UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09645
Columbia Funds Series Trust
(Exact name of registrant as specified in charter)
225 Franklin Street
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip code)
Ryan Larrenaga
c/o Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800) 345-6611
Date of fiscal year end: April 30
Date of reporting period: April 30, 2017
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.
Columbia Funds Series Trust
Item 1. Reports to Stockholders.
Annual Report
April 30, 2017
Columbia AMT-Free Georgia Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free Georgia Intermediate Muni Bond Fund (the Fund) seeks current income exempt from U.S. federal income tax and Georgia individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Brian McGreevy
Co-manager
Managed Fund since 2011
Paul Fuchs, CFA
Co-manager
Managed Fund since September 2016
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 05/04/92 | -0.93 | 1.78 | 3.19 |
| | Including sales charges | | -3.93 | 1.16 | 2.88 |
| Class B | Excluding sales charges | 06/07/93 | -1.67 | 1.04 | 2.43 |
| | Including sales charges | | -4.55 | 1.04 | 2.43 |
| Class C | Excluding sales charges | 06/17/92 | -1.57 | 1.04 | 2.43 |
| | Including sales charges | | -2.53 | 1.04 | 2.43 |
| Class R4 * | 03/19/13 | -0.68 | 2.04 | 3.45 |
| Class Y * | 03/01/17 | -0.67 | 2.04 | 3.45 |
| Class Z | 03/01/92 | -0.68 | 2.04 | 3.45 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.15 | 2.80 | 4.37 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 3.00% in the first year, declining to 1.00% in the fourth year and eliminated thereafter. The Fund does not accept new investments in Class B shares, except for certain limited transactions. The Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
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.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free Georgia Intermediate Muni Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 5.8 |
| AA rating | 53.0 |
| A rating | 35.6 |
| BBB rating | 3.6 |
| Not rated | 2.0 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
For the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned -0.93% excluding sales charges. Class Z shares returned -0.68% for the 12-month period. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.15% for the same time period. The Fund underperformed its benchmark due to its exposure to the Virgin Islands and its positions in the hospital sector.
Market overview
Municipal bonds experienced negative total returns during the 12 months ended April 30, 2017, but the bulk of the losses occurred in the weeks immediately following the U.S. election.
The market was relatively stable early in the period, as rates fell slightly at the start of the summer of 2016 (as prices rose) and held in a tight range through September 2016. Municipal bonds weakened somewhat in October as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve at its December meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November due to the unexpected result of the U.S. election. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes, and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. The resulting selling pressure was exacerbated by heavy mutual fund liquidations, which compelled managers to sell into the falling market. Volatility subsequently abated in the new year, as the combination of lower new-issue supply and positive fund flows helped the benchmark produce a string of months with positive returns. As a result, the major national indices were able to finish the 12-month period with slight gains. Tax-exempt securities outperformed Treasuries thanks in part to the continued strength in state and local finances.
Short-term issues experienced the best relative performance. While bonds with maturities of five years and below posted small gains, the remainder of the yield curve closed in the red with issues with maturities of 15 years and above registering the weakest returns. Lower quality securities generally outpaced their higher quality peers at the national level due largely to the relative strength of New Jersey and Illinois issues.
Strong growth for Georgia’s economy
Georgia’s economy continued to experience healthy growth during the period. A robust job market, a diverse mix of industries, and beneficial tax policies have led to a steady decline in the unemployment rate and increases in personal income and consumer spending. In addition, the state has benefited from both rising port traffic and the prospects of increased defense spending. These factors have contributed to rising property prices and higher tax revenues, providing a firm foundation for the state’s municipal bond market. Georgia’s municipal bond market performed in line with the national index.
Contributors and detractors
The Fund’s exposure to Virgin Islands bonds was the primary factor in its underperformance. Moody’s downgraded the territory in mid-2016 as the language in the federal oversight bill to aid the distressed island of Puerto Rico was written in such a way as to include other territories. In addition, investors reacted unfavorably to the Virgin Islands’ poor credit fundamentals. After evaluating the outlook for the territory and determining that the risk-reward tradeoff was unfavorable given the way events unfolded in Puerto Rico, we decided to eliminate the position. Historically, the Fund has invested in Virgin Islands credits because they are exempt from federal and state income taxes, and they offered the opportunity to own higher yielding bonds than would typically be found in Georgia.
The Fund’s allocation to the hospital sector — which lagged the broader market due to the uncertainty regarding the future of the Affordable Care Act — was an additional detractor. We also experienced some weakness in the electric revenue area. The bankruptcy filing of Westinghouse, which is building two nuclear power plants in the state, weighed on the bonds of The Municipal Electric Authority of Georgia due to its ownership interest in the project.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
The Fund had a slightly shorter duration (lower interest rate sensitivity) relative to the benchmark, as the low level of yields prompted us to take a conservative stance during the summer of 2016. This aspect of the Fund’s positioning, together with its slight overweight in shorter maturity issues, had a favorable impact on results given the subsequent increase in yields. Near the end of the reporting period, we targeted a more neutral duration positioning as yields had risen and spreads had become more attractive.
At the sector level, investments in the transportation and education sectors added value, as did an allocation to pre-refunded bonds due to their shorter maturities and higher quality. Additionally, the Fund’s investments in bonds in the six- to eight-year range outperformed the corresponding holdings in the benchmark.
Fund positioning
The tone in the municipal market was quite upbeat at the end of the period, highlighted by five consecutive months of positive returns and a favorable combination of strong demand and low new-issue supply. However, we continued to monitor several issues that could affect market performance, including the potential for lower taxes, the possibility of increased new-issue supply stemming from increased infrastructure spending, and likely changes to the Affordable Care Act.
This mixed picture prompted us to remain cautious with regard to issuers that have had persistent pension-funding challenges, as the rating agencies appear to have lost their patience with those that show no sign of making progress in resolving their underfunded pensions. In addition, we continued to favor areas that have dedicated revenue streams. We remained tax-aware, seeking to manage the gains and losses within the portfolio.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | Account value at the
end of the
period ($) | Expenses paid during
the period ($) | Fund’s annualized
expense ratio (%) |
| | Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual |
| Class A | 1,000.00 | 1,000.00 | 992.20 | 1,020.55 | 3.96 | 4.01 | 0.81 |
| Class B | 1,000.00 | 1,000.00 | 989.40 | 1,016.87 | 7.61 | 7.71 | 1.56 |
| Class C | 1,000.00 | 1,000.00 | 989.40 | 1,016.87 | 7.61 | 7.71 | 1.56 |
| Class R4 | 1,000.00 | 1,000.00 | 994.30 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| Class Y | 1,000.00 | 1,000.00 | 1,011.70 (a) | 1,022.41 | 0.68 (a) | 2.13 | 0.43 (a) |
| Class Z | 1,000.00 | 1,000.00 | 993.40 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Municipal Bonds 98.9% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 4.0% |
| City of Atlanta Department of Aviation |
| Refunding Revenue Bonds |
General
Series 2010C |
| 01/01/25 | 5.000% | | 1,500,000 | 1,663,695 |
| Revenue Bonds |
| Series 2012B |
| 01/01/27 | 5.000% | | 1,000,000 | 1,138,500 |
| Total | 2,802,195 |
| Higher Education 11.6% |
| Athens Housing Authority |
| Refunding Revenue Bonds |
UGAREF East Campus Housing
Series 2011 |
| 12/01/25 | 5.000% | | 1,000,000 | 1,146,811 |
| Bleckley County & Dodge County Joint Development Authority |
| Revenue Bonds |
Middle Georgia College
Series 2008 |
| 07/01/21 | 5.000% | | 750,000 | 780,000 |
| Bulloch County Development Authority |
| Refunding Revenue Bonds |
Georgia Southern University Housing Foundation
Series 2012 (AGM) |
| 08/01/27 | 5.000% | | 500,000 | 565,670 |
| Revenue Bonds |
Georgia Southern University Housing Foundation
Series 2008 (AGM) |
| 07/01/20 | 5.250% | | 1,000,000 | 1,048,180 |
| Carrollton Payroll Development Authority |
| Refunding Revenue Bonds |
Anticipation Certificates - UWG Campus Center
Series 2012 (AGM) |
| 08/01/25 | 5.000% | | 800,000 | 913,696 |
| Fulton County Development Authority |
| Refunding Revenue Bonds |
Spelman College
Series 2015 |
| 06/01/32 | 5.000% | | 1,000,000 | 1,128,160 |
| Gwinnett County Development Authority(a) |
| Refunding Revenue Bonds |
Georgia Gwinnett College Student Housing
Series 2017 |
| 07/01/34 | 5.000% | | 1,000,000 | 1,141,960 |
| Richmond County Development Authority |
| Refunding Revenue Bonds |
ASU Jaguar Student Housing
Series 2012 (AGM) |
| 02/01/27 | 5.000% | | 750,000 | 849,727 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Georgia Regents University Cancer Center
Series 2014 (AGM) |
| 12/15/32 | 5.000% | | 425,000 | 483,506 |
| Total | 8,057,710 |
| Hospital 11.2% |
| Carroll City-County Hospital Authority |
| Refunding Revenue Bonds |
Tanner Medical Center, Inc. Project
Series 2016 |
| 07/01/30 | 4.000% | | 1,000,000 | 1,055,800 |
| Cedartown Polk County Hospital Authority |
| Revenue Bonds |
Floyd Healthcare Polk Medical Center
RAC Series 2016 |
| 07/01/34 | 5.000% | | 500,000 | 547,710 |
| DeKalb Private Hospital Authority |
| Revenue Bonds |
Children’s Healthcare
Series 2009 |
| 11/15/17 | 5.000% | | 320,000 | 326,829 |
| Fayette County Hospital Authority |
| Revenue Bonds |
Fayette Community Hospital
Series 2009A |
| 06/15/23 | 5.250% | | 2,000,000 | 2,158,160 |
| Gainesville & Hall County Hospital Authority |
| Refunding Revenue Bonds |
Northeast Georgia Health System Project
Series 2017 |
| 02/15/30 | 5.000% | | 300,000 | 345,027 |
| Gwinnett County Hospital Authority |
| Revenue Bonds |
Gwinnet Hospital System
Series 2007A (AGM) |
| 07/01/23 | 5.000% | | 2,000,000 | 2,149,440 |
| Richmond County Hospital Authority |
| Refunding Revenue Bonds |
University Health Services, Inc. Project
Series 2016 |
| 01/01/28 | 5.000% | | 1,000,000 | 1,171,590 |
| Total | 7,754,556 |
| Joint Power Authority 4.3% |
| Municipal Electric Authority of Georgia |
| Refunding Revenue Bonds |
Project One
Subordinated Series 2015A |
| 01/01/32 | 5.000% | | 1,000,000 | 1,115,110 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
Project One
Subordinated Series 2008A |
| 01/01/21 | 5.250% | | 1,395,000 | 1,556,932 |
| Unrefunded Revenue Bonds |
Project One
Subordinated Series 2008D |
| 01/01/23 | 6.000% | | 260,000 | 274,417 |
| Total | 2,946,459 |
| Local Appropriation 1.0% |
| Atlanta Public Safety & Judicial Facilities Authority |
| Refunding Revenue Bonds |
Public Safety Facility Project
Series 2016 |
| 12/01/24 | 5.000% | | 580,000 | 703,337 |
| Local General Obligation 22.7% |
| Cherokee County Board of Education |
| Unlimited General Obligation Bonds |
| Series 2014A |
| 08/01/30 | 5.000% | | 1,000,000 | 1,157,060 |
| City of Atlanta |
| Unlimited General Obligation Refunding Bonds |
| Series 2014A |
| 12/01/26 | 5.000% | | 500,000 | 598,055 |
| City of Decatur |
| Unlimited General Obligation Bonds |
| Series 2016 |
| 08/01/29 | 4.000% | | 750,000 | 833,408 |
| Columbia County School District |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 10/01/22 | 5.000% | | 1,000,000 | 1,179,830 |
| County of Columbia |
| Unlimited General Obligation Bonds |
Sales Tax
Series 2015 |
| 04/01/22 | 5.000% | | 285,000 | 333,555 |
| County of DeKalb |
| Unlimited General Obligation Refunding Bonds |
Special Transportation - Parks Greenspace
Series 2016 |
| 12/01/27 | 5.000% | | 750,000 | 914,490 |
| Forsyth County School District |
| Unlimited General Obligation Bonds |
| Series 2014 |
| 02/01/28 | 5.000% | | 1,000,000 | 1,173,190 |
| Gwinnett County School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2010 |
| 02/01/24 | 5.000% | | 1,500,000 | 1,814,715 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Henry County School District |
| Unlimited General Obligation Bonds |
| Series 2016 |
| 08/01/32 | 4.000% | | 1,000,000 | 1,080,280 |
| Sandy Springs Public Facilities Authority |
| Revenue Bonds |
City Center Project
Series 2015 |
| 05/01/28 | 5.000% | | 1,000,000 | 1,202,330 |
| Savannah-Chatham County School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2004 (AGM) |
| 08/01/19 | 5.250% | | 2,000,000 | 2,186,860 |
| South Fulton Municipal Regional Water & Sewer Authority |
| Refunding Revenue Bonds |
| Series 2014 |
| 01/01/31 | 5.000% | | 1,000,000 | 1,136,320 |
| Winder-Barrow Industrial Building Authority |
| Refunding Revenue Bonds |
City of Winder Project
Series 2012 (AGM) |
| 12/01/24 | 5.000% | | 1,900,000 | 2,148,007 |
| Total | 15,758,100 |
| Multi-Family 1.5% |
| Cobb County Development Authority |
| Refunding Revenue Bonds |
Kennesaw State University
Junior Subordinated Series 2014 |
| 07/15/29 | 5.000% | | 980,000 | 1,069,846 |
| Municipal Power 0.4% |
| Guam Power Authority(b) |
| Refunding Revenue Bonds |
| Series 2012A (AGM) |
| 10/01/24 | 5.000% | | 220,000 | 249,198 |
| Other Bond Issue 0.9% |
| Columbus Housing Authority |
| Revenue Bonds |
Eagles Trace Apartments Project
Series 2015 |
| 12/01/25 | 3.250% | | 655,000 | 644,841 |
| Prepaid Gas 0.5% |
| Main Street Natural Gas, Inc. |
| Revenue Bonds |
| Series 2007A |
| 09/15/19 | 5.250% | | 295,000 | 317,960 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Refunded / Escrowed 8.7% |
| Cherokee County Board of Education |
| Prerefunded 08/01/19 Unlimited General Obligation Bonds |
| Series 2009A |
| 08/01/22 | 5.000% | | 1,600,000 | 1,739,088 |
| DeKalb Newton & Gwinnett Counties Joint Development Authority |
| Prerefunded 07/01/19 Revenue Bonds |
GGC Foundation LLC Project
Series 2009 |
| 07/01/24 | 5.500% | | 2,500,000 | 2,735,725 |
| Municipal Electric Authority of Georgia |
| Prerefunded 07/01/18 Revenue Bonds |
Project One
Subordinated Series 2008D |
| 01/01/23 | 6.000% | | 740,000 | 783,460 |
| State of Georgia |
| Prerefunded 05/01/19 Unlimited General Obligation Bonds |
| Series 2009D |
| 05/01/23 | 5.000% | | 750,000 | 808,830 |
| Total | 6,067,103 |
| Retirement Communities 0.8% |
| Fulton County Residential Care Facilities for the Elderly Authority |
| Refunding Revenue Bonds |
Lenbrook Square Foundation, Inc.
Series 2016 |
| 07/01/25 | 4.000% | | 500,000 | 523,785 |
| Sales Tax 1.3% |
| Metropolitan Atlanta Rapid Transit Authority |
| Refunding Revenue Bonds |
3rd Indenture
Series 2014A |
| 07/01/24 | 5.000% | | 750,000 | 893,520 |
| Single Family 1.4% |
| Georgia Housing & Finance Authority |
| Revenue Bonds |
| Series 2014B-1 |
| 12/01/29 | 3.000% | | 1,000,000 | 997,460 |
| Special Non Property Tax 5.3% |
| Cobb-Marietta Coliseum & Exhibit Hall Authority |
| Refunding Revenue Bonds |
| Series 2005 (NPFGC) |
| 10/01/19 | 5.250% | | 1,500,000 | 1,624,455 |
| Metropolitan Atlanta Rapid Transit Authority |
| Refunding Revenue Bonds |
Third Indenture
Series 2012A |
| 07/01/30 | 5.000% | | 1,500,000 | 1,726,515 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Territory of Guam(b) |
| Revenue Bonds |
| Series 2011A |
| 01/01/31 | 5.000% | | 300,000 | 313,179 |
| Total | 3,664,149 |
| Special Property Tax 6.3% |
| Atlanta & Fulton County Recreation Authority |
| Refunding Revenue Bonds |
Park Improvement
Series 2014A |
| 12/01/28 | 5.000% | | 525,000 | 615,032 |
Park Improvement
Series 2014A |
| 12/01/33 | 5.000% | | 1,000,000 | 1,141,420 |
| City of Atlanta |
| Refunding Tax Allocation Bonds |
Atlanta Station Project
Series 2007 (AGM) |
| 12/01/20 | 5.250% | | 1,545,000 | 1,580,690 |
Eastside Project
Series 2016 |
| 01/01/28 | 5.000% | | 300,000 | 349,755 |
Eastside Project
Series 2016 |
| 01/01/29 | 5.000% | | 300,000 | 347,007 |
Eastside Project
Series 2016 |
| 01/01/30 | 5.000% | | 300,000 | 343,791 |
| Total | 4,377,695 |
| Transportation 1.6% |
| Georgia State Road & Tollway Authority |
| Revenue Bonds |
Federal Highway Grant
Series 2009A |
| 06/01/21 | 5.000% | | 1,000,000 | 1,075,840 |
| Turnpike / Bridge / Toll Road 0.9% |
| Georgia State Road & Tollway Authority(c),(d) |
| Revenue Bonds |
I-75 S Express Lanes Project
Series 2014 |
| 06/01/24 | 0.000% | | 1,000,000 | 650,790 |
| Water & Sewer 14.5% |
| Augusta Water & Sewerage |
| Refunding Revenue Bonds |
| Series 2007 (AGM) |
| 10/01/22 | 5.000% | | 2,000,000 | 2,054,520 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Cherokee County Water & Sewer Authority |
| Refunding Revenue Bonds |
| Series 2016 |
| 08/01/31 | 5.000% | | 250,000 | 295,468 |
| City of Atlanta Water & Wastewater |
| Refunding Revenue Bonds |
| Series 2015 |
| 11/01/30 | 5.000% | | 1,000,000 | 1,179,630 |
| City of Atlanta Water & Wastewater(a) |
| Refunding Revenue Bonds |
| Series 2017A |
| 11/01/34 | 5.000% | | 1,000,000 | 1,179,860 |
| City of Columbus Water & Sewerage |
| Refunding Revenue Bonds |
| Series 2016 |
| 05/01/32 | 5.000% | | 350,000 | 411,848 |
| City of Gainesville Water & Sewerage |
| Refunding Revenue Bonds |
| Series 2014 |
| 11/15/26 | 5.000% | | 1,500,000 | 1,782,705 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| County of DeKalb Water & Sewage |
| Refunding Revenue Bonds |
| Series 2006B |
| 10/01/21 | 5.250% | | 2,000,000 | 2,325,480 |
| Villa Rica Public Facilities Authority |
| Refunding Revenue Bonds |
Water & Sewer Project
Series 2015 |
| 03/01/31 | 5.000% | | 750,000 | 855,577 |
| Total | 10,085,088 |
Total Municipal Bonds
(Cost $66,190,940) | 68,639,632 |
Total Investments
(Cost: $66,190,940) | 68,639,632 |
| Other Assets & Liabilities, Net | | 792,353 |
| Net Assets | 69,431,985 |
Notes to Portfolio of Investments
| (a) | Represents a security purchased on a when-issued basis. |
| (b) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2017, the value of these securities amounted to $562,377 which represents 0.81% of net assets. |
| (c) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At April 30, 2017, the value of these securities amounted to $650,790 which represents 0.94% of net assets. |
| (d) | Zero coupon bond. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| NPFGC | National Public Finance Guarantee Corporation |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Municipal Bonds | — | 68,639,632 | — | 68,639,632 |
| Total Investments | — | 68,639,632 | — | 68,639,632 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $66,190,940 |
| Total investments, at cost | 66,190,940 |
| Investments, at value | |
| Unaffiliated issuers, at value | 68,639,632 |
| Total investments, at value | 68,639,632 |
| Cash | 2,423,628 |
| Receivable for: | |
| Investments sold | 35,568 |
| Capital shares sold | 87,135 |
| Interest | 895,563 |
| Expense reimbursement due from Investment Manager | 134 |
| Prepaid expenses | 625 |
| Other assets | 761 |
| Total assets | 72,083,046 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 2,322,410 |
| Capital shares purchased | 21,897 |
| Distributions to shareholders | 158,972 |
| Management services fees | 893 |
| Distribution and/or service fees | 233 |
| Transfer agent fees | 6,608 |
| Compensation of board members | 104,435 |
| Other expenses | 35,613 |
| Total liabilities | 2,651,061 |
| Net assets applicable to outstanding capital stock | $69,431,985 |
| Represented by | |
| Paid in capital | 67,033,308 |
| Undistributed net investment income | 105,247 |
| Accumulated net realized loss | (155,262) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 2,448,692 |
| Total - representing net assets applicable to outstanding capital stock | $69,431,985 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $18,933,870 |
| Shares outstanding | 1,810,988 |
| Net asset value per share | $10.45 |
| Maximum offering price per share(a) | $10.77 |
| Class B | |
| Net assets | $58,867 |
| Shares outstanding | 5,628 |
| Net asset value per share | $10.46 |
| Class C | |
| Net assets | $3,732,796 |
| Shares outstanding | 356,956 |
| Net asset value per share | $10.46 |
| Class R4 | |
| Net assets | $274,896 |
| Shares outstanding | 26,332 |
| Net asset value per share | $10.44 |
| Class Y | |
| Net assets | $10,070 |
| Shares outstanding | 961 |
| Net asset value per share | $10.48 |
| Class Z | |
| Net assets | $46,421,486 |
| Shares outstanding | 4,441,037 |
| Net asset value per share | $10.45 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Interest | $2,546,087 |
| Total income | 2,546,087 |
| Expenses: | |
| Management services fees | 356,944 |
| Distribution and/or service fees | |
| Class A | 52,858 |
| Class B | 883 |
| Class C | 45,925 |
| Transfer agent fees | |
| Class A | 34,394 |
| Class B | 148 |
| Class C | 7,533 |
| Class R4 | 431 |
| Class Z | 81,000 |
| Compensation of board members | 25,738 |
| Custodian fees | 1,726 |
| Printing and postage fees | 18,566 |
| Registration fees | 10,979 |
| Audit fees | 32,393 |
| Legal fees | 7,565 |
| Compensation of chief compliance officer | 17 |
| Other | 12,560 |
| Total expenses | 689,660 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (163,717) |
| Total net expenses | 525,943 |
| Net investment income | 2,020,144 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (33,598) |
| Net realized loss | (33,598) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (2,837,667) |
| Net change in unrealized appreciation (depreciation) | (2,837,667) |
| Net realized and unrealized loss | (2,871,265) |
| Net decrease in net assets resulting from operations | $(851,121) |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $2,020,144 | $2,206,234 |
| Net realized gain (loss) | (33,598) | 351,587 |
| Net change in unrealized appreciation (depreciation) | (2,837,667) | 424,166 |
| Net increase (decrease) in net assets resulting from operations | (851,121) | 2,981,987 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (538,681) | (551,222) |
| Class B | (1,564) | (3,015) |
| Class C | (82,024) | (96,802) |
| Class R4 | (7,498) | (6,445) |
| Class Y | (49) | — |
| Class Z | (1,394,944) | (1,554,637) |
| Net realized gains | | |
| Class A | (121,817) | (68,634) |
| Class B | (505) | (498) |
| Class C | (26,364) | (17,023) |
| Class R4 | (1,501) | (623) |
| Class Z | (281,718) | (178,493) |
| Total distributions to shareholders | (2,456,665) | (2,477,392) |
| Decrease in net assets from capital stock activity | (5,348,816) | (1,509,052) |
| Total decrease in net assets | (8,656,602) | (1,004,457) |
| Net assets at beginning of year | 78,088,587 | 79,093,044 |
| Net assets at end of year | $69,431,985 | $78,088,587 |
| Undistributed net investment income | $105,247 | $134,881 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 324,953 | 3,540,943 | 130,384 | 1,404,666 |
| Distributions reinvested | 36,799 | 389,042 | 38,098 | 410,631 |
| Redemptions | (423,385) | (4,422,404) | (151,849) | (1,637,945) |
| Net increase (decrease) | (61,633) | (492,419) | 16,633 | 177,352 |
| Class B | | | | |
| Subscriptions | 8 | 89 | 1,051 | 11,290 |
| Distributions reinvested | 159 | 1,681 | 189 | 2,036 |
| Redemptions (b) | (8,459) | (90,569) | (2,418) | (25,951) |
| Net decrease | (8,292) | (88,799) | (1,178) | (12,625) |
| Class C | | | | |
| Subscriptions | 32,466 | 349,629 | 108,840 | 1,171,124 |
| Distributions reinvested | 8,148 | 86,019 | 8,524 | 91,875 |
| Redemptions | (142,622) | (1,490,856) | (85,007) | (914,610) |
| Net increase (decrease) | (102,008) | (1,055,208) | 32,357 | 348,389 |
| Class R4 | | | | |
| Subscriptions | 2,695 | 29,187 | 5,421 | 58,325 |
| Distributions reinvested | 822 | 8,668 | 625 | 6,734 |
| Redemptions | (160) | (1,678) | (3,482) | (37,466) |
| Net increase | 3,357 | 36,177 | 2,564 | 27,593 |
| Class Y | | | | |
| Subscriptions | 961 | 10,000 | — | — |
| Net increase | 961 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 890,510 | 9,547,486 | 769,419 | 8,308,660 |
| Distributions reinvested | 23,091 | 244,108 | 22,919 | 247,056 |
| Redemptions | (1,280,672) | (13,550,161) | (983,808) | (10,605,477) |
| Net decrease | (367,071) | (3,758,567) | (191,470) | (2,049,761) |
| Total net decrease | (534,686) | (5,348,816) | (141,094) | (1,509,052) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class A |
| 4/30/2017 | $10.88 | 0.27 | (0.37) | (0.10) | (0.27) | (0.06) |
| 4/30/2016 | $10.81 | 0.29 | 0.11 | 0.40 | (0.29) | (0.04) |
| 4/30/2015 | $10.82 | 0.31 | 0.01 | 0.32 | (0.31) | (0.02) |
| 4/30/2014 | $11.21 | 0.31 | (0.32) | (0.01) | (0.31) | (0.07) |
| 4/30/2013 | $11.18 | 0.31 | 0.04 | 0.35 | (0.31) | (0.01) |
| Class B |
| 4/30/2017 | $10.89 | 0.19 | (0.37) | (0.18) | (0.19) | (0.06) |
| 4/30/2016 | $10.81 | 0.21 | 0.12 | 0.33 | (0.21) | (0.04) |
| 4/30/2015 | $10.82 | 0.23 | 0.01 | 0.24 | (0.23) | (0.02) |
| 4/30/2014 | $11.22 | 0.23 | (0.33) | (0.10) | (0.23) | (0.07) |
| 4/30/2013 | $11.18 | 0.23 | 0.05 | 0.28 | (0.23) | (0.01) |
| Class C |
| 4/30/2017 | $10.88 | 0.19 | (0.36) | (0.17) | (0.19) | (0.06) |
| 4/30/2016 | $10.81 | 0.21 | 0.11 | 0.32 | (0.21) | (0.04) |
| 4/30/2015 | $10.82 | 0.23 | 0.01 | 0.24 | (0.23) | (0.02) |
| 4/30/2014 | $11.22 | 0.23 | (0.33) | (0.10) | (0.23) | (0.07) |
| 4/30/2013 | $11.18 | 0.23 | 0.04 | 0.27 | (0.22) | (0.01) |
| Class R4 |
| 4/30/2017 | $10.87 | 0.30 | (0.38) | (0.08) | (0.29) | (0.06) |
| 4/30/2016 | $10.79 | 0.32 | 0.12 | 0.44 | (0.32) | (0.04) |
| 4/30/2015 | $10.80 | 0.33 | 0.02 | 0.35 | (0.34) | (0.02) |
| 4/30/2014 | $11.20 | 0.34 | (0.33) | 0.01 | (0.34) | (0.07) |
| 4/30/2013 (c) | $11.12 | 0.04 | 0.08 | 0.12 | (0.04) | — |
| Class Y |
| 4/30/2017 (e) | $10.41 | 0.05 | 0.07 | 0.12 | (0.05) | — |
| Class Z |
| 4/30/2017 | $10.88 | 0.30 | (0.37) | (0.07) | (0.30) | (0.06) |
| 4/30/2016 | $10.81 | 0.32 | 0.11 | 0.43 | (0.32) | (0.04) |
| 4/30/2015 | $10.82 | 0.34 | 0.01 | 0.35 | (0.34) | (0.02) |
| 4/30/2014 | $11.22 | 0.34 | (0.33) | 0.01 | (0.34) | (0.07) |
| 4/30/2013 | $11.18 | 0.34 | 0.05 | 0.39 | (0.34) | (0.01) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (d) | Annualized. |
| (e) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.33) | $10.45 | (0.93%) | 1.03% | 0.81% | 2.54% | 14% | $18,934 |
| (0.33) | $10.88 | 3.78% | 1.04% | 0.81% | 2.73% | 13% | $20,377 |
| (0.33) | $10.81 | 2.98% | 1.06% | 0.81% | 2.83% | 19% | $20,060 |
| (0.38) | $10.82 | 0.02% | 1.07% | 0.81% | 2.89% | 5% | $16,728 |
| (0.32) | $11.21 | 3.16% | 1.03% | 0.81% | 2.77% | 16% | $21,517 |
| |
| (0.25) | $10.46 | (1.67%) | 1.77% | 1.56% | 1.77% | 14% | $59 |
| (0.25) | $10.89 | 3.10% | 1.80% | 1.56% | 1.99% | 13% | $152 |
| (0.25) | $10.81 | 2.21% | 1.81% | 1.56% | 2.09% | 19% | $163 |
| (0.30) | $10.82 | (0.82%) | 1.83% | 1.56% | 2.15% | 5% | $212 |
| (0.24) | $11.22 | 2.48% | 1.78% | 1.56% | 2.04% | 16% | $216 |
| |
| (0.25) | $10.46 | (1.57%) | 1.78% | 1.56% | 1.78% | 14% | $3,733 |
| (0.25) | $10.88 | 3.01% | 1.79% | 1.56% | 1.98% | 13% | $4,996 |
| (0.25) | $10.81 | 2.21% | 1.81% | 1.56% | 2.08% | 19% | $4,612 |
| (0.30) | $10.82 | (0.82%) | 1.82% | 1.56% | 2.14% | 5% | $3,501 |
| (0.23) | $11.22 | 2.48% | 1.78% | 1.56% | 2.02% | 16% | $4,301 |
| |
| (0.35) | $10.44 | (0.68%) | 0.77% | 0.56% | 2.79% | 14% | $275 |
| (0.36) | $10.87 | 4.14% | 0.79% | 0.56% | 2.98% | 13% | $250 |
| (0.36) | $10.79 | 3.24% | 0.81% | 0.56% | 3.09% | 19% | $220 |
| (0.41) | $10.80 | 0.18% | 0.88% | 0.56% | 3.21% | 5% | $37 |
| (0.04) | $11.20 | 1.07% | 0.72% (d) | 0.53% (d) | 3.12% (d) | 16% | $3 |
| |
| (0.05) | $10.48 | 1.17% | 0.64% (d) | 0.43% (d) | 3.04% (d) | 14% | $10 |
| |
| (0.36) | $10.45 | (0.68%) | 0.78% | 0.56% | 2.79% | 14% | $46,421 |
| (0.36) | $10.88 | 4.04% | 0.79% | 0.56% | 2.98% | 13% | $52,315 |
| (0.36) | $10.81 | 3.24% | 0.81% | 0.56% | 3.09% | 19% | $54,037 |
| (0.41) | $10.82 | 0.18% | 0.82% | 0.56% | 3.14% | 5% | $58,973 |
| (0.35) | $11.22 | 3.51% | 0.78% | 0.56% | 3.02% | 16% | $73,154 |
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia AMT-Free Georgia Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Class B shares are typically subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, the Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or
| 20 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
Notes to Financial Statements (continued)
April 30, 2017
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.47% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
| 22 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.16 |
| Class B | 0.17 |
| Class C | 0.16 |
| Class R4 | 0.16 |
| Class Y | 0.025 (a) |
| Class Z | 0.16 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements (continued)
April 30, 2017
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 8,633 |
| Class C | 315 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | Fee rates contractual
through
August 31, 2017 |
| Class A | 0.810% |
| Class B | 1.560 |
| Class C | 1.560 |
| Class R4 | 0.560 |
| Class Y | 0.430* |
| Class Z | 0.560 |
*Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for post-October capital losses, trustees’ deferred compensation, distributions and distribution reclassifications. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| (25,018) | 25,018 | — |
| 24 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| — | 2,049,778 | 406,887 | 2,456,665 | — | 2,212,121 | 265,271 | 2,477,392 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 367,990 | — | — | 2,448,692 |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 66,190,940 | 2,828,257 | (379,565) | 2,448,692 |
Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year. As of April 30, 2017, the Fund elected to treat the following late-year ordinary losses and post-October capital losses as arising on May 1, 2017.
Late year
ordinary losses ($) | Post-October
capital losses ($) |
| — | 155,262 |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $10,140,820 and $14,936,516, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
April 30, 2017
matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At April 30, 2017, one unaffiliated shareholder of record owned 68.7% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
| 26 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia AMT-Free Georgia Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free Georgia Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 28 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Capital
gain
dividend | Exempt-
interest
dividends |
| $127,747 | 100.00% |
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 30 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 32 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 34 | Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia AMT-Free Georgia Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free Georgia Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
April 30, 2017
Columbia AMT-Free Maryland Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free Maryland Intermediate Muni Bond Fund (the Fund) seeks current income exempt from U.S. federal income tax and Maryland individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Brian McGreevy
Co-manager
Managed Fund since 2011
Paul Fuchs, CFA
Co-manager
Managed Fund since September 2016
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 09/01/90 | -0.19 | 1.95 | 3.10 |
| | Including sales charges | | -3.21 | 1.34 | 2.79 |
| Class B | Excluding sales charges | 06/08/93 | -0.94 | 1.19 | 2.34 |
| | Including sales charges | | -3.86 | 1.19 | 2.34 |
| Class C | Excluding sales charges | 06/17/92 | -0.93 | 1.19 | 2.33 |
| | Including sales charges | | -1.91 | 1.19 | 2.33 |
| Class R4 * | 03/19/13 | 0.07 | 2.16 | 3.21 |
| Class Y * | 03/01/17 | -0.13 | 1.96 | 3.11 |
| Class Z | 09/01/90 | 0.06 | 2.21 | 3.36 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.15 | 2.80 | 4.37 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 3.00% in the first year, declining to 1.00% in the fourth year and eliminated thereafter. The Fund does not accept new investments in Class B shares, except for certain limited transactions. The Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
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.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free Maryland Intermediate Muni Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 7.8 |
| AA rating | 37.7 |
| A rating | 38.2 |
| BBB rating | 13.0 |
| B rating | 1.1 |
| Not rated | 2.2 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments.
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
For the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned -0.19% excluding sales charges. Class Z shares of the Fund returned 0.06% for the same 12 months. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.15% for the same time period. The Fund benefited from its short duration relative to the benchmark, but its positions in lower coupon bonds detracted.
Market overview
Municipal bonds experienced negative total returns during the 12 months ended April 30, 2017, but the bulk of the losses occurred in the weeks immediately following the U.S. election.
The market was relatively stable early in the period, as rates fell slightly at the start of the summer of 2016 (as prices rose) and held in a tight range through September 2016. Municipal bonds weakened somewhat in October as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve at its December meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November due to the unexpected result of the U.S. election. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes, and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. The resulting selling pressure was exacerbated by heavy mutual fund liquidations, which compelled managers to sell into the falling market. Volatility subsequently abated in the new year, as the combination of lower new-issue supply and positive fund flows helped the index produce a string of months with positive returns. As a result, the major national indices were able to finish the 12-month period with slight gains. Tax-exempt securities outperformed Treasuries thanks in part to the continued strength in state and local finances.
Short-term issues experienced the best relative performance. While bonds with maturities of five years and below posted small gains, the remainder of the yield curve closed in the red with issues with maturities of 15 years and above registering the weakest returns. Lower quality securities generally outpaced their higher quality peers at the national level due largely to the relative strength of New Jersey and Illinois issues.
Maryland experienced slow but positive growth
While Maryland’s economy continued to exhibit growth in the past year, it lagged the broader national average. The state’s economy tends to be more heavily reliant on government jobs and the healthcare sector than the United States as a whole. These areas, while stable, also are less sensitive to movements in the broader business cycle, preventing Maryland from fully participating in the robust growth of the U.S. economy. Maryland’s municipal bond market performed in line with the broader national index during the past year.
Contributors and detractors
The Fund had a slightly shorter duration (lower interest rate sensitivity) relative to the benchmark, as the low level of yields prompted us to take a conservative stance during the summer of 2016. This aspect of the Fund’s positioning, together with its slight overweight in shorter maturity issues, had a favorable impact on results given the subsequent increase in yields. Near the end of the reporting period, we targeted a more neutral duration positioning as yields had risen and spreads had become more attractive.
The Fund was also helped by its overweight positions in A and BBB rated bonds, which outperformed the benchmark due in part to their higher yields. At the sector level, allocations to hospital and housing issues — both of which outpaced the benchmark — had a positive effect on relative performance.
The Fund’s positions in higher quality issues in the 10- to 15-year range, including some lower coupon bonds that were more volatile during the period of rising rates in late 2016, were the most significant detractors from performance. Lower coupon bonds have slightly higher durations, which translated to larger losses in the selloff. Positions in local general obligation bonds — which are primarily higher quality issues with longer maturities — also detracted.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
Fund positioning
The tone in the municipal market was quite upbeat at the end of the period, highlighted by five consecutive months of positive returns and a favorable combination of strong demand and low new-issue supply. However, we continued to monitor several issues that could affect market performance, including the potential for lower taxes, the possibility of increased new-issue supply stemming from increased infrastructure spending, and likely changes to the Affordable Care Act.
This mixed picture prompted us to remain cautious with regard to issuers that have had persistent pension-funding challenges, as the rating agencies appear to have lost their patience with those that showed no sign of making progress in resolving their underfunded pensions. In addition, we continued to favor areas that have dedicated revenue streams. We remained tax-aware, seeking to manage the gains and losses within the portfolio.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | 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 | 995.10 | 1,020.55 | 3.96 | 4.01 | 0.81 |
| Class B | 1,000.00 | 1,000.00 | 991.30 | 1,016.87 | 7.62 | 7.71 | 1.56 |
| Class C | 1,000.00 | 1,000.00 | 990.40 | 1,016.87 | 7.61 | 7.71 | 1.56 |
| Class R4 | 1,000.00 | 1,000.00 | 996.40 | 1,021.87 | 2.64 | 2.68 | 0.54 |
| Class Y | 1,000.00 | 1,000.00 | 1,013.50 (a) | 1,022.46 | 0.66 (a) | 2.08 | 0.42 (a) |
| Class Z | 1,000.00 | 1,000.00 | 995.40 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Municipal Bonds 96.7% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Disposal 1.5% |
| Maryland Environmental Service |
| Revenue Bonds |
Mid Shore II Regional Landfill
Series 2011 |
| 11/01/24 | 5.000% | | 1,030,000 | 1,153,497 |
| Higher Education 5.5% |
| Maryland Health & Higher Educational Facilities Authority |
| Revenue Bonds |
Maryland Institute College of Art
Series 2012 |
| 06/01/29 | 5.000% | | 1,000,000 | 1,098,270 |
Notre Dame of Maryland University
Series 2012 |
| 10/01/32 | 5.000% | | 1,000,000 | 1,092,610 |
| Montgomery County Authority |
| Refunding Revenue Bonds |
| Series 2014 |
| 05/01/27 | 5.000% | | 500,000 | 580,955 |
| Morgan State University |
| Refunding Revenue Bonds |
| Series 2012 |
| 07/01/30 | 5.000% | | 150,000 | 167,939 |
| University System of Maryland |
| Refunding Revenue Bonds |
| Series 2015A |
| 04/01/24 | 5.000% | | 1,000,000 | 1,205,290 |
| Total | 4,145,064 |
| Hospital 21.1% |
| Maryland Health & Higher Educational Facilities Authority |
| Refunding Revenue Bonds |
Anne Arundel Health System
Series 2014 |
| 07/01/29 | 5.000% | | 750,000 | 853,687 |
MedStar Health, Inc.
Series 2015 |
| 08/15/33 | 5.000% | | 500,000 | 558,720 |
Mercy Medical Center
Series 2016A |
| 07/01/32 | 5.000% | | 600,000 | 651,426 |
Meritus Medical Center Issue
Series 2015 |
| 07/01/27 | 5.000% | | 1,000,000 | 1,145,190 |
Peninsula Regional Medical Center
Series 2015 |
| 07/01/32 | 5.000% | | 1,000,000 | 1,115,900 |
Peninsula Regional Medical Center
Series 2015 |
| 07/01/34 | 5.000% | | 1,000,000 | 1,103,070 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2017B |
| 07/01/31 | 5.000% | | 1,000,000 | 1,152,410 |
University of Maryland Medical System
Series 2015 |
| 07/01/28 | 5.000% | | 500,000 | 583,840 |
Western Maryland Health System
Series 2014 |
| 07/01/34 | 5.250% | | 1,500,000 | 1,672,260 |
| Revenue Bonds |
Carroll Hospital
Series 2012A |
| 07/01/26 | 5.000% | | 1,210,000 | 1,372,939 |
Carroll Hospital
Series 2012A |
| 07/01/27 | 5.000% | | 1,000,000 | 1,128,660 |
Johns Hopkins Health System
Series 2012 |
| 07/01/28 | 5.000% | | 1,000,000 | 1,121,130 |
Johns Hopkins Health System
Series 2013C |
| 05/15/33 | 5.000% | | 1,500,000 | 1,681,500 |
MedStar Health
Series 2011 |
| 08/15/22 | 5.000% | | 1,620,000 | 1,844,419 |
| Total | 15,985,151 |
| Investor Owned 3.6% |
| Maryland Economic Development Corp. |
| Refunding Revenue Bonds |
Potomac
Series 2009 |
| 09/01/22 | 6.200% | | 2,500,000 | 2,732,425 |
| Local Appropriation 2.0% |
| Howard County Housing Commission |
| Revenue Bonds |
Roger Carter Recreation Center Project
Series 2011 |
| 06/01/26 | 5.000% | | 585,000 | 649,157 |
| Maryland State Transportation Authority |
| Refunding Revenue Bonds |
Metrorail Parking Projects
Series 2014 |
| 07/01/23 | 4.000% | | 750,000 | 834,915 |
| Total | 1,484,072 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Local General Obligation 9.0% |
| City of Baltimore |
| Unlimited General Obligation Bonds |
Consolidated Public Improvement
Series 2008A (AGM) |
| 10/15/22 | 5.000% | | 2,000,000 | 2,118,239 |
| County of Anne Arundel |
| Limited General Obligation Bonds |
Consolidated General Improvement
Series 2015 |
| 04/01/27 | 5.000% | | 1,500,000 | 1,813,920 |
| County of Frederick |
| Unlimited General Obligation Refunding Bonds |
Public Facilities
Series 2006 |
| 11/01/21 | 5.250% | | 2,500,000 | 2,926,200 |
| Total | 6,858,359 |
| Multi-Family 8.1% |
| Howard County Housing Commission |
| Revenue Bonds |
Gateway Village Apartments
Series 2016 |
| 06/01/31 | 4.000% | | 870,000 | 911,899 |
General Capital Improvement Program
Series 2015 |
| 06/01/32 | 4.000% | | 750,000 | 770,880 |
Woodfield Oxford Square Apartments
Series 2017 |
| 12/01/29 | 5.000% | | 555,000 | 653,729 |
| Maryland Economic Development Corp. |
| Refunding Revenue Bonds |
University of Maryland Baltimore County Student Housing
Series 2016 (AGM) |
| 07/01/30 | 5.000% | | 725,000 | 850,041 |
University of Maryland College Park Student Housing
Series 2016 (AGM) |
| 06/01/30 | 5.000% | | 875,000 | 1,024,852 |
| Revenue Bonds |
Salisbury University Project
Series 2012 |
| 06/01/27 | 5.000% | | 1,100,000 | 1,182,148 |
Towson University Project
Senior Series 2012 |
| 07/01/27 | 5.000% | | 700,000 | 760,851 |
| Total | 6,154,400 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Municipal Power 0.3% |
| Guam Power Authority(a) |
| Refunding Revenue Bonds |
| Series 2012A (AGM) |
| 10/01/24 | 5.000% | | 220,000 | 249,198 |
| Other Bond Issue 3.0% |
| County of Montgomery |
| Revenue Bonds |
Department of Liquor Control
Series 2009A |
| 04/01/22 | 5.000% | | 2,055,000 | 2,197,658 |
| Maryland Community Development Administration |
| Revenue Bonds |
Capital Fund Securitization
Series 2003 (AGM) |
| 07/01/21 | 4.400% | | 45,000 | 45,108 |
| Total | 2,242,766 |
| Other Industrial Development Bond 1.1% |
| Maryland Economic Development Corp. |
| Refunding Revenue Bonds |
CNX Marine Terminals, Inc.
