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AS FILED ELECTRONICALLY WITH THE SECURITIES AND EXCHANGE COMMISSION ON
OCTOBER 12, 2010
SECURITIES ACT FILE NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 | x | |||||||
Pre-Effective Amendment No. | ¨ | |||||||
Post-Effective Amendment No. | ¨ |
COLUMBIA FUNDS SERIES TRUST I
(Exact Name of Registrant as Specified in Charter)
225 Franklin Street
Boston, MA 02110
(Address of Principal Executive Offices) (Zip Code)
(617) 426-3750
(Registrant’s Area Code and Telephone Number)
Scott R. Plummer
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
(Name and Address of Agent for Service)
With a copy to:
Brian D. McCabe, Esq.
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
TITLE OF SECURITIES BEING REGISTERED:
Class A, Class B, Class C, Class I, Class K, Class R, Class R4 and Class Z shares of the Columbia Mid Cap Growth Fund series of the Registrant.
Class A, Class B, Class C, Class I, Class K, Class R, Class R5 and Class Z shares of the Columbia Small Cap Growth Fund I series of the Registrant.
Class A, Class B, Class C, Class I, Class K, Class R, Class R5, Class W and Class Z shares of the Columbia Emerging Markets Fund series of the Registrant.
Class A, Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class W and Class Z shares of the Columbia Intermediate Bond Fund series of the Registrant.
Class A, Class B, Class C and Class Z shares of the Columbia Tax-Exempt Fund series of the Registrant.
Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement.
No filing fee is required because an indefinite number of shares have previously been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
It is proposed that this filing will become effective on November 12, 2012 pursuant to Rule 488 under the Securities Act of 1933.
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Columbia Mid Cap Growth Opportunity Fund
Columbia Frontier Fund
Columbia Select Small Cap Fund
Columbia Small Cap Growth Fund II
Columbia Emerging Markets Opportunity Fund
Columbia Diversified Bond Fund
Columbia Connecticut Tax-Exempt Fund
Columbia Massachusetts Tax-Exempt Fund
COMBINED PROXY STATEMENT/PROSPECTUS
[[Date, 2012]]
This is a brief overview of the reorganization proposed for your fund. We encourage you to read the full text of the enclosed combined proxy statement/prospectus.
Q: Why am I being asked to vote?
Funds are required to obtain shareholder approval for certain kinds of changes, like the reorganizations proposed in the enclosed combined proxy statement/prospectus. As a shareholder of one of the above-listed funds, you are being asked to vote on a reorganization involving your fund.
Q: What is a fund reorganization?
A fund reorganization involves one fund transferring all of its assets and liabilities to another fund in exchange for shares of such fund. Once completed, shareholders of the selling fund will hold shares of the buying fund.
Q: Is my vote important?
Absolutely! While the board of trustees (the “Board”) of each fund listed above has reviewed its proposed reorganization and recommends that you approve it, these proposals generally cannot go forward without the approval of shareholders. A Fund will continue to contact shareholders asking them to vote until it is sure that a quorum will be reached, and may continue to contact shareholders thereafter.
Q: On what am I being asked to vote?
Shareholders are being asked to vote on the reorganization (a “Reorganization”) of one or more funds (each a “Selling Fund” and together, the “Selling Funds”) into other corresponding funds (each a “Buying Fund” and together, the “Buying Funds”), as noted in the table below:
Selling Fund | Buying Fund | |
Columbia Mid Cap Growth Opportunity Fund | Columbia Mid Cap Growth Fund | |
Columbia Frontier Fund | Columbia Small Cap Growth Fund I | |
Columbia Select Small Cap Fund | Columbia Small Cap Growth Fund I | |
Columbia Small Cap Growth Fund II | Columbia Small Cap Growth Fund I | |
Columbia Emerging Markets Opportunity Fund | Columbia Emerging Markets Fund | |
Columbia Diversified Bond Fund | Columbia Intermediate Bond Fund | |
Columbia Connecticut Tax-Exempt Fund | Columbia Tax-Exempt Fund | |
Columbia Massachusetts Tax-Exempt Fund | Columbia Tax-Exempt Fund |
If the Reorganization of your Selling Fund is approved by shareholders and the other closing conditions are met, your shares of the Selling Fund will, in effect, be converted into shares of the corresponding Buying Fund
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with the same aggregate net asset value as your Selling Fund shares at the time of the Reorganization. (The Selling Funds and the Buying Funds are referred to individually or collectively as a “Fund” or the “Funds.”) While the aggregate net asset value of your shares will not change as a result of the Reorganization, the number of shares you hold may differ based on each Fund’s net asset value.
We encourage you to read the full text of the enclosed combined proxy statement/prospectus to obtain a more detailed understanding of the issues relating to each proposed Reorganization.
Q: Why are the Reorganizations being proposed?
Columbia Management Investment Advisers, LLC, the Funds’ investment manager (“Columbia Management”), proposed the Reorganizations to each Board in order to reduce, in the aggregate, the total expenses borne by Fund shareholders and to streamline the product offerings of the funds managed by Columbia Management (the “Columbia Funds”), so that management, administration, distribution and other resources can be focused more effectively on a smaller group of funds. The Reorganization of each Selling Fund into the corresponding Buying Fund will enable shareholders of each Selling Fund to invest in a larger, potentially more efficient portfolio while continuing to pursue a similar investment strategy.
Q: Will there be any changes to the options or services associated with my account as a result of the Reorganizations?
Account-level features and options such as dividend distributions, dividend diversification, automatic investment plans, systematic withdrawals and dollar cost averaging will automatically carry over from accounts in each Selling Fund to accounts in the corresponding Buying Fund.
Q: Are there costs or tax consequences of the Reorganizations?
You will not pay any sales charge in connection with the Reorganizations. Reorganization costs may be allocated to each Fund, but will be limited to an amount that is not more than the anticipated reduction in expenses borne by the Fund’s shareholders during the first year following the Reorganization. Each Reorganization is expected to be tax-free for U.S. federal income tax purposes. Accordingly, it is expected that Selling Fund shareholders will not and the Selling Fund generally will not recognize gain or loss as a direct result of a Reorganization, as described in more detail in the section entitled “Tax Status of the Reorganizations.” A portion of the portfolio assets of a Selling Fund may be sold in connection with its Reorganization. Such sales will cause such Selling Fund to incur transaction costs and may result in a taxable distribution of gains to shareholders.
Q: Will there be any changes to my fees and expenses as a result of the Reorganizations?
It is expected that, following the proposed Reorganizations, the expenses borne by Selling Fund shareholders would generally be the same as or lower than the expenses they currently bear, as described in detail in the combined proxy statement/prospectus under “Reorganization Proposals – Summary – Fees and Expenses.”
Q: If approved, when will the Reorganizations happen?
The Reorganizations will take place as soon as practicable following shareholder approval, and are expected to close in the first half of 2013.
Q: How does my Board recommend that I vote?
After careful consideration, your Board recommends that you vote FOR the Reorganization of your Selling Fund.
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Q: How can I vote?
You can vote in one of four ways:
• | By telephone (call the toll free number listed on your proxy card) |
• | By internet (log on to the internet site listed on your proxy card) |
• | By mail (using the enclosed postage prepaid envelope) |
• | In person at the shareholder meeting scheduled to occur at 225 Franklin Street, Boston, MA (32nd Floor, Room 3200) on February 27, 2013 |
The deadline for voting by telephone or internet is 11:59 E.T. on February 26, 2013. We encourage you to vote as soon as possible to avoid the cost of additional solicitation efforts. Please refer to the enclosed proxy card for instructions for voting by telephone, internet or mail.
Q: Will I be notified of the results of the vote?
The final voting results for each proposal also will be included in each Selling Fund’s next report to shareholders following the special shareholder meeting.
Q: Whom should I call if I have questions?
If you have questions about any of the proposals described in the combined proxy statement/prospectus or about voting procedures, please call the Selling Funds’ proxy solicitor, Computershare Fund Services, toll free at 800-708-7953. Shareholders of Selling Funds for which a Reorganization is effected within 60 days following the completion of its fiscal year or half year may call 800-345-6611 to request a copy of the Selling Fund’s final report to shareholders for that period.
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NOTICE OF A JOINT SPECIAL MEETING OF SHAREHOLDERS
Columbia Funds Series Trust
Columbia Small Cap Growth Fund II
Columbia Funds Series Trust I
Columbia Select Small Cap Fund
Columbia Connecticut Tax-Exempt Fund
Columbia Massachusetts Tax-Exempt Fund
Columbia Funds Series Trust II
Columbia Mid Cap Growth Opportunity Fund
Columbia Frontier Fund
Columbia Emerging Markets Opportunity Fund
Columbia Diversified Bond Fund
To be held February 27, 2013
A Joint Special Meeting of Shareholders (the “Meeting”) of each of the funds listed above (each a “Selling Fund”) will be held at 10:00 a.m. on February 27, 2013, at 225 Franklin Street, Boston, MA (32nd Floor, Room 3200). At the Meeting, shareholders will consider the following proposals with respect to their Selling Fund:
1. | To approve the Agreement and Plan of Reorganization (the “Agreement”) by and among Columbia Funds Series Trust, on behalf of its Columbia Small Cap Growth Fund II series, Columbia Funds Series Trust I, on behalf of its Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund, Columbia Tax-Exempt Fund, Columbia Select Small Cap Fund, Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund series, Columbia Funds Series Trust II, on behalf of its Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Emerging Markets Opportunity Fund and Columbia Diversified Bond Fund series, certain other registered investment companies and Columbia Management Investment Advisers, LLC, pursuant to which each Selling Fund will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the corresponding buying fund, as indicated below (each a “Buying Fund”), in exchange for shares of a corresponding class of the Buying Fund and the assumption by the Buying Fund of all of the liabilities of the Selling Fund. Shares of each class of the Buying Fund will be distributed proportionately to shareholders of the relevant class of the Selling Fund. |
Shareholders of each Selling Fund will vote separately on the proposal, as shown below.
Selling Fund | Buying Fund | Proposal # | ||
Columbia Mid Cap Growth Opportunity Fund | Columbia Mid Cap Growth Fund | 1 | ||
Columbia Frontier Fund | Columbia Small Cap Growth Fund I | 2 | ||
Columbia Select Small Cap Fund | Columbia Small Cap Growth Fund I | 2 | ||
Columbia Small Cap Growth Fund II | Columbia Small Cap Growth Fund I | 2 | ||
Columbia Emerging Markets Opportunity Fund | Columbia Emerging Markets Fund | 3 | ||
Columbia Diversified Bond Fund | Columbia Intermediate Bond Fund | 4 | ||
Columbia Connecticut Tax-Exempt Fund | Columbia Tax-Exempt Fund | 5 | ||
Columbia Massachusetts Tax-Exempt Fund | Columbia Tax-Exempt Fund | 5 |
Please take some time to read the enclosed combined proxy statement/prospectus. It discusses these proposals in more detail. If you were a shareholder as of the close of business on November 27, 2012, you may vote at the Meeting or at any adjournment or postponement of the Meeting. You are welcome to attend the Meeting in person. If you cannot attend in person, please vote by mail, telephone or internet. Just follow the
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instructions on the enclosed proxy card. If you have questions, please call the Selling Funds’ proxy solicitor toll free at 800-708-7953. It is important that you vote. The board of trustees of each Selling Fund recommends that you vote FOR its Reorganization.
By order of the boards of trustees
Christopher O. Petersen, Secretary
[•], 2012
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Columbia Mid Cap Growth Opportunity Fund
Columbia Frontier Fund
Columbia Select Small Cap Fund
Columbia Small Cap Growth Fund II
Columbia Emerging Markets Opportunity Fund
Columbia Diversified Bond Fund
Columbia Connecticut Tax-Exempt Fund
Columbia Massachusetts Tax-Exempt Fund
COMBINED PROXY STATEMENT/PROSPECTUS
Dated [•], 2012
This document is a proxy statement for each Selling Fund (as defined below) and a prospectus for each Buying Fund (as defined below). The address and telephone number of each Selling Fund and each Buying Fund is c/o Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081, and 800.345.6611. This combined proxy statement/prospectus and the enclosed proxy card were first mailed to shareholders of each Selling Fund beginning on or about [•]. This combined proxy statement/prospectus contains information you should know before voting on the following proposals with respect to your Selling Fund, as indicated below. You should retain this document for future reference.
Proposal | To be voted on by | |||
1. | To approve an Agreement and Plan of Reorganization by and among Columbia Funds Series Trust II, on behalf of its Columbia Mid Cap Growth Opportunity Fund series (a “Selling Fund”), Columbia Funds Series Trust I, on behalf of its Columbia Mid Cap Growth Fund series (a “Buying Fund”), certain other registered investment companies and Columbia Management Investment Advisers, LLC (“Columbia Management”). Under the agreement, the Selling Fund will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the Buying Fund in exchange for shares of the corresponding class of the Buying Fund (as indicated below) and the assumption by the Buying Fund of all of the liabilities of the Selling Fund. Shares of each class of the Buying Fund will be distributed proportionately to shareholders of the relevant class of the Selling Fund. | Columbia Mid Cap Growth Opportunity Fund |
Selling Fund | Buying Fund | |||||
Class A | g | Class A | ||||
Class B | g | Class B | ||||
Class C | g | Class C | ||||
Class I | g | Class I | ||||
Class R | g | Class R | ||||
Class R4 | g | Class R4 | ||||
Class K | g | Class K | ||||
Class Z | g | Class Z |
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Proposal | To be voted on by | |||
2. | To approve an Agreement and Plan of Reorganization by and among Columbia Funds Series Trust II, on behalf of its Columbia Frontier Fund series, Columbia Funds Series Trust I, on behalf of its Columbia Select Small Cap Fund series, and Columbia Funds Series Trust, on behalf of its Columbia Small Cap Growth Fund II series (each a “Selling Fund”), Columbia Funds Series Trust I, on behalf of its Columbia Small Cap Growth Fund I series (a “Buying Fund”), certain other registered investment companies and Columbia Management Investment Advisers, LLC. Under the agreement, each Selling Fund will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the Buying Fund in exchange for shares of the corresponding class of the Buying Fund (as indicated below) and the assumption by the Buying Fund of all of the liabilities of each Selling Fund. Shares of each class of the Buying Fund will be distributed proportionately to shareholders of the relevant class of each of the Selling Funds. | Columbia Frontier Fund, Columbia Select Small Cap Fund, and Columbia Small Cap Growth Fund II |
Selling Funds | Buying Fund | |||||
Class A | g | Class A | ||||
Class B | g | Class B | ||||
Class C | g | Class C | ||||
Class I | g | Class I | ||||
Class R | g | Class R | ||||
Class K | g | Class K | ||||
Class R5 | g | Class R5 | ||||
Class Z | g | Class Z |
3. | To approve an Agreement and Plan of Reorganization by and among Columbia Funds Series Trust II, on behalf of its Columbia Emerging Markets Opportunity Fund series (a “Selling Fund”), Columbia Funds Series Trust I, on behalf of its Columbia Emerging Markets Fund series (a “Buying Fund”), certain other registered investment companies and Columbia Management Investment Advisers, LLC. Under the agreement, the Selling Fund will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the Buying Fund in exchange for shares of the corresponding class of the Buying Fund (as indicated below) and the assumption by the Buying Fund of all of the liabilities of the Selling Fund. Shares of each class of the Buying Fund will be distributed proportionately to shareholders of the relevant class of the Selling Fund. | Columbia Emerging Markets Opportunity Fund |
Selling Fund | Buying Fund | |||||
Class A | g | Class A | ||||
Class B | g | Class B | ||||
Class C | g | Class C | ||||
Class I | g | Class I | ||||
Class R | g | Class R | ||||
Class K | g | Class K | ||||
Class R5 | g | Class R5 | ||||
Class W | g | Class W | ||||
Class Z | g | Class Z |
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Proposal | To be voted on by | |||
4. | To approve an Agreement and Plan of Reorganization by and among Columbia Funds Series Trust II, on behalf of its Columbia Diversified Bond Fund series (a “Selling Fund”), Columbia Funds Series Trust I, on behalf of its Columbia Intermediate Bond Fund series (a “Buying Fund”), certain other registered investment companies and Columbia Management Investment Advisers, LLC. Under the agreement, the Selling Fund will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the Buying Fund in exchange for shares of the corresponding class of the Buying Fund (as indicated below) and the assumption by the Buying Fund of all of the liabilities of the Selling Fund. Shares of each class of the Buying Fund will be distributed proportionately to shareholders of the relevant class of the Selling Fund. | Columbia Diversified Bond Fund |
Selling Fund | Buying Fund | |||||
Class A | g | Class A | ||||
Class B | g | Class B | ||||
Class C | g | Class C | ||||
Class I | g | Class I | ||||
Class R | g | Class R | ||||
Class R4 | g | Class R4 | ||||
Class K | g | Class K | ||||
Class R5 | g | Class R5 | ||||
Class W | g | Class W | ||||
Class Z | g | Class Z |
5. | To approve an Agreement and Plan of Reorganization by and among Columbia Funds Series Trust I, on behalf of its Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund series (each a “Selling Fund”), Columbia Funds Series Trust I, on behalf of its Columbia Tax-Exempt Fund series (a “Buying Fund”), certain other registered investment companies and Columbia Management Investment Advisers, LLC. Under the agreement, each Selling Fund will transfer that portion of its assets attributable to each class of its shares (in aggregate, all of its assets) to the Buying Fund in exchange for shares of the corresponding class of the Buying Fund (as indicated below) and the assumption by the Buying Fund of all of the liabilities of the Selling Fund. Shares of each class of the Buying Fund will be distributed proportionately to shareholders of the relevant class of the Selling Fund. | Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund |
Selling Funds | Buying Fund | |||||
Class A | g | Class A | ||||
Class B | g | Class B | ||||
Class C | g | Class C | ||||
Class Z | g | Class Z |
The proposals will be considered by shareholders who owned shares of the Selling Funds on November 27, 2012 at a joint special meeting of shareholders (the “Meeting”) that will be held at 10:00 a.m. on February 27, 2013, at 225 Franklin Street, Boston, MA in Room 3200 on the 32nd floor. Each of the Selling Funds and the Buying Funds (each a “Fund” and collectively, the “Funds”) is a registered open-end management investment company (or a series thereof).
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Although the board of trustees (the “Board”) of each Selling Fund* recommends that shareholders approve the reorganization of the Selling Fund into the corresponding Buying Fund (each a “Reorganization”), the Reorganization of each Selling Fund is not conditioned upon the Reorganization of any other Selling Fund. Accordingly, if shareholders of one Selling Fund approve its Reorganization, but shareholders of a second Selling Fund do not approve the second Selling Fund’s Reorganization, it is expected that the Reorganization of the first Selling Fund will take place as described in this combined proxy statement/prospectus. If shareholders of any Selling Fund fail to approve its Reorganization, the Board of such Selling Fund will consider what other actions, if any, may be appropriate.
How Each Reorganization Will Work
• | Each Selling Fund will transfer all of its assets to the corresponding Buying Fund in exchange for shares of such Buying Fund (“Reorganization Shares”) and the assumption by the Buying Fund of all of the Selling Fund’s liabilities. |
• | Each Buying Fund will issue Reorganization Shares with an aggregate net asset value equal to the aggregate value of the assets that it receives from the corresponding Selling Fund, less the liabilities it assumes from the corresponding Selling Fund. Each class of Reorganization Shares will be distributed to the shareholders of the corresponding class of the Selling Fund in liquidation of the Selling Fund in proportion to their holdings in such class of the Selling Fund. For example, holders of Class A shares of a Selling Fund will receive Class A shares of the corresponding Buying Fund with the same aggregate net asset value as their Selling Fund Class A shares at the time of the Reorganization. You will not pay any sales charge in connection with the receipt or distribution of Reorganization Shares. If you already have a Buying Fund account with exactly the same registration as your Selling Fund account, your Reorganization Shares typically will be added to that account. |
• | Reorganization costs will be allocated to each Selling Fund only to the extent they are expected to be offset by the anticipated reduction in expenses borne by the Selling Fund’s shareholders during the first year following the Reorganization. Each Reorganization is expected to be tax-free for U.S. federal income tax purposes. Accordingly, it is expected that Selling Fund shareholders will not and the Selling Fund generally will not recognize gain or loss as a direct result of a Reorganization, as described in more detail in the section entitled “Tax Status of the Reorganizations.” A portion of the portfolio assets of a Selling Fund may be sold in connection with its Reorganization. Such sales will cause such Selling Fund to incur transaction costs and may result in a taxable distribution of gains to shareholders. |
Where to Get More Information
The following documents have been filed with the Securities and Exchange Commission (the “SEC”) and are incorporated into this combined proxy statement/prospectus by reference:
• | the Statement of Additional Information of the Buying Funds relating to the Reorganizations (the “Merger SAI”), dated [•], 2012; |
Columbia Mid Cap Growth Opportunity Fund (SEC file no. 811-21852)
• | the prospectuses of Columbia Mid Cap Growth Opportunity Fund, dated April 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Mid Cap Growth Opportunity Fund, dated July 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Mid Cap Growth Opportunity Fund for the year |
* | References to the board of a Selling Fund refer to the Board of the trust of which the Selling Fund is a series. |
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ended November 30, 2011, and the unaudited financial statements included in the Semiannual Report to Shareholders of Columbia Mid Cap Growth Opportunity Fund for the period ended May 31, 2012; |
Columbia Frontier Fund (SEC file no. 811-21852)
• | the prospectuses of Columbia Frontier Fund, dated March 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Frontier Fund, dated October 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Frontier Fund for the year ended October 31, 2011, and the unaudited financial statements included in the Semiannual Report to Shareholders of Columbia Frontier Fund for the period ended April 30, 2012; |
Columbia Select Small Cap Fund (SEC file no. 811-04367)
• | the prospectuses of Columbia Select Small Cap Fund, dated October 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Select Small Cap Fund, dated August 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Select Small Cap Fund for the year ended March 31, 2012; |
Columbia Small Cap Growth Fund II (SEC file no. 811-09645)
• | the prospectuses of Columbia Small Cap Growth Fund II, dated July 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Small Cap Growth Fund II, dated August 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Small Cap Growth Fund II for the year ended February 29, 2012, and the unaudited financial statements included in the Semiannual Report to Shareholders of Columbia Small Cap Growth Fund II for the period ended [August 31, 2012]; |
Columbia Emerging Markets Opportunity Fund (SEC file no. 811-21852)
• | the prospectuses of Columbia Emerging Markets Opportunity Fund, dated March 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Emerging Markets Opportunity Fund, dated October 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Emerging Markets Opportunity Fund for the year ended October 31, 2011, and the unaudited financial statements included in the Semiannual Report to Shareholders of Columbia Emerging Markets Opportunity Fund for the period ended April 30, 2012; |
Columbia Diversified Bond Fund (SEC file no. 811-21852)
• | the prospectuses of Columbia Diversified Bond Fund, dated October 28, 2011, as supplemented to date; |
• | the Statement of Additional Information of Columbia Diversified Bond Fund, dated October 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Diversified Bond Fund for the year ended [August 31, 2012]; |
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Columbia Connecticut Tax-Exempt Fund (SEC file no. 811-04367)
• | the prospectuses of Columbia Connecticut Tax-Exempt Fund, dated March 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Connecticut Tax-Exempt Fund, dated October 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Connecticut Tax-Exempt Fund for the year ended October 31, 2011, and the unaudited financial statements included in the Semiannual Report to Shareholders of Columbia Connecticut Tax-Exempt Fund for the period ended April 30, 2012; |
Columbia Massachusetts Tax-Exempt Fund (SEC file no. 811-04367)
• | the prospectuses of Columbia Massachusetts Tax-Exempt Fund, dated March 1, 2012, as supplemented to date; |
• | the Statement of Additional Information of Columbia Massachusetts Tax-Exempt Fund, dated October 1, 2012, as supplemented to date; |
• | the Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of Columbia Massachusetts Tax-Exempt Fund for the year ended October 31, 2011, and the unaudited financial statements included in the Semiannual Report to Shareholders of Columbia Massachusetts Tax-Exempt Fund for the period ended April 30, 2012. |
For a free copy of any of the documents listed above and/or to ask questions about this combined proxy statement/prospectus, please call your Selling Fund’s proxy solicitor toll free at 800-708-7953.
Each of the Funds is subject to the information requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended (the “1940 Act”), and files reports, proxy materials and other information with the SEC. These reports, proxy materials and other information can be inspected and copied at the Public Reference Room maintained by the SEC. Copies may be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by writing to the Public Reference Branch of the SEC Office of Consumer Affairs and Information Services, 100 F Street, N.E., Washington, D.C. 20549-0102. In addition, copies of these documents may be viewed online or downloaded from the SEC’s website at www.sec.gov.
Please note that investments in the Funds are not bank deposits, are not federally insured, are not guaranteed by any bank or government agency and may lose value. There is no assurance that any Fund will achieve its investment objectives.
As with all open-end mutual funds, the SEC has not approved or disapproved these securities or passed on the adequacy of this combined proxy statement/prospectus. Any representation to the contrary is a criminal offense.
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Reasons for the Proposed Reorganizations and Board Deliberations | 102 | |||
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Section B — Proxy Voting and Shareholder Meeting Information | 109 | |||
Section C — Capitalization, Ownership of Fund Shares and Financial Highlights | 113 | |||
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SECTION A — REORGANIZATION PROPOSALS
The following information describes each proposed Reorganization.
This combined proxy statement/prospectus is being used by each Selling Fund to solicit proxies to vote at a joint special meeting of shareholders. Shareholders of each Selling Fund will consider a proposal to approve the Agreement and Plan of Reorganization (the “Agreement”) providing for the Reorganization of their Selling Fund into the corresponding Buying Fund.
The following is a summary. More complete information appears later in this combined proxy statement/prospectus. You should read the entire combined proxy statement/prospectus and the exhibits because they contain details that are not included in this summary.
How Each Reorganization Will Work
• | Each Selling Fund will transfer all of its assets to the corresponding Buying Fund in exchange for Reorganization Shares and the assumption by the corresponding Buying Fund of all of the Selling Fund’s liabilities. |
• | Each Buying Fund will issue Reorganization Shares with an aggregate net asset value equal to the aggregate value of the assets that it receives from the corresponding Selling Fund, less the liabilities it assumes from the corresponding Selling Fund. Reorganization Shares of each class of each Buying Fund will be distributed to the shareholders of the corresponding class of the corresponding Selling Fund in proportion to their holdings of such class of such Selling Fund. For example, holders of Class A shares of a Selling Fund will receive Class A shares of the corresponding Buying Fund with the same aggregate net asset value as the aggregate net asset value of their Selling Fund Class A shares at the time of the Reorganization. |
• | As part of the Reorganization of your Selling Fund, systematic transactions (such as bank authorizations and systematic payouts) currently set up for your Selling Fund account may be transferred to your new Buying Fund account. Please contact your financial intermediary for additional details. |
• | No shareholders of any Selling Fund will pay any sales charge in connection with acquiring Reorganization Shares. |
• | After a Reorganization is completed, Selling Fund shareholders will be shareholders of the corresponding Buying Fund, and the Selling Fund will be dissolved. |
Each Reorganization is expected to be tax-free for U.S. federal income tax purposes and will not take place unless the Selling Fund and the corresponding Buying Fund receive a satisfactory opinion of tax counsel substantially to the effect that the Reorganization will be tax-free, as described in more detail in the section entitled “Tax Status of the Reorganizations.” Accordingly, subject to the limited exceptions described in that section, no gain or loss is expected to be recognized by any Selling Fund or its shareholders as a direct result of its Reorganization. A portion of the portfolio assets of a Selling Fund may be sold in connection with its Reorganization. The actual tax effect of such sales will depend on the difference between the price at which such portfolio assets are sold and the tax basis in such assets of the Selling Fund. Any capital gains recognized in those sales on a net basis, after reduction by any available capital losses, will be distributed to shareholders as capital gain dividends (to the extent of net realized long-term capital gains over net realized short-term capital losses) and/or ordinary dividends (to the extent of net realized short-term capital gains over net realized long-term capital losses) during or with respect to the year of sale, and such distributions will be taxable to shareholders. Additionally, because each Reorganization will end the tax year of the applicable Selling Fund, it
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will accelerate distributions to shareholders from the Selling Fund for its short tax year ending on the date of the Reorganization. Those tax year-end distributions will be taxable, and will include any distributable, but not previously distributed, capital gains resulting from portfolio turnover prior to consummation of the Reorganization. At any time prior to a Reorganization, a shareholder may redeem shares of a Selling Fund. This would likely result in the recognition of gain or loss by the shareholder for U.S. federal income tax purposes. If a shareholder holds Selling Fund shares in a non-taxable account, distributions and redemption proceeds with respect to those shares will not be taxable to the shareholder if those amounts remain in the non-taxable account.
The Selling Fund shareholders’ aggregate tax basis in the Reorganization Shares is expected to carry over from the shareholders’ Selling Fund shares, and the Selling Fund shareholders’ holding period in the Reorganization Shares is expected to include the shareholders’ holding period in the Selling Fund shares.
For more information about the U.S. federal income tax consequences of the Reorganizations, see the section entitled “Tax Status of the Reorganizations.”
The following tables describe the fees and expenses that you may pay if you buy and hold shares of a Fund.
Annual fund operating expense ratios are based on expenses incurred during each Fund’s most recently completed fiscal year, adjusted to reflect current and expected fees, as more fully described below, and are expressed as a percentage (expense ratio) of the Fund’s average net assets during the period. Pro forma expense ratios are based on the average net assets of each Buying Fund and the corresponding Selling Fund for the twelve months ended August 31, 2012 for Columbia Mid Cap Growth Opportunity Fund and Columbia Mid Cap Growth Fund, August 31, 2012 for Columbia Frontier Fund, Columbia Select Small Cap Fund, Columbia Small Cap Growth Fund II and Columbia Small Cap Growth Fund I, August 31, 2012 for Columbia Emerging Markets Opportunity Fund and Columbia Emerging Markets Fund, April 30, 2012 for Columbia Diversified Bond Fund and Columbia Intermediate Bond Fund, and July 31, 2012 for Columbia Connecticut Tax-Exempt Fund, Columbia Massachusetts Tax-Exempt Fund and Columbia Tax-Exempt Fund]. As of the date of this combined proxy statement/prospectus, each Fund’s net assets may be lower or higher than the Fund’s average net assets over such period (or on such date). In general, a Fund’s annual operating expense ratios will increase as the Fund’s assets decrease and will decrease as the Fund’s assets increase. Accordingly, each Fund’s annual operating expense ratios, if adjusted based on net assets as of the date of this combined proxy statement/prospectus, could be higher or lower than those shown in the tables below. The commitment by Columbia Management and/or its affiliates to waive fees and/or to reimburse expenses for each Buying Fund, noted below, may limit the effect that any decrease in the Buying Fund’s net assets will have on its annual net operating expense ratios in the current fiscal year. Certain Selling Funds have contractual fee waiver and/or expense reimbursement arrangements. For more information, see the Selling Funds’ prospectuses.
The fees and expenses below exclude one-time costs of the Reorganizations. The costs of each Reorganization expected to be borne by each Fund are set forth in Exhibit A.
Proposal 1. Fees and Expenses. Reorganization of Columbia Mid Cap Growth Opportunity Fund into Columbia Mid Cap Growth Fund
If the Reorganization occurs, certain Reorganization expenses, as described in Exhibit A, may be allocated to the Selling Fund, which will reduce the Selling Fund’s net asset value prior to the closing of the Reorganization by less than $0.005 per share based on the Selling Fund’s shares outstanding as of August 31, 2012.
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Current and Pro Forma Fees and Expenses
Shareholder Fees (fees paid directly from your investment)
Columbia Mid Cap Growth Opportunity Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class Z | ||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Columbia Mid Cap Growth Fund (Current and Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class Z | ||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A |
(a) | Contingent deferred sales charges (CDSC) on certain investments of between $1 million and $50 million redeemed within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within 12 months of purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months of purchase, with certain limited exceptions. |
(b) | This charge decreases over time. |
(c) | This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions. |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
Columbia Mid Cap Growth Opportunity Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class Z | ||||||||||||||||||||||||
Management fees(1) | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | ||||||||||||||||
Distribution and/or service | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Other expenses(2) | 0.34 | % | 0.34 | % | 0.34 | % | 0.03 | % | 0.34 | % | 0.34 | % | 0.33 | % | 0.34 | % | ||||||||||||||||
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Total annual Fund operating expenses | 1.39 | % | 2.14 | % | 2.14 | % | 0.83 | % | 1.64 | % | 1.14 | % | 1.13 | % | 1.14 | % | ||||||||||||||||
Less: Fee waiver/expense reimbursement(3) | (0.09 | )% | (0.09 | )% | (0.09 | )% | 0.00 | % | (0.09 | )% | (0.09 | )% | 0.00 | % | (0.09 | )% | ||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.30 | % | 2.05 | % | 2.05 | % | 0.83 | % | 1.55 | % | 1.05 | % | 1.13 | % | 1.05 | % |
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Columbia Mid Cap Growth Fund (Current) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class Z | ||||||||||||||||||||||||
Management fees(4) | 0.74 | % | 0.74 | % | 0.74 | % | 0.74 | % | 0.74 | % | 0.74 | % | N/A | 0.74 | % | |||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | N/A | 0.00 | % | |||||||||||||||||
Other expenses(2) | 0.24 | % | 0.24 | % | 0.24 | % | 0.04 | % | 0.24 | % | 0.24 | % | N/A | 0.24 | % | |||||||||||||||||
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Total annual Fund operating expenses | 1.23 | % | 1.98 | % | 1.98 | % | 0.78 | % | 1.48 | % | 0.98 | % | N/A | 0.98 | % | |||||||||||||||||
Columbia Mid Cap Growth Fund (Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class Z | ||||||||||||||||||||||||
Management fees(5) | 0.72 | % | 0.72 | % | 0.72 | % | 0.72 | % | 0.72 | % | 0.72 | % | 0.72 | % | 0.72 | % | ||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Other expenses(2) | 0.27 | % | 0.27 | % | 0.27 | % | 0.03 | % | 0.27 | % | 0.27 | % | 0.33 | % | 0.27 | % | ||||||||||||||||
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Total annual Fund operating expenses | 1.24 | % | 1.99 | % | 1.99 | % | 0.75 | % | 1.49 | % | 0.99 | % | 1.05 | % | 0.99 | % | ||||||||||||||||
Less: Fee waiver/expense reimbursement(6) | (0.05 | )% | (0.05 | )% | (0.05 | )% | 0.00 | % | (0.05 | )% | (0.05 | )% | 0.00 | % | (0.05 | )% | ||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.19 | % | 1.94 | % | 1.94 | % | 0.75 | % | 1.44 | % | 0.94 | % | 1.05 | % | 0.94 | % |
(1) | Management Fees are composed of an investment management service fee of 0.74% and an administration fee of 0.06%. |
(2) | Other expenses have been restated to reflect contractual changes to certain fees paid by the Fund. |
(3) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until March 31, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 1.30% for Class A, 2.05% for Class B, 2.05% for Class C, 0.87% for Class I, 1.17% for K, 1.55% for Class R, 1.05% for R4 and 1.05% for Class Z. Columbia Management and certain of its affiliates have further contractually agreed, effective April 1, 2013, to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until March 31, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 1.35% for Class A, 2.10% for Class B, 2.10% for Class C, 0.90% for Class I, 1.20% for Class K, 1.60% for Class R, 1.10% for Class R4 and 1.10% for Class Z. |
(4) | Management Fees are composed of an investment management service fee of 0.69% and an administration fee of 0.05%. |
(5) | Management Fees are composed of an investment management service fee of 0.67% and an administration fee of 0.05%. |
(6) | Columbia Management and certain of its affiliates have further contractually agreed, assuming approval by shareholders of the Reorganization, effective upon the closing of the Reorganization to waive and/or reimburse transfer agency expenses until December 31, 2014. Under this agreement, transfer agency expenses will not exceed an annual rate of 0.19% for Class A, Class B, Class C, Class R, Class R4, and Class Z. Columbia Management and certain of its affiliates have further contractually agreed to, assuming approval by shareholders of the Reorganization, effective upon the closing of the Reorganization to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 1.35% for Class A, 2.10% for Class B, 2.10% for Class C, 0.94% for Class I, 1.24% for K, 1.60% for Class R, 1.10% for R4 and 1.10% for Class Z. |
Expense examples: These examples are intended to help you compare the cost of investing in each Fund with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated and then redeem all of your shares at the end of those periods, both under the current arrangements and, for the Buying Fund, assuming completion of the proposed Reorganization. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense
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reimbursement arrangement only for the period indicated in the Fund’s Annual Fund Operating Expenses table. Although your actual costs may be higher or lower, based on those assumptions your costs would be:
Columbia Mid Cap Growth Opportunity Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 700 | $ | 982 | $ | 1,285 | $ | 2,145 | ||||||||
Class B | $ | 708 | $ | 962 | $ | 1,342 | $ | 2,279 | ||||||||
Class C | $ | 308 | $ | 662 | $ | 1,142 | $ | 2,470 | ||||||||
Class I | $ | 85 | $ | 265 | $ | 461 | $ | 1,029 | ||||||||
Class R | $ | 158 | $ | 509 | $ | 884 | $ | 1,941 | ||||||||
Class R4 | $ | 107 | $ | 354 | $ | 620 | $ | 1,383 | ||||||||
Class K | $ | 115 | $ | 359 | $ | 623 | $ | 1,379 | ||||||||
Class Z | $ | 107 | $ | 354 | $ | 620 | $ | 1,383 | ||||||||
Columbia Mid Cap Growth Fund (Current) (Buying Fund) | ||||||||||||||||
Class A | $ | 693 | $ | 943 | $ | 1,212 | $ | 1,978 | ||||||||
Class B | $ | 701 | $ | 921 | $ | 1,268 | $ | 2,113 | ||||||||
Class C | $ | 301 | $ | 621 | $ | 1,068 | $ | 2,306 | ||||||||
Class I | $ | 80 | $ | 249 | $ | 433 | $ | 966 | ||||||||
Class R | $ | 151 | $ | 468 | $ | 808 | $ | 1,768 | ||||||||
Class R4 | $ | 100 | $ | 312 | $ | 542 | $ | 1,201 | ||||||||
Class Z | $ | 100 | $ | 312 | $ | 542 | $ | 1,201 | ||||||||
Columbia Mid Cap Growth Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class A | $ | 689 | $ | 941 | $ | 1,212 | $ | 1,985 | ||||||||
Class B | $ | 697 | $ | 920 | $ | 1,268 | $ | 2,119 | ||||||||
Class C | $ | 297 | $ | 620 | $ | 1,068 | $ | 2,313 | ||||||||
Class I | $ | 77 | $ | 240 | $ | 417 | $ | 930 | ||||||||
Class R | $ | 147 | $ | 466 | $ | 808 | $ | 1,775 | ||||||||
Class R4 | $ | 96 | $ | 310 | $ | 542 | $ | 1,208 | ||||||||
Class K | $ | 107 | $ | 334 | $ | 579 | $ | 1,283 | ||||||||
Class Z | $ | 96 | $ | 310 | $ | 542 | $ | 1,208 |
If you owned or will own any class of shares other than Class B or Class C shares, you would pay the same costs shown in the tables above if you did not redeem your shares at the end of the periods indicated. If you owned or will own Class B or Class C shares, you would pay the following costs if you did not redeem your shares at the end of the periods indicated, which may be different than the costs shown in the tables above.
Columbia Mid Cap Growth Opportunity Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class B | $ | 208 | $ | 662 | $ | 1,142 | $ | 2,279 | ||||||||
Class C | $ | 208 | $ | 662 | $ | 1,142 | $ | 2,470 | ||||||||
Columbia Mid Cap Growth Fund (Current) (Buying Fund) | ||||||||||||||||
Class B | $ | 201 | $ | 621 | $ | 1,068 | $ | 2,113 | ||||||||
Class C | $ | 201 | $ | 621 | $ | 1,068 | $ | 2,306 | ||||||||
Columbia Mid Cap Growth Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class B | $ | 197 | $ | 620 | $ | 1,068 | $ | 2,119 | ||||||||
Class C | $ | 197 | $ | 620 | $ | 1,068 | $ | 2,313 |
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Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in annual Fund operating expenses or in the example expenses, affect a Fund’s performance. During the most recent fiscal year, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:
Fund | Percentage of the Average Value of the Fund’s Portfolio | |||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | 157 | % | ||
Columbia Mid Cap Growth Fund (Buying Fund) | 138 | % |
Proposal 2. Fees and Expenses. Reorganization of each of Columbia Frontier Fund, Columbia Select Small Cap Fund, and Columbia Small Cap Growth Fund II into Columbia Small Cap Growth Fund I
If the Reorganizations occur, certain Reorganization expenses, as described in Exhibit A, may be allocated to each Selling Fund, which will reduce such Selling Fund’s net asset value prior to the closing of the Reorganizations by less than $0.010 per share, based on each Selling Fund’s shares outstanding as of August 31, 2012.
Current and Pro Forma Fees and Expenses
Shareholder Fees (fees paid directly from your investment)
Columbia Frontier Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class Z | ||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Columbia Select Small Cap Fund (Current) (Selling Fund) | Class A | Class C | Class R | Class Z | ||||||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | |||||||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 1.00 | %(c) | N/A | N/A |
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Columbia Small Cap Growth Fund II (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class Z | |||||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | % | 1.00 | % | N/A | N/A | ||||||||||||||||||||||||
Columbia Small Cap Growth Fund I (Current and Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class Z | ||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A |
(a) | Contingent deferred sales charges (CDSC) on certain investments of between $1 million and $50 million redeemed within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within 12 months of purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months of purchase, with certain limited exceptions |
(b) | This charge decreases over time. |
(c) | This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions. |
Annual Fund Operating Expenses (expenses that expenses that you pay each year as a percentage of the value of your investment):
Columbia Frontier Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class Z | ||||||||||||||||||||||||
Management fees(1) | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | ||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Other expenses(2) | 0.80 | % | 0.80 | % | 0.80 | % | 0.33 | % | 0.80 | % | 0.63 | % | 0.38 | % | 0.80 | % | ||||||||||||||||
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Total annual Fund operating expenses | 1.92 | % | 2.67 | % | 2.67 | % | 1.20 | % | 2.17 | % | 1.50 | % | 1.25 | % | 1.67 | % | ||||||||||||||||
Less: Fee waiver/expense reimbursement(3) | (0.39 | )% | (0.39 | )% | (0.39 | )% | (0.12 | )% | (0.39 | )% | (0.12 | )% | (0.12 | )% | (0.39 | )% | ||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.53 | % | 2.28 | % | 2.28 | % | 1.08 | % | 1.78 | % | 1.38 | % | 1.13 | % | 1.28 | % |
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Columbia Select Small Cap Fund (Current) (Selling Fund) | Class A | Class C | Class R | Class Z | ||||||||||||||||
Management fees(1) | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | ||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 0.50 | % | 0.00 | % | ||||||||||||
Other expenses(2) | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||||
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Total annual Fund operating expenses | 1.47 | % | 2.22 | % | 1.72 | % | 1.22 | % | ||||||||||||
Less: Fee waiver/expense reimbursement(4) | (0.06 | )% | (0.06 | )% | (0.06 | )% | (0.06 | )% | ||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.41 | % | 2.16 | % | 1.66 | % | 1.16 | % | ||||||||||||
Columbia Small Cap Growth Fund II (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class Z | |||||||||||||||
Management fees(5) | 0.82 | % | 0.82 | % | 0.82 | % | 0.82 | % | 0.82 | % | ||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Other expenses(2) | 0.30 | % | 0.30 | % | 0.30 | % | 0.09 | % | 0.30 | % | ||||||||||
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Total annual Fund operating expenses | 1.37 | % | 2.12 | % | 2.12 | % | 0.91 | % | 1.12 | % |
Columbia Small Cap Growth Fund I (Current) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class Z | ||||||||||||||||||
Management fees(6) | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | ||||||||||||
Other expenses(2) | 0.25 | % | 0.25 | % | 0.25 | % | 0.04 | % | 0.25 | % | 0.25 | % | ||||||||||||
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Total annual Fund operating expenses | 1.34 | % | 2.09 | % | 2.09 | % | 0.88 | % | 1.59 | % | 1.09 | % | ||||||||||||
Less: Fee waiver/expense reimbursement(7) | (0.03 | )% | (0.03 | )% | (0.03 | )% | 0.00 | % | (0.03 | )% | (0.03 | )% | ||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.31 | % | 2.06 | % | 2.06 | % | 0.88 | % | 1.56 | % | 1.06 | % |
The number of Reorganizations that occur will affect the Total annual Fund operating expenses of the Buying Fund on a pro forma combined basis after the Reorganizations. The tables below present the pro forma combined Total annual Fund operating expenses of the Buying Fund assuming (1) that certain, but not all, of the Reorganizations are consummated and (2) that all of the Reorganizations are consummated. Specifically, the first table shows the pro forma combined Total annual Fund operating expenses of the Buying Fund assuming the combination of Reorganizations that results in the highest possible Total annual Fund operating expenses, the Reorganization of only Columbia Frontier Fund, and the second table shows the pro forma combined Total annual Fund operating expenses of the Buying Fund assuming the combination of Reorganizations that results in the lowest possible Total annual Fund operating expenses, the Reorganization of all of the Selling Funds.
Columbia Small Cap Growth Fund I (Pro Forma — Highest) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class Z | ||||||||||||||||||||||||
Management fees(6) | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Other expenses(2) | 0.27 | % | 0.27 | % | 0.27 | % | 0.04 | % | 0.27 | % | 0.34 | % | 0.09 | % | 0.27 | % | ||||||||||||||||
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Total annual Fund operating expenses | 1.36 | % | 2.11 | % | 2.11 | % | 0.88 | % | 1.61 | % | 1.18 | % | 0.93 | % | 1.11 | % | ||||||||||||||||
Columbia Small Cap Growth Fund I (Pro Forma — Lowest/All Reorganizations) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class Z | ||||||||||||||||||||||||
Management fees(8) | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | ||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Other expenses(2) | 0.26 | % | 0.26 | % | 0.26 | % | 0.03 | % | 0.26 | % | 0.33 | % | 0.08 | % | 0.26 | % | ||||||||||||||||
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Total annual Fund operating expenses | 1.32 | % | 2.07 | % | 2.07 | % | 0.84 | % | 1.57 | % | 1.14 | % | 0.89 | % | 1.07 | % |
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Table of Contents
(1) | Management Fees are composed of an investment management service fee of 0.79% and an administration fee of 0.08%. |
(2) | Other expenses have been restated to reflect contractual changes to certain fees paid by the Fund. |
(3) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until February 28, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 1.53% for Class A, 2.28% for Class B, 2.28% for Class C, 1.08% for Class I, 1.78% for Class R, 1.38% for K, 1.13% for R5 and 1.28% for Class Z. Columbia Management and certain of its affiliates have further contractually agreed, effective March 1, 2013, to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 1.41% for Class A, 2.16% for Class B, 2.16% for Class C, 0.96% for Class I, 1.66% for Class R, 1.26% for Class K, 1.01% for Class R5 and 1.16% for Class Z. |
(4) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 1.41% for Class A, 2.16% for Class C, 1.66% for Class R and 1.16% for Class Z. |
(5) | Management Fees are composed of an investment management service fee of 0.70% and an administration fee of 0.12%. |
(6) | Management Fees are composed of an investment management service fee of 0.76% and an administration fee of 0.08%. |
(7) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2012, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 1.31% for Class A, 2.06% for Class B, 2.06% for Class C, 0.93% for Class I, 1.56% for Class R and 1.06% for Class Z. Columbia Management and certain of its affiliates have further contractually agreed, effective January 1, 2013, to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 1.41% for Class A, 2.16% for Class B, 2.16% for Class C, 1.02% for Class I, 1.66% for Class R and 1.16% for Class Z. |
(8) | Management Fees are composed of an investment management service fee of 0.74% and an administration fee of 0.07%. |
Expense examples: These examples are intended to help you compare the cost of investing in each Fund with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated and then redeem all of your shares at the end of those periods, both under the current arrangements and, for the Buying Fund, assuming completion of the proposed Reorganizations. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangement only for the period indicated in the Fund’s Annual Fund Operating Expenses table. Although your actual costs may be higher or lower, based on those assumptions, your costs would be:
Columbia Frontier Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 722 | $ | 1,108 | $ | 1,519 | $ | 2,664 | ||||||||
Class B | $ | 731 | $ | 1,093 | $ | 1,581 | $ | 2,796 | ||||||||
Class C | $ | 331 | $ | 793 | $ | 1,381 | $ | 2,978 | ||||||||
Class I | $ | 110 | $ | 369 | $ | 649 | $ | 1,449 | ||||||||
Class R | $ | 181 | $ | 642 | $ | 1,130 | $ | 2,478 | ||||||||
Class K | $ | 140 | $ | 463 | $ | 808 | $ | 1,785 | ||||||||
Class R5 | $ | 115 | $ | 385 | $ | 676 | $ | 1,506 | ||||||||
Class Z | $ | 130 | $ | 489 | $ | 872 | $ | 1,949 | ||||||||
Columbia Select Small Cap Fund (Current) (Selling Fund) | ||||||||||||||||
Class A | $ | 710 | $ | 1,008 | $ | 1,326 | $ | 2,227 | ||||||||
Class C | $ | 319 | $ | 688 | $ | 1,184 | $ | 2,550 | ||||||||
Class R | $ | 169 | $ | 536 | $ | 928 | $ | 2,025 | ||||||||
Class Z | $ | 118 | $ | 381 | $ | 665 | $ | 1,472 |
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Table of Contents
Columbia Small Cap Growth Fund II (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 706 | $ | 984 | $ | 1,282 | $ | 2,127 | ||||||||
Class B | $ | 715 | $ | 964 | $ | 1,239 | $ | 2,261 | ||||||||
Class C | $ | 315 | $ | 664 | $ | 1,139 | $ | 2,452 | ||||||||
Class I | $ | 93 | $ | 290 | $ | 504 | $ | 1,120 | ||||||||
Class Z | $ | 114 | $ | 356 | $ | 617 | $ | 1,363 | ||||||||
Columbia Small Cap Growth Fund I (Current) (Buying Fund) | ||||||||||||||||
Class A | $ | 701 | $ | 972 | $ | 1,264 | $ | 2,092 | ||||||||
Class B | $ | 709 | $ | 952 | $ | 1,321 | $ | 2,227 | ||||||||
Class C | $ | 309 | $ | 652 | $ | 1,121 | $ | 2,418 | ||||||||
Class I | $ | 90 | $ | 281 | $ | 488 | $ | 1,084 | ||||||||
Class R | $ | 159 | $ | 499 | $ | 863 | $ | 1,887 | ||||||||
Class Z | $ | 108 | $ | 344 | $ | 598 | $ | 1,326 | ||||||||
Columbia Small Cap Growth Fund I (Pro Forma — Highest) (Buying Fund) | ||||||||||||||||
Class A | $ | 706 | $ | 981 | $ | 1,277 | $ | 2,116 | ||||||||
Class B | $ | 714 | $ | 961 | $ | 1,334 | $ | 2,250 | ||||||||
Class C | $ | 314 | $ | 661 | $ | 1,134 | $ | 2,441 | ||||||||
Class I | $ | 90 | $ | 281 | $ | 488 | $ | 1,084 | ||||||||
Class R | $ | 164 | $ | 508 | $ | 876 | $ | 1,911 | ||||||||
Class K | $ | 120 | $ | 375 | $ | 649 | $ | 1,432 | ||||||||
Class R5 | $ | 95 | $ | 296 | $ | 515 | $ | 1,143 | ||||||||
Class Z | $ | 113 | $ | 353 | $ | 612 | $ | 1,352 | ||||||||
Columbia Small Cap Growth Fund I (Pro Forma — Lowest/All Reorganizations) (Buying Fund) | ||||||||||||||||
Class A | $ | 702 | $ | 969 | $ | 1,257 | $ | 2,074 | ||||||||
Class B | $ | 710 | $ | 949 | $ | 1,314 | $ | 2,208 | ||||||||
Class C | $ | 310 | $ | 649 | $ | 1,114 | $ | 2,400 | ||||||||
Class I | $ | 86 | $ | 268 | $ | 466 | $ | 1,037 | ||||||||
Class R | $ | 160 | $ | 496 | $ | 855 | �� | $ | 1,867 | |||||||
Class K | $ | 116 | $ | 362 | $ | 628 | $ | 1,386 | ||||||||
Class R5 | $ | 91 | $ | 284 | $ | 493 | $ | 1,096 | ||||||||
Class Z | $ | 109 | $ | 340 | $ | 590 | $ | 1,306 |
If you owned or will own any class of shares other than Class B or Class C shares you would pay the same costs shown in the tables above if you did not redeem your shares at the end of the periods indicated. If you owned or will own Class B or Class C shares, you would pay the following costs if you did not redeem your shares at the end of the periods indicated, which may be different than the costs shown in the tables above.
Columbia Frontier Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class B | $ | 231 | $ | 793 | $ | 1,381 | $ | 2,796 | ||||||||
Class C | $ | 231 | $ | 793 | $ | 1,381 | $ | 2,978 | ||||||||
Columbia Select Small Cap Fund (Current) (Selling Fund) | ||||||||||||||||
Class C | $ | 219 | $ | 688 | $ | 1,184 | $ | 2,550 |
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Table of Contents
Columbia Small Cap Growth Fund II (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class B | $ | 215 | $ | 664 | $ | 1,139 | $ | 2,261 | ||||||||
Class C | $ | 215 | $ | 664 | $ | 1,139 | $ | 2,452 | ||||||||
Columbia Small Cap Growth Fund I (Current) (Buying Fund) | ||||||||||||||||
Class B | $ | 209 | $ | 652 | $ | 1,121 | $ | 2,227 | ||||||||
Class C | $ | 209 | $ | 652 | $ | 1,121 | $ | 2,418 | ||||||||
Columbia Small Cap Growth Fund I (Pro Forma – Highest) (Buying Fund) | ||||||||||||||||
Class B | $ | 214 | $ | 661 | $ | 1,134 | $ | 2,250 | ||||||||
Class C | $ | 214 | $ | 661 | $ | 1,134 | $ | 2,441 | ||||||||
Columbia Small Cap Growth Fund I (Pro Forma – Lowest/All Reorganizations) (Buying Fund) | ||||||||||||||||
Class B | $ | 210 | $ | 649 | $ | 1,114 | $ | 2,208 | ||||||||
Class C | $ | 210 | $ | 649 | $ | 1,114 | $ | 2,400 |
Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in annual Fund operating expenses or in the example, affect a Fund’s performance. During the most recent fiscal year, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:
Fund | Percentage of the Average Value of the Fund’s Portfolio | |||
Columbia Frontier Fund (Selling Fund) | 72 | % | ||
Columbia Select Small Cap Growth Fund (Selling Fund) | 61 | % | ||
Columbia Small Cap Growth Fund II (Selling Fund) | 112 | % | ||
Columbia Small Cap Growth Fund I (Buying Fund) | 113 | % |
Proposal 3 Fees and Expenses. Reorganization of Columbia Emerging Markets Opportunity Fund into Columbia Emerging Markets Fund
Current and Pro Forma Fees and Expenses
Shareholder Fees (fees paid directly from your investment)
Columbia Emerging Markets Opportunity Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class W | Class Z | |||||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A | N/A |
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Table of Contents
Columbia Emerging Markets Fund (Current and Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class W | Class Z | |||||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A | N/A |
(a) | Contingent deferred sales charges (CDSC) on certain investments of between $1 million and $50 million redeemed within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within 12 months of purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months of purchase, with certain limited exceptions |
(b) | This charge decreases over time. |
(c) | This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions. |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
Columbia Emerging Markets Opportunity Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class W | Class Z | |||||||||||||||||||||||||||
Management fees(1) | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | 1.16 | % | ||||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.25 | % | 0.00 | % | ||||||||||||||||||
Other expenses(2) | 0.43 | % | 0.43 | % | 0.43 | % | 0.14 | % | 0.43 | % | 0.44 | % | 0.19 | % | 0.43 | % | 0.43 | % | ||||||||||||||||||
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Total annual Fund operating expenses | 1.84 | % | 2.59 | % | 2.59 | % | 1.30 | % | 2.09 | % | 1.60 | % | 1.35 | % | 1.84 | % | 1.59 | % | ||||||||||||||||||
Columbia Emerging Markets Fund (Current) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class W | Class Z | |||||||||||||||||||||||||||
Management fees(3) | 1.35 | % | N/A | 1.35 | % | 1.35 | % | 1.35 | % | N/A | 1.35 | % | 1.35 | % | 1.35 | % | ||||||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | N/A | 1.00 | % | 0.00 | % | 0.50 | % | N/A | 0.00 | % | 0.25 | % | 0.00 | % | ||||||||||||||||||||
Other expenses(2) | 0.48 | % | N/A | 0.48 | % | 0.17 | % | 0.48 | % | N/A | 0.22 | % | 0.48 | % | 0.48 | % | ||||||||||||||||||||
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Total annual Fund operating expenses | 2.08 | % | N/A | 2.83 | % | 1.52 | % | 2.33 | % | N/A | 1.57 | % | 2.08 | % | 1.83 | % | ||||||||||||||||||||
Less: Fee waiver/expense reimbursement(4) | (0.29 | )% | N/A | (0.29 | )% | (0.18 | )% | (0.29 | )% | N/A | (0.18 | )% | (0.29 | )% | (0.29 | )% | ||||||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.79 | % | N/A | 2.54 | % | 1.34 | % | 2.04 | % | N/A | 1.39 | % | 1.79 | % | 1.54 | % |
-20-
Table of Contents
Columbia Emerging Markets Fund (Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class K | Class R5 | Class W | Class Z | |||||||||||||||||||||||||||
Management fees(5)(6) | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | ||||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.25 | % | 0.00 | % | ||||||||||||||||||
Other expenses(2) | 0.47 | % | 0.47 | % | 0.47 | % | 0.12 | % | 0.47 | % | 0.42 | % | 0.17 | % | 0.47 | % | 0.47 | % | ||||||||||||||||||
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Total annual Fund operating expenses | 1.87 | % | 2.62 | % | 2.62 | % | 1.27 | % | 2.12 | % | 1.57 | % | 1.32 | % | 1.87 | % | 1.62 | % | ||||||||||||||||||
Less: Fee waiver/expense reimbursement(7) | (0.09 | )% | (0.09 | )% | (0.09 | )% | 0.00 | % | (0.09 | )% | 0.00 | % | 0.00 | % | (0.09 | )% | (0.09 | )% | ||||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 1.78 | % | 2.53 | % | 2.53 | % | 1.27 | % | 2.03 | % | 1.57 | % | 1.32 | % | 1.78 | % | 1.53 | % |
(1) | Management Fees are composed of an investment management service fee of 1.08% and an administration fee of 0.08%. |
(2) | Other expenses have been restated to reflect contractual changes to certain fees paid by the Fund. |
(3) | Management Fees are composed of an investment management service fee of 1.27% and an administration fee of 0.08%. |
(4) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 1.79% for Class A, 2.54% for Class C, 1.34% for Class I, 2.04% for Class R, 1.39% for R5, 1.79% for Class W and 1.54% for Z. |
(5) | Management Fees are composed of an investment management service fee of 1.07% and an administration fee of 0.08%. |
(6) | Management fees have been restated to reflect contractual changes to the investment advisory fee rates effective upon closing of the Reorganization. |
(7) | Columbia Management and certain of its affiliates have further contractually agreed, assuming approval by shareholders of the Reorganization, effective upon the closing of the reorganization to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses), until December 31, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 1.78% for Class A, 2.53% for Class B, 2.53% for Class C, 1.33% for Class I, 1.63% for Class K, 2.03% for Class R 1.38% for Class R5, 1.78% for Class W, 1.53% for Class Z. |
Expense examples: These examples are intended to help you compare the cost of investing in each Fund with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated and then redeem all of your shares at the end of those periods, both under the current arrangements and, for the Buying Fund, assuming completion of the proposed Reorganization. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangement only for the period indicated in the Fund’s Annual Fund Operating Expenses table. Although your actual costs may be higher or lower, based on those assumptions your costs would be:
Columbia Emerging Markets Opportunity Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 751 | $ | 1,121 | $ | 1,514 | $ | 2,614 | ||||||||
Class B | $ | 762 | $ | 1,106 | $ | 1,576 | $ | 2,746 | ||||||||
Class C | $ | 362 | $ | 806 | $ | 1,376 | $ | 2,928 | ||||||||
Class I | $ | 132 | $ | 412 | $ | 714 | $ | 1,573 | ||||||||
Class R | $ | 212 | $ | 655 | $ | 1,125 | $ | 2,425 | ||||||||
Class K | $ | 163 | $ | 505 | $ | 872 | $ | 1,905 | ||||||||
Class R5 | $ | 137 | $ | 428 | $ | 740 | $ | 1,629 | ||||||||
Class W | $ | 187 | $ | 579 | $ | 996 | $ | 2,164 | ||||||||
Class Z | $ | 162 | $ | 502 | $ | 867 | $ | 1,894 |
-21-
Table of Contents
Columbia Emerging Markets Fund (Current) (Buying Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 746 | $ | 1,163 | $ | 1,604 | $ | 2,825 | ||||||||
Class C | $ | 357 | $ | 850 | $ | 1,468 | $ | 3,136 | ||||||||
Class I | $ | 136 | $ | 463 | $ | 812 | $ | 1,797 | ||||||||
Class R | $ | 207 | $ | 700 | $ | 1,219 | $ | 2,644 | ||||||||
Class R5 | $ | 142 | $ | 478 | $ | 838 | $ | 1,852 | ||||||||
Class W | $ | 182 | $ | 624 | $ | 1,092 | $ | 2,387 | ||||||||
Class Z | $ | 157 | $ | 547 | $ | 963 | $ | 2,124 | ||||||||
Columbia Emerging Markets Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class A | $ | 745 | $ | 1,121 | $ | 1,521 | $ | 2,637 | ||||||||
Class B | $ | 756 | $ | 1,106 | $ | 1,583 | $ | 2,769 | ||||||||
Class C | $ | 356 | $ | 806 | $ | 1,383 | $ | 2,951 | ||||||||
Class I | $ | 129 | $ | 403 | $ | 698 | $ | 1,539 | ||||||||
Class R | $ | 206 | $ | 656 | $ | 1,132 | $ | 2,449 | ||||||||
Class K | $ | 160 | $ | 496 | $ | 856 | $ | 1,872 | ||||||||
Class R5 | $ | 134 | $ | 419 | $ | 724 | $ | 1,595 | ||||||||
Class W | $ | 181 | $ | 579 | $ | 1,004 | $ | 2,188 | ||||||||
Class Z | $ | 156 | $ | 503 | $ | 874 | $ | 1,919 |
If you owned or will own any class of shares other than Class B or Class C you would pay the same costs shown in the tables above if you did not redeem your shares at the end of the periods indicated. If you owned or will own Class B or Class C shares, you would pay the following costs if you did not redeem your shares at the end of the periods indicated, which may be different than the costs shown in the tables above.
Columbia Emerging Markets Opportunity Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class B | $ | 262 | $ | 806 | $ | 1,376 | $ | 2,746 | ||||||||
Class C | $ | 262 | $ | 806 | $ | 1,376 | $ | 2,928 | ||||||||
Columbia Emerging Markets Fund (Current) (Buying Fund) | ||||||||||||||||
Class C | $ | 257 | $ | 850 | $ | 1,468 | $ | 3,136 | ||||||||
Columbia Emerging Markets Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class B | $ | 256 | $ | 806 | $ | 1,383 | $ | 2,769 | ||||||||
Class C | $ | 256 | $ | 806 | $ | 1,383 | $ | 2,951 |
Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in annual Fund operating expenses or in the example expenses, affect a Fund’s performance. During the most recent fiscal year, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:
Fund | Percentage of the Average Value of the Fund’s Portfolio | |||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | 84 | % | ||
Columbia Emerging Markets Fund (Buying Fund) | 117 | % |
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Proposal 4 Fees and Expenses. Reorganization of Columbia Diversified Bond Fund into Columbia Intermediate Bond Fund
Current and Pro Forma Fees and Expenses
Shareholder Fees (fees paid directly from your investment)
Columbia Diversified Bond Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class R5 | Class W | Class Z | ||||||||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 4.75 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
Columbia Intermediate Bond Fund (Current) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class R5 | Class W | Class Z | ||||||||||||||||||||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 3.25 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 3.00 | %(b) | 1.00 | %(c) | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
(a) | Contingent deferred sales charges (CDSC) on certain investments of between $1 million and $50 million redeemed within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within 12 months of purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months of purchase, with certain limited exceptions |
(b) | This charge decreases over time. |
(c) | This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions. |
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Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
Columbia Diversified Bond Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class R5 | Class W | Class Z | ||||||||||||||||||||||||||||||
Management fees(1) | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | ||||||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.25 | % | 0.00 | % | ||||||||||||||||||||
Other expenses(2) | 0.17 | % | 0.17 | % | 0.17 | % | 0.02 | % | 0.17 | % | 0.17 | % | 0.32 | % | 0.07 | % | 0.17 | % | 0.17 | % | ||||||||||||||||||||
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Total annual Fund operating expenses | 0.89 | % | 1.64 | % | 1.64 | % | 0.49 | % | 1.14 | % | 0.64 | % | 0.79 | % | 0.54 | % | 0.89 | % | 0.64 | % | ||||||||||||||||||||
Less: Fee waiver/expense reimbursement(3) | (0.04 | )% | (0.04 | )% | (0.04 | )% | 0.00 | % | (0.04 | )% | (0.04 | )% | 0.00 | % | 0.00 | % | (0.04 | )% | (0.04 | )% | ||||||||||||||||||||
Total annual Fund operating expenses after fee waiver/expense reimbursement | 0.85 | % | 1.60 | % | 1.60 | % | 0.49 | % | 1.10 | % | 0.60 | % | 0.79 | % | 0.54 | % | 0.85 | % | 0.60 | % | ||||||||||||||||||||
Columbia Intermediate Bond Fund (Current) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class R5 | Class W | Class Z | ||||||||||||||||||||||||||||||
Management fees(4) | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | N/A | 0.48 | % | 0.48 | % | 0.48 | % | |||||||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | N/A | 0.00 | % | 0.25 | % | 0.00 | % | |||||||||||||||||||||
Other expenses(2) | 0.22 | % | 0.22 | % | 0.22 | % | 0.02 | % | 0.22 | % | 0.22 | % | N/A | 0.07 | % | 0.22 | % | 0.22 | % | |||||||||||||||||||||
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Total annual Fund operating expenses | 0.95 | % | 1.70 | % | 1.70 | % | 0.50 | % | 1.20 | % | 0.70 | % | N/A | 0.55 | % | 0.95 | % | 0.70 | % | |||||||||||||||||||||
Fee waiver/expense reimbursement(5) | (0.07 | )% | (0.07 | )% | (0.07 | )% | 0.00 | % | (0.07 | )% | (0.07 | )% | N/A | 0.00 | % | (0.07 | )% | (0.07 | )% | |||||||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 0.88 | % | 1.63 | % | 1.63 | % | 0.50 | % | 1.13 | % | 0.63 | % | N/A | 0.55 | % | 0.88 | % | 0.63 | % | |||||||||||||||||||||
Columbia Intermediate Bond Fund (Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class R5 | Class W | Class Z | ||||||||||||||||||||||||||||||
Management fees(6) | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | ||||||||||||||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | 0.50 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.25 | % | 0.00 | % | ||||||||||||||||||||
Other expenses(2) | 0.19 | % | 0.19 | % | 0.19 | % | 0.02 | % | 0.19 | % | 0.19 | % | 0.32 | % | 0.07 | % | 0.19 | % | 0.19 | % | ||||||||||||||||||||
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Total annual Fund operating expenses | 0.89 | % | 1.64 | % | 1.64 | % | 0.47 | % | 1.14 | % | 0.64 | % | 0.77 | % | 0.52 | % | 0.89 | % | 0.64 | % | ||||||||||||||||||||
Fee waiver/expense reimbursement(7) | (0.04 | )% | (0.04 | )% | (0.04 | )% | 0.00 | % | (0.04 | )% | (0.04 | )% | 0.00 | % | 0.00 | % | (0.04 | )% | (0.04 | )% | ||||||||||||||||||||
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Total annual Fund operating expenses after fee waiver/expense reimbursement | 0.85 | % | 1.60 | % | 1.60 | % | 0.47 | % | 1.10 | % | 0.60 | % | 0.77 | % | 0.52 | % | 0.85 | % | 0.60 | % |
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Table of Contents
(1) | Management Fees are composed of an investment management service fee of 0.41% and an administration fee of 0.06%. |
(2) | Other Expenses have been restated to reflect contractual changes to certain fees paid by the Fund. |
(3) | Columbia Management has contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until December 31, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.85% for Class A, 1.60% for Class B, 1.60% for Class C, 0.50% for Class I, 1.10% for Class R, 0.60% for Class R4, 0.80% for Class K, 0.55% for Class R5, 0.85% for Class W and 0.60% for Class Z. |
(4) | Management Fees are composed of an investment management service fee of 0.42% and an administration fee of 0.06%. |
(5) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until August 31, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.88% for Class A, 1.63% for Class B, 1.63% for Class C, 0.50% for Class I, 1.13% for Class R, 0.63% for Class R4, 0.55% for Class R5, 0.88% for Class W and 0.63% for Class Z. |
(6) | Management Fees are composed of an investment management service fee of 0.40% and an administration fee of 0.05%. |
(7) | Columbia Management and certain of its affiliates have further contractually agreed, assuming approval by shareholders of the Reorganization, effective upon the closing of the reorganization to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses), until December 31, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses, subject to applicable exclusions, will not exceed the annual rates of 0.85% for Class A, 1.60% for Class B, 1.60% for Class C, 0.50% for Class I, 0.80% for Class K, 1.10% for Class R, 0.60% for Class R4, 0.55% for Class R5, 0.85% for Class W and 0.60% for Class Z. |
Expense examples: These examples are intended to help you compare the cost of investing in each Fund with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated and then redeem all of your shares at the end of those periods, both under the current arrangements and, for the Buying Fund, assuming completion of the proposed Reorganization. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense reimbursement arrangement only for the period indicated in the Fund’s Annual Fund Operating Expenses table. Although your actual costs may be higher or lower, based on those assumptions your costs would be:
Columbia Diversified Bond Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 558 | $ | 742 | $ | 942 | $ | 1,520 | ||||||||
Class B | $ | 663 | $ | 814 | $ | 1,089 | $ | 1,744 | ||||||||
Class C | $ | 263 | $ | 514 | $ | 889 | $ | 1,945 | ||||||||
Class I | $ | 50 | $ | 157 | $ | 275 | $ | 619 | ||||||||
Class R | $ | 112 | $ | 359 | $ | 625 | $ | 1,387 | ||||||||
Class R4 | $ | 61 | $ | 201 | $ | 353 | $ | 798 | ||||||||
Class K | $ | 81 | $ | 253 | $ | 440 | $ | 982 | ||||||||
Class R5 | $ | 55 | $ | 173 | $ | 302 | $ | 680 | ||||||||
Class W | $ | 87 | $ | 280 | $ | 490 | $ | 1,097 | ||||||||
Class Z | $ | 61 | $ | 201 | $ | 353 | $ | 798 | ||||||||
Columbia Intermediate Bond Fund (Current) (Buying Fund) | ||||||||||||||||
Class A | $ | 412 | $ | 611 | $ | 827 | $ | 1,447 | ||||||||
Class B | $ | 466 | $ | 729 | $ | 916 | $ | 1,804 | ||||||||
Class C | $ | 266 | $ | 529 | $ | 916 | $ | 2,003 | ||||||||
Class I | $ | 51 | $ | 160 | $ | 280 | $ | 628 | ||||||||
Class R | $ | 115 | $ | 374 | $ | 653 | $ | 1,448 | ||||||||
Class R4 | $ | 64 | $ | 217 | $ | 383 | $ | 864 | ||||||||
Class R5 | $ | 56 | $ | 176 | $ | 307 | $ | 689 | ||||||||
Class W | $ | 90 | $ | 296 | $ | 519 | $ | 1,160 | ||||||||
Class Z | $ | 64 | $ | 217 | $ | 383 | $ | 864 |
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Columbia Intermediate Bond Fund (Pro Forma) (Buying Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 409 | $ | 596 | $ | 798 | $ | 1,382 | ||||||||
Class B | $ | 463 | $ | 713 | $ | 888 | $ | 1,740 | ||||||||
Class C | $ | 263 | $ | 513 | $ | 888 | $ | 1,940 | ||||||||
Class I | $ | 48 | $ | 151 | $ | 263 | $ | 591 | ||||||||
Class R | $ | 112 | $ | 358 | $ | 624 | $ | 1,383 | ||||||||
Class R4 | $ | 61 | $ | 201 | $ | 353 | $ | 795 | ||||||||
Class K | $ | 79 | $ | 246 | $ | 428 | $ | 954 | ||||||||
Class R5 | $ | 53 | $ | 167 | $ | 291 | $ | 653 | ||||||||
Class W | $ | 87 | $ | 280 | $ | 489 | $ | 1,092 | ||||||||
Class Z | $ | 61 | $ | 201 | $ | 353 | $ | 795 |
If you owned or will own any class of shares other than Class B or Class C you would pay the same costs shown in the tables above if you did not redeem your shares at the end of the periods indicated. If you owned or will own Class B or Class C shares, you would pay the following costs if you did not redeem your shares at the end of the periods indicated, which may be different than the costs shown in the tables above.
Columbia Diversified Bond Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class B | $ | 163 | $ | 514 | $ | 889 | $ | 1,744 | ||||||||
Class C | $ | 163 | $ | 514 | $ | 889 | $ | 1,945 | ||||||||
Columbia Intermediate Bond Fund (Current) (Buying Fund) | ||||||||||||||||
Class B | $ | 166 | $ | 529 | $ | 916 | $ | 1,804 | ||||||||
Class C | $ | 166 | $ | 529 | $ | 916 | $ | 2,003 | ||||||||
Columbia Intermediate Bond Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class B | $ | 163 | $ | 513 | $ | 888 | $ | 1,740 | ||||||||
Class C | $ | 163 | $ | 513 | $ | 888 | $ | 1,940 |
Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in annual Fund operating expenses or in the example expenses, affect a Fund’s performance. During the most recent fiscal year, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:
Fund | Percentage of the Average Value of the Fund’s Portfolio | |||
Columbia Diversified Bond Fund (Current) (Selling Fund) | 373 | % | ||
Columbia Intermediate Bond Fund (Current) (Buying Fund) | 170 | %* |
* | For the fiscal year ended March 31, 2012. For the Fund’s most recent fiscal period ended April 30, 2012, the Fund’s portfolio turnover rate was 10% of the average value of its portfolio. |
Proposal 5 Fees and Expenses. Reorganization of Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund into Columbia Tax-Exempt Fund
If the Reorganization occurs, certain Reorganization expenses, as described in Exhibit A, may be allocated to each Selling Fund, which will reduce such Selling Fund’s net asset value prior to the closing of the Reorganization by less than $0.004 per share based on each Selling Fund’s shares outstanding as of August 31, 2012.
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Table of Contents
Current and Pro Forma Fees and Expenses
Shareholder Fees (fees paid directly from your investment)
Columbia Connecticut Tax-Exempt Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 4.75 | % | N/A | N/A | N/A | |||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | |||||||||
Columbia Massachusetts Tax-Exempt Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 4.75 | % | N/A | N/A | N/A | |||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A | |||||||||
Columbia Tax-Exempt Fund (Current and Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 4.75 | % | N/A | N/A | N/A | |||||||||||
Maximum deferred sales charge (load) imposed on redemptions (as a percentage of net asset value at the time of your purchase or redemption, whichever is lower) | 1.00 | %(a) | 5.00 | %(b) | 1.00 | %(c) | N/A |
(a) | Contingent deferred sales charges (CDSC) on certain investments of between $1 million and $50 million redeemed within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within 12 months of purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months of purchase, with certain limited exceptions. |
(b) | This charge decreases over time. |
(c) | This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions. |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
Columbia Connecticut Tax-Exempt Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Management fees(1)(2) | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | ||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | ||||||||
Other expenses(3) | 0.33 | % | 0.33 | % | 0.33 | % | 0.33 | % | ||||||||
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Total annual Fund operating expenses | 1.05 | % | 1.80 | % | 1.80 | % | 0.80 | % | ||||||||
Less: Fee waivers and/or reimbursements(4)(5) | (0.26 | )% | (0.26 | )% | (0.26 | )% | (0.26 | )% | ||||||||
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Total annual Fund operating expenses after the fee waivers and/or reimbursements | 0.79 | % | 1.54 | % | 1.54 | % | 0.54 | % |
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Columbia Massachusetts Tax-Exempt Fund (Current) (Selling Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Management fees(1)(2) | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | ||||||||
Distribution and/or service (12b-1) fees | 0.25 | % | 1.00 | % | 1.00 | % | 0.00 | % | ||||||||
Other expenses(3) | 0.28 | % | 0.28 | % | 0.28 | % | 0.28 | % | ||||||||
Acquired Fund fees and expenses(6) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||
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Total annual Fund operating expenses | 1.01 | % | 1.76 | % | 1.76 | % | 0.76 | % | ||||||||
Less: Fee waivers and/or reimbursements(4)(7) | (0.18 | )% | (0.18 | )% | (0.18 | )% | (0.18 | )% | ||||||||
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Total annual Fund operating expenses after the fee waivers and/or reimbursements | 0.80 | % | 1.55 | % | 1.55 | % | 0.55 | % | ||||||||
Columbia Tax-Exempt Fund (Current) (Buying Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Management fees(8) | 0.43 | % | 0.43 | % | 0.43 | % | 0.43 | % | ||||||||
Distribution and/or service (12b-1) fees | 0.20 | % | 0.95 | % | 0.95 | % | 0.00 | % | ||||||||
Other expenses(3) | 0.14 | % | 0.14 | % | 0.14 | % | 0.14 | % | ||||||||
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Total annual Fund operating expenses | 0.77 | % | 1.52 | % | 1.52 | % | 0.57 | % | ||||||||
Columbia Tax-Exempt Fund (Pro Forma) (Buying Fund) | Class A | Class B | Class C | Class Z | ||||||||||||
Management fees(8) | 0.43 | % | 0.43 | % | 0.43 | % | 0.43 | % | ||||||||
Distribution and/or service (12b-1) fees | 0.20 | % | 0.95 | % | 0.95 | % | 0.00 | % | ||||||||
Other expenses(3) | 0.14 | % | 0.14 | % | 0.14 | % | 0.14 | % | ||||||||
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Total annual Fund operating expenses | 0.77 | % | 1.52 | % | 1.52 | % | 0.57 | % |
(1) | Management Fees are composed of an investment management service fee of 0.40% and an administration fee of 0.07%. |
(2) | Management fees have been restated to reflect contractual changes to the investment advisory and/or administrative fee rates. |
(3) | Other expenses have been restated to reflect contractual changes to certain fees paid by the Fund. |
(4) | Columbia Management and certain of its affiliates have contractually agreed to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until February 28, 2013, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 0.79% for Class A, 1.54% for Class B, 1.54% for Class C, and 0.54% for Class Z. |
(5) | Columbia Management and certain of its affiliates have further contractually agreed, effective March 1, 2013, to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until February 28, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 0.80% for Class A, 1.55% for Class B, 1.55% for Class C, and 0.55% for Class Z. |
(6) | Acquired fund fees and expenses include fees and expenses associated with the Fund’s investments in other investment companies and/or pooled investment vehicles. |
(7) | Columbia Management and certain of its affiliates have further contractually agreed, effective March 1, 2013, to waive fees and/or to reimburse expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and extraordinary expenses) until February 28, 2014, unless sooner terminated at the sole discretion of the Fund’s Board of Trustees. Under this agreement, the Fund’s net operating expenses will not exceed the annual rates of 0.84% for Class A, 1.59% for Class B, 1.59% for Class C, and 0.59% for Class Z. |
(8) | Management Fees are composed of an investment management service fee of 0.37% and an administration fee of 0.06%. |
Expense examples: These examples are intended to help you compare the cost of investing in each Fund with the cost of investing in other mutual funds. These examples assume that you invest $10,000 in the applicable Fund for the time periods indicated and then redeem all of your shares at the end of those periods, both under the current arrangements and, for the Buying Fund, assuming completion of the proposed Reorganization. These examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. These examples include any contractual fee waiver/expense
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reimbursement arrangement only for the period indicated in the Fund’s Annual Fund Operating Expenses table. Although your actual costs may be higher or lower, based on those assumptions your costs would be:
Columbia Connecticut Tax-Exempt Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class A | $ | 552 | $ | 769 | $ | 1,003 | $ | 1,674 | ||||||||
Class B | $ | 657 | $ | 841 | $ | 1,151 | $ | 1,897 | ||||||||
Class C | $ | 257 | $ | 541 | $ | 951 | $ | 2,095 | ||||||||
Class Z | $ | 55 | $ | 229 | $ | 419 | $ | 966 | ||||||||
Columbia Massachusetts Tax-Exempt Fund (Current) (Selling Fund) | ||||||||||||||||
Class A | $ | 553 | $ | 761 | $ | 987 | $ | 1,634 | ||||||||
Class B | $ | 658 | $ | 834 | $ | 1,135 | $ | 1,857 | ||||||||
Class C | $ | 258 | $ | 534 | $ | 935 | $ | 2,056 | ||||||||
Class Z | $ | 56 | $ | 222 | $ | 402 | $ | 923 | ||||||||
Columbia Tax-Exempt Fund (Current) (Buying Fund) | ||||||||||||||||
Class A | $ | 550 | $ | 709 | $ | 883 | $ | 1,384 | ||||||||
Class B | $ | 655 | $ | 780 | $ | 1,029 | $ | 1,610 | ||||||||
Class C | $ | 255 | $ | 480 | $ | 829 | $ | 1,813 | ||||||||
Class Z | $ | 58 | $ | 183 | $ | 318 | $ | 714 | ||||||||
Columbia Tax-Exempt Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class A | $ | 550 | $ | 709 | $ | 883 | $ | 1,384 | ||||||||
Class B | $ | 655 | $ | 780 | $ | 1,029 | $ | 1,610 | ||||||||
Class C | $ | 255 | $ | 480 | $ | 829 | $ | 1,813 | ||||||||
Class Z | $ | 58 | $ | 183 | $ | 318 | $ | 714 |
If you owned or will own any class of shares other than Class B or Class C you would pay the same costs shown in the tables above if you did not redeem your shares at the end of the periods indicated. If you owned or will own Class B or Class C shares, you would pay the following costs if you did not redeem your shares at the end of the periods indicated, which may be different than the costs shown in the tables above.
Columbia Connecticut Tax-Exempt Fund (Current) (Selling Fund) | 1 year | 3 years | 5 years | 10 years | ||||||||||||
Class B | $ | 157 | $ | 541 | $ | 951 | $ | 1,897 | ||||||||
Class C | $ | 157 | $ | 541 | $ | 951 | $ | 2,095 | ||||||||
Columbia Massachusetts Tax-Exempt Fund (Current) (Selling Fund) | ||||||||||||||||
Class B | $ | 158 | $ | 534 | $ | 935 | $ | 1,857 | ||||||||
Class C | $ | 158 | $ | 534 | $ | 935 | $ | 2,056 | ||||||||
Columbia Tax-Exempt Fund (Current) (Buying Fund) | ||||||||||||||||
Class B | $ | 155 | $ | 480 | $ | 829 | $ | 1,610 | ||||||||
Class C | $ | 155 | $ | 480 | $ | 829 | $ | 1,813 | ||||||||
Columbia Tax-Exempt Fund (Pro Forma) (Buying Fund) | ||||||||||||||||
Class B | $ | 155 | $ | 480 | $ | 829 | $ | 1,610 | ||||||||
Class C | $ | 155 | $ | 480 | $ | 829 | $ | 1,813 |
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Portfolio Turnover. Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. Those costs, which are not reflected in annual Fund operating expenses or in the example expenses, affect a Fund’s performance. During the most recent fiscal year, each Fund’s portfolio turnover rate was the following percentage of the average value of the Fund’s portfolio:
Fund | Percentage of the Average Value of the Fund’s Portfolio | |||
Columbia Connecticut Tax-Exempt Fund (Current) (Selling Fund) | 24 | % | ||
Columbia Massachusetts Tax-Exempt Fund (Current) (Selling Fund) | 26 | % | ||
Columbia Tax-Exempt Fund (Current) (Buying Fund) | 11 | % |
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Proposal 1. Comparison of Objectives, Strategies and Risks. Reorganization of Columbia Mid Cap Growth Opportunity Fund into Columbia Mid Cap Growth Fund
Comparison of the Selling Fund and the Buying Fund
The Selling Fund and the Buying Fund:
• | Have Columbia Management as investment manager. |
• | Have the same policies for buying and selling shares and the same exchange rights. Please see Exhibit B for a description of these policies for the Buying Fund. |
• | Are structured as series of an open-end management investment company. Each Fund is organized as a series of a Massachusetts business trust. Please see Exhibit C to this combined proxy statement/prospectus for more information regarding the differences between the rights of shareholders of the Selling Fund and shareholders of the Buying Fund. |
Comparison of Investment Objectives
The investment objectives of the Funds are as follows:
Selling Fund: Columbia Mid Cap Growth Opportunity Fund seeks to provide shareholders with growth of capital.
Buying Fund: Columbia Mid Cap Growth Fund seeks significant capital appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the Russell Midcap Index.
Each Fund seeks generally the same investment objective. While each Fund normally invests at least 80% of its net assets in equity securities of mid-capitalization companies, which Columbia Management defines as those companies with market capitalization within the range of companies that comprise the Russell Midcap® Index, the Buying Fund has made this policy part of its investment objective.
Because any investment involves risk, there can be no assurance that any Fund’s investment objective will be achieved. The investment objective of the Selling Fund may be changed only with shareholder approval, while the investment objective of the Buying Fund may be changed with 30 days written notice to shareholders or 60 days written notice to shareholders for changes to the Buying Fund’s 80% policy (described below).
Comparison of Principal Investment Strategies
The Funds have generally similar principal investment strategies. Each Fund normally invests at least 80% of its net assets in equity securities of mid-capitalization companies, which Columbia Management defines as those companies with market capitalization within the range of companies that comprise the Russell Midcap® Index. As of September 30, 2012, the Buying Fund and the Selling Fund had invested 92.48% and 93.10% of their net assets, respectively, in equity securities of companies with market capitalization within this range. The 80% policy (described below) of each of the Buying Fund and the Selling Fund may be changed by the Fund’s board on 60 days notice to shareholders. Each Fund may also invest up to 20% of its net assets in foreign securities, either directly or indirectly through depositary receipts. As of September 30, 2012, the Buying Fund and the Selling Fund had invested 2.72% and 2.74% of their net assets, respectively, in foreign securities. Each Fund may also invest in special situations, such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or developing new technologies.
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Additional information regarding the principal investment strategies of each Fund is set forth below:
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | Columbia Mid Cap Growth Fund (Buying Fund) | |
Under normal market conditions, the Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) at the time of purchase in the common stocks of mid-capitalization companies. Columbia Management defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by the share price) falls within the market capitalization range of the companies that comprise the Russell Midcap® Index. The market capitalization range of the companies included within the Index was $161.1 million to $21.49 billion as of February 29, 2012.
Over time, the capitalization of the companies in the Russell Midcap® Index will change. As they do, the size of the companies in which the Fund invests may change. As long as an investment continues to meet the Fund’s other investment criteria, the Fund may choose to continue to hold a stock even if the company’s market capitalization grows beyond the largest market capitalization of a company within the Russell Midcap® Index or falls below the market capitalization of the smallest company within the Russell Midcap® Index. Columbia Management may select investments for either their short-, medium-, or long-term prospects.
| Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities of companies that have market capitalizations in the range of the companies in the Russell Midcap Index at the time of purchase.
The Fund invests primarily in common stocks of companies that Columbia Management believes have the potential for long-term, above-average earnings growth. | |
The Fund will provide shareholders with at least 60 days’ written notice of any change in the 80% policy. | The Fund’s policy of investing at least 80% of its “net assets” (which includes net assets plus any borrowings for investment purposes) discussed above may be changed without shareholder approval as long as shareholders are given 60 days advance notice of the change. | |
The Fund may invest up to 20% of its total assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts. Depositary receipts are receipts issued by a bank or trust company and evidence ownership of underlying securities issued by foreign companies. | ||
The Fund may invest up to 20% of its net assets in equity securities of companies that have market capitalizations outside the range of the Russell Midcap Index. | ||
The Fund may invest in special situations such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies. |
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Buying Fund Investment Style
A description of the investment style of the Buying Fund is set forth below.
Columbia Management combines fundamental and quantitative analysis with risk management in identifying investment opportunities and constructing the Buying Fund’s portfolio. Columbia Management considers, among other factors:
• | overall economic and market conditions. |
• | the financial condition and management of a company, including its competitive position, the quality of its balance sheet and earnings, its future prospects, and the potential for growth and stock price appreciation. |
Columbia Management may sell a security when the security’s price reaches a target set by Columbia Management; if Columbia Management believes that there is deterioration in the issuer’s financial circumstances or fundamental prospects, or that other investments are more attractive; or for other reasons.
The Buying Fund’s investment strategy may involve the frequent trading of portfolio securities. This may cause the Buying Fund to incur higher transaction costs (which may adversely affect the Buying Fund’s performance) and may increase taxable distributions for shareholders.
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Fundamental Investment Policies
If the Reorganization occurs, the combined Fund will be subject to the fundamental investment policies of the Buying Fund. Columbia Management does not believe that the differences between the fundamental investment policies of the Selling Fund and the Buying Fund result in any material difference between the way the Funds have been managed and the way the combined Fund will be managed. A “fundamental” investment policy is one that may not be changed without a shareholder vote.
The Funds’ fundamental investment policies are set forth below:
Policy | Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | Columbia Mid Cap Growth Fund (Buying Fund) | ||
Borrowing/ Issuing Senior Securities | The Fund will not borrow money, except for temporary purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings) immediately after the borrowings.
The Fund will not issue senior securities, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
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Policy | Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | Columbia Mid Cap Growth Fund (Buying Fund) | ||
Commodities | The Fund will not buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from buying or selling options and futures contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities. | The Fund may not purchase or sell commodities, except that the Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts. | ||
Diversification | The Fund will not purchase more than 10% of the outstanding voting securities of an issuer, except that up to 25% of the fund’s assets may be invested without regard to this 10% limitation. The fund will not invest more than 5% of its total assets in securities of any company, government, or political subdivision thereof, except the limitation will not apply to investments in securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, or other investment companies, and except that up to 25% of the fund’s total assets may be invested without regard to this 5% limitation. | The Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. | ||
Industry Concentration | The Fund will not concentrate in any one industry. According to the present interpretation by the SEC, this means that up to 25% of the fund’s total assets, based on current market value at time of purchase, can be invested in any one industry. | The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
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Policy | Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | Columbia Mid Cap Growth Fund (Buying Fund) | ||
Lending | The Fund will not lend securities or participate in an interfund lending program if the total of all such loans would exceed 33 1/3% of the Fund’s total assets, except this fundamental investment policy shall not prohibit the Fund from purchasing money market securities, loans, loan participation or other debt securities, or from entering into repurchase agreements. | The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||
Real Estate | The Fund will not buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business or real estate investment trusts. For purposes of this policy, real estate includes real estate limited partnerships. | The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein. | ||
Underwriting | The Fund will not act as an underwriter (sell securities for others). However, under the securities laws, the Fund may be deemed to be an underwriter when it purchases securities directly from the issuer and later resells them. | The Fund may not underwrite any issue of securities issued by other persons within the meaning of the Securities Act of 1933 (the “1933 Act”) except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies. |
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Non-Fundamental Investment Policies
If the Reorganization occurs, the combined Fund will be subject to the non-fundamental investment policies (policies that may be changed without a shareholder vote) of the Buying Fund. Columbia Management does not believe that the differences between the non-fundamental policies of the Funds result in any material differences between the way the Funds have been managed and the way the combined Fund will be managed.
The Funds’ non-fundamental investment policies are set forth below:
Policy | Columbia Mid Cap Growth Opportunity Fund | Columbia Mid Cap Growth Fund | ||
Illiquid Securities | No more than 15% of the Fund’s net assets will be held in securities and other instruments that are illiquid. | The Fund may not invest more than 15% of its net assets in illiquid securities. |
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Policy | Columbia Mid Cap Growth Opportunity Fund | Columbia Mid Cap Growth Fund | ||
Investments in Other Investment Companies | The Fund may not purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. If shares of the Fund are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the fund are held by such other fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. |
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided below.
Although the Funds describe them somewhat differently, the principal risks associated with investments in the Buying Fund and the Selling Fund are generally similar because the Funds have similar investment objectives, principal investment strategies and investment policies. The actual risks of investing in each Fund depend on the securities held in each Fund’s portfolio and on market conditions, both of which change over time. The Buying Fund is subject to the principal risks described below. Similarities and material differences between the Buying Fund’s principal risks and those of the Selling Fund are also identified below.
• | Investment Strategy Risk. Columbia Management uses the principal investment strategies and other investment strategies to seek to achieve the Buying Fund’s investment objective. There is no assurance that the Buying Fund will achieve its investment objective. Investment decisions made by Columbia Management in using these strategies may not produce the returns expected by Columbia Management, may cause the Buying Fund’s shares to lose value or may cause the Buying Fund to underperform other funds with similar investment objectives. The Selling Fund is also subject to this principal risk. |
• | Market Risk. Market risk refers to the possibility that the market values of securities that the Buying Fund holds will fall, sometimes rapidly or unpredictably. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Buying Fund. Accordingly, an investment in the Buying Fund could lose money over short or even long periods. The market values of the securities the Buying Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities. The Selling Fund is also subject to this principal risk. |
• | Growth Securities Risk. Because growth securities typically trade at a higher multiple of earnings than other types of securities, the market values of growth securities may be more sensitive to changes in current or expected earnings than the market values of other types of securities. In addition, growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time. The Selling Fund also subject to this principal risk. |
• | Smaller Company Securities Risk. Securities of small- or mid-capitalization companies (“smaller companies”) can, in certain circumstances, have a higher potential for gains than securities of large-capitalization companies but may also have more risk. For example, smaller companies may be more vulnerable to market downturns and adverse business or economic events than larger, more established companies because they may have more limited financial resources and business operations. These companies are also more likely than large-capitalization companies (“larger companies”) to have more limited product lines and operating histories and to depend on smaller management teams. Their securities may trade less frequently and in smaller volumes and may be less liquid and fluctuate more sharply in value |
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than securities of larger companies. In addition, some smaller companies may not be widely followed by the investment community, which can lower the demand for their stocks. The Selling Fund is also subject to this principal risk. |
• | Foreign Securities Risk. Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Buying Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Buying Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies. The Selling Fund is also subject to this principal risk. |
• | Convertible Securities Risk. Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert. Because the value of a convertible security can be influenced by both interest rates and the common stock’s market movements, a convertible security generally is not as sensitive to interest rates as a similar debt security, and generally will not vary in value in response to other factors to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, holders of convertible securities would typically be paid before the company’s common stockholders but after holders of any senior debt obligations of the company. The Buying Fund may be forced to convert a convertible security before it otherwise would choose to do so, which may decrease the Buying Fund’s return. The Selling Fund is not subject to convertible securities risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in convertible securities. |
• | Currency Risk. Securities denominated in non-U.S. dollar currencies are subject to the risk that, for example, if the value of a foreign currency were to decline against the U.S. dollar, such decline would reduce the U.S. dollar value of any securities held by the Buying Fund denominated in that currency. The Selling Fund is also subject to this risk. |
• | Special Situations Risk. Securities of companies that are involved in an initial public offering or a major corporate event, such as a business consolidation or restructuring, may present special risk because of the high degree of uncertainty that can be associated with such events. Securities issued in initial public offerings often are issued by companies that are in the early stages of development, have a history of little or no revenues and may operate at a loss following the offering. It is possible that there will be no active trading market for the securities after the offering, and that the market price of the securities may be subject to significant and unpredictable fluctuations. Investing in special situations may have a magnified effect on the performance of funds with small amounts of assets. The Selling Fund is also subject to this principal risk. |
• | Sector Risk. At times, the Buying Fund may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by economic or market events, making the Buying Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. The Selling Fund is also subject to this principal risk. |
• | Frequent Trading Risk. Frequent trading of investments increases the possibility that the Buying Fund will realize taxable capital gains (including short-term capital gains, which are generally taxable at higher rates |
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than long-term capital gains for U.S. federal income tax purposes), which could reduce the Buying Fund’s after-tax return. Frequent trading can also mean higher brokerage and other transaction costs, which could reduce the Buying Fund’s return. The Selling Fund is also subject to this risk. |
The following bar charts and tables provide some illustration of the risks of investing in the Funds by showing, respectively:
• | how each Fund’s performance has varied for each full calendar year shown in the bar chart; and |
• | how each Fund’s average annual total returns compare to certain measures of market performance shown in the table. |
Both the bar charts and the tables assume that all distributions have been reinvested. The performance of different classes varies because of differences in sales charges and other fees and expenses. How a Fund has performed in the past (before and after taxes) does not indicate how the Fund will perform in the future. The performance shown reflects any fee waiver or expense reimbursement arrangements in effect for the periods reported. In the absence of such fee waiver or expense reimbursement arrangements, the performance shown would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales charge for Class A shares is not reflected in the bar charts.
Tables. The tables below show total returns from hypothetical investments in the indicated classes of shares of each Fund. The returns shown are compared to measures of market performance shown for the same periods.
The inception date of the Selling Fund’s Class I shares is March 4, 2004; the inception date of the Selling Fund’s Class R and Class R4 shares is March 15, 2010; and the inception date for the Selling Fund’s Class Z shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of the Selling Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class A shares because all classes of the Selling Fund’s shares invest in the same portfolio of securities.
The inception date of the Buying Fund’s Class C shares is October 13, 2003; the inception date for the Buying Fund’s Class R shares is January 23, 2006; and the inception date for the Buying Fund’s Class I shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of the Buying Fund’s Class A shares for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class A shares because all classes of the Buying Fund’s shares invest in the same portfolio of securities. Class R4 and Class K shares of the Buying Fund have not yet commenced operations; accordingly, performance information for those classes is not shown.
The performance calculations in the tables assume:
• | the maximum sales charge for Class A shares; |
• | redemption at the end of the indicated period and deduction of the applicable CDSC for Class B and Class C shares; |
• | no sales charge for Class Z shares; and |
• | except as noted for Class A shares, no adjustments for taxes paid by an investor on reinvested income and capital gains. |
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After-Tax Returns
After-tax returns are shown only for Class A shares. After-tax returns for the other share classes will vary. After-tax returns are calculated using the highest historical individual U.S. federal marginal income tax rate and do not reflect the effect of foreign, state or local taxes. Actual after-tax returns will depend on your tax situation and most likely will differ from the returns shown in the table. If you hold your shares in a tax-deferred account, such as a 401(k) plan or an IRA, the after-tax returns do not apply to you because you will not incur taxes until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the return before taxes for the same period if there were no distributions or if the distributions were small. The return after taxes on distributions and sale of Fund shares for a period may be greater than the return before taxes for the same period if there was a tax loss realized on the sale of Fund shares. The benefit of the tax loss (because it can be used to offset other gains) may result in a higher return.
Columbia Mid Cap Growth Opportunity Fund (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +26.78% (quarter ended June 30, 2009) and the lowest return for a calendar quarter was -28.29% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The returns shown for periods prior to March 7, 2011 represent the returns of the Fund as a series of RiverSource Equity Series, Inc., a Minnesota corporation. The Fund was reorganized into a series of Columbia Funds Series Trust II, a Massachusetts business trust, on that date.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 12.35%.
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Columbia Mid Cap Growth Fund (Buying Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +19.11% (quarter ended September 30, 2009) and the lowest return for a calendar quarter was -27.29% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 12.02%.
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Average Annual Total Returns (for periods ended December 31, 2011)
Columbia Mid Cap Growth Opportunity Fund (Current) (Selling Fund) | 1 year | 5 years | 10 years | |||||||||
Class A | ||||||||||||
Return before taxes | -20.42 | % | +0.56 | % | +2.72 | % | ||||||
Return after taxes on distributions | -20.92 | % | -0.24 | % | +1.91 | % | ||||||
Return after taxes on distributions and sale of Fund shares | -12.59 | % | +0.37 | % | +2.27 | % | ||||||
Class B | ||||||||||||
Return before taxes | -20.20 | % | +0.64 | % | +2.53 | % | ||||||
Class C | ||||||||||||
Return before taxes | -17.00 | % | +0.98 | % | +2.55 | % | ||||||
Class I | ||||||||||||
Return before taxes | -15.13 | % | +2.24 | % | +3.72 | % | ||||||
Class R | ||||||||||||
Return before taxes | -15.79 | % | +1.48 | % | +3.06 | % | ||||||
Class R4 | ||||||||||||
Return before taxes | -15.67 | % | +1.68 | % | +3.28 | % | ||||||
Class K | ||||||||||||
Return before taxes | -15.50 | % | +1.93 | % | +3.51 | % | ||||||
Class Z | ||||||||||||
Return before taxes | -15.38 | % | +1.82 | % | +3.37 | % | ||||||
Russell Midcap® Growth Index (reflects no deduction for fees, expenses or taxes) | -1.65 | % | +2.44 | % | +5.29 | % |
Average Annual Total Returns (for periods ended December 31, 2011)
Columbia Mid Cap Growth Fund (Buying Fund) | 1 year | 5 years | 10 years | |||||||||
Class A | ||||||||||||
Return before taxes | -10.14 | % | +2.26 | % | +4.22 | % | ||||||
Return after taxes on distributions | -10.58 | % | +1.51 | % | +3.73 | % | ||||||
Return after taxes on distributions and sale of Fund shares | -5.98 | % | +1.76 | % | +3.57 | % | ||||||
Class B | ||||||||||||
Return before taxes | -9.95 | % | +2.36 | % | +4.06 | % | ||||||
Class C | ||||||||||||
Return before taxes | -6.28 | % | +2.71 | % | +4.11 | % | ||||||
Class I | ||||||||||||
Return before taxes | -4.29 | % | +3.78 | % | +5.17 | % | ||||||
Class R | ||||||||||||
Return before taxes | -4.89 | % | +3.21 | % | +4.63 | % | ||||||
Class Z | ||||||||||||
Return before taxes | -4.41 | % | +3.74 | % | +5.15 | % | ||||||
Russell Midcap® Growth Index (reflects no deduction for fees, expenses or taxes) | -1.65 | % | +2.44 | % | +5.29 | % | ||||||
Russell Midcap Index (reflects no deduction for fees, expenses or taxes) | -1.55 | % | +1.41 | % | +6.99 | % |
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Proposal 2. Comparison of Objectives, Strategies and Risks. Reorganization of each of Columbia Frontier Fund, Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund II into Columbia Small Cap Growth Fund I
Comparison of each Selling Fund and the Buying Fund
All of the Selling Funds and the Buying Fund:
• | Have Columbia Management as investment manager. |
• | Have the same policies for buying and selling shares and the same exchange rights. Please see Exhibit B for a description of these policies for the Buying Fund. |
• | Are structured as series of an open-end management investment company. Each of Columbia Frontier Fund, Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund I is organized as a series of a Massachusetts business trust, and Columbia Small Cap Growth Fund II is organized as a series of a Delaware statutory trust. Please see Exhibit C to this combined proxy statement/prospectus for more information regarding the differences between the rights of shareholders of the Selling Funds and shareholders of the Buying Fund. |
Comparison of Investment Objectives
The investment objectives of the Funds are as follows:
Selling Fund: Columbia Frontier Fund seeks growth of capital. Income may be considered but is incidental to the Fund’s investment objective.
Selling Fund: Columbia Select Small Cap Fund seeks long-term capital appreciation.
Selling Fund: Columbia Small Cap Growth Fund II seeks long-term growth of capital.
Buying Fund: Columbia Small Cap Growth Fund I seeks capital appreciation by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the Standard & Poor’s (S&P) SmallCap 600® Index.
Each Fund seeks generally the same investment objective. While each Fund normally invests at least 80% of its net assets in equity securities of smaller capitalization companies, the Buying Fund has made this policy part of its investment objective, and defines smaller capitalization companies by reference to the capitalization range of the S&P SmallCap 600 Index.
Because any investment involves risk, there can be no assurance that a Fund’s investment objective will be achieved. The investment objective of each of Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund II may be changed without shareholder approval, while the investment objective of each of Columbia Frontier Fund and the Buying Fund may be changed only with shareholder approval.
Comparison of Principal Investment Strategies
The Funds have generally similar principal investment strategies. Each Fund invests primarily in equity securities of smaller companies. Columbia Frontier Fund, Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund II normally invest at least 80% of their net assets in companies with market capitalizations in the range of companies in the Russell 2000 Growth Index (between $45 million and $4.5 billion as of September 30, 2012), while the Buying Fund normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the S&P SmallCap 600 Index (between $35 million and
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$3.8 billion as of September 30, 2012). As of September 30, 2012, each of Columbia Frontier Fund, Columbia Select Small Cap Fund, Columbia Small Cap Growth Fund II and the Buying Fund had invested 93.78%, 94.53%, 96.63% and 85.45% of their net assets, respectively, in equity securities of companies with market capitalization within the range of the S&P SmallCap 600 Index. The 80% policy (described below) of the Buying Fund and each Selling Fund may be changed by the Fund’s board on 60 days notice to shareholders, although a similar 80% policy is incorporated into the Buying Fund’s investment objective, which can be changed only with shareholder approval. Each Fund may also invest up to 20% of its net assets in foreign securities. As of September 30, 2012, each of Columbia Frontier Fund, Columbia Select Small Cap Fund, Columbia Small Cap Growth Fund II and the Buying Fund had invested 7.91%, 8.02%, 7.88% and 7.91% of their net assets, respectively, in foreign securities.
Additional information regarding the principal investment strategies of each Fund is set forth below:
Columbia Frontier Fund (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | |||
Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities of companies that have market capitalizations in the range of companies in the Russell 2000 Growth Index at the time of purchase.
| Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have market capitalizations in the range of the companies in the Russell 2000 Growth Index at the time of purchase.
The Fund’s policy of investing at least 80% of its net assets (discussed above) may be changed by the Fund’s board without shareholder approval as long as shareholders are given 60 days advance notice of the change. | Under normal circumstances, the Fund invests at least 80% of its net assets in securities of companies that have market capitalizations in the range of companies in the Russell 2000 Growth Index at the time of purchase.
The Fund’s policy of investing at least 80% of its net assets (discussed above) may be changed by the Fund’s board without shareholder approval as long as shareholders are given 60 days advance notice of the change. | Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have market capitalizations in the range of companies in the S&P SmallCap 600® Index at the time of purchase.
The Fund’s policy of investing at least 80% of its net assets (discussed above) may be changed by the Fund’s board without shareholder approval as long as shareholders are given 60 days advance notice of the change. | |||
The Fund may invest up to 20% of its net assets in stocks of companies that have market capitalizations outside the range of the Russell 2000 Growth Index. | The Fund may invest up to 20% of its net assets in stocks of companies that have market capitalizations at time of purchase outside the range of Russell 2000 Growth Index. | The Fund may also invest up to 20% of its net assets in stocks of companies that have market capitalizations outside the range of the S&P SmallCap 600® Index. |
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Columbia Frontier Fund (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | |||
The Fund may invest up to 20% of its total assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts. Depositary receipts are receipts issued by a bank or trust company and evidence ownership of underlying securities issued by foreign companies. | The Fund may invest up to 20% of its total assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts. Depositary receipts are receipts issued by a bank or trust company and evidence ownership of underlying securities issued by foreign companies. | The Fund may invest up to 20% of its total assets in foreign securities. | The Fund may also invest up to 20% of its total assets in foreign securities. The Fund may invest directly in foreign securities or indirectly through depositary receipts. Depositary receipts are receipts issued by a bank or trust company and evidence ownership of underlying securities issued by foreign companies. | |||
The Fund invests primarily in common stocks that Columbia Management believes have the potential for long-term, above-average earnings growth. | The Fund invests primarily in common stocks of companies that Columbia Management believes have the potential for long-term, above-average earnings growth. | The Fund invests primarily in common stocks of companies that Columbia Management believes have the potential for long-term, above-average earnings growth. | ||||
The Fund’s portfolio may from time to time emphasize one or more economic sectors, which may include, among other sectors, the technology sector. |
Buying Fund Investment Style
A description of the investment style of the Buying Fund is set forth below.
Columbia Management combines fundamental and quantitative analysis with risk management in identifying investment opportunities and constructing the Fund’s portfolio. Columbia Management considers, among other factors:
• | overall economic and market conditions. |
• | the financial condition and management of a company, including its competitive position, the quality of its balance sheet and earnings, its future prospects, and the potential for growth and stock price appreciation. |
Columbia Management may sell a security when the security’s price reaches a target set by Columbia Management; if Columbia Management believes that there has been deterioration in the issuer’s financial circumstances or fundamental prospects, or that other investments are more attractive; or for other reasons.
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The Buying Fund’s investment strategy may involve the frequent trading of portfolio securities. This may cause the Fund to incur higher transaction costs (which may adversely affect the Fund’s performance) and may increase taxable distributions for shareholders.
Differences between each Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in each Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Fundamental Investment Policies
If the Reorganizations occur, the combined Fund will be subject to the fundamental investment policies of the Buying Fund. The Funds have similar fundamental investment policies and therefore the Reorganizations will not result in any material differences between the way the Funds have been managed and the way the combined Fund will be managed. A “fundamental” investment policy is one that may not be changed without a shareholder vote.
The Funds’ fundamental investment policies are set forth below:
Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
Borrowing/ Issuing Senior Securities | The Fund will not issue senior securities or borrow money, except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC. | The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund. | The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||||
Buying on Margin | The Fund will not purchase securities on margin except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC. | No stated policy. | No stated policy. | No stated policy. |
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Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
Commodities | The Fund will not purchase or sell commodities or commodity contracts, except to the extent permissible under applicable law and interpretations, as they may be amended from time to time. | The Fund may not purchase or sell commodities, except that the Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including without limitation forward currency contracts. | The Fund may not purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts. | The Fund may not purchase or sell commodities, except that the Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions, including without limitation forward currency contracts. | ||||
Diversification | The Fund will not make any investment inconsistent with its classification as a diversified company under the 1940 Act. | The Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except | The Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except | The Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except |
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Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder or any applicable exemptive relief. | that: (i) up to 25% of its total assets may be invested without regard to these limitations; and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund. | that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder or any applicable exemptive relief. | ||||||
Industry Concentration | The Fund will not invest 25% or more of its total assets, at market value, in the securities of issuers in any particular industry, provided that this limitation shall exclude securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities. | The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental | The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental | The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental |
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Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | investment limitation, assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund. | investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||||||
Lending | The Fund will not make loans, except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC. | The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund. | The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||||
Real Estate | The Fund will not purchase or hold any real estate, except that a fund may invest in securities secured by real estate or interests therein or issued by persons (other than real estate investment trusts) which deal in real estate or interests therein. | The Fund may not purchase or sell real estate, except each Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein. | The Fund may not purchase or sell real estate, except the Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate. | The Fund may not purchase or sell real estate, except each Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein. |
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Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
Underwriting | The Fund will not underwrite the securities of other issuers, except insofar as the Fund may be deemed an underwriter under the 1933 Act in disposing of a portfolio security or in connection with investments in other investment companies. | The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies. | The Fund may not underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered management investment companies. | The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies. | ||||
Directors and Officers Share Ownership | The Fund will not purchase or hold securities of any issuer, if to its knowledge, directors or officers of the Fund individually owning beneficially more than 0.5% of the outstanding securities of that issuer own in the aggregate more than 5% of such securities. | No stated policy. | No stated policy. | No stated policy. |
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Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
Repurchase Agreements | The Fund will not enter into repurchase agreements of more than one week’s duration if more than 10% of the Fund’s net assets would be so invested. | No stated policy. | No stated policy. | No stated policy. |
Differences between each Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in each Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Non-Fundamental Investment Policies
If the Reorganizations occur, the combined Fund will be subject to the non-fundamental investment policies (policies that may be changed without a shareholder vote) of the Buying Fund. There are no material differences between the non-fundamental investment policies of the Funds and therefore the Reorganizations will not result in any material differences between the way the Funds have been managed and the way the combined Fund will be managed.
The Funds’ non-fundamental investment policies are set forth below:
Policy | Columbia Frontier (the Selling Fund) | Columbia Select Small (the Selling Fund) | Columbia Small Cap (the Selling Fund) | Columbia Small Cap (the Buying Fund) | ||||
Illiquid Securities | No more than 15% of the Fund’s net assets will be held in securities and other instruments that are illiquid. | The Fund may not invest more than 15% of its net assets in illiquid securities. | ||||||
Investment in Other Investment Companies | The Fund may not purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. If shares the Funds are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are held by such fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. | |||||||
Short Selling | The Fund may sell securities short in accordance with the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may sell securities short in accordance with the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may not sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may sell securities short in accordance with the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
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Differences between each Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in each Selling Fund and the Buying Fund is provided below.
Although the Funds describe them somewhat differently, the principal risks associated with investments in the Buying Fund and the Selling Funds are generally similar because the Funds have similar investment objectives, principal investment strategies and investment policies. The actual risks of investing in each Fund depend on the securities held in each Fund’s portfolio and on market conditions, both of which change over time. The Buying Fund is subject to the principal risks described below. Similarities and material differences between the Buying Fund’s principal risks and those of the Selling Funds are also identified below.
• | Investment Strategy Risk – Columbia Management uses the principal investment strategies and other investment strategies to seek to achieve the Buying Fund’s investment objective. There is no assurance that the Buying Fund will achieve its investment objective. Investment decisions made by the Investment Manager in using these strategies may not produce the returns expected by the Investment Manager, may cause the Buying Fund’s shares to lose value or may cause the Buying Fund to underperform other funds with similar investment objectives. Each Selling Fund is also subject to this principal risk . |
• | Market Risk – Market risk refers to the possibility that the market values of securities that the Buying Fund holds will fall, sometimes rapidly or unpredictably. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Buying Fund. Accordingly, an investment in the Buying Fund could lose money over short or even long periods. The market values of the securities the Buying Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities. Each Selling Fund is also subject to this principal risk. |
• | Growth Securities Risk – Because growth securities typically trade at a higher multiple of earnings than other types of securities, the market values of growth securities may be more sensitive to changes in current or expected earnings than the market values of other types of securities. In addition, growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time. Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund II are also subject to this principal risk. Columbia Frontier Fund is not subject to growth securities risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in growth securities. |
• | Smaller Company Securities Risk – Securities of small- or mid-capitalization companies (“smaller companies”) can, in certain circumstances, have a higher potential for gains than securities of large-capitalization companies but may also have more risk. For example, smaller companies may be more vulnerable to market downturns and adverse business or economic events than larger, more established companies because they may have more limited financial resources and business operations. These companies are also more likely than large-capitalization companies (“larger companies”) to have more limited product lines and operating histories and to depend on smaller management teams. Their securities may trade less frequently and in smaller volumes and may be less liquid and fluctuate more sharply in value than securities of larger companies. In addition, some smaller companies may not be widely followed by the investment community, which can lower the demand for their stocks. Each Selling Fund is also subject to this principal risk. |
• | Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies or in U.S. dollars, without a |
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change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Buying Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Buying Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies. Each Selling Fund is also subject to this principal risk. |
• | Convertible Securities Risk – Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert. Because the value of a convertible security can be influenced by both interest rates and the common stock’s market movements, a convertible security generally is not as sensitive to interest rates as a similar debt security, and generally will not vary in value in response to other factors to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, holders of convertible securities would typically be paid before the company’s common stockholders but after holders of any senior debt obligations of the company. The Fund may be forced to convert a convertible security before it otherwise would choose to do so, which may decrease the Fund’s return. Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund II are also subject to this principal risk. Columbia Frontier Fund is not subject to convertible securities risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in convertible securities. |
• | Currency Risk – Securities denominated in non-U.S. dollar currencies are subject to the risk that, for example, if the value of a foreign currency were to decline against the U.S. dollar, such decline would reduce the U.S. dollar value of any securities held by the Fund denominated in that currency. Each Selling Fund is also subject to this risk. |
• | Sector Risk – At times, the Fund may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by economic or market events, making the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Each Selling Fund is also subject to this principal risk. |
• | Frequent Trading Risk – Frequent trading of investments increases the possibility that the Fund will realize taxable capital gains (including short-term capital gains, which are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes), which could reduce the Fund’s after-tax return. Frequent trading can also mean higher brokerage and other transaction costs, which could reduce the Fund’s return. Each Selling Fund is also subject to this principal risk. |
The following bar charts and tables provide some illustration of the risks of investing in the Funds by showing, respectively:
• | how each Fund’s performance has varied for each full calendar year shown in the bar chart; and |
• | how each Fund’s average annual total returns compare to certain measures of market performance shown in the table. |
Both the bar charts and the tables assume that all distributions have been reinvested. The performance of different classes varies because of differences in sales charges and other fees and expenses. How a Fund has
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performed in the past (before and after taxes) does not indicate how the Fund will perform in the future. The performance shown reflects any fee waiver or expense reimbursement arrangements in effect for the periods reported. In the absence of such fee waiver or expense reimbursement arrangements, the performance shown would have been lower.
Bar Charts. Class A or Class Z share information, as applicable, is shown in the bar charts; the sales charge for Class A shares is not reflected in the bar charts.
Tables. The tables below show total returns from hypothetical investments in the indicated classes of shares of each Fund. The returns shown are compared to measures of market performance shown for the same periods.
The inception date of Columbia Frontier Fund’s Class R shares is April 30, 2003; the inception date of Columbia Frontier Fund’s Class I and Class K shares is August 3, 2009; and the inception date of Columbia Frontier Fund’s Class Z shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of Columbia Frontier Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class A shares because all classes of the Columbia Frontier Fund’s shares invest in the same portfolio of securities.
The inception date of Columbia Select Small Cap Fund’s Class A and Class C shares is September 28, 2007 and the inception date of Columbia Select Small Cap Fund’s Class R shares is December 31, 2004. The returns shown for each of these classes of shares include the returns of Columbia Select Small Cap Fund’s Class Z shares (adjusted to reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class Z shares because all classes of Columbia Select Small Cap Fund’s shares invest in the same portfolio of securities. The returns shown for Columbia Select Small Cap Fund include the returns of Small Cap Fund, the predecessor to the Fund and a series of Excelsior Funds, Inc. for periods prior to March 31, 2008.
The inception date of Columbia Small Cap Growth Fund II’s Class I shares is November 16, 2011. The returns shown for this class of shares include the returns of Columbia Small Cap Growth Fund II’s Class A shares (adjusted to reflect the higher class-related operating expenses of Class I shares, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), this class of shares have annual returns substantially similar to those of Class A shares because all classes of Columbia Small Cap Growth Fund II’s shares invest in the same portfolio of securities.
The inception date of the Buying Fund’s Class A, Class B and Class C shares is November 1, 2005, and the inception date of the Buying Fund’s Class I and Class R shares is September 27, 2010. The returns shown for the Buying Fund’s Class A, Class B and Class C shares include the returns of the Buying Fund’s Class Z shares for periods prior to November 1, 2005, the date that Class A, Class B and Class C shares were initially offered by the Buying Fund. The returns shown for Class I shares include the returns of the Buying Fund’s Class Z shares for periods prior to September 27, 2010, the date on which Class I shares were initially offered by the Buying Fund. The returns shown for Class R shares include the returns of the Buying Fund’s Class A shares (without applicable sales charges) for periods prior to September 27, 2010, the date on which Class R shares were initially offered by the Buying Fund. The returns shown for Class R shares also include the returns of the Buying Fund’s Class Z shares for periods prior to November 1, 2005, the date on which Class A shares were initially offered by the Buying Fund. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class A shares because all classes of the Buying Fund’s shares invest in the same portfolio of securities. Class R4, Class R5 and Class K shares of the Buying Fund have not yet commenced operations; accordingly, performance information for those classes is not shown.
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The performance calculations in the tables assume:
• | the maximum applicable sales charge for Class A shares; |
• | redemption at the end of the indicated period and deduction of the applicable contingent deferred sales charge (“CDSC”) for Class B and Class C shares; |
• | no sales charge for Class Z shares; and |
• | except as noted for Class Z shares, no adjustments for taxes paid by an investor on reinvested income and capital gains. |
After-Tax Returns
After-tax returns are shown only for Class A shares or Class Z shares, as applicable. After-tax returns for the other share classes will vary. After-tax returns are calculated using the highest historical individual U.S. federal marginal income tax rate and do not reflect the effect of foreign, state or local taxes. Actual after-tax returns will depend on your tax situation and most likely will differ from the returns shown in the table. If you hold your shares in a tax-deferred account, such as a 401(k) plan or an IRA, the after-tax returns do not apply to you because you will not incur taxes until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the return before taxes for the same period if there were no distributions or if the distributions were small. The return after taxes on distributions and sale of Fund shares for a period may be greater than the return before taxes for the same period if there was a tax loss realized on the sale of Fund shares. The benefit of the tax loss (because it can be used to offset other gains) may result in a higher return.
Columbia Frontier Fund (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +20.88% (quarter ended June 30, 2009) and the lowest return for a calendar quarter was -26.72% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
Fund performance prior to March 7, 2011 represents that of the Fund as a series of Columbia Frontier Fund, Inc., a Maryland corporation. The Fund was reorganized into a series of Columbia Funds Series Trust II, a Massachusetts business trust, on that date.
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The Fund’s Class A shares year-to-date return at September 30, 2012 was 18.06%.
Columbia Select Small Cap Fund (Selling Fund)
CLASS Z SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +29.04% (quarter ended June 30, 2003) and the lowest return for a calendar quarter was -26.64% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class Z shares year-to-date return September 30, 2012 was 5.63%.
Columbia Small Cap Growth Fund II (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
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During the periods shown in the bar chart, the highest return for a calendar quarter was +20.56% (quarter ended June 30, 2009) and the lowest return for a calendar quarter was -28.53% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A year-to-date return at September 30, 2012 was 13.49%.
Columbia Small Cap Growth Fund I (Buying Fund)
CLASS Z SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +20.96% (quarter ended June 30, 2003) and the lowest return for a calendar quarter was -28.52% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 13.60%.
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Average Annual Total Returns (for periods ended December 31, 2011)
Columbia Frontier Fund (Selling Fund): | 1 year | 5 years | 10 years | |||||||||
Class A | ||||||||||||
Return before taxes | -17.51% | -4.35% | +0.46% | |||||||||
Return after taxes on distributions | -17.51% | -5.03% | -0.18% | |||||||||
Return after taxes on distributions and sale of Fund shares | -11.38% | -3.74% | +0.31% | |||||||||
Class B | ||||||||||||
Return before taxes | -17.36% | -4.25% | +0.29% | |||||||||
Class C | ||||||||||||
Return before taxes | -14.03% | -3.86% | +0.34% | |||||||||
Class I | ||||||||||||
Return before taxes | -12.13% | -3.02% | +1.16% | |||||||||
Class R | ||||||||||||
Return before taxes | -12.67% | -3.51% | +0.79% | |||||||||
Class K | ||||||||||||
Return before taxes | -12.27% | -3.13% | +1.10% | |||||||||
Class R5 | ||||||||||||
Return before taxes | -12.06% | -2.77% | +1.61% | |||||||||
Class Z | ||||||||||||
Return before taxes | -12.14% | -3.15% | +1.09% | |||||||||
Russell 2000 Growth Index (reflects no deduction for fees, expenses or taxes) | -2.91% | +2.09% | +4.48% |
Average Annual Total Returns (for periods ended December 31, 2011)
Columbia Select Small Cap Fund (Selling Fund): | 1 year | 5 years | 10 years | |||||||||
Class A | ||||||||||||
Return before taxes | -17.68% | -2.22% | +4.43% | |||||||||
Return after taxes on distributions | -17.68% | -2.53% | +4.09% | |||||||||
Return after taxes on distributions and sale of Fund shares | -11.49% | -1.84% | +3.88% | |||||||||
Class C | ||||||||||||
Return before taxes | -14.17% | -1.80% | +4.27% | |||||||||
Class R | ||||||||||||
Return before taxes | -12.86% | -1.32% | +4.80% | |||||||||
Class Z | ||||||||||||
Return before taxes | -12.50% | -0.84% | +5.35% | |||||||||
Russell 2000 Growth Index (reflects no deduction for fees, expenses or taxes) | -2.91% | +2.09% | +4.48% | |||||||||
Russell 2000 Index (reflects no deductions for fees, expenses, or taxes) | -4.18% | +0.15% | +5.62% |
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Average Annual Total Returns (for periods ended December 31, 2011)
Columbia Small Cap Growth Fund II (Selling Fund): | 1 year | 5 years | 10 years | |||||||||
Class A | ||||||||||||
Return before taxes | -11.02% | -1.16% | +2.03% | |||||||||
Return after taxes on distributions | -11.02% | -2.06% | +1.00% | |||||||||
Return after taxes on distributions and sale of Fund shares | -7.16% | -1.26% | +1.53% | |||||||||
Class B | ||||||||||||
Return before taxes | -11.02% | -1.05% | +1.87% | |||||||||
Class C | ||||||||||||
Return before taxes | -7.31% | -0.72% | +1.86% | |||||||||
Class I | ||||||||||||
Return before taxes | -5.54% | +0.04% | +2.64% | |||||||||
Class Z | ||||||||||||
Return before taxes | -5.44% | +0.28% | +2.89% | |||||||||
Russell 2000 Growth Index (reflects no deductions for fees, expenses, or taxes) | -2.91% | +2.09% | +4.48% |
Average Annual Total Returns (for periods ended December 31, 2011)
Columbia Small Cap Growth Fund I (Buying Fund): | 1 year | 5 years | 10 years | |||||||||
Class A | ||||||||||||
Return before taxes | -10.88% | +2.08% | +5.32% | |||||||||
Return after taxes on distributions | -12.16% | +1.35% | +4.59% | |||||||||
Return after taxes on distributions and sale of Fund shares | -5.40% | +1.69% | +4.50% | |||||||||
Class B | ||||||||||||
Return before taxes | -10.37% | +2.19% | +5.17% | |||||||||
Class C | ||||||||||||
Return before taxes | -6.97% | +2.52% | +5.17% | |||||||||
Class I | ||||||||||||
Return before taxes | -4.99% | +3.61% | +6.24% | |||||||||
Class R | ||||||||||||
Return before taxes | -5.66% | +3.05% | +5.69% | |||||||||
Class Z | ||||||||||||
Return before taxes | -5.18% | +3.56% | +6.21% | |||||||||
Russell 2000 Index (reflects no deduction for fees, expenses or taxes) | -4.18% | +0.15% | +5.62% | |||||||||
Russell 2000 Growth Index (reflects no deduction for fees, expenses or taxes) | -2.91% | +2.09% | +4.48% |
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Proposal 3. Comparison of Objectives, Strategies and Risks. Reorganization of Columbia Emerging Markets Opportunity Fund into Columbia Emerging Markets Fund
Comparison of the Selling Fund and the Buying Fund
Both the Selling Fund and the Buying Fund:
• | Have Columbia Management as investment manager. Threadneedle International Limited (“Threadneedle”) services as subadviser for the Selling Fund. |
• | Have the same policies for buying and selling shares and the same exchange rights. Please see Exhibit B for a description of these policies for the Buying Fund. |
• | Are structured as series of an open-end management investment company. Each Fund is organized as a series of a Massachusetts business trust. Please see Exhibit C to this combined proxy statement/prospectus for more information regarding the differences between the rights of shareholders of the Selling Fund and the shareholders of the Buying Fund. |
Comparison of Investment Objectives
The investment objectives of the Funds are as follows:
Selling Fund: Columbia Emerging Markets Opportunity Fund seeks to provide shareholders with long-term capital growth.
Buying Fund: Columbia Emerging Markets Fund seeks long-term capital appreciation.
Each Fund seeks generally the same investment objective.
Because any investment involves risk, there can be no assurance that a Fund’s investment objective will be achieved. The investment objective of the Selling Fund may be changed only with shareholder approval, while the investment objective of the Buying Fund may be changed without shareholder approval.
Comparison of Principal Investment Strategies
The Funds have generally similar principal investment strategies. Each Fund invests primarily in equity securities of emerging markets companies. The Buying Fund normally invests at least 80% of its net assets in companies located in emerging market countries, which include those countries whose economies are considered to be developing or emerging from underdevelopment. Similarly, the Selling Fund normally invests at least 80% of its net assets in companies that are located in emerging market countries, or that earn 50% or more of their total revenues from goods or services produced in emerging market countries or from sales made in emerging market countries. The Selling Fund considers emerging markets to be countries characterized as developing or emerging by either the World Bank or the United Nations. As of September 30, 2012, the Buying Fund and the Selling Fund had invested 86.42% and 78.75% of their net assets, respectively, in securities of emerging market issuers. The 80% policy of each of the Buying Fund and the Selling Fund may be changed by the Funds’ Board on 60 days notice to shareholders. Each Fund may invest in companies of any size. The Buying Fund may invest in currency forwards for hedging purposes and futures for hedging and non-hedging purposes as part of its principal investment strategies; the Selling Fund has no similar principal investment strategy, though it may make such investments. As part of its principal investment strategies, the Buying Fund may invest in special situations (such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings) and in companies involved in management changes or companies developing new technologies; the Selling Fund has no similar principal investment strategy, though it may invest in such companies.
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Additional information regarding the principal investment strategies of each Fund is set forth below:
Columbia Emerging Markets Opportunity Fund (the Selling Fund) | Columbia Emerging Markets Fund (the Buying Fund) | |
The Fund’s assets are primarily invested in equity securities of emerging markets companies. For these purposes, emerging markets are countries characterized as developing or emerging by either the World Bank or the United Nations. Under normal market conditions, at least 80% of the Fund’s net assets (including the amount of any borrowings for investment purposes) will be invested in securities of companies that are located in emerging market countries, or that earn 50% or more of their total revenues from goods or services produced in emerging market countries or from sales made in emerging market countries. The Fund will provide shareholders with at least 60 days’ written notice of any change in the 80% policy. | Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities (including, but not limited to, common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies located in emerging market countries. Emerging market countries include those countries whose economies are considered to be developing or emerging from underdevelopment. The Fund’s policy of investing at least 80% of its net assets (discussed above) may be changed by the Fund’s board without shareholder approval as long as shareholders are given 60 days advance notice of the change. | |
Columbia Management is responsible for oversight of the Fund’s subadviser, Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial, Inc., the parent company of Columbia Management. | ||
The Fund can invest in securities of companies of any size, including small- and mid-capitalization companies. | The Fund may invest in a variety of countries, industries and sectors and does not attempt to invest a specific percentage of its assets in any given country, industry or sector. The Fund may invest in companies that have market capitalizations of any size. | |
The Fund will normally have exposure to foreign currencies. | The Fund may invest in currency forwards for hedging purposes and futures for both hedging and non-hedging purposes, including, for example, to seek to enhance returns, in certain unusual circumstances, when holding a derivative is deemed preferable to holding the underlying asset, or as a substitute for a position in an underlying asset. | |
The Fund may invest in special situations such as companies involved in initial public offerings, tender offers, mergers and other corporate restructurings, and in companies involved in management changes or companies developing new technologies. | ||
The Fund may invest in securities that Columbia Management believes are undervalued, represent growth opportunities, or both. |
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Buying Fund Investment Style
A description of the investment style of the Buying Fund is set forth below.
Columbia Management combines fundamental and quantitative analysis with risk management in identifying investment opportunities and constructing the Buying Fund’s portfolio. In doing this, Columbia Management considers, among other factors:
• | various measures of valuation, including price-to-cash flow, price-to-earnings, price-to-sales, price-to-book value and discounted cash flow. Columbia Management believes that companies with lower valuations are generally more likely to provide opportunities for capital appreciation. |
• | potential indicators of stock price appreciation, such as anticipated earnings growth, company restructuring, changes in management, business model changes, new product opportunities, or anticipated improvements in macroeconomic factors. |
• | the financial condition and management of a company, including its competitive position, the quality of its balance sheet and earnings, its future prospects, and the potential for growth and stock price appreciation. |
• | overall economic and market conditions. |
Columbia Management may sell a security when the security’s price reaches a target set by Columbia Management; if Columbia Management believes that there is deterioration in the issuer’s financial circumstances or fundamental prospects, or that other investments are more attractive; or for other reasons.
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Fundamental Investment Policies
If the Reorganization occurs, the combined Fund will be subject to the fundamental investment policies of the Buying Fund. Columbia Management does not believe that the differences between the fundamental investment policies of the Selling Fund and the Buying Fund result in any material difference between the way the Funds have been managed and the way the combined Fund will be managed. A “fundamental” investment policy is one that may not be changed without a shareholder vote.
The Funds’ fundamental investment policies are set forth below:
Policy | Columbia Emerging Markets Opportunity Fund (the Selling Fund) | Columbia Emerging Markets Fund (the Buying Fund) | ||
Borrowing/ Issuing Senior Securities | The Fund will not borrow money, except for temporary purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings) immediately after the borrowings. | The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||
The Fund will not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
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Policy | Columbia Emerging Markets Opportunity Fund (the Selling Fund) | Columbia Emerging Markets Fund (the Buying Fund) | ||
Commodities | The Fund will not buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from buying or selling options and futures contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities. | The Fund may not purchase or sell commodities, except that the Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts. | ||
Diversification | The Fund will not purchase more than 10% of the outstanding voting securities of an issuer, except that up to 25% of the Fund’s assets may be invested without regard to this 10% limitation.
The Fund will not invest more than 5% of its total assets in securities of any company, government, or political subdivision thereof, except the limitation will not apply to investments in securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, or other investment companies, and except that up to 25% of the Fund’s total assets may be invested without regard to this 5% limitation. | The Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations; and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. | ||
Industry Concentration | The Fund will not concentrate in any one industry. According to the present interpretation by the SEC, this means that up to 25% of the Fund’s total assets, based on current market value at time of purchase, can be invested in any one industry. | The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
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Policy | Columbia Emerging Markets Opportunity Fund (the Selling Fund) | Columbia Emerging Markets Fund (the Buying Fund) | ||
Lending | The Fund will not lend securities or participate in an interfund lending program if the total of all such loans would exceed 33 1/3% of the Fund’s total assets, except this fundamental investment policy shall not prohibit the Fund from purchasing money market securities, loans, loan participation or other debt securities, or from entering into repurchase agreements. | The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||
Real Estate | The Fund will not buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business or real estate investment trusts. For purposes of this policy, real estate includes real estate limited partnerships. | The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein. | ||
Underwriting | The Fund will not act as an underwriter (sell securities for others). However, under the securities laws, the Fund may be deemed to be an underwriter when it purchases securities directly from the issuer and later resells them. | The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies. |
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Non-Fundamental Investment Policies
If the Reorganization occurs, the combined Fund will be subject to the non-fundamental investment policies (policies that may be changed without a shareholder vote) of the Buying Fund. Columbia Management does not believe that the differences between the non-fundamental policies of the Funds result in any material differences between the way the Funds have been managed and the way the combined Fund will be managed.
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The Funds’ non-fundamental investment policies are set forth below:
Policy | Columbia Emerging Markets Opportunity Fund (the Selling Fund) | Columbia Emerging Markets Fund (the Buying Fund) | ||
Illiquid Securities | No more than 15% of the fund’s net assets will be held in securities and other instruments that are illiquid. | The Fund may not invest more than 15% of its net assets in illiquid securities. | ||
Securities of other Investment Companies | The Fund may not purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. If shares of the Fund are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are held by such fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. |
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided below.
Although the Funds describe them somewhat differently, the principal risks associated with investments in the Buying Fund and the Selling Fund are generally similar because the Funds have similar investment objectives, principal investment strategies and investment policies. The actual risks of investing in each Fund depend on the securities held in each Fund’s portfolio and on market conditions, both of which change over time. The Buying Fund is subject to the principal risks described below. Similarities and material differences between the Buying Fund’s principal risks and those of the Selling Fund are also identified below.
• | Investment Strategy Risk – Columbia Management uses the principal investment strategies and other investment strategies to seek to achieve the Buying Fund’s investment objective. There is no assurance that the Buying Fund will achieve its investment objective. Investment decisions may not produce the expected returns, may cause the Buying Fund’s shares to lose value or may cause the Buying Fund to underperform other funds with similar investment objectives. The Selling Fund is also subject to this principal risk. |
• | Market Risk – Market risk refers to the possibility that the market values of securities that the Buying Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Buying Fund. Accordingly, an investment in the Buying Fund could lose money over short or even long periods, or fail to increase in value. The market values of the securities the Buying Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities. The Selling Fund is also subject to this principal risk. |
• | Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates |
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may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Buying Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Buying Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies. The Selling Fund is also subject to this principal risk. |
• | Emerging Market Securities Risk – Securities issued by foreign governments or companies in emerging market countries, like Russia and those in Eastern Europe, the Middle East, Asia, Latin America or Africa, are more likely to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition, emerging market countries are more likely to experience instability resulting, for example, from rapid social, political and economic development. Their economies are usually less mature and their securities markets are typically less developed with more limited trading activity than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily dependent on international trade, which makes them more sensitive to world commodity prices and economic downturns in other countries. Some emerging market countries have a higher risk of currency devaluations, and some of these countries may experience periods of high inflation or rapid changes in inflation rates. The Selling Fund is also subject to this principal risk. |
• | Growth Securities Risk – Because growth securities typically trade at a higher multiple of earnings than other types of securities, the market values of growth securities may be more sensitive to changes in current or expected earnings than the market values of other types of securities. In addition, growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time. The Selling Fund is not subject to growth securities risk as a principal risk, but may be subject to such risk to the extent of its investment, if any, in growth securities. |
• | Value Securities Risk – Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially undervalued. The market value of a portfolio security may not meet Columbia Management’s future value assessment of that security, or may decline. There is also a risk that it may take longer than expected for the value of these investments to rise to the believed value. In addition, value securities, at times, may not perform as well as growth securities or the stock market in general, and may be out of favor with investors for varying periods of time. The Selling Fund is not subject to value securities risk as a principal risk, but may be subject to such risk to the extent of its investment, if any, in value securities. |
• | Currency Risk – Securities denominated in non-U.S. dollar currencies are subject to the risk that, for example, if the value of a foreign currency were to decline against the U.S. dollar, such decline would reduce the U.S. dollar value of any securities held by the Buying Fund denominated in that currency. The Selling Fund is also subject to this principal risk. |
• | Special Situations Risk – Securities of companies that are involved in an initial public offering or a major corporate event, such as a business consolidation or restructuring, may present special risk because of the high degree of uncertainty that can be associated with such events. Securities issued in initial public offerings often are issued by companies that are in the early stages of development, have a history of little or no revenues and may operate at a loss following the offering. It is possible that there will be no active |
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trading market for the securities after the offering, and that the market price of the securities may be subject to significant and unpredictable fluctuations. Investing in special situations may have a magnified effect on the performance of funds with small amounts of assets. The Selling Fund is not subject to special situations risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in special situations. |
• | Smaller Company Securities Risk – Securities of small- or mid-capitalization companies (smaller companies) can, in certain circumstances, have a higher potential for gains than securities of large-capitalization companies but may also have more risk. For example, smaller companies may be more vulnerable to market downturns and adverse business or economic events than larger, more established companies because they may have more limited financial resources and business operations. These companies are also more likely than large-capitalization companies (larger companies) to have more limited product lines and operating histories and to depend on smaller management teams. Their securities may trade less frequently and in smaller volumes and may be less liquid and fluctuate more sharply in value than securities of larger companies. In addition, some smaller companies may not be widely followed by the investment community, which can lower the demand for their stocks. The Selling Fund is also subject to this principal risk. |
• | Derivatives Risk – Forward Foreign Currency Contracts – The Buying Fund may enter into forward foreign currency contracts, which are a type of derivative contract, whereby the Buying Fund may agree to buy or sell a country’s currency at a specific price on a specific date, usually 30, 60, or 90 days in the future. These currency contracts may change in value due to foreign market fluctuations or foreign currency value fluctuations. The effectiveness of any currency hedging strategy by the Buying Fund may be reduced by the Buying Fund’s inability to precisely match forward contract amounts and the value of securities involved. Forward foreign currency contracts used for hedging may also limit any potential gain that might result from an increase or decrease in the value of the currency. When entering into forward foreign currency contracts for investment purposes, unanticipated changes in the currency markets could result in reduced performance for the Buying Fund. At or prior to maturity of a forward contract, the Fund may enter into an offsetting contract and may incur a loss to the extent there has been movement in forward contract prices. When the Buying Fund converts its foreign currencies into U.S. dollars it may incur currency conversion costs due to the spread between the prices at which it may buy and sell various currencies in the market. The Selling Fund is not subject to derivatives risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in derivatives. |
• | Derivatives Risk – Futures Contracts – The Buying Fund may buy or sell futures. A futures contract is a contract between a buyer (holding the “long” position) and a seller (holding the “short” position) for an asset with delivery deferred until a future date. The buyer agrees to pay a fixed price at the agreed future date and the seller agrees to deliver the asset. The seller hopes that the market price on the delivery date is less than the agreed upon price, while the buyer hopes for the contrary. The liquidity of the futures markets depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the particular futures market could be reduced. Certain futures markets are more liquid than others. In addition, certain futures exchanges often impose a maximum permissible price movement on each futures contract for each trading session. To the extent that the Buying Fund trades on such futures exchanges, the Buying Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement. The Selling Fund is not subject to derivatives risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in derivatives. |
The following bar charts and tables provide some illustration of the risks of investing in the Funds by showing, respectively:
• | how each Fund’s performance has varied for each full calendar year shown in the bar chart; and |
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• | how each Fund’s average annual total returns compare to certain measures of market performance shown in the table. |
Both the bar charts and the tables assume that all distributions have been reinvested. The performance of different classes varies because of differences in sales charges and other fees and expenses. How a Fund has performed in the past does not indicate how the Fund will perform in the future. The performance shown reflects any fee waiver or expense reimbursement arrangements in effect for the periods reported. In the absence of such fee waivers or expense reimbursement arrangements, the performance shown would have been lower.
Bar Charts. Class A or Class Z share information, as applicable, is shown in the bar charts; the sales charge for Class A shares is not reflected in the bar charts.
Tables. The tables below show total returns from hypothetical investments in the indicated classes of shares of each Fund. These returns are compared to the recognized measures of market performance shown for the same periods.
The inception date of the Selling Fund’s Class I shares is March 4, 2004, the inception date of the Selling Fund’s Class R5 shares is August 1, 2008, the inception date of the Selling Fund’s Class R shares is August 3, 2009 and the inception date of the Selling Fund’s Class W and Class Z shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of the Selling Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class A shares because all classes of the Selling Fund’s shares invest in the same portfolio of securities.
The inception date of the Buying Fund’s Class A and Class C shares is September 28, 2007, and the inception date of the Buying Fund’s Class I, Class R and Class W shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of the Buying Fund’s Class Z shares (adjusted to reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class Z shares because all classes of the Fund’s shares invest in the same portfolio of securities. The returns shown for the Buying Fund include the returns of Emerging Markets Fund, the predecessor to the Fund and a series of Excelsior Funds, Inc., for periods prior to March 31, 2008. Class B, Class K and Class R5 shares of the Buying Fund have not yet commenced operations; accordingly, performance information for those classes is not shown.
The performance calculations in the tables assume:
• | the maximum sales charge for Class A shares; |
• | redemption at the end of the indicated period and deduction of the applicable contingent deferred sales charge (“CDSC”) for Class B and Class C shares; |
• | No sales charge for Z shares; and |
• | except as noted for Class A or Class Z shares, no adjustments for taxes paid by an investor on reinvested income and capital gains. |
After-Tax Returns
After-tax returns are shown only for Class A shares or Class Z shares, as applicable. After-tax returns for the other share classes will vary. After-tax returns are calculated using the highest historical individual U.S. federal marginal income tax rate and do not reflect the effect of foreign, state or local taxes. Actual after-tax returns will
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depend on your tax situation and most likely will differ from the returns shown in the table. If you hold your shares in a tax-deferred account, such as a 401(k) plan or an IRA, the after-tax returns do not apply to you because you will not incur taxes until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the return before taxes for the same period if there were no distributions or if the distributions were small. The return after taxes on distributions and sale of Fund shares for a period may be greater than the return before taxes for the same period if there was a tax loss realized on the sale of Fund shares. The benefit of the tax loss (because it can be used to offset other gains) may result in a higher return.
Columbia Emerging Markets Opportunity Fund (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +32.99% (quarter ended June 30, 2009) and the lowest return for a calendar quarter was -29.68% (quarter ended September 30, 2008).
Fund performance information prior to March 7, 2011 represents that of the Fund as a series of RiverSource Global Series, Inc., a Minnesota corporation. The Fund was reorganized into a series of Columbia Funds Series Trust II, a Massachusetts business trust, on that date.
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 12.92%.
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Columbia Emerging Markets Fund (Buying Fund)
CLASS Z SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +33.14% (quarter ended June 30, 2009) and the lowest return for a calendar quarter was -29.98% (quarter ended September 30, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class Z shares year-to-date return at September 30, 2012 was 14.21%.
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Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Emerging Markets Opportunity Fund (Selling Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | -26.06% | -0.89% | +11.30% | |||||||||
Return after taxes on distributions | -26.76% | -2.35% | +9.86% | |||||||||
Return after taxes on distributions and sale of Fund shares | -15.53% | -1.07% | +9.69% | |||||||||
Class B | ||||||||||||
Return before taxes | -25.63% | -0.74% | +11.09% | |||||||||
Class C | ||||||||||||
Return before taxes | -22.79% | -0.45% | +11.14% | |||||||||
Class I | ||||||||||||
Return before taxes | -21.19% | +0.78% | +12.40% | |||||||||
Class R | ||||||||||||
Return before taxes | -21.74% | +0.02% | +11.66% | |||||||||
Class K | ||||||||||||
Return before taxes | -21.41% | +0.56% | +12.21% | |||||||||
Class R5 | ||||||||||||
Return before taxes | -21.21% | +0.62% | +12.15% | |||||||||
Class W | ||||||||||||
Return before taxes | -21.56% | +0.24% | +11.92% | |||||||||
Class Z | ||||||||||||
Return before taxes | -21.38% | +0.34% | +12.00% | |||||||||
MSCI Emerging Markets Index (Net)* (reflects reinvested dividends net of withholding taxes but reflects no deduction for fees, expenses or other taxes) | -18.42% | +2.40% | +13.86% | |||||||||
MSCI Emerging Markets Index (Gross) (reflects no deductions for fees, expenses or taxes) | -18.17% | +2.70% | +14.20% |
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Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Emerging Markets Fund (Buying Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | -23.79% | -1.87% | +12.07% | |||||||||
Return after taxes on distributions | -24.38% | -3.07% | +11.26% | |||||||||
Return after taxes on distributions and sale of Fund shares | -14.47% | -1.33% | +11.03% | |||||||||
Class C | ||||||||||||
Return before taxes | -20.58% | -1.46% | +11.90% | |||||||||
Class I | ||||||||||||
Return before taxes | -18.81% | -0.46% | +13.03% | |||||||||
Class R | ||||||||||||
Return before taxes | -19.31% | -0.99% | +12.44% | |||||||||
Class W | ||||||||||||
Return before taxes | -19.24% | -0.76% | +12.72% | |||||||||
Class Z | ||||||||||||
Return before taxes | -18.90% | -0.49% | +13.01% | |||||||||
MSCI Emerging Markets Index (Net) (reflects reinvested dividends net of withholding taxes but reflects no deduction for fees, expenses or other taxes) | -18.42% | +2.40% | +13.86% | |||||||||
MSCI EAFE (Net) (reflects reinvested dividends net of withholding taxes but reflects no deduction for fees, expenses or other taxes) | -12.14% | -4.72% | +4.67% |
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Proposal 4. Comparison of Objectives, Strategies and Risks. Reorganization of Columbia Diversified Bond Fund into Columbia Intermediate Bond Fund.
Comparison of the Selling Fund and the Buying Fund
Both the Selling Fund and the Buying Fund:
• | Have Columbia Management as investment manager. |
• | Have the same policies for buying and selling shares and the same exchange rights. Please see Exhibit B for a description of these policies for the Buying Fund. |
• | Are structured as series of an open-end management investment company. Each Fund is organized as a series of a Massachusetts business trust. Please see Exhibit C to this combined proxy statement/prospectus for more information regarding the differences between the rights of shareholders of the Selling Fund and the shareholders of the Buying Fund. |
Comparison of Investment Objectives
The investment objectives of the Funds are as follows:
Selling Fund: Columbia Diversified Bond Fund seeks to provide shareholders with a high level of current income while conserving the value of the investment for the longest period of time.
Buying Fund: Columbia Intermediate Bond Fund seeks total return, consisting of current income and capital appreciation.
The investment objectives of the Funds are generally similar with respect to seeking current income, while the Selling Fund also seeks to preserve the value of the investment, and the Buying Fund also seeks capital appreciation.
Because any investment involves risk, there can be no assurance that a Fund’s investment objective will be achieved. The investment objective of the Selling Fund may be changed only with shareholder approval, while the investment objective of the Buying Fund may be changed without shareholder approval.
Comparison of Principal Investment Strategies
The Funds have generally similar principal investment strategies. Each Fund normally invests at least 80% of its net assets in bonds. The 80% policy of each of the Buying Fund and the Selling Fund may be changed by the Fund’s Board on 60 days notice to shareholders. The Selling Fund normally invests at least 50% of its net assets in securities like those included in the Barclays U.S. Aggregate Bond Index, which are investment grade and denominated in U.S. dollars, while the Buying Fund normally invests at least 60% of its net assets in debt securities that are rated in at least one of the three highest bond rating categories or are unrated securities determined by Columbia Management to be of comparable quality. The Buying Fund may invest up to 20% of net assets in securities that, at the time of purchase, are below investment grade or are unrated but determined by Columbia Management to be of comparable quality, while the Selling Fund may similarly buy lower-quality bonds in an effort to achieve higher yield and/or capital appreciation. As of September 30, 2012, the Buying Fund and the Selling Fund had invested 8.20% and 13.85% of their net assets, respectively, in below-investment-grade securities. The Buying Fund, under normal circumstances, will have a dollar-weighted average maturity between three and ten years; the Selling Fund does not seek to maintain a particular dollar-weighted average maturity, though Columbia Management targets an average portfolio duration within two years of the Barclays U.S. Aggregate Bond Index. The Selling Fund may, as a principal investment strategy, invest up to 25% of its net assets in foreign investments, which may include emerging markets; the Buying Fund has no similar principal investment strategy, though it may invest in foreign securities. In addition, the Buying Fund may, as a principal
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investment strategy, invest in dollar-denominated securities issued by foreign governments. As of September 30, 2012, the Buying Fund and the Selling Fund had invested 0.16% and 8.48% of their net assets, respectively, in foreign securities. Both Funds may invest in derivatives as part of their principal investment strategies.
Additional information regarding the principal investment strategies of each Fund is set forth below:
Columbia Diversified Bond Fund (the Selling Fund) | Columbia Intermediate Bond Fund (the Buying Fund) | |
Under normal market conditions, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in bonds and other debt securities. At least 50% of the Fund���s net assets will be invested in securities like those included in the Barclays U.S. Aggregate Bond Index (the Index), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. Government, corporate bonds, and mortgage- and asset-backed securities. The Fund will provide shareholders with at least 60 days’ written notice of any change in the 80% policy. | Under normal circumstances, the Fund invests at least 80% of its net assets in bonds, including debt securities issued by the U.S. Government and its agencies, debt securities issued by corporations, mortgage- and other asset-backed securities and dollar-denominated securities issued by foreign governments, companies or other entities. The Fund invests at least 60% of its net assets in debt securities that, at the time of purchase, are rated in at least one of the three highest bond rating categories or are unrated securities determined by Columbia Management, the Fund’s investment adviser to be of comparable quality. The Fund’s policy of investing at least 80% of its net assets (discussed above) may be changed by the Fund’s board without shareholder approval as long as shareholders are given 60 days advance notice of the change. | |
Although the Fund emphasizes high- and medium-quality debt securities, it will assume increased credit risk in an effort to achieve higher yield and/or capital appreciation by buying lower-quality (junk) bonds. | The Fund may invest up to 20% of net assets in securities that, at the time of purchase, are below investment grade securities (commonly referred to as “high yield securities” or “junk bonds”) or in unrated securities determined by Columbia Management to be of comparable quality. | |
Up to 25% of the Fund’s net assets may be invested in foreign investments, which may include investments in emerging markets. | ||
The Fund may invest in derivatives such as credit default swaps and futures contracts. The Fund may enter into derivatives for investment purposes, for risk management (hedging) purposes, and to increase investment flexibility. | The Fund may invest in derivatives, including futures, forwards, options, swap contracts and other derivative instruments. The Fund may invest in derivatives for both hedging and non-hedging purposes, including, for example, to seek to enhance returns or as a substitute for a position in an underlying asset. | |
The Fund may also invest in private placements. | ||
The Fund may participate in mortgage dollar rolls up to the Fund’s then current position in mortgage-backed securities. |
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Columbia Diversified Bond Fund (the Selling Fund) | Columbia Intermediate Bond Fund (the Buying Fund) | |
The Fund may invest in fixed income securities of any maturity and does not seek to maintain a particular dollar-weighted average maturity. A bond is issued with a specific maturity date, which is the date when the issuer must pay back the bond’s principal (face value). Bond maturities range from less than 1 year to more than 30 years. Typically, the longer a bond’s maturity, the more price risk the Fund, and a bond fund investor, faces as interest rates rise, but the Fund could receive a higher yield in return for that longer maturity and higher interest rate risk. | Under normal circumstances, the Fund’s dollar-weighted average effective maturity will be between three and ten years. |
Buying Fund Investment Style
A description of the investment style of the Buying Fund is set forth below.
In pursuit of the Buying Fund’s objective, Columbia Management evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. The selection of individual debt obligations is the primary decision in building the portfolio.
Columbia Management evaluates a security based on its potential to generate income and/or capital appreciation. Columbia Management considers, among other factors, the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, yield, maturity, any call features and value relative to other securities.
Columbia Management also considers local, national and global economic conditions, market conditions, interest rate movements and other relevant factors in allocating the Fund’s assets among issuers, securities, industry sectors and maturities.
Columbia Management may sell a security if Columbia Management believes that there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; if there is deterioration in a security’s credit rating; or for other reasons.
The Fund’s investment strategy may involve the frequent trading of portfolio securities. This may cause the Fund to incur higher transaction costs (which may adversely affect the Fund’s performance) and may increase taxable distributions for shareholders.
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Fundamental Investment Policies
If the Reorganization occurs, the combined Fund will be subject to the fundamental investment policies of the Buying Fund. Columbia Management does not believe that the differences between the fundamental investment policies of the Selling Fund and the Buying Fund result in any material differences between the way the Funds have been managed and the way the combined Fund will be managed. A “fundamental” investment policy is one that may not be changed without a shareholder vote.
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The Funds’ fundamental investment policies are set forth below:
Policy | Columbia Diversified Bond Fund (the Selling Fund) | Columbia Intermediate Bond Fund (the Buying Fund) | ||
Borrowing/ Issuing Senior Securities | The Fund will not borrow money, except for temporary purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings) immediately after the borrowings.
The Fund will not issue senior securities, except as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||
Commodities | The Fund will not buy or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from buying or selling options and futures contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities. | The Fund may not purchase or sell commodities, except that the Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs; (ii) purchase and sell options, forward contracts, futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts. | ||
Diversification | The Fund will not purchase more than 10% of the outstanding voting securities of an issuer, except that up to 25% of the Fund’s assets may be invested without regard to this 10% limitation.
The Fund will not invest more than 5% of its total assets in securities of any company, government, or political subdivision thereof, except the limitation will not apply to investments in securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, or other investment companies, and except that up to 25% of the Fund’s total assets may be invested without regard to this 5% limitation. | The Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations; and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. |
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Policy | Columbia Diversified Bond Fund (the Selling Fund) | Columbia Intermediate Bond Fund (the Buying Fund) | ||
Industry Concentration | The Fund will not concentrate in any one industry. According to the present interpretation by the Securities and Exchange Commission (SEC), this means that up to 25% of the Fund’s total assets, based on current market value at time of purchase, can be invested in any one industry. | The Fund may not purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisions, and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||
Lending | The Fund will not lend securities or participate in an interfund lending program if the total of all such loans would exceed 33 1/3% of the Fund’s total assets, except this fundamental investment policy shall not prohibit the Fund from purchasing money market securities, loans, loan participation or other debt securities, or from entering into repurchase agreements. | The Fund may not make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | ||
Real Estate | The Fund will not buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business or real estate investment trusts. For purposes of this policy, real estate includes real estate limited partnerships. | The Fund may not purchase or sell real estate, except the Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein. | ||
Underwriting | The Fund will not act as an underwriter (sell securities for others). However, under the securities laws, the Fund may be deemed to be an underwriter when it purchases securities directly from the issuer and later resells them. | The Fund may not underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies. |
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Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Non-Fundamental Investment Policies
If the Reorganization occurs, the combined Fund will be subject to the non-fundamental investment policies (policies that may be changed without a shareholder vote) of the Buying Fund. Columbia Management does not believe that the differences between the non-fundamental policies of the Funds result in any material differences between the way the Funds have been managed and the way the combined Fund will be managed.
The Funds’ non-fundamental investment policies are set forth below:
Policy | Columbia Diversified Bond Fund (the Selling Fund) | Columbia Intermediate Bond Fund (the Buying Fund) | ||
Illiquid Securities | No more than 15% of the Fund’s net assets will be held in securities and other instruments that are illiquid. | The Fund may not invest more than 15% of their net assets in illiquid securities. | ||
Securities of other Investment Companies | The Fund may not purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. If shares of the Fund are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are held by such fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. | |||
Limiting Investments in Foreign Securities | Up to 25% of the Fund’s net assets may be invested in foreign investments. | No stated policy. | ||
Short Sales | The Fund may sell securities short in accordance with the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. | The Fund may not sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
Differences between the Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in the Selling Fund and the Buying Fund is provided below.
Although the Funds describe them somewhat differently, the principal risks associated with investments in the Buying Fund and the Selling Fund are generally similar because the Funds have similar investment objectives, principal investment strategies and investment policies. The actual risks of investing in each Fund depend on the securities held in each Fund’s portfolio and on market conditions, both of which change over time. The Buying Fund is subject to the principal risks described below. Similarities and material differences between the Buying Fund’s principal risks and those of the Selling Fund are also identified below.
• | Investment Strategy Risk – Columbia Management uses the principal investment strategies and other investment strategies to seek to achieve the Buying Fund’s investment objective. There is no assurance that |
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the Buying Fund will achieve its investment objective. Investment decisions may not produce the expected returns, may cause the Buying Fund’s shares to lose value or may cause the Buying Fund to underperform other funds with similar investment objectives. The Selling Fund is also subject to this principal risk. |
• | Market Risk – Market risk refers to the possibility that the market values of securities that the Buying Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Buying Fund. Accordingly, an investment in the Buying Fund could lose money over short or even long periods, or fail to increase in value. The market values of the securities the Buying Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities. The Selling Fund is also subject to this principal risk. |
• | Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Buying Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations. The Selling Fund is also subject to this principal risk. |
• | U.S. Government Obligations Risk – While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (i.e., the risk that the U.S. Government may be, or may be perceived to be, unable or unwilling to honor its financial obligations, such as making payments). Securities issued or guaranteed by federal agencies or authorities and U.S. Government-sponsored instrumentalities or enterprises may or may not be backed by the full faith and credit of the U.S. Government. For example, securities issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and the Federal Home Loan Banks are neither insured nor guaranteed by the U.S. Government. These securities may be supported by the ability to borrow from the U.S. Treasury or only by the credit of the issuing agency, authority, instrumentality or enterprise and, as a result, are subject to greater credit risk than securities issued or guaranteed by the U.S. Treasury. Securities guaranteed by the Federal Deposit Insurance Corporation under its Temporary Liquidity Guarantee Program (TLGP) are subject to certain risks, including whether such securities will continue to trade in line with recent experience in relation to treasury and government agency securities in terms of yield spread and the volatility of such spread, as well as uncertainty as to how such securities will trade in the secondary market and whether that market will be liquid or illiquid. The TLGP is subject to change. The Selling Fund is also subject to this principal risk. |
• | Dollar Rolls Risk – Dollar rolls are transactions in which the Buying Fund sells securities to a counterparty and simultaneously agrees to purchase those or similar securities in the future at a predetermined price. Dollar rolls involve the risk that the market value of the securities the Buying Fund is obligated to repurchase may decline below the repurchase price, or that the counterparty may default on its obligations. These transactions may also increase the Buying Fund’s portfolio turnover rate. If the Buying Fund reinvests the proceeds of the security sold, the Buying Fund will also be subject to the risk that the investments purchased with such proceeds will decline in value (a form of leverage risk). The Selling Fund is not subject to dollar rolls risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in dollar rolls. |
• | Asset-Backed Securities Risk – The value of the Buying Fund’s asset-backed securities may be affected by, among other things, changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Asset-backed securities represent interests in, or are backed by, pools of receivables such as credit card, auto, student and home equity loans. They may also be backed, in turn, by securities backed by these types of loans and others, such as mortgage loans. Asset-backed securities can have a fixed or an adjustable rate. Most asset-backed securities are subject to prepayment risk, which is the possibility that the |
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underlying debt may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Buying Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of asset-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of asset-backed securities, making them more volatile and more sensitive to changes in interest rates. The Selling Fund is also subject to this principal risk. |
• | Mortgage-Backed Securities Risk – The value of the Buying Fund’s mortgage-backed securities may be affected by, among other things, changes or perceived changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgages, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Mortgage-backed securities represent interests in, or are backed by, pools of mortgages from which payments of interest and principal (net of fees paid to the issuer or guarantor of the securities) are distributed to the holders of the mortgage-backed securities. Mortgage-backed securities can have a fixed or an adjustable rate. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed (i) by the full faith and credit of the U.S. Government (in the case of securities guaranteed by the Government National Mortgage Association) or (ii) by its agencies, authorities, enterprises or instrumentalities (in the case of securities guaranteed by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)), which are not insured or guaranteed by the U.S. Government (although FNMA and FHLMC may be able to access capital from the U.S. Treasury to meet their obligations under such securities). Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may be supported by various credit enhancements, such as pool insurance, guarantees issued by governmental entities, letters of credit from a bank or senior/subordinated structures, and may entail greater risk than obligations guaranteed by the U.S. Government, whether or not such obligations are guaranteed by the private issuer. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Buying Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of mortgage-backed securities, making them more volatile and more sensitive to changes in interest rates. The Selling Fund is also subject to this principal risk. |
• | Credit Risk – Credit risk applies to most debt securities, but is generally less of a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Buying Fund could lose money if the issuer of a debt security owned by the Fund is unable or perceived to be unable to pay interest or repay principal when it becomes due. Various factors could affect the issuer’s actual or perceived willingness or ability to make timely interest or principal payments, including changes in the issuer’s financial condition or in general economic conditions. Debt securities backed by an issuer’s taxing authority may be subject to legal limits on the issuer’s power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default. The Selling Fund is also subject to this principal risk. |
• | Low and Below Investment Grade Securities Risk – Debt securities with the lowest investment grade rating (e.g., BBB by Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (S&P), or Fitch, Inc. (Fitch) or Baa by Moody’s Investors Service, Inc. (Moody’s)), or that are below investment grade (which are commonly referred to as “junk bonds”) (e.g., BB or below by S&P or Fitch or Ba by Moody’s) and unrated securities of comparable quality are more speculative than securities with higher ratings and may experience greater price fluctuations. These securities tend to be more sensitive to credit risk than higher-rated securities, particularly during a downturn in the economy, which is more likely to weaken the ability of the issuers to make principal and interest payments on these securities. These securities typically |
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pay a premium – a higher interest rate or yield – because of the increased risk of loss, including default. These securities also are generally less liquid than higher-rated securities. The securities ratings provided by Moody’s, S&P and Fitch are based on analyses by these ratings agencies of the credit quality of the securities and may not take into account every risk related to whether interest or principal will be timely repaid. The Selling Fund is also subject to this principal risk. |
• | Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies. The Selling Fund is also subject to this principal risk. |
• | Prepayment and Extension Risk – Prepayment and extension risk is the risk that a loan, bond or other security might be called or otherwise converted, prepaid or redeemed before maturity. This risk is primarily associated with asset-backed securities, including mortgage-backed securities and floating rate loans. If a loan or security is converted, prepaid or redeemed before maturity, particularly during a time of declining interest rates or spreads, the portfolio managers may not be able to invest the proceeds in securities or loans providing as high a level of income, resulting in a reduced yield to the Fund. Conversely, as interest rates rise or spreads widen, the likelihood of prepayment decreases. The portfolio managers may be unable to capitalize on securities with higher interest rates or wider spreads because the Fund’s investments are locked in at a lower rate for a longer period of time. The Selling Fund is also subject to this principal risk. |
• | Reinvestment Risk – Income from the Fund’s debt securities portfolio will decline if and when the Fund invests the proceeds from matured, traded or called securities in securities with market interest rates that are below the current earnings rate of the Fund’s portfolio. The Selling Fund is also subject to this risk. |
• | Liquidity Risk – Illiquid securities are securities that cannot be readily disposed of in the normal course of business. There is a risk that the Fund may not be able to sell such securities at the time it desires or without adversely affecting their price. The Selling Fund is also subject to this principal risk. |
• | Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the Standard & Poor’s (S&P) 500® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the |
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risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. U.S. federal legislation has recently been enacted that provides for new clearing, margin, reporting and registration requirements for participants in the derivatives market. While the ultimate impact is not yet clear, these changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of derivative investments and strategies, see the Merger SAI. The Selling Fund is also subject to this principal risk. |
• | Changing Distribution Levels Risk – The amount of the distributions paid by the Fund generally depends on the amount of interest and/or dividends received by the Fund on the securities it holds. The Fund may not be able to pay distributions or may have to reduce its distribution level if the interest and/or dividends the Fund receives from its investments decline. The Selling Fund is also subject to this risk. |
• | Frequent Trading Risk – Frequent trading of investments increases the possibility that the Fund will realize taxable capital gains (including short-term capital gains, which are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes), which could reduce the Fund’s after-tax returns. Frequent trading can also mean higher brokerage and other transaction costs, which could reduce the Fund’s returns. The Selling Fund is also subject to this risk. |
• | Rule 144A Securities Risk – The Fund may invest significantly in privately placed securities that have not been registered for sale under the Securities Act of 1933 pursuant to Rule 144A (Rule 144A securities) which are determined to be liquid in accordance with procedures adopted by the Fund’s Board of Trustees. However, an insufficient number of qualified institutional buyers interested in purchasing Rule 144A securities could affect adversely the marketability of such securities and the Fund might be unable to dispose of such securities promptly or at reasonable prices. Accordingly, even if determined to be liquid, the Fund’s holdings of Rule 144A securities may increase the level of Fund illiquidity if eligible buyers become uninterested in buying them. The Fund may also have to bear the expense of registering the securities for resale and the risk of substantial delays in effecting the registration. Additionally, the purchase price and subsequent valuation of restricted and illiquid securities normally reflect a discount, which may be significant, from the market price of comparable securities for which a liquid market exists. The Selling Fund is not subject to Rule 144A securities risk as a principal risk, but may be subject to such risk to the extent of its investments, if any, in Rule 144A securities. |
The following bar charts and tables provide some illustration of the risks of investing in the Funds by showing, respectively:
• | how each Fund’s performance has varied for each full calendar year shown in the bar chart; and |
• | how each Fund’s average annual total returns compare to certain measures of market performance shown in the table. |
Both the bar charts and the tables assume that all distributions have been reinvested. The performance of different classes varies because of differences in sales charges and other fees and expenses. How a Fund has performed in the past (before and after taxes) does not indicate how the Fund will perform in the future. The performance shown reflects any fee waiver or expense reimbursement arrangements in effect for the periods reported. In the absence of such fee waiver or expense reimbursement arrangements, the performance shown would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales charge for Class A shares is not reflected in the bar charts.
