6.500% 08/01/34

  312,938    343,796

6.500% 06/01/38

  1,131,182    1,227,526

7.000% 08/15/23

  116,842    130,541

7.000% 07/01/32

  12,037    13,528

7.000% 01/01/37

  63,700    70,694

7.000% 07/01/37

  395,119    438,613
TBA,     

5.500% 04/01/40

  415,000    437,371
Government National Mortgage Association   

5.000% 08/15/39

  1,210,618    1,261,141

5.500% 09/15/39

  2,252,975    2,388,514

6.000% 12/15/37

  576,269    616,649
    

Total Mortgage-Backed Securities
(cost of $32,600,472)

   33,382,480
    
Commercial Mortgage-Backed Securities – 5.0%

Bear Stearns Commercial Mortgage

Securities, Inc.

4.804% 09/11/42

  1,232,000    1,280,932

4.980% 02/11/41

  512,652    535,334

5.694% 09/11/38 (04/01/10) (b)(c)

  1,500,000    1,614,413
GE Capital Commercial Mortgage Corp.   

4.819% 01/10/38

  1,375,000    1,437,860
JPMorgan Chase Commercial Mortgage Securities Corp.   

5.201% 08/12/37 (04/01/10) (b)(c)

  712,654    743,712

5.440% 06/12/47

  2,040,000    1,993,885

5.447% 06/12/47

  1,023,000    1,047,457

5.506% 12/12/44 (04/01/10) (b)(c)

  1,172,000    1,238,302
LB-UBS Commercial Mortgage Trust   

6.510% 12/15/26

  2,776,737    2,827,198
Morgan Stanley Capital I   

5.325% 12/15/43

  1,500,000    1,588,610

5.386% 03/12/44 (04/01/10) (b)(c)

  2,800,000    2,908,714

 

     Par ($)    Value ($)
Nationslink Funding Corp.   

7.104% 01/22/26

  838,540    913,006
      

Total Commercial Mortgage-Backed Securities
(cost of $17,100,840)

     18,129,423

Collateralized Mortgage Obligations – 1.9%

       
Agency – 1.3%     
Federal Home Loan Mortgage Corp. REMICS   

4.500% 08/15/28

  380,000    397,406
Federal Home Loan Mortgage Corp.   

5.500% 09/15/33

  1,600,000    1,707,056
Federal National Mortgage Association   

4.500% 11/25/23

  1,382,540    1,449,057
Federal National Mortgage Association REMICS   

4.350% 10/25/20

  571,179    589,747

5.000% 12/25/15

  523,768    528,461
      

Agency Total

     4,671,727
    
Non-Agency – 0.6%     
Countrywide Alternative Loan Trust   

5.500% 10/25/35

  870,257    721,236
Residential Asset Securitization Trust   

4.500% 08/25/34

  1,149,891    1,034,453
Washington Mutual Alternative Mortgage
Pass-Through Certificates

5.500% 07/25/35

  472,406    416,339
      

Non-agency Total

     2,172,028
      

Total Collateralized Mortgage Obligations
(cost of $7,129,914)

   6,843,755

Asset-Backed Securities – 1.2%

    
Citicorp Residential Mortgage Securities, Inc.   

6.080% 06/25/37 (04/01/10) (b)(c)

  1,050,000    975,612
Franklin Auto Trust     

5.360% 05/20/16

  1,890,000    1,957,341
Green Tree Financial Corp.     

6.870% 01/15/29

  254,265    267,128
Harley-Davidson Motorcycle Trust   

5.350% 03/15/13

  1,034,171    1,060,667
      

Total Asset-Backed Securities (cost of $4,202,350)

     4,260,748

 

See Accompanying Notes to Financial Statements.

 

13

Columbia Liberty Fund

March 31, 2010 (Unaudited)

Convertible Preferred Stocks – 0.4%

 

     Shares    Value ($)
Financials – 0.2%     
Diversified Financial Services – 0.2%   

Citigroup, Inc., 7.500%

  4,197    511,530
      

Diversified Financial Services Total

   511,530
      

Financials Total

     511,530
    
Materials – 0.2%     
Metals & Mining – 0.2%     

Freeport-McMoRan Copper & Gold, Inc., 6.750%

  6,800    788,596
      

Metals & Mining Total

     788,596
      

Materials Total

     788,596
      

Total Convertible Preferred Stocks
(cost of $700,155)

   1,300,126

Preferred Stock – 0.1%

    
    
Financials – 0.1%     
Commercial Banks – 0.1%     

Fifth Third Bancorp., 8.500%

  1,600    217,888
      

Commercial Banks Total

     217,888
      

Financials Total

     217,888
      

Total Preferred Stock
(cost of $226,575)

     217,888
Short-Term Obligation – 3.1%   Par ($)      

Repurchase agreement with Fixed Income Clearing Corp., dated 03/31/10, due on 04/01/10, at 0.000%, collateralized by U.S. Treasury obligations with various maturities to 01/13/14, market value $11,568,925 (repurchase proceeds $11,328,000)

  11,328,000    11,328,000
      

Total Short-Term Obligation
(cost of $11,328,000)

     11,328,000
      

Total Investments – 99.6%
(cost of $318,296,607)(j)

     362,034,354
      

Other Assets & Liabilities, Net – 0.4%

   1,329,540
      

Net Assets – 100.0%

     363,363,894

Notes to Investment Portfolio:

 

(a) Non-income producing security.

 

(b) Parenthetical date represents the next interest rate reset date for the security.

 

(c) The interest rate shown on floating rate or variable rate securities reflects the rate at March 31, 2010.

 

(d) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2010, the value of these securities, which are not illiquid, amounted to $6,532,920, which represents 1.8% of net assets.

 

(e) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws or in transactions exempt from registration. At March 31, 2010, the value of these securities amounted to $3,822,333, which represent 1.1% of net assets.

 

Security

 

Acquisition
Date

   

Par

 

Acquisition
Cost

 

Market
Value

ANZ National International Ltd. 6.200% 07/19/13

  04/27/2009-
05/19/2009
 
  
  $ 650,000   $ 657,050   $ 716,329

Citicorp Lease Pass-Through Trust, 8.040% 12/15/19

  01/06/2000

04/12/2001


  

    1,360,000     1,371,414     1,500,118

HSBC Capital
Funding LP, 9.547% 12/31/49

  01/02/2003        765,000     935,870     774,562

Miller Brewing Co., 5.500% 08/15/13

  06/09/2009        441,000     450,971     472,158

Roche Holdings, Inc., 6.000% 03/01/19

  07/30/2009        325,000     353,450     359,166
           
        $ 3,822,333
           

 

(f) Investments in affiliates during the six months ended March 31, 2010:

 

Affiliate

 

Value,
beginning
of period

 

Purchases

 

Sales
Proceeds

 

Interest
Income

 

Value,
end of
period

Merrill Lynch & Co., Inc. 6.050% 08/15/12

  $ 773,203   $   $   $ 21,931   $ 774,304

 

(g) Represents fair value as determined in good faith under procedures approved by the Board of Trustees. The value of this security amounted to $177,188, which represents less than 0.1% of net assets.

 

(h) The issuer has filed for bankruptcy protection under Chapter 11. Income is not being accrued. At March 31, 2010, the value of this security amounted to $177,188, which represents less than 0.1% of net assets.

 

(i) All of this security with a market value of $96,395 is pledged as collateral for open futures contracts.

 

(j) Cost for federal income tax purposes is $318,396,943.

The following table summarizes the inputs used, as of March 31, 2010, in valuing the Fund’s assets:

 

Description

 

Quoted
Prices
(Level 1)

 

Other
Significant
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Total

Common Stocks

       

Consumer Discretionary

  $ 19,851,363   $ 5,698,196   $   $ 25,549,559

Consumer Staples

    14,171,944     3,230,830         17,402,774

Energy

    16,256,972     2,479,399         18,736,371

Financials

    26,027,633     5,818,234         31,845,867

Health Care

    20,838,369     3,051,630         23,889,999

Industrials

    19,426,905     6,819,927         26,246,832

Information Technology

    34,565,006     2,754,907         37,319,913

Materials

    10,686,611     3,782,696         14,469,307

Telecommunication Services

    4,258,747     748,779         5,007,526

Utilities

    4,920,744     429,081         5,349,825
                       

Total Common Stocks

    171,004,294     34,813,679         205,817,973
                       

 

See Accompanying Notes to Financial Statements.

 

14

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Description

 

Quoted
Prices
(Level 1)

 

Other
Significant
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Total

Total Corporate Fixed-Income Bonds & Notes

  $   $ 40,877,068   $   $ 40,877,068
                       

Government & Agency Obligations

   

Foreign Government Obligations

        2,470,745         2,470,745

U.S. Government Agencies

        3,861,274         3,861,274

U.S. Government Obligations

    33,544,874             33,544,874
                       

Total Government & Agency Obligations

    33,544,874     6,332,019         39,876,893
                       

Total Mortgage-Backed Securities

    437,371     32,945,109         33,382,480
                       

Total Commercial Mortgage-Backed Securities

        18,129,423         18,129,423
                       

Total Collateralized Mortgage Obligations

        6,843,755         6,843,755
                       

Total Asset-Backed Securities

        4,260,748         4,260,748
                       

Total Convertible Preferred Stocks

    1,300,126             1,300,126
                       

Total Preferred Stock

    217,888             217,888
                       

Total Short-Term Obligation

        11,328,000         11,328,000
                       

Total Investments

    206,504,553     155,529,801         362,034,354
                       

Unrealized Appreciation on Futures Contracts

    168,376             168,376
                       

Total

  $ 206,672,929   $ 155,529,801   $   $ 362,202,730
                       

 

The Fund’s assets assigned to Level 2 input category include certain foreign securities for which a third party statistical pricing service may be employed for purposes of fair market valuation.

For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

 

At March 31, 2010, the Fund held the following open long futures contracts:

Equity Risk

 

Type

 

Number of
Contracts

 

Value

 

Aggregate
Face Value

 

Expiration
Date

 

Unrealized
Appreciation

S&P 500 Index Futures

  14   $ 4,078,200   $ 3,991,117   June-2010   $ 87,083

At March 31, 2010, the Fund held the following open short futures contracts:

Interest Rate Risk

 

Type

 

Number of
Contracts

 

Value

 

Aggregate
Face Value

 

Expiration
Date

 

Unrealized
Appreciation

5-Year U.S. Treasury Notes

  79   $ 9,072,656   $ 9,153,949   June-2010   $ 81,293

At March 31, 2010, cash of $1,215,000 was pledged as collateral for open futures contracts.

At March 31, 2010, asset allocation of the Fund is as follows:

 

Asset Allocation

  

% of
Net Assets

Common Stocks

   56.6

Corporate Fixed-Income Bonds & Notes

   11.2

Government & Agency Obligations

   11.0

Mortgage-Backed Securities

   9.1

Commercial Mortgage-Backed Securities

   5.0

Collateralized Mortgage Obligations

   1.9

Asset-Backed Securities

   1.2

Convertible Preferred Stocks

   0.4

Preferred Stock

   0.1
    
   96.5

Short-Term Obligation

   3.1

Other Assets & Liabilities, Net

   0.4
    
   100.0
    

 

Acronym

  

Name

ADR    American Depositary Receipt
TBA    To Be Announced

 

See Accompanying Notes to Financial Statements.

 

15

Statement of Assets and Liabilities – Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

          ($)  
Assets   

Unaffiliated investments, at identified cost

   317,572,622   
  

Affiliated investments, at identified cost

   723,985   
         
  

Total investments, at identified cost

   318,296,607   
  

Unaffiliated investments, at value

   361,260,050   
  

Affiliated investments, at value

   774,304   
         
  

Total investments, at value

   362,034,354   
  

Foreign currency (cost of $32,504)

   32,518   
  

Cash collateral for open futures contracts

   1,215,000   
  

Receivable for:

  
  

Investments sold

   2,891,183   
  

Fund shares sold

   14,172   
  

Dividends

   262,371   
  

Interest

   1,071,600   
  

Foreign tax reclaims

   47,631   
  

Trustees’ deferred compensation plan

   85,239   
  

Prepaid expenses

   7,532   
  

Other assets

   20,590   
           
  

Total Assets

   367,682,190   
Liabilities   

Payable to custodian bank

   574   
  

Payable for:

  
  

Investments purchased

   3,232,229   
  

Fund shares repurchased

   522,691   
  

Futures variation margin

   32,598   
  

Investment advisory fee

   169,581   
  

Pricing and bookkeeping fees

   11,279   
  

Transfer agent fee

   87,569   
  

Trustees’ fees

   909   
  

Custody fee

   23,923   
  

Distribution and service fees

   83,313   
  

Chief compliance officer expenses

   139   
  

Trustees’ deferred compensation plan

   85,239   
  

Other liabilities

   68,252   
           
  

Total Liabilities

   4,318,296   
           
  

Net Assets

   363,363,894   
Net Assets Consist of   

Paid-in capital

   387,654,536   
  

Overdistributed net investment income

   (58,360
  

Accumulated net realized loss

   (68,143,047
  

Net unrealized appreciation (depreciation) on:

  
  

Investments

   43,737,747   
  

Foreign currency translations

   4,642   
  

Futures contracts

   168,376   
           
  

Net Assets

   363,363,894   

 

See Accompanying Notes to Financial Statements.