Series 2010 |
| 09/01/25 | 5.750% | | 800,000 | 800,384 |
| Refunded / Escrowed 3.3% |
| City of Baltimore |
| Revenue Bonds |
Water Project
Series 1994A Escrowed to Maturity (FGIC) |
| 07/01/24 | 5.000% | | 1,400,000 | 1,632,960 |
| Maryland Health & Higher Educational Facilities Authority |
| Prerefunded 01/01/21 Revenue Bonds |
Charlestown Community
Series 2010 |
| 01/01/30 | 6.125% | | 735,000 | 860,398 |
| Total | 2,493,358 |
| Retirement Communities 6.1% |
| City of Gaithersburg |
| Refunding Revenue Bonds |
Asbury Obligation Group
Series 2009B |
| 01/01/23 | 6.000% | | 1,250,000 | 1,358,750 |
| County of Baltimore |
| Refunding Revenue Bonds |
Oak Crest Village, Inc.
Series 2016 |
| 01/01/29 | 5.000% | | 500,000 | 569,715 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| County of Howard |
| Refunding Revenue Bonds |
Columbia Vantage House Corp.
Series 2017 |
| 04/01/26 | 5.000% | | 500,000 | 515,040 |
| Maryland Health & Higher Educational Facilities Authority |
| Refunding Revenue Bonds |
Charlestown Community
Series 2016A |
| 01/01/28 | 5.000% | | 1,000,000 | 1,144,660 |
| Revenue Bonds |
King Farm Presbyterian Community
Series 2007A |
| 01/01/27 | 5.250% | | 1,000,000 | 999,960 |
| Total | 4,588,125 |
| Single Family 0.8% |
| Maryland Community Development Administration Housing |
| Revenue Bonds |
| Series 2016 |
| 03/01/36 | 3.250% | | 600,000 | 591,648 |
| Special Non Property Tax 5.9% |
| Maryland Stadium Authority |
| Revenue Bonds |
Baltimore City Public Schools
Series 2016 |
| 05/01/29 | 5.000% | | 1,800,000 | 2,130,192 |
Baltimore City Public Schools
Series 2016 |
| 05/01/30 | 5.000% | | 750,000 | 881,872 |
| State of Maryland Department of Transportation |
| Revenue Bonds |
| 3rd Series 2015 |
| 12/15/26 | 4.000% | | 1,000,000 | 1,117,900 |
| Territory of Guam(a) |
| Revenue Bonds |
| Series 2011A |
| 01/01/31 | 5.000% | | 350,000 | 365,376 |
| Total | 4,495,340 |
| Special Property Tax 6.2% |
| Anne Arundel County Consolidated District |
| Special Tax Refunding Bonds |
Villages of Dorchester & Farmington
Series 2013 |
| 07/01/23 | 5.000% | | 225,000 | 260,554 |
Villages of Dorchester & Farmington
Series 2013 |
| 07/01/24 | 5.000% | | 500,000 | 585,295 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Baltimore |
| Refunding Tax Allocation Bonds |
Consolidated Tax Projects
Series 2015 |
| 06/15/27 | 5.000% | | 520,000 | 581,989 |
| County of Frederick |
| Special Tax Bonds |
Urbana Community Development Authority
Series 2010A |
| 07/01/25 | 5.000% | | 2,500,000 | 2,757,150 |
| County of Montgomery |
| Refunding Special Tax Bonds |
West Germantown Development District
Series 2014 |
| 07/01/25 | 4.000% | | 485,000 | 529,179 |
| Total | 4,714,167 |
| State Appropriated 4.0% |
| Maryland Economic Development Corp. |
| Refunding Revenue Bonds |
Department of Transportation Headquarters
Series 2010 |
| 06/01/22 | 4.500% | | 2,675,000 | 3,055,332 |
| State General Obligation 3.7% |
| State of Maryland |
| Unlimited General Obligation Bonds |
| Series 2015A |
| 03/01/27 | 4.000% | | 1,500,000 | 1,661,850 |
| Unlimited General Obligation Refunding Bonds |
| Series 2015B |
| 08/01/24 | 4.000% | | 1,000,000 | 1,149,770 |
| Total | 2,811,620 |
| Transportation 4.3% |
| Washington Metropolitan Area Transit Authority |
| Revenue Bonds |
Transit
Series 2009 |
| 07/01/23 | 5.250% | | 3,000,000 | 3,245,160 |
| Turnpike / Bridge / Toll Road 1.4% |
| Maryland State Transportation Authority |
| Revenue Bonds |
| Series 2009A |
| 07/01/22 | 5.000% | | 1,000,000 | 1,085,830 |
| Water & Sewer 5.8% |
| City of Baltimore |
| Subordinated Revenue Bonds |
| Series 2014A |
| 07/01/32 | 5.000% | | 1,000,000 | 1,139,100 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Wastewater Project
Series 2017A |
| 07/01/31 | 5.000% | | 1,000,000 | 1,177,860 |
| Maryland Water Quality Financing Administration Revolving Loan Fund |
| Revenue Bonds |
| Series 2008 |
| 03/01/21 | 5.000% | | 2,000,000 | 2,066,760 |
| Total | 4,383,720 |
Total Municipal Bonds
(Cost $70,293,064) | 73,269,616 |
Total Investments
(Cost: $70,293,064) | 73,269,616 |
| Other Assets & Liabilities, Net | | 2,471,956 |
| Net Assets | 75,741,572 |
Notes to Portfolio of Investments
| (a) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2017, the value of these securities amounted to $614,574 which represents 0.81% of net assets. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| FGIC | Financial Guaranty Insurance Corporation |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements (continued)
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Municipal Bonds | — | 73,269,616 | — | 73,269,616 |
| Total Investments | — | 73,269,616 | — | 73,269,616 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $70,293,064 |
| Total investments, at cost | 70,293,064 |
| Investments, at value | |
| Unaffiliated issuers, at value | 73,269,616 |
| Total investments, at value | 73,269,616 |
| Cash | 1,785,873 |
| Receivable for: | |
| Capital shares sold | 51,966 |
| Interest | 965,410 |
| Prepaid expenses | 641 |
| Other assets | 935 |
| Total assets | 76,074,441 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 10,241 |
| Distributions to shareholders | 173,856 |
| Management services fees | 976 |
| Distribution and/or service fees | 181 |
| Transfer agent fees | 5,130 |
| Compensation of board members | 106,471 |
| Audit fees | 31,520 |
| Other expenses | 4,494 |
| Total liabilities | 332,869 |
| Net assets applicable to outstanding capital stock | $75,741,572 |
| Represented by | |
| Paid in capital | 72,554,370 |
| Undistributed net investment income | 226,979 |
| Accumulated net realized loss | (16,329) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 2,976,552 |
| Total - representing net assets applicable to outstanding capital stock | $75,741,572 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $15,124,564 |
| Shares outstanding | 1,426,048 |
| Net asset value per share | $10.61 |
| Maximum offering price per share(a) | $10.94 |
| Class B | |
| Net assets | $9,895 |
| Shares outstanding | 932 |
| Net asset value per share | $10.62 |
| Class C | |
| Net assets | $2,807,466 |
| Shares outstanding | 264,671 |
| Net asset value per share | $10.61 |
| Class R4 | |
| Net assets | $85,562 |
| Shares outstanding | 8,067 |
| Net asset value per share | $10.61 |
| Class Y | |
| Net assets | $10,085 |
| Shares outstanding | 948 |
| Net asset value per share | $10.64 |
| Class Z | |
| Net assets | $57,704,000 |
| Shares outstanding | 5,440,428 |
| Net asset value per share | $10.61 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Interest | $3,005,127 |
| Total income | 3,005,127 |
| Expenses: | |
| Management services fees | 426,149 |
| Distribution and/or service fees | |
| Class A | 43,003 |
| Class B | 300 |
| Class C | 27,554 |
| Transfer agent fees | |
| Class A | 27,951 |
| Class B | 51 |
| Class C | 4,408 |
| Class R4 | 37 |
| Class Z | 115,264 |
| Compensation of board members | 26,233 |
| Custodian fees | 1,881 |
| Printing and postage fees | 18,908 |
| Registration fees | 20,193 |
| Audit fees | 29,540 |
| Legal fees | 7,695 |
| Compensation of chief compliance officer | 21 |
| Other | 13,173 |
| Total expenses | 762,361 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (182,646) |
| Total net expenses | 579,715 |
| Net investment income | 2,425,412 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 83,953 |
| Net realized gain | 83,953 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (3,079,707) |
| Net change in unrealized appreciation (depreciation) | (3,079,707) |
| Net realized and unrealized loss | (2,995,754) |
| Net decrease in net assets resulting from operations | $(570,342) |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $2,425,412 | $2,556,613 |
| Net realized gain | 83,953 | 398,814 |
| Net change in unrealized appreciation (depreciation) | (3,079,707) | 387,379 |
| Net increase (decrease) in net assets resulting from operations | (570,342) | 3,342,806 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (432,259) | (509,670) |
| Class B | (513) | (872) |
| Class C | (48,648) | (52,436) |
| Class R4 | (857) | (299) |
| Class Y | (49) | — |
| Class Z | (1,947,621) | (2,000,211) |
| Total distributions to shareholders | (2,429,947) | (2,563,488) |
| Increase (decrease) in net assets from capital stock activity | (14,715,705) | 1,205,609 |
| Total increase (decrease) in net assets | (17,715,994) | 1,984,927 |
| Net assets at beginning of year | 93,457,566 | 91,472,639 |
| Net assets at end of year | $75,741,572 | $93,457,566 |
| Undistributed net investment income | $226,979 | $231,514 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 106,251 | 1,147,040 | 177,165 | 1,913,094 |
| Distributions reinvested | 17,202 | 184,611 | 19,394 | 209,164 |
| Redemptions | (381,477) | (4,045,942) | (418,028) | (4,500,332) |
| Net decrease | (258,024) | (2,714,291) | (221,469) | (2,378,074) |
| Class B | | | | |
| Subscriptions | 7 | 85 | 958 | 10,278 |
| Distributions reinvested | 23 | 245 | 41 | 441 |
| Redemptions (b) | (3,043) | (31,891) | (742) | (7,941) |
| Net increase (decrease) | (3,013) | (31,561) | 257 | 2,778 |
| Class C | | | | |
| Subscriptions | 54,263 | 582,482 | 15,273 | 164,372 |
| Distributions reinvested | 3,534 | 37,881 | 3,810 | 41,089 |
| Redemptions | (35,049) | (371,820) | (35,889) | (386,679) |
| Net increase (decrease) | 22,748 | 248,543 | (16,806) | (181,218) |
| Class R4 | | | | |
| Subscriptions | 8,087 | 85,000 | — | — |
| Distributions reinvested | 55 | 579 | — | — |
| Redemptions | (1,011) | (10,679) | — | — |
| Net increase | 7,131 | 74,900 | — | — |
| Class Y | | | | |
| Subscriptions | 948 | 10,000 | — | — |
| Net increase | 948 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 1,563,041 | 16,864,850 | 1,554,156 | 16,771,673 |
| Distributions reinvested | 16,480 | 176,823 | 16,949 | 182,824 |
| Redemptions | (2,779,018) | (29,344,969) | (1,225,516) | (13,192,374) |
| Net increase (decrease) | (1,199,497) | (12,303,296) | 345,589 | 3,762,123 |
| Total net increase (decrease) | (1,429,707) | (14,715,705) | 107,571 | 1,205,609 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class A |
| 4/30/2017 | $10.90 | 0.27 | (0.29) | (0.02) | (0.27) | — |
| 4/30/2016 | $10.81 | 0.29 | 0.09 | 0.38 | (0.29) | — |
| 4/30/2015 | $10.80 | 0.31 | 0.01 | 0.32 | (0.31) | — |
| 4/30/2014 | $11.14 | 0.32 | (0.34) | (0.02) | (0.32) | — |
| 4/30/2013 | $11.05 | 0.30 | 0.09 | 0.39 | (0.30) | — |
| Class B |
| 4/30/2017 | $10.91 | 0.19 | (0.29) | (0.10) | (0.19) | — |
| 4/30/2016 | $10.82 | 0.21 | 0.09 | 0.30 | (0.21) | — |
| 4/30/2015 | $10.81 | 0.23 | 0.01 | 0.24 | (0.23) | — |
| 4/30/2014 | $11.15 | 0.23 | (0.34) | (0.11) | (0.23) | — |
| 4/30/2013 | $11.06 | 0.22 | 0.09 | 0.31 | (0.22) | — |
| Class C |
| 4/30/2017 | $10.90 | 0.19 | (0.29) | (0.10) | (0.19) | — |
| 4/30/2016 | $10.81 | 0.21 | 0.09 | 0.30 | (0.21) | — |
| 4/30/2015 | $10.80 | 0.23 | 0.01 | 0.24 | (0.23) | — |
| 4/30/2014 | $11.14 | 0.24 | (0.34) | (0.10) | (0.24) | — |
| 4/30/2013 | $11.05 | 0.22 | 0.09 | 0.31 | (0.22) | — |
| Class R4 |
| 4/30/2017 | $10.90 | 0.30 | (0.29) | 0.01 | (0.30) | — |
| 4/30/2016 | $10.81 | 0.32 | 0.09 | 0.41 | (0.32) | — |
| 4/30/2015 | $10.80 | 0.34 | 0.01 | 0.35 | (0.34) | — |
| 4/30/2014 | $11.14 | 0.34 | (0.34) | 0.00 (d) | (0.34) | — |
| 4/30/2013 (e) | $11.06 | 0.04 | 0.08 | 0.12 | (0.04) | — |
| Class Y |
| 4/30/2017 (g) | $10.55 | 0.05 | 0.09 (h) | 0.14 | (0.05) | — |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.27) | $10.61 | (0.19%) | 1.01% | 0.81% | 2.50% | 20% | $15,125 |
| (0.29) | $10.90 | 3.60% | 1.04% | 0.81% (c) | 2.72% | 13% | $18,362 |
| (0.31) | $10.81 | 3.00% | 1.04% | 0.81% (c) | 2.87% | 10% | $20,593 |
| (0.32) | $10.80 | (0.16%) | 1.05% | 0.81% (c) | 2.94% | 2% | $20,973 |
| (0.30) | $11.14 | 3.58% | 1.01% | 0.81% (c) | 2.72% | 15% | $23,767 |
| |
| (0.19) | $10.62 | (0.94%) | 1.77% | 1.56% | 1.71% | 20% | $10 |
| (0.21) | $10.91 | 2.83% | 1.79% | 1.56% (c) | 1.97% | 13% | $43 |
| (0.23) | $10.82 | 2.22% | 1.79% | 1.56% (c) | 2.13% | 10% | $40 |
| (0.23) | $10.81 | (0.90%) | 1.79% | 1.56% (c) | 2.18% | 2% | $93 |
| (0.22) | $11.15 | 2.81% | 1.75% | 1.56% (c) | 1.96% | 15% | $119 |
| |
| (0.19) | $10.61 | (0.93%) | 1.76% | 1.56% | 1.76% | 20% | $2,807 |
| (0.21) | $10.90 | 2.83% | 1.79% | 1.56% (c) | 1.97% | 13% | $2,638 |
| (0.23) | $10.81 | 2.23% | 1.79% | 1.56% (c) | 2.11% | 10% | $2,796 |
| (0.24) | $10.80 | (0.90%) | 1.80% | 1.56% (c) | 2.19% | 2% | $2,666 |
| (0.22) | $11.14 | 2.81% | 1.76% | 1.56% (c) | 1.96% | 15% | $2,939 |
| |
| (0.30) | $10.61 | 0.07% | 0.72% | 0.54% | 2.87% | 20% | $86 |
| (0.32) | $10.90 | 3.86% | 0.77% | 0.56% (c) | 2.97% | 13% | $10 |
| (0.34) | $10.81 | 3.25% | 0.78% | 0.56% (c) | 3.12% | 10% | $10 |
| (0.34) | $10.80 | 0.08% | 0.81% | 0.56% (c) | 3.24% | 2% | $10 |
| (0.04) | $11.14 | 1.06% | 0.71% (f) | 0.55% (f) | 2.97% (f) | 15% | $3 |
| |
| (0.05) | $10.64 | 1.35% | 0.58% (f) | 0.42% (f) | 3.05% (f) | 20% | $10 |
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class Z |
| 4/30/2017 | $10.90 | 0.29 | (0.28) | 0.01 | (0.30) | — |
| 4/30/2016 | $10.81 | 0.32 | 0.09 | 0.41 | (0.32) | — |
| 4/30/2015 | $10.80 | 0.34 | 0.01 | 0.35 | (0.34) | — |
| 4/30/2014 | $11.14 | 0.34 | (0.34) | 0.00 (d) | (0.34) | — |
| 4/30/2013 | $11.05 | 0.33 | 0.09 | 0.42 | (0.33) | — |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Rounds to zero. |
| (e) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (f) | Annualized. |
| (g) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (h) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.30) | $10.61 | 0.06% | 0.76% | 0.56% | 2.75% | 20% | $57,704 |
| (0.32) | $10.90 | 3.86% | 0.79% | 0.56% (c) | 2.97% | 13% | $72,405 |
| (0.34) | $10.81 | 3.26% | 0.79% | 0.56% (c) | 3.12% | 10% | $68,033 |
| (0.34) | $10.80 | 0.09% | 0.79% | 0.56% (c) | 3.17% | 2% | $63,765 |
| (0.33) | $11.14 | 3.84% | 0.76% | 0.56% (c) | 2.96% | 15% | $110,105 |
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia AMT-Free Maryland Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a non-diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Class B shares are typically subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, the Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or
| 22 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements (continued)
April 30, 2017
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.47% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
| 24 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.16 |
| Class B | 0.17 |
| Class C | 0.16 |
| Class R4 | 0.12 |
| Class Y | 0.025 (a) |
| Class Z | 0.16 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
April 30, 2017
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | Fee rates contractual
through
August 31, 2017 |
| Class A | 0.810% |
| Class B | 1.560% |
| Class C | 1.560% |
| Class R4 | 0.560% |
| Class Y | 0.420%* |
| Class Z | 0.560% |
| *Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017. | |
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share class) are waived proportionately across all share classes, but the Fund’s net operating expenses shall not exceed the contractual annual rates listed in the table above. This arrangement may be revised or discontinued at any time. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for post-October capital losses, capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
| 26 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| — | 1,437,066 | (1,437,066) |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 16,878 | 2,413,069 | — | 2,429,947 | 15,072 | 2,548,416 | — | 2,563,488 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 506,637 | — | — | 2,976,552 |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 70,293,064 | 3,274,920 | (298,368) | 2,976,552 |
The following capital loss carryforwards, determined at April 30, 2017, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended April 30, 2017, capital loss carryforwards utilized, expired unused and permanently lost were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | — | — | — | — | 100,282 | 1,437,066 | — |
Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year. As of April 30, 2017, the Fund elected to treat the following late-year ordinary losses and post-October capital losses as arising on May 1, 2017.
Late year
ordinary losses ($) | Post-October
capital losses ($) |
| — | 16,329 |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
April 30, 2017
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $17,344,888 and $28,779,612, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
| 28 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Non-diversification risk
A non-diversified fund is permitted to invest a greater percentage of its total assets in fewer issuers than a diversified fund. The Fund may, therefore, have a greater risk of loss from a few issuers than a similar fund that invests more broadly.
Shareholder concentration risk
At April 30, 2017, one unaffiliated shareholder of record owned 79.5% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia AMT-Free Maryland Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free Maryland Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 30 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Capital
gain
dividend | Exempt-
interest
dividends |
| $2,413,069 | 99.31% |
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 32 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 34 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 36 | Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia AMT-Free Maryland Intermediate Muni Bond Fund | Annual Report 2017
| 37 |
Columbia AMT-Free Maryland Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
April 30, 2017
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund (the Fund) seeks current income exempt from U.S. federal income tax and North Carolina individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Brian McGreevy
Co-manager
Managed Funds since 2011
Paul Fuchs, CFA
Co-manager
Managed Fund since 2016
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 12/14/92 | -1.11 | 1.67 | 2.96 |
| | Including sales charges | | -4.07 | 1.04 | 2.65 |
| Class B | Excluding sales charges | 06/07/93 | -1.77 | 0.92 | 2.19 |
| | Including sales charges | | -4.67 | 0.92 | 2.19 |
| Class C | Excluding sales charges | 12/16/92 | -1.85 | 0.92 | 2.20 |
| | Including sales charges | | -2.81 | 0.92 | 2.20 |
| Class R4 * | 03/19/13 | -0.86 | 1.92 | 3.21 |
| Class Y * | 03/01/17 | -0.85 | 1.92 | 3.21 |
| Class Z | 12/11/92 | -0.86 | 1.92 | 3.21 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.15 | 2.80 | 4.37 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 3.00% in the first year, declining to 1.00% in the fourth year and eliminated thereafter. The Fund does not accept new investments in Class B shares, except for certain limited transactions. The Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
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.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free North Carolina Intermediate Muni Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 15.5 |
| AA rating | 47.4 |
| A rating | 30.7 |
| BBB rating | 3.6 |
| Not rated | 2.8 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
For the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned -1.11% excluding sales charges. Class Z shares of the Fund returned -0.86% for the same 12 months. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.15% during the same time period. The Fund’s exposure to the Virgin Islands and the longer end of the yield curve detracted from performance, while its positions in shorter term issues was a positive.
Market overview
Municipal bonds experienced negative total returns during the 12 months ended April 30, 2017, but the bulk of the losses occurred in the weeks immediately following the U.S. Presidential election.
The market was relatively stable early in the period, as rates fell slightly at the start of the summer of 2016 (as prices rose) and held in a tight range through September 2016. Municipal bonds weakened somewhat in October as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve (the Fed) at its December meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November due to the unexpected result of the U.S. Presidential election. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes, and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. The resulting selling pressure was exacerbated by heavy mutual fund liquidations, which compelled managers to sell into the falling market. Volatility subsequently abated in the new year, as the combination of lower new-issue supply and positive fund flows helped the iFund’s Index produce a string of months with positive returns. As a result, the major national indices were able to finish the 12-month period with slight gains. Tax-exempt securities outperformed Treasuries thanks in part to the continued strength in state and local finances.
Short-term issues experienced the best relative performance. While bonds with maturities of five years and below posted small gains, the remainder of the yield curve closed in the red with issues with maturities of 15 years and above registering the weakest returns. Lower quality securities generally outpaced their higher quality peers at the national level due largely to the relative strength of New Jersey and Illinois issues.
North Carolina’s municipal bond market lagged
North Carolina continued to display sound economic fundamentals, highlighted by expanding growth, rising employment, robust consumer demand, and a strong property market. The technology and research industries remained an engine for growth, aiding the economy by boosting productivity and leading to higher average wages and augmenting contributions from the finance and manufacturing sectors. Still, the state’s municipal bond market underperformed the broader national index in the past year due to its higher quality bias.
Contributors and detractors
The Fund’s exposure to Virgin Islands bonds was the primary factor in its underperformance. Moody’s downgraded the territory in mid-2016 as the language in the federal oversight bill to aid the distressed island of Puerto Rico was written in such a way as to include other territories. In addition, investors reacted unfavorably to the Virgin Islands’ poor credit fundamentals. After evaluating the outlook for the territory and determining that the risk-reward tradeoff was unfavorable given the way events unfolded in Puerto Rico, we decided to eliminate the position. Historically, the Fund has invested in Virgin Islands credits because they are exempt from federal and state income taxes, and they offered the opportunity to own higher yielding bonds than would typically be found in North Carolina.
The Fund was also hurt by its overweight position in bonds with longer maturities and lower coupons, which underperformed during the sell-off of late 2016. Conversely, its overweight in shorter maturity issues helped performance given that the zero- to three-year area outperformed amid the backdrop of rising rates
Fund positioning
The Fund experienced strong positive cash flows in the last two years, and we invested a large portion of the funds into new issues with maturities in the 12- to 18-year range. Most of these carried bond calls of nine to ten years, so they added duration (interest-rate sensitivity) to the portfolio. (A callable bond is a bond that can be redeemed by the issuer prior to its maturity.) In addition, they provided more income since longer maturities typically pay more interest. At the same time, the
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
Fund was overweight in shorter maturity issues due to the heavy pre-refunding of debt that has occurred in North Carolina’s market in recent years. The portfolio therefore featured a “barbell” positioning with an overall duration about equal to that of the benchmark.
The tone in the municipal market was quite upbeat at the end of the period, highlighted by five consecutive months of positive returns and a favorable combination of strong demand and low new-issue supply. However, we continued to monitor several issues that could affect market performance, including the potential for lower taxes, the possibility of increased new-issue supply stemming from increased infrastructure spending, and likely changes to the Affordable Care Act.
This mixed picture prompted us to remain cautious with regard to issuers that have had persistent pension funding issues, as the rating agencies appear to have lost their patience with those that showed no sign of making progress in resolving their underfunded pensions. In addition, we favored areas that have dedicated revenue streams. We remained tax-aware, seeking to manage the gains and losses within the portfolio.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | 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 | 990.40 | 1,020.55 | 3.95 | 4.01 | 0.81 |
| Class B | 1,000.00 | 1,000.00 | 987.50 | 1,016.87 | 7.60 | 7.71 | 1.56 |
| Class C | 1,000.00 | 1,000.00 | 987.60 | 1,016.87 | 7.60 | 7.71 | 1.56 |
| Class R4 | 1,000.00 | 1,000.00 | 991.60 | 1,021.77 | 2.73 | 2.78 | 0.56 |
| Class Y | 1,000.00 | 1,000.00 | 1,011.50 (a) | 1,022.46 | 0.66 (a) | 2.08 | 0.42 (a) |
| Class Z | 1,000.00 | 1,000.00 | 991.60 | 1,021.77 | 2.73 | 2.78 | 0.56 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Municipal Bonds 97.1% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 1.8% |
| Raleigh Durham Airport Authority |
| Refunding Revenue Bonds |
| Series 2010A |
| 05/01/23 | 5.000% | | 3,000,000 | 3,328,650 |
| Higher Education 8.5% |
| Appalachian State University |
| Refunding Revenue Bonds |
| Series 2016A |
| 10/01/26 | 5.000% | | 325,000 | 394,920 |
| Series 2016B |
| 10/01/20 | 5.000% | | 1,380,000 | 1,552,459 |
| East Carolina University |
| Revenue Bonds |
General
Series 2014A |
| 10/01/31 | 5.000% | | 1,900,000 | 2,190,035 |
| North Carolina Agricultural & Technical State University |
| Refunding Revenue Bonds |
General Purpose
Series 2015A |
| 10/01/32 | 5.000% | | 2,000,000 | 2,284,600 |
| North Carolina Capital Facilities Finance Agency |
| Unrefunded Revenue Bonds |
Meredith College
Series 2008A |
| 06/01/31 | 6.000% | | 970,000 | 1,001,835 |
| North Carolina Central University |
| Refunding Revenue Bonds |
| Series 2016 |
| 10/01/28 | 4.000% | | 955,000 | 1,025,594 |
| Series 2016 |
| 10/01/29 | 4.000% | | 625,000 | 661,919 |
| University of North Carolina at Charlotte (The) |
| Revenue Bonds |
| Series 2014 |
| 04/01/30 | 5.000% | | 1,000,000 | 1,143,690 |
| University of North Carolina at Greensboro |
| Refunding Revenue Bonds |
| Series 2016 |
| 04/01/29 | 5.000% | | 390,000 | 459,787 |
| Series 2016 |
| 04/01/30 | 5.000% | | 250,000 | 292,732 |
| Revenue Bonds |
General
Series 2014 |
| 04/01/32 | 5.000% | | 2,000,000 | 2,267,120 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| University of North Carolina at Wilmington |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/01/29 | 5.000% | | 2,000,000 | 2,302,640 |
| University of North Carolina System |
| Unrefunded Revenue Bonds |
UNC System Appalachian State
Series 2017A (AGM) |
| 10/01/22 | 5.000% | | 140,000 | 147,543 |
| Total | 15,724,874 |
| Hospital 12.0% |
| Charlotte-Mecklenburg Hospital Authority (The) |
| Refunding Revenue Bonds |
Carolinas Health Care System Group
Series 2009A |
| 01/15/21 | 5.000% | | 1,000,000 | 1,065,090 |
| North Carolina Medical Care Commission |
| Refunding Revenue Bonds |
Duke University Health System
Series 2016 |
| 06/01/28 | 5.000% | | 1,000,000 | 1,231,570 |
Mission Health System, Inc.
Series 2015 |
| 10/01/36 | 5.000% | | 2,515,000 | 2,819,315 |
Novant Health Obligation Group
Series 2013 |
| 11/01/24 | 5.000% | | 530,000 | 611,980 |
Southeastern Regional Medical Center
Series 2012 |
| 06/01/26 | 5.000% | | 1,000,000 | 1,108,040 |
Vidant Health
Series 2012A |
| 06/01/25 | 5.000% | | 1,500,000 | 1,701,120 |
Vidant Health
Series 2012A |
| 06/01/36 | 5.000% | | 1,445,000 | 1,574,776 |
Vidant Health
Series 2015 |
| 06/01/30 | 5.000% | | 1,000,000 | 1,135,920 |
WakeMed
Series 2012A |
| 10/01/31 | 5.000% | | 2,000,000 | 2,222,120 |
| Revenue Bonds |
Duke University Health System
Series 2012A |
| 06/01/32 | 5.000% | | 3,635,000 | 4,079,779 |
Moses Cone Health System
Series 2011 |
| 10/01/20 | 5.000% | | 3,215,000 | 3,589,258 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Rex Hospital, Inc.
Series 2015A |
| 07/01/32 | 5.000% | | 1,000,000 | 1,138,560 |
| Total | 22,277,528 |
| Joint Power Authority 2.5% |
| North Carolina Municipal Power Agency No. 1 |
| Refunding Revenue Bonds |
| Series 2015A |
| 01/01/31 | 5.000% | | 2,000,000 | 2,321,680 |
| Series 2016A |
| 01/01/28 | 5.000% | | 1,500,000 | 1,797,540 |
| Unrefunded Revenue Bonds |
| Series 2009A |
| 01/01/25 | 5.000% | | 430,000 | 456,862 |
| Total | 4,576,082 |
| Local Appropriation 17.7% |
| City of Kannapolis |
| Revenue Bonds |
| Series 2014 |
| 04/01/31 | 5.000% | | 1,365,000 | 1,544,566 |
| City of Monroe |
| Refunding Revenue Bonds |
| Series 2016 |
| 03/01/33 | 4.000% | | 800,000 | 838,232 |
| Series 2016 |
| 03/01/35 | 5.000% | | 1,000,000 | 1,135,150 |
| City of Raleigh |
| Limited Obligation Refunding Revenue Bonds |
| Series 2016 |
| 02/01/31 | 4.000% | | 385,000 | 415,677 |
| Series 2016 |
| 02/01/32 | 4.000% | | 775,000 | 829,955 |
| City of Wilmington |
| Refunding Revenue Bonds |
| Series 2014A |
| 06/01/28 | 5.000% | | 500,000 | 581,995 |
| City of Winston-Salem |
| Refunding Revenue Bonds |
| Series 2014C |
| 06/01/29 | 5.000% | | 750,000 | 872,250 |
| County of Brunswick |
| Revenue Bonds |
| Series 2015A |
| 06/01/28 | 5.000% | | 250,000 | 293,622 |
| Series 2015A |
| 06/01/29 | 5.000% | | 250,000 | 291,163 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| County of Buncombe |
| Revenue Bonds |
| Series 2012 |
| 06/01/28 | 5.000% | | 500,000 | 574,925 |
| Series 2012 |
| 06/01/29 | 5.000% | | 1,000,000 | 1,148,280 |
| Series 2014A |
| 06/01/32 | 5.000% | | 1,635,000 | 1,878,468 |
| County of Cabarru |
| Revenue Bonds |
Installment Financing Contract
Series 2016 |
| 04/01/28 | 5.000% | | 1,000,000 | 1,199,970 |
| County of Catawba |
| Revenue Bonds |
| Series 2011 |
| 10/01/22 | 5.000% | | 400,000 | 455,620 |
| County of Cumberland |
| Refunding Certificate of Participation |
Improvement Projects
Series 2009-B1 |
| 12/01/21 | 5.000% | | 2,775,000 | 3,033,685 |
| County of Dare |
| Refunding Revenue Bonds |
| Series 2016A |
| 06/01/31 | 4.000% | | 225,000 | 238,367 |
| County of Davidson |
| Revenue Bonds |
| Series 2016 |
| 06/01/29 | 5.000% | | 1,000,000 | 1,186,160 |
| County of Duplin |
| Revenue Bonds |
| Series 2016 |
| 04/01/34 | 5.000% | | 1,000,000 | 1,132,130 |
| County of Johnston |
| Revenue Bonds |
| Series 2014 |
| 06/01/28 | 5.000% | | 1,000,000 | 1,163,990 |
| County of Martin |
| Refunding Revenue Bonds |
Water & Sewer District
Series 2014 |
| 06/01/30 | 4.000% | | 730,000 | 771,128 |
| County of Onslow |
| Revenue Bonds |
| Series 2015 |
| 06/01/27 | 4.000% | | 405,000 | 449,720 |
| County of Pender |
| Revenue Bonds |
| Series 2015 |
| 04/01/27 | 5.000% | | 1,165,000 | 1,367,722 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2015 |
| 04/01/28 | 5.000% | | 1,290,000 | 1,499,638 |
| County of Randolph |
| Refunding Revenue Bonds |
| Series 2013C |
| 10/01/26 | 5.000% | | 1,500,000 | 1,795,365 |
| County of Union |
| Refunding Revenue Bonds |
| Series 2012 |
| 12/01/24 | 5.000% | | 1,715,000 | 2,073,092 |
| County of Wilkes |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/01/27 | 5.000% | | 500,000 | 584,700 |
| Series 2015 |
| 06/01/29 | 5.000% | | 500,000 | 576,830 |
| Durham Capital Financing Corp |
| Refunding Revenue Bonds |
| Series 2016 |
| 12/01/29 | 5.000% | | 1,100,000 | 1,320,308 |
| Durham Capital Financing Corp. |
| Refunding Revenue Bonds |
| Series 2016 |
| 12/01/28 | 5.000% | | 630,000 | 763,314 |
| Jacksonville Public Facilities Corp. |
| Limited Obligation Revenue Bonds |
| Series 2012 |
| 04/01/26 | 5.000% | | 1,075,000 | 1,217,846 |
| Orange County Public Facilities Co. |
| Revenue Bonds |
| Series 2012 |
| 10/01/24 | 5.000% | | 1,325,000 | 1,540,591 |
| Total | 32,774,459 |
| Local General Obligation 4.8% |
| City of Winston-Salem |
| Unlimited General Obligation Bonds |
| Series 2016B |
| 06/01/23 | 5.000% | | 1,935,000 | 2,316,137 |
| County of Henderson |
| Revenue Bonds |
| Series 2015 |
| 10/01/30 | 5.000% | | 500,000 | 585,720 |
| County of Pitt |
| Refunding Revenue Bonds |
| Series 2017 |
| 04/01/22 | 5.000% | | 750,000 | 870,795 |
| Series 2017 |
| 04/01/24 | 5.000% | | 410,000 | 489,975 |
| Series 2017 |
| 04/01/25 | 5.000% | | 520,000 | 626,309 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| County of Wake |
| Unlimited General Obligation Refunding Bonds |
| Series 2010C |
| 03/01/22 | 5.000% | | 2,000,000 | 2,334,580 |
| Unrefunded Unlimited General Obligation Public Improvement Bonds |
| Series 2009 |
| 03/01/20 | 5.000% | | 1,565,000 | 1,683,517 |
| Total | 8,907,033 |
| Multi-Family 2.6% |
| North Carolina Capital Facilities Finance Agency |
| Refunding Revenue Bonds |
North Carolina A&T University Foundation Project
Series 2015A |
| 06/01/28 | 5.000% | | 1,000,000 | 1,125,060 |
| University of North Carolina at Wilmington |
| Refunding Revenue Bonds |
Student Housing Projects
Series 2016 |
| 06/01/29 | 4.000% | | 1,000,000 | 1,080,770 |
| Western Carolina University |
| Limited Obligation Refunding Revenue Bonds |
Student Housing
Series 2016 (AGM) |
| 06/01/27 | 5.000% | | 500,000 | 591,935 |
Student Housing
Series 2016 (AGM) |
| 06/01/28 | 5.000% | | 1,000,000 | 1,176,290 |
Student Housing
Series 2016 (AGM) |
| 06/01/29 | 5.000% | | 800,000 | 934,160 |
| Total | 4,908,215 |
| Municipal Power 3.2% |
| City of Concord Utilities Systems |
| Refunding Revenue Bonds |
| Series 2009B |
| 12/01/19 | 5.000% | | 1,500,000 | 1,644,060 |
| City of Fayetteville Public Works Commission |
| Revenue Bonds |
| Series 2014 |
| 03/01/27 | 4.000% | | 1,250,000 | 1,383,538 |
| Greenville Utilities Commission |
| Refunding Revenue Bonds |
| Series 2016 |
| 04/01/31 | 5.000% | | 1,000,000 | 1,177,840 |
| Revenue Bonds |
| Series 2008A (AGM) |
| 11/01/18 | 5.000% | | 1,040,000 | 1,100,122 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Guam Power Authority(a) |
| Refunding Revenue Bonds |
| Series 2012A (AGM) |
| 10/01/24 | 5.000% | | 520,000 | 589,014 |
| Total | 5,894,574 |
| Ports 1.2% |
| North Carolina State Ports Authority |
| Revenue Bonds |
Senior Lien
Series 2010B |
| 02/01/25 | 5.000% | | 2,000,000 | 2,160,640 |
| Refunded / Escrowed 19.6% |
| Charlotte-Mecklenburg Hospital Authority (The) |
| Prerefunded 01/15/18 Revenue Bonds |
Carolinas Health Care System Group
Series 2008A |
| 01/15/24 | 5.250% | | 2,000,000 | 2,062,280 |
| City of High Point Combined Water & Sewer System |
| Prerefunded 11/01/18 Revenue Bonds |
| Series 2008 (AGM) |
| 11/01/24 | 5.000% | | 1,000,000 | 1,060,550 |
| Series 2008 (AGM) |
| 11/01/25 | 5.000% | | 1,000,000 | 1,060,550 |
| City of Raleigh Combined Enterprise System |
| Prerefunded 03/01/21 Revenue Bonds |
| Series 2011 |
| 03/01/27 | 5.000% | | 800,000 | 910,464 |
| City of Winston-Salem Water & Sewer System |
| Prerefunded 06/01/19 Revenue Bonds |
| Series 2009 |
| 06/01/23 | 5.000% | | 1,000,000 | 1,081,100 |
| County of Cabarrus |
| Prerefunded 06/01/18 Certificates of Participation |
Installment Financing Contract
Series 2008C |
| 06/01/22 | 5.000% | | 1,545,000 | 1,614,108 |
| County of Harnett |
| Prerefunded 06/01/19 Certificate of Participation |
| Series 2009 |
| 06/01/22 | 5.000% | | 1,880,000 | 2,032,055 |
| County of Mecklenburg |
| Prerefunded 02/01/19 Certificate of Participation |
| Series 2009A |
| 02/01/23 | 5.000% | | 1,000,000 | 1,069,490 |
| County of Moore |
| Prerefunded 07/01/20 Revenue Bonds |
| Series 2010 |
| 06/01/24 | 5.000% | | 1,635,000 | 1,821,668 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| County of Wake |
| Prerefunded 03/01/19 Unlimited General Obligation Public Improvement Bonds |
| Series 2009 |
| 03/01/20 | 5.000% | | 935,000 | 1,002,834 |
| Revenue Bonds |
| Series 1993 Escrowed to Maturity (NPFGC) |
| 10/01/26 | 5.125% | | 3,065,000 | 3,480,767 |
| North Carolina Capital Facilities Finance Agency |
| Prerefunded 01/01/19 Revenue Bonds |
Wake Forest University
Series 2009 |
| 01/01/26 | 5.000% | | 1,000,000 | 1,066,440 |
| Prerefunded 06/01/18 Revenue Bonds |
Meredith College
Series 2008A |
| 06/01/31 | 6.000% | | 30,000 | 31,660 |
| North Carolina Eastern Municipal Power Agency |
| Prerefunded 01/01/19 Revenue Bonds |
| Series 2009B |
| 01/01/26 | 5.000% | | 2,250,000 | 2,399,085 |
| Prerefunded 01/01/22 Revenue Bonds |
| Series 1988A |
| 01/01/26 | 6.000% | | 1,000,000 | 1,202,910 |
| Refunding Revenue Bonds |
| Series 1993B Escrowed to Maturity (NPFGC / IBC) |
| 01/01/22 | 6.000% | | 3,000,000 | 3,608,730 |
| Series 1993B Escrowed to Maturity (NPFGC) |
| 01/01/22 | 6.000% | | 1,000,000 | 1,202,910 |
| North Carolina Municipal Power Agency No. 1 |
| Prerefunded 01/01/18 Revenue Bonds |
| Series 2008A |
| 01/01/20 | 5.250% | | 2,000,000 | 2,058,940 |
| Prerefunded 01/01/19 Revenue Bonds |
| Series 2009A |
| 01/01/25 | 5.000% | | 1,070,000 | 1,139,978 |
| Northern Hospital District of Surry County |
| Prerefunded 04/01/18 Revenue Bonds |
| Series 2008 |
| 10/01/24 | 5.750% | | 1,000,000 | 1,043,900 |
| Puerto Rico Highways & Transportation Authority(a) |
| Refunding Revenue Bonds |
| Series 2003AA Escrowed to Maturity (NPFGC) |
| 07/01/18 | 5.500% | | 3,360,000 | 3,536,131 |
| University of North Carolina System |
| Prerefunded 10/01/18 Revenue Bonds |
| Series 2008A (AGM) |
| 10/01/22 | 5.000% | | 985,000 | 1,041,539 |
| Series 2008A (AGM) |
| 10/01/22 | 5.000% | | 655,000 | 692,597 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2008A (AGM) |
| 10/01/22 | 5.000% | | 220,000 | 232,628 |
| Total | 36,453,314 |
| Retirement Communities 5.2% |
| North Carolina Medical Care Commission |
| Refunding Revenue Bonds |
1st Mortgage-United Church
Series 2015A |
| 09/01/30 | 4.500% | | 1,000,000 | 991,530 |
1st Mortgage-United Methodist
Series 2013A |
| 10/01/33 | 5.000% | | 1,595,000 | 1,634,987 |
Deerfield Episcopal Retirement Community
Series 2016 |
| 11/01/31 | 5.000% | | 1,500,000 | 1,675,500 |
Pennybyrn at Maryfield
Series 2015 |
| 10/01/25 | 5.000% | | 1,000,000 | 1,076,830 |
Presbyterian Homes
Series 2016C |
| 10/01/31 | 4.000% | | 2,000,000 | 2,065,040 |
Southminster, Inc.