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Tables. The tables below show total returns from hypothetical investments in the indicated classes of shares of each Fund. The returns shown are compared to measures of market performance shown for the same periods.
The inception date of the Selling Fund’s Class I shares is March 4, 2004; the inception date of the Selling Fund’s Class R, Class R4 and Class R5 shares is December 11, 2006; the inception date of the Selling Fund’s Class W shares is December 1, 2006; and the inception date of the Selling Fund’s Class Z shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of the Selling Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class A shares because all classes of the Selling Fund’s shares invest in the same portfolio of securities.
The inception date of the Buying Fund’s Class R shares is January 23, 2006, and the inception date of the Buying Fund’s Class I and Class W shares is September 27, 2010. The returns shown for each of these classes of shares include the returns of the Buying Fund’s Class Z shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), these classes of shares have annual returns substantially similar to those of Class Z shares because all classes of the Buying Fund’s shares invest in the same portfolio of securities. The returns shown for periods prior to March 31, 2008 include the returns of Intermediate-Term Bond Fund, the predecessor to the Buying Fund and a series of Excelsior Funds, Inc. Class R4, Class K and Class R5 shares of the Buying Fund have not yet commenced operations; accordingly, performance information for those classes is not shown.
The performance calculations in the tables assume:
• | the maximum sales charge for Class A shares; |
• | redemption at the end of the indicated period and deduction of the applicable contingent deferred sales charge (“CDSC”) for Class B and Class C shares; |
• | no sales charge for Class Z shares; and |
• | except as noted for Class A shares, no adjustments for taxes paid by an investor on reinvested income and capital gains. |
After-Tax Returns
After-tax returns are shown only for Class A shares. After-tax returns for the other share classes will vary. After-tax returns are calculated using the highest historical individual U.S. federal marginal income tax rate and do not reflect the effect of foreign, state or local taxes. Actual after-tax returns will depend on your tax situation and most likely will differ from the returns shown in the table. If you hold your shares in a tax-deferred account, such as a 401(k) plan or an IRA, the after-tax returns do not apply to you because you will not incur taxes until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the return before taxes for the same period if there were no distributions or if the distributions were small. The return after taxes on distributions and sale of Fund shares for a period may be greater than the return before taxes for the same period if there was a tax loss realized on the sale of Fund shares. The benefit of the tax loss (because it can be used to offset other gains) may result in a higher return.
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Columbia Diversified Bond Fund (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +5.34% (quarter ended September 30, 2009) and the lowest return for a calendar quarter was -3.30% (quarter ended December 31, 2008).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 6.35%.
Columbia Intermediate Bond Fund (Buying Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +8.13% (quarter ended June 30, 2009) and the lowest return for a calendar quarter was -5.30% (quarter ended September 30, 2008).
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These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 6.07%.
Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Diversified Bond Fund (Selling Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | +1.45% | +4.36% | +4.38% | |||||||||
Return after taxes on distributions | -0.12% | +2.83% | +2.85% | |||||||||
Return after taxes on distributions and sale of Fund shares | +1.21% | +2.83% | +2.83% | |||||||||
Class B | ||||||||||||
Return before taxes | +0.73% | +4.25% | +4.10% | |||||||||
Class C | ||||||||||||
Return before taxes | +4.73% | +4.59% | +4.10% | |||||||||
Class I | ||||||||||||
Return before taxes | +6.89% | +5.75% | +5.21% | |||||||||
Class R | ||||||||||||
Return before taxes | +6.26% | +5.06% | +4.63% | |||||||||
Class R4 | ||||||||||||
Return before taxes | +6.07% | +5.23% | +4.74% | |||||||||
Class K | ||||||||||||
Return before taxes | +6.36% | +5.42% | +5.00% | |||||||||
Class R5 | ||||||||||||
Return before taxes | +6.84% | +5.66% | +5.06% | |||||||||
Class W | ||||||||||||
Return before taxes | +6.53% | +5.30% | +4.85% | |||||||||
Class Z | ||||||||||||
Return before taxes | +6.80% | +5.45% | +4.93% | |||||||||
Barclays Aggregate Bond Index (reflects no deductions for fees, expenses or taxes) | +7.84% | +6.50% | +5.78% |
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Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Intermediate Bond Fund (Buying Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | +3.01% | +5.24% | +5.02% | |||||||||
Return after taxes on distributions | +1.64% | +3.49% | +3.21% | |||||||||
Return after taxes on distributions and sale of Fund shares | +1.93% | +3.42% | +3.19% | |||||||||
Class B | ||||||||||||
Return before taxes | +2.62% | +5.16% | +4.75% | |||||||||
Class C | ||||||||||||
Return before taxes | +4.80% | +5.32% | +4.90% | |||||||||
Class I | ||||||||||||
Return before taxes | +6.78% | +6.25% | +5.82% | |||||||||
Class R | ||||||||||||
Return before taxes | +6.15% | +5.68% | +5.28% | |||||||||
Class W | ||||||||||||
Return before taxes | +6.48% | +6.00% | +5.60% | |||||||||
Class Z | ||||||||||||
Return before taxes | +6.68% | +6.21% | +5.81% | |||||||||
Barclays Aggregate Bond Index (reflects no deductions for fees, expenses or taxes) | +7.84% | +6.50% | +5.78% |
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Proposal 5. Comparison of Objectives, Strategies and Risks. Reorganization of each of Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund into Columbia Tax-Exempt Fund.
Comparison of each Selling Fund and the Buying Fund
All of the Selling Funds and the Buying Fund:
• | Have Columbia Management as investment manager. |
• | Have the same policies for buying and selling shares and the same exchange rights. Please see Exhibit B for a description of these policies for the Buying Fund. |
• | Are structured as series of an open-end management investment company. Each Fund is organized as a series of a Massachusetts business trust. Please see Exhibit C to this combined proxy statement/prospectus for more information regarding the differences between the rights of shareholders of the Selling Fund and shareholders of the Buying Fund. |
Comparison of Investment Objectives
The investment objectives of the Funds are as follows:
Selling Fund: Columbia Connecticut Tax-Exempt Fund seeks total return, consisting of current income exempt from federal income tax and Connecticut individual income tax and of capital appreciation, consistent with moderate fluctuation of principal.
Selling Fund: Columbia Massachusetts Tax-Exempt Fund seeks total return, consisting of current income exempt from federal income tax and Massachusetts individual income tax and of capital appreciation, consistent with moderate fluctuation of principal.
Buying Fund: Columbia Tax-Exempt Fund seeks total return, consisting of current income exempt from federal income tax and of capital appreciation, consistent with moderate fluctuations of principal.
Each Fund seeks total return, consisting of current income exempt from federal income tax and of capital appreciation, except that each of Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund also seeks current income exempt from the individual income tax of Connecticut and Massachusetts, respectively.
Because any investment involves risk, there can be no assurance that a Fund’s investment objective will be achieved. The investment objective of each of the Funds may be changed without shareholder approval.
Comparison of Principal Investment Strategies
The Funds have generally similar principal investment strategies. Each Fund normally invests at least 80% of its net assets in bonds that pay interest exempt from federal income tax. Each of Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund also normally invests at least 80% of its net assets in municipal bonds that are also exempt from Connecticut and Massachusetts income tax, respectively. The 80% policy of each Fund may be changed only with shareholder approval. Each Fund may invest up to 20% of its net assets in securities that pay interest subject to taxation, and each Fund may invest in bonds of any maturity. As of September 30, 2012, each of Columbia Connecticut Tax-Exempt Fund, Columbia Massachusetts Tax-Exempt Fund and the Buying Fund had invested 3.84%, 11.85% and 8.52% of their net assets, respectively, in securities that pay interest subject to taxation. The Buying Fund normally invests up to 65% of its total assets in, and each Selling Fund invests primarily in, securities that are rated investment grade or are unrated but determined by Columbia Management to be of comparable quality. The Buying Fund may invest up to 35% of its
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net assets in securities that are rated below investment grade (or unrated securities of comparable quality) while each Selling Fund may invest up to 25% of its net assets in such securities. As of September 30, 2012, each of Columbia Connecticut Tax-Exempt Fund, Columbia Massachusetts Tax-Exempt Fund and the Buying Fund had invested 7.49%, 10.68% and 23.95%of their net assets, respectively, in below-investment-grade securities. Each Fund may invest in derivatives. Each Selling Fund is a non-diversified fund, while the Buying Fund is a diversified fund.
Additional information regarding the principal investment strategies of each Fund is set forth below:
Columbia Connecticut Tax-Exempt Fund (the Selling Fund) | Columbia Massachusetts Tax-Exempt (the Selling Fund) | Columbia Tax-Exempt (the Buying Fund) | ||
Under normal circumstances, the Fund invests at least 80% of its net assets in municipal bonds that pay interest exempt from federal income tax (including the federal alternative minimum tax) and Connecticut individual income tax. These securities are issued by the State of Connecticut and its political subdivisions, agencies, authorities and instrumentalities, by other qualified issuers and by mutual funds that invest in such securities. | Under normal circumstances, the Fund invests at least 80% of its net assets in municipal bonds that pay interest exempt from federal income tax (including the federal alternative minimum tax) and Massachusetts individual income tax. These securities are issued by the Commonwealth of Massachusetts and its political subdivisions, agencies, authorities and instrumentalities, by other qualified issuers and by mutual funds that invest in such securities. | Under normal circumstances, the Fund invests at least 80% of its total net assets in bonds that pay interest exempt from federal income tax (including the federal alternative minimum tax). These securities are issued by states and their political subdivisions, agencies, authorities and instrumentalities and by other qualified issuers. | ||
The Fund may invest up to 20% of its net assets in securities that pay interest subject to taxation. The Fund may invest in bonds of any maturity. Qualified issuers include issuers located in U.S. territories Guam, Puerto Rico and the U.S. Virgin Islands. The Fund may also invest in zero-coupon bonds. | The Fund may invest up to 20% of its net assets in securities that pay interest subject to taxation. The Fund may invest in bonds of any maturity. Qualified issuers include issuers located in U.S. territories Guam, Puerto Rico and the U.S. Virgin Islands. The Fund may also invest in zero-coupon bonds. | The Fund may invest up to 20% of its total net assets in securities the interest on which is subject to federal income tax. The Fund may invest in fixed or variable-rate debt securities, including zero-coupon bonds, and the Fund may invest in bonds of any maturity. | ||
The Fund primarily invests in municipal securities that, at the time of purchase, are rated investment grade or are unrated but determined by Columbia Management to be of comparable quality. | The Fund primarily invests in municipal securities that, at the time of purchase, are rated investment grade or are unrated but determined by Columbia Management to be of comparable quality. | Under normal circumstances, the Fund invests at least 65% of its total assets in tax-exempt bonds that, at the time of purchase, are rated investment grade or are unrated but determined by Columbia Management to be of comparable quality. | ||
The Fund may invest up to 25% of its total assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined by the | The Fund may invest up to 25% of its total assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined by | The Fund may invest up to 35% of its total assets in bonds (not including prerefunded bonds) that, at the time of purchase, are rated below investment grade or |
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Columbia Connecticut Tax-Exempt Fund (the Selling Fund) | Columbia Massachusetts Tax-Exempt (the Selling Fund) | Columbia Tax-Exempt (the Buying Fund) | ||
Columbia Management to be of comparable quality, which are commonly referred to as “junk bonds.” | Columbia Management to be of comparable quality, which are commonly referred to as “junk bonds.” | are unrated but determined by Columbia Management to be of comparable quality, which are commonly referred to as “junk bonds.” The Fund will invest no more than 25% of its total assets in bonds that, at the time of purchase, are unrated but determined by the Investment Manager to be of comparable quality to below investment grade bonds. | ||
The Fund may invest in derivatives, including futures, forwards, options, swap contracts, inverse floaters and other derivative instruments. The Fund may invest in derivatives for both hedging and non-hedging purposes, including, for example, to seek to enhance returns or as a substitute for a position in an underlying asset. | ||||
The Fund is non-diversified, which means that it can invest a greater percentage of its assets in a single issuer than can a diversified fund. | The Fund is non-diversified, which means that it can invest a greater percentage of its assets in a single issuer than can a diversified fund. | The Fund is diversified. |
Buying Fund Investment Style
A description of the investment style of the Buying Fund is set forth below.
Columbia Management evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. Columbia Management considers local, national and global economic conditions, market conditions, interest rate movements and other relevant factors to determine the allocation of the Fund’s assets among different issuers, industry sectors and maturities.
Columbia Management, in connection with selecting individual investments for the Fund, evaluates a security based on its potential to generate income and capital appreciation. Columbia Management considers, among other factors, the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, yield, maturity, any call features and value relative to other securities.
Columbia Management may sell a security if Columbia Management believes that there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; if there is deterioration in the issuer’s credit rating; or for other reasons.
Differences between each Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in each Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Fundamental Investment Policies
If the Reorganizations occur, the combined Fund will be subject to the fundamental investment policies of the Buying Fund. A “fundamental” investment policy is one that may not be changed without a shareholder vote.
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The Funds have generally similar fundamental investment policies. Each Fund’s policy of investing at least 80% of its net assets (noted above) has been adopted as a fundamental investment policy, and therefore may not be changed without shareholder approval. The Funds differ, however, with respect to their fundamental investment policies on diversification. The Buying Fund may not purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund are not similarly constrained. Columbia Management does not believe that these differences between the fundamental investment policies of the Funds will result in any material difference between the way the Funds have been managed and the way the combined Fund will be managed.
Differences between each Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in each Selling Fund and the Buying Fund is provided under “Comparison of Principal Risks” below.
Comparison of Non-Fundamental Investment Policies
If the Reorganizations occur, the combined Fund will be subject to the non-fundamental investment policies (policies that may be changed without a shareholder vote) of the Buying Fund. Each of the Funds has the same non-fundamental investment policies except with respect to short selling. While Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund may sell securities short to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief, Columbia Tax-Exempt Fund may not have a short securities position unless the Fund owns, or owns rights (exercisable without payment) to acquire, an equal amount of such securities. Columbia Management does not believe that the differences between the non-fundamental policies of the Funds will result in any material differences between the way Funds have been managed and the way the combined Fund will be managed.
Differences between each Selling Fund’s principal investment strategies, fundamental and non-fundamental investment policies and holdings and those of the Buying Fund may expose the Selling Fund’s shareholders to new or increased risks. A comparison of the principal risks of investing in each Selling Fund and the Buying Fund is provided below.
Although the Funds describe them somewhat differently, the principal risks associated with investments in the Buying Fund and the Selling Funds are generally similar because the Funds have similar investment objectives, principal investment strategies and investment policies. The actual risks of investing in each Fund depend on the securities held in each Fund’s portfolio and on market conditions, both of which change over time. The Buying Fund is subject to the principal risks described below. Similarities and material differences between the Buying Fund’s principal risks and those of the Selling Funds are also identified below.
• | Investment Strategy Risk – Columbia Management uses the principal investment strategies and other investment strategies to seek to achieve the Fund’s investment objective. There is no assurance that the Fund will achieve its investment objective. Investment decisions made by Columbia Management in using these strategies may not produce the returns expected by the Investment Manager, may cause the Fund’s shares to lose value or may cause the Fund to underperform other funds with similar investment objectives. Each Selling Fund is also subject to this principal risk. |
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• | Market Risk – Market risk refers to the possibility that the market values of securities that the Fund holds will fall, sometimes rapidly or unpredictably. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Fund. Accordingly, an investment in the Fund could lose money over short or even long periods. The market values of the securities the Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities. Each Selling Fund is also subject to this principal risk. |
• | Municipal Securities Risk – Municipal securities are debt obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility. Municipal securities may be fully or partially backed by the taxing authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. General obligation bonds are backed by an issuer’s taxing authority and may be vulnerable to limits on a government’s power or ability to raise revenue or increase taxes. They may also depend for payment on legislative appropriation and/or funding or other support from other governmental bodies. Revenue obligations are payable from revenues generated by a particular project or other revenue source, and are typically subject to greater risk of default than general obligation bonds because investors can look only to the revenue generated by the project or other revenue source backing the project, rather than to the general taxing authority of the state or local government issuer of the obligations. Because many municipal securities are issued to finance projects in sectors such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market. Municipal securities generally pay interest that, in the opinion of bond counsel, is free from U.S. federal income tax (and, in some cases, the federal alternative minimum tax). There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued, and the value of the security would likely fall. As a shareholder of the Fund, you may be required to file an amended tax return and pay additional taxes as a result. Each Selling Fund is also subject to this principal risk. |
• | Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations. Each Selling Fund is also subject to this principal risk. |
• | Credit Risk – Credit risk applies to most debt securities, but is generally less of a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Fund could lose money if the issuer of a debt security owned by the Fund is unable or perceived to be unable to pay interest or repay principal when it becomes due. Various factors could affect the issuer’s actual or perceived willingness or ability to make timely interest or principal payments, including changes in the issuer’s financial condition or in general economic conditions. Debt securities backed by an issuer’s taxing authority may be subject to legal limits on the issuer’s power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default. Each Selling Fund is also subject to this principal risk. |
• | Changing Distribution Levels Risk – The amount of the distributions paid by the Fund generally depends on the amount of interest and/or dividends received by the Fund on the securities it holds. The Fund may not be able to pay distributions or may have to reduce its distribution level if the interest and/or dividends the Fund receives from its investments decline. Each Selling Fund is also subject to this principal risk. |
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• | Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the Standard & Poor’s (S&P) 500® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. U.S. federal legislation has recently been enacted that provides for new clearing, margin, reporting and registration requirements for participants in the derivatives market. While the ultimate impact is not yet clear, these changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. For more information on the risks of derivative investments and strategies, see the Merger SAI. Each Selling Fund is also subject to this principal risk. |
• | Low and Below Investment Grade Securities Risk – Debt securities with the lowest investment grade rating (e.g., BBB by Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (S&P), or Fitch, Inc. (Fitch) or Baa by Moody’s Investors Service, Inc. (Moody’s)), or that are below investment grade (which are commonly referred to as “junk bonds”) (e.g., BB or below by S&P or Fitch or Ba by Moody’s) and unrated securities of comparable quality are more speculative than securities with higher ratings and may experience greater price fluctuations. These securities tend to be more sensitive to credit risk than higher-rated securities, particularly during a downturn in the economy, which is more likely to weaken the ability of the issuers to make principal and interest payments on these securities. These securities typically pay a premium – a higher interest rate or yield – because of the increased risk of loss, including default. These securities also are generally less liquid than higher-rated securities. The securities ratings provided by Moody’s, S&P and Fitch are based on analyses by these ratings agencies of the credit quality of the securities and may not take into account every risk related to whether interest or principal will be timely repaid. Each Selling Fund is also subject to this principal risk. |
• | Reinvestment Risk – Income from the Fund’s debt securities portfolio will decline if and when the Fund invests the proceeds from matured, traded or called securities in securities with market interest rates that are below the current earnings rate of the Fund’s portfolio. Each Selling Fund is also subject to this principal risk. |
• | Zero-Coupon Bonds Risk – Zero-coupon bonds are bonds that do not pay interest in cash on a current basis, but instead accrue interest over the life of the bond. As a result, these securities are issued at a discount and their values may fluctuate more than the values of similar securities that pay interest periodically. Although these securities pay no interest to holders prior to maturity, interest accrued on these securities is reported as income to the Fund and affects the amounts distributed to its shareholders. Each Selling Fund is also subject to this principal risk. |
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The following bar charts and tables provide some illustration of the risks of investing in the Funds by showing, respectively:
• | how each Fund’s performance has varied for each full calendar year shown in the bar chart; and |
• | how each Fund’s average annual total returns compare to certain measures of market performance shown in the table. |
Both the bar charts and the tables assume that all distributions have been reinvested. The performance of different classes varies because of differences in sales charges and other fees and expenses. How a Fund has performed in the past (before and after taxes) does not indicate how the Fund will perform in the future. The performance shown reflects any fee waiver or expense reimbursement arrangements in effect for the periods reported. In the absence of such fee waiver or expense reimbursement arrangements, the performance shown would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales charge for Class A shares is not reflected in the bar charts.
Tables. The tables below show total returns from hypothetical investments in the indicated classes of shares of each Fund. The returns shown are compared to measures of market performance shown for the same periods.
The inception date of Columbia Connecticut Tax-Exempt Fund’s Class Z shares is September 27, 2010. The returns shown for this class of shares include the returns of Columbia Connecticut Tax-Exempt Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), this class of shares has annual returns substantially similar to those of Class A shares because all classes of Columbia Connecticut Tax-Exempt Fund’s shares invest in the same portfolio of securities.
The inception date of Columbia Massachusetts Tax-Exempt Fund’s Class Z shares is September 1, 2011. The returns shown for this class of shares include the returns of Columbia Massachusetts Tax-Exempt Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), this class of shares has annual returns substantially similar to those of Class A shares because all classes of Columbia Massachusetts Tax-Exempt Fund’s shares invest in the same portfolio of securities.
The inception date of the Buying Fund’s Class Z shares is September 16, 2005. The returns shown for this class of shares include the returns of the Buying Fund’s Class A shares (adjusted to reflect higher class-related operating expenses of such classes, where applicable) for periods prior to its inception date. Except for differences in expenses and sales charges (where applicable), this class of shares has annual returns substantially similar to those of Class A shares because all classes of the Buying Fund’s shares invest in the same portfolio of securities.
The performance calculations in the tables assume:
• | the maximum applicable sales charge for Class A shares; |
• | redemption at the end of the indicated period and deduction of the applicable contingent deferred sales charge (“CDSC”) for Class B and Class C shares; |
• | no sales charge for Class Z shares; and |
• | except as noted for Class Z shares, no adjustments for taxes paid by an investor on reinvested income and capital gains. |
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After-Tax Returns
After-tax returns are shown only for Class A shares. After-tax returns for the other share classes will vary. After-tax returns are calculated using the highest historical individual U.S. federal marginal income tax rate and do not reflect the effect of foreign, state or local taxes. Actual after-tax returns will depend on your tax situation and most likely will differ from the returns shown in the table. If you hold your shares in a tax-deferred account, such as a 401(k) plan or an IRA, the after-tax returns do not apply to you because you will not incur taxes until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the return before taxes for the same period if there were no distributions or if the distributions were small. The return after taxes on distributions and sale of Fund shares for a period may be greater than the return before taxes for the same period if there was a tax loss realized on the sale of Fund shares. The benefit of the tax loss (because it can be used to offset other gains) may result in a higher return.
Columbia Connecticut Tax-Exempt Fund (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +6.97% (quarter ended September 30, 2009) and the lowest return for a calendar quarter was -5.29% (quarter ended December 31, 2010).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 6.45%.
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Columbia Massachusetts Tax-Exempt Fund (Selling Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was 8.63% (quarter ended September 30, 2009) and the lowest return for a calendar quarter was -6.23% (quarter ended December 31, 2010).
These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 6.50%.
Columbia Tax-Exempt (Buying Fund)
CLASS A SHARE PERFORMANCE
(based on calendar years)
During the periods shown in the bar chart, the highest return for a calendar quarter was +8.66% (quarter ended September 30, 2009) and the lowest return for a calendar quarter was -5.98% (quarter ended December 31, 2010).
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These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did. The performance of other share classes may vary from that shown because of differences in expenses.
The Fund’s Class A shares year-to-date return at September 30, 2012 was 7.99%.
Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Connecticut Tax-Exempt Fund (Selling Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | +6.54% | +3.69% | +4.18% | |||||||||
Return after taxes on distributions | +6.42% | +3.60% | +4.05% | |||||||||
Return after taxes on distributions and sale of Fund shares | +5.69% | +3.65% | +4.07% | |||||||||
Class B | ||||||||||||
Return before taxes | +6.02% | +3.59% | +3.91% | |||||||||
Class C | ||||||||||||
Return before taxes | +10.34% | +4.24% | +4.21% | |||||||||
Class Z | ||||||||||||
Return before taxes | +11.97% | +4.74% | +4.70% | |||||||||
Barclays Capital Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | +10.70% | +5.22% | +5.38% | |||||||||
Barclays Capital Connecticut Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | +7.90% | +5.23% | +4.95% | |||||||||
Lipper Connecticut Municipal Debt Funds Classification (reflects no deductions for taxes) | +10.31% | +4.02% | +4.35% |
Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Massachusetts Tax-Exempt Fund (Selling Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | +6.94% | +3.63% | +4.53% | |||||||||
Return after taxes on distributions | +6.84% | +3.55% | +4.40% | |||||||||
Return after taxes on distributions and sale of Fund shares | +6.09% | +3.66% | +4.44% | |||||||||
Class B | ||||||||||||
Return before taxes | +6.38% | +3.52% | +4.26% | |||||||||
Class C | ||||||||||||
Return before taxes | +10.72% | +4.18% | +4.57% | |||||||||
Class Z | ||||||||||||
Return before taxes | +12.30% | +4.66% | +5.05% | |||||||||
Barclays Capital Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | +10.70% | +5.22% | +5.38% | |||||||||
Barclays Capital Massachusetts Municipal Bond Index (reflects no deduction for fees, expenses or taxes) | +10.52% | +5.58% | +5.50% | |||||||||
Lipper Massachusetts Municipal Debt Funds Classification (reflects no deductions for taxes) | +10.94% | +3.80% | +4.56% |
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Average Annual Total Returns (for periods ended December 31, 2011)
1 year | 5 years | 10 years | ||||||||||
Columbia Tax-Exempt (Selling Fund): | ||||||||||||
Class A | ||||||||||||
Return before taxes | +6.60% | +3.41% | +4.69% | |||||||||
Return after taxes on distributions | +6.60% | +3.41% | +4.69% | |||||||||
Return after taxes on distributions and sale of Fund shares | +5.86% | +3.53% | +4.66% | |||||||||
Class B | ||||||||||||
Return before taxes | +5.98% | +3.28% | +4.40% | |||||||||
Class C | ||||||||||||
Return before taxes | +10.23% | +3.79% | +4.56% | |||||||||
Class Z | ||||||||||||
Return before taxes | +12.10% | +4.62% | +5.32% | |||||||||
Barclays Capital Municipal Bond Index (reflects no deductions for fees, expenses or taxes) | +10.70% | +5.22% | +5.38% | |||||||||
Lipper General Municipal Debt Funds Classification (reflects no deductions for taxes) | +10.56% | +3.71% | +4.36% |
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ADDITIONAL INFORMATION ABOUT EACH REORGANIZATION
The board of trustees of each Fund has approved the Agreement. While shareholders are encouraged to review the Agreement, which has been filed with the SEC as an exhibit to the registration statement of which this combined proxy statement/prospectus is a part, the following is a summary of certain terms of the Agreement:
• | Each Reorganization is expected to occur before the end of the first half of 2013, subject to approval by Selling Fund shareholders, receipt of any necessary regulatory approvals and satisfaction of any other conditions to closing. However, following such approvals, each Reorganization may happen at any time agreed to by the applicable Selling Fund and the corresponding Buying Fund. |
• | Each Selling Fund will transfer all of its assets to the corresponding Buying Fund and, in exchange, the corresponding Buying Fund will assume all the Selling Fund’s liabilities and will issue Reorganization Shares to the Selling Fund. The value of each Selling Fund’s assets, as well as the number of Reorganization Shares to be issued to the Selling Fund, will be determined in accordance with the Agreement. The Reorganization Shares will have an aggregate net asset value on the business day immediately preceding the closing of the Reorganization equal to the value of the assets received from the Selling Fund, less the liabilities assumed by the corresponding Buying Fund in the transaction. The Reorganization Shares will immediately be distributed to Selling Fund shareholders in proportion to their holdings of shares of the Selling Fund, in liquidation of the Selling Fund. As a result, shareholders of the Selling Fund will become shareholders of the corresponding Buying Fund. No shareholders of any Selling Fund will pay any sales charge in connection with its Reorganization. |
• | The net asset value of each Selling Fund and the corresponding Buying Fund will be computed as of the close of regular trading on the New York Stock Exchange on the business day next preceding the closing date of the applicable Reorganization. |
Conditions to Closing Each Reorganization
The completion of each Reorganization is subject to certain conditions described in the Agreement, including:
• | The Selling Fund will have declared and paid one or more dividends that, together with all previous dividends, will distribute all of the Selling Fund’s net investment income and net realized capital gains, if any, to the shareholders of the Selling Fund for its tax year ending on the closing date of the Reorganization, and for prior tax years to the extent such dividends are eligible to be treated as paid in respect of such prior tax years. |
• | The Selling Fund and the corresponding Buying Fund will have received any approvals, consents or exemptions from the SEC or any other regulatory body necessary to carry out the Reorganization. |
• | A registration statement on Form N-14 relating to the Reorganization will have been filed with the SEC and become effective. |
• | The shareholders of the Selling Fund will have approved the Agreement by the requisite vote. |
• | The Selling Fund will have received an opinion of tax counsel to the effect that, as described in more detail in the section entitled “Tax Status of the Reorganizations,” the shareholders of the Selling Fund will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their Selling Fund shares for the Reorganization Shares of the corresponding Buying Fund in connection with the Reorganization and the Selling Fund generally will not recognize gain or loss as a direct result of the Reorganization. |
The Agreement and the transactions contemplated by it may be terminated and abandoned with respect to any Reorganization by mutual agreement of the Selling Fund and the Buying Fund at any time prior to the
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closing date thereof, or by either the Selling Fund or the Buying Fund in the event of a material breach of the Agreement by the other Fund or a failure of any condition precedent to the terminating Fund’s obligations under the Agreement. In the event of a termination, Columbia Management will bear all costs associated with the Reorganization.
Tax Status of the Reorganizations
Each Reorganization is intended to qualify for U.S. federal income tax purposes as a tax-free reorganization under section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). As a condition to the closing of each Reorganization, the Selling Fund and the Buying Fund will receive an opinion from Ropes & Gray LLP to the effect that, as further described below, on the basis of existing provisions of the Code, U.S. Treasury regulations issued thereunder, current administrative rules, pronouncements and court decisions, for U.S. federal income tax purposes:
• | (i) The Reorganization will constitute a “reorganization” within the meaning of Section 368(a)(1) of the Code, and the Selling Fund and the Buying Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code. |
• | (ii) Under Sections 361 and 357 of the Code, the Selling Fund will not recognize gain or loss upon the transfer of all of its assets to the Buying Fund in exchange for Reorganization Shares and the assumption by the Buying Fund of all of the liabilities of the Selling Fund, or upon the distribution of the Reorganization Shares by the Selling Fund to its shareholders in liquidation, except for (A) any gain or loss recognized on (1) “Section 1256 contracts” as defined in Section 1256(b) of the Code or (2) stock in a “passive foreign investment company” as defined in Section 1297(a) of the Code, and (B) any other gain or loss required to be recognized by reason of the reorganization (1) as a result of the closing of the tax year of the Selling Fund, (2) upon the termination of a position, or (3) upon the transfer of such asset regardless of whether such a transfer would otherwise be a nontaxable transaction under the Code. |
• | (iii) Under Section 354 of the Code, the shareholders of the Selling Fund will not recognize gain or loss upon the exchange of their Selling Fund shares for Reorganization Shares. |
• | (iv) Under Section 358 of the Code, the aggregate tax basis of Reorganization Shares that a Selling Fund shareholder receives in the Reorganization will be the same as the aggregate tax basis of the Selling Fund shares exchanged therefor. |
• | (v) Under Section 1223(1) of the Code, a Selling Fund shareholder’s holding period for the Reorganization Shares received in the Reorganization will include the shareholder’s holding period for the Selling Fund shares exchanged therefor, provided the shareholder held such Selling Fund shares as capital assets. |
• | (vi) Under Section 1032 of the Code, the Buying Fund will not recognize gain or loss upon the receipt of assets of the Selling Fund in exchange for Reorganization Shares and the assumption by the Buying Fund of all of the liabilities of the Selling Fund. |
• | (vii) Under Section 362(b) of the Code, the Buying Fund’s tax basis in the assets of the Selling Fund transferred to the Buying Fund in the Reorganization will be the same as the Selling Fund’s tax basis in such assets immediately prior to the Reorganization, adjusted for any gain or loss required to be recognized as described in (ii) above. |
• | (viii) Under Section 1223(2) of the Code, the Buying Fund’s holding periods in the assets received from the Selling Fund in the Reorganization, other than any asset with respect to which gain or loss is required to be recognized as described in (ii) above, will include the periods during which such assets were held or treated for federal income tax purposes as being held by the Selling Fund. |
• | (ix) The Buying Fund will succeed to and take into account the items of the Selling Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the regulations thereunder. |
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Each opinion will be based on certain factual certifications made by the officers of the Selling Fund and the Buying Fund and will also be based on customary assumptions. Each opinion will note and distinguish certain published precedent. It is possible that the Internal Revenue Service (the “IRS”) or a court could disagree with Ropes & Gray LLP’s opinion, which therefore cannot be free from doubt.
Opinions of counsel are not binding upon the IRS or the courts. If a Reorganization were consummated but did not qualify as a tax-free reorganization under the Code, a shareholder of the Selling Fund would recognize a taxable gain or loss equal to the difference between his or her tax basis in his or her Selling Fund shares and the fair market value of the Reorganization Shares he or she received. Shareholders of a Selling Fund should consult their tax advisers regarding the effect, if any, of the Reorganization in light of their individual circumstances.
A portion of the portfolio assets of each Buying Fund and Selling Fund may be sold at any time before or after the Reorganization in connection with its Reorganization. The actual tax effect of such sales depends on the difference between the price at which such portfolio assets are sold and the tax basis in such assets of the Fund making the sale. Any capital gains recognized in these sales on a net basis, after reduction by any available capital losses, will be distributed to shareholders as capital gain dividends (to the extent of net realized long-term capital gains over net realized short-term capital losses) and/or ordinary dividends (to the extent of net realized short-term capital gains over net realized long-term capital losses) during or with respect to the year of sale, and such distributions will be taxable to shareholders. Each Reorganization will end the tax year of the applicable Selling Fund, and will therefore accelerate any distributions to shareholders from the Selling Fund for its short tax year ending on the date of the Reorganization. Those tax year-end distributions will be taxable and will include any undistributed capital gains resulting from portfolio turnover prior to the Reorganization.
More generally, prior to the closing of each Reorganization, the Selling Fund will, and the Buying Fund may, declare a distribution to shareholders, which, together with all previous distributions, will have the effect of distributing to shareholders all of its investment company taxable income (computed without regard to the deduction for dividends paid), net tax-exempt income, if any, and net realized capital gains, if any, through the closing of the Reorganization, and may include undistributed income or gains from prior years. These distributions will be taxable to shareholders, and such distributions by the Selling Fund will include any distributable, but undistributed, capital gains resulting from portfolio turnover prior to the Reorganization. If a shareholder holds shares of either Fund in a non-taxable account, distributions with respect to those shares will not be taxable to the shareholder if the amount distributed remains in the nontaxable account.
A Fund’s ability to carry forward capital losses and to use them to offset future gains may be limited as a result of its Reorganization. First, a Fund’s “pre-acquisition losses” (including capital loss carryforwards, net current-year capital losses, and unrealized losses that exceed certain thresholds) may become unavailable to offset gains of the combined Fund to the extent such pre-acquisition losses exceed an annual limitation amount. Second, one Fund’s pre-acquisition losses cannot be used to offset gains in another Fund that are unrealized (“built in”) at the time of the Reorganization and that exceed certain thresholds (“non-de minimis built-in gains”) for five tax years. Third, the Selling Fund’s loss carryforwards, as limited under the previous two rules, are permitted to offset only that portion of the gains of the Buying Fund for the taxable year of the Reorganization that is equal to the portion of the Buying Fund’s taxable year that follows the date of the Reorganization (prorated according to number of days). Therefore, in certain circumstances, shareholders of a Fund may pay taxes sooner, or pay more taxes, than they would have had the Reorganization not occurred.
In addition, the combined Fund will have tax attributes that reflect a blending of the tax attributes of each Fund at the time of the Reorganization (including as affected by the rules described above). Therefore, the shareholders of the Selling Fund will in each case receive a proportionate share of any unrealized gains in the combined Fund’s assets, as well as any taxable income or gains realized by the Buying Fund but not distributed to its shareholders prior to the Reorganization, when such income or gains are eventually distributed by the Buying Fund. As a result, shareholders of the Selling Fund may receive a greater amount of taxable distributions than they would have had the Reorganization not occurred. In addition, any pre-acquisition losses of the Selling
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Fund (whether realized or unrealized) remaining after the operation of the limitation rules described above will become available to offset capital gains realized by the combined Fund after the Reorganization and thus may reduce subsequent capital gain distributions to a broader group of shareholders than would have been the case absent such Reorganization, such that the benefit of those losses to Selling Fund shareholders may be further reduced relative to what the benefit would have been had the Reorganization not occurred.
The effect of the rules described above will depend on the relative sizes of, and the losses and gains (both realized and unrealized) in, each Fund at the time of the Reorganization and thus cannot be calculated precisely prior to the Reorganization.
The realized and unrealized gains and losses of each Fund at the time of the Reorganization, and the occurrence of other Reorganizations involving the same Buying Fund, will determine the extent to which the combining Funds’ respective losses, both realized and unrealized, will be available to reduce gains realized by the combined Fund following the Reorganization, and consequently the extent to which the combined Fund may be required to distribute gains to its shareholders earlier or in greater amounts than would have been the case absent the Reorganization. The following paragraphs provide a brief summary of the tax effect of each Reorganization assuming all Reorganizations occurred on May 31, 2012. As noted above, the tax effect of a Reorganization depends on each Fund’s relative tax situation at the time of the Reorganization, which situation will be different than the tax situation on May 31, 2012 and cannot be calculated precisely prior to the Reorganization. Portfolio turnover in a Fund, market fluctuations, redemption activity, the nonoccurrence of one or more other Reorganizations into the same Buying Fund, or changes in the tax laws could cause the actual tax effect of the Reorganization to differ substantially from that described below. For purposes of the following discussion, a Fund’s “net realized losses” consist of its capital loss carryforwards plus year-to-date net realized losses or net of year-to-date net realized gains, in each case as of May 31, 2012.
Proposal 1. Reorganization of Columbia Mid Cap Growth Opportunity Fund into Columbia Mid Cap Growth Fund.
As of May 31, 2012, the Selling Fund had carryforward losses equal to about 12% of net assets. These carryforwards were subject to a loss limitation due to a prior reorganization and were due to expire in four to five years. The Selling Fund had net unrealized gains equal to about 6% of net assets. The Buying Fund had, net of year-to-date net realized gains, net realized losses of approximately 2% of net assets, consisting of carryforward losses subject to a loss limitation due to a prior reorganization and expiring in three to four years. The Buying Fund also had net unrealized gains equal to about 11% of net assets.
If the Reorganization occurred on May 31, 2012, Selling Fund would have technically been subject to an annual loss limitation, but the limitation would have had no effect because the limitation amount would have been larger than the pre-existing limitation on Selling Fund’s losses. The Reorganization would have permitted the Buying Fund to spread its proportionately larger net unrealized gains, if and when realized after the Reorganization, across the larger combined Fund, resulting in a potential tax cost to Selling Fund shareholders and a potential tax benefit to Buying Fund shareholders.
Proposal 2. Reorganizations of Columbia Frontier Fund, Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund II into Columbia Small Cap Growth Fund I.
As of May 31, 2012, Columbia Frontier Fund had, net of year-to-date net realized gains, net realized losses equal to approximately 24% of net assets, consisting of carryforward losses, a portion of which were subject to a prior loss limitation and all of which were expiring in four to five years. Columbia Frontier Fund had net unrealized losses equal to about 6% of net assets. Columbia Select Small Cap Fund had no realized losses, year-to-date net realized gains equal to about 2% of net assets, and net unrealized gains equal to about 20% of net assets. Columbia Small Cap Growth Fund II had, net of year-to-date net realized gains, net realized losses equal to approximately 9% of net assets, consisting of carryforward losses expiring in six years, and net unrealized
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gains equal to about 4% of net assets. Columbia Small Cap Growth Fund I had no realized losses, year-to-date net realized gains equal to about 7% of net assets, and net unrealized gains equal to about 8% of net assets.
If all three Reorganizations occurred on May 31, 2012, each Selling Fund would have become subject to annual loss limitations. The loss limitation rules would have limited the combined Fund’s ability to use the net realized losses of the Columbia Frontier Fund to offset gains recognized by the combined Fund. The limitation potentially could have resulted in earlier and larger taxable distributions, and therefore a greater tax cost to Columbia Frontier Fund shareholders, than if the Reorganizations had not occurred. The limitation would have had no practical effect on Columbia Select Small Cap Fund because it had no pre-Reorganization losses. The limitation would have had little to no effect on Columbia Small Cap Growth Fund II, because its loss carryforwards would have been small enough relative to the size of the limitation that they could have been used nearly in full over their remaining expiration period, particularly after also offsetting that Fund’s net unrealized gains, if and when realized. Further, the year-to-date and proportionately larger net unrealized gains of Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund I, if and when realized after the Reorganization, would have been spread across the larger combined Fund, thereby increasing the potential tax cost to Columbia Frontier Fund shareholders, resulting in a potential tax cost to Columbia Small Cap Growth Fund II shareholders, and resulting in a potential tax benefit to shareholders of Columbia Select Small Cap Fund and Columbia Small Cap Growth Fund I.
Proposal 3. Reorganization of Columbia Emerging Markets Opportunity Fund into Columbia Emerging Markets Fund.
With respect to Proposal 3, if the Reorganization had occurred on May 31, 2012, the potential tax costs to the shareholders of both Funds due to the loss limitation rules and the blending of tax attributes would have been de minimis.
Proposal 4. Reorganization of Columbia Diversified Bond Fund into Columbia Intermediate Bond Fund.
As of May 31, 2012, the Selling Fund had negligible loss carryforwards, net realized gains of approximately 5% of net assets, and unrealized net gains equal to about 3% of net assets. The Buying Fund had loss carryforwards equal to less than 0.5% of net assets, year-to-date net realized gains equal to about 1% of net assets, and net unrealized gains totaling about 3% of net assets.
If the Reorganization had occurred on May 31, 2012, Buying Fund would have technically become subject to an annual loss limitation, but because its loss carryforwards would have been used in full to offset its pre-merger realized gains, the limitation would have had no practical effect. Because the Funds’ had nearly equivalent net unrealized gain positions, and the Buying Fund had only negligible year-to-date net realized gains, the potential tax costs to the shareholders of both Funds due to the blending of tax attributes would have been de minimis.
Proposal 5. Reorganization of Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund into Columbia Tax-Exempt Fund.
With respect to Proposal 5, if the Reorganization had occurred on May 31, 2012, the potential tax costs to the shareholders of both Funds due to the loss limitation rules and the blending of tax attributes would have been de minimis.
The tax principles described above will apply in each case and are not expected to change prior to the Reorganizations. However, the results of their application and, at a minimum, the specific percentages noted above will change prior to each Reorganization because of market developments and volatility in the
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marketplace, any pre-Reorganization realignments or other sales of portfolio securities that might occur or that already have occurred (including in connection with the Reorganization) and shareholder activity (i.e., purchases and redemptions) in the Funds, among other changes.
This description of the U.S. federal income tax consequences of the Reorganizations is made without regard to the particular facts and circumstances of any shareholder. Shareholders are urged to consult their tax advisors regarding the effect, if any, of the Reorganizations in light of their individual circumstances. Because the foregoing discussion relates only to the U.S. federal income tax consequences of the Reorganizations, shareholders of a Selling Fund should also consult their tax advisors as to the state, local and foreign tax consequences, if any, of its Reorganization.
Reasons for the Proposed Reorganizations and Board Deliberations
Each Reorganization was reviewed by the Board of the Selling Fund involved therein, with the advice and assistance of Fund counsel and independent legal counsel to such Board. Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Emerging Markets Opportunity Fund, Columbia Diversified Bond Fund and Columbia Small Cap Growth Fund II are overseen by one Board (the “Columbia Funds Board”); Columbia Select Small Cap Fund, Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund are overseen by a second Board (the “Columbia Atlantic Board”). At regular meetings of each Selling Fund’s Board in June and August 2012 (and September 2012 for Columbia Funds Board), each Board considered the Reorganization of each Selling Fund overseen by it, as proposed by Columbia Management. In connection with those Board meetings, Columbia Management and its affiliates provided background materials, analyses and other information to each Board regarding, among other things, the topics discussed below, including responses to specific requests by each Board, and responded to questions raised by each Board at those meetings.
After each Board reviewed, evaluated and discussed the materials, analyses and information provided to it that the Board considered relevant to its deliberations, each Board, including the independent Board members thereof, unanimously approved the Reorganization of each Selling Fund overseen by it. Each Board, including the independent Board members thereof, also unanimously determined that participation by each Selling Fund overseen by it in its Reorganization was in the best interests of the Selling Fund and that the interests of existing shareholders of the Selling Fund would not be diluted as a result of the Reorganization.
The general factors considered by each Board in assessing and approving each applicable Reorganization included, among others, in no order of priority:
1. | various potential benefits of the Reorganization to the shareholders of the Selling Fund; |
2. | the Reorganization as part of Columbia Management’s overall commitment to streamline and to improve its fund offerings for the benefit of Fund shareholders; |
3. | the investment objectives and principal investment strategies of the Selling Fund and the Buying Fund; |
4. | the operating expenses that shareholders of each class of shares of the Selling Fund are expected to experience as shareholders of the Buying Fund after the Reorganization relative to the operating expenses currently borne by such shareholders, including that, on a net basis, such expenses generally are expected to decline or remain the same as a result of the Reorganization and including Columbia Management’s contractual agreement to limit the total operating expenses of the Buying Fund (except that for Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund, based on estimated operating expense ratios, shareholders of Class Z are expected to bear total operating expenses (after taking into account any applicable expense caps) after the Reorganization that are slightly higher than the current total operating expenses of that Fund) (see “Fees and Expenses”); |
5. | the current assets of the Selling Fund and the Buying Fund, and the anticipated combined pro forma assets of the Buying Fund after the Reorganization; |
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6. | the portfolio management team expected to be responsible for the combined Fund, and the historical performance of the Selling Fund and the Buying Fund, recognizing that no assurances can be given that the Buying Fund will achieve any particular level of performance after the Reorganization; |
7. | the likelihood that the Selling Fund would achieve and/or maintain sufficient size to ensure its continued economic viability absent the Reorganization, and the Buying Fund’s relative prospects for attracting additional assets after the Reorganization; |
8. | the anticipated tax-free nature of the exchange of shares in the Reorganization, and other expected U.S. federal income tax consequences of the Reorganization, including potential limitations on the Buying Fund’s use of the Selling Fund’s pre-merger losses for U.S. federal income tax purposes after the Reorganization and the potential diminution of the Buying Fund’s ability to use those losses to offset future gains (see “Tax Status of the Reorganizations”); |
9. | the potential benefits of the Reorganization to Columbia Management and its affiliates; |
10. | that shareholders of the Selling Fund will experience no material change in shareholder services as a result of the Reorganization; |
11. | any brokerage costs resulting from the Reorganization (e.g., the Selling Fund’s turnover associated with and resulting from the sale of any securities the Buying Fund cannot, or does not wish to, acquire); and |
12. | that, except with respect to the Reorganizations for Columbia Frontier Fund and Columbia Small Cap Growth Fund II, for which Columbia Management has agreed to bear all Reorganization costs, the direct costs associated with the Reorganization will be borne by the Selling Fund only to the extent that Columbia Management anticipates a reduction in expenses to shareholders of the Selling Fund in the first year following the Reorganization. |
In their deliberations, the Boards did not identify any single factor that was paramount or controlling and individual Board members may have attributed different weights to various factors. Each Board also evaluated the information available to it on a Selling Fund-by-Selling Fund basis, and made determinations separately in respect of each Selling Fund it oversees. Certain of the factors considered by each Board are discussed in more detail below.
STREAMLINED PRODUCT LINE. Each Board considered that the Reorganizations are part of a larger effort intended, among other things, to streamline Columbia Management’s product offerings by reducing the number of funds in the Columbia Fund Complex. Reducing the number of funds in the complex is intended to enhance the funds’ prospects for attracting additional assets by better differentiating the funds for potential shareholders (which may lead to a more concentrated selling effort).
CONTINUITY OF INVESTMENT. Each Board took into account the fact that each applicable Selling Fund and its corresponding Buying Fund have similar investment objectives and principal investment strategies. Specifically, the relevant Board noted the following with respect to each Reorganization:
Proposal 1
Columbia Mid Cap Growth Opportunity Fund into Columbia Mid Cap Growth Fund.
Among other factors, the Columbia Funds Board considered that both Columbia Mid Cap Growth Opportunity Fund and the Buying Fund seek generally the same investment objective. The Columbia Funds Board noted that the Funds have generally similar principal investment strategies as each Fund normally invests at least 80% of its net assets in equity securities of mid-capitalization companies. The Columbia Funds Board also noted that the Funds share the same portfolio management team and benchmark their performance against the Russell Midcap Growth Index.
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Proposal 2
Columbia Frontier Fund into Columbia Small Cap Growth Fund I.
Among other factors, the Columbia Funds Board considered that both Columbia Frontier Fund and the Buying Fund seek generally the same investment objective. The Columbia Funds Board noted that the Funds have generally the same principal investment strategies, share the same portfolio management team, and benchmark their performance against the Russell 2000 Growth Index. The Columbia Funds Board noted that Columbia Frontier Fund normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the Russell 2000 Growth Index, while the Buying Fund normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the S&P SmallCap 600 Index. The Columbia Funds Board observed, however, that as of September 30, 2012, Columbia Frontier Fund and the Buying Fund had both invested more than 80% of their net assets in equity securities of companies with market capitalization within the range of the S&P SmallCap 600 Index.
Columbia Select Small Cap Fund into Columbia Small Cap Growth Fund I.
Among other factors, the Columbia Atlantic Board considered that both Columbia Select Small Cap Fund and the Buying Fund seek generally the same investment objective. The Columbia Atlantic Board noted that the Funds have generally similar principal investment strategies, share the same portfolio management team, and benchmark their performance against the Russell 2000 Growth Index. The Columbia Atlantic Board noted that Columbia Select Small Cap Fund normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the Russell 2000 Growth Index, while the Buying Fund normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the S&P SmallCap 600 Index. The Columbia Atlantic Board observed, however, that as of September 30, 2012, Columbia Select Small Cap Fund and the Buying Fund had both invested more than 80% of their net assets in equity securities of companies with market capitalization within the range of the S&P SmallCap 600 Index.
Columbia Small Cap Growth Fund II into Columbia Small Cap Growth Fund I.
Among other factors, the Columbia Funds Board considered that both Columbia Small Cap Growth Fund II and the Buying Fund seek generally the same investment objective. The Columbia Funds Board noted that the Funds have generally similar principal investment strategies, share the same portfolio management team, and benchmark their performance against the Russell 2000 Growth Index. The Columbia Funds Board noted that Columbia Small Cap Growth Fund II normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the Russell 2000 Growth Index, while the Buying Fund normally invests at least 80% of its net assets in companies with market capitalization in the range of companies in the S&P SmallCap 600 Index.
Proposal 3
Columbia Emerging Markets Opportunity Fund into Columbia Emerging Markets Fund.
Among other factors, the Columbia Funds Board considered that both Columbia Emerging Markets Opportunity Fund and the Buying Fund seek generally the same investment objective, have generally similar principal investment strategies, and benchmark their performance against the MSCI Emerging Markets Index. The Columbia Funds Board noted that the Selling Fund is subadvised by Threadneedle, but that each Fund is managed by Columbia Management. The Columbia Funds Board also noted that each Fund invests primarily in equity securities of emerging markets companies. The Columbia Funds Board further noted that the Buying Fund normally invests at least 80% of its net assets in companies located in emerging market countries, while Columbia Emerging Markets Opportunity Fund normally invests at least 80% of its net assets in companies that are located in emerging market countries or that earn 50 % or more of their total revenues from goods or services produced in or sales made in emerging market countries. The Columbia Funds Board further noted that each Fund may invest in companies of any size.
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Proposal 4
Columbia Diversified Bond Fund into Columbia Intermediate Bond Fund.
Among other factors, the Columbia Funds Board considered that the investment objectives of the Funds are generally similar with respect to seeking current income, but Columbia Diversified Bond Fund also seeks to preserve the value of the investment, and the Buying Fund also seeks capital appreciation. The Columbia Funds Board also considered that both Funds have generally similar principal investment strategies, share the same portfolio management team, and benchmark their performance against the Barclays Aggregate Bond Index. The Columbia Funds Board noted that each Fund normally invests at least 80% of its net assets in bonds, and that Columbia Diversified Bond Fund normally invests at least 50% of its net assets in securities that are investment grade, while the Buying Fund normally invests at least 60% of its net assets in debt securities that are rated in at least one of the three highest bond rating categories (or in unrated securities of comparable quality). The Columbia Funds Board further noted that the Buying Fund may invest up to 20% of its net assets in securities that are below investment grade (or unrated securities of comparable quality), while Columbia Diversified Bond Fund may similarly buy lower-quality bonds in an effort to achieve higher yield and/or capital appreciation. The Columbia Funds Board further noted that, under normal circumstances, the Buying Fund will have a dollar-weighted average effective maturity between three and ten years and that while Columbia Diversified Bond Fund does not seek to maintain a particular dollar-weighted average maturity, Columbia Management targets an average portfolio duration within two years of the Barclays U.S. Aggregate Bond Index. In this regard, the Columbia Funds Board observed that, as of September 30, 2012, Columbia Diversified Bond Fund and the Buying Fund had each invested less than 15% of its net assets in below-investment-grade securities.
Proposal 5
Columbia Connecticut Tax-Exempt Fund into Columbia Tax-Exempt Fund.
Among other factors, the Columbia Atlantic Board considered that each Fund seeks total return, consisting of current income exempt from federal income tax and of capital appreciation, except that Columbia Connecticut Tax-Exempt Fund also seeks current income exempt from the individual income tax of Connecticut. The Columbia Atlantic Board also considered that each Fund has generally similar principal investment strategies, although Columbia Connecticut Tax-Exempt Fund is a state-specific municipal bond fund. The Columbia Atlantic Board noted that each Fund normally invests at least 80% of its net assets in bonds that pay interest exempt from federal income tax, while Columbia Connecticut Tax-Exempt Fund normally invests at least 80% of its net assets in municipal bonds that are also exempt from Connecticut income tax. The Columbia Atlantic Board also noted that each Fund may invest up to 20% of its assets in debt obligations whose interest is subject to the alternative minimum tax and each Fund may invest in bonds of any maturity. The Columbia Atlantic Board further noted that the Buying Fund may invest up to 35% of its net assets in securities that are rated below investment grade (or unrated securities of comparable quality), while Columbia Connecticut Tax-Exempt Fund may invest up to 25% of its net assets in such securities. The Columbia Atlantic Board noted that Columbia Connecticut Tax-Exempt Fund is a non-diversified fund, while the Buying Fund is a diversified fund.
Columbia Massachusetts Tax-Exempt Fund into Columbia Tax-Exempt Fund.
Among other factors, the Columbia Atlantic Board considered that each Fund seeks total return, consisting of current income exempt from federal income tax and of capital appreciation, except that Columbia Massachusetts Tax-Exempt Fund also seeks current income exempt from the individual income tax of Massachusetts. The Columbia Atlantic Board also considered that each Fund has generally similar principal investment strategies, although Columbia Massachusetts Tax-Exempt Fund is a state-specific municipal bond fund. . The Columbia Atlantic Board noted that each Fund normally invests at least 80% of its net assets in bonds that pay interest exempt from federal income tax, while Columbia Massachusetts Tax-Exempt Fund normally invests at least 80% of its net assets in municipal bonds that are also exempt from Massachusetts income tax. The Columbia Atlantic Board also noted that each Fund may invest in debt obligations whose interest is subject to the
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alternative minimum tax and each Fund may invest in bonds of any duration. The Columbia Atlantic Board further noted that the Buying Fund may invest up to 35% of its net assets in securities that are rated below investment grade (or unrated securities of comparable quality), while Columbia Massachusetts Tax-Exempt Fund may invest up to 25% of its net assets in such securities. The Columbia Atlantic Board noted that Columbia Massachusetts Tax-Exempt Fund is a non-diversified fund, while the Buying Fund is a diversified fund.
EXPENSE RATIO. Each Board took into account the fact that the total annual operating expense ratio of each applicable Selling Fund (net of applicable waivers/reimbursements) is generally expected to decrease following its Reorganization.
INVESTMENT PERFORMANCE. Each Board considered the relative performance record of each Selling Fund overseen by it and of each corresponding Buying Fund, noting, however, that past performance is no guarantee of future results. Specifically, the relevant Board noted the following with respect to each Reorganization:
Proposal 1
Columbia Mid Cap Growth Opportunity Fund into Columbia Mid Cap Growth Fund.
Among other factors, the Columbia Funds Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for the one-, three-, five- and ten-year periods. The Columbia Funds Board noted that the Buying Fund received higher ratings for the one-, three- and five-year periods from an independent information provider, and that both Funds have had the same portfolio management team since August 2011.
Proposal 2
Columbia Frontier Fund into Columbia Small Cap Growth Fund I.
Among other factors, the Columbia Funds Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for the three-, five- and ten-year periods, while Columbia Frontier Fund’s performance was better for the one-year period. The Columbia Funds Board noted that Columbia Frontier Fund received higher ratings for the one-year period, but the Buying Fund received higher ratings for the three- and five-year periods from an independent information provider. The Columbia Funds Board also observed that the Funds have had the same portfolio management team since April 2012.
Columbia Select Small Cap Fund into Columbia Small Cap Growth Fund I.
Among other factors, the Columbia Atlantic Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for the one-, three-, five- and ten-year periods. The Columbia Atlantic Board noted that the Buying Fund received higher ratings for all applicable periods from an independent information provider. The Columbia Atlantic Board further noted that the Funds have had the same portfolio manager since January 2012.
Columbia Small Cap Growth Fund II into Columbia Small Cap Growth Fund I.
Among other factors, the Columbia Funds Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for the one-, three-, five- and ten-year periods. The Columbia Funds Board noted that the Funds received similar ratings for the one-year period, but that the Buying Fund received higher ratings for the three- and five-year periods from an independent information provider. The Columbia Funds Board further noted that the Funds have had the same portfolio management team since May 2010.
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Proposal 3
Columbia Emerging Markets Growth Opportunity Fund into Columbia Emerging Markets Fund.
The Columbia Funds Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for the one- and three-year periods, and that the Buying Fund received higher performance ratings for the one- and three-year periods from an independent information provider. The Columbia Funds Board noted that the current portfolio management team assumed responsibility for the Buying Fund in 2008.
Proposal 4
Columbia Diversified Bond Fund into Columbia Intermediate Bond Fund.
Among other factors, the Columbia Funds Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for the three-, five- and ten-year periods, but that Columbia Diversified Bond Fund’s performance was slightly better for the one-year period. The Columbia Funds Board further considered that the Buying Fund received higher performance ratings for the three-, five- and ten-year periods, while Columbia Diversified Bond Fund received a higher performance rating for the one-year period from an independent information provider. The Columbia Funds Board noted, however, that the Funds have been managed by the same portfolio management team for eleven of those twelve months.
Proposal 5
Columbia Connecticut Tax-Exempt Fund into Columbia Tax-Exempt Fund.
Among other factors, the Columbia Atlantic Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for all periods. The Columbia Atlantic Board noted that the Buying Fund received higher performance ratings for the three- and ten- year periods, while Columbia Connecticut Tax-Exempt Fund received higher performance ratings for the one- and five-year periods from an independent information provider.
Columbia Massachusetts Tax-Exempt Fund into Columbia Tax-Exempt Fund.
Among other factors, the Columbia Atlantic Board considered the relative performance of the Funds for periods ending March 31, 2012, during which the Buying Fund’s performance was better for all periods. The Columbia Atlantic Board noted that the Funds received similar performance ratings for the one- and five-year periods, and that the Buying Fund received higher performance ratings for the three- and ten-year periods from an independent information provider.
ECONOMIES OF SCALE. Each Board observed that, in addition to the potential to realize immediate economies associated with consolidating each Selling Fund into a larger combined Fund, such as the elimination of duplicative costs, the combined funds may be able to take advantage of other economies of scale associated with larger funds. For example, a larger fund may benefit from fee breakpoints more quickly, may have an enhanced ability to effect portfolio transactions on favorable terms and may have greater investment flexibility. Each Board also considered the potential benefits and economies of scale to Columbia Management resulting from the Reorganizations and whether those benefits were shared with Fund shareholders. Each Board also considered Columbia Management’s belief that each Buying Fund would be better positioned to experience growth in assets from investor inflows than each Selling Fund overseen by such Board.
Board Recommendation and Required Vote
The Board of each Selling Fund unanimously recommends that shareholders of that Selling Fund approve the proposed Agreement.
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For each Selling Fund, the Agreement must be approved by the affirmative vote of a majority of the outstanding voting securities of the Selling Fund, as defined in the 1940 Act. A vote of a majority of the outstanding voting securities of the Selling Fund is defined in the 1940 Act as the affirmative vote of the lesser of (a) 67% or more of the voting securities of the Selling Fund that are present or represented by proxy at the Meeting, if the holders of more than 50% of the outstanding voting securities of the Selling Fund are present or represented by proxy at the Meeting; or (b) more than 50% of the outstanding voting securities of the Selling Fund.
If the Agreement is not approved for a Selling Fund, the applicable Board will consider what further action should be taken with respect to the Selling Fund. The approval of the Reorganization of one Selling Fund is not conditioned upon the approval of the Reorganization of any other Selling Fund.
If shareholders approve the Reorganization of a Selling Fund, it is anticipated that the Reorganization would occur before the end of the first half of 2013.
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SECTION B — PROXY VOTING AND SHAREHOLDER MEETING INFORMATION
Voting. Shareholders of record of each Selling Fund on November 27, 2012 (the “Record Date”) are entitled to vote at the Meeting. With respect to each Reorganization, shares of each of Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Select Small Cap Fund, Columbia Emerging Markets Opportunity Fund, Columbia Diversified Bond Fund, Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund are entitled to one vote for each dollar of net asset value (number of shares owned times net asset value per share), or a proportional fractional vote for each fractional dollar, represented by those shares on the Record Date, and shares of Columbia Small Cap Growth Fund II are entitled to one vote per share or a proportional fractional vote for each fractional share. All share classes of a Selling Fund will vote together as one class on the Selling Fund’s proposed Reorganization. The total number of shares of each class of each Selling Fund outstanding as of the close of business on the Record Date, and the total number of votes to which shareholders of such class are entitled at the Meeting, are set forth below.
Class A | Class B | Class C | Class I | Class R | Class R4 | Class K | Class R5 | Class W | Class Z | Total | ||||||||||||
Columbia Mid Cap Growth Opportunity Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Frontier Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Select Small Cap Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Small Cap Growth Fund II | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Emerging Markets Opportunity Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Diversified Bond Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Connecticut Tax-Exempt Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled | ||||||||||||||||||||||
Columbia Massachusetts Tax-Exempt Fund | ||||||||||||||||||||||
Shares Outstanding | ||||||||||||||||||||||
Total Votes to which Entitled |
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Quorum and Methods of Tabulation. A quorum is required for shareholders of a Selling Fund to take action at the Meeting. For Columbia Small Cap Growth Fund II, thirty three and one-third percent (33 1/3%) of the shares outstanding and entitled to vote, present at the Meeting in person or by proxy, constitutes a quorum. For Columbia Select Small Cap Fund, Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund, thirty percent (30%) of the votes entitled to be cast at the Meeting, present at the Meeting in person or by proxy, constitutes a quorum. For Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Emerging Markets Opportunity Fund and Columbia Diversified Bond Fund, ten percent (10%) of the votes entitled to be cast at the Meeting, present at the Meeting in person or by proxy, constitutes a quorum.
All shares represented at the Meeting in person or by proxy will be counted for purposes of establishing a quorum. Broker non-votes will be counted for purposes of establishing a quorum but not toward the approval of any proposal. (Broker non-votes are shares for which the underlying owner has not voted and the broker holding the shares does not have authority to vote.) Abstentions and broker non-votes will have the effect of votes against the proposal. In certain circumstances in which a Selling Fund has received sufficient votes to approve a Reorganization, the Selling Fund may request that brokers and nominees, in their discretion, withhold submission of broker non-votes in order to avoid the need for solicitation of additional votes in favor of the proposal. A Selling Fund may also request that selected brokers and nominees, in their discretion, submit broker non-votes, if doing so is necessary to obtain a quorum.
If your shares are held in an IRA account, you have the right to vote those shares. If you do not provide voting instructions with respect to your shares, your IRA custodian may or may not, depending upon the terms of your IRA agreement, vote shares for which it has not received your voting instructions. Please consult your IRA agreement and/or financial advisor for more information.
Shareholder Proxies. If you properly authorize your proxy by internet or telephone, or by executing and returning the enclosed proxy card by mail, and your proxy is not subsequently revoked, your vote will be cast at the Meeting and at any postponement or adjournment thereof. If you give instructions, your vote will be cast in accordance with your instructions. If you return your signed proxy card without instructions, your vote will be cast in favor of the Reorganization of your Selling Fund. Your votes will be cast in the discretion of the proxy holders on any other matter that may properly come before the Meeting, including, but not limited to, proposing the adjournment of the Meeting with respect to one or more proposals in the event that sufficient votes in favor of any proposal are not received. Not all proposals affect each Selling Fund, and shareholders of a Selling Fund will be entitled to cast votes and authorize proxies on only those proposals affecting the Selling Fund in which they are shareholders. If you intend to vote in person at the Meeting, please call 800-708-7953 to obtain important information regarding your attendance at the Meeting, including directions.
Proxy Statement Delivery. “Householding” is the term used to describe the practice of delivering one copy of a document to a household of shareholders instead of delivering one copy of a document to each shareholder in the household. Certain shareholders of the Selling Funds who share a common address and who have not opted out of the householding process may receive a single copy of the combined proxy statement/prospectus along with the proxy cards. If you received more than one copy of the combined proxy statement/prospectus, you may elect to household in the future if permitted by your financial intermediary. Contact the financial intermediary through which you purchased your shares to determine whether householding is an option for your account. If you received a single copy of the combined proxy statement/prospectus, you may opt out of householding in the future by contacting your financial intermediary.
An additional copy of this combined proxy statement/prospectus may be obtained by writing or calling the Selling Funds’ proxy solicitor, Computershare Fund Services, at c/o Operation Department, 280 Oser Avenue, Hauppauge, NY 11788, or toll free at 800-708-7953.
Revoking Your Proxy. If you execute, date and submit a proxy card with respect to your Selling Fund, you may revoke your proxy prior to the Meeting by providing written notice to the Funds’ proxy solicitor at
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Computershare Fund Services, c/o Operation Department, 280 Oser Avenue, Hauppauge, NY 11788, or change your vote by submitting a subsequently executed and dated proxy card, by authorizing your proxy by internet or telephone on a later date or by attending the Meeting and casting your vote in person. If you authorize your proxy by internet or telephone, you may change your vote prior to the Meeting by authorizing a subsequent proxy by internet or telephone or by completing, signing and returning a proxy card dated as of a date that is later than your last internet or telephone proxy authorization or by attending the Meeting and casting your vote in person. Merely attending the Meeting without voting will not revoke your prior proxy.
Simultaneous Meetings. The meeting for each Selling Fund will be held simultaneously with the meeting for each other Selling Fund, with each proposal being voted on separately by the shareholders of the relevant Selling Fund. If any shareholder objects to the holding of simultaneous meetings, the shareholder may move for an adjournment of his or her Selling Fund’s meeting to a time after the Meeting so that a meeting for that Selling Fund may be held separately. If a shareholder makes this motion, the persons named as proxies will take into consideration the reasons for the objection in deciding whether to vote in favor of the adjournment, and may vote for or against the adjournment in their discretion.
Solicitation of Proxies. The Board of each Selling Fund is asking for your vote and for you to vote as promptly as possible. The expenses of the solicitation will be allocated to each Fund subject to the limitations described in Exhibit A. Proxies will be solicited primarily through the mailing of the prospectus/proxy statement and its enclosures, but proxies also may be solicited through further mailings, telephone calls, personal interviews or e-mail by officers of each Selling Fund or by employees or agents of Columbia Management and its affiliated companies. In addition, Computershare Fund Services, 280 Oser Avenue, Hauppauge, NY 11788, has been engaged to assist in the solicitation of proxies, at the estimated cost set forth below, plus expenses.
Fund | Estimated Cost | |||
Columbia Mid Cap Growth Opportunity Fund | $ | 283,718 | ||
Columbia Frontier Fund | $ | 52,633 | ||
Columbia Select Small Cap Fund | $ | 63,942 | ||
Columbia Small Cap Growth Fund II | $ | 48,091 | ||
Columbia Emerging Markets Opportunity Fund | $ | 183,922 | ||
Columbia Diversified Bond Fund | $ | 507,704 | ||
Columbia Connecticut Tax-Exempt Fund | $ | 6,273 | ||
Columbia Massachusetts Tax-Exempt Fund | $ | 7,333 |
Shareholder Proposals. The Selling Funds do not hold annual meetings of shareholders. Shareholders who wish to make a proposal not involving the nomination of a person for election as a trustee at a Selling Fund’s next special meeting that may be included in the Selling Fund’s proxy materials must notify the relevant Selling Fund a reasonable amount of time before the Selling Fund begins to print and mail its proxy materials. The fact that a Selling Fund receives such a shareholder proposal in a timely manner does not ensure inclusion of the proposal in the proxy materials, because there are other requirements in the proxy rules and the Selling Fund’s bylaws relating to such inclusion.
Dissenters’ Right of Appraisal. Shareholders of each Selling Fund have no appraisal or dissenters’ rights.
Other Business. The Board of each Selling Fund does not know of any matters to be presented at the Meeting other than the Reorganizations. If other business should properly come before the Meeting, the persons named as proxies will vote thereon in their discretion.
Adjournment. If the quorum required for the Meeting has not been met for any Selling Fund, the persons named as proxies may propose adjournment of the Meeting and vote all shares that they are entitled to vote in favor of such adjournment. If the quorum required for the Meeting has been met, but sufficient votes in favor of one or more proposals are not received by the time scheduled for the Meeting, then the persons named as proxies
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may move for one or more adjournments of the Meeting as to one or more proposals to allow further solicitation of shareholders. The procedures for adjournment of the Meeting for each Selling Fund are as follows:
• | For Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Select Small Cap Fund, Columbia Emerging Markets Opportunity Fund, Columbia Diversified Bond Fund, Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund, the Meeting may be adjourned by a majority of the votes properly cast upon the question, whether or not a quorum is present, and the Meeting may be held as adjourned within a reasonable time after the date set for the original Meeting without further notice. |
• | For Columbia Small Cap Growth Fund II, the Meeting may be adjourned, whether or not a quorum is present, by the vote of a majority of the shares represented at the Meeting, either in person or by proxy. If the Meeting is adjourned, notice does not need to be given of the adjourned Meeting date unless a new record date for the adjourned Meeting is set or unless the adjourned Meeting is to take place more than sixty (60) days from the date set for the original Meeting, in which case the Board would be required to set a new record date. |
The persons named as proxies will vote in favor of adjournment with respect to a proposal those shares they are entitled to vote in favor of such proposal. They will vote against any such adjournment those shares they are required to vote against such proposal. The costs of any additional solicitation and of any adjourned Meeting will be borne in the same manner as the other expenses associated with the proposals described herein. Any proposal for which sufficient favorable votes have been received may be acted upon and considered final regardless of whether the Meeting is adjourned to permit additional solicitation with respect to any other proposal.
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SECTION C — CAPITALIZATION, OWNERSHIP OF FUND SHARES AND FINANCIAL HIGHLIGHTS
This section contains the following information about the Buying Funds and the Selling Funds (all information is shown for the most recently ended fiscal year unless otherwise noted):
Table | Content | |
C-1 | Current and pro forma capitalization of each Selling Fund and each Buying Fund | |
C-2 | Current and pro forma ownership of shares of each Selling Fund and each Buying Fund | |
C-3 | Financial highlights of each Buying Fund |
The Funds’ Investment Manager and Distributor. Columbia Management Investment Advisers, LLC, Boston, MA 02110, is the investment manager for each Fund. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110, is the distributor for each Fund.
Capitalization of Selling Funds and Buying Funds
The following table shows the capitalization as of August 31, 2012 for Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Select Small Cap Fund, Columbia Small Cap Growth Fund II and Columbia Emerging Markets Opportunity Fund, as of April 30, 2012 for Columbia Diversified Bond Fund, and as of July 31, 2012 for Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund; and, with respect to each corresponding Buying Fund, on a pro forma basis, assuming the proposed Reorganization had taken place as of that date. The pro forma combined net assets are determined by adding the net assets of the Selling Funds and the net assets of the corresponding Buying Fund. The pro forma combined shares outstanding are determined by dividing the net assets of the Selling Funds by the net asset value per share of the corresponding Buying Fund and adding the actual shares outstanding of the corresponding Buying Fund.
Table C-1. Current and Pro Forma Capitalization of each Selling Fund and each Buying Fund
Fund | Net assets | Net asset value per share | Shares outstanding* | |||||||||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | ||||||||||||
Class A | $ | 655,715,156 | $ | 10.11 | 64,867,297 | |||||||
Class B | $ | 18,354,810 | $ | 8.14 | �� | 2,255,101 | ||||||
Class C | $ | 8,847,309 | $ | 8.15 | 1,085,788 | |||||||
Class I | $ | 11,070 | $ | 10.82 | 1,023 | |||||||
Class R | $ | 56,842 | $ | 10.04 | 5,659 | |||||||
Class R4 | $ | 29,981 | $ | 10.09 | 2,972 | |||||||
Class K | $ | 585,419 | $ | 10.48 | 55,871 | |||||||
Class Z | $ | 3,011,256 | $ | 10.78 | 279,436 | |||||||
|
|
|
| |||||||||
Total | $ | 686,611,843 | 68,553,147 | |||||||||
|
|
|
| |||||||||
Columbia Mid Cap Growth Fund (Current) (Buying Fund) | ||||||||||||
Class A | $ | 330,349,851 | $ | 26.42 | 12,505,854 | |||||||
Class B | $ | 5,140,615 | $ | 24.29 | 211,647 | |||||||
Class C | $ | 44,985,836 | $ | 24.37 | 1,846,154 | |||||||
Class I | $ | 268,678,126 | $ | 27.33 | 9,831,595 | |||||||
Class R | $ | 25,718,788 | $ | 25.96 | 990,802 | |||||||
Class R5 | $ | 2,335,693 | $ | 27.31 | 85,534 | |||||||
Class T | $ | 20,968,120 | $ | 26.37 | 795,092 | |||||||
Class Y | $ | 66,699,391 | $ | 26.43 | 2,523,706 | |||||||
Class W | $ | 16,445 | $ | 27.26 | 603 | |||||||
Class Z | $ | 1,275,519,543 | $ | 27.23 | 46,846,523 | |||||||
|
|
|
| |||||||||
Total | $ | 2,040,412,408 | 75,637,510 | |||||||||
|
|
|
|
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Fund | Net assets | Net asset value per share | Shares outstanding* | |||||||||
Columbia Mid Cap Growth Fund (Pro Forma Combined Fund) | ||||||||||||
Class A | $ | 985,742,540 | $ | 26.42 | 37,312,542 | |||||||
Class B | $ | 23,486,399 | $ | 24.29 | 966,928 | |||||||
Class C | $ | 53,828,794 | $ | 24.37 | 2,209,016 | |||||||
Class I | $ | 268,689,191 | $ | 27.33 | 9,832,000 | |||||||
Class R | $ | 25,775,602 | $ | 25.96 | 992,991 | |||||||
Class R4 | $ | 29,966 | $ | 27.23 | 1,100 | |||||||
Class K | $ | 585,131 | $ | 27.23 | 21,488 | |||||||
Class R5 | $ | 2,335,693 | $ | 27.31 | 85,534 | |||||||
Class T | $ | 20,968,120 | $ | 26.37 | 795,092 | |||||||
Class W | $ | 66,699,391 | $ | 26.43 | 2,523,706 | |||||||
Class Y | $ | 16,445 | $ | 27.26 | 603 | |||||||
Class Z | $ | 1,278,529,317 | $ | 27.23 | 46,957,055 | |||||||
|
|
|
| |||||||||
Total | $ | 2,726,686,589 | 101,698,055 | |||||||||
|
|
|
| |||||||||
Columbia Frontier Fund (Selling Fund) | ||||||||||||
Class A | $ | 57,926,995 | $ | 10.87 | 5,328,265 | |||||||
Class B | $ | 2,427,359 | $ | 8.55 | 283,925 | |||||||
Class C | $ | 10,197,924 | $ | 8.59 | 1,186,706 | |||||||
Class I | $ | 15,725 | $ | 11.67 | 1,347 | |||||||
Class R | $ | 122,108 | $ | 10.59 | 11,528 | |||||||
Class K | $ | 37,320 | $ | 11.58 | 3,222 | |||||||
Class R5 | $ | 920,471 | $ | 11.68 | 78,840 | |||||||
Class Z | $ | 207,234 | $ | 11.64 | 17,801 | |||||||
|
|
|
| |||||||||
Total | $ | 71,855,136 | 6,911,634 | |||||||||
|
|
|
| |||||||||
Columbia Select Small Cap Fund (Selling Fund) | ||||||||||||
Class A | $ | 3,807,504 | $ | 15.40 | 247,232 | |||||||
Class C | $ | 936,530 | $ | 14.82 | 63,181 | |||||||
Class R | $ | 3,850,067 | $ | 14.93 | 257,892 | |||||||
Class Z | $ | 179,651,494 | $ | 15.57 | 11,536,748 | |||||||
|
|
|
| |||||||||
Total | $ | 188,245,595 | 12,105,053 | |||||||||
|
|
|
| |||||||||
Columbia Small Cap Growth Fund II (Selling Fund) | ||||||||||||
Class A | $ | 119,857,955 | $ | 12.03 | 9,962,467 | |||||||
Class B | $ | 564,857 | $ | 10.39 | 54,367 | |||||||
Class C | $ | 1,799,454 | $ | 10.64 | 169,074 | |||||||
Class I | $ | 2,766 | $ | 12.69 | 218 | |||||||
Class Z | $ | 139,194,409 | $ | 12.68 | 10,975,958 | |||||||
|
|
|
| |||||||||
Total | $ | 261,419,441 | 21,162,084 | |||||||||
|
|
|
|
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Fund | Net assets | Net asset value per share | Shares outstanding* | |||||||||
Columbia Small Cap Growth Fund I (Current) (Buying Fund) | ||||||||||||
Class A | $ | 61,047,767 | $ | 29.54 | 2,066,268 | |||||||
Class B | $ | 1,428,089 | $ | 28.19 | 50,666 | |||||||
Class C | $ | 11,288,819 | $ | 28.19 | 400,514 | |||||||
Class I | $ | 91,042,910 | $ | 30.09 | 3,025,902 | |||||||
Class R | $ | 54,026 | $ | 29.47 | 1,833 | |||||||
Class Y | $ | 12,495,634 | $ | 30.08 | 415,442 | |||||||
Class Z | $ | 843,069,521 | $ | 29.98 | 28,124,573 | |||||||
|
|
|
| |||||||||
Total | $ | 1,020,426,766 | 34,085,198 | |||||||||
|
|
|
| |||||||||
Columbia Small Cap Growth Fund I (Pro Forma Combined) | ||||||||||||
Class A | $ | 242,637,852 | $ | 29.54 | 8,213,529 | |||||||
Class B | $ | 4,420,305 | $ | 28.19 | 156,811 | |||||||
Class C | $ | 24,222,144 | $ | 28.19 | 859,305 | |||||||
Class I | $ | 91,061,401 | $ | 30.09 | 3,026,517 | |||||||
Class R | $ | 4,023,805 | $ | 29.47 | 136,539 | |||||||
Class K | $ | 37,320 | $ | 29.98 | 1,245 | |||||||
Class R5 | $ | 920,471 | $ | 30.09 | 30,591 | |||||||
Class Y | $ | 12,495,634 | $ | 30.08 | 415,442 | |||||||
Class Z | $ | 1,162,010,869 | $ | 29.98 | 38,763,044 | |||||||
|
|
|
| |||||||||
Total | $ | 1,541,829,801 | 51,603,023 | |||||||||
|
|
|
| |||||||||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | ||||||||||||
Class A | $ | 339,800,246 | $ | 7.61 | 44,658,966 | |||||||
Class B | $ | 13,462,571 | $ | 6.60 | 2,039,957 | |||||||
Class C | $ | 22,778,385 | $ | 6.57 | 3,469,047 | |||||||
Class I | $ | 12,449 | $ | 7.99 | 1,558 | |||||||
Class R | $ | 6,848,737 | $ | 7.55 | 906,635 | |||||||
Class K | $ | 591,247 | $ | 7.97 | 74,170 | |||||||
Class R5 | $ | 608,849 | $ | 8.01 | 76,047 | |||||||
Class W | $ | 34,993 | $ | 7.58 | 4,619 | |||||||
Class Z | $ | 1,114,560 | $ | 7.95 | 140,126 | |||||||
|
|
|
| |||||||||
Total | $ | 385,252,037 | 51,371,125 | |||||||||
|
|
|
| |||||||||
Columbia Emerging Markets Fund (Current) (Buying Fund) | ||||||||||||
Class A | $ | 11,167,703 | $ | 9.08 | 1,230,340 | |||||||
Class C | $ | 2,816,438 | $ | 8.89 | 316,714 | |||||||
Class I | $ | 239,573,182 | $ | 9.13 | 26,245,298 | |||||||
Class R | $ | 491,147 | $ | 9.06 | 54,230 | |||||||
Class W | $ | 31,466,973 | $ | 9.07 | 3,467,592 | |||||||
Class Z | $ | 174,602,642 | $ | 9.11 | 19,160,822 | |||||||
|
|
|
| |||||||||
Total | $ | 460,118,085 | 50,474,996 | |||||||||
|
|
|
|
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Fund | Net assets | Net asset value per share | Shares outstanding* | |||||||||
Columbia Emerging Markets Fund (Pro Forma Combined) | ||||||||||||
Class A | $ | 350,967,888 | $ | 9.08 | 38,653,275 | |||||||
Class B | $ | 13,462,571 | $ | 9.07 | 1,484,297 | |||||||
Class C | $ | 25,594,808 | $ | 8.89 | 2,878,962 | |||||||
Class I | $ | 239,584,330 | $ | 9.13 | 26,246,662 | |||||||
Class R | $ | 7,339,881 | $ | 9.06 | 810,161 | |||||||
Class K | $ | 591,247 | $ | 9.11 | 64,901 | |||||||
Class R5 | $ | 608,849 | $ | 9.13 | 66,687 | |||||||
Class W | $ | 31,501,795 | $ | 9.07 | 3,471,450 | |||||||
Class Z | $ | 175,716,253 | $ | 9.11 | 19,283,167 | |||||||
|
|
|
| |||||||||
Total | $ | 845,367,622 | 92,959,562 | |||||||||
|
|
|
| |||||||||
Columbia Diversified Bond Fund (Selling Fund) | ||||||||||||
Class A | $ | 2,218,267,784 | $ | 5.12 | 432,844,939 | |||||||
Class B | $ | 56,626,175 | $ | 5.12 | 11,055,247 | |||||||
Class C | $ | 59,944,647 | $ | 5.12 | 11,697,303 | |||||||
Class I | $ | 260,250,822 | $ | 5.13 | 50,720,953 | |||||||
Class R | $ | 203,635 | $ | 5.13 | 39,687 | |||||||
Class R4 | $ | 12,471 | $ | 5.13 | 2,432 | |||||||
Class K | $ | 75,373,052 | $ | 5.12 | 14,724,459 | |||||||
Class R5 | $ | 250,283 | $ | 5.12 | 48,919 | |||||||
Class W | $ | 536,890,330 | $ | 5.13 | 104,756,368 | |||||||
Class Z | $ | 2,666,934 | $ | 5.13 | 519,741 | |||||||
|
|
|
| |||||||||
Total | $ | 3,210,486,133 | 626,410,048 | |||||||||
|
|
|
| |||||||||
Columbia Intermediate Bond Fund (Current) (Buying Fund) | ||||||||||||
Class A | $ | 352,338,421 | $ | 9.39 | 37,528,286 | |||||||
Class B | $ | 6,080,849 | $ | 9.39 | 647,735 | |||||||
Class C | $ | 35,579,256 | $ | 9.39 | 3,790,026 | |||||||
Class I | $ | 90,344,969 | $ | 9.39 | 9,616,322 | |||||||
Class R | $ | 2,630,773 | $ | 9.39 | 280,217 | |||||||
Class W | $ | 2,574 | $ | 9.39 | 274 | |||||||
Class Z | $ | 2,881,802,688 | $ | 9.39 | 306,946,044 | |||||||
|
|
|
| |||||||||
Total | $ | 3,368,779,530 | 358,808,904 | |||||||||
|
|
|
| |||||||||
Columbia Intermediate Bond Fund (Pro Forma Combined) | ||||||||||||
Class A | $ | 2,570,605,944 | $ | 9.39 | 273,765,537 | |||||||
Class B | $ | 62,707,019 | $ | 9.39 | 6,678,212 | |||||||
Class C | $ | 95,523,877 | $ | 9.39 | 10,173,907 | |||||||
Class I | $ | 350,595,724 | $ | 9.39 | 37,332,064 | |||||||
Class R | $ | 2,834,406 | $ | 9.39 | 301,903 | |||||||
Class R4 | $ | 12,471 | $ | 9.39 | 1,328 | |||||||
Class K | $ | 75,373,052 | $ | 9.39 | 8,026,949 | |||||||
Class R5 | $ | 250,283 | $ | 9.39 | 26,654 | |||||||
Class W | $ | 536,892,904 | $ | 9.39 | 57,177,093 | |||||||
Class Z | $ | 2,884,467,483 | $ | 9.39 | 307,230,063 | |||||||
|
|
|
| |||||||||
Total | $ | 6,579,263,163 | 700,713,710 | |||||||||
|
|
|
|
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Fund | Net assets | Net asset value per share | Shares outstanding* | |||||||||
Columbia Connecticut Tax-Exempt Fund (Selling Fund) | ||||||||||||
Class A | $ | 74,929,713 | $ | 8.23 | 9,105,845 | |||||||
Class B | $ | 606,564 | $ | 8.23 | 73,707 | |||||||
Class C | $ | 12,164,142 | $ | 8.23 | 1,478,105 | |||||||
Class Z | $ | 11,150,471 | $ | 8.22 | 1,356,425 | |||||||
|
|
|
| |||||||||
Total | $ | 98,850,890 | 12,014,082 | |||||||||
|
|
|
| |||||||||
Columbia Massachusetts Tax-Exempt (Selling Fund) | ||||||||||||
Class A | $ | 119,047,872 | $ | 8.08 | 14,741,694 | |||||||
Class B | $ | 634,209 | $ | 8.08 | 78,533 | |||||||
Class C | $ | 12,784,182 | $ | 8.08 | 1,583,139 | |||||||
Class Z | $ | 231,575 | $ | 8.07 | 28,691 | |||||||
|
|
|
| |||||||||
Total | $ | 132,697,838 | 16,432,057 | |||||||||
|
|
|
| |||||||||
Columbia Tax-Exempt Fund (Current) (Buying Fund) | ||||||||||||
Class A | $ | 3,848,955,184 | $ | 14.27 | 269,714,141 | |||||||
Class B | $ | 9,007,762 | $ | 14.26 | 631,855 | |||||||
Class C | $ | 93,116,892 | $ | 14.26 | 6,528,011 | |||||||
Class Z | $ | 780,835,779 | $ | 14.27 | 54,712,021 | |||||||
|
|
|
| |||||||||
Total | $ | 4,731,915,617 | 331,586,028 | |||||||||
|
|
|
| |||||||||
Columbia Tax-Exempt Fund (Pro Forma Combined) (Buying Fund) | ||||||||||||
Class A | $ | 4,042,882,020 | $ | 14.27 | 283,303,968 | |||||||
Class B | $ | 10,248,223 | $ | 14.26 | 718,844 | |||||||
Class C | $ | 118,058,947 | $ | 14.26 | 8,277,103 | |||||||
Class Z | $ | 792,215,537 | $ | 14.27 | 55,509,481 | |||||||
|
|
|
| |||||||||
Total | $ | 4,963,404,725 | 347,809,396 | |||||||||
|
|
|
|
* | Pro forma shares outstanding are calculated by dividing the net assets of the applicable Selling Fund by the net asset value per share of the corresponding Buying Fund and adding the result to the number of shares of such Buying Fund currently outstanding. |
Ownership of Selling Fund and Buying Fund Shares
The following table provides information on each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund as of September 30, 2012 because it owns, directly or indirectly, of record more than 25% of the outstanding shares of the Fund, by virtue of its fiduciary roles with respect to its clients or otherwise. A control person may be able to facilitate shareholder approval of proposals it favors and to impede shareholder approval of proposals it opposes. In this regard, if a control person owns a sufficient number of a Fund’s outstanding shares, then, for certain shareholder proposals, such control person may be able to approve, or to prevent approval, of such proposals without regard to votes by other Fund shareholders.
Fund | Shareholder Account Registration | Percentage of Fund | Percentage of Fund following Reorganization | |||||||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | N/A | N/A | N/A | |||||||
Columbia Mid Cap Growth Fund (Buying Fund) | N/A | N/A | N/A |
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Fund | Shareholder Account Registration | Percentage of Fund | Percentage of Fund following Reorganization | |||||||
Columbia Frontier Fund (Selling Fund) | N/A | N/A | N/A | |||||||
Columbia Select Small Cap Fund (Selling Fund) | Merrill Lynch Pierce Fenner & Smith, Jacksonville, FL | 55.01 | % | N/A | ||||||
Columbia Small Cap Growth Fund II (Selling Fund) | Merrill Lynch Pierce Fenner & Smith, Jacksonville, FL | 45.81 | % | N/A | ||||||
Columbia Small Cap Growth Fund I (Buying Fund) | Merrill Lynch Pierce Fenner & Smith, Jacksonville, FL | 33.79 | % | 30.33 | % | |||||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | N/A | N/A | N/A | |||||||
Columbia Emerging Markets Fund (Buying Fund) | N/A | N/A | N/A | |||||||
Columbia Diversified Bond Fund (Selling Fund) | American Enterprise Investment Services, Minneapolis, MN | 43.21 | % | N/A | ||||||
Columbia Intermediate Bond Fund (Buying Fund) | Merrill Lynch Pierce Fenner & Smith, Jacksonville, FL | 50.19 | % | 25.04 | % | |||||
American Enterprise Investment Services, Minneapolis, MN | N/A | 26.17 | % | |||||||
Columbia Connecticut Tax-Exempt Fund (Selling Fund) | N/A | N/A | N/A | |||||||
Columbia Massachusetts Tax-Exempt Fund (Selling Fund) | N/A | N/A | N/A | |||||||
Columbia Tax-Exempt Fund (Buying Fund) | N/A | N/A | N/A |
The following table provides information on shareholders who owned of record or, to the knowledge of the Fund, beneficially, more than 5% of any class of a Fund’s outstanding shares as of September 30, 2012. As of September 30, 2012, the officers and directors/trustees of each Fund, as a group, owned less than 1% of the outstanding shares of each class of such Fund.
Table C-2. Current and Pro Forma Ownership of Fund Shares
Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 9.67% | N/A | |||||||
Class B | American Enterprise Investment Services, Inc., Minneapolis, MN | 10.32% | N/A | |||||||
Class C | American Enterprise Investment Services, Inc., Minneapolis, MN | 27.27% | N/A | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 8.19% | N/A | ||||||||
Class I | RiverSource Investments LLC, Minneapolis, MN | 100.00% | N/A |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class K* | Great-West Trust Company, Greenwood Village, CO | 36.89% | N/A | |||||||
Charles Schwab & Co., San Francisco, CA | 25.03% | N/A | ||||||||
Counsel Trust, Pittsburgh, PA | 14.13% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 8.81% | N/A | ||||||||
Class R | Frontier Trust Company FBO Yankton Surgical Associates, Fargo, ND | 59.98% | N/A | |||||||
Satya N Voleti, Port Charlotte, FL | 20.54% | N/A | ||||||||
RiverSource Investments LLC, Minneapolis, MN | 12.74% | N/A | ||||||||
Mid Atlantic Trust Company, Pittsburgh, PA | 6.72% | N/A | ||||||||
Class R4** | MG Trust Company FBO Body Masters, Denver CO | 58.49% | N/A | |||||||
RiverSource Investments LLC, Minneapolis, MN | 24.28% | N/A | ||||||||
MG Trust Company FBO Central Jersey Collision, Denver CO | 17.25% | N/A | ||||||||
Class Z | Morgan Stanley Smith Barney, Jersey City, NJ | 62.12% | N/A | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 21.58% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 8.17% | N/A | ||||||||
Columbia Mid Cap Growth Fund (Buying Fund) | ||||||||||
Class A | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 8.61% | 2.92% | |||||||
Pershing LLC, Jersey City, NJ | 5.88% | 2.00% | ||||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 5.64% | 8.30% | ||||||||
Class B | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 15.42% | 3.31% | |||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 14.56% | 11.23% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 10.72% | 2.30% | ||||||||
First Clearing LLC, St Louis, MO | 9.14% | 1.96% | ||||||||
Pershing LLC, Jersey City, NJ | 6.86% | 1.47% | ||||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 18.97% | 17.20% | |||||||
First Clearing LLC, St Louis, MO | 12.05% | 10.08% | ||||||||
Pershing LLC, Jersey City, NJ | 9.26% | 7.74% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 7.76% | 6.49% | ||||||||
Raymond James, St Petersburg, FL | 5.80% | 4.85% | ||||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | N/A | 4.47% | ||||||||
Class I | Columbia Portfolio Builder Moderate Fund, Minneapolis, MN | 23.19% | 23.19% | |||||||
Columbia Portfolio Builder Moderate Aggressive Fund, Minneapolis, MN | 21.47% | 21.47% | ||||||||
Columbia LifeGoal Balanced Growth Portfolio, Minneapolis, MN | 17.65% | 17.64% | ||||||||
Columbia Portfolio Builder Aggressive Fund, Minneapolis, MN | 14.30% | 14.30% | ||||||||
Columbia LifeGoal Growth Portfolio, Minneapolis, MN | 13.91% | 13.91% | ||||||||
Columbia Portfolio Builder Moderate Conservative Fund, Minneapolis, MN | 5.27% | 5.27% | ||||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 0.00% | *** | |||||||
Class K* | Great-West Trust Company, Greenwood Village, CO | N/A | 36.89% | |||||||
Charles Schwab & Co., San Francisco, CA | N/A | 25.03% | ||||||||
Counsel Trust, Pittsburgh, PA | N/A | 14.13% | ||||||||
First Clearing LLC, St Louis, MO | N/A | 8.81% |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class R | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 23.13% | 23.08% | |||||||
DCGT Trustee & OR Custodian, Des Moines, IA | 17.00% | 16.95% | ||||||||
Frontier Trust Company FBO Yankton Surgical Associates, Fargo, ND | N/A | 0.13% | ||||||||
Satya N Voleti, Port Charlotte, FL | N/A | 0.05% | ||||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 0.03% | ||||||||
Mid Atlantic Trust Company, Pittsburgh, PA | N/A | 0.01% | ||||||||
Class R4** | MG Trust Company FBO Body Masters, Denver CO | N/A | 58.49% | |||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 24.28% | ||||||||
MG Trust Company FBO Central Jersey Collision, Denver CO | N/A | 17.25% | ||||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 36.20% | 36.16% | |||||||
Fidelity Management Trust Co., Covington, KY | 11.61% | 11.59% | ||||||||
Charles Schwab & Co., San Francisco, CA | 7.99% | 7.97% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | N/A | 0.14% | ||||||||
First Clearing LLC, St Louis, MO | N/A | 0.02% | ||||||||
Columbia Frontier Fund (Selling Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 12.85% | N/A | |||||||
Class B | American Enterprise Investment Services, Inc., Minneapolis, MN | 11.96% | N/A | |||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 19.81% | N/A | |||||||
First Clearing LLC, St Louis, MO | 8.42% | N/A | ||||||||
UBS WM USA, Weehawken, NJ | 5.52% | N/A | ||||||||
Class I | RiverSource Investments LLC, Minneapolis, MN | 100.00% | N/A | |||||||
Class K* | Charles Schwab & Co., San Francisco, CA | 67.42% | N/A | |||||||
RiverSource Investments LLC, Minneapolis, MN | 22.09% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 8.49% | N/A | ||||||||
Class R | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 59.94% | N/A | |||||||
Frontier Trust Company FBO Financial Network Audit LLC, Fargo, ND | 24.93% | N/A | ||||||||
Frontier Trust Company FBO C. Anthony Phillips Accountancy, Fargo, ND | 6.80% | N/A | ||||||||
RiverSource Investments LLC, Minneapolis, MN | 5.34% | N/A | ||||||||
Class R5 | Charles Schwab & Co., San Francisco, CA | 86.68% | N/A | |||||||
RiverSource Investments LLC, Minneapolis, MN | 13.33% | N/A | ||||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 54.52% | N/A | |||||||
First Clearing LLC, St Louis, MO | 21.89% | N/A | ||||||||
Carol M Fenzan & Robert K Fenzan, Naples, FL | 6.83% | N/A | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 6.78% | N/A | ||||||||
Legent Clearing LLC, St Louis, MO | 5.41% | N/A | ||||||||
Columbia Select Small Cap Fund (Selling Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 28.21% | N/A | |||||||
Raymond James, St Petersburg, FL | 25.67% | N/A | ||||||||
National Financial Services LLC, New York, NY | 18.09% | N/A | ||||||||
TD Ameritrade Trust Co, Denver, CO | 8.56% | N/A |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class C | Morgan Stanley Smith Barney, Jersey City, NJ | 36.28% | N/A | |||||||
National Financial Services LLC, New York, NY | 18.23% | N/A | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 12.48% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 10.38% | N/A | ||||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 7.59% | N/A | ||||||||
Class R | Hartford Securities Distribution Company, Inc, Hartford, CT | 61.06% | N/A | |||||||
DCGT Trustee & OR Custodian, Des Moines, IA | 13.97% | N/A | ||||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 57.51% | N/A | |||||||
Charles Schwab & Co., San Francisco, CA | 12.95% | N/A | ||||||||
National Financial Services LLC, New York, NY | 8.74% | N/A | ||||||||
Columbia Small Cap Growth Fund II (Selling Fund) | ||||||||||
Class A | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 22.23% | N/A | |||||||
National Financial Services LLC, New York, NY | 5.76% | N/A | ||||||||
Class B | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 22.11% | N/A | |||||||
Pershing LLC, Jersey City, NJ | 17.41% | N/A | ||||||||
UBS WM USA, Weehawken, NJ | 15.40% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 9.91% | N/A | ||||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 30.78% | N/A | |||||||
First Clearing LLC, St Louis, MO | 12.44% | N/A | ||||||||
UBS WM USA, Weehawken, NJ | 11.58% | N/A | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 8.59% | N/A | ||||||||
Pershing LLC, Jersey City, NJ | 8.25% | N/A | ||||||||
National Financial Services LLC, New York, NY | 6.04% | N/A | ||||||||
Raymond James, St Petersburg, FL | 5.57% | N/A | ||||||||
Class I | Columbia Management Investment Advisors LLC, Minneapolis, MN | 100.00% | N/A | |||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 66.56% | N/A | |||||||
Hartford Securities Distribution Company, Inc, Hartford, CT | 12.66% | N/A | ||||||||
Columbia Small Cap Growth Fund I (Buying Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 20.02% | 8.55% | |||||||
UBS WM USA, Weehawken, NJ | 7.74% | 1.95% | ||||||||
National Financial Services LLC, New York, NY | 6.62% | 1.67% | ||||||||
Pershing LLC, Jersey City, NJ | 6.51% | 1.64% | ||||||||
New York Life Trust Company, Westwood, MA | 5.02% | 1.26% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | N/A | 10.94% | ||||||||
National Financial Services LLC, New York, NY | N/A | 4.50% | ||||||||
Raymond James, St Petersburg, FL | N/A | 0.37% | ||||||||
TD Ameritrade Trust Co, Denver, CO | N/A | 0.12% | ||||||||
Class B | First Clearing LLC, St Louis, MO | 31.81% | 11.60% | |||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 11.10% | 10.20% | ||||||||
National Financial Services LLC, New York, NY | 10.93% | 3.56% | ||||||||
Pershing LLC, Jersey City, NJ | 10.93% | 5.73% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 9.45% | 5.83% | ||||||||
UBS WM USA, Weehawken, NJ | N/A | 1.92% |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class C | First Clearing LLC, St Louis, MO | 24.52% | 16.24% | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 16.90% | 19.00% | ||||||||
Pershing LLC, Jersey City, NJ | 9.63% | 5.06% | ||||||||
UBS WM USA, Weehawken, NJ | 6.25% | 6.10% | ||||||||
Raymond James, St Petersburg, FL | 6.03% | 3.20% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | N/A | 2.03% | ||||||||
National Financial Services LLC, New York, NY | N/A | 1.15% | ||||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | N/A | 0.29% | ||||||||
Class I | Columbia LifeGoal Balanced Growth Portfolio, Minneapolis, MN | 40.66% | 40.65% | |||||||
Columbia Portfolio Builder Moderate Aggressive Fund, Minneapolis. MN | 19.17% | 19.17% | ||||||||
Columbia LifeGoal Growth Portfolio, Minneapolis, MN | 16.54% | 16.53% | ||||||||
Columbia Portfolio Builder Aggressive Fund, Minneapolis, MN | 10.61% | 10.60% | ||||||||
Columbia Portfolio Builder Moderate Fund, Minneapolis, MN | 8.28% | 8.28% | ||||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 0.02% | ||||||||
Columbia Management Investment Adivors LLC, Minneapolis, MN | N/A | 0.00% | *** | |||||||
Class K* | Charles Schwab & Co., San Francisco, CA | N/A | 67.42% | |||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 22.09% | ||||||||
First Clearing LLC, St Louis, MO | N/A | 8.49% | ||||||||
Class R | Frontier Trust Company FBO Hennessey Enterprises, Fargo, ND | 54.44% | 0.71% | |||||||
Frontier Trust Company FBO Greenwood Christian Church, Fargo, ND | 40.23% | 0.52% | ||||||||
Columbia Management Investment Adivors LLC, Minneapolis, MN | 5.35% | 0.07% | ||||||||
Hartford Securities Distribution Company, Inc, Hartford, CT | N/A | 58.38% | ||||||||
DCGT Trustee & OR Custodian, Des Moines, IA | N/A | 13.35% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | N/A | 1.85% | ||||||||
Frontier Trust Company FBO Financial Network Audit LLC, Fargo, ND | N/A | 0.77% | ||||||||
Frontier Trust Company FBO C. Anthony Phillips Accountancy, Fargo, ND | N/A | 0.21% | ||||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 0.17% | ||||||||
Class R5 | Charles Schwab & Co., San Francisco, CA | N/A | 86.68% | |||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 13.33% | ||||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 40.64% | 46.29% | |||||||
National Financial Services, Inc., New York, NY | 14.39% | 11.82% | ||||||||
Charles Schwab & Co., San Francisco, CA | 10.24% | 9.44% | ||||||||
Hartford Securities Distribution Company, Inc, Hartford, CT | N/A | 1.50% | ||||||||
First Clearing LLC, St Louis, MO | N/A | 0.00% | *** | |||||||
Carol M Fenzan & Robert K Fenzan, Naples, FL | N/A | 0.00% | *** | |||||||
Morgan Stanley Smith Barney, Jersey City, NJ | N/A | 0.00% | *** | |||||||
Legent Clearing LLC, St Louis, MO | N/A | 0.00% | *** | |||||||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 22.06% | N/A |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class B | American Enterprise Investment Services, Inc., Minneapolis, MN | 25.96% | N/A | |||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 26.13% | N/A | |||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 15.06% | N/A | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 5.60% | N/A | ||||||||
Class I | RiverSource Investments LLC, Minneapolis, MN | 100.00% | N/A | |||||||
Class K* | Charles Schwab & Co., San Francisco, CA | 76.16% | N/A | |||||||
Class R | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, | 83.14% | N/A | |||||||
Class R5 | Charles Schwab & Co., San Francisco, CA | 48.76% | N/A | |||||||
Great-West Trust Company, Greenwood Village, CO | 36.11% | N/A | ||||||||
MG Trust Company, Denver CO | 10.56% | N/A | ||||||||
Class W | American Enterprise Investment Services, Inc., Minneapolis, MN | 89.28% | N/A | |||||||
RiverSource Investments LLC, Minneapolis, MN | 10.72% | N/A | ||||||||
Class Z | Morgan Stanley Smith Barney, Jersey City, NJ | 31.96% | N/A | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 22.78% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 22.68% | N/A | ||||||||
Raymond James, St Petersburg, FL | 6.35% | N/A | ||||||||
Columbia Emerging Markets Fund (Buying Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 49.49% | 22.93% | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 10.36% | 0.33% | ||||||||
Pershing LLC, Jersey City, NJ | 10.07% | 0.32% | ||||||||
Class B | American Enterprise Investment Services, Inc., Minneapolis, MN | N/A | 25.96% | |||||||
Class C | American Enterprise Investment Services, Inc., Minneapolis, MN | 19.45% | 15.55% | |||||||
UBS WM USA, Weehawken, NJ | 9.23% | 1.02% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 7.05% | 5.76% | ||||||||
Pershing LLC, Jersey City, NJ | 6.35% | 0.70% | ||||||||
First Clearing LLC, St Louis, MO | 6.00% | 0.66% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 5.58% | 23.86% | ||||||||
National Financial Services, Inc., New York, NY | 5.49% | 0.61% | ||||||||
Class I | Columbia LifeGoal Balanced Growth Portfolio, Minneapolis, MN | 24.70% | 24.70% | |||||||
Columbia LifeGoal Growth Portfolio, Minneapolis, MN | 18.98% | 18.98% | ||||||||
Columbia Portfolio Builder Moderate Fund, Minneapolis, MN | 17.97% | 17.97% | ||||||||
Columbia Portfolio Builder Moderate Aggressive Fund, Minneapolis, MN | 17.39% | 17.39% | ||||||||
Columbia Portfolio Builder Aggressive Fund, Minneapolis, MN | 9.85% | 9.85% | ||||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 0.01% | ||||||||
Class K* | Charles Schwab & Co., San Francisco, CA | N/A | 76.16% |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class R | Frontier Trust Company FBO Hospice Advantage, Fargo, ND | 13.46% | 0.93% | |||||||
Frontier Trust Company FBO EFK Moen, Fargo, ND | 13.26% | 0.92% | ||||||||
Frontier Trust Company FBO MacArthur OBGYN Management LLC, Fargo, ND | 10.03% | 0.69% | ||||||||
Frontier Trust Company FBO C Anthony Phillips Accountancy, Fargo, ND | 6.79% | 0.47% | ||||||||
Frontier Trust Company FBO B & L Corp. 401k, Fargo, ND | 6.06% | 0.42% | ||||||||
Frontier Trust Company FBO Financial Network Audit LLC, Fargo, ND | 6.03% | 0.42% | ||||||||
Frontier Trust Company FBO Nordaas American Homes of MN, Fargo, ND | 5.83% | 0.40% | ||||||||
Frontier Trust Company FBO RGS, Fargo, ND | 5.64% | 0.39% | ||||||||
Frontier Trust Company FBO Rhuematology Consultants WNY PC, Fargo, ND | 5.50% | 0.38% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | N/A | 77.40% | ||||||||
Class R5 | Charles Schwab & Co., San Francisco, CA | N/A | 48.76% | |||||||
Great-West Trust Company, Greenwood Village, CO | N/A | 36.11% | ||||||||
MG Trust Company, Denver CO | N/A | 10.56% | ||||||||
Class W | American Enterprise Investment Services, Inc., Minneapolis, MN | 99.92% | 99.91% | |||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 0.01% | ||||||||
Class Z | Charles Schwab & Co., San Francisco, CA | 40.66% | 40.39% | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 30.19% | 30.15% | ||||||||
National Financial Services, Inc., New York, NY | 10.15% | 10.08% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | N/A | 0.21% | ||||||||
First Clearing LLC, St Louis, MO | N/A | 0.15% | ||||||||
Raymond James, St Petersburg, FL | N/A | 0.04% | ||||||||
Columbia Diversified Bond Fund (Selling Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 34.24% | N/A | |||||||
Class B | American Enterprise Investment Services, Inc., Minneapolis, MN | 29.23% | N/A | |||||||
Class C | American Enterprise Investment Services, Inc., Minneapolis, MN | 24.30% | N/A | |||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 16.66% | N/A | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 7.91% | N/A | ||||||||
Class I | Columbia Portfolio Builder Moderate Fund, Minneapolis, MN | 100.00% | N/A | |||||||
Class K* | Wells Fargo Bank, Charlotte, NC | 99.52% | N/A | |||||||
Class R | Frontier Trust Company FBO Brian P Sommer, Fargo, ND | 35.91% | N/A | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 17.27% | N/A | ||||||||
MG Trust Company, Denver, CO | 8.20% | N/A | ||||||||
Frontier Trust Company FBO Andreini Bros Inc., Fargo, ND | 6.70% | N/A | ||||||||
Frontier Trust Company FBO Wamore Inc, Fargo, ND | 6.20% | N/A | ||||||||
Frontier Trust Company FBO RGS Fargo, ND | 5.69% | N/A | ||||||||
Class R4** | RiverSource Investments LLC, Minneapolis, MN | 83.02% | N/A | |||||||
MG Trust Company, Denver, CO | 17.05% | N/A | ||||||||
Class R5 | Charles Schwab & Co., San Francisco, CA | 93.65% | N/A | |||||||
RiverSource Investments LLC, Minneapolis, MN | 6.30% | N/A |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class W | American Enterprise Investment Services, Inc., Minneapolis, MN | 100.00% | N/A | |||||||
Class Z | Raymond James, St Petersburg, FL | 76.57% | N/A | |||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 9.48% | N/A | ||||||||
Columbia Intermediate Bond Fund (Buying Fund) | ||||||||||
Class A | American Enterprise Investment Services, Inc., Minneapolis, MN | 65.24% | 39.43% | |||||||
National Financial Services, Inc., New York, NY | 12.45% | 2.08% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 5.47% | 0.92% | ||||||||
Class B | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 52.13% | 5.71% | |||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 7.39% | 26.84% | ||||||||
First Clearing LLC, St Louis, MO | 6.93% | 0.76% | ||||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 23.79% | 13.77% | |||||||
Pershing LLC, Jersey City, NJ | 14.12% | 5.22% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 13.23% | 15.39% | ||||||||
First Clearing LLC, St Louis, MO | 8.43% | 3.12% | ||||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 7.19% | 17.98% | ||||||||
Class I | Columbia Thermostat Fund, Minneapolis, MN | 100.00% | 45.63% | |||||||
Columbia Portfolio Builder Moderate Fund, Minneapolis, MN | N/A | 54.37% | ||||||||
Class K* | Wells Fargo Bank, Charlotte, NC | N/A | 99.52% | |||||||
Class R | Frontier Trust Company FBO RKT Savings Fargo, ND | 21.88% | 20.19% | |||||||
Frontier Trust Company FBO Reggio Register Co. Fargo, ND | 11.20% | 10.33% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 10.13% | 10.68% | ||||||||
MG Trust Company, Denver, CO | 5.40% | 5.61% | ||||||||
Frontier Trust Company FBO Brian P Sommer, Fargo, ND | N/A | 2.78% | ||||||||
Frontier Trust Company FBO Andreini Bros Inc., Fargo, ND | N/A | 0.52% | ||||||||
Frontier Trust Company FBO Wamore Inc, Fargo, ND | N/A | 0.48% | ||||||||
Frontier Trust Company FBO RGS Fargo, ND | N/A | 0.44% | ||||||||
Class R4** | RiverSource Investments LLC, Minneapolis, MN | N/A | 83.02% | |||||||
MG Trust Company, Denver, CO | N/A | 17.05% | ||||||||
Class R5 | Charles Schwab & Co., San Francisco, CA | N/A | 93.65% | |||||||
RiverSource Investments LLC, Minneapolis, MN | N/A | 6.30% | ||||||||
Class W | Columbia Management Investment Advisors LLC, Minneapolis, MN | 100.00% | 0.00% | *** | ||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | N/A | 99.78% | ||||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 62.28% | 61.87% | |||||||
Charles Schwab & Co., San Francisco, CA | 5.05% | 6.37% | ||||||||
Raymond James, St Petersburg, FL | N/A | 0.50% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | N/A | 0.06% | ||||||||
Columbia Connecticut Tax Exempt Fund (Selling Fund) | ||||||||||
Class A | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 13.26% | N/A | |||||||
Pershing LLC, Jersey City, NJ | 5.56% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 5.54% | N/A |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class B | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 33.14% | N/A | |||||||
First Clearing LLC, St Louis, MO | 18.28% | N/A | ||||||||
Francis J Sersanti & Mary E Sersanti, Somers, CT | 12.88% | N/A | ||||||||
National Financial Services, Inc., New York, NY | 6.55% | N/A | ||||||||
Charles Schwab & Co., San Francisco, CA | 6.46% | N/A | ||||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 22.48% | N/A | |||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 14.97% | N/A | ||||||||
UBS WM USA, Weehawken, NJ | 9.16% | N/A | ||||||||
Pershing LLC, Jersey City, NJ | 6.08% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 5.51% | N/A | ||||||||
Class Z | First Clearing LLC, St Louis, MO | 97.20% | N/A | |||||||
Columbia Massachusetts Tax Exempt Fund (Selling Fund) | ||||||||||
Class A | First Clearing LLC, St Louis, MO | 14.59% | N/A | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 13.59% | N/A | ||||||||
National Financial Services, Inc., New York, NY | 8.51% | N/A | ||||||||
UBS WM USA, Weehawken, NJ | 8.21% | N/A | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 7.63% | N/A | ||||||||
Pershing LLC, Jersey City, NJ | 6.70% | N/A | ||||||||
James H Orr & Jane P Orr, Dover, MA | 5.17% | N/A | ||||||||
Class B | First Clearing LLC, St Louis, MO | 42.96% | N/A | |||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 17.14% | N/A | ||||||||
RBC Capital Markets, LLC, Minneapolis, MN | 5.85% | N/A | ||||||||
National Financial Services, Inc., New York, NY | 5.63% | N/A | ||||||||
Thomas R O’Brien & Doris V O’Brien, Lynn, MA | 5.04% | N/A | ||||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 30.74% | N/A | |||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 19.93% | N/A | ||||||||
First Clearing LLC, St Louis, MO | 14.38% | N/A | ||||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 10.16% | N/A | ||||||||
UBS WM USA, Weehawken, NJ | 5.86% | N/A | ||||||||
Class Z | First Clearing LLC, St Louis, MO | 92.92% | N/A | |||||||
Columbia Tax Exempt Fund (Buying Fund) | ||||||||||
Class A | Edward D Jones & Co., Maryland Heights, MO | 9.19% | 8.75% | |||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 5.02% | 4.78% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | N/A | 0.72% | ||||||||
First Clearing LLC, St Louis, MO | N/A | 0.56% | ||||||||
Pershing LLC, Jersey City, NJ | N/A | 0.33% | ||||||||
National Financial Services, Inc., New York, NY | N/A | 0.25% | ||||||||
UBS WM USA, Weehawken, NJ | N/A | 0.24% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | N/A | 0.23% | ||||||||
James H Orr & Jane P Orr, Dover, MA | N/A | 0.15% | ||||||||
Class B | American Enterprise Investment Services, Inc., Minneapolis, MN | 10.22% | 9.09% | |||||||
First Clearing LLC, St Louis, MO | 8.68% | 10.99% | ||||||||
Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 7.02% | 9.09% | ||||||||
Francis J Sersanti & Mary E Sersanti, Somers, CT | N/A | 0.78% | ||||||||
National Financial Services, Inc., New York, NY | N/A | 0.67% | ||||||||
Charles Schwab & Co., San Francisco, CA | N/A | 0.39% | ||||||||
RBC Capital Markets, LLC, Minneapolis, MN | N/A | 0.30% | ||||||||
Thomas R O’Brien & Doris V O’Brien, Lynn, MA | N/A | 0.25% |
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Fund | 5% Owners | Percent of shares held | Percent of shares held following the Reorganization | |||||||
Class C | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 18.28% | 20.04% | |||||||
American Enterprise Investment Services, Inc., Minneapolis, MN | 17.13% | 14.73% | ||||||||
First Clearing LLC, St Louis, MO | 10.35% | 10.33% | ||||||||
Morgan Stanley Smith Barney, Jersey City, NJ | 8.70% | 10.53% | ||||||||
UBS WM USA, Weehawken, NJ | N/A | 1.52% | ||||||||
Pershing LLC, Jersey City, NJ | N/A | 0.58% | ||||||||
Class Z | Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville, FL | 61.35% | 60.42% | |||||||
First Clearing LLC, St Louis, MO | N/A | 1.47% |
* | Class K shares were redesignated from Class R4, effective October 25, 2012. |
** | Class R4 shares were redesignated from Class R3, effective October 31, 2012. |
*** | Rounds to less than 0.01%. |
Financial Highlights of the Buying Funds
The financial highlights tables below are designed to help you understand how each Buying Fund has performed for the past five full fiscal years or, if shorter, the Buying Fund’s period of operations. Certain information reflects financial results for a single Buying Fund share. The total return line indicates how much an investment in the Buying Fund would have earned each period assuming any dividends and distributions had been reinvested. Total returns do not reflect payment of sales charges, if any. The information shown below for each Buying Fund has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report, along with such Buying Fund’s financial statements, is included in such Buying Fund’s annual report to shareholders.
Because Class R4 and Class K shares of Columbia Mid Cap Growth Fund are new, Class R4, Class R5 and Class K shares of Columbia Small Cap Growth Fund I are new, Class B, Class K and Class R5 shares of Columbia Emerging Markets Fund are new, and Class R4, Class R5 and Class K shares of Columbia Intermediate Bond Fund are new, no financial highlights are provided for these shares.
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Table C-3. Financial Highlights of Buying Funds
Financial Highlights — Columbia Intermediate Bond Fund
The following tables are 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 returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Year ended April 30, 2012(a) | March 31, | |||||||||||||||||||||||
Class A | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | $ | 8.84 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.03 | 0.33 | 0.36 | 0.43 | 0.43 | 0.43 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.05 | 0.28 | 0.15 | 1.26 | (0.97 | ) | (0.13 | ) | ||||||||||||||||
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Total from investment operations | 0.08 | 0.61 | 0.51 | 1.69 | (0.54 | ) | 0.30 | |||||||||||||||||
Less distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.02 | ) | (0.36 | ) | (0.38 | ) | (0.46 | ) | (0.43 | ) | (0.43 | ) | ||||||||||||
Net realized gains | — | — | — | — | (0.02 | ) | — | |||||||||||||||||
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| |||||||||||||
Total distributions to shareholders | (0.02 | ) | (0.36 | ) | (0.38 | ) | (0.46 | ) | (0.45 | ) | (0.43 | ) | ||||||||||||
Proceeds from regulatory settlement | — | 0.00 | (b) | — | 0.00 | (b) | — | — | ||||||||||||||||
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| |||||||||||||
Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | ||||||||||||
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| |||||||||||||
Total return | 0.91% | 6.82% | 5.80% | 22.31% | (6.34)% | 3.48% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 0.96% | (d) | 0.95% | (e) | 0.97% | (e) | 1.00% | (e) | 0.99% | (e) | 0.98% | |||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(f) | 0.84% | (d) | 0.84% | (e)(g) | 0.92% | (e)(g) | 0.90% | (e)(g) | 0.89% | (e)(g) | 0.88% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 0.96% | (d) | 0.95% | 0.97% | 1.00% | 0.99% | 0.98% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 0.84% | (d) | 0.84% | (g) | 0.92% | (g) | 0.90% | (g) | 0.89% | (g) | 0.88% | (g) | ||||||||||||
Net investment income | 3.35% | (d) | 3.62% | (g) | 4.02% | (g) | 5.01% | (g) | 5.33% | (g) | 4.88% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 352,338 | $ | 338,578 | $ | 201,506 | $ | 163,333 | $ | 153,435 | $ | 207,215 | ||||||||||||
Portfolio turnover | 10% | (h) | 170% | (h) | 177% | 160% | 137% | 266% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April 30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Annualized. |
(e) | Includes interest expense which rounds to less than 0.01%. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(h) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively |
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Financial Highlights — Columbia Intermediate Bond Fund
Year ended April 30, 2012(a) | March 31, | |||||||||||||||||||||||
Class B | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | $ | 8.84 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.02 | 0.27 | 0.30 | 0.37 | 0.37 | 0.36 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | 0.27 | 0.15 | 1.26 | (0.97 | ) | (0.12 | ) | ||||||||||||||||
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Total from investment operations | 0.08 | 0.54 | 0.45 | 1.63 | (0.60 | ) | 0.24 | |||||||||||||||||
Less distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.02 | ) | (0.29 | ) | (0.32 | ) | (0.40 | ) | (0.37 | ) | (0.37 | ) | ||||||||||||
Net realized gains | — | — | — | — | (0.02 | ) | — | |||||||||||||||||
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Total distributions to shareholders | (0.02 | ) | (0.29 | ) | (0.32 | ) | (0.40 | ) | (0.39 | ) | (0.37 | ) | ||||||||||||
Proceeds from regulatory settlement | — | 0.00 | (b) | — | 0.00 | (b) | — | — | ||||||||||||||||
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Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | ||||||||||||
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Total return | 0.85% | 6.01% | 5.03% | 21.41% | (7.04 | )% | 2.72% | |||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 1.71% | (d) | 1.72% | (e) | 1.68% | (e) | 1.65% | (e) | 1.64% | (e) | 1.63% | |||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(f) | 1.59% | (d) | 1.59% | (e)(g) | 1.67% | (e)(g) | 1.65% | (e)(g) | 1.64% | (e)(g) | 1.63% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 1.71% | (d) | 1.72% | 1.68% | 1.65% | 1.64% | 1.63% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 1.59% | (d) | 1.59% | (g) | 1.67% | (g) | 1.65% | (g) | 1.64% | (g) | 1.63% | (g) | ||||||||||||
Net investment income | 2.59% | (d) | 2.93% | (g) | 3.32% | (g) | 4.29% | (g) | 4.59% | (g) | 4.14% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,081 | $ | 6,253 | $ | 14,779 | $ | 31,476 | $ | 37,247 | $ | 56,087 | ||||||||||||
Portfolio turnover | 10% | (h) | 170% | (h) | 177% | 160% | 137% | 266% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April 30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Annualized. |
(e) | Includes interest expense which rounds to less than 0.01%. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(h) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively. |
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Financial Highlights — Columbia Intermediate Bond Fund
Year ended April 30, 2012(a) | March 31, | |||||||||||||||||||||||
Class C | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | $ | 8.84 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.02 | 0.28 | 0.31 | 0.38 | 0.39 | 0.37 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | 0.28 | 0.15 | 1.26 | (0.98 | ) | (0.12 | ) | ||||||||||||||||
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Total from investment operations | 0.08 | 0.56 | 0.46 | 1.64 | (0.59 | ) | 0.25 | |||||||||||||||||
Less distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.02 | ) | (0.31 | ) | (0.33 | ) | (0.41 | ) | (0.38 | ) | (0.38 | ) | ||||||||||||
Net realized gains | — | — | — | — | (0.02 | ) | — | |||||||||||||||||
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| |||||||||||||
Total distributions to shareholders | (0.02 | ) | (0.31 | ) | (0.33 | ) | (0.41 | ) | (0.40 | ) | (0.38 | ) | ||||||||||||
Proceeds from regulatory settlement | — | 0.00 | (b) | — | 0.00 | (b) | — | — | ||||||||||||||||
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| |||||||||||||
Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | ||||||||||||
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| |||||||||||||
Total return | 0.86% | 6.20% | 5.17% | 21.59% | (6.91)% | 2.87% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 1.71% | (d) | 1.70% | (e) | 1.68% | (e) | 1.65% | (e) | 1.64% | (e) | 1.63% | |||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(f) | 1.44% | (d) | 1.44% | (e)(g) | 1.52% | (e)(g) | 1.50% | (e)(g) | 1.49% | (e)(g) | 1.48% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 1.71% | (d) | 1.70% | 1.68% | 1.65% | 1.64% | 1.63% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 1.44% | (d) | 1.44% | (g) | 1.52% | (g) | 1.50% | (g) | 1.49% | (g) | 1.48% | (g) | ||||||||||||
Net investment income | 2.75% | (d) | 3.04% | (g) | 3.42% | (g) | 4.43% | (g) | 4.74% | (g) | 4.28% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 35,579 | $ | 35,304 | $ | 33,885 | $ | 30,731 | $ | 31,372 | $ | 37,164 | ||||||||||||
Portfolio turnover | 10% | (h) | 170% | (h) | 177% | 160% | 137% | 266% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April 30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Annualized. |
(e) | Includes interest expense which rounds to less than 0.01%. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(h) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively. |
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Financial Highlights — Columbia Intermediate Bond Fund
Year ended April 30, 2012(a) | Year ended March 31, | |||||||||||
Class I | 2012 | 2011(b) | ||||||||||
Per share data | ||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 9.21 | ||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.03 | 0.37 | 0.19 | |||||||||
Net realized and unrealized gain (loss) | 0.06 | 0.27 | (0.11 | ) | ||||||||
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| |||||||
Total from investment operations | 0.09 | 0.64 | 0.08 | |||||||||
Less distributions to shareholders from: | ||||||||||||
Net investment income | (0.03 | ) | (0.39 | ) | (0.21 | ) | ||||||
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|
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|
|
| |||||||
Total distributions to shareholders | (0.03 | ) | (0.39 | ) | (0.21 | ) | ||||||
Proceeds from regulatory settlement | — | 0.00 | (c) | — | ||||||||
|
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| |||||||
Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | ||||||
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| |||||||
Total return | 0.94% | 7.17% | 0.87% | |||||||||
Ratios to average net assets(d) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 0.52% | (e) | 0.51% | (f) | 0.53% | (e)(f) | ||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(g) | 0.52% | (e) | 0.51% | (f)(h) | 0.52% | (e)(f)(h) | ||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 0.52% | (e) | 0.51% | 0.53% | (e) | |||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(g) | 0.52% | (e) | 0.51% | (h) | 0.52% | (e)(h) | ||||||
Net investment income | 3.68% | (e) | 4.01% | (h) | 4.05% | (e)(h) | ||||||
Supplemental data | ||||||||||||
Net assets, end of period (in thousands) | $ | 90,345 | $ | 86,768 | $ | 26,866 | ||||||
Portfolio turnover | 10% | (i) | 170% | (i) | 177% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April 30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | For the period from September 27, 2010 (commencement of operations) to March 31, 2011. |
(c) | Rounds to less than $0.01. |
(d) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(e) | Annualized. |
(f) | Includes interest expense which rounds to less than 0.01%. |
(g) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(h) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(i) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively. |
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Table of Contents
Financial Highlights — Columbia Intermediate Bond Fund
Year ended April 30, 2012(a) | March 31, | |||||||||||||||||||||||
Class R | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | $ | 8.84 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.02 | 0.31 | 0.34 | 0.41 | 0.41 | 0.40 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | 0.28 | 0.15 | 1.26 | (0.97 | ) | (0.12 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.08 | 0.59 | 0.49 | 1.67 | (0.56 | ) | 0.28 | |||||||||||||||||
Less distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.02 | ) | (0.34 | ) | (0.36 | ) | (0.44 | ) | (0.41 | ) | (0.41 | ) | ||||||||||||
Net realized gains | — | — | — | — | (0.02 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions to shareholders | (0.02 | ) | (0.34 | ) | (0.36 | ) | (0.44 | ) | (0.43 | ) | (0.41 | ) | ||||||||||||
Proceeds from regulatory settlement | — | 0.00 | (b) | — | 0.00 | (b) | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.89% | 6.55% | 5.54% | 22.01% | (6.58)% | 3.24% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 1.21% | (d) | 1.20% | (e) | 1.18% | (e) | 1.15% | (e) | 1.14% | (e) | 1.13% | |||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(f) | 1.09% | (d) | 1.09% | (e)(g) | 1.17% | (e)(g) | 1.15% | (e)(g) | 1.14% | (e)(g) | 1.13% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 1.21% | (d) | 1.20% | 1.18% | 1.15% | 1.14% | 1.13% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 1.09% | (d) | 1.09% | (g) | 1.17% | (g) | 1.15% | (g) | 1.14% | (g) | 1.13% | (g) | ||||||||||||
Net investment income | 3.08% | (d) | 3.39% | (g) | 3.75% | (g) | 4.78% | (g) | 5.11% | (g) | 4.60% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,631 | $ | 2,786 | $ | 2,969 | $ | 1,694 | $ | 1,819 | $ | 1,606 | ||||||||||||
Portfolio turnover | 10% | (h) | 170% | (h) | 177% | 160% | 137% | 266% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April 30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Annualized. |
(e) | Includes interest expense which rounds to less than 0.01%. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(h) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively. |
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Table of Contents
Financial Highlights — Columbia Intermediate Bond Fund
Year ended April 30, 2012(a) | Year ended March 31, | |||||||||||
Class W | 2012 | 2011(b) | ||||||||||
Per share data | ||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 9.21 | ||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.03 | 0.34 | 0.17 | |||||||||
Net realized and unrealized gain (loss) | 0.05 | 0.27 | (0.11 | ) | ||||||||
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|
|
|
| |||||||
Total from investment operations | 0.08 | 0.61 | 0.06 | |||||||||
Less distributions to shareholders from: | ||||||||||||
Net investment income | (0.02 | ) | (0.36 | ) | (0.19 | ) | ||||||
|
|
|
|
|
| |||||||
Total distributions to shareholders | (0.02 | ) | (0.36 | ) | (0.19 | ) | ||||||
Proceeds from regulatory settlement | — | 0.00 | (c) | — | ||||||||
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|
|
|
|
| |||||||
Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | ||||||
|
|
|
|
|
| |||||||
Total return | 0.91% | 6.84% | 0.69% | |||||||||
Ratios to average net assets(d) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 0.94% | (e) | 0.94% | (f) | 0.89% | (e)(f) | ||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(g) | 0.82% | (e) | 0.83% | (f)(h) | 0.87% | (e)(f)(h) | ||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 0.94% | (e) | 0.94% | 0.89% | (e) | |||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(g) | 0.82% | (e) | 0.83% | (h) | 0.87% | (e)(h) | ||||||
Net investment income | 3.38% | (e) | 3.64% | (h) | 3.62% | (e)(h) | ||||||
Supplemental data | ||||||||||||
Net assets, end of period (in thousands) | $ | 3 | $ | 3 | $ | 2 | ||||||
Portfolio turnover | 10% | (i) | 170% | (i) | 177% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April 30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | For the period from September 27, 2010 (commencement of operations) to March 31, 2011. |
(c) | Rounds to less than $0.01. |
(d) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(e) | Annualized. |
(f) | Includes interest expense which rounds to less than 0.01%. |
(g) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(h) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(i) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively. |
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Table of Contents
Financial Highlights — Columbia Intermediate Bond Fund
Year ended April 30, 2012(a) | March 31, | |||||||||||||||||||||||
Class Z | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | $ | 8.84 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.03 | 0.36 | 0.39 | 0.45 | 0.45 | 0.45 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | 0.27 | 0.15 | 1.26 | (0.97 | ) | (0.13 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.09 | 0.63 | 0.54 | 1.71 | (0.52 | ) | 0.32 | |||||||||||||||||
Less distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.03 | ) | (0.38 | ) | (0.41 | ) | (0.48 | ) | (0.45 | ) | (0.45 | ) | ||||||||||||
Net realized gains | — | — | — | — | (0.02 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions to shareholders | (0.03 | ) | (0.38 | ) | (0.41 | ) | (0.48 | ) | (0.47 | ) | (0.45 | ) | ||||||||||||
Proceeds from regulatory settlement | — | 0.00 | (b) | — | 0.00 | (b) | — | — | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 9.39 | $ | 9.33 | $ | 9.08 | $ | 8.95 | $ | 7.72 | $ | 8.71 | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.93% | 7.08% | 6.07% | 22.62% | (6.11)% | 3.74% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense) | 0.71% | (d) | 0.70% | (e) | 0.68% | (e) | 0.65% | (e) | 0.64% | (e) | 0.63% | |||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(f) | 0.59% | (d) | 0.59% | (e)(g) | 0.67% | (e)(g) | 0.65% | (e)(g) | 0.64% | (e)(g) | 0.63% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 0.71% | (d) | 0.70% | 0.68% | 0.65% | 0.64% | 0.63% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 0.59% | (d) | 0.59% | (g) | 0.67% | (g) | 0.65% | (g) | 0.64% | (g) | 0.63% | (g) | ||||||||||||
Net investment income | 3.60% | (d) | 3.89% | (g) | 4.28% | (g) | 5.26% | (g) | 5.58% | (g) | 5.13% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,881,803 | $ | 2,853,669 | $ | 2,835,104 | $ | 1,973,020 | $ | 1,710,920 | $ | 2,259,863 | ||||||||||||
Portfolio turnover | 10% | (h) | 170% | (h) | 177% | 160% | 137% | 266% |
Notes to Financial Highlights
(a) | For the period from April 1, 2012 to April��30, 2012. During the period, the Fund’s fiscal year end was changed from March 31 to April 30. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Annualized. |
(e) | Includes interest expense which rounds to less than 0.01%. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
(h) | Includes mortgage dollar rolls. If mortgage dollar roll transactions were excluded, the portfolio turnover would have been 9% and 157% for the year ended April 30, 2012 and March 31, 2012, respectively. |
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Table of Contents
Financial Highlights — Columbia Tax-Exempt Fund
Year ended July 31, 2012(a) | Year ended November 30, | |||||||||||||||||||||||
Class A | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.43 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | $ | 13.88 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.39 | 0.58 | 0.59 | 0.60 | 0.59 | 0.60 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.83 | 0.31 | 0.08 | 1.09 | (1.57 | ) | (0.37 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 1.22 | 0.89 | 0.67 | 1.69 | (0.98 | ) | 0.23 | |||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||||||
Net investment income | (0.38 | ) | (0.59 | ) | (0.59 | ) | (0.59 | ) | (0.59 | ) | (0.59 | ) | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions to shareholders | (0.38 | ) | (0.59 | ) | (0.59 | ) | (0.59 | ) | (0.59 | ) | (0.59 | ) | ||||||||||||
Proceeds from regulatory settlements | 0.00 | (b) | — | 0.00 | (b) | — | — | — | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 14.27 | $ | 13.43 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 9.18% | 7.00% | 5.12% | 14.42% | (7.48)% | 1.74% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense)(d) | 0.76% | (e) | 0.76% | 0.80% | 0.80% | 0.80% | 0.82% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(d)(f) | 0.76% | (e)(g) | 0.75% | (g) | 0.80% | (g) | 0.80% | (g) | 0.80% | (g) | 0.82% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 0.76% | (e) | 0.76% | 0.80% | 0.80% | 0.78% | 0.78% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 0.76% | (e)(g) | 0.75% | (g) | 0.80% | (g) | 0.80% | (g) | 0.78% | (g) | 0.78% | (g) | ||||||||||||
Net investment income | 4.17% | (e)(g) | 4.41% | (g) | 4.43% | (g) | 4.73% | (g) | 4.56% | (g) | 4.40% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 3,848,957 | $ | 3,708,744 | $ | 1,305,921 | $ | 1,362,545 | $ | 1,296,698 | $ | 1,533,614 | ||||||||||||
Portfolio turnover | 5% | 11% | 11% | 12% | 14% | 13% |
Notes to Financial Highlights
(a) | For the period from December 31, 2011 to July 31, 2012. During the period, the Portfolio’s fiscal year end was changed from November 30 to July 31. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Portfolio bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Portfolio invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Ratios include interest and fee expense related to the Fund’s participation in certain inverse floater programs, if any. Due to an equal increase in interest income from fixed rate municipal bonds held in trust, there is no impact on the Fund’s net assets, net asset value per share, total return or net investment income. |
(e) | Annualized. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
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Table of Contents
Financial Highlights — Columbia Tax-Exempt Fund
Year ended July 31, 2012(a) | Year ended November 30, | |||||||||||||||||||||||
Class B | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.42 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | $ | 13.88 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.32 | 0.48 | 0.49 | 0.50 | 0.50 | 0.50 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.84 | 0.30 | 0.08 | 1.10 | (1.58 | ) | (0.37 | ) | ||||||||||||||||
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|
|
|
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|
|
| |||||||||||||
Total from investment operations | 1.16 | 0.78 | 0.57 | 1.60 | (1.08 | ) | 0.13 | |||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||||||
Net investment income | (0.32 | ) | (0.49 | ) | (0.49 | ) | (0.50 | ) | (0.49 | ) | (0.49 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions to shareholders | (0.32 | ) | (0.49 | ) | (0.49 | ) | (0.50 | ) | (0.49 | ) | (0.49 | ) | ||||||||||||
Proceeds from regulatory settlements | 0.00 | (b) | — | 0.00 | (b) | — | — | — | ||||||||||||||||
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|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 14.26 | $ | 13.42 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | ||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.68% | 6.12% | 4.34% | 13.57% | (8.17)% | 0.98% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense)(d) | 1.51% | (e) | 1.51% | 1.55% | 1.55% | 1.55% | 1.57% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(d)(f) | 1.51% | (e)(g) | 1.50% | (g) | 1.55% | (g) | 1.55% | (g) | 1.55% | (g) | 1.57% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 1.51% | (e) | 1.51% | 1.55% | 1.55% | 1.53% | 1.53% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 1.51% | (e)(g) | 1.50% | (g) | 1.55% | (g) | 1.55% | (g) | 1.53% | (g) | 1.53% | (g) | ||||||||||||
Net investment income | 3.41% | (e)(g) | 3.65% | (g) | 3.69% | (g) | 4.00% | (g) | 3.81% | (g) | 3.65% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 9,008 | $ | 12,630 | $ | 6,817 | $ | 12,775 | $ | 17,816 | $ | 27,047 | ||||||||||||
Portfolio turnover | 5% | 11% | 11% | 12% | 14% | 13% |
Notes to Financial Highlights
(a) | For the period from December 31, 2011 to July 31, 2012. During the period, the Portfolio’s fiscal year end was changed from November 30 to July 31. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Portfolio bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Portfolio invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Ratios include interest and fee expense related to the Fund’s participation in certain inverse floater programs, if any. Due to an equal increase in interest income from fixed rate municipal bonds held in trust, there is no impact on the Fund’s net assets, net asset value per share, total return or net investment income. |
(e) | Annualized. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
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Table of Contents
Financial Highlights — Columbia Tax-Exempt Fund
Year ended July 31, 2012(a) | Year ended November 30, | |||||||||||||||||||||||
Class C | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.43 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | $ | 13.88 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.33 | 0.50 | 0.51 | 0.52 | 0.51 | 0.51 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.83 | 0.31 | 0.08 | 1.09 | (1.57 | ) | (0.36 | ) | ||||||||||||||||
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|
|
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|
|
| |||||||||||||
Total from investment operations | 1.16 | 0.81 | 0.59 | 1.61 | (1.06 | ) | 0.15 | |||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||||||
Net investment income | (0.33 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | ||||||||||||
Total distributions to shareholders | (0.33 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | ||||||||||||
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| |||||||||||||
Proceeds from regulatory settlements | 0.00 | (b) | — | 0.00 | (b) | — | — | — | ||||||||||||||||
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Net asset value, end of period | $ | 14.26 | $ | 13.43 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | ||||||||||||
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Total return | 8.70% | 6.36% | 4.49% | 13.74% | (8.05)% | 1.13% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense)(d) | 1.51% | (e) | 1.52% | 1.55% | 1.55% | 1.55% | 1.57% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(d)(f) | 1.36% | (e)(g) | 1.36% | (g) | 1.40 | (g) | 1.40% | (g) | 1.40% | (g) | 1.42% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 1.51% | (e) | 1.52% | 1.55% | 1.55% | 1.53% | 1.53% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 1.36% | (e)(g) | 1.36% | (g) | 1.40% | (g) | 1.40% | (g) | 1.38% | (g) | 1.38% | (g) | ||||||||||||
Net investment income | 3.57% | (e)(g) | 3.82% | (g) | 3.83% | (g) | 4.11% | (g) | 3.95% | (g) | 3.78% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 93,117 | $ | 81,742 | $ | 37,377 | $ | 34,079 | $ | 25,023 | $ | 22,650 | ||||||||||||
Portfolio turnover | 5% | 11% | 11% | 12% | 14% | 13% |
Notes to Financial Highlights
(a) | For the period from December 31, 2011 to July 31, 2012. During the period, the Portfolio’s fiscal year end was changed from November 30 to July 31. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Portfolio bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Portfolio invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Ratios include interest and fee expense related to the Fund’s participation in certain inverse floater programs, if any. Due to an equal increase in interest income from fixed rate municipal bonds held in trust, there is no impact on the Fund’s net assets, net asset value per share, total return or net investment income. |
(e) | Annualized. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
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Financial Highlights — Columbia Tax-Exempt Fund
Year ended July 31, 2012(a) | Year ended November 30, | |||||||||||||||||||||||
Class Z | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||
Per share data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.43 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | $ | 13.88 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.41 | 0.61 | 0.62 | 0.62 | 0.62 | 0.62 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 0.83 | 0.30 | 0.07 | 1.10 | (1.58 | ) | (0.36 | ) | ||||||||||||||||
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Total from investment operations | 1.24 | 0.91 | 0.69 | 1.72 | (0.96 | ) | 0.26 | |||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||||||
Net investment income | (0.40 | ) | (0.61 | ) | (0.61 | ) | (0.62 | ) | (0.61 | ) | (0.62 | ) | ||||||||||||
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Total distributions to shareholders | (0.40 | ) | (0.61 | ) | (0.61 | ) | (0.62 | ) | (0.61 | ) | (0.62 | ) | ||||||||||||
Proceeds from regulatory settlements | 0.00 | (b) | — | 0.00 | (b) | — | — | — | ||||||||||||||||
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Net asset value, end of period | $ | 14.27 | $ | 13.43 | $ | 13.13 | $ | 13.05 | $ | 11.95 | $ | 13.52 | ||||||||||||
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Total return | 9.32% | 7.16% | 5.33% | 14.64% | (7.30)% | 1.94% | ||||||||||||||||||
Ratios to average net assets(c) | ||||||||||||||||||||||||
Expenses prior to fees waived or expenses reimbursed (including interest expense)(d) | 0.56% | (e) | 0.59% | 0.60% | 0.60% | 0.60% | 0.62% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (including interest expense)(d)(f) | 0.56% | (e)(g) | 0.56% | (g) | 0.60% | (g) | 0.60% | (g) | 0.60% | (g) | 0.62% | (g) | ||||||||||||
Expenses prior to fees waived or expenses reimbursed (excluding interest expense) | 0.56% | (e) | 0.59% | 0.60% | 0.60% | 0.58% | 0.58% | |||||||||||||||||
Net expenses after fees waived or expenses reimbursed (excluding interest expense)(f) | 0.56% | (e)(g) | 0.56% | (g) | 0.60% | (g) | 0.60% | (g) | 0.58% | (g) | 0.58% | (g) | ||||||||||||
Net investment income | 4.37% | (e)(g) | 4.68% | (g) | 4.63% | (g) | 4.93% | (g) | 4.76% | (g) | 4.59% | (g) | ||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 780,836 | $ | 716,844 | $ | 793,302 | $ | 833,847 | $ | 814,018 | $ | 884,741 | ||||||||||||
Portfolio turnover | 5% | 11% | 11% | 12% | 14% | 13% |
Notes to Financial Highlights
(a) | For the period from December 31, 2011 to July 31, 2012. During the period, the Portfolio’s fiscal year end was changed from November 30 to July 31. |
(b) | Rounds to less than $0.01. |
(c) | In addition to the fees and expenses which the Portfolio bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Portfolio invests. Such indirect expenses are not included in the reported expense ratios. |
(d) | Ratios include interest and fee expense related to the Fund’s participation in certain inverse floater programs, if any. Due to an equal increase in interest income from fixed rate municipal bonds held in trust, there is no impact on the Fund’s net assets, net asset value per share, total return or net investment income. |
(e) | Annualized. |
(f) | The Investment Manager and certain of its affiliates agreed to waive/reimburse certain fees and expenses, if applicable. |
(g) | The benefits derived from expense reductions had an impact of less than 0.01%. |
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Exhibit A
Each Selling Fund and the corresponding Buying Fund may bear a portion of the out-of-pocket expenses associated with its Reorganization. Out-of-pocket expenses associated with a Reorganization include, but are not limited to: (1) the expenses associated with the preparation, printing and mailing of any shareholder communications, including this proxy statement/prospectus, and any filings with the SEC and/or other governmental authorities in connection with the Reorganization; (2) the fees and expenses of any proxy solicitation firm retained in connection with the Reorganization; and (3) the legal and other fees and expenses incurred in connection with the Reorganization.
All fees paid to governmental authorities for the registration or qualification of the Buying Fund shares to be issued in the Reorganization and all transfer agency costs related to such shares will be allocated to the Buying Fund. All fees and expenses related to printing and mailing communications to Selling Fund shareholders will be allocated to the Selling Fund. All of the other out-of-pocket expenses of a Reorganization including, without limitation, accounting, legal and custodial expenses, will be allocated equally among the applicable Funds. Following this initial allocation among the Funds, Columbia Management limits the expenses actually borne by a Fund to not more than the anticipated reduction in expenses to be incurred by that Fund over the first year following the Reorganization. Any reduction in the Reorganization expenses borne by a Fund as a result of this limitation is absorbed by Columbia Management, not by any other Fund. The estimated costs of each Reorganization expected to be borne by each Selling Fund and each Buying Fund, in the aggregate and on a per-share basis based on shares outstanding as of August 31, 2012, are set forth below:
Costs Estimated to be Borne | ||||||||
Fund | Total | Per Share | ||||||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | $ | 337,662 | $ | 0.005 | ||||
Columbia Frontier Fund (Selling Fund) | $ | 0 | $ | 0.000 | ||||
Columbia Select Small Cap Fund (Selling Fund) | $ | 117,137 | $ | 0.010 | ||||
Columbia Small Cap Growth Fund II (Selling Fund) | $ | 0 | $ | 0.000 | ||||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | $ | 0 | $ | 0.000 | ||||
Columbia Diversified Bond Fund (Selling Fund) | $ | 0 | $ | 0.000 | ||||
Columbia Connecticut Tax-Exempt Fund (Selling Fund) | $ | 19,666 | $ | 0.002 | ||||
Columbia Massachusetts Tax-Exempt Fund (Selling Fund) | $ | 39,954 | $ | 0.002 | ||||
Columbia Mid Cap Growth Fund (Buying Fund) | $ | 0 | $ | 0.000 | ||||
Columbia Small Cap Growth Fund I (Buying Fund) | $ | 0 | $ | 0.000 | ||||
Columbia Emerging Markets Fund (Buying Fund) | $ | 2,500 | $ | 0.000 | ||||
Columbia Intermediate Bond Fund (Buying Fund | $ | 2,500 | $ | 0.000 | ||||
Columbia Tax-Exempt Fund (Buying Fund) | $ | 0 | $ | 0.000 |
Should any Reorganization fail to occur, Columbia Management will bear all costs associated with that Reorganization.
A-1
Table of Contents
Based on the operating expense ratios shown in the Fees and Expenses section above for each Buying Fund, it is projected that, after the Reorganizations, assuming all of the Reorganizations are consummated, each class of each Selling Fund will benefit from expense savings that will offset the allocated Reorganization expenses. However, the benefit of those projected expense savings will not be realized immediately. It is projected that the aggregate expense savings for each Selling Fund will not exceed the allocated Reorganization expenses of that Selling Fund until approximately the number of months after its Reorganization set forth below.
Fund | Number of Months | |||
Columbia Mid Cap Growth Opportunity Fund | 4 | |||
Columbia Frontier Fund | N/A | |||
Columbia Select Small Cap Fund | 8 | |||
Columbia Small Cap Growth Fund II | N/A | |||
Columbia Emerging Markets Opportunity Fund | N/A | |||
Columbia Diversified Bond Fund | N/A | |||
Columbia Connecticut Tax-Exempt Fund | 12 | |||
Columbia Massachusetts Tax-Exempt Fund | 12 |
If a shareholder redeems his or her Buying Fund shares prior to the indicated time, the shareholder will receive no net benefit from the projected expense savings.
A-2
Table of Contents
Exhibit B
Additional Information Applicable to the Buying Funds
Below is information regarding the Buying Funds. All references to a Fund or the Funds in this Exhibit B refer to a Buying Fund or the Buying Funds, respectively, unless otherwise noted.
Fund Management and Compensation (for all Buying Funds)
Columbia Management is located at 225 Franklin Street, Boston, MA 02110 and serves as investment adviser to the Funds. Columbia Management is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. Prior to May 1, 2010, Columbia Management’s name was RiverSource Investments, LLC. Ameriprise Financial is a financial planning and financial services company that has been offering solutions for clients’ asset accumulation, income management and protection needs for more than 110 years. Columbia Management’s management experience covers all major asset classes, including equity securities, fixed-income securities and money market instruments. In addition to serving as an investment adviser to mutual funds, Columbia Management acts as an investment adviser for itself, its affiliates, individuals, corporations, retirement plans, private investment companies, exchange-traded funds and financial intermediaries.
Subject to oversight by the Board of Trustees (the Board), Columbia Management manages the day-to-day operations of each Fund, determines what securities and other investments each Fund should buy or sell and executes the portfolio transactions. Although Columbia Management is responsible for the investment management of each Fund, Columbia Management may delegate certain of its duties to one or more subadvisers. Columbia Management may use the research and other capabilities of its affiliates and third parties in managing investments.
Columbia Management may, subject to the approval of the Board, engage an investment subadviser or subadvisers to make the day-to-day investment decisions for each Fund. Columbia Management retains ultimate responsibility (subject to Board oversight) for overseeing any subadviser it engages and for evaluating each Fund’s needs and the subadvisers’ skills and abilities on an ongoing basis. Based on its evaluations, Columbia Management may at times recommend to the Board that each Fund change, add or terminate one or more subadvisers; continue to retain a subadviser even though the subadviser’s ownership or corporate structure has changed; or materially change a subadvisory agreement with a subadviser.
The SEC has issued an order that permits Columbia Management, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for each Fund without first obtaining shareholder approval. The order permits each Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. Columbia Management and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, Columbia Management discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.
B-1
Table of Contents
Each Fund pays Columbia Management a fee for managing their respective assets. The fees paid by Columbia Intermediate Bond Fund for its most recent fiscal period, and each other Fund for its most recent fiscal year were the following percentage of each Buying Fund’s average daily net assets:
Buying Fund | Percentage of Fund’s Average Daily Net Assets | |||
Columbia Mid Cap Growth Fund | 0.73 | % | ||
Columbia Small Cap Growth Fund I | 0.79 | % | ||
Columbia Emerging Markets Fund | 1.24 | % | ||
Columbia Intermediate Bond Fund | 0.41 | %* | ||
Columbia Tax-Exempt Fund | 0.39 | % |
* | For the fiscal period from April 1, 2012 to April 30, 2012. The fee for the prior fiscal year ended March 31, 2012 was 0.42% of Columbia Intermediate Bond Fund’s average daily net assets. |
Under its investment management services agreement (“IMS Agreement”), each Fund also pays taxes brokerage commissions and nonadvisory expenses. A discussion regarding the basis for each Fund’s board of trustees approving the IMS Agreement is available in Columbia Mid Cap Growth Fund’s Semiannual Report to Shareholders for the period ended February 28, 2011, Columbia Small Cap Growth Fund I’s Semiannual Report to Shareholders for the period ended February 28, 2011, Columbia Emerging Markets Fund’s Annual Report to Shareholders for the fiscal year ended March 31, 2012, Columbia Intermediate Bond Fund’s Semiannual Report to Shareholders for the period ended September 30, 2010 and Columbia Tax-Exempt Fund’s Annual Report to Shareholders for the fiscal year ended July 31, 2012.
Each Fund may from time to time take temporary defensive investment positions that may be inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, social or other conditions, including, without limitation, (i) investing some or all of its assets in money market instruments or shares of affiliated or unaffiliated money market funds, (ii) holding some or all of its assets in cash or cash equivalents, or (iii) investing in derivatives, such as futures (e.g., index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment exposures to a sector, country or region where Columbia Management believes such defensive positioning is appropriate. While each Fund is so positioned defensively, derivatives could comprise a substantial portion of a Fund’s investment. For more information on the risks of investing in derivatives, as applicable, see “Comparison of Principal Risks” section above.
The Funds may not achieve their investment objectives while they are investing defensively.
Portfolio Managers
Information about the portfolio managers who are primarily responsible for overseeing each Fund’s investments is shown below. The Merger SAI provides more information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in each Fund.
Columbia Mid Cap Growth Fund
George J. Myers, CFA, Lead manager
• | Service with the Fund since 2006. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2004. |
• | Began investment career in 1998. |
• | B.B.A. and M.S., University of Wisconsin, Madison. |
B-2
Table of Contents
Wayne M. Collette, CFA, Co-manager
• | Service with the Fund since 2006. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2001. |
• | Began investment career in 1996. |
• | B.B.A., Brandeis University; M.B.A., Columbia University. |
Lawrence W. Lin, CFA, Co-manager
• | Service with the Fund since 2006. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2006. |
• | Began investment career in 1998. |
• | B.S., University of Southern California. |
Brian D. Neigut, CFA, Co-manager
• | Service with the Fund since 2006. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2007. |
• | Began investment career in 1995. |
• | B.B.A., Pacific Lutheran University. |
Columbia Small Cap Growth Fund I
Wayne M. Collette, CFA, Lead Manager
• | Service with the Fund since 2006. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2001. |
• | Began investment career in 1996. |
• | B.B.A., Brandeis University; M.B.A., Columbia University. |
George J. Myers, CFA, Co-manager
• | Service with the Fund since 2006. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2004. |
• | Began investment career in 1998. |
• | B.B.A. and M.S., University of Wisconsin, Madison. |
Lawrence W. Lin, CFA, Co-manager
• | Service with the Fund since 2007. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2006. |
• | Began investment career in 1998. |
• | B.S., University of Southern California. |
Brian D. Neigut, CFA, Co-manager
• | Service with the Fund since 2007. |
B-3
Table of Contents
• | Associated with Columbia Management or its predecessors as an investment professional since 2007. |
• | Began investment career in 1995. |
• | B.B.A., Pacific Lutheran University. |
Columbia Emerging Markets Fund
Dara J. White, CFA, Lead manager
• | Service with the Fund or the predecessor fund since 2008. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2006. |
• | Began investment career in 1998. |
• | B.S., Boston College. |
Robert B. Cameron, Co-manager
• | Service with the Fund since December 2008. |
• | Associated with Columbia Management or its predecessors as an investment professional since October 2008. |
• | Began investment career in 1983. |
• | B.A., University of Toronto. |
Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM, Co-manager
• | Service with the Fund or the predecessor fund since 2008. |
• | Associated with Columbia Management or its predecessors as an investment professional since 2003. |
• | Began investment career in 1995. |
• | B.A., Shenzhen University; M.B.A., Willamette University. |
Columbia Intermediate Bond Fund
Carl W. Pappo, CFA, Lead manager
• | Service with the Fund since 2005. |
• | Associated with Columbia Management or its predecessor as an investment professional since 1993. |
• | Began investment career in 1991. |
• | B.S., Babson College. |
Alexander D. Powers, Co-manager
• | Service with the Fund since 2010. |
• | Associated with Columbia Management or its predecessor as an investment professional since 1996. |
• | Began investment career in 1979. |
• | B.A., Boston College; M.B.A., New York University. |
Brian Lavin, CFA, Co-manager
• | Service with the Fund since 2010. |
B-4
Table of Contents
• | Associated with Columbia Management or its predecessor as an investment professional since 1994. |
• | Began investment career in 1986. |
• | M.B.A., University of Wisconsin, Milwaukee. |
Michael Zazzarino, Co-manager
• | Service with the Fund since 2010. |
• | Associated with Columbia Management or its predecessor as an investment professional since 2005. |
• | Began investment career in 1988. |
• | B.S., Lafayette College; M.B.A., Columbia University. |
Columbia Tax-Exempt Fund
Kimberly A. Campbell, Manager
• | Service with the Fund since 2002. |
• | Associated with Columbia Management or its predecessor as an investment professional since 1995. |
• | Began investment career in 1980. |
• | B.A., Smith College. |
Certain Legal Matters
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 each Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on a Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with each Fund. Information regarding certain pending and settled legal proceedings may be found in each Fund’s shareholder reports and in the Merger SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the 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.
Choosing a Share Class
The Funds
The Columbia Funds generally share the same policies and procedures for investor services, as described below. Funds and portfolios that used the “Columbia” and “Columbia Acorn” brands prior to September 27, 2010 are collectively referred to herein as the Legacy Columbia Funds. The funds that historically used the RiverSource brand, including those renamed with the “Columbia” brand effective September 27, 2010, as well as certain other funds are collectively referred to as the Legacy RiverSource Funds. Together the Legacy Columbia Funds and the Legacy RiverSource Funds are referred to as the Funds. For a list of Legacy Columbia Funds and Legacy RiverSource Funds, see the appendices to a Fund’s SAI.
The Funds’ primary service providers are referred to as follows: the Investment Manager refers to Columbia Management Investment Advisers, LLC, the Transfer Agent refers to Columbia Management Investment Services Corp. and the Distributor refers to Columbia Management Investment Distributors, Inc.
B-5
Table of Contents
Funds Contact Information
Additional information about the Funds can be obtained at www.columbiamanagement.com,* by calling toll-free 800.345.6611, or by writing (regular mail) to Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081 or (express mail) Columbia Management Investment Services Corp., c/o Boston Financial, 30 Dan Road, Suite 8081, Canton, MA 02021-2809.
Summary of Share Class Features
Each share class has its own investment eligibility criteria, cost structure and other features. You may not be eligible for every share class. If you purchase shares of a Fund through a retirement plan or other product or program offered by your selling agent, not all share classes of the Fund may be made available to you. When deciding which class of shares to buy, you should consider, among other things:
• | The amount you plan to invest. |
• | How long you intend to remain invested in the Fund. |
• | The expenses for each share class. |
• | Whether you may be eligible for a reduction or waiver of sales charges when you buy or sell shares. |
Each investor’s personal situation is different and you may wish to discuss with your selling agent which share classes are available to you and which share class is appropriate for you.
FUNDamentalsTM |
Selling and/or Servicing Agents |
The terms “selling agent” and “servicing agent” refer to the financial intermediaries that are authorized to sell shares of the Fund. Selling and/or servicing agents (collectively, selling agents) include broker-dealers and financial advisors as well as firms that employ such broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisers, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates. |
Retirement Plans and Omnibus Retirement Plans |
The term “retirement plan” refers to retirement plans created under sections 401(a), 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the Code), non-qualified deferred compensation plans governed by section 409A of the Code and similar plans but does not refer to individual retirement plans. The term “omnibus retirement plan” refers to a retirement plan that has a plan-level or omnibus account with a Fund or the Transfer Agent. |
* | The website references in this prospectus are intended to be inactive textual references and information contained in or otherwise accessible through the referenced websites does not form a part of this prospectus. |
B-6
Table of Contents
The following summarizes the primary features of Class A, Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class T, Class W, Class Y and Class Z shares. Not all Funds offer every class of shares. The Fund offers the class(es) of shares set forth on the cover of this prospectus and may offer other share classes through a separate prospectus. Although certain share classes are generally closed to new or existing investors, information relating to these share classes is included in the table below because certain qualifying purchase orders are permitted, as described below.