 

16

Statement of Assets and Liabilities (continued) – Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

             
Class A   

Net assets

   $ 348,568,209   
  

Shares outstanding

     46,685,097   
  

Net asset value per share

   $ 7.47 (a) 
  

Maximum sales charge

     5.75
  

Maximum offering price per share ($7.47/0.9425)

   $ 7.93 (b) 
Class B   

Net assets

   $ 9,606,505   
  

Shares outstanding

     1,280,793   
  

Net asset value and offering price per share

   $ 7.50 (a) 
Class C   

Net assets

   $ 4,199,038   
  

Shares outstanding

     561,397   
  

Net asset value and offering price per share

   $ 7.48 (a) 
Class Z   

Net assets

   $ 990,142   
  

Shares outstanding

     123,092   
  

Net asset value, offering and redemption price per share

   $ 8.04   

 

 

 

 

 

(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

 

(b) On sales of $50,000 or more the offering price is reduced.

 

See Accompanying Notes to Financial Statements.

 

17

Statement of Operations – Columbia Liberty Fund

For the Six Months Ended March 31, 2010 (Unaudited)

 

 

          ($)  
Investment Income   

Dividends

   1,611,460   
  

Interest

   3,375,401   
  

Interest from affiliates

   21,931   
  

Foreign taxes withheld

   (15,162
           
  

Total Investment Income

   4,993,630   
Expenses   

Investment advisory fee

   998,766   
  

Distribution fee:

  
  

Class B

   40,809   
  

Class C

   15,790   
  

Service fee:

  
  

Class A

   418,224   
  

Class B

   13,093   
  

Class C

   5,073   
  

Transfer agent fee

   325,447   
  

Pricing and bookkeeping fees

   58,880   
  

Trustees’ fees

   15,532   
  

Custody fee

   70,163   
  

Chief compliance officer expenses

   349   
  

Other expenses

   148,110   
           
  

Total Expenses

   2,110,236   
  

Expense reductions

   (377
           
  

Net Expenses

   2,109,859   
           
  

Net Investment Income

   2,883,771   

Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency

  

Net realized gain (loss) on:

  
  

Investments

   12,653,514   
  

Foreign currency transactions

   (13,378
  

Futures contracts

   676,269   
           
  

Net realized gain

   13,316,405   
  

Net change in unrealized appreciation (depreciation) on:

  
  

Investments

   7,669,300   
  

Foreign currency translations

   (495
  

Futures contracts

   129,758   
  

Foreign capital gains tax

   70,593   
           
  

Net change in unrealized appreciation (depreciation)

   7,869,156   
           
  

Net Gain

   21,185,561   
           
  

Net Increase Resulting from Operations

   24,069,332   

 

See Accompanying Notes to Financial Statements.

 

18

Statement of Changes in Net Assets – Columbia Liberty Fund

 

Increase (Decrease) in Net Assets         (Unaudited)
Six Months
Ended
March 31,
2010 ($)
     Year
Ended
September 30,
2009 ($)
 
Operations   

Net investment income

   2,883,771       7,892,596   
  

Net realized gain (loss) on investments, futures contracts and foreign currency transactions

   13,316,405       (66,041,687
  

Net change in unrealized appreciation (depreciation) on investments, futures contracts, foreign currency translations and foreign capital gains tax

   7,869,156       53,611,790   
                  
  

Net increase (decrease) resulting from operations

   24,069,332       (4,537,301
Distributions to Shareholders   

From net investment income:

     
  

Class A

   (3,225,002    (7,937,444
  

Class B

   (60,717    (263,578
  

Class C

   (23,487    (62,787
  

Class Z

   (9,078    (19,444
                  
  

Total distributions to shareholders

   (3,318,284    (8,283,253
  

Net Capital Stock Transactions

   (23,444,537    (44,655,167
  

Increase from regulatory settlements

   20,590         
                  
  

Total decrease in net assets

   (2,672,899    (57,475,721
Net Assets   

Beginning of period

   366,036,793       423,512,514   
  

End of period

   363,363,894       366,036,793   
  

Undistributed (overdistributed) net investment income at end of period

   (58,360    376,153   

 

See Accompanying Notes to Financial Statements.

 

19

Statement of Changes in Net Assets (continued) – Columbia Liberty Fund

 

       Capital Stock Activity  
       (Unaudited)
Six Months Ended
March 31, 2010
         Year Ended
September 30, 2009
 
        Shares      Dollars ($)           Shares      Dollars ($)  

Class A

               

Subscriptions

     469,408       3,406,452         1,615,185       9,816,547   

Distributions reinvested

     403,347       2,940,172         1,176,047       7,279,444   

Redemptions

     (3,673,322    (26,550,147      (8,541,579    (52,173,187
                                 

Net decrease

     (2,800,567    (20,203,523      (5,750,347    (35,077,196

Class B

               

Subscriptions

     12,430       91,243         82,928       496,044   

Distributions reinvested

     7,817       57,002         41,084       251,924   

Redemptions

     (428,573    (3,129,657      (1,730,218    (10,553,453
                                 

Net decrease

     (408,326    (2,981,412      (1,606,206    (9,805,485

Class C

               

Subscriptions

     20,772       150,562         121,898       763,588   

Distributions reinvested

     3,020       21,986         9,606       59,444   

Redemptions

     (63,649    (463,177      (104,380    (644,439
                                 

Net increase (decrease)

     (39,857    (290,629      27,124       178,593   

Class Z

               

Subscriptions

     12,041       93,334         23,681       151,192   

Distributions reinvested

     1,070       8,416         2,750       18,379   

Redemptions

     (8,936    (70,723      (17,473    (120,650
                                 

Net increase

     4,175       31,027         8,958       48,921   

 

See Accompanying Notes to Financial Statements.

 

20

Financial Highlights – Columbia Liberty Fund

Selected data for a share outstanding throughout each period is as follows:

 

   

(Unaudited)
Six Months
Ended
March 31,

    Year Ended September 30,  
Class A Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 7.05      $ 7.15      $ 9.63      $ 8.79      $ 8.36      $ 7.68   

Income from Investment Operations:

           

Net investment income (a)

    0.06        0.15        0.18        0.19        0.18        0.15   

Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts, foreign capital gains tax and
written options

    0.43        (0.10     (1.53     1.12        0.44        0.70   
                                               

Total from investment operations

    0.49        0.05        (1.35     1.31        0.62        0.85   

Less Distributions to Shareholders:

           

From net investment income

    (0.07     (0.15     (0.20     (0.21     (0.19     (0.17

From net realized gains

                  (0.93     (0.26              
                                               

Total distributions to shareholders

    (0.07     (0.15     (1.13     (0.47     (0.19     (0.17

Increase from regulatory settlements

    (b)                                    

Net Asset Value, End of Period

  $ 7.47      $ 7.05      $ 7.15      $ 9.63      $ 8.79      $ 8.36   

Total return (c)

    6.94 %(d)      1.07 %(e)      (15.83 )%      15.29     7.47 %(f)(g)      11.12 %(f) 

Ratios to Average Net Assets/
Supplemental Data:

           

Net expenses before interest expense

    1.13 %(h)(i)      1.16 %(i)      1.03 %(j)      1.04 %(i)      1.03 %(i)      1.13 %(i) 

Interest expense

                  %(k)                      

Net expenses

    1.13 %(h)(i)      1.16 %(i)      1.03 %(j)      1.04 %(i)      1.03 %(i)      1.13 %(i) 

Waiver/Reimbursement

                                0.01     0.01

Net investment income

    1.62 %(h)(i)      2.36 %(i)      2.18 %(j)      2.06 %(i)      2.07 %(i)      1.88 %(i) 

Portfolio turnover rate

    46 %(d)      105     88     106     98     83

Net assets, end of period (000s)

  $ 348,568      $ 348,922      $ 394,884      $ 532,413      $ 514,826      $ 545,773   

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Rounds to less than $0.01 per share.

 

(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

 

(d) Not annualized.

 

(e) Total return includes a reimbursement of a loss experienced by the Fund due to a compliance violation. This reimbursement had an impact of less than 0.01% on total return.

 

(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(g) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01%.

 

(h) Annualized.

 

(i) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(j) The benefits derived from expense reductions had an impact of 0.01%.

 

(k) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

21

Financial Highlights – Columbia Liberty Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class B Shares   2010     2009     2008     2007     2006     2005  

Net Asset Value, Beginning of Period

  $ 7.08      $ 7.18      $ 9.62      $ 8.78      $ 8.36      $ 7.68   

Income from Investment Operations:

           

Net investment income (a)

    0.03        0.10        0.12        0.12        0.11        0.09   

Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts, foreign capital gains tax and written options

    0.43        (0.09     (1.54     1.12        0.43        0.70   
                                               

Total from investment operations

    0.46        0.01        (1.42     1.24        0.54        0.79   

Less Distributions to Shareholders:

           

From net investment income

    (0.04     (0.11     (0.09     (0.14     (0.12     (0.11

From net realized gains

                  (0.93     (0.26              
                                               

Total distributions to shareholders

    (0.04     (0.11     (1.02     (0.40     (0.12     (0.11

Increase from regulatory settlements

    (b)                                    

Net Asset Value, End of Period

  $ 7.50      $ 7.08      $ 7.18      $ 9.62      $ 8.78      $ 8.36   

Total return (c)

    6.52 %(d)      0.32 %(e)      (16.51 )%      14.46     6.55 %(f)(g)      10.30 %(f) 

Ratios to Average Net Assets/Supplemental Data:

           

Net expenses before interest expense

    1.88 %(h)(i)      1.91 %(i)      1.78 %(j)      1.79 %(i)      1.78 %(i)      1.88 %(i) 

Interest expense

                  %(k)                      

Net expenses

    1.88 %(h)(i)      1.91 %(i)      1.78 %(j)      1.79 %(i)      1.78 %(i)      1.88 %(i) 

Waiver/Reimbursement

                                0.01     0.01

Net investment income

    0.87 %(h)(i)      1.67 %(i)      1.39 %(j)      1.28 %(i)      1.31 %(i)      1.14 %(i) 

Portfolio turnover rate

    46 %(d)      105     88     106     98     83

Net assets, end of period (000s)

  $ 9,607      $ 11,965      $ 23,672      $ 51,229      $ 85,766      $ 130,724   

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Rounds to less than $0.01 per share.

 

(c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

 

(d) Not annualized.

 

(e) Total return includes a reimbursement of a loss experienced by the Fund due to a compliance violation. This reimbursement had an impact of less than 0.01% on total return.

 

(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(g) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01%.

 

(h) Annualized.

 

(i) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(j) The benefits derived from expense reductions had an impact of 0.01%.

 

(k) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

22

Financial Highlights – Columbia Liberty Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class C Shares   2010     2009      2008      2007      2006     2005  

Net Asset Value, Beginning of Period

  $ 7.06      $ 7.16       $ 9.59       $ 8.76       $ 8.34      $ 7.66   

Income from Investment Operations:

              

Net investment income (a)

    0.03        0.10         0.12         0.12         0.11        0.09   

Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts, foreign capital gains tax and written options

    0.43        (0.09      (1.53      1.11         0.43        0.70   
                                                  

Total from investment operations

    0.46        0.01         (1.41      1.23         0.54        0.79   

Less Distributions to Shareholders:

              

From net investment income

    (0.04     (0.11      (0.09      (0.14      (0.12     (0.11

From net realized gains

                   (0.93      (0.26               
                                                  

Total distributions to shareholders

    (0.04     (0.11      (1.02      (0.40      (0.12     (0.11

Increase from regulatory settlements

    (b)                                       

Net Asset Value, End of Period

  $ 7.48      $ 7.06       $ 7.16       $ 9.59       $ 8.76      $ 8.34   

Total return (c)

    6.54 %(d)      0.33 %(e)       (16.46 )%       14.38      6.56 %(f)(g)      10.33 %(f) 

Ratios to Average Net Assets/Supplemental Data:

              

Net expenses before interest expense

    1.88 %(h)(i)      1.91 %(i)       1.78 %(j)       1.79 %(i)       1.78 %(i)      1.88 %(i) 

Interest expense

                   %(k)                        

Net expenses

    1.88 %(h)(i)      1.91 %(i)       1.78 %(j)       1.79 %(i)       1.78 %(i)      1.88 %(i) 

Waiver/Reimbursement

                                   0.01     0.01

Net investment income

    0.87 %(h)(i)      1.60 %(i)       1.43 %(j)       1.31 %(i)       1.31 %(i)      1.13 %(i) 

Portfolio turnover rate

    46 %(d)      105      88      106      98     83

Net assets, end of period (000s)

  $ 4,199      $ 4,247       $ 4,112       $ 5,447       $ 5,076      $ 5,478   

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Rounds to less than $0.01 per share.

