UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04367
Columbia Funds Series Trust I
(Exact name of registrant as specified in charter)
225 Franklin Street
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip code)
Ryan Larrenaga
c/o Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800) 345-6611
Date of fiscal year end: July 31
Date of reporting period: July 31, 2017
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
| Item 1. | Reports to Stockholders. |
Annual Report
July 31, 2017
CMG Ultra Short Term Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
The current outlook for financial markets is clouded by two primary concerns: the high valuation of equities and the direction of interest rates. Following the U.S. presidential election, U.S. equities rallied based on the assumption that the new administration’s policies would stimulate growth quickly. Unfortunately it’s unclear whether those measures will get passed, much less passed quickly. In fixed income, uncertainty stems from the possibility that interest rates won’t rise as rapidly as expected if the administration’s proposed growth policies are not implemented.
Given this uncertainty, investors value a consistent approach more than ever. Investors want strong, repeatable risk-adjusted returns. Consistency — not surprises. As a leading global asset manager, we believe our consistent, collaborative investment approach enables us to deliver the dependable experience your portfolio demands. So, how do we strive to deliver a consistent investment experience?
Better insights
Your portfolio benefits from the investment insights uncovered by our talented investment teams around the world.
Better decisions
Our collaborative, interactive environment enables our investment teams to construct portfolios that take advantage of the best investment ideas.
Better outcomes
We aim to deliver a consistent experience, which means fewer surprises, dependable insights, and products designed to do the thing you want.
Whether you’re trying to save money to help your children go to college or for your own retirement, it’s the consistency of the return that is most essential. People who chase higher returns are usually also the first to sell when that investment goes through a bad patch. We try to combat this behavioral tendency by offering strategies that aim for a more consistent return. Our goal is for investors to panic less during periods of volatility, which can have a significant effect on their long-term results.
Nothing is more important to us than making sure those who have entrusted us to protect and grow their assets can do what matters most to them: build a nest egg, leave a legacy, and live confidently — now and throughout retirement. It’s why our talented professionals around the world work together to uncover uncommon opportunities and why our process encourages challenge and debate around our most compelling ideas to ensure better informed investment decisions, which hopefully lead to better outcomes for you.
Your success is our priority. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for consistent, sustainable outcomes, no matter the market conditions.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
CMG Ultra Short Term Bond Fund | Annual Report 2017
CMG Ultra Short Term Bond Fund | Annual Report 2017
Investment objective
CMG Ultra Short Term Bond Fund (the Fund) seeks a high level of current income consistent with the maintenance of liquidity and the preservation of capital.
Portfolio management
Leonard Aplet, CFA
Co-manager
Managed Fund since 2012
Gregory Liechty
Co-manager
Managed Fund since February 2016
Ronald Stahl, CFA
Co-manager
Managed Fund since 2015
| Average annual total returns (%) (for the period ended July 31, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| CMG Ultra Short Term Bond Fund | 03/08/04 | 1.19 | 0.68 | 1.14 |
| Bloomberg Barclays U.S. Short-Term Government/Corporate Index | | 0.80 | 0.44 | 1.09 |
The Fund commenced operations on November 23, 2009. The returns shown for periods prior to November 23, 2009 are the returns of CMG Ultra Short Term Bond Fund, the predecessor to the Fund and a portfolio of Columbia Funds Institutional Trust. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower. All results shown assume reinvestment of distributions. The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of shares.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting columbiathreadneedleus.com/institutional or calling 800.345.6611.
The Bloomberg Barclays U.S. Short-Term Government/Corporate Index tracks the performance of U.S. Government and corporate bonds rated investment grade or better, with maturities of less than one year.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
| 2 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Fund at a Glance (continued)
Performance of a hypothetical $3,000,000 investment (July 31, 2007 — July 31, 2017)
The chart above shows the change in value of a hypothetical $3,000,000 investment in CMG Ultra Short Term Bond Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at July 31, 2017) |
| Asset-Backed Securities - Non-Agency | 26.0 |
| Commercial Mortgage-Backed Securities - Non-Agency | 2.9 |
| Corporate Bonds & Notes | 52.2 |
| Foreign Government Obligations | 1.2 |
| Money Market Funds | 3.5 |
| Residential Mortgage-Backed Securities - Agency | 0.0 (a) |
| Residential Mortgage-Backed Securities - Non-Agency | 1.0 |
| Treasury Bills | 2.8 |
| U.S. Government & Agency Obligations | 7.1 |
| U.S. Treasury Obligations | 3.3 |
| Total | 100.0 |
Percentages indicated are based upon total investments. The Fund’s portfolio composition is subject to change.
| Quality breakdown (%) (at July 31, 2017) |
| AAA rating | 42.9 |
| AA rating | 10.7 |
| A rating | 27.3 |
| BBB rating | 19.1 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 3 |
Manager Discussion of Fund Performance
For the 12-month period that ended July 31, 2017, CMG Ultra Short Term Bond Fund returned 1.19%. The Fund outperformed its benchmark, the Bloomberg Barclays U.S. Short-Term Government/Corporate Index, which returned 0.80% for the same period. Overweight allocations in the corporate and securitized sectors, which outperformed similar-duration Treasuries, contributed to the Fund’s performance advantage as did floating rate positions, which benefited as the Federal Reserve (the Fed) raised its short term target rate three times during the period.
U.S. markets logged gains
Global events, political uncertainty and mixed economic data were enough to keep investors off balance early in the 12-month period, as financial markets moved sharply in reaction to each significant change on the world stage. However, the end of a contentious U.S. presidential contest in November 2016 eliminated a key element of uncertainty, and the U.S. financial markets moved higher through the end of the period. Positive economic data, steady job growth, rising corporate earnings and accelerated manufacturing activity further bolstered investor confidence and drove the yield curve higher.
In three rate cuts during the 12-month period, the Federal Reserve (the Fed) raised the target range of its benchmark short-term interest rate to between 1.00% and 1.25%. The Fed signaled that it was prepared to raise rates more aggressively on the heels of strong job gains and progress towards its 2.0% inflation target, creating expectations that the June rate hike may not be the last during the calendar year. Against this backdrop, the 12-month period saw almost all non-Treasury sectors produce positive results as spreads tightened relative to similar-duration Treasuries in credit and structured bond sectors.
Contributors and detractors
An underweight in Treasury securities contributed to the Fund’s performance advantage over the benchmark during the period, as most short-term spread sectors produced positive returns relative to similarly-maturing Treasury securities. An overweight in both corporates and asset-backed Securities (ABS) were the largest contributors to performance. The Bloomberg Barclays Short-term Corporate Index outperformed similar duration Treasuries by 88 basis points. Communications, insurance, banking and energy subsectors were among the largest contributors. ABS account for approximately 28% of the portfolio. The Bloomberg Barclays Asset-Backed Securities AAA Index outperformed similar-duration Treasuries by 80 basis points during the 12-month period. Over the course of the period, we increased the Fund’s allocations to ABS and corporate bonds from approximately 81% to 84% of the portfolio. An overweight in BBB rated credits also was a positive performance factor, as lower rated credits outperformed. U.S. government securities (Treasuries and Agencies), which accounted for approximately 12% of the portfolio, were the most significant detractor from performance during the period. As investors looked to add yield in an environment of low interest rates, U.S. government securities underperformed almost all similar-duration spread products.
Fund strategy
The Fund is managed with a focus on achieving a total return in excess of the benchmark and cash alternatives, which include money market funds. We take a conservative approach and apply it aggressively in an effort to achieve superior risk-adjusted returns. We perform in-depth qualitative and quantitative assessments of individual issues and issuers to build a highly diversified portfolio. Ongoing monitoring and risk management is a valued part of the investment process.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Foreign investments subject the Fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. Dividend payments are not guaranteed and the amount, if any, can vary over time. Value securities may be unprofitable if the market fails to recognize their intrinsic worth or the portfolio manager misgauged that worth. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These
| 4 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance (continued)
views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 5 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2017 — July 31, 2017 |
| | Account value at the
beginning of the
period ($) | Account value at the
end of the
period ($) | Expenses paid during
the period ($) | Fund’s annualized
expense ratio (%) |
| | Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual |
| | 1,000.00 | 1,000.00 | 1,007.00 | 1,023.55 | 1.24 | 1.25 | 0.25 |
Expenses paid during the period are equal to the annualized expense ratio as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| 6 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Portfolio of Investments
July 31, 2017
(Percentages represent value of investments compared to net assets)
| Asset-Backed Securities — Non-Agency 26.0% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Academic Loan Funding Trust(a),(b) |
| Series 2012-1A Class A1 |
| 12/27/2022 | 1.824% | | 585,837 | 586,048 |
| AccessLex Institute(b) |
| Series 2004A Class A2 |
| 04/25/2029 | 1.574% | | 602,600 | 600,608 |
| Series 2005-1 Class A3 |
| 06/22/2022 | 1.437% | | 2,298,515 | 2,297,268 |
| Ally Auto Receivables Trust |
| Series 2016-2 Class A2 |
| 10/15/2018 | 1.170% | | 607,496 | 607,434 |
| Ally Master Owner Trust |
| Series 2012-5 Class A |
| 09/15/2019 | 1.540% | | 18,988,000 | 18,989,432 |
| Series 2014-5 Class A2 |
| 10/15/2019 | 1.600% | | 17,650,000 | 17,653,482 |
| Series 2015-3 Class A |
| 05/15/2020 | 1.630% | | 10,000,000 | 10,003,401 |
| American Credit Acceptance Receivables Trust(a) |
| Series 2016-1A Class A |
| 05/12/2020 | 2.370% | | 353,765 | 353,887 |
| Series 2016-3 Class A |
| 11/12/2020 | 1.700% | | 6,372,039 | 6,363,697 |
| Series 2016-4 Class A |
| 06/12/2020 | 1.500% | | 9,175,501 | 9,164,200 |
| Series 2017-1 Class A |
| 06/15/2020 | 1.720% | | 11,527,985 | 11,522,454 |
| Series 2017-2 Class A |
| 07/13/2020 | 1.840% | | 4,296,751 | 4,294,657 |
| AmeriCredit Automobile Receivables Trust |
| Series 2016-1 Class A2A |
| 06/10/2019 | 1.520% | | 317,565 | 317,592 |
| Series 2017-2 Class A2A |
| 09/18/2020 | 1.650% | | 2,400,000 | 2,400,075 |
| AmeriCredit Automobile Receivables Trust(b) |
| Series 2016-3 Class A2B |
| 11/08/2019 | 1.784% | | 1,669,288 | 1,670,808 |
| ARI Fleet Lease Trust(a) |
| Series 2016-A Class A2 |
| 07/15/2024 | 1.820% | | 4,348,370 | 4,346,402 |
| Ascentium Equipment Receivables Trust(a) |
| Series 2017-1A Class A2 |
| 07/10/2019 | 1.870% | | 3,050,000 | 3,049,377 |
| Avis Budget Rental Car Funding AESOP LLC(a) |
| Series 2013-1A Class A |
| 09/20/2019 | 1.920% | | 5,808,000 | 5,805,971 |
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| California Republic Auto Receivables Trust |
| Series 2013-2 Class A2 |
| 03/15/2019 | 1.230% | | 256,917 | 256,820 |
| Series 2016-1 Class A2 |
| 12/17/2018 | 1.500% | | 492,788 | 492,802 |
| CarMax Auto Owner Trust |
| Series 2013-4 Class A4 |
| 05/15/2019 | 1.280% | | 5,624,014 | 5,621,762 |
| Series 2016-4 Class A2 |
| 11/15/2019 | 1.210% | | 2,736,465 | 2,732,833 |
| Series 2017-3 Class A2A |
| 09/15/2020 | 1.640% | | 4,615,000 | 4,613,566 |
| CCG Receivables Trust(a) |
| Series 2015-1 Class A2 |
| 11/14/2018 | 1.460% | | 2,173,993 | 2,171,204 |
| Series 2017-1 Class A2 |
| 11/14/2023 | 1.840% | | 4,700,000 | 4,694,713 |
| Chesapeake Funding II LLC(a) |
| Series 2016-1A Class A1 |
| 03/15/2028 | 2.110% | | 5,755,188 | 5,768,633 |
| Series 2016-2A Class A1 |
| 06/15/2028 | 1.880% | | 7,929,376 | 7,921,215 |
| Chesapeake Funding II LLC(a),(b) |
| Series 2017-2A Class A2 |
| 05/15/2029 | 1.676% | | 6,600,000 | 6,599,997 |
| Chrysler Capital Auto Receivables Trust(a) |
| Series 2016-BA Class A2 |
| 01/15/2020 | 1.360% | | 3,421,560 | 3,418,613 |
| CNH Equipment Trust |
| Series 2014-C Class A3 |
| 11/15/2019 | 1.050% | | 3,140,738 | 3,137,080 |
| Series 2015-B Class A3 |
| 07/15/2020 | 1.370% | | 2,779,306 | 2,776,258 |
| Series 2016-B Class A2A |
| 10/15/2019 | 1.310% | | 1,722,506 | 1,721,079 |
| Series 2016-C Class A2 |
| 02/18/2020 | 1.260% | | 4,567,060 | 4,556,233 |
| Conn’s Receivables Funding LLC(a) |
| Series 2016-B Class A |
| 10/15/2018 | 3.730% | | 955,879 | 956,788 |
| Dell Equipment Finance Trust(a) |
| Series 2016-1 Class A2 |
| 09/24/2018 | 1.430% | | 1,244,702 | 1,244,456 |
| Discover Card Execution Note Trust |
| Series 2007-A1 Class A1 |
| 03/16/2020 | 5.650% | | 5,600,000 | 5,627,401 |
| Series 2014-A5 Class A |
| 04/15/2020 | 1.390% | | 10,300,000 | 10,299,942 |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments (continued)
July 31, 2017
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Drive Auto Receivables Trust(a) |
| Series 2016-CA Class A2 |
| 01/15/2019 | 1.410% | | 2,246,455 | 2,245,972 |
| Series 2017-AA Class A2 |
| 03/15/2019 | 1.480% | | 2,183,939 | 2,183,228 |
| Series 2017-BA Class A2 |
| 12/17/2018 | 1.590% | | 6,150,000 | 6,149,859 |
| Drive Auto Receivables Trust |
| Series 2017-2 Class A2A |
| 08/15/2019 | 1.630% | | 4,370,000 | 4,369,920 |
| DT Auto Owner Trust(a) |
| Series 2016-2A Class A |
| 08/15/2019 | 1.730% | | 706,680 | 706,508 |
| Series 2016-4A Class A |
| 11/15/2019 | 1.440% | | 2,524,681 | 2,523,552 |
| Series 2017-2A Class A |
| 05/15/2020 | 1.720% | | 3,232,750 | 3,232,532 |
| Enterprise Fleet Financing LLC(a) |
| Series 2014-2 Class A2 |
| 03/20/2020 | 1.050% | | 364,537 | 364,288 |
| Series 2015-1 Class A2 |
| 09/20/2020 | 1.300% | | 3,535,144 | 3,533,072 |
| Series 2015-2 Class A2 |
| 02/22/2021 | 1.590% | | 2,656,451 | 2,656,470 |
| Series 2016-2 Class A2 |
| 02/22/2022 | 1.740% | | 2,937,845 | 2,935,023 |
| Series 2017-1 Class A2 |
| 07/20/2022 | 2.130% | | 3,700,000 | 3,716,033 |
| Exeter Automobile Receivables Trust(a) |
| Series 2015-2A Class A |
| 11/15/2019 | 1.540% | | 219,883 | 219,833 |
| Series 2015-3A Class A |
| 03/16/2020 | 2.000% | | 767,693 | 767,846 |
| Series 2016-1A Class A |
| 07/15/2020 | 2.350% | | 1,056,290 | 1,056,085 |
| Series 2016-3A Class A |
| 11/16/2020 | 1.840% | | 1,842,089 | 1,837,110 |
| First Investors Auto Owner Trust(a) |
| Series 2015-1A Class A3 |
| 11/16/2020 | 1.710% | | 1,654,924 | 1,654,627 |
| Series 2015-2A Class A1 |
| 12/16/2019 | 1.590% | | 912,132 | 912,115 |
| Series 2017-1A Class A1 |
| 04/15/2021 | 1.690% | | 1,643,212 | 1,640,803 |
| Series 2017-2A Class A1 |
| 10/15/2021 | 1.860% | | 5,000,000 | 4,999,733 |
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Flagship Credit Auto Trust(a) |
| Series 2016-3 Class A1 |
| 12/15/2019 | 1.610% | | 3,999,395 | 3,993,111 |
| Ford Credit Floorplan Master Owner Trust |
| Series 2015-1 Class A1 |
| 01/15/2020 | 1.420% | | 12,460,000 | 12,456,370 |
| GM Financial Automobile Leasing Trust |
| Series 2015-1 Class A3 |
| 09/20/2018 | 1.530% | | 5,064,245 | 5,064,946 |
| Series 2015-2 Class A3 |
| 12/20/2018 | 1.680% | | 9,986,198 | 9,994,472 |
| Series 2015-3 Class A3 |
| 03/20/2019 | 1.690% | | 2,800,000 | 2,802,026 |
| GreatAmerica Leasing Receivables Funding LLC(a) |
| Series 2017-1 Class A2 |
| 04/22/2019 | 1.720% | | 3,500,000 | 3,496,147 |
| Harley-Davidson Motorcycle Trust |
| Series 2015-2 Class A3 |
| 03/16/2020 | 1.300% | | 7,137,872 | 7,133,029 |
| Hertz Fleet Lease Funding LP(a),(b) |
| Series 2014-1 Class A |
| 04/10/2028 | 1.624% | | 944,903 | 944,928 |
| Series 2015-1 Class A |
| 07/10/2029 | 1.794% | | 4,538,786 | 4,543,888 |
| Series 2016-1 Class A1 |
| 04/10/2030 | 2.217% | | 5,406,609 | 5,422,091 |
| Series 2017-1 Class A1 |
| 04/10/2031 | 1.767% | | 6,700,000 | 6,700,199 |
| Huntington Auto Trust |
| Series 2016-1 Class A3 |
| 11/16/2020 | 1.590% | | 4,000,000 | 3,998,084 |
| Hyundai Auto Lease Securitization Trust(a) |
| Series 2017-A Class A2A |
| 07/15/2019 | 1.560% | | 2,100,000 | 2,099,040 |
| Hyundai Floorplan Master Owner Trust(a) |
| Series 2016-1A Class A2 |
| 03/15/2021 | 1.810% | | 4,000,000 | 3,996,996 |
| John Deere Owner Trust |
| Series 2017-B Class A2A |
| 04/15/2020 | 1.590% | | 3,115,000 | 3,114,696 |
| Navitas Equipment Receivables LLC(a) |
| Series 2016-1 Class A2 |
| 06/15/2021 | 2.200% | | 10,743,589 | 10,745,340 |
| New York City Tax Lien Trust(a) |
| Series 2015-A Class A |
| 11/10/2028 | 1.340% | | 669,105 | 666,303 |
| Series 2016-A Class A |
| 11/10/2029 | 1.470% | | 1,141,792 | 1,135,311 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New York City Tax Lien Trust(a),(c) |
| Series 2017-A Class A |
| 11/10/2030 | 1.470% | | 8,300,000 | 8,299,655 |
| Nissan Master Owner Trust Receivables(b) |
| Series 2017-A Class A |
| 04/15/2021 | 1.536% | | 9,250,000 | 9,267,277 |
| OneMain Direct Auto Receivables Trust(a) |
| Series 2016-1A Class A |
| 01/15/2021 | 2.040% | | 591,142 | 591,812 |
| Prestige Auto Receivables Trust(a) |
| Series 2016-1A Class A3 |
| 06/15/2020 | 1.990% | | 3,250,000 | 3,256,797 |
| Santander Drive Auto Receivables Trust |
| Series 2016-2 Class A2A |
| 07/15/2019 | 1.380% | | 395,318 | 395,257 |
| Series 2016-3 Class A2 |
| 11/15/2019 | 1.340% | | 1,866,627 | 1,865,852 |
| SLM Private Education Loan Trust(a),(b) |
| Series 2013-B Class A1 |
| 07/15/2022 | 1.876% | | 602,083 | 602,168 |
| Series 2014-A Class A1 |
| 07/15/2022 | 1.826% | | 18,007 | 18,006 |
| SLM Student Loan Trust(a),(b) |
| Series 2003-12 Class A5 |
| 09/15/2022 | 1.526% | | 750,939 | 751,270 |
| Series 2004-8A Class A5 |
| 04/25/2024 | 1.656% | | 8,931,709 | 8,961,614 |
| SLM Student Loan Trust(b) |
| Series 2005-3 Class A5 |
| 10/25/2024 | 1.404% | | 9,718,088 | 9,718,081 |
| Series 2006-1 Class A4 |
| 07/25/2019 | 1.404% | | 557,946 | 557,844 |
| SMB Private Education Loan Trust(a),(b) |
| Series 2015-B Class A1 |
| 02/15/2023 | 1.926% | | 641,728 | 641,754 |
| Series 2016-A Class A1 |
| 05/15/2023 | 1.926% | | 1,389,241 | 1,390,513 |
| Series 2016-B Class A1 |
| 11/15/2023 | 1.876% | | 5,709,516 | 5,717,561 |
| SoFi Consumer Loan Program LLC(a) |
| Series 2017-4 Class A |
| 05/26/2026 | 2.500% | | 4,625,000 | 4,617,027 |
| Sofi Professional Loan Program(a) |
| Series 2017-C Class A2A |
| 07/25/2040 | 1.750% | | 3,451,449 | 3,450,974 |
| SoFi Professional Loan Program LLC(a) |
| Series 2016-B Class A2A |
| 03/25/2031 | 1.680% | | 4,381,559 | 4,380,652 |
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2016-C Class A2A |
| 05/26/2031 | 1.480% | | 2,035,897 | 2,028,611 |
| TCF Auto Receivables Owner Trust(a) |
| Series 2016-1A Class A2 |
| 11/15/2019 | 1.390% | | 4,872,426 | 4,868,268 |
| Series 2016-PT1A Class A |
| 06/15/2022 | 1.930% | | 7,265,473 | 7,259,847 |
| Verizon Owner Trust(a) |
| Series 2016-1A Class A |
| 01/20/2021 | 1.420% | | 7,654,000 | 7,618,395 |
| Series 2016-2A Class A |
| 05/20/2021 | 1.680% | | 10,210,000 | 10,186,227 |
| Volvo Financial Equipment LLC(a) |
| Series 2016-1A Class A2 |
| 10/15/2018 | 1.440% | | 792,390 | 792,405 |
| Series 2017-1A Class A2 |
| 10/15/2019 | 1.550% | | 5,000,000 | 4,997,625 |
| Wachovia Student Loan Trust(b) |
| Series 2005-1 Class A5 |
| 01/26/2026 | 1.444% | | 5,793,554 | 5,787,107 |
| Westlake Automobile Receivables Trust(a) |
| Series 2016-1A Class A2A |
| 01/15/2019 | 1.820% | | 1,081,121 | 1,081,569 |
| Series 2016-3A Class A2 |
| 10/15/2019 | 1.420% | | 4,123,545 | 4,119,650 |
| Series 2017-1A Class A2 |
| 04/15/2020 | 1.780% | | 6,000,000 | 6,002,468 |
| Wheels SPV 2 LLC(a) |
| Series 2015-1A Class A2 |
| 04/22/2024 | 1.270% | | 1,584,127 | 1,582,608 |
| World Financial Network Credit Card Master Trust |
| Series 2014-C Class A |
| 08/16/2021 | 1.540% | | 16,100,000 | 16,100,204 |
| World Omni Automobile Lease Securitization Trust(b) |
| Series 2016-A2B Class A2B |
| 02/15/2019 | 1.636% | | 3,040,133 | 3,043,367 |
Total Asset-Backed Securities — Non-Agency
(Cost $450,661,543) | 450,602,239 |
|
| Commercial Mortgage-Backed Securities - Non-Agency 2.9% |
| | | | |
| CFCRE Commercial Mortgage Trust |
| Series 2016-C4 Class A1 |
| 05/10/2058 | 1.501% | | 2,453,378 | 2,435,466 |
| Commercial Mortgage Pass-Through Certificates |
| Series 2012-CR3 Class A2 |
| 10/15/2045 | 1.765% | | 5,661,834 | 5,659,854 |
| Series 2013-LC6 Class A2 |
| 01/10/2046 | 1.906% | | 4,535,211 | 4,535,075 |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
July 31, 2017
| Commercial Mortgage-Backed Securities - Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2014-CR14 Class A1 |
| 02/10/2047 | 1.330% | | 829,629 | 828,822 |
| Commercial Mortgage Trust |
| Series 2013-CR10 Class A1 |
| 08/10/2046 | 1.278% | | 1,088,867 | 1,087,289 |
| Series 2013-CR6 Class A2 |
| 03/10/2046 | 2.122% | | 4,672,753 | 4,679,835 |
| Series 2013-CR9 Class A2 |
| 07/10/2045 | 3.055% | | 7,110,178 | 7,160,994 |
| Series 2014-CR19 Class A1 |
| 08/10/2047 | 1.415% | | 4,513,376 | 4,499,610 |
| JPMBB Commercial Mortgage Securities Trust |
| Series 2013-C12 Class A2 |
| 07/15/2045 | 2.424% | | 2,323,249 | 2,335,127 |
| Series 2014-C19 Class A1 |
| 04/15/2047 | 1.266% | | 1,153,505 | 1,152,123 |
| JPMorgan Chase Commercial Mortgage Securities Trust |
| Series 2012-LC9 Class A2 |
| 12/15/2047 | 1.677% | | 5,569,650 | 5,568,485 |
| Morgan Stanley Bank of America Merrill Lynch Trust |
| Series 2014-C17 Class A1 |
| 08/15/2047 | 1.551% | | 846,102 | 844,680 |
| UBS-Barclays Commercial Mortgage Trust |
| Series 2012-C3 Class A2 |
| 08/10/2049 | 1.852% | | 315,252 | 315,130 |
| Series 2012-C4 Class A2 |
| 12/10/2045 | 1.712% | | 4,856,424 | 4,855,116 |
| Series 2013-C5 Class A1 |
| 03/10/2046 | 0.779% | | 356,431 | 355,899 |
| WF-RBS Commercial Mortgage Trust |
| Series 2014-C20 Class A1 |
| 05/15/2047 | 1.283% | | 4,082,867 | 4,069,184 |
Total Commercial Mortgage-Backed Securities - Non-Agency
(Cost $50,433,965) | 50,382,689 |
|
| Corporate Bonds & Notes 52.2% |
| | | | |
| Aerospace & Defense 1.0% |
| Lockheed Martin Corp. |
| 11/23/2018 | 1.850% | | 10,000,000 | 10,027,210 |
| Northrop Grumman Corp. |
| 06/01/2018 | 1.750% | | 8,000,000 | 8,012,968 |
| Total | 18,040,178 |
| Automotive 1.4% |
| Daimler Finance North America LLC(a),(b) |
| 11/05/2018 | 1.421% | | 5,000,000 | 5,000,265 |
| Ford Motor Credit Co. LLC |
| 10/05/2018 | 2.551% | | 10,000,000 | 10,075,050 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Toyota Motor Credit Corp. |
| 01/12/2018 | 1.450% | | 10,000,000 | 10,001,990 |
| Total | 25,077,305 |
| Banking 16.9% |
| American Express Credit Corp.(b) |
| 03/18/2019 | 1.817% | | 11,000,000 | 11,073,832 |
| Australia & New Zealand Banking Group Ltd.(a),(b) |
| 09/23/2019 | 1.949% | | 9,500,000 | 9,569,265 |
| Bank of America Corp.(b) |
| 04/01/2019 | 2.169% | | 15,000,000 | 15,148,305 |
| Bank of Montreal(b) |
| 12/12/2019 | 1.828% | | 10,000,000 | 10,064,310 |
| Bank of New York Mellon Corp. (The)(b) |
| 05/22/2018 | 1.552% | | 6,000,000 | 6,018,216 |
| Bank of Nova Scotia (The)(b) |
| 07/14/2020 | 1.694% | | 10,000,000 | 10,005,960 |
| Barclays Bank PLC |
| 02/20/2019 | 2.500% | | 7,000,000 | 7,060,291 |
| BB&T Corp.(b) |
| 02/01/2019 | 1.830% | | 10,000,000 | 10,056,750 |
| Capital One NA(b) |
| 02/05/2018 | 1.851% | | 8,750,000 | 8,756,344 |
| Citigroup Inc.(b) |
| 01/10/2020 | 1.789% | | 14,000,000 | 14,112,420 |
| Commonwealth Bank of Australia |
| 03/12/2018 | 1.625% | | 8,500,000 | 8,508,662 |
| Cooperatieve Rabobank UA |
| 01/14/2019 | 2.250% | | 8,000,000 | 8,072,336 |
| Credit Suisse AG |
| 04/27/2018 | 1.700% | | 6,000,000 | 6,001,596 |
| Discover Bank |
| 02/21/2018 | 2.000% | | 7,000,000 | 7,010,199 |
| Fifth Third Bank |
| 02/28/2018 | 1.450% | | 10,000,000 | 9,997,360 |
| Goldman Sachs Group, Inc. (The)(b) |
| 04/23/2020 | 2.313% | | 13,000,000 | 13,218,790 |
| HSBC USA, Inc. |
| 08/07/2018 | 2.000% | | 11,000,000 | 11,034,474 |
| Huntington National Bank (The) |
| 06/30/2018 | 2.000% | | 8,000,000 | 8,023,264 |
| ING Bank NV(a),(b) |
| 03/22/2019 | 2.417% | | 7,050,000 | 7,146,888 |
| JPMorgan Chase & Co.(b) |
| 03/22/2019 | 1.996% | | 16,000,000 | 16,140,000 |
| KeyBank NA |
| 02/01/2018 | 1.650% | | 8,000,000 | 8,004,080 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Lloyds Bank PLC |
| 11/27/2018 | 2.300% | | 8,000,000 | 8,050,336 |
| Manufacturers & Traders Trust Co. |
| 01/30/2019 | 2.300% | | 1,595,000 | 1,607,698 |
| Morgan Stanley(b) |
| 01/24/2019 | 2.003% | | 12,000,000 | 12,093,300 |
| PNC Bank NA(b) |
| 12/07/2018 | 1.351% | | 10,400,000 | 10,438,324 |
| Royal Bank of Canada(b) |
| 04/15/2019 | 2.014% | | 10,000,000 | 10,078,000 |
| State Street Corp. |
| 05/15/2018 | 1.350% | | 3,713,000 | 3,709,035 |
| Toronto-Dominion Bank (The)(b) |
| 07/23/2018 | 1.853% | | 7,500,000 | 7,531,605 |
| 01/22/2019 | 2.153% | | 3,474,000 | 3,508,691 |
| U.S. Bank NA(b) |
| 05/24/2019 | 1.352% | | 12,325,000 | 12,322,165 |
| Wells Fargo & Co.(b) |
| 07/22/2020 | 2.033% | | 12,500,000 | 12,684,487 |
| Westpac Banking Corp.(b) |
| 03/06/2020 | 1.653% | | 6,885,000 | 6,894,267 |
| Total | 293,941,250 |
| Cable and Satellite 1.0% |
| British Sky Broadcasting Group PLC(a) |
| 02/15/2018 | 6.100% | | 6,170,000 | 6,310,855 |
| Comcast Corp. |
| 05/15/2018 | 5.700% | | 10,000,000 | 10,324,590 |
| Total | 16,635,445 |
| Chemicals 0.7% |
| LyondellBasell Industries NV |
| 04/15/2019 | 5.000% | | 7,000,000 | 7,312,515 |
| Rohm & Haas Co. |
| 09/15/2017 | 6.000% | | 4,951,000 | 4,976,235 |
| Total | 12,288,750 |
| Construction Machinery 1.2% |
| Caterpillar Financial Services(b) |
| 01/10/2020 | 1.503% | | 10,000,000 | 10,073,890 |
| John Deere Capital Corp.(b) |
| 10/15/2018 | 1.275% | | 10,000,000 | 10,026,450 |
| Total | 20,100,340 |
| Diversified Manufacturing 1.4% |
| General Electric Capital Corp.(b) |
| 01/14/2019 | 1.814% | | 2,479,000 | 2,494,055 |
| 01/09/2020 | 1.924% | | 10,473,000 | 10,592,392 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Honeywell International, Inc.(b) |
| 10/30/2019 | 1.319% | | 1,875,000 | 1,884,482 |
| United Technologies Corp.(b) |
| 11/01/2019 | 1.520% | | 10,000,000 | 10,059,460 |
| Total | 25,030,389 |
| Electric 2.6% |
| Duke Energy Corp. |
| 06/15/2018 | 2.100% | | 2,848,000 | 2,858,740 |
| MidAmerican Energy Co. |
| 03/15/2018 | 5.300% | | 7,010,000 | 7,171,062 |
| National Rural Utilities Cooperative Finance Corp. |
| 02/01/2018 | 5.450% | | 2,255,000 | 2,298,702 |
| Pacific Gas & Electric Co.(b) |
| 11/30/2017 | 1.400% | | 7,000,000 | 7,001,029 |
| Southern California Edison Co. |
| 11/01/2017 | 1.250% | | 2,000,000 | 1,998,642 |
| Southern Co. (The) |
| 08/15/2017 | 1.300% | | 7,250,000 | 7,248,966 |
| Virginia Electric & Power Co. |
| 04/30/2018 | 5.400% | | 9,393,000 | 9,649,250 |
| WEC Energy Group, Inc. |
| 06/15/2018 | 1.650% | | 7,807,000 | 7,810,232 |
| Total | 46,036,623 |
| Food and Beverage 2.2% |
| Anheuser-Busch InBev Finance, Inc.(b) |
| 02/01/2019 | 1.711% | | 6,152,000 | 6,178,085 |
| Diageo Capital PLC |
| 04/29/2018 | 1.125% | | 7,000,000 | 6,980,589 |
| General Mills, Inc. |
| 10/20/2017 | 1.400% | | 5,377,000 | 5,375,747 |
| Kraft Heinz Foods Co. |
| 07/02/2018 | 2.000% | | 6,000,000 | 6,016,710 |
| Molson Coors Brewing Co.(a) |
| 03/15/2019 | 1.900% | | 7,245,000 | 7,241,834 |
| PepsiCo, Inc.(b) |
| 05/02/2019 | 1.210% | | 7,000,000 | 7,000,518 |
| Total | 38,793,483 |
| Health Care 1.4% |
| Cardinal Health, Inc. |
| 06/14/2019 | 1.948% | | 7,000,000 | 7,028,007 |
| Medtronic, Inc.(b) |
| 03/15/2020 | 2.046% | | 10,000,000 | 10,165,450 |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
July 31, 2017
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Thermo Fisher Scientific, Inc. |
| 02/01/2019 | 2.400% | | 7,500,000 | 7,562,243 |
| Total | 24,755,700 |
| Healthcare Insurance 1.5% |
| Aetna, Inc.(b) |
| 12/08/2017 | 1.869% | | 8,000,000 | 8,014,624 |
| Anthem, Inc. |
| 01/15/2018 | 1.875% | | 8,000,000 | 8,001,688 |
| UnitedHealth Group, Inc. |
| 07/16/2018 | 1.900% | | 10,000,000 | 10,035,650 |
| Total | 26,051,962 |
| Independent Energy 0.3% |
| Canadian Natural Resources Ltd. |
| 01/15/2018 | 1.750% | | 4,510,000 | 4,506,852 |
| Integrated Energy 1.9% |
| BP Capital Markets PLC(b) |
| 08/14/2018 | 1.532% | | 10,000,000 | 10,022,790 |
| Chevron Corp.(b) |
| 03/03/2020 | 1.428% | | 5,640,000 | 5,655,668 |
| Petro-Canada |
| 05/15/2018 | 6.050% | | 8,450,000 | 8,721,338 |
| Total Capital S.A. |
| 08/10/2018 | 2.125% | | 9,082,000 | 9,136,274 |
| Total | 33,536,070 |
| Life Insurance 2.9% |
| American International Group, Inc. |
| 01/16/2018 | 5.850% | | 6,704,000 | 6,831,664 |
| MetLife Global Funding I(a),(b) |
| 12/19/2018 | 1.423% | | 10,000,000 | 10,034,990 |
| New York Life Global Funding(a) |
| 04/27/2018 | 1.300% | | 10,000,000 | 9,992,230 |
| Pricoa Global Funding I(a) |
| 09/21/2018 | 1.900% | | 10,000,000 | 10,028,140 |
| Principal Life Global Funding II(a) |
| 09/11/2017 | 1.500% | | 10,000,000 | 9,999,559 |
| Voya Financial, Inc. |
| 02/15/2018 | 2.900% | | 2,740,000 | 2,756,909 |
| Total | 49,643,492 |
| Media and Entertainment 0.9% |
| 21st Century Fox America, Inc. |
| 05/18/2018 | 7.250% | | 7,925,000 | 8,263,500 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Thomson Reuters Corp. |
| 09/29/2017 | 1.650% | | 7,000,000 | 6,999,959 |
| Total | 15,263,459 |
| Midstream 1.0% |
| Enterprise Products Operating LLC |
| 05/07/2018 | 1.650% | | 6,370,000 | 6,365,458 |
| Kinder Morgan Finance Co. LLC(a) |
| 01/15/2018 | 6.000% | | 6,000,000 | 6,107,970 |
| TransCanada PipeLines Ltd.(b) |
| 01/12/2018 | 1.946% | | 5,000,000 | 5,014,245 |
| Total | 17,487,673 |
| Natural Gas 0.5% |
| Sempra Energy |
| 06/15/2018 | 6.150% | | 8,000,000 | 8,293,472 |
| Office REIT 0.4% |
| Boston Properties LP |
| 11/15/2018 | 3.700% | | 7,000,000 | 7,142,688 |
| Pharmaceuticals 2.8% |
| AbbVie, Inc. |
| 05/14/2018 | 1.800% | | 7,000,000 | 7,010,479 |
| Allergan Funding SCS(b) |
| 03/12/2018 | 2.308% | | 5,000,000 | 5,019,765 |
| Amgen, Inc.(b) |
| 05/10/2019 | 1.502% | | 8,000,000 | 8,013,144 |
| Baxalta, Inc.(b) |
| 06/22/2018 | 1.936% | | 850,000 | 853,913 |
| Baxalta, Inc. |
| 06/22/2018 | 2.000% | | 5,000,000 | 5,010,485 |
| Gilead Sciences, Inc. |
| 09/04/2018 | 1.850% | | 8,500,000 | 8,527,931 |
| Merck & Co., Inc.(b) |
| 05/18/2018 | 1.541% | | 5,000,000 | 5,013,590 |
| Roche Holdings, Inc.(a) |
| 09/29/2017 | 1.350% | | 9,000,000 | 8,999,310 |
| Total | 48,448,617 |
| Property & Casualty 1.6% |
| Berkshire Hathaway Finance Corp.(b) |
| 01/11/2019 | 1.555% | | 12,000,000 | 12,041,736 |
| Chubb Corp. (The) |
| 05/15/2018 | 5.750% | | 8,000,000 | 8,264,064 |
| Hartford Financial Services Group, Inc. (The) |
| 01/15/2019 | 6.000% | | 5,875,000 | 6,211,508 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Travelers Companies, Inc. (The) |
| 05/15/2018 | 5.800% | | 1,720,000 | 1,775,654 |
| Total | 28,292,962 |
| Railroads 0.6% |
| Canadian National Railway Co.(b) |
| 11/14/2017 | 1.352% | | 5,528,000 | 5,529,465 |
| Union Pacific Corp. |
| 11/15/2017 | 5.750% | | 4,430,000 | 4,481,849 |
| Total | 10,011,314 |
| Refining 0.1% |
| Marathon Petroleum Corp. |
| 12/14/2018 | 2.700% | | 1,032,000 | 1,042,555 |
| Retail REIT 0.5% |
| Simon Property Group LP |
| 02/01/2019 | 2.200% | | 8,000,000 | 8,056,328 |
| Retailers 1.7% |
| CVS Health Corp. |
| 07/20/2018 | 1.900% | | 8,600,000 | 8,625,542 |
| Lowes Companies, Inc.(b) |
| 09/14/2018 | 1.842% | | 9,000,000 | 9,051,984 |
| Target Corp. |
| 01/15/2018 | 6.000% | | 1,000,000 | 1,020,305 |
| Wal-Mart Stores, Inc. |
| 02/15/2018 | 5.800% | | 9,859,000 | 10,089,129 |
| Total | 28,786,960 |
| Technology 2.6% |
| Apple, Inc.(b) |
| 08/02/2019 | 1.314% | | 10,000,000 | 10,012,920 |
| Cisco Systems, Inc.(b) |
| 03/01/2019 | 1.702% | | 8,000,000 | 8,054,952 |
| International Business Machines Corp. |
| 09/14/2017 | 5.700% | | 7,000,000 | 7,034,164 |
| Oracle Corp.(b) |
| 01/15/2019 | 1.884% | | 10,000,000 | 10,070,350 |
| QUALCOMM, Inc.(b) |
| 05/20/2019 | 1.534% | | 10,000,000 | 10,029,160 |
| Total | 45,201,546 |
| Transportation Services 0.3% |
| ERAC U.S.A. Finance LLC(a) |
| 10/15/2017 | 6.375% | | 5,100,000 | 5,148,068 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Wireless 0.4% |
| Rogers Communications, Inc. |
| 08/15/2018 | 6.800% | | 7,000,000 | 7,367,339 |
| Wirelines 2.4% |
| AT&T, Inc. |
| 03/11/2019 | 2.300% | | 13,000,000 | 13,097,448 |
| Deutsche Telekom International Finance BV |
| 08/20/2018 | 6.750% | | 8,000,000 | 8,410,656 |
| Orange SA |
| 02/06/2019 | 2.750% | | 8,000,000 | 8,109,552 |
| Verizon Communications, Inc.(b) |
| 06/17/2019 | 2.037% | | 12,000,000 | 12,094,788 |
| Total | 41,712,444 |
Total Corporate Bonds & Notes
(Cost $905,293,322) | 906,693,264 |
|
| Foreign Government Obligations 1.2% |
| | | | |
| Canada 1.2% |
| Province of Ontario |
| 01/18/2019 | 1.625% | | 10,000,000 | 10,005,390 |
| Province of Quebec |
| 05/14/2018 | 4.625% | | 10,000,000 | 10,244,860 |
| Total | 20,250,250 |
Total Foreign Government Obligations
(Cost $20,273,739) | 20,250,250 |
|
| Residential Mortgage-Backed Securities - Agency 0.0% |
| | | | |
| Federal Home Loan Mortgage Corp.(b) |
| 02/01/2036 | 2.923% | | 162,733 | 171,729 |
| Federal National Mortgage Association(b) |
| 03/01/2034 | 3.755% | | 133,613 | 136,500 |
Total Residential Mortgage-Backed Securities - Agency
(Cost $295,201) | 308,229 |
|
| Residential Mortgage-Backed Securities - Non-Agency 1.0% |
| | | | |
| COLT Mortgage Loan Trust(a),(b) |
| CMO Series 2016-2 Class A1 |
| 09/25/2046 | 2.750% | | 2,830,341 | 2,857,273 |
| Mill City Mortgage Trust(a) |
| Series 2015-2 Class A1 |
| 09/25/2057 | 3.000% | | 3,473,621 | 3,488,646 |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
July 31, 2017
| Residential Mortgage-Backed Securities - Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Mortgage Repurchase Agreement Financing Trust(a),(b) |
| Series 2017-1 Class A1 |
| 07/10/2019 | 2.074% | | 10,400,000 | 10,403,418 |
Total Residential Mortgage-Backed Securities - Non-Agency
(Cost $16,729,931) | 16,749,337 |
|
| Treasury Bills 2.8% |
| Issuer | Effective
Yield | | Principal
Amount ($) | Value ($) |
| United States 2.8% |
| U.S. Treasury Bills |
| 08/03/2017 | 0.880% | | 49,425,000 | 49,421,434 |
| Total | | | | 49,421,434 |
Total Treasury Bills
(Cost $49,423,288) | 49,421,434 |
|
| U.S. Government & Agency Obligations 7.1% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Federal Farm Credit Banks |
| 06/25/2018 | 1.220% | | 34,000,000 | 33,955,154 |
| Federal Farm Credit Banks(b) |
| 02/21/2020 | 1.279% | | 72,050,000 | 72,182,644 |
| U.S. Government & Agency Obligations (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Federal Home Loan Mortgage Corp. |
| 06/13/2018 | 4.875% | | 16,620,000 | 17,136,383 |
Total U.S. Government & Agency Obligations
(Cost $123,162,510) | 123,274,181 |
|
| U.S. Treasury Obligations 3.3% |
| | | | |
| U.S. Treasury |
| 10/31/2017 | 0.750% | | 57,850,000 | 57,794,702 |
Total U.S. Treasury Obligations
(Cost $57,802,512) | 57,794,702 |
| Money Market Funds 3.5% |
| | Shares | Value ($) |
| Columbia Short-Term Cash Fund, 1.137%(d),(e) | 60,146,968 | 60,146,968 |
Total Money Market Funds
(Cost $60,140,953) | 60,146,968 |
Total Investments
(Cost: $1,734,216,964) | 1,735,623,293 |
| Other Assets & Liabilities, Net | | (594,756) |
| Net Assets | 1,735,028,537 |
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At July 31, 2017, the value of these securities amounted to $370,886,542, which represents 21.38% of net assets. |
| (b) | Variable rate security. |
| (c) | Represents a security purchased on a when-issued basis. |
| (d) | The rate shown is the seven-day current annualized yield at July 31, 2017. |
| (e) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended July 31, 2017 are as follows: |
| Issuer | Beginning
shares | Shares
purchased | Shares
sold | Ending
shares | Realized gain
(loss) ($) | Dividends —
affiliated
issuers($) | Value ($) |
| Columbia Short-Term Cash Fund, 1.137% | 100,312,375 | 1,454,768,092 | (1,494,933,499) | 60,146,968 | (976) | 540,702 | 60,146,968 |
Abbreviation Legend
| CMO | Collateralized Mortgage Obligation |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
Fair value measurements (continued)
pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Certain investments that have been measured at fair value using the net asset value (NAV) per share (or its equivalent) are not categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to reconcile the fair value hierarchy to the amounts presented in the Portfolio of Investments. The Columbia Short-Term Cash Fund seeks to provide shareholders with maximum current income consistent with liquidity and stability of principal. Columbia Short-Term Cash Fund prices its shares with a floating NAV and no longer seeks to maintain a stable NAV.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2017:
| | Level 1
quoted prices
in active
markets for
identical
assets ($) | Level 2
other
significant
observable
inputs ($) | Level 3
significant
unobservable
inputs ($) | Investments
measured at
net asset
value ($) | Total ($) |
| Investments | | | | | |
| Asset-Backed Securities — Non-Agency | — | 442,302,584 | 8,299,655 | — | 450,602,239 |
| Commercial Mortgage-Backed Securities - Non-Agency | — | 50,382,689 | — | — | 50,382,689 |
| Corporate Bonds & Notes | — | 906,693,264 | — | — | 906,693,264 |
| Foreign Government Obligations | — | 20,250,250 | — | — | 20,250,250 |
| Residential Mortgage-Backed Securities - Agency | — | 308,229 | — | — | 308,229 |
| Residential Mortgage-Backed Securities - Non-Agency | — | 16,749,337 | — | — | 16,749,337 |
| Treasury Bills | 49,421,434 | — | — | — | 49,421,434 |
| U.S. Government & Agency Obligations | — | 123,274,181 | — | — | 123,274,181 |
| U.S. Treasury Obligations | 57,794,702 | — | — | — | 57,794,702 |
| Money Market Funds | — | — | — | 60,146,968 | 60,146,968 |
| Total Investments | 107,216,136 | 1,559,960,534 | 8,299,655 | 60,146,968 | 1,735,623,293 |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 15 |
Portfolio of Investments (continued)
July 31, 2017
Fair value measurements (continued)
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between Levels 1 and 2 during the period.