Share | Eligible Investors(a); Minimum | Front-End Sales | Contingent Deferred | Maximum Distribution | ||||
Class A | Eligibility: Available to the general public for investment
Minimum Initial Investment: $2,000 for most investors
Investment Limits and Conversion Features: None | 5.75% maximum, declining to 0.00% on investments of $1 million or more
None for money market Funds and certain other Funds(e) | CDSC on certain investments of between $1 million and $50 million redeemed within 18 months of purchase charged as follows:
• 1.00% CDSC if redeemed within 12 months of purchase and
• 0.50% CDSC if redeemed more than 12, but less than 18, months of | Distribution and/or Service (12b-1) Fees: up to 0.25% | ||||
Class B | Eligibility: Closed to new investors(f)
Investment Limits: Up to $49,999
Conversion Features: Converts to Class A shares generally eight years after purchase(g) | None | 5.00% maximum, gradually declining to 0.00% after six years(g) | Distribution Fee: 0.75%
Service Fee: 0.25% | ||||
Class C | Eligibility: Available to the general public for investment
Minimum Initial Investment: $2,000 for most investors
Investment Limits: Up to $999,999; none for omnibus retirement plans Conversion Features: None | None | 1.00% on certain investments redeemed within one year of purchase | Distribution Fee: 0.75%
Service Fee: 0.25% |
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Table of Contents
Share | Eligible Investors(a); Minimum | Front-End Sales | Contingent Deferred | Maximum Distribution | ||||
Class I | Eligibility: Available only to other Funds (i.e., fund-of-fund investments)
Minimum Initial Investment, Investment Limits and Conversion Features: None | None | None | None | ||||
Class K(h) | Eligibility: Closed to new investors; available only to qualified employee benefit plans, trust companies or similar institutions, 501(c)(3) charitable organizations, non-qualified deferred compensation plans whose participants are included in a qualified employee benefit plan described above, 529 plans, and health savings accounts(f)
Minimum Initial Investment, Investment Limits and Conversion Features: None | None | None | Plan Administration Fee: 0.25% | ||||
Class R | Eligibility: Available only to eligible retirement plans, health savings accounts and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by the Distributor
Minimum Initial Investment, Investment Limits and Conversion Features: None | None | None | Legacy Columbia Funds: distribution fee of 0.50%
Legacy RiverSource Funds: distribution and service fee of 0.50%, of which the service fee may be up to 0.25% | ||||
Class R4(h) | Eligibility: Available only to omnibus retirement plans, trust companies or similar institutions, 501(c)(3) charitable organizations, 529 plans and health savings accounts
Minimum Initial Investment, Investment Limits and Conversion Features: None | None | None | None |
B-8
Table of Contents
Share | Eligible Investors(a); Minimum | Front-End Sales | Contingent Deferred | Maximum Distribution | ||||
Class R5 | Eligibility: Available only to (i) certain registered investment advisers that clear Fund share transactions for their client or customer accounts through designated mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans(f)
Minimum Initial Investment, Investment Limits and Conversion Features: None | None | None | None | ||||
Class T | Eligibility: Generally closed to new investors; available only to investors who received (and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into various Legacy Columbia Funds (formerly named Liberty funds)
Minimum Initial Investment, Investment Limits and Conversion Features: None | 5.75% maximum, declining to 0.00% on investments of $1 million or more | CDSC on certain investments of between $1 million and $50 million redeemed within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within 12 months of purchase and 0.50% CDSC if redeemed more than 12, but less than 18, months of purchase | Non-12b-1 Service Fee: up to 0.50% | ||||
Class W | Eligibility: Available only to investors purchasing through certain authorized investment programs managed by investment professionals, including discretionary managed account programs
Minimum Initial Investment: $500
Investment Limits and Conversion Features: None | None | None | Distribution and Service Fees: 0.25% |
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Share | Eligible Investors(a); Minimum | Front-End Sales | Contingent Deferred | Maximum Distribution | ||||
Class Y | Eligibility: Available only to (i) omnibus retirement plans with plan assets of at least $10 million as of the date of funding the Fund account; and (ii) omnibus retirement plans with plan assets of less than $10 million as of the date of funding the Fund account, provided that such plans invest $500,000 or more in Class Y shares of the Fund(f)
Minimum Initial Investment: See Eligibility above
Investment Limits and Conversion Features: None | None | None | None | ||||
Class Z | Eligibility: Available only to certain eligible investors, which are subject to different minimum investment requirements, ranging from $0 to $2,000; effective March 29, 2013, closed to (i) accounts of selling agents that clear Fund share transactions for their client or customer accounts through designated mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and (ii) omnibus retirement plans, subject to certain exceptions(f)
Minimum Initial Investment: See Eligibility above
Investment Limits and Conversion Features: None | None | None | None |
(a) | For money market Funds, new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of the money market Funds are available as a new investment only to investors in the Distributor’s proprietary 401(k) products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. The money market Funds offer other classes of shares only to facilitate exchanges with other Funds offering such share classes. |
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(b) | The minimum initial investment requirement is $5,000 for Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund, and $10,000 for Columbia 120/20 Contrarian Equity Fund, Columbia Absolute Return Currency and Income Fund, Columbia Absolute Return Emerging Markets Macro Fund and Columbia Global Extended Alpha Fund. See Buying, Selling and Exchanging Shares – Buying Shares for more details on the eligible investors and minimum initial investment requirements. Certain share classes are subject to minimum account balance requirements, as described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies. |
(c) | Actual front-end sales charges and CDSCs vary among the Funds. For more information on applicable sales charges, see Choosing a Share Class – Sales Charges and Commissions and for information about certain exceptions to these sales charges, see Choosing a Share Class – Reductions/Waivers of Sales Charges. |
(d) | These are the maximum applicable distribution, shareholder service and/or non-12b-1 service fees. Fee rates and fee components (i.e., the portion of a combined fee that is a distribution or service fee) may vary among Funds. Because these fees are paid out of Fund assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of distribution and/or shareholder service fees. Although Class A shares of certain Legacy Columbia Funds are subject to a combined distribution and service fee of up to 0.35%, these Funds currently limit the combined fee to 0.25%. Columbia Money Market Fund pays a distribution and service fee of up to 0.10% on Class A shares, up to 0.75% distribution fee and up to 0.10% service fee on Class B shares, up to 0.75% distribution fee on Class C shares, and 0.10% distribution and service fees on Class W shares. Columbia High Yield Municipal Fund, Columbia Intermediate Municipal Bond Fund and Columbia Tax-Exempt Fund pay a service fee of up to 0.20% on Class A, Class B and Class C shares. Columbia Intermediate Municipal Bond Fund pays a distribution fee of up to 0.65% on Class B and Class C shares. For more information on distribution and service fees, see Choosing a Share Class – Distribution and Service Fees. |
(e) | The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: money market Funds, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund and Columbia Small Cap Index Fund. |
(f) | These share classes are closed, or will be closed, to new accounts generally or to new accounts of certain categories of investors, subject to certain conditions, as summarized below and described in more detail under Buying, Selling and Exchanging Shares – Buying Shares – Eligible Investors: |
• | Class B Shares. The Funds no longer accept investments from new or existing investors in Class B shares, except through reinvestment of dividend and/or capital gain distributions by existing Class B shareholders, or a permitted exchange. |
• | Class K Shares. Shareholders who opened and funded a Class K shares account with a Fund as of the close of business on December 31, 2010 may continue to make additional purchases of such share class, and existing Class K accounts may continue to allow new investors or participants to be established in their Fund account. |
• | Class R5 Shares. Shareholders with Class R5 accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class R5 shares may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in existing accounts. In addition, investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts and add new shareholders in the program. |
• | Class Y Shares. Shareholders with Class Y accounts funded before November 8, 2012 who do not satisfy the current eligibility criteria for Class Y shares may not establish new accounts for such share class but may continue to make additional purchases of Class Y shares in existing accounts. |
• | Class Z Shares. Effective March 29, 2013, selling agents that clear Fund share transactions through designated mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans will not be permitted to establish new Class Z accounts, subject to certain exceptions. Omnibus retirement plans that opened and, subject to exceptions, funded a Class Z account as of close of business on March 28, 2013, and continuously hold Class Z shares in such account after such date, may generally continue to make additional purchases of Class Z shares, open new Class Z accounts and add new participants. In certain circumstances and in the sole discretion of the Distributor, omnibus retirement plans affiliated with these grandfathered plans may also open new Class Z accounts after March 28, 2013. Accounts of selling agents (other than omnibus retirement plans) that clear Fund share transactions for their client or customer accounts through designated mutual fund trading platforms will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through reinvestment of distributions) after March 28, 2013. |
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(g) | Timing of conversion and CDSC schedules will vary depending on the Fund and the date of your original purchase of Class B shares. For more information on the conversion of Class B shares to Class A shares, see Choosing a Share Class – Sales Charges and Commissions. Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares. |
(h) | Prior to October 25, 2012, Class K shares were named Class R4; and prior to October 31, 2012, Class R4 shares were named Class R3. |
Sales Charges and Commissions
Sales charges, commissions and distribution and service fees (discussed in a separate sub-section below) compensate selling agents, and typically your financial advisor, for selling shares to you and for maintaining and servicing the shares held in your account with them. These charges, commissions and fees are intended to provide incentives for selling agents to provide these services.
Depending on which share class you choose you will pay these charges either at the outset as a front-end sales charge, at the time you sell your shares as a CDSC and/or over time in the form of increased ongoing fees. Whether the ultimate cost is higher for one class over another depends on the amount you invest, how long you hold your shares and whether you are eligible for reduced or waived sales charges. The differential between classes also will vary depending on the actual investment return for any given investment period. We encourage you to consult with a financial advisor who can help you with your investment decisions.
Class A Shares — Front-End Sales Charge
You’ll pay a front-end sales charge when you buy Class A shares (other than shares of a money market Fund and certain other Funds), resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see Choosing a Share Class – Reductions/Waivers of Sales Charges.
The Distributor receives the sales charge and re-allows (or pays) a portion of the sales charge to the selling agent through which you purchased the shares. The Distributor retains the balance of the sales charge. The Distributor retains the full sales charge you pay when you purchase shares of the Fund directly from the Fund (rather than through a selling agent). Sales charges vary depending on the amount of your purchase.
FUNDamentalsTM |
Front-End Sales Charge Calculation |
The table below presents the front-end sales charge as a percentage of both the offering price and the net amount invested. |
• The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day. |
• The offering price per share is the NAV per share plus any front-end sales charge that applies. |
The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge for the Fund) and the net asset value of those shares. To determine the front-end sales charge you will pay when you buy your shares, the Fund will add the amount of your investment to the value of your account (and any other accounts eligible for aggregation of which you or your selling agent notify the Fund) and base the sales charge on the aggregate amount. See Choosing a Share Class – Reductions/Waivers of Sales Charges for a discussion of account value aggregation. There is no initial sales charge on reinvested dividend or capital gain distributions. |
The front-end sales charge you’ll pay on Class A shares:
• | depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and |
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• | is based on the total amount of your purchase and the value of your account (and any other accounts eligible for aggregation of which you or your selling agent notifies the Fund). |
Class A Shares — Front-End Sales Charge — Breakpoint Schedule
Breakpoint Schedule For: | Dollar amount of | Sales charge as a % of the offering price(b) | Sales charge as a % of the net amount invested(b) | Amount retained by or paid to selling agents as a % of the offering price | ||||||||||
Equity Funds, Columbia Absolute Return Emerging Markets Macro Fund, Columbia Absolute Return Enhanced Multi-Strategy Fund, Columbia Commodity Strategy Fund, Columbia Risk Allocation Fund and Funds-of-Funds (equity)* | $0 – $49,999 | 5.75 | % | 6.10 | % | 5.00 | % | |||||||
$50,000 – $99,999 | 4.50 | % | 4.71 | % | 3.75 | % | ||||||||
$100,000 – $249,999 | 3.50 | % | 3.63 | % | 3.00 | % | ||||||||
$250,000 – $499,999 | 2.50 | % | 2.56 | % | 2.15 | % | ||||||||
$500,000 – $999,999 | 2.00 | % | 2.04 | % | 1.75 | % | ||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) | ||||||||
For Fixed Income Funds (except those listed below) and Funds-of-Funds (fixed income)* | $0 – $49,999 | 4.75 | % | 4.99 | % | 4.00 | % | |||||||
$50,000 – $99,999 | 4.25 | % | 4.44 | % | 3.50 | % | ||||||||
$100,000 – $249,999 | 3.50 | % | 3.63 | % | 3.00 | % | ||||||||
$250,000 – $499,999 | 2.50 | % | 2.56 | % | 2.15 | % | ||||||||
$500,000 – $999,999 | 2.00 | % | 2.04 | % | 1.75 | % | ||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) | ||||||||
Columbia Intermediate Bond Fund, Columbia Intermediate Municipal Bond Fund, Columbia LifeGoal® Income Portfolio and each of the state-specific intermediate municipal bond Funds | $0 – $99,999 | 3.25 | % | 3.36 | % | 2.75 | % | |||||||
$100,000 – $249,999 | 2.50 | % | 2.56 | % | 2.15 | % | ||||||||
$250,000 – $499,999 | 2.00 | % | 2.04 | % | 1.75 | % | ||||||||
$500,000 – $999,999 | 1.50 | % | 1.53 | % | 1.25 | % | ||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) | ||||||||
Columbia Absolute Return Currency and Income Fund, Columbia Absolute Return Multi-Strategy Fund, Columbia Floating Rate Fund, Columbia Inflation Protected Securities Fund and Columbia Limited Duration Credit Fund | $0 – $99,999 | 3.00 | % | 3.09 | % | 2.50 | % | |||||||
$100,000 – $249,999 | 2.50 | % | 2.56 | % | 2.15 | % | ||||||||
$250,000 – $499,999 | 2.00 | % | 2.04 | % | 1.75 | % | ||||||||
$500,000 – $999,999 | 1.50 | % | 1.52 | % | 1.25 | % | ||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) | ||||||||
Columbia Short Term Bond Fund and Columbia Short Term Municipal Bond Fund | $0 – $99,999 | 1.00 | % | 1.01 | % | 0.75 | % | |||||||
$100,000 – $249,999 | 0.75 | % | 0.76 | % | 0.50 | % | ||||||||
$250,000 – $999,999 | 0.50 | % | 0.50 | % | 0.40 | % | ||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) |
* | The following Funds are not subject to a front-end sales charge or a CDSC on Class A shares: money market Funds, Columbia Large Cap Index Fund, Columbia Large Cap Enhanced Core Fund, Columbia Mid Cap Index Fund and Columbia Small Cap Index Fund. “Funds-of-Funds (equity)” includes Columbia LifeGoal® Growth Portfolio, Columbia LifeGoal® Balanced Growth Portfolio, Columbia LifeGoal® Income and Growth Portfolio, Columbia Portfolio Builder Aggressive Fund, Columbia Portfolio Builder Moderate Aggressive Fund and Columbia Portfolio Builder Moderate Fund. “Funds-of-Funds (fixed income)” includes Columbia Income Builder Fund, Columbia Portfolio Builder Conservative Fund and Columbia Portfolio Builder Moderate Conservative Fund. Columbia Balanced Fund and Columbia Strategic Allocation Fund are treated as equity Funds for purposes of the table. |
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(a) | Purchase amounts and account values may be aggregated among all eligible Fund accounts for the purposes of this table. See Choosing a Share Class – Reductions/Waivers of Sales Charges for a discussion of account value aggregation. |
(b) | Because the offering price is calculated to two decimal places, the dollar amount of the sales charge as a percentage of the offering price and your net amount invested for any particular purchase of Fund shares may be higher or lower depending on whether downward or upward rounding was required during the calculation process. Purchase price includes the sales charge. |
(c) | For information regarding cumulative commissions paid to your selling agent when you buy $1 million or more of Class A shares of a Fund, see Class A Shares – Commissions below. |
Class A Shares — CDSC
In some cases, you’ll pay a CDSC if you sell Class A shares that you purchased without an initial sales charge.
• | If you purchased Class A shares without an initial sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months of purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months of purchase; and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months of purchase. |
• | Subsequent Class A share purchases that bring your aggregate account value to $1 million or more (but less than $50 million) will also be subject to a CDSC if you redeem them within the time periods noted above. |
FUNDamentalsTM |
Contingent Deferred Sales Charge |
A contingent deferred sales charge or CDSC is a sales charge applied at the time you sell your shares, unlike a front-end sales charge that is applied at the time of purchase. A CDSC varies based on the length of time that you have held your shares. A CDSC is applied to the NAV at the time of your purchase or sale, whichever is lower, and will not be applied to any shares you receive through reinvested distributions or any amount that represents appreciation in the value of your shares. For purposes of calculating a CDSC, the start of the holding period is generally the first day of the month in which your purchase was made. |
When you place an order to sell shares of a class that has a CDSC, the Fund will first redeem any shares that aren’t subject to a CDSC, followed by those you have held the longest. This means that if a CDSC is imposed, you cannot designate the individual shares being redeemed for U.S. federal income tax purposes. You should consult your tax advisor about the tax consequences of investing in the Fund. In certain circumstances, the CDSC may not apply. See Choosing a Share Class – Reductions/Waivers of Sales Charges for details. |
Class A Shares — Commissions
The Distributor may pay your selling agent an up-front commission when you buy Class A shares. The Distributor generally funds the commission through the applicable sales charge paid by you. For more information, see Class A Shares – Front-End Sales Charge – Breakpoint Schedule, Amount retained by or paid to selling agents as a % of the offering price.
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The Distributor may also pay your selling agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:
Class A Shares — Commission Schedule (Paid by the Distributor to Selling Agents)*
Purchase Amount | Commission Level (as a % of net asset value per share) | |||
$1 million – $2,999,999 | 1.00 | % | ||
$3 million –$49,999,999 | 0.50 | % | ||
$50 million or more | 0.25 | % |
* | Not applicable to Funds that do not assess a front-end sales charge. Currently, the Distributor does not make such payments on purchases of the following Funds for purchases of $1 million or more: Columbia Large Cap Enhanced Core Fund, Columbia Large Cap Index Fund, Columbia Mid Cap Index Fund, Columbia Small Cap Index Fund and Columbia U.S. Treasury Index Fund. |
Class B Shares — Sales Charges
The Funds no longer accept new investments in Class B shares, except for certain limited transactions as described in more detail under Buying, Selling and Exchanging Shares – Buying Shares – Eligible Investors – Class B Shares (Closed). You don’t pay a front-end sales charge when you buy Class B shares, but you may pay a CDSC when you sell Class B shares.
Class B Shares — CDSC
You’ll pay a CDSC if you sell Class B shares unless you qualify for a waiver of the CDSC or the shares you’re selling were bought through reinvested distributions. See Choosing a Share Class – Reductions/Waivers of Sales Charges for details. The CDSC you pay on Class B shares depends on how long you’ve held your shares and generally declines each year until there is no sales charge, as follows:
Class B Shares — CDSC Schedule for the Funds
Applicable CDSC* |
| |||
Number of Years Class B Shares Held | All Funds Except those Listed to the Right | Columbia Intermediate Bond Fund, Columbia Intermediate Municipal Bond Fund, Columbia LifeGoal® Income Portfolio, Columbia Short Term Bond Fund and the State-specific Intermediate Municipal Bond Funds | ||
One | 5.00% | 3.00% | ||
Two | 4.00% | 3.00% | ||
Three | 3.00%** | 2.00% | ||
Four | 3.00% | 1.00% | ||
Five | 2.00% | None | ||
Six | 1.00% | None | ||
Seven | None | None | ||
Eight | None | None | ||
Nine | Conversion to Class A Shares | Conversion to Class A Shares |
* | Because of rounding in the calculation, the actual CDSC you pay may be more or less than the CDSC calculated using these percentages. |
** | For shares purchased in a Legacy RiverSource Fund (other than a former Seligman Fund) on or prior to June 12, 2009, the CDSC percentage for year three is 4%. |
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Class B shares of Columbia Short Term Municipal Bond Fund are not subject to a CDSC.
Class B Shares — Commissions
The Distributor paid an up-front commission directly to your selling agent when you bought the Class B shares (a portion of this commission may have been paid to your financial advisor). This up-front commission, which varies across the Funds, was up to 4.00% of the net asset value per share of Funds with a maximum CDSC of 5.00% and of Class B shares of Columbia Short Term Municipal Bond Fund and up to 2.75% of the net asset value per share of Funds with a maximum CDSC of 3.00%. The Distributor continues to seek to recover this commission through distribution fees it receives under the Fund’s distribution plan and any applicable CDSC paid when you sell your shares. For more information, see Choosing a Share Class – Distribution and Service Fees.
Class B Shares — Conversion to Class A Shares
Class B shares of the Funds automatically convert to Class A shares at different times depending upon the Fund and, for certain Funds, when shares were purchased. In general, Class B shares convert to Class A shares after eight years. For details and related information about how the Funds’ Class B shares’ convert to Class A shares, see Appendix S to the SAI. Class B shares of Columbia Short Term Municipal Bond Fund do not convert to Class A shares.
Class C Shares — Front-End Sales Charge
You don’t pay a front-end sales charge when you buy Class C shares. Although Class C shares do not have a front-end sales charge such that the full amount of your purchase price is invested in a Fund, over time Class C shares can incur distribution (12b-1) and/or shareholder servicing fees that are equal to or more than the front-end sales charge and distribution (12b-1) and/or shareholder servicing fees you would pay for Class A shares. Thus, although the full amount of your purchase of Class C shares is invested in a Fund, any positive investment return on this money may be partially or fully offset by the expected higher annual expenses of Class C shares.
Class C Shares — CDSC
You’ll pay a CDSC of 1.00% if you redeem Class C shares within 12 months of buying them unless you qualify for a waiver of the CDSC or the shares you’re selling were purchased through reinvested distributions. For more information, see Choosing a Share Class – Reductions/Waivers of Sales Charges. Redemptions of Class C shares are not subject to a CDSC if redeemed after 12 months.
Class C Shares — Commissions
Although there is no front-end sales charge when you buy Class C shares, the Distributor pays an up-front commission directly to your selling agent of up to 1.00% of the net asset value per share when you buy Class C shares (a portion of this commission may be paid to your financial advisor). The Distributor seeks to recover this commission through distribution fees it receives under the Fund’s distribution and/or service plan and any applicable CDSC applied when you sell your shares. For more information, see Choosing a Share Class – Distribution and Service Fees.
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Class R Shares — Sales Charges and Commissions
You don’t pay a front-end sales charge when you buy Class R shares of the Fund or a CDSC when you sell Class R shares of the Fund. The Distributor pays an up-front commission directly to your selling agent when you buy Class R shares (a portion of this commission may be paid to your financial advisor), according to the following schedule:
Class R Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
Purchase Amount | Commission Level (as a % of net asset value per share) | |||
$0 – $49,999,999 | 0.50 | % | ||
$50 million or more | 0.25 | % |
The Distributor seeks to recover this commission through distribution fees it receives under the Fund’s distribution plan. For more information, see Choosing a Share Class – Distribution and Service Fees.
Class T Shares — Front-End Sales Charge
You’ll pay a front-end sales charge when you buy Class T shares, resulting in a smaller dollar amount being invested in a Fund than the purchase price you pay, unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. For more information, see Choosing a Share Class – Reductions/Waivers of Sales Charges.
The front-end sales charge you’ll pay on Class T shares:
• | depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and |
• | is based on the total amount of your purchase and the value of your account. |
Class T Shares — Front-End Sales Charge — Breakpoint Schedule
Breakpoint Schedule For: | Dollar amount | Sales charge as a | Sales charge as a | Amount retained | ||||||||||||
Equity Funds | $0 – $49,999 | 5.75 | % | 6.10 | % | 5.00 | % | |||||||||
$50,000 – $99,999 | 4.50 | % | 4.71 | % | 3.75 | % | ||||||||||
$100,000 – $249,999 | 3.50 | % | 3.63 | % | 2.75 | % | ||||||||||
$250,000 – $499,999 | 2.50 | % | 2.56 | % | 2.00 | % | ||||||||||
$500,000 – $999,999 | 2.00 | % | 2.04 | % | 1.75 | % | ||||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) | ||||||||||
Fixed Income Funds | $0 – $49,999 | 4.75 | % | 4.99 | % | 4.25 | % | |||||||||
$50,000 – $99,999 | 4.50 | % | 4.71 | % | 3.75 | % | ||||||||||
$100,000 – $249,999 | 3.50 | % | 3.63 | % | 2.75 | % | ||||||||||
$250,000 – $499,999 | 2.50 | % | 2.56 | % | 2.00 | % | ||||||||||
$500,000 – $999,999 | 2.00 | % | 2.04 | % | 1.75 | % | ||||||||||
$1,000,000 or more | 0.00 | % | 0.00 | % | 0.00 | %(c) |
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(a) | Purchase amounts and account values are aggregated among all eligible Fund accounts for the purposes of this table. |
(b) | Because the offering price is calculated to two decimal places, the dollar amount of the sales charge as a percentage of the offering price and your net amount invested for any particular purchase of Fund shares may be higher or lower depending on whether downward or upward rounding was required during the calculation process. |
(c) | For more information regarding cumulative commissions paid to your selling agent when you buy $1 million or more of Class T shares, see Class T Shares – Commissions below. |
Class T Shares — CDSC
In some cases, you’ll pay a CDSC if you sell Class T shares that you bought without an initial sales charge.
• | If you purchased Class T shares without a front-end sales charge because your accounts aggregated between $1 million and $50 million at the time of purchase, you will incur a CDSC if you redeem those shares within 18 months of purchase, which is charged as follows: 1.00% CDSC if shares are redeemed within 12 months of purchase, and 0.50% CDSC if shares are redeemed more than 12, but less than 18, months of purchase. |
• | Subsequent Class T share purchases that bring your aggregate account value to $1 million or more (but less than $50 million) will also be subject to a CDSC if you redeem them within the time periods noted above. |
Class T Shares — Commissions
The Distributor may pay your selling agent an up-front commission when you buy Class T shares (a portion of this commission may, in turn, be paid to your financial advisor). For more information, see Class T Shares –Front-End Sales Charge – Breakpoint Schedule, Amount retained by or paid to selling agents as a % of the offering price.
The Distributor may also pay your selling agent a cumulative commission when you buy $1 million or more of Class T shares, according to the following schedule:
Class T Shares — Commission Schedule (Paid by the Distributor to Selling Agents)
Purchase Amount | Commission Level (as a % of net asset value per share) | |
$1 million – $2,999,999 | 1.00% | |
$3 million – $49,999,999 | 0.50% | |
$50 million or more | 0.25% |
Reductions/Waivers of Sales Charges
Front-End Sales Charge Reductions
There are two ways in which you may be able to reduce the front-end sales charge that you may pay when you buy Class A or Class T shares of a Fund. These types of sales charge reductions are also referred to as breakpoint discounts.
First, through the right of accumulation (ROA), you may combine the value of eligible accounts maintained by you and members of your immediate family to reach a breakpoint discount level and apply a lower sales charge to your purchase. To calculate the combined value of your Fund accounts in the particular class of shares, the Fund will use the current public offering price per share. For purposes of obtaining a breakpoint discount through ROA, you may aggregate your or your immediate family members’ ownership of different classes of shares, except for Class I, Class K, Class R, Class R4, Class R5 and Class Y shares of the Funds and direct purchases of Columbia Money Market Fund and Columbia Government Money Market Fund shares, which may not be aggregated. Shares of Columbia Money Market Fund and Columbia Government Money Market Fund acquired by exchange from other Funds may be combined for ROA purposes.
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Second, by making a statement of intent to purchase additional shares (commonly referred to as a letter of intent (LOI)), you may pay a lower sales charge on all purchases (including existing ROA purchases) of Class A shares or Class T shares made within 13 months of the date of your LOI. Your LOI must state the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000 (or $100,000 for Funds with breakpoint discounts beginning at $100,000). The required form of LOI may vary by selling agent, so please contact them directly for more information. Five percent of the purchase commitment amount will be placed in escrow. At the end of the 13-month period, the shares will be released from escrow, provided that you have invested the commitment amount. If you do not invest the commitment amount by the end of the 13 months, the remaining amount of the unpaid sales charge will be redeemed from the escrowed shares and the remaining balance released from escrow. To calculate the total value of the purchases you’ve made under an LOI, the Fund will use the historic cost (i.e., dollars invested) of the shares held in each eligible account. For purposes of making an LOI to purchase additional shares, you may aggregate your ownership of different classes of shares, except for Class I, Class K, Class R, Class R4, Class R5 and Class Y shares of the Funds and direct purchases of Columbia Money Market Fund and Columbia Government Money Market Fund shares, which may not be aggregated. Shares of Columbia Money Market Fund and Columbia Government Money Market Fund acquired by exchange from other Funds may be combined for LOI purposes.
You must request the reduced sales charge (whether through ROA or an LOI) when you buy shares. If you do not complete and file an LOI, or do not request the reduced sales charge at the time of purchase, you will not be eligible for the reduced sales charge. To obtain a breakpoint discount, you must notify your selling agent in writing at the time you buy your shares of each eligible account maintained by you and members of your immediate family, including accounts maintained through different selling agents. You and your selling agent are responsible for ensuring that you receive discounts for which you are eligible. The Fund is not responsible for a selling agent’s failure to apply the eligible discount to your account. You may be asked by your selling agent for account statements or other records to verify your discount eligibility, including, when applicable, records for accounts opened with a different selling agent and records of accounts established by members of your immediate family.
FUNDamentalsTM |
Your “Immediate Family” and Account Value Aggregation |
For purposes of obtaining a breakpoint discount for Class A shares or Class T shares, the value of your account will be deemed to include the value of all applicable shares in eligible Fund accounts that are held by you and your “immediate family,” which includes your spouse, domestic partner, parent, step-parent, legal guardian, child, step-child, father-in-law and mother-in-law, provided that you and your immediate family members share the same mailing address. Any Fund accounts linked together for account value aggregation purposes as of the close of business on September 3, 2010 will be permitted to remain linked together. Group plan accounts are valued at the plan level. |
Eligible Accounts
The following accounts are eligible for account value aggregation as described above, provided that they are invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W or Class Z shares of a Fund: individual or joint accounts; Roth and traditional Individual Retirement Accounts (IRAs); Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; accounts held in the name of your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; qualified retirement plan assets, provided that you are
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the sole owner of the business sponsoring the plan, are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and investments in wrap accounts.
The following accounts are not eligible for account value aggregation as described above: accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); investments in 529 plans, donor advised funds, variable annuities, variable insurance products or managed separate accounts; charitable and irrevocable trust accounts; accounts holding shares of money market funds that used the Columbia brand before May 1, 2010; and accounts invested in Class I, Class K, Class R, Class R4, Class R5 or Class Y shares of a Fund.
Front-End Sales Charge Waivers
The Distributor may waive front-end sales charges on purchases of Class A and Class T shares of the Funds by certain categories of investors, including Board members, certain employees of selling agents, Fund portfolio managers and certain retirement and employee benefit plans. The Distributor may waive front-end sales charges on (i) purchases (including exchanges) of Class A shares in accounts of selling agents that have entered into agreements with the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may not charge a transaction fee to customers and (ii) exchanges of Class Z shares of a Fund for Class A shares of the Fund. For a more complete description of categories of investors who may purchase Class A and Class T shares of the Funds at NAV, without payment of any front-end sales charge that would otherwise apply, see Appendix S to the SAI. In addition, certain types of purchases of Class A and Class T shares may be made at NAV. For a description of these eligible transactions, see Appendix S to the SAI.
CDSC Waivers
You may be able to avoid an otherwise applicable CDSC when you sell Class A, Class B, Class C or Class T shares of the Fund. This could happen because of the way in which you originally invested in the Fund, because of your relationship with the Funds or for other reasons. For example, the CDSC will be waived on redemptions of shares in the event of the shareholder’s death; that result from required minimum distributions taken from retirement accounts when the shareholder reaches age 70 1/2; in connection with the Fund’s Small Account Policy (which is described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies); and by certain other investors and in certain other types of transactions. For a more complete description of the available waivers of the CDSC on redemptions of Class A, Class B, Class C and Class T shares, see Appendix S to the SAI.
Repurchases
Investors can also buy Class A shares without paying a sales charge if the purchase is made from the proceeds of a redemption of any Class A, Class B, Class C or Class T shares of a Fund (other than Columbia Money Market Fund or Columbia Government Money Market Fund) within 90 days, up to the amount of the redemption proceeds. Any CDSC paid upon redemption of your Class A, Class B, Class C or Class T shares of a Fund will not be reimbursed.
To be eligible for the reinstatement privilege, the purchase must be made into an account for the same owner, but does not need to be into the same Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request from you or your selling agent within 90 days after the shares are redeemed and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of such shares next calculated after the request is received in “good form”. The repurchased shares will be deemed to have the original purchase date for purposes of applying the CDSC (if any) to subsequent redemptions. Systematic withdrawals and purchases are excluded from this policy.
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Restrictions and Changes in Terms and Conditions
Restrictions may apply to certain accounts and certain transactions. The Funds may change or cancel these terms and conditions at any time. Unless you provide your selling agent with information in writing about all of the factors that may count toward a waiver of a sales charge, there can be no assurance that you will receive all of the waivers for which you may be eligible. You should request that your selling agent provide this information to the Fund when placing your purchase order. Please see Appendix S of the SAI for more information about the sales charge reductions and waivers.
Distribution and Service Fees
The Board has approved, and the Funds have adopted, distribution and/or shareholder service plans which set the distribution and/or service fees that are periodically deducted from the Fund’s assets. These fees are calculated daily, may vary by share class and are intended to compensate the Distributor and/or eligible selling agents for selling Fund shares and directly or indirectly providing services to shareholders. Because the fees are paid out of the Fund’s assets on an ongoing basis, they will increase the cost of your investment over time.
The table below shows the maximum annual distribution and/or service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:
Distribution Fee | Service Fee | Combined Total | ||||
Class A | up to 0.25% | up to 0.25% | up to 0.35%(a)(b)(c) | |||
Class B | 0.75% | 0.25% | 1.00%(b) | |||
Class C | 0.75%(c) | 0.25% | 1.00%(b)(d) | |||
Class I | None | None | None | |||
Class K | None | 0.25%(e) | 0.25%(e) | |||
Class R (Legacy Columbia Funds) | 0.50% | —(f) | 0.50% | |||
Class R (Legacy RiverSource Funds) | up to 0.50% | up to 0.25% | 0.50%(f) | |||
Class R4 | None | None | None | |||
Class R5 | None | None | None | |||
Class T | None | 0.50%(g) | 0.50%(g) | |||
Class W | up to 0.25% | up to 0.25% | 0.25%(c) | |||
Class Y | None | None | None | |||
Class Z | None | None | None |
(a) | The maximum distribution and service fees of Class A shares varies among the Funds, as shown in the table below: |
Funds | Maximum Class A Distribution Fee | Maximum Class A Service Fee | Maximum Class A Combined Total | |||
Legacy RiverSource Funds (other than Columbia Money Market Fund) | up to 0.25% | up to 0.25% | 0.25% | |||
Columbia Money Market Fund | — | — | 0.10% |
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Funds | Maximum Class A Distribution Fee | Maximum Class A Service Fee | Maximum Class A Combined Total | |||
Columbia Balanced Fund, Columbia Contrarian Core Fund, Columbia Dividend Income Fund, Columbia Intermediate Bond Fund, Columbia Large Cap Growth Fund, Columbia Mid Cap Growth Fund, Columbia Oregon Intermediate Municipal Bond Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I, Columbia Technology Fund | up to 0.10% | up to 0.25% | up to 0.35%; these Funds may pay distribution and service fees up to a maximum of 0.35% of their average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder liaison services) but currently limit such fees to an aggregate fee of not more than 0.25% for Class A shares | |||
Columbia Bond Fund, Columbia California Tax-Exempt Fund, Columbia Connecticut Intermediate Municipal Bond Fund, Columbia Connecticut Tax-Exempt Fund, Columbia Corporate Income Fund, Columbia Emerging Markets Fund, Columbia Energy and Natural Resources Fund, Columbia Global Dividend Opportunity Fund, Columbia Greater China Fund, Columbia High Yield Opportunity Fund, Columbia International Bond Fund, Columbia Massachusetts Intermediate Municipal Bond Fund, Columbia New York Intermediate Municipal Bond Fund, Columbia Massachusetts Tax-Exempt Fund, Columbia New York Tax-Exempt Fund, Columbia Risk Allocation Fund, Columbia Small Cap Value Fund I, Columbia Pacific/Asia Fund, Columbia Select Large Cap Growth Fund, Columbia Select Small Cap Fund, Columbia Strategic Income Fund, Columbia U.S. Treasury Index Fund, Columbia Value and Restructuring Fund | — | 0.25% | 0.25% | |||
Columbia High Yield Municipal Fund, Columbia Intermediate Municipal Bond Fund, Columbia Tax Exempt Fund | — | 0.20% | 0.20% |
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Funds | Maximum Class A Distribution Fee | Maximum Class A Service Fee | Maximum Class A Combined Total | |||
Columbia California Intermediate Municipal Bond Fund, Columbia Convertible Securities Fund, Columbia Georgia Intermediate Municipal Bond Fund, Columbia International Value Fund, Columbia Large Cap Core Fund, Columbia Large Cap Enhanced Core Fund, Columbia Large Cap Index Fund, Columbia Large Cap Value Fund, Columbia LifeGoal® Balanced Growth Portfolio, Columbia LifeGoal® Growth Portfolio, Columbia LifeGoal® Income and Growth Portfolio, Columbia LifeGoal® Income Portfolio, Columbia Marsico 21st Century Fund, Columbia Marsico Focused Equities Fund, Columbia Marsico Growth Fund, Columbia Marsico International Opportunities Fund, Columbia Marsico Global Fund, Columbia Maryland Intermediate Municipal Bond Fund, Columbia Masters International Equity Portfolio, Columbia Mid Cap Index Fund, Columbia Mid Cap Value Fund, Columbia Multi-Advisor International Equity Fund, Columbia North Carolina Intermediate Municipal Bond Fund, Columbia Overseas Value Fund, Columbia Short Term Bond Fund, Columbia Short Term Municipal Bond Fund, Columbia Small Cap Growth Fund II, Columbia Small Cap Index Fund, Columbia Small Cap Value Fund II, Columbia South Carolina Intermediate Municipal Bond Fund, Columbia Virginia Intermediate Municipal Bond Fund, | — | — | 0.25%; these Funds pay a combined distribution and service fee |
(b) | The service fees for Class A shares, Class B shares and Class C shares of certain Funds vary. Service Fee for Class A shares, Class B shares and Class C shares of Columbia High Yield Municipal Fund, Columbia Intermediate Municipal Bond Fund and Columbia Tax-Exempt Fund – The annual service fee may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B shares and Class C shares for Columbia Intermediate Municipal Bond Fund – The annual distribution fee shall be 0.65% of the average daily net assets of the Fund’s Class B shares and Class C shares. Fee amounts noted apply to Class B shares of the Funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. |
(c) | Fee amounts noted apply to all Funds other than Columbia Money Market Fund, which, for each of Class A and Class W shares, pays distribution and service fees of 0.10%, and for Class C shares pays distribution fees of 0.75%. The Distributor has voluntarily agreed, effective April 15, 2010, to waive the 12b-1 fees it receives from Class A, Class C, Class R (formerly Class R2) and Class W shares of Columbia Money Market Fund and from Class A, Class C and Class R (formerly Class R2) shares of Columbia Government Money Market Fund. Compensation paid to broker-dealers and other selling agents may be suspended to the extent of the Distributor’s waiver of the 12b-1 fees on these specific share classes of these Funds. |
(d) | The Distributor has voluntarily agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the distribution fee does not exceed the specified percentage annually: 0.20% for Columbia Intermediate Municipal Bond Fund; 0.31% for Columbia Short Term Bond Fund; 0.40% for Columbia Connecticut Intermediate Municipal Bond Fund, Columbia Massachusetts Intermediate Municipal Bond Fund, Columbia New York Intermediate Municipal Bond Fund and Columbia Oregon Intermediate Municipal Bond Fund; 0.45% for Columbia California Tax-Exempt Fund, Columbia Connecticut Tax-Exempt Fund, Columbia Massachusetts Tax-Exempt Fund and Columbia New York Tax-Exempt Fund; and 0.60% for Columbia Bond Fund, Columbia Corporate |
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Income Fund, Columbia High Yield Municipal Fund, Columbia High Yield Opportunity Fund, Columbia Income Opportunities Fund, Columbia Intermediate Bond Fund, Columbia Strategic Income Fund, Columbia Tax-Exempt Fund and Columbia U.S. Treasury Index Fund. These arrangements may be modified or terminated by the Distributor at any time. |
(e) | The shareholder service fees for Class K shares are not paid pursuant to a 12b-1 plan. Under a plan administration services agreement, the Funds’ Class K shares pay for plan administration services. See Class K Plan Administration Services Fee below for more information. |
(f) | Class R shares of Legacy Columbia Funds pay a distribution fee pursuant to a distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. The Legacy RiverSource Funds have a distribution and shareholder service plan for Class R shares, which, prior to the close of business on September 3, 2010, were known as Class R2 shares. For Class R shares of Legacy RiverSource Funds, the maximum fee under the plan reimbursed for distribution expenses is equal on an annual basis to 0.50% of the average daily net assets of the Fund attributable to Class R shares. Of that amount, up to 0.25% may be reimbursed for shareholder service expenses. |
(g) | The shareholder servicing fees for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. The Funds currently limit such fees to a maximum of 0.30% for equity Funds and 0.15% for fixed-income Funds. See Class T Shareholder Service Fees below for more information. |
The distribution and/or shareholder service fees for Class A, Class B, Class C, Class R and Class W shares, as applicable, may be subject to the requirements of Rule 12b-1 under the 1940 Act. The Distributor may retain these fees otherwise payable to selling agents if the amounts due are below an amount determined by the Distributor in its sole discretion.
For Legacy RiverSource Fund Class A, Class B and Class W shares, the Distributor begins to pay these fees immediately after purchase. For Legacy RiverSource Fund Class C shares, the Distributor pays these fees in advance for the first 12 months. Selling agents also receive distribution fees up to 0.75% of the average daily net assets of Legacy RiverSource Fund Class C shares sold and held through them, which the Distributor begins to pay 12 months after purchase. For Legacy RiverSource Fund Class B shares, and, for the first 12 months following the sale of Legacy RiverSource Fund Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents, and to pay for other distribution related expenses. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
For Legacy Columbia Fund Class R shares and, with the exception noted in the next sentence, Class A shares, the Distributor begins to pay these fees immediately after purchase. For Legacy Columbia Fund Class B shares, Class A shares (if purchased as part of a purchase of shares of $1 million or more) and, with the exception noted in the next sentence, Class C shares, the Distributor begins to pay these fees 12 months after purchase (for Legacy Columbia Fund Class B shares, and, for the first 12 months following the sale of Legacy Columbia Fund Class C shares, the Distributor retains the distribution fee of up to 0.75% in order to finance the payment of sales commissions to selling agents, and to pay for other distribution related expenses). For Legacy Columbia Fund Class C shares, selling agents may opt to decline payment of sales commission and, instead, may receive these fees immediately after purchase. Selling agents may compensate their financial advisors with the shareholder service and distribution fees paid to them by the Distributor.
If you maintain shares of the Fund directly with the Fund, without working directly with a financial advisor or selling agent, distribution and service fees may be retained by the Distributor as payment or reimbursement for incurring certain distribution and shareholder service related expenses.
Over time, these distribution and/or shareholder service fees will reduce the return on your investment and may cost you more than paying other types of sales charges. The Fund will pay these fees to the Distributor and/or to eligible selling agents for as long as the distribution and/or shareholder servicing plans continue in effect, which is expected to be indefinitely. The Fund may reduce or discontinue payments at any time. Your selling agent may also charge you other additional fees for providing services to your account, which may be different from those described here.
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Class K Plan Administration Services Fee
Class K shares pay an annual plan administration services fee for the provision of various administrative, recordkeeping, communication and educational services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account recordkeeping, education services and administration to various plan types, including 529 plans, retirement plans and health savings accounts. The fee for Class K shares is equal on an annual basis to 0.25% of average daily net assets attributable to the class.
Class T Shareholder Service Fees
The Funds that offer Class T shares have adopted a shareholder services plan that permits them to pay for certain services provided to Class T shareholders by their selling agents. Equity Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.50% of the Fund’s average daily net assets attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the Fund’s average daily net assets attributable to Class T shares (comprised of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of not more than 0.30% for equity Funds and not more than 0.15% for fixed income Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the selling agents to the extent necessary to prevent net investment income from falling below 0% on a daily basis.
Selling Agent Compensation
The Distributor, the Investment Manager and their affiliates make payments, from their own resources, to selling agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Funds (Marketing Support Payments). Such payments are generally based upon one or more of the following factors: average net assets of the Funds sold by the Distributor attributable to that selling agent, gross sales of the Funds distributed by the Distributor attributable to that selling agent, reimbursement of ticket charges (fees that a selling agent charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each selling agent, Marketing Support Payments to any one selling agent are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the selling agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Funds attributable to the selling agent. The Distributor and the Investment Manager may make payments in larger amounts or on a basis other than those described above when dealing with certain selling agents, including certain affiliates of Bank of America Corporation (Bank of America). Such increased payments may enable such selling agents to offset credits that they may provide to customers. The Distributor, the Investment Manager and their affiliates do not make Marketing Support Payments with respect to Class Y shares; provided, however, that such payments are made to Bank of America with respect to Class Y shares of Columbia Bond Fund, Columbia Global Dividend Opportunity Fund, Columbia Income Opportunities Fund, Columbia Large Cap Enhanced Core Fund, Columbia Large Cap Growth Fund, Columbia Large Cap Value Fund, Columbia Mid Cap Growth Fund, Columbia Mid Cap Value Fund, Columbia Multi-Advisor International Equity Fund, Columbia Short Term Bond Fund, Columbia Small Cap Growth Fund I and Columbia Small Cap Value Fund I.
In addition, the Transfer Agent has certain arrangements in place to compensate selling agents, including other Ameriprise Financial affiliates, that hold Fund shares through omnibus accounts, including omnibus retirement plans, for services that they provide to beneficial shareholders (Shareholder Services). Shareholder Services may include sub-accounting, sub-transfer agency, participant recordkeeping, shareholder or participant reporting, shareholder or participant transaction processing, keeping shareholder records, preparing account statements and providing customer service. Payments for Shareholder Services vary by selling agent but
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generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares. Generally, each Fund (other than the Columbia Acorn Funds) pays a percentage of the average aggregate value of shares maintained in omnibus accounts: 0.20% for all share classes other than Class I, K, R5 and Y shares; 0.05% for Class K and R5 shares; and 0% for Class I and Y. The amounts in excess of that reimbursed by the Fund are borne by the Distributor, the Investment Manager and/or their affiliates. The Transfer Agent does not pay selling agents for Shareholder Services and the Fund does not pay the Transfer Agent for any Shareholder Services provided by selling agents, with respect to Class Y shares.
In addition to the payments described above, the Distributor, the Investment Manager and their affiliates may make other payments or allow promotional incentives to broker-dealers to the extent permitted by SEC and Financial Industry Regulatory Authority (FINRA) rules and by other applicable laws and regulations.
Amounts paid by the Distributor, the Investment Manager and their affiliates are paid out of their own resources and do not increase the amount paid by you or the Fund. You can find further details in the SAI about the payments made by the Distributor, the Investment Manager and their affiliates, as well as a list of the selling agents, including Ameriprise Financial affiliates, to which the Distributor and the Investment Manager have agreed to make Marketing Support Payments and Shareholder Services fees.
Your selling agent may charge you fees and commissions in addition to those described in this prospectus. You should consult with your selling agent and review carefully any disclosure your selling agent provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a selling agent and its financial advisors may have a financial incentive for recommending the Fund or a particular share class over others.
Buying, Selling and Exchanging Shares
Share Price Determination
The price you pay or receive when you buy, sell or exchange shares is the Fund’s next determined net asset value (or NAV) per share for a given share class. The Fund calculates the NAV per share for each class of shares of the Fund at the end of each business day.
FUNDamentalsTM | ||||
NAV Calculation | ||||
Each of the Fund’s share classes calculates its NAV as follows: | ||||
NAV = | (Value of assets of the share class) – | |||
Number of outstanding shares of the class |
FUNDamentalsTM |
Business Days |
A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s NAV is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open. |
Equity securities are valued primarily on the basis of market quotations reported on stock exchanges and other securities markets around the world. If an equity security is listed on a national exchange, the security is
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valued at the closing price or, if the closing price is not readily available, the mean of the closing bid and asked prices. Certain equity securities, debt securities and other assets are valued differently. For instance, bank loans trading in the secondary market are valued primarily on the basis of indicative bids, fixed-income investments maturing in 60 days or less are valued primarily using the amortized cost method and those maturing in excess of 60 days are valued at the readily available market price, if available. Investments in other open-end funds are valued at their NAVs. Both market quotations and indicative bids are obtained from outside pricing services approved and monitored pursuant to a policy approved by the Fund’s Board. For money market Funds, the Fund’s investments are valued at amortized cost, which approximates market value.
If a market price isn’t readily available or is deemed not to reflect market value, the Fund will determine the price of the security held by the Fund based on a determination of the security’s fair value pursuant to a policy approved by the Fund’s Board. In addition, the Fund may use fair valuation to price securities that trade on a foreign exchange when a significant event has occurred after the foreign exchange closes but before the time at which the Fund’s share price is calculated. Foreign exchanges typically close before the time at which Fund share prices are calculated, and may be closed altogether on some days when the Fund is open. Such significant events affecting a foreign security may include, but are not limited to: (1) corporate actions, earnings announcements, litigation or other events impacting a single issuer; (2) governmental action that affects securities in one sector or country; (3) natural disasters or armed conflicts affecting a country or region; or (4) significant domestic or foreign market fluctuations. The Fund uses various criteria, including an evaluation of U.S. market moves after the close of foreign markets, in determining whether a foreign security’s market price is readily available and reflective of market value and, if not, the fair value of the security.
To the extent the Fund has significant holdings of small cap stocks, high yield bonds, floating rate loans, or tax-exempt, foreign or other securities that may trade infrequently, fair valuation may be used more frequently than for other funds. Fair valuation may have the effect of reducing stale pricing arbitrage opportunities presented by the pricing of Fund shares. However, when the Fund uses fair valuation to price securities, it may value those securities higher or lower than another fund would have priced the security. Also, the use of fair valuation may cause the Fund’s performance to diverge to a greater degree from the performance of various benchmarks used to compare the Fund’s performance because benchmarks generally do not use fair valuation techniques. Because of the judgment involved in fair valuation decisions, there can be no assurance that the value ascribed to a particular security is accurate. The Fund has retained one or more independent fair valuation pricing services to assist in the fair valuation process for foreign securities.
Transaction Rules and Policies
The Fund, the Distributor or the Transfer Agent may refuse any order to buy or exchange shares. If this happens, the Fund will return any money it received, but no interest will be paid on that money.
Order Processing
Orders to buy, sell or exchange Fund shares are processed on business days. Depending upon the class of shares, orders can be made by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling agent before the end of a business day are priced at the NAV per share of the Fund’s applicable share class on that day. Orders received after the end of a business day will receive the next business day’s NAV per share. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery. The market value of the Fund’s investments may change between the time you submit your order and the time the Fund next calculates its NAV per share. The business day that applies to your order is also called the trade date.
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“Good Form”
An order is in “good form” if the Transfer Agent or your selling agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion Signature Guarantee (as described below) for amounts greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.
Medallion Signature Guarantees
A Medallion Signature Guarantee helps assure that a signature is genuine and not a forgery. The selling agent providing the Medallion Signature Guarantee is financially liable for the transaction if the signature is a forgery.
A Medallion Signature Guarantee is required if:
• | The amount is greater than $100,000. |
• | You want your check made payable to someone other than the registered account owner(s). |
• | Your address of record has changed within the last 30 days. |
• | You want the check mailed to an address other than the address of record. |
• | You want the proceeds sent to a bank account not on file. |
• | You are the beneficiary of the account and the account owner is deceased (additional documents may be required). |
Customer Identification Program
Federal law requires the Fund to obtain and record specific personal information to verify your identity when you open an account. This information may include your name, address, date of birth (for individuals) and taxpayer or other government issued identification (e.g., social security number (SSN) or other taxpayer identification number (TIN)). If you fail to provide the requested information, the Fund may need to delay the date of your purchase or may be unable to open your account, which may result in a return of your investment monies. In addition, if the Fund is unable to verify your identity after your account is open, the Fund reserves the right to close your account or take other steps as deemed reasonable. The Fund will not be liable for any loss resulting from any purchase delay, application rejection or account closure due to a failure to provide proper identifying information.
Small Account Policy — Class A, Class B, Class C, Class T and Class Z Share Accounts Below the Minimum Account Balance
The Funds generally will automatically sell your shares if the value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the applicable Minimum Account Balance. The Minimum Account Balance varies among Funds, share classes and types of accounts, as follows:
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Minimum Account Balance
Minimum Account Balance | ||
For all Funds, classes and account types except those listed below | $250 (None for accounts with Systematic Investment Plans) | |
Individual Retirement Accounts for all Funds and classes except those listed below | None | |
Columbia 120/20 Contrarian Equity Fund, Columbia Absolute Return Currency and Income Fund, Columbia Absolute Return Emerging Markets Macro Fund and Columbia Global Extended Alpha Fund | $5,000 | |
Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund | $2,500 | |
Class I, Class K , Class R, Class R4, Class R5, Class W and Class Y | N/A |
If your shares are sold, the Transfer Agent will remit the sale proceeds to you. Any otherwise applicable CDSC will not be imposed on such an automatic sale of your shares. The Transfer Agent will send you written notification in advance of any automatic sale, which will provide details on how you may avoid such an automatic sale. Generally, you may avoid such an automatic sale by raising your account balance, consolidating your accounts through an exchange of shares of another Fund in which you hold shares, or setting up a Systematic Investment Plan. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent’s contact information (toll-free number and mailing address(es)) as well as the Funds’ website address can be found at the beginning of the section Choosing a Share Class.
The Fund also may sell your Fund shares if your selling agent tells us to sell your shares pursuant to arrangements made with you, and under certain other circumstances allowed under the 1940 Act.
Small Account Policy — Class A, Class B, Class C, Class T and Class Z Share Accounts Minimum Balance Fee
If the value of your Fund account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the minimum initial investment requirement applicable to you for any reason, including as a result of market decline, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of Fund shares in your account. Any otherwise applicable CDSC will not be imposed on such an automatic sale of your shares. The Transfer Agent will reduce the expenses paid by the Fund by any amounts it collects from the assessment of this fee. For Funds that do not have transfer agency expenses against which to offset the amount collected through assessment of this fee, the fee will be paid directly to the Fund. The Transfer Agent will send you written notification in advance of assessing any fee, which will provide details on how you can avoid the imposition of such fee. Generally, you may avoid the imposition of such fee by raising your Fund account balance, consolidating your Fund accounts through an exchange of shares of another Fund in which you hold shares, or setting up a Systematic Investment Plan that invests at least monthly. For more information, contact the Transfer Agent or your selling agent. The Transfer Agent’s contact information (toll-free number and mailing address(es)) as well as the Funds’ website address can be found at the beginning of the section Choosing a Share Class.
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The Funds reserve the right to lower the account size trigger point for the minimum balance fee in any year or for any class of shares when we believe it is appropriate to do so in light of declines in the market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.
Exceptions to the Small Account Policy (Accounts Below Minimum Account Balance and Minimum Balance Fee)
The automatic sale of Fund shares of accounts under $250 and the annual minimum balance fee described above do not apply to shareholders of Class I, Class K, Class R, Class R4, Class R5, Class W and Class Y shares; shareholders holding their shares through broker-dealer networked accounts; wrap fee and omnibus accounts; accounts with active Systematic Investment Plans; certain qualified retirement plans; and health savings accounts. The automatic sale of Fund shares of accounts under the applicable Minimum Account Balance does not apply to individual retirement plans.
Small Account Policy — Broker-Dealer and Wrap Fee Accounts
The Funds may automatically redeem at any time broker-dealer networked accounts and wrap fee accounts that have account balances of $20 or less or have less than one share.
Information Sharing Agreements
As required by Rule 22c-2 under the 1940 Act, the Funds or certain of their service providers will enter into information sharing agreements with selling agents, including participating life insurance companies and selling agents that sponsor or offer retirement plans through which shares of the Funds are made available for purchase. Pursuant to Rule 22c-2, selling agents are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures.
Excessive Trading Practices Policy of Non-Money Market Funds
Right to Reject or Restrict Share Transaction Orders — The Fund is intended for investors with long-term investment purposes and is not intended as a vehicle for frequent trading activity (market timing) that is excessive. Investors should transact in Fund shares primarily for investment purposes. The Board has adopted excessive trading policies and procedures that are designed to deter excessive trading by investors (the Excessive Trading Policies and Procedures). The Fund discourages and does not accommodate excessive trading.
The Fund reserves the right to reject, without any prior notice, any buy or exchange order for any reason, and will not be liable for any loss resulting from rejected orders. For example, the Fund may in its sole discretion restrict or reject a buy or exchange order even if the transaction is not subject to the specific exchange limitation described below if the Fund or its agents determine that accepting the order could interfere with efficient management of the Fund’s portfolio or is otherwise contrary to the Fund’s best interests. The Excessive Trading Policies and Procedures apply equally to buy or exchange transactions communicated directly to the Transfer Agent and to those received by selling agents.
Specific Buying and Exchanging Limitations — If a Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor’s future buy orders, including exchange buy orders, involving any Fund.
For these purposes, a “round trip” is a purchase or exchange into the Fund followed by a sale or exchange out of the Fund, or a sale or exchange out of the Fund followed by a purchase or exchange into the Fund. A “material” round trip is one that is deemed by the Fund to be material in terms of its amount or its potential
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detrimental impact on the Fund. Independent of this limit, the Fund may, in its sole discretion, reject future buy orders by any person, group or account that appears to have engaged in any type of excessive trading activity.
These limits generally do not apply to automated transactions or transactions by registered investment companies that invest in the Fund using a “fund-of-funds” structure. These limits do not apply to payroll deduction contributions by retirement plan participants, transactions initiated by a retirement plan sponsor or certain other retirement plan transactions consisting of rollover transactions, loan repayments and disbursements, and required minimum distribution redemptions. They may be modified or rescinded for accounts held by certain retirement plans to conform to plan limits, for considerations relating to the Employee Retirement Income Security Act of 1974 or regulations of the Department of Labor, and for certain asset allocation or wrap programs. Accounts known to be under common ownership or control generally will be counted together, but accounts maintained or managed by a common intermediary generally will not be considered to be under common ownership or control. The Fund retains the right to modify these restrictions at any time without prior notice to shareholders. In addition, the Fund may, in its sole discretion, reinstate trading privileges that have been revoked under the Fund’s excessive trading policies.
Limitations on the Ability to Detect and Prevent Excessive Trading Practices — The Fund takes various steps designed to detect and prevent excessive trading, including daily review of available shareholder transaction information. However, the Fund receives buy, sell and exchange orders through selling agents, and cannot always know of or reasonably detect excessive trading that may be facilitated by selling agents or by the use of the omnibus account arrangements they offer. Omnibus account arrangements are common forms of holding shares of mutual funds, particularly among certain selling agents such as broker-dealers, retirement plans and variable insurance products. These arrangements often permit selling agents to aggregate their clients’ transactions and accounts, and in these circumstances, the identity of the shareholders is often not known to the Fund.
Some selling agents apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.
Although these restrictions and policies involve judgments that are inherently subjective and may involve some selectivity in their application, the Fund seeks to act in a manner that it believes is consistent with the best interests of shareholders in making any such judgments.
Risks of Excessive Trading — Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:
• | negative impact on the Fund’s performance; |
• | potential dilution of the value of the Fund’s shares; |
• | interference with the efficient management of the Fund’s portfolio, such as the need to maintain undesirably large cash positions, the need to use its line of credit or the need to buy or sell securities it otherwise would not have bought or sold; |
• | losses on the sale of investments resulting from the need to sell securities at less favorable prices; |
• | increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and |
• | increased brokerage and administrative costs. |
To the extent that the Fund invests significantly in foreign securities traded on markets that close before the Fund’s valuation time, it may be particularly susceptible to dilution as a result of excessive trading. Because
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events may occur after the close of foreign markets and before the Fund’s valuation time that influence the value of foreign securities, investors may seek to trade Fund shares in an effort to benefit from their understanding of the value of foreign securities as of the Fund’s valuation time. This is often referred to as price arbitrage. The Fund has adopted procedures designed to adjust closing market prices of foreign securities under certain circumstances to reflect what the Fund believes to be the fair value of those securities as of its valuation time. To the extent the adjustments don’t work fully, investors engaging in price arbitrage may cause dilution in the value of the Fund’s shares held by other shareholders.
Similarly, to the extent that the Fund invests significantly in thinly traded high-yield bonds (junk bonds) or equity securities of small-capitalization companies, because these securities are often traded infrequently, investors may seek to trade Fund shares in an effort to benefit from their understanding of the value of these securities. This is also a type of price arbitrage. Any such frequent trading strategies may interfere with efficient management of the Fund’s portfolio to a greater degree than would be the case for mutual funds that invest in highly liquid securities, in part because the Fund may have difficulty selling those portfolio securities at advantageous times or prices to satisfy large and/or frequent sell orders. Any successful price arbitrage may also cause dilution in the value of Fund shares held by other shareholders.
Excessive Trading Practices Policy of Money Market Funds
The money market Funds are designed to offer investors a liquid cash option that they may buy and sell as often as they wish. Accordingly, the Board has not adopted policies and procedures designed to discourage excessive or short-term trading of money market Fund shares. However, since frequent purchases and sales of money market Fund shares could in certain instances harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs (such as spreads paid to dealers who trade money market instruments with the money market Funds) and disrupting portfolio management strategies, each of the money market Funds reserves the right, but has no obligation, to reject any purchase or exchange transaction at any time. Except as expressly described in this prospectus (such as minimum purchase amounts), the money market Funds have no limits on buy or exchange transactions. In addition, each of the money market Funds reserve the right to impose or modify restrictions on purchases, exchanges or trading of the Fund shares at any time.
Opening an Account and Placing Orders
We encourage you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling agent. As described below, once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.
The Funds are generally available directly and through broker-dealers, banks and other selling agents or institutions, and through certain qualified and non-qualified plans, wrap fee products or other investment products sponsored by selling agents. You may exchange or sell shares through your selling agent. If you maintain your account directly with your selling agent, you must contact that agent to process your transaction.
Not all selling agents offer the Funds and certain selling agents that offer the Funds may not offer all Funds on all investment platforms or programs. Please consult with your financial advisor to determine the availability of the Funds. If you set up an account at a selling agent that does not have, and is unable to obtain, a selling agreement with the Distributor, you will not be able to transfer Fund holdings to that account. In that event, you must either maintain your Fund holdings with your current selling agent, find another selling agent with a selling agreement, or sell your Fund shares, paying any applicable CDSC. Please be aware that transactions in taxable accounts are taxable events and may result in income tax liability.
Selling agents that offer the Funds may charge you additional fees for the services they provide and they may have different policies that are not described in this prospectus. Some policy differences may
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include different minimum investment amounts, exchange privileges, Fund choices and cutoff times for investments. Additionally, recordkeeping, transaction processing and payments of distributions relating to your account may be performed by the selling agents through which your shares of the Fund are held. Since the Fund (and its service providers) may not have a record of your account transactions, you should always contact the financial advisor employed by the selling agent through which you purchased or at which you maintain your shares of the Fund to make changes to your account or to give instructions concerning your account, or to obtain information about your account. The Fund and its service providers, including the Distributor and the Transfer Agent, are not responsible for the failure of one of these selling agents to carry out its obligations to its customers.
The Fund may engage selling agents to receive purchase orders and exchange (and sale) orders on its behalf. Accounts established directly with the Fund will be serviced by the Transfer Agent. The Funds, the Transfer Agent and the Distributor do not provide investment advice.
Accounts Established Directly with the Fund
You or the financial advisor through which you buy shares may establish an account with the Fund. To do so, complete a Fund account application with your financial advisor or investment professional, and mail the account application to the Transfer Agent. Account applications may be obtained at www.columbiamanagement.com or may be requested by calling 800.345.6611. Make your check payable to the Fund. You will be assessed a $15 fee for any checks rejected by your financial institution due to insufficient funds or other reasons. The Funds do not accept cash, credit card convenience checks, money orders, traveler’s checks, starter checks, third or fourth party checks, or other cash equivalents.
Mail your check and completed application to the Transfer Agent at its address that can be found at the beginning of the section Choosing a Share Class. You may also use these addresses to request an exchange or redemption of Fund shares. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery.
You will be sent a statement confirming your purchase and any subsequent transactions in your account. You will also be sent quarterly and annual statements detailing your transactions in the Fund and the other Funds you own under the same account number. Duplicate quarterly account statements for the current year and duplicate annual statements for the most recent prior calendar year will be sent to you free of charge. Copies of year-end statements for prior years are available for a fee. Please contact the Transfer Agent for more information.
Written Transactions
Once you have an account, you can communicate written buy, sell or exchange orders to the Transfer Agent at its address that can be found at the beginning of the section Choosing a Share Class. When a written order to buy, sell or exchange shares is sent to the Transfer Agent, the share price used to fill the order is the next price calculated by the Fund after the Transfer Agent receives the order at its transaction processing center in Canton, Massachusetts, not the P.O. Box provided for regular mail delivery.
Include in your letter: your name; the name of the Fund(s); your account number; the class of shares to be exchanged or sold; your SSN or other TIN; the dollar amount or number of shares you want to exchange or sell; specific instructions regarding delivery or exchange destination; signature(s) of registered account owner(s); and any special documents the Transfer Agent may require in order to process your order.
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Corporate, trust or partnership accounts may need to send additional documents. Payment will be mailed to the address of record and made payable to the names listed on the account, unless your request specifies differently and is signed by all owners.
Telephone Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and Class Z shares, once you have an account, you may place orders to buy, sell or exchange shares by telephone. To place orders by telephone, call 800.422.3737. Have your account number and SSN or TIN available when calling.
You can sell via the telephone, by electronic funds transfer or by check to the address of record, up to and including an aggregate of $100,000 of shares per day, per Fund account, if you qualify for telephone orders. Wire redemptions requested via the telephone are subject to a maximum of $3 million of shares per day, per Fund. You can buy up to and including $100,000 of shares per day, per Fund account through your bank account as an ACH transaction via the telephone if you qualify for telephone orders.
Telephone orders may not be as secure as written orders. The Fund will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.
Online Transactions
For Class A, Class B, Class C, Class R, Class T, Class Y and Class Z shares, once you have an account, you may contact the Transfer Agent at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services. You can sell up to and including an aggregate of $100,000 of shares per day, per Fund account through the internet if you qualify for internet orders.
Wire Transactions
You may buy (or redeem) Class A, Class B (redemptions only), Class C, Class T, Class W (redeem only), Class Y and Class Z shares of a Fund by wiring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to your request unless you are submitting your request in writing with a Medallion Signature Guarantee. The Transfer Agent charges a fee for shares sold by Fedwire. The Transfer Agent may waive the fee for certain accounts. In the case of a redemption, the receiving bank may charge an additional fee. The minimum amount that can be redeemed by wire is $500. The maximum amount that can be redeemed over the telephone is $3 million per day, per Fund account.
Electronic Funds Transfer
You may buy (or redeem) Class A, Class B (redemptions only), Class C, Class T, Class Y and Class Z shares of a Fund by electronically transferring money from (or to) your bank account to (or from) your Fund account by calling the Transfer Agent at 800.422.3737. An electronic funds transfer may take up to three business days to settle and be considered in “good form.” You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.
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Important: Payments sent by electronic fund transfers, a bank authorization, or check that are not guaranteed may take up to 10 or more days to clear. If you request a redemption before the purchase funds clear, this may cause your redemption request to fail to process if the requested amount includes unguaranteed funds. If you purchased your shares by check or from your bank account as an ACH transaction, the Fund may hold the redemption proceeds when you sell those shares for a period of time after the trade date of the purchase.
Buying Shares
Eligible Investors
Class A and Class C Shares
Class A and Class C shares are available to the general public for investment. Once you have opened an account, you can buy Class A and Class C shares in a lump sum, through our Systematic Investment Plan, by dividend diversification, by wire or by electronic funds transfer. For money market Funds, new investments must be made in Class A, Class I, Class W or Class Z shares, subject to eligibility. Class C and Class R shares of the money market Funds are available as a new investment only to investors in the Distributor’s proprietary 401(k) products, provided that such investor is eligible to invest in the class and transact directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper. The money market Funds offer other classes of shares only to facilitate exchanges with other Funds offering these classes of shares.
Class B Shares (Closed)
The Funds no longer accept investments from new or existing investors in Class B shares, except for certain limited transactions involving existing investors in Class B shares as described in more detail below.
Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):
• | Dividend and/or capital gain distributions may continue to be reinvested in Class B shares of a Fund. |
• | Shareholders invested in Class B shares of a Fund may exchange those shares for Class B shares of other Funds offering such shares. Certain exceptions apply, including that not all Funds may permit exchanges. |
Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).
Unless contrary instructions are received in advance by the Fund, any purchase orders (except those submitted by a selling agent through the National Securities Clearing Corporation (NSCC) as described in more detail below) that are orders for additional Class B shares of the Fund received from existing investors in Class B shares, including orders made through an active systematic investment plan, will automatically be invested in Class A shares of the Fund, without regard to the normal minimum initial investment requirement for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See Choosing a Share Class – Sales Charges and Commissions – Class A Shares – Front-End Sales Charge for additional information. Your selling agent may have different policies not described here, including a policy to reject purchase orders for a Fund’s Class B shares or to automatically invest the purchase amount in a money market Fund. Please consult your selling agent to understand their policy.
Additional purchase orders for a Fund’s Class B shares by an existing Class B shareholder, submitted by such shareholder’s selling agent through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their selling agent if they wish to invest in the Fund by purchasing a share class of the Fund other than Class B shares.
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Dividend and/or capital gain distributions from Class B shares of a Fund will not be automatically invested in Class B shares of another Fund. Unless contrary instructions are received in advance of the date of declaration, such dividend and/or capital gain distributions from Class B shares of a Fund will be reinvested in Class B shares of the same Fund that is making the distribution.
Class I Shares
Class I shares are available only to the Funds (i.e., fund-of-fund investments).
Class K Shares (Closed)
Class K Shares are closed to new investors and new accounts, subject to certain limited exceptions described below. Shareholders who opened and funded a Class K account with the Fund as of the close of business on December 31, 2010 (including accounts once funded that subsequently reached a zero balance) may continue to make additional purchases of Class K shares. Plans may continue to make additional purchases of Fund shares and add new participants, and new plans sponsored by the same or an affiliated sponsor may invest in the Fund (and add new participants) if an initial plan so sponsored invested in the Fund as of December 31, 2010 (or had approved the Fund as an investment option as of December 31, 2010 and funded its initial account with the Fund prior to March 31, 2011) and holds Fund shares at the plan level.
An order to purchase Class K shares received by the Fund or the Transfer Agent after the close of business on December 31, 2010 (other than as described above) from a new investor or a new account that is not eligible to purchase shares will be refused by the Fund and the Transfer Agent and any money that the Fund or the Transfer Agent received with the order will be returned to the investor or the selling agent, as appropriate, without interest.
Class K shares are designed for qualified employee benefit plans, trust companies or similar institutions, charitable organizations that meet the definition in Section 501(c)(3) of the Internal Revenue Code, non-qualified deferred compensation plans whose participants are included in a qualified employee benefit plan described above, state sponsored college savings plans established under Section 529 of the Internal Revenue Code, and health savings accounts created pursuant to public law 108-173. Class K shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent.
Prior to October 25, 2012, Class K shares were named Class R4 shares.
Class R Shares
Class R shares are available only through eligible health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates, eligible retirement plans and, in the sole discretion of the Distributor, other types of retirement accounts held through platforms maintained by selling agents approved by the Distributor. Eligible retirement plans include any retirement plan other than individual 403(b) plans. Class R shares are generally not available for investment through retail nonretirement accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, Simple IRAs or 529 tuition programs. Contact the Transfer Agent or your retirement plan or health savings account administrator for more information about investing in Class R shares.
Class R4 Shares
Effective November 8, 2012, Class R4 shares are available only to omnibus retirement plans, trust companies or similar institutions, 501(c)(3) charitable organizations, 529 plans and health savings accounts. Prior to November 8, 2012, Class R4 shares were closed to new investors and new accounts, subject to certain exceptions.
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Prior to October 31, 2012, Class K shares were named Class R4 shares.
Class R5 Shares
Effective November 8, 2012, Class R5 shares are available only to (i) registered investment advisers that clear Fund share transactions for their client or customer accounts through designated mutual fund trading platforms that have been granted specific written authorization from the Transfer Agent with respect to Class R5 eligibility apart from selling, servicing or similar agreements and (ii) omnibus retirement plans. Prior to November 8, 2012, Class R5 shares were closed to new investors and new accounts, subject to certain exceptions. Existing shareholders who do not satisfy the new eligibility requirements for investment in Class R5 may not establish new Class R5 accounts but may continue to make additional purchases of Class R5 shares in accounts opened and funded prior to November 8, 2012; provided, however, that investment advisory programs and similar programs that opened a Class R5 account as of May 1, 2010, and continuously hold Class R5 shares in such account after such date, may generally not only continue to make additional purchases of Class R5 shares but also open new Class R5 accounts and add new shareholders in the program.
Class T Shares
Class T shares are available only to investors who received (and who have continuously held) Class T shares in connection with the merger of certain Galaxy funds into various Legacy Columbia Funds (formerly named Liberty funds).
Class W Shares
Class W shares are available only to investors purchasing through authorized investment programs managed by investment professionals, including discretionary managed account programs. Class W shares may be purchased, sold or exchanged only through the Distributor or an authorized selling agent. Shares originally purchased in a discretionary managed account may continue to be held in Class W outside of a discretionary managed account, but no additional Class W purchases may be made and no exchanges to Class W shares of another Fund may be made outside of a discretionary managed account.
Class Y Shares
Effective November 8, 2012, Class Y shares, except as noted below, are available only to (i) omnibus retirement plans with plan assets of at least $10 million as of the date of funding the Fund account; and (ii) omnibus retirement plans with plan assets of less than $10 million as of the date of funding the Fund account, provided that such plans invest $500,000 or more in Class Y shares of the Fund.
Prior to November 8, 2012, Class Y shares were offered only to certain former shareholders of series of the former Columbia Funds Institutional Trust (together, Former CFIT Shareholders). Former CFIT Shareholders who opened and funded a Class Y account with a Fund as of the close of business on November 7, 2012 may continue to make additional purchases of Class Y shares even if they do not satisfy the current eligibility requirements but may not establish new Class Y shares accounts and will not be eligible to exchange Class Y shares of a Fund into Class Y shares of other Funds. Former CFIT Shareholders may exchange Class Y shares of a Fund for Class Z shares of the same Fund or Class Z shares of another Fund, subject to applicable minimum investments. As with other minimum initial investment requirements, the Distributor may, in its sole discretion, waive the minimum initial investment requirement for Class Y shares.
Class Z Shares
Class Z shares are available only to the categories of eligible investors described below under Class Z Shares Minimum Initial Investments. Effective March 29, 2013, selling agents that clear Fund share
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transactions through designated mutual fund trading platforms that have been given specific written notice from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares and omnibus retirement plans are not permitted to establish new Class Z accounts, subject to certain exceptions described below.
Effective March 29, 2013, omnibus retirement plans are not permitted to establish new Class Z accounts, other than pursuant to the following exceptions. Omnibus retirement plans that opened and funded a Class Z account with the Fund as of the close of business on March 28, 2013, and continuously hold Class Z shares in such account after March 28, 2013, may continue to make additional purchases of Class Z shares, open new Class Z accounts and add new participants. In addition, an omnibus retirement plan may, in the sole discretion of the Distributor, open new Class Z accounts for a Fund after March 28, 2013 if the plan’s sponsor or an affiliated sponsor opened a Class Z account for another omnibus retirement plan on or before March 28, 2013. If an omnibus retirement plan invested in Class Z shares changes recordkeepers after March 28, 2013, any new accounts established for that plan may not be established in Class Z shares but such a plan may establish new accounts in a different share class for which the plan is eligible. The Distributor may, in its sole discretion, delay the funding requirement described above for omnibus retirement plans to allow an omnibus retirement plan that opened a Class Z account (the initial Class Z account), with the Fund as of the close of business on March 28, 2013 to make additional purchases of Class Z shares, open new Class Z accounts and add new participants after March 28, 2013 so long as the initial Class Z account is funded by June 30, 2013.
Effective March 29, 2013, accounts of selling agents (other than omnibus retirement plans, which are discussed above) that clear Fund share transactions for their client or customer accounts through designated mutual fund trading platforms that have received specific written notice from the Transfer Agent of the termination of their eligibility for new purchases of Class Z shares will not be permitted to establish new Class Z accounts or make additional purchases of Class Z shares (other than through reinvestment of distributions).
Additional Eligible Investors
In addition, the Distributor, in its sole discretion, may accept investments in any share class from investors other than those listed in this prospectus.
Minimum Initial Investments
The table below shows the Fund’s minimum initial investment requirements, which may vary by Fund, class and type of account.
Minimum Initial Investment
Minimum Initial Investment(a) | Minimum Initial Investment for Accounts with Systematic Investment Plans | |||||||
For all Funds, classes and account types except those listed below | $ | 2,000 | $ | 100 | (b) | |||
Individual Retirement Accounts for all Funds and classes except those listed below | $ | 1,000 | $ | 100 | (c) | |||
Columbia 120/20 Contrarian Equity Fund, Columbia Absolute Return Currency and Income Fund, Columbia Absolute Return Emerging Markets Macro Fund and Columbia Global Extended Alpha Fund | $ | 10,000 | $ | 10,000 |
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Minimum Initial Investment(a) | Minimum Initial Investment for Accounts with Systematic Investment Plans | |||||||
Columbia Floating Rate Fund and Columbia Inflation Protected Securities Fund | $ | 5,000 | $ | 5,000 | ||||
Class I, Class K, Class R, Class R4 and Class R5 | None | None | ||||||
Class W | $ | 500 | $ | 500 | ||||
Class Y | variable | (d) | N/A | |||||
Class Z | variable | (e) | variable | (e) |
(a) | If your Class A, Class B, Class C, Class T or Class Z shares account balance falls below the minimum initial investment amount for any reason, including a market decline, you may be asked to increase it to the minimum initial investment amount or establish a Systematic Investment Plan. If you do not do so, your account will be subject to a $20 annual low balance fee and/or shares may be automatically redeemed and the proceeds mailed to you if the account falls below the minimum account balance. See Buying, Selling and Exchanging Shares – Transaction Rules and Policies above. |
(b) | Money market Funds – $2,000 |
(c) | Money market Funds – $1,000 |
(d) | There is no minimum initial investment in Class Y shares for omnibus retirement plans with plan assets of at least $10 million as of the date of funding the Fund account. The minimum initial investment in Class Y shares for omnibus retirement plans with plan assets of less than $10 million as of the date of funding is $500,000. |
(e) | The minimum initial investment amount for Class Z shares is $0, $1,000 or $2,000 depending upon the category of eligible investor. See – Class Z Shares Minimum Initial Investments below. |
The minimum initial investment requirements may be waived for accounts that are managed by an investment professional, for accounts held in approved discretionary or non-discretionary wrap programs, or for accounts that are a part of an employer-sponsored retirement plan. The Distributor, in its discretion, may also waive minimum initial investment requirements for other account types.
Each Fund reserves the right to modify its minimum investment and related requirements at any time, with or without prior notice. If your account is closed and then re-opened with a systematic investment plan, your account must meet the then-current applicable minimum initial investment.
Class Z Shares Minimum Initial Investments
There is no minimum initial investment in Class Z shares for the following categories of eligible investors:
• | Any person investing all or part of the proceeds of a distribution, rollover or transfer of assets into a Columbia Management Individual Retirement Account, from any deferred compensation plan which was a shareholder of any of the Funds of Columbia Acorn Trust on September 29, 2000, in which the investor was a participant and through which the investor invested in one or more of the Funds of Columbia Acorn Trust immediately prior to the distribution, transfer or rollover. |
• | Any health savings account sponsored by a third party platform. |
• | Any investor participating in a wrap program sponsored by a selling agent or other entity that is paid an asset-based fee by the investor and that is not compensated by the Fund for those services, other than payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent. |
The minimum initial investment in Class Z shares for the following eligible investors is $1,000:
• | Any individual retirement plan for which a selling agent or other entity provides services and is not compensated by the Fund for those services, other than in the form of payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent. |
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• | Any employee of Columbia Management Investment Advisers, LLC, Distributor or Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Legacy Columbia Funds’ former investment manager, distributor or transfer agent and immediate family members of any of the foregoing who share the same address are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to purchase shares to notify them that you qualify for Class Z shares. |
The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,000:
• | Any shareholder (as well as any family member of a shareholder or person listed on an account registration for any account of the shareholder) of another fund distributed by the Distributor (i) who holds Class Z shares; (ii) who held Primary A shares prior to the share class redesignation of Primary A shares as Class Z shares that occurred on August 22, 2005; (iii) who holds Class A shares that were obtained by an exchange of Class Z shares; or (iv) who bought shares of certain mutual funds that were not subject to sales charges and that merged with a Legacy Columbia Fund distributed by the Distributor. |
• | Any investor participating in an account offered by a selling agent or other entity that provides services to such an account, is paid an asset-based fee by the investor and is not compensated by the Fund for those services, other than payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent (each investor buying shares through a selling agent must independently satisfy the minimum investment requirement noted above). |
• | Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933. |
• | Certain financial institutions and intermediaries, such as insurance companies, trust companies, banks, endowments, investment companies or foundations, buying shares for their own account, including Ameriprise Financial and its affiliates and/or subsidiaries. |
• | Any employee of the Investment Manager, Distributor or Transfer Agent and immediate family members of any of the foregoing who share the same address and any persons employed as of April 30, 2010 by the Legacy Columbia Funds’ former investment manager, distributor or transfer agent and immediate family members of any of the foregoing who share the same address are eligible to make new and subsequent purchases in Class Z shares through a non-retirement account. If you maintain your account with a selling agent, you must contact that selling agent each time you seek to purchase shares to notify them that you qualify for Class Z shares. |
• | Certain other investors as set forth in more detail in the SAI. |
Systematic Investment Plan
The Systematic Investment Plan allows you to schedule regular purchases via automatic transfers from your bank account to the Fund on a monthly, quarterly or semi-annual basis. Contact the Transfer Agent or your selling agent to set up the plan. Systematic Investment Plans may not be available for all share classes.
Dividend Diversification
Generally, you may automatically invest distributions made by another Fund into the same class of shares (and in some cases certain other classes of shares) of a Fund at no additional sales charge. A sales charge may apply when you invest distributions made with respect to shares that were not subject to a sales charge at the time of your initial purchase. Call the Transfer Agent at 800.345.6611 for details.
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Other Purchase Rules You Should Know
• | Once the Transfer Agent or your selling agent receives your buy order in “good form,” your purchase will be made at the next calculated public offering price per share, which is the net asset value per share plus any sales charge that applies. |
• | You generally buy Class A and Class T shares at the public offering price per share because purchases of these share classes are generally subject to a front-end sales charge. |
• | You buy Class B, Class C, Class I, Class K, Class R, Class R4, Class R5, Class W, Class Y and Class Z shares at net asset value per share because no front-end sales charge applies to purchases of these share classes. |
• | The Distributor and the Transfer Agent reserve the right to cancel your order if the Fund doesn’t receive payment within three business days of receiving your buy order. The Fund will return any payment received for orders that have been cancelled, but no interest will be paid on that money. |
• | Selling agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time. |
• | Shares purchased are recorded on the books of the Fund. The Fund doesn’t issue certificates. |
Selling Shares
When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption. You may sell your shares at any time. The payment will be sent within seven days after your request is received in “good form.” When you sell shares, the amount you receive may be more or less than the amount you invested. Your sale price will be the next NAV calculated after your request is received in “good form,” minus any applicable CDSC.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan allows you to schedule regular redemptions from your Class A, Class B, Class C, Class T, Class W, Class Y and/or Class Z shares account any day of the month on a monthly, quarterly or semi-annual basis. Contact the Transfer Agent or your financial advisor to set up the plan. To set up the plan, your account balance must meet the class minimum initial investment amount. All dividend and capital gain distributions must be reinvested to set up the plan. A Systematic Withdrawal Plan cannot be set up on an account that already has a Systematic Investment Plan established. If you set up the plan after you’ve opened your account, we may require your signature to be Medallion Signature Guaranteed.
You can choose to receive your withdrawals via check or direct deposit into your bank account. The Fund will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving the Fund 30 days notice in writing or by calling the Transfer Agent at 800.422.3737. It’s important to remember that if you withdraw more than your investment in the Fund is earning, you’ll eventually withdraw your entire investment.
Check Redemption Service (for Money Market Funds)
Class A and Class Z shares of the money market Funds offer check writing privileges. If you have $2,000 in a money market Fund, you may request checks which may be drawn against your account. The amount of any check drawn against your money market Fund must be at least $100. You can elect this service on your initial application or thereafter. Call 800.345.6611 for the appropriate forms to establish this service. If you own Class A shares that were originally purchased in another Fund at NAV because of the size of the purchase, and then exchanged into a money market Fund, check redemptions may be subject to a CDSC. A $15 charge will be assessed for any stop payment order requested by you or any overdraft in connection with checks written against your money market Fund account. Note that a Medallion Signature Guarantee is required if this service is established after the account is opened.
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In-Kind Redemptions
The Fund reserves the right to honor redemption orders with in-kind distributions of portfolio securities instead of cash. In the event the Fund distributed portfolio securities in-kind, you may incur the brokerage and transaction costs associated with converting the portfolio securities you receive into cash. Also, the portfolio securities you receive may increase or decrease in value before you convert them into cash. For U.S. federal income tax purposes redemptions paid in securities are generally treated the same as redemptions paid in cash.
Other Redemption Rules You Should Know
• | Once the Transfer Agent or your selling agent receives your sell order in “good form,” your shares will be sold at the next calculated NAV per share. Any applicable CDSC will be deducted from the amount you’re selling and the balance will be remitted to you. |
• | If you sell your shares directly through the Funds, we will normally send the sale proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling agent receives your order in “good form.” |
• | If you sell your shares through a selling agent, the Funds will normally send the sale proceeds by Fedwire within three business days after the Transfer Agent or your selling agent receives your order in “good form.” |
• | If you paid for your shares by check or from your bank account as an Automated Clearing House (ACH) transaction, the Funds will hold the sale proceeds when you sell those shares for a period of time after the trade date of the purchase. |
• | No interest will be paid on uncashed redemption checks. |
• | The Funds can delay payment of the redemption proceeds for up to seven days and may suspend redemptions and/or further postpone payment of redemption proceeds when the NYSE is closed or during emergency circumstances as determined by the SEC. |
• | Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator. |
• | Also keep in mind the Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies. |
• | The Fund reserves the right to redeem your shares if your account falls below the Fund’s minimum initial investment requirement. |
Exchanging Shares
You can generally sell shares of a Fund to buy shares of another Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective, principal investment strategies, risks, fees and expenses of, the Fund into which you are exchanging. You may be subject to a sales charge if you exchange from a money market Fund or any other Fund that does not charge a front-end sales charge into a non-money market Fund. If you hold your Fund shares through certain selling agents, including Ameriprise Financial Services, Inc., you may have limited exchangeability among the Funds. Please contact your selling agent for more information.
You can generally make exchanges between like share classes of any Fund and, subject to eligibility requirements, other share classes of any Fund. Some exceptions apply. Although the Funds allow certain exchanges from one share class to another share class with higher expenses, you should consider the expenses of each class before making such an exchange.
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Systematic Exchanges
You may buy Class A, Class C, Class T, Class W, Class Y and/or Class Z shares of a Fund by exchanging each month from another Fund for shares of the same class of the Fund at no additional cost, subject to the following exchange amount minimums: $50 each month for individual retirement accounts (i.e. tax qualified accounts); and $100 each month for non-retirement accounts. Contact the Transfer Agent or your selling agent to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must obtain a Medallion Signature Guarantee.
Exchanges will continue as long as your balance is sufficient to complete the systematic monthly transfers, subject to the Funds’ Small Account Policy described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies. You may terminate the program or change the amount you would like to exchange (subject to the $50 and $100 minimum requirements noted immediately above) by calling the Transfer Agent at 800.345.6611. A sales charge may apply when you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase.
Other Exchange Rules You Should Know
• | Exchanges are made at the NAV next calculated after your exchange order is received in “good form.” |
• | Once the Fund receives your exchange request, you cannot cancel it after the market closes. |
• | The rules for buying shares of a Fund generally apply to exchanges into that Fund, including, if your exchange creates a new Fund account, it must satisfy the minimum investment amount, unless a waiver applies. |
• | Shares of the purchased Fund may not be used on the same day for another exchange or sale. |
• | If you exchange shares from Class A shares of a money market Fund to a non-money market Fund, any further exchanges must be between shares of the same class. For example, if you exchange from Class A shares of a money market Fund into Class C shares of a non-money market Fund, you may not exchange from Class C shares of that non-money market Fund back to Class A shares of a money market Fund. |
• | A sales charge may apply when you exchange shares of a Fund that were not assessed a sales charge at the time of your initial purchase. For example, if your initial investment was in a money market Fund and you exchange into a non-money market Fund, your transaction is subject to a front-end sales charge if you exchange into Class A shares and to a CDSC if you exchange into Class C shares of the Funds. |
• | If your initial investment was in Class A shares of a non-money market Fund and you exchange shares into a money market Fund, you may exchange that amount to another Fund, including dividends earned on that amount, without paying a sales charge. |
• | If your shares are subject to a CDSC, you will not be charged a CDSC upon the exchange of those shares. Any CDSC will be deducted when you sell the shares you received from the exchange. The CDSC imposed at that time will be based on the period that begins when you bought shares of the original Fund and ends when you sell the shares of the Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Fund. |
• | You may make exchanges only into a Fund that is legally offered and sold in your state of residence. Contact the Transfer Agent or your selling agent for more information. |
• | You generally may make an exchange only into a Fund that is accepting investments. |
• | The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation). |
• | Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another Fund is a taxable event, and you may recognize a gain or loss for tax purposes. |
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• | Changing your investment to a different Fund will be treated as a sale and purchase, and you will be subject to applicable taxes on the sale and sales charges on the purchase of the new Fund. |
• | You may generally exchange Class T shares of a Fund for Class A shares of another Fund if the other Fund does not offer Class T shares. Class T shares exchanged into Class A shares cannot be exchanged back into Class T shares. |
• | Class W shares originally purchased, but no longer held, in a discretionary managed account, may not be exchanged for Class W shares of another Fund |
• | Class Z shares of a Fund may be exchanged for Class A or Class Z shares of another Fund. |
• | Former CFIT Shareholders may not exchange Class Y shares of a Fund into Class Y shares of another Fund. |
Same-Fund Exchange Privilege
Certain shareholders of a Fund may be or become eligible to invest in other classes of shares of the same Fund. Upon a determination of such eligibility, such shareholders may be eligible to exchange their shares for shares of the other share class, if offered. Such exchanges include exchanges of shares of one class for shares of another share class with higher expenses. Before making such an exchange, you should consider the expenses of each class. Investors should contact their selling agents to learn more about the details of exchange privilege.
Note the following rules relating to same-Fund exchanges:
• | No sales charges or other charges will apply to any such exchange, except that when Class B shares are exchanged, any CDSC applicable to Class B shares will be applied. |
• | Ordinarily, shareholders will not recognize a gain or loss for U.S. federal income tax purposes upon such an exchange. You should consult your tax advisor about your particular exchanges. |
Distributions and Taxes
Distributions to Shareholders
A mutual fund can make money two ways:
• | It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks. |
• | A mutual fund can also have capital gains if the value of its investments increases. While a fund continues to hold an investment, any gain is unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a higher price than it originally paid. Capital gains are either short-term or long-term, depending on whether the fund holds the securities for one year or less (short-term gains) or more than one year (long-term gains). |
FUNDamentalsTM |
Distributions |
Mutual funds make payments of fund earnings to shareholders, distributing them among all shareholders of the fund. As a shareholder, you are entitled to your portion of a fund’s distributed income, including capital gains. Reinvesting your distributions buys you more shares of a fund – which lets you take advantage of the potential for compound growth. Putting the money you earn back into your investment means it, in turn, may earn even more money. Over time, the power of compounding has the potential to significantly increase the value of your investment. There is no assurance, however, that you’ll earn more money if you reinvest your distributions rather than receive them in cash. |
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The Fund intends to pay out, in the form of distributions to shareholders, a sufficient amount of its income and gains so that the Fund will qualify for treatment as a regulated investment company and generally will not have to pay any federal excise tax. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. Normally, Columbia Multi-Cap Growth Fund and Columbia Small Cap Growth Fund I will declare and pay distributions of net investment income according to the following schedule:
Declaration and Distribution Schedule
Declarations | annually | |
Distributions | annually |
Normally, Columbia Emerging Markets Fund will declare and pay distributions of net investment income according to the following schedule:
Declaration and Distribution Schedule
Declarations | semiannually | |
Distributions | semiannually |
Normally, Columbia Intermediate Bond Fund and Columbia Tax-Exempt Fund will declare and pay distributions of net investment income according to the following schedule:
Declaration and Distribution Schedule
Declarations | daily | |
Distributions | monthly |
The Fund may, however, declare or pay distributions of net investment income more frequently.
Different share classes of the Fund usually pay different net investment income distribution amounts, because each class has different expenses. Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.
The Fund generally pays cash distributions within five business days after the distribution was declared (or, if the Fund declares distributions daily, within five business days after the end of the month in which the distribution was declared). If you sell all of your shares after the record date, but before the payment date, for a distribution, you’ll normally receive that distribution in cash within five business days after the sale was made.
The Fund will automatically reinvest distributions in additional shares of the same share class of the Fund unless you inform us you want to receive your distributions in cash (the selling agent through which you purchased shares may have different policies). You can do this by contacting the Funds at the addresses and telephone numbers listed at the beginning of the section entitled Choosing a Share Class. No sales charges apply to the purchase or sale of such shares.
For accounts held directly with the Fund, distributions of $10 or less will automatically be reinvested in additional Fund shares only. If you elect to receive distributions by check and the check is returned as undeliverable, all subsequent distributions will be reinvested in additional shares of the Fund.
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Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution (other than distributions of net investment income that are declared daily) of net investment income or net realized capital gain, because doing so can cost you money in taxes to the extent the distribution consists of taxable income or gains. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” before you invest check the Fund’s distribution schedule, which is available at the Funds’ website and/or by calling the Funds’ telephone number listed at the beginning of the section entitled Choosing a Share Class.
If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those securities and distributes any net realized capital gain. Any such distribution is generally subject to tax. The Fund may have, or may build up over time, high levels of unrealized capital gain. If you buy shares of the Fund when it has capital loss carryforwards, the Fund may have the ability to offset capital gains realized by the Fund that otherwise would have been distributed to shareholders. These losses may be subject to certain limitations.
Taxes and Your Investment
You should be aware of the following considerations applicable to all Funds (unless otherwise noted):
• | The Fund intends to qualify each year as a regulated investment company. A regulated investment company generally is not subject to tax at the fund level on income and gains from investments that are distributed to shareholders. However, the Fund’s failure to qualify as a regulated investment company would result in Fund level taxation, and consequently, a reduction in income available for distribution to you. For tax-exempt Funds: In addition, any dividends of net tax-exempt income would no longer be exempt from U.S. federal income tax and, instead, in general, would be taxable to you as ordinary income. |
• | Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Fund shares. |
• | Distributions of the Fund’s ordinary income and net short-term capital gain, if any, generally are taxable to you as ordinary income. Distributions of the Fund’s net long-term capital gain, if any, generally are taxable to you as long-term capital gain. Whether capital gains are long-term or short-term is determined by how long the Fund has owned the investments that generated them, rather than how long you have owned your shares. |
• | From time to time, a distribution from the Fund could constitute a return of capital, which is not taxable to you so long as the amount of the distribution does not exceed your tax basis in your Fund shares. A return of capital reduces your tax basis in your Fund shares, with any amounts exceeding such basis generally taxable as capital gain. |
• | For taxable fixed income Funds: The Fund expects that distributions will consist primarily of ordinary income. |
• | For taxable years beginning on or before December 31, 2012, if you are an individual and you meet certain holding period and other requirements for your Fund shares, a portion of your distributions may be treated as “qualified dividend income” taxable at the lower net long-term capital gain rates described below. Qualified dividend income is income attributable to the Fund’s dividends received from certain U.S. and foreign corporations, as long as the Fund meets certain holding period and other requirements for the stock producing such dividends. The special tax treatment of qualified dividend income and the reduced tax rates applicable to long-term capital gain (described below) will expire for taxable years beginning on or after January 1, 2013, unless Congress enacts legislation providing otherwise. For taxable fixed income and tax-exempt Funds: The Fund does not expect a significant portion of Fund distributions to be qualified dividend income. |
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• | For taxable years beginning on or before December 31, 2012, generally the top individual U.S. federal income tax rate on net long-term capital gain (and qualified dividend income) has been reduced to 15% (0% for individuals in the 10% and 15% Federal income tax brackets). |
• | Effective for taxable years beginning on or after January 1, 2013, certain high-income individuals (as well as estates and trusts) will be subject to a new 3.8% Medicare contribution tax. For individuals, the 3.8% tax will apply to the lesser of (1) the amount (if any) by which the taxpayer’s modified adjusted gross income exceeds certain threshold amounts or (2) the taxpayer’s “net investment income.” Net investment income generally includes for this purpose dividends, including any capital gain dividends, paid by the Fund, and net capital gains recognized on the sale, redemption or exchange of shares of the Fund. For tax-exempt Funds: Exempt interest dividends are not included in net investment income for this purpose, and are therefore not subject to the Medicare contribution tax. |
• | Certain derivative instruments when held in a Fund’s portfolio subject the Fund to special tax rules, the effect of which may be to, among other things, accelerate income to the Fund, defer Fund losses, cause adjustments in the holding periods of Fund portfolio securities, or convert capital gains into ordinary income, short-term capital losses into long-term capital losses or long-term capital gains into short-term capital gains. These rules could therefore affect the amount, timing and/or character of distributions to shareholders. For tax-exempt Funds: Derivative instruments held by a Fund may also generate taxable income to the Fund. |
• | Certain Funds may purchase or sell (write) options, as described further in the SAI. In general, option premiums which may be received by the Fund are not immediately included in the income of the Fund. Instead, such premiums are taken into account when the option contract expires, the option is exercised by the holder, or the Fund transfers or otherwise terminates the option. If an option written by a Fund is exercised and such Fund sells or delivers the underlying security, the Fund generally will recognize capital gain or loss equal to (a) the sum of the exercise price and the option premium received by the Fund minus (b) the Fund’s basis in the security. Such capital gain or loss generally will be short-term or long-term depending upon the holding period of the underlying security. Capital gains or losses with respect to any termination of a Fund’s obligation under an option other than through the exercise of the option and the related sale or delivery of the underlying security generally will be short-term gains or losses. Thus, for example, if an option written by a Fund expires unexercised, such Fund generally will recognize short-term capital gains equal to the premium received. |
• | If at the end of the taxable year more than 50% of the value of the Fund’s assets consists of securities of foreign corporations, and the Fund makes a special election, you will generally be required to include in your income for U.S. federal income tax purposes your share of the qualifying foreign income taxes paid by the Fund in respect of its foreign portfolio securities. You may be able to claim an offsetting foreign tax credit or deduction in respect of this amount, subject to certain limitations. There is no assurance that the Fund will make this election for a taxable year, even if it is eligible to do so. |
• | For tax-exempt Funds: The Fund expects that distributions will consist primarily of exempt interest dividends. Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to U.S. federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Similarly, distributions of interest income that is exempt from state and local income taxes of a particular state may be subject to other taxes, including income taxes of other states, and federal and state alternative minimum tax. The Fund may invest a portion of its assets in securities that generate income that is not exempt from federal or state income tax. Distributions by the Fund of this income generally are taxable to you as ordinary income. Distributions of capital gains realized by the Fund, including those generated from the sale or exchange of tax-exempt securities, generally also are taxable to you. Distributions of the Fund’s net short-term capital gain, if any, generally are taxable to you as ordinary income. |
• | For a Fund organized as a fund-of-funds: Because most of the Fund’s investments are shares of underlying Funds, the tax treatment of the Fund’s gains, losses, and distributions may differ from the tax |
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treatment that would apply if either the Fund invested directly in the types of securities held by the underlying Funds or the Fund shareholders invested directly in the underlying Funds. As a result, you may receive taxable distributions earlier and recognize higher amounts of capital gain or ordinary income than you otherwise would. |
• | A sale, redemption or exchange of Fund shares is a taxable event. This includes redemptions where you are paid in securities. Your sales, redemptions and exchanges of Fund shares (including those paid in securities) usually will result in a taxable capital gain or loss to you, equal to the difference between the amount you receive for your shares (or are deemed to have received in the case of exchanges) and the amount you paid (or are deemed to have paid in the case of exchanges) for them. Any such capital gain or loss generally will be long-term capital gain or loss if you have held your Fund shares for more than one year at the time of sale or exchange. In certain circumstances, capital losses may be converted from short-term to long-term; in other circumstances, capital losses may be disallowed under the “wash sale” rules. |
• | Historically, the Fund has only been required to report to you and the Internal Revenue Service (IRS) gross proceeds on sales, redemptions or exchanges of Fund shares. The Fund is subject to new reporting requirements for shares purchased, including shares purchased through dividend reinvestment, on or after January 1, 2012 and sold, redeemed or exchanged after that date. IRS regulations now generally require the Fund (or your selling agent, if you hold Fund shares through a selling agent) to provide you and the IRS, upon the sale, redemption or exchange of Fund shares, with cost basis information about those shares as well as information about whether any gain or loss is short- or long-term and whether any loss is disallowed under the “wash sale” rules. This reporting is not required for Fund shares held in a retirement or other tax-advantaged account. With respect to Fund shares in accounts held directly with the Fund, the Fund will calculate and report cost basis using the Fund’s default method of average cost, unless you instruct the Fund to use a different calculation method. The Fund will not report cost basis for shares whose cost basis is uncertain or unknown to the Fund. Please see www.columbiamanagement.com or contact the Fund at 800.345.6611 for more information regarding average cost basis reporting and other available methods for cost basis reporting and how to select or change a particular method or to choose specific shares to sell, redeem or exchange. If you hold Fund shares through a selling agent, you should contact your selling agent to learn about its cost basis reporting default method and the reporting elections available to your account. The Fund does not recommend any particular method of determining cost basis. Please consult your tax advisor to determine which available cost basis method is best for you. When completing your U.S. federal and state income tax returns, carefully review the cost basis and other information provided to you and make any additional basis, holding period or other adjustments that may be required. |
• | The Fund is required by federal law to withhold tax on any taxable and possibly tax-exempt distributions and redemption proceeds paid to you (including amounts paid to you in securities and amounts deemed to be paid to you upon an exchange of shares) if: you haven’t provided a correct TIN or haven’t certified to the Fund that withholding doesn’t apply; the IRS has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding. |
FUNDamentalsTM |
Taxes |
The information provided above is only a summary of how U.S. federal income taxes may affect your investment in the Fund. It is not intended as a substitute for careful tax planning. Your investment in the Fund may have other tax implications. It does not apply to certain types of investors who may be subject to special rules, including foreign or tax-exempt investors or those holding Fund shares through a tax-advantaged account, such as a 401(k) plan or IRA. Please see the SAI for more detailed tax information. You should consult with your own tax advisor about the particular tax consequences to you of an investment in the Fund, including the effect of any foreign, state and local taxes, and the effect of possible changes in applicable tax laws. |
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Exhibit C
Comparison of Organizational Documents
This chart highlights material differences between the terms of the Declarations of Trust and By-Laws of the Buying Funds and Selling Funds.
Group A: | Selling Fund: Columbia Small Cap Growth Fund II. | |
Group B: | Selling Funds: Columbia Select Small Cap Fund, Columbia Connecticut Tax-Exempt Fund, Columbia Massachusetts Tax-Exempt Fund. Buying Funds: Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund, Columbia Tax-Exempt Fund. | |
Group C: | Selling Funds: Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Emerging Markets Opportunity Fund, Columbia Diversified Bond Fund. |
Policy | Group A | Group B | Group C | |||
Shareholder Liability | Shareholders of the trust are protected from liability under Delaware statutory law, which provides that shareholders of a Delaware statutory trust have the same limitation of personal liability as is extended to shareholders of a private corporation for profit incorporated in the state of Delaware.
In addition, any shareholder or former shareholder exposed to liability by reason of a claim or demand relating solely to his or her being or having been a shareholder of the trust, and not because of his acts or omissions, the shareholder or former shareholder (or his or her heirs, executors, administrators, or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) will be entitled to be held harmless from and indemnified out of the assets of the trust against all loss and expense arising from such claim or demand. | The shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable as partners for its obligations. However, the Declaration of Trust contains express disclaimers of shareholder liability for acts, obligations or affairs of the trust. The Declaration of Trust also provides for indemnification and reimbursement of expenses out of the assets of a series for any shareholder held personally liable for obligations of such series. Therefore, the possibility that a shareholder could be held liable would be limited to a situation in which the assets of the applicable series had been exhausted. | The shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable as partners for its obligations. However, the Declaration of Trust contains express disclaimers of shareholder liability for acts, obligations or affairs of the trust. The Declaration of Trust also provides for indemnification and reimbursement of expenses out of the assets of a series for any shareholder held personally liable for obligations of such series. Therefore, the possibility that a shareholder could be held liable would be limited to a situation in which the assets of the applicable series had been exhausted. | |||
Shareholder Voting Rights | Shareholders have only the powers to vote on matters as the trustees may consider desirable and so authorize, and those voting powers expressly | At all meetings of shareholders, each shareholder of record is entitled to one vote for each dollar of net asset value (number of shares owned | Any fractional share of a series or class shall carry proportionately all the rights and obligations of a whole share of that series or class, |
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granted under the 1940 Act or under the law of Delaware applicable to statutory trusts.
Shares may be voted in person or by proxy or in any manner authorized by the trustees. On any matter that requires shareholder approval under the 1940 Act, whether shareholders are required to vote by series or class is determined by reference to the 1940 Act. On all other matters, all shares are voted in the aggregate and not by series or class unless the trustees determine otherwise.
Each whole share is entitled to one vote as to any matter on which it is entitled to vote, and each fractional share is entitle to a proportionate fractional vote.
There is no cumulative voting in the election of trustees. | times net asset value per share) and each fractional dollar amount is entitled to a proportionate fractional vote.
The shareholders have the power to vote (i) for the election of trustees, (ii) to the same extent as shareholders of a Massachusetts business corporation as to whether or not a court action, proceeding or claim should or should not be brought or maintained derivatively or as a class action on behalf of the trust or shareholder, (iii) with respect to termination of the trust or any class or series of the trust, (iv) with respect to the approval or termination in accordance with the 1940 Act of any contract with any one or more corporations, trusts, associations, partnerships, limited partnerships or other types of organizations, or individuals as to which shareholder approval is required by the 1940 Act, and (v) with respect to additional matters relating to the trust as may be required by the 1940 Act, the Declaration of Trust, the By-Laws or any registration of the trust with the SEC (or any successor agency) or any state, or as the trustees may consider necessary or desirable.
On any matter submitted to a vote of shareholders, all shares entitled to vote will be voted in the aggregate as a single class without regard to series or class of shares, except that shares may be voted by individual series or classes (1) when required by the 1940 Act, (2) when the trustees have determined that the matter affects one or more series or classes of shares materially differently, or (3) when the matter affects only the interests of one or more series or classes. | including rights with respect to voting.
The shareholders have the power to vote (i) for the election of trustees, (ii) to the same extent as shareholders of a Massachusetts business corporation as to whether or not a court action, proceeding or claim should or should not be brought or maintained derivatively or as a class action on behalf of the trust or shareholder, (iii) with respect to termination of the trust or any class or series of the trust, (iv) with respect to the approval or termination in accordance with the 1940 Act of any contract with any one or more corporations, trusts, associations, partnerships, limited partnerships or other types of organizations, or individuals as to which shareholder approval is required by the 1940 Act, and (v) with respect to additional matters relating to the trust as may be required by the 1940 Act, the Declaration of Trust, the By-Laws or any registration of the trust with the SEC (or any successor agency) or any state, or as the trustees may consider necessary or desirable.
On any matter submitted to a vote of shareholders, all shares entitled to vote will be voted in the aggregate as a single class without regard to series or class of shares, except that shares may be voted by individual series or classes (1) when required by the 1940 Act, (2) when the trustees have determined that the matter affects one or more series or classes of shares materially differently, or (3) when the matter affects only the interests of one or more series or classes. |
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There is no cumulative voting in the election of trustees. | If authorized by the trustees, shareholders shall be entitled to vote cumulatively in the election of trustees. | |||||
Shareholder Meetings | The trust is not required to hold annual meetings of shareholders.
Shareholders have the right to call special meetings and vote to remove trustees but only if and to the extent the SEC staff takes the position by rule, interpretive letter or public release that Section 16(c) of the 1940 Act gives them such right. Otherwise, only the trustees, the chairman of the trustees or the president of the trust may call shareholder meetings. | The Declaration of Trust and By-Laws do not address annual shareholder meetings. Regular shareholder meetings are not required for business trusts under the General Laws of Massachusetts.
Shareholder meetings will be held when called by the trustees for the purpose of taking action on any matter requiring the vote or authority of the shareholders, or for any other matter the trustees deem necessary or desirable. | The Declaration of Trust and By-Laws do not address annual shareholder meetings. Regular shareholder meetings are not required for business trusts under the General Laws of Massachusetts.
Shareholder meetings will be held when called by the trustees for the purpose of taking action on any matter requiring the vote or authority of the shareholders, or for any other matter the trustees deem necessary or desirable. | |||
Shareholder Quorum | Except when a larger quorum is required by applicable law, thirty-three and one-third percent (33 1/3%) of the shares entitled to vote constitutes a quorum at a shareholders’ meeting. When any one or more series or classes of the trust is to vote as a single class separate from any other shares, thirty-three and one-third percent (33 1/3%) of the shares of each such series or classes entitled to vote constitutes a quorum at a shareholder’s meeting of that series.
A meeting may be adjourned, whether or not a quorum is present, by the vote of a majority of the shares represented at the meeting, either in | The presence in person or by proxy of 30% of the votes entitled to be cast at a meeting constitutes a quorum.
When any one or more series or classes votes as a single class separate from any other shares which are to vote on the same matters as a separate class or classes, 30% of the votes entitled to be cast by each such class entitled to vote constitutes a quorum at a shareholders’ meeting of that class.
A meeting may be adjourned by a majority of the votes properly cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned within a reasonable | The presence in person or by proxy of 10% of the votes entitled to be cast at a meeting constitutes a quorum.
When any one or more series or classes votes as a single class separate from any other shares which are to vote on the same matters as a separate class or classes, 10% of the votes entitled to be cast by each such class entitled to vote constitutes a quorum at a shareholders’ meeting of that class.
A meeting may be adjourned by a majority of the votes properly cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned within a reasonable |
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person or by proxy. If a meeting is adjourned, notice does not need to be given of the adjourned meeting date unless a new record date for the adjourned meeting is set or unless the adjourned meeting is to take place more than sixty (60) days from the date set for the original meeting, in which case the board of trustees would be required to set a new record date. | time after the date set for the original meeting without further notice. | time after the date set for the original meeting without further notice. | ||||
Shareholder Consent | Any action taken by shareholders may be taken without a meeting if shareholders holding a majority of the shares entitled to vote on the matter and holding a majority of the shares of any series or class entitled to vote separately on the matter consent to the action in writing and such written consents are filed with the records of the meetings of shareholders. Such consent is treated for all purposes as a vote taken at a meeting of shareholders. | Except as otherwise provided by law, the Declaration of Trust or the By-Laws, any action required or permitted to be taken at any meeting of shareholders may be taken without a meeting if a majority of the shareholders entitled to vote consent to the action in writing and the consents are filed with the records of the trust. The consent will be treated for all purposes as a vote taken at a meeting of shareholders. | Except as otherwise provided by law, the Declaration of Trust or the By-Laws, any action required or permitted to be taken at any meeting of shareholders may be taken without a meeting if a majority of the shareholders entitled to vote consent to the action in writing and the consents are filed with the records of the trust. The consent will be treated for all purposes as a vote taken at a meeting of shareholders. | |||
Notice to Shareholders of Record Date | Notice of any meeting of shareholders must be given by the trustees, chairman of the trustees or president not less than 7 days nor more than 120 days before the date of the meeting.
The trustees may set a record date for the | Written notice of any meeting of shareholders must be given by the trustees at least 7 days before the meeting.
The trustees may set a record date for the purpose of determining the shareholders entitled to notice of or | Written notice of any meeting of shareholders must be given by the trustees at least 7 days before the meeting.
The trustees may set a record date for the purpose of determining the shareholders entitled to notice of or |
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purpose of determining the shareholders entitled to vote or act at a shareholders’ meeting. The record date cannot be more than 120 days before the date of the meeting. | to vote at a shareholder meeting. The record date cannot be more than 90 days or less than 7 days before the date of the meeting. | to vote at a shareholder meeting. The record date cannot be more than 90 days or less than 7 days before the date of the meeting. | ||||
Shareholder Proxies | Shareholders may vote in person or by proxy.
Unless the trustees declare otherwise, proxies may be given by any electronic or telecommunications device, including telefacsimile, telephone or through the Internet, but if a proposal by anyone other than the officers or trustees is submitted to a vote of the shareholders of any series or class, or if there is a proxy contest or proxy solicitation or proposal in opposition to any proposal by the officers or trustees, shares may be voted only in person or by written proxy unless the trustees specifically authorize other permissible methods of transmission.
The trustees may appoint inspectors for any meeting of shareholders, and these inspectors are charged with, among other things, determining the authenticity, validity and effect of proxies. | Shareholders may vote in person or by proxy.
A proxy with respect to shares held in the name of two or more persons will be valid if executed by any one of them unless at or prior to exercise of the proxy the trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a shareholder will be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity rests on the challenger. | Shareholders may vote in person or by proxy.
A proxy with respect to shares held in the name of two or more persons will be valid if executed by any one of them unless at or prior to exercise of the proxy the trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a shareholder will be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity rests on the challenger. |
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Shareholder Demand Procedure | If a meeting of shareholders has not been held during the immediately preceding fifteen (15) months for the purpose of electing trustees, a shareholder or shareholders holding three percent (3%) or more of the voting power of all shares entitled to vote may demand a meeting of shareholders for the purpose of electing trustees by written notice of demand given to the trustees. Within thirty (30) days after receipt of such demand, the trustees shall call and give notice of a meeting of shareholders for the purpose of electing trustees. If the trustees shall fail to call such meeting or give notice thereof, then the shareholder or shareholders making the demand may call and give notice of such meeting at the expense of the trust. The trustees shall promptly call and give notice of a meeting of shareholders for the purpose of voting upon removal of any trustee of the trust when requested to do so in writing by shareholders holding not less than ten percent (10%) of the shares then outstanding. If the trustees shall fail to call or give notice of any meeting of |
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shareholders for a period of thirty (30) days after written application by shareholders holding at least ten percent (10%) of the shares then outstanding requesting that a meeting be called for any purpose requiring action by the shareholders as provided in the Declaration of Trust or the By-laws, then shareholders holding at least ten percent (10%) of the shares then outstanding may call and give notice of such meeting. | ||||||
Trustee Power to Amend Organizational Document | The trustees may, without shareholder vote, amend or otherwise supplement the Declaration of Trust; provided that shareholders have the right to vote on any amendment if expressly required under Delaware law or the 1940 Act, or submitted to shareholders by the trustees at their discretion. | The trustees may amend the Declaration of Trust at any time by an instrument in writing signed by a majority of the then trustees provided that notice of such amendment is transmitted promptly to shareholders of record.
The trustees need not, however, provide notice of an amendment if the amendment is for the purpose of supplying an omission, curing any ambiguity or curing, correcting or supplementing any defective or inconsistent provision contained in the Declaration of Trust, or having any other purpose which is ministerial or clerical in nature. | The trustees may amend the Declaration of Trust at any time by an instrument in writing signed by a majority of the then trustees provided that notice of such amendment is transmitted promptly to shareholders of record.
The trustees need not, however, provide notice of an amendment if the amendment is for the purpose of supplying an omission, curing any ambiguity or curing, correcting or supplementing any defective or inconsistent provision contained in the Declaration of Trust, or having any other purpose which is ministerial or clerical in nature. |
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Termination of Trust | The trust and any series thereof may be terminated at any time by the board of trustees with written notice to shareholders. To the extent the 1940 Act expressly allows shareholders the power to vote on such terminations, the trust or any series thereof may be terminated by a vote of a majority of shares entitled to vote. | The trust may be terminated by the trustees with written notice to shareholders, or by the affirmative vote of at least two-thirds of the shares of each series entitled to vote.
Any series of or class may be terminated by the affirmative vote of at least two-thirds of the shares of that series or class, or by the trustees by written notice to the shareholders of that series or class. | The trust may be terminated by the trustees with written notice to shareholders, or by the affirmative vote of at least two-thirds of the shares of each series entitled to vote.
Any series of or class may be terminated by the affirmative vote of at least two-thirds of the shares of that series or class, or by the trustees by written notice to the shareholders of that series or class. | |||
Merger or Consolidation | The trustees have the power to cause the trust or any series to be merged or consolidated with another trust or company. The trustees may accomplish such merger or consolidation with written notice to shareholders but without the vote of shareholders, unless such shareholder vote is required by law. | Subject to applicable laws, the trustees may, without shareholder consent, cause the trust or any series to be merged or consolidated with another trust or company. The trustees may also transfer all or a substantial portion of the trust’s assets to another fund or company. | Subject to applicable laws, the trustees may, without shareholder consent, cause the trust or any series to be merged or consolidated with another trust or company. The trustees may also transfer all or a substantial portion of the trust’s assets to another fund or company. | |||
Removal of Trustees | A trustee may be removed with or without cause at any time by a written instrument signed by at least two-thirds of the other trustees.
In addition, if required by Section 16(c) of the 1940 Act, any trustee may be removed at any meeting of the shareholders by a vote of at least two-thirds of the outstanding shares. | Trustees may be removed with or without cause by majority vote of the trustees. | Trustees may be removed with or without cause by majority vote of the trustees. |
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Trustee Committees | The trust has two standing committees that may not be abolished: the Audit Committee and the Nominating Committee. Otherwise, the trustees may, with a majority vote of the trustees, appoint from their number other committees consisting of two or more trustees which may be delegated such authority as the trustees consider desirable. The trustees may also abolish the non-standing committees with a majority vote of the trustees.
Each committee may elect a chair and each committee must maintain records of its meetings and report its actions to the full board of trustees.
A majority of the authorized number of committee members shall constitute a quorum for the transaction of business of such committee, unless the board of trustees designates a lower percentage. | The trustees may appoint from their own number and terminate committees consisting of one or more trustees, which may exercise the powers and authority of the trustees to the extent that the trustees determine. | The trustees may appoint from their own number and terminate committees consisting of one or more trustees, which may exercise the powers and authority of the trustees to the extent that the trustees determine, provided, that an Executive Committee designated by the trustees shall not be empowered to elect the president or the treasurer, to amend the By-laws, to designate, alter or abolish any committee designated by the trustees, or to perform any act for which the action of a majority of the trustees is required by law, by the Declaration of Trust or the By-laws. | |||
Trustee Liability | Trustees will be liable to the trust by reason of willful misfeasance, bad faith, negligence or reckless disregard of the duties involved in the conduct of the trustee’s office. | Trustees are not subject to personal liability, except by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of trustee. Additionally, trustees | Trustees are not subject to personal liability, except by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of trustee. Additionally, trustees |
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are not personally liable for any neglect or wrong-doing of any officer, agent, or employee of the trust or for any act or omission of any other trustee.
Trustees that are singled out as experts on particular issues, such as a chair of a committee, are not held to any higher standard than their non-expert counterparts. | are not personally liable for any neglect or wrong-doing of any officer, agent, or employee of the trust or for any act or omission of any other trustee.
Trustees that are singled out as experts on particular issues, such as a chair of a committee, are not held to any higher standard than their non-expert counterparts. | |||||
Trustee Indemnification | The trust indemnifies the trustees against expenses, judgments, fines and settlements and other amounts actually and reasonably incurred in connection with any civil or criminal proceeding or investigations, if it is determined that the trustee acted in good faith and reasonably believed 1) that his or her conduct was in the trust’s best interests, and 2) that his or her conduct was at least not opposed to the trust’s best interests, and 3) in the case of a criminal proceeding, that he or she had no reasonable cause to believe that the conduct was unlawful.
| The trust indemnifies each of its trustees against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and attorneys’ fees incurred in connection with the defense of any civil or criminal suit or action, except with respect to any matter (i) as to which a trustee is finally adjudicated in any such action or proceeding not to have acted in good faith in reasonable belief that such trustee’s action was in the best interests of the trust; or (ii) where the trustee acted in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such trustee’s office.
Expenses, including counsel fees, so | Each person made or threatened to be made a party to or who is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding whether civil, criminal, administrative, arbitration, or investigative, including a proceeding by or in the right of the trust by reason of the former or present capacity as a trustee of the trust or who, while a trustee of the trust, is or was serving at the request of the trust or whose duties as a trustee involve or involved service as a director, officer, partner, trustee or agent of another organization or employee benefit plan whether the basis of any proceeding is alleged action in an official capacity or in any capacity while serving as a director, |
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A trustee will not, however, be indemnified 1) with respect to any matters where the trustee is judged to be liable on the basis that a personal benefit was improperly received, whether or not the benefit resulted from action taken in that trustee’s official capacity, 2) with respect to any matter where the trustee is judged to be liable in the performance of his or her duty to the trust unless the adjudicator determines that the trustee was not liable as the result of conduct in (1) above and that the trustee is fairly entitled to indemnification, and 3) with respect to amounts paid to settle or dispose of an action with or without court approval unless a) approved by a majority vote of a quorum of trustees who are not parties and are disinterested persons, or b) a written opinion of counsel is obtained.
Expenses incurred in defending any proceeding may be advanced by the trust before the final disposition of a proceeding upon a written undertaking by the trustee to repay the amount advanced if it is ultimately determined that he or she is not entitled to | incurred by any such trustee (but excluding amounts paid in satisfaction of judgments, in compromise or as fines or penalties) will be paid from time to time by the trust in advance of the final disposition of any such action, suit or proceeding upon receipt of an undertaking by or on behalf of such trustee to repay amounts so paid to the trust if it is ultimately determined that indemnification of such expenses is not authorized under the By-Laws, provided, however, that either (a) such trustee shall have provided appropriate security for such undertaking, (b) the trust shall be insured against losses arising from any such advance payments, or (c) either a majority of the disinterested trustees acting on the matter (provided that a majority of the disinterested trustees then in office act on the matter), or independent legal counsel in a written opinion, will have determined, based upon a review of readily available facts, that there is reason to believe that such trustee will be found entitled to indemnification under the By-Laws. | officer, partner, trustee or agent, shall be indemnified and held harmless by the trust to the full extent authorized by the laws of The Commonwealth of Massachusetts; provided, however, that in an action brought against the trust to enforce rights to indemnification, the trustee shall be indemnified only if the action was authorized by the board of trustees of the trust.
This right to indemnification shall be a contract right and shall include the right to be paid by the trust in advance of the final disposition of a proceeding for expenses incurred in connection therewith provided, however, such payment of expenses shall be made only upon receipt of a written undertaking by the trustee or officer to repay all amounts so paid if it is ultimately determined that the trustee or officer is not entitled to indemnification.
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indemnification, together with at least on of the following conditions to the advance: 1) security for the undertaking, 2) the existence of insurance protecting the trust against losses arising by reason of any lawful advances, or 3) a determination by a majority of a quorum of the trustees who are not parties to the proceeding and are not interested persons of the trust, or by an independent legal counsel, based on a review of the readily available facts that there is reason to believe that the trustee ultimately will be found entitled to indemnification. | ||||||
Dividends | The trustees may declare and pay dividends and distributions to shareholders of each series from the assets of such series. | Dividends and distributions may be paid to shareholders from the trust’s net income with the frequency as the trustees may determine. | Dividends and distributions may be paid to shareholders from the trust’s net income with the frequency as the trustees may determine. | |||
Capitalization | The beneficial interest in the trust shall at all times be divided into an unlimited number of shares, without par value. | The beneficial interest in the trust shall at all times be divided into an unlimited number of shares without par value. | The beneficial interest in the trust shall at all times be divided into an unlimited number of shares without par value. | |||
Number of Trustees and Vacancies | The number of trustees may be fixed by the trustees from time to time by a written instrument signed, or a resolution approved at a duly constituted meeting, by a majority of the trustees. | The trustees may fix the number of trustees, fill vacancies in the trustees, including vacancies arising from an increase in the number of trustees, or remove trustees with or without cause. | The trustees may fix the number of trustees, fill vacancies in the trustees, including vacancies arising from an increase in the number of trustees, or remove trustees with or without cause. |
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Provided, however, that the number of trustees cannot be fewer than 1 or more than 15.
Vacancies in the board of trustees may be filled by a majority of the remaining trustees, even if less than a quorum, or by a sole remaining trustee, unless the trustees call a meeting of shareholders for the purpose of electing trustees. In the event that at any time less than a majority of the trustees holding office at that time were so elected by shareholders, the board of trustees will hold a shareholders’ meeting within 60 days for the election of trustees to fill such vacancies on the board. | Shareholders may fix the number of trustees and elect trustees at any meeting of shareholders called by the trustees for that purpose and to the extent required by applicable law, including paragraphs (a) and (b) of Section 16 of the 1940 Act.
Each trustee serves during the continued lifetime of the trust until he or she dies, resigns or is removed, or, if sooner, until the next meeting of shareholders called for the purpose of electing trustees and until the election and qualification of his or her successor. | Shareholders may elect trustees at any meeting of shareholders called by the trustees for that purpose and to the extent required by applicable law, including paragraphs (a) and (b) of Section 16 of the 1940 Act.
Each trustee serves during the continued lifetime of the trust until he or she dies, resigns or is removed, or, if sooner, until the next meeting of shareholders called for the purpose of electing trustees and until the election and qualification of his or her successor. | ||||
Independent Chair of the Board | The Declaration of Trust does not require an independent chair of the board of trustees. | The Declaration of Trust and By-Laws do not require an independent chair of the board of trustees. | The By-Laws require an independent chair of the board of trustees. | |||
Inspection of Books and Records | The original or a copy of the Declaration of Trust, and of each amendment thereto, is kept at the office of the trust where it may be inspected by any shareholder. | The original or a copy of the Declaration of Trust, and of each amendment thereto, is kept at the office of the trust where it may be inspected by any shareholder. | The original or a copy of the Declaration of Trust, and of each amendment thereto, is kept at the office of the trust where it may be inspected by any shareholder. | |||
Involuntary Redemption of Accounts | The trustees may redeem, repurchase and transfer shares pursuant to applicable law. | The trust has the right at its option and at any time to redeem shares of any shareholder at the net asset value thereof: (i) if at such time such shareholder owns shares of any | The trust has the right at its option and at any time to redeem shares of any shareholder at the net asset value thereof: (i) if at such time such shareholder owns shares of any |
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series or class having an aggregate net asset value of less than an amount determined from time to time by the trustees; or (ii) to the extent that such shareholder owns shares equal to or in excess of a percentage determined from time to time by the trustees of the outstanding shares of the trust or of any series or class. | series or class having an aggregate net asset value of less than an amount determined from time to time by the trustees; or (ii) to the extent that such shareholder owns shares equal to or in excess of a percentage determined from time to time by the trustees of the outstanding shares of the trust or of any series or class. |
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![]() | COLUMBIA FUNDS JOINT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 27, 2013 |
The undersigned shareholder of the Fund or Funds named below hereby acknowledges receipt of the Notice of a Joint Special Meeting of Shareholders and Combined Proxy Statement/Prospectus for the Joint Special Meeting of Shareholders (the “Meeting”) to be held at 10:00 a.m., local time, on February 27, 2013, at 225 Franklin Street, Boston, Massachusetts 02110, and, revoking any previous proxies, hereby appoints J. Kevin Connaughton, Michael Clarke, Marybeth Pilat, Joseph F. DiMaria, Julian Quero, Scott R. Plummer, Christopher O. Petersen and Ryan C. Larrenaga (or any of them) as proxies for the undersigned, with full power of substitution in each of them, to attend the Meeting and any adjournments or postponements thereof and to cast on behalf of the undersigned all the votes the undersigned is entitled to cast at the Meeting and otherwise to represent the undersigned at the Meeting with all the powers possessed by the undersigned if personally present at the Meeting. Capitalized terms in this proxy card that are otherwise undefined have the meanings set forth in the Combined Proxy Statement/Prospectus.
YOUR VOTE IS IMPORTANT. Mark, sign, date and return this proxy card as soon as possible.
VOTE VIA THE INTERNET: www.proxy-direct.com | ||||||
VOTE VIA THE TELEPHONE: 1-XXX-XXX-XXXX
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Note: Please sign exactly as your name(s) appear(s) on this proxy card, and date it. When shares are held jointly, each holder should sign. When signing in a representative capacity, please give title. | ||||||
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Signature | ||||||
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Additional Signature (if held jointly) | ||||||
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Date | 2011 | |||||
CFS_22080_MB7_120910 |
FUND | FUND | FUND | ||
Fundname Drop-In 1 | Fundname Drop-In 2 | Fundname Drop-In 3 | ||
Fundname Drop-In 4 | Fundname Drop-In 5 | Fundname Drop-In 6 | ||
Fundname Drop-In 7 |
VOTING OPTIONS
Read your Combined Proxy Statement/Prospectus and have it at hand when voting.
Vote on the Internet
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Vote by Phone
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Vote by Mail
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Vote In Person
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Log on to: www.proxy-direct.com Follow the on-screen instructions available 24 hours
| Call 1-xxx-xxx-xxxx Follow the recorded instructions available 24 hours
| Vote, sign and date this proxy card and return it in the postage-paid envelope.
| Attend Shareholder Meeting 225 Franklin Street, Boston, MA 02110 on February 27, 2013
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ABOVE.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS LISTED BELOW. THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BELOW AND, ABSENT DIRECTION, WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED BELOW. THE PROXIES ARE ALSO AUTHORIZED TO VOTE UPON ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF, INCLUDING ANY ADJOURNMENT(S) NECESSARY TO OBTAIN QUORUMS AND/OR APPROVALS.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: | ¡ | |
¨ To vote FOR all Proposals for your Fund or Fund(s), mark this box. No other vote is necessary.
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1. | To approve an Agreement and Plan of Reorganization between your Selling Fund listed below and the corresponding Buying Fund providing for (i) the sale of all of the assets of the Selling Fund to, and the assumption of all of the liabilities of the Selling Fund by, the corresponding Buying Fund and (ii) the distribution of such shares to the shareholders of the Selling Fund in complete liquidation of the Selling Fund. |
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||
Fundname Drop-In 1 | ¨ | ¨ | ¨ | Fundname Drop-In 2 | ¨ | ¨ | ¨ | |||||||||||
Fundname Drop-In 3 | ¨ | ¨ | ¨ |
2. | To approve an Agreement and Plan of Reorganization between your Selling Fund listed below and the corresponding Buying Fund providing for (i) the sale of all of the assets of the Selling Fund to, and the assumption of all of the liabilities of the Selling Fund by, the corresponding Buying Fund and (ii) the distribution of such shares to the shareholders of the Selling Fund in complete liquidation of the Selling Fund. |
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||
Fundname Drop-In 1 | ¨ | ¨ | ¨ | Fundname Drop-In 2 | ¨ | ¨ | ¨ |
3. | To approve an Agreement and Plan of Reorganization between your Selling Fund listed below and the corresponding Buying Fund providing for (i) the sale of all of the assets of the Selling Fund to, and the assumption of all of the liabilities of the Selling Fund by, the corresponding Buying Fund and (ii) the distribution of such shares to the shareholders of the Selling Fund in complete liquidation of the Selling Fund. |
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||
Fundname Drop-In 1 | ¨ | ¨ | ¨ | Fundname Drop-In 2 | ¨ | ¨ | ¨ |
4. | To approve an Agreement and Plan of Reorganization between your Selling Fund listed below and the corresponding Buying Fund providing for (i) the sale of all of the assets of the Selling Fund to, and the assumption of all of the liabilities of the Selling Fund by, the corresponding Buying Fund and (ii) the distribution of such shares to the shareholders of the Selling Fund in complete liquidation of the Selling Fund. |
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||
Fundname Drop-In 1 | ¨ | ¨ | ¨ | Fundname Drop-In 2 | ¨ | ¨ | ¨ |
Important Notice Regarding the Availability of Proxy Materials for the Meeting
to Be Held on February 27, 2013.
The Combined Proxy Statement/Prospectus for the Meeting and the
Notice of a Joint Special Meeting of Shareholders are available at:
[https://www.proxy-direct.com/col22080]
EVERY VOTE IS IMPORTANT! PLEASE VOTE TODAY USING ONE OF THE FOUR AVAILABLE OPTIONS!
Table of Contents
STATEMENT OF ADDITIONAL INFORMATION
[Date, 2012]
This Statement of Additional Information (the “SAI”) relates to the following proposed reorganizations (the “Reorganizations”):
1. | Reorganization of Columbia Mid Cap Growth Opportunity Fund, a series of Columbia Funds Series Trust II (a “Selling Fund”) into Columbia Mid Cap Growth Fund, a series of Columbia Funds Series Trust I (a “Buying Fund”). |
2. | Reorganization of each of Columbia Frontier Fund, a series of Columbia Funds Series Trust II, Columbia Select Small Cap Fund, a series of Columbia Funds Series Trust I, and Columbia Small Cap Growth Fund II, a series of Columbia Funds Series Trust, (each a “Selling Fund”) into Columbia Small Cap Growth Fund I, a series of Columbia Funds Series Trust I (a “Buying Fund”). |
3. | Reorganization of Columbia Emerging Markets Opportunity Fund, a series of Columbia Funds Series Trust II (a “Selling Fund”) into Columbia Emerging Markets Fund, a series of Columbia Funds Series Trust I (a “Buying Fund”). |
4. | Reorganization of Columbia Diversified Bond Fund, a series of Columbia Funds Series Trust II (a “Selling Fund”), into Columbia Intermediate Bond Fund, a series of Columbia Funds Series Trust I (a “Buying Fund”). |
5. | Reorganization of each of Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund, each a series of Columbia Funds Series Trust I (each a “Selling Fund”) into Columbia Tax-Exempt Fund, a series of Columbia Funds Series Trust I (a “Buying Fund”). |
This SAI contains information which may be of interest to shareholders of the Selling Funds but which is not included in the combined Prospectus/Proxy Statement dated [[Date, 2012]] (the “Proxy Statement/Prospectus”) which relates to the Reorganizations. As described in the Proxy Statement/Prospectus, the Reorganizations would involve the transfer of all the assets of each Selling Fund in exchange for shares of the Buying Fund and the assumption of all the liabilities of each Selling Fund by the Buying Fund. Each Selling Fund would distribute the Buying Fund shares it receives to its shareholders in complete liquidation of each Selling Fund. This SAI is not a prospectus and should be read in conjunction with the Proxy Statement/Prospectus. The Proxy Statement/Prospectus has been filed with the Securities and Exchange Commission and is available upon request and without charge by writing to the Buying Funds at c/o Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081, or by calling 800.345.6611.
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1 | ||||
13 | ||||
13 | ||||
A-1 | ||||
B-1 |
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ADDITIONAL INFORMATION ABOUT EACH BUYING FUND
Attached hereto as Appendix A is the Statement of Additional Information of the Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund and Columbia Tax-Exempt Fund dated [[Date, 2012]] as supplemented (the “October SAI”). The October SAI is supplemented as follows:
1. The paragraphs within the section entitled “ABOUT THE TRUST – Funds with fiscal years ending March 31” are deleted and replaced in their entirety with the following:
AP – Select Large Cap Growth Fund, Energy and Natural Resources Fund, Pacific/Asia Fund, Select Large Cap Growth Fund, Select Small Cap Fund and Value and Restructuring Fund
Each of AP – Select Large Cap Growth Fund, Energy and Natural Resources Fund, Pacific/Asia Fund, Select Large Cap Growth Fund, Select Small Cap Fund and Value and Restructuring Fund represents a separate series of the Trust and is an open-end management investment company. Each of the Funds is a diversified fund, except Energy and Natural Resources Fund, which is a non-diversified Fund. Each ofthe Funds has a fiscal year end of March 31.
On March 31, 2008, each of Energy and Natural Resources Fund, Pacific/Asia Fund, Select Large Cap Growth Fund, Select Small Cap Fund and Value and Restructuring Fund acquired all assets and assumed all liabilities of, respectively, the following funds, each of which is a series of Excelsior Funds Trust or Excelsior Funds, Inc., as applicable: Energy and Natural Resources Fund, Pacific/Asia Fund, Large Cap Growth Fund, Small Cap Fund and Value and Restructuring Fund (the Predecessor Funds). For periods prior to March 31, 2008, the performance and financial information shown for each Fund is the performance and financial information of the corresponding Predecessor Fund. The Funds commenced operations on March 31, 2008, except for AP – Select Large Cap Growth Fund, which commenced operations on March 14, 2012.
AP – Select Large Cap Growth Fund offers one class of shares; Select Large Cap Growth Fund and Value and Restructuring Fund offer six classes of shares; Energy and Natural Resources Fund offers seven classes of shares; Pacific/Asia Fund offers five classes of shares; and Select Small Cap Fund offers four classes of shares, each as described in Capital Stock and Other Securities.
2. The section entitled “ABOUT THE TRUST – Fund with fiscal year ending July 31” is recaptioned “ABOUT THE TRUST – Funds with fiscal years ending July 31” and the paragraphs within the section are deleted and replaced in their entirety with the following:
Ultra Short Term Bond Fund and Tax-Exempt Fund
Each of Ultra Short Term Bond Fund and Tax-Exempt Fund represents a separate series of the Trust and is an open-end diversified management investment company. Each of the Funds has a fiscal year end of July 31.
Ultra Short Term Bond Fund does not offer multiple share classes. Prior to November 23, 2009, CMG Ultra Short Term Bond Fund (the Predecessor Ultra Short Term Bond Fund) was organized as a separate portfolio of Columbia Funds Institutional Trust, a Massachusetts business trust (the Predecessor Institutional Trust). The information provided for Ultra Short Term Bond Fund in this SAI for periods prior to November 23, 2009 relates to the Predecessor Ultra Short Term Bond Fund; the information provided for the Trust in this SAI for periods prior to November 23, 2009 includes information for the Predecessor Institutional Trust to the extent it relates to Ultra Short Term Bond Fund. Prior to March 27, 2006, the Predecessor Ultra Short Term Bond Fund was organized as a separate portfolio of CMG Fund Trust (the Prior Predecessor Ultra Short Term Bond Fund), an Oregon business trust organized in 1989 (the Prior Predecessor Institutional Trust). The information provided for Ultra Short Term Bond Fund in this SAI for periods prior to March 27, 2006 relates to the Prior Predecessor Ultra Short Term Bond Fund; the information provided for the Trust in this SAI for periods prior to March 27, 2006 includes information for the Prior Predecessor Institutional Trust to the extent it relates to Ultra Short Term Bond Fund.
Tax-Exempt Fund offers four classes of shares, as described in Capital Stock and Other Securities. Prior to September 19, 2005 (the Fund Reorganization Date), the Fund was organized as a series of Columbia Funds Trust IV, a Massachusetts business trust (the Predecessor Fund). The information provided for the Fund in this SAI for periods prior to the Fund Reorganization Date relates to the Predecessor Fund. The Predecessor Fund commenced investment operations on November 21, 1978.
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3. The paragraphs within the section entitled “ABOUT THE TRUST – Funds with fiscal years ending August 31” are deleted and replaced in their entirety with the following:
AP – Alternative Strategies Fund, AP – Core Plus Bond Fund, AP – Small Cap Equity Fund, Balanced Fund, Emerging Markets Fund, Greater China Fund, Mid Cap Growth Fund, Oregon Intermediate Municipal Bond Fund, Small Cap Growth Fund I, Strategic Investor Fund, and Technology Fund
Each of AP – Alternative Strategies Fund, AP – Core Plus Bond Fund, AP – Small Cap Equity Fund, Balanced Fund, Emerging Markets Fund, Greater China Fund, Mid Cap Growth Fund, Oregon Intermediate Municipal Bond Fund, Small Cap Growth Fund I, Strategic Investor Fund and Technology Fund represents a separate series of the Trust, is an open-end management investment company and has a fiscal year end of August 31. Each of AP – Core Plus Bond Fund, AP – Small Cap Equity Fund, Balanced Fund, Emerging Markets Fund, Mid Cap Growth Fund, Small Cap Growth Fund I and Strategic Investor Fund is a diversified series of the Trust. Technology Fund and Oregon Intermediate Municipal Bond Fund are operating as diversified series of the Trust. AP – Alternative Strategies Fund and Greater China Fund are non-diversified series of the Trust.
Prior to March 27, 2006, each Fund, except for Emerging Markets Fund and Greater China Fund, was organized as an Oregon corporation. The information provided for these Funds in this SAI for periods prior to March 27, 2006 relates to the predecessor Oregon corporation funds. Prior to March 27, 2006, Greater China Fund was organized as a series of Columbia Funds Trust II. The information provided for Greater China Fund in this SAI for periods prior to March 27, 2006 relates to the corresponding series of Columbia Funds Trust II. Emerging Markets Fund commenced operations on March 31, 2008. On March 31, 2008, Emerging Markets Fund acquired all assets and assumed all liabilities of Emerging Markets Fund, a series of Excelsior Funds, Inc. (the Predecessor Fund). For periods prior to March 31, 2008, the performance and financial information shown for Emerging Markets Fund is the performance and financial information of the Predecessor Fund.
AP – Alternative Strategies Fund, AP – Core Plus Bond Fund and AP – Small Cap Equity Fund offer one class of shares; Oregon Intermediate Municipal Bond Fund and Technology Fund offer four classes of shares, Emerging Markets Fund and Greater China Fund offer six classes of shares, Balanced Fund and Small Cap Growth Fund I offers seven classes of shares, Mid Cap Growth Fund offers ten classes of shares and Strategic Investor Fund offers eight classes of shares, as described in Capital Stock and Other Securities.
4. The section entitled “ABOUT THE TRUST – Fund with fiscal year ending November 30” is deleted.
5. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Advisory Fees Paid by the Funds” in the section of the October SAI entitled “Investment Advisory and Other Services – The Investment Manager and Investment Advisory Services” are hereby deleted and replaced in their entirety with the following:
Fiscal Period Ended August 31, 2012** | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010* | |||||||||||||||||
Emerging Markets Fund | Adviser | Previous Adviser | ||||||||||||||||||
Advisory Fee Paid | 2,473,783 | $ | 5,473,855 | $ | 4,340,081 | $ | 386,909 | $ | 4,059,904 | |||||||||||
Amount Reimbursed | $ | (202,945 | ) | $ | (734,739 | ) | $ | 1,166,939 | $ | 95,101 | $ | 133,614 | ||||||||
Amount Waived | — | — | — | — | — |
* | All amounts were paid to/reimbursed by the Previous Adviser. |
** | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
Fiscal Year Ended August 31, 2012 | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | ||||||||||||||
Mid Cap Growth Fund | Adviser | Previous Adviser | ||||||||||||||
Advisory Fee Paid | $ | 13,873,055 | $ | 11,840,449 | $ | 2,977,727 | $ | 5,939,170 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
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Small Cap Growth Fund I | ||||||||||||||||
Advisory Fee Paid | $ | 8,072,792 | $ | 9,319,430 | $ | 2,371,009 | $ | 4,158,194 | ||||||||
Amount Reimbursed | $ | 79,402 | $ | 306 | — | — | ||||||||||
Amount Waived | — | — | — | — |
Fiscal Period Ended July 31, 2012** | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009* | |||||||||||||||||
Tax-Exempt Fund | Adviser | Previous Adviser | ||||||||||||||||||
Advisory Fee Paid | $ | 11,382,292 | $ | 12,644,779 | $ | 6,340,827 | $ | 4,490,488 | $ | 10,701,653 | ||||||||||
Amount Reimbursed | $ | 37,429 | $ | 575,239 | — | — | — | |||||||||||||
Amount Waived | — | — | — | — | — |
* | All amounts were paid to/reimbursed by the Previous Adviser. |
** | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
6. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Portfolio Manager(s) Information” in the section of the October SAI entitled “Investment Advisory and Other Services – The Investment Manager and Investment Advisory Services” are hereby deleted and replaced in their entirety with the following:
Other Accounts Managed (excluding the Fund) | ||||||||||||
Portfolio Manager | Number and Type of Account* | Approximate Total Net Assets | Performance Based Accounts | Dollar Range of Equity Securities in the Fund Beneficially Owned | Structure of Compensation (described in next sub-section) | |||||||
For Funds with fiscal year ending July 31 | ||||||||||||
Tax-Exempt Fund | Kimberly A. Campbell | 5 RICs 19 other accounts | $762 million $1.2 million | None | $50,001-$100,000a | (1) | ||||||
For Funds with fiscal year ending August 31 | ||||||||||||
Emerging Markets Fund | Robert B. Cameron | 1 RIC 1 PIV 4 other accounts | $914.5 million $170 million $1.3 million | None | $50,001-$100,000a | (1) | ||||||
Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM, CMA | 3 RICs 1 PIV 7 other accounts | $1.39 billion $170 million $600,000 | None | $10,001-$50,000b | (1) | |||||||
Dara J. White, CFA | 3 RICs 1 PIV 9 other accounts | $1.13 billion $170 million $760,000 | None | $50,001-$100,000a $50,001-$100,000b | (1) |
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Mid Cap Growth Fund | Wayne M. Collette, CFA | 10 RICs 4 PIVs 276 other accounts | $3.08 billion $191.34 million $393.41 million | None | None | (1) | ||||||
Lawrence W. Lin, CFA | 9 RICs 4 PIVs 278 other accounts | $2.94 billion $191.34 million $393.02 million | None | $1-$10,000a | (1) | |||||||
George J. Myers, CFA | 9 RICs 4 PIVs 275 other accounts | $2.94 billion $191.34 million $393.11 million | None | $10,001-$50,000a $50,001-$100,000b | (1) | |||||||
Brian D. Neigut | 9 RICs 4 PIVs 276 other accounts | $2.94 billion $191.34 million $392.27 million | None | $10,001-$50,000a | (1) | |||||||
Small Cap Growth Fund I | Wayne M. Collette, CFA | 10 RICs 4 PIVs 276 other accounts | $4.10 billion $191.34 million $393.41 million | None | $10,001-$50,000a | (1) | ||||||
Lawrence W. Lin, CFA | 9 RICs 4 PIVs 278 other accounts | $3.96 billion $191.34 million $393.02 million | None | $10,001-$50,000a | (1) | |||||||
George J. Myers, CFA | 9 RICs 4 PIVs 275 other accounts | $3.96 billion $191.34 million $393.11 million | None | $10,001-$50,000a $50,001-$100,000b | (1) | |||||||
Brian D. Neigut | 9 RICs 4 PIVs 276 other accounts | $3.96 billion $191.34 million $392.27 million | None | $10,001-$50,000a | (1) |
7. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Administration Fees Paid by the Funds” in the section of the October SAI entitled “Investment Advisory and Other Services – The Administrator” are hereby deleted and replaced in their entirety with the following:
Fiscal Period Ended August 31, 2012** | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010* | |||||||||||||||||
Emerging Markets Fund | Administrator | Previous Administrator | ||||||||||||||||||
Administration Fee Paid | $ | 155,829 | $ | 463,603 | $ | 754,797 | $ | 67,288 | $ | 615,027 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | $ | 734,739 | — | — | — |
* | All amounts paid to/reimbursed by the Previous Administrator. |
** | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
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Fiscal Year Ended August 31, 2012 | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | ||||||||||||||
Mid Cap Growth Fund | Adviser | Previous Adviser | ||||||||||||||
Administration Fee Paid | $ | 1,078,839 | $ | 435,624 | — | — | ||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Small Cap Growth Fund I | ||||||||||||||||
Administration Fee Paid | $ | 814,772 | $ | 499,433 | — | — | ||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
Fiscal Period Ended July 31, 2012** | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009* | |||||||||||||||||
Tax-Exempt Fund | Administrator | Previous Administrator | ||||||||||||||||||
Administration Fee Paid | $ | 1,799,630 | $ | 1,621,818 | — | — | — | |||||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — |
* | All amounts were paid to/reimbursed by the Previous Administrator |
** | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
8. The rows showing data for Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund and Columbia Tax-Exempt Fund in the table entitled “Pricing and Bookkeeping Fees Paid by the Funds” in the section of the October SAI entitled “Investment Advisory and Other Services – Pricing and Bookkeeping Services” are hereby deleted and replaced in their entirety with the following:
Fiscal Period Ended August 31, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | |||||||||||||
Emerging Markets Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 38,036 | $ | 112,330 | $ | 103,288 |
* | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
Fiscal Year Ended August 31, 2012 | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | ||||||||||
Mid Cap Growth Fund | ||||||||||||
Amount Paid to State Street | — | $ | 81,856 | $ | 145,095 | |||||||
Small Cap Growth Fund I | ||||||||||||
Amount Paid to State Street | — | $ | 117,915 | $ | 145,808 |
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Fiscal Period Ended July 31, 2012* | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009 | |||||||||||||
Tax-Exempt Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 86,802 | $ | 196,542 | $ | 202,126 |
* | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
9. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Underwriting Commissions Paid by the Funds” in the section of the October SAI entitled “Investment Advisory and Other Services – Principal Underwriter/Distributor” are hereby deleted and replaced in their entirety with the following:
Fiscal Period Ended August 31, 2012*** | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010* | |||||||||||||||||
Emerging Markets Fund | Distributor | Previous Distributor | ||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 18,741 | $ | 49,385 | $ | 60,093 | $ | 6,426 | $ | 71,380 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Shares | $ | 18,471 | $ | 49,492 | $9,645** | $ | 11,618 | |||||||||||||
Class C Shares | $ | 2,155 | $ | 667 | $1,767** | $ | 134 |
* | All amounts were paid to or retained by the previous distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
*** | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
Fiscal Year Ended August 31, 2012 | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | ||||||||||||||
Mid Cap Growth Fund | Distributor | Previous Distributor | ||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 106,910 | $ | 179,957 | $ | 19,121 | $ | 32,841 | ||||||||
Class T Shares | $ | 76 | $ | 65 | $ | 156 | $ | 372 | ||||||||
Amount Retained | ||||||||||||||||
Class A Retained | $ | 111,201 | $ | 180,981 | $7,346** | |||||||||||
Class B Retained | $ | 5,714 | $ | 5,021 | $4,870** | |||||||||||
Class C Retained | $ | 4,201 | $ | 8,468 | $1,021** | |||||||||||
Class T Retained | $ | 76 | $ | 17 | $61** | |||||||||||
Small Cap Growth Fund I | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 9,021 | $ | 111,874 | $ | 27,242 | $ | 55,837 | ||||||||
Amount Retained | ||||||||||||||||
Class A Retained | $ | 9,028 | $ | 111,563 | $11,901** | |||||||||||
Class B Retained | $ | 3,123 | $ | 3,117 | $5,690** | |||||||||||
Class C Retained | $ | 1,070 | $ | 1,301 | $2,854** |
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* | All amounts were paid to or retained by the previous distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
*** | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
Fiscal Period Ended July 31, 2012*** | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009* | |||||||||||||||||
Tax-Exempt Fund | Administrator | Previous Administrator | ||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 904,276 | $ | 608,257 | $ | 391,049 | $ | 276,186 | $ | 617,256 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Retained | $ | 1,656,814 | $ | 1,010,865 | $85,745** | $ | 75,800 | |||||||||||||
Class B Retained | $ | 2,671 | $ | 5,332 | $5,696** | $ | 12,162 | |||||||||||||
Class C Retained | $ | 2,804 | $ | 6,965 | $2,737** | $ | 6,371 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
*** | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
10. The rows showing data for Columbia Emerging Markets Fund in the table entitled “Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended March 31, 2012” in the section of the October SAI entitled “Investment Advisory and Other Services – Distribution and Servicing Plans” are hereby deleted and replaced in their entirety with the following:
Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended August 31, 2012
Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class T Shares | Class W Shares | |||||||||||||||||||
Emerging Markets Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | 8,773 | 1,027 | — | — | ||||||||||||||||||
Service Fee | 11,875 | — | 2,924 | — | — | 32,219 | ||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
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11. The rows showing data for Columbia Mid Cap Growth Fund and Columbia Small Cap Growth Fund I in the table entitled “Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended August 31, 2011” in the section of the October SAI entitled “Investment Advisory and Other Services – Distribution and Servicing Plans” are hereby deleted and replaced in their entirety with the following:
Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended August 31, 2012
Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class T Shares | Class W Shares | |||||||||||||||||||
Mid Cap Growth Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 47,183 | $ | 366,657 | $ | 129,636 | — | — | |||||||||||||||
Service Fee | $ | 810,644 | $ | 15,727 | $ | 122,219 | — | $ | 63,857 | $ | 163,275 | |||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Small Cap Growth Fund I | ||||||||||||||||||||||||
Distribution Fee | — | $ | 12,251 | $ | 99,385 | $ | 276 | — | — | |||||||||||||||
Service Fee | $ | 193,242 | $ | 4,084 | $ | 33,128 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
12. The rows showing data for Columbia Tax-Exempt Fund in the table entitled “Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended November 30, 2011” in the section of the October SAI entitled “Investment Advisory and Other Services – Distribution and Servicing Plans” are hereby deleted and replaced in their entirety with the following:
Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended July 31, 2012
Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class T Shares | Class W Shares | |||||||||||||||||||
Tax-Exempt Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 60,702 | $ | 438,820 | — | — | — | ||||||||||||||||
Service Fee | $ | 5,058,836 | $ | 16,187 | $ | 117,056 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
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13. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Compensation” in the section of the October SAI entitled “Fund Governance – The Board” are hereby deleted and replaced in their entirety with the following:
Aggregate Compensation From Fund Independent Trustees | ||||||||||||||||||||||||
Rodman L. Drake (1) | John D. Collins (2) | Douglas A. Hacker | Janet Langford Kelly(3) | Nancy T. Lukitsh(4) | William E. Mayer | |||||||||||||||||||
For Funds with fiscal year ending July 31 | ||||||||||||||||||||||||
Tax-Exempt Fund*** | 16,049 | 0 | 12,146 | 10,942 | 11,366 | 11,178 | ||||||||||||||||||
Amount Deferred*** | 4,118 | 0 | 0 | 4,875 | 0 | 0 | ||||||||||||||||||
For Funds with fiscal year ending August 31 | ||||||||||||||||||||||||
Mid Cap Growth Fund | 8,935 | 0 | 6,913 | 6,241 | 6,488 | 6,355 | ||||||||||||||||||
Amount Deferred | 2,486 | 0 | 0 | 3,224 | 0 | 0 | ||||||||||||||||||
Small Cap Growth Fund I | 6,234 | 0 | 4,853 | 4,379 | 4,529 | 4,457 | ||||||||||||||||||
Amount Deferred | 1,759 | 0 | 0 | 2,237 | 0 | 0 | ||||||||||||||||||
Emerging Markets Fund**** | 3,665 | 0 | 2,838 | 2,561 | 2,659 | 2,885 | ||||||||||||||||||
Amount Deferred**** | 1,019 | 0 | 0 | 1,323 | 0 | 0 |
Aggregate Compensation From Fund Independent Trustees | ||||||||||||||||||||||||
David M. Moffett(5) | Charles R. Nelson | John J. Neuhauser | Jonathan Piel(6) | Patrick J. Simpson(7) | Anne-Lee Verville(8) | |||||||||||||||||||
For Funds with fiscal year ending July 31 | ||||||||||||||||||||||||
Tax-Exempt Fund*** | 11,966 | 11,244 | 11,809 | 0 | 10,733 | 12,057 | ||||||||||||||||||
Amount Deferred*** | 0 | 0 | 0 | 0 | 4,768 | 0 | ||||||||||||||||||
For Funds with fiscal year ending August 31 | ||||||||||||||||||||||||
Mid Cap Growth Fund | 6,183 | 6,338 | 6,684 | 0 | 6,109 | 6,798 | ||||||||||||||||||
Amount Deferred | 0 | 0 | 0 | 0 | 2,885 | 0 | ||||||||||||||||||
Small Cap Growth Fund I | 4,685 | 4,447 | 4,667 | 0 | 4,280 | 4,754 | ||||||||||||||||||
Amount Deferred | 0 | 0 | 0 | 0 | 2,043 | 0 | ||||||||||||||||||
Emerging Markets Fund**** | 2,751 | 2,602 | 2,740 | 0 | 2,506 | 2,785 | ||||||||||||||||||
Amount Deferred**** | 0 | 0 | 0 | 0 | 1,183 | 0 |
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*** | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
**** | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
(1) | As of September 28, 2012, the value of Mr. Drake’s account under the deferred compensation plan was $415,825.10. |
(2) | As of September 28, 2012, the value of Mr. Collins’ account under the deferred compensation plan was $374,336.29. Mr. Collins served as a Trustee of the Trust until May 2011. |
(3) | As of September 28, 2012, the value of Ms. Kelly’s account under the deferred compensation plan was $80,089.45. |
(4) | Ms. Lukitsh began serving as a Trustee of the Trust in August 2011. |
(5) | Mr. Moffett began serving as a Trustee of the Trust in May 2011. |
(6) | Mr. Piel served as a Trustee of the Trust until May 2011. |
(7) | As of September 28, 2012, the value of Mr. Simpson’s account under the deferred compensation plan was $1,544,784.06. |
(8) | As of September 28, 2012, the value of Ms. Verville’s account under the deferred compensation plan was $753,436.92. |
14. The tables entitled “Independent Trustee Compensation for the Fiscal Year Ended April 30, 2012” and “Interested Trustee Compensation for the Fiscal Year Ended April 30, 2012” in the section of the October SAI entitled “Fund Governance – The Board” is hereby deleted and replaced in its entirety with the following:
Independent Trustee Compensation for the Fiscal Year Ended August 31, 2012
Rodman L. Drake | $ | 278,000 | ||
Amount Deferred | $ | 78,000 | ||
Douglas A. Hacker | $ | 215,571.00 | ||
Amount Deferred | $ | 0 | ||
Janet Langford Kelly | $ | 194,500 | ||
Amount Deferred | $ | 100,000 | ||
Nancy T. Lukitsh | $ | 202,481 | ||
Amount Deferred | $ | 0 | ||
William E. Mayer | $ | 198,000 | ||
Amount Deferred | $ | 0 | ||
David M. Moffett | $ | 209,929 | ||
Amount Deferred | $ | 0 | ||
Charles R. Nelson | $ | 197,500 | ||
Amount Deferred | $ | 0 | ||
John J. Neuhauser | $ | 208,500 | ||
Amount Deferred | $ | 0 | ||
Patrick J. Simpson | $ | 190,500 | ||
Amount Deferred | $ | 90,500 | ||
Anne-Lee Verville | $ | 212,000 | ||
Amount Deferred | $ | 0 |
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Interested Trustee Compensation for the Fiscal Year Ended August 31, 2012
Name of Trustee | Total Compensation from the Columbia Funds Complex Paid to Interested Trustee for the Fiscal Year Ended August 31, 2012* | |
William F. Truscott | $ 0 |
* | Mr. Truscott receives reimbursements for reasonable expenses related to his attendance at meetings of theBoard or standing committees, which are not included in the amounts shown. Mr. Truscott became a Trusteein March 2012. Michael A. Jones served as Interested Trustee of the Trust until February 2012. Mr. Joneswas not compensated by the Funds for his services on the Board, except for reimbursements for reasonable expenses related to his attendance at meetings of the Board or standing committees. |
15. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Aggregate Brokerage Commissions Paid by the Funds” in the section of the October SAI entitled “BROKERAGE ALLOCATION AND OTHER PRACTICES – Brokerage Commissions” are hereby deleted and replaced in their entirety with the following:
Fiscal Period Ended August 31, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | |||||||||||||
Emerging Markets Fund | $ | 672,429 | $ | 1,973,067 | $ | 1,684,409 | $ | 1,613,790 |
* | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
Fiscal Year Ended August 31, 2012 | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | ||||||||||
Mid Cap Growth Fund | $ | 3,638,725 | $ | 3,716,464 | $ | 3,436,137 | ||||||
Small Cap Growth Fund I | $ | 2,781,535 | $ | 3,227,355 | $ | 4,948,857 |
Fiscal Period Ended July 31, 2012* | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009 | |||||||||||||
Tax-Exempt Fund | — | $ | 1,886 | — | — |
* | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
16. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Directed Brokerage” in the section of the October SAI entitled “BROKERAGE ALLOCATION AND OTHER PRACTICES – Directed Brokerage” are hereby deleted and replaced in their entirety with the following:
Amount of Transactions | Related Commissions | |||||||
For Funds with fiscal year ended July 31, 2012 | ||||||||
Tax-Exempt Fund*** | — | — | ||||||
For Funds with fiscal year ended August 31, 2012 | ||||||||
Emerging Markets Fund **** | $ | 4,716,502 | $ | 3,117 | ||||
Mid Cap Growth Fund | $ | 749,546,912 | $ | 421,521 | ||||
Small Cap Growth Fund I | $ | 431,922,608 | $ | 389,999 |
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*** | For the period from November 30, 2011 to July 31, 2012. During the period, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
**** | For the period from March 31, 2012 to August 31, 2012. During the period, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
17. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Investments in Securities of Regular Broker-Dealers” in the section of the October SAI entitled “BROKERAGE ALLOCATION AND OTHER PRACTICES – Securities of Regular Broker-Dealers” are hereby deleted and replaced in their entirety with the following:
Broker-Dealer | Dollar Amount of Securities Held | |||||
For Funds with fiscal year ended July 31, 2012 | ||||||
Tax-Exempt Fund* | None | $ | 0 | |||
For Funds with fiscal year ended August 31, 2012 | ||||||
Emerging Markets Fund ** | None | $ | 0 | |||
Mid Cap Growth Fund | Affiliated Managers Group, Inc. | $ | 15,325,651 | |||
Small Cap Growth Fund I | None | $ | 0 |
* | During the period from November 30, 2011 to July 31, 2012, the fiscal year end of Tax-Exempt Fund changed from November 30 to July 31. |
** | During the period March 31, 2012 to August 31, 2012, the fiscal year end of Emerging Markets Fund changed from March 31 to August 31. |
18. The rows showing data for Columbia Emerging Markets Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I and Columbia Tax-Exempt Fund in the table entitled “Capital Loss Carryforwards” in the section of the October SAI entitled “TAXATION” are hereby deleted and replaced in their entirety with the following:
Total Capital Loss Carryforwards | Losses Expiring In | |||||||||||||||||||||||||||||||||||
Fund | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||||||||||
For Funds with Fiscal Year Ending July 31 |
| |||||||||||||||||||||||||||||||||||
Tax-Exempt Fund* | $ | 101,989,877 | — | — | — | $ | 13,239,272 | $ | 57,869,171 | $ | 1,455,576 | $ | 6,621,391 | $ | 14,381,427 | |||||||||||||||||||||
For Funds with Fiscal Year Ending August 31 |
| |||||||||||||||||||||||||||||||||||
Emerging Markets Fund | $ | 11,367,014 | ** | — | $ | 36,739 | — | — | — | — | — | — | ||||||||||||||||||||||||
Mid Cap Growth Fund | $ | 64,533,955 | — | — | — | $ | 4,234,198 | $ | 60,299,757 | — | — | — | ||||||||||||||||||||||||
Small Cap Growth Fund I | — | — | — | — | — | — | — | — | — |
* | During the period from November 30, 2011 to July 31, 2012, the fiscal year end of Tax-Exempt Fund was changed from November 30 to July 31. |
** | Includes unlimited capital loss carryforwards of $11,330,275. During the period from March 31, 2012 to August 31, 2012, the fiscal year end of Emerging Markets Fund was changed from March 31 to August 31. |
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
PricewaterhouseCoopers LLP, located at 225 South 6th Street, Minneapolis, MN 55402, is the independent registered public accounting firm for Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund and Columbia Tax-Exempt Fund, providing audit and tax return review services and assistance and consultation in connection with the review of various Securities and Exchange Commission filings. The Report of Independent Registered Public Accounting Firm, Financial Highlights and Financial Statements included in Columbia Mid Cap Growth Fund’s Annual Report to Shareholders for the fiscal year ended August 31, 2012; the Report of Independent Registered Public Accounting Firm, Financial Highlights and Financial Statements included in Columbia Small Cap Growth Fund I’s Annual Report to Shareholders for the fiscal year ended August 31, 2012; the Report of Independent Registered Public Accounting Firm, Financial Highlights and Financial Statements included in Columbia Emerging Markets Fund’s Annual Report to Shareholders for the fiscal year ended August 31, 2012; the Report of Independent Registered Public Accounting Firm, Financial Highlights and Financial Statements included in Columbia Intermediate Bond Fund’s Annual Report to Shareholders for the fiscal year ended April 30, 2012; and the Report of Independent Registered Public Accounting Firm, Financial Highlights and Financial Statements included in Columbia Tax-Exempt Fund’s Annual Report to Shareholders for the fiscal year ended July 31, 2012 are incorporated by reference into this SAI. The audited financial statements for Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund, and Columbia Tax-Exempt Fund included in their respective Annual Reports to Shareholders and incorporated by reference into this SAI have been so included and incorporated in reliance upon the reports of PricewaterhouseCoopers LLP, given on their authority as experts in auditing and accounting. The audited financial statements for Columbia Select Small Cap Fund, Columbia Small Cap Growth Fund II, Columbia Connecticut Tax-Exempt Fund and Columbia Massachusetts Tax-Exempt Fund incorporated by reference to the Proxy Statement/Prospectus have been so included and incorporated in reliance upon the reports of PricewaterhouseCoopers LLP, given on their authority as experts in auditing and accounting. The audited financial statements for Columbia Mid Cap Growth Opportunity Fund, Columbia Frontier Fund, Columbia Diversified Bond Fund and Columbia Emerging Markets Opportunity Fund incorporated by reference to the Proxy Statement/Prospectus have been so included and incorporated in reliance upon the reports of Ernst & Young LLP, given on their authority as experts in auditing and accounting except for the information for the periods ended on or before October 31, 2008 for Columbia Frontier Fund, which has been audited by another auditor.