Series 2016 |
| 10/01/25 | 5.000% | | 1,260,000 | 1,365,739 |
United Methodist Retirement
Series 2016 |
| 10/01/30 | 5.000% | | 700,000 | 785,750 |
| Total | 9,595,376 |
| Sales Tax 0.6% |
| City of Rocky Mount |
| Revenue Bonds |
| Series 2016 |
| 05/01/28 | 5.000% | | 1,000,000 | 1,194,310 |
| Special Non Property Tax 0.3% |
| Territory of Guam(a) |
| Revenue Bonds |
| Series 2011A |
| 01/01/31 | 5.000% | | 500,000 | 521,965 |
| State Appropriated 1.3% |
| State of North Carolina |
| Refunding Revenue Bonds |
| Series 2014B |
| 06/01/25 | 5.000% | | 2,000,000 | 2,432,580 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Transportation 0.6% |
| State of North Carolina |
| Revenue Bonds |
Vehicle - GARVEE
Series 2015 |
| 03/01/27 | 5.000% | | 900,000 | 1,055,583 |
| Turnpike / Bridge / Toll Road 1.0% |
| North Carolina Turnpike Authority |
| Refunding Revenue Bonds |
Senior Lien
Series 2017 |
| 01/01/30 | 5.000% | | 700,000 | 807,247 |
Senior Lien
Series 2017 (AGM) |
| 01/01/31 | 5.000% | | 750,000 | 873,068 |
| North Carolina Turnpike Authority(b) |
| Revenue Bonds |
| Series 2017C |
| 07/01/31 | 0.000% | | 500,000 | 265,950 |
| Total | 1,946,265 |
| Water & Sewer 14.2% |
| City of Charlotte Water & Sewer System |
| Revenue Bonds |
| Series 2008 |
| 07/01/23 | 5.000% | | 3,000,000 | 3,149,220 |
| Series 2009B |
| 07/01/25 | 5.000% | | 5,835,000 | 6,498,498 |
| City of Gastonia Combined Utilities System |
| Revenue Bonds |
| Series 2015 |
| 05/01/29 | 5.000% | | 265,000 | 311,277 |
| Series 2015 |
| 05/01/30 | 5.000% | | 660,000 | 770,392 |
| City of Greensboro Combined Water & Sewer System |
| Refunding Revenue Bonds |
| Series 2006 |
| 06/01/22 | 5.250% | | 1,200,000 | 1,418,616 |
| Series 2006 |
| 06/01/23 | 5.250% | | 2,000,000 | 2,409,960 |
| City of Jacksonville Enterprise System |
| Refunding Revenue Bonds |
| Series 2016 |
| 05/01/28 | 5.250% | | 250,000 | 311,442 |
| City of Raleigh Combined Enterprise System |
| Refunding Revenue Bonds |
| Series 2015B |
| 12/01/25 | 5.000% | | 1,200,000 | 1,480,548 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Thomasville Combined Enterprise System |
| Refunding Revenue Bonds |
| Series 2012 |
| 05/01/26 | 4.000% | | 860,000 | 918,712 |
| City of Winston-Salem Water & Sewer System |
| Refunding Revenue Bonds |
| Series 2016A |
| 06/01/33 | 4.000% | | 2,165,000 | 2,336,122 |
| County of Brunswick Enterprise Systems |
| Refunding Revenue Bonds |
| Series 2015 |
| 04/01/26 | 5.000% | | 1,070,000 | 1,286,589 |
| Series 2015 |
| 04/01/27 | 5.000% | | 1,500,000 | 1,789,485 |
| County of Union Enterprise System |
| Revenue Bonds |
| Series 2015 |
| 06/01/29 | 5.000% | | 500,000 | 590,625 |
| Guam Government Waterworks Authority(a) |
| Revenue Bonds |
| Series 2016 |
| 07/01/36 | 5.000% | | 350,000 | 373,590 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Onslow Water & Sewer Authority |
| Refunding Revenue Bonds |
| Series 2016 |
| 12/01/31 | 4.000% | | 1,640,000 | 1,780,056 |
| Town of Fuquay-Varina Combined Utilities System |
| Revenue Bonds |
| Series 2016 |
| 04/01/30 | 5.000% | | 335,000 | 397,491 |
| Series 2016 |
| 04/01/31 | 5.000% | | 450,000 | 530,419 |
| Total | 26,353,042 |
Total Municipal Bonds
(Cost $174,503,084) | 180,104,490 |
Total Investments
(Cost: $174,503,084) | 180,104,490 |
| Other Assets & Liabilities, Net | | 5,406,032 |
| Net Assets | 185,510,522 |
Notes to Portfolio of Investments
| (a) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2017, the value of these securities amounted to $5,020,700 which represents 2.71% of net assets. |
| (b) | Zero coupon bond. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| IBC | Insurance Bond Certificate |
| NPFGC | National Public Finance Guarantee Corporation |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements (continued)
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Municipal Bonds | — | 180,104,490 | — | 180,104,490 |
| Total Investments | — | 180,104,490 | — | 180,104,490 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $174,503,084 |
| Total investments, at cost | 174,503,084 |
| Investments, at value | |
| Unaffiliated issuers, at value | 180,104,490 |
| Total investments, at value | 180,104,490 |
| Cash | 3,687,915 |
| Receivable for: | |
| Capital shares sold | 207,285 |
| Interest | 2,179,925 |
| Expense reimbursement due from Investment Manager | 148 |
| Prepaid expenses | 745 |
| Other assets | 764 |
| Total assets | 186,181,272 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 94,231 |
| Distributions to shareholders | 404,520 |
| Management services fees | 2,387 |
| Distribution and/or service fees | 309 |
| Transfer agent fees | 24,268 |
| Compensation of board members | 108,097 |
| Other expenses | 36,938 |
| Total liabilities | 670,750 |
| Net assets applicable to outstanding capital stock | $185,510,522 |
| Represented by | |
| Paid in capital | 180,040,158 |
| Undistributed net investment income | 710,338 |
| Accumulated net realized loss | (841,380) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 5,601,406 |
| Total - representing net assets applicable to outstanding capital stock | $185,510,522 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $18,246,031 |
| Shares outstanding | 1,765,979 |
| Net asset value per share | $10.33 |
| Maximum offering price per share(a) | $10.65 |
| Class B | |
| Net assets | $9,835 |
| Shares outstanding | 951 |
| Net asset value per share | $10.34 |
| Class C | |
| Net assets | $6,681,705 |
| Shares outstanding | 646,889 |
| Net asset value per share | $10.33 |
| Class R4 | |
| Net assets | $2,235,817 |
| Shares outstanding | 216,662 |
| Net asset value per share | $10.32 |
| Class Y | |
| Net assets | $10,070 |
| Shares outstanding | 973 |
| Net asset value per share | $10.35 |
| Class Z | |
| Net assets | $158,327,064 |
| Shares outstanding | 15,337,745 |
| Net asset value per share | $10.32 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Interest | $7,084,184 |
| Total income | 7,084,184 |
| Expenses: | |
| Management services fees | 1,037,000 |
| Distribution and/or service fees | |
| Class A | 59,380 |
| Class B | 759 |
| Class C | 75,448 |
| Transfer agent fees | |
| Class A | 42,917 |
| Class B | 140 |
| Class C | 13,582 |
| Class R4 | 5,616 |
| Class Z | 335,310 |
| Compensation of board members | 28,188 |
| Custodian fees | 2,786 |
| Printing and postage fees | 21,199 |
| Registration fees | 24,598 |
| Audit fees | 29,540 |
| Legal fees | 8,836 |
| Compensation of chief compliance officer | 49 |
| Other | 15,082 |
| Total expenses | 1,700,430 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (326,612) |
| Total net expenses | 1,373,818 |
| Net investment income | 5,710,366 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (660,541) |
| Net realized loss | (660,541) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (8,001,562) |
| Net change in unrealized appreciation (depreciation) | (8,001,562) |
| Net realized and unrealized loss | (8,662,103) |
| Net decrease in net assets resulting from operations | $(2,951,737) |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $5,710,366 | $5,355,123 |
| Net realized gain (loss) | (660,541) | 26,729 |
| Net change in unrealized appreciation (depreciation) | (8,001,562) | 2,371,811 |
| Net increase (decrease) in net assets resulting from operations | (2,951,737) | 7,753,663 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (569,495) | (676,701) |
| Class B | (1,236) | (1,851) |
| Class C | (124,781) | (140,794) |
| Class R4 | (82,476) | (103,447) |
| Class Y | (47) | — |
| Class Z | (4,943,178) | (4,448,177) |
| Total distributions to shareholders | (5,721,213) | (5,370,970) |
| Increase (decrease) in net assets from capital stock activity | (36,679,708) | 42,658,785 |
| Total increase (decrease) in net assets | (45,352,658) | 45,041,478 |
| Net assets at beginning of year | 230,863,180 | 185,821,702 |
| Net assets at end of year | $185,510,522 | $230,863,180 |
| Undistributed net investment income | $710,338 | $721,185 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 225,286 | 2,349,062 | 425,311 | 4,500,943 |
| Distributions reinvested | 43,081 | 452,531 | 51,488 | 544,566 |
| Redemptions | (1,083,668) | (11,218,615) | (253,754) | (2,686,901) |
| Net increase (decrease) | (815,301) | (8,417,022) | 223,045 | 2,358,608 |
| Class B | | | | |
| Subscriptions | — | — | 984 | 10,333 |
| Distributions reinvested | 101 | 1,061 | 130 | 1,379 |
| Redemptions (b) | (9,001) | (92,943) | (103) | (1,091) |
| Net increase (decrease) | (8,900) | (91,882) | 1,011 | 10,621 |
| Class C | | | | |
| Subscriptions | 100,590 | 1,059,458 | 151,363 | 1,599,052 |
| Distributions reinvested | 9,937 | 104,109 | 11,304 | 119,528 |
| Redemptions | (213,792) | (2,219,056) | (95,856) | (1,017,005) |
| Net increase (decrease) | (103,265) | (1,055,489) | 66,811 | 701,575 |
| Class R4 | | | | |
| Subscriptions | 48,806 | 510,683 | 36,919 | 390,617 |
| Distributions reinvested | 7,846 | 82,211 | 9,746 | 102,947 |
| Redemptions | (163,597) | (1,693,297) | (70,861) | (750,476) |
| Net decrease | (106,945) | (1,100,403) | (24,196) | (256,912) |
| Class Y | | | | |
| Subscriptions | 973 | 10,000 | — | — |
| Net increase | 973 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 4,436,223 | 46,507,866 | 6,371,841 | 67,492,180 |
| Distributions reinvested | 65,139 | 681,191 | 59,331 | 626,946 |
| Redemptions | (7,095,034) | (73,213,969) | (2,679,841) | (28,274,233) |
| Net increase (decrease) | (2,593,672) | (26,024,912) | 3,751,331 | 39,844,893 |
| Total net increase (decrease) | (3,627,110) | (36,679,708) | 4,018,002 | 42,658,785 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class A |
| 4/30/2017 | $10.70 | 0.25 | (0.37) | (0.12) | (0.25) |
| 4/30/2016 | $10.58 | 0.27 | 0.12 | 0.39 | (0.27) |
| 4/30/2015 | $10.61 | 0.28 | (0.03) | 0.25 | (0.28) |
| 4/30/2014 | $10.94 | 0.30 | (0.33) | (0.03) | (0.30) |
| 4/30/2013 | $10.84 | 0.28 | 0.10 | 0.38 | (0.28) |
| Class B |
| 4/30/2017 | $10.70 | 0.17 | (0.36) | (0.19) | (0.17) |
| 4/30/2016 | $10.58 | 0.19 | 0.12 | 0.31 | (0.19) |
| 4/30/2015 | $10.61 | 0.20 | (0.03) | 0.17 | (0.20) |
| 4/30/2014 | $10.94 | 0.22 | (0.33) | (0.11) | (0.22) |
| 4/30/2013 | $10.84 | 0.20 | 0.10 | 0.30 | (0.20) |
| Class C |
| 4/30/2017 | $10.70 | 0.17 | (0.37) | (0.20) | (0.17) |
| 4/30/2016 | $10.58 | 0.19 | 0.12 | 0.31 | (0.19) |
| 4/30/2015 | $10.61 | 0.20 | (0.03) | 0.17 | (0.20) |
| 4/30/2014 | $10.94 | 0.22 | (0.33) | (0.11) | (0.22) |
| 4/30/2013 | $10.83 | 0.20 | 0.11 | 0.31 | (0.20) |
| Class R4 |
| 4/30/2017 | $10.69 | 0.28 | (0.37) | (0.09) | (0.28) |
| 4/30/2016 | $10.57 | 0.30 | 0.12 | 0.42 | (0.30) |
| 4/30/2015 | $10.60 | 0.31 | (0.03) | 0.28 | (0.31) |
| 4/30/2014 | $10.93 | 0.33 | (0.33) | 0.00 (c) | (0.33) |
| 4/30/2013 (d) | $10.85 | 0.04 | 0.08 | 0.12 | (0.04) |
| Class Y |
| 4/30/2017 (f) | $10.28 | 0.05 | 0.07 (g) | 0.12 | (0.05) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.25) | $10.33 | (1.11%) | 0.96% | 0.81% | 2.39% | 12% | $18,246 |
| (0.27) | $10.70 | 3.77% | 0.97% | 0.81% | 2.57% | 11% | $27,616 |
| (0.28) | $10.58 | 2.41% | 0.98% | 0.81% | 2.67% | 6% | $24,948 |
| (0.30) | $10.61 | (0.22%) | 0.99% | 0.81% | 2.84% | 3% | $27,797 |
| (0.28) | $10.94 | 3.57% | 0.97% | 0.80% | 2.59% | 10% | $34,852 |
| |
| (0.17) | $10.34 | (1.77%) | 1.71% | 1.56% | 1.64% | 12% | $10 |
| (0.19) | $10.70 | 3.00% | 1.73% | 1.56% | 1.82% | 11% | $105 |
| (0.20) | $10.58 | 1.65% | 1.73% | 1.56% | 1.92% | 6% | $94 |
| (0.22) | $10.61 | (0.96%) | 1.74% | 1.56% | 2.09% | 3% | $102 |
| (0.20) | $10.94 | 2.80% | 1.72% | 1.55% | 1.85% | 10% | $139 |
| |
| (0.17) | $10.33 | (1.85%) | 1.71% | 1.56% | 1.65% | 12% | $6,682 |
| (0.19) | $10.70 | 3.00% | 1.73% | 1.56% | 1.82% | 11% | $8,023 |
| (0.20) | $10.58 | 1.65% | 1.73% | 1.56% | 1.92% | 6% | $7,227 |
| (0.22) | $10.61 | (0.96%) | 1.74% | 1.56% | 2.09% | 3% | $7,015 |
| (0.20) | $10.94 | 2.89% | 1.72% | 1.55% | 1.84% | 10% | $8,683 |
| |
| (0.28) | $10.32 | (0.86%) | 0.71% | 0.56% | 2.64% | 12% | $2,236 |
| (0.30) | $10.69 | 4.03% | 0.72% | 0.56% | 2.83% | 11% | $3,458 |
| (0.31) | $10.57 | 2.67% | 0.74% | 0.56% | 2.92% | 6% | $3,675 |
| (0.33) | $10.60 | 0.03% | 0.76% | 0.56% | 3.17% | 3% | $1,737 |
| (0.04) | $10.93 | 1.07% | 0.60% (e) | 0.52% (e) | 2.98% (e) | 10% | $3 |
| |
| (0.05) | $10.35 | 1.15% | 0.55% (e) | 0.42% (e) | 2.87% (e) | 12% | $10 |
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class Z |
| 4/30/2017 | $10.69 | 0.28 | (0.37) | (0.09) | (0.28) |
| 4/30/2016 | $10.57 | 0.30 | 0.12 | 0.42 | (0.30) |
| 4/30/2015 | $10.60 | 0.31 | (0.03) | 0.28 | (0.31) |
| 4/30/2014 | $10.93 | 0.32 | (0.32) | 0.00 (c) | (0.33) |
| 4/30/2013 | $10.83 | 0.31 | 0.10 | 0.41 | (0.31) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Rounds to zero. |
| (d) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (e) | Annualized. |
| (f) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (g) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.28) | $10.32 | (0.86%) | 0.71% | 0.56% | 2.65% | 12% | $158,327 |
| (0.30) | $10.69 | 4.03% | 0.73% | 0.56% | 2.82% | 11% | $191,661 |
| (0.31) | $10.57 | 2.67% | 0.73% | 0.56% | 2.92% | 6% | $149,878 |
| (0.33) | $10.60 | 0.03% | 0.74% | 0.56% | 3.09% | 3% | $125,420 |
| (0.31) | $10.93 | 3.83% | 0.72% | 0.55% | 2.84% | 10% | $165,833 |
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Class B shares are typically subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, the Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or
| 24 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
April 30, 2017
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.47% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
| 26 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.18 |
| Class B | 0.18 |
| Class C | 0.18 |
| Class R4 | 0.18 |
| Class Y | 0.025 (a) |
| Class Z | 0.18 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
April 30, 2017
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 12,458 |
| Class C | 611 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | Fee rates contractual
through August 31, 2017 |
| Class A | 0.810% |
| Class B | 1.560 |
| Class C | 1.560 |
| Class R4 | 0.560 |
| Class Y | 0.420* |
| Class Z | 0.560 |
*Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| — | 2,649,648 | (2,649,648) |
| 28 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 7,936 | 5,713,277 | — | 5,721,213 | 11,875 | 5,359,095 | — | 5,370,970 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 1,196,441 | — | (841,380) | 5,627,158 |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 174,477,332 | 6,734,584 | (1,107,426) | 5,627,158 |
The following capital loss carryforwards, determined at April 30, 2017, 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. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended April 30, 2017, capital loss carryforwards utilized, expired unused and permanently lost were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | — | 841,380 | — | 841,380 | — | 2,649,648 | — |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $25,956,238 and $53,585,543, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Notes to Financial Statements (continued)
April 30, 2017
matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At April 30, 2017, two unaffiliated shareholders of record owned 82.8% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
| 30 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia AMT-Free North Carolina Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free North Carolina Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 32 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 99.86% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 34 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 36 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 37 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 38 | Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 39 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free North Carolina Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
April 30, 2017
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund (the Fund) seeks current income exempt from U.S. federal income tax and South Carolina individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Brian McGreevy
Co-manager
Managed Fund since 2011
Paul Fuchs, CFA
Co-manager
Managed Fund since September 2016
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 05/05/92 | -0.98 | 1.98 | 3.25 |
| | Including sales charges | | -3.98 | 1.36 | 2.93 |
| Class B | Excluding sales charges | 06/08/93 | -1.81 | 1.20 | 2.47 |
| | Including sales charges | | -4.70 | 1.20 | 2.47 |
| Class C | Excluding sales charges | 06/17/92 | -1.81 | 1.20 | 2.47 |
| | Including sales charges | | -2.77 | 1.20 | 2.47 |
| Class R4 * | 03/19/13 | -0.74 | 2.21 | 3.49 |
| Class Y * | 03/01/17 | -0.82 | 2.22 | 3.50 |
| Class Z | 01/06/92 | -0.83 | 2.21 | 3.50 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.15 | 2.80 | 4.37 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 3.00% in the first year, declining to 1.00% in the fourth year and eliminated thereafter. The Fund does not accept new investments in Class B shares, except for certain limited transactions. The Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3-15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
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.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free South Carolina Intermediate Muni Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 4.9 |
| AA rating | 27.8 |
| A rating | 61.8 |
| BBB rating | 1.5 |
| BB rating | 0.9 |
| Not rated | 3.1 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
For the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned -0.98% excluding sales charges. Class Z shares of the Fund returned -0.83% for the same time period. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.15% for the same 12 months. The Fund’s exposure to the Virgin Islands and the longer end of the yield curve detracted from performance, while its positions in shorter term issues were positive.
Market overview
Municipal bonds experienced negative total returns during the 12 months ended April 30, 2017, but the bulk of the losses occurred in the weeks immediately following the U.S. elections.
The market was relatively stable early in the period, as rates fell slightly at the start of the summer of 2016 (as prices rose) and held in a tight range through September 2016. Municipal bonds weakened somewhat in October as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve (the Fed) at its December meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November due to the unexpected result of the U.S. election. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. The resulting selling pressure was exacerbated by heavy mutual fund liquidations, which compelled managers to sell into the falling market. Volatility subsequently abated in the new year, as the combination of lower new-issue supply and positive fund flows helped the benchmark produce a string of months with positive returns. As a result, the major national indices were able to finish the 12-month period with slight gains. Tax-exempt securities outperformed Treasuries thanks in part to the continued strength in state and local finances.
Short-term issues experienced the best relative performance. While bonds with maturities of five years and below posted small gains, the remainder of the yield curve closed in the red with issues with maturities of 15 years and above registering the weakest returns. Lower quality securities generally outpaced their higher quality peers at the national level due largely to the relative strength of New Jersey and Illinois issues.
Healthy expansion for the South Carolina economy
South Carolina continued to experience robust economic growth, providing a firm fundamental underpinning for municipal issuers. Employment growth has been above the national average, leading to rising income and improving housing prices. The auto manufacturing, tourism and health care industries represented important drivers of growth, augmenting the benefits of healthy population growth and the state’s growth-oriented, pro-business political climate.
Nevertheless, South Carolina’s municipal bond market underperformed the broader national index.
Contributors and detractors
The Fund’s exposure to Virgin Islands bonds was the primary factor in its underperformance. Moody’s downgraded the territory in mid-2016 as the language in the federal oversight bill to aid the distressed island of Puerto Rico was written in such a way as to include other territories. In addition, investors reacted unfavorably to the Virgin Islands’ poor credit fundamentals. After evaluating the outlook for the territory and determining that the risk-reward tradeoff was unfavorable given the way events unfolded in Puerto Rico, we decided to eliminate the position. Historically, the Fund has invested in Virgin Islands credits because they were exempt from federal and state income taxes, and they offered the opportunity to own higher yielding bonds than would typically be found in South Carolina.
The Fund’s position in the electric utility operator South Carolina Public Service also detracted from performance. The company, which is involved in building two new nuclear plants, lagged following an announcement from Westinghouse — the primary contractor — that it was filing for bankruptcy protection due to cost overruns for the project. We continue to hold the position, but we are closely monitoring the bankruptcy proceedings and the construction of the plants.
The Fund’s positions in longer maturity bonds detracted from performance at a time of rising rates. However, we also held an overweight in shorter maturity bonds (including pre-refunded securities), which added to results as short-term issues outperformed in the weak market. The Fund further benefited from an overweight in the hospital sector, which outpaced the broader index. Water and sewer issues also aided performance, as did small positions in zero-coupon and non-rated issues.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
Fund positioning
The tone in the municipal market was quite upbeat at the end of the period, highlighted by five consecutive months of positive returns and a favorable combination of strong demand and low new-issue supply. However, we continued to monitor several issues that could affect market performance, including the potential for lower taxes, the possibility of increased new-issue supply stemming from increased infrastructure spending, and likely changes to the Affordable Care Act.
This mixed picture prompted us to remain cautious with regard to issuers that have had persistent pension funding issues, as the rating agencies appear to have lost their patience with those that showed no sign of making progress in resolving their underfunded pensions. In addition, we continued to favor areas that have dedicated revenue streams. With regard to duration (interest-rate sensitivity), we moved from a level below that of the benchmark early in the period to a more neutral stance in the second half of the period once yields rose. We remained tax-aware, seeking to manage the gains and losses within the portfolio.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | 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 | 991.30 | 1,020.55 | 3.96 | 4.01 | 0.81 |
| Class B | 1,000.00 | 1,000.00 | 986.70 | 1,016.87 | 7.60 | 7.71 | 1.56 |
| Class C | 1,000.00 | 1,000.00 | 986.70 | 1,016.87 | 7.60 | 7.71 | 1.56 |
| Class R4 | 1,000.00 | 1,000.00 | 992.50 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| Class Y | 1,000.00 | 1,000.00 | 1,010.90 (a) | 1,022.41 | 0.68 (a) | 2.13 | 0.43 (a) |
| Class Z | 1,000.00 | 1,000.00 | 992.50 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Municipal Bonds 95.8% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 1.0% |
| County of Horry Airport |
| Revenue Bonds |
| Series 2010A |
| 07/01/20 | 5.000% | | 1,150,000 | 1,260,055 |
| Charter Schools 1.3% |
| South Carolina Jobs-Economic Development Authority(a) |
| Revenue Bonds |
| Series 2015A |
| 08/15/35 | 5.125% | | 1,000,000 | 995,220 |
| South Carolina Jobs-Economic Development Authority |
| Revenue Bonds |
York Preparatory Academy Project
Series 2014A |
| 11/01/33 | 7.000% | | 500,000 | 547,875 |
| Total | 1,543,095 |
| Higher Education 5.9% |
| Clemson University |
| Revenue Bonds |
Athletic Facility
Series 2014A |
| 05/01/28 | 5.000% | | 1,170,000 | 1,381,723 |
| Coastal Carolina University |
| Revenue Bonds |
| Series 2015 |
| 06/01/24 | 5.000% | | 1,500,000 | 1,779,945 |
| South Carolina Jobs-Economic Development Authority |
| Refunding Revenue Bonds |
Furman University
Series 2015 |
| 10/01/32 | 5.000% | | 1,895,000 | 2,179,838 |
| University of South Carolina |
| Revenue Bonds |
Moore School of Business Project
Series 2012 |
| 05/01/26 | 5.000% | | 1,500,000 | 1,709,895 |
| Total | 7,051,401 |
| Hospital 15.5% |
| County of Florence |
| Refunding Revenue Bonds |
McLeod Regional Medical Center Project
Series 2014 |
| 11/01/31 | 5.000% | | 1,500,000 | 1,707,915 |
| County of Greenwood |
| Refunding Revenue Bonds |
Self Regional Healthcare
Series 2012B |
| 10/01/27 | 5.000% | | 1,750,000 | 1,957,322 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Self Regional Healthcare
Series 2012B |
| 10/01/31 | 5.000% | | 2,000,000 | 2,207,840 |
| Greenville Health System |
| Refunding Revenue Bonds |
| Series 2008A |
| 05/01/21 | 5.250% | | 2,750,000 | 2,863,080 |
| Lexington County Health Services District, Inc. |
| Refunding Revenue Bonds |
| Series 2007 |
| 11/01/18 | 5.000% | | 1,000,000 | 1,020,340 |
| Revenue Bonds |
Lexington Medical Center
Series 2016 |
| 11/01/34 | 5.000% | | 1,500,000 | 1,683,645 |
| South Carolina Jobs-Economic Development Authority |
| Refunding Revenue Bonds |
Palmetto Health
Series 2005A (AGM) |
| 08/01/21 | 5.250% | | 3,000,000 | 3,134,460 |
| Revenue Bonds |
Bon Secours Health System, Inc.
Series 2013 |
| 11/01/20 | 5.000% | | 2,000,000 | 2,241,980 |
Bon Secours Health System, Inc.
Series 2013 |
| 11/01/24 | 5.000% | | 450,000 | 520,880 |
| Spartanburg Regional Health Services District |
| Revenue Bonds |
| Series 2008A |
| 04/15/19 | 5.000% | | 1,225,000 | 1,269,725 |
| Total | 18,607,187 |
| Joint Power Authority 5.5% |
| South Carolina Public Service Authority |
| Refunding Revenue Bonds |
| Series 2014B |
| 12/01/32 | 5.000% | | 1,250,000 | 1,349,700 |
| Series 2016A |
| 12/01/28 | 5.000% | | 2,000,000 | 2,252,560 |
| Series 2016B |
| 12/01/35 | 5.000% | | 1,500,000 | 1,630,920 |
| Unrefunded Revenue Bonds |
| Series 2009A |
| 01/01/28 | 5.000% | | 1,360,000 | 1,425,688 |
| Total | 6,658,868 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Local Appropriation 25.5% |
| Berkeley County School District |
| Refunding Revenue Bonds |
Securing Assets for Education
Series 2015A |
| 12/01/27 | 5.000% | | 1,500,000 | 1,772,940 |
| Charleston Educational Excellence Finance Corp. |
| Refunding Revenue Bonds |
Charleston County School
Series 2013 |
| 12/01/25 | 5.000% | | 2,000,000 | 2,361,540 |
| Charleston Public Facilities Corp. |
| Revenue Bonds |
| Series 2015A |
| 09/01/29 | 5.000% | | 1,000,000 | 1,177,530 |
| City of Florence Accommodations Fee |
| Revenue Bonds |
| Series 2015 |
| 05/01/30 | 4.000% | | 1,000,000 | 1,065,830 |
| Series 2015 |
| 05/01/35 | 5.000% | | 1,000,000 | 1,110,610 |
| City of North Charleston |
| Revenue Bonds |
| Series 2012 |
| 06/01/29 | 5.000% | | 2,280,000 | 2,548,675 |
| County of Florence |
| Revenue Bonds |
| Series 2015 |
| 10/01/28 | 5.000% | | 1,000,000 | 1,140,830 |
| Dorchester County School District No. 2 |
| Refunding Revenue Bonds |
Growth Installment Purchase
Series 2013 |
| 12/01/27 | 5.000% | | 1,000,000 | 1,147,440 |
| Fort Mill School Facilities Corp. |
| Refunding Revenue Bonds |
Fort Mills School District #4
Series 2015 |
| 12/01/28 | 5.000% | | 1,000,000 | 1,153,910 |
| Greenwood Fifty Schools Facilities, Inc. |
| Refunding Revenue Bonds |
Greenwood School District #50
Series 2016 (BAM) |
| 12/01/27 | 5.000% | | 1,750,000 | 2,059,260 |
| Kershaw County School District |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/25 | 5.000% | | 1,000,000 | 1,173,400 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Lexington One School Facilities Corp. |
| Refunding Revenue Bonds |
Lexington County School District
Series 2015 |
| 12/01/26 | 5.000% | | 835,000 | 985,943 |
| Lexington School District No. 2 Educational Facilities Corp. |
| Refunding Revenue Bonds |
| Series 2015B |
| 12/01/26 | 5.000% | | 1,815,000 | 2,108,576 |
| Newberry Investing in Children’s Education |
| Refunding Revenue Bonds |
Newberry County School District
Series 2014 |
| 12/01/29 | 5.000% | | 1,500,000 | 1,720,455 |
| SCAGO Educational Facilities Corp. for Calhoun School District |
| Refunding Revenue Bonds |
| Series 2015 (BAM) |
| 12/01/26 | 5.000% | | 520,000 | 612,310 |
| SCAGO Educational Facilities Corp. for Cherokee School District No. 1 |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/28 | 5.000% | | 1,830,000 | 2,100,255 |
| SCAGO Educational Facilities Corp. for Colleton School District |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/27 | 5.000% | | 1,295,000 | 1,487,333 |
| SCAGO Educational Facilities Corp. for Pickens School District |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/29 | 5.000% | | 1,500,000 | 1,714,740 |
| Series 2015 |
| 12/01/30 | 5.000% | | 1,275,000 | 1,451,231 |
| Sumter Two School Facilities, Inc. |
| Refunding Revenue Bonds |
Sumter County School District No. 2
Series 2016 (BAM) |
| 12/01/27 | 5.000% | | 1,500,000 | 1,731,405 |
| Total | 30,624,213 |
| Local General Obligation 2.1% |
| Beaufort County School District |
| Unlimited General Obligation Bonds |
| Series 2014B |
| 03/01/23 | 5.000% | | 1,190,000 | 1,408,853 |
| South Carolina Jobs-Economic Development Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 04/01/34 | 5.000% | | 940,000 | 1,055,488 |
| Total | 2,464,341 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Municipal Power 2.7% |
| City of Rock Hill Combined Utility System |
| Refunding Revenue Bonds |
| Series 2012A (AGM) |
| 01/01/23 | 5.000% | | 1,560,000 | 1,775,311 |
| Easley Combined Utility System |
| Refunding Revenue Bonds |
| Series 2011 (AGM) |
| 12/01/28 | 5.000% | | 1,000,000 | 1,056,590 |
| Guam Power Authority(b) |
| Refunding Revenue Bonds |
| Series 2012A (AGM) |
| 10/01/24 | 5.000% | | 315,000 | 356,807 |
| Total | 3,188,708 |
| Ports 0.9% |
| South Carolina Ports Authority |
| Revenue Bonds |
| Series 2010 |
| 07/01/23 | 5.250% | | 1,000,000 | 1,115,170 |
| Refunded / Escrowed 5.9% |
| City of Columbia Waterworks & Sewer System |
| Prerefunded 02/01/21 Revenue Bonds |
| Series 2011A |
| 02/01/27 | 5.000% | | 1,000,000 | 1,135,980 |
| County of Charleston |
| Prerefunded 08/01/19 Unlimited General Obligation Bonds |
Improvement
Series 2009A |
| 08/01/23 | 5.000% | | 2,000,000 | 2,174,320 |
| South Carolina Jobs-Economic Development Authority |
| Prerefunded 09/15/18 Revenue Bonds |
Kershaw County Medical Center Project
Series 2008 |
| 09/15/25 | 5.500% | | 1,925,000 | 2,045,120 |
| South Carolina Public Service Authority |
| Prerefunded 01/01/19 Revenue Bonds |
| Series 2009A |
| 01/01/28 | 5.000% | | 640,000 | 682,406 |
| University of South Carolina |
| Prerefunded 06/01/18 Revenue Bonds |
| Series 2008A (AGM) |
| 06/01/21 | 5.000% | | 1,060,000 | 1,107,276 |
| Total | 7,145,102 |
| Resource Recovery 2.5% |
| Three Rivers Solid Waste Authority(c) |
| Revenue Bonds |
Capital Appreciation-Landfill Gas Project
Series 2007 |
| 10/01/24 | 0.000% | | 1,835,000 | 1,510,572 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Capital Appreciation-Landfill Gas Project
Series 2007 |
| 10/01/25 | 0.000% | | 1,835,000 | 1,445,154 |
| Total | 2,955,726 |
| Retirement Communities 2.0% |
| South Carolina Jobs-Economic Development Authority |
| Refunding Revenue Bonds |
1st Mortgage-Lutheran Homes
Series 2007 |
| 05/01/21 | 5.375% | | 1,360,000 | 1,360,517 |
| South Carolina Jobs-Economic Development Authority(a) |
| Refunding Revenue Bonds |
Wesley Commons
Series 2016 |
| 10/01/26 | 5.000% | | 1,000,000 | 1,038,500 |
| Total | 2,399,017 |
| Single Family 0.2% |
| South Carolina State Housing Finance & Development Authority |
| Revenue Bonds |
| Series 2010-1 (GNMA) |
| 01/01/28 | 5.000% | | 240,000 | 252,754 |
| Special Non Property Tax 6.3% |
| City of Columbia |
| Revenue Bonds |
| Series 2014 |
| 02/01/33 | 5.000% | | 1,195,000 | 1,351,880 |
| City of Greenville Hospitality Tax |
| Improvement Refunding Revenue Bonds |
| Series 2011 (AGM) |
| 04/01/21 | 5.000% | | 1,290,000 | 1,448,102 |
| City of Myrtle Beach |
| Revenue Bonds |
Hospitality Fee
Series 2014B |
| 06/01/30 | 5.000% | | 560,000 | 629,216 |
| City of Rock Hill |
| Revenue Bonds |
Hospitality Fee Pledge
Series 2013 |
| 04/01/23 | 5.000% | | 695,000 | 803,802 |
| Greenville County Public Facilities Corp. |
| Refunding Certificate of Participation |
| Series 2014 |
| 04/01/26 | 5.000% | | 890,000 | 1,037,286 |
| Spartanburg County Tourist Public Facilities Corp. |
| Refunding Certificate of Participation |
Public Facilities Corp.
Series 2016 (BAM) |
| 04/01/28 | 4.000% | | 580,000 | 634,381 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Territory of Guam(b) |
| Revenue Bonds |
| Series 2011A |
| 01/01/31 | 5.000% | | 400,000 | 417,572 |
| Town of Hilton Head Island |
| Revenue Bonds |
| Series 2011A |
| 06/01/23 | 5.000% | | 555,000 | 631,129 |
| Series 2011A |
| 06/01/24 | 5.000% | | 580,000 | 657,094 |
| Total | 7,610,462 |
| Special Property Tax 1.0% |
| City of Myrtle Beach |
| Refunding Tax Allocation Bonds |
Myrtle Beach Air Force Base
Series 2016 |
| 10/01/30 | 5.000% | | 1,000,000 | 1,145,870 |
| State General Obligation 1.0% |
| State of South Carolina |
| Unlimited General Obligation Bonds |
| Series 2014B |
| 04/01/25 | 5.000% | | 1,000,000 | 1,204,230 |
| Student Loan 1.2% |
| South Carolina State Education Assistance Authority |
| Revenue Bonds |
Student Loan
Series 2009I |
| 10/01/24 | 5.000% | | 1,415,000 | 1,487,802 |
| Transportation 6.6% |
| South Carolina Transportation Infrastructure Bank |
| Refunding Revenue Bonds |
Infrastructure Bank
Series 2015A |
| 10/01/24 | 5.000% | | 2,000,000 | 2,397,160 |
| Series 2005A (AMBAC) |
| 10/01/20 | 5.250% | | 4,880,000 | 5,514,839 |
| Total | 7,911,999 |
| Water & Sewer 8.7% |
| Anderson Regional Joint Water System |
| Refunding Revenue Bonds |
| Series 2012 |
| 07/15/28 | 5.000% | | 2,000,000 | 2,249,980 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Beaufort-Jasper Water & Sewer Authority |
| Refunding Revenue Bonds |
| Series 2016B |
| 03/01/24 | 5.000% | | 1,000,000 | 1,200,840 |
| City of Sumter Waterworks & Sewer System |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/27 | 4.000% | | 400,000 | 441,780 |
| County of Berkeley Water & Sewer |
| Refunding Revenue Bonds |
| Series 2008A (AGM) |
| 06/01/21 | 5.000% | | 1,000,000 | 1,042,660 |
| Georgetown County Water & Sewer District |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/01/27 | 4.000% | | 450,000 | 491,125 |
| Renewable Water Resources |
| Refunding Revenue Bonds |
| Series 2005B (AGM) |
| 03/01/19 | 5.250% | | 1,000,000 | 1,075,320 |
| Series 2010A |
| 01/01/20 | 5.000% | | 1,500,000 | 1,651,680 |
| Series 2012 |
| 01/01/24 | 5.000% | | 1,000,000 | 1,155,960 |
| Spartanburg Sanitation Sewer District |
| Refunding Revenue Bonds |
| Series 2014B |
| 03/01/34 | 5.000% | | 1,000,000 | 1,126,140 |
| Total | 10,435,485 |
Total Municipal Bonds
(Cost $111,420,752) | 115,061,485 |
| Money Market Funds 1.4% |
| | Shares | Value ($) |
| Dreyfus Tax-Exempt Cash Management Fund, Institutional Shares, 0.660%(d) | 1,701,061 | 1,701,061 |
Total Money Market Funds
(Cost $1,701,061) | 1,701,061 |
Total Investments
(Cost: $113,121,813) | 116,762,546 |
| Other Assets & Liabilities, Net | | 3,388,518 |
| Net Assets | 120,151,064 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At April 30, 2017, the value of these securities amounted to $2,033,720 which represents 1.69% of net assets. |
| (b) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2017, the value of these securities amounted to $774,379 which represents 0.64% of net assets. |
| (c) | Zero coupon bond. |
| (d) | The rate shown is the seven-day current annualized yield at April 30, 2017. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| GNMA | Government National Mortgage Association |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Municipal Bonds | — | 115,061,485 | — | 115,061,485 |
| Money Market Funds | 1,701,061 | — | — | 1,701,061 |
| Total Investments | 1,701,061 | 115,061,485 | — | 116,762,546 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $113,121,813 |
| Total investments, at cost | 113,121,813 |
| Investments, at value | |
| Unaffiliated issuers, at value | 116,762,546 |
| Total investments, at value | 116,762,546 |
| Cash | 1,625,516 |
| Receivable for: | |
| Investments sold | 300,167 |
| Capital shares sold | 613,901 |
| Interest | 1,513,340 |
| Expense reimbursement due from Investment Manager | 346 |
| Prepaid expenses | 678 |
| Other assets | 761 |
| Total assets | 120,817,255 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 252,746 |
| Distributions to shareholders | 252,355 |
| Management services fees | 1,545 |
| Distribution and/or service fees | 525 |
| Transfer agent fees | 14,912 |
| Compensation of board members | 106,693 |
| Other expenses | 37,415 |
| Total liabilities | 666,191 |
| Net assets applicable to outstanding capital stock | $120,151,064 |
| Represented by | |
| Paid in capital | 116,390,249 |
| Undistributed net investment income | 478,849 |
| Accumulated net realized loss | (358,767) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 3,640,733 |
| Total - representing net assets applicable to outstanding capital stock | $120,151,064 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $21,485,773 |
| Shares outstanding | 2,115,320 |
| Net asset value per share | $10.16 |
| Maximum offering price per share(a) | $10.47 |
| Class B | |
| Net assets | $9,805 |
| Shares outstanding | 965 |
| Net asset value per share | $10.16 |
| Class C | |
| Net assets | $13,698,298 |
| Shares outstanding | 1,347,700 |
| Net asset value per share | $10.16 |
| Class R4 | |
| Net assets | $1,204,503 |
| Shares outstanding | 118,643 |
| Net asset value per share | $10.15 |
| Class Y | |
| Net assets | $10,061 |
| Shares outstanding | 987 |
| Net asset value per share | $10.19 |
| Class Z | |
| Net assets | $83,742,624 |
| Shares outstanding | 8,241,042 |
| Net asset value per share | $10.16 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $1,061 |
| Interest | 4,507,266 |
| Total income | 4,508,327 |
| Expenses: | |
| Management services fees | 648,545 |
| Distribution and/or service fees | |
| Class A | 58,223 |
| Class B | 121 |
| Class C | 146,772 |
| Transfer agent fees | |
| Class A | 39,736 |
| Class B | 20 |
| Class C | 25,060 |
| Class R4 | 1,687 |
| Class Z | 169,631 |
| Compensation of board members | 26,889 |
| Custodian fees | 2,523 |
| Printing and postage fees | 22,186 |
| Registration fees | 18,778 |
| Audit fees | 32,393 |
| Legal fees | 8,108 |
| Compensation of chief compliance officer | 31 |
| Other | 13,662 |
| Total expenses | 1,214,365 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (234,631) |
| Expense reduction | (20) |
| Total net expenses | 979,714 |
| Net investment income | 3,528,613 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (292,352) |
| Net realized loss | (292,352) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (5,107,583) |
| Net change in unrealized appreciation (depreciation) | (5,107,583) |
| Net realized and unrealized loss | (5,399,935) |
| Net decrease in net assets resulting from operations | $(1,871,322) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $3,528,613 | $3,749,774 |
| Net realized gain (loss) | (292,352) | 170,726 |
| Net change in unrealized appreciation (depreciation) | (5,107,583) | 2,064,400 |
| Net increase (decrease) in net assets resulting from operations | (1,871,322) | 5,984,900 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (626,804) | (630,209) |
| Class B | (229) | (569) |
| Class C | (284,374) | (330,101) |
| Class R4 | (29,497) | (22,150) |
| Class Y | (50) | — |
| Class Z | (2,893,513) | (3,077,712) |
| Net realized gains | | |
| Class A | (21,761) | (61,950) |
| Class B | (10) | (88) |
| Class C | (14,040) | (45,331) |
| Class R4 | (858) | (2,241) |
| Class Z | (98,365) | (299,932) |
| Total distributions to shareholders | (3,969,501) | (4,470,283) |
| Increase (decrease) in net assets from capital stock activity | (17,015,022) | 6,420,711 |
| Total increase (decrease) in net assets | (22,855,845) | 7,935,328 |
| Net assets at beginning of year | 143,006,909 | 135,071,581 |
| Net assets at end of year | $120,151,064 | $143,006,909 |
| Undistributed net investment income | $478,849 | $785,348 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 739,754 | 7,679,830 | 357,593 | 3,737,566 |
| Distributions reinvested | 51,043 | 525,331 | 50,887 | 531,090 |
| Redemptions | (758,007) | (7,736,451) | (623,214) | (6,479,638) |
| Net increase (decrease) | 32,790 | 468,710 | (214,734) | (2,210,982) |
| Class B | | | | |
| Subscriptions | — | — | 964 | 10,000 |
| Distributions reinvested | 2 | 25 | 38 | 394 |
| Redemptions (b) | (1,554) | (16,499) | (353) | (3,708) |
| Net increase (decrease) | (1,552) | (16,474) | 649 | 6,686 |
| Class C | | | | |
| Subscriptions | 154,232 | 1,608,614 | 169,657 | 1,773,712 |
| Distributions reinvested | 21,705 | 223,288 | 26,528 | 277,060 |
| Redemptions | (253,768) | (2,603,985) | (271,758) | (2,839,168) |
| Net decrease | (77,831) | (772,083) | (75,573) | (788,396) |
| Class R4 | | | | |
| Subscriptions | 74,650 | 772,282 | 31,036 | 324,428 |
| Distributions reinvested | 2,924 | 30,054 | 2,306 | 24,045 |
| Redemptions | (30,776) | (310,923) | (28,857) | (300,827) |
| Net increase | 46,798 | 491,413 | 4,485 | 47,646 |
| Class Y | | | | |
| Subscriptions | 987 | 10,000 | — | — |
| Net increase | 987 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 2,820,656 | 28,977,425 | 2,706,901 | 28,314,343 |
| Distributions reinvested | 46,778 | 481,388 | 40,913 | 427,277 |
| Redemptions | (4,592,797) | (46,655,401) | (1,850,539) | (19,375,863) |
| Net increase (decrease) | (1,725,363) | (17,196,588) | 897,275 | 9,365,757 |
| Total net increase (decrease) | (1,724,171) | (17,015,022) | 612,102 | 6,420,711 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class A |
| 4/30/2017 | $10.55 | 0.25 | (0.35) | (0.10) | (0.28) | (0.01) |
| 4/30/2016 | $10.44 | 0.28 | 0.16 | 0.44 | (0.30) | (0.03) |
| 4/30/2015 | $10.49 | 0.30 | 0.02 (d) | 0.32 | (0.30) | (0.07) |
| 4/30/2014 | $10.89 | 0.32 | (0.40) | (0.08) | (0.31) | (0.01) |
| 4/30/2013 | $10.74 | 0.30 | 0.15 | 0.45 | (0.30) | — |
| Class B |
| 4/30/2017 | $10.56 | 0.17 | (0.36) | (0.19) | (0.20) | (0.01) |
| 4/30/2016 | $10.45 | 0.20 | 0.17 | 0.37 | (0.23) | (0.03) |
| 4/30/2015 | $10.50 | 0.22 | 0.02 (d) | 0.24 | (0.22) | (0.07) |
| 4/30/2014 | $10.89 | 0.24 | (0.39) | (0.15) | (0.23) | (0.01) |
| 4/30/2013 | $10.75 | 0.22 | 0.14 | 0.36 | (0.22) | — |
| Class C |
| 4/30/2017 | $10.56 | 0.18 | (0.37) | (0.19) | (0.20) | (0.01) |
| 4/30/2016 | $10.44 | 0.20 | 0.18 | 0.38 | (0.23) | (0.03) |
| 4/30/2015 | $10.50 | 0.22 | 0.01 (d) | 0.23 | (0.22) | (0.07) |
| 4/30/2014 | $10.89 | 0.24 | (0.39) | (0.15) | (0.23) | (0.01) |
| 4/30/2013 | $10.75 | 0.22 | 0.14 | 0.36 | (0.22) | — |
| Class R4 |
| 4/30/2017 | $10.54 | 0.28 | (0.36) | (0.08) | (0.30) | (0.01) |
| 4/30/2016 | $10.43 | 0.30 | 0.17 | 0.47 | (0.33) | (0.03) |
| 4/30/2015 | $10.49 | 0.33 | 0.00 (d),(e) | 0.33 | (0.32) | (0.07) |
| 4/30/2014 | $10.88 | 0.34 | (0.38) | (0.04) | (0.34) | (0.01) |
| 4/30/2013 (f) | $10.80 | 0.04 | 0.08 | 0.12 | (0.04) | — |
| Class Y |
| 4/30/2017 (h) | $10.13 | 0.05 | 0.06 (d) | 0.11 | (0.05) | — |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.29) | $10.16 | (0.98%) | 0.98% | 0.81% (c) | 2.45% | 11% | $21,486 |
| (0.33) | $10.55 | 4.33% | 0.99% | 0.81% | 2.69% | 16% | $21,972 |
| (0.37) | $10.44 | 3.05% | 1.00% | 0.81% | 2.85% | 16% | $23,975 |
| (0.32) | $10.49 | (0.66%) | 1.01% | 0.81% | 3.02% | 6% | $21,694 |
| (0.30) | $10.89 | 4.28% | 0.97% | 0.81% (c) | 2.81% | 14% | $27,743 |
| |
| (0.21) | $10.16 | (1.81%) | 1.72% | 1.56% (c) | 1.67% | 11% | $10 |
| (0.26) | $10.56 | 3.55% | 1.74% | 1.56% | 1.93% | 16% | $27 |
| (0.29) | $10.45 | 2.27% | 1.75% | 1.56% | 2.11% | 16% | $20 |
| (0.24) | $10.50 | (1.31%) | 1.76% | 1.56% | 2.29% | 6% | $24 |
| (0.22) | $10.89 | 3.41% | 1.72% | 1.55% (c) | 2.07% | 14% | $113 |
| |
| (0.21) | $10.16 | (1.81%) | 1.73% | 1.56% (c) | 1.70% | 11% | $13,698 |
| (0.26) | $10.56 | 3.65% | 1.74% | 1.56% | 1.94% | 16% | $15,051 |
| (0.29) | $10.44 | 2.18% | 1.75% | 1.56% | 2.10% | 16% | $15,677 |
| (0.24) | $10.50 | (1.31%) | 1.76% | 1.56% | 2.28% | 6% | $13,871 |
| (0.22) | $10.89 | 3.41% | 1.72% | 1.55% (c) | 2.06% | 14% | $15,694 |
| |
| (0.31) | $10.15 | (0.74%) | 0.73% | 0.56% (c) | 2.71% | 11% | $1,205 |
| (0.36) | $10.54 | 4.59% | 0.74% | 0.56% | 2.93% | 16% | $758 |
| (0.39) | $10.43 | 3.21% | 0.75% | 0.56% | 3.11% | 16% | $703 |
| (0.35) | $10.49 | (0.32%) | 0.79% | 0.56% | 3.34% | 6% | $604 |
| (0.04) | $10.88 | 1.09% | 0.58% (g) | 0.53% (g) | 3.12% (g) | 14% | $3 |
| |
| (0.05) | $10.19 | 1.09% | 0.57% (g) | 0.43% (g) | 2.85% (g) | 11% | $10 |
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class Z |
| 4/30/2017 | $10.56 | 0.28 | (0.37) | (0.09) | (0.30) | (0.01) |
| 4/30/2016 | $10.44 | 0.31 | 0.17 | 0.48 | (0.33) | (0.03) |
| 4/30/2015 | $10.50 | 0.33 | 0.00 (d),(e) | 0.33 | (0.32) | (0.07) |
| 4/30/2014 | $10.89 | 0.34 | (0.38) | (0.04) | (0.34) | (0.01) |
| 4/30/2013 | $10.75 | 0.33 | 0.14 | 0.47 | (0.33) | — |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (e) | Rounds to zero. |
| (f) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (g) | Annualized. |
| (h) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.31) | $10.16 | (0.83%) | 0.73% | 0.56% (c) | 2.70% | 11% | $83,743 |
| (0.36) | $10.56 | 4.69% | 0.74% | 0.56% | 2.93% | 16% | $105,200 |
| (0.39) | $10.44 | 3.21% | 0.75% | 0.56% | 3.10% | 16% | $94,697 |
| (0.35) | $10.50 | (0.32%) | 0.76% | 0.56% | 3.27% | 6% | $87,992 |
| (0.33) | $10.89 | 4.45% | 0.72% | 0.55% (c) | 3.06% | 14% | $122,578 |
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Class B shares are typically subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, the Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or
| 24 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
April 30, 2017
Distributions to shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.47% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
| 26 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.17 |
| Class B | 0.17 |
| Class C | 0.17 |
| Class R4 | 0.17 |
| Class Y | 0.025 (a) |
| Class Z | 0.17 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, these minimum account balance fees reduced total expenses of the Fund by $20.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
April 30, 2017
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 47,417 |
| Class C | 339 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | Fee rates contractual
through
August 31, 2017 |
| Class A | 0.810% |
| Class B | 1.560 |
| Class C | 1.560 |
| Class R4 | 0.560 |
| Class Y | 0.430* |
| Class Z | 0.560 |
*Expense cap is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for deferral/reversal of wash sale losses, capital loss carryforwards, trustees’ deferred compensation, distributions and distribution reclassifications. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
| 28 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| (645) | 645 | — |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 2,665 | 3,832,447 | 134,389 | 3,969,501 | 10,321 | 4,050,420 | 409,542 | 4,470,283 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 837,188 | — | (292,352) | 3,574,318 |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 113,188,228 | 4,268,386 | (694,068) | 3,574,318 |
The following capital loss carryforwards, determined at April 30, 2017, 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. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended April 30, 2017, capital loss carryforwards utilized, expired unused and permanently lost were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | — | 292,352 | — | 292,352 | — | — | — |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $14,964,092 and $29,627,880, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Notes to Financial Statements (continued)
April 30, 2017
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At April 30, 2017, one unaffiliated shareholder of record owned 56.1% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a
| 30 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia AMT-Free South Carolina Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free South Carolina Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 32 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 99.93% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 34 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 36 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 37 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 38 | Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund | Annual Report 2017
| 39 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free South Carolina Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
April 30, 2017
Columbia AMT-Free Virginia Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free Virginia Intermediate Muni Bond Fund (the Fund) seeks current income exempt from U.S. federal income tax and Virginia individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Brian McGreevy
Co-manager
Managed Fund since 2011
Paul Fuchs, CFA
Co-manager
Managed Fund since September 2016
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 12/05/89 | -0.51 | 1.85 | 3.26 |
| | Including sales charges | | -3.53 | 1.24 | 2.95 |
| Class B | Excluding sales charges | 06/07/93 | -1.25 | 1.07 | 2.49 |
| | Including sales charges | | -4.15 | 1.07 | 2.49 |
| Class C | Excluding sales charges | 06/17/92 | -1.25 | 1.09 | 2.50 |
| | Including sales charges | | -2.22 | 1.09 | 2.50 |
| Class R4 * | 03/19/13 | -0.26 | 2.12 | 3.52 |
| Class Y * | 03/01/17 | -0.16 | 2.12 | 3.53 |
| Class Z | 09/20/89 | -0.26 | 2.10 | 3.52 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.15 | 2.80 | 4.37 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 3.00% in the first year, declining to 1.00% in the fourth year and eliminated thereafter. The Fund does not accept new investments in Class B shares, except for certain limited transactions. The Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3-15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
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.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free Virginia Intermediate Muni Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 18.4 |
| AA rating | 51.8 |
| A rating | 17.6 |
| BBB rating | 7.1 |
| Not rated | 5.1 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
For the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned -0.51% excluding sales charges. Class Z shares of the Fund returned -0.26% for the same 12 months. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.15% for the same time period. The Fund’s higher quality bias contributed to its underperformance versus the national index, as did its positions in Virgin Islands bonds.