 

(c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

 

(d) Not annualized.

 

(e) Total return includes a reimbursement of a loss experienced by the Fund due to a compliance violation. This reimbursement had an impact of less than 0.01% on total return.

 

(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(g) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01%.

 

(h) Annualized.

 

(i) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(j) The benefits derived from expense reductions had an impact of 0.01%.

 

(k) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

23

Financial Highlights – Columbia Liberty Fund

Selected data for a share outstanding throughout each period is as follows:

 

    (Unaudited)
Six Months
Ended
March 31,
    Year Ended September 30,  
Class Z Shares   2010     2009      2008      2007      2006     2005  

Net Asset Value, Beginning of Period

  $ 7.59      $ 7.68       $ 10.28       $ 9.34       $ 8.88      $ 8.15   

Income from Investment Operations:

              

Net investment income (a)

    0.07        0.17         0.22         0.22         0.21        0.18   

Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts, foreign capital gains tax and written options

    0.46        (0.09      (1.65      1.21         0.46        0.74   
                                                  

Total from investment operations

    0.53        0.08         (1.43      1.43         0.67        0.92   

Less Distributions to Shareholders:

              

From net investment income

    (0.08     (0.17      (0.24      (0.23      (0.21     (0.19

From net realized gains

                   (0.93      (0.26               
                                                  

Total distributions to shareholders

    (0.08     (0.17      (1.17      (0.49      (0.21     (0.19

Increase from regulatory settlements

    (b)                                       

Net Asset Value, End of Period

  $ 8.04      $ 7.59       $ 7.68       $ 10.28       $ 9.34      $ 8.88   

Total return (c)

    6.95 %(d)      1.35 %(e)       (15.67 )%       15.72      7.60 %(f)(g)      11.33 %(f) 

Ratios to Average Net Assets/Supplemental Data:

              

Net expenses before interest expense

    0.89 %(h)(i)      0.92 %(i)       0.79 %(j)       0.80 %(i)       0.79 %(i)      0.90 %(i) 

Interest expense

                   %(k)                        

Net expenses

    0.89 %(h)(i)      0.92 %(i)       0.79 %(j)       0.80 %(i)       0.79 %(i)      0.90 %(i) 

Waiver/Reimbursement

                                   0.01     0.01

Net investment income

    1.86 %(h)(i)      2.58 %(i)       2.44 %(j)       2.29 %(i)       2.34 %(i)      2.11 %(i) 

Portfolio turnover rate

    46 %(d)      105      88      106      98     83

Net assets, end of period (000s)

  $ 990      $ 903       $ 845       $ 856       $ 1,175      $ 700   

 

(a) Per share data was calculated using the average shares outstanding during the period.

 

(b) Rounds to less than $0.01 per share.

 

(c) Total return at net asset value assuming all distributions reinvested.

 

(d) Not annualized.

 

(e) Total return includes a reimbursement of a loss experienced by the Fund due to a compliance violation. This reimbursement had an impact of less than 0.01% on total return.

 

(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

 

(g) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01%.

 

(h) Annualized.

 

(i) The benefits derived from expense reductions had an impact of less than 0.01%.

 

(j) The benefits derived from expense reductions had an impact of 0.01%.

 

(k) Rounds to less than 0.01%.

 

See Accompanying Notes to Financial Statements.

 

24

Notes to Financial Statements – Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Note 1. Organization

Columbia Liberty Fund (the “Fund”), a series of Columbia Funds Series Trust I (the “Trust”), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company organized as a Massachusetts business trust.

Investment Objective

The Fund seeks total return, consisting of current income and long-term capital appreciation.

Fund Shares

The Trust may issue an unlimited number of shares, and the Fund offers four classes of shares: Class A, Class B, Class C and Class Z. Each share class has its own expense structure and sales charges, as applicable. The Fund no longer accepts investments from new or existing investors in the Fund’s Class B shares, except in connection with the reinvestment of any dividend and/or capital gain distributions in Class B shares of the Fund and exchanges by existing Class B shareholders of the other Columbia Funds.

Class A shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within one year after purchase. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Fund’s prospectus.

Note 2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

Security Valuation

Debt securities generally are valued by pricing services approved by the Trust’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available may also be valued based upon an over-the-counter or exchange bid quotation.

Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis.

Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Short-term investments maturing in 60 days or less are valued at amortized cost, which approximates market value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.

 

25

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net asset value of the Fund’s shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Fund’s net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Trustees.

The Fund may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation.

Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. If a security is valued at fair value, such value is likely to be different from the last quoted market price for the security. The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine value.

GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical securities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:

   

Level 1 – quoted prices in active markets for identical securities

 
   

Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others)

 
   

Level 3 – prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management’s own assumptions about the factors market participants would use in pricing an investment.

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

On January 21, 2010, the FASB issued an Accounting Standards Update (the amendment), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, which provides guidance on how investment assets and liabilities are to be valued and disclosed. Specifically, the amendment requires reporting entities to disclose the input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements for Level 2 or Level 3 positions. The amendment also requires that transfers between all levels (including Level 1 and Level 2) be disclosed on a gross basis (i.e., transfers out must be disclosed separately from transfers in), and the reason(s) for the transfer. Additionally purchases, sales, issuances and settlements must be disclosed on a gross basis in the Level 3 rollforward. The effective date of the amendment is for interim and annual periods beginning after December 15, 2009, however, the requirement to provide the Level 3 activity for purchases, sales, issuances and settlements on a gross basis will be effective for interim and annual periods beginning after December 15, 2010. At this time, management is evaluating the implications of the amendment and the impact to the financial statements.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

Derivative Instruments

The Fund may invest in derivative instruments. For additional information on derivative instruments, please see Note 6.

 

26

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Repurchase Agreements

The Fund may engage in repurchase agreement transactions with institutions that Columbia Management Advisors, LLC (“Columbia”), the Fund’s investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement. Columbia is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.

Treasury Inflation Protected Securities

The Funds may invest in treasury inflation protected securities (“TIPS”). The principal amount of TIPS is adjusted periodically and is increased for inflation or decreased for deflation based on a monthly published index. Interest payments are based on the adjusted principal at the time the interest is paid. These adjustments are recorded as interest income on the Statements of Operations.

Foreign Currency Transactions and Translations

The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day’s exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.

For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments on the Statement of Operations.

 

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.

Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Fund becomes aware of such, net of any non-reclaimable tax withholdings.

Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.

Awards from class action litigation are recorded as a reduction of cost if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains.

The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities.

Expenses

General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.

Determination of Class Net Asset Value

All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

Federal Income Tax Status

The Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the

 

27

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no provision is made for federal income or excise taxes.

Foreign Capital Gains Taxes

Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 15%. The Fund accrues for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction.

Distributions to Shareholders

 

Distributions from net investment income are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.

Indemnification

In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust’s organizational documents and by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.

Note 3. Federal Tax Information

The tax character of distributions paid during the year ended September 30, 2009 was as follows:

 

      

Distributions paid from:

  

Ordinary Income*

   $ 8,283,253

Long-Term Capital Gains

     —  
* For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions.

Unrealized appreciation and depreciation at March 31, 2010, based on cost of investments for federal income tax purposes and excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates were:

 

       

Unrealized appreciation

  $ 47,539,509   

Unrealized depreciation

    (3,902,098

Net unrealized appreciation

  $ 43,637,411   

The following capital loss carryforwards, determined as of September 30, 2009, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:

 

     
Year of Expiration   Capital Loss Carryforward
2017   $25,018,329

Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.

Note 4. Fees and Compensation Paid to Affiliates

Investment Advisory Fee

Columbia, an indirect, wholly owned subsidiary of Bank of America Corporation (“BOA”) provides investment advisory, administrative and other services to the Fund. Columbia receives a monthly investment advisory fee based on the Fund’s average daily net assets at the following annual rates:

 

28

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

       
Average Daily Net Assets   Annual Fee Rate  

First $1 billion

  0.55

$1 billion to $1.5 billion

  0.50

Over $1.5 billion

  0.45

For the six month period ended March 31, 2010, the Fund’s annualized effective investment advisory fee rate was 0.55% of the Fund’s average daily net assets.

Bank of America, N.A., an indirect parent company of Columbia, entered into an agreement dated September 29, 2009, to sell a portion of the asset management business of Columbia Management Group, LLC to Ameriprise Financial, Inc. (“Ameriprise Financial”). The transaction (“Transaction”) includes the sale of the part of the asset management business that advises long-term mutual funds, including the Fund. The Transaction is subject to certain approvals and other conditions to closing, and is currently expected to close on or about April 30, 2010 (the “Closing”).

In connection with the Closing, certain changes will occur, including a change in the entities serving as the investment advisor, administrator, distributor and transfer agent of the Fund. RiverSource Investments, LLC (the “New Advisor”), a subsidiary of Ameriprise Financial, will become the investment advisor of the Fund upon the Closing. On March 3, 2010, the Fund’s shareholders approved, among other matters, the proposed investment management services agreement with the New Advisor. The New Advisor will serve as investment advisor under a new investment management services agreement effective upon the Closing. The New Advisor will change its name to Columbia Management Investment Advisers, LLC upon or shortly after the Closing. Effective upon the Closing, as the context requires, references to Columbia shall be deemed to refer to the New Advisor.

Sub-Advisory Fee

Nordea Investment Management North America, Inc. (“NIMNAI”) has been retained by Columbia to serve as the investment sub-advisor and to manage a portion of the Fund’s assets. As the sub-advisor, and subject to the oversight of Columbia and the Fund’s Board of Trustees, NIMNAI is responsible for daily investment operations, including placing all orders for the purchase and sale of portfolio securities for foreign stocks of the Fund. Columbia, from the investment advisory fee it receives, pays NIMNAI a monthly sub-advisory fee.

Pricing and Bookkeeping Fees

The Fund has entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank and Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Fund. The Fund has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) with State Street and Columbia pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Fund also reimburses State Street for certain out-of-pocket expenses and charges.

Among other updates to the State Street Agreements, Columbia will assign and delegate its rights and obligations thereunder to the New Advisor upon the Closing.

The Fund has entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, the Fund reimburses Columbia for out-of-pocket expenses.

The Services Agreement will be terminated upon the Closing, and the services provided thereunder will be covered under the administrative services agreement with the New Advisor.

Transfer Agent Fee

Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Fund and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Effective November 1, 2009, the Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $22.36

 

29

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

per account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. Prior to November 1, 2009, the annual rate was $17.34 per account. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Fund.

The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, Individual Retirement Account (“IRA”) trustee agent fees and account transcript fees due to the Transfer Agent from shareholders of the Fund and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Fund. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

RiverSource Service Corporation (the “New Transfer Agent”), a subsidiary of Ameriprise Financial, will become the transfer agent of the Fund upon the Closing. The New Transfer Agent will change its name to Columbia Management Investment Services Corp. upon or shortly after the Closing.

An annual minimum account balance fee of $20 may apply to certain accounts with a value below the Fund’s initial minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the six month period ended March 31, 2010, no minimum account balance fees were charged by the Fund.

Underwriting Discounts, Service and Distribution Fees

Columbia Management Distributors, Inc. (the “Distributor”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Fund’s shares. For the six month period ended March 31, 2010, the Distributor has retained net underwriting discounts of $5,374 on sales of the Fund’s Class A shares and net CDSC fees of $130, $4,813 and $377 on Class A, Class B and Class C share redemptions, respectively.

RiverSource Fund Distributors, Inc. (the “New Distributor”), a subsidiary of Ameriprise Financial, will become the distributor of the Fund upon the Closing. The New Distributor will change its name to Columbia Management Investment Distributors, Inc. upon or shortly after the Closing.

The Fund has adopted plans pursuant to Rule 12b-1 under the 1940 Act (the “Plans”) for Class A, Class B and Class C shares, which require the payment of a monthly service fee to the Distributor. The annual service fee portion of the Plans may equal up to 0.15% of net assets attributable to shares issued prior to April 1, 1989 and 0.25% on net assets attributable to shares issued thereafter. This arrangement results in a rate of service fee for all shares that is a blend between the 0.15% and 0.25% annual rates. For the six month period ended March 31, 2010, the Class A, Class B and Class C shares’ annualized effective service fee rate was 0.24%.