Pro forma financial statements of the Buying Funds for the Reorganizations are attached hereto as Appendix B.
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Appendix A – Statement of Additional Information of Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund, and Columbia Tax-Exempt Fund
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Columbia Management®
COLUMBIA FUNDS SERIES TRUST I
STATEMENT OF ADDITIONAL INFORMATION
October 1, 2012 |
Fund | ||||||
Active Portfolios® Multi-Manager Alternative Strategies Fund | ||||||
Class A: CPASX | ||||||
Active Portfolios® Multi-Manager Core Plus Bond Fund | ||||||
Class A: CMCPX | ||||||
Active Portfolios® Multi-Manager Small Cap Equity Fund | ||||||
Class A: CSCEX | ||||||
CMG Ultra Short Term Bond Fund | ||||||
CMGUX | ||||||
Columbia Active Portfolios® – Select Large Cap Growth Fund | ||||||
Class A: CSLGX | ||||||
Columbia Balanced Fund | ||||||
Class A: CBLAX | Class B: CBLBX | Class C: CBLCX | Class R: CBLRX | |||
Class R4: CLRFX | Class R5: CLREX | Class Z: CBALX | ||||
Columbia Bond Fund | ||||||
Class A: CNDAX | Class B: CNDBX | Class C: CNDCX | Class I: CBNIX | |||
Class R: CBFRX | Class T: CNDTX | Class W: CBDWX | Class Y: CBFYX | |||
Class Z: UMMGX | ||||||
Columbia California Tax-Exempt Fund | ||||||
Class A: CLMPX | Class B: CCABX | Class C: CCAOX | Class Z: CCAZX | |||
Columbia Connecticut Intermediate Municipal Bond Fund | ||||||
Class A: LCTAX | Class B: LCTBX | Class C: LCTCX | Class T: GCBAX | |||
Class Z: SCTEX | ||||||
Columbia Connecticut Tax-Exempt Fund | ||||||
Class A: COCTX | Class B: CCTBX | Class C: CCTCX | Class Z: CCTZX | |||
Columbia Contrarian Core Fund | ||||||
Class A: LCCAX | Class B: LCCBX | Class C: LCCCX | Class I: CCCIX | |||
Class R: CCCRX | Class R4: CCRFX | Class T: SGIEX | Class W: CTRWX | |||
Class Z: SMGIX | ||||||
Columbia Corporate Income Fund | ||||||
Class A: LIIAX | Class B: CIOBX | Class C: CIOCX | Class I: CPTIX | |||
Class W: CPIWX | Class Z: SRINX | |||||
Columbia Dividend Income Fund | ||||||
Class A: LBSAX | Class B: LBSBX | Class C: LBSCX | Class I: CDVIX | |||
Class R: CDIRX | Class T: GEQAX | Class W: CDVWX | Class Z: GSFTX | |||
Columbia Emerging Markets Fund | ||||||
Class A: EEMAX | Class C: EEMCX | Class I: CEHIX | Class R: CEMRX | |||
Class W: CEMWX | Class Z: UMEMX | |||||
Columbia Energy and Natural Resources Fund | ||||||
Class A: EENAX | Class B: CEGBX | Class C: EENCX | Class I: CERIX | |||
Class R: CETRX | Class R4: CEGFX | Class Z: UMESX | ||||
Columbia Global Dividend Opportunity Fund | ||||||
Class A: CSVAX | Class B: CSVBX | Class C: CSRCX | Class I: CEVIX | |||
Class R: CSGRX | Class W: CTVWX | Class Y: CLSYX | Class Z: CSVFX | |||
Columbia Greater China Fund | ||||||
Class A: NGCAX | Class B: NGCBX | Class C: NGCCX | Class I: CCINX | |||
Class W: CGCWX | Class Z: LNGZX |
C-6517 AC (10/12)
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Fund | ||||||
Columbia High Yield Municipal Fund | ||||||
Class A: LHIAX | Class B: CHMBX | Class C: CHMCX | Class Z: SRHMX | |||
Columbia High Yield Opportunity Fund | ||||||
Class A: COLHX | Class B: COHBX | Class C: CHYCX | Class Z: LHYZX | |||
Columbia Intermediate Bond Fund | ||||||
Class A: LIBAX | Class B: LIBBX | Class C: LIBCX | Class I: CIMIX | |||
Class R: CIBRX | Class W: CIBWX | Class Z: SRBFX | ||||
Columbia Intermediate Municipal Bond Fund | ||||||
Class A: LITAX | Class B: LITBX | Class C: LITCX | Class T: GIMAX | |||
Class Z: SETMX | ||||||
Columbia International Bond Fund | ||||||
Class A: CNBAX | Class C: CNBCX | Class I: CIBIX | Class W: CLBWX | |||
Class Z: CNBZX | ||||||
Columbia Large Cap Growth Fund | ||||||
Class A: LEGAX | Class B: LEGBX | Class C: LEGCX | Class E: CLGEX | |||
Class F: CLGFX | Class I: CLGIX | Class R: CGWRX | Class R4: CLRUX | |||
Class R5: CLWFX | Class T: GAEGX | Class W: CLGWX | Class Y: CGFYX | |||
Class Z: GEGTX | ||||||
Columbia Massachusetts Intermediate Municipal Bond Fund | ||||||
Class A: LMIAX | Class B: LMIBX | Class C: LMICX | Class T: GMBAX | |||
Class Z: SEMAX | ||||||
Columbia Massachusetts Tax-Exempt Fund | ||||||
Class A: COMAX | Class B: CMABX | Class C: COMCX | Class Z: CMSZX | |||
Columbia Mid Cap Growth Fund | ||||||
Class A: CBSAX | Class B: CBSBX | Class C: CMCCX | Class I: CMTIX | |||
Class R: CMGRX | Class R5: CMGVX | Class T: CBSTX | Class W: CMRWX | |||
Class Y: CMGYX | Class Z: CLSPX | |||||
Columbia New York Intermediate Municipal Bond Fund | ||||||
Class A: LNYAX | Class B: LNYBX | Class C: LNYCX | Class T: GANYX | |||
Class Z: GNYTX | ||||||
Columbia New York Tax-Exempt Fund | ||||||
Class A: COLNX | Class B: CNYBX | Class C: CNYCX | Class Z: CNYZX | |||
Columbia Oregon Intermediate Municipal Bond Fund | ||||||
Class A: COEAX | Class B: COEBX | Class C: CORCX | Class Z: CMBFX | |||
Columbia Pacific/Asia Fund | ||||||
Class A: CASAX | Class C: CASCX | Class I: CPCIX | Class W: CPAWX | |||
Class Z: USPAX | ||||||
Columbia Real Estate Equity Fund | ||||||
Class A: CREAX | Class B: CREBX | Class C: CRECX | Class I: CREIX | |||
Class R: CRSRX | Class R4: CRRFX | Class R5: CRRVX | Class W: CREWX | |||
Class Z: CREEX | ||||||
Columbia Risk Allocation Fund | ||||||
Class A: CRAAX | Class C: CRACX | Class R: CRKRX | Class R4: CRFRX | |||
Class R5: CRDRX | Class W: CRAWX | Class Z: CRAZX | ||||
Columbia Select Large Cap Growth Fund | ||||||
Class A: ELGAX | Class C: ELGCX | Class I: CSPIX | Class R: URLGX | |||
Class W: CSLWX | Class Z: UMLGX | |||||
Columbia Select Small Cap Fund | ||||||
Class A: ESCAX | Class C: ESCCX | Class R: URLCX | Class Z: UMLCX | |||
Columbia Small Cap Core Fund | ||||||
Class A: LSMAX | Class B: LSMBX | Class C: LSMCX | Class I: CPOIX | |||
Class T: SSCEX | Class W: CSCWX | Class Z: SMCEX |
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Fund | ||||||
Columbia Small Cap Growth Fund I | ||||||
Class A: CGOAX | Class B: CGOBX | Class C: CGOCX | Class I: CSWIX | |||
Class R: CCRIX | Class Y: CSGYX | Class Z: CMSCX | ||||
Columbia Small Cap Value Fund I | ||||||
Class A: CSMIX | Class B: CSSBX | Class C: CSSCX | Class I: CVUIX | |||
Class R: CSVRX | Class Y: CSVYX | Class Z: CSCZX | ||||
Columbia Strategic Income Fund | ||||||
Class A: COSIX | Class B: CLSBX | Class C: CLSCX | Class R: CSNRX | |||
Class R4: CSIVX | Class R5: CTIVX | Class W: CTTWX | Class Z: LSIZX | |||
Columbia Tax-Exempt Fund | ||||||
Class A: COLTX | Class B: CTEBX | Class C: COLCX | Class Z: CTEZX | |||
Columbia Technology Fund | ||||||
Class A: CTCAX | Class B: CTCBX | Class C: CTHCX | Class Z: CMTFX | |||
Columbia U.S. Treasury Index Fund | ||||||
Class A: LUTAX | Class B: LUTBX | Class C: LUTCX | Class I: CUTIX | |||
Class W: CTIWX | Class Z: IUTIX | |||||
Columbia Value and Restructuring Fund | ||||||
Class A: EVRAX | Class C: EVRCX | Class I: CVRIX | Class R: URBIX | |||
Class W: CVRWX | Class Z: UMBIX |
This Statement of Additional Information (SAI) is not a prospectus, is not a substitute for reading any prospectus and is intended to be read in conjunction with a Fund’s current prospectus. The most recent annual report for each Fund that has been in operation for a fiscal year and has produced an annual report, which includes the Fund’s audited financial statements for its most recent fiscal period, and the most recent semi-annual report to shareholders of Columbia Greater China Fund, which includes unaudited financial statements for the most recent semi-annual fiscal period for the Fund, are incorporated by reference into this SAI.
Copies of the Funds’ current prospectuses and annual and semi-annual reports may be obtained without charge by writing Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081, by calling Columbia Funds at 800.345.6611 or by visiting the Columbia Funds website at www.columbiamanagement.com.
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1 | ||||||
6 | ||||||
13 | ||||||
13 | ||||||
13 | ||||||
18 | ||||||
61 | ||||||
61 | ||||||
63 | ||||||
63 | ||||||
64 | ||||||
70 | ||||||
70 | ||||||
96 | ||||||
111 | ||||||
116 | ||||||
120 | ||||||
Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest | 128 | |||||
132 | ||||||
134 | ||||||
141 | ||||||
143 | ||||||
143 | ||||||
145 | ||||||
145 | ||||||
160 | ||||||
163 | ||||||
General Brokerage Policy, Brokerage Transactions and Broker Selection | 163 | |||||
165 | ||||||
168 | ||||||
169 | ||||||
173 | ||||||
175 | ||||||
176 | ||||||
179 | ||||||
179 | ||||||
183 | ||||||
183 | ||||||
184 | ||||||
186 | ||||||
207 | ||||||
298 | ||||||
A-1 | ||||||
B-1 | ||||||
C-1 | ||||||
D-1 | ||||||
E-1 | ||||||
F-1 |
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The SAI is a part of the Funds’ registration statement that is filed with the SEC. The registration statement includes the Funds’ prospectuses, the SAI and certain exhibits. The SAI, and any supplements to it, can be found online at www.columbiamanagement.com, or by accessing the SEC’s website at www.sec.gov.
For purposes of any electronic version of this SAI, all references to websites, or universal resource locators (URLs), are intended to be inactive and are not meant to incorporate the contents of any websites into this SAI.
The SAI generally provides additional information about the Funds that is not required to be in the Funds’ prospectuses. The SAI expands discussions of certain matters described in the Funds’ prospectuses and provides certain additional information about the Funds that may be of interest to some investors. Among other things, the SAI provides information about:
• | the organization of the Trust; |
• | the Funds’ investments; |
• | the Funds’ investment adviser, investment subadviser(s) (if any) and other service providers, including roles and relationships of Ameriprise Financial and its affiliates, and conflicts of interest; |
• | the governance of the Funds; |
• | the Funds’ brokerage practices; |
• | the share classes offered by the Funds; |
• | the purchase, redemption and pricing of Fund shares; and |
• | the application of U.S. federal income tax laws. |
Investors may find this information important and helpful. If you have any questions about the Funds, please call Columbia Funds at 800.345.6611 or contact your financial advisor.
Before reading the SAI, you should consult the Glossary below, which defines certain of the terms used in the SAI.
Glossary
1933 Act | Securities Act of 1933, as amended | |
1934 Act | Securities Exchange Act of 1934, as amended | |
1940 Act | Investment Company Act of 1940, as amended | |
Administrative Services Agreement | The administrative services agreement between the Trust, on behalf of the Funds, and the Administrator | |
Administrator | Columbia Management Investment Advisers, LLC | |
Ameriprise Financial | Ameriprise Financial, Inc. | |
Active Portfolio Funds | AP – Alternative Strategies Fund, AP – Core Plus Bond Fund, AP – Select Large Cap Growth Fund and AP – Small Cap Equity Fund | |
AP – Alternative Strategies Fund | Active Portfolios® Multi-Manager Alternative Strategies Fund | |
AP – Core Plus Bond Fund | Active Portfolios® Multi-Manager Core Plus Bond Fund | |
AP – Select Large Cap Growth Fund | Columbia Active Portfolios® – Select Large Cap Growth Fund | |
AP – Small Cap Equity Fund | Active Portfolios® Multi-Manager Small Cap Equity Fund | |
AQR | AQR Capital Management, LLC |
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Balanced Fund | Columbia Balanced Fund | |
BANA | Bank of America, National Association | |
Bank of America | Bank of America Corporation | |
BFDS/DST | Boston Financial Data Services, Inc./DST Systems, Inc. | |
Board | The Trust’s Board of Trustees | |
Bond Fund | Columbia Bond Fund | |
CA Tax-Exempt Fund | Columbia California Tax-Exempt Fund | |
CMOs | Collateralized mortgage obligations | |
Code | Internal Revenue Code of 1986, as amended | |
Codes of Ethics | The codes of ethics adopted by the Board pursuant to Rule 17j-1 under the 1940 Act | |
Columbia Funds Complex | The mutual fund complex that is comprised of the open-end investment management companies advised by the Investment Manager or its affiliates and principally underwritten by Columbia Management Investment Distributors, Inc. | |
Columbia Funds or Columbia Funds Family | The funds within the Columbia Funds Complex | |
CT Intermediate Municipal Bond Fund | Columbia Connecticut Intermediate Municipal Bond Fund | |
CT Tax-Exempt Fund | Columbia Connecticut Tax-Exempt Fund | |
Conestoga | Conestoga Capital Advisors, LLC | |
Contrarian Core Fund | Columbia Contrarian Core Fund | |
Corporate Income Fund | Columbia Corporate Income Fund | |
Distribution Agreement | The distribution agreement between the Trust, on behalf of the Funds, and the Distributor | |
Distribution Plan(s) | One or more of the plans adopted by the Board pursuant to Rule 12b-1 under the 1940 Act for the distribution of the Funds’ shares | |
Distributor | Columbia Management Investment Distributors, Inc. | |
Dividend Income Fund | Columbia Dividend Income Fund | |
DGHM | Dalton, Greiner, Hartman, Maher & Co., LLC | |
EAM | EAM Investors, LLC | |
Eaton Vance | Eaton Vance Management | |
Emerging Markets Fund | Columbia Emerging Markets Fund | |
Energy and Natural Resources Fund | Columbia Energy and Natural Resources Fund | |
FDIC | Federal Deposit Insurance Corporation | |
Federated | Federated Investment Management Company | |
FHLMC | The Federal Home Loan Mortgage Corporation | |
Fitch | Fitch, Inc. |
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FNMA | Federal National Mortgage Association | |
The Fund(s) or a Fund | One or more of the open-end management investment companies listed on the front cover of this SAI that are series of the Trust. | |
Global Dividend Opportunity Fund | Columbia Global Dividend Opportunity Fund; formerly known as Columbia Strategic Investor Fund | |
GNMA | Government National Mortgage Association | |
Greater China Fund | Columbia Greater China Fund | |
High Yield Municipal Fund | Columbia High Yield Municipal Fund | |
High Yield Opportunity Fund | Columbia High Yield Opportunity Fund | |
Independent Trustee(s) | One or more of the Trustees of the Board who are not “interested persons” (as defined in the 1940 Act) of the Funds | |
Interested Trustee | A Trustee of the Board who is currently treated as an “interested person” (as defined in the 1940 Act) of the Funds | |
Intermediate Bond Fund | Columbia Intermediate Bond Fund | |
Intermediate Municipal Bond Fund | Columbia Intermediate Municipal Bond Fund | |
International Bond Fund | Columbia International Bond Fund | |
Investment Management Services Agreement | The investment management services agreement between the Trust, on behalf of the Funds, and the Investment Manager | |
Investment Manager or Adviser | Columbia Management Investment Advisers, LLC | |
Investment Sub-Advisory Agreement | The investment subadvisory agreement between the Investment Manager and a Fund’s subadviser, as the context may require | |
IRS | United States Internal Revenue Service | |
JPMorgan | JPMorgan Chase Bank, N.A. | |
Large Cap Growth Fund | Columbia Large Cap Growth Fund | |
Legacy Columbia Funds | The funds within the Columbia Funds Complex that used the Columbia brand prior to September 27, 2010, as listed on Appendix E hereto | |
Legacy RiverSource Funds or RiverSource Funds | The funds within the Columbia Funds Complex that historically bore the RiverSource, Seligman and Threadneedle brands, including those renamed to bear the “Columbia” brand effective September 27, 2010, as well as certain other funds, as listed on Appendix F hereto | |
LIBOR | London Interbank Offered Rate | |
MA Intermediate Municipal Bond Fund | Columbia Massachusetts Intermediate Municipal Bond Fund | |
MA Tax-Exempt Fund | Columbia Massachusetts Tax-Exempt Fund | |
Mid Cap Growth Fund | Columbia Mid Cap Growth Fund | |
Moody’s | Moody’s Investors Service, Inc. | |
NASDAQ | National Association of Securities Dealers Automated Quotations system | |
NY Intermediate Municipal Bond Fund | Columbia New York Intermediate Municipal Bond Fund | |
NY Tax-Exempt Fund | Columbia New York Tax-Exempt Fund | |
NRSRO | Nationally recognized statistical ratings organization (such as Moody’s, Fitch or S&P) |
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NSCC | National Securities Clearing Corporation | |
NYSE | New York Stock Exchange | |
Oregon Intermediate Municipal Bond Fund | Columbia Oregon Intermediate Municipal Bond Fund | |
Pacific/Asia Fund | Columbia Pacific/Asia Fund | |
Previous Administrator | Columbia Management Advisors, LLC | |
Previous Adviser | Columbia Management Advisors, LLC | |
Previous Distributor | Columbia Management Distributors, Inc. | |
Previous Transfer Agent | Columbia Management Services, Inc. | |
Real Estate Equity Fund | Columbia Real Estate Equity Fund | |
REIT | Real estate investment trust | |
REMIC | Real estate mortgage investment conduit | |
REMS | Real Estate Management Services Group, LLC | |
RIC | A “regulated investment company,” as such term is used in the Internal Revenue Code of 1986, as amended | |
Risk Allocation Fund | Columbia Risk Allocation Fund | |
S&P | Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s” and “S&P” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Investment Manager. The Columbia Funds are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Columbia Funds). | |
SAI | This Statement of Additional Information | |
SEC | United States Securities and Exchange Commission | |
Select Large Cap Growth Fund | Columbia Select Large Cap Growth Fund | |
Select Small Cap Fund | Columbia Select Small Cap Fund | |
Selling Agent(s) | One or more of the financial intermediaries that are authorized to sell shares of the Funds, which include banks, broker-dealers and financial advisors as well as firms that employ such broker-dealers and financial advisors, including, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates. | |
Small Cap Core Fund | Columbia Small Cap Core Fund | |
Small Cap Growth Fund I | Columbia Small Cap Growth Fund I | |
Small Cap Value Fund I | Columbia Small Cap Value Fund I | |
State Bond Fund(s) | CT Intermediate Municipal Bond Fund, MA Intermediate Municipal Bond Fund and NY Intermediate Municipal Bond Fund | |
State Street | State Street Bank and Trust Company |
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State Tax-Exempt Fund(s) | CA Tax-Exempt Fund, CT Tax-Exempt Fund, MA Tax-Exempt Fund and NY Tax-Exempt Fund | |
Strategic Income Fund | Columbia Strategic Income Fund | |
Tax-Exempt Fund | Columbia Tax-Exempt Fund | |
TCW | TCW Investment Management Company | |
Technology Fund | Columbia Technology Fund | |
Transfer Agency Agreement | The transfer agency and dividend disbursing agent agreement between the Trust, on behalf of the Funds, and Columbia Management Investment Services Corp. | |
Transfer Agent | Columbia Management Investment Services Corp. | |
The Trust | Columbia Funds Series Trust I, the registered investment company in the Columbia Funds Family to which this SAI relates | |
Trustee(s) | One or more of the Board’s Trustees | |
Ultra Short Term Bond Fund | CMG Ultra Short Term Bond Fund | |
U.S. Treasury Index Fund | Columbia U.S. Treasury Index Fund | |
Value and Restructuring Fund | Columbia Value and Restructuring Fund | |
Wasatch | Wasatch Advisors, Inc. | |
Water Island | Water Island Capital, LLC |
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The Trust is a registered investment company under the 1940 Act within the Columbia Funds Family. Columbia Funds currently include more than 100 mutual funds in major asset classes.
The Trust was organized as a Massachusetts business trust in 1987. On September 23, 2005, the Trust changed its name from Columbia Funds Trust IX to its current name. On October 13, 2003, the Trust changed its name from Liberty-Stein Roe Funds Municipal Trust to Columbia Funds Trust IX.
Funds with fiscal years ending March 31
AP – Select Large Cap Growth Fund, Emerging Markets Fund, Energy and Natural Resources Fund, Pacific/Asia Fund, Select Large Cap Growth Fund, Select Small Cap Fund and Value and Restructuring Fund
Each of AP – Select Large Cap Growth Fund, Emerging Markets Fund, Energy and Natural Resources Fund, Pacific/Asia Fund, Select Large Cap Growth Fund, Select Small Cap Fund and Value and Restructuring Fund represents a separate series of the Trust and is an open-end management investment company. Each of the Funds is a diversified fund, except Energy and Natural Resources Fund, which is a non-diversified Fund. Each of the Funds has a fiscal year end of March 31.
On March 31, 2008, each of Emerging Markets Fund, Energy and Natural Resources Fund, Pacific/Asia Fund, Select Large Cap Growth Fund, Select Small Cap Fund and Value and Restructuring Fund acquired all assets and assumed all liabilities of, respectively, the following funds, each of which is a series of Excelsior Funds Trust or Excelsior Funds, Inc., as applicable: Emerging Markets Fund, Energy and Natural Resources Fund, Pacific/Asia Fund, Large Cap Growth Fund, Small Cap Fund and Value and Restructuring Fund (the Predecessor Funds). For periods prior to March 31, 2008, the performance and financial information shown for each Fund is the performance and financial information of the corresponding Predecessor Fund. The Funds commenced operations on March 31, 2008, except for AP – Select Large Cap Growth Fund, which commenced operations on March 14, 2012.
AP – Select Large Cap Growth Fund offers one class of shares; Emerging Markets Fund, Select Large Cap Growth Fund and Value and Restructuring Fund offer six classes of shares; Energy and Natural Resources Fund offers seven classes of shares; Pacific/Asia Fund offers five classes of shares; and Select Small Cap Fund offers four classes of shares, each as described in Capital Stock and Other Securities.
Funds with fiscal years ending April 30
Bond Fund
Bond Fund represents a separate series of the Trust and is an open-end management investment company. The Fund is a diversified fund.
On March 31, 2008, Bond Fund acquired all assets and assumed all liabilities of Core Bond Fund, which is a series of Excelsior Funds, Inc. For periods prior to March 31, 2008, the performance and financial information shown for the Fund is the performance and financial information of Core Bond Fund. The Fund commenced operations on March 31, 2008.
Bond Fund offers nine classes of shares, as described in Capital Stock and Other Securities.
Prior to April 30, 2012, Bond Fund had a fiscal year end of March 31.
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Corporate Income Fund and Intermediate Bond Fund
Each of Corporate Income Fund and Intermediate Bond Fund represents a separate series of the Trust and is an open-end diversified management investment company. Each of the Funds has a fiscal year end of March 31. Prior to March 27, 2006, each Fund was organized as a series of Columbia Funds Trust VIII, a Massachusetts business trust. The information provided for each Fund in this SAI for periods prior to March 27, 2006 relates to such predecessor fund. Corporate Income Fund commenced investment operations on March 5, 1986. Intermediate Bond Fund commenced investment operations on December 5, 1978.
Intermediate Bond Fund offers seven classes of shares, as described in Capital Stock and Other Securities. Prior to July 31, 2000, the Fund had a single class of shares. On July 14, 2000, the outstanding shares of the Fund were converted into Class S shares, and on July 31, 2000, the Fund commenced offering Class A shares. On February 1, 2002, the Fund commenced offering Class B and C shares. On July 29, 2002, the Fund’s Class S shares were redesignated as Class Z shares. On January 23, 2006, the Fund commenced offering Class R shares. Prior to September 12, 2002, the Fund invested all of its assets in the SR&F Intermediate Bond Portfolio as part of a master fund/feeder fund structure. Effective October 13, 2003, the Fund changed its name from Liberty Intermediate Bond Fund to its current name. Effective February 1, 2002, the Fund changed its name from Stein Roe Intermediate Bond Fund to Liberty Intermediate Bond Fund.
Corporate Income Fund offers six classes of shares, as described in Capital Stock and Other Securities. Prior to August 1, 2000, the Fund had a single class of shares. On that date, the outstanding shares of the Fund were converted into Class S shares, and the Fund commenced offering Class A shares. On July 15, 2002, the Fund added Class B and C shares, redesignated its Class S shares as Class Z shares, and changed its name from Stein Roe Income Fund to Liberty Income Fund. Prior to July 15, 2002, the Fund invested all of its assets in the SR&F Income Portfolio as part of a master fund/feeder fund structure. On October 13, 2003, the Fund changed its name from Liberty Income Fund to Income Fund. Effective September 27, 2010, the Fund changed its name from Income Fund to its current name.
Prior to April 30, 2012, Corporate Income Fund and Intermediate Bond Fund each had a fiscal year end of March 31.
Small Cap Value Fund I
Small Cap Value Fund I commenced operations on July 25, 1986. Small Cap Value Fund I was organized as a series of Columbia Funds Trust VI, a Massachusetts business trust, prior to its reorganization as a series of the Trust on March 27, 2006. The information provided for Small Cap Value Fund I in this SAI for periods prior to March 27, 2006 relates to Columbia Funds Trust VI.
Small Cap Value Fund I offers seven classes of shares, as described in Capital Stock and Other Securities. The Fund changed its name from “Colonial Small Stock Fund” to “Colonial Small-Cap Value Fund” on February 28, 1997, and from “Colonial Small-Cap Value Fund” to “Liberty Small-Cap Value Fund” on July 14, 2000. The Fund changed its name from “Liberty Small-Cap Value Fund” to “Columbia Small Cap Value Fund” on October 13, 2003. The Fund changed its name from “Columbia Small Cap Value Fund” to its current name effective October 10, 2005.
Prior to April 30, 2012, Small Cap Value Fund I had a fiscal year end of June 30.
U.S. Treasury Index Fund
U.S. Treasury Index Fund represents a series of the Trust and is an open-end diversified management investment company. U.S. Treasury Index Fund has a fiscal year end of April 30. Prior to March 27, 2006, the Fund was organized as a series of Columbia Funds Trust V, a Massachusetts business trust. The information provided for U.S. Treasury Index Fund in this SAI for periods prior to March 27, 2006 relates to such predecessor fund. The predecessor fund commenced investment operations on June 4, 1991. The predecessor
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fund was the successor by reorganization to the Galaxy II U.S. Treasury Fund, a series of The Galaxy Fund II, a Massachusetts business trust organized on February 22, 1990. Class Z shares of the predecessor fund were issued in exchange for existing shares of the Galaxy II U.S. Treasury Fund. The reorganization occurred on November 25, 2002. All references to U.S. Treasury Index Fund prior to November 25, 2002 shall be deemed to refer to the Galaxy II U.S. Treasury Fund.
U.S. Treasury Index Fund offers six classes of shares, as described in Capital Stock and Other Securities. Effective October 13, 2003, U.S. Treasury Index Fund changed its name from Liberty U.S. Treasury Index Fund to its current name.
Prior to April 30, 2012, U.S. Treasury Index Fund had a fiscal year end of March 31.
Funds with fiscal years ending May 31
Dividend Income Fund, High Yield Municipal Fund, High Yield Opportunity Fund, International Bond Fund, Risk Allocation Fund and Strategic Income Fund
Each of Dividend Income Fund, High Yield Municipal Fund, High Yield Opportunity Fund, International Bond Fund, Risk Allocation Fund and Strategic Income Fund represents a separate series of the Trust and is an open-end management investment company. Dividend Income Fund, High Yield Municipal Fund, High Yield Opportunity Fund and Strategic Income Fund are diversified funds and Risk Allocation Fund and International Bond Fund are non-diversified funds. Each of the Funds has a fiscal year end of May 31.
Dividend Income Fund commenced operations on March 4, 1998, the successor to a series of the Galaxy Fund, a Massachusetts business trust organized on March 31, 1986. Dividend Income Fund offers eight classes of shares, as described in Capital Stock and Other Securities. Prior to May 31, 2012, Dividend Income Fund had a fiscal year end of September 30.
High Yield Municipal Fund commenced investment operations on March 5, 1984. The Fund offers four classes of shares, as described in Capital Stock and Other Securities. Prior to August 1, 2000, the Fund had a single class of shares. On that date, the outstanding shares of the Fund were converted into Class S shares, and the Fund commenced offering Class A shares. On July 15, 2002, the Fund added Class B and Class C shares and redesignated Class S shares as Class Z shares. Also on July 15, 2002, the Fund changed its name from “Stein Roe High-Yield Municipals Fund” to “Liberty High Yield Municipal Fund” and the Fund’s Class A shares changed their name from “Liberty High Income Municipals Fund, Class A,” to Class A shares. The Fund invested all of its assets in SR&F High Yield Municipals Portfolio as part of a master fund/feeder fund structure through July 15, 2002. The Fund changed its name from “Liberty High Yield Municipal Fund” to its current name effective October 13, 2003. Prior to May 31, 2012, High Yield Municipal Fund had a fiscal year end of June 30.
Prior to March 27, 2006 and September 26, 2005, respectively, High Yield Opportunity Fund and Strategic Income Fund were organized as a series of Columbia Funds Trust I, a Massachusetts business trust. The information provided for High Yield Opportunity Fund and Strategic Income Fund in this SAI for periods prior to March 27, 2006 and September 26, 2005, respectively, relates to the corresponding series of such predecessor trust.
High Yield Opportunity Fund offers four classes of shares, as described in Capital Stock and Other Securities. On October 21, 1971, High Yield Opportunity Fund commenced offering Class A shares. On June 8, 1992, High Yield Opportunity Fund commenced offering Class B shares. On January 15, 1996, High Yield Opportunity Fund commenced offering Class C shares. On January 8, 1999, High Yield Opportunity Fund commenced offering Class Z shares. Effective October 13, 2003, High Yield Opportunity Fund changed its name from Liberty High Yield Securities Fund to its current name. Effective July 14, 2000, High Yield Opportunity Fund changed its name from Colonial High Yield Securities Fund to Liberty High Yield Securities Fund.
International Bond Fund offers five classes of shares, as described in Capital Stock and Other Securities. On December 1, 2008, International Bond Fund commenced offering Class A, C and Z shares.
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Strategic Income Fund offers eight classes of shares, as described in Capital Stock and Other Securities. On April 22, 1977, Strategic Income Fund commenced offering Class A shares. On May 15, 1992, Strategic Income Fund commenced offering Class B shares. On July 1, 1997, Strategic Income Fund commenced offering Class C shares. On November 2, 1998, Strategic Income Fund commenced offering Class J shares. On June 12, 2009, Strategic Income Fund stopped accepting Class J share purchases. On July 27, 2009, Strategic Income Fund liquidated and terminated Class J shares. On January 29, 1999, Strategic Income Fund commenced offering Class Z shares.
Risk Allocation Fund offers seven classes of shares, as described in Capital Stock and Other Securities.
Fund with fiscal year ending July 31
Ultra Short Term Bond Fund
Ultra Short Term Bond Fund represents a separate series of the Trust and is an open-end diversified management investment company. The Fund has a fiscal year end of July 31.
Ultra Short Term Bond Fund does not offer multiple share classes. Prior to November 23, 2009, CMG Ultra Short Term Bond Fund (the Predecessor Ultra Short Term Bond Fund) was organized as a separate portfolio of Columbia Funds Institutional Trust, a Massachusetts business trust (the Predecessor Institutional Trust). The information provided for Ultra Short Term Bond Fund in this SAI for periods prior to November 23, 2009 relates to the Predecessor Ultra Short Term Bond Fund; the information provided for the Trust in this SAI for periods prior to November 23, 2009 includes information for the Predecessor Institutional Trust to the extent it relates to Ultra Short Term Bond Fund. Prior to March 27, 2006, the Predecessor Ultra Short Term Bond Fund was organized as a separate portfolio of CMG Fund Trust (the Prior Predecessor Ultra Short Term Bond Fund), an Oregon business trust organized in 1989 (the Prior Predecessor Institutional Trust). The information provided for Ultra Short Term Bond Fund in this SAI for periods prior to March 27, 2006 relates to the Prior Predecessor Ultra Short Term Bond Fund; the information provided for the Trust in this SAI for periods prior to March 27, 2006 includes information for the Prior Predecessor Institutional Trust to the extent it relates to Ultra Short Term Bond Fund.
Funds with fiscal years ending August 31
AP – Alternative Strategies Fund, AP – Core Plus Bond Fund, AP – Small Cap Equity Fund, Balanced Fund, Global Dividend Opportunity Fund, Greater China Fund, Mid Cap Growth Fund, Oregon Intermediate Municipal Bond Fund, Small Cap Growth Fund I, and Technology Fund
Each of AP – Alternative Strategies Fund, AP – Core Plus Bond Fund, AP – Small Cap Equity Fund, Balanced Fund, Global Dividend Opportunity Fund, Greater China Fund, Mid Cap Growth Fund, Oregon Intermediate Municipal Bond Fund, Small Cap Growth Fund I and Technology Fund represents a separate series of the Trust, is an open-end management investment company and has a fiscal year end of August 31. Each of AP – Core Plus Bond Fund, AP – Small Cap Equity Fund, Balanced Fund, Global Dividend Opportunity Fund, Mid Cap Growth Fund and Small Cap Growth Fund I is a diversified series of the Trust. Technology Fund and Oregon Intermediate Municipal Bond Fund are operating as diversified series of the Trust. AP – Alternative Strategies Fund and Greater China Fund are non-diversified series of the Trust.
Prior to March 27, 2006, each Fund, except for Greater China Fund, was organized as an Oregon corporation. The information provided for these Funds in this SAI for periods prior to March 27, 2006 relates to the predecessor Oregon corporation funds. Greater China Fund was organized as a series of Columbia Funds Trust II. The information provided for Greater China Fund in this SAI for periods prior to March 27, 2006 relates to the corresponding series of Columbia Funds Trust II.
AP – Alternative Strategies Fund, AP – Core Plus Bond Fund and AP – Small Cap Equity Fund offer one class of shares; Oregon Intermediate Municipal Bond Fund and Technology Fund offer four classes of shares,
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Greater China Fund offers six classes of shares, Balanced Fund and Small Cap Growth Fund I offers seven classes of shares, Mid Cap Growth Fund offers ten classes of shares and Global Dividend Opportunity Fund offers eight classes of shares, as described in Capital Stock and Other Securities. Effective August 17, 2012, Global Dividend Opportunity Fund changed its name from Strategic Investor Fund to its current name.
Funds with fiscal years ending September 30
Contrarian Core Fund, Large Cap Growth Fund, and Small Cap Core Fund
Each of Contrarian Core Fund, Large Cap Growth Fund and Small Cap Core Fund represents a separate series of the Trust and is an open-end diversified management investment company. Each of the Funds has a fiscal year end of September 30.
Large Cap Growth Fund commenced operations on December 14, 1990; Contrarian Core Fund and Small Cap Core Fund commenced operations on December 14, 1992, as separate portfolios (collectively, the Predecessor Shawmut Funds) of The Shawmut Funds. On December 4, 1995, the Predecessor Shawmut Funds were reorganized as new portfolios of the Galaxy Fund. Prior to the reorganization, the Predecessor Shawmut Funds offered and sold shares of beneficial interest that were similar to the Galaxy Fund’s Trust Shares and Retail A Shares. Contrarian Core Fund changed its name from the Columbia Common Stock Fund to its current name on November 14, 2008.
Each Fund is the successor to a separate series of the Galaxy Fund, a Massachusetts business trust organized on March 31, 1986. On November 18, 2002, November 25, 2002 and December 9, 2002, the series of the Galaxy Fund to which the Funds succeeded (the Predecessor Funds) were reorganized as separate series of the Liberty-Stein Roe Investment Trust. Class A shares of the Funds were issued in exchange for Prime A Shares of the Predecessor Funds, Class B shares of the Funds were issued in exchange for Prime B Shares of the Predecessor Funds, Class T shares of the Funds were issued in exchange for Retail A Shares of the Predecessor Funds, Class G shares of the Funds were issued in exchange for Retail B Shares of the Predecessor Funds and Class Z shares of the Funds were issued in exchange for Trust Shares of the Predecessor Funds. (Prime A and Prime B Shares, Retail A and Retail B Shares and Trust Shares together are referred to herein as the Predecessor Classes). On August 8, 2007, Class G shares of the Funds were converted to Class T shares. Information provided with respect to each Fund for periods prior to such Fund’s inception relates to the Fund’s Predecessor Fund. Further, information provided with respect to each class of each Fund prior to such Fund’s inception relates to the Predecessor Classes of such class.
Contrarian Core Fund offers nine classes of shares; Large Cap Growth Fund offers thirteen classes of shares; and Small Cap Core Fund offers seven classes of shares, each as described in Capital Stock and Other Securities.
Funds with fiscal years ending October 31
Intermediate Municipal Bond Fund
Intermediate Municipal Bond Fund represents a separate series of the Trust and is an open-end diversified management investment company with a fiscal year end of October 31. Intermediate Municipal Bond Fund commenced investment operations as a series of the Trust on September 26, 2005. Prior to September 26, 2005 (the “Intermediate Municipal Bond Fund Reorganization Date”), the Fund was organized as a series of Columbia Funds Trust V, a Massachusetts business trust, under the name Columbia Intermediate Tax-Exempt Bond Fund (the “Intermediate Municipal Bond Predecessor Fund”) that commenced business operations as a separate portfolio of the Boston 1784 Funds. Intermediate Municipal Bond Predecessor Fund was the successor to a separate series of The Galaxy Fund, a Massachusetts business trust organized on March 31, 1986. The information provided for the Fund in this SAI for periods prior to the Intermediate Municipal Bond Fund Reorganization Date relates to the Intermediate Municipal Bond Predecessor Fund.
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Intermediate Municipal Bond Fund offers five classes of shares, each as described in Capital Stock and Other Securities.
State Bond Funds
Each State Bond Fund represents a separate series of the Trust and is an open-end management investment company. Each of the State Bond Funds is a non-diversified fund. Each of the State Bond Funds has a fiscal year end of October 31.
Each State Bond Fund was originally organized as a series of another Massachusetts business trust prior to its reorganization as a series of the Trust on March 27, 2006. Effective October 13, 2003, the Trust of which the State Bond Funds were previously series changed its name from Liberty Funds Trust V to Columbia Funds Trust V. Each State Bond Fund is the successor to a separate series of The Galaxy Fund, a Massachusetts business trust organized on March 31, 1986. On November 18, 2002, November 25, 2002, and December 9, 2002, the series of The Galaxy Fund to which the Funds succeeded (the “State Bond Predecessor Funds”) were reorganized as separate series of Liberty Funds Trust V. As part of this reorganization, Class T shares of the State Bond Funds were issued in exchange for Retail A Shares of the State Bond Predecessor Funds, Class G shares of the State Bond Funds were issued in exchange for Retail B Shares of the State Bond Predecessor Funds and Class Z shares of the State Bond Funds were issued in exchange for Trust Shares of the State Intermediate Predecessor Funds.
NY Intermediate Municipal Bond Fund commenced operations on December 31, 1991.
CT Intermediate Municipal Bond Fund and MA Intermediate Municipal Bond Fund commenced operations as separate portfolios (each a Predecessor Boston 1784 Fund, and collectively, the Predecessor Boston 1784 Funds) of the Boston 1784 Funds. On June 26, 2000, each Predecessor Boston 1784 Fund was reorganized as a new portfolio of The Galaxy Fund (the Boston 1784 Reorganization). Prior to the Boston 1784 Reorganization, the Predecessor Boston 1784 Funds offered and sold one class of shares. In connection with the Boston 1784 Reorganization, shareholders of the Predecessor Boston 1784 Funds exchanged their shares for Shares, Trust Shares and/or BKB Shares of the applicable State Bond Predecessor Funds. Shareholders of Predecessor Boston 1784 Funds who purchased their shares through an investment management, trust, custody, or other agency relationship with BankBoston, N.A. received Shares or Trust Shares of the Funds. BKB Shares were issued to shareholders of the Predecessor Boston 1784 Funds who were not eligible to receive Trust Shares at the time of the Boston 1784 Reorganization. On June 26, 2001, BKB Shares of the Funds converted into Retail A Shares.
Each State Bond Fund offers five classes of shares, each as described in Capital Stock and Other Securities.
State Tax-Exempt Funds
Each State Tax-Exempt Fund represents a separate series of the Trust and is an open-end management investment company. Each of the State Tax-Exempt Funds is a non-diversified fund and has a fiscal year end of October 31.
CA Tax-Exempt Fund was originally organized as a series of another Massachusetts business trust prior to its reorganization as a series of the Trust. CA Tax-Exempt Fund commenced investment operations as a series of the Trust on September 19, 2005. Prior to September 19, 2005 (the CA Tax-Exempt Fund Reorganization Date), CA Tax-Exempt Fund was organized as a series of Columbia Funds Trust V which commenced investment operations on June 16, 1986. The information provided for CA Tax-Exempt Fund in this SAI for periods prior to the CA Tax-Exempt Fund Reorganization Date relates to the predecessor fund of the same name.
Each of CT Tax-Exempt Fund, MA Tax-Exempt Fund and NY Tax-Exempt Fund were originally organized as series of another Massachusetts business trust prior to their reorganization as series of the Trust. CT
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Tax-Exempt Fund, MA Tax-Exempt Fund and NY Tax-Exempt Fund were reorganized as series of the Trust on March 27, 2006 (the Tax-Exempt Fund Reorganization Date). Prior to March 27, 2006, CT Tax-Exempt Fund, MA Tax-Exempt Fund and NY Tax-Exempt Fund were organized as a series of Columbia Funds Trust V. CT Tax-Exempt Fund commenced investment operations on November 1, 1991, MA Tax-Exempt Fund commenced investment operations on April 10, 1987, and NY Tax-Exempt Fund commenced investment operations on September 26, 1986. The information provided for CT Tax-Exempt Fund, MA Tax-Exempt Fund and NY Tax-Exempt Fund in this SAI for periods prior to the Tax-Exempt Fund Reorganization Date relates to the predecessor funds of the same names. The trust of which the State Tax-Exempt Funds were previously series changed its name from Liberty Funds Trust V to Columbia Funds Trust V on October 13, 2003.
Each State Tax-Exempt Fund offers four classes of shares, as described in Capital Stock and Other Securities.
Fund with fiscal year ending November 30
Tax-Exempt Fund
Tax-Exempt Fund represents a separate series of the Trust and is an open-end diversified management investment company.
Prior to September 19, 2005 (the Fund Reorganization Date), the Fund was organized as a series of Columbia Funds Trust IV, a Massachusetts business trust (the Predecessor Fund). The information provided for the Fund in this SAI for periods prior to the Fund Reorganization Date relates to the Predecessor Fund. The Predecessor Fund commenced investment operations on November 21, 1978.
Tax-Exempt Fund offers four shares of classes, as described in Capital Stock and Other Securities.
Fund with fiscal year ending December 31
Real Estate Equity Fund
Real Estate Equity Fund represents a separate series of the Trust and is an open-end non-diversified management investment company. In 2009, Real Estate Equity Fund changed its fiscal year end from August 31 to December 31.
Prior to March 27, 2006, Real Estate Equity Fund was organized as an Oregon corporation. The information provided for the Fund in this SAI for periods prior to March 27, 2006 relates to the predecessor Oregon corporation.
Real Estate Equity Fund offers nine classes of shares, as described in Capital Stock and Other Securities.
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The investment objectives, principal investment strategies (i.e., as used in this SAI and the corresponding prospectuses, a strategy which generally involves the ability to invest 10% or more of a Fund’s total assets) and related principal risks for each Fund are discussed in each Fund’s prospectuses.
Certain Investment Activity Limits
The overall investment and other activities of the Investment Manager and its affiliates may limit the investment opportunities for each Fund in certain markets where limitations are imposed by regulators upon the amount of investment by affiliated investors, in the aggregate or in individual issuers. From time to time, each Fund’s activities also may be restricted because of regulatory restrictions applicable to the Investment Manager and its affiliates and/or because of their internal policies. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest.
Fundamental and Non-Fundamental Investment Policies
The following discussion of “fundamental” and “non-fundamental” investment policies and limitations for each Fund supplements the discussion of investment policies in the Funds’ prospectuses. A fundamental policy may be changed only with Board and shareholder approval. A non-fundamental policy may be changed by the Board and does not require shareholder approval, but may require notice to shareholders in certain instances.
Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of a Fund’s assets that may be invested in any security or other asset, or sets forth a policy regarding an investment standard, compliance with such percentage limitation or standard will be determined solely at the time of the Fund’s acquisition of such security or asset. Borrowings and other instruments that may give rise to leverage and the restriction on investing in illiquid securities are monitored on an ongoing basis.
Fundamental Investment Policies
The 1940 Act provides that a “vote of a majority of the outstanding voting securities” means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of a Fund, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding shares are represented at the meeting in person or by proxy. The following fundamental investment policies cannot be changed without such a vote.
Each Fund may not, as a matter of fundamental policy:
1. | Underwrite any issue of securities issued by other persons within the meaning of the 1933 Act except when it might be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with the Fund’s investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies; |
2. | Purchase or sell real estate, except each Fund may: (i) purchase securities of issuers which deal or invest in real estate, (ii) purchase securities which are secured by real estate or interests in real estate and (iii) hold and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of securities which are secured by real estate or interests therein; |
3. | With the exception of AP – Alternative Strategies Fund, which may invest up to 25% of its total assets in one or more wholly-owned subsidiaries that may invest in commodities, thereby indirectly gaining exposure to commodities, purchase or sell commodities, except that each Fund may to the extent consistent with its investment objective: (i) invest in securities of companies that purchase or sell commodities or which invest in such programs, (ii) purchase and sell options, forward contracts, |
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futures contracts, and options on futures contracts and (iii) enter into swap contracts and other financial transactions relating to commodities.a This limitation does not apply to foreign currency transactions including without limitation forward currency contracts. |
4. | With the exception of Real Estate Equity Fund, which will invest at least 65% of the value of its total assets in securities of companies principally engaged in the real estate industry, purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industryb, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States or any of their agencies, instrumentalities or political subdivisionsc; (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies or subsidiaries to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief; and (iii) under normal market conditions, Energy and Natural Resources Fund will invest at least 25% of the value of its total assets at the time of purchase in the securities of issuers conducting their principal business activities in the energy and other natural resources groups of industriesd; |
5. | Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief; |
6. | Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief; and |
7. | With the exception of AP – Alternative Strategies Fund, Oregon Intermediate Municipal Bond Fund, Greater China Fund, Energy and Natural Resources Fund, International Bond Fund, Risk Allocation Fund, the State Bond Funds, the State Tax-Exempt Funds, Technology Fund and Real Estate Equity Fund, purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. |
8. | Greater China Fund may not, as a matter of fundamental policy, purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 50% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, or any applicable exemptive relief. |
a | For purposes of fundamental investment policy (3) above, at the time of the establishment of the restriction, swap contracts on financial instruments or rates were not within the understanding of the term “commodities,” and notwithstanding any federal legislation or regulatory action by the CFTC that subjects such swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities for purposes of this restriction. |
b | In determining whether a purchase by Real Estate Equity Fund or Technology Fund would cause the Fund to have invested in accordance with this policy, the Investment Manager currently uses the Global Industry Classification Standard (GICS) produced by S&P and MSCI Inc. With respect to the Technology Fund restriction, the Investment Manager currently considers each information technology “sub-industry” identified in the GICS to represent a separate industry. |
c | For purposes of determining whether International Bond Fund has invested 25% or more of the value of its total assets at the time of purchase in the securities of one or more issuers conducting their principal business activities in the same industry pursuant to fundamental investment policy (4) above, the Fund will |
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consider each foreign government to be conducting its business activities in a separate industry, and will consider a security to have been issued by a foreign government if (i) the security is issued directly by such government, (ii) the security is issued by an agency, instrumentality or authority that is backed by the full faith and credit of such foreign government or (iii) the security is issued by an entity the assets and revenues of which the Investment Manager determines are not separate from such foreign government. The Fund generally will treat supranational entities as issuers separate and distinct from any foreign government, so long as such entities do not fall within the characteristics described in item (iii) above. If any other security is guaranteed as to payment of principal and/or interest by a foreign government, then the Fund will generally treat the guarantee as a separate security issued by such foreign government. |
d | In determining whether Energy and Natural Resources Fund has invested at least 25% of the value of its total assets in the securities of one or more issuers conducting their principal business activities in the energy and other natural resources groups of industries, the Investment Manager currently uses the GICS produced by S&P and MSCI Inc. The Investment Manager currently considers companies in each of the indicated GICS industry groups to be within the energy and other natural resources groups of industries: (i) Energy, (ii) Utilities, and (iii) Materials, but limited to companies in the following GICS industries and sub-industries: the Chemicals industry (companies that primarily produce or distribute industrial and basic chemicals, including the Commodity Chemicals, Diversified Chemicals, Fertilizers & Agriculture Chemicals, Industrial Gases, and Specialty Chemicals sub-industries), the Metals & Mining industry (companies that primarily produce, process, extract, or distribute precious or basic metals or minerals, including the Aluminum, Diversified Metals & Mining, Gold, Precious Metals & Minerals, and Steel sub-industries), and the Paper & Forest Products industry (companies that primarily cultivate or manufacture timber or wood-related products or paper products, including the Forest Products and Paper Products sub-industries). |
Intermediate Municipal Bond Fund
As a matter of fundamental policy, under normal circumstances, the Fund invests at least 80% of net assets in municipal securities that pay interest exempt from federal income tax (including the federal alternative minimum tax). These securities are issued by states and their political subdivisions, agencies, authorities and instrumentalities, by other qualified issuers (such as Guam, Puerto Rico and the U.S. Virgin Islands) and by mutual funds that invest in such securities. The Fund may comply with this 80% policy by investing in a partnership, trust, or regulated investment company which invests in such securities, in which case the Fund’s investment in such entity shall be deemed to be an investment in the underlying securities in the same proportion as such entity’s investment in such securities bears to its net assets.
The Fund may not, as a matter of fundamental policy, purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder, and any applicable exemptive relief.
CT Intermediate Municipal Bond Fund
As a matter of fundamental policy, under normal circumstances, the Fund invests at least 80% of net assets in municipal securities that pay interest exempt from federal income tax (including the federal alternative minimum tax) and Connecticut individual income tax. These securities are issued by the State of Connecticut and its political subdivisions, agencies, authorities and instrumentalities, by other qualified issuers (such as Guam, Puerto Rico and the U.S. Virgin Islands) and by mutual funds that invest in such securities. Dividends derived from interest on municipal securities other than such securities will generally be exempt from regular federal income tax (including the federal alternative minimum tax) but subject to Connecticut personal income tax. The Fund may comply with this 80% policy by investing in a partnership, trust or regulated investment company which invests in such securities, in which case the Fund’s investment in such entity shall be deemed to be an
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investment in the underlying securities in the same proportion as such entity’s investment in such securities bears to its net assets.
MA Intermediate Municipal Bond Fund
As a matter of fundamental policy, under normal circumstances, the Fund invests at least 80% of net assets in municipal securities that pay interest exempt from federal income tax (including the federal alternative minimum tax) and Massachusetts individual income tax. These securities are issued by the Commonwealth of Massachusetts and its political subdivisions, agencies, authorities and instrumentalities, by other qualified issuers (such as Guam, Puerto Rico and the U.S. Virgin Islands) and by mutual funds that invest in such securities. Dividends derived from interest on municipal securities other than such securities will generally be exempt from regular federal income tax (including the federal alternative minimum tax) but may be subject to Massachusetts personal income tax. The Fund may comply with this 80% policy by investing in a partnership, trust, or regulated investment company which invests in such securities, in which case the Fund’s investment in such entity shall be deemed to be an investment in the underlying securities in the same proportion as such entity’s investment in such securities bears to its net assets.
NY Intermediate Municipal Bond Fund
As a matter of fundamental policy, under normal circumstances, the Fund invests at least 80% of net assets in municipal securities that pay interest exempt from federal income tax (including the federal alternative minimum tax) and New York state individual income tax. These securities are issued by the State of New York and its political subdivisions, agencies, authorities and instrumentalities and by other qualified issuers (such as Guam, Puerto Rico and the U.S. Virgin Islands). Dividends derived from interest on municipal securities other than such securities will generally be exempt from regular federal income tax (including the federal alternative minimum tax) but may be subject to New York State and New York City personal income tax. The Fund may comply with this 80% policy by investing in a partnership, trust or regulated investment company which invests in such securities, in which case the Fund’s investment in such entity shall be deemed to be an investment in the underlying securities in the same proportion as such entity’s investment in such securities bears to its net assets.
State Tax-Exempt Funds
Each State Tax-Exempt Fund will, as a matter of fundamental policy, under normal circumstances, invest at least 80% of its total assets in state bonds, subject to applicable state requirements.
Tax-Exempt Fund
As a matter of fundamental policy, under normal circumstances, the Fund invests at least 80% of its total assets in tax-exempt bonds.
Non-Fundamental Investment Policies
Fund | May not invest more than 15% of its net assets in illiquid securitiesa | May sell securities short to the extent permitted by the 1940 Actb | May purchase securities of other investment companies to the extent permitted by the 1940 Actc | May not purchase securities of companies for purpose of exercising controld | Provides 60 day notice in connection with Rule 35d-1 changese | |||||||||||||
AP – Alternative Strategies Fund | ü | ü | ü | |||||||||||||||
AP – Core Plus Bond Fund | ü | ü | ü | |||||||||||||||
AP – Select Large Cap Growth Fund | ü | ü | ü | |||||||||||||||
AP – Small Cap Equity Fund | ü | ü | ü | ü | ||||||||||||||
Balanced Fund | ü | ü | ü | |||||||||||||||
Bond Fund | ü | ü | ü | |||||||||||||||
CA Tax-Exempt Fund | ü | ü | ü | ü | * |
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Fund | May not invest more than 15% of its net assets in illiquid securitiesa | May sell securities short to the extent permitted by the 1940 Actb | May purchase securities of other investment companies to the extent permitted by the 1940 Actc | May not purchase securities of companies for purpose of exercising controld | Provides 60 day notice in connection with Rule 35d-1 changese | |||||||||||||||
CT Intermediate Municipal Bond Fund | ü | ü | ü | ü | * | |||||||||||||||
CT Tax-Exempt Fund | ü | ü | ü | ü | * | |||||||||||||||
Contrarian Core Fund | ü | ü | ü | ü | ||||||||||||||||
Corporate Income Fund | ü | ü | ü | ü | ||||||||||||||||
Dividend Income Fund | ü | ü | ü | ü | ü | |||||||||||||||
Emerging Markets Fund | ü | ü | ü | |||||||||||||||||
Energy and Natural Resources Fund | ü | ü | ü | |||||||||||||||||
Global Dividend Opportunity Fund | ü | ü | ü | |||||||||||||||||
Greater China Fund | ü | ü | ü | ü | ||||||||||||||||
High Yield Municipal Fund | ü | ü | ü | ü | ||||||||||||||||
High Yield Opportunity Fund | ü | ü | ü | ü | ||||||||||||||||
Intermediate Bond Fund | ü | ü | ü | ü | ||||||||||||||||
Intermediate Municipal Bond Fund | ü | ü | ü | ü | * | |||||||||||||||
International Bond Fund | ü | ü | ü | ü | ||||||||||||||||
Large Cap Growth Fund | ü | ü | ü | ü | ü | |||||||||||||||
MA Intermediate Municipal Bond Fund | ü | ü | ü | ü | * | |||||||||||||||
MA Tax-Exempt Fund | ü | ü | ü | ü | * | |||||||||||||||
Mid Cap Growth Fund | ü | ü | ü | |||||||||||||||||
NY Intermediate Municipal Bond Fund | ü | ü | ü | ü | * | |||||||||||||||
NY Tax-Exempt Fund | ü | ü | ü | ü | * | |||||||||||||||
Oregon Intermediate Municipal Bond Fund | ü | ü | ü | * | ||||||||||||||||
Pacific/Asia Fund | ü | ü | ü | |||||||||||||||||
Real Estate Equity Fund | ü | ü | ü | * | ||||||||||||||||
Risk Allocation Fund | ü | ü | ü | |||||||||||||||||
Select Large Cap Growth Fund | ü | ü | ü | |||||||||||||||||
Select Small Cap Fund | ü | ü | ü | |||||||||||||||||
Small Cap Core Fund | ü | ü | ü | ü | ||||||||||||||||
Small Cap Growth Fund I | ü | ü | ü | |||||||||||||||||
Small Cap Value Fund I | ü | ü | ü | ü | ||||||||||||||||
Strategic Income Fund | ü | ü | ü | |||||||||||||||||
Tax-Exempt Fundf | ü | ü | g | ü | ü | * | ||||||||||||||
Technology Fund | ü | ü | ü | |||||||||||||||||
Ultra Short Term Bond Fund | ü | ü | ü | ü | ||||||||||||||||
U.S. Treasury Index Fund | ü | ü | ü | ü | ||||||||||||||||
Value and Restructuring Fund | ü | ü |
a | Funds with a check mark in this column may not, as a matter of non-fundamental policy, invest more than 15% of their net assets in illiquid securities. “Illiquid Securities” is defined in accordance with the SEC staff’s current guidance and interpretations which provide that an illiquid security is a security which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the fund has valued the security. |
b | Funds with a check mark in this column may not, as a matter of non-fundamental policy, sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
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c | Funds with a check mark in this column may not, as a matter of non-fundamental policy, purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. If shares of one of these Funds are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are held by such fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. |
d | Funds with a check mark in this column may not, as a matter of non-fundamental policy, purchase securities of companies for the purpose of exercising control. |
e | To the extent a Fund with a check mark in this column is subject to Rule 35d-1 under the 1940 Act (the Names Rule), and does not otherwise have a fundamental investment policy in place to comply with the Names Rule, such Fund has adopted the following non-fundamental policy: Shareholders will receive at least 60 days’ notice of any change to the Fund’s investment objective or principal investment strategies made in order to comply with the Names Rule. The notice will be provided in plain English in a separate written document, and will contain the following prominent statement or similar statement in bold-face type: “Important Notice Regarding Change in Investment Policy.” This statement will appear on both the notice and the envelope in which it is delivered, unless it is delivered separately from other communications to investors, in which case the statement will appear either on the notice or the envelope in which the notice is delivered. |
f | This Fund may not purchase securities on margin, but it may receive short-term credit to clear securities transactions and may make initial or maintenance margin deposits in connection with future transactions. |
g | This Fund may not have a short securities position, unless the Fund owns, or owns rights (exercisable without payment) to acquire, an equal amount of such securities. |
* | This Fund has a fundamental investment policy to comply with the Names Rule. |
Permissible Investments and Related Risks
Each Fund’s prospectuses identify and summarize the individual types of securities in which the Fund invests as part of its principal investment strategies and the principal risks associated with such investments.
The table below identifies certain types of securities in which each Fund is permitted to invest, including certain types of securities that are described in each Fund’s prospectuses. A Fund generally has the ability to invest 10% or more of its total assets in each type of security described in its prospectuses (and in each sub-category of such security type described in this SAI). To the extent that a type of security identified below for a Fund is not described in the Fund’s prospectuses (or as a sub-category of such security type in this SAI), the Fund generally invests less than 10% of the Fund’s total assets in such security type.
Information about individual types of securities (including certain of their associated risks) in which some or all of the Funds may invest is set forth below. Each Fund’s investment in these types of securities is subject to its investment objective and fundamental and non-fundamental investment policies.
Temporary Defensive Positions.
Each Fund may temporarily invest in money market instruments or shares of affiliated or unaffiliated money market funds or hold cash or cash equivalents. Unless prohibited by its investment policies, a Fund may also temporarily invest in derivatives, such as futures (e.g., index futures) or options on futures, for various purposes, including among others, investing in particular derivatives to achieve indirect investment exposures to a sector, country or region where the Investment Manager believes such defensive positioning is appropriate. It may do so without limit and for as long a period as deemed necessary, when the Investment Manager or the Fund’s subadviser, if applicable: (i) believes that market conditions are not favorable for profitable investing or to avoid losses, including under adverse market, economic, political, social or other conditions; (ii) is unable to locate favorable investment opportunities; or (iii) determines that a temporary defensive position is advisable or necessary in order to meet anticipated redemption requests, or for other reasons. While a Fund engages in such strategies, it may not achieve its investment objective.
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Permissible Fund Investments
Investment Type | AP – Alternative Strategies Fund | AP – Core Plus Bond Fund | AP – Select Large Cap Growth Fund | AP – Small Cap Equity Fund | Balanced Fund | Bond Fund | CA Tax-Exempt Fund | CT Intermediate Municipal Bond Fund | CT Tax-Exempt Fund | |||||||||||||||||||||||||||
Asset-Backed Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Bank Obligations | ü | |||||||||||||||||||||||||||||||||||
Domestic | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Foreign | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Common Stock | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Convertible Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Corporate Debt Securities | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Custody Receipts and Trust Certificates | ü | ü | ü | |||||||||||||||||||||||||||||||||
Debt Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Derivatives | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||
Index or Linked Securities (Structured Products) | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Futures Contracts and Options on Futures Contracts | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Stock Options and Stock Index Options | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Swap Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Dollar Rolls | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Foreign Currency Transactions | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Foreign Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Guaranteed Investment Contracts (Funding Arrangements) | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Illiquid Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Initial Public Offerings | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Investments in Other Investment Companies | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Low and Below Investment Grade Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Money Market Instruments | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Mortgage-Backed Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Municipal Securities | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Participation Interests | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Preferred Stock | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Private Placement and Other Restricted Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Real Estate Investment Trusts and Master Limited Partnerships | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Reverse Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Standby Commitments | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Stripped Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
U.S. Government and Related Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Variable- and Floating-Rate Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Warrants and Rights | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
When-Issued, Delayed Delivery and Forward Commitment Transactions | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü |
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Investment Type | Contrarian Core Fund | Corporate Income Fund | Dividend Income Fund | Emerging Markets Fund | Energy and Natural Resources Fund | Global Dividend Opportunity Fund | Greater China Fund | High Yield Municipal Fund | High Yield Opportunity Fund | |||||||||||||||||||||||||||
Asset-Backed Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Bank Obligations | ||||||||||||||||||||||||||||||||||||
Domestic | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Foreign | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Common Stock | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Convertible Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Corporate Debt Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Custody Receipts and Trust Certificates | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||
Debt Obligations | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||||||||||||
Index or Linked Securities (Structured Products) | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Futures Contracts and Options on Futures Contracts | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Stock Options and Stock Index Options | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Swap Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Dollar Rolls | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||
Foreign Currency Transactions | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Foreign Securities | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Guaranteed Investment Contracts (Funding Arrangements) | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||
Illiquid Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Initial Public Offerings | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Investments in Other Investment Companies | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Low and Below Investment Grade Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Money Market Instruments | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Mortgage-Backed Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Municipal Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Participation Interests | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Preferred Stock | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Private Placement and Other Restricted Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Real Estate Investment Trusts and Master Limited Partnerships | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Reverse Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Standby Commitments | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Stripped Securities | ü | ü | ü | |||||||||||||||||||||||||||||||||
U.S. Government and Related Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Variable- and Floating-Rate Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Warrants and Rights | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
When-Issued, Delayed Delivery and Forward Commitment Transactions | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü |
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Investment Type | Intermediate Bond Fund | Intermediate Municipal Bond Fund | International Bond Fund | Large Cap Growth Fund | MA Intermediate Municipal Bond Fund | MA Tax-Exempt Fund | Mid Cap Growth Fund | |||||||||||||||||||||
Asset-Backed Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Bank Obligations | ||||||||||||||||||||||||||||
Domestic | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Foreign | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Common Stock | ü | ü | ü | ü | ||||||||||||||||||||||||
Convertible Securities | ü | ü | ü | |||||||||||||||||||||||||
Corporate Debt Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Custody Receipts and Trust Certificates | ü | |||||||||||||||||||||||||||
Debt Obligations | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||||
Index or Linked Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||
Futures Contracts and Options on Futures Contracts | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Stock Options and Stock Index Options | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Swap Agreements | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Dollar Rolls | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Foreign Currency Transactions | ü | ü | ü | |||||||||||||||||||||||||
Foreign Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||
Guaranteed Investment Contracts (Funding Arrangements) | ü | ü | ü | |||||||||||||||||||||||||
Illiquid Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Initial Public Offerings | ü | ü | ü | ü | ||||||||||||||||||||||||
Investments in Other Investment Companies | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Low and Below Investment Grade Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Money Market Instruments | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Mortgage-Backed Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Municipal Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Participation Interests | ü | ü | ||||||||||||||||||||||||||
Preferred Stock | ü | ü | ü | ü | ||||||||||||||||||||||||
Private Placement and Other Restricted Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Real Estate Investment Trusts and Master Limited Partnerships | ü | ü | ü | |||||||||||||||||||||||||
Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Reverse Repurchase Agreements | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Standby Commitments | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Stripped Securities | ü | ü | ü | |||||||||||||||||||||||||
U.S. Government and Related Obligations | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Variable- and Floating-Rate Obligations | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||
Warrants and Rights | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||
When-Issued, Delayed Delivery and Forward Commitment Transactions | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities | ü | ü | ü | ü | ü | ü | ü |
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Investment Type | NY Intermediate Municipal Bond Fund | NY Tax-Exempt Fund | Oregon Intermediate Municipal Bond Fund | Pacific/ Asia Fund | Real Estate Equity Fund | Risk Allocation Fund | Select Large Cap Growth Fund | Select Small Cap Fund | Small Cap Core Fund | |||||||||||||||||||||||||||
Asset-Backed Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Bank Obligations | ||||||||||||||||||||||||||||||||||||
Domestic | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Foreign | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Common Stock | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Convertible Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Corporate Debt Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Custody Receipts and Trust Certificates | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Debt Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||||||||||||
Index or Linked Securities (Structured Products) | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Futures Contracts and Options on Futures Contracts | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Stock Options and Stock Index Options | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Swap Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Dollar Rolls | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Foreign Currency Transactions | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Foreign Securities | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Guaranteed Investment Contracts (Funding Arrangements) | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Illiquid Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Initial Public Offerings | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Investments in Other Investment Companies | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Low and Below Investment Grade Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Money Market Instruments | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Mortgage-Backed Securities | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Municipal Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Participation Interests | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||
Preferred Stock | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
Private Placement and Other Restricted Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Real Estate Investment Trusts and Master Limited Partnerships | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Reverse Repurchase Agreements | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||
Standby Commitments | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||
Stripped Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||
U.S. Government and Related Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Variable- and Floating-Rate Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Warrants and Rights | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
When-Issued, Delayed Delivery and Forward Commitment Transactions | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities | ü | ü | ü | ü | ü | ü | ü | ü | ü |
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Investment Type | Small Cap Growth Fund I | Small Cap Value Fund I | Strategic Income Fund | Tax- Exempt Fund | Technology Fund | Ultra Short Term Bond Fund | U.S. Treasury Index Fund | Value and Restructuring Fund | ||||||||||||||||||||||||
Asset-Backed Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Bank Obligations | ||||||||||||||||||||||||||||||||
Domestic | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Foreign | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Common Stock | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Convertible Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Corporate Debt Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Custody Receipts and Trust Certificates | ü | ü | ü | |||||||||||||||||||||||||||||
Debt Obligations | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||||||||
Index or Linked Securities (Structured Products) | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Futures Contracts and Options on Futures Contracts | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Stock Options and Stock Index Options | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Swap Agreements | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Dollar Rolls | ü | ü | ü | |||||||||||||||||||||||||||||
Foreign Currency Transactions | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||
Foreign Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Guaranteed Investment Contracts (Funding Arrangements) | ü | ü | ||||||||||||||||||||||||||||||
Illiquid Securities | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Initial Public Offerings | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Investments in Other Investment Companies | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Low and Below Investment Grade Securities | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Money Market Instruments | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Mortgage-Backed Securities | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Municipal Securities | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Participation Interests | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Preferred Stock | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
Private Placement and Other Restricted Securities | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Real Estate Investment Trusts and Master Limited Partnerships | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||
Repurchase Agreements | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Reverse Repurchase Agreements | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Standby Commitments | ü | ü | ü | |||||||||||||||||||||||||||||
Stripped Securities | ü | ü | ü | |||||||||||||||||||||||||||||
U.S. Government and Related Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Variable- and Floating-Rate Obligations | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Warrants and Rights | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||
When-Issued, Delayed Delivery and Forward Commitment Transactions | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities | ü | ü | ü | ü | ü | ü | ü |
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Asset-Backed Securities
Asset-backed securities represent interests in, or debt instruments that are backed by, pools of various types of assets that generate cash payments generally over fixed periods of time. Such securities entitle the security holders to receive distributions that are tied to the payments made on the underlying assets (less fees paid to the originator, servicer, or other parties, and fees paid for credit enhancement), so that the payments made on the underlying assets effectively pass through to such security holders. Asset-backed securities typically are created by an originator of loans or owner of accounts receivable that sells such underlying assets to a special purpose entity in a process called a securitization. The special purpose entity issues securities that are backed by the payments on the underlying assets, and have a minimum denomination and specific term. Asset-backed securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Investing in asset-backed securities is subject to certain risks. For example, the value of asset-backed securities may be affected by, among other factors, changes in: interest rates, the market’s assessment of the quality of underlying assets, the creditworthiness of the servicer for the underlying assets, information concerning the originator of the underlying assets, or the creditworthiness or rating of the entities that provide any supporting letters of credit, surety bonds, derivative instruments, or other credit enhancement. The value of asset-backed securities also will be affected by the exhaustion, termination or expiration of any credit enhancement.
Declining or low interest rates may lead to a more rapid rate of repayment on the underlying assets, resulting in accelerated payments on asset-backed securities that then would be reinvested at a lesser rate of interest. Rising or high interest rates tend to lead to a slower rate of repayment on the underlying assets, resulting in slower than expected payments on asset-backed securities that can, in turn, lead to a decline in value. The impact of changing interest rates on the value of asset-backed securities may be difficult to predict and result in greater volatility. Holders of asset-backed securities generally have no recourse against the originator of the underlying assets in the event of a default on the underlying assets. Credit risk reflects the risk that a holder of asset-backed securities, backed by pools of receivables such as mortgage loans, may not receive all or part of its principal because the issuer, any credit enhancer and/or an underlying obligor has defaulted on its obligations. Credit risk is increased for asset-backed securities that are subordinated to another security (i.e., if the holder of an asset-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be.
Bank Obligations (Domestic and Foreign)
Bank obligations include certificates of deposit, bankers’ acceptances, time deposits and promissory notes that earn a specified rate of return and may be issued by (i) a domestic branch of a domestic bank, (ii) a foreign branch of a domestic bank, (iii) a domestic branch of a foreign bank or (iv) a foreign branch of a foreign bank. Bank obligations may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments – Variable- and Floating-Rate Obligations for more information.
Certificates of deposit, or so-called CDs, typically are interest-bearing debt instruments issued by banks and have maturities ranging from a few weeks to several years. Bankers’ acceptances are time drafts drawn on and accepted by banks, are a customary means of effecting payment for merchandise sold in import-export transactions and are a general source of financing. Yankee dollar certificates of deposit are negotiable CDs issued in the United States by branches and agencies of foreign banks. Eurodollar certificates of deposit are CDs issued by foreign (mainly European) banks with interest and principal paid in U.S. dollars. Such CDs typically have maturities of less than two years and have interest rates that typically are pegged to the London Interbank Offered
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Rate or LIBOR. A time deposit can be either a savings account or CD that is an obligation of a financial institution for a fixed term. Typically, there are penalties for early withdrawals of time deposits. Promissory notes are written commitments of the maker to pay the payee a specified sum of money either on demand or at a fixed or determinable future date, with or without interest.
Bank investment contracts are issued by banks. Pursuant to such contracts, a Fund may make cash contributions to a deposit fund of a bank. The bank then credits to the Fund payments at floating or fixed interest rates. A Fund also may hold funds on deposit with its custodian for temporary purposes.
Investing in bank obligations is subject to certain risks. Certain bank obligations, such as some CDs, are insured by the FDIC up to certain specified limits. Many other bank obligations, however, are neither guaranteed nor insured by the FDIC or the U.S. Government. These bank obligations are “backed” only by the creditworthiness of the issuing bank or parent financial institution. Domestic and foreign banks are subject to different governmental regulation. Accordingly, certain obligations of foreign banks, including Eurodollar and Yankee dollar obligations, involve different investment risks than those affecting obligations of domestic banks, including, among others, the possibilities that: (i) their liquidity could be impaired because of political or economic developments; (ii) the obligations may be less marketable than comparable obligations of domestic banks; (iii) a foreign jurisdiction might impose withholding and other taxes at high levels on interest income; (iv) foreign deposits may be seized or nationalized; (v) foreign governmental restrictions such as exchange controls may be imposed, which could adversely affect the payment of principal or interest on those obligations; (vi) there may be less publicly available information concerning foreign banks issuing the obligations; and (vii) the reserve requirements and accounting, auditing and financial reporting standards, practices and requirements applicable to foreign banks may differ from those applicable to domestic banks. Foreign banks generally are not subject to examination by any U.S. Government agency or instrumentality.
Common Stock
Common stock represents a unit of equity ownership of a corporation. Owners typically are entitled to vote on the selection of directors and other important corporate governance matters, and to receive dividend payments, if any, on their holdings. However, ownership of common stock does not entitle owners to participate in the day-to-day operations of the corporation. Common stocks of domestic and foreign public corporations can be listed, and their shares traded, on domestic stock exchanges, such as the NYSE or the NASDAQ Stock Market. Domestic and foreign corporations also may have their shares traded on foreign exchanges, such as the London Stock Exchange or Tokyo Stock Exchange. Common stock may be privately placed or publicly offered. See Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Investing in common stocks is subject to certain risks. Stock market risk, for example, is the risk that the value of such stocks, like the broader stock markets, may decline or fail to rise over short or even extended periods of time, perhaps substantially or unexpectedly. Domestic and foreign stock markets tend to be cyclical, with periods when stock prices generally rise and periods when stock prices generally decline. The value of individual stocks will rise and fall based on factors specific to each company, such as changes in earnings or management, as well as general economic and market factors.
If a corporation is liquidated, the claims of secured and unsecured creditors and owners of debt securities and “preferred” stock take priority over the claims of those who own common stock.
Investing in common stocks also poses risks applicable to the particular type of company issuing the common stock. For example, stocks of smaller companies tend to have greater price swings than stocks of larger companies because, among other things, they trade less frequently and in lower volumes, are more susceptible to changes in economic conditions, may be more reliant on singular products or services and are more vulnerable to larger competitors. Common stocks of these types of companies may have a higher potential for gains, but also may be subject to greater risk of loss.
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Investing in common stocks also poses risks applicable to a particular industry, such as technology, financial services, consumer goods or natural resources (e.g., oil and gas). To some extent, the prices of common stocks tend to move by industry sector. When market conditions favorably affect, or are expected to favorably affect, an industry, the share prices of the common stocks of companies in that industry tend to rise. Conversely, negative news or a poor outlook for a particular industry can cause the share prices of the common stocks of companies in that industry to decline quickly.
Convertible Securities
Convertible securities include bonds, debentures, notes, preferred stocks or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio or predetermined price (the conversion price). As such, convertible securities combine the investment characteristics of debt securities and equity securities. A holder of convertible securities is entitled to receive the income of a bond, debenture or note or the dividend of a preferred stock until the conversion privilege is exercised. The market value of convertible securities generally is a function of, among other factors, interest rates, the rates of return of similar nonconvertible securities and the financial strength of the issuer. The market value of convertible securities tends to decline as interest rates rise and, conversely, to rise as interest rates decline. However, a convertible security’s market value tends to reflect the market price of the common stock of the issuing company when that stock price approaches or is greater than its conversion price. As the market price of the underlying common stock declines, the price of the convertible security tends to be influenced more by the rate of return of the convertible security. Because both interest rate and market movements can influence their value, convertible securities generally are not as sensitive to changes in interest rates as similar debt securities nor generally are they as sensitive to changes in share price as their underlying common stock. Convertible securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Investing in convertible securities is subject to certain risks. Certain convertible securities, particularly securities that are convertible into securities of an issuer other than the issuer of the convertible security, may be illiquid and, therefore, may be more difficult to resell in a timely fashion or for a fair price, which could result in investment losses. Certain convertible securities may have a mandatory conversion feature, pursuant to which the securities convert automatically into common stock or other equity securities (of the same or a different issuer) at a specified date and a specified exchange ratio. Certain convertible securities may be convertible at the option of the issuer, which may require a holder to convert the security into the underlying common stock, even at times when the value of the underlying common stock or other equity security has declined substantially. In addition, some convertible securities may be rated below investment grade or may not be rated and, therefore, may be considered speculative investments. Companies that issue convertible securities frequently are small- and mid-capitalization companies and, accordingly, carry the risks associated with such companies. In addition, the credit rating of a company’s convertible securities generally is lower than that of its conventional debt securities. Convertible securities are senior to equity securities and have a claim to the assets of an issuer prior to the holders of the issuer’s common stock in the event of liquidation but generally are subordinate to similar non-convertible debt securities of the same issuer. Some convertible securities are particularly sensitive to changes in interest rates when their predetermined conversion price is much higher than the price for the issuing company’s common stock.
Corporate Debt Securities
Corporate debt securities are fixed income securities typically issued by businesses to finance their operations. Notes, bonds, debentures and commercial paper are the most common types of corporate debt securities, with the primary difference being their interest rates, maturity dates and secured or unsecured status.
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Commercial paper has the shortest term and usually is unsecured. The broad category of corporate debt securities includes debt issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. The category also includes bank loans, as well as assignments, participations and other interests in bank loans. Corporate debt securities may be rated investment grade or below investment grade and may be structured as fixed-, variable or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Extendible commercial notes (ECNs) are very similar to commercial paper except that with ECNs, the issuer has the option to extend the notes’ maturity. ECNs are issued at a discount rate, with an initial redemption of not more than 90 days from the date of issue. If ECNs are not redeemed by the issuer on the initial redemption date, the issuer will pay a premium (step-up) rate based on the ECN’s credit rating at the time.
Because of the wide range of types and maturities of corporate debt securities, as well as the range of creditworthiness of issuers, corporate debt securities can have widely varying risk/return profiles. For example, commercial paper issued by a large established domestic corporation that is rated by an NRSRO as investment grade may have a relatively modest return on principal but present relatively limited risk. On the other hand, a long-term corporate note issued, for example, by a small foreign corporation from an emerging market country that has not been rated by an NRSRO may have the potential for relatively large returns on principal but carries a relatively high degree of risk.
Investing in corporate debt securities is subject to certain risks including, among others, credit and interest rate risk. Credit risk is the risk that a Fund could lose money if the issuer of a corporate debt security is unable to pay interest or repay principal when it becomes due. Some corporate debt securities that are rated below investment grade by an NRSRO generally are considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. The credit risk of a particular issuer’s debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than and, therefore, may be paid in full before, lower ranking (subordinated) securities. In addition, in the event of bankruptcy, holders of higher-ranking senior securities may receive amounts otherwise payable to the holders of more junior securities. Interest rate risk is the risk that the value of certain corporate debt securities will tend to fall when interest rates rise. In general, corporate debt securities with longer terms tend to fall more in value when interest rates rise than do corporate debt securities with shorter terms.
Custody Receipts and Trust Certificates
Custody receipts and trust certificates are derivative products that evidence direct ownership in a pool of securities. Typically, a sponsor will deposit a pool of securities with a custodian in exchange for custody receipts evidencing interests in those securities. The sponsor generally then will sell the custody receipts or trust certificates in negotiated transactions at varying prices. Each custody receipt or trust certificate evidences the individual securities in the pool and the holder of a custody receipt or trust certificate generally will have all the rights and privileges of owners of those securities.
Investing in custody receipts and trust certificates is subject to certain risks. Custody receipts and trust certificates generally are subject to the same risks as the securities evidenced by the receipts or certificates. Custody receipts and trust certificates also may be less liquid than the underlying securities.
Debt Obligations
Many different types of debt obligations exist (for example, bills, bonds, and notes). Debt obligations may be issued by corporations, governments, government agencies, REITs and other types of entities. Issuers of debt obligations have a contractual obligation to pay interest at a fixed, variable or floating rate on specified dates and to repay principal by a specified maturity date. Certain debt obligations (usually intermediate and long-term
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bonds) have provisions that allow the issuer to redeem or “call” a bond before its maturity. Issuers are most likely to call these securities during periods of falling interest rates. When this happens, an investor may have to replace these securities with lower yielding securities, which could result in a lower return.
The market value of debt obligations is affected primarily by changes in prevailing interest rates and the issuers perceived ability to repay the debt. The market value of a debt obligation generally reacts inversely to interest rate changes. When prevailing interest rates decline, the market value of the bond usually rises, and when prevailing interest rates rise, the market value of the bond usually declines.
In general, the longer the maturity of a debt obligation, the higher its yield and the greater the sensitivity to changes in interest rates. Conversely, the shorter the maturity, the lower the yield and the lower the sensitivity to changes in interest rates.
As noted, the values of debt obligations also may be affected by changes in the credit rating or financial condition of their issuers. Generally, the lower the quality rating of a security, the higher the degree of risk as to the payment of interest and return of principal. To compensate investors for taking on such increased risk, those issuers deemed to be less creditworthy generally must offer their investors higher interest rates than do issuers with better credit ratings.
Derivatives
General
Derivatives are financial instruments whose values are based on (or “derived” from) traditional securities (such as a stock or a bond), assets (such as a commodity, like gold), reference rates (such as LIBOR), market indices (such as the S&P 500® Index) or customized baskets of securities or instruments. Some forms of derivatives, such as exchange-traded futures and options on securities, commodities, or indices, are traded on regulated exchanges. These types of derivatives are standardized contracts that can easily be bought and sold, and whose market values are determined and published daily. Non-standardized derivatives, on the other hand, tend to be more specialized or complex, and may be harder to value. Derivatives afford leverage and, when used properly, can enhance returns and be useful in hedging portfolios. Some common types of derivatives include futures; options; options on futures; forward foreign currency exchange contracts; forward contracts on securities and securities indices; linked securities and structured products; CMOs; stripped securities; warrants; swap agreements and swaptions.
A Fund may use derivatives for a variety of reasons, including, for example: (i) to enhance its return; (ii) to attempt to protect against possible changes in the market value of securities held in or to be purchased for its portfolio resulting from securities markets or currency exchange rate fluctuations (i.e., to hedge); (iii) to protect its unrealized gains reflected in the value of its portfolio securities; (iv) to facilitate the sale of such securities for investment purposes; (v) to reduce transaction costs; and/or (vi) to manage the effective maturity or duration of its portfolio.
A Fund’s use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying security, asset, index or reference rate, which may be magnified by certain features of the derivatives. These risks are heightened when a Fund uses derivatives to enhance its return or as a substitute for a position or security, rather than solely to hedge or offset the risk of a position or security held by a Fund. There is also a risk that the derivative will not correlate well with the security for which it is substituting. A Fund’s use of derivatives to leverage risk also may exaggerate a loss, potentially causing a Fund to lose more money than if it had invested in the underlying security, or limit a potential gain. The success of management’s derivative strategies will depend on its ability to assess and predict the impact of market or economic developments on the underlying security, asset, index or reference rate and the derivative itself, without necessarily the benefit of observing the performance of the derivative under all possible market conditions. Other risks arise from a Fund’s potential inability to terminate or sell its derivative positions as a
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liquid secondary market for such positions may not exist at times when a Fund may wish to terminate or sell them. Over-the-counter instruments (investments not traded on an exchange) may be illiquid. Derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. Also, with some derivative strategies there is the risk that a Fund may not be able to find a suitable derivative transaction counterparty, and thus may be unable to invest in derivatives altogether. The use of derivatives may also increase the amount and accelerate the timing of taxes payable by shareholders.
A Fund may use any or all of the above investment techniques and may purchase different types of derivative instruments at any time and in any combination. There is no particular strategy that dictates the use of one technique over another, as the use of derivatives is a function of numerous variables, including market conditions.
Index or Linked Securities (Structured Products)
General. Indexed or linked securities, also often referred to as “structured products,” are instruments that may have varying combinations of equity and debt characteristics. These instruments are structured to recast the investment characteristics of the underlying security or reference asset. If the issuer is a unit investment trust or other special purpose vehicle, the structuring will typically involve the deposit with or purchase by such issuer of specified instruments (such as commercial bank loans or securities) and/or the execution of various derivative transactions, and the issuance by that entity of one or more classes of securities (structured securities) backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued structured securities to create securities with different investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent on the extent of the cash flow on the underlying instruments.
Indexed and Inverse Floating Rate Securities. A Fund may invest in securities that provide a potential return based on a particular index of value or interest rates. For example, a Fund may invest in securities that pay interest based on an index of interest rates. The principal amount payable upon maturity of certain securities also may be based on the value of the index. To the extent a Fund invests in these types of securities, a Fund’s return on such securities will rise and fall with the value of the particular index: that is, if the value of the index falls, the value of the indexed securities owned by a Fund will fall. Interest and principal payable on certain securities may also be based on relative changes among particular indices.
A Fund may also invest in so-called “inverse floaters” or “residual interest bonds” on which the interest rates vary inversely with a floating rate (which may be reset periodically by a dutch auction, a remarketing agent, or by reference to a short-term tax-exempt interest rate index). A Fund may purchase synthetically-created inverse floating rate bonds evidenced by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when interest rates increase, and will increase when interest rates decrease. Such securities have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes, as an illustration, in market interest rates at a rate that is a multiple of the rate at which fixed-rate securities increase or decrease in response to such changes. As a result, the market values of such securities will generally be more volatile than the market values of fixed-rate securities. To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that have shorter-term maturities or that contain limitations on the extent to which the interest rate may vary. Certain investments in such obligations may be illiquid. A Fund may invest in indexed and inverse securities for hedging purposes or to seek to increase returns. When used for hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a security includes a contingent liability, in the event of an adverse movement in the underlying index or interest rate, a Fund may be required to pay substantial additional margin to maintain the position.
Credit Linked Securities. Among the income producing securities in which a Fund may invest are credit linked securities. The issuers of these securities frequently are limited purpose trusts or other special purpose vehicles that, in turn, invest in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate swaps and other securities, in order to provide exposure to certain fixed income markets. For instance, a Fund may invest in credit linked securities as a cash management tool in order to gain exposure to a certain market and/or to remain fully invested when more traditional income producing securities are not available.
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Like an investment in a bond, investments in these credit linked securities represent the right to receive periodic income payments (in the form of distributions) and payment of principal at the end of the term of the security. However, these payments are conditioned on or linked to the issuer’s receipt of payments from, and the issuer’s potential obligations to, the counterparties to the derivative instruments and other securities in which the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the issuer would receive a stream of payments over the term of the swap agreements provided that no event of default has occurred with respect to the referenced debt obligation upon which the swap is based. If a default occurs, the stream of payments may stop and the issuer would be obligated to pay the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn, would reduce the amount of income and/or principal that a Fund would receive. A Fund’s investments in these instruments are indirectly subject to the risks associated with derivative instruments, including, among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk and management risk. These securities generally are exempt from registration under the 1933 Act. Accordingly, there may be no established trading market for the securities and they may constitute illiquid investments.
Index-, Commodity-, Currency- and Equity-Linked Securities. “Index-linked” or “commodity-linked” notes are debt securities of companies that call for interest payments and/or payment at maturity in different terms than the typical note where the borrower agrees to make fixed interest payments and to pay a fixed sum at maturity. Principal and/or interest payments on an index-linked or commodity-linked note depend on the performance of one or more market indices, such as the S&P 500® Index, a weighted index of commodity futures such as crude oil, gasoline and natural gas or the market prices of a particular commodity or basket of commodities or securities. Equity-linked securities are short-term or intermediate term instruments having a value at maturity and/or interest rate determined by reference to the market prices of one or more equity securities. At maturity, the principal amount of an equity-linked debt security is often exchanged for common stock of the issuer or is payable in an amount based on the issuer’s common stock price at the time of maturity. Currency-linked debt securities are short-term or intermediate-term instruments having a value at maturity, and/or an interest rate, determined by reference to one or more foreign currencies. Payment of principal or periodic interest may be calculated as a multiple of the movement of one currency against another currency, or against an index.
Index, commodity, currency and equity-linked securities may entail substantial risks. Such instruments may be subject to significant price volatility. The company issuing the instrument may fail to pay the amount due on maturity. The underlying investment or security may not perform as expected by the Investment Manager or a subadviser. Markets, underlying securities and indexes may move in a direction that was not anticipated by the Investment Manager or a subadviser. Performance of the derivatives may be influenced by interest rate and other market changes in the United States and abroad, and certain derivative instruments may be illiquid.
Linked securities are often issued by unit investment trusts. Examples of this include such index-linked securities as S&P Depositary Receipts (SPDRs), which is an interest in a unit investment trust holding a portfolio of securities linked to the S&P 500® Index, and a type of exchange-traded fund (ETF). Because a unit investment trust is an investment company under the 1940 Act, a Fund’s investments in SPDRs are subject to the limitations set forth in Section 12(d)(1)(A) of the 1940 Act. SPDRs closely track the underlying portfolio of securities, trade like a share of common stock and pay periodic dividends proportionate to those paid by the portfolio of stocks that comprise the S&P 500® Index. As a holder of interests in a unit investment trust, a Fund would indirectly bear its ratable share of that unit investment trust’s expenses. At the same time, a Fund would continue to pay its own management and advisory fees and other expenses, as a result of which a Fund and its shareholders in effect would be absorbing levels of fees with respect to investments in such unit investment trusts.
Equity-linked securities include issues such as Structured Yield Product Exchangeable for Stock (STRYPES), Trust Automatic Common Exchange Securities (TRACES), Trust Issued Mandatory Exchange Securities (TIMES), and Trust Enhanced Dividend Securities (TRENDS). The issuers of these equity-linked securities generally purchase and hold a portfolio of stripped U.S. Treasury securities maturing on a quarterly basis through the conversion date, and a forward purchase contract with an existing shareholder of the company relating to the common stock. Quarterly distributions on such equity-linked securities generally consist of the cash received from the U.S. Treasury securities and such equity-linked securities generally are not entitled to any dividends that may be declared on the common stock.
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Investing in structured products and linked securities is subject to certain risks. Because structured products typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments. Investments in structured products may be structured as a class that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured products typically have higher rates of return and present greater risks than unsubordinated structured products. Structured products sometimes are sold in private placement transactions and often have a limited trading market.
Investments in “linked” securities have the potential to lead to significant losses because of unexpected movements in the underlying financial asset, index, currency or other investment. The ability of a Fund to utilize linked-securities successfully will depend on its ability correctly to predict pertinent market movements, which cannot be assured. Because currency-linked securities usually relate to foreign currencies, some of which may be currencies from emerging market countries, there are certain additional risks associated with such investments.
SPDRs are subject to the risks of an investment in a broadly based portfolio of common stocks, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of such investment. In addition, because individual investments in SPDRs are not redeemable, except upon termination of the unit investment trust, the liquidity of small holdings of SPDRs will depend upon the existence of a secondary market. Large holdings of SPDRs are called “creation unit size” and are redeemable in-kind only and are not redeemable for cash from the unit investment trust. The price of a SPDR is derived from and based upon the securities held by the unit investment trust. Accordingly, the level of risk involved in the purchase or sale of a SPDR is similar to the risk involved in the purchase or sale of traditional common stock, with the exception that the pricing mechanism for SPDRs is based on a basket of stocks. Disruptions in the markets for the securities underlying SPDRs purchased or sold by a Fund could result in losses on SPDRs.
Futures Contracts and Options on Futures Contracts
Futures Contracts. A futures contract sale creates an obligation by the seller to deliver the type of security or other asset called for in the contract at a specified delivery time for a stated price. A futures contract purchase creates an obligation by the purchaser to take delivery of the type of security or other asset called for in the contract at a specified delivery time for a stated price. The specific security or other asset delivered or taken at the settlement date is not determined until on or near that date. The determination is made in accordance with the rules of the exchange on which the futures contract was made. A Fund may enter into futures contracts which are traded on national or foreign futures exchanges and are standardized as to maturity date and underlying security or other asset. Futures exchanges and trading in the United States are regulated under the Commodity Exchange Act (CEA) by the Commodity Futures Trading Commission (CFTC), a U.S. Government agency.
Traders in futures contracts may be broadly classified as either “hedgers” or “speculators.” Hedgers use the futures markets primarily to offset unfavorable changes (anticipated or potential) in the value of securities or other assets currently owned or expected to be acquired by them. Speculators less often own the securities or other assets underlying the futures contracts which they trade, and generally use futures contracts with the expectation of realizing profits from fluctuations in the value of the underlying securities or other assets. Pursuant to a notice of eligibility claiming exclusion from the definition of commodity pool operator filed with the CFTC and the National Futures Association on behalf of the Funds, neither the Trust nor any of the individual Funds is deemed to be a “commodity pool operator” under the CEA, and, accordingly, they are excluded from registration or regulation as such under the CEA. However, on February 9, 2012, the CFTC adopted amendments to its rules that, once effective, may affect the ability of a Fund to continue to claim this exclusion. A Fund that seeks to claim the exclusion after the effectiveness of the amended rules would be limited in its ability to use futures and options on futures or commodities or engage in swap transactions. If a Fund were no longer able to claim the exclusion, the Investment Manager would be required to register as a “commodity pool operator,” and the Fund and the Investment Manager would be subject to regulation under the CEA.
Upon entering into futures contracts, in compliance with the SEC’s requirements, cash or liquid securities, equal in value to the amount of a Fund’s obligation under the contract (less any applicable margin deposits and any assets that constitute “cover” for such obligation), will be segregated with a Fund’s custodian.
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Unlike when a Fund purchases or sells a security, no price is paid or received by a Fund upon the purchase or sale of a futures contract, although a Fund is required to deposit with its custodian in a segregated account in the name of the futures broker an amount of cash and/or U.S. Government securities in order to initiate and maintain open positions in futures contracts. This amount is known as “initial margin.” The nature of initial margin in futures transactions is different from that of margin in security transactions, in that futures contract margin does not involve the borrowing of funds by a Fund to finance the transactions. Rather, initial margin is in the nature of a performance bond or good faith deposit intended to assure completion of the contract (delivery or acceptance of the underlying security or other asset) that is returned to a Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Minimum initial margin requirements are established by the relevant futures exchange and may be changed. Brokers may establish deposit requirements which are higher than the exchange minimums. Futures contracts are customarily purchased and sold on margin which may range upward from less than 5% of the value of the contract being traded. Subsequent payments, called “variation margin,” to and from the broker (or the custodian) are made on a daily basis as the price of the underlying security or other asset fluctuates, a process known as “marking to market.” If the futures contract price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional variation margin will be required. Conversely, a change in the contract value may reduce the required margin, resulting in a repayment of excess margin to the contract holder. Variation margin payments are made for as long as the contract remains open. A Fund expects to earn interest income on its margin deposits.
Although futures contracts by their terms call for actual delivery or acceptance of securities or other assets (stock index futures contracts or futures contracts that reference other intangible assets do not permit delivery of the referenced assets), the contracts usually are closed out before the settlement date without the making or taking of delivery. A Fund may elect to close some or all of its futures positions at any time prior to their expiration. The purpose of taking such action would be to reduce or eliminate the position then currently held by a Fund. Closing out an open futures position is done by taking an opposite position (“buying” a contract which has previously been “sold,” “selling” a contract previously “purchased”) in an identical contract (i.e., the same aggregate amount of the specific type of security or other asset with the same delivery date) to terminate the position. Final determinations are made as to whether the price of the initial sale of the futures contract exceeds or is below the price of the offsetting purchase, or whether the purchase price exceeds or is below the offsetting sale price. Final determinations of variation margin are then made, additional cash is required to be paid by or released to a Fund, and a Fund realizes a loss or a gain. Brokerage commissions are incurred when a futures contract is bought or sold.
Successful use of futures contracts by a Fund is subject to the Investment Manager’s or a subadviser’s ability to predict correctly movements in the direction of interest rates and other factors affecting securities and commodities markets. This requires different skills and techniques than those required to predict changes in the prices of individual securities. A Fund, therefore, bears the risk that future market trends will be incorrectly predicted.
The risk of loss in trading futures contracts in some strategies can be substantial, due both to the relatively low margin deposits required and the potential for an extremely high degree of leverage involved in futures contracts. As a result, a relatively small price movement in a futures contract may result in an immediate and substantial loss to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount posted as initial margin for the contract.
In the event of adverse price movements, a Fund would continue to be required to make daily cash payments in order to maintain its required margin. In such a situation, if a Fund has insufficient cash, it may have to sell portfolio securities in order to meet daily margin requirements at a time when it may be disadvantageous to do so. The inability to close the futures position also could have an adverse impact on the ability to hedge effectively.
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To reduce or eliminate a hedge position held by a Fund, a Fund may seek to close out a position. The ability to establish and close out positions will be subject to the development and maintenance of a liquid secondary market. It is not certain that this market will develop or continue to exist for a particular futures contract, which may limit a Fund’s ability to realize its profits or limit its losses. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain contracts; (ii) restrictions may be imposed by an exchange on opening transactions, closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of contracts, or underlying securities; (iv) unusual or unforeseen circumstances, such as volume in excess of trading or clearing capability, may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of contracts (or a particular class or series of contracts), in which event the secondary market on that exchange (or in the class or series of contracts) would cease to exist, although outstanding contracts on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.
Interest Rate Futures Contracts. Bond prices are established in both the cash market and the futures market. In the cash market, bonds are purchased and sold with payment for the full purchase price of the bond being made in cash, generally within five business days after the trade. In the futures market, a contract is made to purchase or sell a bond in the future for a set price on a certain date. Historically, the prices for bonds established in the futures markets have tended to move generally in the aggregate in concert with the cash market prices and have maintained fairly predictable relationships. Accordingly, a Fund may use interest rate futures contracts as a defense, or hedge, against anticipated interest rate changes. A Fund presently could accomplish a similar result to that which it hopes to achieve through the use of interest rate futures contracts by selling bonds with long maturities and investing in bonds with short maturities when interest rates are expected to increase, or conversely, selling bonds with short maturities and investing in bonds with long maturities when interest rates are expected to decline. However, because of the liquidity that is often available in the futures market, the protection is more likely to be achieved, perhaps at a lower cost and without changing the rate of interest being earned by a Fund, through using futures contracts.
Interest rate futures contracts are traded in an auction environment on the floors of several exchanges – principally, the Chicago Board of Trade, the Chicago Mercantile Exchange and the New York Futures Exchange. Each exchange guarantees performance under contract provisions through a clearing corporation, a nonprofit organization managed by the exchange membership. A public market exists in futures contracts covering various financial instruments including long-term U.S. Treasury Bonds and Notes; GNMA modified pass-through mortgage backed securities; three-month U.S. Treasury Bills; and ninety-day commercial paper. A Fund may also invest in exchange-traded Eurodollar contracts, which are interest rate futures on the forward level of LIBOR. These contracts are generally considered liquid securities and trade on the Chicago Mercantile Exchange. Such Eurodollar contracts are generally used to “lock-in” or hedge the future level of short-term rates. A Fund may trade in any interest rate futures contracts for which there exists a public market, including, without limitation, the foregoing instruments.
Index Futures Contracts. An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. Entering into a contract to buy units of an index is commonly referred to as buying or purchasing a contract or holding a long position in the index. Entering into a contract to sell units of an index is commonly referred to as selling a contract or holding a short position in the index. A unit is the current value of the index. A Fund may enter into stock index futures contracts, debt index futures contracts, or other index futures contracts appropriate to its objective(s). Funds may use index futures contracts for hedging or non-hedging purposes.
There are several risks in connection with the use by a Fund of index futures as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the index futures and movements in the prices of securities which are the subject of the hedges. The Investment Manager or a subadviser may attempt to reduce this risk by selling, to the extent possible, futures on indices the movements of which will, in its judgment, have a significant correlation with movements in the prices of a Fund’s portfolio securities sought to be hedged.
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Municipal Bond Index Futures Contracts. Municipal bond index futures contracts may act as a hedge against changes in market conditions. A municipal bond index assigns values daily to the municipal bonds included in the index based on the independent assessment of dealer-to-dealer municipal bond brokers. A municipal bond index futures contract represents a firm commitment by which two parties agree to take or make delivery of an amount equal to a specified dollar amount multiplied by the difference between the municipal bond index value on the last trading date of the contract and the price at which the futures contract is originally struck. No physical delivery of the underlying securities in the index is made.
Commodity-Linked Futures Contracts. Commodity-linked futures contracts are traded on futures exchanges. These futures exchanges offer a central marketplace in which to transact in futures contracts, a clearing corporation to process trades, and standardization of expiration dates and contract sizes. Futures markets also specify the terms and conditions of delivery as well as the maximum permissible price movement during a trading session. Additionally, the commodity futures exchanges may have position limit rules that limit the amount of futures contracts that any one party may hold in a particular commodity at any point in time. These position limit rules are designed to prevent any one participant from controlling a significant portion of the market.
Commodity-linked futures contracts are generally based upon commodities within five main commodity groups: (1) energy, which includes, among others, crude oil, brent crude oil, gas oil, natural gas, gasoline and heating oil; (2) livestock, which includes, among others, feeder cattle, live cattle and hogs; (3) agriculture, which includes, among others, wheat (Kansas wheat and Chicago wheat), corn, soybeans, cotton, coffee, sugar and cocoa; (4) industrial metals, which includes, among others, aluminum, copper, lead, nickel and zinc; and (5) precious metals, which includes, among others, gold and silver. A Fund may purchase commodity futures contracts, swaps on commodity futures contracts, options on futures contracts and options and futures on commodity indices with respect to these five main commodity groups and the individual commodities within each group, as well as other types of commodities.
The price of a commodity futures contract will reflect the storage costs of purchasing the physical commodity. These storage costs include the time value of money invested in the physical commodity plus the actual costs of storing the commodity less any benefits from ownership of the physical commodity that are not obtained by the holder of a futures contract (this is sometimes referred to as the “convenience yield”). To the extent that these storage costs change for an underlying commodity while a Fund is long futures contracts on that commodity, the value of the futures contract may change proportionately.
In the commodity futures markets, if producers of the underlying commodity wish to hedge the price risk of selling the commodity, they will sell futures contracts today to lock in the price of the commodity at delivery tomorrow. In order to induce speculators to take the corresponding long side of the same futures contract, the commodity producer must be willing to sell the futures contract at a price that is below the expected future spot price. Conversely, if the predominant hedgers in the futures market are the purchasers of the underlying commodity who purchase futures contracts to hedge against a rise in prices, then speculators will only take the short side of the futures contract if the futures price is greater than the expected future spot price of the commodity.
The changing nature of the hedgers and speculators in the commodity markets will influence whether futures prices are above or below the expected future spot price. This can have significant implications for a Fund when it is time to replace an existing contract with a new contract. If the nature of hedgers and speculators in futures markets has shifted such that commodity purchasers are the predominant hedgers in the market, a Fund might open the new futures position at a higher price or choose other related commodity-linked investments.
The values of commodities which underlie commodity futures contracts are subject to additional variables which may be less significant to the values of traditional securities such as stocks and bonds. Variables such as drought, floods, weather, livestock disease, embargoes and tariffs may have a larger impact on commodity prices and commodity-linked investments, including futures contracts, commodity-linked structured notes, commodity-linked options and commodity-linked swaps, than on traditional securities. These additional variables may create additional investment risks which subject a Fund’s commodity-linked investments to greater volatility than investments in traditional securities.
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Options on Futures Contracts. A Fund may purchase and write call and put options on those futures contracts that it is permitted to buy or sell. A Fund may use such options on futures contracts in lieu of writing options directly on the underlying securities or other assets or purchasing and selling the underlying futures contracts. Such options generally operate in the same manner as options purchased or written directly on the underlying investments. A futures option gives the holder, in return for the premium paid, the right to buy from (call) or sell to (put) the writer of the option a futures contract at a specified price at any time during the period of the option. Upon exercise, the writer of the option is obligated to pay the difference between the cash value of the futures contract and the exercise price. Like the buyer or seller of a futures contract, the holder or writer of an option has the right to terminate its position prior to the scheduled expiration of the option by selling or purchasing an option of the same series, at which time the person entering into the closing purchase transaction will realize a gain or loss. There is no guarantee that such closing purchase transactions can be effected.
A Fund will enter into written options on futures contracts only when, in compliance with the SEC’s requirements, cash or liquid securities equal in value to the underlying security’s or other asset’s value (less any applicable margin deposits) have been deposited in a segregated account. A Fund will be required to deposit initial margin and maintenance margin with respect to put and call options on futures contracts written by it pursuant to brokers’ requirements similar to those described above.
Investments in futures options involve some of the same risks that are involved in connection with investments in futures contracts (for example, the existence of a liquid secondary market). In addition, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be fully reflected in the value of the option purchased. There may be circumstances when the purchase of a call or put option on a futures contract would result in a loss to a Fund when the purchase or sale of a futures contract would not, such as when there is no movement in the prices of the hedged investments. In general, the market prices of options can be expected to be more volatile than the market prices on the underlying futures contracts. Compared to the purchase or sale of futures contracts, however, the purchase of call or put options on futures contracts may frequently involve less potential risk to a Fund because the maximum amount at risk is the premium paid for the options (plus transaction costs).
Successful use of index futures by a Fund is also subject to the Investment Manager’s or a subadviser’s ability to predict correctly movements in the direction of the market. It is possible that, for example, where a Fund has sold futures to hedge its portfolio against a decline in the market, the index on which the futures are written may advance and the value of securities held in a Fund’s portfolio may decline. If this occurred, a Fund would lose money on the futures and also experience a decline in the value of its portfolio securities, as a Fund’s ability to effectively hedge all or a portion of the securities in its portfolio, in anticipation of or during a market decline, through transactions in futures or put options on stock indices, depends on the degree to which price movements in the underlying index correlate with the price movements of the securities held by a Fund. Inasmuch as a Fund’s securities will not duplicate the components of an index, the correlation will not be perfect. Consequently, a Fund bears the risk that the prices of its securities being hedged will not move to the same extent as do the prices of its put options on the stock indices. It is also possible that, if a Fund has hedged against the possibility of a decline in the market adversely affecting securities held in its portfolio and securities prices increase instead, a Fund will lose part or all of the benefit of the increased values of those securities that it has hedged, because it will have offsetting losses in its futures positions. In addition, in such situations, if a Fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements.
In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in the index futures and the securities of the portfolio being hedged, the prices of index futures may not correlate perfectly with movements in the underlying index due to certain market distortions. First, all participants in the futures markets are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions, which would distort the normal relationship between the index and futures markets. Second, margin requirements in the futures market are less onerous than margin requirements in the securities market, and as a result, the futures market may attract more speculators than the securities market. Increased participation by
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speculators in the futures market may also cause temporary price distortions. Due to the possibility of price distortions in the futures market, and also because of the imperfect correlation between movements in an index and movements in the prices of index futures, even a correct forecast of general market trends by the Investment Manager or a subadviser may still not result in a successful hedging transaction.
There is also the risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker with whom a Fund has an open position in a futures contract or related option. Most futures exchanges limit the amount of fluctuation permitted in some contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and, therefore, does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.
Options on Index Futures Contracts. A Fund may also purchase and sell options on index futures contracts. Options on index futures give the purchaser the right, in return for the premium paid, to assume a position in an index futures contract (a long position if the option is a call and a short position if the option is a put), at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer’s futures margin account, which represents the amount by which the market price of the index futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the index future. If an option is exercised on the last trading day prior to the expiration date of the option, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the index on which the future is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid.
There are various risks in connection with the use by a Fund of index futures as a hedging device. For example, a risk arises because of the imperfect correlation between movements in the prices of the index futures and movements in the prices of securities which are the subject of the hedges. The Investment Manager or a subadviser may attempt to reduce this risk by selling, to the extent possible, futures on indices the movements of which will, in its judgment, have a significant correlation with movements in the prices of a Fund’s portfolio securities sought to be hedged; there can be no assurance that the Investment Manager or a subadviser will be successful in doing so.
Use by Tax-Exempt Funds of Interest Rate and U.S. Treasury Security Futures Contracts and Options. If a Fund invests in tax-exempt securities, it may purchase and sell futures contracts and related options on interest rate and U.S. Treasury securities when, in the opinion of the Investment Manager or a subadviser, price movements in these security futures and related options will correlate closely with price movements in the tax-exempt securities which are the subject of the hedge. Interest rate and U.S. Treasury securities futures contracts require the seller to deliver, or the purchaser to take delivery of, the type of security called for in the contract at a specified date and price. Options on interest rate and U.S. Treasury security futures contracts give the purchaser the right in return for the premium paid to assume a position in a futures contract at the specified option exercise price at any time during the period of the option.
In addition to the risks generally involved in using futures contracts, there is also a risk that price movements in interest rate and U.S. Treasury security futures contracts and related options will not correlate closely with price movements in markets for tax-exempt securities.
Stock Options and Stock Index Options
A Fund may purchase and write (i.e., sell) put and call options. Such options may relate to particular stocks or stock indices, and may or may not be listed on a domestic or foreign securities exchange and may or may not
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be issued by the Options Clearing Corporation (OCC). Stock index options are put options and call options on various stock indices. In most respects, they are identical to listed options on common stocks.
There is a key difference between stock options and stock index options in connection with their exercise. In the case of stock options, the underlying security, common stock, is delivered. However, upon the exercise of an index option, settlement does not occur by delivery of the securities comprising the index. The option holder who exercises the index option receives an amount of cash if the closing level of the stock index upon which the option is based is greater than (in the case of a call) or less than (in the case of a put) the exercise price of the option. This amount of cash is equal to the difference between the closing price of the stock index and the exercise price of the option expressed in dollars times a specified multiple. A stock index fluctuates with changes in the market value of the securities included in the index. For example, some stock index options are based on a broad market index, such as the S&P 500® Index or a narrower market index, such as the S&P 100® Index. Indices may also be based on an industry or market segment.
The successful use of a Fund’s options strategies depends on the ability of the Investment Manager or a subadviser to forecast interest rate and market movements correctly. When it purchases an option, a Fund runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless a Fund exercises the option or enters into a closing sale transaction for such option during the life of the option. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, a Fund will lose part or all of its investment in the option. This contrasts with an investment by a Fund in the underlying securities, since a Fund may continue to hold its investment in those securities notwithstanding the lack of a change in price of those securities.
The effective use of options also depends on a Fund’s ability to terminate option positions at times when the Investment Manager or a subadviser deems it desirable to do so. Although a Fund will take an option position only if the Investment Manager or a subadviser believes there is a liquid secondary market for the option, there is no assurance that a Fund will be able to effect closing transactions at any particular time or at an acceptable price.
If a secondary trading market in options were to become unavailable, a Fund could no longer engage in closing transactions. The writer in such circumstances would be subject to the risk of market decline or appreciation in the instrument during such period. If an option purchased by a Fund expires unexercised, a Fund will realize a loss equal to the premium paid. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options, or underlying securities; (iv) unusual or unforeseen circumstances, such as volume in excess of trading or clearing capability, may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.
Disruptions in the markets for the securities underlying options purchased or sold by a Fund could result in losses on the options. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, a Fund as purchaser or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with losses if trading in the security reopens at a substantially different price. In addition, the OCC or other options markets may impose exercise restrictions. If a prohibition on exercise is imposed at a time when trading in the option has also been halted, a Fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If a prohibition on exercise remains in effect until an option owned by a Fund has expired, a Fund could lose the entire value of its option.
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Special risks are presented by internationally traded options. Because of time differences between the United States and various foreign countries, and because different holidays are observed in different countries, foreign options markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current prices of the underlying interest in the United States.
Dealer (Over-the-Counter) Options. Dealer options are options negotiated individually through dealers rather than traded on an exchange. Certain risks are specific to dealer options. While a Fund might look to a clearing corporation to exercise exchange-traded options, if a Fund purchases a dealer option it must rely on the selling dealer to perform if a Fund exercises the option. Failure by the dealer to do so would result in the loss of the premium paid by a Fund as well as loss of the expected benefit of the transaction. Exchange-traded options generally have a continuous liquid market while dealer options more often may not. Consequently, a Fund can realize the value of a dealer option it has purchased only by exercising or reselling the option to the issuing dealer. Similarly, when a Fund writes a dealer option, a Fund can close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer. While each Fund seeks to enter into dealer options only with dealers who will agree to and can enter into closing transactions with a Fund, no assurance exists that a Fund will at any time be able to liquidate a dealer option at a favorable price at any time prior to expiration. Unless a Fund, as a covered dealer call option writer, can effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) used as cover until the option expires or is exercised. In the event of insolvency of the other party, a Fund may be unable to liquidate a dealer option. With respect to options written by a Fund, the inability to enter into a closing transaction may result in material losses to a Fund. For example, because a Fund must maintain a secured position with respect to any call option on a security it writes, a Fund may not sell the assets, that it has segregated to secure the position while it is obligated under the option. This requirement may impair a Fund’s ability to sell portfolio securities at a time when such sale might be advantageous.
A Fund generally will treat purchased dealer options as illiquid securities. A Fund may treat the cover used for written dealer options as liquid if the dealer agrees that a Fund may repurchase the dealer option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the dealer option would be considered illiquid only to the extent the maximum purchase price under the formula exceeds the intrinsic value of the option.
Writing Covered Options. A Fund may write covered call options and covered put options on securities held in its portfolio when, in the opinion of the Investment Manager or a subadviser, such transactions are consistent with a Fund’s investment goal and policies. Call options written by a Fund give the purchaser the right to buy the underlying securities from a Fund at the stated exercise price at any time prior to the expiration date of the option, regardless of the security’s market price; put options give the purchaser the right to sell the underlying securities to a Fund at the stated exercise price at any time prior to the expiration date of the option, regardless of the security’s market price.
A Fund may write only covered options, which means that, so long as a Fund is obligated as the writer of a call option, it will own the underlying securities subject to the option (or comparable securities satisfying the cover requirements of securities exchanges). In the case of put options, a Fund will hold cash and/or high-grade short-term debt obligations equal to the price to be paid if the option is exercised. In addition, a Fund will be considered to have covered a put or call option if and to the extent that it holds an option that offsets some or all of the risk of the option it has written. A Fund may write combinations of covered puts and calls (straddles) on the same underlying security.
A Fund will receive a premium from writing a put or call option, which increases a Fund’s return on the underlying security if the option expires unexercised or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest rates, and the effect of supply and demand in the options market and in the market for the
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underlying security. By writing a call option, a Fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option but continues to bear the risk of a decline in the value of the underlying security. By writing a put option, a Fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than the security’s then-current market value, resulting in a potential capital loss unless the security subsequently appreciates in value.
A Fund’s obligation to sell an instrument subject to a call option written by it, or to purchase an instrument subject to a put option written by it, may be terminated prior to the expiration date of the option by a Fund’s execution of a closing purchase transaction, which is effected by purchasing on an exchange an offsetting option of the same series (i.e., same underlying instrument, exercise price and expiration date) as the option previously written. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. A Fund realizes a profit or loss from a closing purchase transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.
If a Fund writes a call option but does not own the underlying security, and when it writes a put option, a Fund may be required to deposit cash or securities with its broker as “margin” or collateral for its obligation to buy or sell the underlying security. As the value of the underlying security varies, a Fund may also have to deposit additional margin with the broker. Margin requirements are complex and are fixed by individual brokers, subject to minimum requirements currently imposed by the Federal Reserve Board and by stock exchanges and other self-regulatory organizations.
Purchasing Put Options. A Fund may purchase put options to protect its portfolio holdings in an underlying security against a decline in market value. Such hedge protection is provided during the life of the put option since a Fund, as holder of the put option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security’s market price. For a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, a Fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs.
Purchasing Call Options. A Fund may purchase call options to hedge against an increase in the price of securities that a Fund wants ultimately to buy. Such hedge protection is provided during the life of the call option since a Fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security’s market price. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. These costs will reduce any profit a Fund might have realized had it bought the underlying security at the time it purchased the call option.
Over-the-Counter (OTC) Options. A Fund will enter into OTC options transactions only with primary dealers in U.S. Government securities and, in the case of OTC options written by a Fund, only pursuant to agreements that will assure that a Fund will at all times have the right to repurchase the option written by it from the dealer at a specified formula price. A Fund will treat the amount by which such formula price exceeds the amount, if any, by which the option may be “in-the-money” as an illiquid investment. It is the present policy of a Fund not to enter into any OTC option transaction if, as a result, more than 15% (10% in some cases, refer to your Fund’s prospectuses) of a Fund’s net assets would be invested in (i) illiquid investments (determined under the foregoing formula) relating to OTC options written by a Fund, (ii) OTC options purchased by a Fund, (iii) securities which are not readily marketable, and (iv) repurchase agreements maturing in more than seven days.
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Index Options. As an alternative to purchasing call and put options on index futures, a Fund may purchase call and put options on the underlying indices themselves. Such options could be used in a manner identical to the use of options on index futures. Options involving securities indices provide the holder with the right to make or receive a cash settlement upon exercise of the option based on movements in the relevant index. Such options must be listed on a national securities exchange and issued by the OCC. Such options may relate to particular securities or to various stock indices, except that a Fund may not write covered options on an index.
Foreign Stock Index Options. A Fund may, for the purpose of hedging its portfolio, subject to applicable securities regulations, purchase and write put and call options on foreign stock indices listed on foreign and domestic stock exchanges.
Swap Agreements
Swap agreements are derivative instruments that can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease a Fund’s exposure to long- or short-term interest rates, foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. A Fund may enter into a variety of swap agreements, including interest rate, index, commodity, commodity futures, equity, equity index, credit default, bond futures, total return and currency exchange rate swap agreements, and other types of swap agreements such as caps, collars and floors. A Fund also may enter into swaptions, which are options to enter into a swap agreement.
In a typical interest rate swap, one party agrees to make regular payments equal to a floating interest rate times a “notional principal amount,” in return for payments equal to a fixed rate times the same amount, for a specified period of time. If a swap agreement provides for payments in different currencies, the parties might agree to exchange notional principal amount as well. In a total return swap agreement, the non-floating rate side of the swap is based on the total return of an individual security, a basket of securities, an index or another reference asset. Swaps may also depend on other prices or rates, such as the value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. Caps and floors have an effect similar to buying or writing options. A collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a Fund’s investment exposure from one type of investment to another. For example, if a Fund agreed to pay fixed rates in exchange for floating rates while holding fixed-rate bonds, the swap would tend to decrease a Fund’s exposure to long-term interest rates. Another example is if a Fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease a Fund’s exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates.
Swap agreements are sophisticated hedging instruments that typically involve a small investment of cash relative to the magnitude of risks assumed. As a result, swaps can be highly volatile and may have a considerable impact on a Fund’s performance. Depending on how they are used, swap agreements may increase or decrease the overall volatility of a Fund’s investments and its share price and yield. Additionally, whether a Fund’s use of swap agreements will be successful in furthering its investment objective will depend on the Investment Manager’s or a subadviser’s ability correctly to predict whether certain types of investments are likely to produce greater returns than other investments. Because they are two party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, a Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a
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swap agreement counterparty. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factor that determines the amounts of payments due to and from a Fund. If a swap agreement calls for payments by a Fund, a Fund must be prepared to make such payments when due. In addition, if the counterparty’s creditworthiness declines, the value of a swap agreement likely would decline, potentially resulting in losses for a Fund. A Fund will closely monitor the credit of a swap agreement counterparty in order to attempt to minimize this risk. A Fund may also suffer losses if it is unable to terminate outstanding swap agreements (either by assignment or other disposition) or reduce its exposure through offsetting transactions (i.e., by entering into an offsetting swap agreement with the same party or a similarly creditworthy party).
Credit Default Swap Agreements. A Fund may enter into credit default swap agreements, which may have as reference obligations one or more securities or a basket of securities that are or are not currently held by a Fund. The protection “buyer” in a credit default contract is generally obligated to pay the protection “seller” an upfront or a periodic stream of payments over the term of the contract provided that no credit event, such as a default, on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the “par value” (full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. A Fund may be either the buyer or seller in the transaction. If a Fund is a buyer and no credit event occurs, a Fund may recover nothing if the swap is held through its termination date. However, if a credit event occurs, the buyer generally may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As a seller, a Fund generally receives an upfront payment or a fixed rate of income throughout the term of the swap provided that there is no credit event. As the seller, a Fund would effectively add leverage to its portfolio because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap.
Credit default swap agreements may involve greater risks than if a Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. A Fund will enter into credit default swap agreements generally with counterparties that meet certain standards of creditworthiness. A buyer generally will lose its investment and recover nothing if no credit event occurs and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller, coupled with the upfront or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the seller.
Equity Swaps. A Fund may engage in equity swaps. Equity swaps allow the parties to the swap agreement to exchange components of return on one equity investment (e.g., a basket of equity securities or an index) for a component of return on another non-equity or equity investment, including an exchange of differential rates of return. Equity swaps may be used to invest in a market without owning or taking physical custody of securities in circumstances where direct investment may be restricted for legal reasons or is otherwise impractical. Equity swaps also may be used for other purposes, such as hedging or seeking to increase total return.
The values of equity swaps can be very volatile. To the extent that the Investment Manager or a subadviser does not accurately analyze and predict the potential relative fluctuation on the components swapped with the other party, a Fund may suffer a loss. The value of some components of an equity swap (such as the dividend on a common stock) may also be sensitive to changes in interest rates. Furthermore, during the period a swap is outstanding, a Fund may suffer a loss if the counterparty defaults.
Total Return Swap Agreements. Total return swap agreements are contracts in which one party agrees to make periodic payments to another party based on the change in market value of the assets underlying the contract, which may include a specified security, basket of securities or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other
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underlying assets. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. Total return swap agreements may effectively add leverage to a Fund’s portfolio because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap.
Total return swap agreements are subject to the risk that a counterparty will default on its payment obligations to a Fund thereunder, and conversely, that a Fund will not be able to meet its obligation to the counterparty. Generally, a Fund will enter into total return swaps on a net basis (i.e., the two payment streams are netted against one another with a Fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each total return swap will be accrued on a daily basis, and an amount of liquid assets having an aggregate net asset value at least equal to the accrued excess will be segregated by a Fund. If the total return swap transaction is entered into on other than a net basis, the full amount of a Fund’s obligations will be accrued on a daily basis, and the full amount of a Fund’s obligations will be segregated by a Fund in an amount equal to or greater than the market value of the liabilities under the total return swap agreement or the amount it would have cost a Fund initially to make an equivalent direct investment, plus or minus any amount a Fund is obligated to pay or is to receive under the total return swap agreement.
Variance, Volatility and Correlation Swap Agreements. Variance and volatility swaps are contracts that provide exposure to increases or decreases in the volatility of certain referenced assets. Correlation swaps are contracts that provide exposure to increases or decreases in the correlation between the prices of different assets or different market rates.
Commodity-Linked Swaps. Commodity-linked swaps are two-party contracts in which the parties agree to exchange the return or interest rate on one instrument for the return of a particular commodity, commodity index or commodities futures or options contract. The payment streams are calculated by reference to an agreed upon notional amount. A one-period swap contract operates in a manner similar to a forward or futures contract because there is an agreement to swap a commodity for cash at only one forward date. A Fund may engage in swap transactions that have more than one period and therefore more than one exchange of commodities.
A Fund may invest in total return swaps to gain exposure to the overall commodity markets. In a total return commodity swap, a Fund will receive the price appreciation of a commodity index, a portion of the index, or a single commodity in exchange for paying an agreed-upon fee. If the commodity swap is for one period, the Fund will pay a fixed fee, established at the outset of the swap. However, if the term of the commodity swap is more than one period, with interim swap payments, the Fund will pay an adjustable or floating fee. With “floating” rate payments, the fee is pegged to a base rate such as LIBOR, and is adjusted each period. Therefore, if interest rates increase over the term of the swap contract, a Fund may be required to pay a higher fee at each swap reset date.
Dollar Rolls
Dollar rolls involve selling securities (e.g., mortgage-backed securities or U.S. Treasury securities) and simultaneously entering into a commitment to purchase those or similar (same collateral type, coupon and maturity) securities on a specified future date and price. Mortgage dollar rolls and U.S. Treasury rolls are types of dollar rolls. A Fund foregoes principal and interest paid on the securities during the “roll” period. A Fund is compensated by the difference between the current sales price and the lower forward price for the future purchase of the securities as well as the interest earned on the cash proceeds of the initial sale.
Dollar rolls involve the risk that the market value of the securities a Fund is obligated to repurchase may decline below the repurchase price or that the transaction costs may exceed the return earned by a Fund from the transaction. Dollar rolls also involve risk to a Fund if the other party should default on its obligation and a Fund is delayed or prevented from completing the transaction. In the event that the buyer of securities under a dollar roll files for bankruptcy or becomes insolvent, a Fund’s use of proceeds of the dollar roll may be restricted
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pending a determination by the other party, or its trustee or receiver, whether to enforce a Fund’s obligation to repurchase the securities. In addition, the security to be delivered in the future may turn out to be inferior to the security sold upon entering into the transaction.
Foreign Currency Transactions
Foreign currency transactions may be used to protect, to some extent, against uncertainty in the level of future currency exchange rates by establishing a fixed exchange rate. Foreign currency transactions may involve the purchase or sale of foreign currencies on a “spot” (cash) basis at the prevailing exchange rate or may involve “forward contracts” that allow a Fund to purchase or sell foreign currencies at a future date. Forward contracts may be used for “transaction hedging,” “position hedging” and “cross-hedging.” A Fund may use forward sale contracts to sell an amount of a foreign currency approximating the value of a Fund’s securities denominated in the foreign security when that foreign currency suffers a substantial decline against the U.S. dollar. A Fund may use forward purchase contracts to purchase a foreign currency when it is believed that the U.S. dollar may suffer a substantial decline against the foreign currency. Although these transactions tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain that might be realized if the value of the hedged currency increases.
Transaction hedging may allow a Fund to “lock in” the U.S. dollar price of a security it has agreed to purchase or sell, or the U.S. dollar equivalent of a dividend or interest rate payment in a foreign currency. A Fund may use transaction hedging to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received.
Position hedging may allow a Fund to protect against an adverse change in the relationship between the U.S. dollar and the applicable foreign currencies in which its portfolio securities are denominated. A Fund may use position hedging when it is believed that the U.S. dollar may suffer a decline against the foreign currency by entering into a forward purchase contract to purchase that foreign currency for a fixed dollar amount.
Cross-hedging may allow a Fund to enter into a forward contract to sell a different foreign currency for a fixed U.S. dollar amount when it is believed that the U.S. dollar value of the currency to be sold pursuant to the forward contract will fall if there is a decline in the U.S. dollar value of the currency in which a Fund’s securities are denominated.
A Fund also may purchase exchange-listed and over-the-counter call and put options on foreign currencies and foreign currency contracts. Options on foreign currencies and foreign currency contracts give the holder a right to buy or sell the underlying foreign currencies or foreign currency contracts for a specified period of time and for a specified amount. The value of an option on foreign currencies or foreign currency contracts reflects the value of an exchange rate, which depends on the relative values of the U.S. dollar and the relevant foreign currency.
Certain Funds, including AP – Alternative Strategies Fund, may engage in foreign currency transactions for investment purposes and not solely for hedging purposes.
Engaging in foreign currency transactions is subject to certain risks. For example, if the value of a foreign currency were to decline against the U.S. dollar, such decline would reduce the dollar value of any securities held by a Fund denominated in that currency. It is impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract, which may make it necessary for a Fund to purchase additional foreign currency on the spot market if the market value of the security being hedged is less than the amount of foreign currency a Fund is obligated to deliver at the time a Fund sells the security being hedged. The value of any currency, including the U.S. dollar, may be affected by political and economic factors
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applicable to the issuer’s country. The exchange rates of currencies also may be affected adversely by governmental actions. Transaction, position and cross-hedging do not eliminate fluctuations in the underlying prices of securities that a Fund owns or intends to purchase or sell and may limit the amount of potential gain that might result from the increase in value of the currency being hedged. Settlement procedures relating to a Fund’s foreign currency transactions may be more complex than those relating to investments in securities of U.S. issuers.
Foreign Securities
Foreign securities include debt, equity and derivative securities that the Investment Manager or a subadviser, as the case may be, determines are “foreign” based on the consideration of an issuer’s domicile, its principal place of business, its primary stock exchange listing, the source of its revenue, the location of its assets, its exposure to the economic fortunes and risks of countries or geographic regions outside the United States, or other factors. Foreign securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Foreign securities may include depositary receipts, such as American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs are U.S. dollar denominated receipts issued in registered form by a domestic bank or trust company that evidence ownership of underlying securities issued by a foreign issuer. EDRs are foreign currency-denominated receipts issued in Europe, typically by foreign banks or trust companies and foreign branches of domestic banks, that evidence ownership of foreign or domestic securities. GDRs are receipts structured similarly to ADRs and EDRs and are marketed globally. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities. In general, ADRs, in registered form, are designed for use in the U.S. securities markets, and EDRs, in bearer form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. A Fund may invest in depositary receipts through “sponsored” or “unsponsored” facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary, whereas a depositary may establish an unsponsored facility without participation by the issuer of the deposited security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to distribute interest holder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities. The issuers of unsponsored depositary receipts are not obligated to disclose material information in the United States, and, therefore, there may be limited information available regarding such issuers and/or limited correlation between available information and the market value of the depositary receipts.
Due to the potential for foreign withholding taxes, Morgan Stanley Capital International (MSCI) publishes two versions of its indices reflecting the reinvestment of dividends using two different methodologies: gross dividends and net dividends. While both versions reflect reinvested dividends, they differ with respect to the manner in which taxes associated with dividend payments are treated. In calculating the net dividends version, MSCI incorporates reinvested dividends applying the withholding tax rate applicable to foreign non-resident institutional investors that do not benefit from double taxation treaties. The Investment Manager believes that the net dividends version of MSCI indices better reflects the returns U.S. investors might expect were they to invest directly in the component securities of an MSCI index.
Investing in foreign securities is subject to certain risks. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates also may impact the value of foreign securities denominated in foreign currencies or U.S. dollars, without a change in the intrinsic value of those securities. Additionally, the U.S. dollar value of a foreign security tends to decrease when the value of the U.S. dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the U.S. dollar falls against such currency. A Fund may attempt to minimize the risk from adverse changes in the relationship
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between the U.S. dollar and foreign currencies by purchasing and selling forward foreign currency exchange contracts and foreign currency futures contracts and related options. Foreign securities may be less liquid than domestic securities so that a Fund may, at times, be unable to sell foreign securities at desirable prices. Brokerage commissions, custodial fees and other fees also are generally higher for foreign securities. A Fund may have limited legal recourse in the event of default with respect to certain debt securities issued by foreign governments. Foreign governments may impose potentially confiscatory withholding or other taxes, which would reduce a Fund’s return on these securities. There is generally less publicly available information about foreign companies. Investments in foreign companies may be adversely affected by the impact of political, social or diplomatic events or possible seizure, expropriation or nationalization of a company or its assets resulting in a partial or total loss of an investment in such foreign companies. Accounting, auditing and financial reporting standards may also be less comprehensive and stringent than those applicable to domestic companies.
Operational and Settlement Risks of Foreign Securities. A Fund’s foreign securities are generally held outside the United States in the primary market for the securities in the custody of certain eligible foreign banks and trust companies, as permitted under the 1940 Act (“foreign sub-custodians”). Settlement practices for foreign securities may differ from those in the United States. Some countries have limited governmental oversight and regulation of industry practices, stock exchanges, depositories, registrars, brokers and listed companies, which increases the risk of corruption and fraud and the possibility of losses to a Fund. In particular, under certain circumstances, foreign securities may settle on a delayed delivery basis, meaning that the Fund may be required to make payment for securities before the Fund has actually received delivery of the securities or deliver securities prior to the receipt of payment. Typically, in these cases, the Fund will receive evidence of ownership in accordance with the generally accepted settlement practices in the local market entitling the Fund to delivery or payment at a future date, but there is a risk that the security will not be delivered to the Fund or that payment will not be received, although the Fund and its foreign sub-custodians take reasonable precautions to mitigate this risk. Losses can also result from lost, stolen or counterfeit securities; defaults by brokers and banks; failures or defects of the settlement system; or poor and improper record keeping by registrars and issuers.
Share Blocking. Share blocking refers to a practice in certain foreign markets under which an issuer’s securities are blocked from trading at the custodian or sub-custodian level for a specified number of days before and, in certain instances, after a shareholder meeting where a vote of shareholders takes place. The blocking period can last up to several weeks. Share blocking may prevent the Fund from buying or selling securities during this period, because during the time shares are blocked, trades in such securities will not settle. It may be difficult or impossible to lift blocking restrictions, with the particular requirements varying widely by country. As a consequence of these restrictions, the Funds may abstain from voting proxies in markets that require share blocking.
Emerging Market Securities.
Risks associated with investments in foreign securities are increased with respect to investments in emerging market countries. Political and economic structures in many emerging market countries, especially Russia and those in Eastern Europe, the Pacific Basin, the Middle East, Asia, Latin America and Africa, are undergoing significant evolutionary changes and rapid development, and may lack the social, political and economic stability of more developed countries. Investing in emerging market securities also involves risks beyond the risks applicable to foreign investments.
Operational and Settlement Risks of Securities in Emerging Markets. In addition to having less developed securities markets, banks in emerging markets that are eligible foreign sub-custodians may be recently organized, lack extensive operating experience or lack effective government oversight or regulation. In addition, there may be legal restrictions or limitations on the ability of the Fund to recover assets held in custody by a foreign subcustodian in the event of the bankruptcy of the sub-custodian. Because settlement systems may be less organized than in developed markets and because delivery versus payment settlement may not be possible or reliable, there may be a greater risk that settlement may be delayed and that cash or securities of the Fund may be lost because of failures of
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or defects in the system, including fraud or corruption. Settlement systems in emerging markets also have a higher risk of failed trades. Ownership of Russian securities poses particular risks because ownership records are typically maintained in a decentralized fashion by registrars who may not be subject to effective governmental supervision leading to the possibility that the Fund may lose its ownership rights. In such a case, it may be difficult for the Fund to enforce any rights it may have against the registrar or issuer of the securities.
Risks Related to Currencies and Corporate Actions in Emerging Markets. Risks related to currencies and corporate actions are also greater in emerging market countries than in developed countries. For example, some emerging market countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Further, certain currencies may not be traded internationally, or countries may have varying exchange rates. Some emerging market countries have a higher risk of currency devaluations, and some of these countries may experience sustained periods of high inflation or rapid changes in inflation rates which can have negative effects on a country’s economy and securities markets. Corporate action procedures in emerging market countries may be less reliable and have limited or no involvement by the depositories and central banks. Lack of standard practices and payment systems can lead to significant delays in payment.
Risks Related to Corporate and Securities Laws in Emerging Markets. Securities laws in emerging markets may be relatively new and unsettled and, consequently, there is a risk of rapid and unpredictable change in laws regarding foreign investment, securities regulation, title to securities and shareholder rights. Accordingly, foreign investors may be adversely affected by new or amended laws and regulations. In addition, the systems of corporate governance to which issuers in certain emerging markets are subject may be less advanced than the systems to which issuers located in more developed countries are subject, and therefore, shareholders of such issuers may not receive many of the protections available to shareholders of issuers located in more developed countries. These risks may be heightened in certain countries, including without limitation Russia.
Guaranteed Investment Contracts (Funding Agreements)
Guaranteed investment contracts, or funding agreements, are debt instruments issued by insurance companies. Pursuant to such contracts, a Fund may make cash contributions to a deposit fund of the insurance company’s general account. The insurance company then credits to a Fund payments at negotiated, floating or fixed interest rates. A Fund will purchase guaranteed investment contracts only from issuers that, at the time of purchase, meet certain credit and quality standards.
Investing in guaranteed investment contracts is subject to certain risks. In general, guaranteed investment contracts are not assignable or transferable without the permission of the issuing insurance companies, and an active secondary market does not exist for these investments. In addition, the issuer may not be able to pay the principal amount to a Fund on seven days notice or less, at which time the investment may be considered illiquid under applicable SEC regulatory guidance and subject to certain restrictions.
Illiquid Securities
Illiquid securities are defined by a Fund consistent with SEC staff’s current guidance and interpretations which provide that an illiquid security is an asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which a Fund has valued the investment on its books. Some securities, such as those not registered under U.S. securities laws, cannot be sold in public transactions. Subject to its investment policies, a Fund may invest in illiquid investments and may invest in certain restricted securities that are deemed to be illiquid securities.
Initial Public Offerings
A Fund may invest in initial public offerings (IPOs) of common stock or other primary or secondary syndicated offerings of equity or debt securities issued by a corporate issuer. Fixed income funds frequently
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invest in these types of offerings of debt securities. A purchase of IPO securities often involves higher transaction costs than those associated with the purchase of securities already traded on exchanges or markets. IPO securities are subject to market risk and liquidity risk. The market value of recently issued IPO securities may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading and speculation, a potentially small number of securities available for trading, limited information about the issuer, and other factors. A Fund may hold IPO securities for a period of time, or may sell them soon after the purchase. Investments in IPOs could have a magnified impact – either positive or negative – on a Fund’s performance while the Fund’s assets are relatively small. The impact of an IPO on a Fund’s performance may tend to diminish as the Fund’s assets grow. In circumstances when investments in IPOs make a significant contribution to a Fund’s performance, there can be no assurance that similar contributions from IPOs will continue in the future.
Investments in Other Investment Companies
Investing in other investment companies may be a means by which a Fund seeks to achieve its investment objective. A Fund may invest in securities issued by other investment companies within the limits prescribed by the 1940 Act, the rules and regulations thereunder and any exemptive orders currently or in the future obtained by a Fund from the SEC. These securities include shares of other open-end investment companies (i.e., mutual funds), closed-end funds, exchange-traded funds and business development companies.
Except with respect to funds structured as funds-of-funds or so-called master/feeder funds, the 1940 Act generally requires that a fund limit its investments in another investment company or series thereof so that, as determined at the time a securities purchase is made: (i) no more than 5% of the value of its total assets will be invested in the securities of any one investment company; (ii) no more than 10% of the value of its total assets will be invested in the aggregate in securities of other investment companies; and (iii) no more than 3% of the outstanding voting stock of any one investment company or series thereof will be owned by a fund or by companies controlled by a fund. Such other investment companies may include ETFs, which are shares of publicly traded unit investment trusts, open-end funds or depositary receipts that seek to track the performance of specific indexes or companies in related industries.
Investing in other investment companies is subject to certain risks. Although a Fund may derive certain advantages from being able to invest in shares of other investment companies, such as to be fully invested, there may be potential disadvantages. Investing in other investment companies may result in higher fees and expenses for a Fund and its shareholders. A shareholder may be charged fees not only on Fund shares held directly but also on the investment company shares that a Fund purchases.
In addition, investing in ETFs is subject to certain other risks. ETFs generally are subject to the same risks as the underlying securities the ETFs are designed to track as well as to the risks of the specific sector or industry to which the ETF relates. ETFs also are subject to the risk that their prices may not totally correlate to the prices of the underlying securities the ETFs are designed to track and the risk of possible trading halts due to market conditions or for other reasons.
Under the 1940 Act and rules and regulations thereunder, a Fund may purchase shares of affiliated funds, subject to certain conditions. Investing in affiliated funds may present certain actual or potential conflicts of interest. For more information about such actual and potential conflicts of interest, see Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest.
Low and Below Investment Grade Securities
Low and below investment grade securities (below investment grade securities are also known as “junk bonds”) are debt securities with the lowest investment grade rating (e.g., BBB by S&P and Fitch or Baa by Moody’s), that are below investment grade (e.g., lower than BBB by S&P and Fitch or Baa by Moody’s) or that
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are unrated but determined by the Investment Manager or, as applicable, a subadviser to be of comparable quality. These types of securities may be issued to fund corporate transactions or restructurings, such as leveraged buyouts, mergers, acquisitions, debt reclassifications or similar events, are more speculative in nature than securities with higher ratings and tend to be more sensitive to credit risk, particularly during a downturn in the economy. These types of securities generally are issued by unseasoned companies without long track records of sales and earnings, or by companies or municipalities that have questionable credit strength. Low and below investment grade securities and comparable unrated securities: (i) likely will have some quality and protective characteristics that, in the judgment of one or more NRSROs, are outweighed by large uncertainties or major risk exposures to adverse conditions; (ii) are speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation; and (iii) may have a less liquid secondary market, potentially making it difficult to value or sell such securities. Low and below investment grade securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Investing in low and below investment grade securities and comparable unrated securities is subject to certain risks. The rates of return on these types of securities generally are higher than the rates of return available on more highly rated securities, but generally involve greater volatility of price and risk of loss of principal and income, including the possibility of default by or insolvency of the issuers of such securities. Accordingly, a Fund may be more dependent on the Investment Manager’s or a subadviser’s credit analysis with respect to these types of securities than is the case for more highly rated securities.
The market values of certain low and below investment grade securities and comparable unrated securities tend to be more sensitive to individual corporate developments and changes in economic conditions than are the market value of more highly rated securities. In addition, issuers of low and below investment grade and comparable unrated securities often are highly leveraged and may not have more traditional methods of financing available to them, so that their ability to service their debt obligations during an economic downturn or during sustained periods of rising interest rates may be impaired.
The risk of loss due to default is greater for low and below investment grade and comparable unrated securities than it is for higher rated securities because low and below investment grade securities and comparable unrated securities generally are unsecured and frequently are subordinated to more senior indebtedness. A Fund may incur additional expenses to the extent that it is required to seek recovery upon a default in the payment of principal or interest on its holdings of such securities. The existence of limited markets for lower-rated debt securities may diminish a Fund’s ability to: (i) obtain accurate market quotations for purposes of valuing such securities and calculating portfolio net asset value; and (ii) sell the securities at fair market value either to meet redemption requests or to respond to changes in the economy or in financial markets.
Many lower-rated securities are not registered for offer and sale to the public under the 1933Act. Investments in these restricted securities may be determined to be liquid (able to be sold within seven days at approximately the price at which they are valued by a Fund) pursuant to policies approved by the Fund’s Trustees. Investments in illiquid securities, including restricted securities that have not been determined to be liquid, may not exceed 15% of a Fund’s net assets. A Fund is not otherwise subject to any limitation on its ability to invest in restricted securities. Restricted securities may be less liquid than other lower-rated securities, potentially making it difficult to value or sell such securities.
Determining Investment Grade for Purposes of Investment Policies. When determining whether a security is investment grade or below investment grade for purposes of investment policies of investing in such securities, International Bond Fund uses the middle rating of Moody’s, S&P and Fitch after dropping the highest and lowest available ratings. When a rating from only two of these agencies is available, the lower rating is used. When a
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rating from only one of these agencies is available, that rating is used. When a security is not rated by one of these agencies, the Investment Manager or, as applicable, a subadviser determines whether it is of investment grade or below investment grade quality.
Money Market Instruments
Money market instruments are high-quality, short-term debt obligations, which include: (i) bank obligations, including certificates of deposit, time deposits and bankers’ acceptances; (ii) funding agreements; (iii) repurchase agreements; (iv) obligations of the United States, foreign countries and supranational entities, and each of their subdivisions, agencies and instrumentalities; (v) certain corporate debt securities, such as commercial paper, short-term corporate obligations and extendible commercial notes; (vi) participation interests; and (vii) municipal securities. Money market instruments may be structured as fixed-, variable- or floating-rate obligations and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Investing in money market instruments is subject to certain risks. Money market instruments (other than certain U.S. Government obligations) are not backed or insured by the U.S. Government, its agencies or its instrumentalities. Accordingly, only the creditworthiness of an issuer, or guarantees of that issuer, support such instruments.
Mortgage-Backed Securities
Mortgage-backed securities are a type of asset-backed security and represent interests in, or debt instruments backed by, pools of underlying mortgages. In some cases, these underlying mortgages may be insured or guaranteed by the U.S. Government or its agencies. Mortgage-backed securities entitle the security holders to receive distributions that are tied to the payments made on the underlying mortgage collateral (less fees paid to the originator, servicer, or other parties, and fees paid for credit enhancement), so that the payments made on the underlying mortgage collateral effectively pass through to such security holders. Mortgage-backed securities are created when mortgage originators (or mortgage loan sellers who have purchased mortgage loans from mortgage loan originators) sell the underlying mortgages to a special purpose entity in a process called a securitization. The special purpose entity issues securities that are backed by the payments on the underlying mortgage loans, and have a minimum denomination and specific term. Mortgage-backed securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Mortgage-backed securities may be issued or guaranteed by GNMA (also known as Ginnie Mae), FNMA (also known as Fannie Mae), or FHLMC (also known as Freddie Mac), but also may be issued or guaranteed by other issuers, including private companies. GNMA is a government-owned corporation that is an agency of the U.S. Department of Housing and Urban Development. It guarantees, with the full faith and credit of the United States, full and timely payment of all monthly principal and interest on its mortgage-backed securities. Until recently, FNMA and FHLMC were government-sponsored corporations owned entirely by private stockholders. Both issue mortgage-related securities that contain guarantees as to timely payment of interest and principal but that are not backed by the full faith and credit of the U.S. Government. The value of the companies’ securities fell sharply in 2008 due to concerns that the firms did not have sufficient capital to offset losses. The U.S. Treasury has historically had the authority to purchase obligations of Fannie Mae and Freddie Mac. In addition, in 2008, due to capitalization concerns, Congress provided the U.S. Treasury with additional authority to lend Fannie Mae and Freddie Mac emergency funds and to purchase the companies’ stock, as described below. In September 2008, the U.S. Treasury and the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac had been placed in conservatorship.
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Since 2009, Fannie Mae and Freddie Mac have received significant capital support through U.S. Treasury preferred stock purchases and Federal Reserve purchases of their mortgage backed securities. While the Federal Reserve’s purchases have terminated, the U.S. Treasury announced in December 2009 that it would continue its support for the entities’ capital as necessary to prevent a negative net worth through at least 2012. While the U.S. Treasury is committed to offset negative equity at Fannie Mae and Freddie Mac through its preferred stock purchases through 2012, no assurance can be given that the Federal Reserve, U.S. Treasury, or FHFA initiatives discussed above will ensure that Fannie Mae and Freddie Mac will remain successful in meeting their obligations with respect to the debt and mortgage-backed securities they issue beyond that date. In addition, Fannie Mae and Freddie Mac also are the subject of several continuing class action lawsuits and investigations by federal regulators over certain accounting, disclosure or corporate governance matters, which (along with any resulting financial restatements) may adversely affect the guaranteeing entities. Importantly, the future of the entities is in serious question as the U.S. Government reportedly is considering multiple options, ranging from nationalization, privatization, consolidation, or abolishment of the entities.
CMOs are debt obligations issued by special-purpose trusts, collateralized by underlying mortgage assets. Principal prepayments on underlying mortgage assets may cause the CMOs to be retired substantially earlier than their stated maturities or final distribution dates, resulting in a loss of all or part of the premium if any has been paid. Interest is paid or accrues on all classes of the CMOs on a periodic basis. The principal and interest payments on the underlying mortgage assets may be allocated among the various classes of CMOs in several ways. Typically, payments of principal, including any prepayments, on the underlying mortgage assets are applied to the classes in the order of their respective stated maturities or final distribution dates, so that no payment of principal is made on CMOs of a class until all CMOs of other classes having earlier stated maturities or final distribution dates have been paid in full.
REMICs are entities that own mortgages and elect REMIC status under the Code and, like CMOs, issue debt obligations collateralized by underlying mortgage assets that have characteristics similar to those issued by CMOs.
Investing in mortgage-backed securities is subject to certain risks, including, among others, prepayment, market and credit risks. Prepayment risk reflects the risk that borrowers may prepay their mortgages more quickly than expected, which may affect the security’s average maturity and rate of return. Whether or not a mortgage loan is prepaid is almost entirely controlled by the borrower. Borrowers are most likely to exercise prepayment options at the time when it is least advantageous to investors, generally prepaying mortgages as interest rates fall, and slowing payments as interest rates rise. Besides the effect of prevailing interest rates, the rate of prepayment and refinancing of mortgages also may be affected by home value appreciation, ease of the refinancing process and local economic conditions, among other factors. Market risk reflects the risk that the price of a security may fluctuate over time. The price of mortgage-backed securities can be particularly sensitive to prevailing interest rates, the length of time the security is expected to be outstanding and the liquidity of the issue. In a period of unstable interest rates, there may be decreased demand for certain types of mortgage-backed securities, which in turn may decrease their value. Credit risk reflects the risk that a holder of mortgage-backed securities may not receive all or part of its principal because the issuer, any credit enhancer and/or the underlying mortgage borrower has defaulted on its obligations. Credit risk is increased for mortgage-backed securities that are backed by mortgages to so-called subprime borrowers (who may pose a greater risk of defaulting on their loans) or that are subordinated to another security (i.e., if the holder of a mortgage-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be. Mortgage-backed securities issued by private issuers, whether or not such obligations are subject to guarantees by the private issuer, may entail greater risk than mortgage-backed securities guaranteed by the U.S. Government. The performance of mortgage-backed securities issued by private issuers generally depends on the financial health of those institutions.
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Municipal Securities
Municipal securities include debt obligations issued by governmental entities to obtain funds for various public purposes, including the construction of a wide range of public facilities, the refunding of outstanding obligations, the payment of general operating expenses, and the extension of loans to public institutions and facilities. Municipal securities can be classified into two principal categories, including “general obligation” bonds and other securities and “revenue” bonds and other securities. General obligation bonds are secured by the issuer’s full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, such as the user of the facility being financed. Municipal securities also may include “moral obligation” securities, which normally are issued by special purpose public authorities. If the issuer of moral obligation securities is unable to meet its debt service obligations from current revenues, it may draw on a reserve fund, the restoration of which is a moral commitment but not a legal obligation of the governmental entity that created the special purpose public authority. Municipal securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Municipal securities may include municipal bonds, municipal notes and municipal leases. Municipal bonds are debt obligations of a governmental entity that obligate the municipality to pay the holder a specified sum of money at specified intervals and to repay the principal amount of the loan at maturity.
Municipal notes may be issued by governmental entities and other tax-exempt issuers in order to finance short-term cash needs or, occasionally, to finance construction. Most municipal notes are general obligations of the issuing entity payable from taxes or designated revenues expected to be received within the relevant fiscal period. Municipal notes generally have maturities of one year or less. Municipal notes can be subdivided into two sub-categories: (i) municipal commercial paper and (ii) municipal demand obligations.
Municipal commercial paper typically consists of very short-term unsecured negotiable promissory notes that are sold, for example, to meet seasonal working capital or interim construction financing needs of a governmental entity or agency. While these obligations are intended to be paid from general revenues or refinanced with long-term debt, they frequently are backed by letters of credit, lending agreements, note repurchase agreements or other credit facility agreements offered by banks or institutions.
Municipal demand obligations can be subdivided into two general types: variable rate demand notes and master demand obligations. Variable rate demand notes are tax-exempt municipal obligations or participation interests that provide for a periodic adjustment in the interest rate paid on the notes. They permit the holder to demand payment of the notes, or to demand purchase of the notes at a purchase price equal to the unpaid principal balance, plus accrued interest either directly by the issuer or by drawing on a bank letter of credit or guaranty issued with respect to such note. The issuer of the municipal obligation may have a corresponding right to prepay at its discretion the outstanding principal of the note plus accrued interest upon notice comparable to that required for the holder to demand payment. The variable rate demand notes in which a Fund may invest are payable, or are subject to purchase, on demand usually on notice of seven calendar days or less. The terms of the notes generally provide that interest rates are adjustable at intervals ranging from daily to six months.
Master demand obligations are tax-exempt municipal obligations that provide for a periodic adjustment in the interest rate paid and permit daily changes in the amount borrowed. The interest on such obligations is, in the opinion of counsel for the borrower, excluded from gross income for federal income tax purposes (but not necessarily for alternative minimum tax purposes). Although there is no secondary market for master demand obligations, such obligations are considered by a Fund to be liquid because they are payable upon demand.
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Municipal lease obligations are participations in privately arranged loans to state or local government borrowers. In general, such loans are unrated, in which case they will be determined by the Investment Manager or, as applicable, a subadviser to be of comparable quality at the time of purchase to rated instruments that may be acquired by a Fund. Frequently, privately arranged loans have variable interest rates and may be backed by a bank letter of credit. In other cases, they may be unsecured or may be secured by assets not easily liquidated. Moreover, such loans in most cases are not backed by the taxing authority of the issuers and may have limited marketability or may be marketable only by virtue of a provision requiring repayment following demand by the lender.
Although lease obligations do not constitute general obligations of the municipal issuer to which the government’s taxing power is pledged, a lease obligation ordinarily is backed by the government’s covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses that provide that the government has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a periodic basis. In the case of a “non-appropriation” lease, a Fund’s ability to recover under the lease in the event of non-appropriation or default likely will be limited to the repossession of the leased property in the event that foreclosure proves difficult.
Tender option bonds are municipal securities having relatively long maturities and bearing interest at a fixed interest rate substantially higher than prevailing short-term tax-exempt rates that is coupled with the agreement of a third party, such as a bank, broker-dealer or other financial institution, to grant the security holders the option, at periodic intervals, to tender their securities to the institution and receive the face value thereof. The financial institution receives periodic fees equal to the difference between the municipal security’s coupon rate and the rate that would cause the security to trade at face value on the date of determination.
Investing in municipal securities is subject to certain risks. There are variations in the quality of municipal securities, both within a particular classification and between classifications, and the rates of return on municipal securities can depend on a variety of factors, including general money market conditions, the financial condition of the issuer, general conditions of the municipal bond market, the size of a particular offering, the maturity of the obligation, and the rating of the issue. The ratings of NRSROs represent their opinions as to the quality of municipal securities. It should be emphasized, however, that these ratings are general and are not absolute standards of quality, and municipal securities with the same maturity, interest rate, and rating may have different rates of return while municipal securities of the same maturity and interest rate with different ratings may have the same rate of return.
Because municipal securities are often issued to support health care, education, utilities, and transportation, a Fund’s investment in municipal securities may subject the Fund to risks of those sectors, including the risks described below. Companies in the health care sector are subject to extensive government regulation. Their profitability can be affected significantly and adversely by, among other factors, restrictions on government reimbursement for medical expenses, government approval of medical products and services and competitive pricing pressures. Companies in the health care sector also potentially are subject to extensive product liability and other similar litigation. Bonds related to education may be subject to the risk of unanticipated revenue decline caused by lower enrollment, higher operating costs or decreasing governmental funding. Student loan revenue bonds are subject to the risk of default and repayment deferral, periods of forbearance, changes in federal legislation, and loss of federal or state subsidies. Bonds relating to utilities are subject to the risks facing utilities companies, such as domestic and international competition and rate changes initiated by governments and their agencies. Bonds relating to transportation are highly dependent on economic conditions and fuel costs and may be adversely affected by government regulation and local and world events.
The payment of principal and interest on most municipal securities purchased by a Fund will depend upon the ability of the issuers to meet their obligations. An issuer’s obligations under its municipal securities are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors, such as the United States Bankruptcy Code. The power or ability of an issuer to meet its obligations for the payment of interest on and principal of its municipal securities may be materially adversely affected by litigation or other conditions.
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There are particular considerations and risks relevant to investing in a portfolio of a single state’s municipal securities, such as the greater risk of the concentration of portfolio holdings. Each state’s municipal securities may include, in addition to securities issued by the relevant state and its political subdivisions, agencies, authorities and instrumentalities, securities issued by the governments of Guam, Puerto Rico or the U.S. Virgin Islands. These securities may be subject to different risks than municipal securities issued by the relevant state and its political subdivisions, agencies, authorities and instrumentalities.
The Funds ordinarily purchase municipal securities whose interest, in the opinion of bond counsel, is excluded from gross income for federal income tax purposes. The opinion of bond counsel may assert that such interest is not an item of tax preference for the purposes of the alternative minimum tax or is exempt from certain state or local taxes. There is no assurance that the applicable taxing authority will agree with this opinion. In the event, for example, the IRS determines that an issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. Only certain of the Funds qualify to pass exempt interest through to shareholders (see Special Tax Considerations Pertaining to Tax-Exempt Funds under TAXATION). As a shareholder of such a Fund, you may be required to file an amended tax return under the circumstances described above, reporting such income as taxable.
For more information about the key risks associated with investments in states, see Appendix D.
Participation Interests
Participation interests (also called pass-through certificates or securities) represent an interest in a pool of debt obligations, such as municipal bonds or notes, that have been “packaged” by an intermediary, such as a bank or broker-dealer. Participation interests typically are issued by partnerships or trusts through which a Fund receives principal and interest payments that are passed through to the holder of the participation interest from the payments made on the underlying debt obligations. The purchaser of a participation interest receives an undivided interest in the underlying debt obligations. The issuers of the underlying debt obligations make interest and principal payments to the intermediary, as an initial purchaser, which are passed through to purchasers in the secondary market, such as a Fund. Mortgage-backed securities are a common type of participation interest. Participation interests may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in- kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Loan participations also are a type of participation interest. Loan participations are interests in loans that are administered by a lending bank or agent for a syndicate of lending banks and sold by the bank or syndicate members.
Investing in participation interests is subject to certain risks. Participation interests generally are subject to the credit risk associated with the underlying borrowers. If the underlying borrower defaults, a Fund may be subject to delays, expenses and risks that are greater than those that would have been involved if a Fund had purchased a direct obligation of the borrower. A Fund also may be deemed a creditor of the lending bank or syndicate members and be subject to the risk that the lending bank or syndicate members may become insolvent.
Preferred Stock
Preferred stock represents units of ownership of a corporation that frequently have dividends that are set at a specified rate. Preferred stock has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock shares some of the characteristics of both debt and equity. Preferred stock ordinarily does not carry voting rights. Most preferred stock is cumulative; if dividends are passed (i.e., not paid for any reason), they accumulate and must be paid before common stock dividends. Participating preferred stock entitles its holders to share in profits above and beyond the declared dividend, along with common shareholders, as
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distinguished from nonparticipating preferred stock, which is limited to the stipulated dividend. Convertible preferred stock is exchangeable for a given number of shares of common stock and thus tends to be more volatile than nonconvertible preferred stock, which generally behaves more like a fixed income bond. Preferred stock may be privately placed or publicly offered. See Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.
Auction preferred stock (APS) is a type of adjustable-rate preferred stock with a dividend determined periodically in a Dutch auction process by corporate bidders. Shares typically are bought and sold at face values generally ranging from $100,000 to $500,000 per share.
In addition to reinvestment risk if interest rates fall, some specific risks with regard to APS include:
• | Failed auction: A breakdown of the auction process can occur. In the event that the process fails, the rate is reset at the maximum applicable rate, which is usually described in the prospectuses and typically is influenced by the issuer’s credit rating. In a failed auction, current shareholders generally are unable to sell some, or all, of the shares when the auction is completed. Typically, the liquidity for APS that have experienced a failed auction becomes very limited. If a failed auction were to occur, the shareholder generally would hold his or her shares until the next auction. Should there not be subsequent auctions that “cure” the failed process, the shareholder may: (1) hold the APS in anticipation of a refinancing by the issuer that would cause the APS to be called, or (2) hold securities either indefinitely or in anticipation of the development of a secondary market. |
• | Early call risk: APS generally is redeemable at any time, usually upon notice, at the issuer’s option, at par plus accrued dividends. |
Investing in preferred stock is subject to certain risks. For example, stock market risk is the risk that the value of such stocks, like the broader stock markets, may decline over short or even extended periods. Domestic and foreign stock markets tend to be cyclical, with periods when prices generally rise and periods when prices generally decline. The value of individual stocks will rise and decline based on factors specific to each corporation, such as changes in earnings or management.
Investing in preferred stock also may involve the risks applicable to investing in a particular company. For example, stocks of smaller companies tend to have greater price fluctuations than stocks of larger companies because, among other things, they trade less frequently and in lower volumes, are more susceptible to changes in economic conditions, are more reliant on singular products or services and are more vulnerable to larger competitors. Stocks of these companies may have a higher potential for gains but also are subject to greater risk of loss.