Market overview
Municipal bonds experienced negative total returns during the 12 months ended April 30, 2017, but the bulk of the losses occurred in the weeks immediately following the U.S. election.
The market was relatively stable early in the period, as rates fell slightly at the start of the summer of 2016 (as prices rose) and held in a tight range through September 2016. Municipal bonds weakened somewhat in October as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve at its December meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November due to the unexpected result of the U.S. election. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes, and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. The resulting selling pressure was exacerbated by heavy mutual fund liquidations, which compelled managers to sell into the falling market. Volatility subsequently abated in the new year, as the combination of lower new-issue supply and positive fund flows helped the index produce a string of months with positive returns. As a result, the major national indices were able to finish the 12-month period with slight gains. Tax-exempt securities outperformed Treasuries thanks in part to the continued strength in state and local finances.
Short-term issues experienced the best relative performance. While bonds with maturities of five years and below posted small gains, the remainder of the yield curve closed in the red as issues with maturities of 15 years and above registering the weakest returns. Lower quality securities generally outpaced their higher quality peers at the national level due largely to the relative strength of New Jersey and Illinois issues.
Political uncertainty fueled below-average growth for the Virginia economy
Virginia’s economy, though strengthening overall, continued to experience a mixed impact from the possible changes in government policy. On one hand, President Trump’s proposals for increased defense spending may have a positive effect on the state due to the large representation of military bases and other defense-related institutions. At the same time, possible spending cuts outside of the defense sector could muddy the outlook for the many civil servants who call Virginia home. The uncertainty has contributed to a growth rate for the Commonwealth that has come in below the national average in the past year. Virginia’s municipal bond market performed in line with the national index.
Contributors and detractors
The Fund’s exposure to Virgin Islands bonds was the primary factor in its underperformance. Moody’s downgraded the territory in mid-2016 as the language in the federal oversight bill to aid the distressed island of Puerto Rico was written in such a way as to include other territories. In addition, investors reacted unfavorably to the Virgin Islands’ poor credit fundamentals. After evaluating the outlook for the territory and determining that the risk-reward tradeoff was unfavorable given the way events unfolded in Puerto Rico, we decided to eliminate the position. Historically, the Fund has invested in Virgin Islands credits because they are exempt from federal and state income taxes, and they offered the opportunity to own higher yielding bonds than would typically be found in Virginia.
The Fund’s overall credit quality was above that of the national index due to the larger representation of higher rated credits in Virginia. Since lower rated investment-grade securities performed better in the rising rate environment, this higher quality bias detracted from results.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
On the plus side, the Fund was helped by having a shorter duration (lower interest-rate sensitivity) than the benchmark at a time of rising yields and falling prices. The Fund was further aided by its overweight in the short end of the yield curve given that this segment outpaced the broader market. A smaller weighting in the 12- to 17-year maturity range was an additional plus given that this portion of the yield curve registered the largest underperformance. Positions in pre-refunded bonds and local general obligation debt further added value, as did a position in the hospital sector.
Fund positioning
The tone in the municipal market was quite upbeat at the end of the period, highlighted by five consecutive months of positive returns and a favorable combination of strong demand and low new-issue supply. However, we continued to monitor several issues that could affect market performance, including the potential for lower taxes, the possibility of increased new-issue supply stemming from increased infrastructure spending, and likely changes to the Affordable Care Act.
This mixed picture prompted us to remain cautious with regard to issuers that have had persistent pension funding issues, as the rating agencies appear to have lost their patience with those that showed no sign of making progress in resolving their underfunded pensions. In addition, we continued to favor areas that have dedicated revenue streams. With regard to duration (interest-rate sensitivity), we moved from a level below that of the benchmark early in the period to a more neutral stance in the second half of the period once yields rose. To accomplish this, we decreased exposure in short-term issues and also sold some longer dated securities to register tax losses, and we reinvested in bonds in the 12- to 15-year maturity range. We remained tax-aware, seeking to manage the gains and losses within the portfolio.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | 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 | 995.60 | 1,020.55 | 3.96 | 4.01 | 0.81 |
| Class B | 1,000.00 | 1,000.00 | 991.90 | 1,016.87 | 7.62 | 7.71 | 1.56 |
| Class C | 1,000.00 | 1,000.00 | 992.80 | 1,016.87 | 7.62 | 7.71 | 1.56 |
| Class R4 | 1,000.00 | 1,000.00 | 997.80 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| Class Y | 1,000.00 | 1,000.00 | 1,011.70 (a) | 1,022.46 | 0.66 (a) | 2.08 | 0.42 (a) |
| Class Z | 1,000.00 | 1,000.00 | 996.80 | 1,021.77 | 2.74 | 2.78 | 0.56 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Floating Rate Notes 1.0% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Variable Rate Demand Notes 1.0% |
| Virginia College Building Authority(a) |
| Revenue Bonds |
University of Richmond Project
VRDN Series 2009 |
| 11/01/36 | 0.850% | | 2,000,000 | 2,000,000 |
Total Floating Rate Notes
(Cost $2,000,000) | 2,000,000 |
|
| Municipal Bonds 97.2% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 7.3% |
| Capital Region Airport Commission |
| Refunding Revenue Bonds |
| Series 2016A |
| 07/01/34 | 4.000% | | 1,125,000 | 1,186,864 |
| Metropolitan Washington Airports Authority |
| Refunding Revenue Bonds |
| Series 2010F-1 |
| 10/01/21 | 5.000% | | 1,000,000 | 1,148,130 |
| Revenue Bonds |
| Series 2009B |
| 10/01/21 | 5.000% | | 3,000,000 | 3,266,730 |
| Series 2009C |
| 10/01/23 | 5.000% | | 3,000,000 | 3,159,570 |
| Series 2010A |
| 10/01/23 | 5.000% | | 2,475,000 | 2,763,981 |
| Series 2010A |
| 10/01/27 | 5.000% | | 1,515,000 | 1,680,104 |
| Norfolk Airport Authority |
| Refunding Revenue Bonds |
| Series 2011 (AGM) |
| 07/01/24 | 5.000% | | 1,000,000 | 1,121,060 |
| Total | 14,326,439 |
| Higher Education 9.2% |
| Amherst Industrial Development Authority |
| Refunding Revenue Bonds |
Educational Facilities Sweet Briar Institute
Series 2006 |
| 09/01/26 | 5.000% | | 1,000,000 | 951,150 |
| Lexington Industrial Development Authority |
| Revenue Bonds |
VMI Development Board, Inc. Project
Series 2006A |
| 12/01/20 | 5.000% | | 1,400,000 | 1,582,924 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Virginia College Building Authority |
| Refunding Revenue Bonds |
University of Richmond Project
Series 2011A |
| 03/01/22 | 5.000% | | 1,245,000 | 1,413,834 |
University of Richmond Project
Series 2011B |
| 03/01/21 | 5.000% | | 2,250,000 | 2,560,073 |
| Revenue Bonds |
Liberty University Projects
Series 2010 |
| 03/01/19 | 5.000% | | 1,000,000 | 1,072,870 |
Liberty University Projects
Series 2010 |
| 03/01/22 | 5.000% | | 1,455,000 | 1,599,409 |
Liberty University Projects
Series 2010 |
| 03/01/23 | 5.000% | | 2,000,000 | 2,196,160 |
Washington & Lee University Project
Series 1998 (NPFGC) |
| 01/01/26 | 5.250% | | 3,115,000 | 3,735,352 |
| Virginia Polytechnic Institute & State University |
| Revenue Bonds |
General Dorm and Dining Hall
Series 2015A |
| 06/01/27 | 4.000% | | 2,650,000 | 2,947,065 |
| Total | 18,058,837 |
| Hospital 11.5% |
| Augusta County Economic Development Authority |
| Refunding Revenue Bonds |
Augusta Health Care, Inc.
Series 2003 |
| 09/01/19 | 5.250% | | 905,000 | 986,432 |
| Fairfax County Industrial Development Authority |
| Refunding Revenue Bonds |
Inova Health System Project
Series 1993 |
| 08/15/19 | 5.250% | | 765,000 | 803,724 |
Inova Health System Project
Series 1993I (NPFGC) |
| 08/15/19 | 5.250% | | 775,000 | 806,891 |
| Revenue Bonds |
Inova Health System
Series 2009C |
| 05/15/25 | 5.000% | | 1,000,000 | 1,075,490 |
| Fredericksburg Economic Development Authority |
| Refunding Revenue Bonds |
MediCorp Health Systems Obligation
Series 2007 |
| 06/15/18 | 5.250% | | 1,000,000 | 1,034,930 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
MediCorp Health Systems Obligation
Series 2007 |
| 06/15/20 | 5.250% | | 4,000,000 | 4,342,480 |
| Norfolk Economic Development Authority |
| Refunding Revenue Bonds |
Sentara Healthcare
Series 2012B |
| 11/01/27 | 5.000% | | 1,735,000 | 1,961,817 |
| Roanoke Economic Development Authority |
| Refunding Revenue Bonds |
Carilion Clinic Obligation Group
Series 2010 |
| 07/01/25 | 5.000% | | 3,500,000 | 3,842,930 |
| Revenue Bonds |
Carilion Clinic Obligation Group
Series 2012 |
| 07/01/22 | 5.000% | | 2,000,000 | 2,321,320 |
Carilion Clinic Obligation Group
Series 2012 |
| 07/01/23 | 5.000% | | 1,000,000 | 1,144,930 |
| Stafford County Economic Development Authority |
| Refunding Revenue Bonds |
Mary Washington Healthcare
Series 2016 |
| 06/15/30 | 5.000% | | 1,300,000 | 1,469,767 |
Mary Washington Healthcare
Series 2016 |
| 06/15/33 | 5.000% | | 200,000 | 221,944 |
Mary Washington Healthcare
Series 2016 |
| 06/15/35 | 5.000% | | 1,000,000 | 1,100,720 |
| Winchester Economic Development Authority |
| Refunding Revenue Bonds |
Valley Health System Obligation Group
Series 2015 |
| 01/01/32 | 5.000% | | 1,250,000 | 1,428,362 |
| Total | 22,541,737 |
| Investor Owned 1.1% |
| Chesterfield County Economic Development Authority |
| Refunding Revenue Bonds |
Virginia Electric & Power Co.
Series 2009A |
| 05/01/23 | 5.000% | | 2,000,000 | 2,152,440 |
| Local Appropriation 5.5% |
| Appomattox County Economic Development Authority |
| Unrefunded Revenue Bonds |
| Series 2010 |
| 05/01/22 | 5.000% | | 175,000 | 191,349 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Fairfax County Economic Development Authority |
| Revenue Bonds |
Metrorail Parking Systems
Series 2017 |
| 04/01/33 | 5.000% | | 745,000 | 877,670 |
Six Public Facilities Projects
Series 2010 |
| 04/01/24 | 4.000% | | 1,340,000 | 1,396,039 |
| Henrico County Economic Development Authority |
| Refunding Revenue Bonds |
| Series 2009B |
| 08/01/21 | 4.500% | | 1,770,000 | 1,903,210 |
| Loudoun County Economic Development Authority |
| Revenue Bonds |
Loudoun County Roads & Public Facilities Project
Series 2015 |
| 12/01/25 | 5.000% | | 3,000,000 | 3,669,570 |
| Series 2015 |
| 12/01/28 | 5.000% | | 1,035,000 | 1,220,389 |
| Virginia Beach Development Authority |
| Revenue Bonds |
| Series 2010C |
| 08/01/23 | 5.000% | | 1,380,000 | 1,532,062 |
| Total | 10,790,289 |
| Local General Obligation 9.8% |
| City of Lynchburg |
| Unlimited General Obligation Public Improvement Bonds |
| Series 2009A |
| 08/01/20 | 5.000% | | 525,000 | 571,200 |
| Series 2009A |
| 08/01/21 | 5.000% | | 530,000 | 575,029 |
| City of Manassas Park |
| Unlimited General Obligation Refunding Bonds |
| Series 2008 (AGM) |
| 01/01/22 | 5.000% | | 310,000 | 318,147 |
| City of Newport News |
| Unlimited General Obligation Refunding & Improvement Bonds |
Water
Series 2007B |
| 07/01/20 | 5.250% | | 2,000,000 | 2,256,240 |
| Unlimited General Obligation Refunding Bonds |
| Series 2016A |
| 08/01/31 | 5.000% | | 1,000,000 | 1,187,260 |
| City of Portsmouth |
| Unlimited General Obligation Refunding Bonds |
Public Utilities
Series 2012A |
| 07/15/21 | 5.000% | | 3,000,000 | 3,450,090 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Richmond |
| Unlimited General Obligation Bonds |
Public Improvement
Series 2015B |
| 03/01/28 | 4.000% | | 2,000,000 | 2,198,680 |
| Unlimited General Obligation Public Improvement Bonds |
| Series 2010D |
| 07/15/22 | 5.000% | | 575,000 | 641,849 |
| Series 2010D |
| 07/15/24 | 5.000% | | 1,000,000 | 1,114,580 |
| City of Suffolk |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 02/01/29 | 4.000% | | 2,000,000 | 2,185,940 |
| County of Smyth |
| Unlimited General Obligation Bonds |
Public Improvement
Series 2011A |
| 11/01/31 | 5.000% | | 4,000,000 | 4,628,800 |
| Total | 19,127,815 |
| Other Bond Issue 4.6% |
| Montgomery County Economic Development Authority(b) |
| Refunding Revenue Bonds |
Virginia Tech Foundation
Series 2017A |
| 06/01/29 | 5.000% | | 200,000 | 242,978 |
| Rappahannock Regional Jail Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 10/01/30 | 5.000% | | 1,725,000 | 2,018,612 |
| Riverside Regional Jail Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 07/01/28 | 5.000% | | 2,685,000 | 3,158,903 |
| Western Regional Jail Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/27 | 5.000% | | 1,500,000 | 1,786,575 |
| Series 2016 |
| 12/01/33 | 5.000% | | 1,500,000 | 1,744,335 |
| Total | 8,951,403 |
| Other Industrial Development Bond 0.8% |
| Peninsula Ports Authority |
| Refunding Revenue Bonds |
Dominion Term Association Project
Series 2016D |
| 10/01/33 | 1.550% | | 1,500,000 | 1,492,860 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Pool / Bond Bank 12.1% |
| Virginia College Building Authority |
| Refunding Revenue Bonds |
| Series 2016A |
| 09/01/33 | 3.000% | | 500,000 | 481,770 |
| Virginia Public School Authority |
| Refunding Revenue Bonds |
School Financing
Series 2009C |
| 08/01/25 | 4.000% | | 2,560,000 | 2,715,878 |
| Virginia Resources Authority |
| Refunding Revenue Bonds |
Revolving Fund
Series 2011A |
| 08/01/24 | 5.000% | | 1,395,000 | 1,575,625 |
| Series 2015 |
| 10/01/27 | 5.000% | | 1,500,000 | 1,824,900 |
State Revolving Fund
Subordinated Series 2005 |
| 10/01/19 | 5.500% | | 4,000,000 | 4,425,040 |
State Revolving Fund
Subordinated Series 2005 |
| 10/01/20 | 5.500% | | 3,500,000 | 4,004,105 |
State Revolving Fund
Subordinated Series 2005 |
| 10/01/21 | 5.500% | | 6,475,000 | 7,626,838 |
| Revenue Bonds |
Virginia Pooled Financing Program
Series 2016S |
| 11/01/33 | 4.000% | | 1,000,000 | 1,074,480 |
| Total | 23,728,636 |
| Refunded / Escrowed 15.3% |
| Appomattox County Economic Development Authority |
| Prerefunded 05/01/20 Revenue Bonds |
| Series 2010 |
| 05/01/22 | 5.000% | | 1,315,000 | 1,463,043 |
| Chesapeake Bay Bridge & Tunnel District |
| Refunding Revenue Bonds |
General Resolution
Series 1998 Escrowed to Maturity (NPFGC) |
| 07/01/25 | 5.500% | | 4,000,000 | 4,883,360 |
| City of Manassas Park |
| Prerefunded 01/01/18 Revenue Bonds |
| Series 2008 (AGM) |
| 01/01/22 | 5.000% | | 895,000 | 919,935 |
| City of Newport News |
| Prerefunded 07/01/20 Unlimited General Obligation Improvement Bonds |
| Series 2011A |
| 07/01/23 | 5.000% | | 1,380,000 | 1,542,867 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| County of Fairfax |
| Prerefunded 04/01/21 Unlimited General Obligation Refunding Bonds |
Public Improvement
Series 2011A |
| 04/01/24 | 4.000% | | 2,000,000 | 2,198,320 |
| County of Henrico |
| Prerefunded 12/01/18 Unlimited General Obligation |
Public Improvement Bonds
Series 2008A |
| 12/01/21 | 5.000% | | 1,000,000 | 1,063,900 |
| County of Pittsylvania |
| Prerefunded 02/01/19 Unlimited General Obligation Bonds |
| Series 2008B |
| 02/01/23 | 5.500% | | 1,030,000 | 1,110,721 |
| County of Spotsylvania Water & Sewer |
| Prerefunded 06/01/17 Revenue Bonds |
| Series 2007 (AGM) |
| 06/01/19 | 5.000% | | 1,030,000 | 1,033,996 |
| Fairfax County Economic Development Authority |
| Prerefunded 04/01/20 Special Tax Bonds |
Silver Line Phase I Project
Series 2011 |
| 04/01/26 | 5.000% | | 4,185,000 | 4,642,630 |
| Hampton Roads Sanitation District |
| Prerefunded 04/01/18 Revenue Bonds |
| Series 2008 |
| 04/01/22 | 5.000% | | 1,000,000 | 1,038,100 |
| Prerefunded 11/01/19 Revenue Bonds |
| Series 2011 |
| 11/01/24 | 5.000% | | 1,750,000 | 1,918,070 |
| Series 2011 |
| 11/01/25 | 5.000% | | 1,380,000 | 1,512,535 |
| Montgomery County Industrial Development Authority |
| Prerefunded 02/01/18 Revenue Bonds |
Public Projects
Series 2008 |
| 02/01/29 | 5.000% | | 1,000,000 | 1,031,100 |
| Richmond Metropolitan Transportation Authority (The) Expressway System |
| Refunding Revenue Bonds |
| Series 1998 Escrowed to Maturity (NPFGC) |
| 07/15/17 | 5.250% | | 145,000 | 146,367 |
| Virginia Resources Authority |
| Prerefunded 10/01/18 Revenue Bonds |
State Revolving Fund
Subordinated Series 2008 |
| 10/01/29 | 5.000% | | 5,000,000 | 5,288,450 |
| Revenue Bonds |
| Series 2009B Escrowed to Maturity |
| 11/01/18 | 4.000% | | 130,000 | 135,823 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
St. Moral
Series 2009B Escrowed to Maturity |
| 11/01/18 | 4.000% | | 35,000 | 36,568 |
| Total | 29,965,785 |
| Retirement Communities 2.3% |
| Albermarle County Economic Development Authority |
| Revenue Bonds |
Westminster-Canterbury of the Blue Ridge
Series 2012 |
| 01/01/32 | 4.625% | | 2,000,000 | 2,006,820 |
| Hanover County Economic Development Authority |
| Revenue Bonds |
Covenant Woods
Series 2012A |
| 07/01/22 | 4.000% | | 1,150,000 | 1,181,073 |
| Henrico County Economic Development Authority |
| Refunding Revenue Bonds |
Westminster-Canterbury Corp.
Series 2015 |
| 10/01/35 | 4.000% | | 1,320,000 | 1,328,369 |
| Total | 4,516,262 |
| Sales Tax 1.2% |
| Northern Virginia Transportation Authority |
| Revenue Bonds |
| Series 2014 |
| 06/01/32 | 5.000% | | 2,000,000 | 2,324,460 |
| Special Non Property Tax 2.2% |
| Greater Richmond Convention Center Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/15/29 | 5.000% | | 1,350,000 | 1,559,088 |
| Series 2015 |
| 06/15/30 | 5.000% | | 1,540,000 | 1,765,595 |
| Territory of Guam(c) |
| Revenue Bonds |
| Series 2011A |
| 01/01/31 | 5.000% | | 850,000 | 887,340 |
| Total | 4,212,023 |
| Special Property Tax 3.2% |
| Dulles Town Center Community Development Authority |
| Refunding Special Assessment Bonds |
Dulles Town Center Project
Series 2012 |
| 03/01/23 | 4.000% | | 1,000,000 | 1,004,110 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Fairfax County Economic Development Authority |
| Refunding Special Tax Bonds |
Silver Line Phase I Project
Series 2016 |
| 04/01/31 | 4.000% | | 1,000,000 | 1,081,030 |
Silver Line Phase I Project
Series 2016 |
| 04/01/32 | 4.000% | | 1,000,000 | 1,072,100 |
| Marquis Community Development Authority of York County(d),(e) |
| Revenue Bonds |
Convertible
Series 2015 |
| 09/01/45 | 0.000% | | 644,000 | 416,932 |
| Marquis Community Development Authority of York County |
| Tax Allocation Bonds |
| Series 2007B |
| 09/01/41 | 5.625% | | 2,084,000 | 1,609,744 |
| Marquis Community Development Authority of York County(e) |
| Tax Allocation Bonds |
| Series 2007C |
| 09/01/41 | 0.000% | | 3,164,000 | 414,579 |
| Virginia Gateway Community Development Authority |
| Refunding Special Assessment Bonds |
| Series 2012 |
| 03/01/25 | 5.000% | | 690,000 | 707,988 |
| Total | 6,306,483 |
| Transportation 2.3% |
| Virginia Commonwealth Transportation Board |
| Revenue Bonds |
Capital Projects
Series 2012 |
| 05/15/29 | 5.000% | | 3,000,000 | 3,455,160 |
| Series 2016 |
| 05/15/30 | 4.000% | | 1,000,000 | 1,090,300 |
| Total | 4,545,460 |
| Turnpike / Bridge / Toll Road 3.3% |
| City of Chesapeake Expressway Toll Road |
| Revenue Bonds |
Transportation System
Senior Series 2012A |
| 07/15/23 | 5.000% | | 1,025,000 | 1,154,078 |
Transportation System
Senior Series 2012A |
| 07/15/27 | 5.000% | | 1,000,000 | 1,093,420 |
| Metropolitan Washington Airports Authority Dulles Toll Road(e) |
| Revenue Bonds |
Capital Appreciation-2nd Senior Lien
Series 2009B (AGM) |
| 10/01/23 | 0.000% | | 5,000,000 | 4,164,150 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Richmond Metropolitan Transportation Authority (The) Expressway System |
| Refunding Revenue Bonds |
| Series 1998 (NPFGC) |
| 07/15/17 | 5.250% | | 85,000 | 85,750 |
| Total | 6,497,398 |
| Water & Sewer 5.5% |
| City of Norfolk Water |
| Refunding Revenue Bonds |
| Series 2012 |
| 11/01/19 | 5.000% | | 1,000,000 | 1,096,560 |
| County of Fairfax Sewer |
| Refunding Revenue Bonds |
| Series 2016A |
| 07/15/30 | 5.000% | | 1,000,000 | 1,210,000 |
| Fairfax County Water Authority |
| Refunding Revenue Bonds |
| Series 2017 |
| 04/01/29 | 5.000% | | 2,000,000 | 2,465,260 |
| Subordinated Refunding Revenue Bonds |
| Series 2005B |
| 04/01/19 | 5.250% | | 1,835,000 | 1,984,589 |
| Guam Government Waterworks Authority(c) |
| Revenue Bonds |
| Series 2016 |
| 07/01/36 | 5.000% | | 350,000 | 373,590 |
| Hampton Roads Sanitation District |
| Refunding Subordinated Revenue Bonds |
| Series 2016A |
| 08/01/31 | 5.000% | | 2,000,000 | 2,379,940 |
| Upper Occoquan Sewage Authority |
| Revenue Bonds |
| Series 1995A (NPFGC) |
| 07/01/20 | 5.150% | | 1,060,000 | 1,130,374 |
| Total | 10,640,313 |
Total Municipal Bonds
(Cost $181,858,542) | 190,178,640 |
Total Investments
(Cost: $183,858,542) | 192,178,640 |
| Other Assets & Liabilities, Net | | 3,612,639 |
| Net Assets | 195,791,279 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
Notes to Portfolio of Investments
| (a) | Variable rate security. |
| (b) | Represents a security purchased on a when-issued basis. |
| (c) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2017, the value of these securities amounted to $1,260,930 which represents 0.64% of net assets. |
| (d) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At April 30, 2017, the value of these securities amounted to $416,932 which represents 0.21% of net assets. |
| (e) | Zero coupon bond. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| NPFGC | National Public Finance Guarantee Corporation |
| VRDN | Variable Rate Demand Note |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements (continued)
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Floating Rate Notes | — | 2,000,000 | — | 2,000,000 |
| Municipal Bonds | — | 190,178,640 | — | 190,178,640 |
| Total Investments | — | 192,178,640 | — | 192,178,640 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $183,858,542 |
| Total investments, at cost | 183,858,542 |
| Investments, at value | |
| Unaffiliated issuers, at value | 192,178,640 |
| Total investments, at value | 192,178,640 |
| Cash | 2,316,267 |
| Receivable for: | |
| Capital shares sold | 151,762 |
| Interest | 2,059,392 |
| Expense reimbursement due from Investment Manager | 319 |
| Prepaid expenses | 733 |
| Other assets | 764 |
| Total assets | 196,707,877 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 245,342 |
| Capital shares purchased | 38,526 |
| Distributions to shareholders | 453,648 |
| Management services fees | 2,521 |
| Distribution and/or service fees | 328 |
| Transfer agent fees | 23,675 |
| Compensation of board members | 115,234 |
| Other expenses | 37,324 |
| Total liabilities | 916,598 |
| Net assets applicable to outstanding capital stock | $195,791,279 |
| Represented by | |
| Paid in capital | 187,299,807 |
| Undistributed net investment income | 241,891 |
| Accumulated net realized loss | (70,517) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 8,320,098 |
| Total - representing net assets applicable to outstanding capital stock | $195,791,279 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $28,168,138 |
| Shares outstanding | 2,610,232 |
| Net asset value per share | $10.79 |
| Maximum offering price per share(a) | $11.12 |
| Class B | |
| Net assets | $9,761 |
| Shares outstanding | 904 |
| Net asset value per share | $10.79 (b) |
| Class C | |
| Net assets | $4,938,305 |
| Shares outstanding | 457,348 |
| Net asset value per share | $10.80 |
| Class R4 | |
| Net assets | $812,291 |
| Shares outstanding | 75,310 |
| Net asset value per share | $10.79 |
| Class Y | |
| Net assets | $10,060 |
| Shares outstanding | 930 |
| Net asset value per share | $10.82 |
| Class Z | |
| Net assets | $161,852,724 |
| Shares outstanding | 14,998,848 |
| Net asset value per share | $10.79 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
| (b) | Net asset value per share rounds to this amount due to fractional shares outstanding. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Interest | $7,204,314 |
| Total income | 7,204,314 |
| Expenses: | |
| Management services fees | 1,000,226 |
| Distribution and/or service fees | |
| Class A | 97,586 |
| Class B | 103 |
| Class C | 51,476 |
| Transfer agent fees | |
| Class A | 67,493 |
| Class B | 17 |
| Class C | 8,858 |
| Class R4 | 1,094 |
| Class Z | 289,170 |
| Compensation of board members | 29,053 |
| Custodian fees | 2,644 |
| Printing and postage fees | 21,855 |
| Registration fees | 25,632 |
| Audit fees | 32,393 |
| Legal fees | 8,736 |
| Compensation of chief compliance officer | 48 |
| Other | 14,919 |
| Total expenses | 1,651,303 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (307,843) |
| Total net expenses | 1,343,460 |
| Net investment income | 5,860,854 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (8,421) |
| Net realized loss | (8,421) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (7,110,868) |
| Net change in unrealized appreciation (depreciation) | (7,110,868) |
| Net realized and unrealized loss | (7,119,289) |
| Net decrease in net assets resulting from operations | $(1,258,435) |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $5,860,854 | $6,336,792 |
| Net realized gain (loss) | (8,421) | 908,332 |
| Net change in unrealized appreciation (depreciation) | (7,110,868) | 1,055,449 |
| Net increase (decrease) in net assets resulting from operations | (1,258,435) | 8,300,573 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (1,058,469) | (1,257,373) |
| Class B | (201) | (405) |
| Class C | (101,500) | (99,414) |
| Class R4 | (19,024) | (19,131) |
| Class Y | (52) | — |
| Class Z | (4,995,471) | (5,226,767) |
| Net realized gains | | |
| Class A | (127,621) | (138,967) |
| Class B | (31) | (67) |
| Class C | (17,010) | (15,239) |
| Class R4 | (2,336) | (2,706) |
| Class Z | (537,963) | (517,929) |
| Total distributions to shareholders | (6,859,678) | (7,277,998) |
| Decrease in net assets from capital stock activity | (17,471,019) | (3,828,669) |
| Total decrease in net assets | (25,589,132) | (2,806,094) |
| Net assets at beginning of year | 221,380,411 | 224,186,505 |
| Net assets at end of year | $195,791,279 | $221,380,411 |
| Undistributed net investment income | $241,891 | $555,754 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 666,139 | 7,246,638 | 406,607 | 4,512,753 |
| Distributions reinvested | 68,544 | 747,740 | 75,502 | 837,349 |
| Redemptions | (1,884,374) | (20,270,581) | (974,758) | (10,809,217) |
| Net decrease | (1,149,691) | (12,276,203) | (492,649) | (5,459,115) |
| Class B | | | | |
| Subscriptions | 1 | 6 | 906 | 10,015 |
| Distributions reinvested | — | — | 23 | 256 |
| Redemptions (b) | (60) | (637) | (1,208) | (13,486) |
| Net decrease | (59) | (631) | (279) | (3,215) |
| Class C | | | | |
| Subscriptions | 111,239 | 1,234,219 | 91,281 | 1,011,789 |
| Distributions reinvested | 8,573 | 93,363 | 7,740 | 85,884 |
| Redemptions | (122,031) | (1,330,962) | (36,407) | (403,976) |
| Net increase (decrease) | (2,219) | (3,380) | 62,614 | 693,697 |
| Class R4 | | | | |
| Subscriptions | 96,413 | 1,047,662 | 35,660 | 394,465 |
| Distributions reinvested | 1,929 | 21,033 | 1,941 | 21,495 |
| Redemptions | (68,313) | (726,973) | (51,271) | (570,104) |
| Net increase (decrease) | 30,029 | 341,722 | (13,670) | (154,144) |
| Class Y | | | | |
| Subscriptions | 930 | 10,000 | — | — |
| Net increase | 930 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 3,794,757 | 41,194,146 | 2,439,307 | 27,096,314 |
| Distributions reinvested | 50,579 | 550,870 | 42,112 | 467,046 |
| Redemptions | (4,379,904) | (47,287,543) | (2,386,494) | (26,469,252) |
| Net increase (decrease) | (534,568) | (5,542,527) | 94,925 | 1,094,108 |
| Total net decrease | (1,655,578) | (17,471,019) | (349,059) | (3,828,669) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class A |
| 4/30/2017 | $11.18 | 0.28 | (0.34) | (0.06) | (0.30) | (0.03) |
| 4/30/2016 | $11.13 | 0.30 | 0.10 | 0.40 | (0.32) | (0.03) |
| 4/30/2015 | $11.09 | 0.31 | 0.04 | 0.35 | (0.31) | (0.00) (d) |
| 4/30/2014 | $11.54 | 0.32 | (0.39) | (0.07) | (0.31) | (0.07) |
| 4/30/2013 | $11.47 | 0.31 | 0.09 | 0.40 | (0.31) | (0.02) |
| Class B |
| 4/30/2017 | $11.18 | 0.20 | (0.34) | (0.14) | (0.22) | (0.03) |
| 4/30/2016 | $11.13 | 0.22 | 0.09 | 0.31 | (0.23) | (0.03) |
| 4/30/2015 | $11.10 | 0.23 | 0.03 | 0.26 | (0.23) | (0.00) (d) |
| 4/30/2014 | $11.54 | 0.23 | (0.37) | (0.14) | (0.23) | (0.07) |
| 4/30/2013 | $11.48 | 0.22 | 0.08 | 0.30 | (0.22) | (0.02) |
| Class C |
| 4/30/2017 | $11.19 | 0.20 | (0.34) | (0.14) | (0.22) | (0.03) |
| 4/30/2016 | $11.13 | 0.22 | 0.10 | 0.32 | (0.23) | (0.03) |
| 4/30/2015 | $11.10 | 0.23 | 0.03 | 0.26 | (0.23) | (0.00) (d) |
| 4/30/2014 | $11.54 | 0.23 | (0.37) | (0.14) | (0.23) | (0.07) |
| 4/30/2013 | $11.48 | 0.22 | 0.08 | 0.30 | (0.22) | (0.02) |
| Class R4 |
| 4/30/2017 | $11.18 | 0.31 | (0.34) | (0.03) | (0.33) | (0.03) |
| 4/30/2016 | $11.12 | 0.33 | 0.11 | 0.44 | (0.35) | (0.03) |
| 4/30/2015 | $11.08 | 0.34 | 0.04 | 0.38 | (0.34) | (0.00) (d) |
| 4/30/2014 | $11.52 | 0.35 | (0.38) | (0.03) | (0.34) | (0.07) |
| 4/30/2013 (e) | $11.43 | 0.04 | 0.09 | 0.13 | (0.04) | — |
| Class Y |
| 4/30/2017 (g) | $10.75 | 0.05 | 0.08 (h) | 0.13 | (0.06) | — |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.33) | $10.79 | (0.51%) | 0.95% | 0.81% | 2.56% | 7% | $28,168 |
| (0.35) | $11.18 | 3.65% | 0.96% | 0.81% (c) | 2.72% | 12% | $42,046 |
| (0.31) | $11.13 | 3.21% | 0.97% | 0.81% (c) | 2.79% | 9% | $47,324 |
| (0.38) | $11.09 | (0.51%) | 0.97% | 0.81% (c) | 2.86% | 2% | $47,113 |
| (0.33) | $11.54 | 3.49% | 0.95% | 0.80% (c) | 2.68% | 11% | $55,003 |
| |
| (0.25) | $10.79 | (1.25%) | 1.71% | 1.56% | 1.82% | 7% | $10 |
| (0.26) | $11.18 | 2.87% | 1.71% | 1.56% (c) | 1.95% | 12% | $11 |
| (0.23) | $11.13 | 2.35% | 1.72% | 1.56% (c) | 2.04% | 9% | $14 |
| (0.30) | $11.10 | (1.16%) | 1.71% | 1.56% (c) | 2.08% | 2% | $18 |
| (0.24) | $11.54 | 2.62% | 1.70% | 1.55% (c) | 1.92% | 11% | $47 |
| |
| (0.25) | $10.80 | (1.25%) | 1.70% | 1.56% | 1.82% | 7% | $4,938 |
| (0.26) | $11.19 | 2.97% | 1.72% | 1.56% (c) | 1.97% | 12% | $5,141 |
| (0.23) | $11.13 | 2.35% | 1.72% | 1.56% (c) | 2.03% | 9% | $4,419 |
| (0.30) | $11.10 | (1.16%) | 1.72% | 1.56% (c) | 2.11% | 2% | $4,044 |
| (0.24) | $11.54 | 2.63% | 1.70% | 1.55% (c) | 1.93% | 11% | $5,601 |
| |
| (0.36) | $10.79 | (0.26%) | 0.70% | 0.56% | 2.81% | 7% | $812 |
| (0.38) | $11.18 | 4.00% | 0.72% | 0.56% (c) | 2.97% | 12% | $506 |
| (0.34) | $11.12 | 3.47% | 0.72% | 0.56% (c) | 3.06% | 9% | $656 |
| (0.41) | $11.08 | (0.19%) | 0.72% | 0.56% (c) | 3.18% | 2% | $77 |
| (0.04) | $11.52 | 1.12% | 0.56% (f) | 0.52% (f) | 2.98% (f) | 11% | $3 |
| |
| (0.06) | $10.82 | 1.17% | 0.55% (f) | 0.42% (f) | 3.04% (f) | 7% | $10 |
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class Z |
| 4/30/2017 | $11.18 | 0.31 | (0.34) | (0.03) | (0.33) | (0.03) |
| 4/30/2016 | $11.13 | 0.33 | 0.10 | 0.43 | (0.35) | (0.03) |
| 4/30/2015 | $11.09 | 0.34 | 0.04 | 0.38 | (0.34) | (0.00) (d) |
| 4/30/2014 | $11.54 | 0.34 | (0.38) | (0.04) | (0.34) | (0.07) |
| 4/30/2013 | $11.47 | 0.34 | 0.08 | 0.42 | (0.33) | (0.02) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Rounds to zero. |
| (e) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (f) | Annualized. |
| (g) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (h) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.36) | $10.79 | (0.26%) | 0.70% | 0.56% | 2.82% | 7% | $161,853 |
| (0.38) | $11.18 | 3.91% | 0.71% | 0.56% (c) | 2.97% | 12% | $173,677 |
| (0.34) | $11.13 | 3.47% | 0.72% | 0.56% (c) | 3.04% | 9% | $171,775 |
| (0.41) | $11.09 | (0.26%) | 0.72% | 0.56% (c) | 3.09% | 2% | $177,502 |
| (0.35) | $11.54 | 3.75% | 0.70% | 0.55% (c) | 2.93% | 11% | $281,126 |
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia AMT-Free Virginia Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Class B shares are typically subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, the Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or
| 24 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Delayed delivery securities
The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
April 30, 2017
Distributions to shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.47% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
| 26 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.17 |
| Class B | 0.17 |
| Class C | 0.17 |
| Class R4 | 0.17 |
| Class Y | 0.025 (a) |
| Class Z | 0.17 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
April 30, 2017
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 5,731 |
| Class C | 443 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | Fee rates contractual
through
August 31, 2017 |
| Class A | 0.810% |
| Class B | 1.560 |
| Class C | 1.560 |
| Class R4 | 0.560 |
| Class Y | 0.420* |
| Class Z | 0.560 |
*Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for post-October capital losses, trustees’ deferred compensation and distributions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
The Fund did not have any permanent differences; therefore, no reclassifications were made to the Statement of Assets and Liabilities.
| 28 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 40,043 | 6,134,674 | 684,961 | 6,859,678 | 38,653 | 6,564,437 | 674,908 | 7,277,998 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 810,009 | — | — | 8,320,098 |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 183,858,542 | 10,008,570 | (1,688,472) | 8,320,098 |
Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year. As of April 30, 2017, the Fund elected to treat the following late-year ordinary losses and post-October capital losses as arising on May 1, 2017.