The Plans also require the payment of a monthly distribution fee to the Distributor at the annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares only.

The CDSC and the distribution fees received from the Plans are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares.

Fee Waivers and Expense Reimbursements

Columbia has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.95% of the Fund’s average daily net assets on an annualized basis. Columbia, in its discretion, may revise or discontinue this arrangement at any time.

Fees Paid to Officers and Trustees

All officers of the Fund are employees of Columbia or its affiliates and, with the exception of the Fund’s Chief Compliance Officer, receive no compensation from the Fund. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer. The Fund’s expenses for the Chief Compliance Officer will not exceed $15,000 per year.

 

30

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. The Trust’s eligible Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund’s assets.

Other Related Party Transactions

In connection with the purchase and sale of its securities during the period, the Fund used one or more brokers that are affiliates of BOA. Total brokerage commissions paid to affiliated brokers for the six month period ended March 31, 2010 were $270.

Note 5. Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. For the six month period ended March 31, 2010, these custody credits reduced total expenses by $377 for the Fund.

Note 6. Objectives and Strategies for Investing in Derivative Instruments

The Fund uses derivatives instruments including futures contracts in order to meet its investment objectives. The Fund employs strategies in differing combinations to permit it to increase, decrease or change the level of exposure to market risk factors. The achievement of any strategy relating to derivatives depends on an analysis of various risk factors, and if the strategies for the use of derivatives do not work as intended, the Fund may not achieve its investment objectives.

In pursuit of its investment objectives, the Fund is exposed to the following market risks:

Equity Risk: Equity risk relates to changes in value of equity securities such as common stocks due to general market conditions such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, or adverse investor sentiment. Equity securities generally have greater price volatility than fixed income securities.

 

Interest Rate Risk: Interest rate risk relates to the fluctuation in value of fixed income securities because of the inverse relationship of price and yield. Fixed income securities generally will decline in value upon an increase in general interest rates and their value generally will increase upon a decline in general interest rates. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations.

The following notes provide more detailed information about the derivative type held by the Fund:

Futures Contracts–The Fund entered into U.S. Treasury Note futures contracts to manage the duration and yield curve exposure of the Fund versus the benchmark and equity index futures contracts to equitize cash in order to maintain appropriate equity market exposure while keeping sufficient cash to accommodate daily redemptions.

The use of futures contracts involves certain risks, which include, among others: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instruments or the underlying securities, and (3) an inaccurate prediction of the future direction of interest rates by Columbia.

Upon entering into a futures contract, the Fund identifies within its portfolio of investments cash or securities in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires.

Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.

During the six month period ended March 31, 2010, the Fund entered into 249 futures contracts.

The following table is a summary of the value of the Fund’s derivative instruments as of March 31, 2010:

 

31

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

Fair Value of Derivative Instruments

Statement of Assets and Liabilities

   

Assets

   Fair Value   

Liabilities

   Fair Value

Futures
variation

margin

     $—    Futures variation margin    $32,598*

 

* Includes only the current day’s variation margin.

The effect of derivative instruments on the Fund’s Statement of Operations for the six month period ended March 31, 2010:

 

 

Amount of Realized Gain or (Loss) and Change in
Unrealized Appreciation or (Depreciation) on Derivatives
Recognized in Income

    Risk
Exposure
   Net Realized
Gain (Loss)
   Change in
Unrealized
Appreciation
(Depreciation)
Futures Contracts   Interest
Rate/
Equity
   $676,269    $129,758

Note 7. Portfolio Information

For the six month period ended March 31, 2010, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, for the Fund were $158,536,001 and $178,146,011, respectively, of which $49,226,278 and $45,013,780, respectively, were U.S. Government securities.

Note 8. Regulatory Settlements

During the six month period ended March 31, 2010, the Fund received payments totaling $20,590 relating to certain regulatory settlements with third parties that the Fund had participated in during the six month period. The payments have been included in “Increase from regulatory settlements” on the Statement of Changes in Net Assets.

Note 9. Line of Credit

The Fund and other affiliated funds participate in a $280,000,000 committed, unsecured revolving line of credit provided by State Street. The maximum amount that may be borrowed by any fund is limited to the lesser of $200,000,000 and the Fund’s borrowing limit set forth in the Fund’s registration statement. Borrowings are available for short-term liquidity or temporary or emergency purposes.

 

Effective October 15, 2009, interest is charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. In addition, a commitment fee of 0.15% per annum is accrued and apportioned among the participating funds pro rata based on their relative net assets.

Prior to October 15, 2009, interest was charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 0.50% or the overnight LIBOR Rate plus 0.50%. In addition, an annual operations agency fee of $20,000, an amendment fee of 0.02% and a commitment fee of 0.12% per annum were accrued and apportioned among the participating funds pro rata based on their relative net assets.

For the six month period ended March 31, 2010, the Fund did not borrow under these arrangements.

Note 10. Securities Lending

The Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of collateral. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The collateral received is invested and the income generated by the investment of the collateral, net of any fees remitted to State Street as the lending agent and borrower rebates, is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral.

Note 11. Shares of Beneficial Interest

As of March 31, 2010, 15.4% of the Fund’s shares outstanding were beneficially owned by one participant account over which BOA and/or any of its affiliates had either sole or joint investment discretion.

As of March 31, 2010, no other shareholder owned more than 5% of the outstanding shares of the Fund. Subscription and

 

32

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

redemption activity of this account may have a significant effect on the operations of the Fund.

Note 12. Significant Risks and Contingencies

Foreign Securities Risk

There are certain additional risks involved when investing in foreign securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities.

Asset-Backed Securities Risk

The value of asset-backed securities may be affected by, among other factors, changes in interest rates, the market’s assessment of the quality of underlying assets, the creditworthiness of the servicer for the underlying assets, factors concerning the interests in and structure of the issuer or the originator of the underlying assets, or the creditworthiness or rating of the entities that provide any supporting letters of credit, surety bonds, derivative instruments, or other credit enhancement. The value of asset-backed securities also will be affected by the exhaustion, termination or expiration of any credit enhancement. Most asset-backed securities are subject to prepayment risk, which is the possibility that the underlying debt may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of asset-backed securities may be difficult to predict and may result in greater volatility.

Mortgage-Backed Securities Risk

The value of mortgage-backed securities may be affected by, among other things, changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgages, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements or the quality of underlying assets or the market’s assessment thereof. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility.

Information Regarding Pending and Settled Legal Proceedings

In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc. was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company (now known as RiverSource) mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota (the District Court). In response to defendants’ motion to dismiss the complaint, the District Court dismissed one of plaintiffs’ four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants’ favor on July 9, 2007. The plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit) on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary judgment and remanded to the District Court for further proceedings. On August 6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the Supreme Court), asking the Supreme Court to stay the District Court proceedings while the Supreme Court considers and rules in a case captioned Jones v. Harris Associates, which involves issues of law similar to those presented in the Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v. Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth Circuit’s decision in the Gallus case and remanded the case to the Eighth Circuit for further consideration in light of the Supreme Court’s decision in Jones v. Harris Associates.

In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC,

 

33

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have made regular reports to the RiverSource Funds’ Boards of Directors/Trustees.

On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In late 2003, Seligman conducted an extensive internal review concerning mutual fund trading practices. Seligman’s review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by Seligman (the Seligman Funds); this arrangement was in the process of being closed down by Seligman before September 2003. Seligman identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. Seligman also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (NYAG).

In September 2006, the NYAG commenced a civil action in New York State Supreme Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the Seligman Parties), alleging, in substance, that the Seligman Parties permitted various persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies then managed by Seligman was and had been misleading. The NYAG included other related claims and also claimed that the fees charged by Seligman to the Seligman Funds were excessive. On March 13, 2009, without admitting or denying any violations of law or wrongdoing, the Seligman Parties entered into a stipulation of settlement with the NYAG and settled the claims made by the NYAG. Under the terms of the settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement resolved all outstanding matters between the Seligman Parties and the NYAG. In addition to the foregoing matter, the New York staff of the SEC indicated in September 2005 that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. There have been no further developments with the SEC on this matter.

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on

legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds,

 

34

Columbia Liberty Fund

March 31, 2010 (Unaudited)

 

these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.

Note 13. Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the six months ended March 31, 2010, events and transactions through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events or transactions have occurred that would require adjustment of the financial statements as presented. On April 30, 2010, the Transaction disclosed in Note 4 closed. Effective May 1, 2010, the New Advisor became the investment advisor and administrator of the Fund and subsequently changed its name to Columbia Management Investment Advisers, LLC. On that date, the New Transfer Agent became the transfer agent of the Fund and changed its name to Columbia Management Investment Services Corp. Also on that date, the New Distributor became the distributor of the Fund and changed its name to Columbia Management Investment Distributors, Inc.

 

35

Board Consideration and Approval of Advisory Agreements

 

The Advisory Fees and Expenses Committee of the Board of Trustees meets several times annually to review the current advisory agreements (collectively, the “Agreements”) of the funds for which the Trustees serve as trustees (each a “fund”), to review the current subadvisory agreement (the “Subadvisory Agreement”) for Columbia Liberty Fund (the “Subadvised Fund”) with Nordea Investment Management North America, Inc. (the “Subadviser”) and to determine whether to recommend that the full Board approve the continuation of the Agreements and the Subadvisory Agreement for an additional one-year period. After the Committee has made its recommendation, the full Board, including the Independent Trustees, determines whether to approve the continuation of the Agreements and the Subadvisory Agreement. In addition, the full Board, including the Independent Trustees, considers matters bearing on the Agreements and the Subadvisory Agreement at most of its other meetings throughout the year and meets regularly with senior management of the funds and Columbia, the funds’ investment adviser, including the senior manager of each investment area within Columbia. Through the Board’s Investment Oversight Committees, Trustees also meet with selected fund portfolio managers, research analysts and traders at various times throughout the year.

The Trustees receive and review all materials that they, their legal counsel or Columbia believe to be reasonably necessary for the Trustees to evaluate the Agreements and the Subadvisory Agreement and to determine whether to approve the continuation of the Agreements and the Subadvisory Agreement. Those materials generally include, among other items, (i) information on the investment performance of each fund relative to the performance of peer groups of mutual funds and the fund’s performance benchmarks, and additional information assessing performance on a risk-adjusted basis, (ii) information on each fund’s advisory fees and other expenses, including information comparing the fund’s expenses to those of peer groups of mutual funds and information about any applicable expense caps and fee “breakpoints,” (iii) information about the profitability of the Agreements to Columbia, including potential “fall-out” or ancillary benefits that Columbia and its affiliates may receive as a result of their relationships with the funds, (iv) information about the profitability of the Subadvisory Agreement to the Subadviser, including potential “fall-out” or ancillary benefits that the Subadviser may receive as a result of its relationship with the Subadvised Fund and (v) information obtained through Columbia’s response to a questionnaire prepared at the request of the Trustees by counsel to the funds and independent legal counsel to the Independent Trustees. The Trustees also consider other information such as (vi) Columbia’s (and the Subadviser’s) financial results and financial condition, (vii) each fund’s investment objective and strategies and the size, education and experience of Columbia’s (and the Subadviser’s) investment staffs and their use of technology, external research and trading cost measurement tools, (viii) the allocation of the funds’ brokerage and the use of “soft” commission dollars to pay for research products and services, (ix) Columbia’s (and the Subadviser’s) resources devoted to, and its record of compliance with, the funds’ investment policies and restrictions, policies on personal securities transactions and other compliance policies and legal and regulatory requirements, (x) Columbia’s response to various

legal and regulatory proceedings since 2003 and to the recent period of volatility in the securities markets and (xi) the economic outlook generally and for the mutual fund industry in particular. In addition, the Advisory Fees and Expenses Committee confers with the independent fee consultant (the “Fee Consultant”) appointed by the Independent Trustees pursuant to an assurance of discontinuance entered into by Columbia with the New York Attorney General (“NYAG”) to settle a civil complaint filed by the NYAG relating to trading in mutual fund shares (the “NYAG Settlement”) and reviews materials relating to the funds’ relationships with Columbia provided by the Fee Consultant. Under the NYAG Settlement, the Fee Consultant’s role is to manage the process by which management fees are negotiated so that they are negotiated in a manner that is at arms’ length and reasonable. Throughout the process, the Trustees have the opportunity to ask questions of and to request additional materials from Columbia and to consult with the Fee Consultant and independent legal counsel to the Independent Trustees.