Investing in preferred stock also may involve the risks applicable to investing in a particular industry, such as technology, financial services, consumer goods or natural resources (e.g., oil and gas). To some extent, the prices of stocks tend to move by industry sector. When market conditions favorably affect, or are expected to favorably affect, an industry, the prices of the stocks of companies in that industry tend to rise. Conversely, negative news or a poor outlook for a particular industry can cause the value of those companies’ stock to decline.
Private Placement and Other Restricted Securities
Private placement securities are securities that have been privately placed and are not registered under the 1933 Act. They are eligible for sale only to certain eligible investors. Private placements often may offer attractive opportunities for investment not otherwise available on the open market. Private placement and other “restricted” securities often cannot be sold to the public without registration under the 1933 Act or the availability of an exemption from registration (such as Rules 144 or 144A), or they are “not readily marketable” because they are subject to other legal or contractual delays in or restrictions on resale. Asset-backed securities, common stock, convertible securities, corporate debt securities, foreign securities, low and below investment
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grade securities, money market instruments, mortgage-backed securities, municipal securities, participation interests, preferred stock and other types of equity and debt instruments may be privately placed or restricted securities.
Private placements typically may be sold only to qualified institutional buyers (or, in the case of the initial sale of certain securities, such as those issued in collateralized debt obligations or collateralized loan obligations, to accredited investors (as defined in Rule 501(a) under the 1933 Act), or in a privately negotiated transaction or to a limited number of purchasers, or in limited quantities after they have been held for a specified period of time and other conditions are met pursuant to an exemption from registration.
Investing in private placement and other restricted securities is subject to certain risks. Private placements may be considered illiquid securities. Private placements typically are subject to restrictions on resale as a matter of contract or under federal securities laws. Because there may be relatively few potential purchasers for such securities, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, a Fund could find it more difficult to sell such securities when it may be advisable to do so or it may be able to sell such securities only at prices lower than if such securities were more widely held. At times, it also may be more difficult to determine the fair value of such securities for purposes of computing a Fund’s net asset value due to the absence of a trading market.
Real Estate Investment Trusts and Master Limited Partnerships
REITs are entities that either own properties or make construction or mortgage loans and also may include operating or finance companies. An equity REIT generally holds equity positions in real estate and seeks to provide its shareholders with income from the leasing of its properties and with capital gains from any sales of properties. A mortgage REIT generally specializes in lending money to owners of properties and passes through any interest income it may earn to its shareholders.
Partnership units of real estate and other types of companies sometimes are organized as master limited partnerships in which ownership interests are publicly traded. Master limited partnerships often own several properties or businesses (or directly own interests) that are related to real estate development and the oil and gas industries, but they also may finance motion pictures, research and development and other projects.
Equity investments in REITs are subject to certain risks associated with direct ownership of real estate, including, for example, declines in the value of real estate, risks related to general and local economic conditions, overbuilding and increased competition, increases in property taxes and operating expenses, and variations in rental income. REITs also may be subject to interest rate risk. In general, increases in interest rates will decrease the value of high-yield securities and increase the costs of obtaining financing, which could decrease the value of a REIT’s investments. In addition, equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of credit extended. Both equity and mortgage REITs are dependent upon management skills. REITs also may be subject to heavy cash flow dependency, defaults by borrowers, and the possibility of failing to qualify for preferential tax treatment under the Code, which could adversely affect dividend payments. REITs also may not be diversified.
Equity investments in master limited partnerships generally are subject to the risks applicable to investing in a partnership as opposed to a corporation, which may include fewer protections afforded to investors. Additional risks include those associated with the specific industries in which a master limited partnership invests, such as the risks associated with investing in the real estate or oil and gas industries.
Repurchase Agreements
Repurchase agreements are agreements under which a Fund acquires a security for a relatively short period of time subject to the obligation of a seller to repurchase and a Fund to resell such security at a fixed time and price (representing a Fund’s cost plus interest). Repurchase agreements also may be viewed as loans made by a
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Fund that are collateralized by the securities subject to repurchase. A Fund typically will enter into repurchase agreements only with commercial banks, registered broker-dealers and the Fixed Income Clearing Corporation. Such transactions are monitored to ensure that the value of the underlying securities will be at least equal at all times to the total amount of the repurchase obligation, including any accrued interest. Repurchase agreements generally are subject to counterparty risk.
If a counterparty defaults, a Fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale are less than the resale price provided in the repurchase agreement including interest. In the event that a counterparty fails to perform because it is insolvent or otherwise subject to insolvency proceedings against it, a Fund’s right to take possession of the underlying securities would be subject to applicable insolvency law and procedure, including an automatic stay (which would preclude immediate enforcement of a Fund’s rights) and exemptions thereto (which would permit a Fund to take possession of the underlying securities or to void a repurchase agreement altogether). Since it is possible that an exemption from the automatic stay would not be available, a Fund might be prevented from immediately enforcing its rights against the counterparty. Accordingly, if a counterparty becomes insolvent or otherwise subject to insolvency proceedings against it, a Fund may incur delays in or be prevented from liquidating the underlying securities and could experience losses, including the possible decline in value of the underlying securities during the period in which a Fund seeks to enforce its rights thereto, possible subnormal levels of income or lack of access to income during such time, as well as the costs incurred in enforcing a Fund’s rights. For example, if a Fund enters into a repurchase agreement with a broker that becomes insolvent, it is possible for the Securities Investor Protection Corporation (SIPC) to institute a liquidation proceeding in federal court against the broker counterparty which could lead to a foreclosure by SIPC of the underlying securities or SIPC may stay, or preclude, a Fund’s ability under contract to terminate the repurchase agreement.
Reverse Repurchase Agreements
Reverse repurchase agreements are agreements under which a Fund sells a security subject to the obligation of a buyer to resell and a Fund to repurchase such security at a fixed time and price. Reverse repurchase agreements also may be viewed as borrowings made by a Fund.
Reverse repurchase agreements involve the risk that the market value of the securities a Fund is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, a Fund’s use of proceeds of the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce a Fund’s obligation to repurchase the securities. In addition, reverse repurchase agreements are techniques involving leverage, and are subject to asset coverage requirements. Under the requirements of the 1940 Act, a Fund is required to maintain an asset coverage (including the proceeds of the borrowings) of at least 300% of all borrowings.
Sovereign Debt
A sovereign debtor’s willingness or ability to repay principal and pay interest in a timely manner may be affected by a variety of factors, including its cash flow situation, the extent of its reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which a sovereign debtor may be subject. (See also Permissible Fund Investments – Foreign Securities.) In addition, there may be no legal recourse against a sovereign debtor in the event of a default.
With respect to sovereign debt of emerging market issuers, investors should be aware that certain emerging market countries are among the largest debtors to commercial banks and foreign governments. At times, certain emerging market countries have declared moratoria on the payment of principal and interest on external debt. Certain emerging market countries have experienced difficulty in servicing their sovereign debt on a timely basis that led to defaults and the restructuring of certain indebtedness.
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Sovereign debt includes Brady Bonds, which are securities issued under the framework of the Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989 as a mechanism for debtor nations to restructure their outstanding external commercial bank indebtedness.
Standby Commitments
Standby commitments are securities under which a purchaser, usually a bank or broker-dealer, agrees to purchase, for a fee, an amount of a Fund’s municipal obligations. The amount payable by a bank or broker-dealer to purchase securities subject to a standby commitment typically will be substantially the same as the value of the underlying municipal securities. A Fund may pay for standby commitments either separately in cash or by paying a higher price for portfolio securities that are acquired subject to such a commitment.
Using standby commitments is subject to certain risks. Standby commitments are subject to the risk that a counterparty will not fulfill its obligation to purchase securities subject to a standby commitment.
Stripped Securities
Stripped securities are securities that evidence ownership in either the future interest or principal payments on an instrument. There are many different types and variations of stripped securities. For example, Separate Trading of Registered Interest and Principal Securities (STRIPS), can be component parts of a U.S. Treasury security where the principal and interest components are traded independently through DTC, a clearing agency registered pursuant to Section 17A of the 1934 Act and created to hold securities for its participants, and to facilitate the clearance and settlement of securities transactions between participants through electronic computerized book-entries, thereby eliminating the need for physical movement of certificates. Treasury Investor Growth Receipts (TIGERs) are U.S. Treasury securities stripped by brokers. Stripped mortgage-backed securities, or SMBS, also can be issued by the U.S. Government or its agencies. Stripped securities may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments – Variable- and Floating-Rate Obligations for more information.
SMBS usually are structured with two or more classes that receive different proportions of the interest and principal distributions from a pool of mortgage-backed assets. Common types of SMBS will be structured so that one class receives some of the interest and most of the principal from the mortgage-backed assets, while another class receives most of the interest and the remainder of the principal.
Investing in stripped securities is subject to certain risks. If the underlying obligations experience greater than anticipated prepayments of principal, a Fund may fail fully to recoup its initial investment in such securities. The market value of the class consisting primarily or entirely of principal payments can be especially volatile in response to changes in interest rates. The rates of return on a class of SMBS that receives all or most of the interest are generally higher than prevailing market rates of return on other mortgage-backed obligations because their cash flow patterns also are volatile and there is a greater risk that the initial investment will not be recouped fully.
U.S. Government and Related Obligations
U.S. Government obligations include U.S. Treasury obligations and securities issued or guaranteed by various agencies of the U.S. Government or by various instrumentalities which have been established or sponsored by the U.S. Government. U.S. Treasury obligations and securities issued or guaranteed by various agencies of the U.S. Government differ in their interest rates, maturities and time of issuance, as well as with respect to whether they are guaranteed by the U.S. Government. U.S. Government and related obligations may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments – Variable- and Floating-Rate Obligations for more information.
U.S. Government obligations also include senior unsecured debt securities issued between October 14, 2008 and June 30, 2009 by eligible issuers (including U.S. depository institutions insured by the FDIC (and certain
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affiliates), U.S. bank holding companies and certain U.S. savings and loan holding companies) that are guaranteed by the FDIC under its Temporary Liquidity Guarantee Program (the TLGP). The FDIC’s guarantee under the TLGP will expire upon the earlier of (i) maturity of such security or (ii) June 30, 2012. It is the view of the FDIC and the staff of the Securities and Exchange Commission that any debt security that is guaranteed by the FDIC under the TLGP and that has a maturity that ends on or before June 30, 2012 would be a security exempt from registration under Section 3(a)(2) of the Securities Act of 1933 because such security would be fully and unconditionally guaranteed by the FDIC.
Investing in securities guaranteed under the TLGP is subject to certain risks. Given that there is a limited track record for securities guaranteed under the TLGP, it is uncertain whether such securities will continue to trade in line with recent experience in relation to treasury and government agency securities in terms of yield spread and the volatility of such spread and it is uncertain how such securities will trade in the secondary market and whether that market will be liquid or illiquid. The TLGP is subject to change. In order to collect from the FDIC under the TLGP, a claims process must be followed. Failure to follow the claims process could result in a loss to the right to payment under the guarantee. In addition, guarantee payments by the FDIC under the TLGP may be delayed.
Investing in U.S. Government and related obligations is subject to certain risks. While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (i.e., the risk that the U.S. Government may be, or be perceived to be, unable or unwilling to honor its financial obligations, such as making payments). Securities issued or guaranteed by federal agencies and U.S. Government-sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. Government. These securities may be supported by the ability to borrow from the U.S. Treasury or only by the credit of the issuing agency or instrumentality and, as a result, may be subject to greater credit risk than securities issued or guaranteed by the U.S. Treasury. Obligations of U.S. Government agencies, authorities, instrumentalities and sponsored enterprises historically have involved limited risk of loss of principal if held to maturity. However, no assurance can be given that the U.S. Government can or would provide financial support to any of these entities, including whether or not the U.S. Government is obligated to do so by law.
On August 5, 2011, S&P lowered its long-term sovereign credit rating for the United States of America to “AA+” from “AAA”. Because a Fund may invest in U.S. Government obligations, the value of a Fund’s shares may be adversely affected by S&P’s downgrade or any future downgrades of the U.S. Government’s credit rating. While the long-term impact of the downgrade is uncertain, it could, for example, lead to increased volatility in the short-term. See Appendix A for a description of securities ratings.
Variable- and Floating-Rate Obligations
Variable- and floating-rate obligations provide for periodic adjustments in the interest rate and, under certain circumstances, varying principal amounts. Unlike a fixed interest rate, a variable, or floating, rate is one that rises and declines based on the movement of an underlying index of interest rates and may pay interest at rates that are adjusted periodically according to a specified formula. Asset-backed securities, bank obligations, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, money market instruments, mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as variable- and floating-rate obligations.
Investing in variable- and floating-rate obligations is subject to certain risks. Variable- and floating-rate obligations may involve direct lending arrangements between the purchaser and the issuer and there may be no active secondary market, making it difficult to resell such obligations to a third party. Variable- and floating-rate obligations also may be subject to interest rate and credit risks. Changes in interest rates can affect the rate of return on such obligations. If an issuer of a variable- or floating-rate obligation defaults, a Fund could sustain a loss to the extent of such default.
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Warrants and Rights
Warrants and rights are types of securities that give a holder a right to purchase shares of common stock. Warrants usually are issued together with a bond or preferred stock and entitle a holder to purchase a specified amount of common stock at a specified price typically for a period of years. Rights usually have a specified purchase price that is lower than the current market price and entitle a holder to purchase a specified amount of common stock typically for a period of only weeks. Warrants may be used to enhance the marketability of a bond or preferred stock.
Warrants and rights may be subject to the risk that the securities could lose value. There also is the risk that the potential exercise price may exceed the market price of the warrants or rights, such as when there is no movement in the market price or the market price of such securities declines.
When-Issued, Delayed Delivery and Forward Commitment Transactions
When-issued, delayed delivery and forward commitment transactions involve the purchase or sale of securities by a Fund, with payment and delivery taking place in the future. When engaging in when-issued, delayed delivery and forward commitment transactions, a Fund typically will hold cash or liquid securities in a segregated account in an amount equal to or greater than the purchase price. The payment obligation and, if applicable, the interest rate that will be received on the securities, are fixed at the time that a Fund agrees to purchase the securities. A Fund generally will enter into when-issued, delayed delivery and forward commitment transactions only with the intention of completing such transactions. However, the Investment Manager or a subadviser may determine not to complete a transaction if it deems it appropriate. In such cases, a Fund may realize short-term gains or losses.
When-issued, delayed delivery and forward commitment transactions involve the risks that the securities purchased may fall in value by the time they actually are issued or that the other party may fail to honor the contract terms. A Fund that invests in delayed delivery securities may rely on a third party to complete the transaction. Failure by a third party to deliver a security purchased on a delayed delivery basis may result in a financial loss to a Fund or the loss of an opportunity to make an alternative investment.
Wholly-Owned Subsidiaries
AP – Alternative Strategies Fund (for purposes of this section, the “Fund”) may invest up to 25% of its total assets in one or more wholly-owned subsidiaries (referred to herein collectively as the “Subsidiary”) organized under the laws of the Cayman Islands, which will gain exposure to the commodities markets. The Subsidiary’s commodity-linked investments (including commodity-linked futures contracts, structured notes, swaps and options), swaps and other investments are expected to produce leveraged exposure to the performance of the commodities markets. The Subsidiary also invests in investment-grade fixed income and other securities that may serve as collateral for its commodity-linked positions and may hold cash or cash equivalents, and may invest directly in commodities.
The Subsidiary is overseen by its own board of directors and is not registered under the 1940 Act. The Fund, as the sole shareholder of the Subsidiary, does not have all of the protections offered by the 1940 Act to shareholders of investment companies registered under the 1940 Act. However, the Subsidiary is wholly-owned and controlled by the Fund and the Fund’s Board of Trustees oversees the investment activities of the Fund, including its investment in the Subsidiary, and the Fund’s role as sole shareholder of the Subsidiary. The Investment Manager and the Fund’s subadvisers are responsible for the Subsidiary’s day-to-day business pursuant to their separate agreements with, or in respect of, the Subsidiary.
The Subsidiary has entered into separate contracts for the provision of advisory, administrative and custody services with the same service providers who provide those services to the Fund. Each Subsidiary will bear the fees and expenses incurred in connection with the services it receives pursuant to those agreements.
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The financial information of the Subsidiary will be consolidated into the Fund’s financial statements, as contained within the Fund’s annual and semi-annual reports provided to shareholders.
As described below under TAXATION – Qualification as a Regulated Investment Company, in order to qualify for the special tax treatment accorded to RICs under the Code, the Fund must satisfy a 90% gross income requirement and an asset diversification requirement. These requirements are not applicable to the Subsidiary. Income recognized by the Fund in respect of the Subsidiary is expected to be qualifying income for purposes of the 90% gross income requirement because the Subsidiary is expected to be a controlled foreign corporation. For purposes of the asset diversification requirement, each Subsidiary will be treated as an issuer and the Fund will limit its investment in Subsidiaries to 25% or less of its total assets as of the end of every quarter of its taxable year in order to satisfy the asset diversification requirement, which applies to the Fund’s interest in the Subsidiaries but not to the Subsidiaries’ investments.
Changes in U.S. laws and/or the laws of the Cayman Islands could prevent the Fund and/or the Subsidiary from operating as described in the Fund’s prospectus and this SAI, and could negatively affect the Fund and its shareholders. For example, the Cayman Islands currently does not impose certain taxes on the Subsidiary, including any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax. If Cayman Islands laws were changed to require the Subsidiary to pay Cayman Islands taxes, the investment returns of the Fund would likely decrease.
By investing in the Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The derivatives and other investments held by the Subsidiary are subject to the same risks that would apply to similar investments if held directly by the Fund.
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities
Zero-coupon, pay-in-kind and step-coupon securities are types of debt instruments that do not necessarily make payments of interest in fixed amounts or at fixed intervals. Asset-backed securities, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as zero-coupon, pay-in-kind and step-coupon securities.
Zero-coupon securities do not pay interest on a current basis but instead accrue interest over the life of the security. These securities include, among others, zero-coupon bonds, which either may be issued at a discount by a corporation or government entity or may be created by a brokerage firm when it strips the coupons from a bond or note and then sells the bond or note and the coupon separately. This technique is used frequently with U.S. Treasury bonds, and zero-coupon securities are marketed under such names as CATS (Certificate of Accrual on Treasury Securities), TIGERs or STRIPS. Zero-coupon bonds also are issued by municipalities. Buying a municipal zero-coupon bond frees its purchaser of the obligation to pay regular federal income tax on imputed interest, since the interest is exempt for regular federal income tax purposes. Zero-coupon certificates of deposit and zero-coupon mortgages are generally structured in the same fashion as zero-coupon bonds; the certificate of deposit holder or mortgage holder receives face value at maturity and no payments until then.
Pay-in-kind securities normally give the issuer an option to pay cash at a coupon payment date or to give the holder of the security a similar security with the same coupon rate and a face value equal to the amount of the coupon payment that would have been made.
Step-coupon securities trade at a discount from their face value and pay coupon interest. The coupon rate is paid according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The discount from the face amount or par value depends on the time remaining until cash payments begin, prevailing interest rates, liquidity of the security and the perceived credit quality of the issue.
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Zero-coupon, step-coupon and pay-in-kind securities holders generally have substantially all the rights and privileges of holders of the underlying coupon obligations or principal obligations. Holders of these securities have the right upon default on the underlying coupon obligations or principal obligations to proceed directly and individually against the issuer and are not required to act in concert with other holders of such securities.
Investing in zero-coupon, pay-in-kind and step-coupon securities is subject to certain risks, including that market prices of zero-coupon, pay-in-kind and step-coupon securities generally are more volatile than the prices of securities that pay interest periodically and in cash, and are likely to respond to changes in interest rates to a greater degree than other types of debt securities.
Because zero-coupon securities bear no interest, they are volatile. Since zero-coupon bondholders do not receive interest payments, zero-coupon securities fall more dramatically than bonds paying interest on a current basis when interest rates rise. However, when interest rates fall, zero-coupon securities rise more rapidly in value than interest paying bonds.
Each Fund has a fundamental policy with respect to borrowing that can be found under the heading About the Funds’ Investments – Fundamental and Non-Fundamental Investment Policies. Specifically, each Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds. In general, pursuant to the 1940 Act, a Fund may borrow money only from banks in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount must be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation.
The Funds participate in a committed line of credit (Line of Credit). Any advance under the Line of Credit is contemplated primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely sale of portfolio securities.
Pursuant to an exemptive order from the SEC, a Fund may, subject to certain conditions, borrow money from or lend money to other funds in the Columbia Funds Family or any other registered investment company advised by the Investment Manager or its affiliates for temporary emergency purposes in order to facilitate redemption requests, or for other purposes consistent with Fund investment policies and restrictions. All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans.
A Fund may sometimes sell securities short when it owns an equal amount of such securities as those securities sold short. This is a technique known as selling short “against the box.” If a Fund makes a short sale “against the box,” it would not immediately deliver the securities sold and would not receive the proceeds from the sale. The seller is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. To secure its obligation to deliver securities sold short, a Fund will deposit in escrow in a separate account with the custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. A Fund can close out its short position by purchasing and delivering an equal amount of the securities sold short, rather than by delivering securities already held by a Fund, because a Fund might want to continue to receive interest and dividend payments on securities in its portfolio that are convertible into the securities sold short.
Short sales “against the box” entail many of the same risks and considerations described below regarding short sales not “against the box.” However, when a Fund sells short “against the box” it typically limits the amount of securities that it has leveraged. A Fund’s decision to make a short sale “against the box” may be a technique to hedge against market risks when the Investment Manager or a subadviser believes that the price of a security may
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decline, causing a decline in the value of a security owned by a Fund or a security convertible into or exchangeable for such security. In such case, any future losses in a Fund’s long position would be reduced by a gain in the short position. The extent to which such gains or losses in the long position are reduced will depend upon the amount of securities sold short relative to the amount of the securities a Fund owns, either directly or indirectly, and, in the case where a Fund owns convertible securities, changes in the investment values or conversion premiums of such securities. Short sales may have adverse tax consequences to a Fund and its shareholders.
Subject to its fundamental and non-fundamental investment policies, a Fund may engage in short sales that are not “against the box,” which are sales by a Fund of securities, contracts or instruments that it does not own in hopes of purchasing the same security, contract or instrument at a later date at a lower price. The technique is also used to protect a profit in a long-term position in a security, commodity futures contract or other instrument. To make delivery to the buyer, a Fund must borrow or purchase the security. If borrowed, a Fund is then obligated to replace the security borrowed from the third party, so a Fund must purchase the security at the market price at a later time. If the price of the security has increased during this time, then a Fund will incur a loss equal to the increase in price of the security from the time of the short sale plus any premiums and interest paid to the third party. (Until the security is replaced, a Fund is required to pay to the lender amounts equal to any dividends or interest which accrue during the period of the loan. To borrow the security, a Fund also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet the margin requirements, until the short position is closed out.)
Short sales by a Fund that are not made “against the box” create opportunities to increase a Fund’s return but, at the same time, involve specific risk considerations and may be considered a speculative technique. Because a Fund in effect profits from a decline in the price of the securities sold short without the need to invest the full purchase price of the securities on the date of the short sale, a Fund’s NAV per share tends to increase more when the securities it has sold short decrease in value, and to decrease more when the securities it has sold short increase in value, than if it had not engaged in such short sales. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends or interest a Fund may be required to pay in connection with the short sale. Short sales could potentially involve unlimited loss, as the market price of securities sold short may continually increase, although a Fund can mitigate any such losses by replacing the securities sold short. Under adverse market conditions, a Fund might have difficulty purchasing securities to meet its short sale delivery obligations, and might have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations would not favor such sales. There is also the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to a Fund.
A Fund’s successful use of short sales also will be subject to the ability of the Investment Manager or a subadviser to predict movements in the directions of the relevant market. A Fund therefore bears the risk that the Investment Manager or a subadviser will incorrectly predict future price directions. In addition, if a Fund sells a security short, and that security’s price goes up, a Fund will have to make up the margin on its open position (i.e., purchase more securities on the market to cover the position). It may be unable to do so and thus its position may not be closed out. There can be no assurance that a Fund will not incur significant losses in such a case.
In the view of the SEC, a short sale involves the creation of a “senior security” as such term is defined in the 1940 Act, unless the sale is “against the box” and the securities sold short are placed in a segregated account (not with the broker), or unless a Fund’s obligation to deliver the securities sold short is “covered” by placing in a segregated account (not with the broker) cash, U.S. Government securities or other liquid debt or equity securities in an amount equal to the difference between the market value of the securities sold short at the time of the short sale and any such collateral required to be deposited with a broker in connection with the sale (not including the proceeds from the short sale), which difference is adjusted daily for changes in the value of the securities sold short. The total value of the cash, U.S. Government securities or other liquid debt or equity securities deposited with the broker and otherwise segregated may not at any time be less than the market value of the securities sold short at the time of the short sale.
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Lending of Portfolio Securities
To generate additional income, a Fund may lend up to 33%, or such lower percentage specified by the Fund or Adviser of the value of its total assets (including securities out on loan) to broker-dealers, banks or other institutional borrowers of securities. JPMorgan serves as lending agent (the Lending Agent) to the Funds pursuant to a securities lending agreement (the Securities Lending Agreement) approved by the Board.
Under the Securities Lending Agreement, the Lending Agent loans securities to approved borrowers pursuant to borrower agreements in exchange for collateral. Collateral may consist of cash, securities issued by the U.S. Government or its agencies or instrumentalities (collectively, “U.S. Government securities”) or such other collateral as may be approved by the Board. For loans secured by cash, the Fund retains the interest earned on cash collateral investments, but is required to pay the borrower a rebate for the use of the cash collateral. For loans secured by U.S. Government securities, the borrower pays a borrower fee to the Lending Agent on behalf of the Fund. If the market value of the loaned securities goes up, the Lending Agent will require additional collateral from the borrower.
If the market value of the loaned securities goes down, the borrower may request that some collateral be returned. During the existence of the loan, the lender will receive from the borrower amounts equivalent to any dividends, interest or other distributions on the loaned securities, as well as interest on such amounts.
Loans are subject to termination by a Fund or a borrower at any time. A Fund may choose to terminate a loan in order to vote in a proxy solicitation if the Fund has knowledge of a material event to be voted on that would affect the Fund’s investment in the loaned security.
Securities lending involves counterparty risk, including the risk that a borrower may not provide additional collateral when required or return the loaned securities in a timely manner. Counterparty risk also includes a potential loss of rights in the collateral if the borrower or the Lending Agent defaults or fails financially. This risk is increased if a Fund’s loans are concentrated with a single borrower or limited number of borrowers. There are no limits on the number of borrowers a Fund may use and a Fund may lend securities to only one or a small group of borrowers. Funds participating in securities lending also bear the risk of loss in connection with investments of cash collateral received from the borrowers. Cash collateral is invested in accordance with investment guidelines contained in the Securities Lending Agreement and approved by the Board. Some or all of the cash collateral received in connection with the securities lending program may be invested in one or more pooled investment vehicles, including, among other vehicles, money market funds managed by the Lending Agent (or its affiliates). The Lending Agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the Lending Agent may receive asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the Lending Agent (or its affiliates) and the Fund with respect to the management of such cash collateral. To the extent that the value or return of a Fund’s investments of the cash collateral declines below the amount owed to a borrower, a Fund may incur losses that exceed the amount it earned on lending the security. The Lending Agent will indemnify a Fund from losses resulting from a borrower’s failure to return a loaned security when due, but such indemnification does not extend to losses associated with declines in the value of cash collateral investments. The Investment Manager is not responsible for any loss incurred by the Funds in connection with the securities lending program.
A change in the securities held by a Fund is known as “portfolio turnover.” High portfolio turnover (e.g., over 100%) involves correspondingly greater expenses to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestments in other securities. Such sales may also result in adverse tax consequences to a Fund’s shareholders. The trading costs and tax effects associated with portfolio turnover may adversely affect a Fund’s performance.
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For each Fund’s portfolio turnover rate, see the Fees and Expenses of the Fund — Portfolio Turnover section in the prospectuses for that Fund.
In any particular year, market conditions may result in greater rates than are presently anticipated. The rate of a Fund’s turnover may vary significantly from time to time depending on the volatility of economic and market conditions.
Disclosure of Portfolio Information
The Board and the Investment Manager believe that the investment ideas of the Investment Manager with respect to portfolio management of a Fund should benefit the Fund and its shareholders, and do not want to afford speculators an opportunity to profit by anticipating Fund trading strategies or by using Fund portfolio holdings information for stock picking. However, the Board also believes that knowledge of a Fund’s portfolio holdings can assist shareholders in monitoring their investments, making asset allocation decisions, and evaluating portfolio management techniques.
The Board has therefore adopted policies and procedures relating to disclosure of the Funds’ portfolio securities. These policies and procedures are intended to protect the confidentiality of Fund portfolio holdings information and generally prohibit the release of such information until such information is made available to the general public. It is the policy of the Funds not to provide or permit others to provide portfolio holdings on a selective basis, and the Investment Manager does not intend to selectively disclose portfolio holdings or expect that such holdings information will be selectively disclosed, except where necessary for the Funds’ operation or where there are other legitimate business purposes for doing so and, in any case, where conditions are met that are designed to protect the interests of the Funds and their shareholders.
Certain limited exceptions that have been approved consistent with the policies and procedures are described below. The Board is updated as needed regarding compliance with these policies and procedures. The policies and procedures prohibit the Investment Manager and a Fund’s other service providers from entering into any agreement to disclose Fund portfolio holdings information in exchange for any form of consideration. The same policies and procedures apply to all categories of Columbia Funds and include some variations tailored to the different categories of Columbia Funds. Accordingly, some of the provisions described below do not apply to the Columbia Funds covered by this SAI. The Investment Manager also has adopted policies and procedures to monitor for compliance with these portfolio holdings disclosure policies and procedures.
Although the Investment Manager seeks to limit the selective disclosure of portfolio holdings information and such selective disclosure is monitored under the Funds’ compliance program for conformity with the policies and procedures, there can be no assurance that these policies will protect the Funds from the potential misuse of holdings information by individuals or firms in possession of that information.
Public Disclosures
The Funds’ portfolio holdings are currently disclosed to the public through filings with the SEC and postings on the Funds’ website. The information is available on the Funds’ website as described below.
• | For equity, convertible and balanced Funds (other than the equity Funds identified below) and Risk Allocation Fund, a complete list of Fund portfolio holdings as of month-end is posted approximately, but no earlier than, 15 calendar days after such month-end. |
• | For Funds that are subadvised by Brandes Investment Partners, L.P. and Marsico Capital Management, LLC, Columbia Frontier Fund, Select Small Cap Fund, Small Cap Growth Fund I, Columbia Small |
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Cap Growth Fund II and Columbia Variable Portfolio – Small Company Growth Fund, a complete list of Fund portfolio holdings as of month-end is posted approximately, but no earlier than, 30 calendar days after such month-end. |
• | For fixed-income Funds, a complete list of Fund portfolio holdings as of calendar quarter-end is posted approximately, but no earlier than, 30 calendar days after such quarter-end. |
• | For money market Funds, a complete list of Fund portfolio holdings as of month-end is posted no later than five business days after such month-end. Such month-end holdings are continuously available on the website for at least six months, together with a link to an SEC webpage where a user of the website may obtain access to the Fund’s most recent 12 months of publicly available filings on Form N-MFP. Money market Fund portfolio holdings information posted on the website, at minimum, includes with respect to each holding, the name of the issuer, the category of investment (e.g., Treasury debt, government agency debt, asset backed commercial paper, structured investment vehicle note), the CUSIP number (if any), the principal amount, the maturity date (as determined under Rule 2a-7 for purposes of calculating weighted average maturity), the final maturity date (if different from the maturity date previously described), coupon or yield and the amortized cost value. The money market Funds will also disclose on the website the overall weighted average maturity and weighted average life maturity of a holding. |
Portfolio holdings of Funds owned solely by affiliates of the Investment Manager are not disclosed on the website. A complete schedule of each Fund’s portfolio holdings is available semi-annually and annually in shareholder reports filed on Form N-CSR and, after the first and third fiscal quarters, in regulatory filings on Form N-Q. These shareholder reports and regulatory filings are filed with the SEC in accordance with federal securities laws. Shareholders may obtain each Columbia Fund’s Form N-CSR and N-Q filings on the SEC’s website at www.sec.gov. In addition, each Columbia Fund’s Form N-CSR and N-Q filings may be reviewed and copied at the SEC’s public reference room in Washington, D.C. You may call the SEC at 202.551.8090 for information about the SEC’s website or the operation of the public reference room.
In addition, the Investment Manager makes publicly available information regarding certain Funds’ largest five to fifteen holdings, as a percentage of the market value of the Funds’ portfolios as of a month-end. This holdings information is made publicly available approximately 15 calendar days following the month-end. The scope of the information that is made available on the Funds’ website pursuant to the Funds’ policies may change from time to time without prior notice.
The Investment Manager may also disclose more current portfolio holdings information as of specified dates on the Columbia Funds’ website.
The Columbia Funds, the Investment Manager and their affiliates may include portfolio holdings information that already has been made public through a website posting or SEC filing in marketing literature and other communications to shareholders, advisors or other parties, provided that the information is disclosed no earlier than when the information is disclosed publicly on the funds’ website or no earlier than the time a fund files such information in a publicly available SEC filing required to include such information.
Other Disclosures
The Funds’ policies and procedures provide that no disclosures of the Funds’ portfolio holdings may be made prior to the portfolio holdings information being made available to the general public unless (i) the Funds have a legitimate business purpose for making such disclosure, (ii) the Funds or their authorized agents authorize such non-public disclosure of information, and (iii) the party receiving the non-public information enters into an appropriate confidentiality agreement or is otherwise subject to a confidentiality obligation.
In determining the existence of a legitimate business purpose for making portfolio disclosures, the following factors, among others, are considered: (i) any prior disclosure must be consistent with the anti-fraud provisions of
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the federal securities laws and the fiduciary duties of the Investment Manager; (ii) any conflicts of interest between the interests of Fund shareholders, on the one hand, and those of the Investment Manager, the Distributor or any affiliated person of a Fund, the Investment Manager or Distributor on the other; and (iii) any prior disclosure to a third party, although subject to a confidentiality agreement, would not make conduct lawful that is otherwise unlawful.
In addition, the Funds periodically disclose their portfolio information on a confidential basis to various service providers that require such information to assist the Funds with their day-to-day business affairs. In addition to the Investment Manager and its affiliates, these service providers include each Fund’s subadvisor(s) (if any), affiliates of the Investment Manager, the Funds’ custodian, subcustodians, the Funds’ independent registered public accounting firm, legal counsel, financial printers, proxy solicitor and proxy voting service provider, as well as ratings agencies that maintain ratings on certain Funds. These service providers are required to keep such information confidential, and are prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the Funds. The Funds also may disclose portfolio holdings information to broker-dealers and certain other entities in connection with potential transactions and management of the Funds, provided that reasonable precautions, including limitations on the scope of the portfolio holdings information disclosed, are taken to avoid any potential misuse of the disclosed information.
The Fund also discloses portfolio holdings information as required by federal, state or international securities laws, and may disclose portfolio holdings information in response to requests by governmental authorities, or in connection with litigation or potential litigation, a restructuring of a holding, where such disclosure is necessary to participate or explore participation in a restructuring of the holding (e.g., as part of a bondholder group), or to the issuer of a holding, pursuant to a request of the issuer or any other party who is duly authorized by the issuer.
The Board has adopted policies to ensure that the Fund’s portfolio holdings information is only disclosed in accordance with these policies. Before any selective disclosure of portfolio holdings information is permitted, the person seeking to disclose such holdings information must submit a written request to the Portfolio Holdings Committee (PHC). The PHC is comprised of members from the Investment Manager’s legal department, compliance department, and the Funds’ President. The PHC is authorized by the Board to perform an initial review of requests for disclosure of holdings information to evaluate whether there is a legitimate business purpose for selective disclosure, whether selective disclosure is in the best interests of a Fund and its shareholders, to consider any potential conflicts of interest between the Fund, the Investment Manager, and its affiliates, and to safeguard against improper use of holdings information. Factors considered in this analysis are whether the recipient has agreed to or has a duty to keep the holdings information confidential and whether risks have been mitigated such that the recipient has agreed or has a duty to use the holdings information only as necessary to effectuate the purpose for which selective disclosure may be authorized, including a duty not to trade on such information. Before portfolio holdings may be selectively disclosed, requests approved by the PHC must also be authorized by the Fund’s President, Chief Compliance Officer or General Counsel/Chief Legal Officer or their respective designees. On at least an annual basis, the PHC reviews the approved recipients of selective disclosure and may require a resubmission of the request, in order to re-authorize certain ongoing arrangements. These procedures are intended to be reasonably designed to protect the confidentiality of Fund holdings information and to prohibit their release to individual investors, institutional investors, intermediaries that distribute the Funds’ shares, and other parties, until such holdings information is made public or unless such persons have been authorized to receive such holdings information on a selective basis, as set forth above.
Ongoing Portfolio Holdings Disclosure Arrangements
The Funds currently have ongoing arrangements with certain approved recipients with respect to the disclosure of portfolio holdings information prior to such information being made public. Portfolio holdings information disclosed to such recipients is current as of the time of its disclosure, is disclosed to each recipient
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solely for purposes consistent with the services described below and has been authorized in accordance with the policy. No compensation or consideration is received in exchange for this information. In addition to the daily information provided to a Fund’s custodian, subcustodians (if any), administrator, investment manager and subadvisers (if any), the following disclosure arrangements are in place:
IDENTITY OF RECIPIENT | CONDITIONS/RESTRICTIONS ON | FREQUENCY OF DISCLOSURE | ||
Advent | Portfolio accounting and trade order management systems utilized by EAM, subadviser to certain Columbia Funds. | Daily | ||
Barclays | POINT platform used by the Investment Manager for analytics including risk and attribution assessment. | Daily | ||
Barclays | POINT platform used by Federated, subadviser to certain Columbia Funds, for analytics and modeling. | Daily | ||
BitLathe LLC | Website support for fund holdings and performance disclosure. | Monthly | ||
Bloomberg, L.P. | Use for portfolio analytics. | Daily | ||
Bloomberg, L.P. | Use for independent research of Funds. Sent monthly, approximately 30 days after month end. | Monthly | ||
Bloomberg, L.P. | Used by Wasatch, subadviser to certain Columbia Funds, to upload holdings information for internal reporting and portfolio analysis. | Daily | ||
Cenveo, Inc. | May be used for printing of prospectuses, factsheets, annual and semi-annual reports. | As Needed | ||
Citigroup | Access when assisting in resolving technical difficulties with YieldBook, an analytic software program that the Investment Manager uses to perform ongoing risk analysis and management of certain fixed income Columbia Funds and fixed income separately managed accounts. | Daily | ||
Citigroup | Yield Book software used by Federated, subadviser to certain Columbia Funds, for analytics and modeling. | Daily | ||
CMS BondEdge | Access when assisting in resolving technical difficulties with application used by the Investment Manager’s Fixed Income Portfolio Management team as an analytical and trading tool. | Ad Hoc | ||
Electra | Used by TCW, subadviser to certain Columbia Funds, to electronically prepare market value reconciliations and to transmit custodian audited financial statement information. | Monthly |
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IDENTITY OF RECIPIENT | CONDITIONS/RESTRICTIONS ON | FREQUENCY OF DISCLOSURE | ||
EVARE/SS&C | Used by TCW, subadviser to certain Columbia Funds, to electronically prepare cash reconciliations and to transmit custodian cash transactions. | Daily | ||
Factset Research Systems, Inc. | Use for provision of quantitative analytics, charting and fundamental data to the Investment Manager. | Daily | ||
Factset Research Systems, Inc. | Used by EAM, subadviser to certain Columbia Funds, as a tool for portfolio management, risk modeling and stock research. | Daily | ||
Factset Research Systems, Inc. | Used by Wasatch, subadviser to certain Columbia Funds, to upload holdings information for internal reporting and portfolio analysis. | Daily | ||
First Rate, Inc. | Performance and client reporting systems utilized by EAM, subadviser to certain Columbia Funds. | Daily | ||
Harte Hanks | May be used for printing of prospectuses, factsheets, annual and semi-annual reports. | As Needed | ||
Infinit-O | Used by AQR, subadviser to certain Columbia Funds, to facilitate position and cash reconciliation process. | Daily | ||
Institutional Shareholder Services (ISS) | Proxy voting administration and research on proxy matters. | Daily | ||
Investment Technology Group | Evaluation and assessment of trading activity, execution and practices by the Investment Manager. | Quarterly | ||
InvestorTools, Inc. | Access granted solely for the purpose of testing back office conversion of trading systems. | Daily | ||
InvestorTools, Inc. | Provide descriptive data for municipal securities. | Daily | ||
Kynex | Use to provide portfolio attribution reports for the Columbia Convertible Securities Fund. | Daily | ||
Linedata Services, Inc. | Access when assisting in resolving technical difficulties with the software for the LongView Trade Order Management System. | Ad Hoc | ||
Lipper/Thomson Reuters Corp. (Lipper) | Information provided monthly with a 30 day lag to assure accuracy of Lipper Fact Sheets. | Monthly |
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IDENTITY OF RECIPIENT | CONDITIONS/RESTRICTIONS ON | FREQUENCY OF DISCLOSURE | ||
Malaspina Communications | Use to facilitate writing, publishing and mailing Columbia Fund shareholder reports and communications including shareholder letters and management’s discussion of Columbia Fund performance. | Quarterly | ||
Markit ClearPar | System used by TCW, subadviser to certain Columbia Funds, to confirm and settle bank loan trades. | As Needed | ||
MarkitServ | System used by TCW, subadviser to certain Columbia Funds, to upload derivatives trades (CDS, IRS) for matching and confirmation. | As Needed | ||
Merrill Corporation | May provide Edgar filing and typesetting services, as well as printing of prospectuses, factsheets, annual and semi-annual reports. | As Needed | ||
Morningstar Associates | Receive information to fulfill their role as Investment Consultant for the Variable Portfolio Fund of Funds. | Ad Hoc | ||
Morningstar, Inc. | For independent research and ranking of funds. Provided monthly with a 30 day lag. | Monthly | ||
Omgeo | ACTion system used by TCW, subadviser to certain Columbia Funds, to send confirmed trades electronically to the custodians. | Daily | ||
R.R. Donnelley & Sons Company | May provide Edgar filing and typesetting services, as well as printing of prospectuses, factsheets, annual and semi-annual reports. | As needed | ||
SEI | Used by EAM, subadviser to certain Columbia Funds, for back office settlement, accounting and performance systems. | Daily | ||
SmartStream | Used by Federated, subadviser to certain Columbia Funds, for back office transactions and holdings reconciliation. | Daily | ||
State Street Bank and Trust Company | State Street Analytics used by Wasatch, subadviser to certain Columbia Funds, to upload portfolio information onto a web portal for internal use. | Quarterly | ||
State Street Bank and Trust Company | Used by Eaton Vance, subadviser to certain Columbia Funds, for accounting systems. | Daily |
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INVESTMENT ADVISORY AND OTHER SERVICES
The Investment Manager and Investment Advisory Services
Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (the Investment Manager) is the investment adviser and administrator of the Funds. The Investment Manager is a wholly-owned subsidiary of Ameriprise Financial. Ameriprise Financial is located at 1099 Ameriprise Financial Center, Minneapolis, MN 55474. The Investment Manager is located at 225 Franklin Street, Boston, MA 02110. Prior to May 1, 2010, Columbia Management Advisors, LLC (the Previous Adviser and Previous Administrator), a wholly-owned subsidiary of Bank of America, was the Funds’ investment adviser and administrator.
Services Provided
Under the Investment Management Services Agreement, the Investment Manager has contracted to furnish each Fund with investment research and advice. For these services, each Fund pays a monthly fee to the Investment Manager based on the average of the daily closing value of the total net assets of a Fund for such month. Under the Investment Management Services Agreement, any liability of the Investment Manager to the Trust, a Fund and/or its shareholders is limited to situations involving the Investment Manager’s own willful misfeasance, bad faith, negligence in the performance of its duties or reckless disregard of its obligations and duties.
The Investment Management Services Agreement may be terminated with respect to a Fund at any time on 60 days’ written notice by the Investment Manager or by the Trustees of the Trust or by a vote of a majority of the outstanding voting securities of a Fund. The Investment Management Services Agreement will automatically terminate upon any assignment thereof, will continue in effect for two years from May 1, 2010 and thereafter will continue from year to year with respect to a Fund only so long as such continuance is approved at least annually (i) by the Trustees of the Trust or by a vote of a majority of the outstanding voting securities of a Fund and (ii) by vote of a majority of the Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Investment Manager or the Trust, cast in person at a meeting called for the purpose of voting on such approval.
The Investment Manager pays all compensation of the Trustees and officers of the Trust who are employees of the Investment Manager or its affiliates, except for the Chief Compliance Officer, a portion of whose salary is paid by the Columbia Funds (excluding those Columbia Funds that pay a Unified Fee, as defined below). Except to the extent expressly assumed by the Investment Manager and except to the extent required by law to be paid or reimbursed by the Investment Manager, the Investment Manager does not have a duty to pay any Fund operating expense incurred in the organization and operation of a Fund, including, but not limited to, auditing, legal, custodial, investor servicing and shareholder reporting expenses. The Trust pays the cost of printing and mailing Fund prospectuses to shareholders.
The Investment Manager, at its own expense, provides office space, facilities and supplies, equipment and personnel for the performance of its functions under each Fund’s Investment Management Services Agreement.
Advisory Fee Rates Paid by the Funds
Each Fund pays the Investment Manager an annual fee for its investment advisory services, as set forth in the Investment Management Services Agreement, and as shown in the section entitled Fees and Expenses of the Fund – Annual Fund Operating Expenses in each Fund’s prospectuses. The fee is calculated as a percentage of the average daily net assets of each Fund and is paid monthly. In return for the advisory fee described below, the Investment Manager has agreed to pay all of the operating costs and expenses of Ultra Short Term Bond Fund other than Independent Trustees fees and expenses, including their legal counsel, auditing expenses, interest incurred on borrowing by Ultra Short Term Bond Fund, if any, portfolio transaction expenses, taxes and extraordinary expenses. This fee is sometimes referred to herein as the “Unified Fee.” Any custody credits are
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applied to offset Fund expenses prior to determining the expenses the Investment Manager is required to bear; however, the Investment Manager bears any custodian overdraft charges. The Investment Manager also may pay amounts from its own assets to the Distributor and/or to Selling Agents for services they provide.
The Investment Manager receives a monthly investment advisory fee based on each Fund’s average daily net assets at the following annual rates:
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $7.5 billion | In excess of $7.5 billion | ||||||||||||||||||
CT Intermediate Municipal Bond Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
MA Intermediate Municipal Bond Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
NY Intermediate Municipal Bond Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
Oregon Intermediate Municipal Bond Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
CA Tax-Exempt Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
CT Tax-Exempt Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
MA Tax-Exempt Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % | ||||||||||||
NY Tax-Exempt Fund | 0.400 | % | 0.350 | % | 0.320 | % | 0.290 | % | 0.280 | % | 0.270 | % |
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion | ||||||||||||||||||
AP – Select Large Cap Growth Fund | 0.710 | % | 0.665 | % | 0.620 | % | 0.570 | % | 0.560 | % | 0.540 | % | ||||||||||||
Contrarian Core Fund | 0.710 | % | 0.665 | % | 0.620 | % | 0.570 | % | 0.560 | % | 0.540 | % | ||||||||||||
Dividend Income Fund | 0.660 | % | 0.615 | % | 0.570 | % | 0.520 | % | 0.510 | % | 0.490 | % | ||||||||||||
Global Dividend Opportunity Fund | 0.710 | % | 0.665 | % | 0.620 | % | 0.570 | % | 0.560 | % | 0.540 | % | ||||||||||||
Large Cap Growth Fund | 0.710 | % | 0.665 | % | 0.620 | % | 0.570 | % | 0.560 | % | 0.540 | % | ||||||||||||
Select Large Cap Growth Fund | 0.710 | % | 0.665 | % | 0.620 | % | 0.570 | % | 0.560 | % | 0.540 | % |
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion | |||||||||
Select Small Cap Fund | 0.790 | % | 0.745 | % | 0.700 | % | ||||||
Small Cap Core Fund | 0.790 | % | 0.745 | % | 0.700 | % | ||||||
Small Cap Growth Fund I | 0.790 | % | 0.745 | % | 0.700 | % | ||||||
Small Cap Value Fund I | 0.790 | % | 0.745 | % | 0.700 | % | ||||||
Technology Fund | 0.870 | % | 0.820 | % | 0.770 | % |
Fund | First $1 billion | In excess of $1 billion and up to $2 billion | In excess of $2 billion and up to $6 billion | In excess of $6 billion and up to $7.5 billion | In excess of $7.5 billion and up to $9 billion | In excess of $9 billion and up to $12 billion | In excess of $12 billion and up to $20 billion | In excess of $20 billion and up to $24 billion | In excess of $24 billion and up to $50 billion | In excess of $50 billion | ||||||||||||||||||||||||||||||
AP – Core Plus Bond Fund | 0.430 | % | 0.420 | % | 0.400 | % | 0.380 | % | 0.365 | % | 0.360 | % | 0.350 | % | 0.340 | % | 0.320 | % | 0.300 | % | ||||||||||||||||||||
Bond Fund | 0.430 | % | 0.420 | % | 0.400 | % | 0.380 | % | 0.365 | % | 0.360 | % | 0.350 | % | 0.340 | % | 0.320 | % | 0.300 | % | ||||||||||||||||||||
Intermediate Bond Fund | 0.430 | % | 0.420 | % | 0.400 | % | 0.380 | % | 0.365 | % | 0.360 | % | 0.350 | % | 0.340 | % | 0.320 | % | 0.300 | % | ||||||||||||||||||||
Corporate Income Fund | 0.430 | % | 0.420 | % | 0.400 | % | 0.380 | % | 0.365 | % | 0.360 | % | 0.350 | % | 0.340 | % | 0.320 | % | 0.300 | % |
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Fund | First $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion | |||||||||||||||
Energy and Natural Resources Fund | 0.690 | % | 0.620 | % | 0.570 | % | 0.560 | % | 0.540 | % | ||||||||||
Greater China Fund | 0.870 | % | 0.800 | % | 0.760 | % | 0.720 | % | 0.680 | % | ||||||||||
Pacific/Asia Fund | 0.870 | % | 0.800 | % | 0.750 | % | 0.710 | % | 0.660 | % |
Fund | First $1 billion | In excess of $1 billion and up to $2 billion | In excess of $2 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $9 billion | In excess of $9 billion and up to $10 billion | In excess of $10 billion and up to $15 billion | In excess of $15 billion and up to $24 billion | In excess of $24 billion and up to $50 billion | In excess of $50 billion | ||||||||||||||||||||||||||||||
Intermediate Municipal Bond Fund | 0.410 | % | 0.385 | % | 0.360 | % | 0.335 | % | 0.310 | % | 0.300 | % | 0.290 | % | 0.280 | % | 0.260 | % | 0.250 | % | ||||||||||||||||||||
Tax-Exempt Fund | 0.410 | % | 0.385 | % | 0.360 | % | 0.335 | % | 0.310 | % | 0.300 | % | 0.290 | % | 0.280 | % | 0.260 | % | 0.250 | % |
Fund | First $250 million | In excess of $250 million and up to $500 million | In excess of $500 million and up to $750 million | In excess of $750 million and up to $1 billion | In excess of $1 billion and up to $2 billion | In excess of $2 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $7.5 billion | In excess of $7.5 billion and up to $9 billion | In excess of $9 billion and up to $10 billion | ||||||||||||||||||||||||||||||
High Yield Opportunity Fund | 0.590 | % | 0.575 | % | 0.570 | % | 0.560 | % | 0.550 | % | 0.540 | % | 0.515 | % | 0.490 | % | 0.475 | % | 0.450 | % |
Fund | In excess of $10 billion and up to $15 billion | In excess of $15 billion and up to $20 billion | In excess of $20 billion and up to $24 billion | In excess of $24 billion and up to $50 billion | In excess of $50 billion | |||||||||||||||
High Yield Opportunity Fund | 0.435 | % | 0.425 | % | 0.400 | % | 0.385 | % | 0.360 | % |
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $2 billion | In excess of $2 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $7.5 billion | In excess of $7.5 billion and up to $9 billion | In excess of $9 billion and up to $10 billion | In excess of $10 billion and up to $15 billion | In excess of $15 billion and up to $20 billion | ||||||||||||||||||||||||||||||
Strategic Income Fund | 0.530 | % | 0.525 | % | 0.515 | % | 0.495 | % | 0.480 | % | 0.455 | % | 0.440 | % | 0.431 | % | 0.419 | % | 0.409 | % |
Fund | In excess of $20 billion and up to $24 billion | In excess of $24 billion and up to $50 billion | In excess of $50 billion | |||||||||
Strategic Income Fund | 0.393 | % | 0.374 | % | 0.353 | % |
Fund | First $1 billion | In excess of $1 billion and up to $2 billion | In excess of $2 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $7.5 billion | In excess of $7.5 billion and up to $10 billion | In excess of $10 billion and up to $15 billion | In excess of $15 billion and up to $24 billion | In excess of $24 billion and up to $50 billion | In excess of $50 billion | ||||||||||||||||||||||||||||||
High Yield Municipal Fund | 0.470 | % | 0.445 | % | 0.420 | % | 0.395 | % | 0.370 | % | 0.360 | % | 0.350 | % | 0.340 | % | 0.320 | % | 0.300 | % |
Fund | First $1 billion | In excess of $1 billion and up to $2 billion | In excess of $2 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $7.5 billion | In excess of $7.5 billion and up to $12 billion | In excess of $12 billion and up to $20 billion | In excess of $20 billion and up to $50 billion | In excess of $50 billion | |||||||||||||||||||||||||||
International Bond Fund | 0.570 | % | 0.525 | % | 0.520 | % | 0.515 | % | 0.510 | % | 0.500 | % | 0.490 | % | 0.480 | % | 0.470 | % |
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Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion | ||||||||||||||||||
Balanced Fund | 0.660 | % | 0.615 | % | 0.570 | % | 0.520 | % | 0.510 | % | 0.490 | % |
Fund | First $750 million | In excess of $750 million and up to $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion | ||||||||||||||||||
Emerging Markets Fund | 1.270 | % | 1.125 | % | 0.800 | % | 0.750 | % | 0.710 | % | 0.660 | % |
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion | |||||||||||||||
AP – Alternative Strategies Fund | 1.020 | % | 0.975 | % | 0.950 | % | 0.930 | % | 0.900 | % |
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion | ||||||||||||
Mid Cap Growth Fund | 0.760 | % | 0.715 | % | 0.670 | % | 0.620 | % |
Fund | First $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion | |||||||||
Value and Restructuring Fund | 0.690 | % | 0.560 | % | 0.540 | % |
Fund | First $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion | |||||||||
Real Estate Equity Fund | 0.690 | % | 0.670 | % | 0.620 | % |
Fund | First $250 million | In excess of $250 million and up to $500 million | In excess of $500 million | |||||||||
AP – Small Cap Equity Fund | 0.900 | % | 0.850 | % | 0.800 | % | ||||||
Fund | All assets | |||||||||||
U.S. Treasury Index Fund |
| 0.100 | % |
The Investment Manager has implemented a schedule for Risk Allocation Fund’s investment advisory fees whereby the Fund pays (i) 0.00% advisory fee on its assets that are invested in affiliated mutual funds, ETFs and closed-end funds that pay an investment management services fee to the Investment Manager; (ii) 0.10% advisory fee on its assets that are invested in third-party ETFs and mutual funds; and (iii) an advisory fee rate according to the following schedule on securities, instruments and other assets not described above, including affiliated funds that do not pay an investment management services fee to the Investment Manager, third-party closed-end funds, derivatives and individual securities:
Fund | First $500 million | In excess of $500 million and up to $1 billion | In excess of $1 billion and up to $1.5 billion | In excess of $1.5 billion and up to $3 billion | In excess of $3 billion and up to $6 billion | In excess of $6 billion and up to $12 billion | In excess of $12 billion | |||||||||||||||||||||
Risk Allocation Fund | 0.700 | % | 0.690 | % | 0.680 | % | 0.670 | % | 0.650 | % | 0.625 | % | 0.600 | % |
In no event shall the advisory fee be negative even if the value of one of the categories is a negative amount (for instance, if the Fund’s liabilities exceed the value of assets in category (iii)). Although the fee for each category is calculated separately and there is not negative advisory fee, the Investment Manager currently intends to calculate the advisory fee by reducing (but not below $0) any advisory fee payable on one category by any negative advisory fee in another category. The Investment Manager may change this calculation methodology at any time.
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Advisory Fees Paid by the Funds
The Investment Manager and the Previous Adviser received fees from the Funds for their services as reflected in the following charts, which show the advisory fees paid to and, as applicable, waived/reimbursed by the Investment Manager and the Previous Adviser, for the three most recently completed fiscal years, except as otherwise indicated.
Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
Emerging Markets Fund | ||||||||||||||||
Advisory Fee Paid | $ | 5,473,855 | $ | 4,340,081 | $ | 386,909 | $ | 4,059,904 | ||||||||
Amount Reimbursed | $ | (734,739 | ) | $ | 1,166,939 | $ | 95,101 | $ | 133,614 | |||||||
Amount Waived | — | — | — | — | ||||||||||||
Energy and Natural Resources Fund | ||||||||||||||||
Advisory Fee Paid | $ | 5,262,966 | $ | 4,071,386 | $ | 365,281 | $ | 3,382,995 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Pacific/Asia Fund | ||||||||||||||||
Advisory Fee Paid | $ | 1,493,109 | $ | 343,550 | $ | 22,883 | $ | 219,007 | ||||||||
Amount Reimbursed | — | $ | 87,230 | $ | 8,465 | $ | 131,463 | |||||||||
Amount Waived | — | — | — | — | ||||||||||||
Select Large Cap Growth Fund | ||||||||||||||||
Advisory Fee Paid | $ | 32,252,320 | $ | 16,930,896 | $ | 1,160,977 | $ | 10,061,635 | ||||||||
Amount Reimbursed | — | |||||||||||||||
Amount Waived | — | |||||||||||||||
Select Small Cap Fund | ||||||||||||||||
Advisory Fee Paid | $ | 3,128,477 | $ | 3,838,847 | $ | 393,218 | $ | 3,835,693 | ||||||||
Amount Reimbursed | $ | 312,444 | — | — | — | |||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Value and Restructuring Fund | ||||||||||||||||
Advisory Fee Paid | $ | 36,158,339 | $ | 34,923,979 | $ | 3,605,829 | $ | 38,153,435 | ||||||||
Amount Reimbursed | $ | 2,410,775 | — | — | — | |||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
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Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010** | ||||||||||||||||
Investment Manager | Previous Adviser | |||||||||||||||||||
Bond Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 674,220 | $ | 9,193,773 | $ | 4,015,797 | $ | 301,822 | $ | 3,555,388 | ||||||||||
Amount Reimbursed | $ | (305,850 | ) | $ | (3,840,021 | ) | $ | 2,076,212 | $ | 170,053 | $ | 1,762,911 | ||||||||
Amount Waived | — | — | — | — | — | |||||||||||||||
Corporate Income Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 502,876 | $ | 4,163,696 | $ | 2,030,164 | $ | 187,599 | $ | 2,172,793 | ||||||||||
Amount Reimbursed | $ | 32,856 | $ | 395,818 | — | — | — | |||||||||||||
Amount Waived | — | — | $ | 365,983 | $ | 530 | — | |||||||||||||
Intermediate Bond Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 1,175,998 | $ | 12,982,420 | $ | 6,836,700 | $ | 581,691 | $ | 6,768,041 | ||||||||||
Amount Reimbursed | $ | 325,497 | $ | 3,258,873 | $ | 285,433 | — | — | ||||||||||||
Amount Waived | — | — | — | — | — | |||||||||||||||
U.S. Treasury Index Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 35,300 | $ | 429,804 | $ | 352,603 | $ | 30,361 | $ | 374,018 | ||||||||||
Amount Reimbursed | $ | 72,774 | $ | 897,060 | $ | 734,069 | $ | 63,436 | $ | 659,969 | ||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from April 1, 2012 to April 30, 2012. During the period, the fiscal year end of each Fund was changed from March 31 to April 30. |
** | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009** | ||||||||||||||||
Investment Manager | Previous Adviser | |||||||||||||||||||
Small Cap Value Fund I | ||||||||||||||||||||
Advisory Fee Paid | $ | 10,740,169 | $ | 13,093,445 | $ | 1,883,799 | $ | 7,793,816 | $ | 6,138,109 | ||||||||||
Amount Reimbursed | — | $ | 10 | — | — | — | ||||||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
** | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended May 31, 2012 | Fiscal Year Ended May 31, 2011 | Fiscal Year Ended May 31, 2010 | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
High Yield Opportunity Fund | ||||||||||||||||
Advisory Fee Paid | $ | 1,853,474 | $ | 1,953,985 | $ | 167,714 | $ | 1,881,734 | ||||||||
Amount Reimbursed | $ | 160,526 | $ | 247,123 | $ | 57,327 | $ | 83,858 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
International Bond Fund | ||||||||||||||||
Advisory Fee Paid | $ | 336,309 | $ | 116,214 | $ | 7,487 | $ | 69,573 | ||||||||
Amount Reimbursed | $ | 111,603 | $ | 192,393 | $ | 25,747 | $ | 124,507 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
Strategic Income Fund | ||||||||||||||||
Advisory Fee Paid | $ | 11,871,078 | $ | 10,514,321 | $ | 949,914 | $ | 10,224,619 | ||||||||
Amount Reimbursed | $ | 182,250 | $ | 59,857 | — | — | ||||||||||
Amount Waived | — | — | — | — |
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Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009** | |||||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||||||
High Yield Municipal Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 3,435,899 | $ | 3,084,968 | $ | 524,787 | $ | 2,361,306 | $ | 2,421,629 | ||||||||||
Amount Reimbursed | $ | 1,189,180 | $ | 448,081 | — | — | — | |||||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
** | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Period Ended May 31, 2012* | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009** | |||||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||||||
Dividend Income Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 18,535,458 | $ | 20,026,109 | $ | 5,934,956 | $ | 7,295,736 | $ | 8,227,244 | ||||||||||
Amount Reimbursed | $ | 1,781,743 | $ | 1,966,047 | $ | 412,201 | $ | 54,673 | $ | 791,034 | ||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
** | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended July 31, 2011 | Fiscal Year Ended July 31, 2010* | Fiscal Year Ended July 31, 2009*† | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
Ultra Short Term Bond Fund | ||||||||||||||||
Advisory Fee Paid | $ | 2,591,553 | $ | 774,383 | $ | 1,643,829 | $ | 346,249 | ||||||||
Amount Reimbursed | $ | 105,806.67 | $ | 23,307 | $ | 59,090 | $ | 58,864 | ||||||||
Amount Waived | — | — | — | — |
* | Ultra Short Term Bond Fund commenced operations as of November 23, 2009. All fees shown are the fees paid by the Predecessor Ultra Short Term Bond Fund, a series of Columbia Funds Institutional Trust. |
† | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
Balanced Fund | ||||||||||||||||
Advisory Fee Paid | $ | 3,750,889 | $ | 516,594 | $ | 875,889 | $ | 884,961 | ||||||||
Amount Reimbursed | $ | 347,362 | — | — | — | |||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Global Dividend Opportunity Fund | ||||||||||||||||
Advisory Fee Paid | $ | 5,777,942 | �� | $ | 1,486,665 | $ | 3,136,677 | $ | 4,131,661 | |||||||
Amount Reimbursed | $ | 368,881 | $ | 407,410 | $ | 989,742 | $ | 1,606,165 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
Greater China Fund | ||||||||||||||||
Advisory Fee Paid | $ | 2,368,709 | $ | 717,794 | $ | 1,561,766 | $ | 1,676,914 | ||||||||
Amount Reimbursed | $ | 1,426 | — | — | — | |||||||||||
Amount Waived | — | — | — | — |
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Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
Mid Cap Growth Fund | ||||||||||||||||
Advisory Fee Paid | $ | 11,840,449 | $ | 2,977,727 | $ | 5,939,170 | $ | 7,193,675 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Oregon Intermediate Municipal Bond Fund |
| |||||||||||||||
Advisory Fee Paid | $ | 2,201,895 | $ | 799,938 | $ | 1,515,769 | $ | 2,043,052 | ||||||||
Amount Reimbursed | $ | 500,503 | $ | 183,028 | $ | 329,008 | $ | 564,350 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
Small Cap Growth Fund I | ||||||||||||||||
Advisory Fee Paid | $ | 9,319,430 | $ | 2,371,009 | $ | 4,158,194 | $ | 3,216,309 | ||||||||
Amount Reimbursed | $ | 306 | — | — | $ | 109,017 | ||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Technology Fund | ||||||||||||||||
Advisory Fee Paid | $ | 2,358,996 | $ | 765,180 | $ | 1,638,839 | $ | 2,084,965 | ||||||||
Amount Reimbursed | $ | 66,993 | $ | 45,469 | — | $ | 169,244 | |||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
Contrarian Core Fund | ||||||||||||||||
Advisory Fee Paid | $ | 7,499,179 | $ | 1,604,740 | $ | 1,929,231 | $ | 2,110,310 | ||||||||
Amount Reimbursed | $ | 335,578 | — | — | $ | 318,233 | ||||||||||
Amount Waived | — | $ | 213,720 | $ | 71,834 | — | ||||||||||
Large Cap Growth Fund | ||||||||||||||||
Advisory Fee Paid | $ | 12,427,666 | $ | 2,643,515 | $ | 3,959,944 | $ | 5,877,711 | ||||||||
Amount Reimbursed | $ | 1 | — | — | — | |||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Small Cap Core Fund | ||||||||||||||||
Advisory Fee Paid | $ | 5,993,236 | $ | 1,882,144 | $ | 2,495,915 | $ | 3,382,545 | ||||||||
Amount Reimbursed | $ | 234,050 | — | — | — | |||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended October 31, 2011 | Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
CA Tax-Exempt Fund | ||||||||||||||||
Advisory Fee Paid | $ | 1,781,596 | $ | 982,935 | $ | 984,233 | $ | 2,020,284 | ||||||||
Amount Reimbursed | $ | 455,210 | $ | 43,089 | $ | 58,176 | $ | 73,450 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
CT Intermediate Municipal Bond Fund | ||||||||||||||||
Advisory Fee Paid | $ | 945,991 | $ | 602,895 | $ | 580,714 | $ | 1,091,965 | ||||||||
Amount Reimbursed | $ | 540,983 | $ | 163,248 | $ | 187,129 | — | |||||||||
Amount Waived | — | — | — | $ | 353,794 |
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Fiscal Year Ended October 31, 2011 | Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
CT Tax-Exempt Fund | ||||||||||||||||
Advisory Fee Paid | $ | 376,066 | $ | 240,336 | $ | 235,414 | $ | 462,542 | ||||||||
Amount Reimbursed | $ | 230,450 | $ | 112,730 | $ | 88,418 | $ | 157,165 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
Intermediate Municipal Bond Fund | ||||||||||||||||
Advisory Fee Paid | $ | 9,448,247 | $ | 5,165,472 | $ | 5,091,941 | $ | 10,049,028 | ||||||||
Amount Reimbursed | $ | 2,892,900 | — | — | — | |||||||||||
Amount Waived | — | — | — | $ | 201,056 | |||||||||||
MA Intermediate Municipal Bond Fund | ||||||||||||||||
Advisory Fee Paid | $ | 1,512,989 | $ | 885,979 | $ | 844,565 | $ | 1,610,500 | ||||||||
Amount Reimbursed | $ | 799,425 | $ | 204,395 | $ | 181,924 | — | |||||||||
Amount Waived | — | — | — | $ | 407,124 | |||||||||||
MA Tax-Exempt Fund | ||||||||||||||||
Advisory Fee Paid | $ | 526,866 | $ | 340,619 | $ | 333,453 | $ | 658,411 | ||||||||
Amount Reimbursed | $ | 235,695 | $ | 88,415 | $ | 89,721 | $ | 120,205 | ||||||||
Amount Waived | — | — | — | — | ||||||||||||
NY Intermediate Municipal Bond Fund | ||||||||||||||||
Advisory Fee Paid | $ | 1,257,586 | $ | 781,694 | $ | 763,013 | $ | 1,447,859 | ||||||||
Amount Reimbursed | $ | 628,205 | $ | 210,091 | $ | 201,876 | — | |||||||||
Amount Waived | — | — | — | $ | 389,877 | |||||||||||
NY Tax-Exempt Fund | ||||||||||||||||
Advisory Fee Paid | $ | 468,778 | $ | 171,758 | $ | 166,121 | $ | 334,848 | ||||||||
Amount Reimbursed | $ | 229,929 | $ | 96,660 | $ | 91,479 | $ | 169,148 | ||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009* | ||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||
Tax-Exempt Fund | ||||||||||||||||
Advisory Fee Paid | $ | 12,644,779 | $ | 6,340,827 | $ | 4,490,488 | $ | 10,701,653 | ||||||||
Amount Reimbursed | $ | 575,239 | — | — | — | |||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
Fiscal Year Ended December 31, 2011 | Fiscal Year Ended December 31, 2010 | Fiscal Period Ended December 31, 2009* | Fiscal Year Ended August 31, 2009* | |||||||||||||||||
Fund | Investment Manager | Previous Adviser | ||||||||||||||||||
Real Estate Equity Fund | ||||||||||||||||||||
Advisory Fee Paid | $ | 3,831,112 | $ | 1,814,393.71 | $ | 775,033.09 | $ | 686,031 | $ | 1,670,236 | ||||||||||
Amount Reimbursed | $ | 49,418 | — | — | — | — | ||||||||||||||
Amount Waived | — | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Adviser. |
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Portfolio Manager(s)
The following provides additional information about the portfolio manager(s) of the Investment Manager who are responsible for making the day-to-day investment decisions for the Funds. As described in the Management of the Fund – Primary Service Providers section of each Fund’s prospectuses, the portfolio manager(s) of the Investment Manager who are responsible for the Funds are:
Portfolio Manager | Fund(s) | |
Leonard A. Aplet, CFA | Balanced Fund Ultra Short Term Bond Fund | |
Anwiti Bahuguna, PhD | Risk Allocation Fund | |
Stephen D. Barbaro, CFA | Small Cap Value Fund I | |
Michael S. Barclay, CFA | Dividend Income Fund | |
John S. Barrett, CFA | Small Cap Value Fund I | |
Robert B. Cameron | Emerging Markets Fund | |
Kimberly A. Campbell | Tax-Exempt Fund | |
Richard A. Carter | AP – Select Large Cap Growth Fund Select Large Cap Growth Fund | |
Wayne M. Collette, CFA | Mid Cap Growth Fund Select Small Cap Fund Small Cap Growth Fund I Technology Fund | |
Fred Copper, CFA | Risk Allocation Fund | |
Richard E. Dahlberg, CFA | Dividend Income Fund | |
Richard G. D’Auteuil | Small Cap Core Fund | |
Scott L. Davis | Dividend Income Fund | |
Peter R. Deininger, CFA, CAIA | Large Cap Growth Fund | |
Tim Doubek, CFA | Corporate Income Fund | |
Chad H. Farrington, CFA | High Yield Municipal Fund | |
William Finan Paul F. Fuchs, CFA | U.S. Treasury Index Fund Intermediate Municipal Bond Fund | |
MA Intermediate Municipal Bond Fund NY Intermediate Municipal Bond Fund | ||
Thomas M. Galvin, CFA | AP – Select Large Cap Growth Fund Select Large Cap Growth Fund | |
Jarl Ginsberg, CFA | AP – Small Cap Equity Fund | |
Todd D. Herget | AP – Select Large Cap Growth Fund Select Large Cap Growth Fund | |
Jeffrey M. Hershey, CFA | Small Cap Core Fund | |
Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM | Emerging Markets Fund Greater China Fund Pacific/Asia Fund | |
Arthur J. Hurley, CFA | Real Estate Equity Fund | |
Orhan Imer, PhD, CFA | U.S. Treasury Index Fund | |
Jeremy H. Javidi, CFA | Small Cap Value Fund I | |
Josh Kapp, CFA | Energy and Natural Resources Fund | |
David L. King, CFA | Dividend Income Fund | |
Brian Lavin, CFA | AP – Core Plus Bond Fund Balanced Fund Corporate Income Fund High Yield Opportunity Fund Intermediate Bond Fund Strategic Income Fund |
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Portfolio Manager | Fund(s) | |
Gregory S. Liechty | Balanced Fund | |
Lawrence W. Lin, CFA | Mid Cap Growth Fund Select Small Cap Fund Small Cap Growth Fund I | |
Colin J. Lundgren, CFA | Strategic Income Fund | |
Brian M. McGreevy | CT Intermediate Municipal Bond Fund Intermediate Municipal Bond Fund MA Intermediate Municipal Bond Fund NY Intermediate Municipal Bond Fund Oregon Intermediate Municipal Bond Fund | |
Jonathan Mogil, CFA | Energy and Natural Resources Fund | |
Colin Moore | Energy and Natural Resources Fund | |
Tom Murphy, CFA | Corporate Income Fund | |
George J. Myers, CFA | Mid Cap Growth Fund Select Small Cap Fund Small Cap Growth Fund I | |
Rahul Narang | Technology Fund | |
Brian D. Neigut | Mid Cap Growth Fund Select Small Cap Fund Small Cap Growth Fund I | |
C. Michael Ng, CFA | International Bond Fund | |
Daisuke Nomoto, CMA (SAAJ) | Pacific/Asia Fund | |
Carl W. Pappo, CFA | AP – Core Plus Bond Fund Bond Fund Intermediate Bond Fund | |
Kent M. Peterson, PhD | Risk Allocation Fund | |
Nicholas Pifer, CFA | International Bond Fund | |
Jennifer Ponce de Leon | High Yield Opportunity Fund | |
Guy W. Pope, CFA | Balanced Fund Contrarian Core Fund Value and Restructuring Fund | |
Alexander D. Powers | AP – Core Plus Bond Fund Bond Fund Intermediate Bond Fund | |
Steven R. Schroll, CFA | Global Dividend Opportunity Fund | |
J. Nicholas Smith, CFA | Value and Restructuring Fund | |
Laton Spahr, CFA | Global Dividend Opportunity Fund | |
Christian K. Stadlinger, PhD, CFA | AP – Small Cap Equity Fund | |
Ronald B. Stahl, CFA | Balanced Fund | |
Catherine Stienstra | CA Tax-Exempt Fund CT Tax-Exempt Fund MA Tax-Exempt Fund NY Tax-Exempt Fund | |
Paul F. Stocking, CFA | Global Dividend Opportunity Fund | |
Paul S. Szczygiel, CFA | Small Cap Core Fund | |
Gene R. Tannuzzo, CFA | Strategic Income Fund | |
Beth M. Vanney, CFA | Risk Allocation Fund | |
Mary K. Werler, CFA | Ultra Short Term Bond Fund | |
Dara J. White, CFA | Emerging Markets Fund | |
Todd White | Risk Allocation Fund | |
John T. Wilson, CFA | Large Cap Growth Fund |
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Portfolio Manager | Fund(s) | |
Michael Zazzarino | AP – Core Plus Bond Fund Bond Fund Intermediate Bond Fund |
Portfolio Manager(s) Information
The following table provides information about each Fund’s portfolio manager(s) as of the end of the Fund’s most recent fiscal year, or as indicated, the most recent practicable date including the number and amount of assets of other investment accounts (or portions of investment accounts) that the portfolio manager(s) managed.
Other Accounts Managed (excluding the Fund) | ||||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | Structure of Compensation (described in next sub-section) | ||||||
For Funds with fiscal year ending March 31 | ||||||||||||
AP – Select Large Cap Growth Fund | Thomas M. Galvin, CFA1 | 3 RICs 3 PIVs 1,509 other accounts | $5.98 billion $111.73 million $899.92 million | None | None | (1) | ||||||
Richard A. Carter1 | 3 RICs 3 PIVs 1,509 other accounts | $5.98 billion $111.73 million $899.92 million | None | None | (1) | |||||||
Todd D. Herget1 | 3 RICs 3 PIVs 1,509 other accounts | $5.98 billion $111.73 million $899.92 million | None | None | (1) | |||||||
Emerging Markets Fund | Robert B. Cameron | 2 RICs 1 PIV 4 other accounts | $304.5 million $127 million $1.1 million | None | $50,001-$100,000b | (1) | ||||||
Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM | 2 RICs 2 PIVs 5 accounts | $523 million $137.4 million $550,000 | None | $10,001- $50,000b | (1) | |||||||
Dara J. White, CFA | 2 RICs 1 PIV 9 other accounts | $304.5 million $127 million $750,000 | None | $50,001-$100,000a $10,001- $50,000b | (1) | |||||||
Energy and Natural Resources Fund | Colin Moore | 16 RICs 29 PIVs 21 other accounts | $8.83 billion $4.73 billion $239 million | None | None | (1) | ||||||
Josh Kapp, CFA | 5 other accounts | $27.2 million | None | None | (1) | |||||||
Jonathan Mogil, CFA | 5 other accounts | $1.4 million | None | None | (1) | |||||||
Pacific/Asia Fund | Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM | 2 RICs 2 PIVs 5 other accounts | $705.4 million $137.4 million $550,000 | None | $10,001- $50,000b | (1) | ||||||
Daisuke Nomoto CMA (SAAJ) | 1 RIC 1 PIV 6 other accounts | $274.3 million $10.4 million $1 million | None | $50,001- $100,000a $100,001- $500,000b | (1) | |||||||
Select Large Cap Growth Fund | Thomas M. Galvin, CFA | 2 RICs 3 PIVs 1635 other accounts | $14.24 million $147.40 million $1.72 billion | None | Over $1,000,000a | (1) |
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Other Accounts Managed (excluding the Fund) | ||||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | Structure of Compensation (described in next sub-section) | ||||||
Richard A. Carter | 2 RICs 3 PIVs 1635 other accounts | $14.24 million $147.40 million $1.72 billion | None | $100,001-$500,000a $10,001-$50,000b | (1) | |||||||
Todd D. Herget | 2 RICs 3 PIVs 1635 other accounts | $14.24 million $147.40 million $1.72 billion | None | $100,001- $500,000a | (1) | |||||||
Select Small Cap Fund | Wayne M. Collette, CFA | 9 RICs 4 PIVs 261 other accounts | $5.196 billion $188 million $416.7 million | None | None | (1) | ||||||
Lawrence W. Lin, CFA | 8 RICs 4 PIVs 262 other accounts | $4.982 billion $188 million $415.86 million | None | None | (1) | |||||||
George J. Myers, CFA | 8 RICs 4 PIVs 260 other accounts | $4.982 billion $188 million $416.2 million | None | None | (1) | |||||||
Brian D. Neigut | 8 RICs 4 PIVs 261 other accounts | $4.982 billion $188 million $415.16 million | None | None | (1) | |||||||
Value and Restructuring Fund | Guy W. Pope, CFA | 7 RICs 1 PIV 679 other accounts | $3.52 million $13.9 million $367.1 million | None | $1-$10,000a $100,001- $500,000b | (1) | ||||||
J. Nicholas Smith, CFA | 671 other accounts | $358 million | None | $100,001-$500,000 | (1) | |||||||
For the Funds with fiscal year ending April 30 | ||||||||||||
Bond Fundc | Carl W. Pappo, CFA | 5 RICs 3 other accounts | $3.38 billion $856,000 | None | None | (1) | ||||||
Alexander D. Powers | 4 RICs 9 PIVs 13 other accounts | $12.47 billion $1.81 million $1 million | None | $50,001-$100,000 | (1) | |||||||
Michael Zazzarino | 5 RICs 4 PIVs 7 other accounts | $12.54 billion $409 million $206 million | None | $1-$10,000 | (1) | |||||||
Corporate Income Fundc | Tom Murphy, CFA | 2 RICs 6 other accounts | $3.9 billion $16.9 million | None | None | (1) | ||||||
Tim Doubek, CFA | 2 RICs 6 other accounts | $3.9 billion $12.4 million | None | None | (1) | |||||||
Brian Lavin, CFA | 13 RICs 3 other accounts | $23.1 billion $1.7 million | None | None | (1) | |||||||
Intermediate Bond Fundc | Brian Lavin, CFA | 13 RICs 3 other accounts | $21.2 billion $1.7 million | None | None | (1) | ||||||
Carl W. Pappo, CFA | 5 RICs 3 other accounts | $ 1.78 billion $856,000 | None | None | (1) | |||||||
Alexander D. Powers | 4 RICs 9 PIVs 13 other accounts | $10.86 billion $1.81 million $1 million | None | None | (1) | |||||||
Michael Zazzarino | 5 RICs 4 PIVs 7 other accounts | $10.93 billion $409 million $206 million | None | None | (1) |
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Other Accounts Managed (excluding the Fund) | ||||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | Structure of Compensation (described in next sub-section) | ||||||
Small Cap Value Fund Id | Jeremy Javidi, CFA | 3 RICs 1 PIV 17 other accounts | $500 million $35 million $68 million | None | $100,001- $500,000a $50,001- $100,000b | (1) | ||||||
Stephen D. Barbaro, CFA | 3 RICs 1 PIV 18 other accounts | $500 million $35 million $72 million | None | $50,001- $100,000a $25,001- $50,000b | (1) | |||||||
John S. Barrett, CFA | 3 RICs 1 PIV 14 other accounts | $500 million $35 million $68 million | None | $10,001-$50,000a $10,001-$50,000b | (1) | |||||||
U.S. Treasury Index Fundc | William Finan2 | 5 other accounts | $1 million | None | None | (1) | ||||||
Orhan Imer, PhD, CFA2 | 1 RIC 7 other accounts | $6 million $500,000 | None | None | (1) | |||||||
For Funds with fiscal year ending May 31 | ||||||||||||
Dividend Income Funde | Michael S. Barclay, CFA | 1 RIC 1 PIV 62 other accounts | $55.58 million $290.38 million $1.07 billion | None | $10,001-$50,000b | (1) | ||||||
Richard E. Dahlberg, CFA | 1 RIC 1 PIV 69 other accounts | $55.58 million $290.38 million $1.08 billion | None | None | (1) | |||||||
Scott L. Davis | 1 RIC 1 PIV 69 other accounts | $55.58 million $290.38 million $1.07 billion | None | $100,001-$500,000a $100,001-$500,000b | (1) | |||||||
David L. King, CFA | 6 RICs 16 other accounts | $1.19 billion $22.2 million | None | Over $1,000,000a | (1) | |||||||
High Yield Municipal Fundf | Chad H. Farrington, CFA | 7 other accounts | $486,000 | None | $50,001-$100,000a $50,001-$100,000b | (1) | ||||||
High Yield Opportunity Fund | Brian Lavin, CFA | 14 RICs 3 other accounts | $27 billion $1.61 million | None | None | (1) | ||||||
Jennifer Ponce de Leon | 11 RICs 23 other accounts | $4.23 billion $2.40 billion | None | None | (1) | |||||||
International Bond Fund | C. Michael Ng, CFA | 1 RIC 4 other accounts | $18.58 million $11.35 million | None | None | (1) | ||||||
Nicholas Pifer, CFA | 9 RICs 14 other accounts | $5.97 billion $846 million | None | None | (1) | |||||||
Risk Allocation Fund | Todd White** | 13 RICs 12 other accounts | $1.92 billion $942.85 million | None | None | (1) | ||||||
Anwiti Bahuguna, PhD** | 20 RICs 29 PIVs 17 other accounts1 | $7.25 billion $4.73 billion $223 million | None | None | (1) | |||||||
Fred Copper, CFA** | 7 RICs 2 PIVs 8 other accounts | $1.7 billion $344.3 million $41.7 million | None | None | (1) | |||||||
Kent M. Peterson, PhD** | 11 RICs | $538 million | None | None | (1) | |||||||
Beth M. Vanney, CFA** | 9 RICs 5 other accounts3 | $6.02 billion $382,151 | 1 other account ($183,073) | None | (1) |
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Other Accounts Managed (excluding the Fund) | ||||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | Structure of Compensation (described in next sub-section) | ||||||
Strategic Income Fund | Brian Lavin, CFA | 14 RICs 3 other accounts | $24.86 billion $1.61 million | None | None | (1) | ||||||
Colin J. Lundgren, CFA | 6 RICs 4 other accounts | $46.74 billion $974 million | None | None | (1) | |||||||
Gene R. Tannuzzo, CFA | 6 RICs 11 other accounts | $46.74 billion $1.04 billion | None | $50,001-$100,000a | (1) | |||||||
For Fund with fiscal year ending July 31 | ||||||||||||
Ultra Short Term Bond Fund | Leonard A. Aplet, CFA4 | 3 RICs 10 PIVs 66 other accounts | $3.54 billion $2.58 billion $7.68 billion | None | None | (1) | ||||||
Mary K. Werler, CFA | 4 other accounts | $254.9 million | None | None | (1) | |||||||
For Funds with fiscal year ending August 31 | ||||||||||||
AP – Core Plus Bond Fund | Carl W. Pappo, CFA1 | 3 RICs 3 other accounts | $12.18 billion $648,000 | None | None | (1) | ||||||
Alexander D. Powers1 | 3 RICs 6 PIVs 12 other accounts | $11.2 million $1.66 million $1.07 million | None | None | (1) | |||||||
Brian Lavin, CFA1 | 14 RICs 3 other accounts | $25.06 billion $1.43 million | None | None | (1) | |||||||
Michael Zazzarino1 | 5 RICs 4 PIVs 7 other accounts | $14.46 billion $405.94 million $205.90 million | None | None | (1) | |||||||
AP – Small Cap Equity Fund | Jarl Ginsberg, CFA1 | 3 RICs 17 other accounts | $2.0 billion $34.4 million | None | None | (1) | ||||||
Christian K. Stadlinger, PhD, CFA 1 | 3 RICs 27 other accounts | $2.0 billion $34.4 million | None | None | (1) | |||||||
Balanced Fund | Leonard A. Aplet, CFA | 3 RICs 7 PIVs 75 other accounts | $4.51 billion $3 billion $7.57 billion | None | $50,001-$100,000a $1-$10,000b | (1) | ||||||
Brian Lavin, CFA | 14 RICs 1 PIV 3 other accounts | $22.48 billion $18.48 million $515.43 million | None | None | (1) | |||||||
Gregory S. Liechty | 3 RICs 5 PIVs 13 other accounts | $4.51 billion $399.49 million $114.5 million | None | $1-$10,000a $1-$10,000b | (1) | |||||||
Guy W. Pope, CFA | 6 RICs 1547 other accounts | $7.97 billion $899.3 million | None | $100,001-$500,000a | (1) | |||||||
Ronald B. Stahl, CFA | 7 RICs 5 PIVs 52 other accounts | $4.55 billion $400 million $3.76 billion | None | $10,001-$50,000a $1-$10,000b | (1) | |||||||
Global Dividend Opportunity Fund | Steven R. Schroll, CFA2 | 9 RICs 7 other accounts | $11.64 billion $3.47 million | None | None | (1) | ||||||
Laton Spahr, CFA2 | 9 RICs 4 other accounts | $11.64 billion $4.93 million | None | None | (1) | |||||||
Paul F. Stocking, CFA2 | 9 RICs 10 other accounts | $11.64 billion $11.78 million | None | None | (1) | |||||||
Greater China Fund | Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM | 2 RICs 2 PIVs 5 other accounts | $570.10 million $144.55 million $300,000 | None | $1- $10,000b | (1) |
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Other Accounts Managed (excluding the Fund) | ||||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | Structure of Compensation (described in next sub-section) | ||||||
Mid Cap Growth Fund | Wayne M. Collette, CFA | 8 RICs 4 PIV 257 other accounts | $3.05 billion $203 million $346 million | None | $10,001-$50,000b | (1) | ||||||
Lawrence W. Lin, CFA | 7 RICs 4 PIVs 260 other accounts | $2.83 billion $203 million $345 million | None | $1-$10,000b | (1) | |||||||
George J. Myers, CFA | 7 RICs 4 PIVs 256 other accounts | $2.83 billion $203 million $345 million | None | $10,001- $50,000a $10,001- $50,000b | (1) | |||||||
Brian D. Neigut | 7 RICs 4 PIVs 260 other accounts | $2.83 billion $203 million $34.74 million | None | None | (1) | |||||||
Oregon Intermediate Municipal Bond Fund | Brian M. McGreevy | 12 RICs 7 other accounts | $6.59 billion $502.3 million | None | None | (1) | ||||||
Small Cap Growth Fund I | Wayne M. Collette, CFA | 8 RICs 4 PIVs 257 other accounts | $3.73 billion $203 million $346 million | None | $10,001-$50,000b | (1) | ||||||
Lawrence W. Lin, CFA | 7 RICs 4 PIVs 260 other accounts | $3.50 billion $203 million $345 million | None | $1-$10,000b | (1) | |||||||
George J. Myers, CFA | 7 RICs 4 PIVs 256 other accounts | $3.50 billion $203 million $345 million | None | $10,001- $50,000a $10,001- $50,000b | (1) | |||||||
Brian D. Neigut | 7 RICs 4 PIVs 260 other accounts | $3.50 billion $203 million $344.74 million | None | None | (1) | |||||||
Technology Fund | Wayne M. Collette, CFA | 8 RICs 4 PIVs 257 other accounts | $4.66 billion $203 million $346 million | None | $10,001- $50,000b | (1) | ||||||
Rahul Narang3 | 5 other accounts | $725,000 | None | None | (1) | |||||||
For Funds with fiscal year ending September 30 | ||||||||||||
Contrarian Core Fund | Guy W. Pope, CFA | 6 RICs 1,515 other accounts | $6.12 billion $888 million | None | $100,001- $500,000a $100,001- $ 500,000b | (1) | ||||||
Large Cap Growth Fund | Peter R. Deininger | 2 RICs 1 PIV 10 other accounts | $250 million $250 million $260 million | None | $50,001- $100,000a | (1) | ||||||
John T. Wilson, CFA | 2 RICs 1 PIV 11 other accounts | $250 million $250 million $260 million | None | $500,001-$1,000,000a | (1) | |||||||
Small Cap Core Fund | Richard D’Auteuil | 1 PIV 17 other accounts | $137.4 million $727.7 million | None | $100,001- $500,000a $100,001- $500,000b | (1) | ||||||
Jeffrey Hershey, CFA | 1 PIV 4 other accounts | $137.45 million $724.55 million | None | None | (1) | |||||||
Paul S. Szczygiel, CFA | 1 PIV 16 other accounts | $137.45 million $734.43 million | None | None | (1) |
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Other Accounts Managed (excluding the Fund) | ||||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | Structure of Compensation (described in next sub-section) | ||||||
For Funds with fiscal year ending October 31 | ||||||||||||
CA Tax-Exempt Fund | Catherine Stienstra | 5 RICs 3 other accounts | $1.39 billion $0.17 million | None | None | (1) | ||||||
CT Intermediate Municipal Bond Fund | Brian M. McGreevy | 12 RICs 6 other accounts | $6.80 billion $420.8 million | None | None | (1) | ||||||
CT Tax-Exempt Fund | Catherine Stienstra | 5 RICs 3 other accounts | $1.82 billion $0.17 million | None | None | (1) | ||||||
Intermediate Municipal Bond Fund | Brian M. McGreevy | 12 RICs 6 other accounts | $4.53 billion $420.8 million | None | None | (1) | ||||||
Paul F. Fuchs, CFA4 | 5 RICs 9 other accounts | $3.3 billion $1.3 billion | None | None | (1) | |||||||
MA Intermediate Municipal Bond Fund | Paul F. Fuchs, CFA | 10 PIVs 3 other accounts | $1.58 billion $92 million | None | None | (1) | ||||||
Brian M. McGreevy | 12 RICs 6 other accounts | $6.66 billion $420.8 million | None | $100-001-$500,000a | (1) | |||||||
MA Tax-Exempt Fund | Catherine Stienstra | 5 RICs 3 other accounts | $1.79 billion $0.17 million | None | None | (1) | ||||||
NY Intermediate Municipal Bond Fund | Paul F. Fuchs, CFA | 10 PIVs 3 other accounts | $1.58 billion $92 million | None | None | (1) | ||||||
Brian M. McGreevy | 12 RICs 6 other accounts | $6.72 billion $420.8 million | None | None | (1) | |||||||
NY Tax-Exempt Fund | Catherine Stienstra | 5 RICs 3 other accounts | $1.73 billion $0.17 million | None | None | (1) | ||||||
For the Fund with fiscal year ending November 30 | ||||||||||||
Tax-Exempt Fund | Kimberly A. Campbell | 21 other accounts | $1.6 million | None | $10,001- $50,000a | (1) | ||||||
For the Fund with fiscal year ending December 31 | ||||||||||||
Real Estate Equity Fund | Arthur J. Hurley, CFA | 7 other accounts | $850,000 | None | $1 - $10,000a | (1) |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
** | Account information provided as of April 30, 2012. |
a | Excludes any notional investments. |
b | Notional investments through a deferred compensation account. |
c | During the period, the fiscal year end of the Fund was changed from March 31 to April 30. |
d | During the period, the fiscal year end of Small Cap Value Fund I was changed from June 30 to April 30. |
e | During the period, the fiscal year end of Dividend Income Fund was changed from September 30 to May 31. |
f | During the period, the fiscal year end of High Yield Municipal Fund was changed from June 30 to May 31. |
1 | Account information provided as of January 31, 2012. |
2 | Account information provided as of March 31, 2012. |
3 | Account information provided as of June 30, 2012. |
4 | Account information provided as of July 31, 2012. |
Structure of Compensation
(1) As of the Funds’ most recent fiscal year end, each portfolio manager received all of his or her compensation in the form of salary, bonus, stock options, restricted stock, and notional investments through an incentive plan, the value of which is measured by reference to the performance of the Columbia Funds in which the account is invested. A portfolio manager’s bonus is variable and generally is based on (i) an evaluation of the
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portfolio manager’s investment performance and (ii) the results of a peer and/or management review of the portfolio manager, which takes into account skills and attributes such as team participation, investment process, communication and professionalism. In evaluating investment performance, the Investment Manager generally considers the one, three and five year performance of mutual funds and other accounts managed by the portfolio manager relative to the benchmarks and peer groups noted below, emphasizing the portfolio manager’s three and five year performance. The Investment Manager also may consider a portfolio manager’s performance in managing client assets in sectors and industries assigned to the portfolio manager as part of his/her investment team responsibilities, where applicable. For portfolio managers who also have group management responsibilities, another factor in their evaluation is an assessment of the group’s overall investment performance. The size of the overall bonus pool each year depends on, among other factors, the levels of compensation generally in the investment management industry (based on market compensation data) and the Investment Manager’s profitability for the year, which is largely determined by assets under management.
(2) The compensation of the portfolio manager consists of (i) a base salary, (ii) an annual cash bonus, and (iii) equity incentive awards in the form of stock options and/or restricted stock. The annual cash bonus is based on management’s assessment of the employee’s performance relative to individual and business unit goals and objectives which, for portfolio manager Colin Moore, may be based, in part, on achieving certain investment performance goals and retaining and attracting assets under management. In addition, subject to certain vesting requirements, the compensation of portfolio manager Colin Moore includes an annual award based on the performance of Ameriprise Financial over rolling three-year periods.
Performance Benchmarks
Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Leonard A. Aplet, CFA | Balanced Fund | S&P 500® Index; Barclays Aggregate Bond Index; Blended Benchmark1 | Lipper Mixed-Asset Target Allocation Growth Funds Classification | |||
Ultra Short Term Bond Fund | Barclays U.S. Short-Term Government/Corporate Index | Lipper Ultra-Short Obligations Funds Classification | ||||
Anwiti Bahuguna, PhD | Risk Allocation Fund | Citigroup 3-month U.S. Treasury Bill Index | Lipper Global Flexible Portfolios | |||
Stephen D. Barbaro, CFA | Small Cap Value Fund I | Russell 2000 Value Index | Lipper Small-Cap Value Funds Classification | |||
Michael S. Barclay, CFA | Dividend Income Fund | Russell 1000 Index | Lipper Equity Income Funds Classification | |||
John S. Barrett, CFA | Small Cap Value Fund I | Russell 2000 Value Index | Lipper Small-Cap Value Funds Classification | |||
Robert B. Cameron | Emerging Markets Fund | MSCI Emerging Markets Index (Net); MSCI EAFE Index (Net) | Lipper Emerging Markets Funds Classification | |||
Kimberly A. Campbell | Tax-Exempt Fund | Barclays Municipal Bond Index | Lipper General Municipal Debt Funds Classification | |||
Richard A. Carter | AP – Select Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Select Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification | ||||
Wayne M. Collette, CFA | Mid Cap Growth Fund | Russell MidCap Growth Index; Russell MidCap Index | Lipper Mid-Cap Growth Funds Classification | |||
Select Small Cap Fund | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Core Funds Classification | ||||
Small Cap Growth Fund I | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Growth Funds Classification | ||||
Technology Fund | BofA Merrill Lynch 100 Technology Index | Lipper Science and Technology Funds Classification | ||||
Fred Copper, CFA | Risk Allocation Fund | Citigroup 3-month U.S. Treasury Bill Index | Lipper Global Flexible Portfolios | |||
Richard E. Dahlberg, CFA | Dividend Income Fund | Russell 1000 Index | Lipper Equity Income Funds Classification | |||
Richard D’Auteuil | Small Cap Core Fund | Russell 2000 Index; S&P SmallCap 600 Composite Index | Lipper Small-Cap Core Funds Classification | |||
Scott L. Davis | Dividend Income Fund | Russell 1000 Index | Lipper Equity Income Funds Classification | |||
Peter R. Deininger, CFA, CAIA | Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification | |||
Tim Doubek, CFA | Corporate Income Fund | Barclays U.S. Corporate Index; Blended Benchmark2 | Lipper Corporate Debt Funds BBB-Rated Classification | |||
Chad H. Farrington, CFA | High Yield Municipal Fund | Barclays High Yield Municipal Bond Index; Blended Benchmark4 | Lipper High Yield Municipal Debt Funds Classification | |||
William Finan | U.S. Treasury Index Fund | Citigroup Bond U.S. Treasury Index | Lipper General U.S. Treasury Funds Classification | |||
Paul F. Fuchs, CFA | Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index | Lipper Intermediate Municipal Debt Funds Classification | |||
MA Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index | Lipper Other States Intermediate Municipal Debt Funds Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
NY Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index; Barclays New York 3-15 Year Blend Municipal Bond Index | Lipper New York Intermediate Municipal Debt Funds Classification | ||||
Thomas M. Galvin, CFA | AP – Select Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification | |||
Select Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification | ||||
Jarl Ginsberg, CFA | AP – Small Cap Equity Fund | Russell 2000 Value Index | Lipper Small-Cap Value Classification | |||
Todd D. Herget | AP – Select Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification | |||
Select Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification | ||||
Jeffrey M. Hershey, CFA | Small Cap Core Fund | Russell 2000 Index; S&P SmallCap 600 Composite Index | Lipper Small-Cap Core Funds Classification | |||
Jasmine (Weili) Huang, CFA, CPA (U.S. and China), CFM | Emerging Markets Fund | MSCI Emerging Markets Index (Net); MSCI EAFE Index (Net) | Lipper Emerging Markets Funds Classification | |||
Greater China Fund | MSCI China (Net); Hang Seng Index | Lipper China Region Funds Classification | ||||
Pacific/Asia Fund | MSCI AC Asia Pacific Index (Net); MSCI EAFE Index (Net) | Lipper Pacific Region Funds Classification | ||||
Arthur J. Hurley, CFA | Real Estate Equity Fund | FTSE NAREIT Equity REITs Index; FTSE NAREIT All Equity REITs Index | Lipper Real Estate Funds Classification | |||
Orhan Imer, PhD, CFA | U.S. Treasury Index Fund | Citigroup Bond U.S. Treasury Index | Lipper General U.S. Treasury Funds Classification | |||
Jeremy H. Javidi, CFA | Small Cap Value Fund I | Russell 2000 Value Index | Lipper Small-Cap Value Funds Classification | |||
Josh Kapp, CFA | Energy and Natural Resources Fund | S&P North American Natural Resources Sector Index | Lipper Natural Resources Funds Classification | |||
David L. King, CFA | Dividend Income Fund | Russell 1000 Index | Lipper Equity Income Funds Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Brian Lavin, CFA | Balanced Fund | S&P 500® Index; Barclays Aggregate Bond Index; Blended Benchmark1 | Lipper Mixed-Asset Target Allocation Growth Funds Classification | |||
Corporate Income Fund | Barclays U.S. Corporate Index; Blended Benchmark2 | Lipper Corporate Debt Funds BBB- Rated Classification | ||||
High Yield Opportunity Fund | BofA Merrill Lynch US High Yield Cash Pay Constrained Index; | Lipper High Current Yield Funds Classification | ||||
AP – Core Plus Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification | ||||
Intermediate Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification | ||||
Strategic Income Fund | Barclays Government/Credit Bond Index; Blended Benchmark3 | Lipper Multi-Sector Income Funds Classification | ||||
Gregory S. Liechty | Balanced Fund | S&P 500® Index; Barclays Aggregate Bond Index; Blended Benchmark1 | Lipper Mixed-Asset Target Allocation Growth Funds Classification | |||
Lawrence W. Lin, CFA | Mid Cap Growth Fund | Russell MidCap Growth Index; Russell MidCap Index | Lipper Mid-Cap Growth Funds Classification | |||
Select Small Cap Fund | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Core Funds Classification | ||||
Small Cap Growth Fund I | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Growth Funds Classification | ||||
Colin J. Lundgren, CFA | Strategic Income Fund | Barclays Government/Credit Bond Index; Blended Benchmark3 | Lipper Multi-Sector Income Funds Classification | |||
Brian M. McGreevy | CT Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index | Lipper Other States Intermediate Municipal Debt Funds Classification | |||
Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index | Lipper Intermediate Municipal Debt Funds Classification | ||||
MA Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index | Lipper Other States Intermediate Municipal Debt Funds Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Oregon Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index | Lipper Other States Intermediate Municipal Debt Funds Classification | ||||
NY Intermediate Municipal Bond Fund | Barclays 3-15 Year Blend Municipal Bond Index; Barclays New York 3-15 Year Blend Municipal Bond Index | Lipper New York Intermediate Municipal Debt Funds Classification | ||||
Jonathan Mogil, CFA | Energy and Natural Resources Fund | S&P North American Natural Resources Sector Index | Lipper Natural Resources Funds Classification | |||
Colin Moore | Energy and Natural Resources Fund | S&P North American Natural Resources Sector Index | Lipper Natural Resources Funds Classification | |||
Tom Murphy, CFA | Corporate Income Fund | Barclays U.S. Corporate Index; Blended Benchmark2 | Lipper Corporate Debt Funds BBB-Rated Classification | |||
George J. Myers, CFA | Mid Cap Growth Fund | Russell MidCap Growth Index; Russell MidCap Index | Lipper Mid-Cap Growth Funds Classification | |||
Select Small Cap Fund | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Core Funds Classification | ||||
Small Cap Growth Fund I | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Growth Funds Classification | ||||
Rahul Narang | Technology Fund | BofA Merrill Lynch 100 Technology Index | Lipper Science and Technology Funds Classification | |||
Brian D. Neigut | Mid Cap Growth Fund | Russell MidCap Growth Index; Russell MidCap Index | Lipper Mid-Cap Growth Funds Classification | |||
Select Small Cap Fund | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Core Funds Classification | ||||
Small Cap Growth Fund I | Russell 2000 Growth Index; Russell 2000 Index | Lipper Small-Cap Growth Funds Classification | ||||
C. Michael Ng, CFA | International Bond Fund | Citigroup Non-U.S. Dollar World Government Bond Index; Blended Benchmark5 | Lipper International Income Funds Classification | |||
Daisuke Nomoto, CMA (SAAJ) | Pacific/Asia Fund | MSCI AC Asia Pacific Index (Net); MSCI EAFE Index (Net) | Lipper Pacific Region Funds Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Carl W. Pappo, CFA | Bond Fund | Barclays Aggregate Bond Index | Lipper Corporate Debt Funds A Rated Classification | |||
AP – Core Plus Bond Fund | ||||||
Intermediate Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification | ||||
Kent M. Peterson, PhD | Risk Allocation Fund | Citigroup 3-month U.S. Treasury Bill Index | Lipper Global Flexible Portfolios | |||
Nicholas Pifer, CFA | International Bond Fund | Citigroup Non-U.S. Dollar World Government Bond Index; Blended Benchmark5 | Lipper International Income Funds Classification | |||
Jennifer Ponce de Leon | High Yield Opportunity Fund | BofA Merrill Lynch US High Yield Cash Pay Constrained Index; | Lipper High Current Yield Funds Classification | |||
Guy W. Pope, CFA | Balanced Fund | S&P 500® Index; Barclays Aggregate Bond Index; Blended Benchmark1 | Lipper Mixed-Asset Target Allocation Growth Funds Classification | |||
Contrarian Core Fund | Russell 1000 Index | Lipper Large-Cap Core Funds Classification | ||||
Value and Restructuring Fund | Russell 1000 Value Index; S&P 500® Index | Lipper Multi-Cap Value Funds Classification | ||||
Alexander D. Powers | Bond Fund | Barclays Aggregate Bond Index | Lipper Corporate Debt Funds A Rated Classification | |||
AP – Core Plus Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification | ||||
Intermediate Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification | ||||
Steve R. Schroll, CFA | Global Dividend Opportunity Fund | MSCI All Country World Index | Lipper Global Equity Income Funds Classification | |||
J. Nicholas Smith, CFA | Value and Restructuring Fund | Russell 1000 Value Index; S&P 500® Index | Lipper Multi-Cap Value Funds Classification | |||
Laton Spahr, CFA | Global Dividend Opportunity Fund | MSCI All Country World Index | Lipper Global Equity Income Funds Classification | |||
Christian K. Stadlinger, PhD, CFA | AP – Small Cap Equity Fund | Russell 2000 Value Index | Lipper Small-Cap Value Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Ronald B. Stahl, CFA | Balanced Fund | S&P 500® Index; Barclays Aggregate Bond Index; Blended Benchmark1 | Lipper Mixed-Asset Target Allocation Growth Funds Classification | |||
Catherine Stienstra | CA Tax-Exempt Fund | Barclays California Municipal Bond Index; Barclays Municipal Bond Index | Lipper California Municipal Debt Funds Classification | |||
CT Tax-Exempt Fund | Barclays Municipal Bond Index; Barclays Connecticut Municipal Bond Index | Lipper Connecticut Municipal Debt Funds Classification | ||||
MA Tax-Exempt Fund | Barclays Municipal Bond Index; Barclays Massachusetts Municipal Bond Index | Lipper Massachusetts Municipal Debts Classification | ||||
NY Tax-Exempt Fund | Barclays Municipal Bond Index; Barclays New York Municipal Bond Index | Lipper NY Municipal Debt Funds Classification | ||||
Paul F. Stocking, CFA | Global Dividend Opportunity Fund | MSCI All Country World Index | Lipper Global Equity Income Funds Classification | |||
Paul S. Szczygiel, CFA | Small Cap Core Fund | Russell 2000 Index; S&P SmallCap 600 Composite Index | Lipper Small-Cap Core Funds Classification | |||
Gene R. Tannuzzo, CFA | Strategic Income Fund | Barclays Government/Credit Bond Index; Blended Benchmark3 | Lipper Multi-Sector Income Funds Classification | |||
Beth M. Vanney, CFA | Risk Allocation Fund | Citigroup 3-month U.S. Treasury Bill Index | Lipper Global Flexible Portfolios | |||
Mary K. Werler, CFA | Ultra Short Term Bond Fund | Barclays U.S. Short-Term Government/Corporate Index | Lipper Ultra-Short Obligations Funds Classification | |||
Dara J. White, CFA | Emerging Markets Fund | MSCI Emerging Markets Index (Net); MSCI EAFE Index (Net) | Lipper Emerging Markets Funds Classification | |||
Todd White | Risk Allocation Fund | Citigroup 3-month U.S. Treasury Bill Index | Lipper Global Flexible Portfolios | |||
John T. Wilson, CFA | Large Cap Growth Fund | Russell 1000 Growth Index | Lipper Large-Cap Growth Funds Classification |
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Portfolio Manager | Fund(s) | Benchmark(s) | Peer Group | |||
Michael Zazzarino | Bond Fund | Barclays Aggregate Bond Index | Lipper Corporate Debt Funds A Rated Classification | |||
AP – Core Plus Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification | ||||
Intermediate Bond Fund | Barclays Aggregate Bond Index | Lipper Intermediate Investment Grade Debt Funds Classification |
1 | A custom composite, established by the Investment Manager, consisting of a 60% weighting of the S&P 500® Index and a 40% weighting of the Barclays Aggregate Bond Index. |
2 | A weighted custom composite of the Barclays U.S. Corporate Index (85%) and BofA Merrill Lynch US High Yield Cash Pay Constrained Index (15%) established by the Investment Manager. |
3 | A custom composite, established by the Investment Manager, consisting of a 35% weighting of the Barclays U.S. Aggregate Bond Index, a 35% weighting of the JPMorgan Global High Yield Index, a 15% weighting of the Citigroup Non-U.S. World Government Bond Index – Unhedged and a 15% weighting of the JPMorgan EMBI Global Diversified Index. Effective on February 29, 2012, the Fund will change two components in its blended benchmark from a 35% weighting in the JPMorgan Global High Yield Index and a 15% weighting in the JPMorgan Emerging Markets Bond Index – Global Diversified to a 35% weighting in the BofA Merrill Lynch US High Yield Cash Pay Constrained Index and a 15% weighting in the JPMorgan Emerging Markets Bond Index – Global. |
4 | A custom composite, established by the Investment Manager, consisting of a 60% weighting of the Barclays High Yield Municipal Bond Index and a 40% weighting of the Barclays Municipal Bond Index. |
5 | A custom composite established by the Investment Manager, consisting of 60% weighting in the Citigroup World Government Bond Index, a 20% weighting in the Citigroup Japan Government Bond Index and a 20% weighting in the JP Morgan Government Bond Index – Emerging Markets Global Diversified Composite. Both the Citigroup Non-U.S. Dollar World Government Bond Index and the components of the Blended Benchmark are “unhedged” against non-U.S. dollar denominated currency fluctuation. |
The Investment Manager’s Portfolio Managers and Potential Conflicts of Interest
Like other investment professionals with multiple clients, a Fund’s portfolio manager(s) may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same time. The Investment Manager and the Funds have adopted compliance policies and procedures that attempt to address certain of the potential conflicts that portfolio managers face in this regard. Certain of these conflicts of interest are summarized below.
The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance (performance fee accounts), may raise potential conflicts of interest for a portfolio manager by creating an incentive to favor higher fee accounts.
Potential conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to the Investment Manager’s Code of Ethics and certain limited exceptions, the Investment Manager’s investment professionals do not have the opportunity to invest in client accounts, other than the Funds. A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those funds and/or accounts. The effects of this potential conflict may be more pronounced where funds and/or accounts managed by a particular portfolio manager have different investment strategies.
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A portfolio manager may be able to select or influence the selection of the broker-dealers that are used to execute securities transactions for the Funds. A portfolio manager’s decision as to the selection of broker-dealers could produce disproportionate costs and benefits among the Funds and the other accounts the portfolio manager manages.
A potential conflict of interest may arise when a portfolio manager buys or sells the same securities for a Fund and other accounts. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, the Investment Manager’s trading desk may, to the extent consistent with applicable laws and regulations, aggregate the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to a Fund or another account if a portfolio manager favors one account over another in allocating the securities bought or sold.
“Cross trades,” in which a portfolio manager sells a particular security held by a Fund to another account (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Investment Manager and the Funds have adopted compliance procedures that provide that any transactions between the Fund and another account managed by the Investment Manager are to be made at a current market price, consistent with applicable laws and regulations.
Another potential conflict of interest may arise based on the different investment objectives and strategies of a Fund and other accounts managed by its portfolio manager(s). Depending on another account’s objectives and other factors, a portfolio manager may give advice to and make decisions for a Fund that may differ from advice given, or the timing or nature of decisions made, with respect to another account. A portfolio manager’s investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security for certain accounts, and not for a Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one or more other accounts are selling the security (including short sales). There may be circumstances when a portfolio manager’s purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts, including the Funds.
A Fund’s portfolio manager(s) also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which the Investment Manager’s portfolio managers are subject are essentially the same or similar to the potential conflicts of interest related to the investment management activities of the Investment Manager and its affiliates. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information about conflicts of interest, including those that relate to the Investment Manager and its affiliates.
Manager of Managers Exemption
The SEC has issued an order that permits the Investment Manager, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for a Fund without first obtaining shareholder approval. The order permits a Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Investment Manager and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Investment Manager discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.
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The Subadvisers and Investment Subadvisory Services
Investment Sub-Advisory Agreements
The assets of certain Funds are managed by subadvisers that have been selected by the Investment Manager, subject to the review and approval of the Board. The Investment Manager has recommended the subadvisers to the Board based upon its assessment of the skills of the subadvisers in managing other assets with objectives and investment strategies substantially similar to those of the applicable Fund. Short-term investment performance is not the only factor in selecting or terminating a subadviser, and the Investment Manager does not expect to make frequent changes of subadvisers.
The Investment Manager allocates the assets of a Fund with multiple subadvisers among the subadvisers. Each subadviser has discretion, subject to oversight by the Board and the Investment Manager, to purchase and sell portfolio assets, consistent with the Fund’s investment objectives, policies, and restrictions. Generally, the services that a subadviser provides to the Fund are limited to asset management and related recordkeeping services.
The Investment Manager has entered into an Investment Sub-Advisory Agreement with each subadviser under which the subadviser provides investment advisory assistance and day-to-day management of some or all of the Fund’s portfolio, as well as investment research and statistical information. A subadviser may also serve as a discretionary or non-discretionary investment adviser to management or advisory accounts that are unrelated in any manner to the Investment Manager or its affiliates.
Each Investment Sub-Advisory Agreement generally provides that in the absence of willful misconduct, bad faith, gross negligence or reckless disregard of its obligations or duties thereunder, by the subadviser or any of its respective officers, directors, employees or agents, the subadviser shall not be subject to liability to the Trust or the Investment Manager for any act or omission in the course of rendering services thereunder or for any losses that may be sustained in the purchase, holding or sale of any security.
The Investment Sub-Advisory Agreement became effective with respect to each applicable Fund after approval by the Board, and after an initial two year period, continues from year to year, provided that such continuation of the Investment Sub-Advisory Agreement is specifically approved at least annually by the Trust’s Board, including its Independent Trustees. The Investment Sub-Advisory Agreement terminates automatically in the event of its assignment, and is terminable with respect to the Fund at any time without penalty by the Trust (by vote of the Board or by vote of a majority of the outstanding voting securities of the Fund) or by the Investment Manager on 60 days’ written notice.
DGHM has entered into a Delegation Agreement with REMS to provide investment advisory services relating to investments in REITs for the portion of AP – Small Cap Equity Fund managed by DGHM. DGHM is responsible for payments to REMS. The Delegation Agreement provides that it will remain in effect for so long as the Investment Sub-Advisory Agreement between the Investment Manager and DGHM remains in effect; provided that it will terminate automatically in the event of its assignment, and is terminable with respect to the Fund at any time without penalty by the Trust (by vote of the Board or by vote of a majority of the outstanding voting securities of the Fund) on 60 days’ written notice.
The information below regarding each subadviser has been provided by the respective subadviser.
AQR
AQR manages a sleeve of AP – Alternative Strategies Fund. AQR is a Delaware limited liability company formed in 1998 and is located at Two Greenwich Plaza, 3rd Floor, Greenwich, Connecticut 06830. AQR is a wholly-owned subsidiary of AQR Capital Management Holdings, LLC (“Holdings”), which has no activities other than holding the interest of AQR. Holdings is majority-owned by AQR’s principals and Clifford S. Asness,
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Ph.D. may be deemed to control AQR indirectly through his significant ownership in Holdings. Affiliated Managers Group, Inc., a publicly traded holding company, holds a minority interest in Holdings.
AQR Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the AQR portfolio managers responsible for the portion of the Fund allocated to AQR are:
Portfolio Manager | Fund | |
Clifford S. Asness, Ph.D. | AP – Alternative Strategies Fund | |
Brian K. Hurst | AP – Alternative Strategies Fund | |
John M. Liew, Ph.D. | AP – Alternative Strategies Fund | |
Yao Hua Ooi | AP – Alternative Strategies Fund |
Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the AQR portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Alternative Strategies Fund | Clifford S. Asness, Ph.D. | 18 RICSs 53 PIVs 52 other accounts | $5.09 billion $10.58 billion $12.59 billion | 28 PIVs ($6 billion) 5 other accounts ($1.2 billion) | None | |||||
Brian K. Hurst | 5 RICSs 34 PIVs 24 other accounts | $5.65 billion $13.34 billion $6.7 billion | 12 PIVs ($4.12 billion) 3 other accounts ($1 billion) | None | ||||||
John M. Liew, Ph.D. | 8 RICSs 33 PIVs 25 other accounts | $4.37 billion $7.38 billion $6.81 billion | 20 PIVs ($5.1 billion) 3 other accounts ($1 billion) | None | ||||||
Yao Hua Ooi | 5 RICSs 17 PIVs 1 other account | $5.65 billion $7.91 billion $44.59 million | 4 PIVs ($880.56 million) | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. The compensation for each of the portfolio managers who is a principal of AQR is in the form of distributions based on the revenues generated by AQR. Distributions to each portfolio manager are based on cumulative research, leadership and other contributions to AQR. Revenue distributions are also a function of assets under management and performance of accounts managed by the portfolio manager. There is no direct linkage between performance and compensation. However, there is an indirect linkage in that superior performance tends to attract assets and thus increase revenues.
AQR Portfolio Manager Conflicts of Interest. Each of the portfolio managers is also responsible for managing other accounts in addition to the Fund, including other accounts of AQR or its affiliates, such as separately managed accounts for foundations, endowments, pension plans, and high net-worth families.
Other accounts may also include accounts managed by the portfolio managers in a personal or other capacity, and may include registered investment companies and unregistered investment companies relying on either Section 3(c)(1) or Section 3(c)(7) of the 1940 Act (such companies are commonly referred to as “hedge funds”). Management of other accounts in addition to the Fund can present certain conflicts of interest.
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From time to time, potential conflicts of interest may arise between a portfolio manager’s management of the investments of the Fund, on the one hand, and the management of other accounts, on the other. The other accounts might have similar investment objectives or strategies as the Fund, or otherwise hold, purchase, or sell securities that are eligible to be held, purchased or sold by the Fund. Because of their positions with the Fund, the portfolio managers know the size, timing and possible market impact of the Fund’s trades. It is theoretically possible that the portfolio managers could use this information to the advantage of other accounts they manage and to the possible detriment of the Fund. A potential conflict of interest may arise as a result of the portfolio manager’s management of a number of accounts with similar investment guidelines. Often, an investment opportunity may be suitable for both the Fund and other accounts managed by AQR, but may not be available in sufficient quantities for both the Fund and the other accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by the Fund and another account. Whenever decisions are made to buy or sell securities by the Fund and one or more of the other accounts simultaneously, AQR or portfolio manager may aggregate the purchases and sales of the securities and will allocate the securities transactions in a manner that it believes to be equitable under the circumstances. As a result of the allocations, there may be instances when the Fund will not participate in a transaction that is allocated among other accounts or that may not be allocated the full amount of the securities sought to be traded. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available to the Fund from time to time, it is the opinion of AQR that the overall benefits outweigh any disadvantages that may arise from this practice. Subject to applicable laws and/or account restrictions, AQR may buy, sell or hold securities for other accounts while entering into a different or opposite investment decision for the Fund.
AQR and the portfolio managers may also face a conflict of interest where some accounts pay higher fees to AQR than others, such as by means of performance fees.
AQR has implemented specific policies and procedures (e.g., a code of ethics and trade allocation policies) to seek to address potential conflicts that may arise in connection with the management of the Funds, separately managed accounts and other accounts.
Conestoga
Conestoga manages a sleeve of AP – Small Cap Equity Fund. Conestoga is Delaware limited liability company located at 259 N. Radnor-Chester Road, Radnor Court Suite 120, Radnor, PA 19087. Conestoga is an employee-owned independent registered investment adviser. Conestoga was organized in 2001 and provides investment management services to institutional and individual clients.
Conestoga Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the Conestoga portfolio managers responsible for the portion of the Fund allocated to Conestoga are:
Portfolio Manager | Fund | |
William C. Martindale, Jr. | AP – Small Cap Equity Fund | |
Robert M. Mitchell | AP – Small Cap Equity Fund |
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Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the Conestoga portfolio managers managed, as of July 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar in the Fund | |||||
AP – Small Cap Equity Fund | William C. Martindale, Jr. | 3 RICs 1 PIV 61 other accounts | $282.2 million $38.3 million $40.9 million | None | None | |||||
Robert M. Mitchell | 3 RICs 1 PIV 145 other accounts | $282.2 million $38.3 million $438.1 million | None | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. Each of the Fund’s portfolio managers is a partner of Conestoga. As such, each portfolio manager receives a share of Conestoga’s annual profits, as specified in the manager’s partnership agreement with Conestoga, from Conestoga’s management of the Fund and all other accounts.
Conestoga Portfolio Manager Conflicts of Interest. Like other investment professionals with multiple clients, the Fund’s portfolio managers may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same time. Conestoga and the Fund have adopted compliance policies and procedures that attempt to address certain of the potential conflicts that Conestoga portfolio managers face in this regard. Certain of those conflicts of interest are summarized below.
The management of accounts with different advisory or sub-advisory fee rates and/or fee and expense structures may raise certain potential conflicts of interest for a portfolio manager by creating an incentive to favor higher fee or higher profit margin accounts.
Potential conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those accounts. A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those funds and/or accounts. The effects of this potential conflict may be more pronounced where funds and/or accounts managed by a particular portfolio manager have different investment strategies.
A portfolio manager may be able to select or influence the selection of the broker-dealers that are used to execute securities transactions for the Fund. A portfolio manager’s decision as to the selection of broker-dealers could produce disproportionate costs and benefits among the Fund and the other accounts the portfolio manager manages.
A potential conflict of interest may arise when a portfolio manager buys or sells the same securities for the Fund and other accounts. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interests of the Fund as well as other accounts, Conestoga’s trading desk may, to the extent consistent with applicable laws and regulations, aggregate the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to the Fund or another account if a portfolio manager favors one account over another in allocating the securities bought or sold.
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“Cross trades,” in which a portfolio manager sells a particular security held by the Fund to another account (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Fund has adopted compliance procedures that provide that any transactions between the Fund and another account managed by Conestoga are to be made at a current market price, consistent with applicable laws and regulations.
Another potential conflict of interest may arise based on the different investment objectives and strategies of the Fund and other accounts managed by Conestoga’s portfolio managers. Depending on another account’s objectives and other factors, a portfolio manager may give advice to and make decisions for the Fund that may differ from advice given, or the timing or nature of decisions made, with respect to another account. A portfolio manager’s investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security for certain accounts, and not for the Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one or more other accounts are selling the security. There may be circumstances when a portfolio manager’s purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts, including the Fund.
The Fund’s portfolio managers also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which Conestoga’s portfolio managers are subject are essentially the same or similar to the potential conflicts of interest related to the investment management activities of Conestoga.
DGHM
DGHM manages a sleeve of AP – Small Cap Equity Fund. DGHM is a Delaware limited liability company located at 565 Fifth Avenue, Suite 2101, New York, New York 10017. DGHM is 80% owned by Boston Private Financial Holdings, Inc., which is organized as a bank holding company focusing on wealth management through private banking and investment services. The remaining 20% interest in DGHM is employee owned.
REMS provides advisory services with respect to investments that the portion of the AP – Small Cap Equity Fund managed by DGHM may make in REITs. REMS is located at 1100 Fifth Avenue South, Suite 305, Naples, Florida 34102. The principal owners of REMS are Edward W. Turville, John E. Webster, John S. Whitaker, Michael H. Shelly and Beach Investment Management, LLC.
DGHM Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the DGHM/REMS portfolio managers responsible for the portion of the Fund allocated to DGHM are:
Portfolio Manager | Fund | |
Jeffrey C. Baker, CFA | AP – Small Cap Equity Fund | |
Bruce H. Geller, CFA | AP – Small Cap Equity Fund | |
Peter A. Gulli | AP – Small Cap Equity Fund | |
Edward W. Turville, CFA (with REMS) | AP – Small Cap Equity Fund |
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Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the DGHM portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar in the Fund | |||||
AP – Small Cap Equity Fund | Jeffrey C. Baker, CFA | 2 RICs 7 PIVs 90 other accounts | $132 million $164 million $1.066 million | 5 PIVs ($35 million) 4 other accounts ($167 million) | None | |||||
Bruce H. Geller, CFA | 2 RICs 7 PIVs 90 other accounts | $132 million $164 million $1.066 million | 5 PIVs ($35 million) 4 other accounts ($167 million) | None | ||||||
Peter A. Gulli | 2 RICs 7 PIVs 90 other accounts | $132 million $164 million $1.066 million | 5 PIVs ($35 million) 4 other accounts ($167 million) | None | ||||||
Edward W. Turville, CFA | 2 RICs 10 PIVs 131 other accounts | $132 million $400 million $393 million | 5 PIVs ($1 million) 4 other accounts ($22 million) | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. The portfolio managers’ compensation varies with the general success of the firm. Each portfolio manager’s compensation consists of a fixed annual salary, plus additional remuneration based on assets under management. The portfolio managers’ compensation is not directly linked to the performance of the Fund or other accounts managed by the firm, although positive performance and growth in managed assets are factors that may contribute to distributable profits and assets under management.
DGHM Portfolio Manager Conflicts of Interest. The portfolio managers’ management of “other accounts” may give rise to potential conflicts of interest in connection with their management of the Fund’s investments, on the one hand, and the investments of the other accounts, on the other. The other accounts include hedge funds, separately managed private clients and discretionary 401(k) accounts. These other accounts might have similar investment objectives as the Fund, be compared to the same index as the Fund, or otherwise hold, purchase, or sell securities that are eligible to be held, purchased, or sold by the Fund.
A potential conflict of interest may arise as a result of the portfolio managers’ day-to-day management of the Fund. The portfolio managers know the size and timing of trades for the Fund and other accounts, and may be able to predict the market impact of Fund trades. It is theoretically possible that the portfolio managers could use this information to the advantage of other accounts they manage and to the possible detriment of the Fund, or vice versa.
The firm provides investment supervisory services for a number of investment products that have varying investment guidelines. The same portfolio management team works across all investment products. Differences in the compensation structures of investment products may give rise to a conflict of interest by creating an incentive to allocate the investment opportunities it believes might be the most profitable to the client accounts where it might benefit the most from the investment gains.
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EAM
EAM manages a portion of AP – Small Cap Equity Fund. EAM is located at 2533 South Coast highway 101, Suite 240, Cardiff-by-the-Sea, California 92007. Prior to June 13, 2011, the firm was named Eudaimonia Asset Management, LLC. EAM employees/members own approximately 56% of EAM and Bryon C. Roth, through a majority ownership of CR Financial Holdings, Inc., indirectly owns the remaining 44% interest in the firm.
EAM Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the EAM portfolio manager responsible for the portion of the Fund allocated to EAM is:
Portfolio Manager | Fund | |
Montie L. Weisenberger | AP – Small Cap Equity Fund |
Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the EAM portfolio manager managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar in the Fund | |||||
AP – Small Cap Equity Fund | Montie L. Weisenberger | 4 other accounts | $14 million | None | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. The portfolio manager’s compensation is comprised of a base salary, a revenue allocation and firm profit allocation. The salary is in-line with industry specific benchmarks. The revenue allocation is based on firm-wide revenue while the profit allocation is based on firm-wide profitability. There is no direct linkage between performance and compensation, however, there is an indirect linkage as superior performance tends to attract and retain assets and consequently increase revenues and profitability.
EAM Portfolio Manager Conflicts of Interest. The portfolio manager is responsible for managing other accounts invested in the same strategy as the Fund. These other accounts include separately managed accounts for pension funds. In addition, other EAM portfolio managers manage accounts which have similar investment strategies and may invest in some of the same securities as the Fund.
From time to time, potential conflicts of interest may arise between the portfolio manager’s management of the investments of the Fund, on the one hand, and the management of other accounts, on the other. For example, an investment opportunity may be suitable for both the Fund and other accounts, but may not be available in sufficient quantities for both the Fund and the other accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by the Fund and another account. Whenever decisions are made to buy or sell securities by the Fund and one or more of the other accounts simultaneously, EAM or the portfolio managers may aggregate the purchases and sales of the securities and will allocate the securities transactions in a manner that it believes to be equitable under the circumstances. As a result of the allocations, there may be instances when the Fund will not participate in a transaction that is allocated among other accounts or that may not be allocated the full amount of the securities sought to be traded. Another potential conflict may arise when a portfolio manager may have an incentive to allocate opportunities to an account where EAM and the portfolio manager have a greater financial incentive, such as a performance fee account.
EAM has implemented specific policies and procedures (e.g., a code of ethics and trade allocation policies) that seek to address these potential conflicts.
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Eaton Vance
Eaton Vance manages a sleeve of AP – Alternative Strategies Fund. Eaton Vance is a Massachusetts business trust and is located at Two International Place, Boston, MA 02110. Eaton Vance, Inc. serves as trustee of Eaton Vance, which is a wholly-owned subsidiary of Eaton Vance Corp. Eaton Vance Corp. through its subsidiaries and affiliates engages primarily in investment management, administration and marketing activities. The directors of Eaton Vance Corp. are Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Dorothy E. Puhy, Duncan W. Richardson, Winthrop H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding voting common stock of Eaton Vance Corp. are deposited in a voting trust, the voting trustees of which are Mr. Faust, Jeffrey P. Beale, Cynthia J. Clemson, Maureen A. Gemma, Brian D. Langstraat, Michael R. Mach, Frederick S. Marius, Thomas M. Metzold, Scott H. Page, Mr. Richardson, Walter A. Row, III, G. West Saltonstall, Judith A. Saryan, David M. Stein, Payson F. Swaffield, Mark S. Venezia, Michael W. Weilheimer, Robert J. Whelan and Matthew J. Witkos (all of whom are officers of Eaton Vance or its affiliates).
Eaton Vance Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the Eaton Vance portfolio managers responsible for the portion of the Fund allocated to Eaton Vance are:
Portfolio Manager | Fund | |
Mark S. Venezia | AP – Alternative Strategies Fund | |
John R. Baur | AP – Alternative Strategies Fund | |
Michael A. Cirami | AP – Alternative Strategies Fund | |
Eric A. Stein | AP – Alternative Strategies Fund |
Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the Eaton Vance portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Alternative Strategies Fund | Mark S. Venezia | 12 RICs 3 PIVs | $23.498 billion $1.004 billion | None | None | |||||
John R. Baur | 8 RICs 2 PIVs | $17.563 billion $431 million | None | None | ||||||
Michael A. Cirami | 8 RICs 2 PIVs | $17.654 billion $431 million | None | None | ||||||
Eric A. Stein | 5 RICs 2 PIVs | $19.126 billion $1 billion | None | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. Compensation of Eaton Vance’s portfolio managers and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual stock-based compensation consisting of options to purchase shares of Eaton Vance Corp.’s nonvoting common stock and restricted shares of Eaton Vance Corp.’s non-voting common stock. Eaton Vance’s investment professionals also receive certain retirement, insurance and other benefits that are broadly available to the firm’s employees. Compensation of the firm’s investment professionals is reviewed primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the October 31st fiscal year end of Eaton Vance Corp.
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Eaton Vance compensates its portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance of managed funds and accounts versus relevant benchmark(s) as well as an appropriate peer group. In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance measures include, but are not limited to, the Sharpe ratio. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair comparison, performance may instead be evaluated primarily against a custom peer group. In evaluating the performance of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance over longer and shorter periods. For funds that are tax managed or otherwise have an objective of after-tax returns, performance is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective other than total return (such as current income), consideration will also be given to the fund’s success in achieving its objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of such responsibilities and the managers’ performance in meeting them.
Eaton Vance seeks to compensate portfolio managers commensurate with their responsibilities and performance, and competitive with other firms within the investment management industry. Eaton Vance participates in investment industry compensation surveys and utilizes survey data as a factor in determining salary, bonus and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based compensation are also influenced by the operating performance of the investment adviser and its parent company. The overall annual cash bonus pool is based on a substantially fixed percentage of pre-bonus operating income. While the salaries of the firm’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
Eaton Vance Portfolio Manager Conflicts of Interest. It is possible that conflicts of interest may arise in connection with a portfolio manager’s management of the Fund’s investments on the one hand and the investments of other accounts for which the portfolio manager is responsible for on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and other accounts he advises. In addition, due to differences in the investment strategies or restrictions between the Fund and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund. In some cases, another account managed by a portfolio manager may compensate Eaton Vance based on the performance of the securities held by that account. The existence of such a performance based fee may create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities. Whenever conflicts of interest arise, the portfolio manager will endeavor to exercise his discretion in a manner that he believes is equitable to all interested persons. Eaton Vance has adopted several policies and procedures designed to address these potential conflicts including a code of ethics and policies that govern the investment adviser’s trading practices, including among other things the aggregation and allocation of trades among clients, brokerage allocation, cross trades and best execution.
Federated
Federated manages a sleeve of AP – Core Plus Bond Fund. Federated is wholly-owned subsidiary of Federated Investors, Inc. and is located at Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
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Pennsylvania 15222-3779. Federated Advisory Services Company, an affiliate of Federated, provides certain support services to Federated. The fee for these services is paid by Federated and not by AP – Core Plus Bond Fund.
Federated Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the Federated portfolio managers responsible for the portion of the Fund allocated to Federated are:
Portfolio Manager | Fund | |
Joseph M. Balestrino, CFA | AP – Core Plus Bond Fund | |
Donald T. Ellenberger | AP – Core Plus Bond Fund |
Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the Federated portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Core Plus Bond Fund | Joseph M. Balestrino, CFA | 12 RICs 2 other accounts | $13.4 billion $50.1 million | None | None | |||||
Donald T. Ellenberger | 9 RICs 2 PIVs 12 other accounts | $2.4 billion $2.4 billion $1.5 billion | None | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. Each Federated portfolio manager is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on investment product performance (IPP) and, to a lesser extent, financial success, and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Investors, Inc. The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis vs. a relevant benchmark and vs. a designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded. As noted above, the portfolio managers may manage other accounts in addition to the Fund. Such other accounts may have different benchmarks peer groups and IPP weightings. The performance of certain accounts may be excluded when calculating IPP.
The portfolio managers may serve on one or more investment teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility, and/or yield curve) for taxable fixed income products. A portion of their IPP score is based on Federated Investors, Inc.’s senior management’s assessment of team contributions and any other factors as deemed relevant. In his role as Head of the U.S. Investment Grade Bond Group, Mr. Balestrino has oversight responsibility for other portfolios that he does not personally manage. A portion of his IPP score is determined by the investment performance of these other portfolios vs. product specific benchmarks and peer groups.
The financial success category is designed to tie the portfolio manager’s bonus, in part, to Federated Investors, Inc.’s overall financial results. Funding for the financial success category may be determined on a product or asset class basis, as well as on corporate financial results. Senior management determines individual financial success bonuses on a discretionary basis, considering overall contributions and any other factors deemed relevant.
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Federated Portfolio Manager Conflicts of Interest. As a general matter, certain conflicts of interest may arise in connection with a portfolio manager’s management of the Fund’s investments, on the one hand, and the investments of other accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts might include conflicts created by specific portfolio manager compensation arrangements, and conflicts relating to selection of brokers or dealers to execute fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). Federated has adopted policies and procedures and has structured the portfolio managers’ compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
RS Investment Management Co. LLC
Prior to October 1, 2012, RS Investment Management Co. LLC managed the sleeve of AP – Small Cap Equity Fund currently managed by Conestoga. RS Investment Management Co. LLC is Delaware limited liability company located at 388 Market Street, Suite 1700, San Francisco, California 94111. Guardian Investor Services LLC, a wholly-owned subsidiary of The Guardian Life Insurance Company of America, owns a majority of the ownership interest in RS Investment Management Co. LLC.
TCW
TCW manages a sleeve of AP – Core Plus Bond Fund. TCW, which is located at 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017, is a wholly-owned subsidiary of The TCW Group, Inc. Société Générale Asset Management, S.A. may be deemed to be a control person of TCW by reason of its ownership of more than 25% of the outstanding voting stock of The TCW Group, Inc. Société Générale Asset Management, S.A. is a wholly-owned subsidiary of Société Générale, S.A.
TCW Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the TCW portfolio managers responsible for the portion of the Fund allocated to TCW are:
Portfolio Manager | Fund | |
Tad Rivelle | AP – Core Plus Bond Fund | |
Stephen M. Kane, CFA | AP – Core Plus Bond Fund | |
Laird R. Landmann | AP – Core Plus Bond Fund |
Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the TCW portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Core Plus Bond Fund | Tad Rivelle | 23 RICs 47 PIVs 191 other accounts | $33.673 billion $8.089 billion $17.963 billion | 2 RICs ($195 million) 31 PIVs ($5.922 billion) 7 other accounts ($1.760 billion) | None | |||||
Stephen M. Kane, CFA | 24 RICs 49 PIVs 194 other accounts | $30.593 billion $8.103 billion $17.973 billion | 2 RICs ($195 million) 31 PIVs ($5.922 billion) 7 other accounts ($1.760 billion) | None | ||||||
Laird R. Landmann | 22 RICs 47 PIVs 191 other accounts | $30.621 billion $8.089 billion $17.963 billion | 1 RIC ($189 million) 31 PIVs ($5.922 billion) 7 other accounts ($1.760 billion) | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
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Portfolio Manager Compensation. TCW’s overall objective of the compensation program for portfolio managers is to attract what it considers competent and expert investment professionals and to retain them over the long-term. Compensation is comprised of several components which, in the aggregate are designed to achieve these objectives and to reward the portfolio managers for their contribution to the success of their clients and TCW and its affiliates within the TCW group (TCW Group). Portfolio managers are compensated through a combination of base salary, profit sharing based compensation (profit sharing), bonus and equity incentive participation in TCW’s immediate parent and/or ultimate parent, Société Générale (equity incentives). Profit sharing and equity incentives generally represent most of the portfolio managers’ compensation. In some cases, portfolio managers are eligible for discretionary bonuses.
Salary. Salary is agreed to with managers at time of employment and is reviewed from time to time. It does not change significantly and often does not constitute a significant part of the portfolio manager’s compensation.
Profit Sharing. Profit sharing is linked quantitatively to a fixed percentage of income relating to accounts in the investment strategy area for which the portfolio managers are responsible and is paid quarterly. Profit sharing may be determined on a gross basis, without the deduction of expenses; in other cases, revenues are allocated to a pool and profit sharing compensation is paid out after the deduction of group expenses. The profit sharing percentage used to compensate a portfolio manager for management of the Fund is generally the same as that used to compensate them for all other client accounts they manage in the same strategy for the TCW Group, with limited exceptions involving grandfathered accounts (accounts that become clients of the TCW Group before or after a specified date or former clients of a manager that joined the TCW Group from another firm), firm capital of the TCW Group or accounts sourced through a distinct distribution channel. Income included in a profit sharing pool will relate to the products managed by the portfolio manager. In some cases, the pool includes revenues related to more than one equity or fixed income product where the portfolio managers work together as a team, in which case each participant in the pool is entitled to profit sharing derived from all the included products. In certain cases, a portfolio manager may also participate in a profit sharing pool that includes revenues from products besides the strategy offered in the Fund, including alternative investment products (as described below); the portfolio manger would be entitled to participate in such pool where he or she supervises, is involved in the management of, or is associated with a group, other members of which manage, such products. Profit sharing arrangements are generally the result of agreement between the portfolio manager and the TCW Group, although in some cases they may be discretionary based on supervisor allocation.
In some cases, the profit sharing percentage is subject to increase based on the relative pre-tax performance of the investment strategy composite returns, net of fees and expenses, to that of the benchmark. The measurement of performance relative to the benchmark can be based on single year or multiple year metrics, or a combination thereof. The benchmark used is the one associated with the Fund managed by the portfolio manager as disclosed in the prospectus. Benchmarks vary from strategy to strategy but, within a given strategy, the same benchmark applies to all accounts, including the Fund.
Certain accounts of the TCW Group (but not the Fund) have a performance (or incentive) fee in addition to or in lieu of an asset-based fee. For these accounts, the profit sharing pool from which the portfolio managers’ profit sharing compensation is paid will include the performance fees. For investment strategies investing in marketable securities such as those employed in the Fund, the performance fee normally consists of an increased asset-based fee, the increased percentage of which is tied to the performance of the account relative to a benchmark (usually the benchmark associated with the strategy). In these marketable securities strategies, the profit sharing percentage applied relative to performance fees is generally the same as it is for the asset-based fees chargeable to the Fund. In the case of alternative investment strategies, performance fees are based on the account achieving net gains over a specified rate of return to the account or to a class of securities in the account. Profit sharing for alternative investment strategies may also include structuring or transaction fees. For these purposes, “alternative investment strategies” include (a) mezzanine or other forms of privately placed financing, distressed investing, private equity, project finance, real estate investments, leveraged strategies (including short sales) and other similar strategies not employed by the Fund or (b) strategies employed by the Funds that are offered in structured vehicles, such as collateralized loan obligations or collateralized debt obligations or in private funds (sometimes referred to as hedge funds). In the case of certain alternative investment products in
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which a portfolio manager may be entitled to profit sharing compensation, the profit sharing percentage for performance fees may be lower or higher than the percentage applicable to the asset-based fees.
Discretionary Bonus/Guaranteed Minimums. In general, portfolio managers do not receive discretionary bonuses. However, in some cases bonuses may be paid on a discretionary bonus out of a departmental profit sharing pool, as determined by the supervisor(s) in the department. In other cases, where portfolio managers do not receive profit sharing or where the company has determined the combination of salary and profit sharing does not adequately compensate the portfolio manager, discretionary bonuses may be paid by the TCW Group. Also, pursuant to contractual arrangements, some portfolio managers may be entitled to a mandatory bonus if the sum of their salary and profit sharing does not meet certain minimum thresholds.
Equity Incentives. Many portfolio managers participate in equity incentives based on overall firm performance of the TCW Group and its affiliates, through stock ownership or participation in stock option or stock appreciation plans of the TCW Group and/or Société Générale. The TCW 2005 TCW Stock Option Plan provides eligible portfolio managers the opportunity to participate in an effective economic interest in the TCW Group, the value of which is tied to TCW’s annual financial performance as a whole. Participation is generally determined in the discretion of the TCW Group, taking into account factors relevant to the portfolio manager’s contribution to the success of the TCW Group. Portfolio managers participating in the TCW 2005 TCW Stock Option Plan also generally participate in Société Générale’s stock option plan which grants options on its common stock, the value of which may be realized after certain vesting requirements are met. The TCW 2005 Stock Option Plan has been closed for new issuances and TCW is in the process of establishing a new equity-based plan in which portfolio managers will have an opportunity to participate. In connection with TCW’s acquisition of Metropolitan West Asset Management LLC in 2010, a retention award plan was established pursuant to which certain portfolio managers in the fixed income area will be entitled to awards in the form of cash and/or TCW stock, either on a contractually-determined basis or on a discretionary basis. Also, in connection with this acquisition, certain portfolio managers will receive TCW stock as part of a contingent deferred purchase price. Some portfolio managers are direct stockholders of Société Générale, as well.
Other Plans and Compensation Vehicles. Portfolio managers may also participate in a deferred compensation plan that is generally available to a wide-range of officers of the TCW Group, the purpose of which is to allow the participant to defer portions of income to a later date while accruing earnings on a tax-deferred basis based on performance of the TCW Group-managed products selected by the participant. Portfolio managers may also elect to participate in the TCW Group’s 401(k) plan, to which they may contribute a portion of their pre- and post-tax compensation to the plan for investment on a tax-deferred basis.
TCW Portfolio Manager Conflicts of Interest. Actual or potential conflicts of interest may arise when a portfolio manager has management responsibilities to more than one account (including the Fund), such as devotion of unequal time and attention to the management of the accounts, inability to allocate limited investment opportunities across a broad band of accounts and incentive to allocate opportunities to an account where the portfolio manager or TCW has a greater financial incentive, such as a performance fee account or where an account or fund managed by a portfolio manager has a higher fee sharing percentage than the portfolio manager’s fee sharing percentage with respect to the Fund. TCW has adopted policies and procedures reasonably designed to address these types of conflicts and TCW believes its policies and procedures serve to operate in a manner that is fair and equitable among its clients, including the Fund.
Wasatch
Wasatch manages a portion of AP – Alternative Strategies Fund. Wasatch, which is located at 150 Social Hall Avenue, 4th Floor, Salt Lake City, Utah 84111, is a wholly-owned subsidiary of WA Holdings, Inc., which is 100% owned by the employees of Wasatch.
Wasatch Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the Wasatch portfolio managers responsible for the portion of the Fund allocated to Wasatch are:
Portfolio Manager | Fund | |
Michael L. Shinnick | AP – Alternative Strategies Fund | |
Ralph C. Shive, CFA | AP – Alternative Strategies Fund |
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Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the Watash portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Alternative Strategies Fund | Michael L. Shinnick | 1 RIC 25 other accounts | $1.6 billion $481 million | None | None | |||||
Ralph C. Shive, CFA | 1 RIC 25 other accounts | $1.6 billion $481.8 million | None | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. As of December 31, 2011, the Wasatch’s Compensation Committee and Executive Committee reviewed and determined its portfolio managers’ compensation. The committees may use independent third party investment industry compensation survey results in evaluating competitive market compensation for its investment professionals. The committees may also consult with professional industry recruiters. The elements of total compensation for the portfolio managers are base salary, performance-based bonus, profit sharing and other benefits. Portfolio managers who are also shareholders of Wasatch additionally receive quarterly dividends. Wasatch has balanced the components of pay to provide portfolio managers with an incentive to focus on both shorter and longer term performance. By design, portfolio manager compensation levels fluctuate – both up and down – with the relative investment performance of the Funds that they manage.
Each portfolio manager is paid a base salary, a potential bonus based on performance, potential deferred bonus grants based on performance, and possibly stock dividends.
Base Salary – Each portfolio manager is paid a fixed base salary depending upon their tenure.
Performance Bonus – A large portion of a portfolio manager’s potential compensation is in the form of a performance bonus. At the end of each year, the Board of Directors will allocate a bonus pool that will loosely mirror firm profits net of stock buybacks and deferred compensation payouts. The majority of this bonus pool will be allocated to portfolio managers based on the 1, 3- and 5-year performance of their portfolios, which will provide them with significant economic incentives for achieving top quartile performance over both the short and long term.
Portfolio managers and research analysts are not paid a commission for the solicitation or acquisition of new clients or the retention of existing clients. However, the amount of revenue generated by each product is overlaid on performance to determine the size of each portfolio manager’s bonus (e.g., if performance were equal, a portfolio manager on a higher revenue product would receive a larger bonus than one on a smaller revenue product).
For portfolio managers who manage separate accounts and mutual funds as well, they have bonus components calculated based on the performance of each individual product relative to its peer group. Revenue is again used as an element in converting performance results into the bonus amount.
Portfolio managers are also rewarded for their stock selection contributions to other products and their impact on the overall success of the research team. This incentive is consistent with Wasatch’s collaborative team-based approach to portfolio management.
Deferred Bonus Grants – Portfolio managers are also eligible for deferred bonus grants, which are payable six years from the date of the grant, with their value directly tied to Wasatch’s revenues. Each portfolio managers’ grant size will be based on individual performance factors similar to those used to determine the annual performance bonus.
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Stock/Dividends – All of the portfolio managers are shareholders of the Wasatch. The relative amount of stock owned by each portfolio manager is at the discretion of Wasatch’s Board and will evolve over time, with bigger long-term contributors holding higher levels of ownership. New portfolio manager stock grants typically vest over a five-year period, with the vesting dependent on the performance of the fund(s) managed by the portfolio manager.
It is possible that certain profits of Wasatch could be paid out to shareholders through a stock dividend. However, there are no current plans or expectations for such a dividend.
Other Benefits – Portfolio managers are also eligible to participate in broad-based benefit plans offered generally to Wasatch’s full-time employees, including 401(k), health and other employee benefit plans.
Wasatch Portfolio Manager Conflicts of Interest. There may be certain inherent conflicts of interest that arise in connection with a portfolio manager’s management of the Fund’s investments and the investments of any other fund or client accounts Wasatch or the respective portfolio managers also manages, including Cross Creek Capital, L.P., a pooled investment vehicle whose general partner is an indirect wholly-owned subsidiary of Wasatch and may receive a performance based fee from Cross Creek, L.P. Such conflicts include allocation of investment opportunities among the Fund and other accounts managed by Wasatch or the portfolio manager; the aggregation of purchase and sale orders believed to be in the best interest of more than one account managed by Wasatch or the portfolio manager and the allocation of such orders across such accounts; and any soft dollar arrangements that Wasatch may have in place that could benefit the Fund and/or other accounts. Additionally, some funds or accounts managed by a portfolio manager may have different fee structures, including performance fees, which are, or have the potential to be, higher or lower than the fees paid by another fund or account. To minimize the effects of these inherent conflicts of interest, Wasatch has adopted and implemented policies and procedures, including trade aggregation and allocation procedures, that it believes are reasonably designed to mitigate the potential conflicts associated with managing portfolios for multiple clients, including the Funds, and seeks to ensure that no one client is intentionally favored at the expense of another.
Water Island
Water Island manages a portion of AP – Alternative Strategies Fund. Water Island is located at 41 Madison Avenue, 42nd Floor, New York, New York 10010. John S. Orrico, President of Water Island, controls Water Island.
Water Island Portfolio Managers. As described in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus, the Water Island portfolio managers responsible for the portion of the Fund allocated to Water Island are:
Portfolio Manager | Fund | |
John S. Orrico, CFA | AP – Alternative Strategies Fund | |
Gregory Loprete | AP – Alternative Strategies Fund | |
Todd W. Munn | AP – Alternative Strategies Fund | |
Roger P. Foltynowicz | AP – Alternative Strategies Fund |
Other Accounts Managed. The following table provides information about the number and assets of other investment accounts (or portions of investment accounts) that the Water Island portfolio managers managed, as of January 31, 2012:
Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Alternative Strategies Fund | John S. Orrico, CFA | 4 RICs 1 PIV | $3.020 billion $4.5 million | 1 PIV ($4.5 million) | None | |||||
Gregory Loprete | 4 RICs 1 PIV | $3.020 billion $4.5 million | 1 PIV ($4.5 million) | None |
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Other Accounts Managed (excluding the Fund) | ||||||||||
Fund | Portfolio Manager | Number and Type | Approximate | Performance | Dollar | |||||
AP – Alternative Strategies Fund (cont’d) | Todd W. Munn | 4 RICs 1 PIV | $3.020 billion $4.5 million | 1 PIV ($4.5 million) | None | |||||
Roger P. Foltynowicz | 4 RICs 1 PIV | $3.020 billion $4.5 million | 1 PIV ($4.5 million) | None |
* | RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle. |
Portfolio Manager Compensation. The portfolio managers are compensated in various forms. The following table outlines the forms of compensation paid to the portfolio managers as of May 31, 2011.
Form of Compensation | Source of Compensation | Method Used to Determine Compensation | ||
Salary/Bonus (paid in cash) | Water Island | Each portfolio manager receives compensation that is a combination of salary and a bonus based on the profitability of Water Island. |
Water Island Portfolio Manager Conflicts of Interest. The fact that the portfolio managers serve as both portfolio managers of the Fund and the other account creates the potential for conflicts of interest. However, Water Island does not believe that their overlapping responsibilities or the various elements of their compensation present any material conflict of interest for the following reasons:
• | the Fund and the other account are similarly managed; |
• | Water Island follows strict and detailed written allocation procedures designed to allocate securities purchases and sales between the Funds and the other account in a fair and equitable manner; |
• | Water Island has adopted policies limiting the ability of the portfolio managers to cross trade securities between the Fund and other accounts; and |
• | all allocations are subject to review by Water Island’s chief compliance officer. |
Columbia Management Investment Advisers, LLC (which is also the Investment Manager) serves as Administrator of the Funds.
Services Provided
Pursuant to the terms of the Administrative Services Agreement, the Administrator has agreed to provide all of the services necessary for, or appropriate to, the business and effective operation of each Fund that are not (a) provided by employees or other agents engaged by each Fund or (b) required to be provided by any person pursuant to any other agreement or arrangement with each Fund.
Administration Fee Rates Paid by the Funds
The Administrator receives fees as compensation for its services, which are computed daily and paid monthly, as set forth in the Administrative Services Agreement, and as shown in the section entitled Primary Service Providers – The Administrator in each Fund’s prospectuses.
For U.S. Treasury Index Fund, pursuant to the Administrative Services Agreement, the Administrator, from the administration fee it receives from the Fund, pays all operating expenses of the Fund, except the fees and expenses of the Trustees who are not interested persons of the Administrator or its affiliates, brokerage fees and
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commissions, interest on borrowings and such extraordinary, non-recurring expenses as may arise, including litigation expenses. For the purposes of this arrangement, distribution and service fees and advisory fees are not considered operating expenses.
Ultra Short Term Bond Fund does not pay an administration fee under the Administration Services Agreement because payment for such services is included in the Unified Fee.
Administration Fees Paid by the Funds
The Administrator and the Previous Administrator received fees from the Funds for their services as reflected in the following charts, which show administration fees paid to and, as applicable, waived/reimbursed by the Administrator and the Previous Administrator, for the three most recently completed fiscal years, except as otherwise indicated.
Fund | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010* | |||||||||||||
Administrator | Previous Administrator | |||||||||||||||
Emerging Markets Fund | ||||||||||||||||
Administration Fee Paid | $ | 463,603 | $ | 754,797 | $ | 67,288 | $ | 615,027 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | $ | 734,739 | — | — | — | |||||||||||
Energy and Natural Resources Fund | ||||||||||||||||
Administration Fee Paid | $ | 519,521 | $ | 1,017,847 | $ | 91,320 | $ | 723,263 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Pacific/Asia Fund | ||||||||||||||||
Administration Fee Paid | $ | 161,661 | $ | 91,613 | $ | 6,102 | $ | 16,020 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Select Large Cap Growth Fund | ||||||||||||||||
Administration Fee Paid | $ | 3,883,788 | $ | 4,538,240 | $ | 290,519 | $ | 2,127,779 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Select Small Cap Fund | ||||||||||||||||
Administration Fee Paid | $ | 389,565 | $ | 767,770 | $ | 78,644 | $ | 767,139 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Value and Restructuring Fund | ||||||||||||||||
Administration Fee Paid | $ | 4,735,917 | $ | 8,730,995 | $ | 901,457 | $ | 9,398,359 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010** | ||||||||||||||||
Administrator | Previous Administrator | |||||||||||||||||||
Bond Fund | ||||||||||||||||||||
Administration Fee Paid | $ | 101,460 | $ | 1,355,768 | $ | 991,121 | $ | 76,515 | $ | 754,748 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | $ | 305,414 | $ | 3,837,935 | — | — | — |
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Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010** | ||||||||||||||||
Administrator | Previous Administrator | |||||||||||||||||||
Corporate Income Fund | ||||||||||||||||||||
Administration Fee Paid | $ | 76,982 | $ | 765,092 | $ | 632,598 | $ | 58,423 | $ | 675,315 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — | |||||||||||||||
Intermediate Bond Fund | ||||||||||||||||||||
Administration Fee Paid | $ | 173,468 | $ | 1,928,439 | $ | 2,894,923 | $ | 273,241 | $ | 3,164,565 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — | |||||||||||||||
U.S. Treasury Index Fund | ||||||||||||||||||||
Administration Fee Paid | $ | 105,899 | $ | 1,289,412 | $ | 1,057,810 | $ | 91,084 | $ | 1,122,055 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from April 1, 2012 to April 30, 2012. During the period, the fiscal year end of each Fund was changed from March 31 to April 30. |
** | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009** | ||||||||||||||||
Administrator | Previous Administrator | |||||||||||||||||||
Small Cap Value Fund I | ||||||||||||||||||||
Administration Fee Paid | $ | 1,080,277 | $ | 240,540 | — | — | — | |||||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
** | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fund | Fiscal Year Ended May 31, 2012 | Fiscal Year Ended May 31, 2011 | Fiscal Year Ended May 31, 2010 | |||||||||||||
Administrator | Previous Administrator | |||||||||||||||
High Yield Opportunity Fund | ||||||||||||||||
Administration Fee Paid | $ | 202,606 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
International Bond Fund | ||||||||||||||||
Administration Fee Paid | $ | 46,151 | $ | 10,565 | $ | 680 | $ | 6,325 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Strategic Income Fund | ||||||||||||||||
Administration Fee Paid | $ | 1,450,327 | $ | 101,296 | — | — | ||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
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Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009** | |||||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||||||
High Yield Municipal Fund | ||||||||||||||||||||
Administration Fee Paid | $ | 498,162 | $ | 827,759 | $ | 140,597 | $ | 637,176 | $ | 661,657 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
** | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Period Ended May 31, 2012* | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009** | |||||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||||||
Dividend Income Fund | ||||||||||||||||||||
Administration Fee Paid | $ | 1,613,728 | $ | 2,133,693 | $ | 646,899 | $ | 782,621 | $ | 836,788 | ||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — |
* | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
** | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Year Ended July 31, 2011 | Fiscal Year Ended July 31, 2010* | Fiscal Year Ended July 31, 2009*† | ||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||
Ultra Short Term Bond Fund | ||||||||||||||||
Administration Fee Paid | — | — | — | — | ||||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
* | Ultra Short Term Bond Fund commenced operations as of November 23, 2009. All fees shown are the fees paid by the Predecessor Ultra Short Term Bond Fund, a series of Columbia Funds Institutional Trust. |
† | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009* | ||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||
Balanced Fund | ||||||||||||||||
Administration Fee Paid | $ | 258,601 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Global Dividend Opportunity Fund | ||||||||||||||||
Administration Fee Paid | $ | 901,359 | $ | 382,478 | $ | 810,252 | $ | 1,058,644 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Greater China Fund | ||||||||||||||||
Administration Fee Paid | $ | 32,162 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
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Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009* | ||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||
Mid Cap Growth Fund | ||||||||||||||||
Administration Fee Paid | $ | 435,624 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | |||||||||||||
Amount Waived | — | — | — | |||||||||||||
Oregon Intermediate Municipal Bond Fund | ||||||||||||||||
Administration Fee Paid | $ | 51,335 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Small Cap Growth Fund I | ||||||||||||||||
Administration Fee Paid | $ | 499,433 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Technology Fund | ||||||||||||||||
Administration Fee Paid | — | — | — | — | ||||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009* | ||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||
Contrarian Core Fund | ||||||||||||||||
Administration Fee Paid | $ | 652,775 | $ | 154,593 | $ | 184,969 | $ | 201,987 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Large Cap Growth Fund | ||||||||||||||||
Administration Fee Paid | $ | 1,099,242 | $ | 252,993 | $ | 383,524 | $ | 555,279 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
Small Cap Core Fund | ||||||||||||||||
Administration Fee Paid | $ | 563,842 | $ | 170,200 | $ | 224,996 | $ | 302,523 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009* | |||||||||||||||
Fund | Fiscal Year Ended October 31, 2011 | Administrator | Previous Administrator | |||||||||||||
CA Tax-Exempt Fund | ||||||||||||||||
Administration Fee Paid | $ | 204,533 | N/A | N/A | N/A | |||||||||||
Amount Reimbursed | — | N/A | N/A | N/A | ||||||||||||
Amount Waived | — | N/A | N/A | N/A | ||||||||||||
CT Intermediate Municipal Bond Fund | ||||||||||||||||
Administration Fee Paid | $ | 152,251 | $ | 84,125 | $ | 81,058 | $ | 152,420 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
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Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009* | |||||||||||||||
Fund | Fiscal Year Ended October 31, 2011 | Administrator | Previous Administrator | |||||||||||||
CT Tax-Exempt Fund | ||||||||||||||||
Administration Fee Paid | $ | 40,619 | N/A | N/A | N/A | |||||||||||
Amount Reimbursed | — | N/A | N/A | N/A | ||||||||||||
Amount Waived | — | N/A | N/A | N/A | ||||||||||||
Intermediate Municipal Bond Fund | ||||||||||||||||
Administration Fee Paid | $ | 1,527,709 | $ | 844,085 | $ | 832,258 | $ | 1,638,608 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
MA Intermediate Municipal Bond Fund | ||||||||||||||||
Administration Fee Paid | $ | 241,327 | $ | 123,624 | $ | 117,887 | $ | 224,799 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
MA Tax-Exempt Fund | ||||||||||||||||
Administration Fee Paid | $ | 56,372 | N/A | N/A | N/A | |||||||||||
Amount Reimbursed | — | N/A | N/A | N/A | ||||||||||||
Amount Waived | — | N/A | N/A | N/A | ||||||||||||
NY Intermediate Municipal Bond Fund | ||||||||||||||||
Administration Fee Paid | $ | 207,519 | $ | 109,072 | $ | 106,504 | $ | 202,097 | ||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — | ||||||||||||
NY Tax-Exempt Fund | ||||||||||||||||
Administration Fee Paid | $ | 63,589 | N/A | N/A | N/A | |||||||||||
Amount Reimbursed | — | N/A | N/A | N/A | ||||||||||||
Amount Waived | — | N/A | N/A | N/A |
* | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009 | ||||||||||||||
Fund | Administrator | Previous Administrator | ||||||||||||||
Tax-Exempt Fund | ||||||||||||||||
Administration Fee Paid | $ | 1,621,818 | — | — | — | |||||||||||
Amount Reimbursed | — | — | — | — | ||||||||||||
Amount Waived | — | — | — | — |
Fund | Fiscal Year Ended December 31, 2011 | Fiscal Year Ended December 31, 2010 | Fiscal Period Ended December 31, 2009* | Fiscal Year Ended August 31, 2009* | ||||||||||||||||
Administrator | Previous Administrator | |||||||||||||||||||
Real Estate Equity Fund | ||||||||||||||||||||
Administration Fee Paid | $289,260 | — | — | — | — | |||||||||||||||
Amount Reimbursed | — | — | — | — | — | |||||||||||||||
Amount Waived | — | — | — | — | — |
* | All amounts were paid to or waived/reimbursed by the Previous Administrator. |
Pricing and Bookkeeping Services
Prior to August 8, 2011, State Street provided certain pricing and bookkeeping services to the Funds. The Administrator was responsible for overseeing the performance of these services and for certain other services.
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Services Provided
Effective December 15, 2006, the Trust entered into a Financial Reporting Services Agreement with State Street and the Previous Adviser (the Financial Reporting Services Agreement) pursuant to which State Street provided financial reporting services to the Funds. Also effective December 15, 2006, the Trust entered into an Accounting Services Agreement with State Street and the Previous Adviser (collectively with the Financial Reporting Services Agreement, the State Street Agreements) pursuant to which State Street provided accounting services to the Funds. Effective May 1, 2010, the State Street Agreements were amended to, among other things, assign and delegate the Previous Adviser’s rights and obligations under the State Street Agreements to the Administrator. Under the State Street Agreements, each Fund (other than Ultra Short Term Bond Fund) paid State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee for a Fund during any year did not exceed $140,000 annually (exclusive of out-of-pocket expenses and charges). Each Fund (other than Ultra Short Term Bond Fund) also reimbursed State Street for certain out-of-pocket expenses and charges. Ultra Short Term Bond Fund did not pay any separate fees for services rendered under the State Street Agreements; the fees for pricing and bookkeeping services incurred by Ultra Short Term Bond Fund were paid by the Investment Manager as part of the Unified Fee. The State Street Agreements were terminated on August 8, 2011.