Late year
ordinary losses ($) | Post-October
capital losses ($) |
| — | 70,517 |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $15,325,082 and $32,261,503, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Notes to Financial Statements (continued)
April 30, 2017
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At April 30, 2017, one unaffiliated shareholder of record owned 74.7% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
| 30 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia AMT-Free Virginia Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free Virginia Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 32 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Capital
gain
dividend | Exempt-
interest
dividends |
| $65,201 | 99.35% |
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 34 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 36 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 37 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 38 | Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia AMT-Free Virginia Intermediate Muni Bond Fund | Annual Report 2017
| 39 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free Virginia Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
April 30, 2017
Columbia AMT-Free California Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free California Intermediate Muni Bond Fund (the Fund) seeks current income exempt from U.S. federal income tax and California individual income tax, consistent with moderate fluctuation of principal.
Portfolio management
Brian McGreevy
Co-manager
Managed Fund since 2011
Paul Fuchs, CFA
Co-manager
Managed Fund since 2012
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 09/09/02 | -0.75 | 2.65 | 3.87 |
| | Including sales charges | | -3.71 | 2.03 | 3.55 |
| Class B | Excluding sales charges | 08/29/02 | -1.49 | 1.88 | 3.09 |
| | Including sales charges | | -4.40 | 1.88 | 3.09 |
| Class C | Excluding sales charges | 09/11/02 | -1.49 | 1.88 | 3.09 |
| | Including sales charges | | -2.46 | 1.88 | 3.09 |
| Class R4 * | 03/19/13 | -0.42 | 2.92 | 4.13 |
| Class R5 * | 11/08/12 | -0.42 | 2.99 | 4.16 |
| Class Y * | 03/01/17 | -0.49 | 2.91 | 4.12 |
| Class Z | 08/19/02 | -0.51 | 2.90 | 4.12 |
| Bloomberg Barclays California 3-15 Year Blend Municipal Bond Index | | -0.14 | 3.08 | 4.54 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.15 | 2.80 | 4.37 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 3.00% in the first year, declining to 1.00% in the fourth year and eliminated thereafter. The Fund does not accept new investments in Class B shares, except for certain limited transactions. The Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays California 3-15 Year Blend Municipal Bond Index tracks investment grade bonds issued from the state of California and its municipalities.
The Bloomberg Barclays 3-15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
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.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free California Intermediate Muni Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 0.2 |
| AA rating | 45.8 |
| A rating | 33.9 |
| BBB rating | 15.8 |
| BB rating | 1.3 |
| Not rated | 3.0 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
During the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned -0.75% excluding sales charges. Class Z shares of the Fund returned -0.51% for the same 12 months. During the same time period, the Bloomberg Barclays California 3-15 Year Blend Municipal Bond Index (the California benchmark) returned -0.14% and the broader national index, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.15%. The Fund’s investments in the Virgin Islands were the primary detractor from performance, while positions in shorter term issues contributed positively.
Market overview
Municipal bonds experienced negative total returns during the 12 months ended April 30, 2017, but the bulk of the losses occurred in the weeks immediately following the U.S. election.
The market was relatively stable early in the period, as rates fell slightly at the start of the summer of 2016 (as prices rose) and held in a tight range through September 2016. Municipal bonds weakened somewhat in October as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve at its December meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November due to the unexpected result of the U.S. election. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. The resulting selling pressure was exacerbated by heavy mutual fund liquidations, which compelled managers to sell into the falling market. Volatility subsequently abated in the new year, as the combination of lower new-issue supply and positive fund flows helped the national benchmark produce a string of months with positive returns. As a result, the major national indices were able to finish the 12-month period with slight gains. Tax-exempt securities outperformed Treasuries thanks in part to the continued strength in state and local finances.
Short-term issues experienced the best relative performance. While bonds with maturities of five years and below posted small gains, the remainder of the yield curve closed in the red with issues with maturities of 15 years and above registering the weakest returns. Lower quality securities generally outpaced their higher quality peers at the national level due largely to the relative strength of New Jersey and Illinois issues.
California municipal bond markets lagged
California’s economy continued to demonstrate robust growth in the 12 months under review, highlighted by the continued expansion of the information technology sector. The above-average growth of tech stalwarts such as Apple and Google, together with an increased number of start-ups, led to a strong labor market and rising personal income. While the state’s expansion remained constrained by higher business costs and an above-average tax and regulatory burden, the combination of a vibrant tech industry and an educated workforce continued to fuel above-average growth. Nevertheless, California’s municipal bond market modestly underperformed the broader national index due to weakness in general obligation issues, which make up a substantial portion of the benchmark.
Contributors and detractors
The Fund’s exposure to Virgin Islands bonds was the primary factor in its underperformance. Moody’s downgraded the territory in mid-2016 as the language in the federal oversight bill to aid the distressed island of Puerto Rico was written in such a way as to include other territories. In addition, investors reacted unfavorably to the Virgin Islands’ poor credit fundamentals. After evaluating the outlook for the territory and determining that the risk-reward tradeoff was unfavorable given the way events unfolded in Puerto Rico, we decided to eliminate the position. Historically, the Fund has invested in Virgin Islands credits because they are exempt from federal and state income taxes, and they offered the opportunity to own higher yielding bonds than would typically be found in California.
The Fund’s exposure to lower rated investment-grade issues also detracted from performance since our exposure to this area had a longer maturity profile than the corresponding index components. On the plus side, the Fund benefited from the relative strength of its shorter maturity holdings. Short-term bonds are less sensitive to changes in interest rates, which was a
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
positive at a time of rising yields. Holdings in bonds with maturities of six years and below significantly outpaced issues with maturities of twelve years and longer, adding further value for the Fund. The Fund also benefited from its overweight in bonds maturing in less than two years given that the California benchmark has no exposure in this area due to its maturity constraints.
Fund positioning
The tone in the municipal market was quite upbeat at the end of the period, highlighted by five consecutive months of positive returns and a favorable combination of strong demand and low new-issue supply. However, we continued to monitor several issues that could affect market performance, including the potential for lower taxes, the possibility of increased new-issue supply stemming from increased infrastructure spending, and likely changes to the Affordable Care Act.
We continued to emphasize the lower rated segments of the investment-grade market, with overweights in bonds rated A and BBB to capture their additional income. With that said, we became more selective in our new purchases given that yield spreads remain near historic lows amid the continued strength in investor demand for higher yielding securities. As a result, we have been finding less value in the lower credit tiers. We remained cautious with regard to issuers that have had persistent pension-funding challenges, as the rating agencies appear to have lost their patience with those that showed no sign of making progress in resolving their underfunded pensions. We continued to favor areas that have dedicated revenue streams. In addition, we kept the Fund’s duration (interest-rate sensitivity) relatively neutral to the California benchmark, which provided the latitude to take advantage of an increase in yields or an uptick in new issuance.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | 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 | 990.00 | 1,020.89 | 3.61 | 3.67 | 0.74 |
| Class B | 1,000.00 | 1,000.00 | 986.30 | 1,017.21 | 7.26 | 7.37 | 1.49 |
| Class C | 1,000.00 | 1,000.00 | 987.20 | 1,017.21 | 7.26 | 7.37 | 1.49 |
| Class R4 | 1,000.00 | 1,000.00 | 992.10 | 1,022.12 | 2.39 | 2.43 | 0.49 |
| Class R5 | 1,000.00 | 1,000.00 | 991.50 | 1,022.51 | 2.00 | 2.03 | 0.41 |
| Class Y | 1,000.00 | 1,000.00 | 1,012.70 (a) | 1,022.76 | 0.57 (a) | 1.79 | 0.36 (a) |
| Class Z | 1,000.00 | 1,000.00 | 992.10 | 1,022.12 | 2.39 | 2.43 | 0.49 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Floating Rate Notes 5.3% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Variable Rate Demand Notes 5.3% |
| California Infrastructure & Economic Development Bank(a),(b) |
| Refunding Revenue Bonds |
Los Angeles Museum
VRDN Series 2008 (Wells Fargo Bank) |
| 09/01/37 | 0.600% | | 5,150,000 | 5,150,000 |
Los Angeles Museum
VRDN Series 2008A (Wells Fargo Bank) |
| 09/01/37 | 0.600% | | 4,445,000 | 4,445,000 |
| Calleguas-Las Virgenes Public Financing Authority(a),(b) |
| Refunding Revenue Bonds |
Municipal Water District Project
VRDN Series 2008A (Wells Fargo Bank) |
| 07/01/37 | 0.870% | | 3,000,000 | 3,000,000 |
| Los Angeles Department of Water & Power System(b) |
| Refunding Revenue Bonds |
| VRDN Subordinated Series 2016B-3 |
| 07/01/34 | 0.700% | | 2,000,000 | 2,000,000 |
| State of California(a),(b) |
| Unlimited General Obligation Bonds |
Kindergarten
VRDN Series 2013A2 (State Street) |
| 05/01/34 | 0.600% | | 7,820,000 | 7,820,000 |
| Total | 22,415,000 |
Total Floating Rate Notes
(Cost $22,415,000) | 22,415,000 |
|
| Municipal Bonds 93.4% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 4.4% |
| City of Los Angeles Department of Airports |
| Subordinated Refunding Revenue Bonds |
| Series 2015C |
| 05/15/29 | 5.000% | | 2,410,000 | 2,849,439 |
| County of Orange Airport |
| Revenue Bonds |
| Series 2009A |
| 07/01/25 | 5.250% | | 1,500,000 | 1,623,930 |
| County of Sacramento Airport System |
| Refunding Revenue Bonds |
| Subordinated Series 2016B |
| 07/01/36 | 5.000% | | 1,750,000 | 1,967,560 |
| Unrefunded Revenue Bonds |
| Series 2008A (AGM) |
| 07/01/23 | 5.000% | | 870,000 | 909,802 |
| Norman Y. Mineta San Jose International Airport SJC |
| Refunding Revenue Bonds |
| Series 2014B |
| 03/01/27 | 5.000% | | 2,000,000 | 2,331,540 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2014C |
| 03/01/30 | 5.000% | | 2,500,000 | 2,856,375 |
| San Diego County Regional Airport Authority |
| Subordinated Revenue Bonds |
| Series 2010A |
| 07/01/24 | 5.000% | | 1,000,000 | 1,111,560 |
| San Francisco City & County Airport Commission-San Francisco International Airport |
| Unrefunded Revenue Bonds |
| Series 2011-2 |
| 05/01/26 | 5.250% | | 555,000 | 640,204 |
| San Francisco City & County Airports Commission-San Francisco International Airport |
| Refunding Revenue Bonds |
| 2nd Series 2009C (AGM) |
| 05/01/18 | 5.000% | | 1,825,000 | 1,899,259 |
| 2nd Series 2016A |
| 05/01/26 | 5.000% | | 1,975,000 | 2,434,405 |
| Total | 18,624,074 |
| Charter Schools 2.1% |
| California School Finance Authority(c) |
| Refunding Revenue Bonds |
Aspire Public Schools
Series 2016 |
| 08/01/29 | 5.000% | | 500,000 | 545,120 |
Aspire Public Schools
Series 2016 |
| 08/01/30 | 5.000% | | 750,000 | 812,130 |
Aspire Public Schools
Series 2016 |
| 08/01/31 | 5.000% | | 925,000 | 997,548 |
| Revenue Bonds |
Alliance College-Ready Public Schools
Series 2015 |
| 07/01/30 | 5.000% | | 1,700,000 | 1,822,349 |
Green Dot Public School Project
Series 2015A |
| 08/01/35 | 5.000% | | 1,010,000 | 1,061,510 |
KIPP Los Angeles Projects
Series 2015A |
| 07/01/35 | 5.000% | | 1,000,000 | 1,051,990 |
River Springs Charter School Project
Series 2015 |
| 07/01/25 | 5.250% | | 2,000,000 | 2,041,140 |
| California School Finance Authority |
| Revenue Bonds |
KIPP Los Angeles Projects
Series 2014A |
| 07/01/34 | 5.000% | | 600,000 | 627,924 |
| Total | 8,959,711 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Health Services 0.3% |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
Harbor Regional Center Project
Series 2015 |
| 11/01/32 | 5.000% | | 1,120,000 | 1,238,362 |
| Higher Education 4.5% |
| California Educational Facilities Authority |
| Refunding Revenue Bonds |
Loma Linda University
Series 2017A |
| 04/01/34 | 5.000% | | 1,385,000 | 1,564,094 |
Loma Linda University
Series 2017A |
| 04/01/35 | 5.000% | | 2,000,000 | 2,247,880 |
| Revenue Bonds |
California Lutheran University
Series 2008 |
| 10/01/21 | 5.250% | | 1,500,000 | 1,578,330 |
Chapman University
Series 2015 |
| 04/01/26 | 5.000% | | 1,000,000 | 1,185,630 |
Pitzer College
Series 2009 |
| 04/01/19 | 5.000% | | 1,610,000 | 1,726,870 |
University of Southern California
Series 2009C |
| 10/01/24 | 5.250% | | 3,000,000 | 3,720,990 |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
Azusa Pacific University
Series 2015B |
| 04/01/25 | 5.000% | | 395,000 | 448,258 |
Azusa Pacific University
Series 2015B |
| 04/01/26 | 5.000% | | 1,000,000 | 1,122,120 |
Biola University
Series 2017 |
| 10/01/31 | 5.000% | | 540,000 | 623,500 |
Biola University
Series 2017 |
| 10/01/32 | 5.000% | | 615,000 | 705,405 |
| Revenue Bonds |
Biola University
Series 2013 |
| 10/01/24 | 5.000% | | 505,000 | 582,654 |
Biola University
Series 2013 |
| 10/01/28 | 5.000% | | 840,000 | 947,302 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| California Municipal Finance Authority(c) |
| Revenue Bonds |
California Baptist University
Series 2016A |
| 11/01/26 | 4.000% | | 1,000,000 | 1,011,850 |
| California Statewide Communities Development Authority |
| Revenue Bonds |
California Baptist University
Series 2014A |
| 11/01/23 | 5.125% | | 715,000 | 764,914 |
Lancer Plaza Project
Series 2013 |
| 11/01/23 | 5.125% | | 755,000 | 803,471 |
| Total | 19,033,268 |
| Hospital 8.8% |
| ABAG Finance Authority for Nonprofit Corps. |
| Revenue Bonds |
Sharp Healthcare
Series 2011A |
| 08/01/24 | 5.250% | | 2,750,000 | 3,117,318 |
| California Health Facilities Financing Authority |
| Refunding Revenue Bonds |
Cedars Sinai Medical Center
Series 2015 |
| 11/15/28 | 5.000% | | 1,000,000 | 1,184,340 |
El Camino Hospital
Series 2015A |
| 02/01/27 | 5.000% | | 1,500,000 | 1,750,710 |
Marshall Medical Center
Series 2015 |
| 11/01/23 | 5.000% | | 325,000 | 381,007 |
Sutter Health Obligation Group
Series 2011D |
| 08/15/26 | 5.000% | | 2,250,000 | 2,555,033 |
| Revenue Bonds |
Children’s Hospital of Orange County
Series 2009 |
| 11/01/21 | 6.000% | | 2,000,000 | 2,230,160 |
City of Hope Obligation Group
Series 2012A |
| 11/15/21 | 5.000% | | 600,000 | 688,626 |
Dignity Health
Series 2009E |
| 07/01/25 | 5.625% | | 1,500,000 | 1,627,170 |
El Camino Hospital
Series 2017 |
| 02/01/33 | 5.000% | | 2,500,000 | 2,838,600 |
El Camino Hospital
Series 2017 |
| 02/01/34 | 5.000% | | 500,000 | 565,495 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Lucile Salter Packard Children’s Hospital
Series 2014 |
| 08/15/28 | 5.000% | | 300,000 | 348,273 |
Providence Health & Services
Series 2014A |
| 10/01/30 | 5.000% | | 1,500,000 | 1,727,955 |
| California Health Facilities Financing Authority(d) |
| Revenue Bonds |
Kaiser Permanente
Subordinated Series 2017A-1-G |
| 11/01/27 | 5.000% | | 1,875,000 | 2,311,481 |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
Community Medical Centers
Series 2015A |
| 02/01/27 | 5.000% | | 1,200,000 | 1,376,952 |
Community Medical Centers
Series 2017A |
| 02/01/33 | 5.000% | | 2,770,000 | 3,125,474 |
| California Statewide Communities Development Authority |
| Refunding Revenue Bonds |
Enloe Medical Center
Series 2015 |
| 08/15/30 | 5.000% | | 1,000,000 | 1,168,550 |
Huntington Memorial Hospital
Series 2014B |
| 07/01/33 | 5.000% | | 2,300,000 | 2,506,448 |
| Revenue Bonds |
Henry Mayo Newhall Memorial
Series 2014A (AGM) |
| 10/01/27 | 5.000% | | 1,000,000 | 1,147,090 |
Kaiser Permanente
Series 2009A |
| 04/01/19 | 5.000% | | 2,000,000 | 2,149,940 |
Loma Linda University Medical Center
Series 2014 |
| 12/01/34 | 5.250% | | 3,000,000 | 3,263,820 |
Sutter Health
Series 2011A |
| 08/15/26 | 5.500% | | 1,000,000 | 1,130,600 |
| Total | 37,195,042 |
| Joint Power Authority 3.7% |
| M-S-R Public Power Agency |
| Subordinated Revenue Bonds |
Lien
Series 2008L (AGM) |
| 07/01/21 | 5.000% | | 2,500,000 | 2,607,775 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Northern California Power Agency |
| Refunding Revenue Bonds |
Hydroelectric Project No. 1
Series 2008C (AGM) |
| 07/01/22 | 5.000% | | 3,000,000 | 3,136,890 |
| Northern California Transmission Agency |
| Refunding Revenue Bonds |
California-Oregon Project
Series 2016 |
| 05/01/32 | 5.000% | | 1,500,000 | 1,750,740 |
| Southern California Public Power Authority |
| Refunding Revenue Bonds |
| Series 2008A |
| 07/01/22 | 5.000% | | 2,000,000 | 2,098,980 |
| Series 2015C |
| 07/01/26 | 5.000% | | 5,000,000 | 6,018,900 |
| Total | 15,613,285 |
| Local Appropriation 2.5% |
| City & County of San Francisco |
| Certificate of Participation |
Multiple Capital Improvement Projects
Series 2009B |
| 04/01/24 | 5.000% | | 1,495,000 | 1,597,886 |
| County of Monterey |
| Certificate of Participation |
Refinancing Project
Series 2009 (AGM) |
| 08/01/17 | 5.000% | | 1,000,000 | 1,010,640 |
| Los Angeles County Public Works Financing Authority |
| Refunding Revenue Bonds |
| Series 2015B |
| 12/01/25 | 5.000% | | 1,750,000 | 2,132,917 |
| Oakland Joint Powers Financing Authority |
| Refunding Revenue Bonds |
Oakland Administration Buildings
Series 2008B (AGM) |
| 08/01/22 | 5.000% | | 2,000,000 | 2,093,900 |
| Riverside Public Financing Authority |
| Refunding Revenue Bonds |
| Series 2012A |
| 11/01/27 | 5.000% | | 2,145,000 | 2,451,735 |
| Series 2012A |
| 11/01/28 | 5.000% | | 1,155,000 | 1,318,236 |
| Total | 10,605,314 |
| Local General Obligation 10.1% |
| Compton Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2012 |
| 07/01/22 | 5.000% | | 2,095,000 | 2,420,353 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Compton Unified School District(e) |
| Unlimited General Obligation Bonds |
Election of 2002 - Capital Appreciation
Series 2006C (AMBAC) |
| 06/01/23 | 0.000% | | 2,025,000 | 1,772,969 |
Election of 2002 - Capital Appreciation
Series 2006C (AMBAC) |
| 06/01/24 | 0.000% | | 1,925,000 | 1,621,485 |
| Culver City School Facilities Financing Authority |
| Revenue Bonds |
Unified School District
Series 2005 (AGM) |
| 08/01/23 | 5.500% | | 1,490,000 | 1,827,992 |
| East Side Union High School District |
| Unlimited General Obligation Refunding Bonds |
2012 Crossover
Series 2006 (AGM) |
| 09/01/20 | 5.250% | | 1,280,000 | 1,446,566 |
| Long Beach Community College District |
| Unlimited General Obligation Bonds |
2008 Election
Series 2012B |
| 08/01/23 | 5.000% | | 700,000 | 824,299 |
| Long Beach Unified School District(e) |
| Unlimited General Obligation Bonds |
| Series 2015D-1 |
| 08/01/31 | 0.000% | | 1,375,000 | 800,883 |
| Monterey Peninsula Community College District(e) |
| Unlimited General Obligation Refunding Bonds |
| Series 2016 |
| 08/01/28 | 0.000% | | 2,125,000 | 1,471,159 |
| Oakland Unified School District/Alameda County |
| Unlimited General Obligation Bonds |
| Series 2015A |
| 08/01/25 | 5.000% | | 650,000 | 797,843 |
| Palomar Community College District(e) |
| Unlimited General Obligation Bonds |
Capital Appreciation-Election of 2006
Series 2010B |
| 08/01/22 | 0.000% | | 2,140,000 | 1,943,355 |
| Pomona Unified School District(e) |
| Unlimited General Obligation Bonds |
Election 2008
Series 2016G (AGM) |
| 08/01/32 | 0.000% | | 1,000,000 | 546,450 |
| Rancho Santiago Community College District(e) |
| Unlimited General Obligation Bonds |
Capital Appreciation-Election of 2002
Series 2006C (AGM) |
| 09/01/31 | 0.000% | | 3,785,000 | 2,304,459 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Rancho Santiago Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (AGM) |
| 09/01/19 | 5.250% | | 1,000,000 | 1,097,690 |
| Rescue Union School District(e) |
| Unlimited General Obligation Bonds |
Capital Appreciation-Election of 1998
Series 2005 (NPFGC) |
| 09/01/26 | 0.000% | | 1,100,000 | 848,100 |
| Salinas Union High School District(e) |
| Unlimited General Obligation Bonds |
| BAN Series 2015 |
| 08/01/20 | 0.000% | | 4,725,000 | 4,448,776 |
| San Mateo Foster City School District |
| Revenue Bonds |
| Series 2005 (AGM) |
| 08/15/19 | 5.500% | | 2,000,000 | 2,200,980 |
| Saugus Union School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2006 (NPFGC) |
| 08/01/21 | 5.250% | | 2,375,000 | 2,752,174 |
| Sierra Kings Health Care District |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 08/01/28 | 5.000% | | 1,000,000 | 1,152,000 |
| Series 2015 |
| 08/01/32 | 5.000% | | 1,500,000 | 1,682,940 |
| Simi Valley School Financing Authority |
| Unrefunded Revenue Bonds |
Simi Valley Unified School District
Series 2007 AGM |
| 08/01/18 | 5.000% | | 980,000 | 1,009,753 |
| Simi Valley Unified School District(d) |
| Unlimited General Obligation Refunding Bonds |
| Series 2017 |
| 08/01/25 | 5.000% | | 1,000,000 | 1,228,730 |
| Series 2017 |
| 08/01/26 | 5.000% | | 2,000,000 | 2,483,600 |
| West Contra Costa Unified School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2011 (AGM) |
| 08/01/23 | 5.250% | | 3,000,000 | 3,461,640 |
| Series 2012 |
| 08/01/27 | 5.000% | | 2,365,000 | 2,751,843 |
| Total | 42,896,039 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Multi-Family 0.8% |
| California Municipal Finance Authority |
| Revenue Bonds |
Bowles Hall Foundation
Series 2015A |
| 06/01/35 | 5.000% | | 400,000 | 427,120 |
Caritas Affordable Housing
Senior Series 2014 |
| 08/15/30 | 5.000% | | 1,000,000 | 1,105,980 |
| California Statewide Communities Development Authority |
| Refunding Revenue Bonds |
University of California Irvine East Campus Apartments
Series 2012 |
| 05/15/19 | 5.000% | | 1,000,000 | 1,066,800 |
University of California Irvine East Campus Apartments
Series 2012 |
| 05/15/20 | 5.000% | | 750,000 | 818,707 |
| Total | 3,418,607 |
| Municipal Power 5.0% |
| City of Redding Electric System |
| Refunding Revenue Bonds |
| Series 2017 |
| 06/01/29 | 5.000% | | 1,250,000 | 1,502,575 |
| City of Riverside Electric |
| Revenue Bonds |
| Series 2008D (AGM) |
| 10/01/23 | 5.000% | | 1,000,000 | 1,054,980 |
| City of Santa Clara Electric |
| Refunding Revenue Bonds |
| Series 2011A |
| 07/01/29 | 5.375% | | 1,000,000 | 1,134,080 |
| City of Vernon Electric System |
| Unrefunded Revenue Bonds |
| Series 2009A |
| 08/01/21 | 5.125% | | 2,325,000 | 2,501,956 |
| Imperial Irrigation District Electric System |
| Refunding Revenue Bonds |
| Series 2011D |
| 11/01/22 | 5.000% | | 2,860,000 | 3,291,145 |
| Series 2011D |
| 11/01/23 | 5.000% | | 1,040,000 | 1,187,826 |
| Los Angeles Department of Water & Power System |
| Revenue Bonds |
Power System
Series 2009B |
| 07/01/23 | 5.250% | | 2,000,000 | 2,184,660 |
Power System
Series 2014D |
| 07/01/33 | 5.000% | | 1,700,000 | 1,966,628 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Redding Joint Powers Financing Authority |
| Refunding Revenue Bonds |
| Series 2015A |
| 06/01/31 | 5.000% | | 1,045,000 | 1,201,374 |
| Sacramento Municipal Utility District |
| Unrefunded Revenue Bonds |
| Series 2008U (AGM) |
| 08/15/21 | 5.000% | | 920,000 | 969,266 |
| State of California Department of Water Resources |
| Subordinated Revenue Bonds |
| Series 2005G-11 |
| 05/01/18 | 5.000% | | 2,000,000 | 2,082,400 |
| Turlock Irrigation District |
| Refunding Revenue Bonds |
First Priority
Subordinated Series 2014 |
| 01/01/30 | 5.000% | | 850,000 | 974,924 |
First Priority
Subordinated Series 2014 |
| 01/01/31 | 5.000% | | 1,000,000 | 1,140,670 |
| Total | 21,192,484 |
| Other Bond Issue 1.3% |
| California Infrastructure & Economic Development Bank |
| Refunding Revenue Bonds |
Salvation Army Western Territory (The)
Series 2016 |
| 09/01/33 | 4.000% | | 400,000 | 412,584 |
Salvation Army Western Territory (The)
Series 2016 |
| 09/01/34 | 4.000% | | 600,000 | 618,876 |
Walt Disney Family Museum
Series 2016 |
| 02/01/32 | 4.000% | | 350,000 | 366,317 |
Walt Disney Family Museum
Series 2016 |
| 02/01/33 | 4.000% | | 500,000 | 520,615 |
| City of Long Beach Marina System |
| Revenue Bonds |
| Series 2015 |
| 05/15/28 | 5.000% | | 635,000 | 715,588 |
| County of San Diego |
| Refunding Revenue Bonds |
Sanford Burnham Prebys Medical Discovery Group
Series 2015 |
| 11/01/25 | 5.000% | | 350,000 | 412,181 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Long Beach Bond Finance Authority |
| Refunding Revenue Bonds |
Aquarium of the Pacific
Series 2012 |
| 11/01/27 | 5.000% | | 2,210,000 | 2,488,305 |
| Total | 5,534,466 |
| Ports 1.4% |
| Port of Los Angeles |
| Revenue Bonds |
| Series 2009A |
| 08/01/23 | 5.250% | | 2,000,000 | 2,186,860 |
| Port of Oakland |
| Refunding Revenue Bonds |
Intermediate Lien
Series 2007B (NPFGC) |
| 11/01/29 | 5.000% | | 1,165,000 | 1,188,731 |
| San Diego Unified Port District |
| Refunding Revenue Bonds |
| Series 2013A |
| 09/01/27 | 5.000% | | 1,000,000 | 1,136,520 |
| Series 2013A |
| 09/01/28 | 5.000% | | 1,100,000 | 1,242,626 |
| Total | 5,754,737 |
| Prepaid Gas 0.6% |
| M-S-R Energy Authority |
| Revenue Bonds |
| Series 2009B |
| 11/01/29 | 6.125% | | 2,000,000 | 2,532,780 |
| Recreation 1.0% |
| California Infrastructure & Economic Development Bank |
| Refunding Revenue Bonds |
Segerstrom Center for the Arts
Series 2016 |
| 07/01/26 | 5.000% | | 2,000,000 | 2,362,680 |
| Del Mar Race Track Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 10/01/25 | 5.000% | | 1,665,000 | 1,806,508 |
| Total | 4,169,188 |
| Refunded / Escrowed 9.0% |
| California Health Facilities Financing Authority |
| Prerefunded 07/01/19 Revenue Bonds |
Dignity Health
Series 2009A |
| 07/01/29 | 6.000% | | 1,250,000 | 1,384,113 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
Insured Episcopal Home
Series 2010B Escrowed to Maturity |
| 02/01/19 | 5.100% | | 265,000 | 278,234 |
| California State Public Works Board |
| Prerefunded 03/01/20 Revenue Bonds |
Various Capital Projects
Subordinated Series 2010A-1 |
| 03/01/22 | 5.250% | | 2,000,000 | 2,229,560 |
| California State University |
| Prerefunded 05/01/19 Revenue Bonds |
Systemwide
Series 2009A |
| 11/01/22 | 5.250% | | 2,500,000 | 2,711,250 |
| City & County of San Francisco |
| Prerefunded 06/15/20 Unlimited General Obligation Bonds |
Earthquake Safety
Series 2010E |
| 06/15/27 | 5.000% | | 3,380,000 | 3,780,158 |
| City of Los Angeles |
| Prerefunded 09/01/21 Unlimited General Obligation Bonds |
| Series 2011A |
| 09/01/25 | 5.000% | | 3,000,000 | 3,461,970 |
| City of Los Angeles Wastewater System |
| Prerefunded 06/01/19 Revenue Bonds |
| Series 2009A |
| 06/01/25 | 5.750% | | 1,110,000 | 1,217,759 |
| City of Newport Beach |
| Prerefunded 12/01/21 Revenue Bonds |
Hoag Memorial Hospital Presbyterian
Series 2011 |
| 12/01/30 | 5.875% | | 1,000,000 | 1,190,130 |
| City of Vernon Electric System |
| Prerefunded 08/01/19 Revenue Bonds |
| Series 2009A |
| 08/01/21 | 5.125% | | 1,005,000 | 1,068,878 |
| County of Sacramento Airport System |
| Prerefunded 07/01/18 Revenue Bonds |
| Series 2008A (AGM) |
| 07/01/23 | 5.000% | | 130,000 | 136,356 |
| Imperial Irrigation District Electric System |
| Prerefunded 11/01/18 Revenue Bonds |
System
Series 2008A |
| 11/01/21 | 5.250% | | 2,040,000 | 2,175,293 |
System
Series 2008A |
| 11/01/21 | 5.250% | | 460,000 | 490,507 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Pasadena Public Financing Authority |
| Prerefunded 03/01/21 Revenue Bonds |
Rose Bowl Renovation
Series 2010A |
| 03/01/26 | 5.000% | | 2,500,000 | 2,851,250 |
| Pico Rivera Public Financing Authority |
| Prerefunded 09/01/19 Revenue Bonds |
| Series 2009 |
| 09/01/26 | 5.250% | | 1,085,000 | 1,190,646 |
| Sacramento Municipal Utility District |
| Prerefunded 08/15/18 Revenue Bonds |
| Series 2008U (AGM) |
| 08/15/21 | 5.000% | | 580,000 | 611,465 |
| San Diego Public Facilities Financing Authority Sewer |
| Prerefunded 05/15/19 Revenue Bonds |
| Senior Series 2009B |
| 05/15/25 | 5.250% | | 1,500,000 | 1,629,105 |
| San Diego Public Facilities Financing Authority Water |
| Prerefunded 08/01/20 Revenue Bonds |
| Series 2010A |
| 08/01/24 | 5.000% | | 2,000,000 | 2,243,700 |
| San Francisco City & County Airport Commission-San Francisco International Airport |
| Prerefunded 05/03/21 Revenue Bonds |
| Series 2011-2 |
| 05/01/26 | 5.250% | | 1,445,000 | 1,669,539 |
| San Mateo Joint Powers Financing Authority |
| Prerefunded 07/15/18 Revenue Bonds |
Youth Services Campus
Series 2008A |
| 07/15/28 | 5.250% | | 2,275,000 | 2,397,736 |
| Simi Valley School Financing Authority |
| Prerefunded 08/01/17 Revenue Bonds |
Simi Valley Unified School District
Series 2007 (AGM) |
| 08/01/18 | 5.000% | | 65,000 | 66,997 |
| State of California |
| Unrefunded Unlimited General Obligation Bonds |
| Series 2009A Escrowed to Maturity |
| 07/01/18 | 5.000% | | 680,000 | 713,000 |
| Sulphur Springs Union School District |
| Prerefunded 09/01/22 Special Tax Bonds |
Community Facilities District
Series 2012 |
| 09/01/28 | 5.000% | | 520,000 | 613,272 |
Community Facilities District
Series 2012 |
| 09/01/29 | 5.000% | | 585,000 | 689,931 |
| Tuolumne Wind Project Authority |
| Prerefunded 01/01/19 Revenue Bonds |
Tuolumne Co. Project
Series 2009 |
| 01/01/22 | 5.000% | | 1,000,000 | 1,066,780 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Tustin Community Redevelopment Agency Successor Agency |
| Prerefunded 09/01/18 Tax Allocation Bonds |
MCAS-Tustin Redevelopment Project Area
Series 2010 |
| 09/01/25 | 5.000% | | 1,250,000 | 1,344,225 |
| University of California |
| Prerefunded 05/15/19 Revenue Bonds |
| Series 2009O |
| 05/15/20 | 5.000% | | 1,000,000 | 1,080,380 |
| Total | 38,292,234 |
| Retirement Communities 5.2% |
| ABAG Finance Authority for Nonprofit Corps. |
| Refunding Revenue Bonds |
Episcopal Senior Communities
Series 2011 |
| 07/01/24 | 5.375% | | 2,795,000 | 3,103,987 |
Episcopal Senior Communities
Series 2012 |
| 07/01/21 | 5.000% | | 1,000,000 | 1,114,040 |
| Revenue Bonds |
Odd Fellows Home of California
Series 2012-A |
| 04/01/32 | 5.000% | | 4,750,000 | 5,402,935 |
| California Health Facilities Financing Authority |
| Refunding Revenue Bonds |
Northern California Presbyterian Homes
Series 2015 |
| 07/01/28 | 5.000% | | 310,000 | 359,268 |
Northern California Presbyterian Homes
Series 2015 |
| 07/01/29 | 5.000% | | 300,000 | 344,964 |
| California Statewide Communities Development Authority |
| Refunding Revenue Bonds |
899 Charleston Project
Series 2014A |
| 11/01/19 | 5.000% | | 550,000 | 567,336 |
American Baptist Homes West
Series 2015 |
| 10/01/24 | 5.000% | | 2,575,000 | 2,992,150 |
American Baptist Homes West
Series 2015 |
| 10/01/26 | 5.000% | | 1,000,000 | 1,157,570 |
Episcopal Communities and Services
Series 2012 |
| 05/15/27 | 5.000% | | 1,520,000 | 1,681,956 |
| Revenue Bonds |
Insured Redwoods Project
Series 2013 |
| 11/15/28 | 5.000% | | 1,000,000 | 1,168,200 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of La Verne |
| Refunding Certificate of Participation |
Brethren Hillcrest Homes
Series 2014 |
| 05/15/24 | 5.000% | | 310,000 | 345,387 |
Brethren Hillcrest Homes
Series 2014 |
| 05/15/25 | 5.000% | | 530,000 | 585,518 |
Brethren Hillcrest Homes
Series 2014 |
| 05/15/26 | 5.000% | | 700,000 | 769,076 |
Brethren Hillcrest Homes
Series 2014 |
| 05/15/29 | 5.000% | | 1,135,000 | 1,229,466 |
| Los Angeles County Regional Financing Authority |
| Revenue Bonds |
Montecedro, Inc. Project
Series 2014A |
| 11/15/34 | 5.000% | | 1,000,000 | 1,123,220 |
| Total | 21,945,073 |
| Special Non Property Tax 0.3% |
| Berkeley Joint Powers Financing Authority |
| Revenue Bonds |
| Series 2016 (BAM) |
| 06/01/32 | 4.000% | | 500,000 | 531,325 |
| Series 2016 (BAM) |
| 06/01/33 | 4.000% | | 415,000 | 438,315 |
| Series 2016 (BAM) |
| 06/01/34 | 4.000% | | 250,000 | 262,240 |
| Total | 1,231,880 |
| Special Property Tax 14.9% |
| Chino Public Financing Authority |
| Refunding Special Tax Bonds |
| Series 2012 |
| 09/01/23 | 5.000% | | 1,070,000 | 1,216,130 |
| City of Irvine |
| Refunding Special Assessment Bonds |
Limited Obligation Reassessment District
Series 2015 |
| 09/02/25 | 5.000% | | 1,300,000 | 1,551,251 |
| Concord Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
| Series 2014 (BAM) |
| 03/01/25 | 5.000% | | 840,000 | 996,811 |
| County of El Dorado |
| Refunding Special Tax Bonds |
Community Facilities District No. 92-1
Series 2012 |
| 09/01/26 | 5.000% | | 630,000 | 706,488 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Community Facilities District No. 92-1
Series 2012 |
| 09/01/27 | 5.000% | | 805,000 | 898,758 |
| Emeryville Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
| Series 2014A (AGM) |
| 09/01/23 | 5.000% | | 2,415,000 | 2,863,393 |
| Series 2014A (AGM) |
| 09/01/26 | 5.000% | | 1,000,000 | 1,181,400 |
| Series 2014A (AGM) |
| 09/01/27 | 5.000% | | 1,000,000 | 1,171,090 |
| Series 2014A (AGM) |
| 09/01/30 | 5.000% | | 815,000 | 936,517 |
| Series 2014A (AGM) |
| 09/01/31 | 5.000% | | 590,000 | 672,635 |
| Fontana Public Finance Authority |
| Tax Allocation Bonds |
Lien-North Fontana Redevelopment
Subordinated Series 2005A (AMBAC) |
| 10/01/20 | 5.000% | | 1,515,000 | 1,519,863 |
| Garden Grove Agency Community Development Successor Agency |
| Refunding Tax Allocation Bonds |
Garden Grove Community Project
Series 2016 (BAM) |
| 10/01/30 | 5.000% | | 1,040,000 | 1,215,531 |
Garden Grove Community Project
Series 2016 (BAM) |
| 10/01/31 | 5.000% | | 1,640,000 | 1,906,270 |
| Glendale Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
Central Glendale Redevelopment
Subordinated Series 2013 (AGM) |
| 12/01/21 | 5.000% | | 755,000 | 863,327 |
| Inglewood Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
Merged Redevelopment Project
Subordinated Series 2017 (BAM) |
| 05/01/32 | 5.000% | | 500,000 | 573,785 |
Merged Redevelopment Project
Subordinated Series 2017 (BAM) |
| 05/01/33 | 5.000% | | 1,000,000 | 1,141,150 |
| Irvine Unified School District |
| Refunding Special Tax Bonds |
| Series 2015 |
| 09/01/30 | 5.000% | | 2,065,000 | 2,382,267 |
| Series 2015 |
| 09/01/31 | 5.000% | | 2,720,000 | 3,120,030 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Jurupa Public Financing Authority |
| Refunding Special Tax Bonds |
| Series 2014A |
| 09/01/29 | 5.000% | | 530,000 | 603,230 |
| Series 2014A |
| 09/01/30 | 5.000% | | 625,000 | 707,819 |
| Series 2014A |
| 09/01/32 | 5.000% | | 625,000 | 700,669 |
| La Quinta Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
Redevelopment Project
Subordinated Series 2013A |
| 09/01/30 | 5.000% | | 1,500,000 | 1,675,380 |
| Long Beach Bond Finance Authority |
| Tax Allocation Bonds |
Industrial Redevelopment Project Areas
Series 2002B (AMBAC) |
| 11/01/19 | 5.500% | | 1,070,000 | 1,178,391 |
| Los Angeles Community Facilities District |
| Refunding Special Tax Bonds |
Playa Vista-Phase 1
Series 2014 |
| 09/01/30 | 5.000% | | 1,000,000 | 1,111,140 |
| Los Angeles County Redevelopment Authority |
| Refunding Tax Allocation Bonds |
Los Angeles Bunker Hill Project
Series 2014C (AGM) |
| 12/01/28 | 5.000% | | 3,000,000 | 3,494,370 |
| Oakland Redevelopment Successor Agency |
| Subordinated Refunding Tax Allocation Bonds |
| Series 2013 |
| 09/01/22 | 5.000% | | 2,000,000 | 2,309,420 |
| Palm Desert Redevelopment Agency |
| Refunding Tax Allocation Bonds |
| Series 2017A (BAM) |
| 10/01/29 | 5.000% | | 890,000 | 1,048,278 |
| Series 2017A (BAM) |
| 10/01/30 | 5.000% | | 350,000 | 409,532 |
| Poway Unified School District |
| Special Tax Bonds |
Community Facilities District No. 6-4S Ranch
Series 2012 |
| 09/01/28 | 5.000% | | 1,770,000 | 1,959,107 |
Community Facilities District No. 6-4S Ranch
Series 2012 |
| 09/01/29 | 5.000% | | 1,200,000 | 1,322,160 |
| Poway Unified School District Public Financing Authority |
| Special Tax Refunding Bonds |
| Series 2015B |
| 09/01/26 | 5.000% | | 995,000 | 1,176,826 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Rancho Cucamonga Redevelopment Agency Successor Agency |
| Tax Allocation Bonds |
Rancho Redevelopment Project Area
Series 2014 |
| 09/01/30 | 5.000% | | 700,000 | 799,372 |
Rancho Redevelopment Project Area
Series 2014 (AGM) |
| 09/01/27 | 5.000% | | 2,200,000 | 2,557,654 |
| Riverside County Public Financing Authority |
| Tax Allocation Bonds |
Project Area #1-Desert Communities
Series 2016 (BAM) |
| 10/01/31 | 4.000% | | 2,500,000 | 2,627,750 |
| San Francisco City & County Redevelopment Agency |
| Refunding Tax Allocation Bonds |
Mission Bay North Redevelopment Project
Series 2016 |
| 08/01/30 | 5.000% | | 275,000 | 321,544 |
Mission Bay North Redevelopment Project
Series 2016 |
| 08/01/31 | 5.000% | | 355,000 | 412,318 |
Mission Bay South Redevelopment Project
Series 2016 |
| 08/01/31 | 5.000% | | 670,000 | 769,415 |
Mission Bay South Redevelopment Project
Series 2016 |
| 08/01/32 | 5.000% | | 580,000 | 662,557 |
| Tax Allocation Bonds |
Mission Bay South Redevelopment Project
Series 2014A |
| 08/01/29 | 5.000% | | 225,000 | 255,076 |
Mission Bay South Redevelopment Project
Series 2014A |
| 08/01/30 | 5.000% | | 175,000 | 197,892 |
San Francisco Redevelopment Projects
Series 2009B |
| 08/01/18 | 5.000% | | 1,255,000 | 1,314,863 |
| San Mateo Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
| Series 2015A |
| 08/01/28 | 5.000% | | 1,860,000 | 2,167,086 |
| Series 2015A |
| 08/01/29 | 5.000% | | 1,000,000 | 1,155,520 |
| Semitropic Improvement District |
| Refunding Revenue Bonds |
| Series 2015A 2nd Lien (AGM) |
| 12/01/23 | 5.000% | | 300,000 | 357,150 |
| Series 2015A 2nd Lien (AGM) |
| 12/01/24 | 5.000% | | 400,000 | 482,272 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Sulphur Springs Union School District |
| Unrefunded Special Tax Bonds |
Community Facilities District
Series 2012 |
| 09/01/28 | 5.000% | | 530,000 | 586,625 |
Community Facilities District
Series 2012 |
| 09/01/29 | 5.000% | | 595,000 | 655,571 |
| Tustin Community Facilities District |
| Refunding Special Tax Bonds |
Legacy Villages of Columbus #06-1
Series 2015 |
| 09/01/29 | 5.000% | | 1,200,000 | 1,357,296 |
| Tustin Community Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
| Series 2016 |
| 09/01/32 | 4.000% | | 2,295,000 | 2,421,271 |
| Vista Redevelopment Agency Successor Agency |
| Tax Allocation Refunding Bonds |
| Series 2015B1 (AGM) |
| 09/01/24 | 5.000% | | 580,000 | 689,951 |
| Series 2015B1 (AGM) |
| 09/01/26 | 5.000% | | 700,000 | 829,647 |
| Total | 63,233,848 |
| State Appropriated 3.8% |
| California State Public Works Board |
| Refunding Revenue Bonds |
Various Capital Projects
Series 2012G |
| 11/01/28 | 5.000% | | 1,500,000 | 1,726,830 |
| Revenue Bonds |
Department of Corrections and Rehabilitation
Series 2014C |
| 10/01/22 | 5.000% | | 1,925,000 | 2,250,132 |
Department of Corrections and Rehabilitation
Series 2015A |
| 06/01/28 | 5.000% | | 1,175,000 | 1,372,553 |
Various Capital Projects
Series 2011A |
| 10/01/20 | 5.000% | | 2,000,000 | 2,249,220 |
Various Capital Projects
Series 2013I |
| 11/01/28 | 5.250% | | 3,000,000 | 3,531,450 |
Various Capital Projects
Series 2014E |
| 09/01/30 | 5.000% | | 1,500,000 | 1,729,035 |
Various Correctional Facilities
Series 2014A |
| 09/01/31 | 5.000% | | 3,000,000 | 3,441,570 |
| Total | 16,300,790 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| State General Obligation 4.1% |
| State of California |
| Unlimited General Obligation Bonds |
| Series 2010 |
| 11/01/24 | 5.000% | | 5,000,000 | 5,639,450 |
Various Purpose
Series 2009 |
| 04/01/26 | 5.625% | | 2,000,000 | 2,178,520 |
Various Purpose
Series 2009 |
| 10/01/29 | 5.250% | | 1,500,000 | 1,647,585 |
Various Purpose
Series 2011 |
| 10/01/19 | 5.000% | | 4,000,000 | 4,376,760 |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 08/01/32 | 5.000% | | 3,000,000 | 3,464,760 |
| Unrefunded Unlimited General Obligation Bonds |
| Series 2007 |
| 08/01/18 | 5.000% | | 10,000 | 10,036 |
| Total | 17,317,111 |
| Tobacco 2.2% |
| Golden State Tobacco Securitization Corp. |
| Asset-Backed Refunding Revenue Bonds |
| Series 2015A |
| 06/01/33 | 5.000% | | 4,000,000 | 4,530,920 |
| Refunding Revenue Bonds |
| Series 2017A-1 |
| 06/01/24 | 5.000% | | 4,000,000 | 4,658,560 |
| Total | 9,189,480 |
| Turnpike / Bridge / Toll Road 1.4% |
| Foothill-Eastern Transportation Corridor Agency(e) |
| Refunding Revenue Bonds |
| Series 2015 |
| 01/15/33 | 0.000% | | 5,000,000 | 2,458,100 |
| Foothill-Eastern Transportation Corridor Agency |
| Subordinated Refunding Revenue Bonds |
| Series 2014B-3 |
| 01/15/53 | 5.500% | | 3,000,000 | 3,444,690 |
| Total | 5,902,790 |
| Water & Sewer 6.0% |
| Central Coast Water Authority |
| Refunding Revenue Bonds |