Financial assets were transferred from Level 3 to Level 2 as observable market inputs were utilized and management determined that there was sufficient, reliable and observable market data to value these assets as of period end.
Transfers between Levels are determined based on the fair value at the beginning of the period for security positions held throughout the period.
The following table shows transfers between Levels of the fair value hierarchy:
| Transfers In | Transfers Out |
| Level 2 ($) | Level 3 ($) | Level 2 ($) | Level 3 ($) |
| 2,799,631 | — | — | 2,799,631 |
The Fund does not hold any significant investments (greater than one percent of net assets) categorized as Level 3.
The Fund’s assets assigned to the Level 3 category are valued utilizing the valuation technique deemed the most appropriate in the circumstances. Certain mortgage backed securities classified as Level 3 securities are valued using the market approach and utilize single market quotations from broker dealers which may have included, but were not limited to, observable transactions for identical or similar assets in the market and the distressed nature of the security. The appropriateness of fair values for these securities is monitored on an ongoing basis which may include results of back testing, manual price reviews and other control procedures. Significant increases (decreases) to any of these inputs would result in a significantly lower (higher) fair value measurement.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities
July 31, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $1,674,076,011 |
| Affiliated issuers, at cost | 60,140,953 |
| Total investments, at cost | 1,734,216,964 |
| Investments, at value | |
| Unaffiliated issuers, at value | 1,675,476,325 |
| Affiliated issuers, at value | 60,146,968 |
| Total investments, at value | 1,735,623,293 |
| Cash | 236 |
| Receivable for: | |
| Investments sold | 3,328,609 |
| Capital shares sold | 1,984,837 |
| Dividends | 75,407 |
| Interest | 5,878,321 |
| Foreign tax reclaims | 9,364 |
| Expense reimbursement due from Investment Manager | 866 |
| Trustees’ deferred compensation plan | 74,739 |
| Total assets | 1,746,975,672 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 8,299,655 |
| Capital shares purchased | 1,636,492 |
| Distributions to shareholders | 1,867,974 |
| Management services fees | 35,722 |
| Other expenses | 32,553 |
| Trustees’ deferred compensation plan | 74,739 |
| Total liabilities | 11,947,135 |
| Net assets applicable to outstanding capital stock | $1,735,028,537 |
| Represented by | |
| Paid in capital | 1,757,686,764 |
| Undistributed net investment income | 224,004 |
| Accumulated net realized loss | (24,288,560) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 1,400,314 |
| Investments - affiliated issuers | 6,015 |
| Total - representing net assets applicable to outstanding capital stock | $1,735,028,537 |
| Shares outstanding | 192,416,919 |
| Net asset value per share | 9.02 |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 17 |
Statement of Operations
Year Ended July 31, 2017
| Net investment income | |
| Income: | |
| Dividends — affiliated issuers | $540,702 |
| Interest | 22,473,724 |
| Total income | 23,014,426 |
| Expenses: | |
| Management services fees | 4,331,299 |
| Compensation of board members | 48,898 |
| Audit fees | 31,615 |
| Legal fees | 12,197 |
| Total expenses | 4,424,009 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (88,030) |
| Total net expenses | 4,335,979 |
| Net investment income | 18,678,447 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 1,704,257 |
| Investments — affiliated issuers | (976) |
| Foreign currency translations | (2) |
| Net realized gain | 1,703,279 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (172,223) |
| Investments — affiliated issuers | 6,015 |
| Net change in unrealized appreciation (depreciation) | (166,208) |
| Net realized and unrealized gain | 1,537,071 |
| Net increase in net assets resulting from operations | $20,215,518 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2017 | Year Ended
July 31, 2016 |
| Operations | | |
| Net investment income | $18,678,447 | $9,438,839 |
| Net realized gain (loss) | 1,703,279 | (3,436,171) |
| Net change in unrealized appreciation (depreciation) | (166,208) | 5,847,180 |
| Net increase in net assets resulting from operations | 20,215,518 | 11,849,848 |
| Distributions to shareholders | | |
| Net investment income | (18,609,464) | (9,508,316) |
| Total distributions to shareholders | (18,609,464) | (9,508,316) |
| Increase (decrease) in net assets from capital stock activity | 261,062,137 | (49,161,602) |
| Total increase (decrease) in net assets | 262,668,191 | (46,820,070) |
| Net assets at beginning of year | 1,472,360,346 | 1,519,180,416 |
| Net assets at end of year | $1,735,028,537 | $1,472,360,346 |
| Undistributed (excess of distributions over) net investment income | $224,004 | $(155,124) |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 19 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2017 | July 31, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| | | | | |
| Subscriptions | 169,147,941 | 1,523,749,110 | 93,609,529 | 842,162,488 |
| Distributions reinvested | 157,217 | 1,416,563 | 93,397 | 840,333 |
| Redemptions | (140,309,938) | (1,264,103,536) | (99,165,225) | (892,164,423) |
| Total net increase (decrease) | 28,995,220 | 261,062,137 | (5,462,299) | (49,161,602) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| | Year Ended July 31, |
| 2017 | 2016 | 2015 | 2014 | 2013 |
| Per share data | | | | | |
| Net asset value, beginning of period | $9.01 | $9.00 | $9.00 | $8.99 | $9.01 |
| Income from investment operations: | | | | | |
| Net investment income | 0.10 | 0.06 | 0.03 | 0.04 | 0.07 |
| Net realized and unrealized gain (loss) | 0.01 | 0.01 | (0.00) (a) | 0.01 | (0.02) |
| Total from investment operations | 0.11 | 0.07 | 0.03 | 0.05 | 0.05 |
| Less distributions to shareholders from: | | | | | |
| Net investment income | (0.10) | (0.06) | (0.03) | (0.04) | (0.07) |
| Total distributions to shareholders | (0.10) | (0.06) | (0.03) | (0.04) | (0.07) |
| Net asset value, end of period | $9.02 | $9.01 | $9.00 | $9.00 | $8.99 |
| Total return | 1.19% | 0.77% | 0.37% | 0.52% | 0.55% |
| Ratios to average net assets | | | | | |
| Total gross expenses(b) | 0.26% | 0.26% | 0.26% | 0.26% | 0.26% |
| Total net expenses(b),(c) | 0.25% | 0.25% | 0.25% | 0.25% | 0.25% |
| Net investment income | 1.08% | 0.65% | 0.37% | 0.40% | 0.76% |
| Supplemental data | | | | | |
| Portfolio turnover | 111% | 82% | 62% | 68% | 67% |
| Net assets, end of period (in thousands) | $1,735,029 | $1,472,360 | $1,519,180 | $1,792,626 | $1,836,456 |
| Notes to Financial Highlights |
| (a) | Rounds to zero. |
| (b) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (c) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
The accompanying Notes to Financial Statements are an integral part of this statement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 21 |
Notes to Financial Statements
July 31, 2017
Note 1. Organization
CMG Ultra Short Term Bond Fund (the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
Shares of the Fund are available for purchase by institutional entities, including corporations, partnerships, trusts, foundations, endowments, affiliated funds, government entities or other similar organizations, and to certain qualifying advisory clients of Bank of America. Please see the Fund’s prospectus for further details, including applicable investment minimums.
Fund shares
The Trust may issue an unlimited number of shares (without par value), which are offered continuously at net asset value.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Asset- and mortgage-backed securities are generally valued by pricing services, which utilize pricing models that incorporate the securities’ cash flow and loan performance data. These models also take into account available market data, including trades, market quotations, and benchmark yield curves for identical or similar securities. Factors used to identify similar securities may include, but are not limited to, issuer, collateral type, vintage, prepayment speeds, collateral performance, credit ratings, credit enhancement and expected life. Asset-backed securities for which quotations are readily available may also be valued based upon an over-the-counter or exchange bid quote from an approved independent broker-dealer.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
| 22 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Foreign currency transactions and translations
The values of all assets and liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Asset- and mortgage-backed securities
The Fund may invest in asset-backed and mortgage-backed securities. The maturity dates shown represent the original maturity of the underlying obligation. Actual maturity may vary based upon prepayment activity on these obligations. All, or a portion, of the obligation may be prepaid at any time because the underlying asset may be prepaid. As a result, decreasing market interest rates could result in an increased level of prepayment. An increased prepayment rate will have the effect of shortening the maturity of the security. Unless otherwise noted, the coupon rates presented are fixed rates.
Delayed delivery securities
The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted. The Fund classifies gains and losses realized on prepayments received on mortgage-backed securities as adjustments to interest income.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements (continued)
July 31, 2017
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income (including net short-term capital gains) and capital gains, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Accounting Standards Update 2017-08 Premium Amortization on Purchased Callable Debt Securities
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017-08 Premium Amortization on Purchased Callable Debt Securities. ASU No. 2017-08 updates the accounting standards to shorten the amortization period for certain purchased callable debt securities, held at a premium, to be amortized to the earliest call date. The update applies to securities with explicit, noncontingent call features that are callable at fixed prices and on preset dates. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. At this time, management is evaluating the implication of this guidance and the impact it will have on the financial statement amounts and footnote disclosures, if any.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X are effective for periods on or after August 1, 2017. Management has reviewed the requirements and believes the adoption of the amendments to Regulation S-X will not have a material impact on the Fund’s financial statements and related disclosures.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager determines which securities will be purchased, held or sold. The Fund’s management fee is a unified fee. The Investment Manager, out of the unified fee it receives from the Fund, pays all operating costs and expenses of the Fund (other than the expenses described below or in the Fund’s prospectus), including accounting expenses (other than audit fees), legal fees for the Fund, transfer agent and custodian fees, and other expenses. The Fund pays the following
| 24 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
expenses: disinterested trustees fees and expenses, including their legal counsel, auditing expense, interest on borrowings by the Fund, if any, portfolio transaction expenses, taxes and extraordinary expenses of the Fund. The unified fee is paid monthly to the Investment Manager at the annual rate of 0.25% of the Fund’s average daily net assets.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. These members of the Board of Trustees may participate in a Deferred Compensation Plan (the Plan) which may be terminated at any time. Obligations of the Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually. The expenses of the Chief Compliance Officer allocated to the Fund are payable by the Investment Manager.
Transfer Agency Fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund.
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below), through November 30, 2017, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the annual rate of 0.25% of the Fund’s average daily net assets.
Under the agreement governing this fee waiver and/or expense reimbursement arrangement, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At July 31, 2017, these differences are primarily due to differing treatment for capital loss carryforwards, trustees’ deferred compensation, distributions, principal and/or interest from fixed income securities and foreign currency transactions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
July 31, 2017
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| 310,145 | 1,939,014 | (2,249,159) |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| July 31, 2017 | July 31, 2016 |
Ordinary
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Long-term
capital gains ($) | Total ($) |
| 18,609,464 | — | 18,609,464 | 9,508,316 | — | 9,508,316 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| 2,166,717 | — | (24,288,560) | 1,406,329 |
At July 31, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 1,734,216,964 | 2,120,475 | (714,146) | 1,406,329 |
The following capital loss carryforwards, determined at July 31, 2017, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended July 31, 2017, capital loss carryforwards utilized, expired unused and permanently lost, if any, were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| 1,023,617 | 11,369,928 | 4,055,173 | 7,839,842 | 24,288,560 | 1,392,484 | 2,249,159 | — |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $2,043,083,218 and $1,795,606,950, respectively, for the year ended July 31, 2017, of which $360,312,879 and $370,879,655, respectively, were U.S. government securities. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
| 26 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Note 6. Affiliated money market fund
The Fund invests in Columbia Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. Effective October 1, 2016, the Affiliated MMF prices its shares with a floating net asset value (NAV) and no longer seeks to maintain a stable NAV. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended July 31, 2017.
Note 8. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Mortgage- and other asset-backed securities risk
The value of any mortgage-backed and other asset-backed securities held by the Fund 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 or other assets; the creditworthiness of the entities that provide any supporting letters of credit,
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
July 31, 2017
surety bonds or other credit enhancements; or the market’s assessment of the quality of underlying assets. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of a particular U.S. Government agency, authority, enterprise or instrumentality, and some, but not all, are also insured or guaranteed by the U.S. Government. 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 entail greater risk than obligations guaranteed by the U.S. Government. Mortgage- and other asset-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage or other asset may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. Rising or high interest rates tend to extend the duration of mortgage- and other asset-backed securities, making their prices more volatile and more sensitive to changes in interest rates.
Shareholder concentration risk
At July 31, 2017, one unaffiliated shareholder of record owned 91.6% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 9. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 10. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is 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 Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, 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.
| 28 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of CMG Ultra Short Term Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of CMG Ultra Short Term Bond Fund (the “Fund”, a series of Columbia Funds Series Trust I) as of July 31, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of July 31, 2017 by correspondence with the custodian, brokers and transfer agent, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
September 21, 2017
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 29 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. The year set forth beneath Length of Service in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve terms of indefinite duration.
Independent trustees
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Janet Langford Carrig
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1957 | Trustee
1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company) since September 2007 | 57 | None |
Douglas A. Hacker
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee and Chairman of the Board
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 | 57 | Spartan Nash Company, (food distributor); Nash Finch Company (food distributor) from 2005 to 2013; Aircastle Limited (aircraft leasing); SeaCube Container Leasing Ltd. (container leasing) from 2010 to 2013; and Travelport Worldwide Limited (travel information technology) |
Nancy T. Lukitsh
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1956 | Trustee
2011 | Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser) from 1997 to 2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools) from 2007 to 2010; Director, Wellington Trust Company, NA and other Wellington affiliates from 1997 to 2010 | 57 | None |
David M. Moffett
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee
2011 | Retired. Consultant to Bridgewater and Associates | 57 | Director, CSX Corporation; Genworth Financial, Inc. (financial and insurance products and services); PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
| 30 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Charles R. Nelson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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 | 57 | None |
John J. Neuhauser
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee
1984 | President, Saint Michael’s College since August 2007; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; 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 | 57 | Liberty All-Star Equity Fund and Liberty All- Star Growth Fund (closed-end funds) |
Patrick J. Simpson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee
2000 | Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP from 1988 to 2014 | 57 | None |
Anne-Lee Verville
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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) | 57 | Enesco Group, Inc. (producer of giftware and home and garden decor products) from 2001 to 2006 |
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 31 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds complex overseen | Other directorships held by Trustee during the past five years |
J. Kevin Connaughton
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1964 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since March 2016; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC from May 2010 to February 2015; President, Columbia Funds from 2009 to 2015; and senior officer of Columbia Funds and affiliated funds from 2003 to 2015 | 57 | Board of Governors, Gateway Healthcare since January 2016; Trustee, New Century Portfolios since March 2015; and Director, The Autism Project since March 2015 |
Natalie A. Trunow
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1967 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Partners (investment consulting services to institutions) since January 2016; Director of Investments, Casey Family Programs from April 2016 to September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments from August 2008 to January 2016; Section Head and Portfolio Manager, General Motors Asset Management from June 1997 to August 2008 | 57 | Healthcare Services for Children with Special Needs |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Shareholders of the Funds are expected to be asked to elect each of Mr. Connaughton and Ms. Trunow as a Trustee at a future shareholder meeting. |
Interested trustee affiliated with Investment Manager*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex overseen | Other directorships held by Trustee during the past five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
1960 | Trustee
2012 | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010-September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006-August 2012 | 179 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006 - January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
columbiathreadneedleus.com/institutional.
| 32 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 33 |
Board Consideration and Approval of Management
Agreement
On June 14, 2017, the Board of Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to CMG Ultra Short Term Bond Fund (the Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, both among themselves and with the management team of the Investment Manager, materials provided by the Investment Manager and others before determining to approve the continuation of the Management Agreement.
In connection with their deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and discussed these materials with representatives of the Investment Manager at Committee meetings held on March 27, 2017, April 26, 2017 and June 13, 2017 and at Board meetings held on March 28, 2017 and June 14, 2017. In addition, the Board considers matters bearing on the Management Agreement at most of its other meetings throughout the year and meets regularly with senior management of the Trust and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and other investment personnel at various times throughout the year. The Committee and the Board also consulted with its independent fee consultant, Fund counsel and the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board in their deliberations. On June 13, 2017, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 14, 2017, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund November 30, 2018 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution and transfer agency services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding the management fees of similarly-managed portfolios of other clients of the Investment Manager, including institutional separate accounts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| 34 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement (continued)
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of services provided under the Management Agreement
The Committee and the Board considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management, reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.
The Committee and the Board also considered the professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with similarly-structured funds. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks and information that compared the performance of the Fund to the performance of a group of comparable mutual funds as determined by the independent third-party data provider, and data provided by the independent fee consultant. The Committee and the Board also reviewed a description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Committee and the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the Management Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted that, through December 31, 2016, the Fund’s performance was in the sixty-sixth, sixtieth and fifty-ninth percentile (where the best performance would be in the first percentile) of its category selected by the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the Fund and the Investment Manager was sufficient, in light of other considerations, to warrant the continuation of the Management Agreement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 35 |
Board Consideration and Approval of Management
Agreement (continued)
Investment management fee rates and other expenses
The Committee and the Board considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2016, the Fund’s actual management fee and net total expense ratio are ranked in the third and first quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also received and considered information about the management fees charged by the Investment Manager to institutional separate accounts. In considering the fees charged to those accounts, the Committee and the Board took into account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, warranted the continuation of the Management Agreement.
Costs of services provided and profitability
The Committee and the Board also took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund.
The Committee and the Board also considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of profitability levels realized in 2016 to profitability levels realized in 2015. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard, the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources.
| 36 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement (continued)
In considering these matters, the Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as discussed above. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the continuation of the Management Agreement.
Other benefits to the Investment Manager
The Committee and the Board received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement of the Investment Manager’s affiliates to provide distribution and transfer agency services to the Fund. The Committee and the Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the Investment Manager’s practices with respect to allocating portfolio transactions for brokerage and research services. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower without these benefits.
Conclusion
The Committee and the Board reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement.
CMG Ultra Short Term Bond Fund | Annual Report 2017
| 37 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting columbiathreadneedleus.com/institutional; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting columbiathreadneedleus.com/institutional, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit columbiathreadneedleus.com/institutional or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
| 38 | CMG Ultra Short Term Bond Fund | Annual Report 2017 |
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CMG Ultra Short Term Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
columbiathreadneedleus.com/institutional. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/institutional
Annual Report
July 31, 2017
Columbia AMT-Free Oregon Intermediate Muni Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
The current outlook for financial markets is clouded by two primary concerns: the high valuation of equities and the direction of interest rates. Following the U.S. presidential election, U.S. equities rallied based on the assumption that the new administration’s policies would stimulate growth quickly. Unfortunately it’s unclear whether those measures will get passed, much less passed quickly. In fixed income, uncertainty stems from the possibility that interest rates won’t rise as rapidly as expected if the administration’s proposed growth policies are not implemented.
Given this uncertainty, investors value a consistent approach more than ever. Investors want strong, repeatable risk-adjusted returns. Consistency — not surprises. As a leading global asset manager, we believe our consistent, collaborative investment approach enables us to deliver the dependable experience your portfolio demands. So, how do we strive to deliver a consistent investment experience?
Better insights
Your portfolio benefits from the investment insights uncovered by our talented investment teams around the world.
Better decisions
Our collaborative, interactive environment enables our investment teams to construct portfolios that take advantage of the best investment ideas.
Better outcomes
We aim to deliver a consistent experience, which means fewer surprises, dependable insights, and products designed to do the thing you want.
Whether you’re trying to save money to help your children go to college or for your own retirement, it’s the consistency of the return that is most essential. People who chase higher returns are usually also the first to sell when that investment goes through a bad patch. We try to combat this behavioral tendency by offering strategies that aim for a more consistent return. Our goal is for investors to panic less during periods of volatility, which can have a significant effect on their long-term results.
Nothing is more important to us than making sure those who have entrusted us to protect and grow their assets can do what matters most to them: build a nest egg, leave a legacy, and live confidently — now and throughout retirement. It’s why our talented professionals around the world work together to uncover uncommon opportunities and why our process encourages challenge and debate around our most compelling ideas to ensure better informed investment decisions, which hopefully lead to better outcomes for you.
Your success is our priority. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for consistent, sustainable outcomes, no matter the market conditions.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
Investment objective
Columbia AMT-Free Oregon Intermediate Muni Bond Fund (the Fund) seeks a high level of income exempt from Federal and Oregon income tax by investing at least 80% of its net assets (plus any borrowings for investment purposes) in municipal securities issued by the state of Oregon (and its political subdivisions, agencies, authorities and instrumentalities).
Portfolio management
Brian McGreevy
Co-manager
Managed Fund since 2003
Paul Fuchs, CFA
Co-manager
Managed Fund since October 2016
| Average annual total returns (%) (for the period ended July 31, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/01/02 | -0.39 | 1.89 | 3.44 |
| | Including sales charges | | -3.40 | 1.27 | 3.13 |
| Class B | Excluding sales charges | 11/01/02 | -1.21 | 1.13 | 2.67 |
| | Including sales charges | | -4.12 | 1.13 | 2.67 |
| Class C | Excluding sales charges | 10/13/03 | -0.91 | 1.45 | 3.01 |
| | Including sales charges | | -1.88 | 1.45 | 3.01 |
| Class R4* | 03/19/13 | -0.14 | 2.15 | 3.70 |
| Class R5* | 11/08/12 | -0.18 | 2.17 | 3.71 |
| Class Y* | 03/01/17 | -0.12 | 2.15 | 3.70 |
| Class Z | 07/02/84 | -0.14 | 2.14 | 3.70 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 0.43 | 2.79 | 4.54 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter. The Fund no longer accepts investments by new or existing investors in Class B shares. Effective July 17, 2017, Class B shares were automatically converted to Class A shares without a CDSC. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class B shares was redeemed without a CDSC. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products /mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
| 2 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (July 31, 2007 — July 31, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia AMT-Free Oregon Intermediate Muni Bond Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares.
| Quality breakdown (%) (at July 31, 2017) |
| AAA rating | 10.1 |
| AA rating | 54.6 |
| A rating | 23.2 |
| BBB rating | 6.5 |
| C rating | 1.5 |
| Not rated | 4.1 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 3 |
Manager Discussion of Fund Performance
The Fund’s Class A shares returned -0.39%, excluding sales charges, during the 12-month period that ended July 31, 2017. Class Z shares of the Fund returned -0.14% for the same time period. The Fund’s benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, returned 0.43% for the 12 months. The Fund’s higher quality bias contributed to its underperformance versus the benchmark, as did its positions in Virgin Islands bonds.
Market overview
Municipal bonds produced a slight gain during the 12 months ended July 31, 2017, with a sell-off in late 2016 offset by stronger performance so far in 2017.
The market was relatively stable early in the period, as rates held in a tight range through September 2016. Municipal bonds weakened somewhat in October 2016 as investors began to price in the possibility of an interest rate increase by the U.S. Federal Reserve (the Fed) at its December 2016 meeting, but the downturn was fairly modest in nature. This relatively calm environment changed abruptly in November 2016 due to the unexpected outcome of the U.S. elections. Donald Trump’s surprising victory, in conjunction with the Republican sweep of Congress, prompted investors to recalibrate their expectations toward a backdrop of stronger economic growth, lower taxes, and more aggressive Fed policy. U.S. Treasury yields spiked higher as a result, and municipals followed suit. (Prices and yields move in opposite directions).
Volatility subsequently abated in 2017, as the Republican Party’s difficulties in enacting its agenda led to fading prospects for fiscal stimulus. Additionally, the combination of lower new-issue supply and robust cash inflows into municipals helped the benchmark produce a string of months with positive returns. The volume of new issues set a record in the 2016 calendar year, with more than half of the new issuance resulting from issuers refinancing older, higher yielding debt. In contrast, supply has dropped by approximately 12% year-to-date through July 31, 2017, as higher rates led to a decline in refunding volume. Demand was healthy during the 2017 portion of the reporting period, which — in conjunction with lower supply — has provided a firm foundation for the market. Pension issues continued to dominate headlines nationally, however, with Illinois, Chicago, Connecticut, New Jersey and Pennsylvania all struggling with large underfunded liabilities.
The net impact of these developments was a small price decline for intermediate-term issues over the full 12-month period, but the modest downturn was more than offset by coupon income.
Oregon’s healthy economy fuels positive market sentiment
Oregon municipal bonds performed well relative to the broader tax-exempt market, as there were no significant pension concerns or large unfunded liabilities at either the state or local levels. The market was further supported by the favorable economic conditions in the state. Employment growth remained strong due in part to the high representation of fast-growing industries such as technology and healthcare, leading to rising hourly earnings and surging home prices. Although Oregon is on track for a substantial budget shortfall in the next two years, the healthy growth outlook led to improving credit conditions and provided a tailwind for municipal bond prices.
Contributors and detractors
The Fund underperformed the benchmark due mainly to its yield curve positioning. The Fund had a small barbell structure, with larger weights in the short and longer ends of the curve compared to the intermediate portion, which detracted given that five- to eight-year securities outperformed. The Fund’s shorter maturity, zero-coupon bonds performed well, however, with the four- to five-year range generating the best results.
Electric revenue, hospital, housing and transportation issues all outpaced the benchmark and contributed positively to Fund performance. Local general obligation debt, which comprised more than 30% of the portfolio, finished in line with the benchmark. While this market segment did not offer as much yield as A and BBB rated bonds, it helped augment the portfolio’s overall credit quality.
The Fund’s exposure to Virgin Islands bonds was an additional factor in its underperformance. Moody’s downgraded the territory in mid-2016 as the language in the federal oversight bill to aid the distressed island of Puerto Rico was written in such a way as to include other territories. In addition, investors reacted unfavorably to the Virgin Islands’ poor credit fundamentals. After evaluating the outlook for the territory and determining that the risk-reward tradeoff was unfavorable given
| 4 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance (continued)
the way events unfolded in Puerto Rico, we decided to eliminate the position. Historically, the Fund has invested in Virgin Islands credits because they are exempt from federal and state income taxes, and they offered the opportunity to own higher yielding bonds than would typically be found in Oregon.
The Fund’s overweight in pre-refunded bonds has increased over the past two years due to issuers’ refinancing activity. While these securities are higher quality, they also tend to have shorter maturities. This proved to be a small drag on results due to the outperformance for longer term bonds.
Fund positioning
The Fund was positioned with a slightly shorter duration (lower interest rate sensitivity) relative to the benchmark during the first half of the period, which added value as yields rose in late 2016. We subsequently extended the Fund’s duration, but it remained below the benchmark at the end of July due to the U.S. Federal Reserve’s continued policy tightening.
In terms of credit quality, we continued to see some value in the A and BBB tiers. However, the opportunities in these areas were limited since much of the new-issue supply in Oregon was highly rated. We therefore retained a high-quality portfolio with an average credit quality in the lower AA range.
We decreased the portfolio’s allocation to shorter maturity bonds and used the proceeds to purchase securities with maturities longer than ten years. We saw more value in this segment due to its higher yields, particularly in the wake of the post-election sell-off. At the sector level, we increased the Fund’s weighting in healthcare by adding to both hospital and continuing-care retirement community issues. We also added to the electric utilities area, as well as to higher quality bonds in the water and sewer and local school-district sectors.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of the Fund’s portfolio may be more volatile than a more geographically diversified fund. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. A rise in interest rates may result in a price decline of fixed-income instruments held by the fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 5 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2017 — July 31, 2017 |
| | Account value at the
beginning of the
period ($) | Account value at the
end of the
period ($) | Expenses paid during
the period ($) | Fund’s annualized
expense ratio (%) |
| | Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual |
| Class A | 1,000.00 | 1,000.00 | 1,027.50 | 1,020.63 | 4.22 | 4.21 | 0.84 |
| Class B | 1,000.00 | 1,000.00 | 1,023.70 | 1,016.91 | 7.98 | 7.95 | 1.59 |
| Class C | 1,000.00 | 1,000.00 | 1,025.20 | 1,018.35 | 6.53 | 6.51 | 1.30 |
| Class R4 | 1,000.00 | 1,000.00 | 1,029.60 | 1,021.82 | 3.02 | 3.01 | 0.60 |
| Class R5 | 1,000.00 | 1,000.00 | 1,029.00 | 1,022.02 | 2.82 | 2.81 | 0.56 |
| Class Y | 1,000.00 | 1,000.00 | 1,025.90 (a) | 1,022.17 | 2.22 (a) | 2.66 | 0.53 (a) |
| Class Z | 1,000.00 | 1,000.00 | 1,028.80 | 1,021.82 | 3.02 | 3.01 | 0.60 |
(a) Based on operations from March 1, 2017 (commencement of operations) through the stated period end.