From December 15, 2006 through May 1, 2010, the Trust was party to a Pricing and Bookkeeping Oversight and Services Agreement (the Services Agreement) with the Previous Adviser. Under the Services Agreement, the Previous Adviser provided services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provided oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, each Fund reimbursed the Previous Adviser for out-of-pocket expenses and charges, including fees payable to third parties, such as for pricing the Funds’ portfolio securities, incurred by the Previous Adviser in the performance of services under the Services Agreement. Prior to January 1, 2008, the Funds also reimbursed the Previous Adviser for accounting oversight services and services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002. Effective May 1, 2010, the services previously provided by the Previous Adviser under the Services Agreement began to be provided by the Administrator under the Administrative Services Agreement, and the Services Agreement was terminated. Under the Administrative Services Agreement, fees for pricing and bookkeeping services incurred by U.S. Treasury Index Fund were paid by the Administrator.
Prior to December 15, 2006, the Previous Adviser was responsible for providing pricing and bookkeeping services, to the Funds operating at the time, under a pricing and bookkeeping agreement and was entitled to receive an annual fee at the same rate described above under the State Street Agreements. Under separate agreements between the Previous Adviser and State Street, the Previous Adviser delegated certain functions to State Street. As a result of the delegation, the total fees payable under the pricing and bookkeeping agreement were paid to State Street. The Funds also reimbursed the Previous Adviser for out-of-pocket expenses and charges, including fees payable to third parties for pricing the Funds’ portfolio securities and direct internal costs incurred by the Previous Adviser in connection with providing fund accounting oversight and monitoring and certain other services.
Pricing and Bookkeeping Fees Paid by the Funds
State Street received fees from the Funds for its services as reflected in the following charts, which show the net pricing and bookkeeping fees paid to State Street for the three most recently completed fiscal years, except as otherwise indicated. Effective during 2011, these services began to be provided under the Administrative Services Agreement.
Fund | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | |||||||||
Emerging Markets Fund | ||||||||||||
Amount Paid to State Street | $ | 38,036 | $ | 112,330 | $ | 103,288 | ||||||
Energy and Natural Resources Fund | ||||||||||||
Amount Paid to State Street | $ | 11,820 | $ | 140,428 | $ | 123,403 |
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Fund | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | |||||||||
Pacific/Asia Fund | ||||||||||||
Amount Paid to State Street | $ | 11,950 | $ | 57,651 | $ | 53,504 | ||||||
Select Large Cap Growth Fund | ||||||||||||
Amount Paid to State Street | $ | 46,858 | $ | 140,717 | $ | 140,511 | ||||||
Select Small Cap Fund | ||||||||||||
Amount Paid to State Street | $ | 33,384 | $ | 123,468 | $ | 115,064 | ||||||
Value and Restructuring Fund | ||||||||||||
Amount Paid to State Street | $ | 48,156 | $ | 144,761 | $ | 143,767 |
Fund | Fiscal Period Ended April 30, 2012** | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | ||||||||||||
Bond Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 29,937 | $ | 165,521 | $ | 149,216 | |||||||||
Corporate Income Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 37,889 | $ | 160,650 | $ | 158,268 | |||||||||
Intermediate Bond Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 44,820 | $ | 191,945 | $ | 189,677 | |||||||||
U.S. Treasury Index Fund* | ||||||||||||||||
Amount Paid to State Street | — | — | — | — |
* | Under the Administrative Services Agreement, fees for pricing and bookkeeping services incurred by U.S. Treasury Index Fund were paid by the Administrator. |
** | For the period from April 1, 2012 to April 30, 2012. During the period, the fiscal year end of each Fund was changed from March 31 to April 30. |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009 | ||||||||||||
Small Cap Value Fund I | ||||||||||||||||
Amount Paid to State Street | — | $ | 107,487 | $ | 146,364 | $ | 145,161 |
* | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
Fund | Fiscal Year Ended May 31, 2012 | Fiscal Year Ended May 31, 2011 | Fiscal Year Ended May 31, 2010 | |||||||||
High Yield Opportunity Fund | ||||||||||||
Amount Paid to State Street | $ | 7,332 | $ | 111,434 | $ | 113,154 | ||||||
International Bond Fund | ||||||||||||
Amount Paid to State Street | $ | 3,373 | $ | 50,767 | $ | 46,735 | ||||||
Strategic Income Fund | ||||||||||||
Amount Paid to State Street | — | $ | 181,794 | $ | 193,287 |
Fund | Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009 | ||||||||||||
High Yield Municipal Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 166,025 | $ | 192,931 | $ | 180,290 |
* | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
Fund | Fiscal Period Ended May 31, 2012* | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009 | ||||||||||||
Dividend Income Fund | ||||||||||||||||
Amount Paid to State Street | — | $ | 108,964 | $ | 141,503 | $ | 141,429 |
* | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
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Fund | Fiscal Year Ended July 31, 2011 | Fiscal Year Ended July 31, 2010 | Fiscal Year Ended July 31, 2009 | |||||||||
Ultra Short Term Bond Fund | ||||||||||||
Amount Paid to State Street | — | — | — |
Fund | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009 | |||||||||
Balanced Fund | ||||||||||||
Amount Paid to State Street | $ | 61,783 | $ | 97,492 | $ | 80,304 | ||||||
Global Dividend Opportunity Fund | ||||||||||||
Amount Paid to State Street | $ | 124,817 | $ | 147,864 | $ | 143,423 | ||||||
Greater China Fund | ||||||||||||
Amount Paid to State Street | $ | 78,553 | $ | 86,509 | $ | 73,816 | ||||||
Mid Cap Growth Fund | ||||||||||||
Amount Paid to State Street | $ | 81,856 | $ | 145,095 | $ | 145,117 | ||||||
Oregon Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid to State Street | $ | 100,389 | $ | 146,534 | $ | 128,479 | ||||||
Small Cap Growth Fund I | ||||||||||||
Amount Paid to State Street | $ | 117,915 | $ | 145,808 | $ | 97,227 | ||||||
Technology Fund | ||||||||||||
Amount Paid to State Street | $ | 45,971 | $ | 84,839 | $ | 77,395 |
Fund | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009 | |||||||||
Contrarian Core Fund | ||||||||||||
Amount Paid to State Street | $ | 55,983 | $ | 115,837 | $ | 83,251 | ||||||
Large Cap Growth Fund | ||||||||||||
Amount Paid to State Street | $ | 68,328 | $ | 141,553 | $ | 141,538 | ||||||
Small Cap Core Fund | ||||||||||||
Amount Paid to State Street | $ | 108,034 | $ | 130,787 | $ | 104,080 |
Fund | Fiscal Year Ended October 31, 2011 | Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009 | |||||||||
CA Tax-Exempt Fund | ||||||||||||
Amount Paid to State Street | $ | 61,310 | $ | 119,982 | $ | 124,648 | ||||||
CT Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid to State Street | $ | 47,163 | $ | 94,726 | $ | 92,354 | ||||||
CT Tax-Exempt Fund | ||||||||||||
Amount Paid to State Street | $ | 32,812 | $ | 62,330 | $ | 61,643 | ||||||
Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid to State Street | $ | 107,575 | $ | 202,351 | $ | 225,008 | ||||||
MA Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid to State Street | $ | 61,320 | $ | 114,829 | $ | 110,446 | ||||||
MA Tax-Exempt Fund | ||||||||||||
Amount Paid to State Street | $ | 36,635 | $ | 68,202 | $ | 67,579 | ||||||
NY Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid to State Street | $ | 56,864 | $ | 107,342 | $ | 105,046 | ||||||
NY Tax-Exempt Fund | ||||||||||||
Amount Paid to State Street | $ | 30,397 | $ | 56,620 | $ | 56,413 |
Fund | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009 | |||||||||
Tax-Exempt Fund | ||||||||||||
Amount Paid to State Street | $ | 86,802 | $ | 196,542 | $ | 202,126 |
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Fund | Fiscal Year Ended December 31, 2011 | Fiscal Year Ended December 31, 2010 | Fiscal Period Ended December 31, 2009 | Fiscal Year Ended August 31, 2009 | ||||||||||||
Real Estate Equity Fund | ||||||||||||||||
Amount Paid to State Street | $ | 21,361 | $ | 94,050 | $ | 27,743 | $ | 74,509 |
The Principal Underwriter/Distributor
Columbia Management Investment Distributors, Inc. (the Distributor) serves as the principal underwriter and distributor for the continuous offering of shares of the Funds pursuant to the Distribution Agreement. The Distribution Agreement obligates the Distributor to use appropriate efforts to find purchasers for the shares of the Funds. The Distributor’s address is: 225 Franklin Street, Boston, MA 02110.
Distribution Obligations
Pursuant to the Distribution Agreement, the Distributor, as agent, sells shares of the Funds on a continuous basis and transmits purchase and redemption orders that it receives to the Trust or the Transfer Agent, or their designated agents. Additionally, the Distributor has agreed to use appropriate efforts to solicit orders for the sale of shares and to undertake advertising and promotion as it believes appropriate in connection with such solicitation. Pursuant to the Distribution Agreement, the Distributor, at its own expense, finances those activities which are primarily intended to result in the sale of shares of the Funds, including, but not limited to, advertising, compensation of underwriters, dealers and sales personnel, the printing and mailing of prospectuses to other than existing shareholders, and the printing and mailing of sales literature. The Distributor, however, may be compensated or reimbursed for all or a portion of such expenses to the extent permitted by a Distribution Plan adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act. See Investment Advisory and Other Services – Distribution and Servicing Plans for more information about the share classes for which the Trust has adopted a Distribution Plan.
See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information about conflicts of interest, including those that relate to the Investment Manager and its affiliates.
The Distribution Agreement became effective with respect to each Fund after approval by the Board, and, after an initial two-year period, continues from year to year, provided that such continuation of the Distribution
Agreement is specifically approved at least annually by the Board. The Distribution Agreement terminates automatically in the event of its assignment, and is terminable with respect to each Fund at any time without penalty by the Trust (by vote of the Board or by vote of a majority of the outstanding voting securities of the Fund) or by the Distributor on 60 days’ written notice.
Underwriting Commissions Paid by the Funds
The Distributor and the Previous Distributor received commissions and other compensation for their services as reflected in the following charts, which show amounts paid to the Distributor and the Previous Distributor, as well as amounts the Distributor and Previous Distributor retained, after paying commissions and other expenses, for the three most recently completed fiscal years, except as otherwise indicated. The Distributor does not charge any fees or commissions to Ultra Short Term Bond Fund or its shareholders for the sale of shares of Ultra Short Term Bond Fund.
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Fund | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010* | |||||||||||||
Distributor | Previous Distributor | |||||||||||||||
Emerging Markets Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 49,385 | $ | 60,093 | $ | 6,426 | $ | 71,380 | ||||||||
Amount Retained | ||||||||||||||||
Class A Shares | $ | 49,492 | $9,645** | $ | 11,618 | |||||||||||
Class C Shares | $ | 667 | $1,767** | $ | 134 | |||||||||||
Energy and Natural Resources Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 164,279 | $ | 225,683 | $ | 25,646 | $ | 367,133 | ||||||||
Amount Retained | ||||||||||||||||
Class A Shares | $ | 231,804 | $31,630** | $ | 55,189 | |||||||||||
Class C Shares | $ | 5,419 | $5,798** | $ | 4,646 | |||||||||||
Pacific/Asia Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 9,127 | $ | 10,384 | — | $ | 4,028 | |||||||||
Amount Retained | ||||||||||||||||
Class A Shares | $ | 9,127 | $1,425** | $ | 576 | |||||||||||
Class C Shares | — | — | $ | 28 | ||||||||||||
Select Large Cap Growth Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 910,993 | $ | 216,737 | $ | 4,075 | $ | 72,757 | ||||||||
Amount Retained | ||||||||||||||||
Class A Shares | $ | 916,316 | $31,070** | $ | 11,067 | |||||||||||
Class C Shares | $ | 15,120 | $1,148** | $ | 1,504 | |||||||||||
Select Small Cap Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 4,003.51 | $ | 6,363 | $ | 285 | $ | 12,180 | ||||||||
Amount Retained | ||||||||||||||||
Class A Shares | $ | 4,004 | $915** | $ | 1,693 | |||||||||||
Class C Shares | $ | 15 | $328** | $ | 205 | |||||||||||
Value and Restructuring Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Shares | $ | 56,489.51 | $ | 122,036 | $ | 26,083 | $ | 323,994 | ||||||||
Amount Retained | ||||||||||||||||
Class A Shares | $ | 56,508 | $21,306** | �� | $ | 54,926 | ||||||||||
Class C Shares | $ | 9,633 | $15,522** | $ | 22,254 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
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Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010** | |||||||||||||||||
Fund | Distributor | Previous Distributor | ||||||||||||||||||
Bond Fund | ||||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 7,388 | $ | 96.85 | $ | 66,056 | $ | 5,990 | $ | 87,653 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Shares | $ | 7,388 | $ | 60,977 | $9,358** | $ | 10,847 | |||||||||||||
Class B Shares | $ | 466 | $ | 3,874 | ||||||||||||||||
Class C Shares | — | $ | 699 | $1,122** | $ | 813 | ||||||||||||||
Class T Shares | $ | 279 | $ | 97 | — | N/A | ||||||||||||||
Corporate Income Fund | ||||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 19,406 | $ | 210,655 | $ | 89,839 | $ | 6,640 | $ | 76,987 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Shares | $ | 19,406 | $ | 210,649 | $12,826** | $ | 8,679 | |||||||||||||
Class B Shares | $ | 707 | $ | 2,816 | $2,559** | $ | 6,890 | |||||||||||||
Class C Shares | $ | 10 | $ | 2,321 | $201** | $ | 1,744 | |||||||||||||
Intermediate Bond Fund | ||||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 7,832 | $ | 107,163.96 | $ | 93,150 | $ | 6,735 | $ | 100,659 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Shares | $ | 7,832 | $ | 107,219 | $12,171** | $ | 9,832 | |||||||||||||
Class B Shares | $ | 79 | $ | 3,018 | $7,332** | $ | 20,653 | |||||||||||||
Class C Shares | $ | 506 | $ | 3,013 | $4,018** | $ | 3,191 | |||||||||||||
U.S. Treasury Index Fund | ||||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 310 | $ | 43,610 | $ | 23,745 | $ | 5,074 | $ | 83,413 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Shares | $ | 310 | $ | 43,610 | $3,598*** | $ | 9,858 | |||||||||||||
Class B Shares | $ | 1,099 | $ | 4,420 | $8,221*** | $ | 20,761 | |||||||||||||
Class C Shares | $ | 390 | $ | 454 | $3,262*** | $ | 45,774 |
* | For the period from April 1, 2012 to April 30, 2012. During the period, the fiscal year end of each Fund was changed from March 31 to April 30. |
** | All amounts were paid to or retained by the Previous Distributor. |
*** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009** | ||||||||||||||
Distributor | Previous Distributor | |||||||||||||||||
Small Cap Value Fund I | ||||||||||||||||||
Amount Paid | ||||||||||||||||||
Class A Shares | $ | 33,502 | $ | 48,755 | $ | 26,259 | $ | 154,679 | $253,305 | |||||||||
Amount Retained | ||||||||||||||||||
Class A Shares | $ | 35,171 | $ | 315,838 | $28,705*** | $40,492 (underwriting discount) $519 (CDSC) | ||||||||||||
Class B Shares | $ | 8,246 | $ | 19,950 | $36,729*** | $69,591 | ||||||||||||
Class C Shares | $ | 673 | $ | 3,509 | $5,331*** | $813 |
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* | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
** | All amounts were paid to or retained by the Previous Distributor. |
*** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Fiscal Year Ended May 31, 2012 | Fiscal Year Ended May 31, 2011 | Fiscal Year Ended May 31, 2010 | ||||||||||||||
Fund | Distributor | Previous Distributor | ||||||||||||||
High Yield Opportunity Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A shares | $ | 72,800 | $ | 91,601 | $ | 2,214 | $ | 102,312 | ||||||||
Amount Retained | ||||||||||||||||
Class A shares | $ 72,939 | $11,550 | $12,953* | |||||||||||||
Class B shares | $ 5,889 | $ 7,686 | $12,197* | |||||||||||||
Class C shares | $ 433 | $ 150 | $1,882* | |||||||||||||
International Bond Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A shares | $ | 14,391 | $ | 7,778 | $ | 532 | $ | 7,025 | ||||||||
Amount Retained | ||||||||||||||||
Class A shares | $ | 16,071 | $ | 1,205 | $ 869* | |||||||||||
Class C shares | $ | 64 | — | $ 4* | ||||||||||||
Strategic Income Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A shares | $ | 1,379,650 | $ | 618,447 | $ | 62,252 | $ | 1,393,488 | ||||||||
Amount Retained | ||||||||||||||||
Class A shares | $1,735,829 | $ 83,447 | $212,105* | |||||||||||||
Class B shares | $ 39,178 | $ 71,922 | $112,534* | |||||||||||||
Class C shares | $ 15,293 | $ 15,383 | $ 55,451* |
* | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009*** | |||||||||||||||
Fund | Distributor | Previous Distributor | ||||||||||||||||
High Yield Municipal Fund | ||||||||||||||||||
Amount Paid | ||||||||||||||||||
Class A Shares | $ | 187,563 | $ | 94,557 | $ | 14,851 | $ | 76,842 | $62,416 | |||||||||
Amount Retained | ||||||||||||||||||
Class A Shares | $ | 187,563 | $ | 86,418 | $10,473** | $7,933 (underwriting | ||||||||||||
Class B Shares | $ | 470 | $ | 5,146 | $8,610** | $16,011 | ||||||||||||
Class C Shares | $ | 1,292 | $ | 2,768 | $2,743** | $736 |
* | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
*** | All amounts were paid to or retained by the Previous Distributor. |
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Fiscal Period Ended May 31, 2012* | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009*** | |||||||||||||||||
Fund | Distributor | Previous Distributor | ||||||||||||||||||
Dividend Income Fund | ||||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A Shares | $ | 1,566,959 | $ | 2,058,788 | $ | 461,110 | $ | 580,873 | $ | 803,682 | ||||||||||
Class T Shares | $ | 2,396 | $ | 3,067 | $ | 2,301 | $ | 3,912 | $ | 6,141 | ||||||||||
Amount Retained | ||||||||||||||||||||
Class A Shares | $ | 1,566,770 | $ | 2,060,727 | $164,846** | $ | 125,322 | |||||||||||||
Class B Shares | $ | 9,536 | $ | 33,302 | $24,617** | $ | 39,378 | |||||||||||||
Class C Shares | $ | 23,106 | $ | 19,863 | $19,053** | $ | 5,857 | |||||||||||||
Class T Shares | $ | 2,396 | $ | 1,671 | $690** | $ | 930 |
* | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
** | A portion of the amount shown was retained by the Distributor and the previous Distributor |
*** | All amounts were paid to or retained by the Previous Distributor. |
Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009* | ||||||||||
Fund | Distributor | Previous Distributor | ||||||||||
Balanced Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 618,495 | $207,936 | $337,368 | $ | 134,794 | ||||||
Amount Retained | ||||||||||||
Class A shares | $ | 708,040 | $81,893** | $ | 19,807 | |||||||
Class B shares | $ | 6,935 | $10,629** | $ | 9,543 | |||||||
Class C shares | $ | 6,750 | $7,621** | $ | 423 | |||||||
Global Dividend Opportunity Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 76,025 | $16,138 | $42,407 | $ | 76,883 | ||||||
Amount Retained | ||||||||||||
Class A shares | $ | 76,548 | $8,700** | $ | 12,250 | |||||||
Class B shares | $ | 9,175 | $29,424** | $ | 70,039 | |||||||
Class C shares | $ | 1,209 | $2,257** | $ | 2,303 | |||||||
Greater China Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 167,296 | $56,938 | $249,112 | $ | 320,610 | ||||||
Amount Retained | ||||||||||||
Class A shares | $ | 167,330 | $43,504** | $ | 48,045 | |||||||
Class B shares | $ | 14,795 | $33,525** | $ | 48,758 | |||||||
Class C shares | $ | 5,229 | $15,024** | $ | 20,840 | |||||||
Oregon Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 78,801 | $27,614 | $32,775 | $ | 53,290 | ||||||
Amount Retained | ||||||||||||
Class A shares | $ | 78,801 | $6,342** | $ | 5,749 | |||||||
Class B shares | $ | 1,453 | $99** | $ | 839 | |||||||
Class C shares | $ | 4,930 | $2,134** | $ | 3,336 |
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Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009* | ||||||||||
Fund | Distributor | Previous Distributor | ||||||||||
Mid Cap Growth Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 179,957 | $19,121 | $32,841 | $ | 51,601 | ||||||
Class T shares | $ | 64.66 | $156 | $372 | $ | 917 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 180,981 | $7,346** | $ | 7,987 | |||||||
Class B Retained | $ | 5,021 | $4,870** | $ | 9,579 | |||||||
Class C Retained | $ | 8,468 | $1,021** | $ | 1,459 | |||||||
Class T Retained | $ | 17 | $61** | — | ||||||||
Small Cap Growth Fund I | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 111,874 | $27,242 | $55,837 | $ | 101,052 | ||||||
Amount Retained | ||||||||||||
Class A shares | $ | 111,563 | $11,901** | $ | 17,113 | |||||||
Class B shares | $ | 3,117 | $5,690** | $ | 4,599 | |||||||
Class C shares | $ | 1,301 | $2,854** | $ | 13,038 | |||||||
Technology Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A shares | $ | 109,950 | $24,387 | $97,189 | $ | 103,563 | ||||||
Amount Retained | ||||||||||||
Class A shares | $ | 109,995 | $18,007** | $ | 23,181 | |||||||
Class B shares | $ | 16,836 | $19,027** | $ | 45,466 | |||||||
Class C shares | $ | 773 | $3,446** | $ | 14,176 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Fund | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009* | |||||||||||||
Distributor | Previous Distributor | |||||||||||||||
Contrarian Core Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A shares | $ | 339,489 | $ | 137,976 | $ | 181,656 | $ | 86,071 | ||||||||
Class T shares | $ | 16,898 | $ | 4,739 | $ | 10,074 | $ | 12,088 | ||||||||
Amount Retained | ||||||||||||||||
Class A shares | $ | 454,859 | $47,600** | $ | 12,921 | |||||||||||
Class B shares | $ | 14,090 | $3,157** | $ | 4,070 | |||||||||||
Class C shares | $ | 4,425 | $4,090** | $ | 442 | |||||||||||
Class T shares | $ | 11,309 | $1,978** | $ | 1,659 |
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Fund | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009* | |||||||||||||
Distributor | Previous Distributor | |||||||||||||||
Large Cap Growth Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A shares | $ | 105,205 | $ | 22,715 | $ | 49,723 | $ | 74,526 | ||||||||
Class E shares | $ | 990 | $ | 126 | $ | 657 | — | |||||||||
Class T shares | $ | 27,359 | $ | 13,444 | $ | 26,823 | $ | 41,614 | ||||||||
Amount Retained | ||||||||||||||||
Class A shares | $ | 389,500 | $10,904** | $ | 18,305 | |||||||||||
Class B shares | $ | 32,947 | $19,269** | $ | 33,744 | |||||||||||
Class C shares | $ | 1,778 | $1,872** | $ | 2,549 | |||||||||||
Class E shares | $ | 833 | $686** | $ | 87 | |||||||||||
Class F shares | N/A | N/A | N/A | |||||||||||||
Class T shares | $ | 16,016 | $4,898** | $ | 5,524 | |||||||||||
Small Cap Core Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A shares | $ | 162,671 | $ | 48,856 | $ | 76,255 | $ | 65,118 | ||||||||
Class T shares | $ | 9,681 | $ | 3,429 | $ | 7,144 | $ | 10,735 | ||||||||
Amount Retained | ||||||||||||||||
Class A shares | $ | 162,736 | $2,131** | $ | 9,774 | |||||||||||
Class B shares | $ | 593 | $1,251** | $ | 20,617 | |||||||||||
Class C shares | $ | 1,576 | — | $ | 100 | |||||||||||
Class T shares | $ | 5,871 | — | $ | 1,442 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Fund | Fiscal Year Ended October 31, 2011 | Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009* | |||||||||
Distributor | Previous Distributor | |||||||||||
CA Tax-Exempt Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 85,782 | $89,783 | $44,249 | $ | 228,370 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 102,429 | $17,544** | $ | 101,612 | |||||||
Class B Retained | $ | 379 | $1,225** | $ | 6,819 | |||||||
Class C Retained | $ | 1,501 | $2,890** | $ | 11,765 | |||||||
CT Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 9,598 | $5,855 | $3,126 | $ | 20,003 | ||||||
Class T Paid | — | $45 | $59 | $ | 166 | |||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 9,598 | $1,256** | $ | 18,809 | |||||||
Class B Retained | $ | 76 | $219** | $ | 4,348 | |||||||
Class C Retained | — | $370** | $ | 24 | ||||||||
Class T Retained | — | $16** | $ | 22 | ||||||||
CT Tax-Exempt Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 56,626 | $40,637 | $24,221 | $ | 81,306 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 56,626 | $7,682** | $ | 10,073 | |||||||
Class B Retained | $ | 1,768 | $893** | $ | 5,835 | |||||||
Class C Retained | $ | 204 | $212** | $ | 168 |
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Fund | Fiscal Year Ended October 31, 2011 | Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009* | |||||||||
Distributor | Previous Distributor | |||||||||||
Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 46,383 | $43,435 | $41,026 | $ | 73,980 | ||||||
Class T Paid | $ | 672 | $38 | $79 | $ | 159 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 82,794 | $8,703** | $ | 7,431 | |||||||
Class B Retained | $ | 1,510 | $1,024** | $ | 3,507 | |||||||
Class C Retained | $ | 5,457 | $2,987** | $ | 3,169 | |||||||
Class T Retained | $ | 648 | $13** | $ | 19 | |||||||
MA Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 25,139 | $9,795 | $12,516 | $ | 31,161 | ||||||
Class T Paid | $ | 811 | $2,089 | $1,583 | $ | 1,290 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 25,139 | $4,882** | $ | 27,552 | |||||||
Class B Retained | $ | 525 | $18** | $ | 1,002 | |||||||
Class C Retained | $ | 742 | $1,972** | $ | 1,024 | |||||||
Class T Retained | $ | 811 | $656** | $ | 192 | |||||||
MA Tax-Exempt Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 60,632 | $72,268 | $44,861 | $ | 81,633 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 59,801 | $23,256** | $ | 10,514 | |||||||
Class B Retained | $ | 109 | $3,668** | $ | 6,014 | |||||||
Class C Retained | $ | 433 | $4,220** | $ | 742 | |||||||
NY Intermediate Municipal Bond Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 33,089 | $12,335 | $13,731 | $ | 36,174 | ||||||
Class T Paid | $ | 29 | $25 | $38 | $ | 131 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 33,089 | $2,295** | $ | 3,369 | |||||||
Class B Retained | $ | 623 | $150** | $ | 1,620 | |||||||
Class C Retained | $ | 1,414 | $5,130** | $ | 1,018 | |||||||
Class T Retained | $ | 19 | $77** | $ | 17 | |||||||
NY Tax-Exempt Fund | ||||||||||||
Amount Paid | ||||||||||||
Class A Paid | $ | 76,170 | $67,590 | $36,017 | $ | 68,365 | ||||||
Amount Retained | ||||||||||||
Class A Retained | $ | 83,061 | $29,350** | $ | 8,410 | |||||||
Class B Retained | $ | 1,002 | $3,080** | $ | 2,394 | |||||||
Class C Retained | $ | 946 | $100** | $ | 453 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
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Fund | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009* | |||||||||||||
Distributor | Previous Distributor | |||||||||||||||
Tax-Exempt Fund | ||||||||||||||||
Amount Paid | ||||||||||||||||
Class A Paid | $ | 608,257 | $ | 391,049 | $ | 276,186 | $ | 617,256 | ||||||||
Amount Retained | ||||||||||||||||
Class A Retained | $ | 1,010,865 | $85,745** | $ | 75,800 | |||||||||||
Class B Retained | $ | 5,332 | $5,696** | $ | 12,162 | |||||||||||
Class C Retained | $ | 6,965 | $2,737** | $ | 6,371 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Fund | Fiscal Year Ended December 31, 2011 | Fiscal Year Ended December 31, 2010 | Fiscal Period Ended December 31, 2009* | Fiscal Year Ended August 31, 2009 | ||||||||||||||||
Distributor | Previous Distributor | |||||||||||||||||||
Real Estate Equity Fund | ||||||||||||||||||||
Amount Paid | ||||||||||||||||||||
Class A shares | $ | 63,563 | $14,895.88 | $4,186.53 | $ | 19,596 | $ | 27,222 | ||||||||||||
Amount Retained | ||||||||||||||||||||
Class A shares | $ | 102,309 | $3,047** | $ | 3,518 | $ | 5,864 | |||||||||||||
Class B shares | $ | 3,425 | $4,665** | $ | 2,585 | $ | 6,730 | |||||||||||||
Class C shares | $ | 683 | $226** | $ | 431 | $ | 1,207 |
* | All amounts were paid to or retained by the Previous Distributor. |
** | A portion of the amount shown was retained by the Distributor and the Previous Distributor. |
Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest
As described above in the Investment Advisory and Other Services section of this SAI, and in the Management of the Fund – Primary Service Providers section of each Fund’s prospectuses, the Investment Manager, Administrator, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, receive compensation from the Funds for the various services they provide to the Funds. Additional information as to the specific terms regarding such compensation is set forth in these affiliated service providers’ contracts with the Funds, each of which typically is included as an exhibit to Part C of each Fund’s registration statement.
In many instances, the compensation paid to the Investment Manager and other Ameriprise Financial affiliates for the services they provide to the Funds is based, in some manner, on the size of the Funds’ assets under management. As the size of the Funds’ assets under management grows, so does the amount of compensation paid to the Investment Manager and other Ameriprise Financial affiliates for providing services to the Funds. This relationship between Fund assets and affiliated service provider compensation may create economic and other conflicts of interests of which Fund investors should be aware. These potential conflicts of interest, as well as additional ones, are discussed in detail below and also are addressed in other disclosure materials, including the Funds’ prospectuses. These conflicts of interest also are highlighted in account documentation and other disclosure materials of Ameriprise Financial affiliates that make available or offer the Columbia Funds as investments in connection with their respective products and services. In addition, Part 1A of the Investment Manager’s Form ADV, which it must file with the SEC as an investment adviser registered under the Investment Advisers Act of 1940, provides information about the Investment Manager’s business, assets under management, affiliates and potential conflicts of interest. Part 1A of the Investment Manager’s Form ADV is available online through the SEC’s website at www.adviserinfo.sec.gov.
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Additional actual or potential conflicts of interest and certain investment activity limitations that could affect the Funds may arise from the financial services activities of Ameriprise Financial and its affiliates, including, for example, the investment advisory/management services provided for clients and customers other than the Funds. In this regard, Ameriprise Financial is a major financial services company. Ameriprise Financial and its affiliates are engaged in a wide range of financial activities beyond the mutual fund-related activities of the Investment Manager, including, among others, broker-dealer (sales and trading), asset management, insurance and other financial activities. The broad range of financial services activities of Ameriprise Financial and its affiliates may involve multiple advisory, transactional, lending, financial and other interests in securities and other instruments, and in companies, that may be bought, sold or held by the Funds. The following describes certain actual and potential conflicts of interest that may be presented.
Actual and Potential Conflicts of Interest Related to the Investment Advisory/Management Activities of Ameriprise Financial and its Affiliates in Connection With Other Advised/Managed Funds and Accounts
The Investment Manager and other affiliates of Ameriprise Financial may advise or manage funds and accounts other than the Funds. In this regard, Ameriprise Financial and its affiliates may provide investment advisory/management and other services to other advised/managed funds and accounts that are similar to those provided to the Funds. The Investment Manager and Ameriprise Financial’s other investment adviser affiliates (including, for example, Columbia Wanger Asset Management, LLC) will give advice to and make decisions for all advised/managed funds and accounts, including the Funds, as they believe to be in that fund’s and/or account’s best interests, consistent with their fiduciary duties. The Funds and the other advised/managed funds and accounts of Ameriprise Financial and its affiliates are separately and potentially divergently managed, and there is no assurance that any investment advice Ameriprise Financial and its affiliates give to other advised/managed funds and accounts will also be given simultaneously or otherwise to the Funds.
A variety of other actual and potential conflicts of interest may arise from the advisory relationships of the Investment Manager and other Ameriprise Financial affiliates with other clients and customers. Advice given to the Funds and/or investment decisions made for the Funds by the Investment Manager or other Ameriprise Financial affiliates may differ from, or may conflict with, advice given to and/or investment decisions made for other advised/managed funds and accounts. As a result, the performance of the Funds may differ from the performance of other funds or accounts advised/managed by the Investment Manager or other Ameriprise Financial affiliates. Similarly, a position taken by Ameriprise Financial and its affiliates, including the Investment Manager, on behalf of other funds or accounts may be contrary to a position taken on behalf of the Funds. Moreover, Ameriprise Financial and its affiliates, including the Investment Manager, may take a position on behalf of other advised/managed funds and accounts, or for their own proprietary accounts, that is adverse to companies or other issuers in which the Funds are invested. For example, the Funds may hold equity securities of a company while another advised/managed fund or account may hold debt securities of the same company. If the portfolio company were to experience financial difficulties, it might be in the best interest of the Funds for the company to reorganize while the interests of the other advised/managed fund or account might be better served by the liquidation of the company. This type of conflict of interest could arise as the result of circumstances that cannot be generally foreseen within the broad range of investment advisory/management activities in which Ameriprise Financial and its affiliates engage.
Investment transactions made on behalf of other funds or accounts advised/managed by the Investment Manager or other Ameriprise Financial affiliates also may have a negative effect on the value, price or investment strategies of the Funds. For example, this could occur if another advised/managed fund or account implements an investment decision ahead of, or at the same time as, the Funds and causes the Funds to experience less favorable trading results than they otherwise would have experienced based on market liquidity factors. In addition, the other funds and accounts advised/managed by the Investment Manager and other Ameriprise Financial affiliates, including the other Columbia Funds, may have the same or very similar investment objective and strategies as the Funds. In this situation, the allocation of, and competition for, investment opportunities among the Funds and other funds and/or accounts advised/managed by the Investment
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Manager or other Ameriprise Financial affiliates may create conflicts of interest especially where, for example, limited investment availability is involved. The Investment Manager has adopted policies and procedures addressing the allocation of investment opportunities among the Funds and other funds and accounts advised by the Investment Manager and other affiliates of Ameriprise Financial. For more information, see Investment Advisory and Other Services – The Investment Manager and Investment Advisory Services – Portfolio Manager(s) – The Investment Manager’s Portfolio Managers and Potential Conflicts of Interests.
Sharing of Information among Advised/Managed Accounts
Ameriprise Financial and its affiliates also may possess information that could be material to the management of a Fund and may not be able to, or may determine not to, share that information with the Fund, even though the information might be beneficial to the Fund. This information may include actual knowledge regarding the particular investments and transactions of other advised/managed funds and accounts, as well as proprietary investment, trading and other market research, analytical and technical models, and new investment techniques, strategies and opportunities. Depending on the context, Ameriprise Financial and its affiliates generally will have no obligation to share any such information with the Funds. In general, employees of Ameriprise Financial and its affiliates, including the portfolio managers of the Investment Manager, will make investment decisions without regard to information otherwise known by other employees of Ameriprise Financial and its affiliates, and generally will have no obligation to access any such information and may, in some instances, not be able to access such information because of legal and regulatory constraints or the internal policies and procedures of Ameriprise Financial and its affiliates. For example, if the Investment Manager or another Ameriprise Financial affiliate, or their respective employees, come into possession of non-public information regarding another advised/managed fund or account, they may be prohibited by legal and regulatory constraints, or internal policies and procedures, from using that information in connection with transactions made on behalf of the Funds. For more information, see Investment Advisory and Other Services – The Investment Manager and Investment Advisory Services – Portfolio Manager(s) – The Investment Manager’s Portfolio Managers and Potential Conflicts of Interests.
Soft Dollar Benefits
Certain products and services, commonly referred to as “soft dollar services” (including, to the extent permitted by law, research reports, economic and financial data, financial publications, proxy analysis, computer databases and other research-oriented materials), that the Investment Manager may receive in connection with brokerage services provided to a Fund may have the inadvertent effect of disproportionately benefiting other advised/managed funds or accounts. This could happen because of the relative amount of brokerage services provided to a Fund as compared to other advised/managed funds or accounts, as well as the relative compensation paid by a Fund.
Services Provided to Other Advised/Managed Accounts
Ameriprise Financial and its affiliates also may act as an investment adviser, investment manager, administrator, transfer agent, custodian, trustee, broker-dealer, agent, or in another capacity, for advised/managed funds and accounts other than the Funds, and may receive compensation for acting in such capacity. This compensation that the Investment Manager, Distributor and Transfer Agent and other Ameriprise Financial affiliates receive could be greater than the compensation Ameriprise Financial and its affiliates receive for acting in the same or similar capacity for the Funds. In addition, the Investment Manager, Distributor and Transfer Agent and other Ameriprise Financial affiliates may receive other benefits, including enhancement of new or existing business relationships. This compensation and/or the benefits that Ameriprise Financial and its affiliates may receive from other advised/managed funds and accounts and other relationships could potentially create incentives to favor other advised/managed funds and accounts over the Funds. Trades made by Ameriprise Financial and its affiliates for the Funds may be, but are not required to be, aggregated with trades made for other funds and accounts advised/managed by the Investment Manager and other Ameriprise Financial affiliates. If trades are aggregated among the Funds and those other funds and accounts, the various prices of the securities being traded may be averaged, which could have the potential effect of disadvantaging the Funds as compared to the other funds and accounts with which trades were aggregated.
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Proxy Voting
Although the Investment Manager endeavors to make all proxy voting decisions with respect to the interests of the Funds for which it is responsible in accordance with its proxy voting policies and procedures, the Investment Manager’s proxy voting decisions with respect to a Fund’s portfolio securities may nonetheless benefit other advised/managed funds and accounts, and/or clients, of Ameriprise Financial and its affiliates. The Investment Manager has adopted proxy voting policies and procedures that are designed to provide that all proxy voting is done in the best interests of its clients, including the Funds, without any resulting benefit or detriment to the Investment Manager and/or its affiliates, including Ameriprise Financial and its affiliates. For more information about the Investment Manager’s proxy voting policies and procedures, see Investment Advisory and Other Services – Proxy Voting Policies and Procedures.
Certain Trading Activities
The directors/trustees, officers and employees of Ameriprise Financial and its affiliates may buy and sell securities or other investments for their own accounts, and in doing so may take a position that is adverse to the Funds. In order to reduce the possibility that such personal investment activities of the directors/trustees, officers and employees of Ameriprise Financial and its affiliates will materially adversely affect the Funds, Ameriprise Financial and its affiliates have adopted policies and procedures, and the Funds, the Board, the Investment Manager and the Distributor have each adopted a Code of Ethics that addresses such personal investment activities. For more information, see Investment Advisory and Other Services – Codes of Ethics.
Affiliate Transactions
Subject to applicable legal and regulatory requirements, a Fund may enter into transactions in which Ameriprise Financial and/or its affiliates, or companies that are deemed to be affiliates of a Fund because of, among other factors, their or their affiliates’ ownership or control of shares of the Fund, may have an interest that potentially conflicts with the interests of the Fund. For example, an affiliate of Ameriprise Financial may sell securities to a Fund from an offering in which it is an underwriter or that it owns as a dealer, subject to applicable legal and regulatory requirements. Applicable legal and regulatory requirements also may prevent a Fund from engaging in transactions with an affiliate of the Fund, which may include Ameriprise Financial and its affiliates, or from participating in an investment opportunity in which an affiliate of a Fund participates.
Certain Investment Limitations
Regulatory and other restrictions may limit a Fund’s investment activities in various ways. For example, regulations regarding certain industries and markets, such as emerging or international markets, and certain transactions, such as those involving certain futures and derivatives as well as restrictions applicable to certain issuers (e.g., poison pills), may impose limits on the aggregate amount of investments that may be made by affiliated investors, including accounts owned or managed by the same or affiliated managers, in the aggregate or in individual issuers. In these circumstances, the Investment Manager may be prevented from acquiring securities for a Fund that it might otherwise prefer to acquire if the acquisition would cause the Fund and its affiliated investors to exceed an applicable limit. These types of regulatory and other applicable limits are complex and vary significantly in different contexts including, among others, from country to country, industry to industry and issuer to issuer. The Investment Manager has procedures in place designed to monitor potential conflicts arising from regulatory and other limits. Nonetheless, given the complexity of these limits, the Investment Manager and its affiliates may inadvertently breach these limits, and a Fund may therefore be required to sell securities that it might otherwise prefer to hold in order to comply with such limits. At certain times, a Fund may be restricted in its investment activities because of relationships that an affiliate of the Fund, which may include Ameriprise Financial and its affiliates, may have with the issuers of securities. This could happen, for example, if a Fund desired to buy a security issued by a company for which Ameriprise Financial or an affiliate serves as underwriter. The internal policies and procedures of Ameriprise Financial and its affiliates covering these types of restrictions and addressing similar issues also may at times restrict a Fund’s investment activities. See also About the Funds’ Investments – Certain Investment Activity Limits.
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Actual and Potential Conflicts of Interest Related to Ameriprise Financial and its Affiliates’ Non-Advisory Relationships with Clients and Customers other than the Funds
The financial relationships that Ameriprise Financial and its affiliates may have with companies and other entities in which a Fund may invest can give rise to actual and potential conflicts of interest. Subject to applicable legal and regulatory requirements, a Fund may invest (a) in the securities of Ameriprise Financial and/or its affiliates and/or in companies in which Ameriprise Financial and its affiliates have an equity, debt or other interest, and/or (b) in the securities of companies held by other Columbia Funds. The purchase, holding and sale of such securities by a Fund may enhance the profitability and the business interests of Ameriprise Financial and/or its affiliates and/or other Columbia Funds. There also may be limitations as to the sharing with the Investment Manager of information derived from the non-investment advisory/management activities of Ameriprise Financial and its affiliates because of legal and regulatory constraints and internal policies and procedures (such as information barriers and ethical walls). Because of these limitations, Ameriprise Financial and its affiliates generally will not share information derived from its non-investment advisory/management activities with the Investment Manager.
Actual and Potential Conflicts of Interest Related to Ameriprise Financial Affiliates’ Marketing and Use of the Columbia Funds as Investment Options
Ameriprise Financial and its affiliates also provide a variety of products and services that, in some manner, may utilize the Columbia Funds as investment options. For example, the Columbia Funds may be offered as investments in connection with brokerage and other securities products offered by Ameriprise Financial and its affiliates, and may be utilized as investments in connection with fiduciary, investment management and other accounts offered by affiliates of Ameriprise Financial, as well as for other Columbia Funds structured as “funds of funds.” The use of the Columbia Funds in connection with other products and services offered by Ameriprise Financial and its affiliates may introduce economic and other conflicts of interest. These conflicts of interest are highlighted in account documentation and other disclosure materials for the other products and services offered by Ameriprise Financial and its affiliates.
Ameriprise Financial and its affiliates, including the Investment Manager, may make payments to their affiliates in connection with the promotion and sale of the Funds’ shares, in addition to the sales-related and other compensation that these parties may receive from the Funds. As a general matter, personnel of Ameriprise Financial and its affiliates, do not receive compensation in connection with their sales or use of the Funds that is greater than that paid in connection with their sales of other comparable products and services. Nonetheless, because the compensation that the Investment Manager and other affiliates of Ameriprise Financial may receive for providing services to the Funds is generally based on the Funds’ assets under management and those assets will grow as shares of the Funds are sold, potential conflicts of interest may exist. See Brokerage Allocation and Other Practices – Additional Selling Agent Payments for more information.
The Transfer Agent
Columbia Management Investment Services Corp. (formerly, RiverSource Service Corporation) is the transfer agent for the Funds. The Transfer Agent is located at 225 Franklin Street, Boston, MA 02110. Under the Transfer Agency Agreement, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Funds. Effective July 1, 2012, the Funds pay the Transfer Agent an annual transfer agency fee of $21.00 per account, payable monthly for all share classes, except for Class I shares, and, prior to July 1, 2012, pay the Transfer Agent an annual transfer agency fee of $12.08 per account, payable monthly. Prior to September 7, 2010, the Funds paid the Transfer Agent (and, prior to May 1, 2010, the Previous Transfer Agent) an annual transfer agency fee of $22.36 per account, payable monthly. For the period from March 31, 2009 through October 31, 2009, the Previous Transfer Agent was paid an annual transfer agency fee of $17.34 per account, payable monthly.
In addition, the Funds reimburse the Transfer Agent for the fees and expenses the Transfer Agent pays to financial intermediaries that maintain omnibus accounts with the Funds in an annual amount equal to 0.20% of the average aggregate value of the Fund’s shares maintained in such omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services, Inc. is the broker of record or accounts where the beneficial owner is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent is reimbursed $16.00 annually, calculated monthly based on the total number of positions in such accounts at the end of such month) for all share classes, except for Class I, Class R4,
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Class R5 and Class Y shares. For Class R4 and Class R5 shares, the Funds reimburse the Transfer Agent for the fees and expenses the Transfer Agent pays to financial intermediaries that maintain omnibus accounts with the Funds subject to an annual limitation of 0.05% of the net assets attributable to such shares. Prior to September 7, 2010, the Funds reimbursed the Transfer Agent (and, prior to May 1, 2010, the Previous Transfer Agent) for the fees and expenses the Transfer Agent paid to financial intermediaries that maintained omnibus accounts with the Funds, subject to a cap of up to $22.36 per account for financial intermediaries that sought payment by the Transfer Agent on a per account basis and a cap equal to 0.15% of a Fund’s net assets represented by such an account for financial intermediaries that sought payment by the Transfer Agent based on a percentage of net assets.
The Funds also pay certain reimbursable out-of-pocket expenses of the Transfer Agent. The Transfer Agent also may retain as additional compensation for its services revenues for fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcripts due the Transfer Agent from Fund shareholders and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds.
The Funds that offer Class R4 shares have a Plan Administration Services Agreement with the Transfer Agent. Under the agreement, the Funds pay for plan administration services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account recordkeeping, education services and administration to various plan types, including 529 plans, retirement plans and Health Savings Accounts (HSAs). The fee for services is equal on an annual basis to 0.25% of the average daily net assets of each Fund attributable to Class R4 shares.
Transfer agency costs for each Fund are calculated separately for each of (i) Class Y shares, (ii) Class R4 and Class R5 shares and (iii) all other share classes (except Class I shares, which pay no transfer agency fees). Pursuant to the Administrative Services Agreement, the Administrator pays the Transfer Agency Fees of U.S. Treasury Index Fund on behalf of the Fund. The fees paid to the Transfer Agent may be changed by the Board without shareholder approval.
The Transfer Agent retains BFDS/DST, 2 Heritage Drive, North Quincy, MA 02171 as the Funds’ sub-transfer agent. BFDS/DST assists the Transfer Agent in carrying out its duties.
The Custodian
The Funds’ securities and cash are held pursuant to a custodian agreement with JPMorgan, 1 Chase Manhattan Plaza, 19th Floor, New York, NY 10005. JPMorgan is responsible for safeguarding the Funds’ cash and securities, receiving and delivering securities and collecting the Funds’ interest and dividends. The custodian is permitted to deposit some or all of their securities in central depository systems as allowed by federal law. For its services, each fund pays its custodian a maintenance charge and a charge per transaction in addition to reimbursing the custodian’s out-of-pocket expenses. As part of this arrangement, securities purchased outside the United States are maintained in the custody of various foreign branches of JPMorgan or in other financial institutions as permitted by law and by the Funds’ custodian agreement.
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP, which is located at 225 South Sixth Street, Minneapolis, MN 55402, is the Funds’ independent registered public accounting firm. The financial statements contained in each Fund’s annual report were audited by PricewaterhouseCoopers LLP. The Board has selected PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the Funds’ books and review their tax returns for their respective fiscal year ends.
The Reports of Independent Registered Public Accounting Firm and the audited financial statements are included in the annual reports to shareholders of the Funds, and are incorporated herein by reference. No other parts of the annual reports or semi-annual reports to shareholders are incorporated by reference herein except that the unaudited financial statements included in the semi-annual report to shareholders of Greater China Fund are incorporated herein by reference. The audited financial statements incorporated by reference into the Funds’ prospectuses and this SAI have been so incorporated in reliance upon the report of the independent registered public accounting firm, given on its authority as an expert in auditing and accounting.
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Counsel
Ropes & Gray LLP serves as legal counsel to the Trust. Its address is Prudential Tower, 800 Boylston St., Boston, Massachusetts 02199. K&L Gates LLP serves as co-counsel. Its address is 1601 K Street N.W., Washington, DC 20006-1600.
Distribution and Servicing Plans
The Trust has adopted distribution and/or shareholder servicing plans for the Class A shares, Class B shares, Class C shares, Class E shares, Class F shares, Class R shares, Class R4 shares, Class T shares and Class W shares of the Funds. See Capital Stock and Other Securities for information about which Funds offer which classes of shares. The Funds no longer accept investments from new or existing investors in Class B shares, Class E shares, Class F shares or Class T shares, except for certain limited transactions from existing investors in any such shares. See the prospectuses for these share classes of the Funds for details.
The table below shows the maximum annual distribution and/or services fees (payable monthly and calculated based on an annual percentage of average daily net assets) and the combined amount of such fees applicable to each share class:
Distribution Fee | Service Fee | Combined Total | ||||
Class A | up to 0.10% | 0.25% | up to 0.35%a,b | |||
Class A for Active Portfolio Funds | up to 0.25% | up to 0.25% | 0.25% | |||
Class B | 0.75% | 0.25% | 1.00%b | |||
Class C | 0.75% | 0.25% | 1.00%b,c | |||
Class E | 0.10% | 0.25% | 0.35% | |||
Class F | 0.75% | 0.25% | 1.00% | |||
Class I | none | none | none | |||
Class R | 0.50% | — d | 0.50% | |||
Class R4 | none | 0.25%e | 0.25%e | |||
Class R5 | none | none | none | |||
Class T | none | 0.50%f | 0.50%f | |||
Class W | 0.25% | 0.25% | 0.25% | |||
Class Y | none | none | none | |||
Class Z | none | none | none | |||
Ultra Short Term Bond Fund | none | none | none |
a | As shown in the table below, the maximum distribution and service fees of Class A shares varies among the Funds. |
Funds | Class A Distribution Fee | Class A Service Fee | Class A Combined Total | |||||||||
Active Portfolio Funds | 0.25 | % | 0.25 | % | 0.25 | %* | ||||||
Balanced Fund, Contrarian Core Fund, Dividend Income Fund, Intermediate Bond Fund, Large Cap Growth Fund, Mid Cap Growth Fund, Oregon Intermediate Municipal Bond Fund, Real Estate Equity Fund, Small Cap Core Fund, Small Cap Growth Fund I, Technology Fund | 0.10 | % | 0.25 | % | 0.35 | %** | ||||||
Bond Fund, CA Tax-Exempt Fund, CT Intermediate Municipal Bond Fund, CT Tax-Exempt Fund, Corporate Income Fund, Emerging Markets Fund, Energy and Natural Resources Fund, Global Dividend Opportunity Fund, Greater China Fund, High Yield Opportunity Fund, International Bond Fund, MA Intermediate Municipal Bond Fund, MA Tax-Exempt Fund, NY Intermediate Municipal Bond Fund, NY Tax-Exempt Fund, Pacific/Asia Fund, Risk Allocation Fund, Select Large Cap Growth Fund, Select Small Cap Fund, Small Cap Value Fund I, Strategic Income Fund, U.S. Treasury Index Fund, Value and Restructuring Fund | — | 0.25 | % | 0.25 | % | |||||||
High Yield Municipal Fund, Intermediate Municipal Bond Fund, and Tax-Exempt Fund | — | 0.20 | % | 0.20 | % |
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* | Class A shares of Active Portfolio Funds may pay distribution and service fees up to a maximum of 0.25% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.25% for distribution services and up to 0.25% for shareholder liason services). |
** | The indicated Funds may pay distribution and service fees up to a maximum of 0.35% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder liaison services) but currently limit such fees to an aggregate fee of not more than 0.25% for Class A shares. |
b | Service Fee for Class A shares, Class B shares and Class C shares of High Yield Municipal Fund, Intermediate Municipal Bond Fund and Tax-Exempt Fund – The annual service fee may equal up to 0.20% of the average daily net asset value of all shares of such Fund class. Distribution Fee for Class B shares and Class C shares for Intermediate Municipal Bond Fund – The annual distribution fee shall be 0.65% of the average daily net assets of the Fund’s Class B shares and Class C shares. Fee amounts noted apply to Class B shares of the funds other than Class B shares of Columbia Money Market Fund, which pays distribution fees of up to 0.75% and service fees of up to 0.10% for a combined total of 0.85%. |
c | The Distributor has voluntarily agreed to waive a portion of the distribution fee for Class C shares of the following Funds so that the combined distribution and service fee (or the distribution fee for the State Tax-Exempt Funds) does not exceed the specified percentage annually: 0.70% for CA Tax-Exempt Fund, CT Tax-Exempt Fund, MA Tax-Exempt Fund and NY Tax-Exempt Fund; 0.55% for Intermediate Municipal Bond Fund; 0.65% for CT Intermediate Municipal Bond Fund, MA Intermediate Municipal Bond Fund, NY Intermediate Municipal Bond Fund and Oregon Intermediate Municipal Bond Fund; 0.85% for Bond Fund, Corporate Income Fund, High Yield Municipal Fund, High Yield Opportunity Fund, Intermediate Bond Fund, Strategic Income Fund, Tax-Exempt Fund and U.S. Treasury Index Fund. These arrangements may be modified or terminated by the Distributor at any time. |
d | Class R shares pay a distribution fee pursuant to a Fund’s distribution (Rule 12b-1) plan for Class R shares. The Funds do not have a shareholder service plan for Class R shares. |
e | The shareholder service fees for Class R4 shares are not paid pursuant to a Rule 12b-1 plan. Under a Plan Administration Services Agreement, the Funds’ Class R4 shares pay for plan administration services, including services such as implementation and conversion services, account set-up and maintenance, reconciliation and account recordkeeping, education services and administration to various plan types, including 529 plans, retirement plans and health savings accounts. |
f | The shareholder servicing fees for Class T shares are up to 0.50% of average daily net assets attributable to Class T shares for equity Funds and 0.40% for fixed income Funds. The Funds currently limit such fees to a maximum of 0.30% for equity Funds and 0.15% for fixed income Funds. See Class T Shares Shareholder Service Fees below for more information. |
The shareholder servicing plan permits the Funds to compensate or reimburse Selling Agents for the shareholder services they have provided. The Distribution Plan, adopted pursuant to Rule 12b-1 under the 1940 Act, permits the Funds to compensate or reimburse the Distributor and/or Selling Agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board, and are charged as expenses of each Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans may be paid to affiliates of the Distributor and Ameriprise Financial.
Under the shareholder servicing plan, the Board must review, at least quarterly, a written report of the amounts paid under the servicing agreements and the purposes for which those expenditures were made. The initial term of the shareholder servicing plan is one year and it will continue in effect from year to year after its initial one-year term provided that its continuance is specifically approved at least annually by a majority of the Board, including a majority of the Independent Trustees who have no direct or indirect financial interest in the operation of the shareholder servicing plan or in any agreement related to it. Any material amendment to the shareholder servicing plan must be approved in the same manner. The shareholder servicing plan is terminable at any time with respect to the Funds by a vote of a majority of the Independent Trustees.
The Trustees believe the Distribution Plan could be a significant factor in the growth and retention of a Fund’s assets resulting in more advantageous expense ratios and increased investment flexibility which could benefit each class of Fund shareholders. The Distribution Plan will continue in effect from year to year so long as continuance is specifically approved at least annually by a vote of the Trustees. The Distribution Plan may not be amended to increase the fee materially without approval by vote of a majority of the outstanding voting securities of the relevant class of shares, and all material amendments of the Distribution Plan must be approved by the Trustees in the manner provided in the foregoing sentence. The Distribution Plan may be terminated at any time by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities of the relevant class of shares.
Class T Shares Shareholder Service Fees
The Funds that offer Class T shares have adopted a shareholder services plan that permits them to pay for certain services provided to Class T shareholders by their Selling Agents. Equity Funds may pay shareholder servicing fees up to an aggregate
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annual rate of 0.50% of the Fund’s average daily net assets attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). Fixed income Funds may pay shareholder servicing fees up to an aggregate annual rate of 0.40% of the Fund’s average daily net assets attributable to Class T shares (comprised of an annual rate of up to 0.20% for shareholder liaison services and up to 0.20% for administrative support services). These fees are currently limited to an aggregate annual rate of not more than 0.30% for equity Funds and not more than 0.15% for fixed income Funds. With respect to those Funds that declare dividends on a daily basis, the shareholder servicing fee shall be waived by the Selling Agents to the extent necessary to prevent net investment income from falling below 0.00% on a daily basis. The Funds consider “administrative support services” to include, without limitation, (i) aggregating and processing purchase and redemption orders, (ii) providing beneficial owners with statements showing their positions in the Funds, (iii) processing dividend payments, (iv) providing sub-accounting services for Fund shares held beneficially, (v) forwarding shareholder communications, such as proxies, shareholder reports, dividend and tax notices, and updating prospectuses to beneficial owners, (vi) receiving, tabulating and transmitting proxies executed by the beneficial owners, (vii) sub-transfer agent services for beneficial owners of Fund shares and (viii) other similar services.
Distribution and Service Fees Paid by the Funds
The Distributor and the Previous Distributor received distribution and service fees from the Funds for their services as reflected in the following charts, which show distribution and service fees paid to and waived by, as applicable, the Distributor and the Previous Distributor, for the most recently completed fiscal year, except as otherwise indicated. The Trust is not aware as to what amount, if any, of the distribution and service fees paid to the Distributor and Previous Distributor were, on a Fund-by-Fund basis, used for advertising, printing and mailing of prospectuses to other than current shareholders, compensation to broker-dealers, compensation to sales personnel, or interest, carrying or other financing charges. Class Y shares, Class Z shares and shares of Ultra Short Term Bond Fund do not pay distribution and service fees.
Distribution and Services Fees Paid by the Funds for the Fiscal Year Ended March 31, 2012
Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class T Shares | Class W Shares | ||||||||||||||||||
Emerging Markets Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 14,910 | $ | 567 | — | — | ||||||||||||||||
Service Fee | $ | 27,458 | — | $ | 4,970 | — | — | $ | 90,934 | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Energy and Natural Resources Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 44,822 | $ | 188,847 | $ | 1,810 | — | — | |||||||||||||||
Service Fee | $ | 377,408 | $ | 14,941 | $ | 62,949 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Pacific/Asia Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 1,771 | — | — | — | |||||||||||||||||
Service Fee | $ | 3,549 | — | $ | 590 | — | — | — | ||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Select Large Cap Growth | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 301,363 | $ | 41,363 | — | — | ||||||||||||||||
Service Fee | $ | 3,857,839 | — | $ | 100,454 | — | — | $ | 107,565 | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
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Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class T Shares | Class W Shares | ||||||||||||||||||
Select Small Cap Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 8,706 | $ | 36,051 | — | — | ||||||||||||||||
Service Fee | $ | 37,837 | — | $ | 2,902 | — | — | — | ||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Value and Restructuring Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 393,542 | $ | 230,164 | — | — | ||||||||||||||||
Service Fee | $ | 505,893 | — | $ | 131,181 | — | — | $ | 7 | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
Distribution and Services Fees Paid by the Funds for the Fiscal Year Ended April 30, 2012
Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class T Shares | Class W Shares | ||||||||||||||||||||||||||||||||||||||||||
Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Period Ended April 30, 2012 | Fiscal Year Ended March 31, 2012 | Fiscal Period Ended April 30, 2012 | Fiscal Year Ended March 31, 2012 | Fiscal Period Ended April 30, 2012 | Fiscal Year Ended March 31, 2012 | Fiscal Period Ended April 30, 2012 | Fiscal Year Ended March 31, 2012 | |||||||||||||||||||||||||||||||||||||
Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
Distribution Fee | — | — | $ | 1,860 | $ | 29,481 | $ | 10,718 | $ | 105,763 | $ | 1,071 | $ | 2,840 | — | — | — | — | ||||||||||||||||||||||||||||||
Service Fee | $ | 17,423 | $ | 192,222 | $ | 620 | $ | 9,827 | $ | 3,571 | $ | 35,265 | — | — | — | — | $ | 1 | $ | 7 | ||||||||||||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | $ | 2,148 | $ | 21,128 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Corporate Income Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
Distribution Fee | — | — | $ | 2,012 | $ | 29,035 | $ | 10,376 | $ | 86,346 | �� | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Service Fee | $ | 25,636 | $ | 237,757 | $ | 670 | $ | 9,676 | $ | 3,459 | $ | 28,819 | — | — | — | — | $ | 33,987 | $ | 330,921 | ||||||||||||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | $ | 2,075 | $ | 17,162 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Intermediate Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
Distribution Fee | — | — | $ | 3,921 | $ | 70,947 | $ | 22,503 | $ | 254,567 | $ | 1,161 | $ | 13,608 | — | — | — | — | ||||||||||||||||||||||||||||||
Service Fee | $ | 72,873 | $ | 576,155 | $ | 1,307 | $ | 23,649 | $ | 7,501 | $ | 84,880 | — | — | — | — | $ | 1 | $ | 7 | ||||||||||||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | $ | 4,501 | $ | 50,856 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
U.S. Treasury Index Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
Distribution Fee | — | — | $ | 1,989 | $ | 27,017 | $ | 7,470 | $ | 95,403 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Service Fee | $ | 9,200 | $ | 113,178 | $ | 663 | $ | 9,006 | $ | 2,490 | $ | 31,847 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | $ | 1,494 | $ | 18,969 | — | — | — | — | — | — |
* | For the period from April 1, 2012 to April 30, 2012. During the period, the fiscal year end for each Fund was changed from March 31 to April 30. |
Distribution and Service Fees Paid by the Fund for the Fiscal Period Ended April 30, 2012
Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | ||||||||||||||||||||||||||||
Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | |||||||||||||||||||||||||
Small Cap Value Fund I | ||||||||||||||||||||||||||||||||
Combined Distribution and | $ | 1,267,447 | $ | 1,705,653 | — | — | — | — | — | — | ||||||||||||||||||||||
Distribution Fee | — | — | $ | 83,699 | $ | 157,721 | $ | 276,071 | $ | 404,763 | $ | 4,446 | $ | 23 | ||||||||||||||||||
Service Fee | — | — | $ | 27,900 | $ | 51,999 | $ | 92,024 | $ | 134,921 | — | — | ||||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | — | — |
* | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
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Distribution and Services Fees Paid by the Funds for the Fiscal Year Ended May 31, 2012
Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class W Shares | |||||||||||||||
High Yield Opportunity Fund | ||||||||||||||||||||
Distribution Fee | — | $ | 42,771 | $ | 85,776 | — | — | |||||||||||||
Service Fee | $ | 466,258 | $ | 14,257 | $ | 28,632 | — | — | ||||||||||||
Fees Waived by the Distributor | — | — | $ | 17,058 | — | — | ||||||||||||||
International Bond Fund | ||||||||||||||||||||
Distribution Fee | — | — | $ | 2,606 | — | — | ||||||||||||||
Service Fee | $ | 4,913 | — | $ | 869 | — | — | |||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | |||||||||||||||
Strategic Income Fund | ||||||||||||||||||||
Distribution Fee | — | $ | 488,995 | $ | 1,626,607 | $ | 141 | — | ||||||||||||
Service Fee | $ | 3,230,326 | $ | 163,250 | $ | 541,936 | — | $ | 6 | |||||||||||
Fees Waived by the Distributor | — | — | $ | 323,325 | — | — |
Fund | Class A Shares | Class B Shares | Class C Shares | |||||||||||||||||||||
Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | |||||||||||||||||||
High Yield Municipal Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 17,123 | $ | 35,374 | $ | 68,464 | $ | 69,938 | ||||||||||||||
Service Fee | $ | 140,644 | $ | 142,778 | $ | 4,566 | $ | 9,433 | $ | 18,262 | $ | 18,652 | ||||||||||||
Fees Waived by the Distributor | — | — | — | — | $ | 13,678 | $ | 13,980 |
* | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
Fund | Class A Shares | Class B Shares | Class C Shares | |||||||||||||||||||||
Fiscal Period Ended May 31, 2012** | Fiscal Year Ended September 30, 2011 | Fiscal Period Ended May 31, 2012** | Fiscal Year Ended September 30, 2011 | Fiscal Period Ended May 31, 2012** | Fiscal Year Ended September 30, 2011 | |||||||||||||||||||
Dividend Income Fund | ||||||||||||||||||||||||
Distribution Fee | — | — | $ | 81,704 | $ | 146,783 | $ | 1,210,003 | $ | 1,164,658 | ||||||||||||||
Service Fee | $ | 2,454,192 | $ | 2,530,486 | $ | 27,234 | $ | 48,928 | $ | 403,334 | $ | 388,219 | ||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Fund | Class R Shares | Class T Shares* | Class W Shares | |||||||||||||||||||||
Fiscal Period Ended May 31, 2012** | Fiscal Year Ended September 30, 2011 | Fiscal Period Ended May 31, 2012** | Fiscal Year Ended September 30, 2011 | Fiscal Period Ended May 31, 2012** | Fiscal Year Ended September 30, 2011 | |||||||||||||||||||
Dividend Income Fund | ||||||||||||||||||||||||
Distribution Fee | $ | 76,739 | $ | 62,372 | — | — | — | — | ||||||||||||||||
Service Fee | — | — | $ | 158,657 | $ | 247,391 | $ | 80,221 | $ | 75,979 | ||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
* | Paid pursuant to the Shareholder Plan for Class T shares. |
** | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
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Distribution and Services Fees Paid by the Funds for the Fiscal Year Ended August 31, 2011
Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class W Shares | Class T Shares* | ||||||||||||||||||
Balanced Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 84,184 | $ | 282,269 | $ | 869 | — | — | |||||||||||||||
Service Fee | $ | 801,205 | $ | 28,062 | $ | 94,124 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Global Dividend Opportunity Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 157,869 | $ | 135,103 | $ | 2,923 | — | — | |||||||||||||||
Service Fee | $ | 411,056 | $ | 52,623 | $ | 45,035 | — | $ | 7 | — | ||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Greater China Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 129,073 | $ | 289,015 | — | — | — | ||||||||||||||||
Service Fee | $ | 319,466 | $ | 43,024 | $ | 96,338 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Mid Cap Growth Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 55,806 | $ | 240,943 | $ | 73,714 | — | — | |||||||||||||||
Service Fee | $ | 448,020 | $ | 18,602 | $ | 80,315 | — | $ | 95,387 | $ | 71,977 | |||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Oregon Intermediate Municipal Bond Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 1,751 | $ | 124,160 | — | — | — | ||||||||||||||||
Service Fee | $ | 63,916 | $ | 576 | $ | 41,436 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Small Cap Growth Fund I | ||||||||||||||||||||||||
Distribution Fee | — | $ | 19,048 | $ | 137,924 | $ | 110 | — | — | |||||||||||||||
Service Fee | $ | 235,809 | $ | 6,349 | $ | 45,975 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | ||||||||||||||||||
Technology Fund | ||||||||||||||||||||||||
Distribution Fee | — | $ | 53,083 | $ | 182,808 | — | — | — | ||||||||||||||||
Service Fee | $ | 207,397 | $ | 17,654 | $ | 61,112 | — | — | — | |||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — |
* | Paid pursuant to the Shareholder Services Plan for Class T shares. |
Distribution and Service Fees Paid by the Funds Fiscal Year Ended September 30, 2011 | ||||||||||||||||||||||||||||||||
Fund | Class A Shares | Class B Shares | Class C Shares | Class E Shares | Class F Shares | Class R Shares | Class T Shares* | Class W | ||||||||||||||||||||||||
Contrarian Core Fund | ||||||||||||||||||||||||||||||||
Distribution Fee | — | $ | 130,253 | $ | 229,197 | — | — | $ | 20 | — | — | |||||||||||||||||||||
Service Fee | $ | 740,976 | $ | 43,417 | $ | 76,418 | — | — | — | $ | 362,876 | $ | 165,741 | |||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Large Cap Growth Fund | ||||||||||||||||||||||||||||||||
Distribution Fee | — | $ | 313,139 | $ | 224,218 | $ | 14,014 | $ | 3,945 | $ | 5,414 | — | — | |||||||||||||||||||
Service Fee | $ | 1,875,799 | $ | 104,378 | $ | 74,740 | $ | 35,041 | $ | 1,315 | — | $ | 462,721 | $ | 6 | |||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Small Cap Core Fund | ||||||||||||||||||||||||||||||||
Distribution Fee | — | $ | 114,427 | $ | 188,086 | — | — | — | — | — | ||||||||||||||||||||||
Service Fee | $ | 414,238 | $ | 38,142 | $ | 62,696 | — | — | — | $ | 239,882 | $ | 138,715 | |||||||||||||||||||
Fees Waived by the Distributor | — | — | — | — | — | — | — | — |
* | Paid pursuant to the Shareholder Services Plan for Class T shares. |
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Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended October 31, 2011
Fund | Class A Shares | Class B Shares | Class C Shares | Class T Shares* | ||||||||||||
CA Tax-Exempt Fund | ||||||||||||||||
Distribution Fee | — | $ | 13,580 | $ | 244,231 | N/A | ||||||||||
Service Fee | $ | 748,205 | $ | 4,444 | $ | 79,917 | N/A | |||||||||
Fees Waived by the Distributor | — | — | $ | 97,657 | N/A | |||||||||||
CT Intermediate Municipal Bond Fund | ||||||||||||||||
Distribution Fee | — | $ | 6,183 | $ | 54,232 | — | ||||||||||
Service Fee | $ | 26,701 | $ | 2,061 | $ | 18,079 | $ | 22,936 | ||||||||
Fees Waived by the Distributor | — | — | $ | 25,305 | — | |||||||||||
CT Tax-Exempt Fund | ||||||||||||||||
Distribution Fee | — | $ | 12,557 | $ | 84,582 | N/A | ||||||||||
Service Fee | $ | 175,878 | $ | 4,093 | $ | 27,643 | N/A | |||||||||
Fees Waived by the Distributor | — | — | $ | 33,829 | N/A | |||||||||||
Intermediate Municipal Bond Fund | ||||||||||||||||
Distribution Fee | — | $ | 16,493 | $ | 172,675 | — | ||||||||||
Service Fee | $ | 256,275 | $ | 5,075 | $ | 53,134 | $ | 21,004 | ||||||||
Fees Waived by the Distributor | — | — | $ | 119,542 | — | |||||||||||
MA Intermediate Municipal Bond Fund | ||||||||||||||||
Distribution Fee | — | $ | 4,009 | $ | 75,067 | — | ||||||||||
Service Fee | $ | 73,982 | $ | 1,337 | $ | 25,025 | $ | 55,566 | ||||||||
Fees Waived by the Distributor | — | — | $ | 35,026 | — | |||||||||||
MA Tax-Exempt Fund | ||||||||||||||||
Distribution Fee | — | $ | 14,143 | $ | 73,478 | N/A | ||||||||||
Service Fee | $ | 262,547 | $ | 4,468 | $ | 23,422 | N/A | |||||||||
Fees Waived by the Distributor | — | — | $ | 29,383 | N/A | |||||||||||
NY Intermediate Municipal Bond Fund | ||||||||||||||||
Distribution Fee | — | $ | 4,858 | $ | 101,026 | — | ||||||||||
Service Fee | $ | 32,291 | $ | 1,619 | $ | 33,706 | $ | 14,884 | ||||||||
Fees Waived by the Distributor | — | — | $ | 47,097 | — | |||||||||||
NY Tax-Exempt Fund | ||||||||||||||||
Distribution Fee | — | $ | 22,600 | $ | 87,107 | N/A | ||||||||||
Service Fee | $ | 240,347 | $ | 7,428 | $ | 28,616 | N/A | |||||||||
Fees Waived by the Distributor | — | — | $ | 34,835 | N/A |
* | Paid pursuant to the Shareholder Services Plan for Class T shares. |
Distribution and Service Fees Paid by the Fund for the Fiscal Year Ended November 30, 2011
Fund | Class A Shares | Class B Shares | Class C Shares | |||||||||
Tax-Exempt Fund | ||||||||||||
Distribution Fee | — | $ | 75,966 | $ | 424,507 | |||||||
Service Fee | $ | 4,896,170 | $ | 20,268 | $ | 113,222 | ||||||
Fees Waived by the Distributor | — | — | $ | 84,839 |
Distribution and Services Fees Paid by the Fund for the Fiscal Year Ended December 31, 2011
Fund | Class A Shares | Class B Shares | Class C Shares | Class R Shares | Class W Shares | |||||||||||||||
Real Estate Equity Fund | ||||||||||||||||||||
Distribution Fee | — | $ | 54,701 | $ | 127,855 | $ | 20,624 | — | ||||||||||||
Service Fee | $ | 203,927 | $ | 18,234 | $ | 42,624 | — | $ | 13 | |||||||||||
Fees Waived by the Distributor | — | — | — | — | — |
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The Distributor may use the entire amount of its fees to defray the costs of commissions and service fees paid to Selling Agents and for certain other purposes. Since the distribution and service fees are payable regardless of the Distributor’s expenses, the Distributor may realize a profit from the fees. The Distribution Plan authorizes any other payments by the Funds to the Distributor and its affiliates (including the Investment Manager) to the extent that such payments might be construed to be indirectly financing the distribution of a Fund’s shares.
The Funds participate in joint distribution activities with other Columbia Funds. The fees paid under the Distribution Plan adopted by a Fund may be used to finance the distribution of the shares of other Columbia Funds. Such distribution costs are allocated based on the relative net asset size of the respective Funds.
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding taxes (including foreign transaction taxes), expenses associated with investment in affiliated and non-affiliated pooled investment vehicles (including mutual funds and ETFs), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, extraordinary expenses and any other expenses the exclusion of which is specifically approved by the Board), through the date noted below for each Fund, unless sooner terminated at the sole discretion of the Board, 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 annual rates of:
Fund | Expiration Date | Expense Limitation as a Percent of Average Daily Net Assets of the Applicable Share Class on an Annualized Basis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class C | Class E | Class F | Class I | Class R | Class R4 | Class R5 | Class T | Class W | Class Y | Class Z | Single Class | |||||||||||||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ended March 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AP – Select Large Cap Growth Fund | 7/31/2014 | 1.19 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emerging Markets Fund | 12/31/2013 | 1.79 | % | 2.54 | % | 1.34 | % | 2.04 | % | 1.79 | % | 1.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Energy and Natural Resources Fund | 12/31/2013 | 1.50 | % | 2.25 | % | 2.25 | % | 1.08 | % | 1.75 | % | 1.38 | % | 1.25 | % | |||||||||||||||||||||||||||||||||||||||||||||
Pacific/Asia Fund | 7/31/2013 | 1.54 | % | 2.29 | % | 1.13 | % | 1.54 | % | 1.29 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Select Large Cap Growth Fund | 7/31/2014 | 1.19 | % | 1.94 | % | 0.82 | % | 1.44 | % | 1.19 | % | 0.94 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Select Small Cap Fund | 12/31/2013 | 1.41 | % | 2.16 | % | 1.66 | % | 1.16 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Value and Restructuring Fund | 12/31/2013 | 1.26 | % | 2.01 | % | 0.85 | % | 1.57 | % | 1.26 | % | 1.01 | % | |||||||||||||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ended April 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bond Fund | 8/31/2013 | 0.94 | % | 1.69 | % | 1.69 | % | 0.53 | % | 1.19 | % | 0.84 | % | 0.94 | % | 0.53 | % | 0.69 | % | |||||||||||||||||||||||||||||||||||||||||
Corporate Income Fund | 8/31/2013 | 0.96 | % | 1.71 | % | 1.71 | % | 0.58 | % | 0.96 | % | 0.71 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Intermediate Bond Fund | 8/31/2013 | 0.88 | % | 1.63 | % | 1.63 | % | 0.50 | % | 1.13 | % | 0.88 | % | 0.63 | % | |||||||||||||||||||||||||||||||||||||||||||||
Small Cap Value Fund I | 8/31/2013 | * | 1.40 | % | 2.15 | % | 2.15 | % | 0.99 | % | 1.65 | % | 0.99 | % | 1.15 | % | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury Index Fund | 8/31/2013 | 0.45 | % | 1.20 | % | 1.20 | % | 0.20 | % | 0.45 | % | 0.20 | % | |||||||||||||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ended May 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend Income Fund | 9/30/2013 | 1.19 | % | 1.94 | % | 1.94 | % | — | — | 0.81 | % | 1.44 | % | — | — | 1.24 | % | 1.19 | % | — | 0.94 | % | — | |||||||||||||||||||||||||||||||||||||
High Yield Municipal Fund | 9/30/2013 | ** | 0.89 | % | 1.64 | % | 1.64 | % | — | — | — | — | — | — | — | — | — | 0.69 | % | — | ||||||||||||||||||||||||||||||||||||||||
High Yield Opportunity Fund | 9/30/2013 | 1.08 | % | 1.83 | % | 1.83 | % | — | — | — | — | — | — | — | — | — | 0.83 | % | — | |||||||||||||||||||||||||||||||||||||||||
International Bond Fund | 2/28/2014 | 1.09 | % | — | 1.84 | % | — | — | 0.74 | % | — | — | — | — | 1.09 | % | — | 0.84 | % | — | ||||||||||||||||||||||||||||||||||||||||
Strategic Income Fund | 2/28/2014 | 1.04 | % | 1.79 | % | 1.79 | % | — | — | 1.29 | % | 0.97 | % | 0.72 | % | — | 1.04 | % | — | 0.79 | % | — |
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Fund | Expiration Date | Expense Limitation as a Percent of Average Daily Net Assets of the Applicable Share Class on an Annualized Basis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class C | Class E | Class F | Class I | Class R | Class R4 | Class R5 | Class T | Class W | Class Y | Class Z | Single Class | |||||||||||||||||||||||||||||||||||||||||||||||
For the Fund with fiscal year ended July 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ultra Short Term Bond Fund | 11/30/2012 | 0.25 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ended August 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AP – Alternative Strategies Fund | 12/31/2014 | 1.50 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AP – Core Plus Bond Fund | 12/31/2014 | 0.84 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AP – Small Cap Equity Fund | 12/31/2014 | 1.34 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balanced Fund | 12/31/2012 | 1.11 | % | 1.86 | % | 1.86 | % | 1.36 | % | 1.05 | % | 0.80 | % | 0.86 | % | |||||||||||||||||||||||||||||||||||||||||||||
Global Dividend Opportunity Fund | 12/31/2012 | 1.26 | % | 2.01 | % | 2.01 | % | 0.83 | % | 1.51 | % | 1.26 | % | 1.01 | % | 1.01 | % | |||||||||||||||||||||||||||||||||||||||||||
Greater China Fund | 12/31/2012 | 1.93 | % | 2.68 | % | 2.68 | % | 1.56 | % | 1.93 | % | 1.68 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Mid Cap Growth Fund | 12/31/2012 | 1.35 | % | 2.10 | % | 2.10 | % | 0.99 | % | 1.60 | % | 1.04 | % | 1.40 | % | 1.35 | % | 1.10 | % | 1.10 | % | |||||||||||||||||||||||||||||||||||||||
Oregon Intermediate Municipal Bond Fund | 12/31/2012 | 0.79 | % | 1.54 | % | 1.54 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Small Cap Growth Fund I | 12/31/2012 | 1.31 | % | 2.06 | % | 2.06 | % | 0.93 | % | 1.56 | % | 1.06 | % | 1.06 | % | |||||||||||||||||||||||||||||||||||||||||||||
Technology Fund | 12/31/2012 | 1.45 | % | 2.20 | % | 2.20 | % | 1.20 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ended September 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contrarian Core Fund | 1/31/2013 | 1.16 | % | 1.91 | % | 1.91 | % | 0.78 | % | 1.41 | % | 1.08 | % | 1.21 | % | 1.16 | % | 0.91 | % | |||||||||||||||||||||||||||||||||||||||||
Large Cap Growth Fund | 1/31/2013 | 1.25 | % | 2.00 | % | 2.00 | % | 1.35 | % | 2.00 | % | 0.85 | % | 1.50 | % | 1.15 | % | 0.90 | % | 1.30 | % | 1.25 | % | 1.00 | % | 1.00 | % | |||||||||||||||||||||||||||||||||
Small Cap Core Fund | 1/31/2013 | 1.36 | % | 2.11 | % | 2.11 | % | 0.98 | % | 1.41 | % | 1.36 | % | 1.11 | % | |||||||||||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ended October 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CA Tax-Exempt Fund | 2/28/2013 | 0.79 | % | 1.54 | % | 1.54 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
CT Intermediate Municipal Bond Fund | 2/28/2013 | 0.79 | % | 1.54 | % | 1.54 | % | 0.69 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
CT Tax-Exempt Fund | 2/28/2013 | 0.79 | % | 1.54 | % | 1.54 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Intermediate Municipal Bond Fund | 2/28/2013 | 0.74 | % | 1.39 | % | 1.39 | % | 0.69 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
MA Intermediate Municipal Bond Fund | 2/28/2013 | 0.75 | % | 1.50 | % | 1.50 | % | 0.65 | % | 0.50 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
MA Tax-Exempt Fund | 2/28/2013 | 0.79 | % | 1.54 | % | 1.54 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
NY Intermediate Municipal Bond Fund | 2/28/2013 | 0.75 | % | 1.50 | % | 1.50 | % | 0.65 | % | 0.50 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
NY Tax-Exempt Fund | 2/28/2013 | 0.79 | % | 1.54 | % | 1.54 | % | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
For the Fund with fiscal year ended November 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax-Exempt Fund | 3/31/2013 | 0.76 | % | 1.51 | % | 1.51 | % | 0.56 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
For the Fund with fiscal year ended December 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Equity Fund | 4/30/2013 | 1.38 | % | 2.13 | % | 2.13 | % | 0.97 | % | 1.63 | % | 1.27 | % | 1.02 | % | 1.38 | % | 1.13 | % |
* | Effective November 1, 2011 through October 31, 2012, unless sooner terminated at the sole discretion of the Board, expense limitations for the Small Cap Value Fund I are as follows: 1.37% for Class A, 2.12% for Class B, 2.12% for Class C, 0.97% for Class I, 1.62% for Class R, 1.12% for Class Y and 1.12% for Class Z. |
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** | Effective July 1, 2011 through October 31, 2012, unless sooner terminated at the sole discretion of the Board, expense limitations for High Yield Municipal Fund are as follows: 0.80% for Class A, 1.55% for Class B, 1.55% for Class C and 0.60% for Class Z. |
An expense arrangement is made pursuant to a fee waiver and expense cap agreement that may be modified or amended only with approval from all parties to such arrangement, including the Fund and the Investment Manager.
The Funds, the Investment Manager, each subadviser and the Distributor have adopted Codes of Ethics pursuant to the requirements of the 1940 Act, including Rule 17j–1 under the 1940 Act. These Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, including securities that may be bought or held by the Funds. These Codes of Ethics are included as exhibits to Part C of the Funds’ registration statement. These Codes of Ethics can be reviewed and copied at the SEC’s Public Reference Room and may be obtained by calling the SEC at 202.551.8090; they also are available on the SEC’s website at www.sec.gov, and may be obtained, after paying a duplicating fee, by electronic request to publicinfo@sec.gov or by writing to the SEC’s Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549–1520.
Proxy Voting Policies and Procedures
General. The Funds have delegated to the Investment Manager the responsibility to vote proxies relating to portfolio securities held by the Funds, including Funds managed by subadvisers. In deciding to delegate this responsibility to the Investment Manager, the Board reviewed the policies adopted by the Investment Manager or summaries of such policies. These included the procedures that the Investment Manager follows when a vote presents a conflict between the interests of the Funds and their shareholders and the Investment Manager and its affiliates.
The Investment Manager’s policy is to vote all proxies for Fund securities in a manner considered by the Investment Manager to be in the best economic interests of its clients, including the Funds, without regard to any benefit or detriment to the Investment Manager, its employees or its affiliates. The best economic interests of clients is defined for this purpose as the interest of enhancing or protecting the value of client accounts, considered as a group rather than individually, as the Investment Manager determines in its discretion. The Investment Manager endeavors to vote all proxies of which it becomes aware prior to the vote deadline; provided, however, that in certain circumstances the Investment Manager may refrain from voting securities. For instance, the Investment Manager may refrain from voting foreign securities if it determines that the costs of voting outweigh the expected benefits of voting and typically will not vote securities if voting would impose trading restrictions. In addition, the Funds will generally refrain from recalling portfolio securities on loan to vote proxies based upon a determination that the costs and lost revenue to the Funds, combined with the administrative effects of recalling the securities, generally outweigh the benefit of voting the proxy. While in general, neither the Funds nor the Investment Manager assesses the economic impact and benefits of voting loaned securities on a case-by-case basis, situations may arise in which the Funds or the Investment Manager requests that loaned securities be recalled in order to vote a proxy. However, the Board has established a guideline to direct the Investment Manager to endeavor to recall loaned securities if (i) a proposal relating to a merger or acquisition, a material restructuring, a proxy contest or a shareholder rights plan is expected to be on the ballot or (ii) the prior year’s evaluation of the issuer’s pay-for-performance practices has raised concerns, based on the determination that, in these situations, the benefits of voting such proxies generally outweigh the costs or lost revenue to the Funds or any potential adverse administrative effects to the Funds of not recalling such securities.
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Oversight. The operation of the Investment Manager’s proxy voting policy and procedures is overseen by a committee (the “Proxy Voting Committee”) composed of representatives of the Investment Manager’s equity investments, equity research, compliance, legal and operations functions. The Proxy Voting Committee has the responsibility to review, at least annually, the Investment Manager’s proxy voting policies to ensure consistency with internal policies, regulatory requirements, conflicts of interest and client disclosures.
The Proxy Voting Committee also develops predetermined voting guidelines used to vote securities. The voting guidelines indicate whether to vote for, against or abstain from particular proposals, or whether the matter should be considered on a case-by-case basis. The Proxy Voting Committee may determine to vote differently from the guidelines on particular proposals in the event it determines that doing so is in the clients’ best economic interests. The Investment Manager may also consider the voting recommendations of analysts, portfolio managers and information obtained from outside resources, including one or more third-party research providers. When proposals are not covered by the voting guidelines or a voting determination must be made on a case-by-case basis, a portfolio manager or analyst will make the voting determination based on his or her determination of the clients’ best economic interests. In addition, the Proxy Voting Committee may determine proxy votes when proposals require special consideration.
Addressing Conflicts of Interest. The Investment Manager seeks to address potential material conflicts of interest by having predetermined voting guidelines. In addition, if the Investment Manager determines that a material conflict of interest exists, the Investment Manager will invoke one or more of the following conflict management practices: (i) causing the proxies to be voted in accordance with the recommendations of an independent third party (which may be the Investment Manager’s proxy voting administrator or research provider); (ii) causing the proxies to be delegated to an independent third party (which may be the Investment Manager’s proxy voting administrator or research provider); and (iii) in unusual cases, with the client’s consent and upon ample notice, forwarding the proxies to the Investment Manager’s clients so that they may vote the proxies directly. A member of the Proxy Voting Committee is prohibited from voting on any proposal for which he or she has a conflict of interest by reason of a direct relationship with the issuer or other party affected by a given proposal. Persons making recommendations to the Proxy Voting Committee or its members are required to disclose to the committee any relationship with a party making a proposal or other matter known to the person that would create a potential conflict of interest.
Voting Proxies of Affiliated Underlying Funds. Certain Funds may invest in shares of other Columbia Funds (referred to in this context as “underlying funds”) and may own substantial portions of these underlying funds. If such Funds are in a master-feeder structure, the feeder Fund will either seek instructions from its shareholders with regard to the voting of proxies with respect to the master fund’s shares and vote such proxies in accordance with such instructions or vote the shares held by it in the same proportion as the vote of all other master fund shareholders. With respect to Funds that hold shares of underlying funds other than in a master-feeder structure, the holding Funds will vote proxies of underlying funds in the same proportion as the vote of all other holders of the underlying fund’s shares, unless the Board otherwise instructs.
Proxy Voting Agents. The Investment Manager has retained Institutional Shareholder Services Inc., a third-party vendor, as its proxy voting administrator to implement its proxy voting process and to provide recordkeeping and vote disclosure services. The Investment Manager has retained both Institutional Shareholder Services Inc. and Glass-Lewis & Co. to provide proxy research services.
Additional Information. Information regarding how the Columbia Funds (except certain Columbia Funds that do not invest in voting securities) voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds’ website at www.columbiamanagement.com and (ii) on the SEC’s website at www.sec.gov. For a copy of the Investment Manager’s voting guidelines in effect on the date of this SAI, see Appendix B to this SAI.
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Leadership Structure and Risk Oversight
The Board oversees the Trust and the Funds. The Trustees are responsible for overseeing the management and operations of the Trust. The Board consists of eleven Trustees who have varied experience and skills. Ten of the Trustees, including the Chairman of the Board, are Independent Trustees. The remaining Trustee, Mr. William F. Truscott, is an “interested person” (as defined in the 1940 Act) of the Columbia Funds by reason of his service as chairman of the board and president of the Investment Manager and director and chief executive officer of the Distributor. With respect to Mr. Truscott, the Trustees have concluded that having a senior officer of the Investment Manager serve as a Trustee benefits Fund shareholders by facilitating communication between the Independent Trustees and the senior management of the Investment Manager, and by assisting efforts to align the interests of the Investment Manager more closely with those of Fund shareholders. Further information about the backgrounds and qualifications of the Trustees can be found in the section Trustee Biographical Information and Qualifications. The Board has several standing committees, which are an integral part of each Fund’s overall governance and risk oversight structure. The committees include the Audit Committee, the Governance Committee, the Advisory Fees & Expenses Committee, the Compliance Committee, the Investment Oversight Committees and the Product and Distribution Committee. All of the members of each of the committees are Independent Trustees. The roles of each committee are more fully described in the section Standing Committees below.
The Funds have retained the Investment Manager as the Funds’ investment adviser and administrator. The Investment Manager provides the Funds with investment advisory services, and is responsible for day-to-day administration of the Funds and management of the risks that arise from the Funds’ investments and operations. The Board provides oversight of the services provided by the Investment Manager, including risk management services. In addition, each committee of the Board provides oversight of the Investment Manager’s risk management services with respect to the particular activities within the committee’s purview. In the course of providing oversight, the Board and the committees receive a wide range of reports with respect to the Funds’ activities, including reports regarding each Fund’s investment portfolio, the compliance of the Funds with applicable laws, and the Funds’ financial accounting and reporting. The Board and the relevant committees meet periodically with officers of the Funds and the Investment Manager and with representatives of various of the Funds’ service providers. The Board and certain committees also meet periodically with the Funds’ Chief Compliance Officer to receive reports regarding the compliance of the Funds and the Investment Manager with the federal securities laws and their internal compliance policies and procedures. In addition, the Board meets periodically with the portfolio managers of the Funds to receive reports regarding the management of the Funds, including their investment risks.
The Board reviews its leadership structure periodically and believes that its structure is appropriate, in light of the size of the Trust and the nature of its business, to enable the Board to exercise its oversight of the Funds and the other investment companies overseen by the Trustees. In particular, the Board believes that having an Independent Trustee serve as the chair of the Board and having other Independent Trustees serve as chairs of each committee promotes independence from the Investment Manager in setting agendas and conducting meetings. The Board believes that its committee structure makes the oversight process more efficient and more effective by allowing, among other things, smaller groups of Trustees to bring increased focus to matters within the purview of each committee.
Standing Committees
Ms. Lukitsh and Messrs. Hacker, Nelson and Neuhauser are members of the Advisory Fees & Expenses Committee. The Advisory Fees & Expenses Committee’s functions include reviewing and making recommendations to the Board as to contracts requiring approval of a majority of the Independent Trustees and as to any other contracts that may be referred to the Advisory Fees & Expenses Committee by the Board.
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Ms. Verville and Messrs. Hacker, Moffett and Simpson are members of the Audit Committee. The Audit Committee’s functions include making recommendations to the Board regarding the selection and performance of the independent registered public accounting firm, and reviewing matters relating to accounting and auditing practices and procedures, accounting records and the internal accounting controls of the Funds and certain service providers.
Mses. Kelly and Verville and Messrs. Moffett and Nelson are members of the Compliance Committee. The Compliance Committee’s functions include, among other things, monitoring, supervising and assessing the performance of each Fund’s Chief Compliance Officer and reviewing his compensation, reviewing periodically and recommending changes to the codes of ethics and compliance policies of each Fund and its service providers, and reviewing each Fund’s portfolio execution.
Mses. Kelly and Lukitsh and Messrs. Mayer and Neuhauser are members of the Product and Distribution Committee. The Product and Distribution Committee’s functions include, among other things, reviewing such matters relating to the marketing of the Funds and the distribution of the Fund’s shares, including matters relating
to the design and positioning of funds, marketing and distribution strategies for the Funds and the effectiveness and competitiveness of such strategies, as the Committee may deem appropriate.
Messrs. Drake, Hacker, Mayer and Simpson are members of the Governance Committee. The Governance Committee’s functions include recommending to the Board nominees for Independent Trustee positions and for appointments to various committees, overseeing the Board’s periodic evaluations of the effectiveness of the Board, reviewing and recommending to the Board governance and other policies and practices to be followed in carrying out the Trustees’ duties and responsibilities and reviewing and making recommendations to the Board regarding the compensation of the Independent Trustees.
The Governance Committee will consider nominees for Trustee recommended by shareholders provided that such recommendations are submitted by the date disclosed in a Fund’s proxy statement and otherwise comply with applicable securities laws, including Rule 14a-8 under the 1934 Act. Such shareholder recommendations must be in writing and should be sent to the attention of the Governance Committee in care of the Fund at 225 Franklin Street, Boston, MA 02110. Shareholder recommendations should include the proposed nominee’s biographical information (including business experience for the past ten years) and a description of the qualifications of the proposed nominee, along with a statement from the proposed nominee that he or she is willing to serve and meets the requirements to serve as an Independent Trustee, if applicable.
Each Independent Trustee also serves on an Investment Oversight Committee (IOC). Each IOC is responsible for monitoring, on an ongoing basis, a select group of Columbia Funds overseen by the Board and gives particular consideration to such matters as each Fund’s adherence to its investment mandates, historical performance, changes in investment processes and personnel, and proposed changes to investment objectives. Investment personnel who manage the Funds attend IOC meetings from time to time to assist each IOC in its review of the Funds. Each IOC meets four times a year, as the applicable IOC did for each Fund’s most recently completed fiscal year. The below are members of the respective IOCs and the general categories of funds in the Columbia Funds Family which they review. These asset categories may be reassigned among the IOCs from time to time.
IOC #1: Ms. Verville, Messrs. Drake and Neuhauser are responsible for reviewing funds in the following asset categories: Global Stock, International Stock, Large Growth; Fixed Income – Core and Municipal.
IOC #2: Messrs. Mayer and Nelson and Mses. Kelly and Lukitsh are responsible for reviewing funds in the following asset categories: Asset Allocation, Large Blend Large Value, Small Value and Specialty; Fixed Income – High Yield, International Bond, Multi-Sector and Municipal.
IOC #3: Messrs. Hacker, Moffett and Simpson are responsible for reviewing funds in the following asset categories: Asset Allocation, Mid Growth, Money Market, Small Blend, Small Growth, Specialty; Fixed Income – Core, Municipal and Short Duration.
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The table below shows the number of times each committee met during each Fund’s most recent fiscal year. The table is organized by fiscal year end.
Fiscal Period | Audit Committee | Governance Committee | Advisory Fees & Expenses Committee | Compliance Committee | Investment Oversight Committee | Product & Distribution Committee* | ||||||||||||||||||
For Funds with fiscal periods ending March 31 | 6 | 7 | 7 | 8 | 6 | 3 | ||||||||||||||||||
For Funds with fiscal periods ending April 30 | 6 | 7 | 8 | 8 | 6 | 3 | ||||||||||||||||||
For Funds with fiscal periods ending May 31 | 7 | 7 | 8 | 7 | 6 | 3 | ||||||||||||||||||
For Funds with fiscal periods ending June 30 | 5 | 5 | 6 | 5 | 4 | 0 | ||||||||||||||||||
For Fund with fiscal periods ending July 31 | 6 | 6 | 5 | 5 | 4 | 0 | ||||||||||||||||||
For Funds with fiscal periods ending August 31 | 6 | 8 | 6 | 6 | 5 | 0 | ||||||||||||||||||
For Funds with fiscal periods ending September 30 | 6 | 8 | 5 | 6 | 5 | 0 | ||||||||||||||||||
For Funds with fiscal periods ending October 31 | 6 | 10 | 5 | 6 | 5 | 0 | ||||||||||||||||||
For Fund with fiscal periods ending November 30 | 5 | 10 | 5 | 5 | 5 | 0 | ||||||||||||||||||
For Fund with fiscal periods ending December 31 | 5 | 9 | 5 | 6 | 5 | 1 |
* | The first meeting of the Product and Distribution Committee was held on December 5, 2011. |
Trustee Biographical Information and Qualifications
The following provides an overview of the considerations that led the Board to conclude that each individual serving as a Trustee should so serve. Generally, no one factor was decisive in the selection of an individual to join the Board. Among the factors the Board considered when concluding that an individual should serve on the Board were the following: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s ability to work effectively with the other Trustees; (iii) the individual’s prior experience, if any, serving on the boards of public companies (including, where relevant, other investment companies) and other complex enterprises and organizations; and (iv) how the individual’s skills, experience and attributes would contribute to an appropriate mix of relevant skills and experience on the Board.
In respect of each current Trustee, the individual’s substantial professional accomplishments and experience, including in fields related to the operations of the Fund, were a significant factor in the determination that, in light of the business and structure of the Trust, the individual should serve as a Trustee. Following is a summary of each Trustee’s particular professional experience and additional considerations that contributed to the Board’s conclusion that an individual should serve as a Trustee:
Rodman L. Drake – Mr. Drake has significant experience serving as a CEO and on boards of directors for public companies, including investment companies. This experience includes holding such positions with the various boards as chairman, lead independent director, and chairman of the nominating, compensation and audit committees. Mr. Drake is Co-Founder of Baringo Capital LLC, and was previously the CEO of a hybrid REIT, president of a private equity firm and the CEO of a leading management consulting firm.
Douglas A. Hacker – Mr. Hacker has extensive executive experience, having served in various executive roles with United Airlines and more recently as an independent business executive. Mr. Hacker also has
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experience on other boards of directors. As former chief financial officer of United Airlines, Mr. Hacker has significant experience in accounting and financial management, including in a public company setting.
Janet Langford Kelly – Ms. Kelly is Senior Vice President, General Counsel and Corporate Secretary for ConocoPhillips. Prior to joining ConocoPhillips Ms. Kelly held senior legal and leadership roles in other large corporations and law firms, including as a partner at the law firms Sidley & Austin and at Zelle, Hoffman, Voelbel, Mason and Gette. Ms. Kelly has previously served on the board of directors for a public company and various industry groups and non-profit organizations.
Nancy T. Lukitsh – Ms. Lukitsh has extensive executive experience in the financial services industries, particularly with respect to the marketing of investment products, having served as Senior Vice President, Partner and Director of Marketing for Wellington Management Company, LLP. Ms. Lukitsh has previously served as Chair of Wellington Management Portfolios (commingled investment pools designed for non-U.S. institutional investors) and as a director of other Wellington affiliates. In addition, she has previously served on the boards of directors of various non-profit organizations. She is also a Chartered Financial Analyst.
William E. Mayer – Mr. Mayer has significant executive and board experience with financial services and investment companies. Mr. Mayer, currently a partner at a private equity firm, also has significant executive experience and experience working in finance. Previously, Mr. Mayer was a professor and Dean of the College of Business and Management at the University of Maryland and was President and CEO of The First Boston Corporation.
David M. Moffett – Mr. Moffett has extensive executive and board of director experience, including serving on audit committees for public companies. Mr. Moffett was selected as CEO when the Federal Home Loan Mortgage Corporation was placed under conservatorship in 2008, and served as a consultant to its interim chief executive officer and the board of directors until 2009. Formerly, Mr. Moffett was the CFO of a large U.S. bank holding company where his responsibilities included trust and wealth management.
Charles R. Nelson – Dr. Nelson is an experienced investment company trustee, having served on the Board, and the boards of predecessor funds, since 1981. He served as Professor of Economics at the University of Washington from 1976 to 2011, he has written several books, authored numerous articles in economics and finance, and served on editorial boards of professional journals. He is a Fellow of the Econometric Society and his contributions were the subject of a conference at the Federal Reserve Bank of Atlanta in 2006. Additionally, he is an experienced consultant on economic and statistical matters.
John J. Neuhauser – Dr. Neuhauser is an experienced investment company trustee, having served on the Board since 1985 and on the boards of other investment companies. In addition to his board experience, Dr. Neuhauser has extensive executive experience. He is currently the President of Saint Michael’s College and has served in a variety of other leadership roles in higher education.
Patrick J. Simpson – Mr. Simpson is a partner in the Portland, Oregon office of Perkins Coie LLP, an international law firm. Mr. Simpson’s practice includes such relevant areas as corporate governance, corporate finance and securities law compliance.
Anne-Lee Verville – Ms. Verville has significant executive experience. Prior to her retirement in 1997, she held various leadership and executive roles with IBM Corporation. Ms. Verville has previously served on the board of directors for a public company and non-profit organizations.
William F. Truscott – Mr. Truscott has significant executive and board experience with financial services and investment companies. Mr. Truscott has served on the Board of Trustees of the Legacy RiverSource Funds and affiliated funds (Columbia Funds Board) since 2001. He has served as chairman of the board of the Investment Manager since May 2010 and since February 2012 has served as its president. From 2001 to April 2010, Mr. Truscott served as the president, chairman of the board and chief investment officer of the Investment Manager. He has served as director of the Distributor since May 2010 and since February 2012 has served as its chief executive officer. From 2008 to April 2010, Mr. Truscott served as chairman of the board and chief executive officer of the Distributor.
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The following table provides additional biographical information about the Trustees as of the date of this SAI, including their principal occupations during the past five years, although their specific titles may have varied over the period. The mailing address of each Trustee is: c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street, Mail Drop BX32 05228, Boston, MA 02110.
Independent Trustee Biographical Information
Name, Year of Birth the Trust | Year First Appointed or Elected as Trustee to any Fund Currently in the Columbia Funds Complex or a Predecessor Thereof | Principal Past Five Years | Number of Funds in the Columbia Funds Complex Overseen | Other Directorships Held by Past Five Years | ||||||||
Rodman L. Drake (Born 1943) Trustee and Chairman of the Board | 1994 | Independent consultant since 2010; Co-Founder of Baringo Capital LLC (private equity) from 1997 to 2008; Chairman of Crystal River Capital, Inc. (real estate investment trust) from 2003 to 2010; and CEO from 2008 to 2010 | 52 | Jackson Hewitt Tax Service Inc. (tax preparation services) from 2004 to 2011; Student Loan Corporation (student loan provider) from 2005 to 2010; Celgene Corporation (global biotechnology company); The Helios Funds and Brookfield Funds (closed-end funds); Crystal River Capital, Inc. from 2005 to 2010; Parsons Brinckerhoff from 1995 to 2008; and Apex Silver Mines Ltd. from 2007 to 2009 | ||||||||
Douglas A. Hacker (Born 1955) Trustee | 1996 | Independent business executive since May 2006; Executive Vice President – Strategy of United Airlines from December 2002 to May 2006; President of UAL Loyalty Services (airline marketing company) from September 2001 to December 2002; Executive Vice President and Chief Financial Officer of United Airlines from July 1999 to September 2001 | 52 | Nash Finch Company (food distributor); Aircastle Limited (aircraft leasing); and SeaCube Container Leasing Ltd. (container leasing) |
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Name, Year of Birth the Trust | Year First Appointed or Elected as Trustee to any Fund Currently in the Columbia Funds Complex or a Predecessor Thereof | Principal Occupation(s) During the Past Five Years | Number of Funds in the Columbia Funds Complex Overseen | Other Directorships Held by Past Five Years | ||||||||
Janet Langford Kelly (Born 1957) Trustee | 1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (integrated energy company) since September 2007; Deputy General Counsel – Corporate Legal Services, ConocoPhillips from August 2006 to August 2007; Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) from March 2005 to July 2006; Adjunct Professor of Law, Northwestern University from September 2004 to June 2006; Director, UAL Corporation (airline) from February 2006 to July 2006; Chief Administrative Officer and Senior Vice President, Kmart Holding Corporation (consumer goods) from September 2003 to March 2004 | 52 | None | ||||||||
Nancy T. Lukitsh (Born 1956) Trustee | 2011 | Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser) from 1997 to 2010; Chair, Wellington Management Investment Portfolios (commingled non-U.S. investment pools) from 2007 to 2010; Director, Wellington Trust Company, NA and other Wellington affiliates from 1997 to 2010 | 52 | None | ||||||||
William E. Mayer (Born 1940) Trustee | 1994 | Partner, Park Avenue Equity Partners (private equity) since February 1999; Dean and Professor, College of Business and Management, University of Maryland from 1992 to 1996 | 52 | DynaVox Inc. (speech creation); Lee Enterprises (print media); WR Hambrecht + Co. (financial service provider) from 2000 to 2012; BlackRock Kelso Capital Corporation (investment company) |
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Name, Year of Birth the Trust | Year First Appointed or Elected as Trustee to any Fund Currently in the Columbia Funds Complex or a Predecessor Thereof | Principal Past Five Years | Number of Funds in the Columbia Funds Complex Overseen | Other Directorships Held by Past Five Years | ||||||||
David M. Moffett (Born 1952) Trustee | 2011 | Retired. Chief Executive Officer, Federal Home Loan Mortgage Corporation, from 2008 to 2009; Senior Adviser, Global Financial Services Group, Carlyle Group, Inc., from 2007 to 2008; Vice Chairman and Chief Financial Officer, U.S. Bancorp, from 1993 to 2007 | 52 | CIT Group Inc. (commercial and consumer finance); eBay Inc. (online trading community); MBIA Inc. (financial service provider); E.W. Scripps Co. (print and television media); Building Materials Holding Corp. (building materials and construction services); and University of Oklahoma Foundation | ||||||||
Charles R. Nelson (Born 1942) Trustee | 1981 | Retired. Professor Emeritus, University of Washington since 2011; Professor of Economics, University of Washington from 1976 to 2011; Ford and Louisa Van Voorhis Professor of Political Economy, University of Washington from 1993 to 2011; Adjunct Professor of Statistics, University of Washington from 1980 to 2011; Associate Editor, Journal of Money, Credit and Banking from September 1993 to 2008; consultant on econometric and statistical matters | 52 | None | ||||||||
John J. Neuhauser (Born 1943) Trustee | 1984 | President, Saint Michael’s College since August 2007; Director or Trustee of several non-profit organizations, including Fletcher Allen Health Care, Inc.; Academic Vice President and Dean of Faculties, Boston College from August 1999 to October 2005; University Professor, Boston College from November 2005 to August 2007; | 52 | Liberty All-Star Equity Fund and Liberty All-Star Growth Fund (closed-end funds) |
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Name, Year of Birth the Trust | Year First Appointed or Elected as Trustee to any Fund Currently in the Columbia Funds Complex or a Predecessor Thereof | Principal Past Five Years | Number of Funds in the Columbia Funds Complex Overseen | Other Directorships Held by Past Five Years | ||||||||
Patrick J. Simpson (Born 1944) Trustee | 2000 | Partner, Perkins Coie LLP (law firm) | 52 | None | ||||||||
Anne-Lee Verville (Born 1945) Trustee | 1998 | Retired. General Manager, Global Education Industry from 1994 to 1997, President – Application Systems Division from 1991 to 1994, Chief Financial Officer – US Marketing & Services from 1988 to 1991, and Chief Information Officer from 1987 to 1988, IBM Corporation (computer and technology) | 52 | Enesco Group, Inc. (producer of giftware and home and garden decor products) from 2001 to 2006 |
Interested Trustee Biographical Information
Name, Year of Birth the Trust | Year First Appointed or Elected as Trustee to the Board | Principal Past Five Years | Number of Funds in the Columbia Funds Complex Overseen | Other Directorships Held by Past Five Years | ||||||||
William F. Truscott (Born 1960) Trustee | 2012 | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively (previously President, Chairman of the Board and Chief Investment Officer, from 2001 to April 2010); Chief Executive Officer, Global Asset Management (previously, Chief Executive Officer, U.S. Asset Management & President, Annuities, Ameriprise Financial, Inc. from May 2010 to September 2012; President – U.S. Asset Management and Chief Investment Officer from 2005 to April 2010, and Senior Vice President – Chief Investment Officer, from 2001 to 2005); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively (previously Chairman of the Board and Chief Executive Officer from 2008 to April 2010); Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006. | 208 | Columbia Funds Board |
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Compensation
Trustees are compensated for their services to the Columbia Funds complex on a complex-wide basis, as shown in the table below. Mr. Truscott as an Interested Trustee receives no compensation from the Funds.
Aggregate Compensation from Fund Independent Trustees | ||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Rodman L. Drake(1) | John D. Collins(2) | Douglas A. Hacker | Janet Langford Kelly(3) | Nancy T. Lukitsh(4) | William E. Mayer | David M. Moffett(5) | Charles R. Nelson | John J. Neuhauser | Jonathan Piel(6) | Patrick J. Simpson(7) | Anne-Lee Verville(8) | ||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ending March 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Emerging Markets Fund | $ | 3,938 | $ | 635 | $ | 3,169 | $ | 2,753 | $ | 1,828 | $ | 2,843 | $ | 2,588 | $ | 2,848 | $ | 2,851 | $ | 546 | $ | 2,720 | $ | 2,927 | ||||||||||||||||||||||||
Amount deferred | $ | 1,143 | $ | 384 | — | $ | 339 | — | — | — | — | — | — | $ | 1,323 | — | ||||||||||||||||||||||||||||||||
Energy and Natural Resources Fund | $ | 5,509 | $ | 867 | $ | 4,428 | $ | 3,849 | $ | 2,552 | $ | 3,974 | $ | 3,604 | $ | 3,981 | $ | 3,986 | $ | 766 | $ | 3,803 | $ | 4,092 | ||||||||||||||||||||||||
Amount deferred | $ | 1,596 | $ | 323 | $ | 468 | $ | 1,846 | ||||||||||||||||||||||||||||||||||||||||
Pacific/ Asia Fund | $ | 2,393 | $ | 322 | $ | 1,935 | $ | 1,683 | $ | 1,178 | $ | 1,736 | $ | 1,610 | $ | 1,739 | $ | 1,741 | $ | 286 | $ | 2,800 | $ | 1,786 | ||||||||||||||||||||||||
Amount deferred | $ | 566 | $ | 127 | — | $ | 229 | — | — | — | — | — | — | $ | 1,092 | — | ||||||||||||||||||||||||||||||||
Select Large Cap Growth Fund | $ | 20,600 | $ | 2,970 | $ | 16,544 | $ | 14,395 | $ | 9,931 | $ | 14,847 | $ | 13,485 | $ | 14,871 | $ | 14,936 | $ | 2,621 | $ | 14,202 | $ | 15,306 | ||||||||||||||||||||||||
Amount deferred | $ | 7,668 | $ | 1,078 | — | $ | 1,964 | — | — | — | — | — | — | $ | 6,872 | — | ||||||||||||||||||||||||||||||||
Select Small Cap Fund | $ | 4,319 | $ | 723 | $ | 3,471 | $ | 3,014 | $ | 1,935 | $ | 3,115 | $ | 2,814 | $ | 3,120 | $ | 3,119 | $ | 639 | $ | 2,982 | $ | 3,205 | ||||||||||||||||||||||||
Amount deferred | $ | 979 | $ | 271 | — | $ | 332 | — | — | — | — | — | — | $ | 1,172 | — | ||||||||||||||||||||||||||||||||
Value and Restructuring Fund | $ | 28,303 | $ | 5,098 | $ | 22,641 | $ | 19,659 | $ | 12,249 | $ | 20,327 | $ | 18,076 | $ | 20,362 | $ | 20,374 | $ | 4,498 | $ | 19,469 | $ | 20,933 | ||||||||||||||||||||||||
Amount deferred | $ | 6,289 | $ | 1,842 | — | $ | 2,052 | — | — | — | — | — | — | $ | 7,624 | — | ||||||||||||||||||||||||||||||||
For Funds with fiscal year ending April 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Bond Fund* | $ | 7,713 | $ | 664 | $ | 6,353 | $ | 5,560 | $ | 4,309 | $ | 5,696 | $ | 5,353 | $ | 5,680 | $ | 5,701 | $ | 596 | $ | 5,438 | $ | 5,861 | ||||||||||||||||||||||||
Amount deferred | $ | 2,396 | $ | 317 | — | $ | 900 | — | — | — | — | — | — | $ | 2,780 | — | ||||||||||||||||||||||||||||||||
Bond Fund** | $ | 1,745 | — | $ | 875 | $ | 872 | $ | 925 | $ | 960 | $ | 1,047 | $ | 925 | $ | 1,099 | — | $ | 872 | $ | 1,003 | ||||||||||||||||||||||||||
Amount deferred | — | — | — | $ | 852 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Corporate Income Fund* | $ | 4,703 | $ | 671 | $ | 3,786 | $ | 3,292 | $ | 2,259 | $ | 3,398 | $ | 3,108 | $ | 3,403 | $ | 3,411 | $ | 593 | $ | 3,250 | $ | 3,499 | ||||||||||||||||||||||||
Amount deferred | $ | 1,368 | $ | 252 | — | $ | 433 | — | — | — | — | — | — | $ | 1,582 | — | ||||||||||||||||||||||||||||||||
Corporate Income Fund** | $ | 1,145 | — | $ | 574 | $ | 572 | $ | 692 | $ | 629 | $ | 687 | $ | 572 | $ | 721 | — | $ | 572 | $ | 658 | ||||||||||||||||||||||||||
Amount deferred | — | — | — | $ | 572 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Intermediate Bond Fund* | $ | 12,755 | $ | 1,964 | $ | 10,265 | $ | 8,939 | $ | 6,137 | $ | 9,204 | $ | 8,658 | $ | 9,230 | $ | 9,259 | $ | 1,734 | $ | 8,809 | $ | 9,496 | ||||||||||||||||||||||||
Amount deferred | $ | 3,695 | $ | 717 | — | $ | 1,199 | — | — | — | — | — | — | $ | 4,279 | — | ||||||||||||||||||||||||||||||||
Intermediate Bond Fund** | $ | 2,415 | — | $ | 1,211 | $ | 1,207 | $ | 1,461 | $ | 1,328 | $ | 1,449 | $ | 1,280 | $ | 1,521 | — | $ | 1,207 | $ | 1,388 | ||||||||||||||||||||||||||
Amount deferred | — | — | — | $ | 1,207 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Small Cap Value Fund I*** | $ | 9,381 | $ | 592 | $ | 7,502 | $ | 6,573 | $ | 5,194 | $ | 6,872 | $ | 6,463 | $ | 6,853 | $ | 6,840 | $ | 573 | $ | 6,502 | $ | 6,986 | ||||||||||||||||||||||||
Amount deferred† | $ | 2,759 | $ | 592 | — | $ | 1,506 | — | — | — | — | — | — | $ | 3,191 | — | ||||||||||||||||||||||||||||||||
U.S. Treasury Index Fund* | $ | 3,727 | $ | 576 | $ | 3,000 | $ | 2,605 | $ | 1,736 | $ | 2,691 | $ | 2,453 | $ | 2,696 | $ | 2,699 | $ | 509 | $ | 2,575 | $ | 2,770 | ||||||||||||||||||||||||
Amount deferred | $ | 1,083 | $ | 218 | — | $ | 324 | — | — | — | — | — | — | $ | 1,252 | — | ||||||||||||||||||||||||||||||||
U.S. Treasury Index Fund** | $ | 691 | — | $ | 347 | $ | 346 | $ | 418 | $ | 380 | $ | 415 | $ | 366 | $ | 435 | — | $ | 346 | $ | 397 | ||||||||||||||||||||||||||
Amount deferred | — | — | — | $ | 346 | — | — | — | — | �� | — | — | — | — |
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Aggregate Compensation from Fund Independent Trustees | ||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Rodman L. Drake(1) | John D. Collins(2) | Douglas A. Hacker | Janet Langford Kelly(3) | Nancy T. Lukitsh(4) | William E. Mayer | David M. Moffett(5) | Charles R. Nelson | John J. Neuhauser | Jonathan Piel(6) | Patrick J. Simpson(7) | Anne-Lee Verville(8) | ||||||||||||||||||||||||||||||||||||
For Funds with fiscal year ending May 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Dividend Income Funda | $ | 15,911 | — | $ | 11,982 | $ | 10,567 | $ | 9,569 | $ | 11,089 | $ | 11,095 | $ | 10,905 | $ | 11,295 | — | $ | 10,426 | $ | 11,655 | ||||||||||||||||||||||||||
Amount deferred | $ | 3,766 | — | — | $ | 3,109 | — | — | — | — | — | — | $ | 4,353 | — | |||||||||||||||||||||||||||||||||
High Yield Municipal Fundb | $ | 4,724 | — | $ | 3,596 | $ | 3,152 | $ | 2,813 | $ | 3,313 | $ | 3,283 | $ | 3,253 | $ | 3,359 | — | $ | 3,113 | $ | 3,460 | ||||||||||||||||||||||||||
Amount deferred | $ | 1,145 | — | — | $ | 871 | — | — | — | — | — | — | $ | 1,323 | ||||||||||||||||||||||||||||||||||
High Yield Opportunity Fund | $ | 3,206 | — | $ | 2,443 | $ | 2,144 | $ | 1,915 | $ | 2,251 | $ | 2,229 | $ | 2,212 | $ | 2,281 | — | $ | 2,116 | $ | 2,349 | ||||||||||||||||||||||||||
Amount deferred | $ | 783 | — | — | $ | 584 | — | — | — | — | — | — | $ | 905 | — | |||||||||||||||||||||||||||||||||
International Bond Fund | $ | 2,201 | — | $ | 1,669 | $ | 1,471 | $ | 1,338 | $ | 1,541 | $ | 1,534 | $ | 1,516 | $ | 1,568 | — | $ | 1,449 | $ | 1,612 | ||||||||||||||||||||||||||
Amount deferred | $ | 531 | — | — | $ | 426 | — | — | — | — | — | — | $ | 614 | — | |||||||||||||||||||||||||||||||||
Strategic Income Fund | $ | 9,566 | — | $ | 7,257 | $ | 6,365 | $ | 5,718 | $ | 6,691 | $ | 6,656 | $ | 6,572 | $ | 6,799 | — | $ | 6,285 | $ | 7,005 | ||||||||||||||||||||||||||
Amount deferred | $ | 5,762 | — | — | $ | 1,778 | — | — | — | — | — | — | $ | 2,647 | — | |||||||||||||||||||||||||||||||||
For the Fund with fiscal year ending July 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Ultra Short Term Bond Fund | $ | 7,332 | $ | 4,201 | $ | 5,898 | $ | 5,009 | $ | 245 | $ | 5,350 | $ | 1,389 | $ | 5,316 | $ | 5,116 | $ | 3,751 | $ | 5,326 | $ | 5,364 | ||||||||||||||||||||||||
Amount deferred | $ | 1,310 | $ | 2,017 | — | — | — | — | — | — | — | — | $ | 3,532 | — | |||||||||||||||||||||||||||||||||
For Funds with fiscal year ending August 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Balanced Fund | $ | 3,473 | $ | 1,674 | $ | 2,799 | $ | 2,377 | $ | 328 | $ | 2,534 | $ | 605 | $ | 2,566 | $ | 2,474 | $ | 1,520 | $ | 2,510 | $ | 2,547 | ||||||||||||||||||||||||
Amount deferred | $ | 836 | $ | 719 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,613 | $ | 0 | ||||||||||||||||||||||||
Global Dividend Opportunity Fund | $ | 5,790 | $ | 2,860 | $ | 4,665 | $ | 3,961 | $ | 516 | $ | 4,222 | $ | 1,605 | $ | 4,202 | $ | 4,053 | $ | 2,533 | $ | 4,189 | $ | 4,244 | ||||||||||||||||||||||||
Amount deferred | $ | 1,355 | $ | 1,227 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 2,721 | $ | 0 | ||||||||||||||||||||||||
Greater China Fund | $ | 3,014 | $ | 1,471 | $ | 2,433 | $ | 2,067 | $ | 275 | $ | 2,202 | $ | 872 | $ | 2,192 | $ | 2,115 | $ | 1,303 | $ | 2,183 | $ | 2,213 | ||||||||||||||||||||||||
Amount deferred | $ | 727 | $ | 634 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,412 | $ | 0 | ||||||||||||||||||||||||
Mid Cap Growth Fund | $ | 8,120 | $ | 4,114 | $ | 6,530 | $ | 5,976 | $ | 764 | $ | 5,908 | $ | 2,322 | $ | 6,131 | $ | 5,684 | $ | 3,479 | $ | 5,855 | $ | 5,945 | ||||||||||||||||||||||||
Amount deferred | $ | 1,982 | $ | 1,861 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3,757 | $ | 0 | ||||||||||||||||||||||||
Oregon Intermediate Municipal Bond Fund | $ | 4,261 | $ | 2,203 | $ | 3,601 | $ | 2,959 | $ | 351 | $ | 3,148 | $ | 1,123 | $ | 3,269 | $ | 3,024 | $ | 1,967 | $ | 3,125 | $ | 3,298 | ||||||||||||||||||||||||
Amount deferred | $ | 980 | $ | 1,024 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 2,081 | $ | 0 | ||||||||||||||||||||||||
Small Cap Growth Fund I | $ | 6,551 | $ | 3,123 | $ | 5,268 | $ | 4,476 | $ | 639 | $ | 4,300 | $ | 1,927 | $ | 4,747 | $ | 4,590 | $ | 2,766 | $ | 4,718 | $ | 4,798 | ||||||||||||||||||||||||
Amount deferred | $ | 1,556 | $ | 1,332 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3,010 | $ | 0 | ||||||||||||||||||||||||
Technology Fund | $ | 3,170 | $ | 1,545 | $ | 2,559 | $ | 2,173 | $ | 292 | $ | 2,316 | $ | 910 | $ | 2,305 | $ | 2,223 | $ | 1,369 | $ | 2,296 | $ | 2,327 | ||||||||||||||||||||||||
Amount deferred | $ | 756 | $ | 667 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,490 | $ | 0 | ||||||||||||||||||||||||
For Funds with fiscal year ending September 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Contrarian Core Fund | $ | 5,003 | $ | 2,496 | $ | 4,093 | $ | 3,410 | $ | 493 | $ | 3,631 | $ | 1,484 | $ | 3,698 | $ | 3,498.00 | $ | 2,097 | $ | 3,613 | $ | 3,758 | ||||||||||||||||||||||||
Amount deferred | $ | 1,704 | $ | 1,152 | — | — | — | — | — | — | — | — | $ | 2,310 | — | |||||||||||||||||||||||||||||||||
Large Cap Growth Fund | $ | 8,377 | $ | 4,369 | $ | 6,865 | $ | 5,713 | $ | 739 | $ | 6,083 | $ | 2,307 | $ | 6,204 | $ | 5,848 | $ | 3,665 | $ | 6,073 | $ | 6,303 | ||||||||||||||||||||||||
Amount deferred | $ | 2,875 | $ | 2,018 | — | — | — | — | — | — | — | — | $ | 3,957 | — | |||||||||||||||||||||||||||||||||
Small Cap Core Fund | $ | 5,292 | $ | 2,670 | $ | 4,335 | $ | 3,611 | $ | 511 | $ | 3,843 | $ | 1,546 | $ | 3,918 | $ | 3,700 | $ | 2,240 | $ | 3,828 | $ | 3,981 | ||||||||||||||||||||||||
Amount deferred | $ | 1,247 | $ | 1,237 | — | — | — | — | — | — | — | — | $ | 2,466 | — | |||||||||||||||||||||||||||||||||
For Funds with fiscal year ending October 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||
CA Tax-Exempt Fund | $ | 3,593 | $ | 1,280 | $ | 2,947 | $ | 2,369 | $ | 866 | $ | 2,620 | $ | 1,548 | $ | 2,526 | $ | 2,443 | $ | 1,116 | $ | 2,618 | $ | 2,583 | ||||||||||||||||||||||||
Amount deferred | $ | 935 | $ | 576 | — | — | — | — | — | — | — | — | $ | 1,377 | — |
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Aggregate Compensation from Fund Independent Trustees | ||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Rodman L. Drake(1) | John D. Collins(2) | Douglas A. Hacker | Janet Langford Kelly(3) | Nancy T. Lukitsh(4) | William E. Mayer | David M. Moffett(5) | Charles R. Nelson | John J. Neuhauser | Jonathan Piel(6) | Patrick J. Simpson(7) | Anne-Lee Verville(8) | ||||||||||||||||||||||||||||||||||||
CT Intermediate Municipal Bond Fund | $ | 3,030 | $ | 1,173 | $ | 2,551 | $ | 2,018 | $ | 725 | $ | 2,225 | $ | 1,303 | $ | 2,204 | $ | 2,080 | $ | 965 | $ | 2,219 | $ | 2,252 | ||||||||||||||||||||||||
Amount deferred | $ | 777 | $ | 602 | — | — | — | — | — | — | — | — | $ | 1,192 | — | |||||||||||||||||||||||||||||||||
CT Tax-Exempt Fund | $ | 2,316 | $ | 774 | $ | 1,896 | $ | 1,529 | $ | 596 | $ | 1,687 | $ | 1,052 | $ | 1,630 | $ | 1,579 | $ | 676 | $ | 1,678 | $ | 1,666 | ||||||||||||||||||||||||
Amount deferred | $ | 607 | $ | 351 | — | — | — | — | — | — | — | — | $ | 876 | — | |||||||||||||||||||||||||||||||||
Intermediate Municipal Bond Fund | $ | 12,977 | $ | 5,531 | $ | 10,962 | $ | 8,621 | $ | 2,699 | $ | 9,544 | $ | 5,070 | $ | 9,428 | $ | 8,872 | $ | 4,558 | $ | 9,587 | $ | 9,638 | ||||||||||||||||||||||||
Amount deferred | $ | 3,292 | $ | 2,780 | — | — | — | — | — | — | — | — | $ | 5,214 | — | |||||||||||||||||||||||||||||||||
MA Intermediate Municipal Bond Fund | $ | 3,600 | $ | 1,404 | $ | 2,723 | $ | 2,396 | $ | 851 | $ | 2,642 | $ | 1,532 | $ | 2,616 | $ | 2,470 | $ | 1,155 | $ | 2,637 | $ | 2,673 | ||||||||||||||||||||||||
Amount deferred | $ | 921 | $ | 716 | — | — | — | — | — | — | — | — | $ | 1,416 | — | |||||||||||||||||||||||||||||||||
MA Tax-Exempt Fund | $ | 2,486 | $ | 835 | $ | 2,036 | $ | 1,641 | $ | 630 | $ | 1,812 | $ | 1,117 | $ | 1,749 | $ | 1,694 | $ | 736 | $ | 1,804 | $ | 1,788 | ||||||||||||||||||||||||
Amount deferred | $ | 651 | $ | 835 | — | — | — | — | — | — | — | — | $ | 943 | — | |||||||||||||||||||||||||||||||||
NY Intermediate Municipal Bond Fund | $ | 3,366 | $ | 1,320 | $ | 2,834 | $ | 2,241 | $ | 792 | $ | 2,471 | $ | 1,433 | $ | 2,448 | $ | 2,310 | $ | 1,086 | $ | 2,467 | $ | 2,501 | ||||||||||||||||||||||||
Amount deferred | $ | 862 | $ | 674 | — | — | — | — | — | — | — | — | $ | 1,326 | — | |||||||||||||||||||||||||||||||||
NY Tax-Exempt Fund | $ | 2,237 | $ | 728 | $ | 1,829 | $ | 1,477 | $ | 595 | $ | 1,628 | $ | 1,031 | $ | 1,574 | $ | 1,526 | $ | 636 | $ | 1,617 | $ | 1,609 | ||||||||||||||||||||||||
Amount deferred | $ | 586 | $ | 196 | — | — | — | — | — | — | — | — | $ | 840 | — | |||||||||||||||||||||||||||||||||
For the Fund with fiscal year ended November 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Tax-Exempt Fund | $ | 12,052 | $ | 4,467 | $ | 9,888 | $ | 7,867 | $ | 2,823 | $ | 8,784 | $ | 4,945 | $ | 8,392 | $ | 8,174 | $ | 3,889 | $ | 8,743 | $ | 8,592 | ||||||||||||||||||||||||
Amount deferred | $ | 5,286 | $ | 1,987 | — | — | — | — | — | — | — | — | $ | 4,522 | — | |||||||||||||||||||||||||||||||||
For the Fund with fiscal period ended December 31 |
| |||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Equity Fund | $ | 3,907 | $ | 1,094 | $ | 3,194 | $ | 2,689 | $ | 1,284 | $ | 2,299 | $ | 1,576 | $ | 2,229 | $ | 2,193 | $ | 839 | $ | 2,805 | $ | 2,848 | ||||||||||||||||||||||||
Amount deferred | $ | 1,219 | $ | 410 | — | — | — | — | — | — | — | — | $ | 1,460 | — |
* | For fiscal year ended March 31, 2012. On April 1, 2012, the fiscal year end of each Fund was changed from March 31 to April 30. |
** | For the period from April 1, 2012 to April 30, 2012. |
*** | For the period from May 1, 2011 to April 30, 2012. During the period, the fiscal year end of Small Cap Value Fund I was changed from June 30 to April 30. |
a | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of Dividend Income Fund was changed from September 30 to May 31. |
b | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of High Yield Municipal Fund was changed from June 30 to May 31. |
1. | As of June 30, 2012, the value of Mr. Drake’s account under the deferred compensation plan was $374,563. |
2. | As of June 30, 2012, the value of Mr. Collins’ account under the deferred compensation plan was $355,207. Mr. Collins served as a Trustee of the Trust until May 2011. |
3. | As of June 30, 2012, the value of Ms. Kelly’s account under the deferred compensation plan was $51,943. |
4. | Ms. Lukitsh began serving as a Trustee of the Trust in August 2011. |
5. | Mr. Moffett began serving as a Trustee of the Trust in May 2011. |
6. | Mr. Piel served as a Trustee of the Trust until May 2011. |
7. | As of June 30, 2012, the value of Mr. Simpson account under the deferred compensation plan was $1,463,611. |
8. | As of June 30, 2012, the value of Ms. Verville’s account under the deferred compensation plan was $724,863. |
William F. Truscott, the Interested Trustee, is not compensated by the Funds for his services on the Board. Michael A. Jones served as Interested Trustee of the Trust until February 2012. Mr. Jones received no compensation from the Funds for his services on the Board.
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Independent Trustee Compensation for the Fiscal Year Ended May 31, 2012
Name of Trustee | Total Compensation from the Columbia Funds Complex Paid to Independent Trustees for the Fiscal Year Ended May 31, 2012 | |||
Rodman L. Drake | $ | 264,000 | ||
Amount deferred | $ | 64,000 | ||
John D. Collins a | — | |||
Amount deferred | — | |||
Douglas A. Hacker | $ | 200,588 | ||
Amount deferred | — | |||
Janet Langford Kelly | $ | 176,500 | ||
Amount deferred | $ | 50,000 | ||
Nancy T. Lukitsh b | $ | 159,557 | ||
Amount deferred | — | |||
William E. Mayer | $ | 185,016 | ||
Amount deferred | — | |||
David Moffett c | $ | 184,429 | ||
Amount deferred | — | |||
Charles R. Nelson | $ | 182,000 | ||
Amount deferred | — | |||
John J. Neuhauser | $ | 188,000 | ||
Amount deferred | — | |||
Jonathan Piel d | — | |||
Amount deferred | — | |||
Patrick J. Simpson | $ | 174,000 | ||
Amount deferred | $ | 74,000 | ||
Anne-Lee Verville | $ | 194,000 | ||
Amount deferred | — |
* | All Trustees receive reimbursements for reasonable expenses related to their attendance at meetings of the Board or standing committees, which are not included in the amounts shown. |
a | Mr. Collins served as a Trustee of the Trust until May 2011. |
b | Ms. Lukitsh began serving as a Trustee of the Trust in August 2011. |
c | Mr. Moffett began serving as a Trustee of the Trust in May 2011. |
d | Mr. Piel served as a Trustee of the Trust until May 2011. |
Interested Trustee Compensation for the Fiscal Year Ended May 31, 2012
Name of Trustee | Total Compensation from the Columbia Funds Complex Paid to Interested Trustee for the Fiscal Year Ended May 31, 2012* | |||
William F. Truscott | $ | 0 |
* | Mr. Truscott receives reimbursements for reasonable expenses related to his attendance at meetings of the Board or standing committees, which are not included in the amounts shown. Mr. Truscott became a Trustee in March 2012. Michael A. Jones served as Interested Trustee of the Trust until February 2012. Mr. Jones was not compensated by the Funds for his services on the Board, except for reimbursements for reasonable expenses related to his attendance at meetings of the Board or standing committees. |
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Columbia Funds Deferred Compensation Plan
Under the terms of the Deferred Fee Agreement (the Deferred Compensation Plan), each eligible Trustee may elect, on an annual basis, to defer receipt of all or a portion of compensation payable to him or her for service as Trustee for that calendar year (expressly, a Trustee may elect to defer his/her annual retainer, his/her attendance fees, or both components, which together comprise total compensation for service). Fees deferred by a Trustee are credited to a book reserve account (the Deferral Account) established by the Columbia Funds, the value of which is derived from the rate of return of one or more Columbia Funds selected by the Trustee (with accruals to the Deferral Account beginning at such time as a Trustee’s fund elections having been established, and proceeds for service having been paid into such account, and terminating at such time as when proceeds become payable to such Trustee under the Deferred Compensation Plan). Trustees may change their fund elections only in accordance with the provisions of the Deferred Compensation Plan.
Distributions from a Trustee’s Deferral Account will be paid by check, either in a lump sum or in annual installments. Payments made in annual installments are disbursed over a period of up to ten years, following such time as a Trustee may qualify to receive such payments. If a deferring Trustee dies prior to or after the commencement of the disbursement of amounts accrued in his/her Deferral Account, the balance of the account will be distributed to his/her designated beneficiary either in lump sum or in annual payments as established by such Trustee himself/herself, his/her beneficiary or his/her estate. Amounts payable under the Deferred Compensation Plan are not funded or secured in any way, and each deferring Trustee has the status of an unsecured creditor of the Columbia Fund(s) from which compensation has been deferred.
Beneficial Equity Ownership
The tables below show, for each Independent Trustee, the amount of Fund equity securities beneficially owned by the Trustee and the aggregate value of all investments in equity securities of the Columbia Funds Family overseen by the Trustee, stated as one of the following ranges: A = $0; B = $1-$10,000; C = $10,001-$50,000; D = $50,001-$100,000; and E = over $100,000. The tables do not include ownership of Columbia Funds overseen by other boards of trustees/directors. Michael A. Jones, who served as Interested Trustee until February 2012, did not beneficially own any shares of the funds in the Columbia Funds Family for the calendar year ended December 31, 2011.
Independent Trustee Ownership for the Calendar Year Ended December 31, 2011
Fund | Rodman L. Drake | Douglas A. Hacker | Janet Langford Kelly | Nancy T. Lukitsh | William E. Mayer | David Moffett | Charles R. Nelson | |||||||||||||||||||||
AP – Alternative Strategies Fund | A | A | A | A | A | A | A | |||||||||||||||||||||
AP – Core Plus Bond Fund | A | A | A | A | A | A | A | |||||||||||||||||||||
AP – Select Large Cap Growth Fund | A | A | A | A | A | A | A | |||||||||||||||||||||
AP – Small Cap Equity Fund | A | A | A | A | A | A | A | |||||||||||||||||||||
Balanced Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
CA Tax-Exempt Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
CT Intermediate Municipal Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
CT Tax-Exempt Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Contrarian Core Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Corporate Income Fund | B | 1 | A | A | A | A | A | E | ||||||||||||||||||||
Dividend Income Fund | C | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Emerging Markets Fund | B | 1 | E | A | A | A | A | A | ||||||||||||||||||||
Energy and Natural Resources Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Global Dividend Opportunity Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Greater China Fund | B | 1 | E | A | A | A | A | A | ||||||||||||||||||||
High Yield Municipal Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
High Yield Opportunity Fund | B | 1 | E | A | A | A | A | D | ||||||||||||||||||||
Intermediate Bond Fund | C | 1 | A | A | A | A | A | E | ||||||||||||||||||||
Intermediate Municipal Bond Fund | C | 1 | A | A | A | A | A | E | ||||||||||||||||||||
International Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Large Cap Growth Fund | B | 1 | A | A | A | A | A | D | ||||||||||||||||||||
MA Intermediate Municipal Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
MA Tax-Exempt Fund | B | 1 | A | A | A | A | A | A |
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Fund | Rodman L. Drake | Douglas A. Hacker | Janet Langford Kelly | Nancy T. Lukitsh | William E. Mayer | David Moffett | Charles R. Nelson | |||||||||||||||||||||
Mid Cap Growth Fund | B | 1 | A | A | A | A | A | E | ||||||||||||||||||||
NY Intermediate Municipal Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
NY Tax-Exempt Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Oregon Intermediate Municipal Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Pacific/Asia Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Real Estate Equity Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Risk Allocation Fund | A | A | A | A | A | A | A | |||||||||||||||||||||
Select Large Cap Growth Fund | C | 1 | E | A | A | A | A | A | ||||||||||||||||||||
Select Small Cap Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Small Cap Core Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Small Cap Growth Fund I | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Small Cap Value Fund I | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Strategic Income Fund | C | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Tax-Exempt Fund | C | 1 | A | E | A | A | A | A | ||||||||||||||||||||
Technology Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Ultra Short Term Bond Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
U.S. Treasury Index Fund | B | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Value and Restructuring Fund | C | 1 | A | A | A | A | A | A | ||||||||||||||||||||
Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustee | E | 1 | E | E | A | A | A | E |
1 | Includes the value of compensation payable under the Deferred Compensation Plan that is determined as if the amounts deferred had been invested, as of the date of deferral, in shares of one or more funds in the Columbia Funds Family overseen by the Trustee as specified by each Trustee. |
Independent Trustee Ownership for the Calendar Year Ended December 31, 2011
Fund | John J. Neuhauser | Patrick J Simpson | Anne–Lee Verville | |||||||||
AP – Alternative Strategies Fund | A | A | A | |||||||||
AP – Core Plus Bond Fund | A | A | A | |||||||||
AP – Select Large Cap Growth Fund | A | A | A | |||||||||
AP – Small Cap Equity Fund | A | A | A | |||||||||
Balanced Fund | A | D | 1 | B | 1 | |||||||
Bond Fund | A | C | 1 | A | ||||||||
CA Tax-Exempt Fund | A | C | 1 | C | 1 | |||||||
CT Intermediate Municipal Bond Fund | A | C | 1 | B | 1 | |||||||
CT Tax-Exempt Fund | A | C | 1 | B | 1 | |||||||
Contrarian Core Fund | A | C | 1 | B | 1 | |||||||
Corporate Income Fund | A | C | 1 | C | 1 | |||||||
Dividend Income Fund | A | C | 1 | C | 1 | |||||||
Emerging Markets Fund | A | C | 1 | A | ||||||||
Energy and Natural Resources Fund | A | C | 1 | A | ||||||||
Global Dividend Opportunity Fund | A | C | 1 | C | 1 | |||||||
Greater China Fund | A | C | 1 | B | 1 | |||||||
High Yield Municipal Fund | A | C | 1 | C | 1 | |||||||
High Yield Opportunity Fund | A | C | 1 | C | 1 | |||||||
Intermediate Bond Fund | A | D | 1 | C | 1 | |||||||
Intermediate Municipal Bond Fund | A | D | 1 | B | 1 | |||||||
International Bond Fund | A | B | 1 | A | ||||||||
Large Cap Growth Fund | A | E | 1 | D | 1 | |||||||
MA Intermediate Municipal Bond Fund | A | C | 1 | B | 1 | |||||||
MA Tax-Exempt Fund | E | C | 1 | C | 1 | |||||||
Mid Cap Growth Fund | A | C | 1 | B | 1 | |||||||
NY Intermediate Municipal Bond Fund | A | C | 1 | B | 1 | |||||||
NY Tax-Exempt Fund | A | B | 1 | B | 1 | |||||||
Oregon Intermediate Municipal Bond Fund | A | C | 1 | B | 1 | |||||||
Pacific/Asia Fund | A | B | 1 | A | ||||||||
Real Estate Equity Fund | A | C | 1 | B | 1 |
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Fund | John J. Neuhauser | Patrick J Simpson | Anne–Lee Verville | |||||||||
Risk Allocation Fund | A | A | A | |||||||||
Select Large Cap Growth Fund | A | C | 1 | A | ||||||||
Select Small Cap Fund | A | C | 1 | A | ||||||||
Small Cap Core Fund | A | C | 1 | B | 1 | |||||||
Small Cap Growth Fund I | A | C | 1 | B | 1 | |||||||
Small Cap Value Fund I | D | C | 1 | C | 1 | |||||||
Strategic Income Fund | A | D | 1 | D | 1 | |||||||
Tax-Exempt Fund | A | D | 1 | E | 1 | |||||||
Technology Fund | A | C | 1 | B | 1 | |||||||
Ultra Short Term Bond Fund | A | C | 1 | B | 1 | |||||||
U.S. Treasury Index Fund | A | C | 1 | B | 1 | |||||||
Value and Restructuring Fund | A | D | 1 | A | ||||||||
Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustee | E | E | 1 | E | 1 |
1 | Includes the value of compensation payable under the Deferred Compensation Plan that is determined as if the amounts deferred had been invested, as of the date of deferral, in shares of one or more funds in the Columbia Funds Family overseen by the Trustee as specified by each Trustee. |
Interested Trustee Ownership for the Calendar Year Ended December 31, 2011
Fund | William F. | |||
AP – Alternative Strategies Fund | A | |||
AP – Core Plus Bond Fund | A | |||
AP – Select Large Cap Growth Fund | A | |||
AP – Small Cap Equity Fund | A | |||
Balanced Fund | A | |||
Bond Fund | A | |||
CA Tax-Exempt Fund | A | |||
CT Intermediate Municipal Bond Fund | A | |||
CT Tax-Exempt Fund | A | |||
Contrarian Core Fund | D | |||
Corporate Income Fund | C | |||
Dividend Income Fund | C | |||
Emerging Markets Fund | C | |||
Energy and Natural Resources Fund | A | |||
Global Dividend Opportunity Fund | A | |||
Greater China Fund | A | |||
High Yield Municipal Fund | A | |||
High Yield Opportunity Fund | A | |||
Intermediate Bond Fund | A | |||
Intermediate Municipal Bond Fund | A | |||
International Bond Fund | A | |||
Large Cap Growth Fund | A | |||
MA Intermediate Municipal Bond Fund | A | |||
MA Tax-Exempt Fund | A | |||
Mid Cap Growth Fund | C | |||
NY Intermediate Municipal Bond Fund | A | |||
NY Tax-Exempt Fund | A | |||
Oregon Intermediate Municipal Bond Fund | A | |||
Pacific/Asia Fund | A | |||
Real Estate Equity Fund | A | |||
Risk Allocation Fund | A | |||
Select Large Cap Growth Fund | C | |||
Select Small Cap Fund | A | |||
Small Cap Core Fund | C | |||
Small Cap Growth Fund I | A | |||
Small Cap Value Fund I | A | |||
Strategic Income Fund | E |
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Fund | William F. | |||
Tax-Exempt Fund | A | |||
Technology Fund | A | |||
Ultra Short Term Bond Fund | A | |||
U.S. Treasury Index Fund | A | |||
Value and Restructuring Fund | A | |||
Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustee | E |
Ownership of Funds by Trustees and Officers
As of August 31, 2012, the Trustees and Officers of the Trust, as a group, beneficially owned less than 1% of each class of shares of each Fund, except as set forth in the table below:
Fund | Class | Percent of Class Beneficially Owned | ||||||
Greater China Fund | Class Z | 1.90 | % |
The following table provides basic information about the Officers of the Trust as of the date of this SAI, including their principal occupations during the past five years, although their specific titles may have varied over the period. The mailing address of each Officer is: c/o Columbia Management Investment Advisers, LLC, 225 Franklin Street, Mail Drop BX32 05228, Boston, MA 02110. In addition to Mr. Truscott, who is a Senior Vice President, the other officers are:
Officer Biographical Information
Name and Year of Birth | Position with the Trust | Year First Elected or Appointed to Office | Principal Occupation(s) | |||||
J. Kevin Connaughton (Born 1964) | President | 2009 | Senior Vice President and General Manager – Mutual Fund Products, Columbia Management Investment Advisers, LLC since May 2010; President, Columbia Funds, since 2009, and RiverSource Funds, since May 2010 (previously Senior Vice President and Chief Financial Officer, Columbia Funds, from June 2008 to January 2009, Treasurer, Columbia Funds, from October 2003 to May 2008, and senior officer of various other affiliated funds since 2000); Managing Director, Columbia Management Advisors, LLC from December 2004 to April 2010. | |||||
Michael G. Clarke (Born 1969) | Treasurer and Chief Financial Officer | 2009 | Vice President, Columbia Management Investment Advisers, LLC since May 2010; Managing Director of Fund Administration, Columbia Management Advisors, LLC, from September 2004 to April 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
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Name and Year of Birth | Position with the Trust | Year First Elected or Appointed to Office | Principal Occupation(s) | |||||
Scott R. Plummer (Born 1959) | Senior Vice President and Chief Legal Officer and Assistant Secretary | 2010 | Senior Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since June 2005; Vice President and Lead Chief Counsel – Asset Management, Ameriprise Financial, Inc. since May 2010 (previously Vice President and Chief Counsel – Asset Management, from 2005 to April 2010, and Vice President – Asset Management Compliance from 2004 to 2005); Vice President, Chief Counsel and Assistant Secretary, Columbia Management Investment Distributors, Inc. since 2008; Vice President, General Counsel and Secretary, Ameriprise Certificate Company since 2005; Chief Counsel, RiverSource Distributors, Inc. since 2006; senior officer of Columbia Funds and affiliated funds since 2006. | |||||
Thomas P. McGuire (Born 1972) | Chief Compliance Officer | 2012 | Vice President – Asset Management Compliance, Columbia Management Investment Advisers, LLC since 2010; Chief Compliance Officer, Ameriprise Certificate Company, since September 2010; Compliance Executive, Bank of America, 2005-2010. | |||||
Colin Moore (Born 1958) | Senior Vice President | 2010 | Director and Chief Investment Officer, Columbia Management Investment Advisers, LLC since May 2010; Manager, Managing Director and Chief Investment Officer of Columbia Management Advisors, LLC from 2007 to April 2010; Head of Equities, Columbia Management Advisors, LLC from 2002 to 2007. | |||||
Amy Johnson (Born 1965) | Vice President | 2010 | Senior Vice President and Chief Operating Officer, Columbia Management Investment Advisers, LLC since May 2010 (previously Chief Administrative Officer, from 2009 until April 2010, Vice President – Asset Management and Trust Company Services, from 2006 to 2009, and Vice President – Operations and Compliance from 2004 to 2006). | |||||
Paul D. Pearson (Born 1956) | Vice President and Assistant Treasurer | 2011 | Vice President, Investment Accounting, Columbia Management Investment Advisers, LLC, since May 2010; Vice President, Managed Assets, Investment Accounting, Ameriprise Financial Corporation. |
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Name and Year of Birth | Position with the Trust | Year First Elected or Appointed to Office | Principal Occupation(s) | |||
Joseph F. DiMaria (Born 1968) | Vice President and Chief Accounting Officer | Treasurer since 2009 and Chief Accounting Officer since 2008 | Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC from January 2006 to April 2010; Head of Tax/Compliance and Assistant Treasurer, Columbia Management Advisors, LLC, from November 2004 to December 2005. | |||
Stephen T. Welsh (Born 1957) | Vice President | 2006 | President and Director, Columbia Management Investment Services Corp. since May 2010; President and Director, Columbia Management Services, Inc. from July 2004 to April 2010; Managing Director, Columbia Management Distributors, Inc. from August 2007 to April 2010. | |||
Paul B. Goucher (Born 1968) | Vice President and Assistant Secretary | 2010 | Vice President and Chief Counsel of Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel from November 2008 to January 2010); Director, Managing Director and General Counsel of J. & W. Seligman & Co. Incorporated (Seligman) from July 2008 to November 2008 and Managing Director and Associate General Counsel of Seligman from January 2005 to July 2008. | |||
Christopher O. Petersen (Born 1970) | Vice President and Secretary | 2010 | Vice President and Chief Counsel, Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel or Counsel from April 2004 to January 2010); officer of Columbia Funds and affiliated funds since 2007. | |||
Michael E. DeFao (Born 1968) | Vice President and Assistant Secretary | 2011 | Vice President and Chief Counsel, Ameriprise Financial since May 2010; Associate General Counsel, Bank of America from June 2005 to April 2010. |
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BROKERAGE ALLOCATION AND OTHER PRACTICES
General Brokerage Policy, Brokerage Transactions and Broker Selection
Subject to policies established by the Board, the Investment Manager (or the investment subadviser(s) who make the day-to-day investment decisions for a Fund, as applicable) is responsible for decisions to buy and sell securities for each Fund, for the selection of broker-dealers, for the execution of a Fund’s securities transactions and for the allocation of brokerage commissions in connection with such transactions. The Investment Manager’s primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. Purchases and sales of securities on a securities exchange are effected through brokers who charge negotiated commissions for their services. Orders may be directed to any broker to the extent and in the manner permitted by applicable law.
In the over-the-counter market, securities generally are traded on a “net” basis with dealers acting as principals for their own accounts without stated commissions, although the price of a security usually includes a profit to the dealer. In underwritten offerings, securities are bought at a fixed price that includes an amount of compensation to the underwriter, generally referred to as the underwriter’s “concession” or “discount.” On occasion, certain money market instruments may be bought directly from an issuer, in which case no commissions or discounts are paid.
In placing orders for portfolio securities of the Funds, the Investment Manager gives primary consideration to obtaining the best net prices and most favorable execution. This means that the Investment Manager will seek to execute each transaction at a price and commission, if any, which provides the most favorable total cost or proceeds reasonably attainable in the circumstances. In seeking such execution, the Investment Manager will use its best judgment in evaluating the terms of a transaction, and will give consideration to various relevant factors, including, without limitation, the size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required for the transaction, the general execution and operational capabilities of the broker-dealer, the reputation, reliability, experience and financial condition of the broker-dealer, the value and quality of the services rendered by the broker-dealer in this instance and other transactions and the reasonableness of the spread or commission, if any. Research services received from broker-dealers supplement the Investment Manager’s own research and may include the following types of information: statistical and background information on industry groups and individual companies; forecasts and interpretations with respect to U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on political developments; Fund management strategies; performance information on securities and information concerning prices of securities; and information supplied by specialized services to the Investment Manager and to the Board with respect to the performance, investment activities and fees and expenses of other mutual funds. Such information may be communicated electronically, orally or in written form. Research services also may include the arranging of meetings with management of companies and the provision of access to consultants who supply research information.
The outside research is useful to the Investment Manager since, in certain instances, the broker-dealers utilized by the Investment Manager may follow a different universe of securities issuers and other matters than those that the Investment Manager’s staff can follow. In addition, this research provides the Investment Manager with a different perspective on financial markets, even if the securities research obtained relates to issues followed by the Investment Manager. Research services that are provided to the Investment Manager by broker-dealers are available for the benefit of all accounts managed or advised by the Investment Manager. In some cases, the research services are available only from the broker-dealer providing such services. In other cases, the research services may be obtainable from alternative sources. The Investment Manager is of the opinion that because the broker-dealer research supplements rather than replaces the Investment Manager’s own research, the receipt of such research does not tend to decrease the Investment Manager’s expenses, but tends to improve the quality of its investment advice. However, to the extent that the Investment Manager would have bought any such research services had such services not been provided by broker-dealers, the expenses of such services to
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the Investment Manager could be considered to have been reduced accordingly. Certain research services furnished by broker-dealers may be useful to the clients of the Investment Manager other than the Funds. Conversely, any research services received by the Investment Manager through the placement of transactions of other clients may be of value to the Investment Manager in fulfilling its obligations to the Funds. The Investment Manager is of the opinion that this material is beneficial in supplementing its research and analysis; and, therefore, it may benefit the Trust by improving the quality of the Investment Manager’s investment advice. The advisory fees paid by the Trust are not reduced because the Investment Manager receives such services.
Under Section 28(e) of the 1934 Act, the Investment Manager shall not be “deemed to have acted unlawfully or to have breached its fiduciary duty” solely because under certain circumstances it has caused the account to pay a higher commission than the lowest available. To obtain the benefit of Section 28(e), the Investment Manager must make a good faith determination that the commissions paid are “reasonable in relation to the value of the brokerage and research services provided by such member, broker, or dealer, viewed in terms of either that particular transaction or his overall responsibilities with respect to the accounts as to which he exercises investment discretion.” Accordingly, the price to a Funds in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified by other aspects of the portfolio execution services offered. Some broker-dealers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by the Investment Manager’s clients, including the Funds.
Commission rates are established pursuant to negotiations with broker-dealers based on the quality and quantity of execution services provided by broker-dealers in light of generally prevailing rates. On exchanges on which commissions are negotiated, the cost of transactions may vary among different broker-dealers. Transactions on foreign stock exchanges involve payment of brokerage commissions that generally are fixed. Transactions in both foreign and domestic over-the-counter markets generally are principal transactions with dealers, and the costs of such transactions involve dealer spreads rather than brokerage commissions. With respect to over-the-counter transactions, the Investment Manager, where possible, will deal directly with dealers who make a market in the securities involved, except in those circumstances in which better prices and execution are available elsewhere.
In certain instances there may be securities that are suitable for a Fund as well as for one or more of the other clients of the Investment Manager. Investment decisions for the Funds and for the Investment Manager’s other clients are made with the goal of achieving their respective investment objectives. A particular security may be bought or sold for only one client even though it may be held by, or bought or sold for, other clients. Likewise, a particular security may be bought for one or more clients when one or more other clients are selling that same security. Some simultaneous transactions are inevitable when a number of accounts receive investment advice from the same investment adviser, particularly when the same security is suitable for the investment objectives of more than one client. When two or more clients are engaged simultaneously in the purchase or sale of the same security, the securities are allocated among clients in a manner believed to be equitable to each. In some cases, this policy could have a detrimental effect on the price or volume of the security in a particular transaction that may affect the Funds.
The Funds may participate, if and when practicable, in bidding for the purchase of portfolio securities directly from an issuer in order to take advantage of the lower purchase price available to members of a bidding group. A Fund will engage in this practice, however, only when the Investment Manager, in its sole discretion, believes such practice to be otherwise in such Fund’s interests.
The Trust will not execute portfolio transactions through, or buy or sell portfolio securities from or to, the Distributor, the Investment Manager, the Administrator or their affiliates acting as principal (including repurchase and reverse repurchase agreements), except to the extent permitted by applicable law, regulation or order. However, the Investment Manager is authorized to allocate buy and sell orders for portfolio securities to certain broker-dealers and financial institutions, including, in the case of agency transactions, broker-dealers and
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financial institutions that are affiliated with Ameriprise Financial. To the extent that a Fund executes any securities trades with an affiliate of Ameriprise Financial, such Fund does so in conformity with Rule 17e-1 under the 1940 Act and the procedures that such Fund has adopted pursuant to the rule. In this regard, for each transaction, the Board will determine that: (i) the transaction resulted in prices for and execution of securities transactions at least as favorable to the particular Fund as those likely to be derived from a non-affiliated qualified broker-dealer; (ii) the affiliated broker-dealer charged the Fund commission rates consistent with those charged by the affiliated broker-dealer in similar transactions to clients comparable to the Fund and that are not affiliated with the broker-dealer in question; and (iii) the fees, commissions or other remuneration paid by the Fund did not exceed 2% of the sales price of the securities if the sale was effected in connection with a secondary distribution, or 1% of the purchase or sale price of such securities if effected in other than a secondary distribution.
Certain affiliates of Ameriprise Financial may have deposit, loan or commercial banking relationships with the corporate users of facilities financed by industrial development revenue bonds or private activity bonds bought by certain of the Columbia Funds. Ameriprise Financial or certain of its affiliates may serve as trustee, custodian, tender agent, guarantor, placement agent, underwriter, or in some other capacity, with respect to certain issues of securities. Under certain circumstances, a Fund may buy securities from a member of an underwriting syndicate in which an affiliate of Ameriprise Financial is a member. The Trust has adopted procedures pursuant to Rule 10f-3 under the 1940 Act, and intends to comply with the requirements of Rule 10f-3, in connection with any purchases of municipal securities that may be subject to Rule 10f-3.
Given the breadth of the Investment Manager’s investment management activities, investment decisions for the Funds are not always made independently from those for other funds, or other investment companies and accounts advised or managed by the Investment Manager. When a purchase or sale of the same security is made at substantially the same time on behalf of one or more of the Columbia Funds and another investment portfolio, investment company or account, the transaction will be averaged as to price and available investments allocated as to amount in a manner which the Investment Manager believes to be equitable to the Funds and such other funds, investment portfolio, investment company or account. In some instances, this investment procedure may adversely affect the price paid or received by a Fund or the size of the position obtained or sold by the Fund. To the extent permitted by law, the Investment Manager may aggregate the securities to be sold or bought for the Funds with those to be sold or bought for other funds, investment portfolios, investment companies, or accounts in executing transactions.
See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information about these and other conflicts of interest.
The following charts reflect the amounts of brokerage commissions paid by the Funds for the three most recently completed fiscal years, except as otherwise indicated. In certain instances, the Funds may pay brokerage commissions to broker-dealers that are affiliates of Ameriprise Financial. As indicated above, all such transactions involving the payment of brokerage commissions to affiliates are done in compliance with Rule 17e-1 under the 1940 Act.
Aggregate Brokerage Commissions Paid by the Funds
The following charts reflect the aggregate amount of brokerage commissions paid by the Funds for the three most recent fiscal years, except as otherwise indicated. Differences, year to year, in the amount of brokerage commissions paid by a Fund were primarily the result of increased market volatility as well as shareholder purchase and redemption activity in the Fund.
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Fund | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | |||||||||
Emerging Markets Fund | $ | 1,973,067 | $ | 1,685,409 | $ | 1,613,790 | ||||||
Energy and Natural Resources Fund | $ | 1,876,448 | $ | 6,137,174 | $ | 4,604,246 |
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Fund | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | |||||||||
Pacific/Asia Fund | $ | 664,375 | $ | 136,259 | $ | 121,276 | ||||||
Select Large Cap Growth Fund | $ | 3,367,597 | $ | 2,329,422 | $ | 1,269,007 | ||||||
Select Small Cap Fund | $ | 698,869 | $ | 997,850 | — | |||||||
Value and Restructuring Fund | $ | 2,905,070 | $ | 3,324,224 | $ | 2,433,201 |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended March 31, 2012 | Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2010 | ||||||||||||
Bond Fund | $ | 2,887 | $ | 7,922 | $ | 18,600 | — | |||||||||
Corporate Income Fund | $ | 444 | $ | 12,300 | $ | 20,513 | $ | 16,910 | ||||||||
Intermediate Bond Fund | $ | 4,744 | $ | 48,655 | $ | 173,845 | $ | 72,932 | ||||||||
U.S. Treasury Index Fund | — | — | — | — |
* | For the period from April 1, 2012 to April 30, 2012. During the period, the fiscal year end for each Fund was changed from March 31 to April 30. |
Fund | Fiscal Period Ended April 30, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009 | ||||||||||||
Small Cap Value Fund I | $ | 1,748,075 | $ | 1,708,280 | $ | 1,771,335 | $ | 1,761,043 |
* | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
Fund | Fiscal Year Ended May 31, 2012 | Fiscal Year Ended May 31, 2011 | Fiscal Year Ended May 31, 2010 | |||||||||
High Yield Opportunity Fund | — | — | — | |||||||||
International Bond Fund | $ | 200 | $ | 60 | $ | 7,557 | ||||||
Strategic Income Fund | $ | 73,021 | $ | 86,139 | — |
Fund | Fiscal Period Ended May 31, 2012* | Fiscal Year Ended June 30, 2011 | Fiscal Year Ended June 30, 2010 | Fiscal Year Ended June 30, 2009 | ||||||||||||
High Yield Municipal Fund | — | — | — | $ | 7,745 |
* | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
Fund | Fiscal Period Ended May 31, 2012* | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009 | ||||||||||||
Dividend Income Fund | $ | 2,176,548 | $ | 1,118,331 | $ | 943,668 | $ | 1,224,272 |
* | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
Fund | Fiscal Year Ended July 31, 2011 | Fiscal Year Ended July 31, 2010 | Fiscal Year Ended July 31, 2009 | |||||||||
Ultra Short Term Bond Fund | — | — | — |
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Fund | Fiscal Year Ended August 31, 2011 | Fiscal Year Ended August 31, 2010 | Fiscal Year Ended August 31, 2009 | |||||||||
Balanced Fund | $ | 498,630 | $ | 1,940 | $ | 358,996 | ||||||
Global Dividend Opportunity Fund | $ | 1,325,739 | $ | 1,505,109 | $ | 2,168,357 | ||||||
Greater China Fund | $ | 326,213 | $ | 495,486 | $ | 505,856 | ||||||
Mid Cap Growth Fund | $ | 3,716,464 | $ | 3,436,137 | $ | 4,070,265 | ||||||
Oregon Intermediate Municipal Bond Fund | — | — | $ | 358,996 | ||||||||
Small Cap Growth Fund I | $ | 3,227,355 | $ | 4,948,857 | $ | 2,979,089 | ||||||
Technology Fund | $ | 1,388,641 | $ | 1,507,722 | $ | 1,797,853 |
Fund | Fiscal Year Ended September 30, 2011 | Fiscal Year Ended September 30, 2010 | Fiscal Year Ended September 30, 2009 | |||||||||
Contrarian Core Fund | $ | 1,488,918 | $ | 961,464 | $ | 1,108,739 | ||||||
Large Cap Growth Fund | $ | 3,408,197 | $ | 2,815,647 | $ | 3,113,714 | ||||||
Small Cap Core Fund | $ | 748,746 | $ | 710,492 | $ | 401,075 |
Fund | Fiscal Year Ended October 31, 2011 | Fiscal Year Ended October 31, 2010 | Fiscal Year Ended October 31, 2009 | |||||||||
CA Tax-Exempt Fund | — | — | — | |||||||||
CT Intermediate Municipal Bond Fund | — | — | — | |||||||||
CT Tax-Exempt Fund | — | — | $ | 215 | ||||||||
Intermediate Municipal Bond Fund | — | — | — | |||||||||
MA Intermediate Municipal Bond Fund | — | — | — | |||||||||
MA Tax-Exempt Fund | — | — | $ | 306 | ||||||||
NY Intermediate Municipal Bond Fund | — | — | — | |||||||||
NY Tax-Exempt Fund | — | — | $ | 150 |
Fund | Fiscal Year Ended November 30, 2011 | Fiscal Year Ended November 30, 2010 | Fiscal Year Ended November 30, 2009 | |||||||||
Tax-Exempt Fund | $ | 1,886 | — | — |
Fund | Fiscal Year Ended December 31, 2011 | Fiscal Year Ended December 31, 2010 | Fiscal Period Ended December 31, 2009 | |||||||||
Real Estate Equity Fund | $ | 1,099,715 | $ | 769,811 | $ | 205,056 |
Brokerage Commissions Paid by the Funds to Certain Broker-Dealers
With the exception of Contrarian Core Fund, each Fund paid no brokerage commissions to affiliated broker-dealers , including Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), for the three most recently completed fiscal years. Contrarian Core Fund paid brokerage commissions for its most recently completed fiscal year, as indicated in the following table:
Fund | Broker-Dealer* | Aggregate Brokerage Commission Paid | Percentage of the Fund’s Aggregate Brokerage Commission Paid to the Certain Broker-Dealer During the Fund’s Most Recent Fiscal Year | Percentage of the Fund’s Aggregate Dollar Amount of Transactions Involving the Payment of Commission Effected Through the Certain Broker-Dealer During the Most Recent Fiscal Year Fund’s | ||||||||||
Contrarian Core Fund | MLPF&S | $ | 7,713 | 0.52 | % | 0.17 | % |
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* | Prior to May 1, 2010, MLPF&S (as of January 1, 2009) and other broker-dealers affiliated with BANA were affiliated broker-dealers of the Fund by virtue of being under common control with the Previous Adviser. The affiliation created by this relationship ended on May 1, 2010, when the investment advisory agreement with the Previous Adviser was terminated and the Fund entered into a new investment management services agreement with the Investment Manager. However, BANA, on behalf of its fiduciary accounts, continues to have investments in certain of the Columbia Funds. The amounts shown include any brokerage commissions paid to MLPF&S after May 1, 2010. |
The Funds or the Investment Manager, through an agreement or understanding with a broker-dealer, or otherwise through an internal allocation procedure, may direct, subject to applicable legal requirements, the Funds’ brokerage transactions to a broker-dealer because of the research services it provides the Funds or the Investment Manager.