State Water Project Regional Facilities
Series 2016 |
| 10/01/21 | 5.000% | | 5,000,000 | 5,724,500 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Fresno Sewer System |
| Revenue Bonds |
| Series 2008A |
| 09/01/23 | 5.000% | | 1,000,000 | 1,052,700 |
| City of Los Angeles Wastewater System |
| Unrefunded Revenue Bonds |
| Series 2009A |
| 06/01/25 | 5.750% | | 890,000 | 971,809 |
| City of Tulare Sewer |
| Refunding Revenue Bonds |
| Series 2015 (AGM) |
| 11/15/25 | 5.000% | | 700,000 | 846,650 |
| Series 2015 (AGM) |
| 11/15/26 | 5.000% | | 1,000,000 | 1,203,480 |
| Clovis Public Financing Authority |
| Revenue Bonds |
| Series 2007 (AMBAC) |
| 08/01/21 | 5.000% | | 1,000,000 | 1,009,990 |
| Kern County Water Agency Improvement District No. 4 |
| Refunding Revenue Bonds |
| Series 2016A (AGM) |
| 05/01/27 | 5.000% | | 2,300,000 | 2,758,551 |
| Los Angeles County Sanitation Districts Financing Authority |
| Subordinated Refunding Revenue Bonds |
Capital Projects - District #14
Series 2015 |
| 10/01/24 | 5.000% | | 1,050,000 | 1,266,521 |
Capital Projects - District #14
Series 2015 |
| 10/01/25 | 5.000% | | 1,100,000 | 1,337,314 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Oxnard Financing Authority |
| Revenue Bonds |
Project
Series 2006 |
| 06/01/31 | 5.000% | | 4,315,000 | 4,327,600 |
| Semitropic Improvement District |
| Refunding Revenue Bonds |
| Series 2012A |
| 12/01/23 | 5.000% | | 2,850,000 | 3,305,173 |
| Stockton Public Financing Authority |
| Refunding Revenue Bonds |
| Series 2014 (BAM) |
| 09/01/28 | 5.000% | | 1,500,000 | 1,741,665 |
| Total | 25,545,953 |
Total Municipal Bonds
(Cost $377,545,890) | 395,726,516 |
| Money Market Funds 0.3% |
| | Shares | Value ($) |
| Dreyfus Tax-Exempt Cash Management Fund, Institutional Shares, 0.660% | 1,253,879 | 1,253,879 |
Total Money Market Funds
(Cost $1,253,879) | 1,253,879 |
Total Investments
(Cost: $401,214,769) | 419,395,395 |
| Other Assets & Liabilities, Net | | 4,301,609 |
| Net Assets | 423,697,004 |
Notes to Portfolio of Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Variable rate security. |
| (c) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At April 30, 2017, the value of these securities amounted to $9,343,637 which represents 2.21% of net assets. |
| (d) | Represents a security purchased on a when-issued basis. |
| (e) | Zero coupon bond. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| BAM | Build America Mutual Assurance Co. |
| BAN | Bond Anticipation Note |
| NPFGC | National Public Finance Guarantee Corporation |
| VRDN | Variable Rate Demand Note |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Floating Rate Notes | — | 22,415,000 | — | 22,415,000 |
| Municipal Bonds | — | 395,726,516 | — | 395,726,516 |
| Money Market Funds | 1,253,879 | — | — | 1,253,879 |
| Total Investments | 1,253,879 | 418,141,516 | — | 419,395,395 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $401,214,769 |
| Total investments, at cost | 401,214,769 |
| Investments, at value | |
| Unaffiliated issuers, at value | 419,395,395 |
| Total investments, at value | 419,395,395 |
| Cash | 1,871,282 |
| Receivable for: | |
| Investments sold | 4,844,651 |
| Capital shares sold | 1,863,341 |
| Interest | 4,447,109 |
| Expense reimbursement due from Investment Manager | 1,618 |
| Prepaid expenses | 911 |
| Other assets | 884 |
| Total assets | 432,425,191 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 6,025,589 |
| Capital shares purchased | 1,562,226 |
| Distributions to shareholders | 968,028 |
| Management services fees | 5,446 |
| Distribution and/or service fees | 638 |
| Transfer agent fees | 48,388 |
| Compensation of board members | 78,801 |
| Other expenses | 39,071 |
| Total liabilities | 8,728,187 |
| Net assets applicable to outstanding capital stock | $423,697,004 |
| Represented by | |
| Paid in capital | 410,685,145 |
| Excess of distributions over net investment income | (116,638) |
| Accumulated net realized loss | (5,052,129) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 18,180,626 |
| Total - representing net assets applicable to outstanding capital stock | $423,697,004 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $31,272,729 |
| Shares outstanding | 3,011,622 |
| Net asset value per share | $10.38 |
| Maximum offering price per share(a) | $10.70 |
| Class B | |
| Net assets | $10,086 |
| Shares outstanding | 971 |
| Net asset value per share(b) | $10.38 |
| Class C | |
| Net assets | $15,503,348 |
| Shares outstanding | 1,493,860 |
| Net asset value per share | $10.38 |
| Class R4 | |
| Net assets | $903,151 |
| Shares outstanding | 87,202 |
| Net asset value per share | $10.36 |
| Class R5 | |
| Net assets | $4,867,208 |
| Shares outstanding | 471,092 |
| Net asset value per share | $10.33 |
| Class Y | |
| Net assets | $10,082 |
| Shares outstanding | 974 |
| Net asset value per share | $10.35 |
| Class Z | |
| Net assets | $371,130,400 |
| Shares outstanding | 35,822,390 |
| Net asset value per share | $10.36 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
| (b) | Net asset value per share rounds to this amount due to fractional shares outstanding. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $3,879 |
| Interest | 14,435,779 |
| Total income | 14,439,658 |
| Expenses: | |
| Management services fees | 2,106,368 |
| Distribution and/or service fees | |
| Class A | 113,470 |
| Class B | 101 |
| Class C | 154,683 |
| Transfer agent fees | |
| Class A | 77,077 |
| Class B | 17 |
| Class C | 26,080 |
| Class R4 | 1,667 |
| Class R5 | 3,707 |
| Class Z | 645,154 |
| Compensation of board members | 26,937 |
| Custodian fees | 4,426 |
| Printing and postage fees | 25,549 |
| Registration fees | 27,236 |
| Audit fees | 29,915 |
| Legal fees | 10,788 |
| Compensation of chief compliance officer | 99 |
| Other | 19,774 |
| Total expenses | 3,273,048 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (798,915) |
| Expense reduction | (20) |
| Total net expenses | 2,474,113 |
| Net investment income | 11,965,545 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (2,186,554) |
| Net realized loss | (2,186,554) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (14,158,354) |
| Net change in unrealized appreciation (depreciation) | (14,158,354) |
| Net realized and unrealized loss | (16,344,908) |
| Net decrease in net assets resulting from operations | $(4,379,363) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $11,965,545 | $11,392,033 |
| Net realized loss | (2,186,554) | (495,635) |
| Net change in unrealized appreciation (depreciation) | (14,158,354) | 9,771,491 |
| Net increase (decrease) in net assets resulting from operations | (4,379,363) | 20,667,889 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (1,113,563) | (1,239,276) |
| Class B | (176) | (188) |
| Class C | (266,249) | (260,473) |
| Class R4 | (26,762) | (43,037) |
| Class R5 | (180,405) | (73,549) |
| Class Y | (48) | — |
| Class Z | (10,409,826) | (9,808,850) |
| Total distributions to shareholders | (11,997,029) | (11,425,373) |
| Increase (decrease) in net assets from capital stock activity | (9,272,164) | 48,008,321 |
| Total increase (decrease) in net assets | (25,648,556) | 57,250,837 |
| Net assets at beginning of year | 449,345,560 | 392,094,723 |
| Net assets at end of year | $423,697,004 | $449,345,560 |
| Excess of distributions over net investment income | $(116,638) | $(85,154) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 1,293,645 | 13,645,417 | 1,760,681 | 18,548,397 |
| Distributions reinvested | 95,492 | 1,006,884 | 108,356 | 1,142,708 |
| Redemptions | (3,215,071) | (33,515,366) | (1,539,501) | (16,170,145) |
| Net increase (decrease) | (1,825,934) | (18,863,065) | 329,536 | 3,520,960 |
| Class B | | | | |
| Redemptions (b) | — | — | (1) | (11) |
| Net decrease | — | — | (1) | (11) |
| Class C | | | | |
| Subscriptions | 478,387 | 5,070,896 | 414,836 | 4,369,494 |
| Distributions reinvested | 17,722 | 186,202 | 17,992 | 189,597 |
| Redemptions | (360,032) | (3,775,035) | (310,920) | (3,289,449) |
| Net increase | 136,077 | 1,482,063 | 121,908 | 1,269,642 |
| Class R4 | | | | |
| Subscriptions | 78,182 | 818,869 | 250,266 | 2,610,592 |
| Distributions reinvested | 2,481 | 26,069 | 4,055 | 42,747 |
| Redemptions | (129,751) | (1,374,685) | (168,599) | (1,777,812) |
| Net increase (decrease) | (49,088) | (529,747) | 85,722 | 875,527 |
| Class R5 | | | | |
| Subscriptions | 1,190,985 | 12,589,515 | 171,807 | 1,797,462 |
| Distributions reinvested | 17,337 | 180,117 | 6,974 | 73,249 |
| Redemptions | (1,002,463) | (10,276,901) | (80,014) | (843,943) |
| Net increase | 205,859 | 2,492,731 | 98,767 | 1,026,768 |
| Class Y | | | | |
| Subscriptions | 974 | 10,000 | — | — |
| Net increase | 974 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 15,057,323 | 157,857,698 | 9,935,309 | 104,477,029 |
| Distributions reinvested | 184,865 | 1,945,719 | 163,982 | 1,725,626 |
| Redemptions | (14,814,871) | (153,667,563) | (6,173,525) | (64,887,220) |
| Net increase | 427,317 | 6,135,854 | 3,925,766 | 41,315,435 |
| Total net increase (decrease) | (1,104,795) | (9,272,164) | 4,561,698 | 48,008,321 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class A |
| 4/30/2017 | $10.72 | 0.26 | (0.34) | (0.08) | (0.26) |
| 4/30/2016 | $10.50 | 0.27 | 0.22 | 0.49 | (0.27) |
| 4/30/2015 | $10.42 | 0.29 | 0.08 | 0.37 | (0.29) |
| 4/30/2014 | $10.68 | 0.32 | (0.26) | 0.06 | (0.32) |
| 4/30/2013 | $10.47 | 0.32 | 0.21 | 0.53 | (0.32) |
| Class B |
| 4/30/2017 | $10.72 | 0.18 | (0.34) | (0.16) | (0.18) |
| 4/30/2016 | $10.50 | 0.19 | 0.22 | 0.41 | (0.19) |
| 4/30/2015 | $10.42 | 0.22 | 0.07 | 0.29 | (0.21) |
| 4/30/2014 | $10.68 | 0.24 | (0.26) | (0.02) | (0.24) |
| 4/30/2013 | $10.47 | 0.24 | 0.21 | 0.45 | (0.24) |
| Class C |
| 4/30/2017 | $10.72 | 0.18 | (0.34) | (0.16) | (0.18) |
| 4/30/2016 | $10.49 | 0.19 | 0.23 | 0.42 | (0.19) |
| 4/30/2015 | $10.42 | 0.21 | 0.07 | 0.28 | (0.21) |
| 4/30/2014 | $10.67 | 0.24 | (0.25) | (0.01) | (0.24) |
| 4/30/2013 | $10.47 | 0.24 | 0.20 | 0.44 | (0.24) |
| Class R4 |
| 4/30/2017 | $10.69 | 0.29 | (0.33) | (0.04) | (0.29) |
| 4/30/2016 | $10.46 | 0.29 | 0.24 | 0.53 | (0.30) |
| 4/30/2015 | $10.39 | 0.32 | 0.07 | 0.39 | (0.32) |
| 4/30/2014 | $10.64 | 0.34 | (0.25) | 0.09 | (0.34) |
| 4/30/2013 (d) | $10.54 | 0.04 | 0.10 | 0.14 | (0.04) |
| Class R5 |
| 4/30/2017 | $10.67 | 0.29 | (0.34) | (0.05) | (0.29) |
| 4/30/2016 | $10.44 | 0.31 | 0.23 | 0.54 | (0.31) |
| 4/30/2015 | $10.37 | 0.32 | 0.08 | 0.40 | (0.33) |
| 4/30/2014 | $10.63 | 0.35 | (0.26) | 0.09 | (0.35) |
| 4/30/2013 (f) | $10.63 | 0.16 | 0.01 | 0.17 | (0.17) |
| Class Y |
| 4/30/2017 (g) | $10.27 | 0.05 | 0.08 | 0.13 | (0.05) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 26 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.26) | $10.38 | (0.75%) | 0.92% | 0.74% (c) | 2.45% | 17% | $31,273 |
| (0.27) | $10.72 | 4.76% | 0.94% | 0.74% (c) | 2.58% | 8% | $51,869 |
| (0.29) | $10.50 | 3.60% | 0.95% | 0.74% (c) | 2.76% | 6% | $47,317 |
| (0.32) | $10.42 | 0.64% | 0.96% | 0.74% (c) | 3.10% | 12% | $33,140 |
| (0.32) | $10.68 | 5.12% | 0.96% | 0.73% (c) | 3.01% | 8% | $29,398 |
| |
| (0.18) | $10.38 | (1.49%) | 1.66% | 1.49% (c) | 1.72% | 17% | $10 |
| (0.19) | $10.72 | 3.99% | 1.69% | 1.49% (c) | 1.83% | 8% | $10 |
| (0.21) | $10.50 | 2.82% | 1.70% | 1.49% (c) | 2.04% | 6% | $10 |
| (0.24) | $10.42 | (0.11%) | 1.71% | 1.49% (c) | 2.36% | 12% | $27 |
| (0.24) | $10.68 | 4.34% | 1.70% | 1.48% | 2.26% | 8% | $20 |
| |
| (0.18) | $10.38 | (1.49%) | 1.67% | 1.49% (c) | 1.71% | 17% | $15,503 |
| (0.19) | $10.72 | 4.08% | 1.69% | 1.49% (c) | 1.83% | 8% | $14,549 |
| (0.21) | $10.49 | 2.72% | 1.70% | 1.49% (c) | 2.01% | 6% | $12,965 |
| (0.24) | $10.42 | (0.02%) | 1.71% | 1.49% (c) | 2.35% | 12% | $9,253 |
| (0.24) | $10.67 | 4.24% | 1.71% | 1.48% (c) | 2.25% | 8% | $8,004 |
| |
| (0.29) | $10.36 | (0.42%) | 0.67% | 0.49% (c) | 2.71% | 17% | $903 |
| (0.30) | $10.69 | 5.13% | 0.69% | 0.49% (c) | 2.81% | 8% | $1,457 |
| (0.32) | $10.46 | 3.76% | 0.70% | 0.49% (c) | 3.02% | 6% | $529 |
| (0.34) | $10.39 | 0.98% | 0.70% | 0.49% (c) | 3.46% | 12% | $52 |
| (0.04) | $10.64 | 1.32% | 0.56% (e) | 0.44% (e) | 3.27% (e) | 8% | $3 |
| |
| (0.29) | $10.33 | (0.42%) | 0.55% | 0.41% | 2.80% | 17% | $4,867 |
| (0.31) | $10.67 | 5.23% | 0.55% | 0.39% | 2.93% | 8% | $2,829 |
| (0.33) | $10.44 | 3.85% | 0.55% | 0.40% | 3.09% | 6% | $1,738 |
| (0.35) | $10.37 | 0.98% | 0.58% | 0.40% | 3.47% | 12% | $341 |
| (0.17) | $10.63 | 1.57% | 0.50% (e) | 0.39% (e) | 3.28% (e) | 8% | $3 |
| |
| (0.05) | $10.35 | 1.27% | 0.52% (e) | 0.36% (e) | 2.98% (e) | 17% | $10 |
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class Z |
| 4/30/2017 | $10.70 | 0.28 | (0.33) | (0.05) | (0.29) |
| 4/30/2016 | $10.47 | 0.30 | 0.23 | 0.53 | (0.30) |
| 4/30/2015 | $10.40 | 0.32 | 0.07 | 0.39 | (0.32) |
| 4/30/2014 | $10.65 | 0.34 | (0.25) | 0.09 | (0.34) |
| 4/30/2013 | $10.45 | 0.35 | 0.20 | 0.55 | (0.35) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (e) | Annualized. |
| (f) | Class R5 shares commenced operations on November 8, 2012. Per share data and total return reflect activity from that date. |
| (g) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 28 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.29) | $10.36 | (0.51%) | 0.67% | 0.49% (c) | 2.71% | 17% | $371,130 |
| (0.30) | $10.70 | 5.12% | 0.69% | 0.49% (c) | 2.83% | 8% | $378,630 |
| (0.32) | $10.47 | 3.76% | 0.70% | 0.49% (c) | 3.02% | 6% | $329,535 |
| (0.34) | $10.40 | 0.98% | 0.71% | 0.49% (c) | 3.35% | 12% | $260,101 |
| (0.35) | $10.65 | 5.29% | 0.71% | 0.48% (c) | 3.27% | 8% | $281,301 |
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia AMT-Free California Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Class B shares are typically subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, the Fund’s current Class B investors, having held their shares for the requisite time period, are no longer subject to a CDSC upon redemption of their shares. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class R5 shares are not subject to sales charges and are generally available only to investors purchasing through authorized investment professionals and omnibus retirement plans.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
| 30 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Delayed delivery securities
The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
Notes to Financial Statements (continued)
April 30, 2017
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.47% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
| 32 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Effective January 1, 2017, total transfer agency fees for Class R5 shares are subject to an annual limitation of not more than 0.075% of the average daily net assets attributable to Class R5 shares. Prior to January 1, 2017, total transfer agency fees for Class R5 shares were subject to an annual limitation of not more than 0.05% of the average daily net assets attributable to Class R5 shares. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.17 |
| Class B | 0.16 |
| Class C | 0.17 |
| Class R4 | 0.17 |
| Class R5 | 0.058 |
| Class Y | 0.025 (a) |
| Class Z | 0.17 |
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
Notes to Financial Statements (continued)
April 30, 2017
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, these minimum account balance fees reduced total expenses of the Fund by $20.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 32,531 |
| Class C | 7,007 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | September 1, 2016
through
August 31, 2017 | Prior to
September 1, 2016 |
| Class A | 0.740 | 0.74 |
| Class B | 1.490 | 1.49 |
| Class C | 1.490 | 1.49 |
| Class R4 | 0.490 | 0.49 |
| Class R5 | 0.410 | 0.39 |
| Class Y | 0.360* | — |
| Class Z | 0.490 | 0.49 |
*Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual
| 34 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
In the Statement of Assets and Liabilities the following reclassifications were made:
Excess of distributions
over net investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| — | 10,109 | (10,109) |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 19,491 | 11,977,538 | — | 11,997,029 | 19,022 | 11,406,351 | — | 11,425,373 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 929,247 | — | (5,052,129) | 18,180,626 |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 401,214,769 | 19,439,343 | (1,258,717) | 18,180,626 |
The following capital loss carryforwards, determined at April 30, 2017, 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. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended April 30, 2017, capital loss carryforwards utilized, expired unused and permanently lost were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | — | 4,862,928 | 189,201 | 5,052,129 | — | 10,109 | — |
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
Notes to Financial Statements (continued)
April 30, 2017
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $74,616,818 and $73,557,367, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
| 36 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At April 30, 2017, one unaffiliated shareholder of record owned 73.7% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 37 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia AMT-Free California Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free California Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 38 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 99.84% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 39 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 40 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 41 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 42 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 43 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 44 | Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia AMT-Free California Intermediate Muni Bond Fund | Annual Report 2017
| 45 |
Columbia AMT-Free California Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
April 30, 2017
Columbia Short Term Municipal Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
While emotions have run high following the outcome of the U.S. Presidential election, it remains unclear how the Trump presidency will unfold in terms of policy. We have a sense of the priorities espoused by the President over the past eighteen months, but campaign priorities are not always realized and are often never pursued. What seems certain is that, while some investors have already priced expectations into the market, others have retreated, preferring instead a wait and see approach. The outcome of such behaviors appears to have created conditions ripe for ongoing market volatility.
While volatility in the financial markets can be stressful, volatility itself is not a new phenomenon. Other factors that have been at the root cause of recent volatility include uncertainty following the United Kingdom’s vote to exit the European Union (Brexit), speculation around the Federal Reserve’s decision to increase interest rates, divergent central bank policy and geopolitical unrest. The point is, financial markets have fluctuated for years and may be expected to continue to fluctuate — sometimes wildly. If anything, such volatility seems to be the new normal, perhaps exacerbated by access to information and development of technological tools which have enabled investors to react rapidly to real and perceived change. So what can you do?
Position your portfolio for the reality of market volatility
That there is a historical precedent for market volatility, or even an acceptance that it may persist, offers little comfort. A measured and strategic approach remains the best strategy for investors to stay on track in achieving their investment goals.
Step 1: Review your investment goals
Take this opportunity to review your investment goals and the strategies you are pursuing to achieve those goals in order to remain focused on what’s important to you. It is entirely possible that your goals have changed in response either to your life situation or to changes in the market. Accept what you can’t control — volatility, and focus on what you can — your investment goals and strategies.
Step 2: Reassess your risk tolerance
Sit down with your financial advisor to discuss your investment goals and strategies, as well as any changes to your tolerance for risk. Consider your investment horizon. Increased market volatility and a new investment horizon may impact the strategies that can best help you achieve your investment goals. Remember, achieving your investment goals may require a certain amount of risk. Ultimately, you must maintain vigilance in reassessing your risk tolerance and the strategies you have selected in pursuit of your investment goals, and awareness of how those strategies may react to market volatility.
Step 3: Remain calm and focus on your long-term plan
Remember, investing is about the long game. Short term events are not necessarily evidence of a longer term reality. Investors who attempt to time the market too often end up reacting to a down turn by selling low and then compounding the problem by waiting on the sidelines, ultimately missing the right opportunity to reinvest.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
President’s Message (continued)
As long as there is a market, there will be volatility. How you respond to that volatility can make a big difference in the measure of your success as an investor. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for the reality of ongoing volatility and, perhaps, even turn such volatility into investment opportunity.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
Columbia Short Term Municipal Bond Fund | Annual Report 2017
Investment objective
Columbia Short Term Municipal Bond Fund (the Fund) seeks current income exempt from federal income tax, consistent with minimal fluctuation of principal.
Portfolio management
Catherine Stienstra
Co-manager
Managed Fund since 2012
Anders Myhran, CFA
Co-manager
Managed Fund since 2015
| Average annual total returns (%) (for the period ended April 30, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/02/93 | 0.26 | 0.51 | 1.66 |
| | Including sales charges | | -0.79 | 0.30 | 1.57 |
| Class B | 10/12/93 | -0.58 | -0.26 | 0.90 |
| Class C | Excluding sales charges | 05/19/94 | -0.48 | -0.24 | 0.91 |
| | Including sales charges | | -1.47 | -0.24 | 0.91 |
| Class R4 * | 03/19/13 | 0.51 | 0.76 | 1.92 |
| Class R5 * | 11/08/12 | 0.61 | 0.84 | 1.96 |
| Class Y * | 03/01/17 | 0.53 | 0.76 | 1.92 |
| Class Z | 10/07/93 | 0.51 | 0.76 | 1.92 |
| Bloomberg Barclays 1-3 Year Municipal Bond Index | | 0.67 | 0.88 | 2.11 |
Returns for Class A are shown with and without the maximum initial sales charge of 1.00%. The Fund does not accept new investments in Class B shares, except for certain limited transactions. Returns for Class C are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. 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. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
*The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.
The Bloomberg Barclays 1-3 Year Municipal Bond Index is an unmanaged index which consists of a broad selection of investment-grade general obligation and revenue bonds of maturities ranging from one year to three years.
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.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (April 30, 2007 — April 30, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia Short Term Municipal Bond 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.
| Quality breakdown (%) (at April 30, 2017) |
| AAA rating | 4.7 |
| AA rating | 26.9 |
| A rating | 32.8 |
| BBB rating | 14.4 |
| BB rating | 1.4 |
| Not rated | 19.8 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
Top Ten States/Territories (%)
(at April 30, 2017) |
| New York | 27.3 |
| Illinois | 14.6 |
| New Jersey | 6.1 |
| Texas | 5.0 |
| Pennsylvania | 4.8 |
| California | 4.4 |
| Connecticut | 3.8 |
| Florida | 3.6 |
| Nevada | 2.6 |
| Georgia | 2.1 |
Percentages indicated are based upon total investments (excluding Money Market Funds).
For further detail about these holdings, please refer to the section entitled “Portfolio of Investments.”
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
| 4 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance
For the 12-month period that ended April 30, 2017, the Fund’s Class A shares returned 0.26% excluding sales charges. Class Z shares of the Fund returned 0.51% for the same time period. The Fund modestly underperformed its benchmark, the Bloomberg Barclays 1-3 Year Municipal Bond Index, which returned 0.67% for the same period. Effective duration and credit quality positioning overall contributed positively, while yield curve positioning and security selection in A2-rated credits hampered returns. Overall, sector positioning and security selection generated mixed results during the annual period.
Considerable volatility pressured the short-term tax-exempt bond market
Overall, AAA-rated municipal bond yields rose significantly across all maturities during the 12 month period ended April 30, 2017. The broad municipal market, as represented by the Bloomberg Barclays Municipal Bond Index, eked out a modest positive total return of 0.14%, with results better for shorter maturities and declining into negative territory for bonds with 10- to 20-year maturities. The short-term end of the municipal bond market saw what is known as a “bear steepener,” which is a widening of the yield curve caused by long-term rates increasing at a faster pace than short-term rates. During the period, five-year bond yields rose 43 basis points, while one-year bond yields were higher by 30 basis points. (A basis point is 1/100th of a percentage point.) There was also considerable volatility during the period, as the five-year bond yield saw more than a 100 basis point range between its high and low. Lower quality municipal bonds outperformed higher quality municipal bonds during the annual period, with AAA-rated bonds posting slightly negative returns, AA-rated bonds essentially flat, and A-rated and BAA-rated bonds posting modestly positive returns.
The macro backdrop for the period got off to an unexpected start with the Brexit vote in June 2016, wherein the U.K. voted to leave the European Union. The “leave” outcome sent 10-year U.S. Treasury yields lower by 30 basis points in the two days following the vote. Elsewhere, Puerto Rico bond defaults during the summer of 2016 were justifiably noteworthy but certainly not a surprise. Indeed, the effect to the broader municipal bond market of these defaults was all but nonexistent, as the debt had mostly transitioned into hedge funds and other sophisticated institutional holders’ investments. October 2016 witnessed the implementation of money market reforms, which sent daily and weekly municipal yields higher by more than 40 basis points, more than doubling in the process. Demand for municipal bonds remained consistently strong, with mutual fund industry inflows reaching 54 consecutive weeks. The U.S. municipal bond market also continued to draw the interest of non-U.S. buyers, some driven by negative yields in their own countries’ markets. The defining event of the period was likely the U.S. presidential election. The market euphoria following the surprise results, driven by overnight re-evaluations around regulation, fiscal spending, economic growth, inflation and more, sent equities higher and bond prices lower. Municipal bond yields were already under pressure from record new-issue supply when the post-election sell-off in November 2016 sent the market into its worst month of total return since 2008. However, as often happens, financial markets got a little ahead of themselves and conditions started to reverse in December 2016. The Federal Reserve (the Fed) raised the targeted federal funds rate near the end of 2016, and markets barely blinked. This relative calm produced five consecutive months of positive total returns within the municipal bond market from December 2016 through April 2017, even as the Fed raised interest rates once again in March 2017. The municipal bond market was aided during these months by subdued supply to start 2017, greeted by steady demand from investors.
Contributors and detractors
The Fund’s duration positioning aided its relative results during the period. The Fund had a shorter duration stance than that of the benchmark for most of the annual period, which helped as interest rates rose.
Further, as lower quality securities overall outperformed higher quality securities during the annual period, having underweighted allocations to bonds rated AAA, overweighted allocations to lower investment-grade bonds, and exposure to non-rated securities, added value.
From a sector perspective, having an underweight to pre-refunded bonds contributed positively to the Fund’s relative results. The pre-refunded sector is generally a higher quality one, which underperformed lower quality sectors during the period. (Pre-refunded bonds, also known as advance refunding, is a procedure in which a bond issuer floats a second bond at a lower interest rate, and the proceeds from the sale of the second bond are invested, usually in Treasury securities, which in turn, are held in escrow as collateral for the first bond. Advance refunded bonds no longer represent the credit risk profile of the original borrower, and given the high credit quality of the escrow account they often increase in value — sometimes
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 5 |
Manager Discussion of Fund Performance (continued)
significantly.) Having an overweight to Illinois credits, which outperformed the benchmark during the period, also helped. Security selection among local general obligation securities, including those of Chicago, and among New Jersey credits proved effective as well.
Detracting from the Fund’s relative results was exposure to bonds with maturities of more than three years, which, not part of the benchmark, underperformed the benchmark during the period. As mentioned, shorter term maturities outperformed longer dated maturities even within the short-term segment, i.e. one- to five-year range, of the municipal bond yield curve. This detractor was only partially offset by exposure to bonds with maturities of one year and less, which helped, as yields rose less in this portion of the municipal bond yield curve.
Security selection among A2-rated bonds also hampered the Fund’s relative results, particularly a modest position in Virgin Island bonds.
Fundamental analysis drove portfolio changes
We adjusted the Fund’s duration during the period, though it ended the period near where it began at just under 1.7 years. The Fund’s duration reached a peak of 1.8 years during the summer of 2016 and spent the rest of the calendar year drifting lower, reaching a low of 1.55 years, with the expectation that yields were biased higher. We used the post-election sell-off in the market to add some duration back. All that said, the Fund’s duration was maintained modestly shorter than that of the benchmark throughout the period. From a credit quality perspective, we modestly moved the Fund’s portfolio a bit down in quality and added exposure to non-rated notes but maintained an emphasis on bonds rated AA and A.
We reduced the Fund’s exposure to state general obligation bonds, most especially Illinois and New Jersey state general obligation bonds. We increased the Fund’s allocation to hospital bonds. The Fund owned no Puerto Rico bonds during the period and maintained only a modest exposure to Virgin Island and tobacco sector bonds. The Fund maintained a significant exposure to credits from New York, as this is where most note issuers are located. We increased exposure to bonds subject to the alternative minimum tax and to housing planned amortization class, or PAC, bonds.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state, local or alternative minimum taxes. See the Fund’s prospectus for more information on these and other risks.
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.
| 6 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| November 1, 2016 — April 30, 2017 |
| | Account value at the
beginning of the
period ($) | 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 | 1,002.50 | 1,021.09 | 3.44 | 3.47 | 0.70 |
| Class B | 1,000.00 | 1,000.00 | 997.80 | 1,017.41 | 7.10 | 7.17 | 1.45 |
| Class C | 1,000.00 | 1,000.00 | 998.80 | 1,017.41 | 7.11 | 7.17 | 1.45 |
| Class R4 | 1,000.00 | 1,000.00 | 1,003.70 | 1,022.31 | 2.21 | 2.23 | 0.45 |
| Class R5 | 1,000.00 | 1,000.00 | 1,003.20 | 1,022.76 | 1.77 | 1.79 | 0.36 |
| Class Y | 1,000.00 | 1,000.00 | 1,003.30 (a) | 1,023.00 | 0.48 (a) | 1.54 | 0.31 (a) |
| Class Z | 1,000.00 | 1,000.00 | 1,003.70 | 1,022.31 | 2.21 | 2.23 | 0.45 |
| (a) | Based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
The Fund’s annualized expense ratio excludes the impact of an expense reimbursement from a third party due to overbilling.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments
April 30, 2017
(Percentages represent value of investments compared to net assets)
| Floating Rate Notes 3.4% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| California 0.6% |
| Grossmont Union High School District(a),(b) |
| Prerefunded 08/01/18 Unlimited General Obligation Bonds |
Election of 2004
VRDN Series 2008 |
| 02/01/18 | 1.100% | | 4,545,000 | 4,545,000 |
| Unlimited General Obligation Bonds |
Election of 2008
VRDN Series 2010B |
| 08/01/18 | 1.100% | | 4,850,000 | 4,850,000 |
| Total | 9,395,000 |
| Indiana 0.2% |
| Indiana Finance Authority(b),(c) |
| Unrefunded Revenue Bonds |
Lease Appropriation
VRDN Series 2009A-2 (JPMorgan Chase Bank) |
| 02/01/37 | 0.910% | | 2,000,000 | 2,000,000 |
| New York 2.1% |
| City of New York(b) |
| Unlimited General Obligation Bonds |
Fiscal 2015
VRDN Subordinated Series 2015 |
| 06/01/44 | 0.860% | | 2,000,000 | 2,000,000 |
| VRDN Subordinated Series 2014D-3 |
| 10/01/39 | 0.860% | | 14,445,000 | 14,445,000 |
| New York City Transitional Finance Authority Future Tax Secured(b),(c) |
| Revenue Bonds |
| VRDN Subordinated Series 2015 (Royal Bank of Canada) |
| 08/01/41 | 0.860% | | 2,500,000 | 2,500,000 |
| New York City Water & Sewer System(b) |
| Revenue Bonds |
2nd General Resolution
VRDN Series 2016BB |
| 06/15/49 | 0.850% | | 5,100,000 | 5,100,000 |
| New York City Water & Sewer System(b),(c) |
| Revenue Bonds |
2nd General Resolution
VRDN Series 2016BB (State Street Bank and Trust Co.) |
| 06/15/49 | 0.850% | | 7,440,000 | 7,440,000 |
| Total | 31,485,000 |
| Pennsylvania 0.2% |
| Hospitals & Higher Education Facilities Authority of Philadelphia (The)(b) |
| Revenue Bonds |
Childrens Hospital
VRDN Series 2012 |
| 07/01/41 | 0.860% | | 3,000,000 | 3,000,000 |
| Floating Rate Notes (continued) |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Tennessee 0.3% |
| Metropolitan Government of Nashville & Davidson County Water & Sewer(b) |
| Revenue Bonds |
| VRDN Series 1977 Escrowed to Maturity |
| 07/01/21 | 1.050% | | 5,000,000 | 5,000,000 |
Total Floating Rate Notes
(Cost $50,880,000) | 50,880,000 |
|
| Municipal Bonds 84.4% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Alabama 2.0% |
| Alabama 21st Century Authority |
| Revenue Bonds |
| Series 2012A |
| 06/01/18 | 5.000% | | 1,250,000 | 1,301,463 |
| Alabama Federal Aid Highway Finance Authority |
| Revenue Bonds |
Grant Anticipation - GARVEE
Series 2012 |
| 09/01/20 | 5.000% | | 2,210,000 | 2,474,427 |
| Alabama Public School & College Authority |
| Refunding Revenue Bonds |
Pool
Series 2012A |
| 03/01/18 | 5.000% | | 7,510,000 | 7,768,644 |
| Black Belt Energy Gas District |
| Revenue Bonds |
| Series 2016A |
| 07/01/46 | 4.000% | | 5,000,000 | 5,395,000 |
| City of Birmingham |
| Limited General Obligation Refunding Notes |
| Series 2016A |
| 04/01/18 | 5.000% | | 6,045,000 | 6,273,078 |
| Industrial Development Board of the City of Mobile |
| Revenue Bonds |
Alabama Power Co.-Barry Plant
Series 2015 |
| 07/15/34 | 1.625% | | 3,250,000 | 3,261,862 |
| State of Alabama Docks Department |
| Refunding Revenue Bonds |
Docks Facilities
Series 2017B |
| 10/01/18 | 5.000% | | 1,295,000 | 1,360,721 |
Docks Facilities
Series 2017B |
| 10/01/19 | 5.000% | | 1,275,000 | 1,378,785 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Docks Facilities
Series 2017B |
| 10/01/20 | 5.000% | | 1,280,000 | 1,416,333 |
| Total | 30,630,313 |
| Alaska 0.6% |
| Alaska Railroad Corp. |
| Refunding Revenue Bonds |
Sections 5307 & 5337
Series 2015 |
| 08/01/18 | 5.000% | | 4,500,000 | 4,701,915 |
| Municipality of Anchorage |
| Unlimited General Obligation Refunding Bonds |
General Purpose
Series 2014B |
| 09/01/19 | 5.000% | | 3,645,000 | 3,959,673 |
| Total | 8,661,588 |
| Arizona 1.1% |
| Arizona Health Facilities Authority |
| Refunding Revenue Bonds |
Banner Health
Series 2015A |
| 01/01/21 | 5.000% | | 2,435,000 | 2,747,897 |
| Arizona School Facilities Board |
| Certificate of Participation |
| Series 2008 |
| 09/01/18 | 5.750% | | 5,935,000 | 6,301,724 |
| City of Glendale |
| Limited General Obligation Refunding Bonds |
| Series 2015 (AGM) |
| 07/01/19 | 4.000% | | 1,350,000 | 1,422,535 |
| County of Maricopa |
| Certificate of Participation |
| Series 2015 |
| 07/01/18 | 5.000% | | 3,645,000 | 3,816,607 |
| Maricopa County Industrial Development Authority |
| Prerefunded 07/01/17 Revenue Bonds |
Dignity Health
Series 2007A |
| 07/01/18 | 5.000% | | 1,845,000 | 1,858,173 |
| Total | 16,146,936 |
| Arkansas 0.8% |
| Arkansas Development Finance Authority |
| Refunding Revenue Bonds |
Baptist Health
Series 2015A |
| 12/01/18 | 5.000% | | 2,640,000 | 2,795,205 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Baptist Health
Series 2015A |
| 12/01/19 | 5.000% | | 8,095,000 | 8,830,107 |
| Total | 11,625,312 |
| California 3.6% |
| Brea Redevelopment Agency |
| Refunding Tax Allocation Bonds |
Redevelopment Project
Series 2013 |
| 08/01/17 | 5.000% | | 950,000 | 959,728 |
Redevelopment Project
Series 2013 |
| 08/01/18 | 5.000% | | 995,000 | 1,042,830 |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
Community Medical Centers
Series 2017A |
| 02/01/19 | 5.000% | | 1,635,000 | 1,738,070 |
Community Medical Centers
Series 2017A |
| 02/01/20 | 5.000% | | 1,100,000 | 1,202,311 |
Community Medical Centers
Series 2017A |
| 02/01/21 | 5.000% | | 1,200,000 | 1,340,676 |
Community Medical Centers
Series 2017A |
| 02/01/22 | 5.000% | | 1,000,000 | 1,137,830 |
| California Pollution Control Financing Authority(a),(b),(d),(e) |
| Revenue Bonds |
Waste Management Project
Series 2017 AMT |
| 07/01/31 | 1.600% | | 9,000,000 | 9,000,540 |
| California State Public Works Board |
| Refunding Revenue Bonds |
| Series 2014G |
| 01/01/19 | 5.000% | | 13,500,000 | 14,392,215 |
| Revenue Bonds |
Various Capital Projects
Series 2013I |
| 11/01/17 | 5.000% | | 750,000 | 765,615 |
| County of Los Angeles(f) |
| Certificate of Participation |
Capital Appreciation - Disney Parking Project
Series 1993 (AMBAC) |
| 09/01/19 | 0.000% | | 7,650,000 | 7,392,577 |
| Glendale Redevelopment Agency Successor Agency |
| Refunding Tax Allocation Bonds |
Central Glendale Redevelopment
Subordinated Series 2013 (AGM) |
| 12/01/17 | 4.000% | | 1,235,000 | 1,256,378 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Norman Y Mineta San Jose International Airport(d) |
| Refunding Revenue Bonds |
| Series 2017A AMT |
| 03/01/21 | 5.000% | | 2,750,000 | 3,103,595 |
| Series 2017A AMT |
| 03/01/22 | 5.000% | | 1,750,000 | 2,011,502 |
| Palm Desert Redevelopment Agency |
| Refunding Tax Allocation Bonds |
| Series 2017A |
| 10/01/19 | 4.000% | | 950,000 | 1,008,207 |
| Series 2017A (BAM) |
| 10/01/21 | 5.000% | | 850,000 | 969,060 |
| Palomar Health |
| Refunding Revenue Bonds |
| Series 2016 |
| 11/01/17 | 3.000% | | 500,000 | 503,030 |
| Series 2016 |
| 11/01/18 | 4.000% | | 875,000 | 900,821 |
| Series 2016 |
| 11/01/19 | 4.000% | | 1,500,000 | 1,568,640 |
| Series 2016 |
| 11/01/20 | 5.000% | | 2,235,000 | 2,439,078 |
| State of California |
| Unlimited General Obligation Refunding Bonds |
Veterans Bond
Series 2015 |
| 12/01/18 | 1.050% | | 1,190,000 | 1,188,060 |
| Total | 53,920,763 |
| Colorado 1.2% |
| City & County of Denver Airport System(d) |
| Revenue Bonds |
| Series 2011A AMT |
| 11/15/21 | 5.000% | | 5,000,000 | 5,717,900 |
| Colorado Health Facilities Authority |
| Refunding Revenue Bonds |
Evangelical Lutheran Good Samaritan Society
Series 2015 |
| 06/01/17 | 3.000% | | 300,000 | 300,540 |
Evangelical Lutheran Good Samaritan Society
Series 2015 |
| 06/01/18 | 3.000% | | 550,000 | 559,345 |
Evangelical Lutheran Good Samaritan Society
Series 2015 |
| 06/01/19 | 4.000% | | 900,000 | 942,885 |
| E-470 Public Highway Authority |
| Refunding Revenue Bonds |
| Series 2015A |
| 09/01/19 | 5.000% | | 1,000,000 | 1,083,100 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| University of Colorado Hospital Authority |
| Revenue Bonds |
Obligation Group
Series 2017 |
| 11/15/38 | 5.000% | | 3,650,000 | 4,131,909 |
Obligation Group
Series 2017 |
| 11/15/47 | 4.000% | | 4,700,000 | 4,980,120 |
| Total | 17,715,799 |
| Connecticut 3.1% |
| City of Bridgeport |
| Unlimited General Obligation Refunding Bonds |
| Series 2012B |
| 08/15/17 | 5.000% | | 5,000,000 | 5,054,150 |
| City of New Britain |
| Unlimited General Obligation Refunding Bonds |
| Series 2016A (BAM) |
| 03/01/20 | 5.000% | | 1,000,000 | 1,097,100 |
| Series 2016A (BAM) |
| 03/01/21 | 5.000% | | 1,500,000 | 1,686,720 |
| Connecticut Housing Finance Authority |
| Refunding Revenue Bonds |
| Series 2014 |
| 11/15/44 | 4.000% | | 3,265,000 | 3,372,353 |
| Subordinated Series 2016E-1 |
| 11/15/46 | 3.500% | | 9,865,000 | 10,403,728 |
| Revenue Bonds |
| Series 2014A-1 |
| 11/15/44 | 4.000% | | 3,395,000 | 3,578,839 |
| Connecticut State Health & Educational Facility Authority(a) |
| Revenue Bonds |
Church Home of Hartford, Inc.