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| 6 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments
July 31, 2017
(Percentages represent value of investments compared to net assets)
| Municipal Bonds 98.7% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 3.0% |
| Port of Portland |
| Refunding Revenue Bonds |
| Portland International Airport |
| Series 2015-23 |
| 07/01/2028 | 5.000% | | 1,240,000 | 1,483,524 |
| 07/01/2031 | 5.000% | | 1,750,000 | 2,054,202 |
| 07/01/2032 | 5.000% | | 2,000,000 | 2,333,620 |
| Revenue Bonds |
| Passenger Facility Charge |
| Series 2011 |
| 07/01/2027 | 5.500% | | 6,635,000 | 7,570,071 |
| Total | 13,441,417 |
| Charter Schools 0.2% |
| Oregon State Facilities Authority(a) |
| Revenue Bonds |
| Redmond Proficiency Academy Project |
| Series 2015 |
| 06/15/2025 | 4.750% | | 200,000 | 208,526 |
| 06/15/2035 | 5.500% | | 540,000 | 561,994 |
| Total | 770,520 |
| Higher Education 4.6% |
| City of Forest Grove |
| Refunding Revenue Bonds |
| Campus Improvement Pacific University Project |
| Series 2014 |
| 05/01/2034 | 5.250% | | 1,000,000 | 1,094,230 |
| Series 2015 |
| 05/01/2030 | 5.000% | | 550,000 | 621,214 |
| Oak Tree Foundation Project |
| Series 2017 |
| 03/01/2024 | 5.000% | | 250,000 | 285,922 |
| 03/01/2025 | 5.000% | | 200,000 | 229,428 |
| Oregon Health & Science University(b) |
| Revenue Bonds |
| Capital Appreciation-Independent School District |
| Series 1996A (NPFGC) |
| 07/01/2021 | 0.000% | | 7,070,000 | 6,369,929 |
| Oregon Health & Science University |
| Revenue Bonds |
| Series 2012A |
| 07/01/2018 | 5.000% | | 1,000,000 | 1,036,490 |
| Series 2012E |
| 07/01/2032 | 5.000% | | 7,000,000 | 7,873,740 |
| Oregon State Facilities Authority |
| Refunding Revenue Bonds |
| University of Portland |
| Series 2015A |
| 04/01/2030 | 5.000% | | 500,000 | 577,555 |
| 04/01/2031 | 5.000% | | 530,000 | 611,111 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| Linfield College Project |
| Series 2015A |
| 10/01/2024 | 5.000% | | 1,390,000 | 1,637,615 |
| Total | 20,337,234 |
| Hospital 11.2% |
| Astoria Hospital Facilities Authority |
| Refunding Revenue Bonds |
| Columbia Memorial Hospital |
| Series 2012 |
| 08/01/2018 | 4.000% | | 745,000 | 761,494 |
| 08/01/2019 | 4.000% | | 855,000 | 891,329 |
| 08/01/2020 | 4.000% | | 915,000 | 969,717 |
| 08/01/2021 | 4.000% | | 725,000 | 779,121 |
| 08/01/2026 | 5.000% | | 1,200,000 | 1,326,168 |
| 08/01/2027 | 5.000% | | 1,260,000 | 1,383,417 |
| 08/01/2031 | 5.000% | | 2,860,000 | 3,081,050 |
| Deschutes County Hospital Facilities Authority |
| Refunding Revenue Bonds |
| St. Charles Health System |
| Series 2016 |
| 01/01/2033 | 4.000% | | 500,000 | 526,655 |
| Hospital Facilities Authority of Multnomah County |
| Revenue Bonds |
| Adventist Health West |
| Series 2009A |
| 09/01/2021 | 5.000% | | 3,685,000 | 3,982,269 |
| Klamath Falls Intercommunity Hospital Authority |
| Refunding Revenue Bonds |
| Sky Lakes Medical Center Project |
| Series 2012 |
| 09/01/2018 | 5.000% | | 1,195,000 | 1,244,724 |
| 09/01/2019 | 5.000% | | 1,255,000 | 1,351,372 |
| 09/01/2022 | 5.000% | | 500,000 | 581,520 |
| Series 2016 |
| 09/01/2028 | 5.000% | | 265,000 | 315,522 |
| 09/01/2030 | 5.000% | | 430,000 | 503,014 |
| 09/01/2031 | 5.000% | | 200,000 | 232,802 |
| 09/01/2032 | 5.000% | | 270,000 | 312,884 |
| Oregon Health & Science University |
| Refunding Revenue Bonds |
| Series 2016B |
| 07/01/2034 | 5.000% | | 4,000,000 | 4,690,040 |
| Oregon State Facilities Authority |
| Refunding Revenue Bonds |
| Legacy Health Project |
| Series 2011A |
| 05/01/2020 | 5.250% | | 5,000,000 | 5,544,200 |
| Series 2016A |
| 06/01/2033 | 5.000% | | 1,600,000 | 1,846,640 |
| 06/01/2034 | 5.000% | | 3,185,000 | 3,665,298 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| PeaceHealth Project |
| Series 2009A |
| 11/01/2019 | 5.000% | | 3,695,000 | 4,009,408 |
| Series 2014A |
| 11/15/2029 | 5.000% | | 1,600,000 | 1,860,080 |
| Samaritan Health Services Project |
| Series 2010A |
| 10/01/2022 | 5.000% | | 3,450,000 | 3,781,269 |
| Series 2016 |
| 10/01/2031 | 5.000% | | 2,430,000 | 2,770,880 |
| Salem Hospital Facility Authority |
| Refunding Revenue Bonds |
| Salem Health Project |
| Series 2016A |
| 05/15/2030 | 5.000% | | 1,000,000 | 1,166,210 |
| 05/15/2031 | 5.000% | | 1,025,000 | 1,188,313 |
| Salem Health Projects |
| Series 2016A |
| 05/15/2029 | 5.000% | | 1,000,000 | 1,178,350 |
| Total | 49,943,746 |
| Independent Power 1.4% |
| Western Generation Agency |
| Revenue Bonds |
| Wauna Cogeneration Project |
| Series 2006A |
| 01/01/2020 | 5.000% | | 3,235,000 | 3,236,844 |
| 01/01/2021 | 5.000% | | 3,000,000 | 3,003,270 |
| Total | 6,240,114 |
| Investor Owned 0.9% |
| Port of Morrow |
| Refunding Revenue Bonds |
| Portland General Electric |
| Series 1998A |
| 05/01/2033 | 5.000% | | 3,750,000 | 4,138,388 |
| Local General Obligation 34.1% |
| Benton & Linn Counties Consolidated School District No. 509J & 509A Corvallis |
| Unlimited General Obligation Refunding Bonds |
| Series 2007 (AGM) |
| 06/15/2020 | 5.000% | | 5,000,000 | 5,545,950 |
| Blue Mountain Community College District |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 06/15/2029 | 4.000% | | 1,000,000 | 1,106,430 |
| Boardman Park & Recreation District |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 06/15/2035 | 5.250% | | 3,400,000 | 3,699,506 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Canyonville South Umpqua Rural Fire Protection District |
| Unlimited General Obligation Bonds |
| Series 2001 |
| 07/01/2031 | 5.400% | | 610,000 | 610,622 |
| Central Oregon Community College |
| Limited General Obligation Bonds |
| Series 2014 |
| 06/01/2029 | 5.000% | | 500,000 | 580,815 |
| Unlimited General Obligation Bonds |
| Series 2010 |
| 06/15/2024 | 4.750% | | 2,580,000 | 2,842,747 |
| Chemeketa Community College |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 06/15/2026 | 5.000% | | 1,100,000 | 1,315,149 |
| Chemeketa Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 06/15/2026 | 4.000% | | 1,745,000 | 1,987,730 |
| City of Hillsboro |
| Limited General Obligation Refunding Bonds |
| Series 2012 |
| 06/01/2025 | 4.000% | | 1,875,000 | 2,064,206 |
| City of Lebanon |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 06/01/2026 | 5.000% | | 1,675,000 | 2,002,998 |
| 06/01/2027 | 5.000% | | 1,715,000 | 2,029,308 |
| City of Madras |
| Unlimited General Obligation Refunding Bonds |
| Series 2013 |
| 02/15/2024 | 4.000% | | 745,000 | 809,808 |
| 02/15/2027 | 4.500% | | 500,000 | 544,065 |
| City of Portland |
| Limited General Obligation Bonds |
| Limited Tax Sellwood Bridge Project |
| Series 2014 |
| 06/01/2024 | 5.000% | | 1,985,000 | 2,432,776 |
| Limited Tax General Obligation Refunding Bonds |
| Series 2011A |
| 06/01/2023 | 5.000% | | 6,140,000 | 6,991,250 |
| Unlimited General Obligation Refunding Bonds |
| Public Safety Projects and Emergency Facilities |
| Series 2014 |
| 06/15/2024 | 5.000% | | 1,885,000 | 2,314,365 |
| City of Portland(b) |
| Limited Tax General Obligation Bonds |
| Series 2001B |
| 06/01/2018 | 0.000% | | 4,000,000 | 3,969,320 |
| 06/01/2019 | 0.000% | | 4,000,000 | 3,926,440 |
| 06/01/2020 | 0.000% | | 4,000,000 | 3,874,120 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Redmond |
| Limited General Obligation Bonds |
| Series 2014A |
| 06/01/2027 | 5.000% | | 685,000 | 798,614 |
| City of Salem |
| Unlimited General Obligation Bonds |
| Series 2009 |
| 06/01/2019 | 5.000% | | 2,025,000 | 2,171,185 |
| 06/01/2020 | 5.000% | | 880,000 | 943,721 |
| City of Sisters |
| Limited General Obligation Refunding Bonds |
| Series 2016 |
| 12/01/2035 | 4.000% | | 620,000 | 667,294 |
| Clackamas Community College District(b) |
| Unlimited General Obligation Bonds |
| Convertible Deferred Interest |
| Series 2017A |
| 06/15/2038 | 0.000% | | 760,000 | 783,887 |
| Clackamas County School District No. 108 Estacada |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (AGM) |
| 06/15/2025 | 5.500% | | 2,485,000 | 3,173,047 |
| Clackamas County School District No. 12 North Clackamas |
| Unlimited General Obligation Bonds |
| Series 2017B |
| 06/15/2033 | 5.000% | | 3,500,000 | 4,213,615 |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 06/15/2029 | 5.000% | | 1,500,000 | 1,771,545 |
| Unlimited General Obligation Refunding Notes |
| Series 2016 |
| 06/15/2032 | 4.000% | | 2,000,000 | 2,198,900 |
| Clackamas County School District No. 62 |
| Limited General Obligation Refunding Bonds |
| Series 2014 |
| 06/01/2034 | 5.000% | | 1,770,000 | 2,028,367 |
| Columbia Gorge Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2012 |
| 06/15/2018 | 3.000% | | 810,000 | 823,916 |
| 06/15/2019 | 2.500% | | 1,010,000 | 1,036,745 |
| Deschutes & Jefferson Counties School District No. 2J Redmond(b) |
| Unlimited General Obligation Bonds |
| Series 2004B (NPFGC) |
| 06/15/2022 | 0.000% | | 2,335,000 | 2,165,806 |
| Jackson County School District No. 549C Medford |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 12/15/2023 | 5.000% | | 1,000,000 | 1,215,000 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Jackson County School District No. 9 Eagle Point |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (NPFGC) |
| 06/15/2020 | 5.500% | | 1,000,000 | 1,121,770 |
| 06/15/2021 | 5.500% | | 1,410,000 | 1,633,739 |
| Jefferson County School District No. 509J |
| Unlimited General Obligation Bonds |
| Madras |
| Series 2013B |
| 06/15/2028 | 5.000% | | 2,095,000 | 2,459,404 |
| Klamath Falls City Schools |
| Unlimited General Obligation Refunding Bonds |
| Series 2015A |
| 06/15/2028 | 4.000% | | 500,000 | 550,960 |
| Lane & Douglas Counties School District No. 45J3(b) |
| Unlimited General Obligation Bonds |
| Deferred Interest |
| Series 2016A |
| 06/15/2034 | 0.000% | | 1,000,000 | 563,970 |
| 06/15/2036 | 0.000% | | 1,000,000 | 516,030 |
| Lane & Douglas Counties School District No. 45J3 |
| Unlimited General Obligation Refunding Bonds |
| South Lane |
| Series 2012 |
| 06/15/2020 | 3.000% | | 1,000,000 | 1,053,110 |
| 06/15/2021 | 3.000% | | 1,610,000 | 1,718,900 |
| Lane Community College |
| Unlimited General Obligation Bonds |
| Series 2009 |
| 06/15/2018 | 4.250% | | 2,000,000 | 2,058,680 |
| Series 2012 |
| 06/15/2023 | 5.000% | | 1,000,000 | 1,175,480 |
| Lane County School District No. 1 Pleasant Hill(b) |
| Unlimited General Obligation Bonds |
| Series 2014B |
| 06/15/2029 | 0.000% | | 1,775,000 | 1,274,042 |
| Lane County School District No. 19 Springfield |
| Unlimited General Obligation Bonds |
| Series 2015A |
| 06/15/2031 | 5.000% | | 2,000,000 | 2,372,520 |
| Lane County School District No. 19 Springfield(b) |
| Unlimited General Obligation Bonds |
| Series 2015B |
| 06/15/2033 | 0.000% | | 3,770,000 | 2,129,635 |
| Unlimited General Obligation Refunding Bonds |
| Series 2015D |
| 06/15/2024 | 0.000% | | 2,305,000 | 2,009,130 |
| 06/15/2028 | 0.000% | | 1,480,000 | 1,104,272 |
| Linn & Benton Counties School District No. 8J Greater Albany |
| Unlimited General Obligation Bonds |
| Series 2017 |
| 06/15/2030 | 5.000% | | 1,000,000 | 1,223,010 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Marion & Clackamas Counties School District No. 4J Silver Falls |
| Unlimited General Obligation Refunding Bonds |
| Series 2013 |
| 06/15/2021 | 4.000% | | 2,785,000 | 3,072,858 |
| Multnomah & Clackamas Counties School District No. 10JT Gresham-Barlow(b) |
| Unlimited General Obligation Bonds |
| Series 2017A |
| 06/15/2033 | 0.000% | | 4,000,000 | 2,224,680 |
| Multnomah & Clackamas Counties School District No. 10JT Gresham-Barlow |
| Unlimited General Obligation Bonds |
| Series 2017B |
| 06/15/2031 | 5.000% | | 3,000,000 | 3,643,650 |
| Multnomah County School District No. 7 Reynolds(b) |
| Unlimited General Obligation Bonds |
| Deferred Interest |
| Series 2015B |
| 06/15/2030 | 0.000% | | 4,000,000 | 2,560,840 |
| Pacific Communities Health District |
| Unlimited General Obligation Bonds |
| Series 2016 |
| 06/01/2031 | 5.000% | | 775,000 | 913,562 |
| 06/01/2032 | 5.000% | | 845,000 | 991,726 |
| Polk Marion & Benton Counties School District No. 13J Central |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 02/01/2027 | 4.000% | | 750,000 | 842,490 |
| 02/01/2028 | 4.000% | | 1,000,000 | 1,113,880 |
| Portland Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2016 |
| 06/15/2027 | 5.000% | | 2,100,000 | 2,600,871 |
| Rogue Community College District |
| Unlimited General Obligation Bonds |
| Series 2016B |
| 06/15/2031 | 4.000% | | 330,000 | 363,911 |
| 06/15/2032 | 4.000% | | 455,000 | 497,993 |
| Umatilla County School District No. 16R Pendleton |
| Unlimited General Obligation Bonds |
| Series 2014A |
| 06/15/2030 | 5.000% | | 1,110,000 | 1,293,827 |
| 06/15/2031 | 5.000% | | 2,890,000 | 3,349,452 |
| Umatilla County School District No. 8R Hermiston |
| Unlimited General Obligation Bonds |
| Series 2010 |
| 06/15/2029 | 4.500% | | 2,360,000 | 2,517,577 |
| Union County School District No. 1 La Grande |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 06/15/2030 | 4.000% | | 1,000,000 | 1,087,650 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Washington & Clackamas Counties School District No. 23J Tigard-Tualatin |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (NPFGC) |
| 06/15/2019 | 5.000% | | 850,000 | 913,436 |
| 06/15/2021 | 5.000% | | 6,575,000 | 7,526,468 |
| Washington & Multnomah Counties School District No. 48J Beaverton |
| Limited General Obligation Refunding Notes |
| Series 2016 |
| 06/01/2030 | 4.000% | | 860,000 | 949,990 |
| Unlimited General Obligation Bonds |
| Series 2014 |
| 06/15/2033 | 5.000% | | 4,000,000 | 4,646,920 |
| Unlimited General Obligation Refunding Bonds |
| Series 2012-B |
| 06/15/2023 | 4.000% | | 4,090,000 | 4,598,469 |
| Washington Clackamas & Yamhill Counties School District No. 88J |
| Unlimited General Obligation Bonds |
| Sherwood College |
| Series 2017B |
| 06/15/2031 | 5.000% | | 4,500,000 | 5,465,475 |
| Washington County School District No. 1 West Union |
| Unlimited General Obligation Refunding Bonds |
| Hillsboro |
| Series 2012 |
| 06/15/2020 | 4.000% | | 1,400,000 | 1,515,472 |
| Washington County School District No. 15 Forest Grove |
| Unlimited General Obligation Bonds |
| Series 2012A |
| 06/15/2024 | 5.000% | | 1,780,000 | 2,088,260 |
| Yamhill Clackamas & Washington Counties School District No. 29J Newberg |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (NPFGC) |
| 06/15/2021 | 5.500% | | 1,000,000 | 1,161,940 |
| Total | 151,545,296 |
| Multi-Family 1.4% |
| City of Portland |
| Revenue Bonds |
| Headwaters Apartments Project |
| Series 2005A |
| 04/01/2025 | 5.000% | | 1,305,000 | 1,309,059 |
| Oregon State Facilities Authority |
| Refunding Revenue Bonds |
| College Housing Northwest Projects |
| Series 2013A |
| 10/01/2018 | 4.000% | | 740,000 | 754,985 |
| 10/01/2019 | 4.000% | | 780,000 | 806,676 |
| 10/01/2020 | 4.000% | | 810,000 | 845,996 |
| 10/01/2022 | 4.000% | | 875,000 | 929,057 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Oregon State Facilities Authority(a) |
| Revenue Bonds |
| College Housing Northwest Projects |
| Series 2016A |
| 10/01/2026 | 4.000% | | 500,000 | 513,510 |
| 10/01/2036 | 5.000% | | 1,000,000 | 1,060,290 |
| Total | 6,219,573 |
| Municipal Power 1.4% |
| Central Lincoln People’s Utility District JATC, Inc. |
| Revenue Bonds |
| Series 2016 |
| 12/01/2033 | 5.000% | | 350,000 | 405,174 |
| 12/01/2034 | 5.000% | | 400,000 | 461,452 |
| 12/01/2035 | 5.000% | | 410,000 | 471,680 |
| 12/01/2036 | 5.000% | | 440,000 | 504,790 |
| City of Eugene Electric Utility System |
| Refunding Revenue Bonds |
| Series 2016A |
| 08/01/2031 | 4.000% | | 750,000 | 828,075 |
| Northern Wasco County Peoples Utility District |
| Revenue Bonds |
| Series 2016 |
| 12/01/2031 | 5.000% | | 1,455,000 | 1,705,827 |
| 12/01/2036 | 5.000% | | 1,545,000 | 1,771,822 |
| Total | 6,148,820 |
| Ports 1.6% |
| Port of Morrow |
| Limited General Obligation Bonds |
| Series 2013 |
| 06/01/2022 | 4.000% | | 425,000 | 431,549 |
| 06/01/2023 | 4.000% | | 440,000 | 446,085 |
| 06/01/2024 | 4.000% | | 460,000 | 465,778 |
| 06/01/2025 | 4.000% | | 480,000 | 485,117 |
| 06/01/2026 | 4.000% | | 500,000 | 504,650 |
| 06/01/2027 | 4.000% | | 515,000 | 519,408 |
| 06/01/2028 | 4.000% | | 250,000 | 251,943 |
| Limited General Obligation Refunding Bonds |
| Series 2016 |
| 12/01/2027 | 5.000% | | 615,000 | 697,115 |
| 12/01/2028 | 5.000% | | 645,000 | 727,328 |
| 12/01/2029 | 5.000% | | 340,000 | 382,044 |
| 12/01/2030 | 5.000% | | 335,000 | 376,202 |
| 12/01/2031 | 5.000% | | 375,000 | 420,172 |
| 12/01/2036 | 5.000% | | 1,160,000 | 1,283,262 |
| Total | 6,990,653 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Refunded / Escrowed 15.2% |
| City of Eugene Electric Utility System |
| Prerefunded 08/01/21 Revenue Bonds |
| Series 2011A |
| 08/01/2028 | 5.000% | | 2,200,000 | 2,532,970 |
| 08/01/2029 | 5.000% | | 3,410,000 | 3,926,104 |
| City of Portland |
| Prerefunded 04/01/18 Revenue Bonds |
| Broadway Project LLC |
| Series 2008A |
| 04/01/2023 | 6.250% | | 3,250,000 | 3,447,340 |
| City of Salem |
| Prerefunded 06/01/19 Limited General Obligation Bonds |
| Series 2009 |
| 06/01/2026 | 5.000% | | 3,315,000 | 3,558,586 |
| Clackamas & Washington Counties School District No. 3 |
| Prerefunded 06/15/19 Unlimited General Obligation Bonds |
| West Linn-Wilsonville |
| Series 2009 |
| 06/15/2024 | 5.000% | | 4,150,000 | 4,460,461 |
| Clackamas County School District No. 46 Oregon Trail |
| Prerefunded 06/15/19 Unlimited General Obligation Bonds |
| Series 2009A |
| 06/15/2025 | 5.000% | | 4,350,000 | 4,676,250 |
| 06/15/2026 | 5.000% | | 3,000,000 | 3,225,000 |
| Columbia Multnomah & Washington Counties School District No. 1J |
| Prerefunded 06/15/19 Unlimited General Obligation Bonds |
| Scappoose School District 1J |
| Series 2009 |
| 06/15/2023 | 5.000% | | 1,000,000 | 1,074,810 |
| 06/15/2024 | 5.000% | | 1,165,000 | 1,252,154 |
| 06/15/2025 | 5.000% | | 1,275,000 | 1,370,383 |
| County of Lane |
| Prerefunded 11/01/19 Limited General Obligation Bonds |
| Series 2009A |
| 11/01/2024 | 5.000% | | 1,000,000 | 1,089,610 |
| 11/01/2025 | 5.000% | | 1,140,000 | 1,242,155 |
| Deschutes County Hospital Facilities Authority |
| Prerefunded 01/01/19 Revenue Bonds |
| Cascade Health Services, Inc. |
| Series 2008 |
| 01/01/2023 | 7.375% | | 2,000,000 | 2,175,320 |
| Jackson County School District No. 549C Medford |
| Prerefunded 06/15/18 Unlimited General Obligation Bonds |
| Series 2008 |
| 06/15/2027 | 4.625% | | 1,500,000 | 1,548,855 |
| Oregon State Lottery |
| Prerefunded 04/01/18 Revenue Bonds |
| Series 2008A |
| 04/01/2024 | 5.000% | | 3,130,000 | 3,214,948 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Prerefunded 04/01/19 Revenue Bonds |
| Series 2009A |
| 04/01/2021 | 5.000% | | 2,500,000 | 2,667,425 |
| 04/01/2027 | 5.000% | | 4,000,000 | 4,267,880 |
| Puerto Rico Public Finance Corp.(c) |
| Unrefunded Revenue Bonds |
| Commonwealth Appropriation |
| Series 2002E Escrowed to Maturity |
| 08/01/2026 | 6.000% | | 5,000,000 | 6,425,500 |
| Salem Hospital Facility Authority |
| Revenue Bonds |
| Series 2008A Escrowed to Maturity |
| 08/15/2018 | 5.250% | | 2,500,000 | 2,612,000 |
| State of Oregon Department of Administrative Services |
| Prerefunded 05/01/19 Certificate of Participation |
| Series 2009A |
| 05/01/2023 | 5.000% | | 3,100,000 | 3,314,923 |
| State of Oregon Department of Transportation |
| Prerefunded 05/15/19 Revenue Bonds |
| Senior Lien |
| Series 2009A |
| 11/15/2027 | 4.750% | | 7,000,000 | 7,471,310 |
| Tri-County Metropolitan Transportation District of Oregon |
| Prerefunded 09/01/19 Revenue Bonds |
| Series 2009A |
| 09/01/2021 | 4.250% | | 1,815,000 | 1,936,042 |
| Virgin Islands Public Finance Authority(c) |
| Prerefunded 10/01/18 Revenue Bonds |
| Series 1989A |
| 10/01/2018 | 7.300% | | 330,000 | 343,273 |
| Total | 67,833,299 |
| Retirement Communities 2.5% |
| Hospital Facilities Authority of Multnomah County |
| Refunding Revenue Bonds |
| Mirabella at South Waterfront |
| Series 2014A |
| 10/01/2034 | 5.125% | | 4,000,000 | 4,253,440 |
| Terwilliger Plaza, Inc. |
| Series 2012 |
| 12/01/2020 | 5.000% | | 1,250,000 | 1,314,138 |
| 12/01/2022 | 5.000% | | 500,000 | 554,005 |
| Series 2016 |
| 12/01/2030 | 5.000% | | 325,000 | 370,292 |
| 12/01/2036 | 5.000% | | 900,000 | 999,846 |
| Medford Hospital Facilities Authority |
| Refunding Revenue Bonds |
| Rogue Valley Manor |
| Series 2013 |
| 10/01/2022 | 5.000% | | 625,000 | 719,156 |
| 10/01/2023 | 5.000% | | 645,000 | 752,747 |
| 10/01/2024 | 5.000% | | 455,000 | 525,379 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Polk County Hospital Facility Authority |
| Revenue Bonds |
| Dallas Retirement Village Project |
| Series 2015A |
| 07/01/2035 | 5.125% | | 1,240,000 | 1,245,952 |
| Yamhill County Hospital Authority |
| Refunding Revenue Bonds |
| Friendsview Retirement Community |
| Series 2016 |
| 11/15/2026 | 4.000% | | 500,000 | 508,775 |
| Total | 11,243,730 |
| Single Family 0.8% |
| State of Oregon Housing & Community Services Department |
| Revenue Bonds |
| Single Family Mortgage Program |
| Series 2010A |
| 07/01/2027 | 5.250% | | 210,000 | 219,584 |
| Series 2011A |
| 07/01/2025 | 5.250% | | 2,370,000 | 2,554,291 |
| Series 2011B |
| 07/01/2028 | 5.250% | | 665,000 | 711,138 |
| Total | 3,485,013 |
| Special Non Property Tax 4.6% |
| Oregon State Lottery |
| Refunding Revenue Bonds |
| Series 2014B |
| 04/01/2027 | 5.000% | | 1,750,000 | 2,080,943 |
| Series 2015D |
| 04/01/2027 | 5.000% | | 2,500,000 | 3,038,525 |
| Revenue Bonds |
| Series 2012B |
| 04/01/2018 | 3.000% | | 3,600,000 | 3,653,640 |
| State of Oregon Department of Transportation |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2017B |
| 11/15/2026 | 5.000% | | 4,000,000 | 5,042,080 |
| Territory of Guam(c) |
| Revenue Bonds |
| Series 2011A |
| 01/01/2031 | 5.000% | | 1,100,000 | 1,164,636 |
| Tri-County Metropolitan Transportation District of Oregon |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2016 |
| 09/01/2031 | 4.000% | | 1,000,000 | 1,118,610 |
| 09/01/2032 | 4.000% | | 1,250,000 | 1,387,550 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| Senior Lien Payroll Tax |
| Series 2017A |
| 09/01/2032 | 5.000% | | 1,595,000 | 1,917,190 |
| Series 2009A |
| 09/01/2018 | 4.000% | | 1,000,000 | 1,034,400 |
| Total | 20,437,574 |
| Special Property Tax 4.5% |
| City of Keizer |
| Special Assessment Bonds |
| Keizer Station Area |
| Series 2008A |
| 06/01/2031 | 5.200% | | 2,780,000 | 2,859,786 |
| City of Portland |
| Refunding Tax Allocation Bonds |
| 2nd Lien-Downtown Water |
| Series 2011 |
| 06/15/2018 | 5.000% | | 3,095,000 | 3,202,644 |
| Senior Lien-Oregon Convention Center |
| Series 2011 |
| 06/15/2020 | 5.000% | | 4,305,000 | 4,741,699 |
| Series 2015 |
| 06/15/2024 | 5.000% | | 1,480,000 | 1,655,424 |
| Tax Allocation Bonds |
| Central Eastside |
| Series 2011B |
| 06/15/2026 | 5.000% | | 1,580,000 | 1,771,686 |
| 06/15/2027 | 5.000% | | 1,370,000 | 1,536,208 |
| Lents Town Center |
| Series 2010B |
| 06/15/2025 | 5.000% | | 1,550,000 | 1,705,341 |
| 06/15/2026 | 5.000% | | 1,440,000 | 1,582,186 |
| Veneta Urban Renewal Agency |
| Revenue Bonds |
| Urban Renewal |
| Series 2001 |
| 02/15/2021 | 5.625% | | 905,000 | 906,964 |
| Total | 19,961,938 |
| State General Obligation 2.3% |
| State of Oregon |
| Unlimited General Obligation Bonds |
| Article XI-Q State Project |
| Series 2017A |
| 05/01/2026 | 5.000% | | 1,250,000 | 1,566,375 |
| Series 2015F |
| 05/01/2030 | 5.000% | | 5,565,000 | 6,637,487 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Unlimited General Obligation Notes |
| Higher Education |
| Series 2016C |
| 08/01/2033 | 5.000% | | 750,000 | 898,275 |
| Series 2016A |
| 08/01/2031 | 3.500% | | 500,000 | 527,675 |
| 08/01/2032 | 3.500% | | 500,000 | 524,020 |
| Total | 10,153,832 |
| Transportation 2.8% |
| Tri-County Metropolitan Transportation District of Oregon |
| Prerefunded 10/01/21 Revenue Bonds |
| Capital Grant Receipt |
| Series 2011A |
| 10/01/2025 | 5.000% | | 4,775,000 | 5,516,510 |
| 10/01/2027 | 5.000% | | 3,000,000 | 3,465,870 |
| Tri-County Metropolitan Transportation District of Oregon(d) |
| Refunding Revenue Bonds |
| Series 2017 |
| 10/01/2026 | 5.000% | | 1,235,000 | 1,518,642 |
| 10/01/2027 | 5.000% | | 1,485,000 | 1,836,529 |
| Total | 12,337,551 |
| Water & Sewer 6.2% |
| City of Albany |
| Limited General Obligation Refunding Bonds |
| Series 2013 |
| 08/01/2022 | 4.000% | | 1,240,000 | 1,389,060 |
| 08/01/2023 | 4.000% | | 1,290,000 | 1,461,725 |
| City of Eugene Water Utility System |
| Refunding Revenue Bonds |
| Utility System |
| Series 2016 |
| 08/01/2031 | 4.000% | | 165,000 | 181,484 |
| 08/01/2032 | 4.000% | | 500,000 | 545,780 |
| City of Portland Water System |
| Refunding Revenue Bonds |
| 1st Lien |
| Series 2016A |
| 04/01/2030 | 4.000% | | 7,375,000 | 8,207,785 |
| Revenue Bonds |
| Series 2014A |
| 05/01/2028 | 4.000% | | 3,390,000 | 3,738,661 |
| City of Springfield Sewer System |
| Refunding Revenue Bonds |
| Series 2017 |
| 04/01/2025 | 4.000% | | 200,000 | 230,450 |
| 04/01/2026 | 4.000% | | 250,000 | 289,283 |
| 04/01/2027 | 4.000% | | 270,000 | 312,876 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Woodburn Wastewater |
| Refunding Revenue Bonds |
| Series 2011A |
| 03/01/2019 | 5.000% | | 3,490,000 | 3,704,949 |
| 03/01/2022 | 5.000% | | 4,620,000 | 5,320,438 |
| Clackamas River Water |
| Revenue Bonds |
| Series 2016 |
| 11/01/2032 | 5.000% | | 200,000 | 233,334 |
| 11/01/2033 | 5.000% | | 265,000 | 307,956 |
| 11/01/2034 | 5.000% | | 250,000 | 289,578 |
| 11/01/2035 | 5.000% | | 225,000 | 259,940 |
| 11/01/2036 | 5.000% | | 200,000 | 230,606 |
| Guam Government Waterworks Authority(c) |
| Revenue Bonds |
| Series 2016 |
| 07/01/2036 | 5.000% | | 700,000 | 773,038 |
| Total | 27,476,943 |
Total Municipal Bonds
(Cost $418,433,024) | 438,705,641 |
| Money Market Funds 0.6% |
| | Shares | Value ($) |
| Dreyfus Tax-Exempt Cash Management Fund, Institutional Shares, 0.580%(e) | 2,484,084 | 2,484,084 |
Total Money Market Funds
(Cost $2,484,084) | 2,484,084 |
Total Investments
(Cost: $420,917,108) | 441,189,725 |
| Other Assets & Liabilities, Net | | 3,213,512 |
| Net Assets | 444,403,237 |
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At July 31, 2017, the value of these securities amounted to $2,344,320, which represents 0.53% of net assets. |
| (b) | Zero coupon bond. |
| (c) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At July 31, 2017, the value of these securities amounted to $8,706,447, which represents 1.96% of net assets. |
| (d) | Represents a security purchased on a when-issued basis. |
| (e) | The rate shown is the seven-day current annualized yield at July 31, 2017. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| NPFGC | National Public Finance Guarantee Corporation |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Municipal Bonds | — | 438,705,641 | — | 438,705,641 |
| Money Market Funds | 2,484,084 | — | — | 2,484,084 |
| Total Investments | 2,484,084 | 438,705,641 | — | 441,189,725 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 15 |
Statement of Assets and Liabilities
July 31, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $420,917,108 |
| Total investments, at cost | 420,917,108 |
| Investments, at value | |
| Unaffiliated issuers, at value | 441,189,725 |
| Total investments, at value | 441,189,725 |
| Cash | 24,799 |
| Receivable for: | |
| Investments sold | 2,866,215 |
| Capital shares sold | 964,010 |
| Interest | 4,106,352 |
| Prepaid expenses | 3,422 |
| Trustees’ deferred compensation plan | 59,701 |
| Total assets | 449,214,224 |
| Liabilities | |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 3,360,172 |
| Capital shares purchased | 283,691 |
| Distributions to shareholders | 1,021,282 |
| Management services fees | 17,068 |
| Distribution and/or service fees | 2,289 |
| Transfer agent fees | 30,400 |
| Compensation of chief compliance officer | 18 |
| Other expenses | 36,366 |
| Trustees’ deferred compensation plan | 59,701 |
| Total liabilities | 4,810,987 |
| Net assets applicable to outstanding capital stock | $444,403,237 |
| Represented by | |
| Paid in capital | 424,751,986 |
| Undistributed net investment income | 326,345 |
| Accumulated net realized loss | (947,711) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 20,272,617 |
| Total - representing net assets applicable to outstanding capital stock | $444,403,237 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities (continued)
July 31, 2017
| Class A | |
| Net assets | $43,386,787 |
| Shares outstanding | 3,484,401 |
| Net asset value per share | $12.45 |
| Maximum offering price per share(a) | $12.84 |
| Class B | |
| Net assets | $10,430 |
| Shares outstanding | 838 |
| Net asset value per share(b) | $12.44 |
| Class C | |
| Net assets | $24,330,108 |
| Shares outstanding | 1,953,959 |
| Net asset value per share | $12.45 |
| Class R4 | |
| Net assets | $664,159 |
| Shares outstanding | 53,344 |
| Net asset value per share | $12.45 |
| Class R5 | |
| Net assets | $42,681,014 |
| Shares outstanding | 3,432,708 |
| Net asset value per share | $12.43 |
| Class Y | |
| Net assets | $10,136 |
| Shares outstanding | 813 |
| Net asset value per share | $12.47 |
| Class Z | |
| Net assets | $333,320,603 |
| Shares outstanding | 26,769,823 |
| Net asset value per share | $12.45 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
| (b) | Net asset value per share rounds to this amount due to fractional shares outstanding. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 17 |
Statement of Operations
Year Ended July 31, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $22,614 |
| Interest | 15,526,800 |
| Total income | 15,549,414 |
| Expenses: | |
| Management services fees | 2,152,358 |
| Distribution and/or service fees | |
| Class A | 125,634 |
| Class B | 107 |
| Class C | 264,141 |
| Transfer agent fees | |
| Class A | 50,619 |
| Class B | 11 |
| Class C | 26,599 |
| Class R4 | 498 |
| Class R5 | 19,373 |
| Class Y(a) | 1 |
| Class Z | 351,525 |
| Compensation of board members | 26,980 |
| Custodian fees | 4,388 |
| Printing and postage fees | 23,008 |
| Registration fees | 26,588 |
| Audit fees | 29,915 |
| Legal fees | 12,570 |
| Compensation of chief compliance officer | 200 |
| Other | (47,801) |
| Total expenses | 3,066,714 |
| Fees waived by distributor | |
| Class C | (79,310) |
| Expense reduction | (580) |
| Total net expenses | 2,986,824 |
| Net investment income | 12,562,590 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (777,596) |
| Net realized loss | (777,596) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (13,893,314) |
| Net change in unrealized appreciation (depreciation) | (13,893,314) |
| Net realized and unrealized loss | (14,670,910) |
| Net decrease in net assets resulting from operations | $(2,108,320) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2017 (a) | Year Ended
July 31, 2016 |
| Operations | | |
| Net investment income | $12,562,590 | $12,707,293 |
| Net realized gain (loss) | (777,596) | 1,208,783 |
| Net change in unrealized appreciation (depreciation) | (13,893,314) | 8,962,475 |
| Net increase (decrease) in net assets resulting from operations | (2,108,320) | 22,878,551 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (1,266,590) | (1,146,789) |
| Class B | (191) | (200) |
| Class C | (549,384) | (565,570) |
| Class R4 | (13,955) | (6,150) |
| Class R5 | (958,763) | (580,738) |
| Class Y | (119) | — |
| Class Z | (9,693,553) | (10,465,161) |
| Total distributions to shareholders | (12,482,555) | (12,764,608) |
| Increase (decrease) in net assets from capital stock activity | (19,416,530) | 17,108,359 |
| Total increase (decrease) in net assets | (34,007,405) | 27,222,302 |
| Net assets at beginning of year | 478,410,642 | 451,188,340 |
| Net assets at end of year | $444,403,237 | $478,410,642 |
| Undistributed net investment income | $326,345 | $246,310 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 19 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2017 (a) | July 31, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A(b) | | | | |
| Subscriptions (c) | 1,906,297 | 23,941,317 | 1,215,360 | 15,446,969 |
| Distributions reinvested | 99,655 | 1,238,210 | 87,647 | 1,112,155 |
| Redemptions | (2,478,963) | (30,472,617) | (623,674) | (7,908,027) |
| Net increase (decrease) | (473,011) | (5,293,090) | 679,333 | 8,651,097 |
| Class B(b) | | | | |
| Distributions reinvested | 15 | 191 | 16 | 200 |
| Redemptions (c) | (46) | (564) | — | — |
| Net increase (decrease) | (31) | (373) | 16 | 200 |
| Class C | | | | |
| Subscriptions | 267,322 | 3,345,615 | 523,205 | 6,626,807 |
| Distributions reinvested | 40,437 | 502,520 | 41,001 | 520,230 |
| Redemptions | (571,110) | (7,062,878) | (328,870) | (4,161,731) |
| Net increase (decrease) | (263,351) | (3,214,743) | 235,336 | 2,985,306 |
| Class R4 | | | | |
| Subscriptions | 34,317 | 426,822 | 18,306 | 232,028 |
| Distributions reinvested | 1,125 | 13,954 | 484 | 6,150 |
| Redemptions | (6,015) | (74,511) | (5,199) | (66,506) |
| Net increase | 29,427 | 366,265 | 13,591 | 171,672 |
| Class R5 | | | | |
| Subscriptions | 2,127,825 | 26,151,061 | 814,584 | 10,315,150 |
| Distributions reinvested | 77,327 | 958,177 | 45,778 | 580,443 |
| Redemptions | (712,437) | (8,827,091) | (414,145) | (5,211,523) |
| Net increase | 1,492,715 | 18,282,147 | 446,217 | 5,684,070 |
| Class Y | | | | |
| Subscriptions | 813 | 10,000 | — | — |
| Net increase | 813 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 2,352,832 | 29,099,132 | 2,807,454 | 35,621,560 |
| Distributions reinvested | 585,573 | 7,275,425 | 602,661 | 7,643,566 |
| Redemptions | (5,336,134) | (65,941,293) | (3,445,853) | (43,649,112) |
| Net decrease | (2,397,729) | (29,566,736) | (35,738) | (383,986) |
| Total net increase (decrease) | (1,611,167) | (19,416,530) | 1,338,755 | 17,108,359 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Effective July 17, 2017, Class B shares were automatically converted to Class A shares. |
| (c) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
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Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 21 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class A |
| 7/31/2017 | $12.82 | 0.32 | (0.37) | (0.05) | (0.32) | — |
| 7/31/2016 | $12.54 | 0.33 | 0.28 | 0.61 | (0.33) | — |
| 7/31/2015 | $12.61 | 0.34 | (0.07) | 0.27 | (0.34) | — |
| 7/31/2014 | $12.30 | 0.35 | 0.31 | 0.66 | (0.35) | (0.00) (e) |
| 7/31/2013 | $12.95 | 0.34 | (0.65) | (0.31) | (0.34) | — |
| Class B |
| 7/31/2017 | $12.82 | 0.22 | (0.38) | (0.16) | (0.22) | — |
| 7/31/2016 | $12.54 | 0.23 | 0.28 | 0.51 | (0.23) | — |
| 7/31/2015 | $12.60 | 0.25 | (0.06) | 0.19 | (0.25) | — |
| 7/31/2014 | $12.30 | 0.26 | 0.30 | 0.56 | (0.26) | (0.00) (e) |
| 7/31/2013 | $12.95 | 0.25 | (0.66) | (0.41) | (0.24) | — |
| Class C |
| 7/31/2017 | $12.83 | 0.26 | (0.38) | (0.12) | (0.26) | — |
| 7/31/2016 | $12.54 | 0.27 | 0.29 | 0.56 | (0.27) | — |
| 7/31/2015 | $12.61 | 0.29 | (0.07) | 0.22 | (0.29) | — |
| 7/31/2014 | $12.31 | 0.30 | 0.30 | 0.60 | (0.30) | (0.00) (e) |
| 7/31/2013 | $12.95 | 0.29 | (0.64) | (0.35) | (0.29) | — |
| Class R4 |
| 7/31/2017 | $12.82 | 0.35 | (0.37) | (0.02) | (0.35) | — |
| 7/31/2016 | $12.54 | 0.36 | 0.28 | 0.64 | (0.36) | — |
| 7/31/2015 | $12.60 | 0.37 | (0.06) | 0.31 | (0.37) | — |
| 7/31/2014 | $12.30 | 0.38 | 0.30 | 0.68 | (0.38) | (0.00) (e) |
| 7/31/2013 (f) | $12.83 | 0.13 | (0.53) | (0.40) | (0.13) | — |
| Class R5 |
| 7/31/2017 | $12.81 | 0.35 | (0.38) | (0.03) | (0.35) | — |
| 7/31/2016 | $12.53 | 0.37 | 0.28 | 0.65 | (0.37) | — |
| 7/31/2015 | $12.59 | 0.38 | (0.06) | 0.32 | (0.38) | — |
| 7/31/2014 | $12.29 | 0.38 | 0.30 | 0.68 | (0.38) | (0.00) (e) |
| 7/31/2013 (h) | $12.99 | 0.27 | (0.70) | (0.43) | (0.27) | — |
| Class Y |
| 7/31/2017 (i) | $12.30 | 0.15 | 0.17 (j) | 0.32 | (0.15) | — |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.32) | $12.45 | (0.39%) | 0.83% (c) | 0.83% (c),(d) | 2.53% | 15% | $43,387 |
| (0.33) | $12.82 | 4.92% | 0.86% | 0.85% (d) | 2.60% | 9% | $50,750 |
| (0.34) | $12.54 | 2.17% | 0.87% | 0.83% (d) | 2.71% | 11% | $41,121 |
| (0.35) | $12.61 | 5.43% | 0.86% | 0.81% (d) | 2.81% | 9% | $37,935 |
| (0.34) | $12.30 | (2.47%) | 0.86% | 0.80% (d) | 2.65% | 15% | $35,438 |
| |
| (0.22) | $12.44 | (1.21%) | 1.59% (c) | 1.59% (c),(d) | 1.79% | 15% | $10 |
| (0.23) | $12.82 | 4.13% | 1.64% | 1.61% (d) | 1.84% | 9% | $11 |
| (0.25) | $12.54 | 1.49% | 1.64% | 1.58% (d) | 1.96% | 11% | $11 |
| (0.26) | $12.60 | 4.63% | 1.60% | 1.56% (d) | 2.08% | 9% | $1 |
| (0.24) | $12.30 | (3.19%) | 1.61% | 1.55% (d) | 1.91% | 15% | $19 |
| |
| (0.26) | $12.45 | (0.91%) | 1.58% (c) | 1.28% (c),(d) | 2.09% | 15% | $24,330 |
| (0.27) | $12.83 | 4.53% | 1.61% | 1.30% (d) | 2.15% | 9% | $28,438 |
| (0.29) | $12.54 | 1.73% | 1.62% | 1.26% (d) | 2.27% | 11% | $24,863 |
| (0.30) | $12.61 | 4.93% | 1.61% | 1.21% (d) | 2.41% | 9% | $23,694 |
| (0.29) | $12.31 | (2.78%) | 1.61% | 1.20% (d) | 2.25% | 15% | $26,055 |
| |
| (0.35) | $12.45 | (0.14%) | 0.59% (c) | 0.59% (c),(d) | 2.80% | 15% | $664 |
| (0.36) | $12.82 | 5.18% | 0.61% | 0.61% (d) | 2.85% | 9% | $307 |
| (0.37) | $12.54 | 2.50% | 0.62% | 0.58% (d) | 2.97% | 11% | $130 |
| (0.38) | $12.60 | 5.58% | 0.62% | 0.56% (d) | 3.08% | 9% | $77 |
| (0.13) | $12.30 | (3.13%) | 0.58% (g) | 0.56% (d),(g) | 2.92% (g) | 15% | $2 |
| |
| (0.35) | $12.43 | (0.18%) | 0.55% (c) | 0.55% (c) | 2.85% | 15% | $42,681 |
| (0.37) | $12.81 | 5.24% | 0.55% | 0.55% | 2.90% | 9% | $24,844 |
| (0.38) | $12.53 | 2.54% | 0.55% | 0.55% | 3.00% | 11% | $18,712 |
| (0.38) | $12.59 | 5.64% | 0.56% | 0.53% | 3.09% | 9% | $8,092 |
| (0.27) | $12.29 | (3.38%) | 0.55% (g) | 0.54% (g) | 2.97% (g) | 15% | $5,377 |
| |
| (0.15) | $12.47 | 2.59% | 0.53% (g) | 0.53% (g) | 2.84% (g) | 15% | $10 |
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 23 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class Z |
| 7/31/2017 | $12.82 | 0.35 | (0.37) | (0.02) | (0.35) | — |
| 7/31/2016 | $12.54 | 0.36 | 0.28 | 0.64 | (0.36) | — |
| 7/31/2015 | $12.61 | 0.37 | (0.07) | 0.30 | (0.37) | — |
| 7/31/2014 | $12.31 | 0.38 | 0.30 | 0.68 | (0.38) | (0.00) (e) |
| 7/31/2013 | $12.95 | 0.37 | (0.64) | (0.27) | (0.37) | — |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| | Class A | Class B | Class C | Class R4 | Class R5 | Class Z |
| 07/31/2017 | 0.02 % | 0.02 % | 0.02 % | 0.01 % | 0.01 % | 0.02 % |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Rounds to zero. |
| (f) | Class R4 shares commenced operations on March 19, 2013. Per share data and total return reflect activity from that date. |
| (g) | Annualized. |
| (h) | Class R5 shares commenced operations on November 8, 2012. Per share data and total return reflect activity from that date. |
| (i) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (j) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.35) | $12.45 | (0.14%) | 0.58% (c) | 0.58% (c),(d) | 2.79% | 15% | $333,321 |
| (0.36) | $12.82 | 5.18% | 0.61% | 0.60% (d) | 2.85% | 9% | $374,062 |
| (0.37) | $12.54 | 2.42% | 0.62% | 0.58% (d) | 2.96% | 11% | $366,351 |
| (0.38) | $12.61 | 5.61% | 0.61% | 0.56% (d) | 3.06% | 9% | $370,871 |
| (0.37) | $12.31 | (2.14%) | 0.61% | 0.55% (d) | 2.90% | 15% | $391,179 |
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements
July 31, 2017
Note 1. Organization
Columbia AMT-Free Oregon Intermediate Muni Bond Fund (the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
When available, Class B shares were subject to a maximum CDSC of 3.00% based upon the holding period after purchase. However, as of July 31, 2017 the Fund’s Class B investors, having held their shares for the requisite time period, were no longer subject to a CDSC upon redemption of their shares. Effective July 17, 2017, Class B shares were automatically converted to Class A shares, and the Fund no longer accepts investments by new or existing investors in Class B shares. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class B shares was redeemed.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class R5 shares are not subject to sales charges and are generally available only to investors purchasing through authorized investment professionals and omnibus retirement plans as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund received a reimbursement for expenses overbilled by a third party. Such reimbursement is included as an offset to other expenses on the Statement of Operations. All fee waivers and expense reimbursements by Columbia Management Investment Advisers, LLC and its affiliates were applied before giving effect to the third party reimbursement.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
| 26 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Delayed delivery securities
The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
July 31, 2017
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains) and capital gains, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Accounting Standards Update 2017-08 Premium Amortization on Purchased Callable Debt Securities
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017-08 Premium Amortization on Purchased Callable Debt Securities. ASU No. 2017-08 updates the accounting standards to shorten the amortization period for certain purchased callable debt securities, held at a premium, to be amortized to the earliest call date. The update applies to securities with explicit, noncontingent call features that are callable at fixed prices and on preset dates. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. At this time, management is evaluating the implication of this guidance and the impact it will have on the financial statement amounts and footnote disclosures, if any.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X are effective for periods on or after August 1, 2017. Management has reviewed the requirements and believes the adoption of the amendments to Regulation S-X will not have a material impact on the Fund’s financial statements and related disclosures.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting
| 28 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
services. The management services fee is an annual fee that is equal to a percentage of the Fund’s daily net assets that declines from 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended July 31, 2017 was 0.47% of the Fund’s average daily net assets.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. These members of the Board of Trustees may participate in a Deferred Compensation Plan (the Plan) which may be terminated at any time. Obligations of the Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Effective August 1, 2017, total transfer agency fees for Class R5 and Class Y shares are subject to an annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. From January 1, 2017 to July 31, 2017, these limitations were 0.075% for Class R5 shares and 0.025% for Class Y shares; and prior to January 1, 2017, the limitation was 0.05% for Class R5 shares.