During the Funds’ last applicable fiscal year (or period), each Fund directed certain brokerage transactions and paid related commissions in the amounts as follows:
Fund | Amount of Transactions | Related Commissions | ||||||
For Funds with fiscal year ended March 31, 2012 | ||||||||
Emerging Markets Fund | $ | 11,999,263 | $ | 10,222 | ||||
Energy and Natural Resources Fund | $ | 838,870,889 | $ | 505,338 | ||||
Pacific/ Asia Fund | $ | 2,548,341 | $ | 1,670 | ||||
Select Large Cap Growth Fund | $ | 3,595,893,443 | $ | 1,530,013 | ||||
Select Small Cap Fund | $ | 349,480,075 | $ | 271,718 | ||||
Value and Restructuring Fund | $ | 726,889,305 | $ | 634,168 | ||||
For Funds with fiscal year ended April 30, 2012 | ||||||||
Bond Funda | — | — | ||||||
Corporate Income Funda | — | — | ||||||
Intermediate Bond Funda | — | — | ||||||
Small Cap Value Fund Ib | $ | 451,222,389 | $ | 741,731 | ||||
U.S. Treasury Index Funda | — | — | ||||||
For Funds with fiscal year ended May 31, 2012 | ||||||||
Dividend Income Fundc | $ | 1,167,601,198 | $ | 791,952 | ||||
High Yield Municipal Fundd | — | — | ||||||
High Yield Opportunity Fund | — | — | ||||||
International Bond Fund | — | — | ||||||
Strategic Income Fund | — | — | ||||||
For the Fund with fiscal year ended July 31, 2011 | ||||||||
Ultra Short Term Bond Fund | — | — | ||||||
For Funds with fiscal year ended August 31, 2011 | ||||||||
Balanced Fund | $ | 296,750,754 | $ | 170,218 | ||||
Global Dividend Opportunity Fund | $ | 539,976,669 | $ | 415,309 | ||||
Greater China Fund | $ | 2,221,124 | $ | 3,086 | ||||
Mid Cap Growth Fund | $ | 905,424,443 | $ | 632,358 | ||||
Oregon Intermediate Municipal Bond Fund | — | — | ||||||
Small Cap Growth Fund I | $ | 852,601,437 | $ | 892,888 | ||||
Technology Fund | $ | 624,517,326 | $ | 545,019 |
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Fund | Amount of Transactions | Related Commissions | ||||||
For Funds with fiscal year ended September 30, 2011 | ||||||||
Contrarian Core Fund | $ | 822,298,555 | $ | 507,762 | ||||
Large Cap Growth Fund | $ | 827,528,450 | $ | 599,438 | ||||
Small Cap Core Fund | $ | 163,013,896 | $ | 232,024 | ||||
For Funds with fiscal year ended October 31, 2011 | ||||||||
CA Tax-Exempt Fund | — | — | ||||||
CT Intermediate Municipal Bond Fund | — | — | ||||||
CT Tax-Exempt Fund | — | — | ||||||
Intermediate Municipal Bond Fund | — | — | ||||||
MA Intermediate Municipal Bond Fund | — | — | ||||||
MA Tax-Exempt Fund | — | — | ||||||
NY Intermediate Municipal Bond Fund | — | — | ||||||
NY Tax-Exempt Fund | — | — | ||||||
For the Fund with fiscal year ended November 30, 2011 | ||||||||
Tax-Exempt Fund | — | — | ||||||
For the Fund with fiscal year ended December 31, 2011 | ||||||||
Real Estate Equity Fund | $ | 238,587,850 | $ | 262,921 |
a | During the period from April 1, 2012 to April 30, 2012, the fiscal year end of each Fund was changed from March 31 to April 30. |
b | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
c | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
d | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
Securities of Regular Broker-Dealers
In certain cases, the Funds, as part of their principal investment strategies, or otherwise as a permissible investment, will invest in the common stock or debt obligations of the regular broker-dealers that the Investment Manager uses to transact brokerage for the Funds.
As of each Fund’s most recent applicable fiscal year end (or period), the Funds owned securities of their “regular brokers or dealers” or their parents, as defined in Rule 10b-1 under the 1940 Act, as shown in the table below:
Investments in Securities of Regular Broker-Dealers
Fund | Broker-Dealer | Dollar Amount of Securities Held | ||||
For Funds with fiscal year ended March 31, 2012 |
| |||||
Emerging Markets Fund | None | $ | 0 | |||
Energy and Natural Resources Fund | None | $ | 0 | |||
Pacific/ Asia Fund | None | $ | 0 | |||
Select Large Cap Growth Fund | Franklin Resources, Inc. | $ | 263,989,173 | |||
Select Small Cap Fund | None | $ | 0 | |||
Value and Restructuring Fund | Citigroup, Inc. | $ | 30,972,000 | |||
JPMorgan Chase & Co. | $ | 45,980,000 |
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For Funds with fiscal year ended April 30, 2012* |
| |||||||||
Fund | Broker-Dealer | Dollar Amount of Securities Held | ||||||||
Fiscal year ended March 31, 2012 | Fiscal year ended April 30, 2012 | |||||||||
Bond Fund | Bear Stearns Commercial Mortgage Securities | $ | 52,082,246 | $ | 51,874,897 | |||||
Citigroup Capital XIII | $ | 4,901,168 | $ | 3,866,410 | ||||||
Citigroup Mortgage Loan Trust, Inc. | $ | 249,957 | $ | 238,353 | ||||||
Citigroup, Inc. | $ | 7,832,156 | $ | 5,970,773 | ||||||
Citigroup/Deutsche Bank Commercial Mortgage Trust | $ | 14,777,936 | $ | 14,933,063 | ||||||
Credit Suisse First Boston Mortgage Securities Corp. | $ | 3,568,399 | $ | 3,555,668 | ||||||
Credit Suisse Mortgage Capital Certificates | $ | 14,174,673 | $ | 14,157,601 | ||||||
Eaton Vance Corp. | $ | 1,428,804 | $ | 1,435,118 | ||||||
GS Mortgage Securities Corp. II | $ | 4,961,405 | $ | 4,971,762 | ||||||
JPMorgan Chase & Co. | $ | 1,320,102 | $ | 1,320,246 | ||||||
JPMorgan Chase Capital XVIII | $ | 381,140 | $ | 380,950 | ||||||
JPMorgan Chase Capital XX | $ | 7,103,340 | $ | 5,774,574 | ||||||
JPMorgan Chase Capital XXII | $ | 6,941,000 | $ | 5,646,000 | ||||||
JPMorgan Chase Capital XXIII | $ | 597,139 | $ | 595,717 | ||||||
JPMorgan Chase Commercial Mortgage Securities | $ | 40,304,410 | $ | 40,149,093 | ||||||
LB-UBS Commercial Mortgage Trust | $ | 28,853,144 | $ | 18,280,360 | ||||||
Merrill Lynch & Co., Inc. | $ | 4,697,577 | $ | 4,688,607 | ||||||
Merrill Lynch Mortgage Investors, Inc. | $ | 25,305 | $ | 24,662 | ||||||
Merrill Lynch Mortgage Trust | $ | 10,900,280 | $ | 10,859,140 | ||||||
Morgan Stanley Capital I | $ | 36,729,570 | $ | 36,522,810 | ||||||
Morgan Stanley Reremic Trust | $ | 6,464,431 | $ | 6,468,442 | ||||||
Morgan Stanley, Dean Witter Capital I | $ | 21,278,047 | $ | 11,245,174 | ||||||
PNC Financial Services Group, Inc. | $ | 0 | $ | 2,683,315 | ||||||
Corporate Income Fund | Citigroup, Inc. | $ | 22,435,253 | $ | 22,775,013 | |||||
E*TRADE Financial Corp. | $ | 1,751,341 | $ | 1,755,939 | ||||||
Goldman Sachs Group | $ | 25,120,588 | $ | 28,652,737 | ||||||
JPMorgan Chase & Co. | $ | 26,365,846 | $ | 27,018,454 | ||||||
Morgan Stanley | $ | 17,092,697 | $ | 20,031,741 | ||||||
Nuveen Investments, Inc. | $ | 585,271 | $ | 590,580 | ||||||
Intermediate Bond Fund | Bear Stearns Asset-Backed Securities Trust | $ | 500,556 | $ | 325,824 | |||||
Bear Stearns Commercial Mortgage Securities | $ | 38,475,535 | $ | 38,568,630 | ||||||
Citigroup, Inc. | $ | 29,180,913 | $ | 3,893,530 | ||||||
Citigroup/Deutsche Bank Commercial Mortgage Trust | $ | 20,730,767 | $ | 20,919,715 |
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Fund | Broker-Dealer | Dollar Amount of Securities Held | ||||||||
Fiscal year ended March 31, 2012 | Fiscal year ended April 30, 2012 | |||||||||
Citigroup Mortgage Loan Trust, Inc. | $ | 335,020 | $ | 319,773 | ||||||
Citigroup Capital XIII | $ | 31,376,424 | $ | 30,718,903 | ||||||
Credit Suisse Mortgage Capital Certificates | $ | 44,935,637 | $ | 44,321,488 | ||||||
E*TRADE Financial Corp. | $ | 1,478,231 | $ | 1,481,261 | ||||||
Eaton Vance Corp. | $ | 3,887,940 | $ | 3,367,667 | ||||||
GS Mortgage Securities Corp. II | $ | 23,562,000 | $ | 0 | ||||||
JPMorgan Chase & Co. | $ | 21,109,575 | $ | 21,111,887 | ||||||
JPMorgan Chase Commercial Mortgage Securities | $ | 36,465,535 | $ | 36,589,749 | ||||||
JPMorgan Mortgage Aquistion Corp | $ | 1,210,280 | $ | 1,165,052 | ||||||
JPMorgan Alternative Loan Trust | $ | 1,409,693 | $ | 1,294,477 | ||||||
JPMorgan Chase Capital XXII | $ | 4,005,000 | $ | 4,005,000 | ||||||
JPMorgan Chase Capital XX | $ | 18,051,810 | $ | 18,029,357 | ||||||
JPMorgan Chase Capital XXIII | $ | 2,518,370 | $ | 2,512,371 | ||||||
JPMorgan Chase Capital XXV | $ | 8,431,956 | $ | 8,426,925 | ||||||
LB-UBS Commercial Mortgage Trust | $ | 51,011,779 | $ | 51,118,754 | ||||||
Merrill Lynch & Co., Inc. | $ | 15,698,827 | $ | 7,501,272 | ||||||
Merrill Lynch Mortgage Trust | $ | 7,030,681 | $ | 7,004,145 | ||||||
Merrill Lynch Mortgage Investors, Inc. | $ | 165,502 | $ | 161,295 | ||||||
Morgan Stanley | $ | 16,590,536 | $ | 409,202 | ||||||
Morgan Stanley Capital I | $ | 38,023,390 | $ | 37,933,795 | ||||||
Morgan Stanley, Dean Witter Capital I | $ | 13,651,017 | $ | 13,229,462 | ||||||
Morgan Stanley Mortgage Loan Trust | $ | 806,806 | $ | 805,455 | ||||||
Morgan Stanley Reremic Trust | $ | 17,279,464 | $ | 17,290,188 | ||||||
Nuveen Investments, Inc. | $ | 527,653 | $ | 532,440 | ||||||
PNC Financial Services Group, Inc. | $ | 0 | $ | 15,900,850 | ||||||
U.S. Treasury Index Fund | None | $ | 0 | $ | 0 |
* | During the period from April 1, 2012 to April 30, 2012, the fiscal year end of each Fund was changed from March 31 to April 30. |
For Fund with fiscal year ended April 30, 2012† |
| |||||
Fiscal Period ended April 30, 2012 | ||||||
Small Cap Value Fund I | Investment Technology Group, Inc Knight Capital Group, Inc. Class A | $ $ | 2,368,777 11,172,811 |
|
† | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. |
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Fund | Broker-Dealer | Dollar Amount of Securities Held | ||||
For Funds with fiscal year ended May 31, 2012 |
| |||||
Dividend Income Fund* | JPMorgan Chase & Co. | $ | 93,910,635 | |||
PNC Financial Services Group, Inc. | $ | 52,303,736 | ||||
High Yield Municipal Fund** | None | $ | 0 | |||
High Yield Opportunity Fund | E*TRADE Financial Corp. | $ | 4,046,707 | |||
Nuveen Investments, Inc. | $ | 715,223 | ||||
International Bond Fund | None | $ | 0 | |||
Strategic Income Fund | Bear Stearns Commercial Mortgage Securities | $ | 7,421,923 | |||
Citigroup, Inc. | $ | 921,012 | ||||
Credit Suisse Mortgage Capital Certificates | $ | 9,972,471 | ||||
Credit Suisse First Boston Mort Sec Corp. | $ | 520,282 | ||||
E*TRADE Financial Corp. | $ | 11,874,045 | ||||
GS Mortgage Securities Corp. II | $ | 10,613,195 | ||||
JPMorgan Chase & Co. | $ | 2,964,608 | ||||
Morgan Stanley | $ | 10,623,603 | ||||
Nuveen Investments, Inc. | $ | 676,899 | ||||
Citigroup Mortgage Loan Trust, Inc. | $ | 13,701,475 | ||||
JPMorgan Chase Commercial Mortgage Securities | $ | 13,143,132 | ||||
JPMorgan Reremic | $ | 1,334,861 | ||||
Morgan Stanley Capital I | $ | 5,279,365 | ||||
Morgan Stanley Reremic Trust | $ | 10,698,442 | ||||
For the Fund with fiscal year ended July 31, 2011 |
| |||||
Ultra Short Term Bond Fund | JPMorgan Chase & Co. | $ | 33,867,810 | |||
Goldman Sachs & Co. | $ | 5,997,978 | ||||
Citigroup, Inc | $ | 11,879,867 | ||||
Morgan Stanley & Co., Inc. | $ | 39,509,989 | ||||
Deutsche Bank AG | $ | 18,566,114 | ||||
CS First Boston Corp. | $ | 7,125,709 | ||||
Barclays Capital | $ | 33,642,129 | ||||
Royal Bank of Canada | $ | 3,082,581 | ||||
For Funds with fiscal year ended August 31, 2011 |
| |||||
Balanced Fund | Goldman Sachs & Co. | $ | 15,272,145 | |||
JPMorgan Chase & Co. | $ | 2,611,391 | ||||
Global Dividend Opportunity Fund | Citigroup, Inc. | $ | 12,597,109 | |||
JPMorgan Chase & Co. | $ | 11,834,405 | ||||
Morgan Stanley & Co., Inc. | $ | 7,685,475 | ||||
Greater China Fund | None | $ | 0 | |||
Mid Cap Growth Fund | None | $ | 0 | |||
Oregon Intermediate Municipal Bond Fund | None | $ | 0 | |||
Small Cap Growth Fund I | None | $ | 0 | |||
Technology Fund | None | $ | 0 |
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Fund | Broker-Dealer | Dollar Amount of Securities Held | ||||
For Funds with fiscal year ended September 30, 2011 |
| |||||
Contrarian Core Fund | Citigroup, Inc | $ | 9,747,129 | |||
Goldman Sachs & Co. | $ | 20,391,599 | ||||
JPMorgan Chase & Co. | $ | 42,654,800 | ||||
Large Cap Growth Fund | TD Ameritrade Holding Corp. | $ | 10,034,692 | |||
Franklin Resources, Inc. | $ | 30,124,687 | ||||
JPMorgan Chase & Co. | $ | 21,189,420 | ||||
Small Cap Core Fund | Investment Technology Group, Inc. | $ | 4,095,255 | |||
For Funds with fiscal year ended October 31, 2011 |
| |||||
CA Tax-Exempt Fund | None | $ | 0 | |||
CT Intermediate Municipal Bond Fund | None | $ | 0 | |||
CT Tax-Exempt Fund | None | $ | 0 | |||
Intermediate Municipal Bond Fund | None | $ | 0 | |||
MA Intermediate Municipal Bond Fund | None | $ | 0 | |||
MA Tax-Exempt Fund | None | $ | 0 | |||
NY Intermediate Municipal Bond Fund | None | $ | 0 | |||
NY Tax-Exempt Fund | None | $ | 0 | |||
For the Fund with fiscal year ended November 30, 2011 |
| |||||
Tax-Exempt Fund | None | $ | 0 | |||
For the Fund with fiscal period ended December 31, 2011 |
| |||||
Real Estate Equity Fund | None | $ | 0 |
* | For the period from September 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
** | For the period from June 30, 2011 to May 31, 2012. During the period, the fiscal year end of the Fund was changed from June 30 to May 31. |
Additional Shareholder Servicing Payments
The Funds, along with the Transfer Agent, the Distributor and the Investment Manager, may pay significant amounts to Selling Agents, including other Ameriprise Financial affiliates, for providing the types of services that would typically be provided directly by a mutual fund’s transfer agent. The level of payments made to Selling Agents may vary. A number of factors may be considered in determining payments to a Selling Agent, including, without limitation, the nature of the services provided to shareholders or retirement plan participants that invest in the Funds through retirement plans. These services may include sub-accounting, sub-transfer agency or similar recordkeeping services, shareholder or participant reporting, shareholder or participant transaction processing, and/or the provision of call center support (additional shareholder services). These payments for shareholder servicing support vary by Selling Agent but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of each Fund’s shares on an annual basis. The Board has authorized each Fund to pay up to 0.20% of the average aggregate value of each Fund’s shares. Such payments will be made by a Fund to the Transfer Agent who will in turn make payments to the Selling Agent for the provision of such additional shareholder services. The Funds’ Transfer Agent, Distributor or their affiliates will pay, from its or their own resources, amounts in excess of the amount paid by the Funds to Selling Agents in connection with the provision of these additional shareholder services and other services.
The Funds also may make additional payments to Selling Agents that charge networking fees for certain services provided in connection with the maintenance of shareholder accounts through the NSCC.
In addition, the Distributor and other Ameriprise Financial affiliates may make lump sum payments to selected Selling Agents receiving shareholder servicing payments in reimbursement of printing costs for literature for participants, account maintenance fees or fees for establishment of the Funds on the Selling Agent’s system or other similar services.
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As of April 2012, the Distributor and/or other Ameriprise Financial affiliates had agreed to make shareholder servicing payments with respect to the Funds to the Selling Agents or their affiliates shown on the following page.
Recipients of Shareholder Servicing Payments with Respect to the Funds from the Distributor and/
or other Ameriprise Financial Affiliates
• | ADP Broker-Dealer, Inc. |
• | American Century Investment Management, Inc. |
• | American United Life Insurance Co. |
• | Ameriprise Financial Services, Inc.* |
• | Ascensus, Inc. |
• | AXA Advisors |
• | Bank of America, N.A. |
• | Benefit Plan Administrators |
• | Benefit Trust |
• | Charles Schwab & Co., Inc. |
• | Charles Schwab Trust Co. |
• | Davenport & Company |
• | City National Bank |
• | CPI Qualified Plan Consultants, Inc. |
• | Daily Access Concepts, Inc. |
• | Digital Retirement Solutions |
• | Edward D. Jones & Co., LP |
• | ExpertPlan |
• | Fidelity Investments Institutional Operations Co. |
• | First National Bank of Omaha |
• | Guardian Life and Annuity Company Inc. |
• | Genworth Life and Annuity Insurance Company |
• | GWFS Equities, Inc. |
• | Hartford Life Insurance Company |
• | Hartford Securities Distribution |
• | Hewitt Associates LLC |
• | ICMA Retirement Corporation |
• | ING Life Insurance and Annuity Company |
• | ING Institutional Plan Services, LLP |
• | Janney Montgomery Scott, Inc. |
• | JJB Hilliard Lyons |
• | John Hancock Life Insurance Company (USA) |
• | John Hancock Life Insurance Company of New York |
• | JP Morgan Retirement Plan Services LLC |
• | Lincoln Retirement Services |
• | LPL Financial Corporation |
• | Marshall & Illsley Trust Company |
• | Massachusetts Mutual Life Insurance Company |
• | Matrix Settlement & Clearance Services |
• | Mercer HR Services, LLC |
• | Merrill Lynch Life Insurance Company |
• | Merrill Lynch, Pierce, Fenner & Smith Incorporated |
• | Mid Atlantic Capital Corporation |
• | Minnesota Life Insurance Co. |
• | Morgan Stanley Smith Barney |
• | Morgan Keegan & Company |
• | National Financial Services |
• | Newport Retirement Services, Inc. |
• | New York State Deferred Compensation Plan |
• | NYLife Distributors LLC |
• | Oppenheimer |
• | Plan Administrators, Inc. |
• | PNC Bank |
• | Principal Life Insurance Company of America |
• | Prudential Insurance Company of America |
• | Prudential Retirement Insurance & Annuity Company |
• | Pershing LLC |
• | Raymond James & Associates |
• | RBC Dain Rauscher |
• | Reliance Trust |
• | Scott & Stringfellow, LLC |
• | Robert W. Baird & Co., Inc. |
• | Standard Insurance Company |
• | Stifel Nicolaus & Co. |
• | TD Ameritrade Clearing, Inc. |
• | TD Ameritrade Trust Company |
• | The Retirement Plan Company |
• | Teachers Insurance and Annuity Association of America |
• | Transamerica Life Insurance Company |
• | T. Rowe Price Group, Inc. |
• | UBS Financial Services, Inc. |
• | Unified Trust Company, N.A. |
• | Upromise Investments, Inc. |
• | USAA Investment Management Co |
• | Vanguard Group, Inc. |
• | VALIC Retirement Services Company |
• | Wells Fargo Bank, N.A. |
• | Wells Fargo Funds Management, LLC |
• | Wilmington Trust Company |
• | Wilmington Trust Retirement & Institutional Services Company |
* | Ameriprise Financial affiliate |
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The Distributor and/or other Ameriprise Financial affiliates may enter into similar arrangements with other Selling Agents from time to time. Therefore, the preceding list is subject to change at any time without notice.
Additional Selling Agent Payments
Selling Agents may receive different commissions, sales charge reallowances and other payments with respect to sales of different classes of shares of the Funds. These other payments may include servicing payments to retirement plan administrators and other institutions at rates up to those described above under Brokerage Allocation and Other Practices – Additional Shareholder Servicing Payments.
The Distributor and other Ameriprise Financial affiliates may pay additional compensation to selected Selling Agents, including other Ameriprise Financial affiliates, under the categories described below. These categories are not mutually exclusive, and a single Selling Agent may receive payments under all categories. A Selling Agent also may receive payments described above in Brokerage Allocation and Other Practices – Additional Shareholder Servicing Payments. These payments may create an incentive for a Selling Agent or its representatives to recommend or offer shares of a Fund to its customers. The amount of payments made to Selling Agents may vary. In determining the amount of payments to be made, the Distributor and other Ameriprise Financial affiliates may consider a number of factors, including, without limitation, asset mix and length of relationship with the Selling Agent, the size of the customer/shareholder base of the Selling Agent, the manner in which customers of the Selling Agent make investments in the Funds, the nature and scope of marketing support or services provided by the Selling Agent (as described more fully below) and the costs incurred by the Selling Agent in connection with maintaining the infrastructure necessary or desirable to support investments in the Funds.
These additional payments by the Distributor and other Ameriprise Financial affiliates are made pursuant to agreements between the Distributor and other Ameriprise Financial affiliates and Selling Agents, and do not change the price paid by investors for the purchase of a share, the amount a Fund will receive as proceeds from such sales or the distribution fees and expenses paid by the Fund as shown under the heading Fees and Expenses of the Fund in the Fund’s prospectuses.
Marketing/Sales Support Payments
The Distributor, the Investment Manager and their affiliates may make payments, from their own resources, to certain Selling Agents, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds, including, but not limited to, business planning assistance, educating financial intermediary personnel about the Funds and shareholder financial planning needs, placement on the financial intermediary’s preferred or recommended fund list or otherwise identifying the Funds as being part of a complex to be accorded a higher degree of marketing support than complexes not making such payments, access to sales meetings, sales representatives and management representatives of the financial intermediary, client servicing and systems infrastructure support. These payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds distributed by the Distributor attributable to that Selling Agent, gross sales of the Columbia Funds distributed by the Distributor attributable to that Selling Agent, reimbursement of ticket charges (fees that a Selling Agent firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment.
While the financial arrangements may vary for each Selling Agent, the marketing support payments to each Selling Agent generally are expected to be between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Columbia Funds attributable to the Selling Agent, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the Selling Agent. The Distributor and other Ameriprise Financial affiliates may make payments in materially larger amounts or on a basis materially different from those described above when dealing with certain Selling Agents. Such increased payments may enable the Selling Agents to offset credits that they may provide to their customers.
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As of the date of this SAI, the Distributor, the Investment Manager or their affiliates had agreed to make marketing support payments with respect to the Funds to the Selling Agents or their affiliates shown below.
Recipients of Marketing Support Payments with Respect to the Funds from the Distributor and/or other Ameriprise Financial Affiliates
• | AIG Advisor Group |
• | Ameriprise Financial Services, Inc.* |
• | AXA Advisors, LLC |
• | Commonwealth Financial Network |
• | Fidelity Brokerage Services, Inc. |
• | J.J.B. Hilliard, W.L. Lyons, Inc. |
• | J.P. Morgan Chase Clearing Corp. |
• | Lincoln Financial Advisors Corp. |
• | Linsco/Private Ledger Corp. |
• | Morgan Stanley Smith Barney |
• | Merrill Lynch Life Insurance Company |
• | Merrill Lynch, Pierce, Fenner & Smith Incorporated |
• | Oppenheimer & Co., Inc. |
• | Pershing LLC |
• | Prudential Investment Management Services, LLC |
• | Raymond James & Associates, Inc. |
• | Raymond James Financial Services, Inc. |
• | RBC Dain Raucher, Inc. |
• | Securities America, Inc. |
• | UBS Financial Services Inc. |
• | Wells Fargo Advisors |
• | Wells Fargo Investments, LLC |
• | Vanguard Marketing Corp |
* | Ameriprise Financial affiliate |
The Distributor, the Investment Manager and their affiliates may enter into similar arrangements with other Selling Agents from time to time. Therefore, the preceding list is subject to change at any time without notice.
Other Payments
From time to time, the Distributor, from its own resources, may provide additional compensation to certain Selling Agents that sell or arrange for the sale of shares of the Funds to the extent not prohibited by laws or the rules of any self-regulatory agency, such as the Financial Industry Regulatory Authority (FINRA). Such compensation provided by the Distributor may include financial assistance to Selling Agents that enable the Distributor to participate in and/or present at Selling Agent-sponsored conferences or seminars, sales or training programs for invited registered representatives and other Selling Agent employees, financial intermediary entertainment and other sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Distributor makes payments for entertainment events it deems appropriate, subject to the Distributor’s internal guidelines and applicable law. These payments may vary depending upon the nature of the event.
Your Selling Agent may charge you fees or commissions in addition to those disclosed in this SAI. You should consult with your financial intermediary and review carefully any disclosure your Selling Agent provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a Selling Agent and its financial consultants may have a financial incentive for recommending a particular fund or a particular share class over other funds or share classes. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.
Effective beginning with performance reporting for the December 31, 2011 year end, in presenting performance information for newer share classes, if any, of a Fund, the Fund typically includes, for periods prior to the offering of such share classes, the performance of the Fund’s oldest share class (except as otherwise disclosed), adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable, based on the
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expense ratios of those share classes for the Fund’s most recently completed fiscal year for which data was available at December 31, 2011 or, for funds and classes first offered after January 1, 2011, the expected expense differential at the time the newer share class is first offered. Actual expense differentials across classes will vary over time. The performance of the Fund’s newer share classes would have been substantially similar to the performance of the Fund’s oldest share class because all share classes of a Fund are invested in the same portfolio of securities, and would have differed only to the extent that the classes do not have the same sales charges and/or expenses (although differences in expenses between share classes may change over time).
Prior to December 31, 2011, in presenting performance information for a newer share class of a Fund, the Fund would typically include, for periods prior to the offering of such newer share class, the performance of an older share class, the class-related operating expense structure of which was most similar to that of the newer share class, and for periods prior to the initial offering of such older share class, would include the performance of successively older share classes with successively less similar expense structures. Such performance information was not restated to reflect any differences in expenses between share classes and if such differences had been reflected, the performance shown might have been lower. Because, prior to December 31, 2011, the Funds used a different methodology for presenting performance information for a newer share class, such performance information published before December 31, 2011 may differ from corresponding performance information published after December 31, 2011.
For certain Funds, performance shown includes the returns of a predecessor to the Fund. The table below identifies the predecessor fund for certain of these Funds and shows the periods when performance shown is that of the predecessor fund or a predecessor to that fund.
Fund | Predecessor Fund | For periods prior to: | ||
Columbia Bond Fund | Excelsior Core Bond Fund, a series of Excelsior Funds, Inc. | March 31, 2008 | ||
Columbia Connecticut Intermediate Municipal Bond Fund | Galaxy Connecticut Intermediate Municipal Bond Fund, a series of The Galaxy Fund | November 18, 2002 | ||
Columbia Contrarian Core Fund | Galaxy Growth & Income Fund, a series of The Galaxy Fund | December 9, 2002 | ||
Columbia Dividend Income Fund | Galaxy Strategic Equity Fund, a series of The Galaxy Fund | November 25, 2002 | ||
Columbia Emerging Markets Fund | Excelsior Emerging Markets Fund, a series of Excelsior Funds, Inc. | March 31, 2008 | ||
Columbia Energy and Natural Resources Fund | Excelsior Energy and Natural Resources Fund, a series of Excelsior Funds, Inc. | March 31, 2008 | ||
Columbia Intermediate Municipal Bond Fund | Galaxy Intermediate Tax-Exempt Bond Fund, a series of The Galaxy Fund | November 25, 2002 | ||
Columbia Large Cap Growth Fund | Galaxy Equity Growth Fund, a series of The Galaxy Fund | November 18, 2002 | ||
Columbia Massachusetts Intermediate Municipal Bond Fund | Galaxy Massachusetts Intermediate Municipal Bond Fund, a series of The Galaxy Fund | December 9, 2002 | ||
Columbia New York Intermediate Municipal Bond Fund | Galaxy New York Municipal Bond Fund, a series of The Galaxy Fund | November 25, 2002 |
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Fund | Predecessor Fund | For periods prior to: | ||
Columbia Pacific/Asia Fund | Excelsior Pacific/Asia Fund, a series of Excelsior Funds, Inc. | March 31, 2008 | ||
Columbia Select Large Cap Growth Fund | Excelsior Large Cap Growth Fund, a series of Excelsior Funds, Inc. | March 31, 2008 | ||
Columbia Select Small Cap Fund | Excelsior Small Cap Fund, a series of Excelsior Funds, Inc. | March 31, 2008 | ||
Columbia Small Cap Core Fund | Galaxy Small Cap Value Fund, a series of The Galaxy Fund | November 18, 2002 | ||
Columbia U.S. Treasury Index Fund | Galaxy II U.S. Treasury Index Fund, a series of The Galaxy Fund | November 25, 2002 | ||
Columbia Value and Restructuring Fund | Excelsior Value and Restructuring Fund, a series of Excelsior Funds, Inc. | March 31, 2008 |
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CAPITAL STOCK AND OTHER SECURITIES
Description of the Trust’s Shares
The Funds offer shares in the classes shown in the table below. Subject to certain limited exceptions discussed in each Fund’s prospectuses, a Fund may no longer be accepting new investments from current shareholders or prospective investors. The Funds, however, may at any time and without notice, offer any of these classes to the general public for investment.
The Trust’s Amended and Restated Declaration of Trust (Declaration of Trust) permits it to issue an unlimited number of full and fractional shares of beneficial interest of each Fund, without par value, and to divide or combine the shares of any series into a greater or lesser number of shares of that Fund without thereby changing the proportionate beneficial interests in that Fund and to divide such shares into classes. Each share of a class of a Fund represents an equal proportional interest in that Fund with each other share in the same class and is entitled to such distributions out of the income earned on the assets belonging to that Fund as are declared in the discretion of the Board. However, different share classes of a Fund pay different distribution amounts because each share class has different expenses. Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.
Share Classes Offered by the Funds
Fund | Class A Shares | Class Ba Shares | Class C Shares | Class I Shares | Class R Shares | Class R4 Shares | Class R5 Shares | Class T Shares | Class W Shares | Class Y Shares | Class Z Shares | Other | ||||||||||||||||||||||||||||||||||||
AP – Alternative Strategies Fund | ü | |||||||||||||||||||||||||||||||||||||||||||||||
AP – Core Plus Bond Fund | ü | |||||||||||||||||||||||||||||||||||||||||||||||
AP – Select Large Cap Growth Fund | ü | |||||||||||||||||||||||||||||||||||||||||||||||
AP – Small Cap Equity Fund | ü | |||||||||||||||||||||||||||||||||||||||||||||||
Balanced Fund | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Bond Fund | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||
CA Tax-Exempt Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
CT Intermediate Municipal Bond Fund | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||||
CT Tax-Exempt Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Contrarian Core Fund | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||
Corporate Income Fund | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||
Dividend Income Fund | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||
Emerging Markets Fund | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||
Energy and Natural Resources Fund | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Global Dividend Opportunity Fund | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||
Greater China Fund | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||
High Yield Municipal Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
High Yield Opportunity Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Intermediate Bond Fund | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Intermediate Municipal Bond Fund | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||||
International Bond Fund | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||||
Large Cap Growth Fund | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | b | |||||||||||||||||||||||||||||||||||
MA Intermediate Municipal Bond Fund | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||||
MA Tax-Exempt Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Mid Cap Growth Fund | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||
NY Intermediate Municipal Bond Fund | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||||
NY Tax-Exempt Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Oregon Intermediate Municipal Bond Fund | ü | ü | ü | ü |
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Fund | Class A Shares | Class Ba Shares | Class C Shares | Class I Shares | Class R Shares | Class R4 Shares | Class R5 Shares | Class T Shares | Class W Shares | Class Y Shares | Class Z Shares | Other | ||||||||||||||||||||||||||||||||||||
Pacific/Asia Fund | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||||
Real Estate Equity Fund | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||
Risk Allocation Fund | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Select Large Cap Growth Fund | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||
Select Small Cap Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Small Cap Core Fund | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Small Cap Growth Fund I | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Small Cap Value Fund I | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||||||
Strategic Income Fund | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||
Tax-Exempt Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Technology Fund | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||||
Ultra Short Term Bond Fund | ü | c | ||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury Index Fund | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||||||
Value and Restructuring Fund | ü | ü | ü | ü | ü | ü |
a | Class B shares of the Funds are closed to new investments, except for certain limited transactions from existing investors in Class B shares. Additional Class B shares of the Funds will be issued only in connection with (i) reinvestment of dividends and/or capital gain distributions in Class B shares of the Funds by the Funds’ existing Class B shareholders and (ii) exchanges by shareholders invested in Class B shares of a Columbia Fund for Class B shares of the Funds. See the prospectuses for Class B shares of the Funds for details. |
b | Large Cap Growth Fund also offers Class E shares and Class F shares. See the prospectuses for Class E shares and Class F shares for details. |
c | Ultra Short Term Bond Fund offers only a single class of shares. |
Restrictions on Holding or Disposing of Shares
There are no restrictions on the right of shareholders to retain or dispose of the Funds’ shares, other than the possible future termination of the Funds or any class of shares of the Funds, except that the Funds may redeem Fund shares of shareholders holding less than any minimum or more than any maximum investment from time to time established by the Board. The Funds or any class of shares of the Funds may be terminated by reorganization into another mutual fund or by liquidation and distribution of their assets. Unless terminated by reorganization or liquidation, the Funds will continue indefinitely.
Liability
Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust. However, the Trust’s Declaration of Trust disclaims any shareholder liability for acts or obligations of the Funds and the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by a Fund or the Trustees. The Declaration of Trust provides for indemnification out of Fund property for all loss and expense of any shareholder held personally liable for the obligations of a Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances (which are considered remote) in which a Fund would be unable to meet its obligations and the disclaimer was inoperative.
The risk of a Fund incurring financial loss on account of another series of the Trust also is believed to be remote, because it would be limited to circumstances in which the disclaimer was inoperative and the other series of the Trust was unable to meet its obligations.
Dividend Rights
The shareholders of a Fund are entitled to receive any dividends or other distributions declared for the Fund. No shares have priority or preference over any other shares of a Fund with respect to distributions. Distributions will be made from the assets of a Fund, and will be paid pro rata to all shareholders of the Fund (or class) according to the number of shares of the Fund (or class) held by shareholders on the record date. The amount of income dividends per share may vary between separate share classes of a Fund based upon differences in the way that expenses are allocated between share classes pursuant to a multiple class plan.
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Voting Rights and Shareholder Meetings
The Trust is not required to hold annual shareholder meetings, but special meetings may be called for certain purposes. Previously, the Trust had voluntarily undertaken to adhere to certain governance measures contemplated by an SEC settlement order with respect to the Trust’s prior investment adviser in 2005. Over the past several years, the SEC has adopted many rules under the 1940 Act and the Investment Advisers Act of 1940 to strengthen fund governance and compliance oversight of funds and their investment advisers. Accordingly, although the Trust may continue to follow certain governance practices noted in the 2005 settlement order, it will do so as the Board deems appropriate and not pursuant to any voluntary undertakings. In this regard, the Board has determined that it is unnecessary to commit to holding a meeting of shareholders to elect trustees at least every five years. Instead, the Board will convene meetings of shareholders to elect trustees as required by the 1940 Act or as deemed appropriate by the Board. Each whole share (or fractional share) outstanding on the record date established in accordance with the Trust’s By-Laws shall be entitled to a number of votes on any matter on which it is entitled to vote equal to the net asset value of the share (or fractional share) in U.S. dollars determined at the close of business on the record date (for example, a share having a net asset value of $10.50 would be entitled to 10.5 votes).
The Trustees may fill any vacancies on the Board except that the Trustees may not fill a vacancy if, immediately after filling such vacancy, less than two-thirds of the Trustees then in office would have been elected to such office by the shareholders. In addition, at such times as less than a majority of the Trustees then in office have been elected to such office by the shareholders, the Trustees must call a meeting of shareholders. Trustees may be removed from office by a written consent signed by holders of a majority of the outstanding shares of the Trust or by a vote of the holders of a majority of the outstanding shares at a meeting duly called for the purpose. Except as otherwise disclosed in a Fund’s prospectuses and this SAI, the Trustees shall continue to hold office and may appoint their successors.
At any shareholders’ meetings that may be held, shareholders of all series would vote together, irrespective of series, on the election of Trustees, but each series would vote separately from the others on other matters, such as changes in the investment policies of that series or the approval of the management agreement for that series. Shares of the Fund and any other series of the Trust that may be in existence from time to time generally vote together except when required by law to vote separately by Fund or by class.
Liquidation Rights
In the event of the liquidation or dissolution of the Trust or the Funds, shareholders of the Funds are entitled to receive the assets attributable to the relevant class of shares of the Funds that are available for distribution and to a distribution of any general assets not attributable to a particular investment portfolio that are available for distribution in such manner and on such basis as the Board may determine.
Preemptive Rights
There are no preemptive rights associated with Fund shares.
Conversion Rights
With the exception of Class B shares, which no longer accept investments from new or existing investors in Class B shares, except for certain limited transactions from existing investors in Class B shares as described in the prospectuses for Class B shares of the Funds, shareholders have the right, which is subject to change by the Board, to convert or “exchange” shares of one class for another. Such right is outlined and subject to certain conditions set forth in each Fund’s prospectuses.
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Redemptions
Each Fund’s dividend, distribution and redemption policies can be found in its prospectuses under the headings Buying, Selling and Exchanging Shares and Distributions and Taxes. However, the Board may suspend the right of shareholders to sell shares when permitted or required to do so by law or compel sales or redemptions of shares in certain cases.
Sinking Fund Provisions
The Trust has no sinking fund provisions.
Calls or Assessment
All Fund shares are issued in uncertificated form only and when issued will be fully paid and non-assessable by the Trust.
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PURCHASE, REDEMPTION AND PRICING OF SHARES
An investor may buy, sell and exchange shares in the Funds utilizing the methods, and subject to the restrictions, described in the Funds’ prospectuses. The following information supplements information in the Funds’ prospectuses.
The Funds have authorized one or more broker-dealers to accept buy and sell orders on the Funds’ behalf. These broker-dealers are authorized to designate other intermediaries to accept buy and sell orders on the Funds’ behalf. The Funds will be deemed to have received a buy or sell order when an authorized broker-dealer, or, if applicable, a broker-dealer’s authorized designee, accepts the order. Customer orders will be priced at each Fund’s net asset value next computed after they are accepted by an authorized broker-dealer or the broker’s authorized designee.
The Trust also may make payment for sales in readily marketable securities or other property if it is appropriate to do so in light of the Trust’s responsibilities under the 1940 Act.
Under the 1940 Act, the Funds may suspend the right of redemption or postpone the date of payment for shares during any period when (i) trading on the NYSE is restricted by applicable rules and regulations of the SEC; (ii) the NYSE is closed for other than customary weekend and holiday closings; (iii) the SEC has by order permitted such suspension; (iv) an emergency exists as determined by the SEC. (The Funds may also suspend or postpone the recordation of the transfer of their shares upon the occurrence of any of the foregoing conditions).
The Trust has elected to be governed by Rule 18f–1 under the 1940 Act, as a result of which each Fund is obligated to redeem shares, subject to the exceptions listed above, with respect to any one shareholder during any 90-day period, solely in cash up to the lesser of $250,000 or 1% of the net asset value of each Fund at the beginning of the period.
Potential Adverse Effects of Large Investors
Each Fund may from time to time sell to one or more investors, including other funds advised by the Investment Manager or third parties, a substantial amount of its shares, and may thereafter be required to satisfy redemption requests by such investors. Such sales and redemptions may be very substantial relative to the size of the Fund. While it is not possible to predict the overall effect of such sales and redemptions over time, such transactions may adversely affect the Fund’s performance to the extent that the Fund is required to invest cash received in connection with a sale or to sell portfolio securities to facilitate a redemption at, in either case, a time when the Fund otherwise would not invest or sell. Such transactions also may increase a Fund’s transaction costs, which would detract from Fund performance. If a Fund is forced to sell portfolio securities that have appreciated in value, such sales may accelerate the realization of taxable income.
Anti-Money Laundering Compliance
The Funds are required to comply with various anti-money laundering laws and regulations. Consequently, the Funds may request additional required information from you to verify your identity. Your application will be rejected if it does not contain your name, social security number, date of birth and permanent street address. If at any time the Funds believe a shareholder may be involved in suspicious activity or if certain account information matches information on government lists of suspicious persons, the Funds may choose not to establish a new account or may be required to “freeze” a shareholder’s account. The Funds also may be required to provide a governmental agency with information about transactions that have occurred in a shareholder’s account or to transfer monies received to establish a new account, transfer an existing account or transfer the proceeds of an existing account to a governmental agency. In some circumstances, the law may not permit the Funds to inform the shareholder that it has taken the actions described above.
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The share price of each Fund is based on each Fund’s net asset value per share, which is calculated separately for each class of shares as of the close of regular trading on the NYSE (which is usually 4:00 p.m. Eastern Time unless the NYSE closes earlier) on each day the Fund is open for business, unless the Board determines otherwise. The Funds do not value their shares on days that the NYSE is closed.
For Funds Other than Money Market Funds. The value of each Fund’s portfolio securities is determined in accordance with the Trust’s valuation procedures, which are approved by the Board. Except as described below under “Fair Valuation of Portfolio Securities,” the Fund’s portfolio securities are typically valued using the following methodologies:
Equity Securities. Equity securities (including common stocks, preferred stocks, convertible securities, warrants and ETFs) listed on an exchange are valued at the closing price on their primary exchange (which, in the case of foreign securities, may be a foreign exchange) or, if a closing price is not readily available, at the mean of the closing bid and asked prices. Over-the-counter equity securities not listed on any national exchange but included in the NASDAQ National Market System are valued at the NASDAQ Official Closing Price or, if the official closing price is not readily available, at the mean between the closing bid and asked prices. Equity securities that are not listed on any national exchange and are not included in the NASDAQ National Market System are valued at the mean between the closing bid and asked prices. Shares of open-end investment companies (other than ETFs) are valued at the latest net asset value reported by those companies.
Fixed Income Securities. Short-term debt securities purchased with remaining maturities of 60 days or less and long-term debt securities with remaining maturities of 60 days or less are valued at their amortized cost value. Amortized cost is an approximation of market value determined by systematically increasing the carrying value of a security if acquired at a discount, or reducing the carrying value if acquired at a premium, so that the carrying value is equal to maturity value on the maturity date. The value of short-term debt securities with remaining maturities in excess of 60 days is the market price, which may be obtained from a pricing service or, if a market price is not available from a pricing service, a bid quote from a broker or dealer. Short-term variable rate demand notes are typically valued at their par value. Other debt securities typically are valued using an evaluated bid provided by a pricing service. If pricing information is unavailable from a pricing service or the Investment Manager’s valuation committee believes such information is not reflective of market value, then a quote from a broker or dealer may be used. Newly issued debt securities may be valued at purchase price for up to two days following purchase.
Futures, Options and Other Derivatives. Futures and options on futures are valued based on the settle price at the close of regular trading on their principal exchange or, in the absence of transactions, they are valued at the mean of the closing bid and asked prices closest to the last reported sale price. Listed options are valued at the mean of the closing bid and asked prices. If market quotations are not readily available, futures and options are valued using quotations from brokers. Customized derivative products are valued at a price provided by a pricing service or, if such a price is unavailable, a broker quote or at a price derived from an internal valuation model.
Repurchase Agreements. Repurchase agreements are generally valued at a price equal to the amount of the cash invested in a repurchase agreement.
Foreign Currencies. Foreign currencies and securities denominated in foreign currencies are valued in U.S. dollars utilizing spot exchange rates at the close of regular trading on the NYSE. Forward foreign currency contracts are valued in U.S. dollars utilizing the applicable forward currency exchange rate as of the close of regular trading on the NYSE.
Fair Valuation of Portfolio Securities. Rather than using the methods described above, the Investment Manager’s valuation committee will, pursuant to procedures approved by the Board, determine in good faith a security’s fair value in the event that (i) price quotations or valuations are not readily available, such as when
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trading is halted or securities are not actively traded; (ii) price quotations or valuations available for a security are not, in the judgment of the valuation committee, reflective of market value; or (iii) a significant event has occurred that is not reflected in price quotations or valuations from other sources, such as when an event impacting a foreign security occurs after the closing of the security’s foreign exchange but before the closing of the NYSE. The fair value of a security is likely to be different from the quoted or published price and fair value determinations often require significant judgment.
In general, any one or more of the following factors may be taken into account in determining fair value: the fundamental analytical data relating to the security; the value of other financial instruments, including derivative securities; trading volumes; values of baskets of securities; changes in interest rates; observations from financial institutions; government actions or pronouncements; other news events; information as to any transactions or offers with respect to the security; price and extent of public trading in similar securities; nature and expected duration of the event, if any, giving rise to the valuation issue; pricing history; the relative size of the position in the portfolio; internal models; and other relevant information.
With respect to securities traded on foreign markets, additional factors also may be relevant, including: movements in the U.S. markets following the close of foreign markets; the value of foreign securities traded on other foreign markets; ADR trading; closed-end fund trading; foreign currency exchange activity and prices; and the trading of financial products that are tied to baskets of foreign securities, such as certain exchange-traded index funds. A systematic independent fair value pricing service assists in the fair valuation process for foreign securities in order to adjust for possible changes in value that may occur between the close of the foreign exchange and the time at which a Fund’s NAV is determined. Although the use of this service is intended to decrease opportunities for time zone arbitrage transactions, there can be no assurance that it will successfully decrease arbitrage opportunities.
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The following information supplements and should be read in conjunction with the section in the Funds’ prospectuses entitled Distributions and Taxes. The prospectuses generally describe the U.S. federal income tax treatment of distributions by the Funds. This section of the SAI provides additional information concerning U.S. federal income taxes. It is based on the Code, applicable Treasury Regulations, judicial authority, and administrative rulings and practice, all as in effect as of the date of this SAI and all of which are subject to change, including changes with retroactive effect. Except as specifically set forth below, the following discussion does not address any state, local or foreign tax matters.
A shareholder’s tax treatment may vary depending upon his or her particular situation. This discussion applies only to shareholders holding Fund shares as capital assets within the meaning of the Code. Except as otherwise noted, it may not apply to certain types of shareholders who may be subject to special rules, such as insurance companies, tax-exempt organizations, shareholders holding Fund shares through tax-advantaged accounts (such as 401(k) Plan Accounts or Individual Retirement Accounts), financial institutions, broker-dealers, entities that are not organized under the laws of the United States or a political subdivision thereof, persons who are neither citizens nor residents of the United States, shareholders holding Fund shares as part of a hedge, straddle, or conversion transaction, and shareholders who are subject to the U.S. federal alternative minimum tax.
The Trust has not requested and will not request an advance ruling from the IRS as to the U.S. federal income tax matters described below. The IRS could adopt positions contrary to those discussed below and such positions could be sustained. In addition, the following discussion and the discussions in the prospectuses applicable to each shareholder address only some of the U.S. federal income tax considerations generally affecting investments in the Funds. Prospective shareholders are urged to consult with their own tax advisors and financial planners regarding the U.S. federal tax consequences of an investment in a Fund, the application of state, local, or foreign laws, and the effect of any possible changes in applicable tax laws on their investment in the Funds.
Qualification as a Regulated Investment Company
It is intended that each Fund qualify as a “regulated investment company” under Subchapter M of Subtitle A, Chapter 1 of the Code. Each Fund will be treated as a separate entity for U.S. federal income tax purposes. Thus, the provisions of the Code applicable to regulated investment companies generally will apply separately to each Fund, even though each Fund is a series of the Trust. Furthermore, each Fund will separately determine its income, gains, losses, and expenses for U.S. federal income tax purposes.
In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, each Fund must, among other things, derive at least 90% of its gross income each taxable year generally from (i) dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income attributable to its business of investing in such stock, securities or foreign currencies (including, but not limited to, gains from options, futures or forward contracts) and (ii) net income derived from an interest in a qualified publicly traded partnership, as defined below. In general, for purposes of this 90% gross income requirement, income derived from a partnership (other than a qualified publicly traded partnership) will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized directly by the regulated investment company. However, 100% of the net income derived from an interest in a qualified publicly traded partnership (defined as a partnership (x) the interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof, (y) that derives at least 90% of its income from the passive income sources defined in Code Section 7704(d), and (z) that derives less than 90% of its income from the qualifying income described in clause (i) above) will be treated as qualifying income. Certain of a Fund’s investments in master limited partnerships (MLPs) and ETFs, if any, may qualify as interests in qualified publicly traded partnerships, as described further below. In addition, although in general the passive loss rules do
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not apply to a regulated investment company, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.
Each Fund must also diversify its holdings so that, at the end of each quarter of the Fund’s taxable year: (i) at least 50% of the fair market value of its total assets consists of (A) cash and cash items (including receivables), U.S. Government securities and securities of other regulated investment companies, and (B) securities of any one issuer (other than those described in clause (A)) to the extent such securities do not exceed 5% of the value of the Fund’s total assets and are not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets consists of the securities of any one issuer (other than those described in clause (i)(A)), the securities of two or more issuers the Fund controls and which are engaged in the same, similar, or related trades or businesses, or the securities of one or more qualified publicly traded partnerships. In addition, for purposes of meeting this diversification requirement, the term “outstanding voting securities of such issuer” includes the equity securities of a qualified publicly traded partnership and in the case of a Fund’s investments in loan participations, the Fund shall treat both the financial intermediary and the issuer of the underlying loan as an issuer. The qualifying income and diversification requirements described above may limit the extent to which a Fund can engage in certain derivative transactions, as well as the extent to which it can invest in MLPs.
In addition, each Fund generally must distribute to its shareholders at least 90% of its investment company taxable income for the taxable year, which generally includes its ordinary income and the excess of any net short-term capital gain over net long-term capital loss, and at least 90% of its net tax-exempt interest income (if any) for the taxable year.
If a Fund qualifies as a regulated investment company that is accorded special tax treatment, it generally will not be subject to U.S. federal income tax on any of the investment company taxable income and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) it distributes to its shareholders. Each Fund generally intends to distribute at least annually substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction) and its net capital gain. However, no assurance can be given that a Fund will not be subject to U.S. federal income taxation. Any investment company taxable income on net capital gain retained by a Fund will be subject to tax at regular corporate rates.
If a Fund retains any net capital gain, it will be subject to a tax at regular corporate rates on the amount retained, but may designate the retained amount as undistributed capital gains in a notice mailed within 60 days of the close of the Fund’s taxable year to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) will be entitled to credit their proportionate shares of the tax paid by the Fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds to the extent the credit exceeds such liabilities. For U.S. federal income tax purposes, the tax basis of shares owned by a shareholder of a Fund will be increased by an amount equal under current law to the difference between the amount of undistributed capital gains included in the shareholder’s gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence.
In determining its net capital gain, including in connection with determining the amount available to support a Capital Gain Dividend (as defined below), its taxable income, and its earnings and profits, a regulated investment company generally may elect to treat part or all of any post-October capital loss (defined as the greatest of net capital loss, net long-term capital loss, or net short-term capital loss, in each case attributable to the portion of the taxable year after October 31) or late-year ordinary loss (generally, (i) net ordinary loss from the sale, exchange or other taxable disposition of property, attributable to the portion of the taxable year after October 31, plus (ii) other net ordinary loss attributable to the portion of the taxable year after December 31) as if incurred in the succeeding taxable year.
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In order to comply with the distribution requirements described above applicable to regulated investment companies, a Fund generally must make the distributions in the same taxable year that it realizes the income and gain, although in certain circumstances, a Fund may make the distributions in the following taxable year in respect of income and gains from the prior taxable year. Shareholders generally are taxed on any distributions from a Fund in the year they are actually distributed. If a Fund declares a distribution to shareholders of record in October, November or December of one calendar year and pays the distribution by January 31 of the following calendar year, however, the Fund and its shareholders will be treated as if the Fund paid the distribution by December 31 of the earlier year.
If the Fund were to fail to meet the income, diversification or distribution test described above, the Fund could in some cases cure such failure including by paying a fund-level tax or interest, making additional distributions, or disposing of certain assets. If the Fund were ineligible to or otherwise did not cure such failure for any year, or were otherwise to fail to qualify as a regulated investment company accorded special tax treatment under the Code, it would be taxed in the same manner as an ordinary corporation without any deduction for its distributions to shareholders. In this case, all distributions from the Fund’s current and accumulated earnings and profits (including any distributions of its net tax-exempt income and net long-term capital gains) to its shareholders would be taxable to shareholders as dividend income. In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a regulated investment company.
Excise Tax
If a Fund fails to distribute by December 31 of each calendar year at least the sum of 98% of its ordinary income for that year (excluding capital gains and losses) and 98.2% of its capital gain net income (adjusted for net ordinary losses) for the 1-year period ending on October 31 of that year (or November 30 or December 31 of that year if the Fund is permitted to elect and so elects), and any of its ordinary income and capital gain net income from previous years that were not distributed during such years, the Fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. For these purposes, ordinary gains and losses from the sale, exchange, or other taxable disposition of property that would be properly taken into account after October 31 of a calendar year (or November 30 if the Fund is permitted to elect and so elects) are generally treated as arising on January 1 of the following calendar year. For purposes of the excise tax, a Fund will be treated as having distributed any amount on which it has been subject to corporate income tax in the taxable year ending within the calendar year. Each Fund generally intends to actually distribute or be deemed to have distributed substantially all of its ordinary income and capital gain net income, if any, by the end of each calendar year and, thus, expects not to be subject to the excise tax. However, no assurance can be given that a Fund will not be subject to the excise tax. Moreover, each Fund reserves the right to pay an excise tax rather than make an additional distribution when circumstances warrant (for example, if the amount of excise tax to be paid is deemed de minimis by a Fund).
Capital Loss Carryforwards
Capital losses in excess of capital gains (“net capital losses”) are not permitted to be deducted against a Fund’s net investment income. Instead, potentially subject to certain limitations, a Fund is able to carry forward a net capital loss from any taxable year to offset its capital gains, if any, realized during a subsequent taxable year. If a Fund incurs or has incurred net capital losses in taxable years beginning after December 22, 2010 (“post-2010 losses”), those losses will be carried forward to one or more subsequent taxable years without expiration; any such carryforward losses will retain their character as short-term or long-term. If a Fund incurred net capital losses in a taxable year beginning on or before December 22, 2010 (“pre-2011 losses”), the Fund is permitted to carry such losses forward for eight taxable years; in the year to which they are carried forward, such losses are treated as short-term capital losses that first offset short-term capital gains, and then offset any long-term capital gains. The Fund must use any post 2010-losses, which will not expire, before it uses any pre-2011 losses. This increases the likelihood that pre-2011 losses will expire unused at the conclusion of the eight-year carryforward period. Capital gains that are offset by carried forward capital losses are not subject to fund-level U.S. federal
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income taxation, regardless of whether they are distributed to shareholders. Accordingly, the Funds do not expect to distribute any such offsetting capital gains. The Funds cannot carry back or carry forward any net operating losses.
Fund | Total Capital Loss Carryforwards | Losses Expiring In | ||||||||||||||||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||||||||||||
For Funds with Fiscal Year Ending March 31 |
| |||||||||||||||||||||||||||||||||||
Emerging Markets Fund | $ | 36,739 | — | — | $ | 36,739 | — | — | — | — | — | |||||||||||||||||||||||||
Energy and Natural Resources Fund | $ | 9,909,297 | — | — | — | — | — | — | $ | 9,909,297 | — | |||||||||||||||||||||||||
Pacific/Asia Fund | $ | 29,507,855 | a | — | — | — | — | — | $ | 9,165,902 | $ | 10,992,397 | $ | 790,415 | ||||||||||||||||||||||
Select Large Cap Growth Fund | $ | 122,252,653 | b | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Select Small Cap Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Value and Restructuring Fund | $ | 511,299,923 | b | — | — | — | — | — | — | $ | 511,299,923 | — | ||||||||||||||||||||||||
For Funds with Fiscal Year Ending April 30* |
| |||||||||||||||||||||||||||||||||||
Bond Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Corporate Income Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Intermediate Bond Fund | $ | 7,331,741 | — | — | — | — | — | $ | 3,389,305 | $ | 3,942,436 | — | ||||||||||||||||||||||||
U.S. Treasury Index Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
For Funds with Fiscal Year Ending April 30 |
| |||||||||||||||||||||||||||||||||||
Bond Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Corporate Income Fund | $ | 211,714 | c | — | — | — | — | — | — | $ | 211,714 | — | ||||||||||||||||||||||||
Intermediate Bond Fund | $ | 10,733,711 | d | — | — | — | — | $ | 3,389,305 | $ | 3,942,436 | — | — | |||||||||||||||||||||||
Small Cap Value Fund Ie | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
U.S. Treasury Index Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
For Funds with Fiscal Year Ending May 31 |
| |||||||||||||||||||||||||||||||||||
Dividend Income Fund | $ | 65,445,847 | f | — | — | $ | 2,532,220 | — | — | $ | 37,045,347 | $ | 25,868,280 | — | ||||||||||||||||||||||
High Yield Municipal Fund | $ | 77,282,882 | g | — | $ | 5,621,572 | $ | 466,991 | $ | 1,471,699 | $ | 5,694,295 | $ | 17,741,445 | $ | 35,721,468 | $ | 4,244,605 | ||||||||||||||||||
High Yield Opportunity Fund | $ | 89,082,752 | — | $ | 4,740,585 | $ | 7,033,993 | $ | 6,703,180 | $ | 378,711 | $ | 25,681,397 | $ | 44,544,886 | — | ||||||||||||||||||||
International Bond Fund | — | h | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Strategic Income Fund | $ | 26,548,320 | — | — | — | — | — | — | $ | 26,548,320 | — | |||||||||||||||||||||||||
For Funds with Fiscal Year Ending July 31 |
| |||||||||||||||||||||||||||||||||||
Ultra Short Term Bond Fund | $ | 16,247,003 | $ | 29,640 | $ | 47,961 | $ | 627,248 | $ | 685,751 | $ | 213,699 | $ | 2,249,159 | $ | 1,023,617 | $ | 11,369,928 | ||||||||||||||||||
For Funds with Fiscal Year Ending August 31 |
| |||||||||||||||||||||||||||||||||||
Balanced Fund | $ | 153,828,478 | — | — | — | $ | 4,597,534 | $ | 38,666,884 | $ | 110,564,060 | — | — | |||||||||||||||||||||||
Global Dividend Opportunity Fund | $ | 97,178,837 | — | — | — | — | — | $ | 81,654,079 | $ | 15,524,758 | — | ||||||||||||||||||||||||
Greater China Fund | — | — | — | — | — | — | — | — | — |
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Fund | Total Capital Loss Carryforwards | Losses Expiring In | ||||||||||||||||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||||||||||||
Mid Cap Growth Fund | $ | 89,826,261 | — | — | — | $ | 29,526,504 | $ | 60,299,757 | — | — | — | ||||||||||||||||||||||||
Small Cap Growth Fund I | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Oregon Intermediate Municipal Bond Fund | $ | 7,376 | — | — | — | — | — | — | — | $ | 7,376 | |||||||||||||||||||||||||
Technology Fund | $ | 35,554,493 | — | — | — | — | — | $ | 6,176,370 | $ | 29,378,123 | — | ||||||||||||||||||||||||
For Funds with Fiscal Year Ending September 30 |
| |||||||||||||||||||||||||||||||||||
Contrarian Core Fund | $ | 39,486,674 | — | — | — | — | — | $ | 39,486,674 | — | — | |||||||||||||||||||||||||
Large Cap Growth Fund | $ | 626,636,818 | — | — | — | $ | 484,820,106 | $ | 25,492,915 | — | $ | 116,323,797 | — | |||||||||||||||||||||||
Small Cap Core Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
For Funds with Fiscal Year Ending October 31 |
| |||||||||||||||||||||||||||||||||||
CA Tax-Exempt Fund | $ | 1,773,937 | — | — | — | $ | 44,686 | $ | 1,247,347 | $ | 421,820 | — | $ | 60,084 | ||||||||||||||||||||||
CT Intermediate Municipal Bond Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
CT Tax-Exempt Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Intermediate Municipal Bond Fund | $ | 924,351 | — | $ | 106,525 | — | $ | 361,418 | $ | 160,476 | $ | 233,374 | $ | 62,558 | — | |||||||||||||||||||||
MA Intermediate Municipal Bond Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
MA Tax-Exempt Fund | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
NY Intermediate Municipal Bond Fund | $ | 1,006,068 | — | — | — | — | — | $ | 1,006,068 | — | — | |||||||||||||||||||||||||
NY Tax-Exempt Fund | $ | 174,547 | — | — | — | — | — | $ | 174,547 | — | — | |||||||||||||||||||||||||
For the Fund with Fiscal Year Ending November 30 |
| |||||||||||||||||||||||||||||||||||
Tax-Exempt Fund | $ | 93,566,837 | — | — | — | $ | 13,239,272 | $ | 57,869,171 | $ | 1,455,576 | $ | 6,621,391 | $ | 14,381,427 | |||||||||||||||||||||
For the Fund with Fiscal Year Ending December 31 |
| |||||||||||||||||||||||||||||||||||
Real Estate Equity Fund | $ | 63,398,964 | — | — | $ | 1,671,366 | $ | 31,861,197 | $ | 10,496,317 | $ | 19,370,084 | — | — |
* | During the period from April 1, 2012 to April 30, 2012, the fiscal year end of each Fund was changed from March 31 to April 30. |
a | Includes unlimited short-term capital loss carryforwards of $8,559,141. |
b | Unlimited short-term capital loss carryforwards. |
c | Includes unlimited short-term and unlimited long-term capital loss carryforwards of $118,581 and $93,133, respectively. |
d | Includes unlimited short-term and unlimited long-term capital loss carryforwards of $1,845,386 and $1,556,584 respectively. |
e | For the period from July 1, 2011 to April 30, 2012. During the period, the fiscal year end of the Small Cap Value Fund I was changed from June 30 to April 30. For the period ended April 30, 2012, $1,265,985 of capital loss carryforward was utilized and $205,574 of capital loss carryforward expired unused. |
f | For the period from September 30, 2011 to May 31, 2012, $16,216,375 of capital loss carryforward was utilized. During the period, the fiscal year end of the Fund was changed from September 30 to May 31. |
g | Includes unlimited short-term and long-term capital loss carryforwards of $513,665 and $5,807,142, respectively. During the period from June 30, 2011 to May 31, 2012, the fiscal year end of the Fund was changed from June 30 to May 31. |
h | Includes unlimited short-term and long-term capital loss carryforwards of $3,615 and $62,532, respectively. |
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Equalization Accounting
Each Fund may use the so-called “equalization method” of accounting to allocate a portion of its “accumulated earnings and profits,” which generally equals a Fund’s undistributed net investment income and realized capital gains, with certain adjustments, to redemption proceeds. This method permits a Fund to achieve more balanced distributions for both continuing and redeeming shareholders. Although using this method generally will not affect a Fund’s total returns, it may reduce the amount of income and gains that the Fund would otherwise distribute to continuing shareholders by reducing the effect of redemptions of Fund shares on Fund distributions to shareholders. The IRS has not sanctioned the particular equalization method used by the Funds, and thus a Fund’s use of this method may be subject to IRS scrutiny.
Investment through Master Portfolios
Some Funds seek to continue to qualify as regulated investment companies by investing their assets through one or more Master Portfolios. Each Master Portfolio will be treated as a non-publicly traded partnership for U.S. federal income tax purposes rather than as a regulated investment company or a corporation under the Code. Under the rules applicable to a non-publicly traded partnership, a proportionate share of any interest, dividends, gains and losses of a Master Portfolio will be deemed to have been realized by (i.e., “passed through” to) its investors, including the corresponding Fund, regardless of whether any amounts are actually distributed by the Master Portfolio. Each investor in a Master Portfolio will be taxed on such share, as determined in accordance with the governing instruments of the particular Master Portfolio, the Code and Treasury Regulations, in determining such investor’s U.S. federal income tax liability. Therefore, to the extent a Master Portfolio were to accrue but not distribute any income or gains, the corresponding Fund would be deemed to have realized its proportionate share of such income or gains without receipt of any corresponding distribution. However, each of the Master Portfolios will seek to minimize recognition by its investors (such as a corresponding Fund) of income and gains without a corresponding distribution. Furthermore, each Master Portfolio intends to manage its assets, income and distributions in such a way that an investor in a Master Portfolio will be able to continue to qualify as a regulated investment company by investing its assets through the Master Portfolio.
Taxation of Fund Investments
In general, realized gains or losses on the sale of securities held by a Fund will be treated as capital gains or losses, and long-term capital gains or losses if the Fund has held or is deemed to have held the securities for more than one year at the time of disposition.
If a Fund purchases a debt obligation with original issue discount (OID) (generally a debt obligation with an issue price less than its stated principal amount, such as a zero-coupon bond), the Fund may be required to annually include in its income a portion of the OID as ordinary income, even though the Fund will not receive cash payments for such discount until maturity or disposition of the obligation. Inflation-protected bonds generally can be expected to produce OID income as their principal amounts are adjusted upward for inflation. In general, gains recognized on the disposition of (or the receipt of any partial payment of principal on) a debt obligation (including a municipal obligation) purchased by a Fund at a market discount, generally at a price less than its principal amount, will be treated as ordinary income to the extent of the portion of market discount which accrued, but was not previously recognized pursuant to an available election, during the term that the Fund held the debt obligation. A Fund generally will be required to make distributions to shareholders representing the OID or market discount (if an election is made by the Fund to accrue market discount over the holding period of the applicable debt obligation) on debt securities that is currently includible in income, even though the cash representing such income may not have been received by the Fund. Cash to pay such distributions may be obtained from borrowing or from sales proceeds of securities held by a Fund which the Fund otherwise might have continued to hold; obtaining such cash might be disadvantageous for the Fund.
In addition, payment-in-kind securities similarly will give rise to income which is required to be distributed and is taxable even though a Fund receives no cash interest payment on the security during the year. A portion of
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the interest paid or accrued on certain high-yield discount obligations (such as high-yield corporate debt securities) may not (and interest paid on debt obligations owned by a Fund that are considered for tax purposes to be payable in the equity of the issuer or a related party will not) be deductible to the issuer, possibly affecting the cash flow of the issuer.
If a Fund invests in debt obligations that are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are in default, special tax issues may exist for the Fund. Tax rules are not entirely clear about issues such as whether a Fund should recognize market discount on a debt obligation and, if so, the amount of market discount the Fund should recognize, when a Fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. These and other related issues will be addressed by a Fund when, as and if it invests in such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.
If an option granted by a Fund is sold, lapses or is otherwise terminated through a closing transaction, such as a repurchase by the Fund of the option from its holder, the Fund generally will realize a short-term capital gain or loss, depending on whether the premium income is greater or less than the amount paid by the Fund in the closing transaction. Some capital losses realized by a Fund in the sale, exchange, exercise or other disposition of an option may be deferred if they result from a position that is part of a “straddle,” discussed below. If securities are sold by a Fund pursuant to the exercise of a covered call option granted by it, the Fund generally will add the premium received to the sale price of the securities delivered in determining the amount of gain or loss on the sale. If securities are purchased by a Fund pursuant to the exercise of a put option written by it, the Fund generally will subtract the premium received from its cost basis in the securities purchased.
Some regulated futures contracts, foreign currency contracts, and non-equity, listed options that may be used by a Fund will be deemed “Section 1256 contracts.” A Fund will be required to “mark to market” any such contracts held at the end of the taxable year by treating them as if they had been sold on the last day of that year at market value. Sixty percent of any net gain or loss realized on all dispositions of Section 1256 contracts, including deemed dispositions under the “mark-to-market” rule, generally will be treated as long-term capital gain or loss, and the remaining 40% will be treated as short-term capital gain or loss, although certain foreign currency gains and losses from such contracts may be treated as entirely ordinary income or loss as described below. These provisions may require a Fund to recognize income or gains without a concurrent receipt of cash. Transactions that qualify as designated hedges are exempt from the mark-to-market rule and the “60%/40%” rule and may require the Fund to defer the recognition of losses on certain futures contracts, foreign currency contracts, and non-equity options.
Foreign exchange gains and losses realized by a Fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options, futures contracts, forward contracts and similar instruments relating to foreign currency, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Code, which generally causes such gains and losses to be treated as ordinary income or loss and may affect the amount and timing of recognition of the Fund’s income. Under future Treasury Regulations, any such transactions that are not directly related to a Fund’s investments in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the Fund to satisfy the 90% qualifying income test described above. If the net foreign exchange loss exceeds a Fund’s net investment company taxable income (computed without regard to such loss) for a taxable year, the resulting ordinary loss for such year will not be available as a carryforward and thus cannot be deducted by the Fund or its shareholders in future years.
Offsetting positions held by a Fund involving certain derivative instruments, such as forward, futures and options contracts, may be considered, for U.S. federal income tax purposes, to constitute “straddles.” “Straddles” are defined to include “offsetting positions” in actively traded personal property. The tax treatment of “straddles”
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is governed by Section 1092 of the Code which, in certain circumstances, overrides or modifies the provisions of Section 1256. If a Fund is treated as entering into a “straddle” and at least one (but not all) of the Fund’s positions in derivative contracts comprising a part of such straddle is governed by Section 1256 of the Code, described above, then such straddle could be characterized as a “mixed straddle.” A Fund may make one or more elections with respect to “mixed straddles.” Depending upon which election is made, if any, the results with respect to a Fund may differ. Generally, to the extent the straddle rules apply to positions established by a Fund, losses realized by the Fund may be deferred to the extent of unrealized gain in any offsetting positions. Moreover, as a result of the straddle rules, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gain may be characterized as short-term capital gain. In addition, the existence of a straddle may affect the holding period of the offsetting positions. As a result, the straddle rules could cause distributions that would otherwise constitute “qualified dividend income” or qualify for the dividends-received deduction to fail to satisfy the applicable holding period requirements (as described below). Furthermore, the Fund may be required to capitalize, rather than deduct currently, any interest expense and carrying charges applicable to a position that is part of a straddle, including any interest on indebtedness incurred or continued to purchase or carry any positions that are part of a straddle. The application of the straddle rules to certain offsetting Fund positions can therefore affect the amount, timing, and character of distributions to shareholders, and may result in significant differences from the amount, timing and character of distributions that would have been made by the Fund if it had not entered into offsetting positions in respect of certain of its portfolio securities.
If a Fund enters into a “constructive sale” of any appreciated financial position in stock, a partnership interest, or certain debt instruments, the Fund will be treated as if it had sold and immediately repurchased the property and must recognize gain (but not loss) with respect to that position. A constructive sale of an appreciated financial position occurs when a Fund enters into certain offsetting transactions with respect to the same or substantially identical property, including, but not limited to: (i) a short sale; (ii) an offsetting notional principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in future Treasury Regulations. The character of the gain from constructive sales will depend upon a Fund’s holding period in the appreciated financial position. Losses realized from a sale of a position that was previously the subject of a constructive sale will be recognized when the position is subsequently disposed of. The character of such losses will depend upon a Fund’s holding period in the position beginning with the date the constructive sale was deemed to have occurred and the application of various loss deferral provisions in the Code. Constructive sale treatment does not apply to certain closed transactions, including if such a transaction is closed on or before the 30th day after the close of the Fund’s taxable year and the Fund holds the appreciated financial position unhedged throughout the 60-day period beginning with the day such transaction was closed.
The amount of long-term capital gain a Fund may recognize from certain derivative transactions with respect to interests in certain pass-through entities is limited under the Code’s constructive ownership rules. The amount of long-term capital gain is limited to the amount of such gain the Fund would have had if the Fund directly invested in the pass-through entity during the term of the derivative contract. Any gain in excess of this amount is treated as ordinary income. An interest charge is imposed on the amount of gain that is treated as ordinary income.
If a Fund makes a distribution of income received by the Fund in lieu of dividends (a “substitute payment”) with respect to securities on loan pursuant to a securities lending transaction, such income will not constitute qualified dividend income to individual shareholders and will not be eligible for the dividends-received deduction for corporate shareholders. Similar consequences may apply to repurchase and other derivative transactions. Similarly, to the extent that a Fund makes distributions of income received by such Fund in lieu of tax-exempt interest with respect to securities on loan, such distributions will not constitute exempt-interest dividends (defined below) to shareholders.
In addition, a Fund’s transactions in securities and certain types of derivatives (e.g., options, futures contracts, forward contracts and swap agreements) may be subject to other special tax rules, such as the
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wash-sale rules or the short-sale rules, the effect of which may be to accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains into short-term capital gains, and/or convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing and character of distributions to shareholders.
Certain of a Fund’s investments in derivative instruments and foreign currency-denominated instruments, as well as any of its foreign currency transactions and hedging activities, are likely to produce a difference between its book income and its taxable income. If a Fund’s book income exceeds the sum of its taxable income and net tax-exempt income (if any), the distribution (if any) of such excess generally will be treated as (i) a dividend to the extent of the Fund’s remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient’s basis in its shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If a Fund’s book income is less than the sum of its taxable income and net tax-exempt income (if any), the Fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment.
Rules governing the U.S. federal income tax aspects of derivatives, including swap agreements and certain commodity-linked investments, are in a developing stage and are not entirely clear in certain respects. Accordingly, while each Fund intends to account for such transactions in a manner it deems to be appropriate, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether a Fund has made sufficient distributions, and otherwise satisfied the relevant requirements to maintain its qualification as a regulated investment company and avoid fund-level tax. Certain requirements that must be met under the Code in order for a Fund to qualify as a regulated investment company may limit the extent to which a Fund will be able to engage in certain derivatives or commodity-linked transactions.
Certain of the Funds employ a multi-manager approach in which the Investment Manager and one or more investment subadvisers each provide day-to-day portfolio management for a portion (or “sleeve”) of the Fund’s assets. Due to this multi-manager approach, certain of these Funds’ investments may be more likely to be subject to one or more special tax rules (including, but not limited to, wash sale, constructive sale, short sale, and straddle rules) that may affect the timing, character and/or amount of a Fund’s distributions to shareholders.
Any investment by a Fund in equity securities of a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Investments in equity securities of a REIT or another regulated investment company also may require a Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. Dividends received by the Fund from a REIT generally will not constitute qualified dividend income and will not qualify for the dividends-received deduction.
A Fund may invest directly or indirectly in residual interests in REMICs or equity interests in taxable mortgage pools (TMPs). Under an IRS notice, and Treasury Regulations that have yet to be issued but may apply retroactively, a portion of a Fund’s income (including income allocated to the Fund from a REIT, a regulated investment company, or other pass-through entity) that is attributable to a residual interest in a REMIC or an equity interest in a TMP (referred to in the Code as an “excess inclusion”) will be subject to U.S. federal income tax in all events. This notice also provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment company, such as a Fund, will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related interest directly. As a result, the Fund may not be a suitable investment for certain tax-exempt shareholders, as noted under Tax-Exempt Shareholders below.
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In general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions), (ii) will constitute unrelated business taxable income (UBTI) to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or certain other tax-exempt entities) subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a foreign shareholder, will not qualify for any reduction in U.S. federal withholding tax.
Some amounts received by a Fund from its investments in MLPs will likely be treated as returns of capital because of accelerated deductions available with respect to the activities of MLPs. On the disposition of an investment in such an MLP, the Fund will likely realize taxable income in excess of economic gain from that asset (or, in later periods, if a Fund does not dispose of the MLP, the Fund will likely realize taxable income in excess of cash flow received by the Fund from the MLP), and the Fund must take such income into account in determining whether the Fund has satisfied its regulated investment company distribution requirements. The Fund may have to borrow or liquidate securities to satisfy its distribution requirements and meet its redemption requests, even though investment considerations might otherwise make it undesirable for the Fund to borrow money or sell securities at the time. In addition, distributions attributable to gain from the sale of MLPs that are characterized as ordinary income under the Code’s recapture provisions will be taxable to Fund shareholders as ordinary income.
As noted above, certain of the ETFs and MLPs in which a Fund may invest qualify as qualified publicly traded partnerships. In such cases, the net income derived from such investments will constitute qualifying income for purposes of the 90% gross income requirement described earlier for qualification as a regulated investment company. If, however, such a vehicle were to fail to qualify as a qualified publicly traded partnership in a particular year, a portion of the gross income derived from it in such year could constitute non-qualifying income to a Fund for purposes of the 90% gross income requirement and thus could adversely affect the Fund’s ability to qualify as a regulated investment company for a particular year. In addition, as described above, the diversification requirement for regulated investment company qualification will limit a Fund’s investments in one or more vehicles that are qualified publicly traded partnerships to 25% of the Fund’s total assets as of the end of each quarter of the Fund’s taxable year.
“Passive foreign investment companies” (PFICs) are generally defined as foreign corporations where at least 75% of their gross income for their taxable year is income from passive sources (such as certain interest, dividends, rents and royalties, or capital gains) or at least 50% of their assets on average produce such passive income. If a Fund acquires any equity interest in a PFIC, the Fund could be subject to U.S. federal income tax and interest charges on “excess distributions” received from the PFIC or on gain from the sale of such equity interest in the PFIC, even if all income or gain actually received by the Fund is timely distributed to its shareholders. Excess distributions and gain from the sale of interests in PFICs may be characterized as ordinary income even though, absent the application of PFIC rules, these amounts may otherwise have been classified as capital gain.
A Fund will not be permitted to pass through to its shareholders any credit or deduction for these special taxes and interest charges incurred with respect to a PFIC. Elections may be available that would ameliorate these adverse tax consequences, but such elections would require a Fund to include its share of the PFIC’s income and net capital gains annually, regardless of whether it receives any distribution from the PFIC (in the case of a “QEF election”), or to mark the gains (and to a limited extent losses) in its interests in the PFIC “to the market” as though the Fund had sold and repurchased such interests on the last day of the Fund’s taxable year, treating such gains and losses as ordinary income and loss (in the case of a “mark-to-market election”). The QEF and mark-to-market elections may require a Fund to recognize taxable income or gain without the concurrent receipt of cash and increase the amount required to be distributed by the Fund to avoid taxation. Making either of these elections therefore may require a Fund to liquidate other investments prematurely to meet the minimum distribution requirements described above, which also may accelerate the recognition of gain and adversely affect the Fund’s total return. Each Fund may attempt to limit and/or manage its holdings in PFICs to minimize tax
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liability and/or maximize returns from these investments but there can be no assurance that it will be able to do so. Moreover, because it is not always possible to identify a foreign corporation as a PFIC, a Fund may incur the tax and interest charges described above in some instances. Dividends paid by PFICs will not be eligible to be treated as qualified dividend income, as defined below.
A U.S. person, including a Fund, who owns (directly or indirectly) 10% or more of the total combined voting power of all classes of stock of a foreign corporation is a “U.S. Shareholder” for purposes of the controlled foreign corporation (“CFC”) provisions of the Code. A CFC is a foreign corporation that, on any day of its taxable year, is owned (directly, indirectly, or constructively) more than 50% (measured by voting power or value) by U.S. Shareholders. The wholly-owned subsidiaries of AP-Alternative Strategies Fund (for purposes of this paragraph, the “Fund”) are expected to be CFCs in which the Fund will be a U.S. Shareholder. As a U.S. Shareholder, the Fund is required to include in gross income for U.S. federal income tax purposes all of a CFC’s “subpart F income,” whether or not such income is actually distributed by the CFC, provided that the foreign corporation has been a CFC for at least 30 uninterrupted days in its taxable year. Subpart F income generally includes interest, OID, dividends, net gains from the disposition of stocks or securities, receipts with respect to securities loans, net gains from transactions (including futures, forward, and similar transactions) in commodities, and net payments received with respect to equity swaps and similar derivatives. Subpart F income is treated as ordinary income, regardless of the character of the CFC’s underlying income. Net losses incurred by a CFC during a tax year do not flow through to the Fund and thus will not be available to offset income or capital gain generated from the Fund’s other investments. In addition, net losses incurred by a CFC during a tax year generally cannot be carried forward by the CFC to offset gains realized by it in subsequent taxable years. To the extent the Fund invests in a CFC and recognizes subpart F income in excess of actual cash distributions from the CFC, the Fund may be required to sell assets (including when it is not advantageous to do so) to generate the cash necessary to distribute as dividends to its shareholders all of its income and gains and therefore to eliminate any tax liability at the Fund level.
In addition to the investments described above, prospective shareholders should be aware that other investments made by a Fund may involve complex tax rules that may result in income or gain recognition by the Fund without corresponding current cash receipts. Although each Fund seeks to avoid significant noncash income, such noncash income could be recognized by a Fund, in which case the Fund may distribute cash derived from other sources in order to meet the minimum distribution requirements described above. In this regard, a Fund could be required at times to liquidate investments prematurely in order to satisfy its minimum distribution requirements, which may accelerate the recognition of gain and adversely affect the Fund’s total return.
Taxation of Distributions
Except for exempt-interest dividends (defined below) paid by a Fund, distributions paid out of a Fund’s current and accumulated earnings and profits, whether paid in cash or reinvested in the Fund, generally are deemed to be taxable distributions and must be reported by each shareholder who is required to file a U.S. federal income tax return. Dividends and distributions on a Fund’s shares are generally subject to U.S. federal income tax as described herein to the extent they do not exceed the Fund’s realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased at a time when the Fund’s net asset value reflects either unrealized gains, or realized but undistributed income or gains. Such realized income and gains may be required to be distributed even when the Fund’s net asset value also reflects unrealized losses. For U.S. federal income tax purposes, a Fund’s earnings and profits, described above, are determined at the end of the Fund’s taxable year. Distributions in excess of a Fund’s current and accumulated earnings and profits will first be treated as a return of capital up to the amount of a shareholder’s tax basis in his or her Fund shares and then as capital gain. A return of capital is not taxable, but it reduces a shareholder’s tax basis in his or her Fund shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of his or her shares. A Fund may make distributions in excess of its earnings and profits to a limited extent, from time to time.
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For U.S. federal income tax purposes, distributions of investment income (except for exempt-interest dividends, defined below) are generally taxable as ordinary income, and distributions of gains from the sale of investments that a Fund owned (or is deemed to have owned) for one year or less will be taxable as ordinary income. Distributions properly reported by a Fund as capital gain dividends (“Capital Gain Dividends”) will be taxable to shareholders as long-term capital gain (to the extent such distributions do not exceed the Fund’s actual net long-term capital gain for the taxable year), regardless of how long a shareholder has held Fund shares, and do not qualify as dividends for purposes of the dividends-received deduction or as qualified dividend income (defined below). Each Fund will report Capital Gain Dividends, if any, in written statements furnished to its shareholders.
Some states will not tax distributions made to individual shareholders that are attributable to interest a Fund earns on direct obligations of the U.S. government if the Fund meets the state’s minimum investment or reporting requirements, if any. Investments in GNMA or FNMA securities, bankers’ acceptances, commercial paper, and repurchase agreements collateralized by U.S. Government securities generally do not qualify for tax-free treatment. This exemption may not apply to corporate shareholders.
Sales and Exchanges of Fund Shares
If a shareholder sells or exchanges his or her Fund shares, he or she generally will realize a taxable capital gain or loss on the difference between the amount received for the shares (or deemed received in the case of an exchange) and his or her tax basis in the shares. This gain or loss will be long-term capital gain or loss if he or she has held (or is deemed to have held) such Fund shares for more than one year at the time of the sale or exchange, and short-term capital gain or loss otherwise.
If a shareholder incurs a sales charge in acquiring Fund shares and sells or exchanges those Fund shares within 90 days of having acquired such shares, and if, as a result of having initially acquired those shares, he or she subsequently pays a reduced sales charge on a new purchase of shares of the Fund or a different regulated investment company, the sales charge previously incurred in acquiring the Fund’s shares generally shall not be taken into account (to the extent the previous sales charges do not exceed the reduction in sales charges on the new purchase) for the purpose of determining the amount of gain or loss on the disposition, but generally will be treated as having been incurred in the new purchase. This sales charge basis deferral rule shall apply only when a shareholder makes such new acquisition of Fund shares or shares of a different regulated investment company during the period beginning on the date the original Fund shares are disposed of and ending on January 31 of the calendar year following the calendar year the original Fund shares are disposed of. Also, if a shareholder realizes a loss on a disposition of Fund shares, the loss will be disallowed under “wash sale” rules to the extent that he or she purchases substantially identical shares within the 61-day period beginning 30 days before and ending 30 days after the disposition. Any disallowed loss generally will be reflected in an adjustment to the tax basis of the purchased shares.
If a shareholder receives a Capital Gain Dividend or is deemed to receive a distribution of long-term capital gain with respect to any Fund share and such Fund share is held or treated as held for six months or less, then (unless otherwise disallowed) any loss on the sale or exchange of that Fund share will be treated as a long-term capital loss to the extent of the Capital Gain Dividend or deemed long-term capital gain distribution. If Fund shares are sold at a loss after being held for six months or less, the loss will generally be disallowed to the extent of any exempt-interest dividends (defined below) received on those shares. However, this loss disallowance does not apply with respect to redemptions of Fund shares with a holding period beginning after December 22, 2010 if such Fund declares substantially all of its net tax-exempt income as exempt-interest dividends on a daily basis, and pays such dividends on at least a monthly basis (as would typically be the case for tax-exempt money market funds).
Cost Basis Reporting
Historically, each Fund has been required to report to shareholders and the IRS only gross proceeds on sales, redemptions or exchanges of Fund shares. The Funds are subject to new reporting requirements for shares
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purchased, including shares purchased through dividend reinvestment, on or after January 1, 2012 and sold, redeemed or exchanged after that date. IRS regulations now generally require the Funds (or the shareholder’s Selling Agent, if Fund shares are held through a Selling Agent) to provide the shareholders and the IRS, upon the sale, redemption or exchange of Fund shares, with cost basis information about those shares as well as information about whether any gain or loss is short- or long-term and whether any loss is disallowed under the “wash sale” rules. This reporting is not required for Fund shares held in a retirement or other tax-advantaged account. With respect to Fund shares in accounts held directly with a Fund, each Fund will calculate and report cost basis using the Fund’s default method of average cost, unless the shareholder instructs the Fund to use a different calculation method. A Fund will not report cost basis for shares whose cost basis is uncertain or unknown to the Fund. Please visit the Funds’ website at www.columbiamanagement.com or contact the Funds at 800.345.6611 for more information regarding average cost basis reporting and other available methods for cost basis reporting and how to select or change a particular method or to choose specific shares to sell, redeem or exchange. If a shareholder retains Fund shares through a Selling Agent, he or she should contact their Selling Agent to learn about the Fund’s cost basis reporting default method and the reporting elections available to his or her account. The Funds do not recommend any particular method of determining cost basis. The shareholder should consult a tax advisor to determine which available cost basis method is best. When completing U.S. federal and state income tax returns, shareholders should carefully review the cost basis and other information provided and make any additional basis, holding period or other adjustments that may be required.
Foreign Taxes
Amounts realized by a Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of a Fund’s total assets at the close of its taxable year consists of securities of foreign corporations, the Fund will be eligible to file an annual election with the IRS pursuant to which the Fund may pass through to its shareholders on a pro rata basis foreign income and similar taxes paid by the Fund with respect to foreign securities that the Fund has held for at least the minimum holding periods specified in the Code and such taxes may be claimed, subject to certain limitations, either as a tax credit or deduction by the shareholders. In some cases, a Fund may also be eligible to pass through to its shareholders the foreign taxes paid by underlying funds (as defined below) in which it invests that themselves elected to pass through such taxes to their shareholders, see Special Tax Considerations Pertaining to Funds of Funds below.
Certain Funds may qualify for and make the election; however, even if a Fund qualifies for the election for any year, it may determine not to make the election for such year. If a Fund does not so qualify or qualifies but does not so elect, then shareholders will not be entitled to claim a credit or deduction with respect to foreign taxes paid by or withheld from payments to the Fund. A Fund will notify its shareholders in written statements if it has elected for the foreign taxes paid by it to “pass through” for that year.
In general, if a Fund makes the election, the Fund itself will not be permitted to claim a credit or deduction for foreign taxes paid in that year, and the Fund’s dividends-paid deduction will be increased by the amount of foreign taxes paid that year. Fund shareholders generally shall include their proportionate share of the foreign taxes paid by the Fund in their gross income and treat that amount as paid by them for the purpose of the foreign tax credit or deduction, provided that any applicable holding period and other requirements have been met. If a shareholder claims a credit for foreign taxes paid, in general, the credit will be subject to certain limits. A deduction for foreign taxes paid may be claimed only by shareholders that itemize their deductions. Shareholders that are not subject to U.S. federal income tax, and those who invest in the Fund through tax-exempt accounts (including those who invest through IRAs or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund.
Special Tax Considerations Pertaining to Tax-Exempt Funds
If, at the close of each quarter of a regulated investment company’s taxable year, at least 50% of the value of its total assets consists of obligations the interest on which is exempt from U.S. federal income tax under
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Section 103(a) of the Code, then the regulated investment company may qualify to pay “exempt-interest dividends” and pass through to its shareholders the tax-exempt character of its income from such obligations. Certain of the Funds intend to so qualify and are designed to provide shareholders with a high level of income in the form of exempt-interest dividends, which are generally exempt from U.S. federal income tax (each such qualifying Fund, a “Tax-Exempt Fund”) . In some cases, a Fund may also be eligible to pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds (as defined below) in which it invests, see Special Tax Considerations Pertaining to Funds of Funds below.
Distributions by a Tax-Exempt Fund, other than those attributable to interest on the Tax-Exempt Fund’s tax-exempt obligations and properly reported as exempt-interest dividends, will be taxable to shareholders as ordinary income or long-term capital gain or, in some cases, could constitute a return of capital to shareholders. See Taxation of Distributions above. Each Tax-Exempt Fund will notify its shareholders in written statements of the portion of the distributions for the taxable year that constitutes exempt-interest dividends. The percentage of a shareholder’s income reported as tax-exempt for any particular distribution may be substantially different from the percentage of the Tax-Exempt Fund’s income that was tax-exempt during the period covered by the distribution. The deductibility of interest paid or accrued on indebtedness incurred by a shareholder to purchase or carry shares of a Tax-Exempt Fund may be limited. The portion of such interest that is non-deductible generally equals the amount of such interest times the ratio of a Tax-Exempt Fund’s exempt-interest dividends received by the shareholder to all of the Tax-Exempt Fund’s dividends received by the shareholder (excluding Capital Gain Dividends and any capital gains required to be included in the shareholder’s long term capital gains in respect of capital gains retained by the Tax-Exempt Fund, as described earlier).
Although exempt-interest dividends are generally exempt from U.S. federal income tax, there may not be a similar exemption under the laws of a particular state or local taxing jurisdiction. Thus, exempt-interest dividends may be subject to state and local taxes; however, each state-specific Tax-Exempt Fund generally invests at least 80% of its net assets in municipal bonds that pay interest that is exempt not only from U.S. federal income tax, but also from the applicable state’s personal income tax (but not necessarily local taxes or taxes of other states). You should consult your tax advisor to discuss the tax consequences of your investment in a Tax-Exempt Fund.
Tax-exempt interest on certain “private activity bonds” has been designated as a “tax preference item” and must be added back to taxable income for purposes of calculating U.S. federal alternative minimum tax (“AMT”). To the extent that a Tax-Exempt Fund invests in certain private activity bonds, its shareholders will be required to report that portion of the Tax-Exempt Fund’s distributions attributable to income from the bonds as a tax preference item in determining their U.S. federal AMT, if any. Shareholders will be notified of the tax status of distributions made by a Tax-Exempt Fund. Persons who may be “substantial users” (or “related persons” of substantial users) of facilities financed by private activity bonds should consult their tax advisors before purchasing shares in a Tax-Exempt Fund. In addition, exempt-interest dividends paid by a Tax-Exempt Fund to a corporate shareholder are, with very limited exceptions, included in the shareholder’s “adjusted current earnings” as part of its U.S. federal AMT calculation. As of the date of this SAI, individuals are subject to the U.S. federal AMT at a maximum rate of 28% and corporations at a maximum rate of 20%. Shareholders with questions or concerns about the U.S. federal AMT should consult their own tax advisors.
Ordinarily, a Tax-Exempt Fund relies on an opinion from the issuer’s bond counsel that interest on the issuer’s obligation will be exempt from U.S. federal income taxation. However, no assurance can be given that the IRS will not successfully challenge such exemption, which could cause interest on the obligation to be taxable and could jeopardize a Tax-Exempt Fund’s ability to pay exempt-interest dividends. Similar challenges may occur as to state-specific exemptions. Also, from time to time legislation may be introduced or litigation may arise that would change the treatment of exempt-interest dividends. Such litigation or legislation may have the effect of raising the state or other taxes payable by shareholders on such dividends. Shareholders should consult their tax advisors for the current law on exempt-interest dividends.
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A shareholder who receives Social Security or railroad retirement benefits should consult his or her tax advisor to determine what effect, if any, an investment in a Tax-Exempt Fund may have on the federal taxation of such benefits. Exempt-interest dividends are included in income for purposes of determining the amount of benefits that are taxable.
Special Tax Considerations Pertaining to Funds of Funds
Certain Funds (each such fund, a “Fund of Funds”) invest their assets primarily in shares of other mutual funds, ETFs or other companies that are regulated investment companies (collectively, “underlying funds”). Consequently, their distributable income and gains will normally consist primarily of distributions from underlying funds and gains and losses on the disposition of shares of underlying funds. To the extent that an underlying fund realizes net losses on its investments for a given taxable year, a Fund of Funds will not be able to benefit from those losses until (i) the underlying fund realizes gains that it can reduce by those losses, or (ii) the Fund of Funds recognizes its shares of those losses (so as to offset distributions of net income or capital gains from other underlying funds) when it disposes of shares of the underlying fund. Moreover, even when a Fund of Funds does make such a disposition, a portion of its loss may be recognized as a long-term capital loss, which will not be treated as favorably for U.S. federal income tax purposes as a short-term capital loss or an ordinary deduction. In particular, a Fund of Funds will not be able to offset any capital losses from its dispositions of underlying fund shares against its ordinary income (including distributions of any net short-term capital gains realized by an underlying fund).
In addition, in certain circumstances, the “wash sale” rules may apply to sales of underlying fund shares by a Fund of Funds that have generated losses. As discussed above, a wash sale occurs if shares of an underlying fund are sold by a Fund of Funds at a loss and the Fund of Funds acquires additional shares of that same underlying fund 30 days before or after the date of the sale. The wash-sale rules could defer losses of a Fund of Funds on sales of underlying fund shares (to the extent such sales are wash sales) for extended (and, in certain cases, potentially indefinite) periods of time.
As a result of the foregoing rules, and certain other special rules, it is possible that the amounts of net investment income and net capital gain that a Fund of Funds will be required to distribute to shareholders will be greater than such amounts would have been had the Fund of Funds invested directly in the securities held by the underlying funds, rather than investing in shares of the underlying funds. For similar reasons, the character of distributions from a Fund of Funds (e.g., long-term capital gain, exempt interest, eligibility for dividends-received deduction) will not necessarily be the same as it would have been had the Fund of Funds invested directly in the securities held by the underlying funds.
Depending on the percentage ownership of a Fund of Funds in an underlying fund before and after a redemption of underlying fund shares, the redemption of shares by the Fund of Funds of such underlying fund may cause the Fund of Funds to be treated as receiving a dividend on the full amount of the distribution instead of receiving a capital gain or loss on the shares of the underlying fund. This could be the case where a Fund of Funds holds a significant interest in an underlying fund that is not “publicly offered” (as defined in the Code) and redeems only a small portion of such interest. Dividend treatment of a redemption by a Fund of Funds would affect the amount and character of income required to be distributed by both the Fund of Funds and the underlying fund for the year in which the redemption occurred. It is possible that such a dividend would qualify as “qualified dividend income”; otherwise, it would be taxable as ordinary income and could cause shareholders of a Fund of Funds to recognize higher amounts of ordinary income than if the shareholders had held shares of the underlying funds directly.
If a Fund of Funds receives dividends from an underlying fund, and the underlying fund reports such dividends as “qualified dividend income,” as discussed below, then the Fund of Funds is permitted, in turn, to report a portion of its distributions as “qualified dividend income,” provided the Fund of Funds meets the holding period and other requirements with respect to shares of the underlying fund. If a Fund of Funds receives
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dividends from an underlying fund, and the underlying fund reports such dividends as eligible for the dividends-received deduction, then the Fund of Funds is permitted, in turn, to report a portion of its distributions as eligible for the dividends-received deduction, provided the Fund of Funds meets the holding period and other requirements with respect to shares of the underlying fund.
If a Fund of Funds is a “qualified fund of funds” (a regulated investment company that invests at least 50% of its total assets in other regulated investment companies at the close of each quarter of its taxable year), it will be able to distribute exempt-interest dividends and thereby pass through to its shareholders the tax-exempt character of any interest received on tax-exempt obligations in which it directly invests or any exempt-interest dividends it receives from underlying funds in which it invests. For further considerations pertaining to exempt-interest dividends, see Special Tax Considerations Pertaining to Tax-Exempt Funds above.
Further, if a Fund of Funds is a qualified fund of funds, it will be able to elect to pass through to its shareholders any foreign income and other similar taxes paid by the Fund of Funds or paid by an underlying fund in which the Fund of Funds invests that itself elected to pass such taxes through to shareholders, so that shareholders of the Fund of Funds will be eligible to claim a tax credit or deduction for such taxes. However, even if a Fund of Funds qualifies to make the election for any year, it may determine not to do so. For further considerations pertaining to foreign taxes paid by a Fund, see Foreign Taxes above.
U.S. Federal Income Tax Rates
As of the date of this SAI, the maximum stated U.S. federal income tax rate applicable to individuals generally is 35% for ordinary income and 15% for net long-term capital gain. Long-term capital gain rates applicable to individuals have been reduced—in general, to 15% with a 0% rate applying to taxpayers in the 10% and 15% rate brackets—for taxable years beginning before January 1, 2013.
For taxable years beginning before January 1, 2013, U.S. federal income tax law also provides for a maximum individual U.S. federal income tax rate applicable to “qualified dividend income” equal to the highest net long-term capital gain rate, which, as described above, generally is 15%. It is currently unclear whether Congress will extend the reduction in capital gain rates or this qualified dividend income provision to or for tax years beginning on or after January 1, 2013. In general, “qualified dividend income” is income attributable to dividends received by a Fund from certain domestic and foreign corporations, as long as certain holding period and other requirements are met by the Fund with respect to the dividend-paying corporation’s stock and by the shareholders with respect to the Fund’s shares. If 95% or more of a Fund’s gross income (excluding net long-term capital gain over net short-term capital loss) constitutes qualified dividend income, all of its distributions (other than Capital Gain Dividends) will be generally treated as qualified dividend income in the hands of individual shareholders, as long as they have owned their Fund shares for at least 61 days during the 121-day period beginning 60 days before the Fund’s ex-dividend date (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date) and meet certain other requirements specified in the Code. In general, if less than 95% of a Fund’s income is attributable to qualified dividend income, then only the portion of the Fund’s distributions that is attributable to qualified dividend income and reported as such in a timely manner will be so treated in the hands of individual shareholders who meet the aforementioned holding period requirements. The rules regarding the qualification of Fund distributions as qualified dividend income are complex, including the holding period requirements. Individual Fund shareholders therefore are urged to consult their own tax advisors and financial planners. Fixed income funds typically do not distribute significant amounts of qualified dividend income.
The maximum stated corporate U.S. federal income tax rate applicable to ordinary income and net capital gain currently is 35%. Actual marginal tax rates may be higher for some shareholders, for example, through reductions in deductions. Naturally, the amount of tax payable by any taxpayer will be affected by a combination of tax laws covering, for example, deductions, credits, deferrals, exemptions, sources of income and other matters. U.S. federal income tax rates are set to increase in future years under various “sunset” provisions of U.S. federal income tax laws.
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For taxable years beginning on or after January 1, 2013, Section 1411 of the Code generally imposes a 3.8% Medicare contribution tax on certain high-income individuals, trusts and estates. For individuals, the 3.8% tax will apply to the lesser of (1) the amount (if any) by which the taxpayer’s modified adjusted gross income exceeds certain threshold amounts or (2) the taxpayer’s “net investment income.” For this purpose, “net investment income” generally includes, among other things, (i) distributions paid by a Fund of net investment income and capital gains (other than exempt-interest dividends) as described above, and (ii) any net gain recognized on the sale, redemption, exchange or other taxable disposition of Fund shares. The details of the implementation of this tax and of the calculation of net investment income, among other issues, are currently unclear and remain subject to future guidance. Shareholders are advised to consult their tax advisors regarding the possible implications of this additional tax on their investment in a Fund.
Backup Withholding
Each Fund generally is required to withhold, and remit to the U.S. Treasury, subject to certain exemptions, an amount equal to 28% of all distributions and redemption proceeds (including proceeds from exchanges and redemptions in-kind) paid or credited to a Fund shareholder if (1) the shareholder fails to furnish the Fund with a correct “taxpayer identification number” (TIN) or has not certified to the Fund that withholding does not apply or (2) the IRS notifies the Fund that the shareholder’s TIN is incorrect or the shareholder is otherwise subject to backup withholding. These backup withholding rules may also apply to distributions that are properly reported as exempt-interest dividends (defined above). This backup withholding is not an additional tax imposed on the shareholder. The shareholder may apply amounts required to be withheld as a credit against his or her future U.S. federal income tax liability, provided that the required information is furnished to the IRS. If a shareholder fails to furnish a valid TIN upon request, the shareholder can also be subject to IRS penalties. Unless Congress enacts legislation providing otherwise, the rate of backup withholding is set to increase to 31% for amounts distributed or paid after December 31, 2012.
Tax-Deferred Plans
The shares of a Fund may be available for a variety of tax-deferred retirement and other tax-advantaged plans and accounts. Prospective investors should contact their tax advisors and financial planners regarding the tax consequences to them of holding Fund shares through such plans and/or accounts.
Corporate Shareholders
Subject to limitations and other rules, a corporate shareholder of a Fund may be eligible for the dividends-received deduction on Fund distributions attributable to dividends received by the Fund from domestic corporations, which, if received directly by the corporate shareholder, would qualify for such a deduction. For eligible corporate shareholders, the dividends-received deduction may be subject to certain reductions, and a distribution by a Fund attributable to dividends of a domestic corporation will be eligible for the deduction only if certain holding period and other requirements are met. For information regarding eligibility for the dividends-received deduction of dividend income derived by an underlying fund in which a Fund of Funds invests, see Special Tax Considerations Pertaining to Funds of Funds above. These requirements are complex; therefore, corporate shareholders of the Funds are urged to consult their own tax advisors and financial planners.
As discussed above, a portion of the interest paid or accrued on certain high-yield discount obligations that a Fund may own may not be deductible to the issuer. If a portion of the interest paid or accrued on these obligations is not deductible, that portion will be treated as a dividend. In such cases, if the issuer of the obligation is a domestic corporation, dividend payments by a Fund may be eligible for the dividends-received deduction to the extent of the dividend portion of such interest.
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Foreign Shareholders
For purposes of this discussion, “foreign shareholders” generally include: (i) nonresident alien individuals, (ii) foreign trusts (i.e., a trust other than a trust with respect to which a U.S. court is able to exercise primary supervision over administration of that trust and one or more U.S. persons have authority to control substantial decisions of that trust), (iii) foreign estates (i.e., the income of which is not subject to U.S. tax regardless of source), and (iv) foreign corporations.
Generally, unless an exception applies, dividend distributions made to foreign shareholders other than Capital Gain Dividends and exempt-interest dividends (defined above) will be subject to non-refundable U.S. federal income tax withholding at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty) even if they are funded by income or gains (such as portfolio interest, short-term capital gains, or foreign-source dividend and interest income) that, if paid to a foreign person directly, would not be subject to withholding. However, generally, for taxable years beginning before January 1, 2012, distributions made to foreign shareholders and properly reported by a Fund as “interest-related dividends” were exempt from U.S. federal income tax withholding. The exemption for interest-related dividends did not apply to any distribution to a foreign shareholder (i) to the extent that the dividend was attributable to certain interest on an obligation if the foreign shareholder was the issuer or was a 10% shareholder of the issuer, (ii) that was within certain foreign countries that had inadequate information exchange with the United States, or (iii) to the extent the dividend was attributable to interest paid by a person that was a related person of the foreign shareholder and the foreign shareholder was a controlled foreign corporation. Interest-related dividends are generally attributable to the Fund’s net U.S.-source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder. In order for a distribution to qualify as an interest-related dividend, the Fund was required to report it as such in a written notice furnished to its shareholders. Notwithstanding the foregoing, if a distribution described above is “effectively connected” with a U.S. trade or business (or, if an income tax treaty applies, is attributable to a U.S. permanent establishment) of the recipient foreign shareholder, neither U.S. federal income tax withholding nor the exemption for interest-related dividends (if otherwise applicable) will apply. Instead, the distribution will be subject to the tax, reporting and withholding requirements generally applicable to U.S. persons, and an additional branch profits tax may apply if the recipient foreign shareholder is a foreign corporation.
In general, a foreign shareholder’s capital gains realized on the disposition of Fund shares and distributions properly reported as Capital Gain Dividends are not subject to U.S. federal income or withholding tax, unless: (i) such gains or distributions are effectively connected with a U.S. trade or business (or, if an income tax treaty applies, are attributable to a U.S. permanent establishment) of the foreign shareholder; (ii) in the case of an individual foreign shareholder, the shareholder is present in the U.S. for a period or periods aggregating 183 days or more during the year of the disposition of Fund shares or the receipt of Capital Gain Dividends and certain other conditions are met; or (iii) the Fund shares on which the foreign shareholder realized gain constitute U.S. real property interests (USRPIs, defined below) or, in certain cases, the distributions are attributable to gain from the sale or exchange of a USRPI, as discussed below. If the requirements of clause (i) are met, the tax, reporting and withholding requirements applicable to U.S. persons generally will apply to the foreign shareholder and an additional branch profits tax may apply if the foreign shareholder is a foreign corporation. If the requirements of clause (i) are not met, but the requirements of clause (ii) are met, such gains and distributions will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty). Please see below for a discussion of the tax implications to foreign shareholders in the event that clause (iii) applies. With respect to taxable years of a Fund beginning before January 1, 2012, distributions to a foreign shareholder attributable to the Fund’s net short-term capital gain in excess of its net long-term capital loss and reported as such by the Fund in a written notice, furnished to its shareholders (“short-term capital gain dividends”) were generally not subject to U.S. federal income or withholding tax unless clause (i), (ii) or (iii) above applies to such distributions.
It is currently unclear whether Congress will extend the exemptions from withholding for interest-related dividends and short-term capital gain dividends with respect to taxable years of a Fund beginning on or after
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January 1, 2012 and what the terms of any such extension would be, including whether any such extension would have retroactive effect. Even if permitted to do so, each Fund provides no assurance that it would report any distributions as interest-related dividends or short-term capital gain dividends.
In the case of shares held through an intermediary, even if a Fund reports a payment as exempt from U.S. federal withholding tax, no assurance can be made that the intermediary will respect such classification, and an intermediary may withhold in spite of such reporting by a Fund. Foreign shareholders should contact their intermediaries regarding the application of these rules to their accounts.
Special rules apply to distributions to foreign shareholders from a Fund if it is either a “U.S. real property holding corporation” (USRPHC) or would be a USRPHC but for the operation of certain exceptions from USRPI treatment for interests in domestically controlled REITs (or, prior to January 1, 2012, regulated investment companies) and not-greater-than-5% interests in publicly traded classes of stock in REITs or regulated investment companies. Additionally, special rules apply to the sale of shares in a Fund if it is a USRPHC. Generally, a USRPHC is a domestic corporation that holds USRPIs – defined generally as any interest in U.S. real property or any equity interest in a USRPHC – the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation’s USRPIs, interests in real property located outside the United States and other assets. If a Fund holds (directly or indirectly) significant interests in REITs, it may be a USRPHC.
If a Fund is a USRPHC or would be a USRPHC but for certain of the above-mentioned exceptions, amounts the Fund receives from REITs derived from gains realized from USRPIs generally will retain their character as such in the hands of the Fund’s foreign shareholders. In the hands of a foreign shareholder that holds (or has held in the prior 12 months) more than a 5% interest in any class of the Fund, such amounts generally will be treated as gains “effectively connected” with the conduct of a “U.S. trade or business,” and subject to tax at graduated rates. Moreover, such shareholder generally will be required to file a U.S. income tax return for the year recognized, and the Fund must withhold 35% of the amount of such distribution. Otherwise, in the case of all other foreign shareholders (i.e., those whose interest in any class of the Fund did not exceed 5% at any time during the prior 12 months), such amounts generally will be treated as ordinary income (regardless of whether the Fund otherwise reported such distribution as a short-term capital gain dividend or Capital Gain Dividend), and the Fund must withhold 30% (or a lower applicable treaty rate) of the amount of the distribution paid to such shareholders. If a Fund is subject to the rules of this paragraph, its foreign shareholders may also be subject to “wash sale” rules to prevent the avoidance of the foregoing tax-filing and payment obligations through the sale and repurchase of Fund shares. Prior to January 1, 2012, if a Fund was a USRPHC or would have been a USRPHC but for certain of the above-mentioned exceptions, similar rules generally also applied to any non-REIT USRPI gains recognized by the Fund directly or indirectly through certain lower-tier regulated investment companies. It is currently unclear whether Congress will extend such application for distributions made on or after January 1, 2012 and what the terms of any such extension would be, including whether any such extension would have retroactive effect.
In addition, if a Fund is a USRPHC, it generally must withhold 10% of the amount realized in redemption by a greater-than-5% foreign shareholder, and that shareholder must file a U.S. income tax return for the year of the disposition of the USRPI and pay any additional tax due on the gain. Prior to January 1, 2012, such withholding generally was not required with respect to amounts paid in redemption of shares of a Fund if it was a domestically controlled USRPHC, or, in certain limited cases, if the Fund (whether or not domestically controlled) held substantial investments in regulated investment companies that were domestically controlled USRPHCs. It is currently unclear whether Congress will extend this exemption from withholding for redemptions made on or after January 1, 2012 and what the terms of any such extension would be, including whether any such extension would have retroactive effect.
In order to qualify for any exemptions from withholding described above or for lower withholding tax rates under income tax treaties, or to establish an exemption from backup withholding, a foreign shareholder must comply with applicable certification requirements relating to its foreign status (including, in general, furnishing an IRS Form W-8BEN or substitute form). Foreign shareholders should consult their tax advisors in this regard.
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Special rules (including withholding and reporting requirements) apply to foreign partnerships and those holding Fund shares through foreign partnerships. In addition, additional considerations may apply to foreign trusts and foreign estates. Investors holding Fund shares through foreign entities should consult their tax advisors about their particular situation.
A beneficial holder of shares who is a foreign person may be subject to state and local tax and to the U.S. federal estate tax in addition to the U.S. federal income tax referred to above.
Tax-Exempt Shareholders
Under current law, a Fund serves to “block” (that is, prevent the attribution to shareholders of) UBTI from being realized by tax-exempt shareholders. Notwithstanding this “blocking” effect, a tax-exempt shareholder could realize UBTI by virtue of its investment in a Fund if shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Code Section 514(b).
It is possible that a tax-exempt shareholder will also recognize UBTI if a Fund recognizes excess inclusion income (as described above) derived from direct or indirect investments in residual interests in REMICs or equity interests in TMPs. Furthermore, any investment in residual interests of a CMO that has elected to be treated as a REMIC can create complex tax consequences, especially if the Fund has state or local governments or other tax-exempt organizations as shareholders.
In addition, special tax consequences apply to charitable remainder trusts (CRTs) that invest in regulated investment companies that invest directly or indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a CRT, as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a Fund to the extent that it recognizes excess inclusion income. Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a Fund and the Fund recognizes excess inclusion income, then the Fund will be subject to a tax on that portion of its excess inclusion income for the taxable year that is allocable to such shareholders at the highest U.S. federal corporate income tax rate. The extent to which the IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, each Fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder’s distributions for the year by the amount of the tax that relates to such shareholder’s interest in the Fund. Each Fund has not yet determined whether such an election will be made. CRTs are urged to consult their tax advisors concerning the consequences of investing in a Fund.
Shareholder Reporting Obligations With Respect to Foreign Bank and Financial Accounts
Shareholders that are U.S. persons and own, directly or indirectly, more than 50% of a Fund could be required to report annually their “financial interest” in the Fund’s “foreign financial accounts,” if any, on Treasury Department Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). Shareholders should consult a tax advisor, and persons investing in the Fund through an intermediary should contact their intermediary, regarding the applicability to them of this reporting requirement.
Other Reporting and Withholding Requirements
Rules enacted in March 2010 require the reporting to the IRS of direct and indirect ownership of foreign financial accounts and foreign entities by U.S. persons. Failure, including by a U.S. person, to provide this required information can result in a 30% withholding tax on certain payments (“withholdable payments”), beginning in 2014 or 2015, depending on the type of payment. Specifically, withholdable payments subject to this 30% withholding tax include payments of U.S.-source dividends and interest made on or after January 1,
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2014, and payments of gross proceeds from the sale or other disposal of property that can produce U.S.-source dividends or interest made on or after January 1, 2015.
The IRS has issued preliminary guidance with respect to these rules; such guidance is potentially subject to material change. Very generally, it is possible that all or a portion of a distribution made by a Fund on or after the dates specified above (or such later dates as may be provided in future guidance) to a shareholder, including a distribution in redemption of shares and a distribution of income or gains otherwise exempt from withholding under the rules applicable to non-U.S. shareholders described above (e.g., Capital Gain Dividends, and short-term capital gain and interest-related dividends (if such treatment is extended), as described above), will be treated as a withholdable payment subject to withholding. Payments to a foreign shareholder that is a “foreign financial institution” will generally be subject to withholding, unless such shareholder timely enters into and complies with an agreement with the IRS or qualifies for an exception from entering into such an agreement. Payments to shareholders that are U.S. persons or foreign individuals will generally not be subject to withholding, so long as such shareholders provide a Fund with such certifications or other documentation, including, to the extent required, with regard to their direct and indirect owners, as the Fund requires to comply with these rules. Persons investing in a Fund through an intermediary should contact their intermediary regarding the application of this reporting and withholding regime to their investments in the Fund.
Shareholders are urged to consult a tax advisor regarding this reporting and withholding regime, in light of their particular circumstances.
Tax Shelter Reporting Regulations
Under Treasury Regulations, if a shareholder recognizes a loss of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on IRS Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances.
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CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of the applicable date indicated below, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” (i.e., owns of record or is known by the Trust to own beneficially 5% or more of any class of a Fund’s outstanding shares) is listed below.
Principal Holder Ownership of the Funds with fiscal year ending March 31:
As of June 30, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Emerging Markets Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 322,244.129 | 25.97% | |||||||
Emerging Markets Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 287,140.336 | 23.14% | |||||||
Emerging Markets Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 128,195.905 | 10.33% | |||||||
Emerging Markets Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 111,019.735 | 8.95% | |||||||
Emerging Markets Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 34,261.139 | 10.93% | |||||||
Emerging Markets Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 28,701.822 | 9.16% | |||||||
Emerging Markets Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 26,409.754 | 8.43% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Emerging Markets Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 21,446.700 | 6.84% | |||||||
Emerging Markets Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 20,874.080 | 6.66% | |||||||
Emerging Markets Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 16,681.514 | 5.32% | |||||||
Emerging Markets Fund Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 6,564,886.928 | 24.86% | |||||||
Emerging Markets Fund Class I | COLUMBIA LIFEGOAL GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 5,006,886.307 | 18.96% | |||||||
Emerging Markets Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 4,645,176.201 | 17.59% | |||||||
Emerging Markets Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 4,571,031.942 | 17.31% | |||||||
Emerging Markets Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,616,862.339 | 9.91% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO EFK MOEN 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 7,300.653 | 13.38% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO HOSPICE ADVANTAGE 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 6,710.416 | 12.30% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO MACARTHUR OBGYN MANAGEMENT LLC 401 PO BOX 10758 FARGO ND 58106-0758 | 5,348.556 | 9.80% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO C ANTHONY PHILLIPS ACCOUNTANCY 401 PO BOX 10758 FARGO ND 58106-0758 | 3,673.072 | 6.73% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO FINANCIAL NETWORK AUDIT LLC 401 K PO BOX 10758 FARGO ND 58106-0758 | 3,503.241 | 6.42% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO B & L CORPORATION 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 3,284.794 | 6.02% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO NORDAAS AMERICAN HOMES OF MN LAKE PO BOX 10758 FARGO ND 58106-0758 | 3,121.051 | 5.72% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO RHEUMATOLOGY CONSULTANTS WNY PC 40 PO BOX 10758 FARGO ND 58106-0758 | 2,925.496 | 5.36% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO RGS 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 2,899.767 | 5.32% | |||||||
Emerging Markets Fund Class R | FRONTIER TRUST COMPANY FBO EDWARDS SALES CORPORATION 401 K RE PO BOX 10758 FARGO ND 58106-0758 | 2,728.020 | 5.00% | |||||||
Emerging Markets Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 3,529,020.701 | 99.84% | |||||||
Emerging Markets Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 8,146,731.161 | 41.09% | |||||||
Emerging Markets Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 5,995,241.592 | 30.24% | |||||||
Emerging Markets Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 2,043,543.062 | 10.31% | |||||||
Energy and Natural Resources Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 991,086.866 | 15.44% | |||||||
Energy and Natural Resources Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 787,480.709 | 12.27% | |||||||
Energy and Natural Resources Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 45,124.212 | 17.03% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Energy and Natural Resources Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 17,338.787 | 6.55% | |||||||
Energy and Natural Resources Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 161,186.681 | 15.90% | |||||||
Energy and Natural Resources Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 129,511.069 | 12.78% | |||||||
Energy and Natural Resources Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 106,719.511 | 10.53% | |||||||
Energy and Natural Resources Fund Class C | RAYMOND JAMES ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 85,085.567 | 8.39% | |||||||
Energy and Natural Resources Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 70,810.571 | 6.98% | |||||||
Energy and Natural Resources Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 60,779.835 | 6.00% | |||||||
Energy and Natural Resources Fund Class I | COLUMBIA LIFEGOAL GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,425,996.243 | 99.95% | |||||||
Energy and Natural Resources Fund Class R | GLOBAL MINE SERVICES INC TTEE FBO GLOBAL MINE SERVICE INC 401K PLAN C/O FASCORE 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 5,533.081 | 12.52% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Energy and Natural Resources Fund Class R | JEFFREY DICKERSON TTEE FBO RIDGE CARE 401K C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 5,295.117 | 11.98% | |||||||
Energy and Natural Resources Fund Class R | PEAK ENERGY OPERATING 2 LLC TTEE PEAK ENERGY OPERATING 2 LLC 401 K C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 4,659.028 | 10.54% | |||||||
Energy and Natural Resources Fund Class R | HOEHN MOTORS TTEE FBO THE HOEHN MOTORS RETIREMENT PLAN 40 C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 4,174.133 | 9.44% | |||||||
Energy and Natural Resources Fund Class R | HUGHES ENT OF NEW JERSEY INC TTEE HUGHES ENTERPRISES 401 K PSP C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 3,174.361 | 7.18% | |||||||
Energy and Natural Resources Fund Class R | JOHN M BOURDELAIS TTEE FBO LEVEL ONE FASTENERS 401K PSP C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 2,702.453 | 6.11% | |||||||
Energy and Natural Resources Fund Class R | CAPITAL BANK & TRUST CO TTEE FBO EVERETT GASKINS HANCOCK LLP 401K PS 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 2,537.638 | 5.74% | |||||||
Energy and Natural Resources Fund Class R | LES BUECHELE TTEE FBO INNSBROOK CORP 401K PSP C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 2,494.119 | 5.64% | |||||||
Energy and Natural Resources Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 2,630.328 | 68.90% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Energy and Natural Resources Fund Class R4 | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FBO CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 1,006.287 | 26.36% | |||||||
Energy and Natural Resources Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FOR OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 4,405,493.948 | 27.12% | |||||||
Energy and Natural Resources Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 3,301,539.531 | 20.33% | |||||||
Energy and Natural Resources Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 2,250,887.102 | 13.86% | |||||||
Energy and Natural Resources Fund Class Z | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 1,593,987.422 | 9.81% | |||||||
Pacific/Asia Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 71,115.758 | 35.70% | |||||||
Pacific/Asia Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 45,136.264 | 22.66% | |||||||
Pacific/Asia Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 23,965.269 | 12.03% | |||||||
Pacific/Asia Fund Class A | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 11,016.655 | 5.53% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Pacific/Asia Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 9,947.916 | 27.08% | |||||||
Pacific/Asia Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 6,212.895 | 16.91% | |||||||
Pacific/Asia Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 5,953.920 | 16.21% | |||||||
Pacific/Asia Fund Class C | STATE STREET BK & TR ROTH IRA HARRY KIMURA 3027 ALEXANDER AVE SANTA CLARA CA 95051-5507 | 4,200.083 | 11.43% | |||||||
Pacific/Asia Fund Class C | STATE STREET BK & TR IRA JACK C MASSEY 4370 OLIVE BRANCH RD GREENWOOD IN 46143-9667 | 3,436.139 | 9.35% | |||||||
Pacific/Asia Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 1,888.125 | 5.14% | |||||||
Pacific/Asia Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 7,788,840.934 | 23.27% | |||||||
Pacific/Asia Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 7,487,250.585 | 22.37% | |||||||
Pacific/Asia Fund Class I | COLUMBIA LIFEGOAL GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 5,764,923.713 | 17.22% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Pacific/Asia Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 4,254,140.667 | 12.71% | |||||||
Pacific/Asia Fund Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 3,434,275.776 | 10.26% | |||||||
Pacific/Asia Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,771,099.369 | 5.29% | |||||||
Pacific/Asia Fund Class I | COLUMBIA MASTERS INTERNATIONAL EQUITY PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,685,398.854 | 5.04% | |||||||
Pacific/Asia Fund Class W | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 331.126 | 100.00% | |||||||
Pacific/Asia Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 1,124,737.935 | 39.93% | |||||||
Pacific/Asia Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 816,800.962 | 29.00% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Pacific/Asia Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 363,724.903 | 12.91% | |||||||
Select Large Cap Growth Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 32,397,131.694 | 41.26% | |||||||
Select Large Cap Growth Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 23,075,525.803 | 29.39% | |||||||
Select Large Cap Growth Fund Class A | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 8,575,262.640 | 10.92% | |||||||
Select Large Cap Growth Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 4,947,179.924 | 6.30% | |||||||
Select Large Cap Growth Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 2,337,465.650 | 35.64% | |||||||
Select Large Cap Growth Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 1,252,335.814 | 19.09% | |||||||
Select Large Cap Growth Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 912,903.552 | 13.92% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Select Large Cap Growth Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 370,761.378 | 5.65% | |||||||
Select Large Cap Growth Fund Class I | COLUMBIA LIFEGOAL GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 6,656,027.618 | 33.78% | |||||||
Select Large Cap Growth Fund Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 3,073,437.660 | 15.60% | |||||||
Select Large Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,898,407.815 | 14.71% | |||||||
Select Large Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,897,479.499 | 14.70% | |||||||
Select Large Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,196,473.998 | 11.15% | |||||||
Select Large Cap Growth Fund Class I | COLUMBIA THERMOSTAT FUND C/O PAULA RYAN 227 W MONROE ST STE 3000 CHICAGO IL 60606-5018 | 1,672,154.946 | 8.49% | |||||||
Select Large Cap Growth Fund Class R | HARTFORD SECURITIES DISTRIBUTION COMPANY INC ATTN UIT OPERATIONS/PRG PO BOX 2999 HARTFORD CT 06104-2999 | 239,707.580 | 23.00% | |||||||
Select Large Cap Growth Fund Class R | RELIANCE TRUST CO PO BOX 48529 ATLANTA GA 30362-1529 | 171,899.445 | 16.50% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Select Large Cap Growth Fund Class R | MG TRUST CO CUST FBO LOOSE BROWN & ASSOCIATES PC 401 700 17TH ST STE 300 DENVER CO 80202-3531 | 60,964.728 | 5.85% | |||||||
Select Large Cap Growth Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 2,600,135.375 | 99.79% | |||||||
Select Large Cap Growth Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 196,478,928.820 | 63.25% | |||||||
Select Large Cap Growth Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 21,817,268.452 | 7.02% | |||||||
Select Large Cap Growth Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FOR BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 19,734,694.137 | 6.35% | |||||||
Select Small Cap Fund Class A | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 112,980.051 | 33.65% | |||||||
Select Small Cap Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 70,774.917 | 21.08% | |||||||
Select Small Cap Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 45,888.513 | 13.67% | |||||||
Select Small Cap Fund Class A | TD AMERITRADE TRUST CO PO BOX 17748 DENVER CO 80217-0748 | 18,495.950 | 5.51% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Select Small Cap Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 16,604.670 | 25.20% | |||||||
Select Small Cap Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 11,238.343 | 17.05% | |||||||
Select Small Cap Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 7,695.971 | 11.68% | |||||||
Select Small Cap Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 6,701.448 | 10.17% | |||||||
Select Small Cap Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH 7TH FLOOR 333 W 34TH ST NEW YORK NY 10001-2417 | 6,259.269 | 9.50% | |||||||
Select Small Cap Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 3,424.504 | 5.20% | |||||||
Select Small Cap Fund Class R | HARTFORD SECURITIES DISTRIBUTION COMPANY INC ATTN UIT OPERATIONS/PRG PO BOX 2999 HARTFORD CT 06104-2999 | 199,697.833 | 60.59% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Select Small Cap Fund Class R | DCGT AS TTEE AND/OR CUST FBO PRINCIPAL FINANCIAL GROUP QUALIFIED PRIN ADVTG OMNIBUS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001 | 28,905.721 | 8.77% | |||||||
Select Small Cap Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMER 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 7,121,671.156 | 57.27% | |||||||
Select Small Cap Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FOR BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 1,561,593.372 | 12.56% | |||||||
Select Small Cap Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 1,163,119.520 | 9.35% | |||||||
Value and Restructuring Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 673,507.043 | 22.59% | |||||||
Value and Restructuring Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 567,567.317 | 19.04% | |||||||
Value and Restructuring Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 273,427.577 | 9.17% | |||||||
Value and Restructuring Fund Class A | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FBO CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 236,565.727 | 7.93% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Value and Restructuring Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 176,971.362 | 5.94% | |||||||
Value and Restructuring Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 155,332.210 | 5.21% | |||||||
Value and Restructuring Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 153,040.716 | 5.13% | |||||||
Value and Restructuring Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 112,814.670 | 14.58% | |||||||
Value and Restructuring Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 102,225.265 | 13.21% | |||||||
Value and Restructuring Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 75,809.164 | 9.80% | |||||||
Value and Restructuring Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 68,546.682 | 8.86% | |||||||
Value and Restructuring Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 65,961.674 | 8.52% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Value and Restructuring Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 55,430.722 | 7.16% | |||||||
Value and Restructuring Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 55,180.591 | 7.13% | |||||||
Value and Restructuring Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 47,607.346 | 6.15% | |||||||
Value and Restructuring Fund Class R | DCGT AS TTEE AND/OR CUST FBO PRINCIPAL FINANCIAL GROUP QUALIFIED PRIN ADVTG OMNIBUS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001 | 215,288.261 | 29.16% | |||||||
Value and Restructuring Fund Class R | DCGT AS TTEE AND/OR CUST FBO PRINCIPAL FINANCIAL GROUP QUALIFIED FIA OMNIBUS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001 | 158,304.566 | 21.44% | |||||||
Value and Restructuring Fund Class R | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FOR BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 63,974.657 | 8.67% | |||||||
Value and Restructuring Fund Class I | RIVERSOURCE INVESTMENTS LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 57.511 | 100.00% |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Value and Restructuring Fund Class W | RIVERSOURCE INVESTMENTS LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 57.484 | 100.00% | |||||||
Value and Restructuring Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY A/C FOR BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 19,927,826.011 | 33.48% | |||||||
Value and Restructuring Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 10,260,551.332 | 17.24% | |||||||
Value and Restructuring Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 9,411,060.860 | 15.81% |
Principal Holder Ownership of the Funds with fiscal year ending April 30:
As of June 30, 2012 (and July 31, 2012 for the Small Cap Value Fund I), the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 2,165,989.076 | 24.92% | |||||||
Bond Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 767,020.471 | 8.83% | |||||||
Bond Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 710,153.769 | 8.17% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 138,112.832 | 46.55% | |||||||
Bond Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 46,315.386 | 15.61% | |||||||
Bond Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 18,315.291 | 6.17% | |||||||
Bond Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 15,995.638 | 5.39% | |||||||
Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DR E FL 3 JACKSONVILLE FL 32246-6484 | 413,359.522 | 23.01% | |||||||
Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 191,992.640 | 10.69% | |||||||
Bond Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 120,464.657 | 6.71% | |||||||
Bond Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 112,786.786 | 6.28% | |||||||
Bond Fund Class I | RVS RETIREMENT PLUS 2015 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 87,373.116 | 32.35% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Bond Fund Class I | RVS RETIREMENT PLUS 2010 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 58,898.209 | 21.81% | |||||||
Bond Fund Class I | RVS RETIREMENT PLUS 2020 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 52,123.215 | 19.30% | |||||||
Bond Fund Class I | RVS RETIREMENT PLUS 2025 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 40,713.077 | 15.08% | |||||||
Bond Fund Class I | RVS RETIREMENT PLUS 2030 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 17,019.410 | 6.30% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO EFK MOEN 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 39,495.278 | 16.36% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO ED FAGAN INC 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 31,201.234 | 12.92% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO HOSPICE ADVANTAGE 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 30,296.558 | 12.55% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO C ANTHONY PHILLIPS ACCOUNTANCY 401 PO BOX 10758 FARGO ND 58106-0758 | 23,868.598 | 9.89% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO FINANCIAL NETWORK AUDIT LLC 401 K PO BOX 10758 FARGO ND 58106-0758 | 18,746.765 | 7.76% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO RHEUMATOLOGY CONSULTANTS WNY PC 40 PO BOX 10758 FARGO ND 58106-0758 | 18,294.896 | 7.58% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO B & L CORPORATION 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 17,873.396 | 7.40% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO NORDAAS AMERICAN HOMES OF MN LAKE PO BOX 10758 FARGO ND 58106-0758 | 15,974.542 | 6.62% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO EDWARDS SALES CORPORATION 401 K RE PO BOX 10758 FARGO ND 58106-0758 | 13,479.853 | 5.58% | |||||||
Bond Fund Class R | FRONTIER TRUST COMPANY FBO RGS 401 K PLAN PO BOX 10758 FARGO ND 58106-0758 | 12,171.627 | 5.04% | |||||||
Bond Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 425,568.825 | 26.38% | |||||||
Bond Fund Class W | RIVERSOURCE INVESTMENTS LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 262.565 | 100.00% | |||||||
Bond Fund Class Y | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 2,298,914.310 | 100.00% | |||||||
Bond Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 117,341,445.895 | 80.87% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Bond Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 11,553,933.279 | 7.96% | |||||||
Corporate Income Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 2,546,177.594 | 20.13% | |||||||
Corporate Income Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 2,061,215.228 | 16.30% | |||||||
Corporate Income Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 821,205.301 | 6.49% | |||||||
Corporate Income Fund Class A | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 646,238.505 | 5.11% | |||||||
Corporate Income Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 81,332.306 | 27.68% | |||||||
Corporate Income Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 73,416.809 | 24.98% | |||||||
Corporate Income Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 24,940.476 | 8.49% | |||||||
Corporate Income Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 20,262.514 | 6.90% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Corporate Income Fund Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 18,892.303 | 6.43% | |||||||
Corporate Income Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 16,196.757 | 5.51% | |||||||
Corporate Income Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 293,597.063 | 16.46% | |||||||
Corporate Income Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 244,780.733 | 13.72% | |||||||
Corporate Income Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 231,703.411 | 12.99% | |||||||
Corporate Income Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 160,298.819 | 8.99% | |||||||
Corporate Income Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 144,059.999 | 8.08% | |||||||
Corporate Income Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 143,806.881 | 8.06% | |||||||
Corporate Income Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 95,766.018 | 5.37% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Corporate Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 11,582,250.643 | 21.24% | |||||||
Corporate Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 10,474,514.211 | 19.21% | |||||||
Corporate Income Fund Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 9,128,888.581 | 16.74% | |||||||
Corporate Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 9,121,761.629 | 16.73% | |||||||
Corporate Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 5,505,513.697 | 10.09% | |||||||
Corporate Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 3,082,813.956 | 5.65% | |||||||
Corporate Income Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 15,359,285.158 | 99.92% | |||||||
Corporate Income Fund Class Z | MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 37,269,670.571 | 73.09% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Corporate Income Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 4,260,080.103 | 8.35% | |||||||
Corporate Income Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 3,540,580.561 | 6.94% | |||||||
Intermediate Bond Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 21,745,020.821 | 55.52% | |||||||
Intermediate Bond Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 5,246,905.747 | 13.40% | |||||||
Intermediate Bond Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 2,736,362.708 | 6.99% | |||||||
Intermediate Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 2,414,248.381 | 6.16% | |||||||
Intermediate Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 310,284.579 | 51.66% | |||||||
Intermediate Bond Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 39,150.648 | 6.52% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Intermediate Bond Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 34,026.496 | 5.67% | |||||||
Intermediate Bond Fund Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 31,480.296 | 5.24% | |||||||
Intermediate Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 941,138.840 | 24.54% | |||||||
Intermediate Bond Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 545,942.433 | 14.23% | |||||||
Intermediate Bond Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 351,446.880 | 9.16% | |||||||
Intermediate Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 298,970.544 | 7.79% | |||||||
Intermediate Bond Fund Class I | COLUMBIA THERMOSTAT FUND C/O PAULA RYAN 227 W MONROE ST STE 3000 CHICAGO IL 60606-5018 | 11,190,254.301 | 100.00% | |||||||
Intermediate Bond Fund Class R | FRONTIER TRUST CO FBO RKT SAVINGS & RETPLAN 2122 PO BOX 10758 FARGO ND 58106-0758 | 64,914.574 | 23.50% | |||||||
Intermediate Bond Fund Class R | FRONTIER TRUST CO FBO REGGIO REGISTER CO INC 401K PO BOX 10758 FARGO ND 58106-0758 | 30,686.851 | 11.11% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Intermediate Bond Fund Class R | MERRILL LYNCH PIERCE FOR THE SOLE BENEFIT OF ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST JACKSONVILLE FL 32246-6484 | 27,119.365 | 9.82% | |||||||
Intermediate Bond Fund Class R | MG TRUST COMPANY CUST. FBO ALERT AMBULANCE 700 17TH ST STE 300 DENVER CO 80202-3531 | 14,667.331 | 5.31% | |||||||
Intermediate Bond Fund Class W | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 273.437 | 100.00% | |||||||
Intermediate Bond Fund Class Z | MLPF & S FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 159,567,892.152 | 62.64% | |||||||
Intermediate Bond Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 16,049,043.761 | 6.30% | |||||||
Small Cap Value Fund I Class A | DCGT AS TTEE AND/OR CUST FBO PRINCIPAL FINANCIAL GROUP QUALIFIED FIA OMNIBUS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001 | 914,160.467 | 6.73% | |||||||
Small Cap Value Fund I Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 815,375.311 | 6.00% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Small Cap Value Fund I Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 819,687.851 | 6.03% | |||||||
Small Cap Value Fund I Class A | ORCHARD TRUST COMPANY LLC TTEE FBO EMPLOYEE BENEFITS CLIENTS 401(K) PLAN 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 688,325.092 | 5.07% | |||||||
Small Cap Value Fund I Class B | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 14,157.305 | 5.35% | |||||||
Small Cap Value Fund I Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 51,152.252 | 19.34% | |||||||
Small Cap Value Fund I Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 22,267.981 | 8.42% | |||||||
Small Cap Value Fund I Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 33,754.012 | 12.76% | |||||||
Small Cap Value Fund I Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 34,234.019 | 12.94% | |||||||
Small Cap Value Fund I Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 119,813.490 | 10.74% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Small Cap Value Fund I Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 223,635.715 | 20.04% | |||||||
Small Cap Value Fund I Class C | MORGAN STANLEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 135,670.191 | 12.16% | |||||||
Small Cap Value Fund I Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 71,422.007 | 6.40% | |||||||
Small Cap Value Fund I Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 87,270.895 | 7.82% | |||||||
Small Cap Value Fund I Class C | RAYMOND JAMES FBO OMNIBUS FOR ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 70,587.207 | 6.32% | |||||||
Small Cap Value Fund I Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 369,691.417 | 30.08% | |||||||
Small Cap Value Fund I Class I | RVS INCOME BLDR 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 806,578.298 | 65.62% | |||||||
Small Cap Value Fund I Class R | CAPITAL BANK & TRUST CO TTEE F PARK AVE MOTOR CORP 401K SVGS PL 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 29,023.004 | 66.04% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Small Cap Value Fund I Class R | CAPITAL BANK & TRUST COMPANY TTEE F FORT BELVOIR FEDERAL CREDIT UNION 4 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 11,501.969 | 26.17% | |||||||
Small Cap Value Fund I Class Y | MERRILL LYNCH, PIERCE, FENNER & SMITH INC OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 24,035.207 | 100.00% | |||||||
Small Cap Value Fund I Class Z | CHARLES SCHWAB & CO ATTN MUTUAL FUNDS DEPT 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 1,271,649.485 | 5.71% | |||||||
Small Cap Value Fund I Class Z | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 4,942,723.191 | 22.20% | |||||||
Small Cap Value Fund I Class Z | JP MORGAN CHASE BANK TTEE/CUST FBO THE RETIREMENT PLANS 4 NEW YORK PLAZA NEW YORK NY 10004-2413 | 1,157,561.814 | 5.20% | |||||||
Small Cap Value Fund I Class Z | MERRILL LYNCH, PIERCE, FENNER & SMITH INC OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 5,019,290.156 | 22.55% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Small Cap Value Fund I Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 1,968,636.324 | 8.84% | |||||||
U.S. Treasury Index Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 1,447,442.212 | 29.22% | |||||||
U.S. Treasury Index Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 640,480.683 | 12.93% | |||||||
U.S. Treasury Index Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 519,718.672 | 10.49% | |||||||
U.S. Treasury Index Fund Class A | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 269,096.339 | 5.43% | |||||||
U.S. Treasury Index Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 258,951.372 | 5.23% | |||||||
U.S. Treasury Index Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 91,895.141 | 36.97% | |||||||
U.S. Treasury Index Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 73,967.029 | 29.75% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
U.S. Treasury Index Fund Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 24,110.594 | 9.70% | |||||||
U.S. Treasury Index Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 16,410.238 | 6.60% | |||||||
U.S. Treasury Index Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 268,562.657 | 27.06% | |||||||
U.S. Treasury Index Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 183,287.308 | 18.47% | |||||||
U.S. Treasury Index Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 95,438.187 | 9.62% | |||||||
U.S. Treasury Index Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 89,671.074 | 9.03% | |||||||
U.S. Treasury Index Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 61,914.107 | 6.24% | |||||||
U.S. Treasury Index Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 49,817.981 | 5.02% | |||||||
U.S. Treasury Index Fund Class I | COLUMBIA THERMOSTAT FUND C/O PAULA RYAN 227 W MONROE ST STE 3000 CHICAGO IL 60606-5018 | 3,546,229.353 | 43.91% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
U.S. Treasury Index Fund Class I | RIVERSOURCE PORTFOLIO BUILDER CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,864,172.485 | 23.08% | |||||||
U.S. Treasury Index Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 966,164.511 | 11.96% | |||||||
U.S. Treasury Index Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 935,215.192 | 11.58% | |||||||
U.S. Treasury Index Fund Class I | RVS INCOME BLDR BASIC INCOME FD 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 518,080.441 | 6.41% | |||||||
U.S. Treasury Index Fund Class W | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 210.084 | 100.00% | |||||||
U.S. Treasury Index Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 8,013,113.980 | 37.87% | |||||||
U.S. Treasury Index Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 3,228,524.251 | 15.26% | |||||||
U.S. Treasury Index Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 1,081,135.282 | 5.11% |
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Principal Holder Ownership of the Funds with fiscal year ending May 31:
As of August 31, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Dividend Income Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 46,228,803.252 | 35.59 | % | ||||||
Dividend Income Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 10,235,078.849 | 7.88 | % | ||||||
Dividend Income Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATOR 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 8,429,750.626 | 6.49 | % | ||||||
Dividend Income Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 6,504,511.603 | 5.01 | % | ||||||
Dividend Income Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 290,099.440 | 27.96 | % | ||||||
Dividend Income Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATOR 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 211,779.426 | 20.41 | % | ||||||
Dividend Income Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 140,915.880 | 13.58 | % | ||||||
Dividend Income Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 84,703.669 | 8.16 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Dividend Income Fund Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 53,970.321 | 5.20 | % | ||||||
Dividend Income Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATOR 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 4,117,041.745 | 18.49 | % | ||||||
Dividend Income Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 3,096,922.290 | 13.91 | % | ||||||
Dividend Income Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 2,219,299.495 | 9.97 | % | ||||||
Dividend Income Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 2,097,205.471 | 9.42 | % | ||||||
Dividend Income Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 1,906,655.082 | 8.56 | % | ||||||
Dividend Income Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 1,765,149.551 | 7.93 | % | ||||||
Dividend Income Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 1,556,026.441 | 6.99 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Dividend Income Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 1,366,441.964 | 6.14 | % | ||||||
Dividend Income Fund Class I | COLUMBIA LIFEGOAL GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 6,058,206.027 | 32.00 | % | ||||||
Dividend Income Fund Class I | COLUMBIA THERMOSTAT FUND C/O PAULA RYAN 227 W MONROE ST STE 3000 CHICAGO IL 60606-5018 | 3,413,688.026 | 18.03 | % | ||||||
Dividend Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 3,043,696.976 | 16.08 | % | ||||||
Dividend Income Fund Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,132,509.970 | 11.26 | % | ||||||
Dividend Income Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,561,403.131 | 8.25 | % | ||||||
Dividend Income Fund Class R | EQUITABLE LIFE FOR SA ON BEHALF OF VARIOUS 401K EXPEDITER PLANS 200 PLAZA DR STE 2 SECAUCUS NJ 07094-3607 | 755,339.739 | 27.02 | % | ||||||
Dividend Income Fund Class R | MERRILL LYNCH, PIERCE, FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 617,259.101 | 22.08 | % | ||||||
Dividend Income Fund Class R | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERSMUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 312,177.987 | 11.17 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Dividend Income Fund Class T | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 1,256,971.767 | 23.13 | % | ||||||
Dividend Income Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 854,662.839 | 15.73 | % | ||||||
Dividend Income Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 3,810,762.104 | 99.99 | % | ||||||
Dividend Income Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 122,636,871.433 | 47.15 | % | ||||||
Dividend Income Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 28,730,576.389 | 11.05 | % | ||||||
Dividend Income Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 26,690,910.895 | 10.26 | % | ||||||
Dividend Income Fund Class Z | FIDELITY INVESTMENTS INST L OPS CO FIIOC AS AGENT FOR CERTAIN EMPLOYEE BENEFIT PLANS 100 MAGELLAN WAY # KW1C COVINGTON KY 41015-1999 | 18,357,923.744 | 7.06 | % | ||||||
High Yield Municipal Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 2,276,025.291 | 23.44 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
High Yield Municipal Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 1,290,707.922 | 13.29 | % | ||||||
High Yield Municipal Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 1,064,536.561 | 10.97 | % | ||||||
High Yield Municipal Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 800,539.292 | 8.25 | % | ||||||
High Yield Municipal Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 664,291.791 | 6.84 | % | ||||||
High Yield Municipal Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 647,057.819 | 6.66 | % | ||||||
High Yield Municipal Fund Class A | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 590,719.982 | 6.08 | % | ||||||
High Yield Municipal Fund Class A | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 502,550.843 | 5.18 | % | ||||||
High Yield Municipal Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 89,268.340 | 50.32 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
High Yield Municipal Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 42,647.369 | 24.04 | % | ||||||
High Yield Municipal Fund Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 11,674.171 | 6.58 | % | ||||||
High Yield Municipal Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 293,631.241 | 22.95 | % | ||||||
High Yield Municipal Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 249,679.898 | 19.52 | % | ||||||
High Yield Municipal Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 132,625.489 | 10.37 | % | ||||||
High Yield Municipal Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 120,771.454 | 9.44 | % | ||||||
High Yield Municipal Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 68,164.997 | 5.33 | % | ||||||
High Yield Municipal Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 67,628.376 | 5.29 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
High Yield Municipal Fund Class Z | MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION SEC 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 66,542,199.065 | 82.50 | % | ||||||
High Yield Opportunity Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 4,491,059.599 | 9.77 | % | ||||||
High Yield Opportunity Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 4,330,750.269 | 9.42 | % | ||||||
High Yield Opportunity Fund Class A | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 3,754,686.581 | 8.17 | % | ||||||
High Yield Opportunity Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 3,537,518.428 | 7.69 | % | ||||||
High Yield Opportunity Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 3,015,981.527 | 6.56 | % | ||||||
High Yield Opportunity Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 3,000,075.781 | 6.52 | % | ||||||
High Yield Opportunity Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 156,578.863 | 16.55 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
High Yield Opportunity Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 146,705.448 | 15.51 | % | ||||||
High Yield Opportunity Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 97,895.929 | 10.35 | % | ||||||
High Yield Opportunity Fund Class B | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 90,555.357 | 9.57 | % | ||||||
High Yield Opportunity Fund Class B | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FBO CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 75,882.641 | 8.02 | % | ||||||
High Yield Opportunity Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 67,732.228 | 7.16 | % | ||||||
High Yield Opportunity Fund Class B | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 65,775.526 | 6.95 | % | ||||||
High Yield Opportunity Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 394,781.376 | 14.73 | % | ||||||
High Yield Opportunity Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 352,687.130 | 13.16 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
High Yield Opportunity Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 215,716.980 | 8.05 | % | ||||||
High Yield Opportunity Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 189,278.734 | 7.06 | % | ||||||
High Yield Opportunity Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 187,141.031 | 6.98 | % | ||||||
High Yield Opportunity Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 177,845.994 | 6.64 | % | ||||||
High Yield Opportunity Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 152,980.126 | 5.71 | % | ||||||
High Yield Opportunity Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 25,756,591.394 | 72.42 | % | ||||||
High Yield Opportunity Fund Class Z | TD AMERITRADE INC FOR THE EXCLUSIVE BENEFIT OF OUR CLIENTS PO BOX 2226 OMAHA NE 68103-2226 | 2,487,790.496 | 6.99 | % | ||||||
High Yield Opportunity Fund Class Z | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 2,033,057.938 | 5.72 | % | ||||||
International Bond Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 55,766.616 | 36.19 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
International Bond Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 52,007.776 | 33.75 | % | ||||||
International Bond Fund Class A | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 8,040.944 | 5.22 | % | ||||||
International Bond Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 9,006.787 | 45.39 | % | ||||||
International Bond Fund Class C | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 1,275.261 | 6.43 | % | ||||||
International Bond Fund Class C | STATE STREET BANK & TRUST CO DENTON VENTURES INC HAROLD G DENTON 6320 VISTA DE ORO LAS CRUCES NM 88007-8922 | 1,254.329 | 6.32 | % | ||||||
International Bond Fund Class C | MERRILL LYNCH, PIERCE, FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 1,058.730 | 5.34 | % | ||||||
International Bond Fund Class C | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 1,047.379 | 5.28 | % | ||||||
International Bond Fund Class C | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN TIM ARMBRUSTMACHER 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 1,010.706 | 5.09 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
International Bond Fund Class I | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,843,058.635 | 46.37 | % | ||||||
International Bond Fund Class I | RVS INCOME BLDR BASIC INCOME FD 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 1,514,431.225 | 38.10 | % | ||||||
International Bond Fund Class I | COLUMBIA LIFEGOAL INCOME AND GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 335,555.762 | 8.44 | % | ||||||
International Bond Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 373,213.341 | 99.94 | % | ||||||
International Bond Fund Class Z | MERRILL LYNCH, PIERCE, FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DR E FL 3 JACKSONVILLE FL 32246-6484 | 829,162.857 | 56.76 | % | ||||||
International Bond Fund Class Z | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN TIM ARMBRUSTMACHER 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 512,998.748 | 35.12 | % | ||||||
International Bond Fund Class Z | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 90,313.653 | 6.18 | % | ||||||
Strategic Income Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 79,357,767.459 | 34.70 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Strategic Income Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 14,177,183.023 | 6.20 | % | ||||||
Strategic Income Fund Class B | MERRILL LYNCH, PIERCE, FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 1,671,026.534 | 20.47 | % | ||||||
Strategic Income Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 1,574,575.512 | 19.29 | % | ||||||
Strategic Income Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 1,536,440.277 | 18.82 | % | ||||||
Strategic Income Fund Class B | PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002 | 927,660.000 | 11.36 | % | ||||||
Strategic Income Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 8,862,299.289 | 22.12 | % | ||||||
Strategic Income Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVC 707 2ND AVE S MINNEAPOLIS MN 55402-2405 | 8,623,186.580 | 21.53 | % | ||||||
Strategic Income Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 3,742,788.981 | 9.34 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Strategic Income Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY NJ 07311 | 3,334,295.734 | 8.32 | % | ||||||
Strategic Income Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 2,408,714.321 | 6.01 | % | ||||||
Strategic Income Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 2,348,232.495 | 5.86 | % | ||||||
Strategic Income Fund Class C | NATIONAL FINANCIAL SERVICES LLC FEBO CUSTOMERS MUTUAL FUNDS 200 LIBERTY STREET 1WFC NEW YORK NY 10281-1003 | 2,276,485.596 | 5.68 | % | ||||||
Strategic Income Fund Class R | MG TRUST COMPANY CUST FBO LAKES REGION COMMUNITY SERVICE 700 17TH ST STE 300 DENVER CO 80202-3531 | 8,446.015 | 32.97 | % | ||||||
Strategic Income Fund Class R | MID ATLANTIC TRUST COMPANY FBO PYRAMID TECHNICAL CONSULTANTS 401 K PROFIT SHARING PLAN & TRUST 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228 | 6,536.210 | 25.51 | % | ||||||
Strategic Income Fund Class R | CAPITAL BANK & TRUST COMPANY TTEE F NANTUCKET ISLAND MANAGEMENT 401K PL 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 4,717.104 | 18.41 | % | ||||||
Strategic Income Fund Class R | MID ATLANTIC TRUST COMPANY FBO COACTIV 401 K PROFIT SHARING PLAN & TRUST 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228 | 2,031.221 | 7.93 | % | ||||||
Strategic Income Fund Class R | CAPITAL BANK & TRUST COMPANY TTEE F NEW ENGLAND BUSINESS TR SEC 401K PL 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002 | 1,354.379 | 5.29 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Strategic Income Fund Class R4 | CHARLES SCHWAB & CO INC CUST A/C FOR THE EXCLUSIVE BENEFIT ATTENTION MUTUAL FUND 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 16,546.697 | 57.80 | % | ||||||
Strategic Income Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 10,792.239 | 37.70 | % | ||||||
Strategic Income Fund Class R5 | PATRICKS PLAIN 6967 COOKS HOPE RD EASTON MD 21601-8305 | 44,525.357 | 97.18 | % | ||||||
Strategic Income Fund Class W | RIVERSOURCE INVESTMENTS LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 405.844 | 100.00 | % | ||||||
Strategic Income Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF IT CUSTOMER 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 120,717,948.002 | 80.11 | % | ||||||
Strategic Income Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 8,346,251.508 | 5.54 | % |
Principal Holder Ownership of the Fund with fiscal year ending July 31:
As of October 31, 2011, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Ultra Short Term Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 102,000,780.213 | 94.34 | % |
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Principal Holder Ownership of the Funds with fiscal year ending August 31:
As of November 30, 2011 (except as otherwise indicated), the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Balanced Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 52,906.487 | 10.05 | % | ||||||
Balanced Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 237,179.577 | 12.34 | % | ||||||
Balanced Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 215,181.461 | 11.20 | % | ||||||
Balanced Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 169,337.273 | 8.81 | % | ||||||
Balanced Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 115,278.294 | 6.00 | % | ||||||
Balanced Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 110,378.230 | 5.74 | % | ||||||
Balanced Fund Class R | ALERUS FINANCIAL FBO MILWAUKEE ECONOMIC DEVELOPMENT CORP PO BOX 64535 SAINT PAUL MN 55164-0535 | 12,229.810 | 48.08 | % | ||||||
Balanced Fund Class R | FIIOC FBO NEW MILLENNIUM SOLAR EQUIPMENT CORP 401(K) SAVINGS PLAN 100 MAGELLAN WAY COVINGTON KY 41015-1987 | 4,850.762 | 19.07 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Balanced Fund Class R | MG TRUST CO CUST FBO REYNOLDS H2O PLUS INC 700 17TH ST STE 300 DENVER CO 80202-3531 | 3,163.909 | 12.44 | % | ||||||
Balanced Fund Class R | FRONTIER TRUST CO FBO PORTNOY SAVINGS & RETIREMENT PO BOX 10758 FARGO ND 58106-0758 | 3,034.136 | 11.93 | % | ||||||
Balanced Fund Class R4 | WELLS FARGO BANK FBO 1525 W W T HARRIS BLVD CHARLOTTE NC 28262-8522 | 1,902,584.919 | 99.98 | % | ||||||
Balanced Fund Class R5 | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FBO CUSTOMERS ATTN MUTUAL FUNDS DEPT 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 298.552 | 59.20 | % | ||||||
Balanced Fund Class R5 | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 205.783 | 40.80 | % | ||||||
Balanced Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOM 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 1,794,239.748 | 18.89 | % | ||||||
Balanced Fund Class Z | HARTFORD SECURITIES DISTRIBUTION COMPANY INC ATTN UIT OPERATIONS/PRG PO BOX 2999 HARTFORD CT 06104-2999 | 701,565.693 | 7.38 | % | ||||||
Balanced Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 573,817.543 | 6.04 | % | ||||||
Global Dividend Opportunity Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 438,125.926 | 5.69 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Global Dividend Opportunity Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 233,720.856 | 26.64 | % | ||||||
Global Dividend Opportunity Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 156,737.481 | 17.87 | % | ||||||
Global Dividend Opportunity Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 44,723.368 | 5.10 | % | ||||||
Global Dividend Opportunity Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 146,842.355 | 17.27 | % | ||||||
Global Dividend Opportunity Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 118,180.564 | 13.90 | % | ||||||
Global Dividend Opportunity Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 55,533.271 | 6.53 | % | ||||||
Global Dividend Opportunity Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 44,396.061 | 5.22 | % | ||||||
Global Dividend Opportunity Fund Class I | RIVERSOURCE INVESTMENTS ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 146.972 | 100.00 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Global Dividend Opportunity Fund Class R | HARTFORD SECURITIES DISTRIBUTION COMPANY INC ATTN UIT OPERATIONS/PRG PO BOX 2999 HARTFORD CT 06104-2999 | 52,754.891 | 79.78 | % | ||||||
Global Dividend Opportunity Fund Class R | MG TRUST COMPANY CUST. FBO WATERPARTNERS INTERNATIONAL, INC. 700 17TH STREET SUITE 300 DENVER CO 80202-3531 | 6,016.642 | 9.10 | % | ||||||
Global Dividend Opportunity Fund Class W | RIVERSOURCE INVESTMENTS LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 147.319 | 100.00 | % | ||||||
Global Dividend Opportunity Fund Class Y | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 854,582.105 | 99.91 | % | ||||||
Global Dividend Opportunity Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF IT S CUSTOM 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 4,562,669.398 | 12.65 | % | ||||||
Global Dividend Opportunity Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FBO CUSTOMERS ATTN MUTUAL FUNDS DEPT 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 2,972,689.202 | 8.24 | % | ||||||
Greater China Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 215,812.356 | 11.24 | % | ||||||
Greater China Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 176,367.501 | 9.19 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Greater China Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 150,628.020 | 7.85 | % | ||||||
Greater China Fund Class A | UBS WM USA ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 123,901.408 | 6.45 | % | ||||||
Greater China Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 46,790.339 | 19.59 | % | ||||||
Greater China Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 22,041.949 | 9.23 | % | ||||||
Greater China Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 12,825.399 | 5.37 | % | ||||||
Greater China Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 168,406.101 | 28.54 | % | ||||||
Greater China Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 84,372.342 | 14.30 | % | ||||||
Greater China Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 61,114.613 | 10.36 | % | ||||||
Greater China Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 32,861.842 | 5.57 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Greater China Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 31,485.559 | 5.34 | % | ||||||
Greater China Fund Class C | UBS WM USA ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 30,808.677 | 5.22 | % | ||||||
Greater China Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 455,155.636 | 27.00 | % | ||||||
Greater China Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL BALANCED GROWTH ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 395,591.091 | 23.47 | % | ||||||
Greater China Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 350,848.406 | 20.81 | % | ||||||
Greater China Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 330,409.694 | 19.60 | % | ||||||
Greater China Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 103,720.539 | 6.15 | % | ||||||
Greater China Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 376,033.313 | 41.43 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Greater China Fund Class Z | CHARLES SCHWAB & CO INC CUST ATTN MUTUAL FUNDS DEPT 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 62,803.969 | 6.92 | % | ||||||
Greater China Fund Class Z | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 53,425.367 | 5.89 | % | ||||||
Mid Cap Growth Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,170,580.167 | 9.33 | % | ||||||
Mid Cap Growth Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 922,998.703 | 7.36 | % | ||||||
Mid Cap Growth Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 47,502.229 | 16.07 | % | ||||||
Mid Cap Growth Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 30,526.221 | 10.33 | % | ||||||
Mid Cap Growth Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 18,320.456 | 6.20 | % | ||||||
Mid Cap Growth Fund Class B | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 17,936.659 | 6.07 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Mid Cap Growth Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 500,014.280 | 22.34 | % | ||||||
Mid Cap Growth Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 249,629.490 | 11.15 | % | ||||||
Mid Cap Growth Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 187,927.013 | 8.40 | % | ||||||
Mid Cap Growth Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 121,452.830 | 5.43 | % | ||||||
Mid Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,036,630.150 | 21.27 | % | ||||||
Mid Cap Growth Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL GROWTH PORTFOLIO ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 1,988,958.206 | 20.77 | % | ||||||
Mid Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,719,653.628 | 17.96 | % | ||||||
Mid Cap Growth Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL BALANCED GROWTH ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 1,663,875.544 | 17.38 | % | ||||||
Mid Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,240,487.580 | 12.95 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Mid Cap Growth Fund Class R | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 347,032.986 | 31.98 | % | ||||||
Mid Cap Growth Fund Class R | DCGT TRUSTEE & OR CUSTODIAN FBO PRINCIPAL FINANCIAL GROUP QUALIFIED FIA OMNIBUS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001 | 77,904.428 | 7.18 | % | ||||||
Mid Cap Growth Fund Class R5 | GRAMMA FISHER FOUNDATION 6967 COOKS HOPE RD EASTON MD 21601-8305 | 47,452.281 | 57.15 | % | ||||||
Mid Cap Growth Fund Class R5 | PATRICKS PLAIN 6769 COOKS HOPE RD EASTON MN 21601-8305 | 34,403.697 | 41.44 | % | ||||||
Mid Cap Growth Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 133,952.195 | 16.05 | % | ||||||
Mid Cap Growth Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 2,556,953.225 | 99.98 | % | ||||||
Mid Cap Growth Fund Class Y | FIM FUNDING INC C/O BOFA GLOBAL CAPITAL MANAGEMENT 100 FEDERAL ST BOSTON MA 02110-1802 | 619.067 | 50.65 | % | ||||||
Mid Cap Growth Fund Class Y | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 603.233 | 49.35 | % | ||||||
Mid Cap Growth Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 19,357,397.141 | 41.37 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Mid Cap Growth Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 3,713,784.691 | 7.94 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 330,781.250 | 14.64 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 258,411.534 | 11.43 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 173,781.384 | 7.69 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 168,568.278 | 7.46 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 145,099.154 | 6.42 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 140,441.601 | 6.21 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class A | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 128,477.708 | 5.68 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,750.850 | 29.40 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Oregon Intermediate Municipal Bond Fund Class B | WEDBUSH MORGAN SECURITIES 1000 WILSHIRE BLVD LOS ANGELES CA 90017-2457 | 1,618.580 | 27.18 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class B | WEDBUSH MORGAN SECURITIES 1000 WILSHIRE BLVD LOS ANGELES CA 90017-2457 | 1,586.043 | 26.63 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class B | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 801.931 | 13.46 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 670,263.930 | 43.13 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 246,062.245 | 15.83 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 220,264.084 | 14.17 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FBO CUSTOMERS ATTN MUTUAL FUNDS DEPT 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 4,925,926.024 | 15.20 | % | ||||||
Oregon Intermediate Municipal Bond Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 2,552,904.369 | 7.88 | % | ||||||
Columbia Small Cap Growth Fund I Class A | UBS WM USA OMNI ACCOUNT M/F ATTN DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 153,163.636 | 5.23 | % | ||||||
Columbia Small Cap Growth Fund I Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 150,583.041 | 5.14 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Columbia Small Cap Growth Fund I Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 17,230.033 | 28.43 | % | ||||||
Columbia Small Cap Growth Fund I Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 6,286.300 | 10.37 | % | ||||||
Columbia Small Cap Growth Fund I Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 4,827.029 | 7.96 | % | ||||||
Columbia Small Cap Growth Fund I Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 119,790.102 | 24.73 | % | ||||||
Columbia Small Cap Growth Fund I Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 94,233.439 | 19.45 | % | ||||||
Columbia Small Cap Growth Fund I Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 42,118.957 | 8.69 | % | ||||||
Columbia Small Cap Growth Fund I Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 24,677.316 | 5.09 | % | ||||||
Columbia Small Cap Growth Fund I Class C | UBS WM USA ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 24,645.791 | 5.09 | % | ||||||
Columbia Small Cap Growth Fund I Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL GROWTH PORTFOLIO ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 1,008,113.650 | 34.98 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Columbia Small Cap Growth Fund I Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 556,001.278 | 19.29 | % | ||||||
Columbia Small Cap Growth Fund I Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 457,449.212 | 15.87 | % | ||||||
Columbia Small Cap Growth Fund I Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 312,795.408 | 10.85 | % | ||||||
Columbia Small Cap Growth Fund I Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL BALANCED GROWTH ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 264,490.948 | 9.18 | % | ||||||
Columbia Small Cap Growth Fund I Class R | FRONTIER TRUST CO FBO HENNESSEY ENTERPRISES PS PO BOX 10758 FARGO ND 58106-0758 | 1,195.306 | 61.56 | % | ||||||
Columbia Small Cap Growth Fund I Class R | FRONTIER TRUST CO FBO GREENWOOD CHRISTIAN CHURCH INC 40 PLAN FRONTIER TRUST CO PO BOX 10577 FARGO ND 58106-0577 | 652.125 | 33.59 | % | ||||||
Columbia Small Cap Growth Fund I Class Y | ANCHORAGE POLICE & FIRE RETIREMENT SYSTEM ATTN CHARLES M LAIRD 3600 DR MARTIN LUTHER KING JR AVE STE 207 ANCHORAGE AK 99507-1222 | 375,684.977 | 99.86 | % | ||||||
Columbia Small Cap Growth Fund I Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 14,150,746.328 | 46.82 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Columbia Small Cap Growth Fund I Class Z | NFS LLC FEBO STATE STREET BANK TRUST CO TTEE VARIOUS RETIREMENT PLANS 440 MAMARONECK AVE HARRISON NY 10528-2418 | 2,853,843.423 | 9.44 | % | ||||||
Columbia Small Cap Growth Fund I Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 2,821,188.394 | 9.33 | % | ||||||
Technology Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 691,926.505 | 11.58 | % | ||||||
Technology Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 80,164.997 | 15.04 | % | ||||||
Technology Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 80,040.517 | 15.01 | % | ||||||
Technology Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 63,976.125 | 12.00 | % | ||||||
Technology Fund Class B | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 42,046.606 | 7.89 | % | ||||||
Technology Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 814,443.092 | 40.98 | % | ||||||
Technology Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 166,150.460 | 8.36 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Technology Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 158,529.833 | 7.98 | % | ||||||
Technology Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 143,527.754 | 7.22 | % | ||||||
Technology Fund Class Z | VANGUARD FIDUCIARY TRUST COMPANY COLUMBIA TECHNOLOGY FUND PO BOX 2600 VALLEY FORGE PA 19482-2600 | 2,890,659.110 | 24.05 | % | ||||||
Technology Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 2,720,680.618 | 22.63 | % | ||||||
Technology Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 1,193,141.311 | 9.93 | % | ||||||
Technology Fund Class Z | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 691,404.185 | 5.75 | % |
Principal Holder Ownership of the Funds with fiscal year ending September 30:
As of December 31, 2011, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Contrarian Core Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 872,606.988 | 26.27 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Contrarian Core Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 336,665.261 | 10.13 | % | ||||||
Contrarian Core Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 255,445.147 | 7.69 | % | ||||||
Contrarian Core Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 188,402.509 | 5.67 | % | ||||||
Contrarian Core Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL BALANCED GROWTH ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 3,991,549.435 | 18.62 | % | ||||||
Contrarian Core Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 3,783,551.060 | 17.65 | % | ||||||
Contrarian Core Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 3,641,097.034 | 16.98 | % | ||||||
Contrarian Core Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL BALANCED GROWTH ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 3,266,276.523 | 15.23 | % | ||||||
Contrarian Core Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 2,245,469.536 | 10.47 | % | ||||||
Contrarian Core Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE CONSERVATIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,213,516.352 | 5.66 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Contrarian Core Fund Class I | COLUMBIA THERMOSTAT FUND C/O PAULA RYAN 227 MONROE ST STE 3000 CHICAGO IL 60606-5018 | 1,188,776.675 | 5.54 | % | ||||||
Contrarian Core Fund Class R | RELIANCE TRUST CO FBO READING ORAL PO BOX 48529 ATLANTA GA 30362-1529 | 11,332.676 | 73.47 | % | ||||||
Contrarian Core Fund Class R | MG TRUST CO CUST FBO BRENNAN & ASSOCIATES PC 700 17TH STREET SUITE 300 DENVER CO 80202-3531 | 2,108.157 | 13.67 | % | ||||||
Contrarian Core Fund Class R | MG TRUST CO CUST FBO JULIE ROBIN AROUH DMD 700 17TH STREET SUITE 300 DENVER CO 80202-3531 | 1,312.007 | 8.51 | % | ||||||
Contrarian Core Fund Class R4 | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 5,888.796 | 72.62 | % | ||||||
Contrarian Core Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 1,351.681 | 16.67 | % | ||||||
Contrarian Core Fund Class R4 | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 868.970 | 10.72 | % | ||||||
Contrarian Core Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE EAST JACKSONVILLE FL 32246-6484 | 2,511,950.871 | 31.22 | % | ||||||
Contrarian Core Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 6,348,727.813 | 99.97 | % | ||||||
Contrarian Core Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOM 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 14,670,581.672 | 35.22 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Contrarian Core Fund Class Z | WELLS FARGO BANK FBO AMERIPRISE 401K 1525 WEST WT HARRIS BLVD CHARLOTTE NC 28288-1076 | 5,752,832.936 | 13.81 | % | ||||||
Contrarian Core Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN:MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 2,575,336.740 | 6.18 | % | ||||||
Large Cap Growth Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 197,236.325 | 10.39 | % | ||||||
Large Cap Growth Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 188,798.277 | 9.95 | % | ||||||
Large Cap Growth Fund Class F | BRIDGET NEUMANN ADVANTAGE PLAN TRUST C/O CHRISTOPHER M NEUMANN 101 RAMBLE WOOD DR SKANEATELES NY 13152-2275 | 3,594.067 | 14.13 | % | ||||||
Large Cap Growth Fund Class F | ANDREW NEUMANN ADVANTAGE PLAN TRUST C/O CHRISTOPHER M NEUMANN 101 RAMBLE WOOD DR SKANEATELES NY 13152-2275 | 3,593.697 | 14.13 | % | ||||||
Large Cap Growth Fund Class F | MIRANDA E KRAMER ADVANTAGE PLAN TRUST C/O LEIGH A NEUMANN 5203 SILVER FOX DR JAMESVILLE NY 13078-8742 | 3,078.793 | 12.10 | % | ||||||
Large Cap Growth Fund Class F | CLAIRE NEUMANN ADVANTAGE PLAN TRUST C/O ROBERT S NEUMANN 101 RAMBLE WOOD DR SKANEATELES NY 13152-2275 | 3,048.884 | 11.99 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Large Cap Growth Fund Class F | LILY ELIZABETH KRAMER ADVANTAGE PLAN TRUST C/O LEIGH A NEUMANN 5203 SILVER FOX DR JAMESVILLE NY 13078-8742 | 3,043.402 | 11.96 | % | ||||||
Large Cap Growth Fund Class F | MATTHEW PATRICK NEUMANN ADVANTAGE PLAN TRUST C/O ROBERT S NEUMANN 101 RAMBLE WOOD DR SKANEATELES NY 13152-2275 | 3,033.613 | 11.93 | % | ||||||
Large Cap Growth Fund Class F | KAYLA HALL ADVANTAGE PLAN TRUST C/O MAUREEN HALL 49 RAYMOND PL STATEN ISLAND NY 10310-2231 | 2,804.722 | 11.03 | % | ||||||
Large Cap Growth Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL GROWTH PORTFOLIO ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 2,877,751.223 | 28.39 | % | ||||||
Large Cap Growth Fund Class I | STATE STREET BANK & TRUST COMPANY AAF LIFEGOAL BALANCED GROWTH ATTN JIM BOTSOLIS TWO AVENUE DE LAFAYETTE BOSTON MA 02111-1724 | 2,239,970.665 | 22.10 | % | ||||||
Large Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,652,963.458 | 16.31 | % | ||||||
Large Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,325,241.151 | 13.07 | % | ||||||
Large Cap Growth Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 911,761.079 | 8.99 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Large Cap Growth Fund Class R | ACCUTEK PACKAGING EQUIPMENT COMPA 401(K) P/S PLAN DARREN CHOCHOLEK TRUSTEE 1399 SPECIALTY DR VISTA CA 92081-8521 | 24,345.718 | 24.88 | % | ||||||
Large Cap Growth Fund Class R | FRONTIER TRUST COMPANY FBO FINANCIAL NETWORK AUDIT, LLC 401(K) PO BOX 10758 FARGO ND 58106-0758 | 11,085.662 | 11.33 | % | ||||||
Large Cap Growth Fund Class R | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 10,532.912 | 10.76 | % | ||||||
Large Cap Growth Fund Class R | FRONTIER TRUST COMPANY FBO EEK MOEN 401(K) PLAN PO BOX 10758 FARGO ND 58106-0758 | 10,342.359 | 10.57 | % | ||||||
Large Cap Growth Fund Class R | FRONTIER TRUST COMPANY FBO B & L CORPORATION 401(K) PLAN PO BOX 10758 FARGO ND 58106-0758 | 6,510.421 | 6.65 | % | ||||||
Large Cap Growth Fund Class R | FRONTIER TRUST COMPANY FBO C. ANTHONY PHILLIPS ACCOUNTANCY 401(K) PLAN PO BOX 10758 FARGO ND 58106-0758 | 5,784.634 | 5.91 | % | ||||||
Large Cap Growth Fund Class R4 | FBO AMERIPRISE TR RETIREMENT SVC PL 990 AXP FINANCIAL CTR MINNEAPOLIS MN 55474-0009 | 2,055,195.071 | 99.59 | % | ||||||
Large Cap Growth Fund Class R5 | GRAMMA FISHER FOUNDATION 6967 COOKS HOPE RD EASTON MD 21601-8305 | 17,766.030 | 93.22 | % | ||||||
Large Cap Growth Fund Class R5 | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 1,012.610 | 5.31 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Large Cap Growth Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE EAST JACKSONVILLE FL 32246-6484 | 1,597,029.799 | 26.13 | % | ||||||
Large Cap Growth Fund Class W | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN T ARMBRUSTMACHER & V GEHLHAR 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 120.890 | 100.00 | % | ||||||
Large Cap Growth Fund Class Y | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 706,583.591 | 99.92 | % | ||||||
Large Cap Growth Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 10,697,423.863 | 35.14 | % | ||||||
Small Cap Core Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 2,130,513.540 | 16.01 | % | ||||||
Small Cap Core Fund Class A | DCGT AS TTEE AND/OR CUST FBO PRINCIPAL FINANCIAL GROUP QUALIFIED FIA OMNIBUS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001 | 810,810.204 | 6.09 | % | ||||||
Small Cap Core Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 71,425.222 | 13.24 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Small Cap Core Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 69,526.949 | 12.89 | % | ||||||
Small Cap Core Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 68,492.601 | 12.69 | % | ||||||
Small Cap Core Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 391,275.692 | 19.27 | % | ||||||
Small Cap Core Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 247,608.742 | 12.20 | % | ||||||
Small Cap Core Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 226,965.512 | 11.18 | % | ||||||
Small Cap Core Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 144,140.136 | 7.10 | % | ||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2030 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 45,884.499 | 16.77 | % | ||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2025 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 45,720.947 | 16.71 | % | ||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2035 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 40,217.197 | 14.70 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2045 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 38,796.434 | 14.18 | % | ||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2020 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 33,969.864 | 12.42 | % | ||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2040 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 33,675.174 | 12.31 | % | ||||||
Small Cap Core Fund Class I | RVS RETIREMENT PLUS 2015 FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 25,863.790 | 9.45 | % | ||||||
Small Cap Core Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE EAST JACKSONVILLE FL 32246-6484 | 1,534,652.112 | 30.79 | % | ||||||
Small Cap Core Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 2,676,042.311 | 99.96 | % | ||||||
Small Cap Core Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 15,368,475.656 | 53.68 | % | ||||||
Small Cap Core Fund Class Z | FIDELITY INVSTMNTS INSTITUTIONAL OPERATIONS CO FIIOC AGENT FBO CERTAIN EMP BENEFIT PLANS 100 MAGELLAN WAY COVINGTON KY 41015-1999 | 1,581,324.392 | 5.52 | % |
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Principal Holder Ownership of the Funds with fiscal year ending October 31:
As of January 31, 2012 (except as otherwise indicated), the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
CA Tax-Exempt Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 6,051,300.820 | 11.08 | % | ||||||
CA Tax-Exempt Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 3,681,312.946 | 6.74 | % | ||||||
CA Tax-Exempt Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 39,150.523 | 14.97 | % | ||||||
CA Tax-Exempt Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 20,275.971 | 7.76 | % | ||||||
CA Tax-Exempt Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 20,006.467 | 7.65 | % | ||||||
CA Tax-Exempt Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55474-0001 | 15,874.769 | 6.07 | % | ||||||
CA Tax-Exempt Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 2,867,725.365 | 54.80 | % | ||||||
CA Tax-Exempt Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 542,037.144 | 10.36 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
CA Tax-Exempt Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 399,832.256 | 7.64 | % | ||||||
CA Tax-Exempt Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 9,684,411.926 | 92.00 | % | ||||||
CT Intermediate Municipal Bond Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 162,221.656 | 22.09 | % | ||||||
CT Intermediate Municipal Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 136,303.331 | 18.56 | % | ||||||
CT Intermediate Municipal Bond Fund Class A | JANNEY MONTGOMERY SCOTT LLC GREGORY PENNY 1801 MARKET ST PHILADELPHIA PA 19103-1675 | 97,088.564 | 13.22 | % | ||||||
CT Intermediate Municipal Bond Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55474-0001 | 49,963.826 | 6.80 | % | ||||||
CT Intermediate Municipal Bond Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 42,795.216 | 5.83 | % | ||||||
CT Intermediate Municipal Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 6,912.162 | 29.84 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
CT Intermediate Municipal Bond Fund Class B | NFS LLC FEBO BONNIE A SALAFIA BONNIE A SALAFIA 56 GROVELAND TER NEWINGTON CT 06111-1614 | 4,707.111 | 20.32 | % | ||||||
CT Intermediate Municipal Bond Fund Class B | NFS LLC FEBO NANCY ZIMMER JOHN O ZIMMER 27 STAETH RD EAST HAMPTON CT 06424-1343 | 4,609.202 | 19.90 | % | ||||||
CT Intermediate Municipal Bond Fund Class B | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 3,206.872 | 13.84 | % | ||||||
CT Intermediate Municipal Bond Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 2,820.250 | 12.17 | % | ||||||
CT Intermediate Municipal Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 251,078.880 | 37.28 | % | ||||||
CT Intermediate Municipal Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 96,299.484 | 14.30 | % | ||||||
CT Intermediate Municipal Bond Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 82,207.260 | 12.21 | % | ||||||
CT Intermediate Municipal Bond Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 58,430.120 | 8.68 | % | ||||||
CT Intermediate Municipal Bond Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 46,427.899 | 6.89 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
CT Intermediate Municipal Bond Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR EAST JACKSONVILLE FL 32246-6484 | 252,219.323 | 18.43 | % | ||||||
CT Intermediate Municipal Bond Fund Class T | KELLY F SHACKELFORD PO BOX 672 NEW CANAAN CT 06840-0672 | 151,918.956 | 11.10 | % | ||||||
CT Intermediate Municipal Bond Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 15,968,075.516 | 95.54 | % | ||||||
CT Tax-Exempt Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,555,337.189 | 16.91 | % | ||||||
CT Tax-Exempt Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 673,400.150 | 7.32 | % | ||||||
CT Tax-Exempt Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 671,720.633 | 7.31 | % | ||||||
CT Tax-Exempt Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 487,411.171 | 5.30 | % | ||||||
CT Tax-Exempt Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 26,251.030 | 26.95 | % | ||||||
CT Tax-Exempt Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 12,978.820 | 13.33 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
CT Tax-Exempt Fund Class B | FRANCIS J SERSANTI & MARY E SERSANTI JTWROS 38 HERITAGE DR SOMERS CT 06071-1908 | 9,085.817 | 9.33 | % | ||||||
CT Tax-Exempt Fund Class B | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 5,959.163 | 6.12 | % | ||||||
CT Tax-Exempt Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 5,485.966 | 5.63 | % | ||||||
CT Tax-Exempt Fund Class B | CHARLES J SCHUBERTH & DONNA P SCHUBERTH JTWROS 45 COBBLESTONE ST NEWINGTON CT 06111-5150 | 5,018.344 | 5.15 | % | ||||||
CT Tax-Exempt Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 322,792.182 | 21.81 | % | ||||||
CT Tax-Exempt Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 136,665.418 | 9.23 | % | ||||||
CT Tax-Exempt Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 120,403.466 | 8.14 | % | ||||||
CT Tax-Exempt Fund Class C | LPL FINANCIAL 9785 TOWNE CENTRE DR SAN DIEGO CA 92121-1968 | 94,050.765 | 6.36 | % | ||||||
CT Tax-Exempt Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 92,742.720 | 6.27 | % | ||||||
CT Tax-Exempt Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 76,711.179 | 5.18 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
CT Tax-Exempt Fund Class Z | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 1,209,001.177 | 98.48 | % | ||||||
Intermediate Municipal Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 3,525,688.351 | 19.82 | % | ||||||
Intermediate Municipal Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 90,529.545 | 38.88 | % | ||||||
Intermediate Municipal Bond Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 15,448.335 | 6.63 | % | ||||||
Intermediate Municipal Bond Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVCS, INC ATTN: MFIS CUSTOMER 2003 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0020 | 11,730.665 | 5.04 | % | ||||||
Intermediate Municipal Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,103,783.636 | 30.69 | % | ||||||
Intermediate Municipal Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 603,445.786 | 16.78 | % | ||||||
Intermediate Municipal Bond Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 197,679.162 | 5.50 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Intermediate Municipal Bond Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR EAST JACKSONVILLE FL 32246-6484 | 253,712.916 | 13.77 | % | ||||||
Intermediate Municipal Bond Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 | 199,326,265.890 | 92.34 | % | ||||||
MA Intermediate Municipal Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 1,471,159.903 | 49.51 | % | ||||||
MA Intermediate Municipal Bond Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 535,636.565 | 18.03 | % | ||||||
MA Intermediate Municipal Bond Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 212,142.786 | 7.14 | % | ||||||
MA Intermediate Municipal Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 6,414.471 | 52.50 | % | ||||||
MA Intermediate Municipal Bond Fund Class B | RBC CAPITAL MARKETS LLC R ALAN MILLS GLORIA MILLS JT TEN/WROS 8 CHANDLER RD EAST SANDWICH MA 02537-1730 | 2,869.517 | 23.49 | % | ||||||
MA Intermediate Municipal Bond Fund Class B | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 1,410.016 | 11.54 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
MA Intermediate Municipal Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 335,673.953 | 35.09 | % | ||||||
MA Intermediate Municipal Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 246,469.940 | 25.77 | % | ||||||
MA Intermediate Municipal Bond Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 76,461.728 | 7.99 | % | ||||||
MA Intermediate Municipal Bond Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 1,646,433.641 | 51.60 | % | ||||||
MA Intermediate Municipal Bond Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 25,456,745.654 | 96.30 | % | ||||||
MA Tax-Exempt Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 2,407,754.648 | 16.40 | % | ||||||
MA Tax-Exempt Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,708,176.783 | 11.63 | % | ||||||
MA Tax-Exempt Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 1,099,151.933 | 7.49 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
MA Tax-Exempt Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 962,064.370 | 6.55 | % | ||||||
MA Tax-Exempt Fund Class A | JAMES H ORR JR & JANE P ORR TR JAMES H ORR JR REVOCABLE TRUST 30 MILL ST DOVER MA 02030-2240 | 760,340.211 | 5.18 | % | ||||||
MA Tax-Exempt Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 36,877.978 | 28.93 | % | ||||||
MA Tax-Exempt Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 34,121.767 | 26.77 | % | ||||||
MA Tax-Exempt Fund Class B | RBC CAPITAL MARKETS LLC JANE P HEALEY 7 BRIARWOOD CLOSE HARWICH MA 02645-2542 | 7,838.202 | 6.15 | % | ||||||
MA Tax-Exempt Fund Class B | NFS LLC FEBO LINDA A GWOZDZ TOB BENES ON FILE 124 MIDDLE ST HADLEY MA 01035-9711 | 7,370.629 | 5.78 | % | ||||||
MA Tax-Exempt Fund Class B | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 7,213.632 | 5.66 | % | ||||||
MA Tax-Exempt Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 503,077.679 | 34.12 | % | ||||||
MA Tax-Exempt Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 233,144.345 | 15.81 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
MA Tax-Exempt Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 229,938.677 | 15.59 | % | ||||||
MA Tax-Exempt Fund Class C | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 78,453.339 | 5.32 | % | ||||||
MA Tax-Exempt Fund Class Z | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN TIM ARMBRUSTMACHER 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 663.408 | 54.11 | % | ||||||
MA Tax-Exempt Fund Class Z | STATE STREET BK & TR IRA STEPHEN P ROSE 1419 COLBY LN SCHAUMBURG IL 60193-3608 | 562.646 | 45.89 | % | ||||||
NY Intermediate Municipal Bond Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 330,304.547 | 23.02 | % | ||||||
NY Intermediate Municipal Bond Fund Class A | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 192,084.525 | 13.39 | % | ||||||
NY Intermediate Municipal Bond Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 99,511.585 | 6.94 | % | ||||||
NY Intermediate Municipal Bond Fund Class B | NFS LLC FEBO FRANK V CARREA TESTAMENTARY TRUS NANCY CORNELL, FRANK CARREA TTEE 17 SCENIC DR POUGHKEEPSIE NY 12603-5529 | 9,413.711 | 25.46 | % | ||||||
NY Intermediate Municipal Bond Fund Class B | FANNIE M SCHRAMM 2 STONELEIGH APT 5G BRONXVILLE NY 10708-2606 | 7,039.461 | 19.04 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
NY Intermediate Municipal Bond Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 6,839.338 | 18.49 | % | ||||||
NY Intermediate Municipal Bond Fund Class B | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 6,290.726 | 17.01 | % | ||||||
NY Intermediate Municipal Bond Fund Class B | NFS LLC FEBO CARMELA A SANTERO 59 WESTMINSTER RD YORKTOWN HTS NY 10598-1041 | 3,308.978 | 8.95 | % | ||||||
NY Intermediate Municipal Bond Fund Class B | PERSHING LLC 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002 | 2,497.631 | 6.75 | % | ||||||
NY Intermediate Municipal Bond Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 643,850.155 | 45.25 | % | ||||||
NY Intermediate Municipal Bond Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 184,487.352 | 12.97 | % | ||||||
NY Intermediate Municipal Bond Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 182,879.207 | 12.85 | % | ||||||
NY Intermediate Municipal Bond Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 172,225.367 | 12.11 | % | ||||||
NY Intermediate Municipal Bond Fund Class T | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 174,071.897 | 22.54 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
NY Intermediate Municipal Bond Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 18,504,028.330 | 84.31 | % | ||||||
NY Tax-Exempt Fund Class A | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,657,680.545 | 7.33 | % | ||||||
NY Tax-Exempt Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 1,320,756.929 | 5.84 | % | ||||||
NY Tax-Exempt Fund Class A | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 1,134,299.907 | 5.02 | % | ||||||
NY Tax-Exempt Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 82,333.930 | 27.95 | % | ||||||
NY Tax-Exempt Fund Class B | NFS LLC FEBO HENDRIKA VAN DER NOEN TTEE HENDRIKA VAN DER NOEN 2006 REV TR 251 TURN OF RIVER RD STAMFORD CT 06905-1320 | 31,257.173 | 10.61 | % | ||||||
NY Tax-Exempt Fund Class B | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 19,539.906 | 6.63 | % | ||||||
NY Tax-Exempt Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 17,242.176 | 5.85 | % |
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Fund/Share Class | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
NY Tax-Exempt Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 698,510.542 | 29.33 | % | ||||||
NY Tax-Exempt Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 275,779.709 | 11.58 | % | ||||||
NY Tax-Exempt Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 228,124.523 | 9.58 | % | ||||||
NY Tax-Exempt Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 202,920.538 | 8.52 | % | ||||||
NY Tax-Exempt Fund Class C | UBS WM USA OMNI ACCOUNT M/F ATTN: DEPARTMENT MANAGER 1000 HARBOR BLVD WEEHAWKEN NJ 07086-6761 | 149,519.787 | 6.28 | % | ||||||
NY Tax-Exempt Fund Class C | MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, FL 3 JERSEY CITY NJ 07311 | 124,470.587 | 5.23 | % | ||||||
NY Tax-Exempt Fund Class Z | COLUMBIA MGMT INVESTMENT ADVSR LLC ATTN TIM ARMBRUSTMACHER 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 700.285 | 100.00 | % |
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Principal Holder Ownership of the Fund with fiscal year ending November 30:
As of February 29, 2012 the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Tax-Exempt Fund Class A | EDWARD D JONES & CO MUTUAL FUND SHAREHOLDER ACCOUNTING 201 PROGRESS PKWY MARYLAND HTS MO 63043-3009 | 24,456,210.339 | | 8.97 | % | |||||
Tax-Exempt Fund Class B | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 68,102.797 | | 7.52 | % | |||||
Tax-Exempt Fund Class B | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 59,155.708 | 6.53 | % | ||||||
Tax-Exempt Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: FUND ADMINISTRATION 4800 DEER LAKE DRIVE E FL 2 JACKSONVILLE FL 32246-6484 | 1,246,121.024 | 20.03 | % | ||||||
Tax-Exempt Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 687,555.920 | 11.05 | % | ||||||
Tax-Exempt Fund Class C | CITIGROUP GLOBAL MARKETS, INC. ATTN: PETER BOOTH FL 7 333 W 34TH ST NEW YORK NY 10001-2402 | 359,200.964 | 5.77 | % | ||||||
Tax-Exempt Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN: SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 33,621,348.736 | 62.19 | % |
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Principal Holder Ownership of the Fund with fiscal year ending December 31:
As of March 31, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder” is listed below.
Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Real Estate Equity Fund Class A | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 1,747,802.818 | 23.38 | % | ||||||
Real Estate Equity Fund Class A | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR SAINT LOUIS MO 63103-2523 | 403,050.070 | 5.39 | % | ||||||
Real Estate Equity Fund Class B | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 94,595.415 | 18.32 | % | ||||||
Real Estate Equity Fund Class C | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE ATTN FUND ADMINISTRATION 4800 DEER LAKE DRIVE EAST 3RD FL JACKSONVILLE FL 32246-6484 | 335,182.686 | 23.09 | % | ||||||
Real Estate Equity Fund Class C | RAYMOND JAMES FBO OMNIBUS FOR MUTUAL FUNDS ATTN: COURTNEY WALLER 880 CARILLON PKWY ST PETERSBURG FL 33716-1100 | 232,245.740 | 16.00 | % | ||||||
Real Estate Equity Fund Class C | FIRST CLEARING LLC SPECIAL CUSTODY ACCT FOR SAINT LOUIS MO 63103-2523 | 159,147.576 | 10.96 | % | ||||||
Real Estate Equity Fund Class C | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 105,342.768 | 7.26 | % | ||||||
Real Estate Equity Fund Class I | RVS INCOME BLDR BASIC INCOME FD AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 3,015,388.623 | 58.77 | % | ||||||
Real Estate Equity Fund Class I | RIVERSOURCE PORTFOLIO BUILDER MODERATE AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 854,714.985 | 16.66 | % |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Real Estate Equity Fund Class I | RIVERSOURCE PORTFOLIO BUILDER AGGRESSIVE FUND 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 817,320.311 | 15.93 | % | ||||||
Real Estate Equity Fund Class R | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE 4800 DEER LAKE DRIVE EAST 3RD FL JACKSONVILLE FL 32246-6484 | 179,177.744 | 46.63 | % | ||||||
Real Estate Equity Fund Class R | CAPITAL BANK & TRUST CO TTEE F PARK AVE MOTOR CORP 401K SVGS PL 8515 E ORCHARD RD GREENWOOD VLG CO 80111-5002 | 66,639.935 | 17.34 | % | ||||||
Real Estate Equity Fund Class R | CAPITAL BANK & TRUST CO TTEE F NIBBI BROTHERS ASSOCOCIATES INC 401 8515 E ORCHARD RD GREENWOOD VLG CO 80111-5002 | 27,147.277 | 7.06 | % | ||||||
Real Estate Equity Fund Class R4 | CHARLES SCHWAB & CO INC CUST A/C FOR THE EXCLUSIVE BENEFIT ATTENTION MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 2,374.076 | 40.31 | % | ||||||
Real Estate Equity Fund Class R4 | RIVERSOURCE INVESTMENTS LLC ATTN TIM ARMBRUSTMACHER 50807 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0508 | 1,892.882 | 32.14 | % | ||||||
Real Estate Equity Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 432.443 | 7.34 | % | ||||||
Real Estate Equity Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 411.883 | 6.99 | % | ||||||
Real Estate Equity Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 389.617 | 6.62 | % | ||||||
Real Estate Equity Fund Class R4 | FIRST CLEARING LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523 | 387.979 | 6.59 | % | ||||||
Real Estate Equity Fund Class R5 | GRAMMA FISHER FOUNDATION 6967 COOKS HOPE RD EASTON MD 21601-8305 | 87,944.306 | 32.42 | % |
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Fund | Shareholder Account Registration | Share Balance | Percentage of class | |||||||
Real Estate Equity Fund Class R5 | GRAMMA FISHER FOUNDATION 6967 COOKS HOPE RD EASTON MD 21601-8305 | 79,246.576 | 29.21 | % | ||||||
Real Estate Equity Fund Class R5 | PATRICK’S PLAIN 6967 COOKS HOPE RD EASTON MD 21601-8305 | 52,907.389 | 19.50 | % | ||||||
Real Estate Equity Fund Class R5 | PATRICK’S PLAIN 6967 COOKS HOPE RD EASTON MD 21601-8305 | 48,700.550 | 17.95 | % | ||||||
Real Estate Equity Fund Class W | AMERICAN ENTERPRISE INVESTMENT SVCS PO BOX 9446 MINNEAPOLIS MN 55440-9446 | 610,390.978 | 99.91 | % | ||||||
Real Estate Equity Fund Class Z | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE 4800 DEER LAKE DRIVE EAST 3RD FL JACKSONVILLE FL 32246-6484 | 8,339,563.544 | 34.65 | % | ||||||
Real Estate Equity Fund Class Z | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCT FOR EXCLUSIVE OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151 | 4,417,422.586 | 18.35 | % |
As of the applicable date indicated below, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below. A control person may be able to facilitate shareholder approval of proposals it approves and to impede shareholder approval of proposals it opposes. If a control person’s record ownership of a Fund’s outstanding shares exceeds 50%, then, for certain shareholder proposals, such control person may be able to approve, or prevent approval, of such proposals without regard to votes by other Fund shareholders.
Control Person Ownership of the Funds with fiscal year ending March 31:
As of June 30, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Select Large Cap Growth Fund | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 197,731,264.634 | 47.18 | % |
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Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Select Small Cap Fund | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 7,129,367.127 | 54.15 | % | ||||||
Value and Restructuring Fund | CHARLES SCHWAB & CO INC SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO CA 94104-4151 | 20,228,366.395 | 31.60 | % |
Control Person Ownership of the Funds with fiscal year ending April 30:
As of June 30, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 122,783,390.460 | 76.59% | |||||||
Corporate Income Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 38,416,988.911 | 28.33% | |||||||
Intermediate Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E FL 2 JACKSONVILLE FL 32246-6484 | 163,233,563.952 | 52.69% |
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Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
U.S. Treasury Index Fund | MERRILL LYNCH PIERCE FENNER & SMITH INC FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE EAST 3RD FLOOR JACKSONVILLE FL 32246-6484 | 8,807,403.911 | 24.86 | % |
Control Person Ownership of the Funds with fiscal year ending May 31:
As of August 31, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Dividend Income Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 137,179,543.157 | 30.88 | % | ||||||
High Yield Municipal Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 68,215,806.568 | 74.29 | % | ||||||
High Yield Opportunity Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 29,308,027.414 | 34.41 | % | ||||||
International Bond Fund | COLUMBIA LIFEGOAL BALANCED GROWTH PORTFOLIO 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0001 | 1,843,058.635 | 30.80 | % | ||||||
International Bond Fund | RVS INCOME BLDR BASIC INCOME FD 1767 AMERIPRISE FINANCIAL CTR MINNEAPOLIS MN 55474-0017 | 1,514,431.225 | 25.31 | % | ||||||
Strategic Income Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484 | 145,428,456.848 | 34.00 | % |
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Control Person Ownership of the Fund with fiscal year ending July 31:
As of October 31, 2011, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Ultra Short Term Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTENTION SERVICE TEAM 4800 DEER LAKE DRIVE E FL 3 JACKSONVILLE FL 32246-6484 | 102,000,780.213 | | 94.34 | % |
Control Person Ownership of the Funds with fiscal year ending August 31:
As of November 30, 2011, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Mid Cap Growth Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF IT S CUSTOM 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 19,357,397.141 | 25.47 | % | ||||||
Small Cap Growth Fund I | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF IT S CUSTOM 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 14,150,746.328 | 38.29 | % |
Control Person Ownership of the Funds with fiscal year ending September 30:
As of December 31, 2011, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
Small Cap Core Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE EAST JACKSONVILLE FL 32246-6484 | 19,494,443.949 | 37.17 | % |
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Control Person Ownership of the Funds with fiscal year ending October 31:
As of January 31, 2012, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of a Fund because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary roles with respect to its clients or otherwise, is shown below.
Fund | Shareholder Account Registration | Share Balance | Percentage of Fund | |||||||
CA Tax-Exempt Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 18,642,588.634 | 26.39 | % | ||||||
CT Intermediate Municipal Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 16,614,589.212 | 85.15 | % | ||||||
Intermediate Municipal Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 204,299,980.338 | 85.37 | % | ||||||
MA Intermediate Municipal Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 28,916,427.622 | 86.15 | % | ||||||
NY Intermediate Municipal Bond Fund | MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE BENEFIT OF ITS CUSTOMERS 4800 DEER LAKE DRIVE E JACKSONVILLE FL 32246-6484 | 19,428,301.305 | 75.85 | % |
Control Person Ownership of the Fund with fiscal year ending November 30:
As of February 29, 2012, the Fund has no persons who may be deemed to be a “control person” (as that term is defined in the 1940 Act) because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary role with respect to its clients or otherwise.
Control Person Ownership of the Fund with fiscal year ending December 31:
As of March 31, 2012, the Fund has no persons who may be deemed to be a “control person” (as that term is defined in the 1940 Act) because it owns of record more than 25% of the outstanding shares of the Fund by virtue of its fiduciary role with respect to its clients or otherwise.
Bank of America, N.A. is a national banking association organized under the laws of the United States, 101 South Tryon Street, Charlotte, North Carolina 28255. Bank of America Corporation, a publicly-traded financial services corporation, is the ultimate parent company of Bank of America, N.A.
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Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware Corporation, is a registered broker-dealer located at One Bryant Park, New York, New York 10036. Bank of America Corporation is the ultimate parent company of Merrill Lynch, Pierce, Fenner & Smith Incorporated.
State Street Bank & Trust Company is organized under the laws of Massachusetts and is located at State Street Financial Center, One Lincoln Street, Boston, MA 02111. State Street Corporation is the ultimate parent of State Street Bank & Trust Company.
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In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have made regular reports to the funds’ Board of Trustees.
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
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APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS
This Appendix summarizes the various descriptions of securities ratings applicable to securities purchased by the Columbia Funds. Please refer to a Fund’s prospectus and statement of additional information to determine whether that Fund may invest in securities that have ratings described in this Appendix.
STANDARD & POOR’S (S&P)
Bonds
The following summarizes the ratings used by S&P for bonds. The ratings AAA, AA, A and BBB denote investment grade securities.
AAA bonds have the highest rating assigned by S&P and are considered to have an extremely strong capacity to pay interest and repay principal.
AA bonds are considered to have a very strong capacity to pay interest and repay principal, and they differ from AAA only in small degree.
A bonds are considered to have a strong capacity to pay interest and repay principal, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB bonds are considered to have an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than for bonds in the A category.
BB, B, CCC, CC and C bonds are considered to have predominantly speculative characteristics with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and C the highest degree. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or large exposures to adverse conditions.
BB bonds are considered to have less near-term vulnerability to default than other speculative issues. However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB – rating.
B bonds are considered to have a greater vulnerability to default but currently have the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB – rating.
CCC bonds are considered to have a currently identifiable vulnerability to default, and are dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, the bonds are not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B – rating.
CC rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.
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C rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC – debt rating. The C rating may be used to cover a situation, for example, where a bankruptcy petition has been filed, but debt service payments are continued.
CI rating is reserved for income bonds on which no interest is being paid.
D bonds are in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
Municipal Notes
SP-1. Notes rated SP-1 are considered to have very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics are designated as SP-1+.
SP-2. Notes rated SP-2 are considered to have satisfactory capacity to pay principal and interest.
Notes due in three years or less normally receive a note rating. Notes maturing beyond three years normally receive a bond rating, although the following criteria are used in making that assessment:
Amortization schedule (the larger the final maturity relative to other maturities, the more likely the issue will be rated as a note).
Source of payment (the more dependent the issue is on the market for its refinancing, the more likely it will be rated as a note).
Commercial Paper
A. Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. Issues in this category are further refined with the designations 1, 2, and 3 to indicate the relative degree of safety.
A-1. Issues assigned to this rating are considered to have overwhelming or very strong capacity for timely payment. Those issues determined to possess overwhelming safety characteristics are designed A-1+.
MOODY’S INVESTORS SERVICE, INC. (MOODY’S)
Municipal Bonds
Aaa bonds are considered to be of the best quality. They are considered to have the smallest degree of investment risk and are generally referred to as “gilt edge”. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While various protective elements are likely to change, such changes as can be visualized are most unlikely to impair a fundamentally strong position of such issues.
Aa bonds are considered to be of high quality by all standards. Together with Aaa bonds they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.
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Those bonds in the Aa through B groups that Moody’s believes possess the strongest investment attributes are designated by the symbols Aa1, A1 or Baa1.
A bonds are considered to possess many favorable investment attributes and are to be considered to be upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present that suggest a susceptibility to impairment at some time in the future.
Baa bonds are considered to be medium grade obligations: they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great period of time. Such bonds lack outstanding investment characteristics and, in fact, have speculative characteristics as well.
Ba bonds are considered to have speculative elements: their future cannot be considered as well secured. Often, the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times in the future. Uncertainty of position characterizes bonds in this grade.
B bonds are considered generally to lack characteristics of a desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa bonds are considered to be of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca bonds are considered to represent obligations that are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C bonds are the lowest rated class of bonds and issues so rated are considered to have extremely poor prospects of ever attaining any real investment standing.
Conditional Ratings. Bonds for which the security depends upon the completion of some act or the fulfillment of some condition are rated conditionally. These are bonds secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned in operating experience, (c) rentals which begin when facilities are completed, or (d) payments to which some other limiting conditions attach. Parenthetical rating denotes probable credit stature upon completion of construction or elimination of basis of condition.
Corporate Bonds
The description of the applicable rating symbols (Aaa, Aa, A, Baa, etc.) and their meanings is identical to that of the Municipal Bond ratings as set forth above, except for the numerical modifiers. Moody’s applies numerical modifiers 1, 2, and 3 in the Aa and A classifications of its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a midrange ranking; and the modifier 3 indicates that the issuer ranks in the lower end of its generic rating category.
Municipal Notes
MIG 1. This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing.
MIG 2. This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.
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MIG 3. This designation denotes favorable quality. All security elements are accounted for, but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established.
Commercial Paper
Moody’s employs the following three designations, all judged to be investment grade, to indicate the relative repayment capacity of rated issuers:
Prime-1 Highest Quality
Prime-2 Higher Quality
Prime-3 High Quality
If an issuer represents to Moody’s that its commercial paper obligations are supported by the credit of another entity or entities, Moody’s, in assigning ratings to such issuers, evaluates the financial strength of the indicated affiliated corporations, commercial banks, insurance companies, foreign governments, or other entities, but only as one factor in the total rating assessment.
FITCH, INC. (FITCH)
Long-Term Debt
Investment Grade Bond Ratings
AAA bonds are considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and/or dividends and repay principal, which is unlikely to be affected by reasonably foreseeable events.
AA bonds are considered to be investment grade and of very high credit quality. The obligor’s ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated F-1+.
A bonds are considered to be investment grade and of high credit quality. The obligor’s ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than debt securities with higher ratings.
BBB bonds are considered to be investment grade and of satisfactory credit quality. The obligor’s ability to pay interest or dividends and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have adverse impact on these securities and, therefore, impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for securities with higher ratings.
Speculative Grade Bond Ratings
BB bonds are considered speculative. The obligor’s ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial alternatives can be identified, which could assist the obligor in satisfying its debt service requirements.
B bonds are considered highly speculative. While securities in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor’s limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue.
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CCC bonds are considered to have certain identifiable characteristics that, if not remedied, may lead to default. The ability to meet obligations requires an advantageous business and economic environment.
CC bonds are considered to be minimally protected. Default in payment of interest and/or principal seems probable over time.
C bonds are in imminent default in payment of interest or principal.
DDD, DD, and D bonds are in default on interest and/or principal payments. Such securities are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. DDD represents the highest potential for recovery on these securities and D represents the lowest potential for recovery.
Plus (+) or minus (-): Plus or minus signs are used to show relative standing within the major rating categories. Plus and minus signs, however, are not used in the DDD, DD, or D categories.
Short-Term Debt
Fitch’s short-term ratings apply to debt obligations that are payable on demand or have original maturities of up to three years, including commercial paper, certificates of deposit, medium-term notes, and investment notes.
F-1+ obligations have exceptionally strong credit quality and are considered to have the strongest degree of assurance for timely payment.
F-1 obligations are considered to reflect an assurance of timely payment only slightly less in degree than issues rated F-1+.
F-2 obligations are considered to have good credit quality. Securities in this class have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned F-1+ and F-1 ratings.
F-3 obligations are considered to have characteristics suggesting that the degree of assurance for timely payment is adequate; however, near-term adverse changes could cause these securities to be rated below investment grade.
F-S rating is assigned to obligations that are considered to have a minimal degree of assurance for timely payment and to be vulnerable to near-term adverse changes in financial and economic conditions.
B obligations are considered to have a minimal capacity for timely payment of financial commitments and a susceptibility to the adverse effects of changes in circumstances and economic conditions.
C rating is assigned to obligations that are considered to have a high default risk and whose capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.
D obligations are in actual or imminent payment default.
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APPENDIX B — PROXY VOTING GUIDELINES
COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC
PROXY VOTING GUIDELINES
EFFECTIVE JANUARY 24, 2011
Set forth below are guidelines adopted and used by Columbia Management Investment Advisers, LLC (the “Adviser”, “We”, “Us” or “Our”) in voting proxies (the “Guidelines”). The Guidelines are organized by issue and present certain factors that may be considered in making proxy voting determinations. The Adviser may, in exercising its fiduciary discretion, determine to vote any proxy in a manner contrary to these Guidelines.
Directors, Boards, Committees
Elect Directors
In a routine election of directors, the Adviser generally votes FOR the slate nominated by the nominating committee of independent directors, who are in the best position to know what qualifications are needed for each director to contribute to an effective board. The Adviser generally will WITHHOLD support from a nominee who fails to meet one or more of the following criteria:
Independence – A nominee who is deemed an affiliate of the company by virtue of a material business, familial or other relationship with the company but is otherwise not an employee.
Attendance – A nominee who failed to attend at least 75% of the board’s meetings.
Over Boarding – A nominee who serves on more than four other public company boards or an employee director nominee who serves on more than two other public company boards.
Committee Membership – A nominee who has been assigned to the audit, compensation, nominating, or governance committee if that nominee is not independent of management, or if the nominee does not meet the specific independence and experience requirements for audit committees or the independence requirements for compensation committees.
Audit Committee Chair – A nominee who serves as audit committee chair where the committee failed to put forth shareholder proposals for ratification of auditors.
Board Independence – A nominee of a company whose board as proposed to be constituted would have more than one-third of its members from management.
Interlocking Directorship – A nominee who is an executive officer of another company on whose board one of the company’s executive officers sits.
Poor Governance – A nominee involved with options backdating, financial restatements or material weakness in controls, approving egregious compensation, or who has consistently disregarded the interests of shareholders.
The Adviser will vote on a CASE-BY-CASE basis on any director nominee who meets the aforementioned criteria but whose candidacy has otherwise been identified by the third party research provider as needing further consideration for any reason not identified above.
In the case of contested elections, the Adviser will vote on a CASE-BY-CASE basis, taking into consideration the above criteria and other factors such as the background of the proxy contest, the performance of the company, current board and management, and qualifications of nominees on both slates.
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Shareholder Nominations for Director
The Adviser will vote on a CASE-BY-CASE basis for shareholder-nominated candidates for director, taking into account various factors including, but not limited to: company performance, the circumstances compelling the nomination by the shareholder, composition of the incumbent board, and the criteria listed above the Adviser uses to evaluate nominees.
Shareholder Nominations for Director – Special Criteria
The Adviser generally votes in accordance with recommendations made by its third party research provider, which are typically based on the view that board nominating committees are responsible for establishing and implementing policies regarding the composition of the board and are therefore in the best position to make determinations with respect to special nominating criteria.
Director Independence and Committees
The Adviser generally will vote FOR proposals that require all members of a board’s key committees (audit, compensation, nominating or governance) be independent from management.
Independent Board Chair / Lead Director
The Adviser generally will vote FOR proposals supporting an independent board chair or lead director and FOR the separation of the board chair and CEO roles, as independent board leaders foster the effectiveness of the independent directors and ensure appropriate oversight of management.
Removal of Directors
The Adviser generally will vote FOR proposals that amend governing documents to grant or restore shareholder ability to remove directors with cause, and AGAINST proposals that provide directors may be removed only by supermajority vote. The Adviser will vote on a CASE-BY-CASE basis on proposals calling for removal of specific directors.
Board Vacancies
The Adviser generally votes in accordance with recommendations made by its third party research provider in the case of vacancies filled by continuing directors, taking into account factors including whether the proposal is in connection with a proxy contest or takeover situation.
Cumulative Voting
In the absence of proxy access rights or majority voting, the Adviser generally will vote FOR the restoration or provision for cumulative voting and AGAINST its elimination.
Majority Voting
The Adviser generally will vote FOR amendments to governing documents that provide that nominees standing for election to the board must receive a majority of votes cast in order to be elected to the board.
Number of Directors
The Adviser generally will vote FOR amendments to governing documents that provide directors the authority to adjust the size of the board to adapt to needs that may arise.
Term Limits
The Adviser generally will vote AGAINST proposals seeking to establish a limit on director terms or mandatory retirement.
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General Corporate Governance
Right to Call a Special Meeting
The Adviser generally votes in accordance with recommendations made by its third party research provider, which typically recommends votes FOR adoption, considering factors such as proposed ownership threshold, company size, and shareholder ownership, but will not support proposals allowing for investors with less than 10% ownership to call a special meeting.
Eliminate or Restrict Right to Call Special Meeting
The Adviser will generally vote AGAINST proposals to eliminate the right of shareholders to call special meetings.
Lead Independent Director Right to Call Special Meeting
The Adviser will generally vote FOR governance document amendments or other proposals which give the lead independent director the authority to call special meetings of the independent directors at any time.
Adjourn Meeting
The Adviser will vote on a CASE-BY-CASE basis on adjournment proposals and generally in the same direction as the primary proposal (i.e., if supporting the primary proposal, favor adjournment; if not supporting the primary proposal, oppose adjournment).
Other Business
The Adviser generally will vote AGAINST proposals seeking to give management the authority to conduct or vote on other business at shareholder meetings on the grounds that shareholders not present at the meeting would be unfairly excluded from such deliberations.
Eliminate or Restrict Action by Written Consent
The Adviser will generally vote AGAINST proposals to eliminate the right of shareholders to act by written consent since it may be appropriate to take such action in some instances.
Vote Unmarked Proxies
The Adviser generally will vote FOR proposals prohibiting voting of unmarked proxies in favor of management.
Proxy Contest Advance Notice
The Adviser generally will vote AGAINST proposals to amend governing documents that require advance notice for shareholder proposals or director nominees beyond notice that allows for sufficient time for company response, SEC review, and analysis by other shareholders.
Minimum Stock Ownership
The Adviser will vote on a CASE-BY-CASE basis on proposals regarding minimum stock ownership levels.
Director and Officer Indemnification
The Adviser will generally vote FOR the provision of a maximum dollar amount that can be obtained through the course of legal action from a director or officer who acts in good faith and does not benefit from a transaction.
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Confidential Voting
The Adviser generally will vote FOR actions that ensure all proxies, ballots, and voting tabulations which identify shareholders be kept confidential, except where disclosure is mandated by law. The Adviser supports the proposal to minimize pressure on shareholders, particularly employee shareholders.
Miscellaneous Governing Document Amendments
The Adviser generally will vote FOR bylaw or charter changes that are of a housekeeping nature (e.g., updates or corrections).
Change Company Name
The Adviser will generally vote FOR routine business matters such as changing the company’s name.
Approve Minutes
The Adviser will generally vote FOR routine procedural matters such as approving the minutes of a prior meeting.
Change Date/Time/Location of Annual Meeting
The Adviser will vote in accordance with the recommendation of the third-party research provider on proposals to change the date, time or location of the company’s annual meeting of shareholders.
Approve Annual, Financial and Statutory Reports
The Adviser generally will vote FOR proposals to approve the annual reports and accounts, financial and statutory reports, provided companies required to comply with U.S. securities laws have included the certifications required by the Sarbanes Oxley Act of 2002.
Compensation
Approve or Amend Omnibus Equity Compensation Plan
The Adviser generally votes in accordance with recommendations made by its third party research provider, which typically recommends votes FOR adoption or amendments to omnibus (general) equity compensation plans for employees or non-employee directors if they are reasonable and consistent with industry and country standards, and AGAINST compensation plans that substantially dilute ownership interest in a company, provide participants with excessive awards, or have objectionable structural features.
Approve or Amend Stock Option Plan
The Adviser generally votes in accordance with recommendations made by its third party research provider, which are typically based on factors including cost, size, and pattern of grants in comparison to peer groups, history of repricing, and grants to senior executives and non-employee directors.
Approve or Amend Employee Stock Purchase Plan
The Adviser generally votes in accordance with recommendations made by its third party research provider, which are typically based on factors including the plan’s cost to shareholders, whether those costs are in line with the company’s peer’s plans, and whether the plan requires shareholder approval within five years.
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Approve or Amend Performance-Based 162(m) Compensation Plan
The Adviser generally votes in accordance with recommendations made by its third party research provider, which are typically based on factors that consider the goal of the plan and in particular the linkage between potential payments to senior executives and the attainment of preset performance-based metrics.
Approve or Amend Restricted Stock Plan
The Adviser generally votes in accordance with recommendations made by its third party research provider, which considers such factors as the balance of all equity grants and awards, the term and other restrictions in place for restricted stock.
Stock Option Repricing or Exchanges
The Adviser generally votes in accordance with recommendations made by its third party research provider on matters relating to the repricing of stock options, which are typically based on factors such as whether the amending terms lead to a reduction in shareholder rights, allow the plan to be amended without shareholder approval, or change the terms to the detriment of employee incentives such as excluding a certain class or group of employees. The Adviser generally will vote FOR proposals to put stock option repricings to a shareholder vote.
Performance-Based Stock Options
The Adviser will vote on a CASE-BY-CASE basis regarding proposals urging that stock options be performance-based rather than tied to the vagaries of the stock market.
Ban Future Stock Option Grants
The Adviser generally will vote AGAINST proposals seeking to ban or eliminate stock options in equity compensation plans as such an action would preclude the company from offering a balanced compensation program.
Require Stock Retention Period
The Adviser generally will vote FOR proposals requiring senior executives to hold stock obtained by way of a stock option plan for a minimum of three years.
Require Approval of Extraordinary Benefits
The Adviser generally will vote FOR proposals specifying that companies disclose any extraordinary benefits paid or payable to current or retired senior executives and generally will vote AGAINST proposals requiring shareholder approval of any such extraordinary benefits.
Pay for Performance
The Adviser will vote on a CASE-BY-CASE basis regarding proposals seeking to align executive compensation with shareholders’ interests.
Say on Pay
The Adviser generally votes in accordance with recommendations made by its third party research provider on these proposals, taking into consideration the nature of the proposal, whether the proposal seeks any change in compensation policy, and an analysis of the Compensation Discussion and Analysis disclosure and pay for performance practices of the company.
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Executive Severance Agreements
The Adviser generally votes in accordance with recommendations made by its third party research provider on these proposals regarding approval of specific executive severance arrangements in the event of change in control of a company or due to other circumstances.
Approve or Amend Deferred Compensation Plans for Directors
The Adviser generally will vote FOR approval or amendments to deferred compensation plans for non-employee directors, so that they may defer compensation earned until retirement.
Set Director Compensation
The Adviser generally will vote AGAINST proposals that seek to limit director compensation or mandate that compensation be paid solely in shares of stock.
Director Retirement Plans
The Adviser will generally vote AGAINST the adoption or amendment of director retirement plans on the basis that directors should be appropriately compensated while serving and should not view service on a board as a long-term continuing relationship with a company.
Business Entity and Capitalization
Common or Preferred Stock – Increase in Authorized Shares or Classes
The Adviser will vote on a CASE-BY-CASE basis regarding proposals to increase authorized shares of common stock or to add a class of common stock, taking into consideration the company’s capital goals that may include stock splits, stock dividends, or financing for acquisitions or general operations. With respect to proposals seeking to increase authorized shares of preferred stock, to add a class of preferred stock, to authorize the directors to set the terms of the preferred stock or to amend the number of votes per share of preferred stock, the Adviser will vote on a CASE-BY-CASE basis on the grounds that such actions may be connected to a shareholder rights’ plan that the Adviser also will consider on a CASE-BY-CASE basis.
Common or Preferred Stock – Decrease in Authorized Shares or Classes
The Adviser generally will vote FOR proposals seeking to decrease authorized shares of common or preferred stock or the elimination of a class of common or preferred stock.
Common Stock – Change in Par Value
The Adviser generally will vote FOR proposals to change the par value of the common stock, provided that the changes do not cause a diminution in shareholder rights.
Authorize Share Repurchase Program
The Adviser generally will vote FOR proposals to institute or renew open market share repurchase plans in which all shareholders may participate on equal terms.
Stock Splits
The Adviser generally will vote FOR stock split proposals on the grounds that they intended to encourage stock ownership of a company.
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Private Placements, Conversion of Securities, Issuance of Warrants or Convertible Debentures
The Adviser will generally vote FOR the issuance of shares for private placements, the conversion of securities from one class to another, and the issuance of warrants or convertible debentures on the grounds that such issuances may be necessary and beneficial for the financial health of the company and may be a low cost source of equity capital. The Adviser will generally vote AGAINST any such issuance or related action if the proposal would in any way result in new equity holders having superior voting rights, would result in warrants or debentures, when exercised, holding in excess of 20 percent of the currently outstanding voting rights, or if the proposal would in any way diminish the rights of existing shareholders.
Issuance of Equity or Equity-Linked Securities without Subscription Rights (Preemptive Rights)
The Adviser generally will vote FOR proposals that seek shareholder approval of the issuance of equity, convertible bonds or other equity-linked debt instruments, or to issue shares to satisfy the exercise of such securities that are free of subscription (preemptive) rights on the grounds that companies must retain the ability to issue such securities for purposes of raising capital. The Adviser generally will vote AGAINST any proposal where dilution exceeds 20 percent of the company’s outstanding capital.
Recapitalization
The Adviser generally will vote FOR recapitalization plans that combine two or more classes of stock into one class, or that authorize the company to issue new common or preferred stock for such plans. The Adviser generally will vote AGAINST recapitalization plans that would result in the diminution of rights for existing shareholders.
Merger Agreement
The Adviser will vote on a CASE-BY-CASE basis on proposals seeking approval of a merger or merger agreement and all proposals related to such primary proposals, taking into consideration the particular facts and circumstances of the proposed merger and its potential benefits to existing shareholders.
Going Private
The Adviser will vote on a CASE-BY-CASE basis on proposals that allow listed companies to de-list and terminate registration of their common stock, taking into consideration the cash-out value to shareholders, and weighing the value in continuing as a publicly traded entity.
Reincorporation
The Adviser will vote on a CASE-BY-CASE basis on reincorporation proposals, taking into consideration whether financial benefits (e.g., reduced fees or taxes) likely to accrue to the company as a result of a reincorporation or other change of domicile outweigh any accompanying material diminution of shareholder rights. The Adviser will generally vote AGAINST the proposal unless the long-term business reasons for doing so are valid. The Adviser will generally vote FOR proposals to consider reincorporating in the United States if a company left the country for the purpose of avoiding taxes.
Bundled Proposals
The Adviser generally votes in accordance with recommendations made by its third party research provider on “bundled” or otherwise conditioned proposals, which are determined depending on the overall economic effects to shareholders.
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Defense Mechanisms
Shareholder Rights’ Plan (Poison Pill)
The Adviser will vote on a CASE-BY-CASE basis regarding management proposals seeking ratification of a shareholder rights’ plan, including a net operating loss (NOL) shareholder rights’ plan, or stockholder proposals seeking modification or elimination of any existing shareholder rights’ plan.
Supermajority Voting
The Adviser generally will vote FOR the elimination or material diminution of provisions in company governing documents that require the affirmative vote of a supermajority of shareholders for approval of certain actions, and generally will vote AGAINST the adoption of any supermajority voting clause.
Control Share Acquisition Provisions
The Adviser generally will vote FOR proposals to opt out of control share acquisition statutes and will generally vote AGAINST proposals seeking approval of control share acquisition provisions in company governing documents on the grounds that such provisions may harm long-term share value by effectively entrenching management. The ability to buy shares should not be constrained by requirements to secure approval of the purchase from other shareholders.
Anti-Greenmail
The Adviser generally will vote FOR proposals to adopt anti-greenmail governing document amendments or to otherwise restrict a company’s ability to make greenmail payments.
Classification of Board of Directors
The Adviser generally will vote FOR proposals to declassify a board and AGAINST proposals to classify a board, absent special circumstances that would indicate that shareholder interests are better served by voting to the contrary.
Auditors
Ratify or Appoint Auditors
The Adviser generally votes in accordance with recommendations made by its third party research provider, which typically recommends votes FOR ratification or appointment except in situations where there are questions about the relative qualification of the auditors, conflicts of interest, auditor involvement in significant financial restatements, option backdating, material weaknesses in controls or situations where independence has been compromised.
Prohibit or Limit Auditor’s Non-Audit Services
The Adviser generally votes in accordance with recommendations made by its third party research provider, which typically recommends votes AGAINST these proposals since it may be necessary or appropriate for auditors to provide a service related to the business of a company and that service will not compromise the auditors’ independence. In addition, Sarbanes-Oxley legislation spells out the types of services that need pre-approval or would compromise independence.
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Indemnification of External Auditor
The Adviser will generally vote AGAINST proposals to indemnify external auditors on the grounds that indemnification agreements may limit pursuit of legitimate legal recourse against the audit firm.
Indemnification of Internal Auditor
The Adviser will generally vote FOR the indemnification of internal auditors, unless the costs associated with the approval are not disclosed.
Social and Environmental
Disclose Social Agenda
The Adviser generally will ABSTAIN from voting on proposals that seek disclosure, often in the form of a report, on items such as military contracts or sales, environmental or conservation initiatives, business relationships with foreign countries, or animal welfare for the following reasons: a) our clients are likely to have different views of what is a socially responsible policy, b) whether social responsibility issues other than those mandated by law should be the subject of corporate policy, or c) because the impact of such disclosure on share value can rarely be anticipated with any degree of confidence.
Socially Responsible Investing
The Adviser generally will ABSTAIN from voting on proposals that seek to have a company take a position on social or environmental issues, for the reasons cited under ‘Disclose Social Agenda’ above.
Prohibit or Disclose Contributions and Lobbying Expenses
The Adviser generally votes in accordance with recommendations made by its third party research provider, which typically considers the proposal in the context of the company’s current disclosures, Federal and state laws, and whether the proposal is in shareholders’ best interests.
Disclose Prior Government Service
The Adviser generally will ABSTAIN from voting on proposals seeking the company to furnish a list of high-ranking employees who served in any governmental capacity over the last five years.
Change in Operations or Products Manufactured or Sold
The Adviser generally will ABSTAIN from voting on proposals seeking to change the way a company operates (e.g., protect human rights, sexual orientation, stop selling tobacco products, move manufacturing operations to another country, etc.) .
Executive Compensation Report
The Adviser generally will vote AGAINST proposals seeking companies to issue a report on linkages between executive compensation and financial, environmental and social performance on the grounds that executive compensation is a business matter for the company’s board to consider.
Pay Equity
The Adviser will generally vote AGAINST proposals seeking a cap on the total pay and other compensation of its executive officers to no more than a specified multiple of the pay of the average employee of the company.
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Foreign Issues
Foreign Issues- Directors, Boards, Committees
Approve Discharge of Management (Supervisory) Board
The Adviser generally votes in accordance with recommendations made by its third party research provider, which typically recommends votes FOR approval of the board, based on factors including whether there is an unresolved investigation or whether the board has participated in wrongdoing. This is a standard request in Germany and discharge is generally granted unless a shareholder states a specific reason for withholding discharge and intends to take legal action.
Announce Vacancies on Management (Supervisory) Board
The Adviser generally will vote FOR proposals requesting shareholder approval to announce vacancies on the board, as is required under Dutch law.
Approve Director Fees
The Adviser generally votes in accordance with recommendations made by its third party research provider on proposals seeking approval of director fees.
Foreign Issues- General Corporate Governance
Digitalization of Certificates
The Adviser generally will vote FOR proposals seeking shareholder approval to amend a company’s articles of incorporation to eliminate references to share certificates and beneficial owners, and to make other related changes to bring the articles in line with recent regulatory changes for Japanese companies.
Authorize Filing of Required Documents and Other Formalities
The Adviser generally will vote FOR proposals requesting shareholders authorize the holder of a copy of the minutes of the general assembly to accomplish any formalities required by law, as is required in France.
Propose Publications Media
The Adviser generally will vote FOR proposals requesting shareholders approve the designation of a newspaper as the medium to publish the company’s meeting notice, as is common in Chile and other countries.
Clarify Articles of Association or Incorporation
The Adviser generally will vote FOR proposals seeking shareholder approval of routine housekeeping of the company’s articles, including clarifying items and deleting obsolete items.
Update Articles of Association or Incorporation with Proxy Results
The Adviser generally will vote FOR proposals requesting shareholders approve changes to the company’s articles of association or incorporation to reflect the results of a proxy vote by shareholders, which is a routine proposal in certain country’s proxies.
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Conform Articles of Association or Incorporation to Law or Stock Exchange
The Adviser generally will vote FOR proposals requesting shareholder approval to amend the articles of association or incorporation to conform to new requirements in local or national law or rules established by a stock exchange on which its stock is listed.
Authorize Board to Ratify and Execute Approved Resolutions
The Adviser generally will vote FOR proposals requesting shareholder approval to authorize the board to ratify and execute any resolutions approved at the meeting.
Prepare and Approve List of Shareholders
The Adviser generally votes FOR proposals requesting shareholder approval for the preparation and approval of the list of shareholders entitled to vote at the meeting, which is a routine formality in European countries.
Authorize Company to Engage in Transactions with Related Parties
The Adviser generally will vote FOR proposals requesting shareholder approval for the company, its subsidiaries, and target associated companies to enter into certain transactions with persons who are considered “interested parties” as defined in Chapter 9A of the Listing Manual of the Stock Exchange of Singapore (SES), as the SES related-party transaction rules are fairly comprehensive and provide shareholders with substantial protection against insider trading abuses.
Amend Articles to Lower Quorum Requirement for Special Business
The Adviser generally will vote on a CASE-BY-CASE basis on proposals seeking to amend the articles to lower the quorum requirement to one-third for special business resolutions at a shareholder meeting, which is common when certain material transactions such as mergers or acquisitions are to be considered by shareholders.
Change Date/Location of Annual Meeting
The Adviser will vote in accordance with the recommendation of the third-party research provider on proposals to change the date, time or location of the company’s annual meeting of shareholders.
Elect Chairman of the Meeting
The Adviser generally will vote FOR proposals requesting shareholder approval to elect the chairman of the meeting, which is a routine meeting formality in certain European countries.
Authorize New Product Lines
The Adviser generally will vote FOR proposals requesting shareholder approval to amend the company’s articles to allow the company to expand into new lines of business.
Approve Financial Statements, Directors’ Reports and Auditors’ Reports
The Adviser generally will vote FOR proposals that request shareholder approval of the financial statements, directors’ reports, and auditors’ reports.
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Foreign Issues- Compensation
Approve Retirement Bonuses for Directors/Statutory Auditors
The Adviser generally will ABSTAIN from voting on proposals requesting shareholder approval for the payment of retirement bonuses to retiring directors and/or statutory auditors, which is a standard request in Japan, because information to justify the proposal is typically insufficient.
Approve Payment to Deceased Director’s/Statutory Auditor’s Family
The Adviser generally will ABSTAIN from voting on proposals requesting shareholder approval for the payment of a retirement bonus to the family of a deceased director or statutory auditor, which is a standard request in Japan, because information to justify the proposal is typically insufficient.
Foreign Issues- Business Entity, Capitalization
Set or Approve the Dividend
The Adviser generally will vote FOR proposals requesting shareholders approve the dividend rate set by management.
Approve Allocation of Income and Dividends
The Adviser generally will vote FOR proposals requesting shareholders approve a board’s allocation of income for the current fiscal year, as well as the dividend rate.
Approve Scrip (Stock) Dividend Alternative
The Adviser generally will vote FOR proposals requesting shareholders authorize dividend payments in the form of either cash or shares at the discretion of each shareholder, provided the options are financially equal. The Adviser generally will vote AGAINST proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value.
Authorize Issuance of Equity or Equity-Linked Securities
The Adviser generally will vote FOR proposals requesting shareholder approval to permit the board to authorize the company to issue convertible bonds or other equity-linked debt instruments or to issue shares to satisfy the exercise of such securities.
Authorize Issuance of Bonds
The Adviser generally will vote FOR proposals requesting shareholder approval granting the authority to the board to issue bonds or subordinated bonds.
Authorize Capitalization of Reserves for Bonus Issue or Increase in Par Value
The Adviser generally will vote FOR proposals requesting shareholder approval to increase authorized stock by capitalizing various reserves or retained earnings, which allows shareholders to receive either new shares or a boost in the par value of their shares at no cost.
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Increase Issued Capital for Rights Issue
The Adviser generally will vote FOR proposals requesting shareholder approval to increase to issued capital in order to offer a rights issue to current registered shareholders, which provides shareholders the option of purchasing additional shares of the company’s stock, often at a discount to market value, and the company will use the proceeds from the issue to provide additional financing.
Board Authority to Repurchase Shares
The Adviser generally will vote FOR proposals requesting that a board be given the authority to repurchase shares of the company on the open market, with such authority continuing until the next annual meeting.
Authorize Reissuance of Repurchased Shares
The Adviser generally will vote FOR proposals requesting shareholder approval to reissue shares of the company’s stock that had been repurchased by the company at an earlier date.
Approve Payment of Corporate Income Tax
The Adviser generally will vote FOR proposals seeking approval for the use by a company of its reserves in order to pay corporate taxes, which is common practice in Europe.
Cancel Pre-Approved Capital Issuance Authority
The Adviser generally will vote FOR proposals requesting shareholders cancel a previously approved authority to issue capital, which may be necessary in Denmark as companies there do not have authorized but unissued capital that they may issue as needed like their counterparts in other countries.
Allotment of Unissued Shares
The Adviser generally will vote FOR proposals requesting that shareholders give the board the authority to allot or issue unissued shares.
Authority to Allot Shares for Cash
The Adviser generally will vote FOR proposals requesting that shareholders give the board the ability to allot a set number of authorized but unissued shares for the purpose of employee share schemes and to allot equity securities for cash to persons other than existing shareholders up to a limited aggregate nominal amount (a percentage of the issued share capital of the company).
Foreign Issues- Defense Mechanisms
Authorize Board to Use All Outstanding Capital
The Adviser will vote on a CASE-BY-CASE basis on proposals requesting shareholders authorize the board, for one year, to use all outstanding capital authorizations in the event that a hostile public tender or exchange offer is made for the company, which is a common anti-takeover measure in France similar to the way U.S. companies use preferred stock.
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Foreign Issues- Auditors
Approve Special Auditors’ Report
The Adviser generally will vote FOR proposals that present shareholders of French companies, as required by French law, with a special auditor’s report that confirms the presence or absence of any outstanding related party transactions. At a minimum, such transactions (with directors or similar parties) must be previously authorized by the board. This part of the French commercial code provides shareholders with a mechanism to ensure an annual review of any outstanding related party transactions.
Appoint Statutory Auditor
The Adviser generally will vote FOR proposals requesting shareholder approval to appoint the internal statutory auditor, designated as independent internal auditor as required by the revised Japanese Commercial Code.
Foreign Issues- Social and Environmental
Authorize Company to Make EU Political Organization Donations
The Adviser generally will ABSTAIN from voting on proposals that seek authorization for the company to make EU political organization donations and to incur EU political expenditures.
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APPENDIX C — MORE INFORMATION ABOUT CHOOSING A SHARE CLASS
Front-End Sales Charge Reductions – Accounts Eligible for Aggregation
The following accounts are eligible for account value aggregation for purposes of the right of accumulation and letters of intent as described in the prospectuses offering share classes subject to a front-end sales charge:
• | Individual or joint accounts; |
• | Roth and traditional Individual Retirement Accounts (IRAs), Simplified Employee Pension accounts (SEPs), Savings Investment Match Plans for Employees of Small Employers accounts (SIMPLEs) and Tax Sheltered Custodial Accounts (TSCAs); |
• | Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors (UTMA) accounts for which you, your spouse, or your domestic partner is parent or guardian of the minor child; |
• | Revocable trust accounts for which you or an immediate family member, individually, is the beneficial owner/grantor; |
• | Accounts held in the name of your, your spouse’s, or your domestic partner’s sole proprietorship or single owner limited liability company or S corporation; |
• | Qualified retirement plan assets, provided that you are the sole owner of the business sponsoring the plan, are the sole participant (other than a spouse) in the plan, and have no intention of adding participants to the plan; and |
• | Investments in wrap accounts; |
provided that each of the accounts identified above is invested in Class A, Class B, Class C, Class E, Class F, Class T, Class W and/or Class Z shares of the Funds.
The following accounts are not eligible for account value aggregation:
• | Accounts of pension and retirement plans with multiple participants, such as 401(k) plans (which are combined to reduce the sales charge for the entire pension or retirement plan and therefore are not used to reduce the sales charge for your individual accounts); |
• | Accounts invested in Class I, Class R, Class R3, Class R4, Class R5 and/or Class Y shares of the Funds; |
• | Investments in 529 plans, donor advised funds, variable annuities, variable life insurance products, or managed separate accounts; |
• | Charitable and irrevocable trust accounts; and |
• | Accounts holding shares of money market Funds that used the Columbia brand before May 1, 2010. |
Sales Charge Waivers
Front-End Sales Charge Waivers
The following categories of investors may buy Class A, Class E and Class T shares of the Funds at net asset value, without payment of any front-end sales charge that would otherwise apply:
• | Current or retired Fund Board members, officers or employees of the Funds or Columbia Management or its affiliates1; |
• | Current or retired Ameriprise Financial Services, Inc. financial advisors and employees of such financial advisors1; |
• | Registered representatives and other employees of affiliated or unaffiliated Selling Agents having a selling agreement with the Distributor1; |
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• | Registered broker-dealer firms that have entered into a dealer agreement with the Distributor may buy Class A shares without paying a front-end sales charge for their investment account only; |
• | Portfolio managers employed by subadvisers of the Funds1; |
• | Partners and employees of outside legal counsel to the Funds or the Funds’ directors or trustees who regularly provide advice and services to the Funds, or to their directors or trustees; and |
• | Direct rollovers from qualified employee benefit plans, provided that the rollover involves a transfer to Class A shares in the same Fund. |
• | Employees of Bank of America, its affiliates and subsidiaries. |
• | Employees or partners of Columbia Wanger Asset Management, LLC and Marsico Capital Management, LLC (or their successors). |
• | Individuals receiving a distribution from a Bank of America trust, fiduciary, custodial or other similar account may use the proceeds of that distribution to buy Class A shares without paying a front-end sales charge, as long as the proceeds are invested in the funds within 90 days of the date of distribution. |
• | Any shareholder who owned shares of any fund of Columbia Acorn Trust (formerly named Liberty Acorn Trust) on September 29, 2000 (when all of the then outstanding shares of Columbia Acorn Trust were re-designated Class Z shares) and who since that time has remained a shareholder of any Fund, may buy Class A shares of any Fund without paying a front-end sales charge in those cases where a Columbia Fund Class Z share is not available. |
• | Galaxy Fund shareholders prior to December 1, 1995; and shareholders who (i) bought Galaxy Fund Prime A shares without paying a front-end sales charge and received Class A shares in exchange for those shares during the Galaxy/Liberty Fund reorganization; and (ii) continue to maintain the account in which the Prime A shares were originally bought. |
• | (For Class T shares only) Shareholders who (i) bought Galaxy Fund Retail A shares at net asset value and received Class T shares in exchange for those shares during the Galaxy/Liberty Fund reorganization; and (ii) continue to maintain the account in which the Retail A shares were originally bought; and Boston 1784 Fund shareholders on the date that those funds were reorganized into Galaxy Funds. |
• | Separate accounts established and maintained by an insurance company which are exempt from registration under Section 3(c)(11); |
• | At the Fund’s discretion, front-end sales charges may be waived for shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a party. |
Purchases of Class A, Class E and Class T shares may be made at net asset value if they are made as follows:
• | With dividend or capital gain distributions from a Fund or from the same class of another Fund; |
• | Through or under a wrap fee product or other investment product sponsored by a Selling Agent that charges an account management fee or other managed agency/asset allocation accounts or programs involving fee-based compensation arrangements that have or that clear trades through a Selling Agent that has a selling agreement with the Distributor; |
• | Through state sponsored college savings plans established under Section 529 of the Internal Revenue Code; or |
• | Through banks, trust companies and thrift institutions, acting as fiduciaries; |
• | Through “employee benefit plans” created under section 401(a), 401(k), 457 and 403(b), and qualified deferred compensation plans, that have a plan level or omnibus account maintained with the Fund or the Transfer Agent and transacts directly with the Fund or the Transfer Agent through a third party administrator or third party recordkeeper; and |
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1 | Including their spouses or domestic partners, children or step-children, parents, step-parents or legal guardians, and their spouse’s or domestic partner’s parents, step-parents, or legal guardians. |
Investors can also buy Class A shares without paying a sales charge if the purchase is made from the proceeds of a sale from any Columbia Fund Class A, B, C or T shares of another fund in the Columbia Funds Complex (other than Columbia Money Market Fund or Columbia Government Money Market Fund) within 90 days, up to the amount of the sales proceeds. In addition, shareholders of the money market fund series of BofA Funds Series Trust, which were formerly referred to as the Columbia Money Market Funds (the Former Columbia Money Market Funds), can also buy Class A shares of the Columbia Funds without paying a sales charge if the purchase is made from the proceeds of a sale of shares from a Former Columbia Money Market Fund within 90 days, up to the amount of the sales proceeds, provided that the proceeds are from the sale of shares of a Former Columbia Money Market Fund purchased on or before April 30, 2010. To be eligible for these reinstatement privileges the purchase must be made into an account for the same owner, but does not need to be into the same fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request within 90 days after the shares are sold and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of such shares next calculated after the request is received in good order.
Restrictions may apply to certain accounts and certain transactions. The Funds may change or cancel these terms at any time. Any change or cancellation applies only to future purchases. Unless you provide your financial advisor with information in writing about all of the factors that may count toward a waiver of the sales charge, there can be no assurance that you will receive all of the waivers for which you may be eligible. You should request that your financial advisor provide this information to the Funds when placing your purchase order. For more information about the sales charge reductions and waivers described here, as well as additional categories of eligible investors, please see the applicable prospectus.
Contingent Deferred Sales Charge Waivers (Class A, Class B, Class C, Class E, Class F and Class T Shares)
Shareholders won’t pay a CDSC on redemption of Class A, Class C, Class E and Class T shares:
• | In the event of the shareholder’s death; |
• | For which no sales commission or transaction fee was paid to an authorized Selling Agent at the time of purchase; |
• | Purchased through reinvestment of dividend and capital gain distributions; |
• | In an account that has been closed because it falls below the minimum account balance; |
• | That result from required minimum distributions taken from retirement accounts upon the shareholder’s attainment of age 70 1/2; |
• | That result from returns of excess contributions made to retirement plans or individual retirement accounts, so long as the Selling Agent returns the applicable portion of any commission paid by the Distributor; |
• | Of Class A shares of a Fund initially purchased by an employee benefit plan; |
• | Other than Class A shares of a Fund initially purchased by an employee benefit plan that are not connected with a plan level termination; |
• | In connection with the Fund’s Small Account Policy (as described in the applicable prospectus); and |
• | At a Fund’s discretion, issued in connection with plans of reorganization, including but not limited to mergers, asset acquisitions and exchange offers, to which the Fund is a party. |
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Shareholders won’t pay a CDSC on redemption of Class B or Class F shares:
• | In the event of the shareholder’s death; and |
• | That result from required minimum distributions taken from retirement accounts upon the shareholder’s attainment of age 70 1/2. |
Below are additional categories of CDSC waivers:
• | For shares purchased prior to September 7, 2010, CDSCs may be waived on sales after the sole shareholder on an individual account or a joint tenant on a joint tenant account becomes disabled (as defined by Section 72(m)(7) of the Code). To be eligible for such a waiver: (i) the disability must arise after the account is opened and (ii) a letter from a physician must be signed under penalty of perjury stating the nature of the disability. If the account is transferred to a new registration and then shares are sold, the applicable CDSC will be charged.* |
• | For shares purchased prior to September 7, 2010, CDSCs may be waived on shares sold by health savings accounts sponsored by third party platforms, including those sponsored by Bank of America affiliates.* |
• | For shares purchased prior to September 7, 2010, CDSCs may be waived on (i) shares sold for medical payments that exceed 7.5% of income and (ii) distributions made to pay for insurance by an individual who has separated from employment and who has received unemployment compensation under a federal or state program for at least twelve weeks.* |
• | For shares purchased prior to September 7, 2010, CDSCs may be waived on sales occurring pursuant to a SWP established with the Transfer Agent, to the extent that the sales do not exceed, on an annual basis, 12% of the account’s value as long as distributions are reinvested. Otherwise, a CDSC will be charged on SWP sales until this requirement is met. |
• | CDSCs may be waived on shares (except for Class B shares) sold by certain group retirement plans held in omnibus accounts. However, CDSC may not be waived for Class C shares if the waiver would occur as a result of a plan-level termination. |
• | CDSCs may be waived on shares sold in connection with distributions from qualified retirement plans, government (Section 457) plans, individual retirement accounts or custodial accounts under Section 403(b)(7) of the Code, following normal retirement or the attainment of age 59 1/2 for shares purchased prior to September 7, 2010.** |
• | For Class B shares, and for Class A and Class C shares purchased prior to September 7, 2010, CDSCs may be waived on shares sold in connection with loans from qualified retirement plans to shareholders.* |
* | Fund investors and Selling Agents must inform the Fund or the Transfer Agent in writing that the Fund investor qualifies for the particular sales charge waiver and provide proof thereof. |
** | For direct trades on non-prototype retirement accounts where the date of birth of the Fund shareholder is not maintained, the shareholder or Selling Agent must inform the Fund or the Transfer Agent in writing that the Fund investor qualifies for the particular sales charge waiver and provide proof thereof. |
Restrictions may apply to certain accounts and certain transactions. The Distributor may, in its sole discretion, authorize the waiver of the CDSC for additional classes of investors. The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases. For more information about the sales charge reductions and waivers described here, as well as additional categories of eligible redemptions, please see the prospectuses.
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Minimum Initial Investment in Class Z Shares
Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements described in the prospectuses, as supplemented. In addition to the categories of Class Z investors described in the prospectuses, as supplemented, the minimum initial investment in Class Z shares is as follows:
There is no minimum initial investment in Class Z shares for any health savings account sponsored by a third party platform, including those sponsored by affiliates of Bank of America.
The minimum initial investment in Class Z shares for the following eligible investors is $1,000:
• | Any persons employed as of April 30, 2010 by the Legacy Columbia Funds’ former investment manager, distributor or transfer agent and immediate family members of any of the foregoing who share the same address and any employee of the Investment Manager, Distributor or Transfer Agent and immediate family members of any of the foregoing who share the same address and are eligible to make new and subsequent purchases in Class Z shares through an individual retirement account. If you maintain your account with a financial intermediary, you must contact that financial intermediary each time you seek to purchase shares to notify them that you qualify for Class Z shares. |
The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,000:
• | Any client of Bank of America or one of its subsidiaries buying shares through an asset management company, trust, fiduciary, retirement plan administration or similar arrangement with Bank of America or the subsidiary. |
• | Any employee (or family member of an employee) of Bank of America or one of its subsidiaries. |
• | Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code. |
• | Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor. |
• | Any persons employed as of April 30, 2010 by the Legacy Columbia Funds’ former investment manager, distributor or transfer agent and immediate family members of any of the foregoing who share the same address and any employee of the Investment Manager, Distributor or Transfer Agent and immediate family members of any of the foregoing who share the same address and are eligible to make new and subsequent purchases in Class Z shares through a non-qualified account. If you maintain your account with a financial intermediary, you must contact that financial intermediary each time you seek to purchase shares to notify them that you qualify for Class Z shares. |
Class B Shares—Conversion to Class A Shares
Class B shares purchased in a Legacy Columbia Fund at any time and Legacy RiverSource Fund (including former Seligman Fund) on or after June 13, 2009 automatically convert to Class A shares after you’ve owned the shares for eight years, except for Class B shares of Columbia Short Term Municipal Bond Fund, which do not convert to Class A shares. Class B shares originally purchased in a Legacy RiverSource Fund (other than a former Seligman Fund) on or prior to June 12, 2009 will convert to Class A shares after eight and one half years of ownership. Class B shares originally purchased in a former Seligman Fund on or prior to June 12, 2009 will convert to Class A shares in the month prior to the ninth year of ownership. The conversion feature allows you to benefit from the lower operating costs of Class A shares, which can help increase your total returns from an investment in the Fund.
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The following rules apply to the conversion of Class B shares to Class A shares:
• | Class B shares are converted on or about the 15th day of the month that they become eligible for conversion. For purposes of determining the month when your Class B shares are eligible for conversion, the start of the holding period is the first day of the month in which your purchase was made. |
• | Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time. |
• | You’ll receive the same dollar value of Class A shares as the Class B shares that were converted. Class B shares that you received from an exchange of Class B shares of another Fund will convert based on the day you bought the original shares. |
• | No sales charge or other charges apply, and conversions are free from U.S. federal income tax. |
Class F Shares—Conversion to Class E Shares*
The following rules apply to the conversion of Class F shares to Class E shares:
• | Class F shares are converted on or about the 15th day of the month that they become eligible for conversion. For purposes of determining the month when your Class F shares are eligible for conversion, the start of the holding period is the first day of the month in which your purchase was made. |
• | Any shares you received from reinvested distributions on these shares generally will convert to Class E shares at the same time. |
• | You’ll receive the same dollar value of Class E shares as the Class F shares that were converted. Class F shares that you received from an exchange of Class F shares of another Fund will convert based on the day you bought the original shares. |
• | No sales charge or other charges apply, and conversions are free from U.S. federal income tax. |
* | The Funds no longer accept investments from new or existing investors in Class E or Class F shares, except by existing Class E and/or Class F shareholders who opened and funded their account prior to September 22, 2006 that may continue to invest in Class E and/or Class F shares. See the prospectus offering Class E and Class F shares of Large Cap Growth Fund for details. |
Class A Shares of Active Portfolio Funds
The Active Portfolio Funds offer only Class A shares that are available only to certain eligible investors through certain wrap fee programs sponsored and/or managed by Ameriprise Financial or its affiliates. Class A shares of Active Portfolio Funds are not subject to any front-end sales charge or contingent deferred sales charge.
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APPENDIX D — DESCRIPTION OF STATE RISK FACTORS
State Tax-Exempt Funds
The state tax-exempt Funds invest primarily in municipal securities issued by a single state and political sub-divisions of that state. Each state tax-exempt Fund will be particularly affected by political and economic conditions and developments in the state in which it invests. This exposure to factors affecting the state’s tax-exempt investments will be significantly greater than that of more geographically diversified funds, and may result in greater losses and volatility. Because of the relatively small number of issuers of tax-exempt securities in a given 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. At times, the Fund and other accounts managed by the Investment Manager may own all or most of the debt of a particular issuer. This concentration of ownership may make it more difficult to sell, or to determine the fair value of, these investments. In addition, a Fund may focus on a segment of the tax-exempt debt market, such as revenue bonds for health care facilities, housing or airports. These investments may cause the value of a Fund’s shares to change more than the values of shares of funds that invest more diversely. The yields on the securities in which the Funds invest generally are dependent on a variety of factors, including among others, the financial condition of the issuer or other obligor, the revenue source from which the debt service is payable, general economic and monetary conditions, conditions in the relevant market, the size of a particular issue, the maturity of the obligation, and the rating of the issue. In addition to such factors, geographically concentrated securities will be particularly sensitive to local conditions, including political and economic changes, adverse conditions to an industry significant to the area, and other further developments within a particular locality. Because many tax-exempt bonds may be revenue or general obligations of local governments or authorities, ratings on tax-exempt bonds may be different from the ratings given to the general obligation bonds of a particular state.
Certain events may adversely affect investments within a particular sector in a state. Examples include litigation, legislation or court decisions, concerns about pending or contemplated litigation, legislation or court decisions, or lower demand for the services or products provided by a sector. Investing mostly in state-specific, tax-exempt investments makes the Funds more vulnerable to the relevant state’s economy and to factors affecting tax-exempt issuers in the state than would be true for more geographically diversified funds. These risks include, among others:
• | the inability or perceived inability of a government authority to collect sufficient tax or other revenues to meet its payment obligations; |
• | natural disasters and ecological or environmental concerns; |
• | the introduction of constitutional or statutory limits on a tax-exempt issuer’s ability to raise revenues or increase taxes; |
• | the inability of an issuer to pay interest on or to repay principal or securities in which the funds invest during recessionary periods; and |
• | economic or demographic factors that may cause a decrease in tax or other revenues for a government authority or for private operators of publicly financed facilities. |
State Specific Information
The following discussion regarding certain economic, financial and legal matters pertaining to the states, U.S. territories and possessions referenced below, and their political subdivisions is drawn from the documents indicated below and does not purport to be a complete description or a complete listing of all relevant factors. More information about state specific risks may be available from other official state resources. The information has not been updated nor will it be updated during the year. The Funds have not independently verified any of the information contained in such documents and are not expressing any opinion regarding
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the completeness or materiality of such information. The information is subject to change at any time. Any such change may adversely affect the financial condition of the applicable state, U.S. territory or possession.
Estimates and projections, if any, contained in the following summaries should not be construed as statements of fact; such estimates and projections are based on assumptions that may be affected by numerous factors and there can be no assurance that such estimates and projections will be realized or achieved. Discussions regarding the financial condition of a particular state or U.S. territory or possession may not be relevant to Municipal Obligations issued by political subdivisions of that state or U.S. territory or possession. Moreover, the general economic conditions discussed may or may not affect issuers of the obligations of these states, U.S. territories or possessions.
California
The following information has been obtained from the official statement of the State of California dated November 21, 2011.
Current Economic Condition.
The State of California (“California”) has the largest economy among the 50 states. Major components of California’s diverse economy include high technology, trade, entertainment, agriculture, manufacturing, government, tourism, construction and services.
During the recent recession, which officially ended in 2009, California experienced the most significant economic downturn since the Great Depression of the 1930s. As a result of continuing weakness in California’s economy, California tax revenues declined precipitously, resulting in large budget gaps and occasional cash shortfalls. More recently, California’s economy has grown slowly, and the Budget Act for the 2011-12 fiscal year adopted on June 30, 2011, together with related budget legislation (the “2011 Budget Act”), projects continuing growth in California’s major revenue sources from the recession’s low point.
In its report from May 2011, California’s Department of Finance described the California economy as being in the midst of a modest, drawn-out recovery. The private sector — outside of homebuilding — was providing most of the growth in the economy. Construction and real estate have been showing little growth. Export-driven and high-technology sectors were doing relatively well based on the combination of strong Asian economies and a weak U.S. dollar. Some recent indicators, mainly labor market statistics, have been weak. Public sector employment experienced unprecedented reductions during and after the recession. The May 2011 economic projection reflects a significant drop in state and local government employment in 2009 and 2010, and foresees more losses during 2011. The return to pre-recession conditions is expected to be slow and uneven.
Employment. California’s unemployment rate reached a high of 12.5% in late 2010. The rate improved thereafter, falling to 11.7% in May 2011, but rising to 12.0% for July 2011. In comparison, the national unemployment rate was 9.1% in July 2011.
Real Estate and Building Activity. California’s housing sector began a meager recovery during 2009 and the early months of 2010 in response to the federal home buyers tax credit. Existing home sales stabilized around the half-million unit rate (seasonally-adjusted and annualized) and the median sales price rose by 10% in 2010 from 2009, bringing the median price of these homes to approximately $300,000. Unsold inventory trended downward in 2009, as did the number of days needed to sell a home. However, the housing market indicators worsened during the middle of 2010 after the expiration of the federal home buyers tax credit. Housing market indicators again appeared to stabilize during the early months of 2011.
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Additional foreclosures may result from the resetting of interest rates on adjustable rate mortgages through 2012, the commencement of the requirement to begin repayment of principal with interest during the same period on mortgages that were previously in an interest-only mode, and the expiration of the mortgage foreclosure relief program of the federal government called Homeowners Affordability and Stability Plan.
State Budget.
California’s fiscal year begins on July 1 of each year and ends on June 30 of the following year. California receives revenues from taxes, fees and other sources, the most significant of which are the personal income tax, sales and use tax and corporation tax (which collectively constitute nearly 90% of total General Fund revenues and transfers). California expends money on a variety of programs and services. Significant elements of California’s expenditures include education (both kindergarten through twelfth grade (“K-12”) and higher education), health and human services and correctional programs.
The economic downturn of the last few years adversely affected California’s budget situation. To exacerbate the problem, as California entered the recession, annual revenues generally were less than annual expenses, resulting in a “structural” budget deficit. This structural deficit was due in part to overreliance on temporary remedies, including one-time revenues, internal borrowing, payment deferrals, accounting shifts and expenditure reduction proposals that did not materialize.
The 2011 Budget Act (for fiscal year 2011-12), which was signed by the Governor on June 30, 2011, closes a $26.6 billion projected budget gap and makes substantial progress in addressing California’s long term structural budget deficit. It also shifts certain program responsibilities to local government (and provides certain funding for such program responsibilities to local governments).
The 2011 Budget Act makes substantial cuts to California’s programs in order to bring expenditures more in line with available resources, including slightly over $15 billion in expenditure reductions over a two-year period. Expenditure reductions include significant cuts to Medi-Cal, Mental Health Services, and CalWORKs, among others in the Health and Human Services area, and reductions in K-12 education spending and support for the University of California and California State University systems. The 2011 Budget Act also provides for additional expenditure reductions without further action of the Legislature (called “trigger cuts”) in the event that the revenue projections in the 2011 Budget Act are not realized.
Despite eliminating a significant portion of the structural deficit in the 2011 Budget Act, California continues to face major long-term challenges and must address the remaining structural budget deficit and the consequences of budget-balancing actions taken in the past.
State and Local Government Considerations.
The primary units of local government in California are the 58 counties. Counties are responsible for the provision of many basic services, including indigent health care, welfare, jails and public safety in unincorporated areas. There are also 480 incorporated cities in California and thousands of special districts formed for education, utilities and other services.
Proposition 13, which was approved by voter initiative in 1978, amended California’s constitution to reduce and limit the future growth of property taxes and limit the ability of local governments to impose “special taxes” (those devoted to a specific purpose) without two-thirds voter approval. Although Proposition 13 limited property tax growth rates, it also has had a smoothing effect on property tax revenues, ensuring greater stability in annual revenues than existed before Proposition 13 passed.
Proposition 218, another constitutional amendment enacted by voter initiative in 1996, further limited the ability of local governments to raise taxes, fees and other exactions. The limitations imposed by Proposition 218
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include requiring a majority vote approval for general local tax increases, prohibiting fees for services in excess of the cost of providing such service, and providing that no fee may be charged for fire, police or any other service widely available to the public.
Over the years, a number of constitutional amendments similar to Proposition 13 and Proposition 218 have been enacted, often through voter initiatives, which have increased the difficulty of raising California’s taxes or restricted the use of General Fund revenues. Further initiatives or legislative changes in laws or the California Constitution may also affect the ability of state or local issuers to repay their obligations.
Bond Ratings.
Three major credit rating agencies, Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Services (“S&P”) and Fitch Ratings (“Fitch”), assign ratings to California long-term general obligation bonds. According to the Treasurer of California’s website, as of February 9, 2012, California’s general obligation bonds were rated A1 by Moody’s, A- by S&P and A- by Fitch. It is not possible to determine whether, or the extent to which, Moody’s, S&P or Fitch will change such ratings in the future. Ratings assigned to individual Municipal Obligations vary.
Connecticut
The following information has been obtained from the Annual Information Statement of the State of Connecticut, dated February 23, 2011, as supplemented on November 2, 2011.
Current Economic Condition.
The State of Connecticut (“Connecticut”) is a highly developed and urbanized state. It is situated directly between the financial centers of Boston and New York.
Connecticut’s economic performance is measured by personal income, which has been among the highest in the nation, and gross state product (the market value of all final goods and services produced by labor and property located within Connecticut). Connecticut’s nonagricultural employment reached a high in the first quarter of 2008 with 1,710,170 persons employed, but began declining with the onset of the recession falling to 1,612,000 jobs by the fourth quarter of 2009.
The current recession brought the unemployment rate up to 9.0% for 2010, compared to the New England average of 8.7% and the national average of 9.6% for the same period. For the first six months of 2011, Connecticut had an unemployment rate of 9.1%, compared with a New England average of 8.0% and the national average of 9.0% for the same period.
State Budget.
Connecticut finances most of its operations through its General Fund. However, certain state functions, such as Connecticut’s transportation budget, are financed through other state funds. General Fund revenues are derived primarily from the collection of state taxes, including the personal income tax, the sales and use tax and the corporation business tax. Miscellaneous fees, receipts, transfers and unrestricted federal grants account for most of the other General Fund revenue. Connecticut expends money on a variety of programs and services. Significant elements of state expenditures include human services; education, libraries and museums; non-functional (debt service and miscellaneous expenditures including fringe benefits); health and hospitals; corrections; general government and judicial.
On February 16, 2011, the Governor presented to the General Assembly his proposed budget for fiscal years 2011-12 and 2012-13. This proposal would close an estimated current services gap of $3.2 billion in fiscal year
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2011-12 and $3.0 billion in fiscal year 2012-13. In broad terms, this was achieved by proposed tax increases of $1.5 billion, expenditure cuts of $0.7 billion and an expected savings of $1.0 billion from employee concessions.
On May 3, 2011, the General Assembly passed a budget for the biennium ending June 30, 2013 (the “Budget Act”). The Budget Act makes General Fund appropriations of $18,350.3 million in fiscal year 2011-12 and $18,781.8 million in fiscal year 2012-13. The budget is projected to result in a surplus of $369.3 million in fiscal year 2011-12 and $634.8 million in fiscal year 2012-13.
State Debt.
Pursuant to various public and special acts Connecticut has authorized a variety of types of debt. These types fall generally into the following categories: direct general obligation debt, which is payable from the Connecticut’s General Fund; special tax obligation debt, which is payable from specified taxes and other funds which are maintained outside Connecticut’s General Fund; and special obligation and revenue debt, which is payable from specified revenues or other funds which are maintained outside the Connecticut’s General Fund. In addition, Connecticut has a number of programs under which the state provides annual appropriation support for, or is contingently liable on, the debt of certain state quasi-public agencies and political subdivisions.
Statutory Debt Limit. Section 3-21 of the General Statutes provides that no bonds, notes or other evidences of indebtedness for borrowed money payable from General Fund tax receipts of Connecticut may be authorized by the General Assembly or issued unless they do not cause the aggregate amount of (1) the total amount of bonds, notes or other evidences of indebtedness payable from General Fund tax receipts authorized by the General Assembly but which have not been issued and (2) the total amount of such indebtedness which has been issued and remains outstanding, to exceed 1.6 times the total estimated General Fund tax receipts of Connecticut for the fiscal year in which any such authorization will become effective or in which such indebtedness is issued, as estimated for such fiscal year by the joint standing committee of the General Assembly having cognizance of finance, revenue and bonding. However, in computing the aggregate amount of indebtedness at any time, a significant number of exclusions apply.
Certain Short-Term Borrowings. The General Statutes authorize the Treasurer, subject to the approval of the Governor, to borrow such funds, from time to time, as may be necessary, and to issue obligations of Connecticut therefore, which must be redeemed by the Treasurer whenever, in the opinion of the Treasurer, there are funds in the treasury available for such purpose. Connecticut has established programs of temporary note issuances from time to time to cover periodic cash flow requirements. No temporary notes are outstanding and none have been issued since 1991.
Transportation Fund and Debt. In 1984, Connecticut adopted legislation establishing a transportation infrastructure program and authorizing special tax obligation (“STO”) bonds to finance the program. The infrastructure program is a continuous program for planning, construction and improvement of Connecticut highways and bridges, projects on the interstate highway system, alternate highway projects in the interstate highway substitution program, waterway facilities, mass transportation and transit facilities, aeronautic facilities (excluding Bradley International Airport), the highway safety program, maintenance garages and administrative facilities of the Department of Transportation, payment of Connecticut’s share of the costs of the local bridge program established under the act, and payment of state contributions to the local bridge revolving fund established under the act. The infrastructure program is administered by the Department of Transportation.
The cost of the infrastructure program for state fiscal years 1985-2014, which will be met from federal, state and local funds, is estimated at $25.9 billion. Connecticut’s share of such cost, estimated at $10.5 billion, is to be funded from transportation-related taxes, fees and revenues deposited in the Special Transportation Fund and from the proceeds of STO bonds.
During fiscal years 1985-2011, $23.7 billion of the total infrastructure program was approved by the appropriate governmental authorities. The remaining $2.2 billion is required for fiscal years 2012-2014. The
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$2.2 billion of such infrastructure costs is anticipated to be funded by the issuance of $666 million in STO bonds, $37 million in anticipated revenues, and $1.5 billion in anticipated federal funds.
Certain Pension and Retirement Systems.
State Employees’ Retirement Fund. The State Employees’ Retirement Fund is one of the systems maintained by Connecticut with approximately 50,064 active members, 1,602 inactive (vested) members and 41,782 retired members and beneficiaries as of June 30, 2010. Payments into the fund are made from employee contributions, General and Special Transportation Fund appropriations and grant reimbursements from Federal and other funds. State contributions to the fund are made monthly on the basis of transfers submitted by the Office of the State Comptroller.
As of June 30, 2011, the market value of the fund’s investment assets was $8,980,628,985. Connecticut appropriated $722,137,072 for fiscal year ending June 30, 2012 and $715,503,022 for fiscal year ending June 30, 2013, which together with anticipated grant reimbursements from federal and other funds will be sufficient to fully fund the employer contribution requirements for fiscal years ending June 30, 2012 and June 30, 2013 pursuant to the requirement determinations contained in the November 2010 actuarial valuation.
Teachers’ Retirement Fund. The Teachers’ Retirement Fund, administered by the Teachers’ Retirement Board, provides benefits for any teacher, principal, supervisor, superintendent or other eligible employee in the public school systems of Connecticut, with certain exceptions. While establishing salary schedules for teachers, municipalities do not provide contributions to the maintenance of the fund. As of June 30, 2010, there were 63,998 active and former employees with accrued and accruing benefits, 30,219 retired members and beneficiaries, and 274 members on disability allowance.
Contributions to the fund are made by employees and by General Fund appropriations from Connecticut. State contributions to the fund are made quarterly on the basis of certifications submitted by the Teachers’ Retirement Board and are funded with annual appropriations from the General Fund. As of June 30, 2011, the market value of the fund’s investment assets was $14,143,881,048. Connecticut appropriated $757,246,000 for fiscal year ending June 30, 2012 and $787,536,000 for fiscal year ending June 30, 2013, which will be sufficient to fully fund the employer contribution requirements for fiscal years ending June 30, 2012 and June 30, 2013 pursuant to the requirement determinations contained in the November 2010 actuarial valuation.
Bond Ratings.
Three major credit rating agencies, Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Services (“S&P”) and Fitch Ratings (“Fitch”), assign ratings to the Connecticut’s long-term general obligation bonds. As of November 2011, Connecticut’s general obligation bonds were rated A2 by Moody’s, AA by S&P and AA by Fitch. In January 2012, Moody’s downgraded the rating of Connecticut’s bonds to AA3. It is not possible to determine whether, or the extent to which, Moody’s, S&P or Fitch will change such ratings in the future. Ratings assigned to individual Municipal Obligations vary.
Massachusetts
The following information has been obtained from The Commonwealth of Massachusetts Information Statement, dated March 15, 2011, as supplemented on January 13, 2012.
Current Economic Condition.
The fiscal viability of the authorities and municipalities of the Commonwealth of Massachusetts (“Massachusetts”) is linked to that of Massachusetts. Certain authorities, such as the Massachusetts Convention Center Authority, the Massachusetts Development Finance Agency, the Massachusetts Department of
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Transportation (MassDOT) and the Massachusetts Water Pollution Abatement Trust benefit from contract assistance agreements with Massachusetts. Such agreements constitute general obligations of Massachusetts for which its full faith and credit are pledged. Massachusetts also guarantees the debt of two authorities, the Massachusetts State College Building Authority and the University of Massachusetts Building Authority. Their ratings are based on Massachusetts guarantee and generally can be expected to move in tandem with ratings on the Massachusetts general obligation debt. Massachusetts funds several other authorities in part or in whole and their debt ratings may be adversely affected by a negative change in those of Massachusetts.
In July 2004, Massachusetts’s school building assistance (SBA) program was moved off-budget, to be administered and managed by an independent state authority, the Massachusetts School Building Authority (MSBA). One cent of Massachusetts’s sales tax excluding certain meals and special financing district sales taxes (the “Dedicated Sales Tax”) funds the MSBA and pays for its liabilities. Additionally, Massachusetts has issued $1.0 billion of general obligation bonds to help the MSBA fund its liabilities. The MSBA is expected to finance a substantial portion of its liabilities through the issuance of revenue bonds.
Population and Employment. Massachusetts has a population of about 6.5 million as of the 2010 Census, a little more than 2% of the total United States population. The unemployment rate of Massachusetts dropped to 6.8% in January 2012, compared to a national unemployment rate of 8.5%.
Commonwealth Budget.
The budgeted operating funds of Massachusetts ended fiscal 2011 with an excess of revenues and other sources over expenditures and other uses of $997.8 million and aggregate ending fund balances in the budgeted operating funds of Massachusetts of approximately $1.90 billion. The budgeted operating funds of Massachusetts are projected to end fiscal 2012 with a deficiency of revenues and other sources over expenditures and other uses of $441.5 million and aggregate ending fund balances in the budgeted operating funds of Massachusetts of approximately $1.46 billion.
Growth of tax revenues is limited by law in Massachusetts to the average positive rate of growth in total wages and salaries in Massachusetts, as reported by the federal government, during the three calendar years immediately preceding the end of such fiscal year. The law also requires that allowable state tax revenues be reduced by the aggregate amount received by local governmental units from any newly authorized or increased local option taxes or excises. Any excess in state tax revenue collections for a given fiscal year over the prescribed limit, as determined by the State Auditor, must be applied as a credit against the then current personal income tax liability of all taxpayers in Massachusetts in proportion to the personal income tax liability of all taxpayers in Massachusetts for the immediately preceding tax year.
Legislation enacted in December 1989 imposes a limit on the amount of outstanding “direct” bonds of Massachusetts. The bond cap for fiscal 2012 will be $1.750 billion, plus $148 million in unused bond cap from fiscal 2011 which has been carried forward to support spending in fiscal 2012. It is projected to increase by $125 million in each subsequent fiscal year through fiscal 2016.
Massachusetts is also responsible for the payment of pension benefits for Commonwealth employees and for teachers of the cities, towns and regional school districts throughout Massachusetts. Massachusetts employees’ and teachers’ retirement systems are partially funded by employee contributions of regular compensation. In September 2011, Massachusetts issued a valuation, as of January 1, 2011, of its total pension obligation. The unfunded actuarial accrued liability was calculated to be $18.589 billion.
Local Considerations.
Massachusetts makes substantial payments to its cities, towns and regional school districts (Local Aid) to mitigate the impact of local property tax limits on local programs and services. A statute adopted by voter
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initiative petition at the November 1990 statewide election regulates the distribution of Local Aid to cities and towns. As enacted in 1992 and subsequently amended, this statute requires that, subject to annual appropriation, no less than 40% of collections from personal income taxes, corporate excise taxes and lottery fund proceeds and 32% of collections from sales and use taxes be distributed to cities and towns. Nonetheless, Local Aid payments remain subject to annual appropriation by the Legislature, and the appropriations for Local Aid since the enactment of the initiative law have not met the levels set forth in the initiative law. For fiscal 2011, expenditures for direct Local Aid, exclusive of school building assistance, were $4.785 billion. For fiscal 2012, expenditures for direct Local Aid are projected to total $4.881 billion.
Transportation.
The $14.808 billion Central Artery/Ted Williams Tunnel Project was substantially completed on January 13, 2006. In 2007, the Transportation Finance Commission, established by state legislation in 2004, anticipated a funding gap of between $15 billion and $19 billion over the next 20 years, related to maintaining Massachusetts’s transportation system for that time period. On June 18, 2009, the Legislature enacted, and on June 26, 2009 the Governor approved transportation reform legislation providing for the dissolution of the Massachusetts Turnpike Authority (MTA), creating a new authority called the Massachusetts Department of Transportation (MassDOT) and transferring the assets, liabilities, obligations and debt of the MTA to MassDOT, which has a separate legal existence from Massachusetts. Legislation approved by the Governor on July 20, 2009 provides that Massachusetts Transportation Fund, a fund within MassDOT which receives all tolls and transit fares, will also receive the sales tax receipts dedicated to transportation purposes, with a guaranteed annual payment of $275 million.
Bond Ratings.
Three major credit rating agencies, Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Services (“S&P”) and Fitch Ratings (“Fitch”), assign ratings to Massachusetts long-term general obligation bonds. Massachusetts’s general obligation bonds have been assigned long-term ratings of “Aa1” by Moody’s Investors Service, Inc., “AA” by Standard & Poor’s Ratings Services and “AA+” by Fitch. It is not possible to determine whether, or the extent to which, Moody’s, S&P or Fitch will change such ratings in the future. Ratings assigned to individual Municipal Obligations vary.
New York
The following information has been obtained from the Annual Information Statement of the State of New York, dated May 24, 2011, as supplemented on November 22, 2011.
Current Economic Condition.
The State of New York (“New York”), which boasts the third-largest economy among the 50 states, is currently emerging from the effects of a nationwide recession. Although New York’s recovery outpaced that of the nation overall during the first half of 2011, more recent economic events — including the ongoing European financial crisis — have exerted substantial downward pressure on New York’s economy, which is especially sensitive to credit and equity market volatility. As the nation’s financial capital, such market volatility poses a particularly high degree of uncertainty for New York’s fiscal condition and recovery outlook.
In its report from May 2011 (updated through November 2011), New York’s Division of the Budget noted that tax receipts through September 2011 have increased 14.6 percent over the prior year, largely due to moderate wage growth, strong finance and insurance sector profits resulting in solid Wall Street bonuses, and moderately increased consumer spending. After controlling for the impact of policy changes, base tax revenue is expected to grow by another 6.1 percent in 2013.
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However, weak and unsettled economic conditions around the world, together with a push for broader regulation of the financial environment, have the potential to negatively affect the profitability of New York’s financial services industry, which is a major source of New York tax revenue. In particular, market volatility and increased regulation may result in lower bonuses on Wall Street in the future, which in turn may reduce a major segment of income subject to taxation and depress the level of economic activity generated by the spending of those earnings. Similarly, both financial sector income and taxable capital gains realization may be negatively affected if equity markets fail to grow as anticipated.
Population and Employment. New York ranks third among the 50 states in terms of population. According to the 2010 U.S. Census, New York’s 2010 population was 19.4 million, an increase from 19 million in 2000.
As of December 2011, New York’s unemployment rate was 8.0 percent, compared with a national unemployment rate of 8.3 percent. Total state employment is projected to grow by 0.8 percent for 2012. Private sector employment is projected to grow 1.1 percent in 2012.
State Budget.
New York’s budget process is governed by the New York constitution, with additional details and actions prescribed by New York law and practices established over time. The New York constitution requires the Governor to submit a budget that is balanced on a cash basis in the General Fund, which receives the majority of New York taxes and all income not earmarked for a particular program or activity.
New York receives revenues from taxes, fees, charges for state-provided services, Federal grants, and other miscellaneous sources. General Fund receipts, including transfers from other funds, are estimated to total $56.87 billion in 2012. Tax receipts are expected to grow at an average annual rate of approximately 4.2 percent for fiscal years 2012 through 2015.
New York expends money on a variety of programs and services. Major categories of operating disbursements include healthcare and Medicaid, higher education (including subsidization of the State University of New York and City University of New York systems), criminal justice and public safety, school aid, transportation, and mental hygiene programs. General Fund spending is expected to total $56.86 billion in 2012. State spending is projected to grow at an average annual rate of 4.3 percent for fiscal years 2012 through 2015, driven by target growth rates for Medicaid and education spending, and including preliminary estimates of the effect of national health care reform on New York health care costs.
New York is also responsible for the payment of pension benefits for public employees. Recent market volatility and declines in the market value of many equity investments have negatively affected the assets held by New York’s retirement systems. As a result, contribution rate increases are expected for fiscal years 2012 through 2015.
Based on the adverse economic factors described above, as well as actual operating results through the first half of 2011, New York’s Division of the Budget projects a budget shortfall of $350 million in the current fiscal year. The same economic factors have also resulted in a projected budget gap for 2013 of between $3.0 billion and $3.5 billion.
Implementation of New York’s current financial plan is dependent on the state’s ability to market its bonds successfully. New York finances much of its capital spending from the General Fund, which it reimburses with proceeds from the sale of general obligation or other state-supported bonds. New York’s inability to sell bonds at the levels or on the timetable expected may adversely affect the state’s overall cash position and capital funding plan. The success of projected public sales will be dependent on prevailing market conditions.
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Local Considerations.
New York’s fiscal demands may be affected by the fiscal condition of New York City, which relies in part on state aid to balance its budget and meet its cash requirements. In addition, certain localities outside New York City have experienced financial problems and have received state assistance during the last several state fiscal years. Deficit financing has become more common in recent years.
Grants to local governments include payments to school districts, health care providers, and other local entities, as well as certain financial assistance to, or on behalf of, individuals, families, and nonprofit organizations. Expenditures in the form of aid to local governments for their general purposes (and to school districts and municipalities for specific purposes such as education and social services) are made from New York’s General Fund. These payments are limited under the New York constitution to appropriations in force. Local aid expenditures normally comprise approximately 60 percent of General Fund disbursements.
Debt Service.
New York pays debt service on all outstanding state-supported bonds. These include general obligation bonds, for which New York is constitutionally obligated to pay debt service, as well as bonds issued by New York public authorities. Public authorities refer to certain of New York’s public benefit corporations — such as the Empire State Development Corporation and the New York State Thruway Authority — which are not subject to the constitutional restrictions on the incurrence of debt that apply to New York itself and may issue bonds and notes within the amounts and restrictions set forth in legislative authorization. New York’s access to the public credit markets could be impaired and the market price of its outstanding debt may be materially and adversely affected if its public authorities were to default on their respective obligations.
Total debt service is projected to be $5.8 billion for 2012, of which $1.4 billion is expected to be paid from the General Fund for general obligations and service contract bonds, and $4.4 billion of which is expected to service other state-supported bonds.
Bond Ratings.
As of December 2011, the New York’s general obligation bonds were rated “Aa2” by Moody’s Investors Service, Inc. (“Moody’s”), “AA” by Standard & Poor’s Ratings Services (“S&P”), and “AA” by Fitch Ratings (“Fitch”). It is not possible to determine whether, or the extent to which, Moody’s, S&P or Fitch will change such ratings in the future. Ratings assigned to individual Municipal Obligations may vary.
The Debt Reform Act of 2000 restricts the issuance of state-supported debt to capital purposes only and limits such debt to a maximum term of 30 years. Under the Debt Reform Act, new state-supported debt issued since April 1, 2000 is limited to 4% of state personal income, while new debt service costs are limited to 5% of all Funds receipts.
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APPENDIX E — LEGACY COLUMBIA FUNDS
Legacy Columbia funds are funds that were branded Columbia or Columbia Acorn prior to Sept. 27, 2010.
Columbia Acorn® Fund Columbia Acorn International® Columbia Acorn International SelectSM Columbia Acorn SelectSM Columbia Acorn USA® Columbia Balanced Fund Columbia Bond Fund Columbia California Intermediate Municipal Bond Fund Columbia California Tax-Exempt Fund Columbia Connecticut Intermediate Municipal Bond Fund Columbia Connecticut Tax-Exempt Fund Columbia Contrarian Core Fund Columbia Convertible Securities Fund Columbia Corporate Income Fund (formerly known as Columbia Income Fund) Columbia Dividend Income Fund Columbia Emerging Markets Fund Columbia Energy and Natural Resources Fund Columbia Georgia Intermediate Municipal Bond Fund Columbia Global Dividend Opportunity Fund (formerly known as Columbia Strategic Investor Fund) Columbia Greater China Fund Columbia High Yield Municipal Fund Columbia High Yield Opportunity Fund Columbia Intermediate Bond Fund Columbia Intermediate Municipal Bond Fund Columbia International Bond Fund Columbia International Value Fund Columbia Large Cap Core Fund Columbia Large Cap Enhanced Core Fund Columbia Large Cap Growth Fund Columbia Large Cap Index Fund Columbia Large Cap Value Fund Columbia LifeGoal® Balanced Growth Portfolio Columbia LifeGoal® Growth Portfolio Columbia LifeGoal® Income and Growth Portfolio Columbia LifeGoal® Income Portfolio Columbia Marsico 21st Century Fund Columbia Marsico Focused Equities Fund | Columbia Marsico Global Fund Columbia Marsico Growth Fund Columbia Marsico International Opportunities Fund Columbia Maryland Intermediate Municipal Bond Fund Columbia Massachusetts Intermediate Municipal Bond Fund Columbia Massachusetts Tax-Exempt Fund Columbia Masters International Equity Portfolio Columbia Mid Cap Growth Fund Columbia Mid Cap Index Fund Columbia Mid Cap Value Fund Columbia Multi-Advisor International Equity Fund Columbia New York Intermediate Municipal Bond Fund Columbia New York Tax-Exempt Fund Columbia North Carolina Intermediate Municipal Bond Fund Columbia Oregon Intermediate Municipal Bond Fund Columbia Overseas Value Fund Columbia Pacific/Asia Fund Columbia Real Estate Equity Fund Columbia Select Large Cap Growth Fund Columbia Select Small Cap Fund Columbia Short Term Bond Fund Columbia Short Term Municipal Bond Fund Columbia Small Cap Core Fund Columbia Small Cap Growth Fund I Columbia Small Cap Growth Fund II Columbia Small Cap Index Fund Columbia Small Cap Value Fund I Columbia Small Cap Value Fund II Columbia South Carolina Intermediate Municipal Bond Fund Columbia Strategic Income Fund Columbia Tax-Exempt Fund Columbia Technology Fund Columbia Thermostat FundSM Columbia U.S. Treasury Index Fund Columbia Value and Restructuring Fund Columbia Virginia Intermediate Municipal |
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APPENDIX F — LEGACY RIVERSOURCE FUNDS
Legacy RiverSource funds include RiverSource, Seligman and Threadneedle funds, funds renamed effective Sept. 27, 2010 to bear the Columbia brand, and certain other funds. Prior fund names are noted in parenthesis.
Columbia 120/20 Contrarian Equity Fund (formerly known as RiverSource 120/20 Contrarian Equity Fund)
Columbia Absolute Return Currency and Income Fund (formerly known as RiverSource Absolute Return Currency and Income Fund)
Columbia AMT-Free Tax-Exempt Bond Fund (formerly known as RiverSource Tax-Exempt Bond Fund)
Columbia Asia Pacific ex-Japan Fund (formerly known as Threadneedle Asia Pacific Fund)
Columbia Diversified Bond Fund (formerly known as RiverSource Diversified Bond Fund)
Columbia Diversified Equity Income Fund (formerly known as RiverSource Diversified Equity Income Fund)
Columbia Dividend Opportunity Fund (formerly known as RiverSource Dividend Opportunity Fund)
Columbia Emerging Markets Bond Fund (formerly known as RiverSource Emerging Markets Bond Fund)
Columbia Emerging Markets Opportunity Fund (formerly known as Threadneedle Emerging Markets Fund)
Columbia Equity Value Fund (formerly known as RiverSource Equity Value Fund)
Columbia European Equity Fund (formerly known as Threadneedle European Equity Fund)
Columbia Floating Rate Fund (formerly known as RiverSource Floating Rate Fund)
Columbia Frontier Fund, Inc. (formerly known as Seligman Frontier Fund, Inc.)
Columbia Global Bond Fund (formerly known as RiverSource Global Bond Fund)
Columbia Global Equity Fund (formerly known as Threadneedle Global Equity Fund)
Columbia Global Extended Alpha Fund (RiverSource Global Extended Alpha Fund)
Columbia Government Money Market Fund, Inc. (formerly known as RiverSource Government Money Market Fund, Inc.)
Columbia High Yield Bond Fund (formerly known as RiverSource High Yield Bond Fund)
Columbia Income Builder Fund (formerly known as RiverSource Income Builder Basic Income Fund)
Columbia Income Opportunities Fund (formerly known as RiverSource Income Opportunities Fund)
Columbia Inflation Protected Securities Fund (formerly known as RiverSource Inflation Protected Securities Fund)
Columbia Large Core Quantitative Fund (formerly known as RiverSource Disciplined Equity Fund)
Columbia Large Growth Quantitative Fund (formerly known as RiverSource Disciplined Large Cap Growth Fund)
Columbia Large Value Quantitative Fund (formerly known as RiverSource Disciplined Large Cap Value Fund)
Columbia Limited Duration Credit Fund (formerly known as RiverSource Limited Duration Bond Fund)
Columbia Marsico Flexible Capital Fund
Columbia Mid Cap Growth Opportunity Fund (formerly known as RiverSource Mid Cap Growth Fund)
Columbia Mid Cap Value Opportunity Fund (formerly known as RiverSource Mid Cap Value Fund)
Columbia Minnesota Tax-Exempt Fund (formerly known as RiverSource Minnesota Tax-Exempt Fund)
Columbia Money Market Fund (formerly known as RiverSource Cash Management Fund)
Columbia Multi-Advisor International Value Fund (formerly known as RiverSource Partners International Select Value Fund)
Columbia Multi-Advisor Small Cap Value Fund (formerly known as RiverSource Partners Small Cap Value Fund)
Columbia Portfolio Builder Aggressive Fund (formerly known as RiverSource Portfolio Builder Aggressive Fund)
Columbia Portfolio Builder Conservative Fund (formerly known as RiverSource Portfolio Builder Conservative Fund)
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Columbia Portfolio Builder Moderate Aggressive Fund (formerly known as RiverSource Portfolio Builder Moderate Aggressive Fund)
Columbia Portfolio Builder Moderate Conservative Fund (formerly known as RiverSource Portfolio Builder Moderate Conservative Fund)
Columbia Portfolio Builder Moderate Fund (formerly known as RiverSource Portfolio Builder Moderate Fund)
Columbia Recovery and Infrastructure Fund (formerly known as RiverSource Recovery and Infrastructure Fund)
Columbia Retirement Plus 2010 Fund (formerly known as RiverSource Retirement Plus 2010 Fund)
Columbia Retirement Plus 2015 Fund (formerly known as RiverSource Retirement Plus 2015 Fund)
Columbia Retirement Plus 2020 Fund (formerly known as RiverSource Retirement Plus 2020 Fund)
Columbia Retirement Plus 2025 Fund (formerly known as RiverSource Retirement Plus 2025 Fund)
Columbia Retirement Plus 2030 Fund (formerly known as RiverSource Retirement Plus 2030 Fund)
Columbia Retirement Plus 2035 Fund (formerly known as RiverSource Retirement Plus 2035 Fund)
Columbia Retirement Plus 2040 Fund (formerly known as RiverSource Retirement Plus 2040 Fund)
Columbia Retirement Plus 2045 Fund (formerly known as RiverSource Retirement Plus 2045 Fund)
Columbia Select Large-Cap Value Fund (formerly known as Seligman Large-Cap Value Fund)
Columbia Select Smaller-Cap Value Fund (formerly known as Seligman Smaller-Cap Value Fund)
Columbia Seligman Communications and Information Fund, Inc. (formerly known as Seligman Communications and Information Fund, Inc.)
Columbia Seligman Global Technology Fund (formerly known as Seligman Global Technology Fund)
Columbia Short-Term Cash Fund (formerly known as RiverSource Short-Term Cash Fund)
Columbia Strategic Allocation Fund (formerly known as RiverSource Strategic Allocation Fund)
Columbia U.S. Government Mortgage Fund (formerly known as RiverSource U.S. Government Mortgage Fund)
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Appendix B – Pro forma financial statements of Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund I, Columbia Emerging Markets Fund, Columbia Intermediate Bond Fund and Columbia Tax-Exempt Fund
NARRATIVE DESCRIPTION OF THE PRO FORMA EFFECTS OF THE REORGANIZATIONS
The unaudited pro forma information set forth below for the twelve month periods ended on the dates indicated is intended to present supplemental data as if the reorganizations of one or more funds (each a “Selling Fund” and together, the “Selling Funds”) into other corresponding funds (each a “Buying Fund” and together, the “Buying Funds”), as noted in Table 1 below (the “Reorganizations”), had occurred as of the beginning of the period (unless otherwise noted). No Reorganization is contingent upon any other Reorganization. Information has not been presented for any Reorganizations involving a Selling Fund the net assets of which were less than 10% of the net assets of the corresponding Buying Fund as of September 30, 2012.
Table 1 – Reorganizations
Selling Fund | Buying Fund | Period Ended | ||
Columbia Mid Cap Growth Opportunity Fund | Columbia Mid Cap Growth Fund | August 31, 2012 | ||
Columbia Select Small Cap Fund | Columbia Small Cap Growth Fund I | August 31, 2012 | ||
Columbia Small Cap Growth Fund II | Columbia Small Cap Growth Fund I | August 31, 2012 | ||
Columbia Emerging Markets Opportunity Fund | Columbia Emerging Markets Fund | August 31, 2012 | ||
Columbia Diversified Bond Fund | Columbia Intermediate Bond Fund | April 30, 2012 |
Basis of Combination
In August 2012 and September 2012, the Boards of Trustees of the Selling Funds approved an Agreement and Plan of Reorganization (the “Plan of Reorganization”) pursuant to which, subject to shareholder approval, each Selling Fund will transfer all of its assets to the corresponding Buying Fund in exchange for shares of the corresponding Buying Fund (“Reorganization Shares”) and each Buying Fund will assume all of the liabilities of the corresponding Selling Fund. Selling Fund shareholders will receive the class of Reorganization Shares indicated in Table 2 below. Each Buying Fund will issue Reorganization Shares with an aggregate net asset value equal to the aggregate value of the assets that it receives from the corresponding Selling Fund, less the liabilities it assumes from the corresponding Selling Fund. All Reorganization Shares delivered to the Selling Funds will be delivered at net asset value without a sales load, commission or other similar fee being imposed. Immediately following the transfer, the Reorganization Shares received by each Selling Fund attributable to each class thereof will be distributed pro rata, on what is expected to be a tax-free basis for U.S. federal income tax purposes, to the shareholders of such class of the Selling Fund in proportion to their holdings of shares of the Selling Fund.
Table 2 – Reorganization Shares
Selling Fund Share Class | Reorganization Share Class | |||
Class A | g | Class A | ||
Class B | g | Class B | ||
Class C | g | Class C | ||
Class I | g | Class I | ||
Class K* | g | Class K* | ||
Class R | g | Class R | ||
Class R4** | g | Class R4** | ||
Class R5 | g | Class R5 | ||
Class W | g | Class W | ||
Class Z | g | Class Z |
* | Note that Class R4 of certain Selling Funds was redesignated as Class K, effective October 25, 2012. Class K of such Selling Funds will reorganize into Class K of the corresponding Buying Fund, as applicable. |
** | Note that Class R3 of certain Selling Funds was redesignated as Class R4, effective October 31, 2012. Class R4 of such Selling Funds will reorganize into Class R4 of the corresponding Buying Fund, as applicable. |
Under the terms of the Plan of Reorganization, each Reorganization will be accounted for by the method of accounting for tax-free mergers of investment companies. Following the Reorganizations, the Buying Funds will be the accounting survivors. In accordance
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with accounting principles generally accepted in the United States, the historical cost of investment securities will be carried forward to the surviving funds and the results of operations for pre-Reorganization periods will not be restated. The costs of the Reorganizations, current estimates of which are set forth in Table 5 below, will be borne by the Selling Funds and the Buying Funds (each a “Fund” and collectively, the “Funds”) up to the amount of the anticipated reduction in expenses borne by that Fund over the first year following the Reorganization. Any Reorganization expenses otherwise allocable to a Fund that are in excess of that limitation will be borne by Columbia Management Investment Advisers, LLC (“Columbia Management”) or its affiliates and not by any other Fund. If a Reorganization is not consummated, Columbia Management or its affiliates will bear the costs associated with that Reorganization. The pro forma information provided herein should be read in conjunction with the audited financial statements of the Funds included in their most recent annual reports and, as applicable, the unaudited financial statements of the Funds included in their most recent semi-annual reports, in each case dated as indicated in Table 3 below.
Table 3 – Shareholder Report Dates
Fund | Annual Report | Semi-Annual Report | ||
Columbia Mid Cap Growth Fund (Buying Fund) | 8/31/2012 | N/A | ||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | 11/30/2011 | 5/31/2012 | ||
Columbia Small Cap Growth Fund I (Buying Fund) | 8/31/2012 | N/A | ||
Columbia Select Small Cap Fund (Selling Fund) | 8/31/2012 | N/A | ||
Columbia Small Cap Growth Fund II (Selling Fund) | 2/29/2012 | 8/31/2012 | ||
Columbia Emerging Markets Fund (Buying Fund) | 8/31/2012 | N/A | ||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | 10/31/2011 | 4/30/2012 | ||
Columbia Intermediate Bond Fund (Buying Fund) | 4/30/2012 | N/A | ||
Columbia Diversified Bond Fund (Selling Fund) | 8/31/2012 | N/A |
Table 4 below presents, as of the date indicated, the net assets of each Fund.
Table 4 – Selling Funds and Buying Funds Net Assets
Fund | Net Assets | As-Of Date | ||||
Columbia Mid Cap Growth Fund (Buying Fund) | $ | 2,040,412,408 | August 31, 2012 | |||
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | $ | 686,611,843 | August 31, 2012 | |||
Columbia Small Cap Growth Fund I (Buying Fund) | $ | 1,020,426,766 | August 31, 2012 | |||
Columbia Select Small Cap Fund (Selling Fund) | $ | 188,245,595 | August 31, 2012 | |||
Columbia Small Cap Growth Fund II (Selling Fund) | $ | 261,419,441 | August 31, 2012 | |||
Columbia Emerging Markets Fund (Buying Fund) | $ | 460,118,085 | August 31, 2012 | |||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | $ | 385,252,037 | August 31, 2012 | |||
Columbia Intermediate Bond Fund (Buying Fund) | $ | 3,368,779,530 | April 30, 2012 | |||
Columbia Diversified Bond Fund (Selling Fund) | $ | 3,210,486,133 | April 30, 2012 |
The number of Reorganizations into each Buying Fund that occur will affect the net assets and total annual operating expenses of the Buying Fund and the costs of each Reorganization. Table 5 presents the estimated Reorganization costs (exclusive of any transaction costs associated with any portfolio realignment); the net assets as of the date indicated in Table 4 above of each Buying Fund assuming the indicated Reorganizations occurred on that date, after accounting for the estimated Reorganization costs to be borne by the Buying Fund and the corresponding Selling Fund; and, on a pro forma basis, the estimated relative increases or decreases in combined operating expenses that would have been incurred during the one-year period ended on the date indicated in Table 4 above, assuming in each case that (1) certain, but not all, of the Reorganizations into each Buying Fund are consummated or (2) that all of the
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Reorganizations into each Buying Fund are consummated. Specifically, the table presents information assuming (a) the combination of Reorganizations into each Buying Fund that results in the highest possible total annual operating expense ratio are consummated, and (b) all of the Reorganizations into each Buying Fund, which results in the lowest possible total annual operating expense ratio. The pro forma increases and decreases represent the differences between (i) the combined expenses actually charged to the Buying Fund and the Selling Fund during the period and (ii) the expenses that would have been charged to the combined assets of the Buying and Selling Funds if the Reorganizations and other contractual changes had occurred at the beginning of the year.
The unaudited pro forma information set forth in Table 5 below reflects adjustments made to expenses for differences in contractual rates, duplicate services and other services that would not have occurred if the Reorganizations had taken place on the first day of the period described in Table 1 above. The pro forma information has been derived from the books and records of the Funds utilized in calculating daily net asset value for the Funds and has been prepared in accordance with accounting principles generally accepted in the United States, which require the use of management estimates. Actual results could differ from those estimates.
Table 5 – Estimated Reorganization Costs, Combined Fund Net Assets and Pro Forma Increases or Decreases in Expenses (1)
Proposal 1 - Columbia Mid Cap Growth Opportunity Fund into Columbia Mid Cap | ||
Estimated Reorganization Costs | $337,662 | |
Combined Fund Net Assets as of the Date Indicated in Table 4 | $2,726,686,589 | |
Increase (Decrease) | ||
Management fees (2) | ($1,000,000) | |
Custodian fees (3) | ($22,812) | |
Professional fees (3) | ($40,319) | |
Registration fees (3) | ($87,195) | |
Reports to shareholders (3) | ($77,564) | |
Transfer agency fees (4) | $642,357 | |
Other (3) | ($13,498) | |
(Increase) Decrease | ||
Waiver and/or reimbursement of fund expenses (5) | $593,084 |
Proposal 2 - Columbia Select Small Cap Fund and Columbia Small | Highest Annual Operating (the Reorganization of only | Lowest Annual Operating (the Reorganization of all of | ||
Estimated Reorganization Costs | $0 | $117,137 | ||
Combined Fund Net Assets as of the Date Indicated in Table 4 | $1,281,846,207 | $1,469,974,665 | ||
Increase (Decrease) | Increase (Decrease) | |||
Management fees (2) | ($145,629) | ($419,747) | ||
Custodian fees (3) | ($16,262) | ($13,909) | ||
Professional fees (3) | ($42,866) | ($84,131) | ||
Registration fees (3) | ($42,323) | ($122,529) | ||
Reports to shareholders (3) | ($81,885) | ($158,737) | ||
Transfer agency fees (4) | $225,403 | $242,478 | ||
Other (3) | ($23,103) | ($79,905) | ||
(Increase) Decrease | (Increase) Decrease | |||
Waiver and/or reimbursement of fund expenses (5) | $80,674 | $430,637 |
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Proposal 3 - Columbia Emerging Markets Opportunity Fund into Columbia | ||
Estimated Reorganization Costs | $2,500 | |
Combined Fund Net Assets as of the Date Indicated in Table 4 | $845,367,622 | |
Increase (Decrease) | ||
Management fees (2) | ($910,316) | |
Custodian fees (3) | ($189,584) | |
Professional fees (3) | ($31,258) | |
Registration fees (3) | ($78,180) | |
Reports to shareholders (3) | ($75,774) | |
Transfer agency fees (4) | $269,695 | |
Other (3) | ($2,866) | |
(Increase) Decrease | ||
Waiver and/or reimbursement of fund expenses (5) | ($132,663) |
Proposal 4 - Columbia Diversified Bond Fund into Columbia Intermediate Bond | ||
Estimated Reorganization Costs | $2,500 | |
Combined Fund Net Assets as of the Date Indicated in Table 4 | $6,579,263,163 | |
Increase (Decrease) | ||
Management fees (2) | ($1,679,567) | |
Custodian fees (3) | ($35,992) | |
Professional fees (3) | ($64,993) | |
Registration fees (3) | ($196,634) | |
Reports to shareholders (3) | ($159,807) | |
Transfer agency fees (4) | $201,590 | |
Other (3) | ($49,030) | |
(Increase) Decrease | ||
Waiver and/or reimbursement of fund expenses (5) | $2,271,839 |
(1) | See “Fees and Expenses” in the Proxy Statement/Prospectus for more information. |
(2) | Management fees are composed of an investment management fee and an administration fee and have been adjusted to reflect the contractual rates charged to the buying fund. |
(3) | Adjustment reflects the elimination of duplicative services. |
(4) | Adjustment reflects changes in contractual rates. |
(5) | Adjustment reflects the aggregate (increase) decrease in expense reimbursements and/or waivers by Columbia Management and its affiliates. |
Pursuant to an Investment Management Services Agreement with Columbia Management, each Fund pays a monthly management fee to Columbia Management based on the average daily net assets of the Fund, at the annual rates shown in Table 6 below.
The Board of Trustees of Columbia Emerging Markets Fund has approved a new Investment Management Services Agreement (the “New Agreement”), pending shareholder approval of the Reorganization of Columbia Emerging Markets Opportunity Fund into Columbia Emerging Markets Fund. Under the New Agreement, management fees would be paid to Columbia Management based on the average daily net assets of Columbia Emerging Markets Fund, at the annual rates shown in Table 6 below.
The New Agreement, which is expected to become effective at approximately the same time the proposed Reorganization of Columbia Emerging Markets Opportunity Fund into Columbia Emerging Markets Fund takes place, is not subject to approval by shareholders of Columbia Emerging Markets Opportunity Fund or Columbia Emerging Markets Fund.
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Table 6 – Investment Management Fees
Fund | Assets (billions) | Annual Rate at | Annual Rate at | |||
Columbia Mid Cap Growth Fund (Buying Fund)
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | First $0.5 Next $0.5 Next $0.5 Over $1.5 | 0.760% 0.715% 0.670% 0.620% | Same as Current | |||
Columbia Small Cap Growth Fund I (Buying Fund)
Columbia Select Small Cap Fund (Selling Fund) | First $0.5 Next $0.5 Over $1.0 | 0.790% 0.745% 0.700% | Same as Current | |||
Columbia Small Cap Growth Fund II (Selling Fund) | First $0.5 Next $0.5 Over $1.0 | 0.700% 0.650% 0.600% | N/A | |||
Columbia Emerging Markets Fund (Buying Fund) | First $0.25 Next $0.25 Next $0.25 Next $0.25 Next $0.5 Next $1.5 Next $3.0 Over $6.0 | 1.270% 1.270% 1.270% 1.125% 0.800% 0.750% 0.710% 0.660% | 1.100% 1.080% 1.060% 1.040% 0.800% 0.750% 0.710% 0.660% | |||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | First $0.25 Next $0.25 Next $0.25 Next $0.25 Next $1.0 Next $5.5 Next $2.5 Next $5.0 Next $5.0 Next $4.0 Next $26.0 Over $50.0 | 1.100% 1.080% 1.060% 1.040% 1.020% 1.000% 0.985% 0.970% 0.960% 0.935% 0.920% 0.900% | N/A | |||
Columbia Intermediate Bond Fund (Buying Fund)
Columbia Diversified Bond Fund (Selling Fund) | First $1.0 Next $1.0 Next $4.0 Next $1.5 Next $1.5 Next $3.0 Next $8.0 Next $4.0 Next $26.0 Over $50.0 | 0.430% 0.420% 0.400% 0.380% 0.365% 0.360% 0.350% 0.340% 0.320% 0.300% | Same as Current |
Pursuant to an Administrative Services Agreement, Columbia Management provides administrative services to each Fund. For all services provided under the Administrative Services Agreement, each Fund pays Columbia Management a monthly administration fee as a percentage of the Fund’s average daily net assets, at the annual rates shown in Table 7 below.
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Table 7 – Administration Fees
Fund | Assets (billions) | Annual Rate at Level (Current) | Annual Rate at Level (Buying Fund – Post- | |||
Columbia Mid Cap Growth Fund (Buying Fund)
Columbia Mid Cap Growth Opportunity Fund (Selling Fund) | First $0.5 Next $0.5 Next $2.0 Next $9.0 Over $12.0 | 0.060% 0.055% 0.050% 0.040% 0.030% | Same as Current | |||
Columbia Small Cap Growth Fund I (Buying Fund)
Columbia Select Small Cap Fund (Selling Fund) | First $0.5 Next $0.5 Next $2.0 Next $9.0 Over $12.0 | 0.080% 0.075% 0.070% 0.060% 0.050% | Same as Current | |||
Columbia Small Cap Growth Fund II (Selling Fund) | All | 0.117% | N/A | |||
Columbia Emerging Markets Fund (Buying Fund) | First $0.75 Next $0.25 Next $2.0 Over $3.0 | 0.080% 0.075% 0.070% 0.060% | Same as Current | |||
Columbia Emerging Markets Opportunity Fund (Selling Fund) | First $0.5 Next $0.5 Next $2.0 Next $9.0 Over $12.0 | 0.080% 0.075% 0.070% 0.060% 0.050% | N/A | |||
Columbia Intermediate Bond Fund (Buying Fund)
Columbia Diversified Bond Fund (Selling Fund) | First $0.5 Next $0.5 Next $2.0 Next $9.0 Over $12.0 | 0.070% 0.065% 0.060% 0.050% 0.040% | Same as Current |
Columbia Management Investment Services Corp., an affiliate of Columbia Management, is the transfer agent for each Fund. Columbia Management Investment Distributors, Inc., an affiliate of Columbia Management, is the distributor for each Fund.
No significant accounting policies will change as the result of the proposed Reorganizations.
The estimated costs of the Reorganizations shown in Table 5 above do not reflect any brokerage commissions incurred by a Fund in connection with any portfolio realignment. Columbia Management expects that, subsequent to the Reorganizations, there may be some portfolio realignment of the Buying Funds (of securities acquired from the Selling Funds). However, Columbia Management expects that any such portfolio realignment will not result in any significant increase in a Buying Fund’s portfolio turnover rate, relative to its historical portfolio turnover rates. Columbia Management also does not expect any incremental trading costs to be significant.
Federal Income Taxes
Please see “Tax Status of the Reorganizations” in the Prospectus/Proxy Statement for a discussion of the tax effects of each Reorganization.
It is each Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute all of its investment company taxable income to shareholders. After the Reorganizations, the Buying Funds intend to continue to qualify as regulated investment companies.
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COLUMBIA FUNDS SERIES TRUST I
PART C
OTHER INFORMATION
PART C. OTHER INFORMATION
Item 15. | Indemnification |
Article Five of the Bylaws of Registrant (“Article Five”) provides that Registrant shall indemnify each of its trustees and officers (including persons who serve at Registrant’s request as directors, officers or trustees of another organization in which Registrant has any interest as a shareholder, creditor or otherwise) who are not employees or officers of any investment adviser to Registrant or any affiliated person thereof, and its chief compliance officer, regardless of whether such person is an employee or officer of any investment adviser to Registrant or any affiliated person thereof, and may indemnify each of its trustees and officers (including persons who serve at Registrant’s request as directors, officers or trustees of another organization in which Registrant has any interest as a shareholder, creditor or otherwise) who are employees or officers of any investment adviser to Registrant or any affiliated person thereof (“Covered Persons”) under specified circumstances.
Section 17(h) of the Investment Company Act of 1940 (“1940 Act”) provides that neither the Agreement and Declaration of Trust nor the Bylaws of Registrant, nor any other instrument pursuant to which Registrant is organized or administered, shall contain any provision which protects or purports to protect any trustee or officer of Registrant against any liability to Registrant or its shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. In accordance with Section 17(h) of the 1940 Act, Article Five shall not protect any person against any liability to Registrant or its shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. To the extent required under the 1940 Act, (i) Article Five does not protect any person against any liability to Registrant or to its shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office; (ii) in the absence of a final decision on the merits by a court or other body before whom a proceeding was brought that a Covered Person was not liable by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office, no indemnification is permitted under Article Five unless a determination that such person was not so liable is made on behalf of Registrant by (a) the vote of a majority of the trustees who are neither “interested persons” of Registrant, as defined in Section 2(a)(19) of the 1940 Act, nor parties to the proceeding (“disinterested, non-party trustees”), or (b) an independent legal counsel as expressed in a written opinion; and (iii) Registrant will not advance attorneys’ fees or other expenses incurred by a Covered Person in connection with a civil or criminal action, suit or proceeding unless Registrant receives an undertaking by or on behalf of the Covered Person to repay the advance (unless it is ultimately determined that he is entitled to indemnification) and (a) the Covered Person provides security for his undertaking, or (b) Registrant is insured against losses arising by reason of any lawful advances, or (c) a majority of the disinterested, non-party trustees of Registrant or an independent legal counsel as expressed in a written opinion, determine, based on a review of readily-available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the Covered Person ultimately will be found entitled to indemnification.
Any approval of indemnification pursuant to Article Five does not prevent the recovery from any Covered Person of any amount paid to such Covered Person in accordance with Article Five as indemnification if such Covered Person is subsequently adjudicated by a court of competent jurisdiction not to have acted in good faith in the reasonable belief that such Covered Person’s action was in, or not opposed to, the best interests of Registrant or to have been liable to Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of such Covered Person’s office.
Article Five also provides that its indemnification provisions are not exclusive. Registrant has also entered into Indemnification Agreements with each of its trustees and its chief compliance officer, a copy of which has been filed as an exhibit to this registration statement, establishing certain procedures with respect to the indemnification described above.
Registrant’s investment adviser, Columbia Management Investment Advisers, LLC, maintains investment advisory professional liability insurance to insure it, for the benefit of Registrant and its non-interested trustees, against loss arising out of any effort, omission, or breach of any duty owed to Registrant or any series of Registrant by Columbia Management Investment Advisers, LLC.
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Item 16. | Exhibits |
(1) | (a) Second Amended and Restated Agreement and Declaration of Trust dated August 10, 2005. (1) | |
(1) | (b) Amendment No. 1 to Second Amended and Restated Agreement and Declaration of Trust dated August 10, 2005. (1) | |
(2) | Amended and Restated By-laws of Registrant. (2) | |
(3) | Not applicable. | |
(4) | Agreement and Plan of Reorganization is filed electronically herewith. | |
(5) | Not applicable. | |
(6) | (a) Investment Management Services Agreement by and between Columbia Management Investment Advisers, LLC and Registrant, dated as of May 1, 2010. (13) | |
(6) | (b) Investment Management Services Agreement by and between Columbia Management Investment Advisers, LLC and Registrant, dated as of May 1, 2010 (CMG Ultra Short-Term Bond Fund). (13) | |
(6) | (c) Amendment No. 1 to Investment Management Services Agreement by and between Columbia Management Investment Advisers, LLC and Registrant, dated as of February 28, 2011. (18) | |
(6) | (d) Amendment No. 2 to Investment Management Services Agreement by and between Columbia Management Investment Advisers, LLC and Registrant, dated as of March 14, 2012. (20) | |
(6) | (e) Amendment No. 3 to Investment Management Services Agreement by and between Columbia Management Investment Advisers, LLC and Registrant, dated as of June 18, 2012. (21) | |
(6) | (f) Restated Schedule A to Investment Management Services Agreement effective August 1, 2012. (23) | |
(6) | (g) Form of Subadvisory Agreement between Columbia Management Investment Advisers, LLC and subadvisers. (22) | |
(6) | (h) Form of Delegation Agreement. (22) | |
(6) | (i) Form of Investment Management Services Agreement between Columbia Management Investment Advisers, LLC and the subsidiaries of Active Portfolios Multi-Manager Alternative Strategies Fund. (20) | |
(7) | (a) Distribution Agreement by and between Registrant and Columbia Management Investment Distributors, Inc. dated as of September 7, 2010. (14) | |
(7) | (b) Restated Schedule I as of June 18, 2012, to Distribution Agreement by and between the Registrant and Columbia Management Investment Distributors, Inc. dated as of September 7, 2010. (21) | |
(8) | Not Applicable. | |
(9) | (a) Amended and Restated Master Custodian Agreement between Registrant and State Street Bank and Trust Company dated September 19, 2005. (3) | |
(9) | (b) Second Amended and Restated Master Global Custody Agreement between certain Funds and JP Morgan Chase Bank, N.A., dated March 7, 2011. (17) | |
(10) | (a) Amended and Restated Distribution Plan. (20) | |
(10) | (b) Amended and Restated Shareholder Servicing Plan for certain Fund share classes of the Registrant. (20) | |
(10) | (c) Amended and Restated Shareholder Services Plan for Registrant’s Class T shares. (16) | |
(10) | (d) Shareholder Servicing Plan Implementation Agreement for certain Fund share classes of the Registrant between the Registrant, Columbia Funds Series Trust, Columbia Funds Series Trust II and Columbia Management Investment Distributors, Inc. (16) | |
(10) | (e) Shareholder Servicing Plan Implementation Agreement for Registrant’s Class T shares between the Registrant and Columbia Management Investment Distributors, Inc. (16) | |
(10) | (f) Restated Schedule I to Shareholder Servicing Plan Implementation Agreement. (20) | |
(10) | (g) Amended and Restated Rule 18f-3 Multi-Class Plan. (20) | |
(11) | Opinion and consent of counsel as to the legality of the securities being registered is filed electronically herewith. |
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(12) | Opinion of Counsel – to be filed by amendment. | |
(13) | (a)(i) Administrative Services Agreement by and between Registrant, the other parties listed on Schedule A and Columbia Management Investment Advisers, LLC dated as of May 1, 2010 with Schedule A dated May 1, 2010. (13) | |
(13) | (a)(ii) Amendment No. 1 to Administrative Services Agreement by and among Registrant, the other parties listed on Schedule A thereto and Columbia Management Investment Advisers, LLC dated as of February 28, 2011. (19) | |
(13) | (a)(iii) Amendment No. 2 to Administrative Services Agreement by and among Registrant, the other parties listed on Schedule A thereto and Columbia Management Investment Advisers, LLC dated as of March 14, 2012. (20) | |
(13) | (a)(iv) Amendment No. 3 to Administrative Services Agreement by and among Registrant, the other parties listed on Schedule A thereto and Columbia Management Investment Advisers, LLC dated as of June 18, 2012. (21) | |
(13) | (a)(v) Restated Schedule B to Administrative Services Agreement effective August 1, 2012. (23) | |
(13) | (b)(i) Financial Reporting Services Agreement between Registrant, the other parties listed on Schedule A, Columbia Management Advisors, LLC and State Street Bank and Trust Company dated December 15, 2006 with Schedule A dated May 5, 2008. (6) | |
(13) | (b)(ii) Amendment to Financial Reporting Services Agreement between Registrant, the other parties listed on Schedule A, Columbia Management Advisors, LLC and State Street Bank and Trust Company dated as of June 29, 2007 with Schedule A dated as of June 29, 2007. (10) | |
(13) | (b)(iii) Amendment to Financial Reporting Services Agreement by and among Registrant, Columbia Management Advisors, LLC, State Street Bank and Trust Company, and Columbia Management Investment Advisers, LLC dated as of April 30, 2010, with Schedule A dated as of May 1, 2010. (13) | |
(13) | (c)(i) Accounting Services Agreement between Registrant, the other parties listed on Schedule A, Columbia Management Advisors, LLC and State Street Bank and Trust Company dated as of December 15, 2006 with Schedule A dated May 5, 2008. (6) | |
(13) | (c)(ii) Amendment to Accounting Services Agreement between Registrant, the other parties listed on Schedule A, Columbia Management Advisors, LLC and State Street Bank and Trust Company dated as of June 29, 2007 with Schedule A dated as of June 29, 2007. (10) | |
(13) | (c)(iii) Amendment to Accounting Services Agreement by and among Registrant, Columbia Management Advisors, LLC, State Street Bank and Trust Company, and Columbia Management Investment Advisers, LLC dated as of April 30, 2010, with Schedule A dated as of May 1, 2010. (13) | |
(13) | (d)(i) Transfer and Dividend Disbursing Agent Agreement by and between Registrant and Columbia Management Investment Services Corp. dated as of September 7, 2010 with Schedule A dated as of September 7, 2010. (14) | |
(13) | (d)(ii) Amended and Restated Transfer and Dividend Disbursing Agent Agreement by and between the Registrant and Columbia Management Investment Services Corp. dated as of May 24, 2011 with Schedule A dated as of May 24, 2011. (18) | |
(13) | (d)(iii) Restated Schedule A and Schedule B as of March 14, 2012 to Amended and Restated Transfer and Dividend Disbursing Agent Agreement by and between the Registrant and Columbia Management Investment Services Corp. dated as of May 24, 2011. (20) | |
(13) | (e) Amended and Restated Credit Agreement dated as of October 19, 2006 by and among Registrant and certain other trusts party thereto, on behalf of certain of their series listed on Schedule A thereto, Columbia Fund Series Trust, Columbia Funds Master Investment Trust, Columbia Funds Variable Insurance Trust I and Banc of America Funds Trust, on behalf of certain of their series listed on Schedule B thereto, Lloyds TSB Bank plc, Société Générale, New York Branch, Banco Bilbao Vizcaya Argentaria S.A., State Street Bank and Trust Company, individually, State Street Bank and Trust Company, as administrative agent for each of the banks party thereto, and State Street Bank and Trust Company, as operations agent for each of the banks party thereto. (4) |
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(13) | (f)(i) Amendment Agreement No. 1 and Instrument of Adherence dated as of October 18, 2007 by and among Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I, Banc of America Funds Trust, Excelsior Funds, Inc., Excelsior Funds Trust and Excelsior Tax-Exempt Funds, Inc., Registrant, Columbia Funds Institutional Trust and Columbia Funds Variable Insurance Trust, the banks party thereto, State Street Bank and Trust Company, as operations agent for itself and the banks party thereto, and State Street Bank and Trust Company, as administrative agent for itself and the banks party thereto. (4) | |
(13) | (f)(ii) Amendment Agreement No. 2 dated as of February 28, 2008 by and among the Registrant, Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I, Columbia Funds Institutional Trust, Columbia Funds Variable Insurance Trust, Banc of America Funds Trust, Excelsior Funds, Inc., Excelsior Funds Trust, and Excelsior Tax-Exempt Funds, Inc., the banks party thereto, and State Street Bank and Trust Company, as operations agent for itself and the banks party thereto, and State Street Bank and Trust Company, as administrative agent for itself and the banks party thereto. (5) | |
(13) | (g) Form of Indemnification Agreement. (2) | |
(13) | (h) Fee Waiver and Expense Reimbursement Agreement between Registrant and Columbia Management Advisors, LLC dated November 19, 2008 with Schedule A dated December 1, 2008. (9) | |
(13) | (i) Amendment Agreement No. 3, dated March 31, 2008, to the Limited Waiver and Limited Consent, by and among the Registrant, Columbia Funds Variable Insurance Trust, Columbia Funds Institutional Trust, Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I and Banc of America Funds Trust, on behalf of each of their respective series listed on Schedule 2 and State Street Bank and Trust Company, individually, as operations agent and as administrative agent. (9) | |
(13) | (j) Amendment Agreement No. 4, dated October 16, 2008, to the Limited Waiver and Limited Consent, by and among the Registrant, Columbia Funds Variable Insurance Trust, Columbia Funds Institutional Trust, Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I and Banc of America Funds Trust, on behalf of each of their respective series listed on Schedule 2 and State Street Bank and Trust Company, individually, as operations agent and as administrative agent. (8) | |
(13) | (k) Amendment Agreement No. 5 and Limited Consent, dated as of June 1, 2009, by and among the Registrant, Columbia Funds Variable Insurance Trust, Columbia Funds Institutional Trust, Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I, Banc of America Funds Trust, each on behalf of each of its respective series listed on Schedule 2 thereto and State Street Bank and Trust Company, individually, as operations agent and as administrative agent. (11) | |
(13) | (l) Amendment Agreement No. 6, dated as of October 15, 2009, by and among the Registrant, Columbia Funds Variable Insurance Trust, Columbia Funds Institutional Trust, Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I, Columbia Funds Series Trust II, each on behalf of each of its respective series listed on Schedule 2 thereto and State Street Bank and Trust Company, individually, as operations agent and as administrative agent. (12) | |
(13) | (m)(i) Plan Administration Services Agreement, dated as of September 7, 2010, by and among the Registrant, Columbia Funds Series Trust and Columbia Management Investment Services Corp. (14) | |
(13) | (m)(ii) Restated Schedule A as of June 18, 2012 to Plan Administration Services Agreement, dated as of September 7, 2010 , by and among the Registrant, Columbia Funds Series Trust and Columbia Management Investment Services Corp. (21) | |
(13) | (n) Amendment Agreement No. 7, dated as of October 14, 2010, by and among the Registrant, Columbia Funds Series Trust, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust, Columbia Funds Series Trust II, Columbia Funds Variable Insurance Trust I, each on behalf of its respective series listed on Schedule 2 attached thereto and State Street Bank and Trust Company, individually, as operations agent and as administrative agent. (15) | |
(13) | (o) Fee Waiver and Expense Cap Agreement between Registrant and Columbia Management Investment Advisers, LLC dated February 28, 2011. (18) | |
(13) | (p)(i) Amended and restated Fee Waiver and Expense Cap Agreement between Registrant and Columbia Management Investment Advisers, LLC dated June 1, 2011. (18) | |
(13) | (p)(ii) Restated Schedule A as of June 18, 2012 to Amended and Restated Fee Waiver and Expense Cap Agreement between Registrant and Columbia Management Investment Advisers, LLC dated June 1, 2011. (21) |
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(13) | (q) Form of Administrative Services Agreement between Columbia Management Investment Advisers, LLC and the subsidiaries of Active Portfolios Multi-Manager Alternative Strategies Fund. (20) | |
(13) | (r)(i) Columbia Funds Family Code of Ethics. (17) | |
(13) | (r)(ii) Code of Ethics of Columbia Management Investment Advisers, LLC and Columbia Management Investment Distributors, Inc. dated May 1, 2010. (17) | |
(13) | (r)(iii) Code of Ethics of AQR Capital Management, LLC (a subadviser of Active Portfolios Multi-Manager Alternative Strategies Fund). (20) | |
(13) | (r)(iv) Code of Ethics of Dalton, Greiner, Hartman, Maher & Co., LLC (a subadviser of Active Portfolios Multi-Manager Alternative Strategies Fund). (20) | |
(13) | (r)(v) Code of Ethics and Standards of Business Conduct of EAM Investors, LLC (a subadviser of Active Portfolios Multi-Manager Small Cap Equity Fund). (20) | |
(13) | (r)(vi) Code of Ethics of Eaton Vance Management (a subadviser of Active Portfolios Multi-Manager Alternative Strategies Fund) effective July 15, 2011. (20) | |
(13) | (r)(vii) Code of Ethics for Access Persons of Federated Investment Management Company (a subadviser of Active Portfolios Multi-Manager Core Plus Bond Fund) effective September 16, 2011. (20) | |
(13) | (r)(viii) Code of Ethics of RS Investment Management Co. LLC (a subadviser of Active Portfolios Multi-Manager Small Cap Equity Fund) effective May 13, 2009. (20) | |
(13) | (r)(ix) Code of Ethics of TCW Investment Management Company (a subadviser of Active Portfolios Multi-Manager Core Plus Bond Fund) dated April 11, 2011. (20) | |
(13) | (r)(x) Code of Ethics of Wasatch Advisors, Inc. (a subadviser of Active Portfolios Multi-Manager Alternative Strategies Fund) effective November 9, 2011. (20) | |
(13) | (r)(xi) Code of Ethics of Water Island Capital, LLC (a subadviser of Active Portfolios Multi-Manager Alternative Strategies Fund) effective February 1, 2012. (20) | |
(13) | (r)(xii) Code of Ethics of Real Estate Management Services Group, LLC. (20) | |
(13) | (r)(xiii) Code of Ethics of Conestoga Capital Advisors, LLC (a subadviser of Active Portfolios Multi-Manager Small Cap Equity Fund effective October 1, 2012). (24) | |
(14) | (a) Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP) is filed electronically herewith. | |
(14) | (b) Consent of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP) to be filed by amendment. | |
(15) | Not applicable. | |
(16) | Trustees Power of Attorney to sign Amendments to this Registration Statement is filed electronically herewith. | |
(17) | Not applicable. |
1. | Incorporated by reference to Post-Effective Amendment No. 40 to the Registration Statement of the Registrant on Form N-1A, filed on or about September 16, 2005. |
2. | Incorporated by reference to Post-Effective Amendment No. 46 to the Registration Statement of the Registrant on Form N-1A, filed on or about March 24, 2006. |
3. | Incorporated by reference to Post-Effective Amendment No. 55 to the Registration Statement of the Registrant on Form N-1A, filed on or about March 29, 2007. |
4. | Incorporated by reference to the Registration Statement of the Registrant on Form N-14 (File No. 333-148106), filed on or about December 17, 2007. |
5. | Incorporated by reference to Post-Effective Amendment No. 72 to the Registration Statement of the Registrant on Form N-1A, filed on or about March 28, 2008. |
6. | Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement of the Registrant on Form N-1A, filed on or about July 29, 2008. |
7. | Incorporated by reference to Post-Effective Amendment No. 79 to the Registration Statement of the Registrant on Form N-1A, filed on or about September 25, 2008. |
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8. | Incorporated by reference to Post-Effective Amendment No. 80 to the Registration Statement of the Registrant on Form N-1A, filed on or about October 27, 2008. |
9. | Incorporated by reference to Post-Effective Amendment No. 81 to the Registration Statement of the Registrant on Form N-1A, filed on or about November 25, 2008. |
10. | Incorporated by reference to Post-Effective Amendment No. 88 to the Registration Statement of the Registrant on Form N-1A, filed on or about July 29, 2009. |
11. | Incorporated by reference to Post-Effective Amendment No. 91 to the Registration Statement of the Registrant on Form N-1A, filed on or about August 28, 2009. |
12. | Incorporated by reference to Post-Effective Amendment No. 94 to the Registration Statement of the Registrant on Form N-1A, filed on or about October 28, 2009. |
13. | Incorporated by reference to Post-Effective Amendment No. 105 to the Registration Statement of the Registrant on Form N-1A, filed on or about May 28, 2010. |
14. | Incorporated by reference to Post-Effective Amendment No. 111 to the Registration Statement of the Registrant on Form N-1A, filed on or about September 27, 2010. |
15. | Incorporated by reference to Post-Effective Amendment No. 112 to the Registration Statement of the Registrant on Form N-1A, filed on or about October 28, 2010. |
16. | Incorporated by reference to Post-Effective Amendment No. 113 to the Registration Statement of the Registrant on Form N-1A, filed on or about November 24, 2010. |
17. | Incorporated by reference to Post-Effective Amendment No. 124 to the Registration Statement of the Registrant on Form N-1A, filed on or about April 29, 2011. |
18. | Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-14 (333-170367), filed on or about July 22, 2011. |
19. | Incorporated by reference to Post-Effective Amendment No. 139 to the Registration Statement of the Registrant on Form N-1A, filed on or about January 27, 2012. |
20. | Incorporated by reference to Post-Effective Amendment No. 143 to the Registration Statement of the Registrant on Form N-1A, filed on or about March 14, 2012. |
21. | Incorporated by reference to Post-Effective Amendment No. 153 to the Registration Statement of the Registrant on Form N-1A, filed on or about June 15, 2012. |
22. | Incorporated by reference to Post-Effective Amendment No. 149 to the Registration Statement of the Registrant on Form N-1A, filed on or about April 27, 2012. |
23. | Incorporated by reference to Post-Effective Amendment No. 158 to the Registration Statement of the Registrant on Form N-1A, filed on or about July 27, 2012. |
24. | Incorporated by reference to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A, filed on or about September 27, 2012. |
Item 17. | Undertakings |
(1) | The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(2) | The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. |
(3) | The Registrant undertakes to file the opinion of counsel supporting the tax consequences of the proposed reorganization required by Item 16(12) through an amendment to this Registration Statement no later than a reasonable time after the closing of the transaction. |
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SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been signed on behalf of the Registrant, Columbia Funds Series Trust I, by the undersigned, duly authorized, in the City of Boston, and The Commonwealth of Massachusetts on the 12th day of October, 2012.
COLUMBIA FUNDS SERIES TRUST I | ||
By: | /s/ J. KEVIN CONNAUGHTON | |
Name: | J. Kevin Connaughton | |
Title: | President |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated:
SIGNATURES | TITLE | DATE | ||
/S/ J. KEVIN CONNAUGHTON J. Kevin Connaughton | President (Principal Executive Officer) | October 12, 2012 | ||
/S/ MICHAEL G. CLARKE Michael G. Clarke | Chief Financial Officer (Principal Financial Officer) | October 12, 2012 | ||
/S/ JOSEPH F. DIMARIA Joseph F. DiMaria | Chief Accounting Officer (Principal Accounting Officer) | October 12, 2012 | ||
/s/ RODMAN L. DRAKE* Rodman L. Drake | Trustee | October 12, 2012 | ||
/s/ DOUGLAS A. HACKER* Douglas A. Hacker | Trustee | October 12, 2012 | ||
/s/ JANET LANGFORD KELLY* Janet Langford Kelly | Trustee | October 12, 2012 | ||
/s/ NANCY T. LUKITSH* Nancy T. Lukitsh | Trustee | October 12, 2012 | ||
/s/ WILLIAM E. MAYER* William E. Mayer | Trustee | October 12, 2012 | ||
/s/ DAVID M. MOFFETT* David M. Moffett | Trustee | October 12, 2012 | ||
/s/ CHARLES R. NELSON* Charles R. Nelson | Trustee | October 12, 2012 | ||
/s/ JOHN J. NEUHAUSER* John J. Neuhauser | Trustee | October 12, 2012 | ||
/s/ PATRICK J. SIMPSON* Patrick J. Simpson | Trustee | October 12, 2012 | ||
/s/ ANNE-LEE VERVILLE* Anne-Lee Verville | Trustee | October 12, 2012 |
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/s/ WILLIAM F. TRUSCOTT* William F. Truscott | Trustee | October 12, 2012 |
*By: | /S/ RYAN C. LARRENAGA | |
Ryan C. Larrenaga** Attorney-in-Fact October 12, 2012 |
** | Executed by Ryan C. Larrenaga on behalf of each of the Trustees pursuant to a Power of Attorney filed herewith. |
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Exhibit Index
Exhibit No. | Description | |
(4) | Agreement and Plan of Reorganization | |
(11) | Opinion and consent of counsel as to the legality of the securities being registered | |
(14)(a) | Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP) | |
(16) | Trustees Power of Attorney to sign Amendments to this Registration Statement |