Series 2016 |
| 09/01/20 | 2.875% | | 700,000 | 686,861 |
Church Home of Hartford, Inc.
Series 2016 |
| 09/01/21 | 3.250% | | 850,000 | 829,796 |
| State of Connecticut |
| Unlimited General Obligation Refunding Bonds |
| Series 2014C |
| 12/15/18 | 5.000% | | 5,200,000 | 5,519,540 |
| Series 2014H |
| 11/15/19 | 5.000% | | 13,500,000 | 14,703,120 |
| Total | 46,932,207 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Florida 3.6% |
| Citizens Property Insurance Corp. |
| Revenue Bonds |
Senior Secured
Series 2012A-1 |
| 06/01/17 | 5.000% | | 15,000,000 | 15,058,275 |
| Series 2015A-1 |
| 06/01/18 | 5.000% | | 1,000,000 | 1,024,190 |
| Series 2015A-1 |
| 06/01/20 | 5.000% | | 3,925,000 | 4,313,065 |
| City of Cape Coral Water & Sewer(e) |
| Refunding Special Assessment Bonds |
Various Areas
Series 2017 (AGM) |
| 09/01/19 | 1.650% | | 1,000,000 | 999,490 |
Various Areas
Series 2017 (AGM) |
| 09/01/20 | 1.900% | | 1,000,000 | 998,920 |
| City of Jacksonville |
| Refunding Revenue Bonds |
Better Jacksonville
Series 2012 |
| 10/01/17 | 5.000% | | 2,000,000 | 2,035,260 |
| County of Broward Airport System(d) |
| Refunding Revenue Bonds |
| Series 2015C AMT |
| 10/01/19 | 5.000% | | 3,000,000 | 3,249,090 |
| Series 2015C AMT |
| 10/01/20 | 5.000% | | 1,885,000 | 2,093,085 |
| County of Lee Solid Waste System(d) |
| Refunding Revenue Bonds |
| Series 2016 (NPFGC) AMT |
| 10/01/22 | 5.000% | | 1,500,000 | 1,706,250 |
| County of Miami-Dade Aviation(d) |
| Refunding Revenue Bonds |
| Series 2014 AMT |
| 10/01/20 | 5.000% | | 2,000,000 | 2,220,780 |
| County of Miami-Dade Seaport Department |
| Revenue Bonds |
| Series 2013A |
| 10/01/19 | 5.000% | | 2,015,000 | 2,180,290 |
| Florida Housing Finance Corp. |
| Revenue Bonds |
Homeowner Mortgage Special Program
Series 2010A (GNMA / FNMA / FHLMC) |
| 07/01/28 | 5.000% | | 875,000 | 909,099 |
| Florida Ports Financing Commission(d) |
| Refunding Revenue Bonds |
Transportation Fund
Seris 2011B AMT |
| 06/01/23 | 5.000% | | 3,000,000 | 3,380,310 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Hillsborough County Aviation Authority(d) |
| Refunding Revenue Bonds |
Tampa International
Subordinated Series 2013A AMT |
| 10/01/19 | 5.000% | | 2,000,000 | 2,166,060 |
| Pasco County School Board |
| Revenue Bonds |
| Series 2013 |
| 10/01/18 | 5.000% | | 1,000,000 | 1,055,420 |
| School Board of Miami-Dade County (The) |
| Refunding Bonds Certificate of Participation |
| Series 2015D |
| 02/01/20 | 5.000% | | 2,250,000 | 2,470,162 |
| Refunding Certificate of Participation |
| Series 2015A |
| 05/01/19 | 5.000% | | 2,000,000 | 2,151,900 |
| St. Johns County School Board |
| Refunding Certificate of Participation |
| Series 2015 |
| 07/01/19 | 5.000% | | 1,000,000 | 1,082,900 |
| Series 2015 |
| 07/01/20 | 5.000% | | 2,000,000 | 2,228,740 |
| St. Johns River Power Park |
| Refunding Revenue Bonds |
Issue 2
Series 2011-23 |
| 10/01/17 | 5.000% | | 3,000,000 | 3,053,280 |
| Total | 54,376,566 |
| Georgia 2.2% |
| Burke County Development Authority |
| Refunding Revenue Bonds |
Georgia Power Co. Plant Vogtle Project
Series 2015 |
| 10/01/32 | 2.350% | | 7,700,000 | 7,760,368 |
| City of Atlanta Department of Aviation |
| Refunding Revenue Bonds |
General
Series 2011A |
| 01/01/19 | 5.000% | | 4,000,000 | 4,262,960 |
| Georgia Housing & Finance Authority |
| Refunding Revenue Bonds |
Single Family Mortgage
Series 2016A-1 |
| 12/01/46 | 3.500% | | 3,760,000 | 3,946,910 |
| Main Street Natural Gas, Inc. |
| Revenue Bonds |
| Series 2007A |
| 03/15/21 | 5.000% | | 5,000,000 | 5,595,000 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Monroe County Development Authority |
| Revenue Bonds |
Georgia Power Co. Plant Scherer
Series 2015 |
| 10/01/48 | 2.350% | | 4,000,000 | 4,057,920 |
| Peach County Development Authority |
| Revenue Bonds |
USG Real Estate Foundation LLC
Series 2016 |
| 10/01/18 | 1.200% | | 7,000,000 | 6,981,730 |
| Total | 32,604,888 |
| Illinois 14.8% |
| Chicago O’Hare International Airport(d) |
| Refunding Revenue Bonds |
General 2nd Lien
Series 2012A AMT |
| 01/01/18 | 5.000% | | 11,340,000 | 11,638,809 |
General Senior Lien
Series 2012B AMT |
| 01/01/22 | 5.000% | | 5,000,000 | 5,663,750 |
General Senior Lien
Series 2013A AMT |
| 01/01/22 | 5.000% | | 5,675,000 | 6,428,356 |
| Revenue Bonds |
General Purpose Senior Lien
Series 2013C AMT |
| 01/01/21 | 5.000% | | 2,035,000 | 2,273,217 |
| Chicago O’Hare International Airport |
| Refunding Revenue Bonds |
| Series 2015B |
| 01/01/20 | 5.000% | | 3,000,000 | 3,288,330 |
| Series 2015B |
| 01/01/21 | 5.000% | | 4,000,000 | 4,488,000 |
| Chicago Park District |
| Limited General Obligation Refunding Bonds |
| Series 2015B |
| 01/01/18 | 4.000% | | 1,250,000 | 1,270,550 |
| Series 2015B |
| 01/01/19 | 4.000% | | 1,750,000 | 1,815,870 |
| Series 2015C |
| 01/01/18 | 4.000% | | 1,500,000 | 1,524,660 |
| Series 2015C |
| 01/01/19 | 4.000% | | 1,805,000 | 1,872,940 |
| Limited Tax General Obligation Refunding Bonds |
| Series 2014D |
| 01/01/20 | 5.000% | | 1,000,000 | 1,079,370 |
| Series 2014D |
| 01/01/21 | 5.000% | | 1,000,000 | 1,102,020 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Unlimited General Obligation Refunding Bonds |
Alternative Revenue Source
Series 2015 |
| 01/01/18 | 4.000% | | 1,000,000 | 1,016,440 |
| Chicago Transit Authority |
| Refunding Revenue Bonds |
Federal Transit Administration Section 5307
Series 2015 |
| 06/01/18 | 5.000% | | 6,000,000 | 6,214,500 |
Federal Transit Administration Section 5307
Series 2015 |
| 06/01/19 | 5.000% | | 5,000,000 | 5,324,050 |
Federal Transit Administration Section 5307 Urbanized Area Formula Funds
Series 2015 |
| 06/01/20 | 5.000% | | 11,250,000 | 12,220,762 |
| Unrefunded Revenue Bonds |
Federal Transit Administration
Series 2006 (AMBAC) |
| 06/01/17 | 5.000% | | 2,875,000 | 2,879,823 |
| City of Chicago |
| Prerefunded 01/01/18 Unlimited General Obligation Bonds |
| Series 2008A (BAM-TCRS) |
| 01/01/19 | 5.000% | | 2,010,000 | 2,065,717 |
| Refunding General Obligation Unlimited Bonds |
Project
Series 2014A |
| 01/01/20 | 4.000% | | 1,175,000 | 1,174,648 |
| Series 2015 |
| 01/01/20 | 5.000% | | 1,625,000 | 1,665,333 |
| Refunding Revenue Bonds |
| Series 2009A |
| 01/01/22 | 5.000% | | 2,090,000 | 2,186,725 |
| Unlimited General Obligation Bonds |
| Series 2008A |
| 01/01/21 | 5.250% | | 1,465,000 | 1,475,533 |
| Series 2015A |
| 01/01/19 | 5.000% | | 1,300,000 | 1,322,893 |
| Series 2015A |
| 01/01/20 | 5.000% | | 3,480,000 | 3,566,374 |
| Unlimited General Obligation Notes |
| Series 2015A |
| 01/01/21 | 5.000% | | 5,000,000 | 5,122,650 |
| Unlimited General Obligation Refunding Bonds |
| Escrowed to Maturity Series 1996A-2 (AMBAC) |
| 01/01/18 | 5.500% | | 2,505,000 | 2,582,329 |
Project
Series 2014A |
| 01/01/21 | 5.000% | | 4,875,000 | 4,994,584 |
| Series 2003B |
| 01/01/18 | 5.000% | | 1,500,000 | 1,511,310 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2016C |
| 01/01/20 | 5.000% | | 1,000,000 | 1,024,820 |
| Series 2016C |
| 01/01/21 | 5.000% | | 3,370,000 | 3,452,666 |
| Series 2016C |
| 01/01/22 | 5.000% | | 5,000,000 | 5,101,900 |
| Unrefunded Unlimited General Obligation Bonds |
| Series 2008A (BAM-TCRS) |
| 01/01/19 | 5.000% | | 1,990,000 | 2,004,328 |
| City of Chicago Wastewater Transmission |
| Refunding Revenue Bonds |
2nd Lien
Series 2001 (NPFGC) |
| 01/01/18 | 5.500% | | 1,750,000 | 1,795,833 |
2nd Lien
Series 2015C |
| 01/01/18 | 5.000% | | 2,500,000 | 2,555,250 |
2nd Lien
Series 2015C |
| 01/01/19 | 5.000% | | 2,810,000 | 2,955,727 |
2nd Lien
Series 2015C |
| 01/01/20 | 5.000% | | 1,000,000 | 1,076,380 |
2nd Lien
Series 2015C |
| 01/01/21 | 5.000% | | 1,000,000 | 1,096,450 |
| City of Chicago Waterworks |
| Refunding Revenue Bonds |
2nd Lien
Series 2016 |
| 11/01/18 | 5.000% | | 1,000,000 | 1,053,540 |
2nd Lien
Series 2016 |
| 11/01/19 | 5.000% | | 3,000,000 | 3,244,620 |
2nd Lien
Series 2016 |
| 11/01/20 | 5.000% | | 5,000,000 | 5,502,700 |
| Revenue Bonds |
2nd Lien Project
Series 2014 |
| 11/01/18 | 4.000% | | 1,000,000 | 1,038,670 |
| City of Chicago Waterworks(f) |
| Revenue Bonds |
Capital Appreciation Senior Lien
Series 2000 (AMBAC) |
| 11/01/19 | 0.000% | | 5,550,000 | 5,281,879 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Springfield Electric |
| Refunding Revenue Bonds |
Senior Lien
Series 2015 |
| 03/01/19 | 5.000% | | 2,000,000 | 2,130,440 |
Senior Lien
Series 2015 |
| 03/01/20 | 5.000% | | 2,000,000 | 2,187,380 |
| Cook County Community High School District No. 228 Bremen |
| Limited General Obligation Bonds |
| Series 2014B |
| 12/01/17 | 5.000% | | 2,000,000 | 2,047,840 |
| Illinois Finance Authority |
| Refunding Revenue Bonds |
Advocate Health Care
Series 2014 |
| 08/01/19 | 5.000% | | 600,000 | 650,472 |
Swedish Covenant Hospital
Series 2016 |
| 08/15/18 | 5.000% | | 200,000 | 208,402 |
Swedish Covenant Hospital
Series 2016 |
| 08/15/19 | 5.000% | | 495,000 | 528,774 |
Swedish Covenant Hospital
Series 2016 |
| 08/15/20 | 5.000% | | 400,000 | 435,192 |
Swedish Covenant Hospital
Series 2016 |
| 08/15/21 | 5.000% | | 455,000 | 502,384 |
| Revenue Bonds |
Advocate Health Care Network
Series 2016 |
| 11/15/22 | 1.375% | | 3,030,000 | 2,978,096 |
Ascension Health
Series 2012E |
| 11/15/42 | 5.000% | | 2,000,000 | 2,000,700 |
| Illinois Finance Authority(b) |
| Refunding Revenue Bonds |
Presbyterian Home
Series 2016 |
| 05/01/36 | 2.038% | | 2,400,000 | 2,404,416 |
| Illinois State Toll Highway Authority |
| Refunding Revenue Bonds |
| Series 2014A |
| 12/01/20 | 5.000% | | 5,330,000 | 5,989,747 |
| Kane Cook & DuPage Counties School District No. U-46 Elgin |
| Unlimited General Obligation Refunding Bonds |
| Series 2015C |
| 01/01/19 | 5.000% | | 1,250,000 | 1,329,163 |
| Series 2015C |
| 01/01/20 | 5.000% | | 1,500,000 | 1,640,025 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Kane McHenry Cook & De Kalb Counties Unit School District No. 300 |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 01/01/18 | 5.000% | | 750,000 | 770,228 |
| Northern Illinois Municipal Power Agency |
| Refunding Revenue Bonds |
| Series 2016A |
| 12/01/22 | 5.000% | | 1,500,000 | 1,710,480 |
| Regional Transportation Authority |
| Revenue Bonds |
| Series 2003B (NPFGC) |
| 06/01/19 | 5.500% | | 3,945,000 | 4,291,332 |
| Series 2006A (NPFGC) |
| 07/01/18 | 5.000% | | 4,970,000 | 4,985,755 |
| State of Illinois |
| Revenue Bonds |
Build Illinois
Series 2010 |
| 06/15/19 | 5.000% | | 4,575,000 | 4,926,268 |
Build Illinois
Series 2011 |
| 06/15/18 | 3.000% | | 4,800,000 | 4,903,200 |
| Unlimited General Obligation Bonds |
| Series 2012 |
| 03/01/18 | 5.000% | | 4,550,000 | 4,658,654 |
| Series 2013CR (AGM) |
| 04/01/21 | 5.000% | | 7,180,000 | 7,796,618 |
| Series 2014 |
| 02/01/18 | 4.000% | | 2,750,000 | 2,789,133 |
| Series 2014 |
| 04/01/19 | 5.000% | | 5,000,000 | 5,201,800 |
| Series 2016 |
| 01/01/20 | 5.000% | | 5,000,000 | 5,236,600 |
| Unlimited General Obligation Notes |
| Series 2012 |
| 09/01/17 | 4.000% | | 3,550,000 | 3,576,731 |
| Unrefunded Revenue Bonds |
Build Illinois
Series 2009B |
| 06/15/20 | 5.000% | | 1,415,000 | 1,514,262 |
| State of Illinois Unemployment Compensation Trust Fund |
| Revenue Bonds |
| Series 2012B |
| 06/15/17 | 5.000% | | 9,000,000 | 9,014,306 |
| University of Illinois |
| Refunding Certificate of Participation |
| Series 2014C |
| 03/15/19 | 5.000% | | 1,555,000 | 1,660,553 |
| Total | 223,023,257 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Indiana 0.9% |
| Indiana Finance Authority |
| Refunding Revenue Bonds |
Indiana University Health
Series 2016A |
| 12/01/19 | 5.000% | | 1,100,000 | 1,207,272 |
| Indiana Health & Educational Facilities Financing Authority |
| Revenue Bonds |
Ascension Senior Credit
Series 2016 |
| 11/15/31 | 1.750% | | 5,000,000 | 4,964,450 |
| Indiana Health Facility Financing Authority |
| Revenue Bonds |
Ascension Health Subordinated Credit Group
Series 2016 |
| 11/01/27 | 1.250% | | 3,935,000 | 3,893,958 |
| Indiana Housing & Community Development Authority(d) |
| Refunding Revenue Bonds |
| Series 2017A-2 (GNMA) AMT |
| 01/01/39 | 4.000% | | 2,000,000 | 2,130,860 |
| Ivy Tech Community College of Indiana |
| Revenue Bonds |
Student Fee
Series 2013R-1 |
| 07/01/17 | 5.000% | | 1,000,000 | 1,007,160 |
| Total | 13,203,700 |
| Iowa 0.2% |
| People’s Memorial Hospital of Buchanan County |
| Revenue Bonds |
| Series 2016 |
| 12/01/18 | 1.500% | | 3,000,000 | 2,988,810 |
| Kentucky 1.4% |
| Kentucky Rural Water Finance Corp. |
| Refunding Revenue Bonds |
| Series 2016A |
| 02/01/18 | 1.250% | | 6,385,000 | 6,397,898 |
| Kentucky State Property & Building Commission |
| Refunding Revenue Bonds |
Project #108
Series 2015B |
| 08/01/19 | 5.000% | | 5,000,000 | 5,400,400 |
Project #112
Series 2016B |
| 11/01/21 | 5.000% | | 6,000,000 | 6,859,380 |
Project No. 100
Series 2011A |
| 08/01/18 | 5.000% | | 2,500,000 | 2,622,875 |
| Total | 21,280,553 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Louisiana 1.0% |
| Louisiana State Citizens Property Insurance Corp. |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/01/18 | 5.000% | | 2,850,000 | 2,966,223 |
| State of Louisiana |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 05/01/19 | 5.000% | | 9,250,000 | 9,946,710 |
| Series 2015B |
| 05/01/19 | 5.000% | | 2,530,000 | 2,720,560 |
| Total | 15,633,493 |
| Maine 0.3% |
| Maine State Housing Authority |
| Revenue Bonds |
| Series 2016B-1 |
| 11/15/46 | 3.500% | | 4,505,000 | 4,724,574 |
| Maryland 0.1% |
| Maryland Health & Higher Educational Facilities Authority |
| Refunding Revenue Bonds |
Meritus Medical Center Issue
Series 2015 |
| 07/01/17 | 5.000% | | 400,000 | 402,812 |
Meritus Medical Center Issue
Series 2015 |
| 07/01/18 | 5.000% | | 305,000 | 318,734 |
Meritus Medical Center Issue
Series 2015 |
| 07/01/19 | 5.000% | | 500,000 | 539,540 |
| Total | 1,261,086 |
| Massachusetts 1.0% |
| Massachusetts Educational Financing Authority(d) |
| Refunding Revenue Bonds |
| Series 2016J AMT |
| 07/01/19 | 4.000% | | 2,500,000 | 2,606,925 |
| Series 2016J AMT |
| 07/01/20 | 4.000% | | 2,150,000 | 2,263,262 |
| Revenue Bonds |
Education Loan
Series 2014-I AMT |
| 01/01/18 | 4.000% | | 1,500,000 | 1,523,340 |
Education Loan
Series 2014-I AMT |
| 01/01/19 | 5.000% | | 2,000,000 | 2,101,680 |
| Series 2015A AMT |
| 01/01/19 | 5.000% | | 3,000,000 | 3,150,000 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2015A AMT |
| 01/01/22 | 5.000% | | 3,500,000 | 3,883,670 |
| Total | 15,528,877 |
| Michigan 1.0% |
| Michigan Finance Authority |
| Refunding Revenue Bonds |
Senior Lien - Great Lakes Water Authority
Series 2014C-5 |
| 07/01/18 | 5.000% | | 2,165,000 | 2,259,113 |
| Series 2014H-1 |
| 10/01/19 | 5.000% | | 1,415,000 | 1,529,841 |
State Revolving Fund Drinking Water
Series 2012 |
| 10/01/18 | 5.000% | | 3,640,000 | 3,851,593 |
Trinity Health Corp.
Series 2015 |
| 12/01/19 | 5.000% | | 2,000,000 | 2,192,880 |
| Michigan Finance Authority(d) |
| Refunding Revenue Bonds |
Student Loan
Series 2014 25-A AMT |
| 11/01/18 | 5.000% | | 2,220,000 | 2,320,832 |
Student Loan
Series 2014 25-A AMT |
| 11/01/19 | 5.000% | | 1,250,000 | 1,338,000 |
| Royal Oak School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 05/01/18 | 5.000% | | 1,000,000 | 1,040,410 |
| Series 2014 |
| 05/01/19 | 5.000% | | 450,000 | 484,425 |
| Total | 15,017,094 |
| Minnesota 0.7% |
| Minnesota Housing Finance Agency |
| Refunding Revenue Bonds |
Non-Ace Residential Housing
Series 2016S (GNMA) |
| 07/01/46 | 3.500% | | 8,135,000 | 8,544,190 |
| Minnesota Housing Finance Agency(d) |
| Refunding Revenue Bonds |
Residential Housing
Series 2014C (GNMA) AMT |
| 07/01/19 | 1.800% | | 1,565,000 | 1,577,004 |
| Total | 10,121,194 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 15 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Mississippi 0.3% |
| Mississippi Development Bank |
| Refunding Revenue Bonds |
Jackson Public School District Project
Series 2015A |
| 04/01/19 | 5.000% | | 1,250,000 | 1,334,675 |
Jackson Public School District Project
Series 2015A |
| 04/01/20 | 5.000% | | 1,000,000 | 1,096,320 |
| State of Mississippi |
| Revenue Bonds |
| Series 2015E |
| 10/15/18 | 4.000% | | 2,080,000 | 2,168,171 |
| Total | 4,599,166 |
| Missouri 1.4% |
| City of St. Louis Airport |
| Refunding Revenue Bonds |
Lambert-St. Louis International Airport
Series 2013 |
| 07/01/17 | 5.000% | | 715,000 | 719,962 |
Lambert-St. Louis International Airport
Series 2013 |
| 07/01/18 | 5.000% | | 765,000 | 798,714 |
| Kansas City Planned Industrial Expansion Authority |
| Revenue Bonds |
2nd & DE Apartments
Series 2016 |
| 12/01/18 | 1.500% | | 11,430,000 | 11,443,945 |
| Missouri Joint Municipal Electric Utility Commission |
| Refunding Revenue Bonds |
| Series 2014 |
| 01/01/20 | 5.000% | | 7,825,000 | 8,557,576 |
| Total | 21,520,197 |
| Nebraska 1.7% |
| Central Plains Energy Project |
| Refunding Revenue Bonds |
| Series 2014 (Royal Bank of Canada) |
| 08/01/39 | 5.000% | | 14,500,000 | 15,733,370 |
| Nebraska Investment Finance Authority |
| Revenue Bonds |
| Series 2014A |
| 03/01/44 | 3.000% | | 2,515,000 | 2,568,896 |
| Nebraska Public Power District |
| Refunding Revenue Bonds |
| Series 2014 |
| 01/01/19 | 5.000% | | 2,000,000 | 2,131,140 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Public Power Generation Agency |
| Refunding Revenue Bonds |
Whelan Energy Center Unit
Series 2015 |
| 01/01/19 | 5.000% | | 2,250,000 | 2,385,518 |
Whelan Energy Center Unit
Series 2015 |
| 01/01/20 | 5.000% | | 3,030,000 | 3,293,640 |
| Total | 26,112,564 |
| Nevada 2.7% |
| Clark County School District |
| Limited General Obligation Refunding Bonds |
| Series 2014A |
| 06/15/18 | 5.000% | | 10,000,000 | 10,442,500 |
| Unlimited General Obligation Refunding Bonds |
| Series 2014B |
| 06/15/18 | 5.000% | | 10,000,000 | 10,442,500 |
| County of Clark Department of Aviation(d) |
| Refunding Revenue Bonds |
Las Vegas McCarran International Airport
Series 2017 AMT |
| 07/01/21 | 5.000% | | 2,500,000 | 2,838,650 |
Las Vegas McCarran International Airport
Series 2017 AMT |
| 07/01/22 | 5.000% | | 2,240,000 | 2,581,914 |
| Subordinated Series 2017A-1 AMT |
| 07/01/22 | 5.000% | | 3,000,000 | 3,461,100 |
| County of Clark Department of Aviation |
| Revenue Bonds |
| Series 2014B |
| 07/01/18 | 5.000% | | 5,000,000 | 5,234,800 |
| County of Washoe(d) |
| Refunding Revenue Bonds |
Sierra Pacific Power
Series 2016S AMT |
| 08/01/31 | 1.500% | | 5,500,000 | 5,454,845 |
| Total | 40,456,309 |
| New Jersey 4.7% |
| New Jersey Building Authority |
| Refunding Revenue Bonds |
| Series 2013A |
| 06/15/17 | 5.000% | | 5,500,000 | 5,528,002 |
| Revenue Bonds |
| Series 2009A |
| 12/15/18 | 5.000% | | 2,695,000 | 2,809,025 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New Jersey Economic Development Authority(b) |
| Refunding Revenue Bonds |
NTS School Facilities
Series 2011C |
| 02/01/18 | 2.290% | | 8,895,000 | 8,936,895 |
| New Jersey Economic Development Authority |
| Refunding Revenue Bonds |
School Facilities Construction
Escrowed to Maturity Series 2014 |
| 06/15/18 | 5.000% | | 1,400,000 | 1,463,966 |
| Revenue Bonds |
School Facilities Construction
Series 2010 Escrowed to Maturity |
| 12/15/17 | 5.000% | | 4,260,000 | 4,370,760 |
| Unrefunded Revenue Bonds |
School Facilities Construction
Escrowed to Maturity Series 2010 |
| 12/15/17 | 5.000% | | 175,000 | 179,538 |
School Facilities Construction
Series 2014 |
| 06/15/18 | 5.000% | | 3,600,000 | 3,711,384 |
| New Jersey Health Care Facilities Financing Authority |
| Refunding Revenue Bonds |
Princeton HealthCare System
Series 2016 |
| 07/01/18 | 5.000% | | 540,000 | 562,955 |
Princeton HealthCare System
Series 2016 |
| 07/01/19 | 5.000% | | 525,000 | 563,929 |
Princeton HealthCare System
Series 2016 |
| 07/01/20 | 5.000% | | 650,000 | 716,437 |
Princeton HealthCare System
Series 2016 |
| 07/01/21 | 5.000% | | 750,000 | 844,485 |
| New Jersey Higher Education Student Assistance Authority(d) |
| Revenue Bonds |
| Senior Series 2013-1A AMT |
| 12/01/17 | 5.000% | | 2,780,000 | 2,832,598 |
| Senior Series 2015-1A AMT |
| 12/01/17 | 5.000% | | 2,000,000 | 2,037,840 |
| Senior Series 2015-1A AMT |
| 12/01/18 | 5.000% | | 4,250,000 | 4,451,875 |
| Series 2016-1A AMT |
| 12/01/18 | 5.000% | | 645,000 | 675,638 |
| Series 2016-1A AMT |
| 12/01/20 | 5.000% | | 1,250,000 | 1,359,812 |
Student Loan
Series 2012-1A AMT |
| 12/01/18 | 5.000% | | 2,480,000 | 2,597,800 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New Jersey Housing & Mortgage Finance Agency(e) |
| Refunding Revenue Bonds |
| Series 2017B |
| 05/01/21 | 2.000% | | 7,675,000 | 7,702,476 |
| New Jersey Transit Corp |
| Revenue Bonds |
Grant Anticipation Note
Series 2014A |
| 09/15/18 | 5.000% | | 3,500,000 | 3,639,895 |
| New Jersey Transit Corp. |
| Certificate of Participation |
Federal Transit Administration Grants
Subordinated Series 2005A Escrowed to Maturity (NPFGC) |
| 09/15/17 | 5.000% | | 8,770,000 | 8,908,215 |
| New Jersey Transportation Trust Fund Authority |
| Revenue Bonds |
Transportation System
Series 1999A |
| 06/15/20 | 5.750% | | 5,000,000 | 5,399,450 |
| State of New Jersey |
| Certificate of Participation |
Equipment Lease Purchase
Escrowed to Maturity Series 2008A |
| 06/15/17 | 5.000% | | 1,935,000 | 1,945,978 |
| Total | 71,238,953 |
| New York 17.4% |
| Alexandria Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/27/17 | 1.500% | | 6,200,000 | 6,201,922 |
| Beaver River Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/29/17 | 2.000% | | 9,429,185 | 9,440,029 |
| Center Moriches Union Free School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 08/09/17 | 1.500% | | 5,000,000 | 5,001,350 |
| City of Glen Cove |
| Limited General Obligation Notes |
| BAN Series 2017A |
| 04/05/18 | 2.250% | | 9,988,460 | 10,042,897 |
| City of New York |
| Subordinated Unlimited General Obligation Bonds |
| Series 2004H-B |
| 03/01/19 | 5.000% | | 8,500,000 | 9,109,705 |
| Unlimited General Obligation Bonds |
| Series 2013E |
| 08/01/18 | 5.000% | | 5,960,000 | 6,257,404 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 17 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Unlimited General Obligation Refunding Bonds |
| Series 2012F |
| 08/01/18 | 5.000% | | 1,675,000 | 1,758,583 |
| City of Yonkers |
| Limited General Obligation Refunding Bonds |
| Series 2015D |
| 08/01/17 | 3.000% | | 2,045,000 | 2,054,877 |
| Series 2015D |
| 08/01/18 | 4.000% | | 2,970,000 | 3,068,188 |
| County of Broome(e) |
| Limited General Obligation Notes |
| BAN Series 2017 |
| 05/04/18 | 2.500% | | 10,000,000 | 10,119,300 |
| County of Monroe |
| Limited General Obligation Bonds |
| Series 2016B |
| 06/01/18 | 5.000% | | 4,185,000 | 4,356,543 |
| Series 2016B |
| 06/01/19 | 5.000% | | 5,200,000 | 5,592,340 |
| County of Rockland |
| Limited General Obligation Bonds |
| Series 2014A (AGM) |
| 03/01/18 | 5.000% | | 1,825,000 | 1,880,790 |
| Series 2014A (AGM) |
| 03/01/19 | 5.000% | | 2,000,000 | 2,123,140 |
| Edwards-Knox Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/27/17 | 2.000% | | 4,555,000 | 4,559,660 |
| Erie County Industrial Development Agency (The) |
| Revenue Bonds |
| Series 2012 |
| 05/01/17 | 5.000% | | 3,000,000 | 3,001,098 |
| Fillmore Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/29/17 | 2.000% | | 7,927,904 | 7,935,832 |
| Harpursville Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/21/17 | 1.750% | | 14,705,000 | 14,717,646 |
| Housing Development Corp. |
| Refunding Revenue Bonds |
| Series 2015G-2 |
| 11/01/19 | 1.450% | | 2,500,000 | 2,511,525 |
| Metropolitan Transportation Authority |
| Revenue Bonds |
| Series 2005A (AMBAC) |
| 11/15/18 | 5.500% | | 5,000,000 | 5,342,150 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2008A |
| 11/15/18 | 5.000% | | 2,125,000 | 2,254,157 |
| Series 2012E |
| 11/15/17 | 5.000% | | 1,000,000 | 1,022,730 |
Transportation
Series 2005G |
| 11/15/18 | 5.000% | | 2,900,000 | 3,076,262 |
Transportation
Series 2010D |
| 11/15/18 | 5.000% | | 1,890,000 | 2,004,874 |
Transportation
Series 2014B |
| 11/15/18 | 5.000% | | 1,000,000 | 1,060,780 |
| Mount Markham Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/28/17 | 2.000% | | 3,900,000 | 3,903,510 |
| New York City Industrial Development Agency(d) |
| Refunding Revenue Bonds |
Senior Trips
Series 2012A AMT |
| 07/01/19 | 5.000% | | 1,730,000 | 1,830,686 |
Trips Obligated Group
Senior Series 2012A AMT |
| 07/01/18 | 5.000% | | 4,655,000 | 4,812,944 |
| New York State Thruway Authority |
| Revenue Bonds |
| Series 2007H (NPFGC) |
| 01/01/19 | 5.000% | | 6,240,000 | 6,409,541 |
| Series 2013A |
| 05/01/19 | 5.000% | | 10,000,000 | 10,761,500 |
| Series 2014J |
| 01/01/19 | 5.000% | | 1,200,000 | 1,277,028 |
| New York State Urban Development Corp. |
| Refunding Revenue Bonds |
Personal Income Tax
Series 2017 |
| 03/15/24 | 5.000% | | 5,000,000 | 6,025,100 |
State Personal Income Tax
Series 2014 |
| 03/15/19 | 5.000% | | 10,000,000 | 10,737,400 |
| New York Transportation Development Corp.(d) |
| Refunding Revenue Bonds |
American Airlines, Inc.
Series 2016 AMT |
| 08/01/17 | 5.000% | | 4,000,000 | 4,027,120 |
American Airlines, Inc.
Series 2016 AMT |
| 08/01/18 | 5.000% | | 5,000,000 | 5,184,500 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Terminal One Group Association
Series 2015 AMT |
| 01/01/21 | 5.000% | | 5,500,000 | 6,120,950 |
| Ogdensburg Enlarged City School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/21/17 | 2.000% | | 15,000,000 | 15,015,935 |
| Port Authority of New York & New Jersey(d) |
| Revenue Bonds |
167th
Series 2011 AMT |
| 09/15/19 | 5.000% | | 5,000,000 | 5,436,750 |
Consolidated 172nd
Series 2012 AMT |
| 10/01/17 | 5.000% | | 5,000,000 | 5,086,300 |
| State of New York Mortgage Agency(d) |
| Revenue Bonds |
| 55th Series 2017 AMT |
| 04/01/19 | 1.500% | | 585,000 | 585,164 |
| 55th Series 2017 AMT |
| 10/01/19 | 1.650% | | 845,000 | 845,896 |
| 55th Series 2017 AMT |
| 04/01/20 | 1.750% | | 960,000 | 960,950 |
| 55th Series 2017 AMT |
| 10/01/20 | 1.800% | | 1,725,000 | 1,726,121 |
| 55th Series 2017 AMT |
| 04/01/21 | 1.950% | | 1,815,000 | 1,820,136 |
| 55th Series 2017 AMT |
| 10/01/21 | 2.050% | | 505,000 | 507,015 |
| Ticonderoga Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 08/04/17 | 1.500% | | 4,000,000 | 4,000,480 |
| Town of Oyster Bay |
| General Obligation Limited Notes |
| BAN Series 2017A |
| 06/01/18 | 3.500% | | 10,000,000 | 10,069,000 |
| General Obligation Unlimited Notes |
| BAN Series 2017B |
| 02/02/18 | 3.500% | | 1,650,000 | 1,663,118 |
| Limited General Obligation Notes |
| BAN Series 2016D |
| 06/28/17 | 3.875% | | 3,000,000 | 3,003,570 |
| Town of Stillwater |
| Limited General Obligation Notes |
| BAN Series 2016 |
| 06/08/17 | 2.000% | | 2,500,000 | 2,501,647 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| TSASC, Inc. |
| Refunding Revenue Bonds |
| Series 2017A |
| 06/01/19 | 4.000% | | 2,000,000 | 2,092,640 |
| Series 2017A |
| 06/01/20 | 5.000% | | 1,000,000 | 1,092,320 |
| Utica School District |
| Unlimited General Obligation Notes |
| RAN Series 2016 |
| 06/23/17 | 2.000% | | 10,000,000 | 10,006,518 |
| Weedsport Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/14/17 | 1.500% | | 5,744,000 | 5,744,517 |
| Westchester County Healthcare Corp. |
| Revenue Bonds |
Senior Lien
Series 2010B |
| 11/01/19 | 5.000% | | 3,135,000 | 3,385,800 |
| Total | 261,127,938 |
| North Carolina 0.7% |
| North Carolina Eastern Municipal Power Agency |
| Prerefunded 01/01/18 Revenue Bonds |
| Series 2008A (AGM) |
| 01/01/19 | 5.250% | | 3,740,000 | 3,850,218 |
| North Carolina Housing Finance Agency(d) |
| Refunding Revenue Bonds |
| Series 2016-37A AMT |
| 07/01/39 | 3.500% | | 2,500,000 | 2,616,900 |
| State of North Carolina |
| Revenue Bonds |
Grant Anticipation Revenue Vehicle
Series 2007 (NPFGC) |
| 03/01/18 | 5.000% | | 4,500,000 | 4,515,435 |
| Total | 10,982,553 |
| Ohio 0.6% |
| Ohio Housing Finance Agency |
| Revenue Bonds |
| Series 2010-1 (GNMA / FNMA) |
| 11/01/28 | 5.000% | | 960,000 | 998,170 |
| State of Ohio |
| Refunding Revenue Bonds |
| Series 2014B |
| 12/15/19 | 5.000% | | 5,000,000 | 5,503,650 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 19 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| State of Ohio(d) |
| Revenue Bonds |
Ohio Water Development Authority Waste Management
Series 2015 AMT |
| 11/01/22 | 1.700% | | 2,980,000 | 2,981,460 |
| Total | 9,483,280 |
| Oklahoma 0.6% |
| Cleveland County Educational Facilities Authority |
| Revenue Bonds |
Moore Public Schools Project
Series 2016 |
| 06/01/19 | 5.000% | | 3,000,000 | 3,225,810 |
Moore Public Schools Project
Series 2016 |
| 06/01/20 | 5.000% | | 500,000 | 552,105 |
Norman Public Schools Project
Series 2014 |
| 07/01/18 | 5.000% | | 2,400,000 | 2,505,768 |
| Norman Regional Hospital Authority |
| Refunding Revenue Bonds |
| Series 2016 |
| 09/01/18 | 4.000% | | 800,000 | 827,064 |
| Series 2016 |
| 09/01/19 | 4.000% | | 1,005,000 | 1,059,401 |
| Total | 8,170,148 |
| Pennsylvania 4.1% |
| Commonwealth of Pennsylvania |
| Unlimited General Obligation Bonds |
| 1st Series 2012 |
| 06/01/19 | 5.000% | | 5,650,000 | 6,090,700 |
| 1st Series 2013 |
| 04/01/21 | 5.000% | | 5,000,000 | 5,644,200 |
| Unlimited General Obligation Refunding Bonds |
| 2nd Series 2009 |
| 07/01/19 | 5.000% | | 10,980,000 | 11,867,953 |
| County of Allegheny |
| Unlimited General Obligation Refunding Bonds |
| Series 2014C-73 |
| 12/01/18 | 5.000% | | 6,650,000 | 7,052,391 |
| Monroeville Finance Authority |
| Revenue Bonds |
| Series 2012 |
| 02/15/18 | 4.000% | | 1,250,000 | 1,280,113 |
| Montgomery County Industrial Development Authority |
| Refunding Revenue Bonds |
Albert Einstein HealthCare Network
Series 2015 |
| 01/15/18 | 5.000% | | 750,000 | 766,905 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Albert Einstein HealthCare Network
Series 2015 |
| 01/15/19 | 5.000% | | 1,000,000 | 1,051,760 |
| Pennsylvania Economic Development Financing Authority(b),(d) |
| Revenue Bonds |
Waste Management, Inc. Project
Series 2014 AMT |
| 07/01/41 | 2.250% | | 2,775,000 | 2,805,053 |
| Pennsylvania Housing Finance Agency |
| Refunding Revenue Bonds |
| Series 2016-119 |
| 10/01/41 | 3.500% | | 5,790,000 | 6,045,223 |
| Series 2016-120 |
| 10/01/46 | 3.500% | | 7,110,000 | 7,460,594 |
| Pennsylvania Turnpike Commission(b) |
| Revenue Bonds |
| Series 2013B |
| 12/01/19 | 1.640% | | 3,070,000 | 3,088,144 |
| Pittsburgh Public Parking Authority |
| Refunding Revenue Bonds |
System
Series 2015A |
| 12/01/18 | 4.000% | | 1,750,000 | 1,824,970 |
| School District of Philadelphia (The) |
| Unlimited General Obligation Refunding Bonds |
| Series 2015D |
| 09/01/19 | 5.000% | | 3,750,000 | 4,000,350 |
| State Public School Building Authority |
| Refunding Revenue Bonds |
The School District of Philadelphia Project
Series 2015 |
| 06/01/19 | 5.000% | | 2,890,000 | 3,052,562 |
| Total | 62,030,918 |
| Rhode Island 0.4% |
| Rhode Island Health & Educational Building Corp. |
| Refunding Revenue Bonds |
Hospital Financing - Lifespan Obligation
Series 2016G |
| 05/15/18 | 5.000% | | 1,250,000 | 1,293,563 |
Hospital Financing - Lifespan Obligation
Series 2016G |
| 05/15/19 | 5.000% | | 1,500,000 | 1,594,890 |
Hospital Financing - Lifespan Obligation
Series 2016G |
| 05/15/22 | 5.000% | | 1,250,000 | 1,394,687 |
| Rhode Island Housing & Mortgage Finance Corp. |
| Revenue Bonds |
| Series 2016 |
| 10/01/46 | 3.500% | | 1,755,000 | 1,822,655 |
| Total | 6,105,795 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| South Carolina 1.5% |
| Berkeley County School District |
| Revenue Bonds |
| Series 2013 |
| 12/01/17 | 5.000% | | 500,000 | 511,990 |
| Piedmont Municipal Power Agency |
| Refunding Revenue Bonds |
| Series 2009A-3 |
| 01/01/18 | 5.000% | | 5,080,000 | 5,216,296 |
| Series 2009A-4 |
| 01/01/19 | 5.000% | | 6,645,000 | 7,065,828 |
| SCAGO Educational Facilities Corp. for Pickens School District |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/18 | 5.000% | | 1,100,000 | 1,165,483 |
| Series 2015 |
| 12/01/19 | 5.000% | | 1,250,000 | 1,365,350 |
| South Carolina State Housing Finance & Development Authority |
| Refunding Revenue Bonds |
| Series 2016B-1 |
| 07/01/43 | 3.500% | | 1,920,000 | 2,020,493 |
| South Carolina State Housing Finance & Development Authority(d) |
| Refunding Revenue Bonds |
| Series 2016B-2 AMT |
| 07/01/43 | 4.000% | | 4,790,000 | 5,076,155 |
| Total | 22,421,595 |
| Tennessee 1.2% |
| Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board |
| Revenue Bonds |
Ascension Senior Credit
Series 2016 |
| 11/15/30 | 1.550% | | 3,000,000 | 2,992,740 |
| Tennessee Energy Acquisition Corp. |
| Revenue Bonds |
| Series 2006C |
| 02/01/19 | 5.000% | | 9,920,000 | 10,509,347 |
| Series 2006C |
| 02/01/20 | 5.000% | | 3,820,000 | 4,145,235 |
| Total | 17,647,322 |
| Texas 5.1% |
| Central Texas Regional Mobility Authority |
| Refunding Revenue Bonds |
| Series 2016 |
| 01/01/21 | 5.000% | | 1,000,000 | 1,109,510 |
| Series 2016 |
| 01/01/22 | 5.000% | | 1,250,000 | 1,412,363 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of El Paso Water & Sewer |
| Refunding Revenue Bonds |
| Series 2014 |
| 03/01/19 | 4.000% | | 1,000,000 | 1,053,730 |
| City of San Antonio Electric & Gas Systems |
| Refunding Revenue Bonds |
Junior Lien
Series 2014 |
| 02/01/19 | 5.000% | | 13,865,000 | 14,831,945 |
| Dallas/Fort Worth International Airport(d) |
| Refunding Revenue Bonds |
| Series 2013E AMT |
| 11/01/18 | 5.000% | | 20,980,000 | 22,143,131 |
| Harris County-Houston Sports Authority |
| Refunding Revenue Bonds |
Senior Lien
Series 2014A |
| 11/15/19 | 5.000% | | 3,000,000 | 3,264,000 |
| Houston Independent School District |
| Revenue Bonds |
| Series 2014 |
| 09/15/19 | 5.000% | | 4,100,000 | 4,472,116 |
| New Hope Cultural Education Facilities Finance Corp. |
| Revenue Notes |
Construction Project
Series 2016 |
| 02/01/18 | 1.000% | | 2,320,000 | 2,315,174 |
| North Texas Tollway Authority |
| Refunding Revenue Bonds |
2nd Tier
Series 2015A |
| 01/01/19 | 5.000% | | 1,350,000 | 1,432,930 |
2nd Tier
Series 2015A |
| 01/01/20 | 5.000% | | 1,105,000 | 1,206,627 |
| Sam Rayburn Municipal Power Agency |
| Refunding Revenue Bonds |
| Series 2012 |
| 10/01/17 | 5.000% | | 4,895,000 | 4,976,306 |
| Tarrant County Cultural Education Facilities Finance Corp. |
| Refunding Revenue Bonds |
Trinity Terrace Project
Series 2014 |
| 12/01/18 | 2.500% | | 4,995,000 | 4,997,547 |
| Tarrant County Housing Finance Corp. |
| Revenue Bonds |
Multifamily Housing Reserve Quebec Apartments
Series 2016 |
| 08/01/18 | 1.000% | | 5,100,000 | 5,087,352 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 21 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Texas State University System |
| Refunding Revenue Bonds |
| Series 2017A |
| 03/15/20 | 5.000% | | 1,580,000 | 1,748,602 |
| Series 2017A |
| 03/15/21 | 5.000% | | 1,600,000 | 1,818,464 |
| University of Texas System (The) |
| Revenue Bonds |
| Series 2017J |
| 08/15/21 | 5.000% | | 3,895,000 | 4,482,639 |
| Total | 76,352,436 |
| Utah 0.1% |
| Utah Housing Corp.(d) |
| Refunding Revenue Bonds |
| Series 2015D-1 Class III (FHA) AMT |
| 01/01/19 | 1.850% | | 1,805,000 | 1,812,707 |
| Virgin Islands, U.S. 0.2% |
| Virgin Islands Public Finance Authority(a),(g) |
| Revenue Bonds |
| Series 2015 |
| 09/01/17 | 4.000% | | 500,000 | 503,350 |
| Series 2015 |
| 09/01/18 | 5.000% | | 1,720,000 | 1,784,122 |
| Series 2015 |
| 09/01/20 | 5.000% | | 750,000 | 809,797 |
| Total | 3,097,269 |
| Virginia 1.6% |
| Louisa Industrial Development Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 11/01/35 | 1.750% | | 7,000,000 | 7,064,960 |
| Wise County Industrial Development Authority |
| Revenue Bonds |
| Series 2015A |
| 10/01/40 | 2.150% | | 11,875,000 | 12,005,150 |
Virginia Electric & Power Co.