For the year ended July 31, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.10 |
| Class B | 0.10 |
| Class C | 0.10 |
| Class R4 | 0.10 |
| Class R5 | 0.057 |
| Class Y | 0.025 (a) |
| Class Z | 0.10 |
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 29 |
Notes to Financial Statements (continued)
July 31, 2017
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended July 31, 2017, these minimum account balance fees reduced total expenses of the Fund by $580.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A, Class B and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly distribution fee to the Distributor at the maximum annual rates of 0.10%, 0.75% and 0.75% of the average daily net assets attributable to Class A, Class B and Class C shares of the Fund, respectively.
Although the Fund may pay distribution and service fees up to a maximum annual rate of 0.35% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder liaison services), the Fund currently limits such fees to an aggregate fee of not more than 0.25% of the Fund’s average daily net assets attributable to Class A shares.
The Distributor has voluntarily agreed to waive a portion of the distribution fee for Class C shares so that the distribution fee does not exceed 0.45% annually of the average daily net assets attributable to Class C shares. This arrangement may be modified or terminated by the Distributor at any time.
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended July 31, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 88,133 |
| Class C | 2,689 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rate(s) as a percentage of the class’ average daily net assets:
| | December 1, 2016
through
November 30, 2017 | Prior to
December 1, 2016 |
| Class A | 0.85% | 0.87% |
| Class B | 1.60 | 1.62 |
| Class C | 1.60 | 1.62 |
| Class R4 | 0.60 | 0.62 |
| Class R5 | 0.58 | 0.58 |
| Class Y | 0.53* | – |
| Class Z | 0.60 | 0.62 |
| 30 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
* Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through November 30, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods. Class C distribution fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At July 31, 2017, these differences are primarily due to differing treatment for capital loss carryforwards, trustees’ deferred compensation and distributions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
The Fund did not have any permanent differences; therefore, no reclassifications were made to the Statement of Assets and Liabilities.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2017 | Year Ended July 31, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 9,277 | 12,473,278 | — | 12,482,555 | — | 12,764,608 | — | 12,764,608 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 1,372,346 | — | (947,711) | 20,307,599 |
At July 31, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 420,882,126 | 20,977,341 | (669,742) | 20,307,599 |
The following capital loss carryforwards, determined at July 31, 2017, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 31 |
Notes to Financial Statements (continued)
July 31, 2017
result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended July 31, 2017, capital loss carryforwards utilized, expired unused and permanently lost, if any, were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | — | 947,711 | — | 947,711 | — | — | — |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $66,971,975 and $76,063,413, respectively, for the year ended July 31, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended July 31, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
| 32 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At July 31, 2017, one unaffiliated shareholder of record owned 18.6% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 and Note 3 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 9. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is 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 Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 33 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of Columbia AMT-Free Oregon Intermediate Muni Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia AMT-Free Oregon Intermediate Muni Bond Fund (the “Fund”, a series of Columbia Funds Series Trust I) as of July 31, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of July 31, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
September 21, 2017
| 34 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 99.93% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 35 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. The year set forth beneath Length of Service in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve terms of indefinite duration.
Independent trustees
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Janet Langford Carrig
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1957 | Trustee
1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company) since September 2007 | 57 | None |
Douglas A. Hacker
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee and Chairman of the Board
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 | 57 | Spartan Nash Company, (food distributor); Nash Finch Company (food distributor) from 2005 to 2013; Aircastle Limited (aircraft leasing); SeaCube Container Leasing Ltd. (container leasing) from 2010 to 2013; and Travelport Worldwide Limited (travel information technology) |
Nancy T. Lukitsh
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1956 | Trustee
2011 | Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser) from 1997 to 2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools) from 2007 to 2010; Director, Wellington Trust Company, NA and other Wellington affiliates from 1997 to 2010 | 57 | None |
David M. Moffett
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee
2011 | Retired. Consultant to Bridgewater and Associates | 57 | Director, CSX Corporation; Genworth Financial, Inc. (financial and insurance products and services); PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
| 36 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Charles R. Nelson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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 | 57 | None |
John J. Neuhauser
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee
1984 | President, Saint Michael’s College since August 2007; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; 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 | 57 | Liberty All-Star Equity Fund and Liberty All- Star Growth Fund (closed-end funds) |
Patrick J. Simpson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee
2000 | Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP from 1988 to 2014 | 57 | None |
Anne-Lee Verville
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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) | 57 | Enesco Group, Inc. (producer of giftware and home and garden decor products) from 2001 to 2006 |
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 37 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds complex overseen | Other directorships held by Trustee during the past five years |
J. Kevin Connaughton
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1964 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since March 2016; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC from May 2010 to February 2015; President, Columbia Funds from 2009 to 2015; and senior officer of Columbia Funds and affiliated funds from 2003 to 2015 | 57 | Board of Governors, Gateway Healthcare since January 2016; Trustee, New Century Portfolios since March 2015; and Director, The Autism Project since March 2015 |
Natalie A. Trunow
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1967 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Partners (investment consulting services to institutions) since January 2016; Director of Investments, Casey Family Programs from April 2016 to September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments from August 2008 to January 2016; Section Head and Portfolio Manager, General Motors Asset Management from June 1997 to August 2008 | 57 | Healthcare Services for Children with Special Needs |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Shareholders of the Funds are expected to be asked to elect each of Mr. Connaughton and Ms. Trunow as a Trustee at a future shareholder meeting. |
Interested trustee affiliated with Investment Manager*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex overseen | Other directorships held by Trustee during the past five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
1960 | Trustee
2012 | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010-September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006-August 2012 | 179 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006 - January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
| 38 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 39 |
Board Consideration and Approval of Management
Agreement
On June 14, 2017, the Board of Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia AMT-Free Oregon Intermediate Muni Bond Fund (the Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, both among themselves and with the management team of the Investment Manager, materials provided by the Investment Manager and others before determining to approve the continuation of the Management Agreement.
In connection with their deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and discussed these materials with representatives of the Investment Manager at Committee meetings held on March 27, 2017, April 26, 2017 and June 13, 2017 and at Board meetings held on March 28, 2017 and June 14, 2017. In addition, the Board considers matters bearing on the Management Agreement at most of its other meetings throughout the year and meets regularly with senior management of the Trust and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and other investment personnel at various times throughout the year. The Committee and the Board also consulted with its independent fee consultant, Fund counsel and the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board in their deliberations. On June 13, 2017, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 14, 2017, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through November 30, 2018 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding the management fees of similarly-managed portfolios of other clients of the Investment Manager, including institutional separate accounts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| 40 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement (continued)
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of services provided under the Management Agreement
The Committee and the Board considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management, reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.
The Committee and the Board also considered the professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with similarly-structured funds. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks and information that compared the performance of the Fund to the performance of a group of comparable mutual funds as determined by the independent third-party data provider, and data provided by the independent fee consultant. The Committee and the Board also reviewed a description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Committee and the Board noted that, through December 31, 2016, the Fund’s performance was in the forty-seventh, twenty-seventh and thirty-first percentile (where the best performance would be in the first percentile) of its category selected by the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the Fund and the Investment Manager was sufficient, in light of other considerations, to warrant the continuation of the Management Agreement.
Investment management fee rates and other expenses
The Committee and the Board considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2016, the Fund’s actual management fee and net total expense ratio are ranked in the third and fourth quintiles, respectively,
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 41 |
Board Consideration and Approval of Management
Agreement (continued)
(where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also received and considered information about the management fees charged by the Investment Manager to institutional separate accounts. In considering the fees charged to those accounts, the Committee and the Board took into account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, warranted the continuation of the Management Agreement.
Costs of services provided and profitability
The Committee and the Board also took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund.
The Committee and the Board also considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of profitability levels realized in 2016 to profitability levels realized in 2015. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard, the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate on assets above specified threshold levels.
In considering these matters, the Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as discussed above. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the continuation of the Management Agreement.
| 42 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement (continued)
Other benefits to the Investment Manager
The Committee and the Board received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the Investment Manager’s practices with respect to allocating portfolio transactions for brokerage and research services. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower without these benefits.
Conclusion
The Committee and the Board reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement.
Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017
| 43 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
| 44 | Columbia AMT-Free Oregon Intermediate Muni Bond Fund | Annual Report 2017 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia AMT-Free Oregon Intermediate Muni Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
July 31, 2017
Columbia Large Cap Growth Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
The current outlook for financial markets is clouded by two primary concerns: the high valuation of equities and the direction of interest rates. Following the U.S. presidential election, U.S. equities rallied based on the assumption that the new administration’s policies would stimulate growth quickly. Unfortunately it’s unclear whether those measures will get passed, much less passed quickly. In fixed income, uncertainty stems from the possibility that interest rates won’t rise as rapidly as expected if the administration’s proposed growth policies are not implemented.
Given this uncertainty, investors value a consistent approach more than ever. Investors want strong, repeatable risk-adjusted returns. Consistency — not surprises. As a leading global asset manager, we believe our consistent, collaborative investment approach enables us to deliver the dependable experience your portfolio demands. So, how do we strive to deliver a consistent investment experience?
Better insights
Your portfolio benefits from the investment insights uncovered by our talented investment teams around the world.
Better decisions
Our collaborative, interactive environment enables our investment teams to construct portfolios that take advantage of the best investment ideas.
Better outcomes
We aim to deliver a consistent experience, which means fewer surprises, dependable insights, and products designed to do the thing you want.
Whether you’re trying to save money to help your children go to college or for your own retirement, it’s the consistency of the return that is most essential. People who chase higher returns are usually also the first to sell when that investment goes through a bad patch. We try to combat this behavioral tendency by offering strategies that aim for a more consistent return. Our goal is for investors to panic less during periods of volatility, which can have a significant effect on their long-term results.
Nothing is more important to us than making sure those who have entrusted us to protect and grow their assets can do what matters most to them: build a nest egg, leave a legacy, and live confidently — now and throughout retirement. It’s why our talented professionals around the world work together to uncover uncommon opportunities and why our process encourages challenge and debate around our most compelling ideas to ensure better informed investment decisions, which hopefully lead to better outcomes for you.
Your success is our priority. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for consistent, sustainable outcomes, no matter the market conditions.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia Large Cap Growth Fund | Annual Report 2017
Columbia Large Cap Growth Fund | Annual Report 2017
Investment objective
Columbia Large Cap Growth Fund (the Fund) seeks long-term capital appreciation.
Portfolio management
John Wilson, CFA
Lead manager
Managed Fund since 2005
Peter Deininger, CFA, CAIA
Co-manager
Managed Fund since 2010
Tchintcia Barros, CFA
Co-manager
Managed Fund since 2015
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2017 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
| Average annual total returns (%) (for the period ended July 31, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/01/98 | 19.61 | 15.55 | 8.66 |
| | Including sales charges | | 12.74 | 14.19 | 8.02 |
| Class B | Excluding sales charges | 11/01/98 | 18.71 | 14.68 | 7.85 |
| | Including sales charges | | 13.71 | 14.45 | 7.85 |
| Class C | Excluding sales charges | 11/18/02 | 18.72 | 14.68 | 7.85 |
| | Including sales charges | | 17.72 | 14.68 | 7.85 |
| Class E | Excluding sales charges | 09/22/06 | 19.50 | 15.43 | 8.55 |
| | Including sales charges | | 14.12 | 14.37 | 8.05 |
| Class F | Excluding sales charges | 09/22/06 | 18.71 | 14.68 | 7.85 |
| | Including sales charges | | 13.71 | 14.45 | 7.85 |
| Class K* | 03/07/11 | 19.72 | 15.69 | 8.81 |
| Class R* | 09/27/10 | 19.29 | 15.26 | 8.38 |
| Class R4* | 11/08/12 | 19.92 | 15.85 | 8.94 |
| Class R5* | 03/07/11 | 20.02 | 15.98 | 9.03 |
| Class T* | Excluding sales charges | 09/27/10 | 19.57 | 15.56 | 8.69 |
| | Including sales charges | | 16.58 | 14.98 | 8.42 |
| Class V | Excluding sales charges | 12/14/90 | 19.59 | 15.52 | 8.62 |
| | Including sales charges | | 12.70 | 14.15 | 7.98 |
| Class Y* | 07/15/09 | 20.09 | 16.05 | 9.10 |
| Class Z | 12/14/90 | 19.92 | 15.83 | 8.93 |
| Russell 1000 Growth Index | | 18.05 | 15.60 | 9.36 |
Returns for Class A and Class V are shown with and without the maximum initial sales charge of 5.75%. Class V shares have no relation to, or connection with, the Fund’s current Class T shares which were renamed and re-designated from Class W shares effective March 27, 2017. Returns for Class E are shown with and without the maximum sales charge of 4.50%. Returns for Class B and Class F are shown with and without the applicable contingent deferred sales charge (CDSC) of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter. The Fund no longer accepts investments by new or existing investors in Class B or Class F shares. Effective July 17, 2017, Class B and Class F shares were automatically converted to Class A and Class E shares (respectively) without a CDSC. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class B and Class F shares was redeemed without a CDSC. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. Returns for Class T shares are shown with and without the maximum initial sales charge of 2.50% per transaction. The Fund’s other classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. Since the Fund launched more than one share class at its inception, Class Z shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Russell 1000 Growth Index, an unmanaged index, measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
| 2 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Fund at a Glance (continued)
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Performance of a hypothetical $10,000 investment (July 31, 2007 — July 31, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia Large Cap Growth Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares.
| Top 10 holdings (%) (at July 31, 2017) |
| Apple, Inc. | 4.9 |
| Microsoft Corp. | 4.8 |
| Facebook, Inc., Class A | 4.1 |
| Amazon.com, Inc. | 4.1 |
| Visa, Inc., Class A | 3.5 |
| Alphabet, Inc., Class A | 3.1 |
| Alphabet, Inc., Class C | 2.9 |
| Comcast Corp., Class A | 2.8 |
| PepsiCo, Inc. | 2.1 |
| NVIDIA Corp. | 2.1 |
Percentages indicated are based upon total investments (excluding Money Market Funds).
For further detail about these holdings, please refer to the section entitled “Portfolio of Investments.”
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
| Portfolio breakdown (%) (at July 31, 2017) |
| Common Stocks | 96.9 |
| Money Market Funds | 3.1 |
| Total | 100.0 |
Percentages indicated are based upon total investments. The Fund’s portfolio composition is subject to change.
| Equity sector breakdown (%) (at July 31, 2017) |
| Consumer Discretionary | 17.8 |
| Consumer Staples | 7.1 |
| Energy | 1.0 |
| Financials | 4.4 |
| Health Care | 17.2 |
| Industrials | 9.9 |
| Information Technology | 37.1 |
| Materials | 2.5 |
| Real Estate | 3.0 |
| Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund’s portfolio composition is subject to change.
Columbia Large Cap Growth Fund | Annual Report 2017
| 3 |
Manager Discussion of Fund Performance
For the 12-month period that ended July 31, 2017, the Fund’s Class A shares returned 19.61% excluding sales charges. The Fund outperformed its benchmark, the Russell 1000 Growth Index, which returned 18.05% during the same time period. Favorable stock selection across a range of sectors combined with sector positioning to lift the Fund’s performance above its benchmark. An overweight in information technology during most of the period made a significant contribution to Fund gains, as the sector was a performance leader during the period.
U.S. equity markets logged solid gains
Global events, political uncertainty and mixed economic data were enough to keep investors off balance early in the 12-month period ended July 31, 2017, as financial markets moved sharply in reaction to each significant change on the world stage. However, the end of a contentious U.S. presidential contest in November 2016 eliminated one key element of uncertainty, and the U.S. equity markets moved solidly higher through the end of the period. Positive economic data, steady job growth, rising corporate earnings and accelerated manufacturing activity further bolstered investor confidence.
In three rate cuts during the 12-month period, the Federal Reserve (the Fed) raised the target range of its benchmark short-term interest rate to between 1.00% and 1.25%. The Fed signaled that it was prepared to raise rates more aggressively on the heels of strong job gains and progress towards its 2.0% inflation target, creating expectations that its June rate hike may not be the last during the calendar year.
Against this backdrop, the U.S. equity markets moved solidly higher during the period. The S&P 500 Index gained 16.04%, with dividends reinvested. Small-caps outperformed large- and mid-cap stocks. Small-cap value was the strongest U.S. equity market sector.
Contributors and detractors
In the information technology sector, overweight allocations to the semiconductor and semiconductor equipment and internet software and services industries amplified the impact of favorable stock selection to produce positive returns relative to the benchmark. Within semiconductors, NVIDIA, Lam Research, Micron Technology and Broadcom were top performers for the Fund. NVIDIA makes semiconductor chips and software for emerging growth applications, such as data centers, machine learning, autonomous driving and virtual reality. The company has continued to enjoy broad adoption of its products across a variety of end markets. Micron, Broadcom and Lam outperformed given strong end-market demand and pricing for semiconductors and equipment. In the internet software and services industry, Alibaba and Facebook led performance for the Fund. Alibaba, the leading Chinese e-commerce company, outperformed on robust revenue guidance for 2018. Facebook surpassed Wall Street earnings estimates as the company continued to drive strong advertising growth from its properties. Within software, gaming company Electronic Arts also continued to deliver strong results. Electronic Arts develops, markets, publishes and distributes video games. The company continues to benefit from the highly profitable secular shift to online gaming.
Stock selection and positioning in the consumer staples and real estate sectors also aided relative performance. An underweight in consumer staples aided results, as the sector underperformed the broader market. We also avoided some of the period’s most significant losers in food, household and personal products. In the real estate sector, the Fund’s outperformance relative to the benchmark was the result of both what it owned and what it did not own. An overweight in Equinix, a leading provider of data center hosting facilities aided relative results. It outperformed given strong demand for its services both in the United States and abroad. The Fund also had no exposure to Public Storage, a real estate investment trust, which pulled back during the period.
These strong performances more than offset smaller disappointments in the industrials, consumer discretionary and health care sectors. Lack of exposure to Boeing in the industrials sector was a drag on relative results as the aerospace company logged a substantial return. In the consumer discretionary sector, the Fund had no exposure to McDonald’s, which delivered a solid gain on strong execution and favorable response to new menu items and its all-day breakfast service. Overweights in discount retailer Dollar General and consumer and commercial products marketer Newell hampered results, as both stocks underperformed on concerns over earnings visibility. We sold Dollar General. In health care, the positive impact of avoiding certain biotechnology laggards as well as gains from Vertex, a key biotechnology holding, were more than offset by results from medical equipment makers Edwards Life Sciences and Medtronic. Vertex continued to outperform based on data showing the potential for expanded market opportunity for its cystic fibrosis treatment.
| 4 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Manager Discussion of Fund Performance (continued)
At period’s end
During the 12-month period, the Fund’s sector positioning was affected by certain adjustments we made, but it also reflected the impact of the annual rebalancing of the Russell 1000 Growth Index. In information technology, we took profits in selected semiconductor and online names that hit our price targets. In addition, rebalancing raised the weight of information technology in the benchmark, which left the Fund modestly underweight in the sector at period’s end. Within health care, selective additions to biotechnology, where we saw the potential for solid risk reward profiles, combined with the impact of companies that moved out of the benchmark, effectively raised the Fund’s relative health care weight, making it the largest overweight in the Fund.
Overall, we were heartened to see a strong recovery in many growth-oriented stocks that lagged in the previous year — and gratified to see greater linkage between company fundamentals and stock prices. Our strategy remains unchanged: We continue to look for ideas where our internal research conviction is high and where we can find a differentiated research view combined with an attractive risk/return profile. We seek opportunities in companies that we believe have the potential to consistently drive organic revenue and earnings growth in an environment of slow economic growth and earnings scarcity.
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. 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. Foreign investments subject the fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Investments in a limited number of companies subject the fund to greater risk of loss. The fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the fund more vulnerable to unfavorable developments in the sector. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
Columbia Large Cap Growth Fund | Annual Report 2017
| 5 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2017 — July 31, 2017 |
| | Account value at the
beginning of the
period ($) | Account value at the
end of the
period ($) | Expenses paid during
the period ($) | Fund’s annualized
expense ratio (%) |
| | Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual |
| Class A | 1,000.00 | 1,000.00 | 1,155.60 | 1,019.44 | 5.77 | 5.41 | 1.08 |
| Class B | 1,000.00 | 1,000.00 | 1,151.10 | 1,015.72 | 9.76 | 9.15 | 1.83 |
| Class C | 1,000.00 | 1,000.00 | 1,151.20 | 1,015.72 | 9.76 | 9.15 | 1.83 |
| Class E | 1,000.00 | 1,000.00 | 1,154.90 | 1,018.94 | 6.30 | 5.91 | 1.18 |
| Class F | 1,000.00 | 1,000.00 | 1,151.40 | 1,015.72 | 9.76 | 9.15 | 1.83 |
| Class K | 1,000.00 | 1,000.00 | 1,156.10 | 1,019.89 | 5.29 | 4.96 | 0.99 |
| Class R | 1,000.00 | 1,000.00 | 1,154.20 | 1,018.20 | 7.10 | 6.66 | 1.33 |
| Class R4 | 1,000.00 | 1,000.00 | 1,157.10 | 1,020.68 | 4.44 | 4.16 | 0.83 |
| Class R5 | 1,000.00 | 1,000.00 | 1,157.40 | 1,021.12 | 3.96 | 3.71 | 0.74 |
| Class T (formerly Class W) | 1,000.00 | 1,000.00 | 1,155.30 | 1,019.59 | 5.61 | 5.26 | 1.05 |
| Class V (formerly Class T) | 1,000.00 | 1,000.00 | 1,155.40 | 1,019.44 | 5.77 | 5.41 | 1.08 |
| Class Y | 1,000.00 | 1,000.00 | 1,157.90 | 1,021.37 | 3.69 | 3.46 | 0.69 |
| Class Z | 1,000.00 | 1,000.00 | 1,157.20 | 1,020.68 | 4.44 | 4.16 | 0.83 |
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
| 6 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Portfolio of Investments
July 31, 2017
(Percentages represent value of investments compared to net assets)
| Common Stocks 97.2% |
| Issuer | Shares | Value ($) |
| Consumer Discretionary 17.3% |
| Hotels, Restaurants & Leisure 3.7% |
| Norwegian Cruise Line Holdings Ltd.(a) | 568,850 | 31,326,569 |
| Starbucks Corp. | 727,700 | 39,281,246 |
| Yum China Holdings, Inc.(a) | 552,770 | 19,783,638 |
| Yum! Brands, Inc. | 552,770 | 41,723,080 |
| Total | | 132,114,533 |
| Household Durables 1.8% |
| Mohawk Industries, Inc.(a) | 129,800 | 32,318,902 |
| Newell Brands, Inc. | 571,302 | 30,119,041 |
| Total | | 62,437,943 |
| Internet & Direct Marketing Retail 6.5% |
| Amazon.com, Inc.(a) | 141,705 | 139,973,365 |
| Expedia, Inc. | 240,951 | 37,701,603 |
| Priceline Group, Inc. (The)(a) | 25,194 | 51,106,029 |
| Total | | 228,780,997 |
| Media 3.9% |
| Comcast Corp., Class A | 2,396,146 | 96,924,106 |
| DISH Network Corp., Class A(a) | 626,148 | 40,092,256 |
| Total | | 137,016,362 |
| Specialty Retail 1.4% |
| TJX Companies, Inc. (The) | 711,121 | 49,998,918 |
| Total Consumer Discretionary | 610,348,753 |
| Consumer Staples 6.9% |
| Beverages 2.1% |
| PepsiCo, Inc. | 624,891 | 72,868,540 |
| Food & Staples Retailing 3.4% |
| Costco Wholesale Corp. | 320,600 | 50,818,306 |
| SYSCO Corp. | 871,628 | 45,865,065 |
| Wal-Mart Stores, Inc. | 284,100 | 22,725,159 |
| Total | | 119,408,530 |
| Tobacco 1.4% |
| Philip Morris International, Inc. | 439,142 | 51,252,263 |
| Total Consumer Staples | 243,529,333 |
| Common Stocks (continued) |
| Issuer | Shares | Value ($) |
| Energy 1.0% |
| Oil, Gas & Consumable Fuels 1.0% |
| Cimarex Energy Co. | 140,600 | 13,923,618 |
| Hess Corp. | 489,040 | 21,781,842 |
| Total | | 35,705,460 |
| Total Energy | 35,705,460 |
| Financials 4.3% |
| Capital Markets 4.3% |
| Bank of New York Mellon Corp. (The) | 1,054,270 | 55,907,938 |
| BlackRock, Inc. | 71,839 | 30,641,489 |
| Charles Schwab Corp. (The) | 593,500 | 25,461,150 |
| Goldman Sachs Group, Inc. (The) | 177,981 | 40,104,459 |
| Total | | 152,115,036 |
| Total Financials | 152,115,036 |
| Health Care 16.7% |
| Biotechnology 8.9% |
| AbbVie, Inc. | 744,726 | 52,063,795 |
| ACADIA Pharmaceuticals, Inc.(a) | 179,700 | 5,349,669 |
| Alexion Pharmaceuticals, Inc.(a) | 384,034 | 52,743,230 |
| Biogen, Inc.(a) | 179,470 | 51,972,717 |
| bluebird bio, Inc.(a) | 47,500 | 4,476,875 |
| Celgene Corp.(a) | 428,713 | 58,052,027 |
| Clovis Oncology, Inc.(a) | 140,900 | 11,949,729 |
| Intercept Pharmaceuticals, Inc.(a) | 118,900 | 13,926,757 |
| TESARO, Inc.(a) | 67,300 | 8,591,518 |
| Vertex Pharmaceuticals, Inc.(a) | 370,665 | 56,274,360 |
| Total | | 315,400,677 |
| Health Care Equipment & Supplies 3.7% |
| Edwards Lifesciences Corp.(a) | 444,467 | 51,193,709 |
| Medtronic PLC | 476,300 | 39,994,911 |
| Zimmer Biomet Holdings, Inc. | 308,273 | 37,399,680 |
| Total | | 128,588,300 |
| Health Care Providers & Services 2.3% |
| Aetna, Inc. | 350,042 | 54,014,981 |
| Humana, Inc. | 119,100 | 27,535,920 |
| Total | | 81,550,901 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2017
| 7 |
Portfolio of Investments (continued)
July 31, 2017
| Common Stocks (continued) |
| Issuer | Shares | Value ($) |
| Life Sciences Tools & Services 1.8% |
| Illumina, Inc.(a) | 111,400 | 19,366,890 |
| Thermo Fisher Scientific, Inc. | 253,148 | 44,435,069 |
| Total | | 63,801,959 |
| Total Health Care | 589,341,837 |
| Industrials 9.7% |
| Air Freight & Logistics 2.0% |
| FedEx Corp. | 334,250 | 69,534,027 |
| Airlines 1.2% |
| Alaska Air Group, Inc. | 486,000 | 41,421,780 |
| Commercial Services & Supplies 0.6% |
| Stericycle, Inc.(a) | 299,300 | 23,070,044 |
| Electrical Equipment 0.7% |
| Sensata Technologies Holding NV(a) | 550,100 | 24,820,512 |
| Industrial Conglomerates 2.0% |
| Honeywell International, Inc. | 523,300 | 71,231,596 |
| Machinery 2.1% |
| Cummins, Inc. | 233,600 | 39,221,440 |
| Xylem, Inc. | 611,800 | 34,707,414 |
| Total | | 73,928,854 |
| Road & Rail 1.1% |
| Kansas City Southern | 364,951 | 37,659,294 |
| Total Industrials | 341,666,107 |
| Information Technology 36.0% |
| Internet Software & Services 11.2% |
| Alibaba Group Holding Ltd., ADR(a) | 308,842 | 47,855,068 |
| Alphabet, Inc., Class A(a) | 112,819 | 106,670,364 |
| Alphabet, Inc., Class C(a) | 106,073 | 98,700,927 |
| Facebook, Inc., Class A(a) | 839,973 | 142,165,430 |
| Total | | 395,391,789 |
| IT Services 4.4% |
| FleetCor Technologies, Inc.(a) | 237,400 | 36,099,044 |
| Visa, Inc., Class A | 1,196,326 | 119,106,217 |
| Total | | 155,205,261 |
| Common Stocks (continued) |
| Issuer | Shares | Value ($) |
| Semiconductors & Semiconductor Equipment 6.7% |
| Broadcom Ltd. | 239,631 | 59,107,382 |
| Lam Research Corp. | 247,000 | 39,386,620 |
| MACOM Technology Solutions Holdings, Inc.(a) | 625,000 | 37,843,750 |
| Micron Technology, Inc.(a) | 1,102,600 | 31,005,112 |
| NVIDIA Corp. | 439,860 | 71,481,649 |
| Total | | 238,824,513 |
| Software 8.9% |
| Electronic Arts, Inc.(a) | 580,205 | 67,733,132 |
| Microsoft Corp. | 2,285,738 | 166,173,153 |
| Salesforce.com, Inc.(a) | 497,405 | 45,164,374 |
| ServiceNow, Inc.(a) | 325,167 | 35,914,695 |
| Total | | 314,985,354 |
| Technology Hardware, Storage & Peripherals 4.8% |
| Apple, Inc. | 1,135,762 | 168,921,882 |
| Total Information Technology | 1,273,328,799 |
| Materials 2.4% |
| Chemicals 2.4% |
| Eastman Chemical Co. | 636,959 | 52,969,510 |
| LyondellBasell Industries NV, Class A | 364,021 | 32,794,652 |
| Total | | 85,764,162 |
| Total Materials | 85,764,162 |
| Real Estate 2.9% |
| Equity Real Estate Investment Trusts (REITS) 2.9% |
| American Tower Corp. | 349,900 | 47,701,867 |
| Equinix, Inc. | 119,400 | 53,817,162 |
| Total | | 101,519,029 |
| Total Real Estate | 101,519,029 |
Total Common Stocks
(Cost $2,231,617,406) | 3,433,318,516 |
|
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Money Market Funds 3.1% |
| | Shares | Value ($) |
| Columbia Short-Term Cash Fund, 1.137%(b),(c) | 110,369,809 | 110,369,809 |
Total Money Market Funds
(Cost $110,369,843) | 110,369,809 |
Total Investments
(Cost: $2,341,987,249) | 3,543,688,325 |
| Other Assets & Liabilities, Net | | (10,128,396) |
| Net Assets | 3,533,559,929 |
Notes to Portfolio of Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at July 31, 2017. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended July 31, 2017 are as follows: |
| Issuer | Beginning
shares | Shares
purchased | Shares
sold | Ending
shares | Realized gain
(loss) ($) | Dividends —
affiliated
issuers($) | Value ($) |
| Columbia Short-Term Cash Fund, 1.137% | 112,336,461 | 677,854,434 | 679,821,086 | 110,369,809 | 4,845 | 538,073 | 110,369,809 |
Abbreviation Legend
| ADR | American Depositary Receipt |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Certain investments that have been measured at fair value using the net asset value (NAV) per share (or its equivalent) are not categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to reconcile the fair value hierarchy to the amounts presented in the Portfolio of Investments. The Columbia Short-Term Cash Fund seeks to provide shareholders with maximum current income consistent with liquidity and stability of principal. Columbia Short-Term Cash Fund prices its shares with a floating NAV and no longer seeks to maintain a stable NAV.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
July 31, 2017
Fair value measurements (continued)
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2017:
| | Level 1
quoted prices
in active
markets for
identical
assets ($) | Level 2
other
significant
observable
inputs ($) | Level 3
significant
unobservable
inputs ($) | Investments
measured at
net asset
value ($) | Total ($) |
| Investments | | | | | |
| Common Stocks | | | | | |
| Consumer Discretionary | 610,348,753 | — | — | — | 610,348,753 |
| Consumer Staples | 243,529,333 | — | — | — | 243,529,333 |
| Energy | 35,705,460 | — | — | — | 35,705,460 |
| Financials | 152,115,036 | — | — | — | 152,115,036 |
| Health Care | 589,341,837 | — | — | — | 589,341,837 |
| Industrials | 341,666,107 | — | — | — | 341,666,107 |
| Information Technology | 1,273,328,799 | — | — | — | 1,273,328,799 |
| Materials | 85,764,162 | — | — | — | 85,764,162 |
| Real Estate | 101,519,029 | — | — | — | 101,519,029 |
| Total Common Stocks | 3,433,318,516 | — | — | — | 3,433,318,516 |
| Money Market Funds | — | — | — | 110,369,809 | 110,369,809 |
| Total Investments | 3,433,318,516 | — | — | 110,369,809 | 3,543,688,325 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Statement of Assets and Liabilities
July 31, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $2,231,617,406 |
| Affiliated issuers, at cost | 110,369,843 |
| Total investments, at cost | 2,341,987,249 |
| Investments, at value | |
| Unaffiliated issuers, at value | 3,433,318,516 |
| Affiliated issuers, at value | 110,369,809 |
| Total investments, at value | 3,543,688,325 |
| Receivable for: | |
| Capital shares sold | 1,038,072 |
| Dividends | 989,949 |
| Foreign tax reclaims | 3,496 |
| Prepaid expenses | 26,679 |
| Trustees’ deferred compensation plan | 249,731 |
| Other assets | 43,170 |
| Total assets | 3,546,039,422 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 8,594,407 |
| Capital shares purchased | 2,903,501 |
| Management services fees | 192,584 |
| Distribution and/or service fees | 52,108 |
| Transfer agent fees | 282,306 |
| Plan administration fees | 2 |
| Compensation of board members | 10,699 |
| Compensation of chief compliance officer | 121 |
| Other expenses | 194,034 |
| Trustees’ deferred compensation plan | 249,731 |
| Total liabilities | 12,479,493 |
| Net assets applicable to outstanding capital stock | $3,533,559,929 |
| Represented by | |
| Paid in capital | 2,171,233,844 |
| Undistributed net investment income | 604,936 |
| Accumulated net realized gain | 160,020,393 |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 1,201,701,110 |
| Investments - affiliated issuers | (34) |
| Foreign currency translations | (320) |
| Total - representing net assets applicable to outstanding capital stock | $3,533,559,929 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2017
| 11 |
Statement of Assets and Liabilities (continued)
July 31, 2017
| Class A | |
| Net assets | $1,835,075,169 |
| Shares outstanding | 46,094,634 |
| Net asset value per share | $39.81 |
| Maximum offering price per share(a) | $42.24 |
| Class B | |
| Net assets | $2,526 |
| Shares outstanding | 74 |
| Net asset value per share(b) | $33.91 |
| Class C | |
| Net assets | $101,600,055 |
| Shares outstanding | 2,992,649 |
| Net asset value per share | $33.95 |
| Class E | |
| Net assets | $16,477,680 |
| Shares outstanding | 415,372 |
| Net asset value per share | $39.67 |
| Maximum offering price per share(c) | $41.54 |
| Class F | |
| Net assets | $2,572 |
| Shares outstanding | 76 |
| Net asset value per share(b) | $33.91 |
| Class K | |
| Net assets | $69,911 |
| Shares outstanding | 1,704 |
| Net asset value per share(b) | $41.04 |
| Class R | |
| Net assets | $29,780,760 |
| Shares outstanding | 752,215 |
| Net asset value per share | $39.59 |
| Class R4 | |
| Net assets | $11,552,398 |
| Shares outstanding | 274,690 |
| Net asset value per share | $42.06 |
| Class R5 | |
| Net assets | $25,953,831 |
| Shares outstanding | 629,137 |
| Net asset value per share | $41.25 |
| Class T(d) | |
| Net assets | $1,068,433 |
| Shares outstanding | 26,788 |
| Net asset value per share | $39.88 |
| Maximum offering price per share(e) | $40.90 |
| Class V(f) | |
| Net assets | $194,803,151 |
| Shares outstanding | 4,933,952 |
| Net asset value per share | $39.48 |
| Maximum offering price per share(g) | $41.89 |
| Class Y | |
| Net assets | $184,471,092 |
| Shares outstanding | 4,461,594 |
| Net asset value per share | $41.35 |
| Class Z | |
| Net assets | $1,132,702,351 |
| Shares outstanding | 27,473,918 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Statement of Assets and Liabilities (continued)
July 31, 2017
| Net asset value per share | $41.23 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 5.75% for Class A. |
| (b) | Net asset value per share rounds to this amount due to fractional shares outstanding. |
| (c) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 4.50% for Class E. |
| (d) | Effective March 27, 2017, Class W shares were renamed Class T shares. |
| (e) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 2.50% for Class T. |
| (f) | Effective January 24, 2017, Class T shares were renamed Class V shares. |
| (g) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 5.75% for Class V. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2017
| 13 |
Statement of Operations
Year Ended July 31, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $41,509,286 |
| Dividends — affiliated issuers | 538,073 |
| Foreign taxes withheld | (9,261) |
| Total income | 42,038,098 |
| Expenses: | |
| Management services fees | 22,327,952 |
| Distribution and/or service fees | |
| Class A | 4,419,525 |
| Class B | 67,807 |
| Class C | 1,024,524 |
| Class E | 51,598 |
| Class F | 8,388 |
| Class R | 137,651 |
| Class T(a) | 154,824 |
| Class V(b) | 456,438 |
| Transfer agent fees | |
| Class A | 2,667,731 |
| Class B | 10,430 |
| Class C | 154,759 |
| Class E | 22,215 |
| Class F | 1,270 |
| Class I(c) | 3,465 |
| Class K | 40 |
| Class R | 41,443 |
| Class R4 | 14,156 |
| Class R5 | 12,616 |
| Class T(a) | 98,119 |
| Class V(b) | 275,134 |
| Class Y | 7,221 |
| Class Z | 1,498,284 |
| Plan administration fees | |
| Class K | 182 |
| Compensation of board members | 83,017 |
| Custodian fees | 21,928 |
| Printing and postage fees | 280,510 |
| Registration fees | 207,938 |
| Audit fees | 38,614 |
| Legal fees | 92,223 |
| Compensation of chief compliance officer | 1,455 |
| Other | 108,863 |
| Total expenses | 34,290,320 |
| Expense reduction | (30,486) |
| Total net expenses | 34,259,834 |
| Net investment income | 7,778,264 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Statement of Operations (continued)
Year Ended July 31, 2017
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | $179,039,320 |
| Investments — affiliated issuers | 4,845 |
| Foreign currency translations | (9,692) |
| Net realized gain | 179,034,473 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 414,868,826 |
| Investments — affiliated issuers | (34) |
| Foreign currency translations | 5,365 |
| Net change in unrealized appreciation (depreciation) | 414,874,157 |
| Net realized and unrealized gain | 593,908,630 |
| Net increase in net assets resulting from operations | $601,686,894 |
| (a) | Effective March 27, 2017, Class W shares were renamed Class T shares. |
| (b) | Effective January 24, 2017, Class T shares were renamed Class V shares. |
| (c) | Effective March 27, 2017, Class I shares were redeemed or exchanged for Class Y shares. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2017
| 15 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2017 | Year Ended
July 31, 2016 |
| Operations | | |
| Net investment income | $7,778,264 | $2,726,196 |
| Net realized gain | 179,034,473 | 54,043,162 |
| Net change in unrealized appreciation (depreciation) | 414,874,157 | (94,214,983) |
| Net increase (decrease) in net assets resulting from operations | 601,686,894 | (37,445,625) |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (3,773,406) | — |
| Class E | (17,540) | — |
| Class I(a) | (832,323) | — |
| Class K | (264) | — |
| Class R4 | (36,249) | — |
| Class R5 | (118,814) | — |
| Class T(b) | (235,725) | — |
| Class V(c) | (387,489) | — |
| Class Y | (161,094) | — |
| Class Z | (4,107,006) | — |
| Net realized gains | | |
| Class A | (23,427,982) | (176,100,584) |
| Class B | (122,752) | (1,569,397) |
| Class C | (1,596,310) | (9,955,129) |
| Class E | (194,021) | (1,496,760) |
| Class F | (12,821) | (92,248) |
| Class I(a) | (1,875,904) | (15,622,651) |
| Class K | (1,140) | (10,885) |
| Class R | (363,455) | (1,563,397) |
| Class R4 | (107,340) | (684,994) |
| Class R5 | (290,954) | (493,535) |
| Class T(b) | (1,463,521) | (13,727,878) |
| Class V(c) | (2,405,763) | (17,926,315) |
| Class Y | (363,076) | (880,687) |
| Class Z | (12,161,703) | (95,054,593) |
| Total distributions to shareholders | (54,056,652) | (335,179,053) |
| Increase (decrease) in net assets from capital stock activity | (451,983,087) | 231,083,612 |
| Total increase (decrease) in net assets | 95,647,155 | (141,541,066) |
| Net assets at beginning of year | 3,437,912,774 | 3,579,453,840 |
| Net assets at end of year | $3,533,559,929 | $3,437,912,774 |
| Undistributed net investment income | $604,936 | $2,481,733 |