The Board of Trustees most recently approved the continuation of the Agreements and the Subadvisory Agreement at its October, 2009 meeting, following meetings of the Advisory Fees and Expenses Committee held in December, 2008 and February, May, June, August, September and October, 2009.

The Board of Trustees also unanimously approved new advisory agreements (the “New Agreements”) for the funds

 

36

 

with RiverSource Investments, LLC (to be renamed Columbia Management Investment Advisers, LLC) (“RiverSource”) and a new subadvisory agreement (the “New Subadvisory Agreement”) for the Subadvised Fund with the “Subadviser” at a meeting held on December 17, 2009. The New Agreements and the New Subadvisory Agreement have since been approved by shareholders of the funds and are expected to take effect upon the closing of the acquisition of the long-term asset management business of Columbia by Ameriprise Financial, Inc. (“Ameriprise”), the parent company of RiverSource Investments, LLC (the “Transaction”).

The Advisory Fees and Expenses Committee met on multiple occasions to review the New Agreements and the New Subadvisory Agreement for the funds. On December 14, 2009, the Advisory Fees and Expenses Committee recommended that the full Board approve the New Agreements and the New Subadvisory Agreement. On December 17, 2009, the full Board, including a majority of the Independent Trustees, approved the New Agreements and the New Subadvisory Agreement. Prior to their approval of the New Agreements and the New Subadvisory Agreement, the Advisory Fees and Expenses Committee and the Independent Trustees requested and evaluated materials from, and were provided materials and information about the Transaction and matters related to the proposals by, Bank of America Corp., Columbia, RiverSource and Ameriprise. In connection with their most recent approval of the Agreements (as discussed above) on October 28, 2009, the Advisory Fees and Expenses Committee and the Trustees requested and evaluated materials from Columbia and the Subadviser, and discussed such materials with representatives of Columbia and the Subadviser. The Advisory Fees and Expenses Committee, at meetings held on August 11, 2009, September 23, 2009, October 27, 2009, November 30, 2009, December 7, 2009 and December 14, 2009, and the Independent Trustees, at meetings held on August 12, 2009, August 20, 2009, October 28, 2009, December 8, 2009, December 14, 2009 and December 17, 2009, discussed the materials provided in connection with the October 28, 2009 approvals and the materials provided in connection with their consideration of the New Agreements, the New Subadvisory Agreement and other matters relating to the Transaction with representatives of Bank of America Corp., Columbia, RiverSource and Ameriprise. The Trustees consulted with experienced legal counsel, who advised on the legal standards for consideration by the Trustees. The Independent Trustees also discussed the proposed approvals with independent legal counsel in private sessions.

The Trustees reviewed each New Agreement and the New Subadvisory Agreement, as well as certain information obtained through RiverSource’s responses to initial and supplemental questionnaires prepared at the request of the Trustees by counsel to the funds and independent legal counsel to the Independent Trustees. The Advisory Fees and Expenses Committee and the Trustees also met with, and reviewed and considered a report prepared and provided by, the Fee Consultant (as discussed above).

In considering whether to approve the New Agreements and the New Subadvisory Agreement and to approve the continuation of the Agreements and the Subadvisory Agreement, the Trustees, including the Independent Trustees, did not identify any single factor as determinative, and each weighed various factors as he or she deemed appropriate. In particular, the Trustees considered the following matters:

Matters Relating to the Agreements and Subadvisory Agreement and the New Agreements and New Subadvisory Agreement

The nature, extent and quality of the services provided or to be provided to the funds under the Agreements, the Subadvisory Agreement, the New Agreements and the New Subadvisory Agreement. The Trustees considered the nature, extent and quality of the services provided and the resources dedicated by Columbia and its affiliates (or to be provided and dedicated by RiverSource and its affiliates) to the funds.

Among other things, the Trustees considered, with respect to Columbia and its affiliates and the Subadviser, (i) Columbia’s (or the Subadviser’s) ability (including its personnel and other resources, compensation programs for personnel involved in fund management, reputation and other attributes) to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals; (ii) the portfolio management services provided by those investment professionals; and (iii) the trade execution services provided on behalf of the funds (or the Subadvised Fund). For each fund, the Trustees also considered the benefits to shareholders of investing in a mutual fund that is part of a family of funds offering exposure to a variety of asset

 

37

 

classes and investment disciplines and providing a variety of fund and shareholder services.

Among other things, the Trustees considered, with respect to RiverSource and its affiliates and the Subadviser, (i) the expected effect of the Transaction on the operations of the funds, (ii) the information provided by each of RiverSource and the Subadviser with respect to the nature, extent and quality of services to be provided by it, (iii) RiverSource’s and the Subadviser’s compliance programs and compliance records, (iv) the ability of RiverSource and the Subadviser (including personnel and other resources, compensation programs for personnel involved in fund management, reputation and other attributes) to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals, (v) the trade execution services to be provided on behalf of the funds and (vi) the quality of RiverSource’s and the Subadviser’s investment research capabilities and the other resources that they indicated they would devote to each fund. As noted above, the Trustees also considered RiverSource’s representations that the Chief Investment Officer of Columbia would serve as the Chief Investment Officer of RiverSource following the Transaction, and that the process for determining the portfolio management team for each Fund would be substantially the same process as has customarily been followed by Columbia, and reported to the Trustees, in evaluating the performance of Columbia’s portfolio management teams. The Trustees also noted the professional experience and qualifications of the senior personnel of RiverSource. The Trustees also considered the compliance programs of and the compliance-related resources proposed to be provided to the funds by RiverSource and its affiliates, including discussions with the funds’ Chief Compliance Officer regarding RiverSource’s compliance program. The Trustees also discussed RiverSource’s compliance program with the Chief Compliance Officer for the RiverSource funds. The Trustees also considered RiverSource’s representation that the funds’ Chief Compliance Officer would serve as the Chief Compliance Officer of RiverSource following the Transaction. The Trustees considered RiverSource’s ability to provide administrative services to the funds, noting that while some Agreements contemplated the provision of certain administrative services, following the Transaction, all administrative services were anticipated to be provided pursuant to a new administrative services agreement. The Trustees also considered RiverSource’s ability to coordinate the activities of each fund’s other service providers (including the Subadviser). The Trustees considered performance information provided by RiverSource with respect to other mutual funds advised by RiverSource, and discussed with senior executives of RiverSource its process for identifying which portfolio management teams of the legacy Columbia and RiverSource organizations would be responsible for the management of the funds following the Transaction.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the nature, extent and quality of services provided by Columbia and the Subadviser supported the continuation of the Agreements and the Subadvisory Agreement, and that the nature, extent and quality of services expected to be provided by RiverSource and the Subadviser supported approval of the New Agreements and the New Subadvisory Agreement.

The costs of the services provided and profits realized by Columbia and its affiliates, and the expected costs of the services to be provided and the profits expected to be realized by RiverSource and its affiliates, from their relationships with the funds. With respect to Columbia and its affiliates, the Trustees considered the fees charged to the funds for advisory services as well as the total expense levels of the funds. That information included comparisons (provided by management and by an independent third-party data provider) of each fund’s advisory fees and total expense levels to those of the fund’s peer groups and information about the advisory fees charged by Columbia to comparable institutional accounts. In considering the fees charged to those accounts, the Trustees took into account, among other things, management’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for Columbia, and the additional resources required to manage mutual funds effectively. In evaluating each fund’s advisory fees, the Trustees also took into account the demands, complexity and quality of the investment management of the fund. The Trustees considered existing advisory fee breakpoints, and Columbia’s use of advisory fee waivers and expense caps, which benefited a number of the funds. The Trustees also noted management’s stated justification for the fees charged to the funds, which included information about the investment performance of the funds and the services provided to the funds.

 

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The Trustees considered that Columbia Liberty Fund’s total expenses and actual management fees were in the first quintile (where the lowest fees and expenses would be in the first quintile) of the peer group selected by an independent third-party data provider for purposes of expense comparisons.

The Trustees also considered the compensation directly or indirectly received by Columbia and its affiliates from their relationships with the funds. The Trustees reviewed information provided by management as to the profitability to Columbia and its affiliates of their relationships with each fund, and information about the allocation of expenses used to calculate profitability. When reviewing profitability, the Trustees also considered court cases in which adviser profitability was an issue in whole or in part, the performance of the relevant funds, the expense level of each fund, and whether Columbia had implemented breakpoints and/or expense caps with respect to the fund.

In connection with the integration of the legacy Columbia and RiverSource organizations, the Trustees considered, among other things, RiverSource’s projected annual net expense synergies (reductions in the cost of providing services to the funds), the timetable over which such synergies are expected to be realized and the extent to which any such synergies are expected to be shared with the funds. The Trustees also considered information provided by RiverSource and the Subadviser regarding their respective financial conditions. The Trustees considered that RiverSource proposed to continue voluntary expense caps currently in effect for the funds and that RiverSource had undertaken not to change these caps without further discussion with the Independent Trustees. The Trustees noted that the fees under the New Subadvisory Agreement, like those under the Subadvisory Agreement, were the product of arm’s-length bargaining with the Subadviser.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the advisory fees charged to each fund, and the related profitability to Columbia and its affiliates of their relationships with the fund, supported the continuation of the Agreement pertaining to that fund, and that the expected profitability to RiverSource and its affiliates from its relationship with each fund, and the expected profitability to the Subadviser of its relationship with the Subadvised Fund, supported the approval of the New Agreements and the New Subadvisory Agreement.

Economies of Scale. With respect to Columbia and its affiliates, the Trustees considered the existence of any economies of scale in the provision by Columbia of services to each fund, to groups of related funds, and to Columbia’s investment advisory clients as a whole and whether those economies were shared with the funds through breakpoints in the investment advisory fees or other means, such as fee waivers/expense reductions and additional investments by Columbia in investment, trading and compliance resources. The Trustees noted that many of the funds benefited from breakpoints, fee waivers/expense caps, or both. In considering those issues, the Trustees also took note of the costs of the services provided (both on an absolute and a relative basis) and the profitability to Columbia and its affiliates of their relationships with the funds, as discussed above.

With respect to RiverSource and its affiliates, the Trustees considered the existence of any anticipated economies of scale in the provision by RiverSource of services to each fund, to groups of related funds and to RiverSource’s investment advisory clients as a whole, and whether those economies of scale were expected to be shared with the funds. The Trustees considered Ameriprise’s anticipated net expense synergies resulting from the Transaction, and considered the possibility that the funds might benefit from economies of scale over time as part of the larger, combined fund complex. The Trustees considered how expected synergies and potential economies of scale might benefit the funds and their shareholders. The Trustees considered the potential effect of the Transaction on the distribution of the funds, and noted that the proposed management fee schedules for the funds generally contained breakpoints that would reduce the fee rate on assets above specified threshold levels.

After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions, that the extent to which economies of scale were shared or expected to be shared with the funds supported the continuation of the Agreements and the approval of the New Agreements.

 

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Matters Relating to the Agreements and the Subadvisory Agreement

Investment performance of the funds, Columbia and the Subadviser. The Trustees reviewed information about the performance of each fund over various time periods, including information prepared by an independent third-party data provider that compared the performance of each fund to the performance of peer groups of mutual funds and performance benchmarks. The Trustees also reviewed a description of the third party’s methodology for identifying each fund’s peer group for purposes of performance and expense comparisons. The Trustees also considered additional information that the Advisory Fees and Expenses Committee requested from Columbia relating to funds that presented relatively weaker performance and/or relatively higher fees or expenses. In the case of each fund whose performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Trustees concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the fund’s Agreements or the Subadvisory Agreement. Those factors varied from fund to fund, but included one or more of the following: (i) that the fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the fund’s investment strategy and policies and that the fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the fund’s investment strategy; (iii) that the fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; (iv) that Columbia had taken or was taking steps designed to help improve the fund’s investment performance, including, but not limited to, replacing portfolio managers or modifying investment strategies; and (v) that Columbia proposed to waive advisory fees or cap the expenses of the fund.

The Trustees noted that, through April 30, 2009, Columbia Liberty Fund’s performance was in the second quintile (where the best performance would be in the first quintile) for the one-, three- and five-year periods, and in the third quintile for the ten-year period, of the peer group selected by an independent third-party data provider for purposes of performance comparisons.

 

The Trustees also considered Columbia’s (and the Subadviser’s) performance and reputation generally, the funds’ performance as a fund family generally, and Columbia’s historical responsiveness to Trustee concerns about performance and Columbia’s willingness to take steps intended to improve performance. After reviewing those and related factors, the Trustees concluded, within the context of their overall conclusions regarding each of the Agreements, that the performance of each fund, Columbia and the Subadviser was sufficient, in light of other considerations, to warrant the continuation of the Agreement or the Subadvisory Agreement pertaining to that fund.