Series 2015A |
| 11/01/40 | 1.875% | | 5,000,000 | 4,992,750 |
| Total | 24,062,860 |
| Washington 0.3% |
| Energy Northwest |
| Refunding Revenue Bonds |
Wind Project
Series 2014 |
| 07/01/17 | 5.000% | | 1,000,000 | 1,006,830 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
Wind Project
Series 2014 |
| 07/01/18 | 5.000% | | 1,425,000 | 1,487,800 |
| Washington State Housing Finance Commission(d) |
| Refunding Revenue Bonds |
Single Family Program
Series 2017 AMT |
| 06/01/39 | 4.000% | | 1,200,000 | 1,287,324 |
| Washington State Housing Finance Commission |
| Revenue Bonds |
| Series 2010A (GNMA / FNMA / FHLMC) |
| 10/01/28 | 4.700% | | 365,000 | 383,235 |
| Total | 4,165,189 |
| Wyoming 0.2% |
| Wyoming Community Development Authority(d) |
| Refunding Revenue Bonds |
| Series 2016-1 AMT |
| 12/01/38 | 3.500% | | 2,175,000 | 2,281,336 |
Total Municipal Bonds
(Cost $1,270,089,208) | 1,269,065,545 |
|
| Municipal Short Term 13.8% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| California 0.3% |
| California Pollution Control Financing Authority(a) |
| Refunding Revenue Bonds |
Republic Services, Inc.
Series 2010A AMT |
| 08/01/23 | 1.250% | | 4,000,000 | 4,000,000 |
| Connecticut 0.7% |
| City of Hartford |
| Unlimited General Obligation Notes |
| TAN Series 2017 |
| 10/31/17 | 1.430% | | 5,165,000 | 5,192,684 |
| City of New Haven |
| Unlimited General Obligation Notes |
| TAN Series 2016 |
| 05/18/17 | 1.180% | | 6,000,000 | 6,004,348 |
| Total | 11,197,032 |
| Illinois 0.0% |
| Illinois Finance Authority |
| Refunding Revenue Bonds |
Swedish Covenant Hospital
Series 2016 |
| 08/15/17 | 1.450% | | 500,000 | 505,230 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Short Term (continued) |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Indiana 1.0% |
| Indiana Finance Authority(b),(d) |
| Revenue Bonds |
Republic Services, Inc. Project
Series 2010A AMT |
| 05/01/34 | 1.200% | | 8,100,000 | 8,100,000 |
Republic Services, Inc. Project
Series 2012 AMT |
| 12/01/37 | 1.200% | | 6,900,000 | 6,900,000 |
| Total | 15,000,000 |
| Kentucky 0.4% |
| Kentucky Public Transportation Infrastructure Authority |
| Revenue Bonds |
Downtown Crossing Project
BAN Subordinated Series 2013 |
| 07/01/17 | 1.680% | | 5,550,000 | 5,581,913 |
| New Jersey 1.5% |
| City of Wildwood |
| Unlimited General Obligation Notes |
| Series 2016 |
| 10/20/17 | 1.070% | | 15,561,000 | 15,628,690 |
| Mount Holly Township School District |
| Unlimited General Obligation Notes |
| Series 2016 |
| 07/25/17 | 1.280% | | 7,000,000 | 7,007,630 |
| Total | 22,636,320 |
| New York 8.3% |
| Amherst Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 09/14/17 | 1.230% | | 4,350,000 | 4,362,267 |
| Center Moriches Union Free School District |
| Limited General Obligation Notes |
| TAN Series 2016 |
| 06/23/17 | 1.280% | | 7,500,000 | 7,502,341 |
| Cincinnatus Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/13/17 | 1.440% | | 8,630,732 | 8,631,509 |
| City of Lockport |
| Limited General Obligation Notes |
| BAN Series 2016 |
| 05/25/17 | 1.750% | | 7,198,171 | 7,199,318 |
| City of Long Beach |
| Limited General Obligation Notes |
| BAN Series 2016C |
| 09/15/17 | 1.490% | | 8,124,370 | 8,132,007 |
| Municipal Short Term (continued) |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| City of New York(b) |
| Unlimited General Obligation Bonds |
Fiscal 1995
Subordinated Series 2015F |
| 02/15/19 | 1.550% | | 6,250,000 | 6,246,000 |
| Gouverneur Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/28/17 | 1.170% | | 3,500,000 | 3,501,890 |
| Greater Southern Tier Board of Cooperative Educational Services District |
| Revenue Notes |
| RAN Series 2017 |
| 06/30/17 | 1.330% | | 10,000,000 | 10,011,400 |
| Margaretville Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/30/17 | 1.440% | | 2,039,806 | 2,039,969 |
| Northport-East Northport Union Free School District |
| Unlimited General Obligation Notes |
| TAN Series 2016 |
| 06/27/17 | 1.030% | | 10,000,000 | 10,007,475 |
| Seaford Union Free School District |
| Limited General Obligation Notes |
| TAN Series 2016 |
| 06/22/17 | 1.330% | | 4,000,000 | 4,003,895 |
| Shoreham-Wading River Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/29/17 | 1.300% | | 10,000,000 | 10,011,600 |
| Sidney Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/28/17 | 1.390% | | 5,000,000 | 5,001,200 |
| Solvay Union Free School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/20/17 | 0.880% | | 3,400,000 | 3,408,602 |
| South Kortright Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2017 |
| 07/28/17 | 1.300% | | 3,500,000 | 3,501,750 |
| Thousand Islands Central School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 06/30/17 | 1.300% | | 4,150,000 | 4,154,856 |
| Tompkins-Seneca-Tioga Board of Cooperative Educational Services |
| Revenue Notes |
| RAN Series 2016 |
| 06/23/17 | 1.290% | | 5,440,000 | 5,445,743 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 23 |
Portfolio of Investments (continued)
April 30, 2017
| Municipal Short Term (continued) |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Town of Eden |
| Limited General Obligation Notes |
| BAN Series 2017 |
| 03/08/18 | 1.430% | | 8,440,180 | 8,480,609 |
| Utica School District |
| Unlimited General Obligation Notes |
| BAN Series 2016 |
| 07/21/17 | 1.680% | | 13,757,000 | 13,766,217 |
| Total | 125,408,648 |
| Ohio 0.2% |
| Deer Park Community City School District |
| Unlimited General Obligation Notes |
| BAN Series 2017 |
| 07/13/17 | 1.000% | | 3,750,000 | 3,757,763 |
| Oklahoma 0.1% |
| Norman Regional Hospital Authority |
| Refunding Revenue Bonds |
| Series 2016 |
| 09/01/17 | 1.220% | | 1,000,000 | 1,006,030 |
| Pennsylvania 0.6% |
| Pennsylvania Economic Development Financing Authority(d) |
| Refunding Revenue Bonds |
| VRDN Series 2017A AMT |
| 04/01/19 | 1.350% | | 2,000,000 | 2,000,000 |
| Pennsylvania Economic Development Financing Authority(b),(d),(e) |
| Revenue Bonds |
Waste Management, Inc. Project
VRDN Series 2013 AMT |
| 08/01/45 | 1.200% | | 6,000,000 | 6,000,000 |
| Municipal Short Term (continued) |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| State Public School Building Authority |
| Refunding Revenue Bonds |
Philadelphia School District
Series 2016 |
| 06/01/17 | 1.310% | | 1,000,000 | 1,003,355 |
| Total | 9,003,355 |
| Wisconsin 0.7% |
| Waupun School District |
| Revenue Notes |
| BAN Series 2017 |
| 08/15/17 | 1.350% | | 10,000,000 | 10,011,800 |
Total Municipal Short Term
(Cost $208,288,416) | 208,108,091 |
| Money Market Funds 0.4% |
| | Shares | Value ($) |
| Dreyfus Tax-Exempt Cash Management Fund, Institutional Shares, 0.660%(h) | 6,306,266 | 6,306,266 |
Total Money Market Funds
(Cost $6,306,266) | 6,306,266 |
Total Investments
(Cost $1,535,563,890) | 1,534,359,902 |
| Other Assets & Liabilities, Net | | (30,680,641) |
| Net Assets | $1,503,679,261 |
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At April 30, 2017, the value of these securities amounted to $27,009,466 which represents 1.80% of net assets. |
| (b) | Variable rate security. |
| (c) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (d) | Income from this security may be subject to alternative minimum tax. |
| (e) | Represents a security purchased on a when-issued basis. |
| (f) | Zero coupon bond. |
| (g) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At April 30, 2017, the value of these securities amounted to $3,097,269 which represents 0.21% of net assets. |
| (h) | The rate shown is the seven-day current annualized yield at April 30, 2017. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| AMT | Alternative Minimum Tax |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
April 30, 2017
Abbreviation Legend (continued)
| BAM | Build America Mutual Assurance Co. |
| BAN | Bond Anticipation Note |
| FHA | Federal Housing Authority |
| FHLMC | Federal Home Loan Mortgage Corporation |
| FNMA | Federal National Mortgage Association |
| GNMA | Government National Mortgage Association |
| NPFGC | National Public Finance Guarantee Corporation |
| TAN | Tax Anticipation Note |
| TCRS | Transferable Custody Receipts |
| VRDN | Variable Rate Demand Note |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date (including NAV for open-end mutual funds). Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 25 |
Portfolio of Investments (continued)
April 30, 2017
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at April 30, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Floating Rate Notes | — | 50,880,000 | — | 50,880,000 |
| Municipal Bonds | — | 1,269,065,545 | — | 1,269,065,545 |
| Municipal Short Term | — | 208,108,091 | — | 208,108,091 |
| Money Market Funds | 6,306,266 | — | — | 6,306,266 |
| Total Investments | 6,306,266 | 1,528,053,636 | — | 1,534,359,902 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 26 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities
April 30, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $1,535,563,890 |
| Total investments, at cost | 1,535,563,890 |
| Investments, at value | |
| Unaffiliated issuers, at value | 1,534,359,902 |
| Total investments, at value | 1,534,359,902 |
| Receivable for: | |
| Investments sold | 666,610 |
| Capital shares sold | 1,979,635 |
| Interest | 17,727,234 |
| Expense reimbursement due from Investment Manager | 5,102 |
| Prepaid expenses | 1,869 |
| Other assets | 13,573 |
| Total assets | 1,554,753,925 |
| Liabilities | |
| Due to custodian | 260,543 |
| Payable for: | |
| Investments purchased | 12,110,696 |
| Investments purchased on a delayed delivery basis | 34,794,400 |
| Capital shares purchased | 1,974,780 |
| Distributions to shareholders | 1,554,424 |
| Management services fees | 17,439 |
| Distribution and/or service fees | 1,135 |
| Transfer agent fees | 159,811 |
| Compensation of board members | 156,249 |
| Other expenses | 45,187 |
| Total liabilities | 51,074,664 |
| Net assets applicable to outstanding capital stock | $1,503,679,261 |
| Represented by | |
| Paid in capital | 1,505,383,371 |
| Undistributed net investment income | 1,157,394 |
| Accumulated net realized loss | (1,657,516) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | (1,203,988) |
| Total - representing net assets applicable to outstanding capital stock | $1,503,679,261 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 27 |
Statement of Assets and Liabilities (continued)
April 30, 2017
| Class A | |
| Net assets | $106,750,638 |
| Shares outstanding | 10,306,948 |
| Net asset value per share | $10.36 |
| Maximum offering price per share(a) | $10.46 |
| Class B | |
| Net assets | $16,455 |
| Shares outstanding | 1,591 |
| Net asset value per share | $10.34 |
| Class C | |
| Net assets | $14,630,058 |
| Shares outstanding | 1,413,717 |
| Net asset value per share | $10.35 |
| Class R4 | |
| Net assets | $1,041,101 |
| Shares outstanding | 100,510 |
| Net asset value per share | $10.36 |
| Class R5 | |
| Net assets | $14,451,649 |
| Shares outstanding | 1,396,110 |
| Net asset value per share | $10.35 |
| Class Y | |
| Net assets | $10,008 |
| Shares outstanding | 966 |
| Net asset value per share | $10.36 |
| Class Z | |
| Net assets | $1,366,779,352 |
| Shares outstanding | 131,939,692 |
| Net asset value per share | $10.36 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 1.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 28 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Statement of Operations
Year Ended April 30, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $25,475 |
| Interest | 26,014,740 |
| Total income | 26,040,215 |
| Expenses: | |
| Management services fees | 7,003,233 |
| Distribution and/or service fees | |
| Class A | 294,110 |
| Class B | 828 |
| Class C | 169,256 |
| Transfer agent fees | |
| Class A | 204,476 |
| Class B | 149 |
| Class C | 29,522 |
| Class R4 | 844 |
| Class R5 | 9,158 |
| Class Z | 2,618,701 |
| Compensation of board members | 53,884 |
| Custodian fees | 13,048 |
| Printing and postage fees | 32,915 |
| Registration fees | 160,774 |
| Audit fees | 29,915 |
| Legal fees | 21,246 |
| Compensation of chief compliance officer | 378 |
| Other | 13,051 |
| Total expenses | 10,655,488 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (2,644,451) |
| Expense reduction | (40) |
| Total net expenses | 8,010,997 |
| Net investment income | 18,029,218 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (633,900) |
| Futures contracts | (78,783) |
| Net realized loss | (712,683) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (9,950,490) |
| Net change in unrealized appreciation (depreciation) | (9,950,490) |
| Net realized and unrealized loss | (10,663,173) |
| Net increase in net assets resulting from operations | $7,366,045 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 29 |
Statement of Changes in Net Assets
| | Year Ended
April 30, 2017 (a) | Year Ended
April 30, 2016 |
| Operations | | |
| Net investment income | $18,029,218 | $15,913,802 |
| Net realized gain (loss) | (712,683) | 192,325 |
| Net change in unrealized appreciation (depreciation) | (9,950,490) | 1,836,081 |
| Net increase in net assets resulting from operations | 7,366,045 | 17,942,208 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (1,090,308) | (834,469) |
| Class B | (98) | (2) |
| Class C | (30,979) | (304) |
| Class R4 | (6,089) | (6,078) |
| Class R5 | (210,368) | (207,972) |
| Class Y | (23) | — |
| Class Z | (17,749,792) | (14,875,169) |
| Total distributions to shareholders | (19,087,657) | (15,923,994) |
| Decrease in net assets from capital stock activity | (278,087,530) | (75,957,436) |
| Total decrease in net assets | (289,809,142) | (73,939,222) |
| Net assets at beginning of year | 1,793,488,403 | 1,867,427,625 |
| Net assets at end of year | $1,503,679,261 | $1,793,488,403 |
| Undistributed net investment income | $1,157,394 | $2,215,833 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 30 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | April 30, 2017 (a) | April 30, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (b) | 6,366,818 | 65,879,168 | 4,413,168 | 45,946,467 |
| Distributions reinvested | 88,329 | 915,766 | 65,818 | 685,179 |
| Redemptions | (8,402,406) | (87,086,042) | (4,790,599) | (49,870,873) |
| Net decrease | (1,947,259) | (20,291,108) | (311,613) | (3,239,227) |
| Class B | | | | |
| Subscriptions | 2 | 18 | 961 | 10,002 |
| Distributions reinvested | 1 | 15 | — | — |
| Redemptions (b) | (11,432) | (117,674) | (10) | (106) |
| Net increase (decrease) | (11,429) | (117,641) | 951 | 9,896 |
| Class C | | | | |
| Subscriptions | 229,616 | 2,375,122 | 550,460 | 5,723,086 |
| Distributions reinvested | 1,582 | 16,334 | 15 | 158 |
| Redemptions | (648,322) | (6,709,101) | (752,943) | (7,836,025) |
| Net decrease | (417,124) | (4,317,645) | (202,468) | (2,112,781) |
| Class R4 | | | | |
| Subscriptions | 113,247 | 1,169,951 | 58,008 | 603,072 |
| Distributions reinvested | 577 | 5,975 | 575 | 5,989 |
| Redemptions | (65,491) | (679,453) | (60,923) | (634,700) |
| Net increase (decrease) | 48,333 | 496,473 | (2,340) | (25,639) |
| Class R5 | | | | |
| Subscriptions | 1,199,074 | 12,434,908 | 1,975,369 | 20,533,646 |
| Distributions reinvested | 20,280 | 210,211 | 19,968 | 207,868 |
| Redemptions | (1,949,281) | (20,258,463) | (1,311,922) | (13,660,915) |
| Net increase (decrease) | (729,927) | (7,613,344) | 683,415 | 7,080,599 |
| Class Y | | | | |
| Subscriptions | 966 | 10,000 | — | — |
| Net increase | 966 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 50,085,852 | 519,195,345 | 64,437,575 | 670,727,341 |
| Distributions reinvested | 114,029 | 1,182,672 | 84,231 | 877,035 |
| Redemptions | (73,973,871) | (766,632,282) | (71,971,692) | (749,274,660) |
| Net decrease | (23,773,990) | (246,254,265) | (7,449,886) | (77,670,284) |
| Total net decrease | (26,830,430) | (278,087,530) | (7,281,941) | (75,957,436) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 31 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income
(loss) | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class A |
| 4/30/2017 | $10.43 | 0.09 | (0.06) | 0.03 | (0.10) |
| 4/30/2016 | $10.42 | 0.07 | 0.01 | 0.08 | (0.07) |
| 4/30/2015 | $10.48 | 0.08 | (0.06) | 0.02 | (0.08) |
| 4/30/2014 | $10.54 | 0.10 | (0.06) | 0.04 | (0.10) |
| 4/30/2013 | $10.55 | 0.11 | (0.01) | 0.10 | (0.11) |
| Class B |
| 4/30/2017 | $10.42 | 0.01 | (0.07) | (0.06) | (0.02) |
| 4/30/2016 | $10.42 | (0.01) | 0.01 | 0.00 (d) | (0.00) (d) |
| 4/30/2015 | $10.47 | 0.00 (d) | (0.05) | (0.05) | (0.00) (d) |
| 4/30/2014 | $10.54 | 0.02 | (0.07) | (0.05) | (0.02) |
| 4/30/2013 | $10.55 | 0.03 | (0.01) | 0.02 | (0.03) |
| Class C |
| 4/30/2017 | $10.42 | 0.01 | (0.06) | (0.05) | (0.02) |
| 4/30/2016 | $10.42 | (0.01) | 0.01 | 0.00 (d) | (0.00) (d) |
| 4/30/2015 | $10.48 | 0.00 (d) | (0.06) | (0.06) | (0.00) (d) |
| 4/30/2014 | $10.54 | 0.02 | (0.06) | (0.04) | (0.02) |
| 4/30/2013 | $10.55 | 0.03 | (0.01) | 0.02 | (0.03) |
| Class R4 |
| 4/30/2017 | $10.43 | 0.12 | (0.07) | 0.05 | (0.12) |
| 4/30/2016 | $10.41 | 0.09 | 0.02 | 0.11 | (0.09) |
| 4/30/2015 | $10.47 | 0.11 | (0.06) | 0.05 | (0.11) |
| 4/30/2014 | $10.54 | 0.13 | (0.08) | 0.05 | (0.12) |
| 4/30/2013 (e) | $10.54 | 0.02 | (0.01) | 0.01 | (0.01) |
| Class R5 |
| 4/30/2017 | $10.42 | 0.13 | (0.07) | 0.06 | (0.13) |
| 4/30/2016 | $10.41 | 0.10 | 0.01 | 0.11 | (0.10) |
| 4/30/2015 | $10.47 | 0.12 | (0.06) | 0.06 | (0.12) |
| 4/30/2014 | $10.54 | 0.14 | (0.07) | 0.07 | (0.14) |
| 4/30/2013 (g) | $10.55 | 0.07 | (0.01) | 0.06 | (0.07) |
| Class Y |
| 4/30/2017 (h) | $10.35 | 0.02 | 0.01 (i) | 0.03 | (0.02) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 32 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income (loss)
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.10) | $10.36 | 0.26% | 0.86% | 0.71% (c) | 0.86% | 46% | $106,751 |
| (0.07) | $10.43 | 0.74% | 0.89% | 0.72% (c) | 0.64% | 37% | $127,769 |
| (0.08) | $10.42 | 0.22% | 0.89% | 0.73% (c) | 0.79% | 28% | $130,876 |
| (0.10) | $10.48 | 0.37% | 0.89% | 0.73% (c) | 0.94% | 31% | $165,777 |
| (0.11) | $10.54 | 0.96% | 0.89% | 0.73% (c) | 1.05% | 37% | $185,205 |
| |
| (0.02) | $10.34 | (0.58%) | 1.61% | 1.46% (c) | 0.06% | 46% | $16 |
| (0.00) (d) | $10.42 | 0.00% (d) | 1.65% | 1.47% (c) | (0.11%) | 37% | $136 |
| (0.00) (d) | $10.42 | (0.43%) | 1.64% | 1.48% (c) | 0.04% | 28% | $126 |
| (0.02) | $10.47 | (0.47%) | 1.64% | 1.48% (c) | 0.19% | 31% | $128 |
| (0.03) | $10.54 | 0.20% | 1.64% | 1.48% | 0.30% | 37% | $169 |
| |
| (0.02) | $10.35 | (0.48%) | 1.61% | 1.46% (c) | 0.11% | 46% | $14,630 |
| (0.00) (d) | $10.42 | 0.00% (d) | 1.64% | 1.47% (c) | (0.10%) | 37% | $19,074 |
| (0.00) (d) | $10.42 | (0.53%) | 1.64% | 1.48% (c) | 0.04% | 28% | $21,184 |
| (0.02) | $10.48 | (0.38%) | 1.64% | 1.48% (c) | 0.19% | 31% | $24,424 |
| (0.03) | $10.54 | 0.20% | 1.64% | 1.48% (c) | 0.30% | 37% | $27,730 |
| |
| (0.12) | $10.36 | 0.51% | 0.62% | 0.45% (c) | 1.15% | 46% | $1,041 |
| (0.09) | $10.43 | 1.09% | 0.64% | 0.47% (c) | 0.89% | 37% | $544 |
| (0.11) | $10.41 | 0.47% | 0.65% | 0.48% (c) | 1.04% | 28% | $568 |
| (0.12) | $10.47 | 0.53% | 0.64% | 0.48% (c) | 1.19% | 31% | $85 |
| (0.01) | $10.54 | 0.14% | 0.66% (f) | 0.48% (f) | 1.32% (f) | 37% | $2,044 |
| |
| (0.13) | $10.35 | 0.61% | 0.50% | 0.36% | 1.21% | 46% | $14,452 |
| (0.10) | $10.42 | 1.10% | 0.49% | 0.37% | 1.00% | 37% | $22,159 |
| (0.12) | $10.41 | 0.57% | 0.49% | 0.38% | 1.14% | 28% | $15,024 |
| (0.14) | $10.47 | 0.67% | 0.48% | 0.37% | 1.31% | 31% | $23,173 |
| (0.07) | $10.54 | 0.54% | 0.48% (f) | 0.39% (f) | 1.40% (f) | 37% | $522 |
| |
| (0.02) | $10.36 | 0.33% | 0.50% (f) | 0.31% (f) | 1.42% (f) | 46% | $10 |
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 33 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income
(loss) | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class Z |
| 4/30/2017 | $10.43 | 0.12 | (0.07) | 0.05 | (0.12) |
| 4/30/2016 | $10.42 | 0.09 | 0.01 | 0.10 | (0.09) |
| 4/30/2015 | $10.48 | 0.11 | (0.06) | 0.05 | (0.11) |
| 4/30/2014 | $10.54 | 0.13 | (0.06) | 0.07 | (0.13) |
| 4/30/2013 | $10.55 | 0.14 | (0.01) | 0.13 | (0.14) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Rounds to zero. |
| (e) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (f) | Annualized. |
| (g) | Class R5 shares commenced operations on November 8, 2012. Per share data and total return reflect activity from that date. |
| (h) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (i) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 34 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income (loss)
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.12) | $10.36 | 0.51% | 0.61% | 0.46% (c) | 1.11% | 46% | $1,366,779 |
| (0.09) | $10.43 | 0.99% | 0.64% | 0.47% (c) | 0.89% | 37% | $1,623,807 |
| (0.11) | $10.42 | 0.47% | 0.64% | 0.48% (c) | 1.04% | 28% | $1,699,650 |
| (0.13) | $10.48 | 0.62% | 0.64% | 0.48% (c) | 1.19% | 31% | $1,822,976 |
| (0.14) | $10.54 | 1.21% | 0.64% | 0.48% (c) | 1.30% | 37% | $1,829,096 |
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 35 |
Notes to Financial Statements
April 30, 2017
Note 1. Organization
Columbia Short Term Municipal Bond Fund (the Fund), a series of Columbia Funds Series Trust (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware statutory trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 1.00% based on the initial investment amount. 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 contingent deferred sales charge (CDSC) if the shares are sold within 18 months after purchase, charged as follows: 1.00% CDSC if redeemed within 12 months after purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase.
Class B shares are not subject to sales charges. The Fund no longer accepts investments by 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 certain other funds within the Columbia Family of Funds. Effective on or about July 17, 2017, Class B shares will automatically convert to Class A shares and the Fund will no longer accept investments by new or existing investors in Class B shares.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class R5 shares are not subject to sales charges and are generally available only to investors purchasing through authorized investment professionals and omnibus retirement plans.
Class Y shares are not subject to sales charges or distribution and service (12b-1) fees, and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
| 36 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities, currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract; therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers (including the Fund), potentially resulting in losses to the Fund.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 37 |
Notes to Financial Statements (continued)
April 30, 2017
and a counterparty that governs over-the-counter derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights if the counterparty fails to meet certain terms of the ISDA Master Agreement. In addition to considering counterparty credit risk, the Fund would consider terminating the derivatives contracts based on whether termination would result in a net liability owed from the counterparty.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve exposure of the Fund versus the benchmark. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are recorded as variation margin receivable or payable and are 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 in the Statement of Assets and Liabilities.
| 38 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Effects of derivative transactions in the financial statements
The following tables are intended to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table indicates the effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended April 30, 2017:
| Amount of realized gain (loss) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | (78,783) |
The following table is a summary of the average outstanding volume by derivative instrument for the year ended April 30, 2017:
| Derivative instrument | Average notional
amounts ($)* |
| Futures contracts — short | 0 |
| * | Based on the ending quarterly outstanding amounts for the year ended April 30, 2017. While there was no notional amount of futures contracts outstanding at any quarter end, the Fund did enter into futures contracts during the year ended; the gain (loss) associated with this activity is presented in the Statement of Operations. |
Delayed delivery securities
The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 39 |
Notes to Financial Statements (continued)
April 30, 2017
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains), 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, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X take effect on August 1, 2017. At this time, management is assessing the anticipated impact of these regulatory developments.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s average daily net assets that declines from 0.43% to 0.28% as the Fund’s net assets increase. The effective management services fee rate for the year ended April 30, 2017 was 0.42% of the Fund’s average daily net assets.
Other expenses
Other expenses are for, among other things, miscellaneous expenses of the Fund or the Board of Trustees, including payments to Board Services Corp., a company providing limited administrative services to the Fund and the Board of Trustees. That company’s expenses include boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses.
| 40 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Plan), these members of the Board of Trustees may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Plan. All amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Effective January 1, 2017, total transfer agency fees for Class R5 shares are subject to an annual limitation of not more than 0.075% of the average daily net assets attributable to Class R5 shares. Prior to January 1, 2017, total transfer agency fees for Class R5 shares were subject to an annual limitation of not more than 0.05% of the average daily net assets attributable to Class R5 shares. Total transfer agency fees for Class Y shares are subject to an annual limitation of not more than 0.025% of the average daily net assets attributable to Class Y shares.
For the year ended April 30, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.17 |
| Class B | 0.18 |
| Class C | 0.17 |
| Class R4 | 0.17 |
| Class R5 | 0.056 |
| Class Y | 0.025 (a) |
| Class Z | 0.17 |
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 41 |
Notes to Financial Statements (continued)
April 30, 2017
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended April 30, 2017, these minimum account balance fees reduced total expenses of the Fund by $40.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A shares of the Fund. Also under the Plans, the Fund pays a monthly service fee at the maximum annual rate of 0.25% of the average daily net assets attributable to Class B and Class C shares of the Fund and a monthly distribution fee at the maximum annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended April 30, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 24,865 |
| Class B | 55 |
| Class C | 1,524 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the periods disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rates as a percentage of the class’ average daily net assets:
| | September 1, 2016
through
August 31, 2017 | Prior to
September 1, 2016 |
| Class A | 0.700 | 0.72% |
| Class B | 1.450 | 1.47 |
| Class C | 1.450 | 1.47 |
| Class R4 | 0.450 | 0.47 |
| Class R5 | 0.360 | 0.36 |
| Class Y | 0.310* | - |
| Class Z | 0.450 | 0.47 |
| *Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through August 31, 2017. |
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend and interest expenses associated with securities sold short, inverse
| 42 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At April 30, 2017, these differences are primarily due to differing treatment for tax straddles, capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
The Fund did not have any permanent differences; therefore, no reclassifications were made to the Statement of Assets and Liabilities.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended April 30, 2017 | Year Ended April 30, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| — | 19,087,657 | — | 19,087,657 | — | 15,923,994 | — | 15,923,994 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At April 30, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
(depreciation) ($) |
| — | 2,866,212 | — | (1,623,482) | (1,203,988) |
At April 30, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
(depreciation) ($) |
| 1,535,563,890 | 3,348,069 | (4,552,057) | (1,203,988) |
The following capital loss carryforwards, determined at April 30, 2017, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended April 30, 2017, capital loss carryforwards utilized, expired unused and permanently lost were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| 602,849 | — | 645,924 | 374,709 | 1,623,482 | — | — | — |
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 43 |
Notes to Financial Statements (continued)
April 30, 2017
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $653,525,899 and $668,164,341, respectively, for the year ended April 30, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended April 30, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
New York geographic concentration risk
To the extent that the Fund concentrates its investments in the municipal securities issued by a particular state and political sub-divisions of the state, the Fund will be particularly affected by political and economic conditions and developments in such state in which it invests. The Fund may, therefore, have a greater risk than that of a municipal bond fund which is more geographically diversified. The value of the municipal securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
High-yield investments risk
Securities and other debt instruments held by the Fund that are rated below investment grade (commonly called "high-yield" or "junk" bonds) and unrated debt instruments of comparable quality expose the Fund to a greater risk of loss of principal and income than a fund that invests solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated debt instruments. High-yield debt instruments are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively
| 44 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
April 30, 2017
affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Municipal securities risk
Securities issued by a particular state and its instrumentalities are subject to the risk of unfavorable developments in such state. A municipal security can be significantly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes in a particular state’s (state and its instrumentalities’) financial, economic or other condition and prospects.
Shareholder concentration risk
At April 30, 2017, one unaffiliated shareholder of record owned 84.5% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid or more liquid positions, resulting in Fund losses and the Fund holding a higher percentage of less liquid or illiquid securities. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
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 quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the 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.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 45 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust and the Shareholders of Columbia Short Term Municipal Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia Short Term Municipal Bond Fund (the “Fund”, a series of Columbia Funds Series Trust) as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of April 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
June 21, 2017
| 46 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended April 30, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 100.00% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. Under current Board policy, Trustees not affiliated with the Investment Manager generally may serve through the end of the calendar year in which they reach wither the mandatory retirement age established by the Board or the fifteenth anniversary of the first Columbia Funds board meeting they attended as a member of the Board.
Independent trustees
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
George S. Batejan
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1953 | Trustee since 1/17 | Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016 | 124 | Advisory Board Member, University of Colorado Business School (Executive Committee, Nominating Committee and Governance Committee) since November 2015; former Chairman of the Board, NICSA (National Investment Company Services Association), 2014-2016; former Director, Intech Investment Management, 2011- 2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016 |
Kathleen Blatz
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 1/06 for RiverSource Funds and since 6/11 for Nations Funds | Attorney; specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993, which included service on the Tax and Financial Institutions and Insurance Committees; Member of the Board of the Minnesota Sports Facilities Authority since 2017 | 126 | Trustee, BlueCross BlueShield of Minnesota (Chair of the Business Development Committee) since 2009; Chair of the Robina Foundation since August 2013 |
Edward J. Boudreau, Jr.
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, E.J. Boudreau & Associates (consulting) since 2000; FINRA Industry Arbitrator, 2002-present; Chairman and Chief Executive Officer, John Hancock Investments (asset management), Chairman and Interested Trustee for open-end and closed-end funds offered by John Hancock,1989-2000; John Hancock Mutual Life Insurance Company, including Senior Vice President and Treasurer and Senior Vice President Information Technology, 1968-1988 | 124 | Former Trustee, Boston Museum of Science (Chair of Finance Committee) 1985-2013; former Trustee, BofA Funds Series Trust (11 funds), 2005-2011 |
| 48 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Pamela G. Carlton
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1954 | Trustee since 7/07 for RiverSource Funds and since 6/11 for Nations Funds | President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research, JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992, Investment Banker, Morgan Stanley, 1982-1991 | 126 | Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of Human Resources Committee) since 1996 |
William P. Carmichael
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | Retired; Co-founder, The Succession Fund (provides exit strategies to owners of privately held companies), 1998-2007; Adjunct Professor of Finance, Kelley School of Business, Indiana University, 1993-2007; Senior Vice President, Sara Lee Corporation, 1991-1993; Senior Vice President and Chief Financial Officer, Beatrice Foods Company, 1984-1990; Vice President, Esmark, Inc., 1973-1984; Associate, Price Waterhouse, 1968-1972 | 126 | Director, The Finish Line (athletic shoes and apparel) since July 2003; Director, hhgregg since May 2015; former Director, Cobra Electronics Corporation (electronic equipment manufacturer), 1994-August 2014; former Director, Spectrum Brands, Inc. (consumer products), 2002-2009; former Director, Simmons Company (bedding), 2004-2010; former Trustee, BofA Funds Series Trust (11 funds) 2003-2011; former Director, McMoRan Exploration Company (oil and gas exploration and development) 2010 - 2013; former Director, International Textile Corp., 2012-2016 |
Patricia M. Flynn
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1950 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance); Dean, McCallum Graduate School of Business, Bentley University, 1992-2002 | 126 | Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative since 2010 |
William A. Hawkins
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1942 | Chair of the Board since 11/15, Trustee since 6/11 for RiverSource Funds and since 1/05 for Nations Funds | Managing Director, Overton Partners (financial consulting), since August 2010; President and Chief Executive Officer, California General Bank, N.A., January 2008-August 2010; Operation Hope, COO, 2004-2007; IndyMac Bancorp, President, CBG, 1999-2003; American General Bank, President, 1997-1999; Griffin Financial Services, CEO, 1981-1997; The Griffin Funds, CEO, 1992-1998 | 126 | Former Trustee, BofA Funds Series Trust (11 funds), 2005-2015 |
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 49 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
Name,
address,
year of birth | Position held
with the Trust and
length of service | Principal occupation(s)
during past five years
and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex
overseen | Other directorships
held by Trustee
during the past
five years |
Catherine James Paglia
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee since 11/04 for RiverSource Funds and since 6/11 for Nations Funds | Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and Partner, Interlaken Capital, Inc., 1989-1997; Managing Director, Morgan Stanley, 1982-1989; Vice President, Investment Banking, 1980-1982, Associate, Investment Banking, 1976-1980, Dean Witter Reynolds, Inc. | 126 | Director, Valmont Industries, Inc. (irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee); Trustee, Carnegie Endowment for International Peace (on the Investment Committee) |
Minor M. Shaw
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1947 | Trustee since 6/11 for RiverSource Funds and since 2003 for Nations Funds | President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011 | 126 | Director, BlueCross BlueShield of South Carolina since April 2008; Advisory Board member, Duke Energy Corp. since October 2016; Chair of the Duke Endowment; Director, National Association of Corporate Directors, Carolinas Chapter, since 2013; Chair of Greenville – Spartanburg Airport Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016 |
John G. Taft
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee since 1/17 | Chief Executive Officer, RBC Wealth Management (a division of RBC Capital Markets LLC), 2005-2016 | 124 | Trustee, Andy Warhol Foundation for Visual Arts (Finance Committee) since 2014; former Director, RBC Global Asset Management – U.S., 2001-2016 |
Alison Taunton-Rigby
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee since 11/02 for RiverSource Funds and since 6/11 for Nations Funds | President, Chief Executive Officer (CEO) and Director, RiboNovix, Inc., 2003-2010; President and CEO, CMT Inc., 2001-2003; President and CEO, Aquila Biopharmaceuticals Inc., 1996- 2000; President and CEO, Cambridge Biotechnology Corporation, 1995- 1996, President and CEO, Mitotix Inc., 1993-1994 | 126 | Director, Boston Children’s Hospital since 2002; Director, ICI Mutual Insurance Company, since 2011; Director, Blumont/IRD since 2016; Director, Mount Ida College since 2016; former Director, Abt Associates (government contractor), 2001-2016; former Director, Healthways, Inc. (health and well-being solutions), 2005-2016 |
| 50 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Interested Trustee not affiliated with Investment Manager*
Name
address
year of birth | Position held
with the Trust and
length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships/
held by Trustee
during the past
five years |
Anthony M. Santomero
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1946 | Trustee since 6/11 for RiverSource Funds and since 1/08 for Nations Funds | Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, since 2002; Senior Advisor, McKinsey & Company (consulting), 2006-2008; President, Federal Reserve Bank of Philadelphia, 2000-2006, Professor of Finance, The Wharton School, University of Pennsylvania, 1972-2002 | 124 | Trustee, Penn Mutual Life Insurance Company since March 2008; Director, Renaissance Reinsurance Ltd. since May 2008; Director, Citigroup Inc. since 2009; Director, Citibank, N.A. since 2009; former Trustee, BofA Funds Series Trust (11 funds), 2008-2011 |
| * | Dr. Santomero is not an affiliated person of the Investment Manager or Ameriprise Financial. However, he is currently deemed by the Funds to be an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup Inc. and Citibank, N.A., companies that may directly or through subsidiaries and affiliates engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or accounts advised/managed by the Investment Manager. |
Interested trustee affiliated with Investment Manager*
Name,
address,
year of birth | Position held with the Trusts and length of service | Principal occupation(s) during the
past five years and other relevant
professional experience | Number of
Funds in the
Columbia Funds
complex overseen | Other directorships
held by Trustee
during the past
five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin St.
Boston, MA 02110
1960 | Trustee since 11/01 for RiverSource Funds and since 6/11 for Nations Funds; Senior Vice President since 2002 for RiverSource Funds and since 5/10 for Nations Funds | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010 - September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006 - August 2012. | 183 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006-January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 51 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
| 52 | Columbia Short Term Municipal Bond Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at 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 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia Short Term Municipal Bond Fund | Annual Report 2017
| 53 |
Columbia Short Term Municipal Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Item 2. Code of Ethics.
| | (a) | The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
| | (b) | During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. |
| | (c) | During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics described in 2(a) above that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that Edward J. Boudreau, Pamela G. Carlton, William A. Hawkins, Alison Taunton-Rigby and John Taft, each of whom are members of the registrant’s Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Boudreau, Ms. Carlton, Mr. Hawkins, Ms. Taunton-Rigby and Mr. Taft are each independent trustees, as defined in paragraph (a)(2) of this item’s instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the one series of the registrant whose report to stockholders is included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended April 30, 2017 and April 30, 2016 are approximately as follows:
| | | | |
| 2017 | | 2016 | |
$188,400 | | $ | 154,000 | |
Audit Fees include amounts related to the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended April 30, 2017 and April 30, 2016 are approximately as follows:
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above. In both fiscal years 2017 and 2016, Audit-Related Fees consist of agreed-upon procedures performed for semi-annual shareholder reports.
During the fiscal years ended April 30, 2017 and April 30, 2016, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended April 30, 2017 and April 30, 2016 are approximately as follows:
| | | | |
| 2017 | | 2016 | |
$25,800 | | $ | 28,100 | |
Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning.
During the fiscal years ended April 30, 2017 and April 30, 2016, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended April 30, 2017 and April 30, 2016 are approximately as follows:
All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended April 30, 2017 and April 30, 2016 are approximately as follows:
| | | | |
| 2017 | | 2016 | |
$225,000 | | $ | 335,000 | |
In fiscal years 2017 and 2016, All Other Fees primarily consists of fees billed for internal control examinations of the registrant’s transfer agent and investment adviser.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant’s Audit Committee is required to pre-approve the engagement of the registrant’s independent auditors to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser (the “Adviser”) or any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (a “Control Affiliate”) if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Auditors for Audit and Non-Audit Services (the “Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant (“Fund Services”); (ii) non-audit services to the registrant’s Adviser and any Control Affiliates, that relates directly to the operations and financial reporting of a Fund (“Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the registrant’s Adviser and its Control Affiliates. A service will require specific pre-approval by the Audit Committee if it is to be provided by the Fund’s independent auditor; provided, however, that pre-approval of non-audit services to the Fund, the Adviser or Control Affiliates may be waived if certain de minimis requirements set forth in the SEC’s rules are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee’s responsibilities with respect to the pre-approval of services performed by the independent auditor may not be delegated to management.
On an annual basis, at a regularly scheduled Audit Committee meeting, the Fund’s Treasurer or other Fund officer shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to specific pre-approval. This schedule will provide a description of each type of service that is subject to specific pre-approval, along with total projected fees for each service. The
pre-approval will generally cover a one-year period. The Audit Committee will review and approve the types of services and the projected fees for the next one-year period and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. This specific approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform and the projected fees for each service.
The Fund’s Treasurer or other Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services provided since the last such report was rendered, including a description of the services, by category, with forecasted fees for the annual reporting period, proposed changes requiring specific pre-approval and a description of services provided by the independent auditor, by category, with actual fees during the current reporting period.
*****
(e)(2) 100% of the services performed for items (b) through (d) above during 2017 and 2016 were pre-approved by the registrant’s Audit Committee.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended April 30, 2017 and April 30, 2016 are approximately as follows:
| | | | |
| 2017 | | 2016 | |
$253,600 | | $ | 365,900 | |
(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
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. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11. Controls and Procedures.
| | (a) | The registrant’s principal executive officer and principal financial officer, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that material 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 attached hereto as Exhibit 99.CODE ETH.
(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 | | |
| | | | |
| By (Signature and Title) | | /s/ Christopher O. Petersen | | |
| | Christopher O. Petersen, President and Principal Executive Officer | | |
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/ Christopher O. Petersen | | |
| | Christopher O. Petersen, President and Principal Executive Officer | | |
| | | | |
| By (Signature and Title) | | /s/ Michael G. Clarke | | |
| | Michael G. Clarke, Treasurer and Chief Financial Officer | | |