| (a) | Effective March 27, 2017, Class I shares were redeemed or exchanged for Class Y shares. |
| (b) | Effective March 27, 2017, Class W shares were renamed Class T shares. |
| (c) | Effective January 24, 2017, Class T shares were renamed Class V shares. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2017 | July 31, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions (a),(b) | 1,858,549 | 66,183,811 | 4,613,748 | 155,291,412 |
| Fund reorganization | — | — | 1,462,001 | 46,928,343 |
| Distributions reinvested | 783,217 | 26,049,800 | 4,914,876 | 166,712,581 |
| Redemptions | (10,056,662) | (354,574,767) | (7,111,670) | (233,158,171) |
| Net increase (decrease) | (7,414,896) | (262,341,156) | 3,878,955 | 135,774,165 |
| Class B | | | | |
| Subscriptions | 1,429 | 42,572 | 14,726 | 434,587 |
| Distributions reinvested | 4,275 | 121,714 | 52,582 | 1,538,539 |
| Redemptions (a),(b) | (341,522) | (10,784,195) | (255,564) | (7,325,007) |
| Net decrease | (335,818) | (10,619,909) | (188,256) | (5,351,881) |
| Class C | | | | |
| Subscriptions | 390,516 | 11,829,087 | 937,651 | 27,319,402 |
| Fund reorganization | — | — | 682,164 | 18,850,494 |
| Distributions reinvested | 48,169 | 1,372,803 | 275,189 | 8,060,285 |
| Redemptions | (1,199,784) | (36,443,871) | (730,303) | (20,542,131) |
| Net increase (decrease) | (761,099) | (23,241,981) | 1,164,701 | 33,688,050 |
| Class E | | | | |
| Subscriptions (c),(d) | 26,223 | 1,035,220 | 4,323 | 142,437 |
| Distributions reinvested | 6,380 | 211,561 | 44,244 | 1,496,760 |
| Redemptions | (56,278) | (1,988,067) | (49,352) | (1,623,621) |
| Net increase (decrease) | (23,675) | (741,286) | (785) | 15,576 |
| Class F | | | | |
| Subscriptions | 2,022 | 62,499 | 2,264 | 60,050 |
| Distributions reinvested | 450 | 12,821 | 3,153 | 92,248 |
| Redemptions (c),(d) | (30,173) | (1,020,501) | (3,975) | (110,539) |
| Net increase (decrease) | (27,701) | (945,181) | 1,442 | 41,759 |
| Class I(e) | | | | |
| Subscriptions | 37,383 | 1,364,426 | 35,732 | 1,197,543 |
| Fund reorganization | — | — | 57 | 1,909 |
| Distributions reinvested | 78,633 | 2,708,134 | 445,082 | 15,622,367 |
| Redemptions | (4,390,298) | (162,075,514) | (822,327) | (28,542,209) |
| Net decrease | (4,274,282) | (158,002,954) | (341,456) | (11,720,390) |
| Class K | | | | |
| Distributions reinvested | 40 | 1,356 | 303 | 10,593 |
| Redemptions | (803) | (27,744) | (2,391) | (84,855) |
| Net decrease | (763) | (26,388) | (2,088) | (74,262) |
| Class R | | | | |
| Subscriptions | 233,767 | 8,131,219 | 736,094 | 24,428,710 |
| Fund reorganization | — | — | 8,726 | 278,844 |
| Distributions reinvested | 1,641 | 54,360 | 7,553 | 255,279 |
| Redemptions | (223,851) | (8,023,192) | (155,908) | (4,944,658) |
| Net increase | 11,557 | 162,387 | 596,465 | 20,018,175 |
| Class R4 | | | | |
| Subscriptions | 113,750 | 4,295,741 | 183,110 | 6,461,665 |
| Fund reorganization | — | — | 32,783 | 1,109,895 |
| Distributions reinvested | 3,564 | 125,032 | 16,895 | 603,811 |
| Redemptions | (100,858) | (3,671,647) | (139,333) | (4,796,960) |
| Net increase | 16,456 | 749,126 | 93,455 | 3,378,411 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2017
| 17 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2017 | July 31, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Class R5 | | | | |
| Subscriptions | 161,545 | 6,022,121 | 558,753 | 18,752,637 |
| Fund reorganization | — | — | 7,632 | 253,682 |
| Distributions reinvested | 11,913 | 409,681 | 14,073 | 493,263 |
| Redemptions | (166,488) | (5,993,228) | (58,352) | (1,989,524) |
| Net increase | 6,970 | 438,574 | 522,106 | 17,510,058 |
| Class T(f) | | | | |
| Subscriptions | 129,151 | 4,368,519 | 828,201 | 28,209,126 |
| Distributions reinvested | 50,981 | 1,699,204 | 403,872 | 13,727,609 |
| Redemptions | (3,852,540) | (133,790,607) | (1,353,684) | (44,175,075) |
| Net decrease | (3,672,408) | (127,722,884) | (121,611) | (2,238,340) |
| Class V(g) | | | | |
| Subscriptions | 45,105 | 1,551,127 | 146,686 | 4,903,647 |
| Distributions reinvested | 63,154 | 2,083,438 | 395,079 | 13,294,402 |
| Redemptions | (538,273) | (18,954,069) | (444,629) | (14,713,593) |
| Net increase (decrease) | (430,014) | (15,319,504) | 97,136 | 3,484,456 |
| Class Y(e) | | | | |
| Subscriptions | 4,148,501 | 153,913,582 | 670,208 | 23,098,478 |
| Distributions reinvested | 15,209 | 524,120 | 25,076 | 880,426 |
| Redemptions | (400,991) | (15,530,281) | (67,229) | (2,303,768) |
| Net increase | 3,762,719 | 138,907,421 | 628,055 | 21,675,136 |
| Class Z | | | | |
| Subscriptions | 4,675,026 | 173,981,906 | 3,416,276 | 117,565,383 |
| Fund reorganization | — | — | 201,114 | 6,678,195 |
| Distributions reinvested | 322,796 | 11,100,945 | 1,794,198 | 62,886,686 |
| Redemptions | (4,894,529) | (178,362,203) | (5,092,805) | (172,247,565) |
| Net increase | 103,293 | 6,720,648 | 318,783 | 14,882,699 |
| Total net increase (decrease) | (13,039,661) | (451,983,087) | 6,646,902 | 231,083,612 |
| (a) | Includes conversions of Class B shares to Class A shares, if any. |
| (b) | Effective July 17, 2017, Class B shares were automatically converted to Class A shares. |
| (c) | Effective July 17, 2017, Class F shares were automatically converted to Class E shares. |
| (d) | Includes conversions of Class F shares to Class E shares, if any. |
| (e) | Effective March 27, 2017, Class I shares were redeemed or exchanged for Class Y shares. |
| (f) | Effective March 27, 2017, Class W shares were renamed Class T shares. |
| (g) | Effective January 24, 2017, Class T shares were renamed Class V shares. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Large Cap Growth Fund | Annual Report 2017 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Large Cap Growth Fund | Annual Report 2017
| 19 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income
(loss) | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class A |
| 7/31/2017 | $33.82 | 0.06 | 6.47 | 6.53 | (0.08) | (0.46) |
| 7/31/2016 | $37.69 | 0.00 (d) | (0.36) | (0.36) | — | (3.51) |
| 7/31/2015 | $34.51 | 0.03 | 7.24 | 7.27 | (0.09) | (4.00) |
| 7/31/2014 | $31.25 | 0.06 | 4.90 | 4.96 | (0.08) | (1.62) |
| 7/31/2013 | $25.65 | 0.11 | 5.55 | 5.66 | (0.06) | — |
| Class B |
| 7/31/2017 | $29.03 | (0.15) | 5.49 | 5.34 | — | (0.46) |
| 7/31/2016 | $33.08 | (0.21) | (0.33) | (0.54) | — | (3.51) |
| 7/31/2015 | $30.88 | (0.20) | 6.40 | 6.20 | — | (4.00) |
| 7/31/2014 | $28.25 | (0.17) | 4.42 | 4.25 | — | (1.62) |
| 7/31/2013 | $23.32 | (0.09) | 5.02 | 4.93 | — | — |
| Class C |
| 7/31/2017 | $29.06 | (0.18) | 5.53 | 5.35 | — | (0.46) |
| 7/31/2016 | $33.11 | (0.21) | (0.33) | (0.54) | — | (3.51) |
| 7/31/2015 | $30.90 | (0.21) | 6.42 | 6.21 | — | (4.00) |
| 7/31/2014 | $28.27 | (0.17) | 4.42 | 4.25 | — | (1.62) |
| 7/31/2013 | $23.34 | (0.09) | 5.02 | 4.93 | — | — |
| Class E |
| 7/31/2017 | $33.70 | 0.02 | 6.45 | 6.47 | (0.04) | (0.46) |
| 7/31/2016 | $37.60 | (0.03) | (0.36) | (0.39) | — | (3.51) |
| 7/31/2015 | $34.44 | (0.00) (d) | 7.22 | 7.22 | (0.06) | (4.00) |
| 7/31/2014 | $31.19 | 0.03 | 4.89 | 4.92 | (0.05) | (1.62) |
| 7/31/2013 | $25.61 | 0.08 | 5.53 | 5.61 | (0.03) | — |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Total
distributions to
shareholders | Reimbursement
from affiliate | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income (loss)
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.54) | — | $39.81 | 19.61% | 1.09% | 1.09% (c) | 0.16% | 29% | $1,835,075 |
| (3.51) | — | $33.82 | (0.99%) | 1.10% | 1.10% (c) | 0.01% | 45% | $1,809,727 |
| (4.09) | — | $37.69 | 22.51% | 1.11% | 1.11% (c) | 0.09% | 59% | $1,870,452 |
| (1.70) | — | $34.51 | 16.29% | 1.14% | 1.14% (c) | 0.18% | 88% | $1,581,112 |
| (0.06) | — | $31.25 | 22.09% | 1.18% | 1.18% (c) | 0.40% | 104% | $1,459,893 |
| |
| (0.46) | — | $33.91 | 18.71% | 1.84% | 1.84% (c) | (0.51%) | 29% | $3 |
| (3.51) | — | $29.03 | (1.73%) | 1.85% | 1.85% (c) | (0.74%) | 45% | $9,751 |
| (4.00) | — | $33.08 | 21.57% | 1.86% | 1.86% (c) | (0.62%) | 59% | $17,338 |
| (1.62) | — | $30.88 | 15.46% | 1.89% | 1.89% (c) | (0.56%) | 88% | $24,117 |
| — | — | $28.25 | 21.14% | 1.93% | 1.93% (c) | (0.34%) | 104% | $34,085 |
| |
| (0.46) | — | $33.95 | 18.72% | 1.84% | 1.84% (c) | (0.58%) | 29% | $101,600 |
| (3.51) | — | $29.06 | (1.73%) | 1.86% | 1.86% (c) | (0.74%) | 45% | $109,092 |
| (4.00) | — | $33.11 | 21.59% | 1.86% | 1.86% (c) | (0.67%) | 59% | $85,724 |
| (1.62) | — | $30.90 | 15.45% | 1.89% | 1.89% (c) | (0.57%) | 88% | $63,200 |
| — | — | $28.27 | 21.12% | 1.93% | 1.93% (c) | (0.36%) | 104% | $52,885 |
| |
| (0.50) | — | $39.67 | 19.50% | 1.19% | 1.19% (c) | 0.06% | 29% | $16,478 |
| (3.51) | — | $33.70 | (1.08%) | 1.20% | 1.20% (c) | (0.09%) | 45% | $14,797 |
| (4.06) | — | $37.60 | 22.37% | 1.21% | 1.21% (c) | (0.00%) (d) | 59% | $16,539 |
| (1.67) | — | $34.44 | 16.18% | 1.24% | 1.24% (c) | 0.08% | 88% | $15,333 |
| (0.03) | — | $31.19 | 21.93% | 1.28% | 1.28% (c) | 0.30% | 104% | $14,853 |
Columbia Large Cap Growth Fund | Annual Report 2017
| 21 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income
(loss) | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class F |
| 7/31/2017 | $29.03 | (0.17) | 5.51 | 5.34 | — | (0.46) |
| 7/31/2016 | $33.07 | (0.21) | (0.32) | (0.53) | — | (3.51) |
| 7/31/2015 | $30.87 | (0.21) | 6.41 | 6.20 | — | (4.00) |
| 7/31/2014 | $28.25 | (0.17) | 4.41 | 4.24 | — | (1.62) |
| 7/31/2013 | $23.32 | (0.09) | 5.02 | 4.93 | — | — |
| Class K |
| 7/31/2017 | $34.85 | 0.10 | 6.66 | 6.76 | (0.11) | (0.46) |
| 7/31/2016 | $38.68 | 0.05 | (0.37) | (0.32) | — | (3.51) |
| 7/31/2015 | $35.32 | 0.09 | 7.41 | 7.50 | (0.14) | (4.00) |
| 7/31/2014 | $31.94 | 0.11 | 5.01 | 5.12 | (0.12) | (1.62) |
| 7/31/2013 | $26.24 | 0.18 | 5.64 | 5.82 | (0.12) | — |
| Class R |
| 7/31/2017 | $33.65 | (0.04) | 6.44 | 6.40 | — | (0.46) |
| 7/31/2016 | $37.60 | (0.07) | (0.37) | (0.44) | — | (3.51) |
| 7/31/2015 | $34.44 | (0.07) | 7.24 | 7.17 | (0.01) | (4.00) |
| 7/31/2014 | $31.18 | (0.02) | 4.89 | 4.87 | (0.00) (d) | (1.62) |
| 7/31/2013 | $25.61 | 0.05 | 5.52 | 5.57 | — | — |
| Class R4 |
| 7/31/2017 | $35.69 | 0.15 | 6.84 | 6.99 | (0.16) | (0.46) |
| 7/31/2016 | $39.49 | 0.07 | (0.36) | (0.29) | — | (3.51) |
| 7/31/2015 | $35.98 | 0.06 | 7.63 | 7.69 | (0.18) | (4.00) |
| 7/31/2014 | $32.48 | 0.15 | 5.10 | 5.25 | (0.15) | (1.62) |
| 7/31/2013 (g) | $26.79 | 0.11 | 5.69 | 5.80 | (0.11) | — |
| Class R5 |
| 7/31/2017 | $35.02 | 0.18 | 6.70 | 6.88 | (0.19) | (0.46) |
| 7/31/2016 | $38.77 | 0.09 | (0.33) | (0.24) | — | (3.51) |
| 7/31/2015 | $35.39 | 0.09 | 7.51 | 7.60 | (0.22) | (4.00) |
| 7/31/2014 | $32.00 | 0.19 | 5.02 | 5.21 | (0.20) | (1.62) |
| 7/31/2013 | $26.28 | 0.26 | 5.64 | 5.90 | (0.18) | — |
| Class T(i) |
| 7/31/2017 | $33.89 | 0.09 | 6.44 | 6.53 | (0.08) | (0.46) |
| 7/31/2016 | $37.75 | 0.01 | (0.36) | (0.35) | — | (3.51) |
| 7/31/2015 | $34.57 | 0.03 | 7.24 | 7.27 | (0.09) | (4.00) |
| 7/31/2014 | $31.26 | 0.06 | 4.91 | 4.97 | (0.06) | (1.62) |
| 7/31/2013 | $25.66 | 0.12 | 5.54 | 5.66 | (0.06) | — |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Total
distributions to
shareholders | Reimbursement
from affiliate | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income (loss)
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.46) | — | $33.91 | 18.71% | 1.84% | 1.84% (c) | (0.56%) | 29% | $3 |
| (3.51) | — | $29.03 | (1.70%) | 1.86% | 1.86% (c) | (0.74%) | 45% | $806 |
| (4.00) | — | $33.07 | 21.57% | 1.86% | 1.86% (c) | (0.66%) | 59% | $871 |
| (1.62) | — | $30.87 | 15.43% | 1.89% | 1.89% (c) | (0.57%) | 88% | $791 |
| — | — | $28.25 | 21.14% | 1.93% | 1.93% (c) | (0.36%) | 104% | $859 |
| |
| (0.57) | — | $41.04 | 19.72% | 0.99% | 0.99% | 0.28% | 29% | $70 |
| (3.51) | — | $34.85 | (0.86%) | 0.99% | 0.99% | 0.16% | 45% | $86 |
| (4.14) | — | $38.68 | 22.66% | 0.99% | 0.99% | 0.23% | 59% | $176 |
| (1.74) | — | $35.32 | 16.47% | 1.00% | 1.00% | 0.32% | 88% | $202 |
| (0.12) | — | $31.94 | 22.25% | 0.96% | 0.96% | 0.64% | 104% | $191 |
| |
| (0.46) | — | $39.59 | 19.29% | 1.34% | 1.34% (c) | (0.10%) | 29% | $29,781 |
| (3.51) | — | $33.65 | (1.22%) | 1.36% | 1.36% (c) | (0.22%) | 45% | $24,920 |
| (4.01) | — | $37.60 | 22.20% | 1.36% | 1.36% (c) | (0.20%) | 59% | $5,421 |
| (1.62) | 0.01 | $34.44 | 16.06% (e) | 1.39% | 1.39% (c) | (0.06%) | 88% | $1,534 |
| — | — | $31.18 | 21.75% | 1.43% | 1.43% (c) | 0.17% | 104% | $1,643 |
| |
| (0.62) | — | $42.06 | 19.92% | 0.84% | 0.84% (c) | 0.40% | 29% | $11,552 |
| (3.51) | — | $35.69 | (0.76%) | 0.85% | 0.85% (c) | 0.21% | 45% | $9,217 |
| (4.18) | — | $39.49 | 22.80% | 0.86% | 0.86% (c) | 0.17% | 59% | $6,506 |
| (1.77) | 0.02 | $35.98 | 16.67% (f) | 0.89% | 0.89% (c) | 0.42% | 88% | $766 |
| (0.11) | — | $32.48 | 21.70% | 0.93% (h) | 0.93% (c),(h) | 0.49% (h) | 104% | $33 |
| |
| (0.65) | — | $41.25 | 20.02% | 0.74% | 0.74% | 0.49% | 29% | $25,954 |
| (3.51) | — | $35.02 | (0.64%) | 0.76% | 0.76% | 0.28% | 45% | $21,789 |
| (4.22) | — | $38.77 | 22.95% | 0.75% | 0.75% | 0.25% | 59% | $3,879 |
| (1.82) | — | $35.39 | 16.74% | 0.75% | 0.75% | 0.57% | 88% | $195 |
| (0.18) | — | $32.00 | 22.59% | 0.72% | 0.72% | 0.89% | 104% | $36 |
| |
| (0.54) | — | $39.88 | 19.57% | 1.09% | 1.09% (c) | 0.27% | 29% | $1,068 |
| (3.51) | — | $33.89 | (0.96%) | 1.10% | 1.10% (c) | 0.02% | 45% | $125,354 |
| (4.09) | — | $37.75 | 22.47% | 1.11% | 1.11% (c) | 0.09% | 59% | $144,250 |
| (1.68) | 0.02 | $34.57 | 16.39% (j) | 1.14% | 1.14% (c) | 0.18% | 88% | $125,509 |
| (0.06) | — | $31.26 | 22.12% | 1.14% | 1.14% (c) | 0.43% | 104% | $4 |
Columbia Large Cap Growth Fund | Annual Report 2017
| 23 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income
(loss) | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Distributions
from net
realized
gains |
| Class V(k) |
| 7/31/2017 | $33.55 | 0.06 | 6.41 | 6.47 | (0.08) | (0.46) |
| 7/31/2016 | $37.41 | 0.00 (d) | (0.35) | (0.35) | — | (3.51) |
| 7/31/2015 | $34.27 | 0.03 | 7.19 | 7.22 | (0.08) | (4.00) |
| 7/31/2014 | $31.05 | 0.04 | 4.87 | 4.91 | (0.07) | (1.62) |
| 7/31/2013 | $25.49 | 0.10 | 5.50 | 5.60 | (0.04) | — |
| Class Y |
| 7/31/2017 | $35.10 | 0.16 | 6.76 | 6.92 | (0.21) | (0.46) |
| 7/31/2016 | $38.83 | 0.13 | (0.35) | (0.22) | — | (3.51) |
| 7/31/2015 | $35.44 | 0.07 | 7.57 | 7.64 | (0.25) | (4.00) |
| 7/31/2014 | $32.03 | 0.22 | 5.03 | 5.25 | (0.22) | (1.62) |
| 7/31/2013 | $26.29 | 0.25 | 5.67 | 5.92 | (0.18) | — |
| Class Z |
| 7/31/2017 | $35.00 | 0.15 | 6.70 | 6.85 | (0.16) | (0.46) |
| 7/31/2016 | $38.79 | 0.09 | (0.37) | (0.28) | — | (3.51) |
| 7/31/2015 | $35.41 | 0.13 | 7.43 | 7.56 | (0.18) | (4.00) |
| 7/31/2014 | $32.01 | 0.15 | 5.03 | 5.18 | (0.16) | (1.62) |
| 7/31/2013 | $26.28 | 0.19 | 5.66 | 5.85 | (0.12) | — |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (d) | Rounds to zero. |
| (e) | The Fund received a payment from an affiliate. Had the Fund not received this payment, the total return would have been lower by 0.02%. |
| (f) | The Fund received a payment from an affiliate. Had the Fund not received this payment, the total return would have been lower by 0.05%. |
| (g) | Class R4 shares commenced operations on November 8, 2012. Per share data and total return reflect activity from that date. |
| (h) | Annualized. |
| (i) | Effective March 27, 2017, Class W shares were renamed Class T shares. |
| (j) | The Fund received a payment from an affiliate. Had the Fund not received this payment, the total return would have been lower by 0.06%. |
| (k) | Effective January 24, 2017, Class T shares were renamed Class V shares. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Total
distributions to
shareholders | Reimbursement
from affiliate | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income (loss)
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.54) | — | $39.48 | 19.59% | 1.09% | 1.09% (c) | 0.16% | 29% | $194,803 |
| (3.51) | — | $33.55 | (0.97%) | 1.11% | 1.11% (c) | 0.01% | 45% | $179,935 |
| (4.08) | — | $37.41 | 22.49% | 1.13% | 1.13% (c) | 0.08% | 59% | $197,026 |
| (1.69) | — | $34.27 | 16.21% | 1.19% | 1.19% (c) | 0.13% | 88% | $172,830 |
| (0.04) | — | $31.05 | 22.01% | 1.23% | 1.23% (c) | 0.35% | 104% | $160,462 |
| |
| (0.67) | — | $41.35 | 20.09% | 0.69% | 0.69% | 0.41% | 29% | $184,471 |
| (3.51) | — | $35.10 | (0.58%) | 0.69% | 0.69% | 0.39% | 45% | $24,530 |
| (4.25) | — | $38.83 | 23.03% | 0.71% | 0.71% | 0.19% | 59% | $2,750 |
| (1.84) | — | $35.44 | 16.84% | 0.70% | 0.70% | 0.66% | 88% | $3 |
| (0.18) | — | $32.03 | 22.64% | 0.71% | 0.71% | 0.90% | 104% | $3,826 |
| |
| (0.62) | — | $41.23 | 19.92% | 0.84% | 0.84% (c) | 0.40% | 29% | $1,132,702 |
| (3.51) | — | $35.00 | (0.74%) | 0.85% | 0.85% (c) | 0.26% | 45% | $957,955 |
| (4.18) | — | $38.79 | 22.80% | 0.86% | 0.86% (c) | 0.34% | 59% | $1,049,380 |
| (1.78) | — | $35.41 | 16.61% | 0.89% | 0.89% (c) | 0.43% | 88% | $889,169 |
| (0.12) | — | $32.01 | 22.34% | 0.93% | 0.93% (c) | 0.65% | 104% | $850,041 |
Columbia Large Cap Growth Fund | Annual Report 2017
| 25 |
Notes to Financial Statements
July 31, 2017
Note 1. Organization
Columbia Large Cap Growth Fund (the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on the initial investment amount. Class A shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a contingent deferred sales charge (CDSC) if the shares are sold within 18 months after purchase, charged as follows: 1.00% CDSC if redeemed within 12 months after purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase.
When available, Class B shares were subject to a maximum CDSC of 5.00% based upon the holding period after purchase. However, as of July 31, 2017 the Fund’s Class B investors, having held their shares for the requisite time period, were no longer subject to a CDSC upon redemption of their shares. Effective July 17, 2017, Class B shares were automatically converted to Class A shares, and the Fund no longer accepts investments by new or existing investors in Class B shares. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class B shares was redeemed.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class E shares are trust shares which are held in an irrevocable trust until the specified trust termination date. Class E shares are subject to a maximum front-end sales charge of 4.50% based on the investment amount. Class E shares purchased without an initial sales charge in accounts aggregating $1 million to $5 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (CDSC) if the shares are sold within one year after purchase. Class E shares are closed to new investors and new accounts.
Class F shares, when available, were trust shares which were held in an irrevocable trust until the specified trust termination date. Class F shares were subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Effective July 17, 2017, Class F shares were automatically converted to Class E shares of the Fund. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class F shares was redeemed.
Effective March 27, 2017, Class I shares of the Fund are no longer offered for sale. Class I shares, when available, were not subject to sales charges, and were made available only to the Columbia Family of Funds. On March 27, 2017, Class I shares were redeemed or exchanged for Class Y shares of the Fund in a tax free transaction that had no impact on the fees and expenses paid by shareholders.
Class K shares are not subject to sales charges; however, this share class is closed to new investors.
Class R shares are not subject to sales charges and are generally available only to certain retirement plans and other investors as described in the Fund’s prospectus.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class R5 shares are not subject to sales charges and are generally available only to investors purchasing through authorized investment professionals and omnibus retirement plans as described in the Fund’s prospectus.
| 26 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Class T shares are subject to a maximum front-end sales charge of 2.50% per transaction and must be purchased through financial intermediaries that, by written agreement with Columbia Management Investment Distributors, Inc., are specifically authorized to sell Class T shares. Prior to March 27, 2017, Class T shares were known as Class W shares, were not subject to sales charges, and were generally available only to investors purchasing through authorized investment programs managed by investment professionals, including discretionary managed accounts.
Class V shares (formerly Class T shares) are subject to a maximum front-end sales charge of 5.75% based on the investment amount. Class V shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a CDSC if the shares are sold within 18 months after purchase, charged as follows: 1.00% CDSC if redeemed within 12 months after purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase. Class V shares are available only to investors who received (and who have continuously held) Class V shares in connection with previous fund reorganizations. Prior to January 24, 2017, Class V shares were known as Class T shares. Class V shares have no relation to, or connection with, the Fund’s current Class T shares.
Class Y shares are not subject to sales charges and are available to institutional and certain other investors as described in the Fund’s prospectus.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
All equity securities are valued at the close of business of the New York Stock Exchange. Equity securities are valued at the last quoted sales price on the principal exchange or market on which they trade, except for securities traded on the NASDAQ Stock Market, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets.
Foreign equity securities are valued based on the closing price on the foreign exchange in which such securities are primarily traded. If any foreign equity security closing prices are not readily available, the securities are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy adopted by the Board of Trustees, including, if available, utilizing a third party pricing service to determine these fair values. The third party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the quoted or published price, if available.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Columbia Large Cap Growth Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
July 31, 2017
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Foreign currency transactions and translations
The values of all assets and liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts (REITs), which report information on the tax character of their distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual information reported. Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the extent actual information has not yet been reported, estimates for return of capital are made by the Fund’s management. Management’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a proportionate change in return of capital to shareholders.
Awards from class action litigation are recorded as a reduction of cost basis if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
| 28 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income (including net short-term capital gains) and capital gains, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Realized gains in certain countries may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable. The amount, if any, is disclosed as a liability on the Statement of Assets and Liabilities.
Distributions to shareholders
Distributions from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed along with the income distribution. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Accounting Standards Update 2017-08 Premium Amortization on Purchased Callable Debt Securities
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017-08 Premium Amortization on Purchased Callable Debt Securities. ASU No. 2017-08 updates the accounting standards to shorten the amortization period for certain purchased callable debt securities, held at a premium, to be amortized to the earliest call date. The update applies to securities with explicit, noncontingent call features that are callable at fixed prices and on preset dates. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. At this time, management is evaluating the implication of this guidance and the impact it will have on the financial statement amounts and footnote disclosures, if any.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The
Columbia Large Cap Growth Fund | Annual Report 2017
| 29 |
Notes to Financial Statements (continued)
July 31, 2017
amendments to Regulation S-X are effective for periods on or after August 1, 2017. Management has reviewed the requirements and believes the adoption of the amendments to Regulation S-X will not have a material impact on the Fund’s financial statements and related disclosures.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s daily net assets that declines from 0.77% to 0.57% as the Fund’s net assets increase. The effective management services fee rate for the year ended July 31, 2017 was 0.66% of the Fund’s average daily net assets.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. These members of the Board of Trustees may participate in a Deferred Compensation Plan (the Plan) which may be terminated at any time. Obligations of the Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Effective August 1, 2017, total transfer agency fees for Class K, Class R5 and Class Y shares are subject to an annual limitation of not more than 0.07%, 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. From January 1, 2017 to July 31, 2017, these limitations were 0.075% for Class K and Class R5 shares and 0.025% for Class I and Class Y shares; and prior to January 1, 2017, the limitation was 0.05% for Class K and Class R5 shares and Class I and Class Y shares did not pay transfer agency fees.
| 30 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
For the year ended July 31, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.15 |
| Class B | 0.15 |
| Class C | 0.15 |
| Class E | 0.15 |
| Class F | 0.15 |
| Class I | 0.002 (a),(b) |
| Class K | 0.055 |
| Class R | 0.15 |
| Class R4 | 0.15 |
| Class R5 | 0.056 |
| Class T | 0.16 |
| Class V | 0.15 |
| Class Y | 0.009 |
| Class Z | 0.15 |
| (a) | Effective March 27, 2017, Class I shares were redeemed or exchanged for Class Y shares. |
| (b) | Unannualized. |
The Fund and certain other associated investment companies have severally, but not jointly, guaranteed the performance and observance of all the terms and conditions of a lease entered into by Seligman Data Corp. (SDC), the former transfer agent, including the payment of rent by SDC (the Guaranty). SDC was the legacy Seligman funds’ former transfer agent.
The lease and the Guaranty expire in January 2019. At July 31, 2017, the Fund’s total potential future obligation over the life of the Guaranty is $65,989. The liability remaining at July 31, 2017 for non-recurring charges associated with the lease amounted to $32,096 and is recorded as a part of the payable for other expenses in the Statement of Assets and Liabilities. SDC is owned by six associated investment companies, including the Fund. The Fund’s ownership interest in SDC at July 31, 2017 is recorded as a part of other assets in the Statement of Assets and Liabilities at a cost of $43,170, which approximates the fair value of the ownership interest.
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended July 31, 2017, these minimum account balance fees reduced total expenses of the Fund by $30,486.
Plan administration fees
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund pays an annual fee at a rate of 0.25% of the Fund’s average daily net assets attributable to Class K shares for the provision of various administrative, recordkeeping, communication and educational services.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Columbia Large Cap Growth Fund | Annual Report 2017
| 31 |
Notes to Financial Statements (continued)
July 31, 2017
Under the Plans, the Fund pays a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A, Class B, Class C, Class E, Class F and Class T shares of the Fund. Also under the Plans, the Fund pays a monthly distribution fee to the Distributor at the maximum annual rates of 0.10%, 0.75%, 0.75%, 0.10%, 0.75%, 0.50% and 0.25% of the average daily net assets attributable to Class A, Class B, Class C, Class E, Class F, Class R and Class T shares of the Fund, respectively.
Although the Fund may pay distribution and service fees up to a maximum annual rate of 0.35% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder liaison services), the Fund currently limits such fees to an aggregate fee of not more than 0.25% of the Fund’s average daily net assets attributable to Class A shares.
Although the Fund may pay a distribution fee up to 0.25% of the Fund’s average daily net assets attributable to Class T shares and a service fee of up to 0.25% of the Fund’s average daily net assets attributable to Class T shares, the aggregate fee shall not exceed 0.25% of the Fund’s average daily net assets attributable to Class T shares.
Shareholder services fees
The Fund has adopted a shareholder services plan that permits it to pay for certain services provided to Class V shareholders by their selling and/or servicing agents. The Fund 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 V shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services). These fees are currently limited to an aggregate annual rate of not more than 0.25% of the Fund’s average daily net assets attributable to Class V shares.
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended July 31, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 628,972 |
| Class B | 1,261 |
| Class C | 10,718 |
| Class E | 611 |
| Class F | 10 |
| Class V | 20,135 |
| 32 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rate(s) as a percentage of the class’ average daily net assets:
| | December 1, 2016
through
November 30, 2017 | Prior to
December 1, 2016 |
| Class A | 1.20% | 1.23% |
| Class B | 1.95 | 1.98 |
| Class C | 1.95 | 1.98 |
| Class E | 1.30 | 1.33 |
| Class F | 1.95 | 1.98 |
| Class K | 1.14 | 1.16 |
| Class R | 1.45 | 1.48 |
| Class R4 | 0.95 | 0.98 |
| Class R5 | 0.89 | 0.91 |
| Class T | 1.20 | 1.23 |
| Class V | 1.20 | 1.23 |
| Class Y | 0.84 | 0.86 |
| Class Z | 0.95 | 0.98 |
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At July 31, 2017, these differences are primarily due to differing treatment for deferral/reversal of wash sale losses, re-characterization of distributions for investments, trustees’ deferred compensation and foreign currency transactions. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
gain ($) | Paid in
capital ($) |
| 14,849 | (14,849) | — |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
Columbia Large Cap Growth Fund | Annual Report 2017
| 33 |
Notes to Financial Statements (continued)
July 31, 2017
The tax character of distributions paid during the years indicated was as follows:
| July 31, 2017 | July 31, 2016 |
Ordinary
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Long-term
capital gains ($) | Total ($) |
| 9,669,910 | 44,386,742 | 54,056,652 | 1,791,601 | 333,387,452 | 335,179,053 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| 5,657,794 | 160,149,276 | — | 1,196,784,164 |
At July 31, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 2,346,904,161 | 1,231,643,787 | (34,859,623) | 1,196,784,164 |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $948,008,440 and $1,439,865,942, respectively, for the year ended July 31, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Affiliated money market fund
The Fund invests in Columbia Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. Effective October 1, 2016, the Affiliated MMF prices its shares with a floating net asset value (NAV) and no longer seeks to maintain a stable NAV. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
Note 7. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
| 34 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
The Fund had no borrowings during the year ended July 31, 2017.
Note 8. Fund reorganization
At the close of business on May 20, 2016, the Fund acquired the assets and assumed the identified liabilities of Columbia Large Cap Growth Fund IV, a series of Columbia Funds Series Trust II (the Acquired Fund). The reorganization was completed after shareholders of the Acquired Fund approved a plan of reorganization on April 15, 2016. The purpose of the transaction was to combine two funds managed by the Investment Manager with comparable investment objectives and strategies.
The aggregate net assets of the Fund immediately before the reorganization were $3,280,915,910 and the combined net assets immediately after the reorganization were $3,355,017,272.
The reorganization was accomplished by a tax-free exchange of 2,394,477 shares of the Acquired Fund valued at $74,101,362 (including $2,664,848 of unrealized appreciation).
In exchange for the Acquired fund’s shares, the Fund issued the following number of shares:
| | Shares |
| Class A | 1,462,001 |
| Class C | 682,164 |
| Class I | 57 |
| Class K | 8,726 |
| Class R4 | 32,783 |
| Class R5 | 7,632 |
| Class Z | 201,114 |
For financial reporting purposes, net assets received and shares issued by the Fund were recorded at fair value; however, the Acquired Fund’s cost of investments was carried forward.
The Fund’s financial statements reflect both the operations of the Fund for the period prior to the reorganization and the combined Fund for the period subsequent to the reorganization. Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Acquired Fund that have been included in the combined Fund’s Statement of Operations since the reorganization was completed.
Note 9. Significant risks
Shareholder concentration risk
At July 31, 2017, one unaffiliated shareholder of record owned 11.3% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated shareholders of record owned 42.0% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Technology and technology-related investment risk
The Fund may be more susceptible to the particular risks that may affect companies in the information technology sector, as well as other technology-related sectors (collectively, the technology sectors) than if it were invested in a wider variety of companies in unrelated sectors. Companies in the technology sectors are subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market entrants, competition for market share and short product cycles due to an accelerated rate of technological developments. Such
Columbia Large Cap Growth Fund | Annual Report 2017
| 35 |
Notes to Financial Statements (continued)
July 31, 2017
competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many technology sector companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.
Note 10. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 3 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 11. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is 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 Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, 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.
| 36 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of Columbia Large Cap Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia Large Cap Growth Fund (the “Fund”, a series of Columbia Funds Series Trust I) as of July 31, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of July 31, 2017 by correspondence with the custodian, brokers and transfer agent, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
September 21, 2017
Columbia Large Cap Growth Fund | Annual Report 2017
| 37 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Qualified
dividend
income | Dividends
received
deduction | Capital
gain
dividend |
| 100.00% | 100.00% | $180,893,820 |
Qualified dividend income. For taxable, non-corporate shareholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
| 38 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. The year set forth beneath Length of Service in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve terms of indefinite duration.
Independent trustees
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Janet Langford Carrig
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1957 | Trustee
1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company) since September 2007 | 57 | None |
Douglas A. Hacker
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee and Chairman of the Board
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 | 57 | Spartan Nash Company, (food distributor); Nash Finch Company (food distributor) from 2005 to 2013; Aircastle Limited (aircraft leasing); SeaCube Container Leasing Ltd. (container leasing) from 2010 to 2013; and Travelport Worldwide Limited (travel information technology) |
Nancy T. Lukitsh
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1956 | Trustee
2011 | Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser) from 1997 to 2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools) from 2007 to 2010; Director, Wellington Trust Company, NA and other Wellington affiliates from 1997 to 2010 | 57 | None |
David M. Moffett
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee
2011 | Retired. Consultant to Bridgewater and Associates | 57 | Director, CSX Corporation; Genworth Financial, Inc. (financial and insurance products and services); PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
Columbia Large Cap Growth Fund | Annual Report 2017
| 39 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Charles R. Nelson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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 | 57 | None |
John J. Neuhauser
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee
1984 | President, Saint Michael’s College since August 2007; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; 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 | 57 | Liberty All-Star Equity Fund and Liberty All- Star Growth Fund (closed-end funds) |
Patrick J. Simpson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee
2000 | Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP from 1988 to 2014 | 57 | None |
Anne-Lee Verville
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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) | 57 | Enesco Group, Inc. (producer of giftware and home and garden decor products) from 2001 to 2006 |
| 40 | Columbia Large Cap Growth Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds complex overseen | Other directorships held by Trustee during the past five years |
J. Kevin Connaughton
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1964 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since March 2016; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC from May 2010 to February 2015; President, Columbia Funds from 2009 to 2015; and senior officer of Columbia Funds and affiliated funds from 2003 to 2015 | 57 | Board of Governors, Gateway Healthcare since January 2016; Trustee, New Century Portfolios since March 2015; and Director, The Autism Project since March 2015 |
Natalie A. Trunow
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1967 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Partners (investment consulting services to institutions) since January 2016; Director of Investments, Casey Family Programs from April 2016 to September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments from August 2008 to January 2016; Section Head and Portfolio Manager, General Motors Asset Management from June 1997 to August 2008 | 57 | Healthcare Services for Children with Special Needs |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Shareholders of the Funds are expected to be asked to elect each of Mr. Connaughton and Ms. Trunow as a Trustee at a future shareholder meeting. |
Interested trustee affiliated with Investment Manager*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex overseen | Other directorships held by Trustee during the past five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
1960 | Trustee
2012 | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010-September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006-August 2012 | 179 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006 - January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia Large Cap Growth Fund | Annual Report 2017
| 41 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
| 42 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement
On June 14, 2017, the Board of Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Large Cap Growth Fund (the Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, both among themselves and with the management team of the Investment Manager, materials provided by the Investment Manager and others before determining to approve the continuation of the Management Agreement.
In connection with their deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and discussed these materials with representatives of the Investment Manager at Committee meetings held on March 27, 2017, April 26, 2017 and June 13, 2017 and at Board meetings held on March 28, 2017 and June 14, 2017. In addition, the Board considers matters bearing on the Management Agreement at most of its other meetings throughout the year and meets regularly with senior management of the Trust and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and other investment personnel at various times throughout the year. The Committee and the Board also consulted with its independent fee consultant, Fund counsel and the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board in their deliberations. On June 13, 2017, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 14, 2017, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through November 30, 2018 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding the management fees of similarly-managed portfolios of other clients of the Investment Manager, including institutional separate accounts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
Columbia Large Cap Growth Fund | Annual Report 2017
| 43 |
Board Consideration and Approval of Management
Agreement (continued)
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of services provided under the Management Agreement
The Committee and the Board considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management, reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.
The Committee and the Board also considered the professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with similarly-structured funds. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks and information that compared the performance of the Fund to the performance of a group of comparable mutual funds as determined by the independent third-party data provider, and data provided by the independent fee consultant. The Committee and the Board also reviewed a description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Committee and the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the Management Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted that, through December 31, 2016, the Fund’s performance was in the fifty-ninth, sixteenth and twenty-second percentile (where the best performance would be in the first percentile) of its category selected by the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the Fund and the Investment Manager was sufficient, in light of other considerations, to warrant the continuation of the Management Agreement.
| 44 | Columbia Large Cap Growth Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement (continued)
Investment management fee rates and other expenses
The Committee and the Board considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2016, the Fund’s actual management fee and net total expense ratio are ranked in the third and second quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also received and considered information about the management fees charged by the Investment Manager to institutional separate accounts. In considering the fees charged to those accounts, the Committee and the Board took into account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, warranted the continuation of the Management Agreement.
Costs of services provided and profitability
The Committee and the Board also took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund.
The Committee and the Board also considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of profitability levels realized in 2016 to profitability levels realized in 2015. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard, the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate on assets above specified threshold levels.
Columbia Large Cap Growth Fund | Annual Report 2017
| 45 |
Board Consideration and Approval of Management
Agreement (continued)
In considering these matters, the Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as discussed above. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the continuation of the Management Agreement.
Other benefits to the Investment Manager
The Committee and the Board received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the Investment Manager’s practices with respect to allocating portfolio transactions for brokerage and research services. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower without these benefits.
Conclusion
The Committee and the Board reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement.
| 46 | Columbia Large Cap Growth Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia Large Cap Growth Fund | Annual Report 2017
| 47 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Large Cap Growth Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
July 31, 2017
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
The current outlook for financial markets is clouded by two primary concerns: the high valuation of equities and the direction of interest rates. Following the U.S. presidential election, U.S. equities rallied based on the assumption that the new administration’s policies would stimulate growth quickly. Unfortunately it’s unclear whether those measures will get passed, much less passed quickly. In fixed income, uncertainty stems from the possibility that interest rates won’t rise as rapidly as expected if the administration’s proposed growth policies are not implemented.
Given this uncertainty, investors value a consistent approach more than ever. Investors want strong, repeatable risk-adjusted returns. Consistency — not surprises. As a leading global asset manager, we believe our consistent, collaborative investment approach enables us to deliver the dependable experience your portfolio demands. So, how do we strive to deliver a consistent investment experience?