Other Factors. The Trustees also considered other factors with respect to Columbia and its affiliates, which included but were not limited to the following:

 

n  

the extent to which each fund had operated in accordance with its investment objective and investment restrictions, the nature and scope of the compliance programs of the funds and Columbia and the compliance-related resources that Columbia and its affiliates were providing to the funds;

 

n  

the nature, quality, cost and extent of administrative and shareholder services overseen and performed by Columbia and its affiliates, both under the Agreements and under separate agreements for the provision of transfer agency and administrative services;

 

n  

so-called “fall-out benefits” to Columbia and its affiliates, such as the engagement of its affiliates to provide distribution, brokerage and transfer agency services to the funds, and the benefits of research made available to Columbia by reason of brokerage commissions generated by the funds’ securities transactions, as well as possible conflicts of interest associated with those fall-out and other benefits, and the reporting, disclosure and other processes in place to disclose and monitor those possible conflicts of interest; and

 

n  

the report provided by the Fee Consultant, which included information about and analysis of the funds’ fees, expenses and performance.

Matters Relating to the New Agreements and New Subadvisory Agreement

The Trustees considered all materials that they, their legal counsel or RiverSource believed reasonably necessary to

 

40

 

evaluate and to determine whether to approve the New Agreements and the New Subadvisory Agreement. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. The material factors that formed the basis for the Trustees’ approvals included the factors set forth below:

 

(i) the reputation, financial strength, regulatory histories and resources of RiverSource, its parent, Ameriprise, and the Subadviser;

 

(ii) the capabilities of RiverSource and the Subadviser with respect to compliance, including an assessment of RiverSource’s compliance system by the funds’ Chief Compliance Officer;

 

(iii) the qualifications of the personnel of RiverSource and the Subadviser that would be expected to provide advisory services to each fund, including RiverSource’s representations that the Chief Investment Officer of Columbia would serve as the Chief Investment Officer of RiverSource, and that the process for determining the portfolio management team for each fund would be substantially the same process as has customarily been followed by Columbia, and reported to the Trustees, in evaluating the performance of Columbia’s portfolio management teams;

 

(iv) the terms and conditions of the New Agreements, including the differences between the New Agreements and the Agreements;

 

(v) the terms and conditions of the New Subadvisory Agreement, including that they were substantially identical to those of the Subadvisory Agreement;

 

(vi) the terms and conditions of other agreements and arrangements relating to the future operations of the funds, including an administrative services agreement and a Master Services and Distribution Agreement;

 

(vii) the commitment of RiverSource and Ameriprise that there would not be any diminution in the nature, quality and extent of services provided to each fund or its shareholders following closing of the Transaction;

 

(viii) that the Trustees recently had completed a full annual review of the Agreements and the Subadvisory Agreement, as required by the 1940 Act, for each fund and had determined that they were satisfied with the nature, extent and quality of services provided thereunder and that the management fee rate for each fund and the subadvisory fee rate for the Subadvised Fund were sufficient to warrant their approval;

 

(ix) that the advisory fee rates payable by each fund would not change;

 

(x) that RiverSource and Bank of America, and not any fund, would bear the costs of obtaining approvals of the New Agreement and the New Subadvisory Agreement;

 

(xi) that Ameriprise and RiverSource had agreed to exercise reasonable best efforts to assure that, for a period of two years after the closing of the Transaction, there would not be imposed on any fund any “unfair burden” (within the meaning of Section 15(f) of 1940 Act) with respect to the Transaction; and

 

(xii) that certain members of RiverSource’s management have a significant amount of experience integrating other fund families; that certain current Columbia personnel that would be integrated into RiverSource and its affiliates as a result of the Transaction also have experience in integrating fund families; and that the senior management of RiverSource following the Transaction would include certain senior executives of Columbia who are currently responsible for oversight of services provided to the funds.

Investment Advisory and Subadvisory Fee Rates and Other Expenses. The Trustees considered the fact that the advisory fee rates payable by each fund to RiverSource under the New Agreements are the same as those currently paid by each fund to Columbia under the Agreements. The Trustees also considered the fact that the subadvisory fee rates under the New Subadvisory Agreement are the same as those currently in effect under the Subadvisory Agreement. The Trustees noted that in connection with their October 28, 2009 approval of the continuance of the Agreements and the Subadvisory Agreement, they had concluded, within the context of their overall conclusions regarding each such agreement, that the advisory fees charged to each fund supported the continuation of the agreements pertaining to that fund.

 

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The Trustees noted that in certain cases the effective advisory fee rate for a RiverSource fund was lower than the proposed investment advisory fee rate for a fund with generally similar investment objectives and strategies. The Trustees also noted that RiverSource’s investment advisory fee rates for equity and balanced funds generally are subject to adjustments based on investment performance, whereas the proposed investment advisory fee rates for the funds, consistent with those in the Agreements, do not reflect performance adjustments. The Trustees considered existing advisory fee breakpoints and RiverSource’s undertaking not to change expense caps previously implemented by Columbia with respect to the funds without further discussion with the Independent Trustees.

The Trustees received and considered information about the advisory fees charged by RiverSource to institutional accounts. In considering the fees charged to those accounts, the Trustees took into account, among other things, RiverSource’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for RiverSource and the additional resources required to manage mutual funds effectively. In evaluating each fund’s expected advisory fees, the Trustees also took into account the demands, complexity and quality of the investment management of the fund.

The Trustees also considered that for certain funds, certain administrative services that are provided under the Agreements would not be provided under the New Agreements, but under a separate administrative services agreement. The Trustees noted that, unlike fees under an advisory agreement, fees under the administrative services agreement could be changed without shareholder approval, although RiverSource had not proposed any increase in such administrative fees and any such increase would require Board approval. The Trustees also noted Ameriprise’s and RiverSource’s covenants regarding compliance with Section 15(f) of the 1940 Act.

 

After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions, that the expected advisory and subadvisory fee rates and expenses of each fund supported the approval of the New Agreements and the New Subadvisory Agreement.

Other Benefits to RiverSource and the Subadviser. The Trustees received and considered information regarding any expected “fall-out” or ancillary benefits to be received by RiverSource and its affiliates or by the Subadviser as a result of their relationships with the funds, such as the engagement of RiverSource to provide administrative services to the funds and the engagement of RiverSource’s affiliates to provide distribution and transfer agency services to the funds. The Trustees considered that the funds’ distributor, which would be an affiliate of RiverSource, retains a portion of the distribution fees from the funds and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the funds. The Trustees also considered the benefits of research made available to RiverSource by reason of brokerage commissions generated by the funds’ securities transactions, and reviewed information about RiverSource’s practices with respect to allocating portfolio brokerage for brokerage and research services. The Trustees considered the possible conflicts of interest associated with certain fall-out or other ancillary benefits and the reporting, disclosure and other processes that would be in place to disclose and to monitor such possible conflicts of interest. The Trustees recognized that RiverSource’s and the Subadviser’s profitability would be somewhat lower without these benefits.

Conclusions

Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent counsel and the Fee Consultant, the Trustees, including the Independent Trustees, (i) approved the continuance of each of the Agreements and the Subadvisory Agreement through October 31, 2010 and (ii) approved each New Agreement and the New Subadvisory Agreement.

 

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Summary of Management Fee Evaluation by Independent Fee Consultant (Columbia Management Advisors, LLC)

 

EXCERPTS FROM REPORT OF INDEPENDENT FEE CONSULTANT TO THE FUNDS SUPERVISED BY THE COLUMBIA ATLANTIC BOARD

Prepared Pursuant to the February 9, 2005 Assurance of Discontinuance among the Office of Attorney General of New York State, Columbia Management Advisors, LLC, and Columbia Management Distributors, Inc. November 6, 2009

I. Overview

On February 9, 2005, Columbia Management Advisors, LLC (“CMA”) and Columbia Management Distributors, Inc.1 (“CMDI”) agreed to the New York Attorney General’s Assurance of Discontinuance (“AOD”). Among other things, the AOD stipulates that CMA may manage or advise a Columbia Fund (“Columbia Fund” and, together with some or all of such funds, the “Columbia Funds”) only if the Independent Members of the Columbia Fund’s Board of Trustees appoint a Senior Officer or retain an Independent Fee Consultant (“IFC”) who is to manage the process by which proposed management fees are negotiated. The AOD further stipulates that the Senior Officer or IFC is to prepare a written annual evaluation of the fee negotiation process.

With effect from January 1, 2007, the Independent Members of the Board of Trustees for certain Columbia Funds known collectively as the “Atlantic Funds” (together with the other members of that Board, the “Trustees”) retained me as IFC for the Atlantic Funds.2 In this capacity, I have prepared the fifth annual written evaluation of the fee negotiation process. As was the case with the 2007 and 2008 reports, my immediate predecessor as IFC, John Rea, provided invaluable assistance in the preparation of this year’s report.

A. Role of the Independent Fee Consultant

The AOD charges the IFC with “managing the process by which proposed management fees … to be charged the Columbia Fund are negotiated so that they are negotiated in a manner which is at arms’ length and reasonable and consistent with this Assurance of Discontinuance.” The AOD also provides that CMA “may manage or advise a Columbia Fund only if the reasonableness of the proposed management fees is determined by the Board of Trustees … using … an annual independent written evaluation prepared by or under the direction of … the Independent Fee Consultant.” Therefore, the AOD makes clear that the IFC does not supplant the Trustees in negotiating management fees with CMA, nor does the IFC substitute his or her judgment for that of the Trustees with respect to the reasonableness of proposed fees or any other matter that is committed to the business judgment of the Trustees.

B. Elements Involved in Managing the Fee Negotiation Process

In preparing the report required by the AOD, the IFC must consider at least the following six factors set forth in the AOD:

 

1. The nature and quality of CMA’s services, including the Fund’s performance;

 

2. Management fees (including any components thereof) charged by other mutual fund companies for like services;

 

3. Possible economies of scale as the Fund grows larger;

 

4. Management fees (including any components thereof) charged to institutional and other clients of CMA for like services;

 

5. Costs to CMA and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; and

 

6. Profit margins of CMA and its affiliates from supplying such services.

C. Organization of the Annual Evaluation

This report, like last year’s, focuses on the six factors and contains a section for each factor except that CMA’s costs and profits from managing the Funds are treated in a single section. In addition to a discussion of these factors, the report offers recommendations to improve the fee review process in future years. A review of the status of recommendations made in the 2008 Report is being provided separately with the materials for the October meeting.

 

1

CMA and CMDI are subsidiaries of Columbia Management Group, LLC (“CMG”), and are the successors to the entities named in the AOD.

 

2

I have no material relationship with Bank of America, CMG or any of its affiliates, aside from serving as IFC, and I am aware of no material relationship with any of their affiliates. I retained John Rea, an independent economic consultant, to assist me with this report.

 

   Unless otherwise stated or required by the context, this report covers only the Atlantic Funds, which are also referred as the “Funds.”

 

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II. Summary of Findings

A. General

 

1. Based upon my examination of the information supplied by CMG in the light of the six factors set forth in the AOD, I conclude that the Trustees have the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Atlantic Fund.

 

2. In my view, the process by which the proposed management fees of the Funds have been negotiated in 2009 thus far has been, to the extent practicable, at arms’ length and reasonable and consistent with the AOD.

B. Nature and Quality of Services, Including Performance

 

3. The performance of the Funds has been relatively strong in recent years, although the one-year record was weaker than longer-term records. Based upon 1-, 3-, 5-, and 10-year returns through April 30, 2009, at least half of all the Funds were in the first and second performance quintiles in each of the three longest performance periods; for the one-year period, 40% of the Funds were in the top two quintiles. No more than 13% of the Funds were in the fifth quintile in any one performance period. Domestic equity, quantitative equity, and taxable fixed-income Funds were the strongest performers in 2009, while most foreign equity Funds lagged behind their competitors.

 

4. Performance rankings were similar in 2008 and 2009: the 1- and 3-year rankings declined slightly over the previous year, while the 5-year rankings improved modestly. Year over year, for the 1- and 3-year periods, the performance of equity Funds, both domestic and international, declined, while that of fixed-income Funds improved. Between three-fifths to two-thirds of the Funds changed quintile rankings in 2009 in the 1-, 3-, and 5-year performance periods.

 

5. The performance of the domestic equity Funds against their benchmarks was good for the 3- and 5-year performance periods. In contrast, gross returns of international equity and fixed-income Funds typically fell short of their benchmarks. The performance of equity Funds against their benchmarks was highly correlated to performance versus their peers; no such correlation was observed for fixed-income Funds.