Better insights
Your portfolio benefits from the investment insights uncovered by our talented investment teams around the world.
Better decisions
Our collaborative, interactive environment enables our investment teams to construct portfolios that take advantage of the best investment ideas.
Better outcomes
We aim to deliver a consistent experience, which means fewer surprises, dependable insights, and products designed to do the thing you want.
Whether you’re trying to save money to help your children go to college or for your own retirement, it’s the consistency of the return that is most essential. People who chase higher returns are usually also the first to sell when that investment goes through a bad patch. We try to combat this behavioral tendency by offering strategies that aim for a more consistent return. Our goal is for investors to panic less during periods of volatility, which can have a significant effect on their long-term results.
Nothing is more important to us than making sure those who have entrusted us to protect and grow their assets can do what matters most to them: build a nest egg, leave a legacy, and live confidently — now and throughout retirement. It’s why our talented professionals around the world work together to uncover uncommon opportunities and why our process encourages challenge and debate around our most compelling ideas to ensure better informed investment decisions, which hopefully lead to better outcomes for you.
Your success is our priority. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for consistent, sustainable outcomes, no matter the market conditions.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia Tax-Exempt Fund | Annual Report 2017
Columbia Tax-Exempt Fund | Annual Report 2017
Investment objective
Columbia Tax-Exempt Fund (the Fund) seeks total return, consisting of current income exempt from federal income tax and of capital appreciation, consistent with moderate fluctuation of principal.
Portfolio management
Kimberly Campbell
Co-manager
Managed Fund since 2002
James Dearborn
Co-manager
Managed Fund since October 2016
| Average annual total returns (%) (for the period ended July 31, 2017) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/21/78 | -0.70 | 3.19 | 4.48 |
| | Including sales charges | | -3.67 | 2.56 | 4.16 |
| Class B | Excluding sales charges | 05/05/92 | -1.44 | 2.42 | 3.70 |
| | Including sales charges | | -6.21 | 2.07 | 3.70 |
| Class C | Excluding sales charges | 08/01/97 | -1.27 | 2.61 | 3.87 |
| | Including sales charges | | -2.22 | 2.61 | 3.87 |
| Class R4* | 03/19/13 | -0.50 | 3.38 | 4.58 |
| Class R5* | 12/11/13 | -0.47 | 3.38 | 4.58 |
| Class Y* | 03/01/17 | -0.61 | 3.21 | 4.49 |
| Class Z | 09/16/05 | -0.50 | 3.40 | 4.68 |
| Bloomberg Barclays Municipal Bond Index | | 0.26 | 3.10 | 4.60 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class B are shown with and without the applicable contingent deferred sales charge (CDSC) of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter. The Fund no longer accepts investments by new or existing investors in Class B shares. Effective July 17, 2017, Class B shares were automatically converted to Class A shares without a CDSC. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class B shares was redeemed without a CDSC. Returns for Class C are shown with and without the 1.00% CDSC for the first year only. The Fund’s other classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays Municipal Bond Index is an unmanaged index considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
| 2 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (July 31, 2007 — July 31, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia Tax-Exempt Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares.
| Quality breakdown (%) (at July 31, 2017) |
| AAA rating | 1.8 |
| AA rating | 17.6 |
| A rating | 36.7 |
| BBB rating | 26.9 |
| BB rating | 2.0 |
| B rating | 0.1 |
| C rating | 0.1 |
| Not rated | 14.8 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
Top Ten States/Territories (%)
(at July 31, 2017) |
| Illinois | 14.9 |
| Texas | 10.3 |
| California | 9.8 |
| Florida | 5.8 |
| Pennsylvania | 5.0 |
| Michigan | 4.4 |
| New York | 3.8 |
| Louisiana | 3.5 |
| Wisconsin | 3.4 |
| Massachusetts | 3.3 |
Percentages indicated are based upon total investments (excluding Money Market Funds).
For further detail about these holdings, please refer to the section entitled “Portfolio of Investments.”
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
Columbia Tax-Exempt Fund | Annual Report 2017
| 3 |
Manager Discussion of Fund Performance
For the 12-month period that ended July 31, 2017, the Fund’s Class A shares returned -0.70% excluding sales charges. Class Z shares of the Fund returned -0.50% for the same time period. The Fund lagged its benchmark, the Bloomberg Barclays Municipal Bond Index, which returned 0.26% over the same 12-month period. Issue selection in the resource recovery sector and the Fund’s holdings in bonds maturing beyond 25 years were the main detractors from relative performance.
Municipal bonds made little headway
Municipal bond returns were mixed during the 12 months ended July 31, 2017, as yields at the start were at historical lows. However, the municipal bond market came under pressure in the third quarter of 2016 when heavy new issuance and the results of the November U.S. Presidential election pushed yields substantially higher, leading to significant outflows from many municipal bond funds in November and December (redemptions from the Fund were not major). In addition, investors worried that the new administration’s pro-growth policies could increase inflation and municipal supply. There were concerns about potential changes to the tax code, prompting some buyers — notably in the insurance industry — to take a wait-and-see approach.
Demand recovered in 2017, and implementation of the administration’s policies became less certain. Interest rates recovered partly due to lower inflation expectations and oil prices. With few exceptions, credit fundamentals — the ability of municipal bond issuers to meet their debt obligations — remained stable and supply was tight.
Contributors and detractors
Issue selection in the local general obligation (GO) and education sectors aided relative performance. In particular, an overweight in Chicago GO bonds benefited performance as the city implemented spending cuts and tax increases. In the education sector, security selection among charter schools was beneficial. Security selection and an overweight in the hospital sector further aided relative performance, and security selection in the continuing care retirement community sector also had a positive impact. The Fund’s above-average yield aided return, the result of overweights in BBB and A- rated issues and a 10% stake in below-investment-grade non-rated securities with high yields.
However, these gains did not offset the impact of issue selection in the resource recovery sector, which detracted from results. Resource recovery encompasses a wide variety of projects, including recycling, waste-to-energy and other products. Detractors included issues from two wood pellet producers in Texas and Louisiana, which went into bankruptcy, and bonds from a facility in Florida that treats waste recycling it into fertilizer, which declined as costs increased. All three of these non-rated, high-yielding bonds saw steep price declines. Elsewhere, a small investment in the prepaid gas sector detracted, as the sector underperformed. In addition, the Fund’s overweight in bonds with maturities of 30 years or more also detracted, as longer term issues underperformed shorter maturity bonds.
At period end
We believe active management is key to navigating an environment of shifting interest rates. We remain focused on income as an important driver of total return. To that end, the Fund has maintained an overweight in bonds with maturities of 15 or more years and an underweight in one- to 10-year bonds. Long-term bonds have higher yields and tend to be less vulnerable to Fed interest rate hikes than shorter maturity bonds.
During the period, we boosted exposure to:
| • | bonds subject to the alternative minimum tax (AMT), which currently offer a yield advantage and, should yield spreads narrow because the AMT is reduced or eliminated, the potential for a price boost |
| • | continuing care retirement communities |
| 4 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Manager Discussion of Fund Performance (continued)
The Fund also favored premium callable (redeemable) bonds with a 5% coupon because they offer a price cushion as yields increase. We maintained overweight allocations in bonds with A and BBB ratings, which accounted for more than half of the Fund’s assets at period end, and a sizable stake in non-rated bonds. We plan to maintain our focus on investment-grade bonds, particularly bonds rated A and BBB, as we believe there is potential value to add through security selection supported by the independent research of our municipal credit team. Because credit spreads are relatively narrow on bonds rated below investment grade, we have become increasingly selective. We eliminated exposure to Puerto Rico GO bonds because of the Commonwealth’s deteriorating financial condition.
Fixed-income securities present issuer default risk. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a state’s financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the Fund’s income and yield. These risks may be heightened for longer maturity and duration securities. Federal and state tax rules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state, local or alternative minimum taxes. Liquidity risk is associated with the difficulty of selling underlying investments at a desirable time or price. Investing in derivatives is a specialized activity that involves special risks, which may result in significant losses. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
Columbia Tax-Exempt Fund | Annual Report 2017
| 5 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2017 — July 31, 2017 |
| | Account value at the
beginning of the
period ($) | Account value at the
end of the
period ($) | Expenses paid during
the period ($) | Fund’s annualized
expense ratio (%) |
| | Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual |
| Class A | 1,000.00 | 1,000.00 | 1,036.50 | 1,021.17 | 3.69 | 3.66 | 0.73 |
| Class B | 1,000.00 | 1,000.00 | 1,032.70 | 1,017.46 | 7.46 | 7.40 | 1.48 |
| Class C | 1,000.00 | 1,000.00 | 1,033.20 | 1,017.95 | 6.96 | 6.90 | 1.38 |
| Class R4 | 1,000.00 | 1,000.00 | 1,037.50 | 1,022.17 | 2.68 | 2.66 | 0.53 |
| Class R5 | 1,000.00 | 1,000.00 | 1,037.50 | 1,022.17 | 2.68 | 2.66 | 0.53 |
| Class Y | 1,000.00 | 1,000.00 | 1,031.70 (a) | 1,022.36 | 2.06 (a) | 2.46 | 0.49 (a) |
| Class Z | 1,000.00 | 1,000.00 | 1,037.50 | 1,022.17 | 2.68 | 2.66 | 0.53 |
(a) Based on operations from March 1, 2017 (commencement of operations) through the stated period end.
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| 6 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments
July 31, 2017
(Percentages represent value of investments compared to net assets)
| Floating Rate Notes 1.2% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Massachusetts 0.1% |
| Massachusetts Health & Educational Facilities Authority(a),(b) |
| Revenue Bonds |
| Tufts University |
| VRDN Series 2012N-2 (Wells Fargo Bank) |
| 08/15/2034 | 0.690% | | 2,200,000 | 2,200,000 |
| New Hampshire 0.3% |
| New Hampshire Health & Education Facilities Authority Act(a),(b) |
| Revenue Bonds |
| University System of New Hampshire |
| Series 2016A2 (State Street Bank and Trust Co.) |
| 07/01/2035 | 0.710% | | 9,600,000 | 9,600,000 |
| New York 0.7% |
| City of New York(b) |
| Unlimited General Obligation Bonds |
| Subordinated Series 2013H-2 |
| 01/01/2036 | 0.760% | | 3,250,000 | 3,250,000 |
| New York City Transitional Finance Authority(a),(b) |
| Subordinated Revenue Bonds |
| Future Tax Secured |
| VRDN Series 2016 (JPMorgan Chase Bank) |
| 02/01/2045 | 0.760% | | 8,050,000 | 8,050,000 |
| New York City Transitional Finance Authority Future Tax Secured(a),(b) |
| Revenue Bonds |
| NYC Recovery |
| VRDN Subordinated Series 2002-3-3F (Royal Bank of Canada) |
| 11/01/2022 | 0.740% | | 3,625,000 | 3,625,000 |
| New York City Water & Sewer System(a),(b) |
| Revenue Bonds |
| 2nd General Resolution |
| VRDN Series 2013DD-2 (JPMorgan Chase Bank) |
| 06/15/2043 | 0.760% | | 6,900,000 | 6,900,000 |
| VRDN Series 2016BB (State Street Bank and Trust Co.) |
| 06/15/2049 | 0.770% | | 4,750,000 | 4,750,000 |
| Total | 26,575,000 |
| Oklahoma 0.1% |
| Oklahoma Turnpike Authority(b) |
| Refunding Revenue Bonds |
| VRDN 2nd Senior Series 2010F |
| 01/01/2028 | 0.720% | | 4,005,000 | 4,005,000 |
| Utah 0.0% |
| City of Murray(a),(b) |
| Revenue Bonds |
| IHC Health Services, Inc. |
| VRDN Series 2005A (JPMorgan Chase Bank NA) |
| 05/15/2037 | 0.720% | | 1,700,000 | 1,700,000 |
Total Floating Rate Notes
(Cost $44,080,000) | 44,080,000 |
|
| Municipal Bonds 98.0% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Alabama 0.9% |
| Lower Alabama Gas District (The) |
| Revenue Bonds |
| Series 2016A |
| 09/01/2046 | 5.000% | | 26,385,000 | 33,065,418 |
| Alaska 0.7% |
| City of Koyukuk |
| Prerefunded 10/01/19 Revenue Bonds |
| Tanana Chiefs Conference Health Care |
| Series 2011 |
| 10/01/2032 | 7.500% | | 18,330,000 | 20,823,796 |
| 10/01/2041 | 7.750% | | 4,350,000 | 4,965,047 |
| Total | 25,788,843 |
| Arizona 1.9% |
| Arizona Health Facilities Authority |
| Refunding Revenue Bonds |
| Scottsdale Lincoln Hospital Project |
| Series 2014 |
| 12/01/2042 | 5.000% | | 7,000,000 | 7,836,920 |
| Revenue Bonds |
| Banner Health |
| Series 2014A |
| 01/01/2044 | 5.000% | | 15,000,000 | 16,841,250 |
| Glendale Industrial Development Authority |
| Revenue Bonds |
| Midwestern University |
| Series 2010 |
| 05/15/2035 | 5.000% | | 13,750,000 | 14,897,987 |
| Industrial Development Authority of the County of Pima (The)(c) |
| Refunding Revenue Bonds |
| American Leadership Academy |
| Series 2015 |
| 06/15/2045 | 5.625% | | 2,680,000 | 2,726,659 |
| Industrial Development Authority of the County of Pima (The)(d) |
| Revenue Bonds |
| GNMA Mortgage-Backed Securities |
| Series 1989 Escrowed to Maturity AMT |
| 09/01/2021 | 8.200% | | 7,205,000 | 8,509,321 |
| Maricopa County Industrial Development Authority(c) |
| Revenue Bonds |
| Christian Care Surprise, Inc. |
| Series 2016 |
| 01/01/2036 | 5.750% | | 2,000,000 | 1,966,460 |
| Maricopa County Pollution Control Corp. |
| Refunding Revenue Bonds |
| Southern California Edison Co. |
| Series 2000B |
| 06/01/2035 | 5.000% | | 9,775,000 | 10,619,267 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 7 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Salt Verde Financial Corp. |
| Revenue Bonds |
| Senior Series 2007 |
| 12/01/2032 | 5.000% | | 7,170,000 | 8,512,726 |
| Total | 71,910,590 |
| Arkansas 0.3% |
| Pulaski County Public Facilities Board |
| Revenue Bonds |
| Series 2014 |
| 12/01/2039 | 5.000% | | 8,725,000 | 9,774,181 |
| 12/01/2042 | 5.000% | | 2,000,000 | 2,232,180 |
| Total | 12,006,361 |
| California 9.7% |
| ABAG Finance Authority for Nonprofit Corps. |
| Refunding Revenue Bonds |
| Episcopal Senior Communities |
| Series 2011 |
| 07/01/2026 | 6.125% | | 3,420,000 | 3,877,733 |
| 07/01/2041 | 6.125% | | 7,015,000 | 7,737,335 |
| Revenue Bonds |
| Sharp Healthcare |
| Series 2009 |
| 08/01/2039 | 6.250% | | 4,000,000 | 4,395,520 |
| California Health Facilities Financing Authority |
| Prerefunded 10/01/18 Revenue Bonds |
| Providence Health |
| Series 2008 |
| 10/01/2038 | 6.500% | | 110,000 | 117,184 |
| Providence Health & Services |
| Series 2008C |
| 10/01/2028 | 6.250% | | 2,000,000 | 2,127,380 |
| Refunding Revenue Bonds |
| Sutter Health |
| Series 2016B |
| 11/15/2041 | 4.000% | | 10,000,000 | 10,353,000 |
| Revenue Bonds |
| Kaiser Permanente |
| Subordinated Series 2017A-2 |
| 11/01/2044 | 4.000% | | 15,000,000 | 15,706,500 |
| California Municipal Finance Authority |
| Prerefunded 10/01/18 Revenue Bonds |
| Biola University |
| Series 2008 |
| 10/01/2034 | 5.875% | | 4,000,000 | 4,229,400 |
| Refunding Revenue Bonds |
| Community Medical Centers |
| Series 2017A |
| 02/01/2036 | 5.000% | | 1,500,000 | 1,706,505 |
| 02/01/2037 | 5.000% | | 1,000,000 | 1,135,920 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| California Municipal Finance Authority(c),(d),(e) |
| Revenue Bonds |
| UTS Renewable Energy-Waste Water Facilities |
| Series 2011 AMT |
| 12/01/2032 | 7.500% | | 1,830,000 | 456,878 |
| California Pollution Control Financing Authority(c),(d) |
| Revenue Bonds |
| Aemerge Redpak Services Southern California, LLC Project |
| Series 2016 AMT |
| 12/01/2027 | 7.000% | | 2,000,000 | 1,957,560 |
| California School Finance Authority(c) |
| Revenue Bonds |
| River Springs Charter School Project |
| Series 2015 |
| 07/01/2046 | 6.375% | | 3,000,000 | 3,135,180 |
| 07/01/2046 | 6.375% | | 415,000 | 433,700 |
| California State Public Works Board |
| Prerefunded 11/01/19 Revenue Bonds |
| Various Capital Projects |
| Subordinated Series 2009I-1 |
| 11/01/2029 | 6.125% | | 6,000,000 | 6,693,720 |
| Revenue Bonds |
| Various Capital Projects |
| Series 2012A |
| 04/01/2037 | 5.000% | | 4,660,000 | 5,233,366 |
| Various Correctional Facilities |
| Series 2014A |
| 09/01/2039 | 5.000% | | 7,000,000 | 8,026,690 |
| California Statewide Communities Development Authority |
| Prerefunded 01/01/19 Revenue Bonds |
| Aspire Public Schools |
| Series 2010 |
| 07/01/2030 | 6.000% | | 3,555,000 | 3,810,142 |
| Refunding Revenue Bonds |
| 899 Charleston Project |
| Series 2014A |
| 11/01/2029 | 5.000% | | 1,650,000 | 1,720,653 |
| 11/01/2034 | 5.000% | | 3,700,000 | 3,777,515 |
| Revenue Bonds |
| California Baptist University |
| Series 2014A |
| 11/01/2033 | 6.125% | | 1,560,000 | 1,756,295 |
| 11/01/2043 | 6.375% | | 1,035,000 | 1,177,023 |
| Lancer Plaza Project |
| Series 2013 |
| 11/01/2043 | 5.875% | | 1,875,000 | 2,017,650 |
| Loma Linda University Medical Center |
| Series 2014 |
| 12/01/2044 | 5.250% | | 3,500,000 | 3,805,620 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Castaic Lake Water Agency(f) |
| Certificate of Participation |
| Capital Appreciation-Water System Improvement Project |
| Series 1999 (AMBAC) |
| 08/01/2024 | 0.000% | | 9,445,000 | 8,142,157 |
| Chino Public Financing Authority |
| Refunding Special Tax Bonds |
| Series 2012 |
| 09/01/2022 | 4.000% | | 1,500,000 | 1,651,920 |
| 09/01/2025 | 5.000% | | 790,000 | 883,576 |
| 09/01/2026 | 5.000% | | 1,230,000 | 1,365,349 |
| 09/01/2027 | 5.000% | | 1,280,000 | 1,409,766 |
| City of Los Angeles Department of Airports(d) |
| Revenue Bonds |
| Subordinated Series 2017A AMT |
| 05/15/2042 | 5.000% | | 4,375,000 | 5,052,031 |
| City of Pomona |
| Refunding Revenue Bonds |
| Mortgage-Backed Securities |
| Series 1990A Escrowed to Maturity (GNMA / FNMA) |
| 05/01/2023 | 7.600% | | 4,945,000 | 5,887,468 |
| City of Vernon Electric System |
| Prerefunded 08/01/19 Revenue Bonds |
| Series 2009A |
| 08/01/2021 | 5.125% | | 520,000 | 548,772 |
| Unrefunded Revenue Bonds |
| Series 2009A |
| 08/01/2021 | 5.125% | | 1,225,000 | 1,301,758 |
| County of Sacramento Airport System |
| Revenue Bonds |
| Senior Series 2009B |
| 07/01/2039 | 5.750% | | 4,000,000 | 4,167,440 |
| Foothill-Eastern Transportation Corridor Agency |
| Refunding Revenue Bonds |
| Junior Lien |
| Series 2014C |
| 01/15/2033 | 6.250% | | 3,845,000 | 4,535,062 |
| Series 2014A |
| 01/15/2046 | 5.750% | | 19,005,000 | 21,843,207 |
| Los Angeles County Schools Regionalized Business Services Corp.(f) |
| Certificate of Participation |
| Capital Appreciation-Pooled Financing |
| Series 1999A (AMBAC) |
| 08/01/2022 | 0.000% | | 2,180,000 | 1,973,946 |
| Norwalk-La Mirada Unified School District(f) |
| Unlimited General Obligation Bonds |
| Capital Appreciation |
| Series 2005B (NPFGC) |
| 08/01/2023 | 0.000% | | 9,790,000 | 8,747,365 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Palomar Health |
| Refunding Revenue Bonds |
| Series 2016 |
| 11/01/2036 | 5.000% | | 4,605,000 | 5,085,255 |
| Perris Community Facilities District |
| Special Tax Bonds |
| Series 1991-90-2 Escrowed to Maturity |
| 10/01/2021 | 8.750% | | 6,165,000 | 8,008,582 |
| San Francisco City & County Airports Commission-San Francisco International Airport(d) |
| Revenue Bonds |
| Series 2014A AMT |
| 05/01/2044 | 5.000% | | 24,000,000 | 26,974,560 |
| San Francisco City & County Redevelopment Agency |
| Prerefunded 08/01/19 Tax Allocation Bonds |
| Mission Bay South Redevelopment Project |
| Series 2009D |
| 08/01/2031 | 6.500% | | 500,000 | 555,215 |
| 08/01/2039 | 6.625% | | 1,500,000 | 1,669,200 |
| State of California |
| Unlimited General Obligation Bonds |
| Various Purpose |
| Series 2008 |
| 03/01/2027 | 5.500% | | 1,000,000 | 1,027,220 |
| Series 2009 |
| 04/01/2031 | 5.750% | | 32,500,000 | 35,053,525 |
| 04/01/2035 | 6.000% | | 15,000,000 | 16,232,550 |
| 04/01/2038 | 6.000% | | 22,500,000 | 24,313,500 |
| 11/01/2039 | 5.500% | | 15,520,000 | 16,968,792 |
| Series 2010 |
| 03/01/2030 | 5.250% | | 3,000,000 | 3,315,810 |
| 03/01/2033 | 6.000% | | 5,000,000 | 5,623,900 |
| 03/01/2040 | 5.500% | | 17,200,000 | 19,025,436 |
| Series 2012 |
| 04/01/2035 | 5.250% | | 19,275,000 | 22,492,190 |
| Series 2016 |
| 09/01/2035 | 4.000% | | 3,895,000 | 4,192,967 |
| Unlimited General Obligation Refunding Bonds |
| Series 2007 |
| 08/01/2030 | 4.500% | | 300,000 | 300,705 |
| Unlimited General Obligation Refunding Notes |
| Various Purpose |
| Series 2016 |
| 09/01/2036 | 4.000% | | 2,000,000 | 2,148,620 |
| Unrefunded Unlimited General Obligation Bonds |
| Series 2004 |
| 04/01/2029 | 5.300% | | 6,000 | 6,020 |
| Various Purpose |
| Series 2007 |
| 11/01/2037 | 5.000% | | 1,205,000 | 1,216,484 |
| 12/01/2037 | 5.000% | | 210,000 | 212,673 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2008 |
| 03/01/2038 | 5.250% | | 2,715,000 | 2,779,970 |
| Temecula Public Financing Authority |
| Refunding Special Tax Bonds |
| Wolf Creek Community Facilities District |
| Series 2012 |
| 09/01/2027 | 5.000% | | 1,275,000 | 1,408,072 |
| 09/01/2028 | 5.000% | | 1,315,000 | 1,446,566 |
| 09/01/2029 | 5.000% | | 1,405,000 | 1,537,688 |
| 09/01/2030 | 5.000% | | 1,480,000 | 1,613,200 |
| 09/01/2031 | 5.000% | | 1,555,000 | 1,689,119 |
| West Contra Costa Unified School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2001B (NPFGC) |
| 08/01/2024 | 6.000% | | 2,295,000 | 2,640,856 |
| Total | 370,436,961 |
| Colorado 2.1% |
| City & County of Denver(d) |
| Refunding Revenue Bonds |
| United Air Lines Project |
| Series 2007A AMT |
| 10/01/2032 | 5.250% | | 5,000,000 | 5,025,600 |
| Colorado Educational & Cultural Facilities Authority(c) |
| Improvement Refunding Revenue Bonds |
| Skyview Charter School |
| Series 2014 |
| 07/01/2034 | 5.125% | | 1,525,000 | 1,561,569 |
| 07/01/2044 | 5.375% | | 2,100,000 | 2,151,156 |
| 07/01/2049 | 5.500% | | 925,000 | 947,700 |
| Colorado Educational & Cultural Facilities Authority |
| Refunding Revenue Bonds |
| Student Housing-Campus Village Apartments LLC |
| Series 2008 |
| 06/01/2033 | 5.500% | | 2,000,000 | 2,071,780 |
| 06/01/2038 | 5.500% | | 6,000,000 | 6,215,340 |
| Colorado Health Facilities Authority |
| Refunding Revenue Bonds |
| Covenant Retirement Communities |
| Series 2012A |
| 12/01/2033 | 5.000% | | 5,500,000 | 5,892,425 |
| Series 2015 |
| 12/01/2035 | 5.000% | | 3,800,000 | 4,141,202 |
| Revenue Bonds |
| Catholic Health Initiatives |
| Series 2013A |
| 01/01/2045 | 5.250% | | 7,000,000 | 7,397,670 |
| Unrefunded Revenue Bonds |
| Health Facilities Evangelical Lutheran |
| Series 2005 |
| 06/01/2023 | 5.250% | | 165,000 | 165,500 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Colorado High Performance Transportation Enterprise |
| Revenue Bonds |
| C-470 Express Lanes |
| Series 2017 |
| 12/31/2051 | 5.000% | | 2,500,000 | 2,746,400 |
| 12/31/2056 | 5.000% | | 2,300,000 | 2,515,510 |
| E-470 Public Highway Authority(f) |
| Revenue Bonds |
| Capital Appreciation |
| Senior Series 1997B (NPFGC) |
| 09/01/2022 | 0.000% | | 6,515,000 | 5,882,263 |
| Senior Series 2000B (NPFGC) |
| 09/01/2018 | 0.000% | | 13,600,000 | 13,411,776 |
| E-470 Public Highway Authority |
| Revenue Bonds |
| Series 2010C |
| 09/01/2026 | 5.375% | | 5,000,000 | 5,443,300 |
| University of Colorado Hospital Authority |
| Refunding Revenue Bonds |
| Series 2009A |
| 11/15/2029 | 6.000% | | 5,000,000 | 5,458,800 |
| Revenue Bonds |
| Series 2012A |
| 11/15/2042 | 5.000% | | 7,325,000 | 8,207,443 |
| Total | 79,235,434 |
| Connecticut 0.7% |
| Bridgeport Housing Authority |
| Revenue Bonds |
| Custodial Receipts Energy Performance |
| Series 2009 |
| 06/01/2030 | 5.600% | | 1,000,000 | 1,000,720 |
| City of New Haven |
| Unlimited General Obligation Bonds |
| Series 2002C Escrowed to Maturity (NPFGC) |
| 11/01/2020 | 5.000% | | 10,000 | 10,316 |
| Connecticut State Development Authority |
| Refunding Revenue Bonds |
| Connecticut Light & Power Co. Project |
| Series 2011 |
| 09/01/2028 | 4.375% | | 1,500,000 | 1,655,520 |
| Connecticut State Health & Educational Facility Authority(c) |
| Revenue Bonds |
| Church Home of Hartford, Inc. |
| Series 2016 |
| 09/01/2046 | 5.000% | | 1,250,000 | 1,265,425 |
| Connecticut State Health & Educational Facility Authority |
| Revenue Bonds |
| Connecticut College |
| Series 2011H-1 |
| 07/01/2041 | 5.000% | | 1,625,000 | 1,803,555 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Loomis Chaffe School |
| Series 2005F (AMBAC) |
| 07/01/2025 | 5.250% | | 2,035,000 | 2,505,329 |
| 07/01/2026 | 5.250% | | 1,045,000 | 1,298,444 |
| Middlesex Hospital |
| Series 2011N |
| 07/01/2024 | 5.000% | | 425,000 | 473,480 |
| Sacred Heart University |
| Series 2011G |
| 07/01/2031 | 5.375% | | 500,000 | 556,375 |
| State Supported Child Care |
| Series 2011 |
| 07/01/2028 | 5.000% | | 1,030,000 | 1,124,883 |
| 07/01/2029 | 5.000% | | 860,000 | 935,878 |
| Western Connecticut Health |
| Series 2011M |
| 07/01/2041 | 5.375% | | 1,500,000 | 1,641,720 |
| Western Connecticut Health Network |
| Series 2011 |
| 07/01/2029 | 5.000% | | 1,000,000 | 1,091,730 |
| Harbor Point Infrastructure Improvement District |
| Tax Allocation Bonds |
| Harbor Point Project |
| Series 2010A |
| 04/01/2039 | 7.875% | | 8,750,000 | 9,727,725 |
| Total | 25,091,100 |
| Delaware 0.2% |
| Delaware State Economic Development Authority |
| Refunding Revenue Bonds |
| Gas Facilities-Delmarva Power |
| Series 2010 |
| 02/01/2031 | 5.400% | | 5,000,000 | 5,466,600 |
| Revenue Bonds |
| Newark Charter School |
| Series 2012 |
| 09/01/2032 | 4.625% | | 2,000,000 | 2,101,380 |
| 09/01/2042 | 5.000% | | 1,350,000 | 1,425,074 |
| Total | 8,993,054 |
| District of Columbia 0.4% |
| District of Columbia |
| Refunding Revenue Bonds |
| Children’s Hospital |
| Series 2015 |
| 07/15/2044 | 5.000% | | 9,090,000 | 10,257,701 |
| Friendship Public Charter School |
| Series 2016 |
| 06/01/2046 | 5.000% | | 1,385,000 | 1,477,573 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| KIPP Charter School |
| Series 2013 |
| 07/01/2033 | 6.000% | | 250,000 | 292,593 |
| 07/01/2048 | 6.000% | | 1,150,000 | 1,328,986 |
| District of Columbia(g) |
| Revenue Bonds |
| Ingleside RockCreek Project |
| Series 2017 |
| 07/01/2037 | 5.000% | | 500,000 | 499,975 |
| 07/01/2042 | 5.000% | | 1,000,000 | 982,480 |
| Total | 14,839,308 |
| Florida 5.7% |
| Capital Trust Agency, Inc.(c) |
| Revenue Bonds |
| 1st Mortgage Tallahassee Tapestry Senior Housing Project |
| Series 2015 |
| 12/01/2045 | 7.000% | | 1,665,000 | 1,675,306 |
| Capital Trust Agency, Inc.(e) |
| Revenue Bonds |
| Atlantic Housing Foundation |
| Subordinated Series 2008B |
| 07/15/2032 | 0.000% | | 1,820,000 | 1,364,945 |
| Central Florida Expressway Authority |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2016B |
| 07/01/2039 | 4.000% | | 22,500,000 | 23,636,475 |
| City of Lakeland |
| Revenue Bonds |
| Lakeland Regional Health |
| Series 2015 |
| 11/15/2045 | 5.000% | | 22,000,000 | 24,464,660 |
| County of Broward Airport System(d) |
| Revenue Bonds |
| Series 2015A AMT |
| 10/01/2045 | 5.000% | | 14,000,000 | 15,595,580 |
| County of Miami-Dade Aviation(d) |
| Refunding Revenue Bonds |
| Series 2014A AMT |
| 10/01/2033 | 5.000% | | 15,000,000 | 16,972,800 |
| 10/01/2036 | 5.000% | | 21,400,000 | 24,037,978 |
| County of Seminole Water & Sewer |
| Revenue Bonds |
| Series 1992 Escrowed to Maturity (NPFGC) |
| 10/01/2019 | 6.000% | | 720,000 | 759,730 |
| Florida Development Finance Corp.(c) |
| Revenue Bonds |
| Miami Arts Charter School Project |
| Series 2014A |
| 06/15/2034 | 5.875% | | 420,000 | 417,522 |
| 06/15/2044 | 6.000% | | 3,100,000 | 3,067,109 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Renaissance Charter School |
| Series 2015 |
| 06/15/2046 | 6.125% | | 3,920,000 | 4,024,390 |
| Renaissance Charter School Inc. Projects |
| Series 2015 |
| 06/15/2035 | 6.000% | | 4,000,000 | 4,120,960 |
| Florida Development Finance Corp. |
| Revenue Bonds |
| Renaissance Charter School |
| Series 2012A |
| 06/15/2022 | 5.500% | | 1,240,000 | 1,341,494 |
| 06/15/2032 | 6.000% | | 4,000,000 | 4,294,000 |
| 06/15/2043 | 6.125% | | 5,000,000 | 5,360,650 |
| Renaissance Charter School Projects |
| Series 2013A |
| 06/15/2044 | 8.500% | | 15,000,000 | 17,352,750 |
| Hillsborough County Aviation Authority |
| Revenue Bonds |
| Tampa International Airport |
| Series 2015A |
| 10/01/2044 | 5.000% | | 11,115,000 | 12,296,747 |
| Jacksonville Health Facilities Authority |
| Revenue Bonds |
| Brooks Health System |
| Series 2007 |
| 11/01/2038 | 5.250% | | 5,000,000 | 5,035,650 |
| Miami-Dade County Expressway Authority |
| Revenue Bonds |
| Series 2014A |
| 07/01/2044 | 5.000% | | 5,000,000 | 5,673,750 |
| Mid-Bay Bridge Authority |
| Prerefunded 10/01/21 Revenue Bonds |
| Series 2011A |
| 10/01/2040 | 7.250% | | 7,000,000 | 8,686,930 |
| Refunding Revenue Bonds |
| Series 2015A |
| 10/01/2035 | 5.000% | | 3,765,000 | 4,254,262 |
| Revenue Bonds |
| Series 1991A Escrowed to Maturity |
| 10/01/2022 | 6.875% | | 2,000,000 | 2,366,900 |
| Orange County Industrial Development Authority(c),(d) |
| Revenue Bonds |
| VITAG Florida LLC Project |
| Series 2014 AMT |
| 07/01/2036 | 8.000% | | 12,000,000 | 6,948,000 |
| Palm Beach County Health Facilities Authority |
| Refunding Revenue Bonds |
| Boca Raton Community Hospital Obligation Group |
| Series 2014 |
| 12/01/2031 | 5.000% | | 1,500,000 | 1,659,675 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| Sinai Residences of Boca Raton |
| Series 2014 |
| 06/01/2034 | 7.250% | | 685,000 | 807,163 |
| Sarasota County Public Hospital District |
| Refunding Revenue Bonds |
| Sarasota Memorial Hospital |
| Series 1998B (NPFGC) |
| 07/01/2028 | 5.500% | | 6,980,000 | 8,427,582 |
| Seminole Tribe of Florida, Inc.(c),(h) |
| Revenue Bonds |
| Series 2007A |
| 10/01/2027 | 5.250% | | 9,750,000 | 9,792,802 |
| Tampa Sports Authority |
| Sales Tax Revenue Bonds |
| Tampa Bay Arena Project |
| Series 1995 (NPFGC) |
| 10/01/2025 | 5.750% | | 2,500,000 | 2,958,525 |
| Total | 217,394,335 |
| Georgia 1.4% |
| DeKalb County Hospital Authority |
| Revenue Bonds |
| DeKalb Medical Center, Inc. Project |
| Series 2010 |
| 09/01/2040 | 6.125% | | 6,250,000 | 6,807,438 |
| Fulton County Development Authority(g) |
| Revenue Bonds |
| RAC Series 2017 |
| 04/01/2047 | 5.000% | | 3,000,000 | 3,378,960 |
| Fulton County Residential Care Facilities for the Elderly Authority |
| Refunding Revenue Bonds |
| Lenbrook Square Foundation, Inc. |
| Series 2016 |
| 07/01/2036 | 5.000% | | 3,500,000 | 3,832,080 |
| Gainesville & Hall County Hospital Authority |
| Prerefunded 02/15/20 Revenue Bonds |
| Northeast Georgia Health System |
| Series 2010A |
| 02/15/2045 | 5.500% | | 23,075,000 | 25,637,709 |
| Unrefunded Revenue Bonds |
| Northeast Georgia Health System |
| Series 2010A |
| 02/15/2045 | 5.500% | | 6,925,000 | 7,496,936 |
| Georgia State Road & Tollway Authority(c),(f) |
| Revenue Bonds |
| I-75 S Express Lanes Project |
| Series 2014 |
| 06/01/2024 | 0.000% | | 625,000 | 418,400 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Metropolitan Atlanta Rapid Transit Authority |
| Refunding Revenue Bonds |
| Series 1992P (AMBAC) |
| 07/01/2020 | 6.250% | | 1,440,000 | 1,573,733 |
| Series 2007A (AMBAC) |
| 07/01/2026 | 5.250% | | 1,000,000 | 1,244,360 |
| Rockdale County Development Authority(d) |
| Revenue Bonds |
| Visy Paper Project |
| Series 2007A AMT |
| 01/01/2034 | 6.125% | | 3,000,000 | 3,005,790 |
| Total | 53,395,406 |
| Guam 0.1% |
| Territory of Guam(h) |
| Prerefunded 12/01/19 Revenue Bonds |
| Section 30 |
| Series 2009A |
| 12/01/2034 | 5.750% | | 4,150,000 | 4,602,226 |
| Hawaii 0.6% |
| Hawaii Pacific Health |
| Revenue Bonds |
| Series 2010A |
| 07/01/2040 | 5.500% | | 6,500,000 | 7,068,035 |
| Series 2010B |
| 07/01/2030 | 5.625% | | 1,220,000 | 1,336,132 |
| 07/01/2040 | 5.750% | | 1,630,000 | 1,784,344 |
| State of Hawaii Department of Budget & Finance |
| Prerefunded 11/15/19 Revenue Bonds |
| 15 Craigside Project |
| Series 2009A |
| 11/15/2029 | 8.750% | | 940,000 | 1,086,941 |
| 11/15/2044 | 9.000% | | 3,000,000 | 3,535,110 |
| Refunding Revenue Bonds |
| Special Purpose - Kahala Nui |
| Series 2012 |
| 11/15/2021 | 5.000% | | 1,000,000 | 1,128,400 |
| 11/15/2027 | 5.000% | | 1,400,000 | 1,557,024 |
| 11/15/2032 | 5.125% | | 1,300,000 | 1,427,452 |
| 11/15/2037 | 5.250% | | 1,945,000 | 2,133,529 |
| Revenue Bonds |
| Hawaii Pacific University |
| Series 2013A |
| 07/01/2033 | 6.625% | | 1,430,000 | 1,538,780 |
| 07/01/2043 | 6.875% | | 1,795,000 | 1,946,103 |
| Total | 24,541,850 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Idaho 0.7% |
| Idaho Health Facilities Authority |
| Prerefunded 12/01/18 Revenue Bonds |
| Trinity Health Group |
| Series 2008B |
| 12/01/2023 | 6.000% | | 1,000,000 | 1,066,550 |
| 12/01/2033 | 6.250% | | 6,000,000 | 6,419,100 |
| Revenue Bonds |
| Terraces of Boise Project |
| Series 2014A |
| 10/01/2034 | 7.750% | | 9,135,000 | 9,758,190 |
| 10/01/2044 | 8.000% | | 5,635,000 | 6,058,977 |
| 10/01/2049 | 8.125% | | 4,365,000 | 4,708,657 |
| Total | 28,011,474 |
| Illinois 14.7% |
| Chicago Board of Education(c) |
| Unlimited General Obligation Bonds |
| Dedicated |
| Series 2017A |
| 12/01/2046 | 7.000% | | 7,765,000 | 7,964,793 |
| Chicago Midway International Airport(d) |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2014A AMT |
| 01/01/2041 | 5.000% | | 10,000,000 | 10,957,400 |
| Series 2016A AMT |
| 01/01/2032 | 4.000% | | 3,000,000 | 3,099,630 |
| 01/01/2033 | 4.000% | | 3,500,000 | 3,598,245 |
| Chicago O’Hare International Airport(d) |
| Revenue Bonds |
| General Senior Lien |
| Series 2017D AMT |
| 01/01/2047 | 5.000% | | 7,000,000 | 7,829,990 |
| 01/01/2052 | 5.000% | | 17,620,000 | 19,543,752 |
| Series 2015C AMT |
| 01/01/2046 | 5.000% | | 12,525,000 | 13,742,555 |
| Chicago O’Hare International Airport |
| Revenue Bonds |
| Series 2015D |
| 01/01/2046 | 5.000% | | 7,310,000 | 8,270,315 |
| Chicago Park District |
| Limited General Obligation Bonds |
| Series 2016A |
| 01/01/2033 | 5.000% | | 1,000,000 | 1,112,360 |
| 01/01/2034 | 5.000% | | 1,000,000 | 1,108,510 |
| 01/01/2036 | 5.000% | | 1,000,000 | 1,102,380 |
| City of Chicago |
| Revenue Bonds |
| Asphalt Operating Services - Recovery Zone Facility |
| Series 2010 |
| 12/01/2018 | 6.125% | | 1,805,000 | 1,825,974 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Unlimited General Obligation Bonds |
| Project |
| Series 2011A |
| 01/01/2040 | 5.000% | | 27,625,000 | 27,623,895 |
| Series 2012A |
| 01/01/2033 | 5.000% | | 7,000,000 | 7,024,430 |
| 01/01/2034 | 5.000% | | 10,510,000 | 10,538,482 |
| Series 2009C |
| 01/01/2040 | 5.000% | | 26,730,000 | 26,728,931 |
| Series 2015A |
| 01/01/2033 | 5.500% | | 8,350,000 | 8,679,073 |
| 01/01/2039 | 5.500% | | 1,500,000 | 1,547,805 |
| Series 2017A |
| 01/01/2038 | 6.000% | | 13,080,000 | 14,031,832 |
| Unlimited General Obligation Refunding Bonds |
| Project |
| Series 2014A |
| 01/01/2030 | 5.250% | | 4,200,000 | 4,307,814 |
| 01/01/2033 | 5.250% | | 10,250,000 | 10,467,710 |
| 01/01/2035 | 5.000% | | 6,000,000 | 6,016,080 |
| 01/01/2036 | 5.000% | | 17,860,000 | 17,888,397 |
| Series 2005D |
| 01/01/2040 | 5.500% | | 2,000,000 | 2,061,240 |
| Series 2007E |
| 01/01/2042 | 5.500% | | 1,000,000 | 1,029,370 |
| City of Chicago Wastewater Transmission |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2015C |
| 01/01/2034 | 5.000% | | 1,250,000 | 1,361,288 |
| 01/01/2039 | 5.000% | | 2,970,000 | 3,222,361 |
| Revenue Bonds |
| 2nd Lien |
| Series 2014 |
| 01/01/2039 | 5.000% | | 4,000,000 | 4,306,320 |
| 01/01/2044 | 5.000% | | 4,000,000 | 4,285,040 |
| City of Chicago Wastewater Transmission(f) |
| Refunding Revenue Bonds |
| Capital Appreciation |
| Series 1998A (NPFGC) |
| 01/01/2020 | 0.000% | | 7,275,000 | 6,908,558 |
| City of Chicago Waterworks |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2016 |
| 11/01/2026 | 5.000% | | 935,000 | 1,079,299 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| 2nd Lien |
| Series 2014 |
| 11/01/2034 | 5.000% | | 1,000,000 | 1,094,590 |
| 11/01/2039 | 5.000% | | 2,000,000 | 2,170,520 |
| 11/01/2044 | 5.000% | | 2,850,000 | 3,076,033 |
| Series 2016 |
| 11/01/2028 | 5.000% | | 865,000 | 985,287 |
| 11/01/2029 | 5.000% | | 1,750,000 | 1,985,638 |
| 11/01/2030 | 5.000% | | 1,000,000 | 1,123,340 |
| County of Champaign |
| Unlimited General Obligation Bonds |
| Public Safety Sales Tax |
| Series 1999 (NPFGC) |
| 01/01/2020 | 8.250% | | 1,015,000 | 1,174,355 |
| 01/01/2023 | 8.250% | | 1,420,000 | 1,867,442 |
| DeKalb County Community Unit School District No. 424 Genoa-Kingston(f) |
| Unlimited General Obligation Bonds |
| Capital Appreciation |
| Series 2001 (AMBAC) |
| 01/01/2021 | 0.000% | | 2,675,000 | 2,483,149 |
| Illinois Finance Authority |
| Prerefunded 02/15/20 Revenue Bonds |
| Swedish Covenant |
| Series 2010A |
| 08/15/2038 | 6.000% | | 12,505,000 | 14,043,365 |
| Prerefunded 05/01/19 Revenue Bonds |
| Rush University Medical Center |
| Series 2009C |
| 11/01/2039 | 6.625% | | 8,000,000 | 8,778,320 |
| Prerefunded 08/15/19 Revenue Bonds |
| Silver Cross & Medical Centers |
| Series 2009 |
| 08/15/2038 | 6.875% | | 39,300,000 | 43,891,026 |
| Prerefunded 11/15/19 Revenue Bonds |
| Riverside Health System |
| Series 2009 |
| 11/15/2035 | 6.250% | | 4,940,000 | 5,519,660 |
| Refunding Revenue Bonds |
| Northwest Community Hospital |
| Series 2016A |
| 07/01/2037 | 4.000% | | 5,000,000 | 5,082,500 |
| 07/01/2038 | 4.000% | | 5,000,000 | 5,074,900 |
| Rush University Medical Center |
| Series 2015A |
| 11/15/2038 | 5.000% | | 20,145,000 | 22,318,847 |
| Series 2015B |
| 11/15/2039 | 5.000% | | 6,590,000 | 7,291,637 |
| Silver Cross Hospital & Medical Centers |
| Series 2015C |
| 08/15/2044 | 5.000% | | 9,400,000 | 10,060,632 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| CHF-Normal LLC-Illinois State University |
| Series 2011 |
| 04/01/2043 | 7.000% | | 5,550,000 | 6,150,121 |
| Northwestern Memorial Hospital |
| Series 2009A |
| 08/15/2030 | 5.750% | | 2,000,000 | 2,180,140 |
| Series 2009B |
| 08/15/2030 | 5.750% | | 10,000,000 | 10,900,700 |
| South Suburban |
| Series 1992 Escrowed to Maturity |
| 02/15/2018 | 7.000% | | 435,000 | 447,724 |
| Unrefunded Revenue Bonds |
| Riverside Health System |
| Series 2009 |
| 11/15/2035 | 6.250% | | 3,260,000 | 3,560,670 |
| Illinois Finance Authority(f) |
| Subordinated Revenue Bonds |
| Regency |
| Series 1990-RMK Escrowed to Maturity |
| 04/15/2020 | 0.000% | | 68,000,000 | 65,641,760 |
| Illinois State Toll Highway Authority |
| Revenue Bonds |
| Series 2014C |
| 01/01/2036 | 5.000% | | 5,000,000 | 5,660,400 |
| 01/01/2039 | 5.000% | | 5,000,000 | 5,653,300 |
| Metropolitan Water Reclamation District of Greater Chicago |
| Limited General Obligation Refunding Bonds |
| Series 2007C |
| 12/01/2033 | 5.250% | | 13,210,000 | 16,252,923 |
| Railsplitter Tobacco Settlement Authority |
| Revenue Bonds |
| Series 2010 |
| 06/01/2028 | 6.000% | | 15,000,000 | 17,090,250 |
| Regional Transportation Authority |
| Revenue Bonds |
| Series 1994C (NPFGC) |
| 06/01/2020 | 7.750% | | 2,795,000 | 3,117,627 |
| Series 2002A (NPFGC) |
| 07/01/2031 | 6.000% | | 5,400,000 | 7,279,686 |
| State of Illinois |
| Revenue Bonds |
| 1st Series 2002 (NPFGC) |
| 06/15/2023 | 6.000% | | 4,000,000 | 4,857,760 |
| Unlimited General Obligation Bonds |
| 1st Series 2001 (NPFGC) |
| 11/01/2026 | 6.000% | | 3,000,000 | 3,435,210 |
| Series 2013 |
| 07/01/2038 | 5.500% | | 4,125,000 | 4,380,997 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2013A |
| 04/01/2036 | 5.000% | | 8,000,000 | 8,203,680 |
| Series 2014 |
| 02/01/2039 | 5.000% | | 18,000,000 | 18,441,180 |
| Total | 560,539,198 |
| Indiana 0.8% |
| County of Jasper |
| Refunding Revenue Bonds |
| Northern Indiana Public Services |
| Series 1994C (NPFGC) |
| 04/01/2019 | 5.850% | | 3,000,000 | 3,196,080 |
| Crown Point Multi School Building Corp.(f) |
| Revenue Bonds |
| 1st Mortgage |
| Series 2000 (NPFGC) |
| 01/15/2019 | 0.000% | | 8,165,000 | 8,021,133 |
| Indiana Finance Authority |
| Refunding Revenue Bonds |
| Sisters of St. Francis Health |
| Series 2008 |
| 11/01/2032 | 5.375% | | 4,000,000 | 4,193,240 |
| Revenue Bonds |
| BHI Senior Living |
| Series 2011 |
| 11/15/2031 | 5.500% | | 1,175,000 | 1,277,037 |
| 11/15/2041 | 5.750% | | 5,655,000 | 6,117,522 |
| Parkview Health System |
| Series 2009A |
| 05/01/2031 | 5.750% | | 6,500,000 | 6,962,345 |
| Indianapolis Airport Authority(d),(e) |
| Revenue Bonds |
| Special Facilities-United Air Lines Project |
| Series 1995A AMT |
| 11/15/2031 | 0.000% | | 1,022,832 | 2,148 |
| Total | 29,769,505 |
| Iowa 0.4% |
| Iowa Finance Authority |
| Refunding Revenue Bonds |
| Sunrise Retirement Community |
| Series 2012 |
| 09/01/2032 | 5.500% | | 1,500,000 | 1,521,810 |
| 09/01/2037 | 5.500% | | 2,500,000 | 2,528,550 |
| 09/01/2043 | 5.750% | | 2,630,000 | 2,676,157 |
| Iowa Student Loan Liquidity Corp.(d) |
| Revenue Bonds |
| Senior Series 2011A-2 AMT |
| 12/01/2026 | 5.600% | | 4,050,000 | 4,354,276 |
| 12/01/2027 | 5.700% | | 2,785,000 | 2,976,329 |
| Total | 14,057,122 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 15 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Kansas 1.1% |
| City of Overland Park |
| Revenue Bonds |
| Prairiefire Lionsgate Project |
| Series 2012 |
| 12/15/2029 | 5.250% | | 11,000,000 | 9,374,970 |
| University of Kansas Hospital Authority |
| Improvement Refunding Revenue Bonds |
| Kansas University Health System |
| Series 2015 |
| 09/01/2045 | 5.000% | | 29,000,000 | 32,669,370 |
| Total | 42,044,340 |
| Kentucky 1.6% |
| Kentucky Economic Development Finance Authority |
| Prerefunded 06/01/20 Revenue Bonds |
| Owensboro Medical Health System |
| Series 2010A |
| 03/01/2045 | 6.500% | | 14,550,000 | 16,728,280 |
| Series 2010B |
| 03/01/2040 | 6.375% | | 5,800,000 | 6,648,134 |
| Refunding Revenue Bonds |
| Owensboro Health System |
| Series 2017A |
| 06/01/2041 | 5.000% | | 1,750,000 | 1,914,868 |
| Revenue Bonds |
| Louisville Arena |
| Subordinated Series 2008A-1 (AGM) |
| 12/01/2033 | 6.000% | | 3,200,000 | 3,270,016 |
| 12/01/2038 | 6.000% | | 2,850,000 | 2,909,508 |
| Kentucky Municipal Power Agency |
| Refunding Revenue Bonds |
| Series 2015A |
| 09/01/2042 | 5.000% | | 6,600,000 | 7,355,502 |
| Louisville/Jefferson County Metropolitan Government |
| Refunding Revenue Bonds |
| Norton Healthcare, Inc. |
| Series 2016 |
| 10/01/2035 | 4.000% | | 18,000,000 | 18,699,840 |
| Paducah Electric Plant Board |
| Refunding Revenue Bonds |
| Series 2016A (AGM) |
| 10/01/2033 | 5.000% | | 2,045,000 | 2,330,134 |
| Total | 59,856,282 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Louisiana 3.5% |
| Louisiana Local Government Environmental Facilities & Community Development Authority |
| Revenue Bonds |
| Westlake Chemical Corp. |
| Series 2010A-2 |
| 11/01/2035 | 6.500% | | 6,250,000 | 7,096,875 |
| Louisiana Public Facilities Authority |
| Refunding Revenue Bonds |
| Ochsner Clinic Foundation |
| Series 2016 |
| 05/15/2035 | 4.000% | | 2,500,000 | 2,576,575 |
| 05/15/2041 | 4.000% | | 2,500,000 | 2,553,850 |
| 05/15/2047 | 5.000% | | 1,200,000 | 1,328,304 |
| Ochsner Clinic Foundation Project |
| Series 2017 |
| 05/15/2036 | 5.000% | | 1,750,000 | 1,990,783 |
| 05/15/2046 | 5.000% | | 15,000,000 | 16,824,000 |
| Louisiana Public Facilities Authority(d) |
| Revenue Bonds |
| Impala Warehousing LLC Project |
| Series 2013 AMT |
| 07/01/2036 | 6.500% | | 19,230,000 | 21,270,495 |
| New Orleans Aviation Board |
| Revenue Bonds |
| Consolidated Rental Car |
| Series 2009A |
| 01/01/2030 | 6.250% | | 5,250,000 | 5,556,233 |
| 01/01/2040 | 6.500% | | 20,400,000 | 21,731,916 |
| New Orleans Aviation Board(d) |
| Revenue Bonds |
| General Airport-North Terminal |
| Series 2017B AMT |
| 01/01/2048 | 5.000% | | 3,725,000 | 4,224,187 |
| Series 2015B AMT |
| 01/01/2045 | 5.000% | | 21,150,000 | 23,483,056 |
| Parish of St. Charles |
| Revenue Bonds |
| Valero Energy Corp. |
| Series 2010 |
| 12/01/2040 | 4.000% | | 7,900,000 | 8,389,642 |
| Parish of St. John the Baptist |
| Revenue Bonds |
| Marathon Oil Corp. |
| Series 2007A |
| 06/01/2037 | 5.125% | | 14,600,000 | 14,626,718 |
| Total | 131,652,634 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Maryland 1.1% |
| City of Brunswick |
| Special Tax Bonds |
| Brunswick Crossing Special Taxing |
| Series 2006 |
| 07/01/2036 | 5.500% | | 6,404,000 | 6,404,576 |
| Maryland Economic Development Corp. |
| Refunding Revenue Bonds |
| CNX Marine Terminals, Inc. |
| Series 2010 |
| 09/01/2025 | 5.750% | | 2,000,000 | 2,022,300 |
| Revenue Bonds |
| Salisbury University Project |
| Series 2012 |
| 06/01/2030 | 5.000% | | 400,000 | 427,000 |
| Towson University Project |
| Senior Series 2012 |
| 07/01/2029 | 5.000% | | 650,000 | 709,007 |
| Maryland Economic Development Corp.(d) |
| Revenue Bonds |
| Purple Line Light Rail Project |
| Series 2016 AMT |
| 03/31/2046 | 5.000% | | 2,700,000 | 3,015,117 |
| 03/31/2051 | 5.000% | | 2,200,000 | 2,434,938 |
| Maryland Health & Higher Educational Facilities Authority |
| Prerefunded 07/01/19 Revenue Bonds |
| Anne Arundel Health System |
| Series 2009A |
| 07/01/2039 | 6.750% | | 5,000,000 | 5,545,400 |
| Refunding Revenue Bonds |
| Mercy Medical Center |
| Series 2016A |
| 07/01/2042 | 4.000% | | 5,250,000 | 5,316,728 |
| Meritus Medical Center Issue |
| Series 2015 |
| 07/01/2045 | 5.000% | | 3,000,000 | 3,278,340 |
| Western Maryland Health System |
| Series 2014 |
| 07/01/2034 | 5.250% | | 6,885,000 | 7,772,545 |
| Resolution Trust Corp. |
| Pass-Through Certificates |
| Series 1993A |
| 12/01/2017 | 8.500% | | 6,615,222 | 6,617,670 |
| Total | 43,543,621 |
| Massachusetts 3.3% |
| Berkshire Wind Power Cooperative Corp. |
| Revenue Bonds |
| Series 2010-1 |
| 07/01/2030 | 5.250% | | 1,000,000 | 1,076,280 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Commonwealth of Massachusetts |
| Refunding Revenue Bonds |
| Series 2005 (NPFGC) |
| 01/01/2027 | 5.500% | | 4,500,000 | 5,725,980 |
| 01/01/2030 | 5.500% | | 2,500,000 | 3,215,925 |
| Massachusetts Bay Transportation Authority |
| Revenue Bonds |
| Senior Series 2005B (NPFGC) |
| 07/01/2026 | 5.500% | | 1,500,000 | 1,932,480 |
| Senior Series 2008B |
| 07/01/2027 | 5.250% | | 710,000 | 902,360 |
| Unrefunded Revenue Bonds |
| General Transportation |
| Series 1991 (NPFGC) |
| 03/01/2021 | 7.000% | | 625,000 | 707,862 |
| Massachusetts Clean Water Trust (The) |
| Refunding Revenue Bonds |
| Pool Program |
| Series 2006 |
| 08/01/2030 | 5.250% | | 1,000,000 | 1,281,920 |
| Massachusetts Development Finance Agency |
| Prerefunded 07/01/19 Revenue Bonds |
| Suffolk University |
| Series 2009 |
| 07/01/2030 | 6.250% | | 640,000 | 703,366 |
| Prerefunded 07/01/22 Revenue Bonds |
| Boston Medical Center |
| Series 2012 |
| 07/01/2029 | 5.000% | | 80,000 | 94,034 |
| Prerefunded 11/15/18 Revenue Bonds |
| Harvard University |
| Series 2009A |
| 11/15/2036 | 5.500% | | 755,000 | 799,771 |
| Refunding Revenue Bonds |
| 1st Mortgage-VOA Concord |
| Series 2007 |
| 11/01/2041 | 5.200% | | 1,145,000 | 1,146,145 |
| South Shore Hospital |
| Series 2016I |
| 07/01/2036 | 4.000% | | 1,250,000 | 1,291,675 |
| Revenue Bonds |
| Adventcare Project |
| Series 2007A |
| 10/15/2028 | 6.650% | | 5,000,000 | 5,020,800 |
| Boston College |
| Series 2009Q-2 |
| 07/01/2029 | 5.000% | | 10,000 | 10,744 |
| Evergreen Center, Inc. |
| Series 2005 |
| 01/01/2035 | 5.500% | | 750,000 | 750,660 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 17 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Foxborough Regional Charter School |
| Series 2010A |
| 07/01/2042 | 7.000% | | 1,000,000 | 1,097,660 |
| Partners Healthcare |
| Series 2012L |
| 07/01/2036 | 5.000% | | 1,000,000 | 1,110,860 |
| UMass Boston Student Housing Project |
| Series 2016 |
| 10/01/2048 | 5.000% | | 4,500,000 | 4,914,450 |
| WGBH Educational Foundation |
| Series 2002A (AMBAC) |
| 01/01/2042 | 5.750% | | 2,000,000 | 2,750,740 |
| Unrefunded Revenue Bonds |
| Boston Medical Center |
| Series 2012 |
| 07/01/2029 | 5.000% | | 425,000 | 467,764 |
| Suffolk University |
| Series 2009 |
| 07/01/2030 | 6.250% | | 360,000 | 392,328 |
| Massachusetts Development Finance Agency(f) |
| Revenue Bonds |
| Linden Ponds, Inc. Facility |
| Subordinated Series 2011B |
| 11/15/2056 | 0.000% | | 767,588 | 18,077 |
| Massachusetts Educational Financing Authority(d) |
| Refunding Revenue Bonds |
| Issue K |
| Subordinated Series 2017B AMT |
| 07/01/2046 | 4.250% | | 4,500,000 | 4,529,790 |
| Series 2016J AMT |
| 07/01/2033 | 3.500% | | 5,665,000 | 5,552,890 |
| Revenue Bonds |
| Education Loan |
| Series 2014-I AMT |
| 01/01/2025 | 5.000% | | 12,450,000 | 14,380,746 |
| 01/01/2027 | 5.000% | | 3,000,000 | 3,419,790 |
| Issue I |
| Series 2010B AMT |
| 01/01/2031 | 5.700% | | 4,445,000 | 4,686,452 |
| Series 2008H (AGM) AMT |
| 01/01/2030 | 6.350% | | 3,255,000 | 3,405,837 |
| Series 2011J AMT |
| 07/01/2033 | 5.625% | | 1,155,000 | 1,246,695 |
| Series 2012J AMT |
| 07/01/2025 | 4.625% | | 3,770,000 | 3,970,866 |
| 07/01/2028 | 4.900% | | 495,000 | 517,636 |
| Massachusetts Educational Financing Authority |
| Revenue Bonds |
| Series 2009I |
| 01/01/2028 | 6.000% | | 385,000 | 407,592 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Massachusetts Health & Educational Facilities Authority |
| Prerefunded 10/15/19 Revenue Bonds |
| Springfield College |
| Series 2010 |
| 10/15/2040 | 5.625% | | 4,500,000 | 4,956,030 |
| Revenue Bonds |
| Massachusetts Eye & Ear Infirmary |
| Series 2010C |
| 07/01/2035 | 5.375% | | 1,000,000 | 1,072,190 |
| Milford Regional Medical Center |
| Series 2007E |
| 07/15/2022 | 5.000% | | 1,250,000 | 1,253,450 |
| 07/15/2037 | 5.000% | | 500,000 | 501,060 |
| Partners Healthcare |
| Series 2010J-1 |
| 07/01/2034 | 5.000% | | 11,400,000 | 12,162,204 |
| Tufts University |
| Series 2009M |
| 02/15/2028 | 5.500% | | 1,000,000 | 1,298,110 |
| Massachusetts Housing Finance Agency(d) |
| Revenue Bonds |
| Housing |
| Series 2011A AMT |
| 12/01/2036 | 5.250% | | 905,000 | 943,372 |
| Series 2010C AMT |
| 12/01/2030 | 5.000% | | 675,000 | 700,839 |
| Massachusetts Port Authority(d) |
| Revenue Bonds |
| Bosfuel Project |
| Series 2007 (NPFGC) AMT |
| 07/01/2032 | 5.000% | | 2,000,000 | 2,004,620 |
| Series 2016B AMT |
| 07/01/2046 | 4.000% | | 13,000,000 | 13,413,400 |
| Massachusetts State College Building Authority(f) |
| Revenue Bonds |
| Capital Appreciation |
| Senior Series 1999A Escrowed to Maturity (NPFGC) |
| 05/01/2023 | 0.000% | | 3,000,000 | 2,727,510 |
| Massachusetts Water Resources Authority |
| Revenue Bonds |
| Series 1992A Escrowed to Maturity |
| 07/15/2019 | 6.500% | | 1,410,000 | 1,497,025 |
| Metropolitan Boston Transit Parking Corp. |
| Revenue Bonds |
| Series 2011 |
| 07/01/2036 | 5.250% | | 3,000,000 | 3,396,390 |
| Total | 123,456,375 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Michigan 4.3% |
| Allen Academy(e) |
| Refunding Revenue Bonds |
| Public School Academy |
| Series 2013 |
| 06/01/2022 | 0.000% | | 2,000,000 | 699,960 |
| City of Detroit Sewage Disposal System |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2012A |
| 07/01/2039 | 5.250% | | 11,925,000 | 13,252,252 |
| City of Detroit Water Supply System |
| Revenue Bonds |
| Senior Lien |
| Series 2011A |
| 07/01/2036 | 5.000% | | 4,105,000 | 4,399,862 |
| 07/01/2041 | 5.250% | | 8,765,000 | 9,518,790 |
| Unrefunded Revenue Bonds |
| Senior Lien |
| Series 2003A (NPFGC) |
| 07/01/2034 | 5.000% | | 5,000 | 5,013 |
| Grand Traverse Academy |
| Refunding Revenue Bonds |
| Series 2007 |
| 11/01/2017 | 5.000% | | 390,000 | 391,700 |
| 11/01/2022 | 5.000% | | 750,000 | 751,103 |
| 11/01/2032 | 4.750% | | 1,170,000 | 1,117,315 |
| Grand Traverse County Hospital Finance Authority |
| Revenue Bonds |
| Munson Healthcare |
| Series 2014A |
| 07/01/2047 | 5.000% | | 1,200,000 | 1,318,980 |
| Great Lakes Water Authority Water Supply System |
| Revenue Bonds |
| 2nd Lien |
| Series 2016B |
| 07/01/2046 | 5.000% | | 15,385,000 | 17,027,349 |
| Michigan Finance Authority |
| Refunding Revenue Bonds |
| Henry Ford Health System |
| Series 2016 |
| 11/15/2046 | 4.000% | | 24,420,000 | 24,664,688 |
| Senior Lien - Great Lakes Water Authority |
| Series 2014C-6 |
| 07/01/2033 | 5.000% | | 1,070,000 | 1,198,496 |
| Revenue Bonds |
| Beaumont Health Credit Group |
| Series 2016S |
| 11/01/2044 | 5.000% | | 16,760,000 | 18,789,468 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Local Government Loan Program - Great Lakes Water Authority |
| Series 2015 |
| 07/01/2034 | 5.000% | | 7,095,000 | 7,835,434 |
| 07/01/2035 | 5.000% | | 4,830,000 | 5,323,529 |
| Senior Lien - Great Lakes Water Authority |
| Series 2014C-1 |
| 07/01/2044 | 5.000% | | 2,000,000 | 2,173,900 |
| Michigan Finance Authority(d) |
| Revenue Bonds |
| Senior Lien - Great Lakes Water Authority |
| Series 2014C-2 AMT |
| 07/01/2044 | 5.000% | | 1,500,000 | 1,602,870 |
| Michigan Strategic Fund |
| Refunding Revenue Bonds |
| Collateral Detroit Fund-Pollution |
| Series 1991BB (AMBAC) |
| 05/01/2021 | 7.000% | | 2,505,000 | 2,986,286 |
| Paw Paw Public Schools |
| Unlimited General Obligation Refunding Bonds |
| Series 1998 (NPFGC) (Qualified School Board Loan Fund) |
| 05/01/2025 | 5.000% | | 1,020,000 | 1,208,741 |
| Royal Oak Hospital Finance Authority |
| Refunding Revenue Bonds |
| William Beaumont Hospital |
| Series 2014D |
| 09/01/2039 | 5.000% | | 9,425,000 | 10,483,805 |
| St. Johns Public Schools |
| Unlimited General Obligation Refunding Bonds |
| Series 1998 (NPFGC) (Qualified School Bond Loan Fund) |
| 05/01/2025 | 5.100% | | 1,790,000 | 2,120,130 |
| Wayne County Airport Authority(d) |
| Refunding Revenue Bonds |
| Series 2015F AMT |
| 12/01/2033 | 5.000% | | 11,495,000 | 13,033,491 |
| Wayne County Airport Authority |
| Revenue Bonds |
| Series 2015D |
| 12/01/2045 | 5.000% | | 21,445,000 | 24,047,994 |
| Williamston Community School District |
| Unlimited General Obligation Bonds |
| Series 1996 (NPFGC) (Qualified School Bond Loan Fund) |
| 05/01/2025 | 5.500% | | 810,000 | 926,567 |
| Total | 164,877,723 |
| Minnesota 3.3% |
| City of Blaine |
| Refunding Revenue Bonds |
| Crest View Senior Community Project |
| Series 2015 |
| 07/01/2045 | 6.125% | | 11,775,000 | 12,237,757 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 19 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Brooklyn Center |
| Revenue Bonds |
| Sanctuary Brooklyn Center Project |
| Series 2016 |
| 11/01/2035 | 5.500% | | 4,000,000 | 4,004,880 |
| City of Minneapolis |
| Prerefunded 11/15/18 Revenue Bonds |
| Fairview Health Services |
| Series 2008A |
| 11/15/2032 | 6.750% | | 7,500,000 | 8,054,775 |
| City of St. Louis Park |
| Prerefunded 07/01/19 Revenue Bonds |
| Park Nicollet Health Services |
| Series 2009 |
| 07/01/2039 | 5.750% | | 16,825,000 | 18,344,970 |
| County of Meeker |
| Revenue Bonds |
| Hospital Facilities Memorial Hospital Project |
| Series 2007 |
| 11/01/2037 | 5.750% | | 1,750,000 | 1,760,133 |
| Housing & Redevelopment Authority of The City of St. Paul |
| Refunding Revenue Bonds |
| HealthEast Care System Project |
| Series 2015 |
| 11/15/2030 | 5.000% | | 900,000 | 998,838 |
| 11/15/2040 | 5.000% | | 935,000 | 1,008,566 |
| Perham Hospital District |
| Revenue Bonds |
| Perham Memorial Hospital & Home |
| Series 2010 |
| 03/01/2035 | 6.350% | | 4,000,000 | 4,205,280 |
| 03/01/2040 | 6.500% | | 2,800,000 | 2,950,360 |
| Southern Minnesota Municipal Power Agency(f) |
| Revenue Bonds |
| Capital Appreciation |
| Series 1994A (NPFGC) |
| 01/01/2022 | 0.000% | | 27,500,000 | 25,541,175 |
| 01/01/2023 | 0.000% | | 26,500,000 | 24,061,735 |
| 01/01/2025 | 0.000% | | 17,500,000 | 14,977,200 |
| St. Cloud Housing & Redevelopment Authority |
| Revenue Bonds |
| Sanctuary St. Cloud Project |
| Series 2016A |
| 08/01/2036 | 5.250% | | 7,135,000 | 6,781,247 |
| Total | 124,926,916 |
| Mississippi 0.4% |
| County of Lowndes |
| Refunding Revenue Bonds |
| Weyerhaeuser Co. Project |
| Series 1992A |
| 04/01/2022 | 6.800% | | 2,470,000 | 2,874,586 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Medical Center Educational Building Corp. |
| Refunding Revenue Bonds |
| University of Mississippi Medical Center |
| Series 1998B (AMBAC) |
| 12/01/2023 | 5.500% | | 5,300,000 | 5,981,951 |
| Mississippi Business Finance Corp. |
| Revenue Bonds |
| Series 2009A |
| 05/01/2024 | 4.700% | | 4,920,000 | 5,166,640 |
| Total | 14,023,177 |
| Missouri 1.9% |
| City of Manchester |
| Refunding Tax Allocation Bonds |
| Highway 141/Manchester Road Project |
| Series 2010 |
| 11/01/2025 | 6.000% | | 1,015,000 | 1,034,589 |
| 11/01/2039 | 6.875% | | 1,500,000 | 1,546,440 |
| Health & Educational Facilities Authority of the State of Missouri |
| Revenue Bonds |
| Lutheran Senior Services |
| Senior Series 2010 |
| 02/01/2042 | 5.500% | | 2,000,000 | 2,110,180 |
| Series 2011 |
| 02/01/2031 | 5.750% | | 1,730,000 | 1,913,017 |
| 02/01/2041 | 6.000% | | 2,600,000 | 2,861,872 |
| Series 2014 |
| 02/01/2035 | 5.000% | | 7,350,000 | 7,932,781 |
| 02/01/2044 | 5.000% | | 12,725,000 | 13,551,998 |
| Kirkwood Industrial Development Authority |
| Prerefunded 05/15/20 Revenue Bonds |
| Aberdeen Heights |
| Series 2010A |
| 05/15/2039 | 8.250% | | 12,000,000 | 14,311,440 |
| Refunding Revenue Bonds |
| Aberdeen Heights Project |
| Series 2017 |
| 05/15/2037 | 5.250% | | 2,205,000 | 2,327,466 |
| 05/15/2042 | 5.250% | | 2,290,000 | 2,409,790 |
| Missouri Development Finance Board(d) |
| Revenue Bonds |
| Procter & Gamble Paper Products |
| Series 1999 AMT |
| 03/15/2029 | 5.200% | | 6,385,000 | 7,817,858 |
| Missouri Joint Municipal Electric Utility Commission |
| Refunding Revenue Bonds |
| Series 2016A |
| 12/01/2041 | 4.000% | | 10,000,000 | 10,423,100 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| St. Louis County Industrial Development Authority |
| Revenue Bonds |
| Friendship Village Sunset Hills |
| Series 2013A |
| 09/01/2033 | 5.500% | | 2,750,000 | 3,088,965 |
| Total | 71,329,496 |
| Montana 0.0% |
| City of Kalispell |
| Refunding Revenue Bonds |
| Immanuel Lutheran Corp. Project |
| Series 2017 |
| 05/15/2052 | 5.250% | | 1,080,000 | 1,120,068 |
| Nebraska 1.3% |
| Douglas County Hospital Authority No. 2 |
| Revenue Bonds |
| Health Facilities-Immanuel Obligation Group |
| Series 2010 |
| 01/01/2040 | 5.625% | | 875,000 | 930,869 |
| Madonna Rehabilitation Hospital |
| Series 2014 |
| 05/15/2028 | 5.000% | | 2,025,000 | 2,268,587 |
| 05/15/2029 | 5.000% | | 2,125,000 | 2,366,825 |
| 05/15/2030 | 5.000% | | 2,000,000 | 2,214,360 |
| 05/15/2036 | 5.000% | | 1,000,000 | 1,084,230 |
| 05/15/2044 | 5.000% | | 6,400,000 | 6,871,232 |
| Douglas County Hospital Authority No. 3 |
| Refunding Revenue Bonds |
| Health Facilities - Nebraska Methodist Health System |
| Series 2015 |
| 11/01/2045 | 5.000% | | 12,500,000 | 13,861,250 |
| Madison County Hospital Authority No. 1 |
| Revenue Bonds |
| Faith Regional Health Services Project |
| Series 2008A-1 |
| 07/01/2033 | 6.000% | | 11,500,000 | 12,094,665 |
| Nebraska Elementary & Secondary School Finance Authority |
| Revenue Bonds |
| Boys Town Project |
| Series 2008 |
| 09/01/2028 | 4.750% | | 6,800,000 | 7,055,204 |
| Total | 48,747,222 |
| Nevada 0.7% |
| Carson City |
| Refunding Revenue Bonds |
| Carson Tahoe Regional Medical Center |
| Series 2012 |
| 09/01/2033 | 5.000% | | 2,500,000 | 2,693,700 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Sparks(c) |
| Tax Anticipation Revenue Bonds |
| Senior Sales |
| Series 2008A |
| 06/15/2028 | 6.750% | | 2,000,000 | 2,044,320 |
| County of Clark Department of Aviation |
| Revenue Bonds |
| Las Vegas-McCarran International Airport |
| Series 2010A |
| 07/01/2034 | 5.125% | | 18,750,000 | 20,431,875 |
| State of Nevada Department of Business & Industry(d) |
| Revenue Bonds |
| Republic Services, Inc. Project |
| Series 2003 AMT |
| 12/01/2026 | 5.625% | | 2,000,000 | 2,063,100 |
| State of Nevada Department of Business & Industry(c) |
| Revenue Bonds |
| Somerset Academy |
| Series 2015A |
| 12/15/2035 | 5.000% | | 1,025,000 | 1,046,023 |
| Total | 28,279,018 |
| New Hampshire 0.2% |
| New Hampshire Health & Education Facilities Authority Act |
| Refunding Revenue Bonds |
| Elliot Hospital |
| Series 2016 |
| 10/01/2038 | 5.000% | | 3,150,000 | 3,496,784 |
| New Hampshire Health and Education Facilities Authority Act |
| Revenue Bonds |
| Hillside Village |
| Series 2017A |
| 07/01/2037 | 6.125% | | 1,750,000 | 1,773,240 |
| 07/01/2042 | 6.250% | | 1,000,000 | 1,013,200 |
| Total | 6,283,224 |
| New Jersey 2.9% |
| Middlesex County Improvement Authority(e) |
| Revenue Bonds |
| Heldrich Center Hotel |
| Series 2005C |
| 01/01/2037 | 0.000% | | 1,500,000 | 43,740 |
| Subordinated Revenue Bonds |
| Heldrich Center Hotel |
| Series 2005B |
| 01/01/2037 | 0.000% | | 4,000,000 | 42,000 |
| New Jersey Economic Development Authority |
| Refunding Revenue Bonds |
| School Facilities Construction |
| Series 2005N-1 (AGM) |
| 09/01/2025 | 5.500% | | 14,500,000 | 17,457,420 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 21 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2005N-1 (NPFGC) |
| 09/01/2027 | 5.500% | | 5,000,000 | 5,899,200 |
| Revenue Bonds |
| Lions Gate Project |
| Series 2014 |
| 01/01/2034 | 5.000% | | 1,000,000 | 1,028,680 |
| 01/01/2044 | 5.250% | | 2,000,000 | 2,069,200 |
| MSU Student Housing Project-Provident |
| Series 2010 |
| 06/01/2031 | 5.750% | | 4,350,000 | 4,704,438 |
| 06/01/2042 | 5.875% | | 14,500,000 | 15,646,080 |
| Provident Group-Rowan Properties LLC |
| Series 2015 |
| 01/01/2048 | 5.000% | | 7,200,000 | 7,681,680 |
| Series 2015WW |
| 06/15/2040 | 5.250% | | 2,750,000 | 2,911,480 |
| New Jersey Economic Development Authority(d) |
| Revenue Bonds |
| Continental Airlines, Inc. Project |
| Series 1999 AMT |
| 09/15/2023 | 5.125% | | 5,000,000 | 5,407,900 |
| 09/15/2029 | 5.250% | | 2,500,000 | 2,721,100 |
| New Jersey Health Care Facilities Financing Authority |
| Prerefunded 07/01/18 Revenue Bonds |
| St. Josephs Healthcare Systems |
| Series 2008 |
| 07/01/2038 | 6.625% | | 4,000,000 | 4,209,480 |
| Revenue Bonds |
| Virtua Health |
| Series 2009 |
| 07/01/2033 | 5.750% | | 750,000 | 813,187 |
| New Jersey Transportation Trust Fund Authority |
| Revenue Bonds |
| Transportation Program |
| Series 2015AA |
| 06/15/2045 | 5.000% | | 10,000,000 | 10,267,800 |
| Transportation System |
| Series 2011B |
| 06/15/2031 | 5.500% | | 7,250,000 | 7,606,990 |
| New Jersey Turnpike Authority |
| Refunding Revenue Bonds |
| Series 2005A (AGM) |
| 01/01/2030 | 5.250% | | 2,000,000 | 2,537,380 |
| Revenue Bonds |
| Series 2004C-2 (AMBAC) |
| 01/01/2025 | 5.500% | | 2,500,000 | 3,075,125 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Union County Utilities Authority(d) |
| Refunding Revenue Bonds |
| Covanta Union |
| Series 2011 AMT |
| 12/01/2031 | 5.250% | | 15,000,000 | 16,747,200 |
| Total | 110,870,080 |
| New Mexico 0.4% |
| New Mexico Hospital Equipment Loan Council |
| Prerefunded 08/01/18 Revenue Bonds |
| Presbyterian Healthcare Services |
| Series 2008 |
| 08/01/2032 | 6.375% | | 5,920,000 | 6,236,661 |
| 08/01/2032 | 6.375% | | 2,730,000 | 2,876,027 |
| Prerefunded 08/01/19 Revenue Bonds |
| Presbyterian Healthcare Services |
| Series 2009 |
| 08/01/2039 | 5.000% | | 6,500,000 | 7,007,065 |
| Total | 16,119,753 |
| New York 3.1% |
| Brooklyn Arena Local Development Corp. |
| Prerefunded 01/15/20 Revenue Bonds |
| Barclays Center Project |
| Series 2009 |
| 07/15/2030 | 6.000% | | 6,500,000 | 7,297,940 |
| Build NYC Resource Corp.(c),(d) |
| Refunding Revenue Bonds |
| Pratt Paper, Inc. Project |
| Series 2014 AMT |
| 01/01/2025 | 4.500% | | 500,000 | 530,320 |
| Long Island Power Authority |
| Prerefunded 05/01/19 Revenue Bonds |
| Series 2008A |
| 05/01/2033 | 6.000% | | 2,725,000 | 2,963,056 |
| New York City Industrial Development Agency |
| Revenue Bonds |
| Pilot-Yankee Stadium-Payment I |
| Series 2006I (FGIC) |
| 03/01/2046 | 5.000% | | 2,000,000 | 2,011,660 |
| New York City Transitional Finance Authority Building Aid |
| Revenue Bonds |
| Fiscal 2009 |
| Series 2009S-4 |
| 01/15/2025 | 5.125% | | 2,000,000 | 2,118,220 |
| New York Counties Tobacco Trust VI |
| Tobacco Settlement Pass-Through Bonds |
| Series 2016 |
| 06/01/2045 | 5.000% | | 1,860,000 | 1,959,640 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New York State Dormitory Authority |
| Prerefunded 12/01/18 Revenue Bonds |
| Orange Regional Medical Center |
| Series 2008 |
| 12/01/2029 | 6.125% | | 2,250,000 | 2,405,273 |
| Revenue Bonds |
| Consolidated City University System 2nd Generation |
| Series 1993A |
| 07/01/2018 | 5.750% | | 1,215,000 | 1,267,743 |
| 07/01/2020 | 6.000% | | 13,350,000 | 14,828,779 |
| Independent School District-Educational Housing Services |
| Series 2005 (AMBAC) |
| 07/01/2030 | 5.250% | | 3,000,000 | 3,658,920 |
| New York Transportation Development Corp.(d) |
| Revenue Bonds |
| LaGuardia Airport Terminal B Redevelopment |
| Series 2016 AMT |
| 07/01/2041 | 4.000% | | 10,000,000 | 9,923,600 |
| Laguardia Airport Terminal B Redevelopment Project |
| Series 2016 AMT |
| 01/01/2050 | 5.250% | | 7,500,000 | 8,226,000 |
| LaGuardia Airport Terminal B Redevelopment Project |
| Series 2016 AMT |
| 07/01/2046 | 4.000% | | 7,000,000 | 6,858,600 |
| Port Authority of New York & New Jersey(d) |
| Revenue Bonds |
| 5th Installment-Special Project |
| Series 1996-4 AMT |
| 10/01/2019 | 6.750% | | 3,200,000 | 3,253,952 |
| JFK International Air Terminal Special Project |
| Series 1997 (NPFGC) AMT |
| 12/01/2022 | 5.750% | | 6,500,000 | 6,577,090 |
| Port Authority of New York & New Jersey |
| Revenue Bonds |
| JFK International Air Terminal |
| Series 2010 |
| 12/01/2036 | 6.000% | | 7,000,000 | 7,865,340 |
| Suffolk County Industrial Development Agency(d) |
| Revenue Bonds |
| Nissequogue Cogen Partners Facility |
| Series 1998 AMT |
| 01/01/2023 | 5.500% | | 5,420,000 | 5,420,325 |
| Triborough Bridge & Tunnel Authority |
| Revenue Bonds |
| General Purpose |
| Series 1992Y Escrowed to Maturity |
| 01/01/2021 | 6.125% | | 11,000,000 | 12,125,410 |
| Ulster County Capital Resource Corp.(c),(f) |
| Refunding Revenue Bonds |
| Alliance Senior Living Co. |
| Series 2014A |
| 09/15/2044 | 0.000% | | 545,000 | 484,080 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Ulster County Capital Resource Corp.(c) |
| Refunding Revenue Bonds |
| Alliance Senior Living Co. |
| Series 2014B |
| 09/15/2044 | 7.000% | | 2,765,000 | 2,811,093 |
| Ulster County Industrial Development Agency |
| Revenue Bonds |
| Series 2007A |
| 09/15/2037 | 6.000% | | 2,900,000 | 2,900,058 |
| 09/15/2042 | 6.000% | | 7,000,000 | 7,001,610 |
| Westchester County Local Development Corp. |
| Refunding Revenue Bonds |
| Westchester Medical Center |
| Series 2016 |
| 11/01/2046 | 5.000% | | 4,000,000 | 4,378,480 |
| Total | 116,867,189 |
| North Carolina 0.6% |
| Durham Housing Authority(d) |
| Revenue Bonds |
| Magnolia Pointe Apartments |
| Series 2005 AMT |
| 02/01/2038 | 5.650% | | 3,035,052 | 3,108,561 |
| North Carolina Department of Transportation(d) |
| Revenue Bonds |