 

6. The Atlantic equity Funds’ overall performance adjusted for risk was solid. Based upon 3-year returns, nearly 57% of the equity Funds had a combination of risk-adjusted and unadjusted returns that placed them in the top half of their performance universes. About one quarter of the fixed-income Funds posted high returns and low risk relative to comparable funds. Just over half of the fixed-income Funds, primarily tax-exempt Funds, took on more risk than the typical fund in their performance universes.

 

7. The industry-standard procedure used by Lipper that includes all share classes in the performance universe tends to bias a Fund’s ranking upward within that universe. The bias occurs because either no-12b-1 fee or low-12b-1 fee share classes of the Atlantic Funds are compared with funds in performance universes that include all share classes of multi-class funds with 12b-1 fees of up to 100 basis points. Correcting this bias by limiting the performance universe to classes of comparable funds with low or no 12b-1 fees (a “filtered universe”) lowers the relative performance for the Funds, but not to a material extent. The filtering process, however, did identify one Fund for further review that had not been identified as a review fund using unfiltered universes. Conversely, two Funds that had been identified as review funds in the unfiltered universe lost that status in filtered universes.

 

8. A small number of Funds have consistently underperformed over the past five years. The exact number depends on the criteria used to evaluate longer-term performance. For example, only three Funds had below-median performance in each 1- and 3-year period from 2005 to 2009.

 

9. The services performed by CMG professionals beyond portfolio management, such as compliance, legal, information technology, risk management, finance, and fund administration, are critical to the success of the Funds and appear to be of high quality.

C. Management Fees Charged by Other Mutual Fund Companies

 

10.

The Funds’ management fees and total expenses are generally low relative to those of their peers, with over half of the Funds in the most favorable two quintiles. Only 26% of the Funds ranked in the two most expensive quintiles for actual management fees, and 18% in those quintiles for total expenses. Two Funds are in the fifth quintile for total

 

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expenses; four Funds are in the fifth quintile for actual management fees.

 

11. The highest concentration of low-expense Funds is found among the foreign equity Funds. The 12 former Excelsior Funds have relatively high fees and expenses, with two-thirds ranking in either the fourth or fifth quintiles for actual management fees. The higher actual management fee rankings of certain former Excelsior Funds are due in part to fee schedules that are higher than standard Columbia Fund fee schedules at current asset levels.

 

12. The distribution of total expense and management fee rankings has improved over the prior two years. The implementation of the voluntary standardized cap system has contributed significantly to the improved rankings in 2009.

 

13. The management fees of the Atlantic Funds are generally in line with those of Columbia Funds supervised by the Nations Board of Trustees (the “Nations Funds”). To the extent that Atlantic Funds have higher average fees in certain investment categories than Nations Funds, the difference reflects either differences in asset size, different fee structures of the former Excelsior Funds, or special circumstances of the Funds included in the investment categories.

D. Trustees’ Advisory Contract Review Process

 

14. The Trustees’ evaluation process identified 16 Funds in 2009 for further review based upon long-standing criteria relating to their relative performance or expenses or both. When compared in filtered universes, one additional Fund met the criteria for further review. CMG provided further information about each of those Funds to assist the Trustees in their evaluation.

E. Potential Economies of Scale

 

15. CMG presented to the Trustees its analysis of the sources and sharing of potential economies of scale. CMG views economies of scale as arising at the complex level and would regard estimates of scale economies for individual funds as unreliable. In its analysis, CMG did not identify specific sources of economies of scale or provide any estimates of any economies of scale that might arise from future asset growth. CMG’s analysis included measures taken by the Trustees and CMG that seek to share any potential economies of scale through breakpoints in management fee schedules, the establishment of expense limits for each Fund, enhanced shareholder services, fund mergers, and operational consolidation.

 

16. An examination of the contractual fee schedules for five Atlantic Funds shows that those with standard fee structures are generally in line with those of their competitors. The fee schedules of the former Excelsior Funds, however, have high initial fees relative to competitors but otherwise have comparable breakpoint structures.

F. Management Fees Charged to Institutional Clients

 

17. CMG has provided Trustees with comparisons of mutual fund management fees and institutional fees based upon standardized fee schedules and upon actual fees. The results show that, consistent with industry practice, actual and scheduled institutional fees are generally lower than the Funds’ management fees. CMG provided additional data this year demonstrating that at small asset levels, the effective fee of certain Funds may be equal to or less than institutional fee levels at those asset levels, due to the effect of expense limits on small funds with high gross expenses. CMG also analyzed the differences between the services provided and risks borne on the one hand by a manager of mutual funds and on the other by institutional advisers, and suggested that these differences should be kept in mind when Trustees review the reasonableness of the Funds’ management fees.

G. Revenues, Expenses, and Profits

 

18. The activity-based cost allocation methodology employed by CMG to allocate costs, both direct and indirect, for purposes of calculating Fund profitability is thoughtful and detailed. This year, CMG further refined the technique by allocating additional indirect expenses on an activity basis.

 

19. The materials provided on CMG’s revenues and expenses with respect to the Funds and the methodology underlying their construction form a sufficient basis for Trustees to evaluate the expenses of and profitability to CMG arising out of its relationships with the Funds.

 

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20. CMG provided a firm-wide pro forma 2009 income statement demonstrating the effect of market events beginning in the fourth quarter of 2008 on its revenues and profitability to provide an additional perspective on calendar 2008 profitability data. In particular, 2008 revenues reflected the higher market prices prevailing during the first three quarters of that year, while expenses dropped due to cost cutting in the wake of the market downturn late in 2008. The continuing effects of this downturn are expected to produce a significant decline in profitability this year.

 

21. In 2008, CMG’s pre-tax post-distribution margin on the Atlantic Fund complex was above industry medians, based on the limited data available for publicly held mutual fund managers. However, as is to be expected in a large fund complex, some Atlantic Funds had relatively high pre-tax profit margins in 2008, when calculated solely with respect to management revenues and expenses, while other Atlantic Funds operated at a loss. There is a positive relationship between Fund size and profitability to CMG, with smaller Funds generally operating at a loss to CMG.

 

22. CMG pays a fixed percentage of its management fee revenues to an affiliate, U.S. Trust, Bank of America Private Wealth Management, with respect to assets of its clients invested in Atlantic Funds to compensate it for services it performs with respect to those client assets and for the effect of state law limitations on affiliates charging multiple fees. Based on our analysis of the services provided by this affiliate, we have concluded that all payments other than those for sub-transfer agent or sub-accounting services should be treated as a distribution expense.

III. Recommendations

 

1) Criteria for review. The Trustees may wish to consider modifying the criteria for identifying a Fund for further review (a “Review Fund”) to include criteria that focus exclusively on performance. The Trustees’ supplementary data request included one such criterion. They may also wish to consider whether it would be useful to apply CMG’s own internal monitoring standards for Fund performance to the contract review process, or whether such criteria are more relevant to their ongoing investment oversight.

 

2) Presentation of Review Fund discussion. CMG should consider whether it could more systematically present in one discussion all relevant information regarding each Review Fund, which is now split into several different portions of the 15(c) materials. For any Fund that has been a Review Fund in consecutive years, CMG should address under what circumstances it could reasonably be anticipated that the Fund would lose that status.

 

3) Refinement of tax-exempt performance data. Certain single-state tax-exempt Funds compete in extremely small universes and are compared to a multi-state benchmark of uncertain relevance. Notwithstanding the difficulties, CMG should work to improve the reliability of the calculation of relative performance of these Funds. If that is not possible, CMG should provide guidance on how the Trustees should judge the quality of CMG’s management of these Funds.

 

4) Development of risk metrics for asset-allocation, tax-exempt, and money market funds. CMG has developed and shared with the Trustees quantitative risk metrics comparing equity and taxable fixed-income Funds against their peers. However, reliable risk metrics have not been developed for asset-allocation, tax-exempt fixed income, and money market funds. We urge CMG to continue its efforts to provide reliable risk measures for these categories of Funds, especially in the cases of asset-allocation and money market funds, because their investors are likely to be motivated at least in part by a desire to manage risk.

 

5) Profitability data. For any period during which CMG is an affiliate of U.S. Trust, Bank of America Private Wealth Management, CMG should continue to present to the Trustees the profitability of each Fund, each investment style and each complex (of which Atlantic is one) calculated as follows:

 

  a. Management-only profitability should be calculated without reference to any Private Bank expense.

 

  b. Profitability excluding distribution (which essentially covers the management and transfer agency functions) should be adjusted by removing from the expense calculation any portion of the Private Bank payment not attributable to the performance by the Private Bank of sub-transfer agency or sub-accounting functions.

 

  c.

Total profitability, including distribution: No adjustment for Private Bank expenses should be made, because all such expenses represent legitimate fund

 

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expenses to be taken into account in calculating CMG’s profit margin including distribution.

 

  d. Distribution only: This should include all Private Bank expenses other than those attributable to sub-transfer agency services.

 

6) Contractual fee analysis. This year CMG presented a new Lipper report comparing the contractual management fees of Funds with those of competitors in similar investment styles. However, the reliability of the conclusion – that Fund management fee breakpoints compared favorably with competitive fee rates – was limited by the use of competitive funds at all asset levels. The sponsors of a $100 million mutual fund may not have given much thought to breakpoints at $5 billion; therefore, that fund’s contractual fee at that level is unlikely to compare favorably with that of a $5 billion Fund. Limiting the competitors to the Lipper expense group, whose constituents are similar in size to the relevant Fund, would make the results more meaningful. In addition, the breakpoints of a select group of Atlantic Funds (which would differ each year) should continue to be compared to those of industry rivals to ensure that the Funds’ breakpoint schedules remain within industry norms. As breakpoint schedules change relatively little each year, performing such a comparison for each Atlantic Fund each year would not be an efficient use of Trustee and CMG resources.

 

7) Pro forma profitability data. In any year in which CMG or the Trustees believe that the prior year’s profitability is unlikely to be representative of current business results due to changes in markets or for any other reason, CMG should, consistent with this year’s practice, prepare a pro forma income statement based on year-to-date actual data and reasonable projections used for its own business planning purposes.

 

8) Additional institutional data and analysis. While CMG provided a substantial amount of information on its institutional business, including a virtually complete database of all institutional accounts, we suggest some additional items for future years: (a) profitability data for the institutional business in the format, and based upon the same allocation methodologies, used to present Fund profitability, (b) an explanation of how CMA sets institutional fee breakpoints, which normally begin at asset levels far lower than those found in Fund management fee breakpoints, and (c) an analysis of differences in actual fees within specific investment categories, with special attention given to accounts established before and after the implementation of the standardized institutional fee schedules in 2005.

 

9) Management fee disparities. In any future study of management fees, CMG and the Atlantic Trustees should analyze the differences in management fee schedules, including those arising out of the reorganization of the former Excelsior Funds as Atlantic Funds. As part of that analysis, CMG should provide an explanation for any significant fee differences among comparable funds across fund families sponsored by CMG, such as differences in the management styles of different Funds included the same Lipper category. Finally, if CMG proposes a management fee change or an expense cap for any mutual fund managed by CMA that is comparable to any Atlantic Fund, CMG should provide the Trustees with sufficient information about the proposal to allow the Trustees to assess the applicability of the proposed change to the relevant Atlantic Fund or Funds.

 

10) Explanation of data supplied to Lipper. Each year, as part of the 15(c) process, CMG retains Lipper to compare the fees and expenses of each Fund to a group of competitors. In many cases, CMG, with the approval of the Trustees, adjusts the actual expense data, which is based on the most recent full fiscal year of the Fund (and each competitive fund) to reflect changes in fees or expense limits that occurred during or after the relevant fiscal year. This improves the reliability and usefulness of the comparison. However, to ensure that the Trustees know when and how CMG adjusted the data, we recommend that CMG prepare a table listing for each Fund what adjustments were made, e.g., to reflect a new expense limitation of x basis points that commenced on y date.

Reduction of volume of paper documents submitted. The effort to streamline and better organize the data presented to the Trustees and the process by which that data was prepared and organized continued to be well-received by all parties. Notwithstanding past success, it is always appropriate to look for opportunities to reduce and simplify the presentation of 15(c) data. One possibility would be to remove the 124 pages of biographical data, most if not all of which the Trustees have

 

47

 

previously seen as part of their ongoing investment oversight duties, from the paper volume and post it on the Internet-based document storage and retrieval system used by the Funds to provide reference data to Trustees.

Respectfully Submitted,

Steven E. Asher

 

48

Summary of Management Fee Evaluation by Independent Fee Consultant (RiverSource Investments, LLC)

 

REPORT OF INDEPENDENT FEE CONSULTANT TO THE FUNDS SUPERVISED BY THE COLUMBIA ATLANTIC BOARD

Prepared Pursuant to the February 9, 2005 Assurance of Discontinuance among the Office of Attorney General of New York State, Columbia Management Advisors, LLC, and Columbia Management Distributors, Inc. December 21, 2009

I. Overview

On February 9, 2005, Columbia Management Advisors, LLC (“CMA”) and Columbia Management Distributors, Inc.1 (“CMD”) agreed to the New York Attorney General’s Assurance of Discontinuance (“AOD”). Among other things, the AOD stipulates that CMA may manage or advise a Columbia Fund (“Columbia Fund” and, together with some or all of such funds, the “Columbia Funds”) only if the Independent Members of the Columbia Fund’s Board of Trustees appoint a Senior Officer or retain an Independent Fee Consultant (“IFC”) who is to manage the process by which proposed management fees are negotiated. The AOD further stipulates that the Senior Officer or IFC is to prepare a written annual evaluation of the fee negotiation process.

With effect from January 1, 2007, the Independent Members of the Board of Trustees for certain Columbia Funds known collectively as the “Atlantic Funds” (together with the other members of that Board, the “Trustees”) retained me as IFC for the Atlantic Funds.2 In this capacity, I have prepared this written evaluation of the fee negotiation process. As was the case with the last three annual reports, my immediate predecessor as IFC, John Rea, provided invaluable assistance in the preparation of this report.

 

On September 29, 2009, Ameriprise entered into an asset purchase agreement with Bank of America, N.A. and its parent, Bank of America Corporation (together, the “Bank”) pursuant to which the Bank agreed to sell certain CMG assets relating to Columbia’s long-term asset management business, including management of the Atlantic Funds (the “Transaction”).3 The Transaction if completed would result in the termination of the existing Investment Management Agreements with CMA. Therefore, the Trustees have been requested to approve and recommend to the shareholders of each Atlantic Fund new Investment Management and Sub-Advisory Agreements (together, the “Management Agreements”) with RiverSource Investments, LLC (“RI”),4 investment manager of the RiverSource Funds and a subsidiary of Ameriprise. This report is intended to fulfill the requirements of the AOD with respect to the Trustees’ consideration of the new Management Agreements.

A. Role of the Independent Fee Consultant

The AOD charges the IFC with “managing the process by which proposed management fees … to be charged the Columbia Fund are negotiated so that they are negotiated in a manner which is at arms’ length and reasonable and consistent with this Assurance of Discontinuance.” The AOD also provides that CMA “may manage or advise a Columbia Fund only if the reasonableness of the proposed management fees is determined by the Board of Trustees … using … an annual independent written evaluation prepared by or under the direction of … the Independent Fee Consultant.” Therefore, the AOD makes clear that the IFC does not supplant the Trustees in negotiating management fees with CMA (or RI), nor does the IFC substitute his or her judgment for that of the Trustees with respect to the reasonableness of proposed fees or any other matter that is committed to the business judgment of the Trustees.

 

1

CMA and CMD are subsidiaries of Columbia Management Group, LLC (“CMG”), and are the successors to the entities named in the AOD.

 

2

I have no material relationship with Bank of America, CMG or Ameriprise Financial, Inc. (“Ameriprise”), aside from serving as IFC, and I am aware of no material relationship with any of their affiliates. I retained John Rea, an independent economic consultant, to assist me with this report.

 

   Unless otherwise stated or required by the context, this report covers only the Atlantic Funds.

 

3

Preliminary Response of Ameriprise to Information Request of Columbia Atlantic Board dated October 21, 2009 (hereafter, the “Preliminary Response”), p. 1. The one money market Atlantic Fund, Money Market Fund VS, was included in the Transaction because it was an integral part of CMG’s array of Funds used as investment vehicles by variable annuity and similar insurance products.

 

4

Ameriprise intends to re-brand RI with the “Columbia” name (which is one of the assets being sold in the Transaction). Preliminary Response, pp. 4-5. In the case of new Sub-Advisory Agreements, the current sub-adviser would also be a party.

 

49

 

B. Elements Involved in Managing the Fee Negotiation Process

In preparing the report required by the AOD, the IFC must consider at least the following six factors set forth in the AOD:

 

1. The nature and quality of the adviser’s services, including the Fund’s performance;

 

2. Management fees (including any components thereof) charged by other mutual fund companies for like services;

 

3. Possible economies of scale as the Fund grows larger;

 

4. Management fees (including any components thereof) charged to institutional and other clients of the adviser for like services;

 

5. Costs to the adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; and

 

6. Profit margins of the adviser and its affiliates from supplying such services.

C. Data Presented to the Trustees

In considering the proposed new Management Agreements with RI, the Trustees relied in part on the data that had been prepared as part of their annual contract review process, which concluded in late October. This data remained relevant because the fees in the proposed Management Agreements were identical to the fees approved at that time. The annual review materials included a Lipper report on the performance of each Atlantic Fund compared to its peers and its benchmark, comparisons of the fees and expenses of each Atlantic Fund to similar CMG-sponsored Funds, comparable competitive funds chosen by Lipper, and institutional accounts advised by CMA, revenues, expenses, and profits of CMG from managing the Atlantic Funds, calculated both by Fund and collectively, and CMG’s views on the existence and sharing of economies of scale.

In addition, the Trustees reviewed materials specific to the proposed new Management Agreements with RI in response to requests for information made on behalf of the Trustees, including the following:

 

n  

Performance data for the RiverSource Funds showing percentile and quartile rankings of each fund within its Lipper performance universe for periods up to five years and net returns of each fund relative to its benchmark returns. This data was arguably relevant due to the possibility that some RiverSource investment teams would be providing investment management services to certain Columbia Funds. 5

 

n  

tables comparing the fee schedules and effective fee rates of funds managed by CMA and RI and institutional accounts advised by the two firms.

 

n  

extensive discussion of the process by which the various components of the two asset management businesses would be integrated including investment management, compliance, transfer agency, custody, fund accounting, and distribution.

 

n  

information about the financial condition of Ameriprise, including its most recent annual report on Form 10-K, RI’s profit margins from managing the RiverSource Funds in 2007 and 2008, and pro forma income statements for the combined Columbia and RiverSource fund complex.

 

n  

disclosure that certain senior CMG executives, including President Michael Jones, Chief Investment Officer Colin Moore, Head of Mutual Funds J. Kevin Connaughton, and Chief Compliance Officer Linda Wondrack would continue in analogous capacities following the consummation of the Transaction, and

 

n  

a breakdown of the synergies RI expects to realize in the two years following the Transaction and the extent to which those potential synergies are expected to be shared with shareholders of funds advised by RI.

II. Findings

 

1. Based upon my examination of the information supplied by CMG and Ameriprise in the light of the six factors set forth in the AOD, I conclude that the Trustees have the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Atlantic Fund.

 

2. In my view, the process by which the proposed management fees of the Atlantic Funds have been negotiated with RI thus far has been, to the extent practicable, at arms’ length and reasonable and consistent with the AOD.

Respectfully submitted,

Steven E. Asher

 

5

On page 20 of its Supplemental Response to the Atlantic Trustees (undated but delivered November 24, 2009), Ameriprise said that “most personnel decisions, including with respect to the portfolio management teams for the Atlantic Funds … will be made primarily by [current CMA CIO] Colin Moore using the Columbia 5P process.”

 

50

Proxy Voting Results

 

Columbia Liberty Fund

On March 3, 2010, a special meeting of shareholders of Columbia Funds Series Trust I was held to consider the approval of several proposals listed in the proxy statement for the meeting. Proposal 1, Proposal 2 and Proposal 3 were voted on at the March 3, 2010 meeting of shareholders and Proposal 3 was voted on at an adjourned meeting of shareholders held on March 31, 2010. The shareholder meeting results are as follows:

Proposal 1: A proposed Investment Management Services Agreement with Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (CMIA) was approved as follows:

 

             
Votes For   Votes Against   Abstentions   Broker Non-Votes
194,985,597   8,845,143   8,343,365   46,048,637

Proposal 2: A proposed Subadvisory Agreement with Nordea Investment Management North America, Inc. was approved as follows:

 

             
Votes For   Votes Against   Abstentions   Broker Non-Votes
194,311,620   9,057,822   8,804,621   46,048,680

Proposal 3: A proposal authorizing CMIA to enter into and materially amend subadvisory agreements for the Fund in the future, with the approval of the Trust’s Board of Trustees, but without obtaining additional shareholder approval, was approved, as follows:

 

             
Votes For   Votes Against   Abstentions   Broker Non-Votes
188,022,426   15,289,004   8,862,625   46,048,688

Proposal 4: Each of the nominees for trustees was elected to the Trust’s Board of Trustees, as follows:

 

                      
Trustee      Votes For      Votes Withheld      Abstentions
John D. Collins      30,977,072,412      859,827,038      0

Rodman L. Drake

     30,951,179,004      885,720,446      0
Douglas A. Hacker      30,989,793,279      847,106,171      0

Janet Langford Kelly

     30,999,020,814      837,878,636      0
William E. Mayer      16,291,139,483      15,545,759,967      0

Charles R. Nelson

     30,997,700,700      839,198,750      0
John J. Neuhauser      30,988,095,661      848,803,789      0

Jonathon Piel

     30,968,801,048      868,098,402      0
Patrick J. Simpson      30,999,065,030      837,834,420      0

Anne-Lee Verville

     30,996,227,913      840,671,537      0

 

 

51

 

 

[THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

52

Important Information About This Report

 

Transfer Agent*

Columbia Management Investment Services Corp.

P.O. Box 8081

Boston, MA 02266-8081

1-800-345-6611

Distributor*

Columbia Management Investment

Distributors, Inc.

One Financial Center

Boston, MA 02111

Investment Advisor*

Columbia Management Investment Advisers, LLC

100 Federal Street

Boston, MA 02110

* As of May 1, 2010.

 

 

The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Liberty Fund.

A description of the policies and procedures that the fund uses to determine how to vote proxies and a copy of the fund’s voting records are available (i) at www.columbiamanagement.com, (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) without charge, upon request, by calling 1-800-368-0346. Information regarding how the fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available on the SEC’s website. Information regarding how the fund voted proxies relating to portfolio securities is also available from the fund’s website, www.columbiamanagement.com.

The fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus, which contains this and other important information about the funds, visit columbiamanagement.com. Read the prospectus carefully before investing.

On April 30, 2010, Ameriprise Financial, Inc., the parent company of RiverSource Investments, LLC, acquired the long-term asset management business of Columbia Management Group, LLC, including certain of its affiliates, which were, prior to this acquisition, part of Bank of America. In connection with the acquisition of the long-term assets, the Columbia Funds have a new investment adviser, RiverSource Investments, LLC, which is now known as Columbia Management Investment Advisers, LLC. For those clients that use the services of a subadviser, those arrangements are continuing unless notified otherwise. RiverSource Fund Distributors, Inc., now known as Columbia Management Investment Distributors, Inc., member FINRA, will act as the principal distributor of the Columbia Funds.

 

53


LOGO

One Financial Center

Boston, MA 02111-2621

 

LOGO

Columbia Liberty Fund

Semiannual Report, March 31, 2010

©2010 Columbia Management Investment Advisers, LLC. All rights reserved.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

SHC-44/44512-0310 (05/10) 10/1680W4


 

Item 2. Code of Ethics.

 

Not applicable for semi-annual reports.

 

Item 3. Audit Committee Financial Expert.

 

Not applicable for semi-annual reports.

 

Item 4. Principal Accountant Fees and Services.

 

Not applicable for semi-annual reports.

 

Item 5. Audit Committee of Listed Registrants.

 

Not applicable.

 

Item 6. Investments

 

(a)          The registrant’s “Schedule I — Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.

 

(b)         Not applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable.

 



 

Item 10. Submission of Matters to a Vote of Security Holders.

 

There have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, since those procedures were last disclosed in response to requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A) or this Item.

 

Item 11. Controls and Procedures.

 

(a)          The registrant’s principal executive officer and principal financial officers, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

(b)         There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Exhibits.

 

(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable at this time.

 

(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.

 

(a)(3) Not applicable.

 

(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(registrant)

 

Columbia Funds Series Trust I

 

 

 

 

 

By (Signature and Title)

 

/s/ J. Kevin Connaughton

 

 

 

J. Kevin Connaughton, President

 

 

 

Date

May 21, 2010

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By (Signature and Title)

 

/s/ J. Kevin Connaughton

 

 

 

J. Kevin Connaughton, President

 

 

 

Date

May 21, 2010

 

 

 

 

 

By (Signature and Title)

 

/s/ Michael G. Clarke

 

 

 

Michael G. Clarke, Chief Financial Officer

 

 

 

Date

May 21, 2010