| I-77 Hot Lanes Project |
| Series 2015 AMT |
| 06/30/2054 | 5.000% | | 10,000,000 | 10,598,700 |
| North Carolina Eastern Municipal Power Agency |
| Prerefunded 01/01/19 Revenue Bonds |
| Series 2009A |
| 01/01/2026 | 5.500% | | 300,000 | 319,248 |
| Prerefunded 01/01/22 Revenue Bonds |
| Series 1988A |
| 01/01/2026 | 6.000% | | 1,940,000 | 2,336,594 |
| North Carolina Medical Care Commission |
| Prerefunded 11/01/18 Revenue Bonds |
| 1st Mortgage-Deerfield Episcopal |
| Series 2008A |
| 11/01/2033 | 6.000% | | 4,060,000 | 4,314,805 |
| Revenue Bonds |
| Health Care Housing-Arc Projects |
| Series 2004A |
| 10/01/2034 | 5.800% | | 1,400,000 | 1,403,136 |
| North Carolina Turnpike Authority(f) |
| Revenue Bonds |
| Series 2017C |
| 07/01/2030 | 0.000% | | 445,000 | 260,828 |
| 07/01/2034 | 0.000% | | 1,135,000 | 522,282 |
| Total | 22,864,154 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 23 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| North Dakota 0.3% |
| County of McLean |
| Revenue Bonds |
| Great River Energy |
| Series 2010B |
| 07/01/2040 | 5.150% | | 7,900,000 | 8,323,282 |
| County of Ward |
| Revenue Bonds |
| Trinity Obligated Group |
| Series 2006 |
| 07/01/2029 | 5.125% | | 4,490,000 | 4,501,045 |
| Total | 12,824,327 |
| Ohio 1.6% |
| American Municipal Power, Inc. |
| Revenue Bonds |
| AMP Fremont Energy Center Project |
| Series 2012 |
| 02/15/2037 | 5.000% | | 13,220,000 | 14,629,649 |
| Greenup Hydroelectric Project |
| Series 2016A |
| 02/15/2036 | 4.000% | | 500,000 | 522,445 |
| Buckeye Tobacco Settlement Financing Authority |
| Asset-Backed Senior Turbo Revenue Bonds |
| Series 2007A-2 |
| 06/01/2047 | 5.875% | | 4,000,000 | 3,768,080 |
| City of Lakewood Water System |
| Revenue Bonds |
| Mortgage |
| Series 1995 (AMBAC) |
| 07/01/2020 | 5.850% | | 670,000 | 722,468 |
| City of Middleburg Heights |
| Revenue Bonds |
| Southwest General Facilities |
| Series 2011 |
| 08/01/2036 | 5.250% | | 2,380,000 | 2,583,252 |
| 08/01/2041 | 5.250% | | 6,900,000 | 7,451,379 |
| Cleveland Department of Public Utilities Division of Public Power |
| Revenue Bonds |
| Series 2008B-1 (NPFGC) |
| 11/15/2028 | 5.000% | | 500,000 | 515,010 |
| Cleveland Department of Public Utilities Division of Water |
| Refunding Revenue Bonds |
| 1st Mortgage |
| Series 1993G (NPFGC) |
| 01/01/2021 | 5.500% | | 2,790,000 | 3,018,975 |
| Ohio Higher Educational Facility Commission |
| Revenue Bonds |
| University of Dayton Project |
| Series 2009 |
| 12/01/2024 | 5.500% | | 3,000,000 | 3,176,520 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Ohio Turnpike & Infrastructure Commission |
| Refunding Revenue Bonds |
| Series 1998A (NPFGC) |
| 02/15/2026 | 5.500% | | 3,000,000 | 3,795,480 |
| State of Ohio(d) |
| Revenue Bonds |
| Portsmouth Bypass Project |
| Series 2015 AMT |
| 06/30/2053 | 5.000% | | 9,835,000 | 10,683,269 |
| Toledo-Lucas County Port Authority |
| Refunding Revenue Bonds |
| CSX Transportation, Inc. Project |
| Series 1992 |
| 12/15/2021 | 6.450% | | 3,950,000 | 4,725,029 |
| Revenue Bonds |
| University of Toledo Project |
| Series 2014 |
| 07/01/2046 | 5.000% | | 5,000,000 | 5,246,950 |
| Special Assessment Bonds |
| Town Square - Levis Commons Project |
| Series 2016 |
| 11/01/2036 | 5.400% | | 1,280,518 | 1,280,390 |
| Toledo-Lucas County Port Authority(f) |
| Special Assessment Bonds |
| Town Square - Levis Commons Project |
| Series 2016 |
| 11/01/2036 | 0.000% | | 510,206 | 5 |
| Total | 62,118,901 |
| Oklahoma 0.1% |
| Tulsa County Industrial Authority |
| Refunding Revenue Bonds |
| Montereau, Inc. Project |
| Series 2017 |
| 11/15/2045 | 5.250% | | 2,000,000 | 2,184,260 |
| Oregon 0.4% |
| City of Forest Grove |
| Refunding Revenue Bonds |
| Campus Improvement Pacific University Project |
| Series 2014 |
| 05/01/2040 | 5.000% | | 1,500,000 | 1,596,240 |
| Hospital Facilities Authority of Multnomah County |
| Refunding Revenue Bonds |
| Mirabella at South Waterfront |
| Series 2014A |
| 10/01/2044 | 5.400% | | 3,225,000 | 3,458,264 |
| Oregon Health & Science University |
| Prerefunded 06/01/19 Revenue Bonds |
| Series 2009A |
| 07/01/2039 | 5.750% | | 4,500,000 | 4,907,430 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Port of Portland Airport(d) |
| Revenue Bonds |
| Series 2017-24B AMT |
| 07/01/2033 | 5.000% | | 1,000,000 | 1,170,140 |
| 07/01/2034 | 5.000% | | 1,355,000 | 1,579,483 |
| 07/01/2042 | 5.000% | | 2,000,000 | 2,294,160 |
| Total | 15,005,717 |
| Pennsylvania 5.0% |
| Butler County Hospital Authority |
| Prerefunded 07/01/19 Revenue Bonds |
| Butler Health Systems Project |
| Series 2009 |
| 07/01/2039 | 7.250% | | 7,000,000 | 7,805,630 |
| Cumberland County Municipal Authority |
| Refunding Revenue Bonds |
| Diakon Lutheran Ministries |
| Series 2015 |
| 01/01/2038 | 5.000% | | 8,840,000 | 9,573,190 |
| Dauphin County Industrial Development Authority(d) |
| Revenue Bonds |
| Dauphin Consolidated Water Supply |
| Series 1992A AMT |
| 06/01/2024 | 6.900% | | 3,400,000 | 4,258,330 |
| Delaware Valley Regional Finance Authority |
| Revenue Bonds |
| Series 1997C (AMBAC) |
| 07/01/2027 | 7.750% | | 1,000,000 | 1,409,560 |
| Montgomery County Industrial Development Authority |
| Refunding Revenue Bonds |
| Albert Einstein HealthCare Network |
| Series 2015 |
| 01/15/2045 | 5.250% | | 11,150,000 | 11,988,591 |
| Pennsylvania Convention Center Authority |
| Revenue Bonds |
| Series 1989A Escrowed to Maturity (FGIC) |
| 09/01/2019 | 6.000% | | 9,610,000 | 10,118,946 |
| Pennsylvania Economic Development Financing Authority(d) |
| Revenue Bonds |
| PA Bridges Finco LP |
| Series 2015 AMT |
| 12/31/2038 | 5.000% | | 1,625,000 | 1,815,548 |
| 06/30/2042 | 5.000% | | 29,375,000 | 32,629,162 |
| Proctor & Gamble Paper Project |
| Series 2001 AMT |
| 03/01/2031 | 5.375% | | 1,000,000 | 1,251,250 |
| Pennsylvania Economic Development Financing Authority |
| Revenue Bonds |
| Philadelphia Biosolids Facility |
| Series 2009 |
| 01/01/2032 | 6.250% | | 5,325,000 | 5,656,215 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Pennsylvania Turnpike Commission |
| Refunding Subordinated Revenue Bonds |
| Series 2015A-1 |
| 12/01/2045 | 5.250% | | 25,295,000 | 28,842,118 |
| Series 2016A-1 |
| 12/01/2046 | 5.000% | | 10,000,000 | 11,060,400 |
| Revenue Bonds |
| Series 2014B |
| 12/01/2044 | 5.250% | | 10,000,000 | 11,253,500 |
| Subordinated Series 2017B-1 |
| 06/01/2042 | 5.000% | | 15,000,000 | 16,857,600 |
| Subordinated Revenue Bonds |
| Series 2014A-1 |
| 12/01/2043 | 5.000% | | 16,940,000 | 18,697,017 |
| Philadelphia Authority for Industrial Development |
| Revenue Bonds |
| First Philadelphia Preparatory Charter School |
| Series 2014 |
| 06/15/2043 | 7.250% | | 5,475,000 | 6,366,713 |
| Philadelphia Municipal Authority |
| Prerefunded 04/01/19 Revenue Bonds |
| Lease |
| Series 2009 |
| 04/01/2034 | 6.500% | | 2,500,000 | 2,727,975 |
| Washington County Industrial Development Authority |
| Revenue Bonds |
| Washington Jefferson College |
| Series 2010 |
| 11/01/2036 | 5.000% | | 4,850,000 | 5,251,337 |
| Westmoreland County Municipal Authority(f) |
| Revenue Bonds |
| Capital Appreciation |
| Series 1999A (NPFGC) |
| 08/15/2022 | 0.000% | | 2,000,000 | 1,815,660 |
| Total | 189,378,742 |
| Puerto Rico 0.3% |
| Puerto Rico Electric Power Authority(h) |
| Refunding Revenue Bonds |
| Series 2007UU (AGM) |
| 07/01/2023 | 5.000% | | 1,000,000 | 1,001,880 |
| Revenue Bonds |
| Series 2003NN (NPFGC) |
| 07/01/2021 | 5.250% | | 3,500,000 | 3,748,745 |
| Puerto Rico Highway & Transportation Authority(h) |
| Refunding Revenue Bonds |
| Series 2003AA (NPFGC) |
| 07/01/2020 | 5.500% | | 180,000 | 192,213 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 25 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Puerto Rico Public Finance Corp.(h) |
| Revenue Bonds |
| Commonwealth Appropriation |
| Series 2002E Escrowed to Maturity (AMBAC) |
| 08/01/2027 | 5.500% | | 450,000 | 564,494 |
| Unrefunded Revenue Bonds |
| Commonwealth Appropriation |
| Series 2002E Escrowed to Maturity |
| 08/01/2026 | 6.000% | | 2,470,000 | 3,174,197 |
| Series 2002E Escrowed to Maturity (AMBAC) |
| 08/01/2027 | 5.500% | | 1,050,000 | 1,317,151 |
| Total | 9,998,680 |
| South Carolina 1.5% |
| Piedmont Municipal Power Agency |
| Refunding Revenue Bonds |
| Electric |
| Series 1991 (NPFGC) |
| 01/01/2021 | 6.250% | | 1,250,000 | 1,450,525 |
| Unrefunded Revenue Bonds |
| Series 1993 (NPFGC) |
| 01/01/2025 | 5.375% | | 11,180,000 | 13,338,523 |
| South Carolina Jobs-Economic Development Authority |
| Revenue Bonds |
| York Preparatory Academy Project |
| Series 2014A |
| 11/01/2023 | 5.750% | | 985,000 | 1,044,199 |
| 11/01/2033 | 7.000% | | 910,000 | 1,007,215 |
| 11/01/2045 | 7.250% | | 3,935,000 | 4,391,499 |
| South Carolina Ports Authority(d) |
| Revenue Bonds |
| Series 2015 AMT |
| 07/01/2050 | 5.250% | | 13,675,000 | 15,377,264 |
| South Carolina Public Service Authority |
| Prerefunded 01/01/19 Revenue Bonds |
| Series 2008A |
| 01/01/2028 | 5.375% | | 10,000 | 10,624 |
| Refunding Revenue Bonds |
| Series 2016B |
| 12/01/2056 | 5.000% | | 12,000,000 | 13,198,560 |
| Revenue Bonds |
| Series 2015E |
| 12/01/2055 | 5.250% | | 5,415,000 | 6,055,324 |
| Total | 55,873,733 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| South Dakota 0.3% |
| South Dakota Health & Educational Facilities Authority |
| Refunding Revenue Bonds |
| Sanford Obligated Group |
| Series 2015 |
| 11/01/2035 | 5.000% | | 2,500,000 | 2,851,150 |
| 11/01/2045 | 5.000% | | 6,920,000 | 7,763,271 |
| Total | 10,614,421 |
| Tennessee 0.3% |
| Chattanooga Health Educational & Housing Facility Board |
| Refunding Revenue Bonds |
| Student Housing - CDFI Phase I |
| Series 2015 |
| 10/01/2032 | 5.000% | | 1,300,000 | 1,426,763 |
| 10/01/2035 | 5.000% | | 645,000 | 701,231 |
| Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board |
| Revenue Bonds |
| Vanderbilt University Medical Center |
| Series 2016 |
| 07/01/2046 | 5.000% | | 6,800,000 | 7,630,620 |
| Series 2017A |
| 07/01/2048 | 5.000% | | 1,665,000 | 1,879,053 |
| Total | 11,637,667 |
| Texas 10.2% |
| Bexar County Health Facilities Development Corp. |
| Prerefunded 07/01/20 Revenue Bonds |
| Army Retirement Residence |
| Series 2010 |
| 07/01/2030 | 5.875% | | 1,155,000 | 1,313,223 |
| Army Retirement Residence Project |
| Series 2010 |
| 07/01/2045 | 6.200% | | 7,200,000 | 8,253,288 |
| Unrefunded Revenue Bonds |
| Army Retirement Residence |
| Series 2010 |
| 07/01/2030 | 5.875% | | 215,000 | 234,114 |
| Capital Area Cultural Education Facilities Finance Corp. |
| Revenue Bonds |
| Roman Catholic Diocese |
| Series 2005B |
| 04/01/2045 | 6.125% | | 13,450,000 | 14,831,584 |
| Central Texas Regional Mobility Authority |
| Prerefunded 01/01/21 Revenue Bonds |
| Senior Lien |
| Series 2011 |
| 01/01/2041 | 6.000% | | 8,620,000 | 10,007,217 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 26 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2013A |
| 01/01/2033 | 5.000% | | 2,700,000 | 2,977,992 |
| Series 2016 |
| 01/01/2046 | 5.000% | | 9,835,000 | 11,070,079 |
| Revenue Bonds |
| Senior Lien |
| Series 2015A |
| 01/01/2045 | 5.000% | | 3,000,000 | 3,357,120 |
| Central Texas Regional Mobility Authority(f) |
| Revenue Bonds |
| Capital Appreciation |
| Series 2010 |
| 01/01/2025 | 0.000% | | 2,000,000 | 1,620,400 |
| Central Texas Turnpike System |
| Refunding Revenue Bonds |
| 1st Tier |
| Series 2012A |
| 08/15/2041 | 5.000% | | 16,075,000 | 17,950,309 |
| Subordinated Series 2015C |
| 08/15/2042 | 5.000% | | 14,730,000 | 16,389,040 |
| Subordinated Refunding Revenue Bonds |
| Series 2015C |
| 08/15/2037 | 5.000% | | 10,000,000 | 11,186,400 |
| City of Austin Airport System(d) |
| Revenue Bonds |
| Series 2017B AMT |
| 11/15/2041 | 5.000% | | 1,000,000 | 1,135,860 |
| 11/15/2046 | 5.000% | | 3,000,000 | 3,392,190 |
| City of Houston Airport System |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2009A |
| 07/01/2034 | 5.500% | | 10,500,000 | 10,927,560 |
| City of Houston Airport System(d) |
| Refunding Revenue Bonds |
| Special Facilities-United Airlines |
| Series 2011A AMT |
| 07/15/2030 | 6.500% | | 5,555,000 | 6,148,218 |
| United Airlines, Inc. |
| Series 2014 AMT |
| 07/01/2029 | 5.000% | | 4,000,000 | 4,298,240 |
| Subordinated Refunding Revenue Bonds |
| Lien |
| Series 2012A AMT |
| 07/01/2031 | 5.000% | | 5,000,000 | 5,511,550 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Clifton Higher Education Finance Corp. |
| Revenue Bonds |
| Idea Public Schools |
| Series 2011 |
| 08/15/2041 | 5.750% | | 2,000,000 | 2,161,040 |
| Series 2012 |
| 08/15/2032 | 5.000% | | 2,165,000 | 2,302,478 |
| 08/15/2042 | 5.000% | | 5,575,000 | 5,853,025 |
| Series 2013 |
| 08/15/2033 | 6.000% | | 990,000 | 1,141,104 |
| International Leadership |
| Series 2015 |
| 08/15/2038 | 5.750% | | 5,810,000 | 6,115,025 |
| International Leadership of Texas |
| Series 2015 |
| 08/15/2045 | 5.750% | | 10,500,000 | 11,252,535 |
| Series 2015A |
| 12/01/2035 | 5.000% | | 2,200,000 | 2,386,604 |
| 12/01/2045 | 5.000% | | 1,100,000 | 1,179,409 |
| Dallas Love Field(d) |
| Revenue Bonds |
| Series 2017 AMT |
| 11/01/2034 | 5.000% | | 750,000 | 863,805 |
| 11/01/2035 | 5.000% | | 1,000,000 | 1,149,130 |
| Dallas/Fort Worth International Airport |
| Refunding Revenue Bonds |
| Series 2012B |
| 11/01/2035 | 5.000% | | 10,000,000 | 11,091,800 |
| Dallas/Fort Worth International Airport(d) |
| Refunding Revenue Bonds |
| Series 2014A AMT |
| 11/01/2032 | 5.000% | | 3,400,000 | 3,799,126 |
| Deaf Smith County Hospital District |
| Limited General Obligation Bonds |
| Series 2010A |
| 03/01/2040 | 6.500% | | 4,000,000 | 4,372,520 |
| Harris County Health Facilities Development Corp. |
| Prerefunded 12/01/18 Revenue Bonds |
| Memorial Hermann Healthcare System |
| Series 2008B |
| 12/01/2035 | 7.250% | | 8,800,000 | 9,536,912 |
| Revenue Bonds |
| St. Luke’s Episcopal Hospital Project |
| Series 1991 Escrowed to Maturity |
| 02/15/2021 | 6.750% | | 1,620,000 | 1,739,945 |
| Houston Higher Education Finance Corp. |
| Prerefunded 05/15/21 Revenue Bonds |
| Harmony Public Schools |
| Series 2011A |
| 05/15/2041 | 6.875% | | 4,045,000 | 4,896,149 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 27 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| La Vernia Higher Education Finance Corp. |
| Prerefunded 08/15/19 Revenue Bonds |
| Kipp, Inc. |
| Series 2009A |
| 08/15/2044 | 6.375% | | 7,500,000 | 8,296,725 |
| Matagorda County Navigation District No. 1 |
| Refunding Revenue Bonds |
| Central Power & Light Co. Project |
| Series 2001A |
| 11/01/2029 | 6.300% | | 2,800,000 | 3,106,796 |
| Mission Economic Development Corp(d) |
| Revenue Bonds |
| Dallas Clean Energy McCommas |
| Series 2011 AMT |
| 12/01/2024 | 6.875% | | 15,000,000 | 15,161,550 |
| Mission Economic Development Corp.(c),(d) |
| Revenue Bonds |
| Senior Lien - Natgasoline Project |
| Series 2016 AMT |
| 10/01/2031 | 5.750% | | 500,000 | 523,545 |
| New Hope Cultural Education Facilities Finance Corp. |
| Revenue Bonds |
| Cardinal Bay, Inc. - Village on the Park |
| Series 2016 |
| 07/01/2031 | 4.000% | | 1,000,000 | 1,025,640 |
| 07/01/2046 | 5.000% | | 4,600,000 | 4,942,010 |
| 07/01/2051 | 4.750% | | 2,715,000 | 2,833,238 |
| Collegiate Housing College Station |
| Series 2014 |
| 04/01/2046 | 5.000% | | 7,250,000 | 7,635,483 |
| Collegiate Housing Tarleton State University |
| Series 2015 |
| 04/01/2047 | 5.000% | | 2,995,000 | 3,180,750 |
| NCCD-College Station Properties LLC |
| Series 2015A |
| 07/01/2047 | 5.000% | | 25,860,000 | 27,445,994 |
| New Hope Cultural Education Facilities Finance Corp.(c) |
| Revenue Bonds |
| Jubilee Academic Center Project |
| Series 2017 |
| 08/15/2037 | 5.000% | | 940,000 | 944,756 |
| North Texas Tollway Authority |
| Refunding Revenue Bonds |
| 1st Tier |
| Series 2009C |
| 01/01/2044 | 5.250% | | 5,000,000 | 5,234,400 |
| Series 2011 |
| 01/01/2038 | 5.000% | | 5,500,000 | 5,923,170 |
| Series 2012B |
| 01/01/2042 | 5.000% | | 12,845,000 | 14,066,945 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| 2nd Tier |
| Series 2015A |
| 01/01/2038 | 5.000% | | 9,230,000 | 10,495,156 |
| Series 2016A |
| 01/01/2039 | 5.000% | | 2,500,000 | 2,871,425 |
| Pottsboro Higher Education Finance Corp. |
| Revenue Bonds |
| Series 2016A |
| 08/15/2036 | 5.000% | | 390,000 | 396,517 |
| Red River Health Facilities Development Corp. |
| Revenue Bonds |
| MRC Crossings Project |
| Series 2014A |
| 11/15/2034 | 7.500% | | 2,000,000 | 2,264,360 |
| 11/15/2044 | 7.750% | | 2,800,000 | 3,184,776 |
| San Juan Higher Education Finance Authority |
| Prerefunded 08/15/20 Revenue Bonds |
| Idea Public Schools |
| Series 2010A |
| 08/15/2040 | 6.700% | | 2,700,000 | 3,150,603 |
| Sanger Industrial Development Corp.(c),(d),(e) |
| Revenue Bonds |
| Texas Pellets Project |
| Series 2012B AMT |
| 07/01/2038 | 8.000% | | 34,645,000 | 9,787,213 |
| Tarrant County Cultural Education Facilities Finance Corp. |
| Refunding Revenue Bonds |
| Trinity Terrace Project |
| Series 2014 |
| 10/01/2044 | 5.000% | | 2,500,000 | 2,646,325 |
| 10/01/2049 | 5.000% | | 1,870,000 | 1,972,457 |
| Revenue Bonds |
| Buckner Senior Living Ventana Project |
| Series 2017 |
| 11/15/2047 | 6.750% | | 3,665,000 | 3,916,199 |
| CC Young Memorial Home |
| Series 2009A |
| 02/15/2038 | 8.000% | | 4,000,000 | 4,309,160 |
| Texas City Industrial Development Corp. |
| Refunding Revenue Bonds |
| Arco Pipe Line Co. Project |
| Series 1990 |
| 10/01/2020 | 7.375% | | 2,000,000 | 2,349,080 |
| Texas Municipal Gas Acquisition & Supply Corp. III |
| Revenue Bonds |
| Series 2012 |
| 12/15/2029 | 5.000% | | 8,300,000 | 9,244,042 |
| 12/15/2032 | 5.000% | | 7,500,000 | 8,238,900 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 28 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Texas Private Activity Bond Surface Transportation Corp.(d) |
| Revenue Bonds |
| Senior Lien - Blueridge Transportation |
| Series 2016 AMT |
| 12/31/2050 | 5.000% | | 7,750,000 | 8,463,930 |
| 12/31/2055 | 5.000% | | 13,250,000 | 14,423,552 |
| Uptown Development Authority |
| Prerefunded 09/01/19 Tax Allocation Bonds |
| Infrastructure Improvement Facilities |
| Series 2009 |
| 09/01/2029 | 5.500% | | 500,000 | 545,980 |
| Total | 389,025,668 |
| Utah 0.5% |
| Salt Lake City Corp. Airport(d) |
| Revenue Bonds |
| Series 2017A AMT |
| 07/01/2036 | 5.000% | | 4,000,000 | 4,644,480 |
| 07/01/2047 | 5.000% | | 11,500,000 | 13,162,670 |
| Total | 17,807,150 |
| Virginia 0.8% |
| Chesapeake Bay Bridge & Tunnel District |
| Revenue Bonds |
| 1st Tier General Resolution |
| Series 2016 |
| 07/01/2046 | 5.000% | | 3,500,000 | 3,941,875 |
| 07/01/2051 | 5.000% | | 2,700,000 | 3,025,377 |
| City of Chesapeake Expressway Toll Road |
| Revenue Bonds |
| Transportation System |
| Senior Series 2012A |
| 07/15/2047 | 5.000% | | 7,505,000 | 8,158,310 |
| Fairfax County Industrial Development Authority |
| Refunding Revenue Bonds |
| Inova Health System Project |
| Series 1993 |
| 08/15/2023 | 5.000% | | 10,000,000 | 11,550,100 |
| Fredericksburg Economic Development Authority |
| Refunding Revenue Bonds |
| Mary Washington Healthcare Obligation |
| Series 2014 |
| 06/15/2030 | 5.000% | | 1,000,000 | 1,117,240 |
| 06/15/2031 | 5.000% | | 800,000 | 889,736 |
| 06/15/2033 | 5.000% | | 500,000 | 552,510 |
| Mosaic District Community Development Authority |
| Special Assessment Bonds |
| Series 2011A |
| 03/01/2026 | 6.625% | | 2,145,000 | 2,370,654 |
| Total | 31,605,802 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Washington 2.0% |
| Greater Wenatchee Regional Events Center Public Facilities District |
| Revenue Bonds |
| Series 2012A |
| 09/01/2027 | 5.000% | | 1,540,000 | 1,604,757 |
| 09/01/2032 | 5.250% | | 1,000,000 | 1,030,270 |
| King County Public Hospital District No. 4 |
| Revenue Bonds |
| Series 2015A |
| 12/01/2035 | 6.000% | | 1,300,000 | 1,283,243 |
| 12/01/2045 | 6.250% | | 2,500,000 | 2,475,175 |
| Port of Seattle(d),(g) |
| Refunding Revenue Bonds |
| Intermediate Lien |
| Series 2017 AMT |
| 05/01/2036 | 5.000% | | 9,000,000 | 10,421,640 |
| 05/01/2042 | 5.000% | | 7,500,000 | 8,603,475 |
| Snohomish County Public Utility District No. 1 |
| Refunding Revenue Bonds |
| Generation System |
| Series 1986A Escrowed to Maturity |
| 01/01/2020 | 5.000% | | 12,000,000 | 13,137,120 |
| Washington Health Care Facilities Authority |
| Revenue Bonds |
| Overlake Hospital Medical Center |
| Series 2010 |
| 07/01/2030 | 5.500% | | 3,000,000 | 3,288,420 |
| Washington Higher Education Facilities Authority |
| Prerefunded 10/01/19 Revenue Bonds |
| Whitworth University Project |
| Series 2009 |
| 10/01/2040 | 5.625% | | 4,685,000 | 5,138,086 |
| Washington State Housing Finance Commission |
| Prerefunded 01/01/23 Revenue Bonds |
| Presbyterian Retirement |
| Series 2013 |
| 01/01/2028 | 5.000% | | 985,000 | 1,167,649 |
| Refunding Revenue Bonds |
| Nonprofit Housing-Mirabella |
| Series 2012 |
| 10/01/2032 | 6.500% | | 9,800,000 | 10,632,804 |
| 10/01/2047 | 6.750% | | 1,000,000 | 1,093,230 |
| Presbyterian Retirement |
| Series 2013 Escrowed to Maturity |
| 01/01/2023 | 5.000% | | 500,000 | 545,910 |
| Revenue Bonds |
| Heron’s Key |
| Series 2015A |
| 07/01/2030 | 6.500% | | 480,000 | 477,480 |
| 07/01/2035 | 6.750% | | 550,000 | 538,175 |
| 07/01/2045 | 7.000% | | 1,800,000 | 1,786,752 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 29 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Unrefunded Revenue Bonds |
| Presbyterian Retirement |
| Series 2013 |
| 01/01/2023 | 5.000% | | 500,000 | 534,410 |
| 01/01/2028 | 5.000% | | 1,030,000 | 1,060,962 |
| 01/01/2033 | 5.000% | | 1,315,000 | 1,335,501 |
| 01/01/2043 | 5.250% | | 3,870,000 | 3,948,329 |
| Washington State Housing Finance Commission(c) |
| Refunding Revenue Bonds |
| Bayview Manor Homes |
| Series 2016A |
| 07/01/2046 | 5.000% | | 2,475,000 | 2,528,485 |
| Skyline 1st Hill Project |
| Series 2015 |
| 01/01/2020 | 4.125% | | 375,000 | 374,820 |
| 01/01/2025 | 5.000% | | 770,000 | 769,353 |
| 01/01/2035 | 5.750% | | 575,000 | 574,028 |
| 01/01/2045 | 6.000% | | 2,325,000 | 2,320,210 |
| Total | 76,670,284 |
| West Virginia 0.1% |
| West Virginia Economic Development Authority |
| Refunding Revenue Bonds |
| Appalachian Power Co.-Amos Project |
| Series 2010A |
| 12/01/2038 | 5.375% | | 3,850,000 | 4,223,335 |
| Wisconsin 3.4% |
| City of La Crosse(d) |
| Refunding Revenue Bonds |
| Northern States Power Co. Project |
| Series 1996 AMT |
| 11/01/2021 | 6.000% | | 6,000,000 | 7,035,300 |
| Monroe Redevelopment Authority |
| Prerefunded 02/15/19 Revenue Bonds |
| Monroe Clinic, Inc. |
| Series 2009 |
| 02/15/2039 | 5.875% | | 5,000,000 | 5,374,500 |
| Public Finance Authority(d) |
| Refunding Revenue Bonds |
| Celanese Project |
| Series 2016B AMT |
| 12/01/2025 | 5.000% | | 4,500,000 | 5,094,180 |
| TRIPS Senior Obligation Group |
| Series 2012B AMT |
| 07/01/2028 | 5.250% | | 4,000,000 | 4,317,280 |
| 07/01/2042 | 5.000% | | 2,000,000 | 2,077,100 |
| Waste Management, Inc. Project |
| Series 2016 AMT |
| 05/01/2027 | 2.875% | | 2,370,000 | 2,357,747 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Public Finance Authority(c) |
| Refunding Revenue Bonds |
| Mary’s Woods at Marylhurst |
| Series 2017 |
| 05/15/2042 | 5.250% | | 820,000 | 878,942 |
| 05/15/2047 | 5.250% | | 1,105,000 | 1,179,886 |
| State of Wisconsin |
| Prerefunded 05/01/19 Revenue Bonds |
| Series 2009 |
| 05/01/2033 | 5.750% | | 1,675,000 | 1,814,293 |
| Series 2009A |
| 05/01/2033 | 5.750% | | 16,025,000 | 17,357,639 |
| Wisconsin Health & Educational Facilities Authority |
| Prerefunded 02/15/19 Revenue Bonds |
| ProHealth Care, Inc. Obligation Group |
| Series 2009 |
| 02/15/2039 | 6.625% | | 25,150,000 | 27,319,187 |
| Prerefunded 09/15/19 Revenue Bonds |
| St. John’s Community, Inc. |
| Series 2009A |
| 09/15/2029 | 7.250% | | 1,000,000 | 1,130,200 |
| 09/15/2039 | 7.625% | | 1,000,000 | 1,138,060 |
| Refunding Revenue Bonds |
| Ascension Health Credit Group |
| Series 2016 |
| 11/15/2046 | 4.000% | | 28,000,000 | 28,624,120 |
| Revenue Bonds |
| Aurora Health Care, Inc. |
| Series 2010A |
| 04/15/2039 | 5.625% | | 6,100,000 | 6,585,438 |
| Beaver Dam Community Hospitals |
| Series 2013A |
| 08/15/2028 | 5.125% | | 6,750,000 | 7,287,570 |
| 08/15/2034 | 5.250% | | 8,000,000 | 8,536,080 |
| Unrefunded Revenue Bonds |
| Medical College of Wisconsin |
| Series 2008A |
| 12/01/2035 | 5.250% | | 1,365,000 | 1,430,725 |
| Total | 129,538,247 |
| Wyoming 0.2% |
| County of Campbell |
| Revenue Bonds |
| Basin Electric Power Cooperative |
| Series 2009A |
| 07/15/2039 | 5.750% | | 7,900,000 | 8,450,314 |
Total Municipal Bonds
(Cost $3,523,310,163) | 3,727,496,705 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 30 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Money Market Funds 0.4% |
| | Shares | Value ($) |
| Dreyfus Tax-Exempt Cash Management Fund, Institutional Shares, 0.580%(i) | 15,688,284 | 15,688,284 |
Total Money Market Funds
(Cost $15,688,284) | 15,688,284 |
Total Investments
(Cost $3,583,078,447) | 3,787,264,989 |
| Other Assets & Liabilities, Net | | 16,434,617 |
| Net Assets | $3,803,699,606 |
Notes to Portfolio of Investments
| (a) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (b) | Variable rate security. |
| (c) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At July 31, 2017, the value of these securities amounted to $81,828,643, which represents 2.15% of net assets. |
| (d) | Income from this security may be subject to alternative minimum tax. |
| (e) | Represents securities that have defaulted on payment of interest. The Fund has stopped accruing interest on these securities. At July 31, 2017, the value of these securities amounted to $12,396,884, which represents 0.33% of net assets. |
| (f) | Zero coupon bond. |
| (g) | Represents a security purchased on a when-issued basis. |
| (h) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At July 31, 2017, the value of these securities amounted to $24,393,708, which represents 0.64% of net assets. |
| (i) | The rate shown is the seven-day current annualized yield at July 31, 2017. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| AMT | Alternative Minimum Tax |
| FGIC | Financial Guaranty Insurance Corporation |
| FNMA | Federal National Mortgage Association |
| GNMA | Government National Mortgage Association |
| NPFGC | National Public Finance Guarantee Corporation |
| VRDN | Variable Rate Demand Note |
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 31 |
Portfolio of Investments (continued)
July 31, 2017
Fair value measurements (continued)
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Floating Rate Notes | — | 44,080,000 | — | 44,080,000 |
| Municipal Bonds | — | 3,727,496,705 | — | 3,727,496,705 |
| Money Market Funds | 15,688,284 | — | — | 15,688,284 |
| Total Investments | 15,688,284 | 3,771,576,705 | — | 3,787,264,989 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 32 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Statement of Assets and Liabilities
July 31, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $3,583,078,447 |
| Total investments, at cost | 3,583,078,447 |
| Investments, at value | |
| Unaffiliated issuers, at value | 3,787,264,989 |
| Total investments, at value | 3,787,264,989 |
| Cash | 6,627,365 |
| Receivable for: | |
| Investments sold | 5,935,146 |
| Capital shares sold | 12,046,915 |
| Regulatory settlements (Note 6) | 1,138,577 |
| Interest | 38,391,428 |
| Prepaid expenses | 29,041 |
| Trustees’ deferred compensation plan | 429,906 |
| Other assets | 10,033 |
| Total assets | 3,851,873,400 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 3,780,000 |
| Investments purchased on a delayed delivery basis | 23,810,765 |
| Capital shares purchased | 6,693,418 |
| Distributions to shareholders | 12,803,348 |
| Management services fees | 135,606 |
| Distribution and/or service fees | 54,651 |
| Transfer agent fees | 194,327 |
| Compensation of board members | 38,827 |
| Compensation of chief compliance officer | 163 |
| Other expenses | 232,783 |
| Trustees’ deferred compensation plan | 429,906 |
| Total liabilities | 48,173,794 |
| Net assets applicable to outstanding capital stock | $3,803,699,606 |
| Represented by | |
| Paid in capital | 3,606,055,748 |
| Undistributed net investment income | 23,607,913 |
| Accumulated net realized loss | (30,150,597) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 204,186,542 |
| Total - representing net assets applicable to outstanding capital stock | $3,803,699,606 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 33 |
Statement of Assets and Liabilities (continued)
July 31, 2017
| Class A | |
| Net assets | $2,882,268,305 |
| Shares outstanding | 211,895,273 |
| Net asset value per share | $13.60 |
| Maximum offering price per share(a) | $14.02 |
| Class B | |
| Net assets | $9,839 |
| Shares outstanding | 724 |
| Net asset value per share | $13.59 |
| Class C | |
| Net assets | $105,080,672 |
| Shares outstanding | 7,728,396 |
| Net asset value per share | $13.60 |
| Class R4 | |
| Net assets | $6,996,811 |
| Shares outstanding | 514,507 |
| Net asset value per share | $13.60 |
| Class R5 | |
| Net assets | $1,990,445 |
| Shares outstanding | 146,350 |
| Net asset value per share | $13.60 |
| Class Y | |
| Net assets | $71,190 |
| Shares outstanding | 5,219 |
| Net asset value per share | $13.64 |
| Class Z | |
| Net assets | $807,282,344 |
| Shares outstanding | 59,340,171 |
| Net asset value per share | $13.60 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 34 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Statement of Operations
Year Ended July 31, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $22,319 |
| Interest | 188,476,181 |
| Total income | 188,498,500 |
| Expenses: | |
| Management services fees | 17,289,123 |
| Distribution and/or service fees | |
| Class A | 6,155,287 |
| Class B | 6,496 |
| Class C | 1,089,503 |
| Transfer agent fees | |
| Class A | 2,488,394 |
| Class B | 572 |
| Class C | 92,580 |
| Class R4 | 6,515 |
| Class R5 | 629 |
| Class Y(a) | 6 |
| Class Z | 643,724 |
| Compensation of board members | 99,235 |
| Custodian fees | 28,769 |
| Printing and postage fees | 161,675 |
| Registration fees | 142,004 |
| Audit fees | 38,815 |
| Legal fees | 109,118 |
| Interest expense | 147,775 |
| Compensation of chief compliance officer | 1,744 |
| Other | (240,626) |
| Total expenses | 28,261,338 |
| Fees waived by distributor | |
| Class C | (114,808) |
| Expense reduction | (4,040) |
| Total net expenses | 28,142,490 |
| Net investment income | 160,356,010 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (12,378,927) |
| Futures contracts | (3,480,539) |
| Net realized loss | (15,859,466) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (185,401,413) |
| Net change in unrealized appreciation (depreciation) | (185,401,413) |
| Net realized and unrealized loss | (201,260,879) |
| Net decrease in net assets resulting from operations | $(40,904,869) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 35 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2017 (a) | Year Ended
July 31, 2016 |
| Operations | | |
| Net investment income | $160,356,010 | $168,675,780 |
| Net realized gain (loss) | (15,859,466) | 40,827,132 |
| Net change in unrealized appreciation (depreciation) | (185,401,413) | 82,171,308 |
| Net increase (decrease) in net assets resulting from operations | (40,904,869) | 291,674,220 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (121,531,849) | (131,973,218) |
| Class B | (21,849) | (48,212) |
| Class C | (3,788,765) | (3,643,444) |
| Class R4 | (337,662) | (102,852) |
| Class R5 | (42,704) | (32,702) |
| Class Y | (1,045) | — |
| Class Z | (33,163,934) | (33,486,512) |
| Total distributions to shareholders | (158,887,808) | (169,286,940) |
| Increase (decrease) in net assets from capital stock activity | (305,297,981) | 91,507,214 |
| Total increase (decrease) in net assets | (505,090,658) | 213,894,494 |
| Net assets at beginning of year | 4,308,790,264 | 4,094,895,770 |
| Net assets at end of year | $3,803,699,606 | $4,308,790,264 |
| Undistributed net investment income | $23,607,913 | $21,617,895 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 36 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2017 (a) | July 31, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A(b) | | | | |
| Subscriptions (c) | 8,485,284 | 116,278,227 | 13,438,078 | 188,427,421 |
| Distributions reinvested | 8,003,012 | 108,989,520 | 7,779,661 | 109,026,786 |
| Redemptions | (39,274,938) | (531,821,040) | (20,509,344) | (287,199,931) |
| Net increase (decrease) | (22,786,642) | (306,553,293) | 708,395 | 10,254,276 |
| Class B(b) | | | | |
| Subscriptions | 55 | 758 | 3,853 | 53,820 |
| Distributions reinvested | 1,471 | 20,070 | 2,826 | 39,509 |
| Redemptions (c) | (74,515) | (1,011,236) | (80,574) | (1,124,452) |
| Net decrease | (72,989) | (990,408) | (73,895) | (1,031,123) |
| Class C | | | | |
| Subscriptions | 1,166,247 | 16,064,610 | 2,043,579 | 28,662,997 |
| Distributions reinvested | 238,948 | 3,253,946 | 217,637 | 3,049,505 |
| Redemptions | (2,103,212) | (28,526,604) | (1,009,055) | (14,139,204) |
| Net increase (decrease) | (698,017) | (9,208,048) | 1,252,161 | 17,573,298 |
| Class R4 | | | | |
| Subscriptions | 533,497 | 7,405,846 | 290,792 | 4,099,216 |
| Distributions reinvested | 24,763 | 336,873 | 7,283 | 102,413 |
| Redemptions | (416,035) | (5,615,989) | (43,878) | (611,382) |
| Net increase | 142,225 | 2,126,730 | 254,197 | 3,590,247 |
| Class R5 | | | | |
| Subscriptions | 105,982 | 1,446,381 | 60,158 | 842,014 |
| Distributions reinvested | 3,104 | 42,280 | 2,301 | 32,258 |
| Redemptions | (25,392) | (339,838) | (44,768) | (626,368) |
| Net increase | 83,694 | 1,148,823 | 17,691 | 247,904 |
| Class Y | | | | |
| Subscriptions | 5,199 | 69,977 | — | — |
| Distributions reinvested | 64 | 871 | — | — |
| Redemptions | (44) | (593) | — | — |
| Net increase | 5,219 | 70,255 | — | — |
| Class Z | | | | |
| Subscriptions | 14,652,700 | 197,981,095 | 23,630,385 | 329,968,407 |
| Distributions reinvested | 788,153 | 10,730,328 | 660,466 | 9,257,482 |
| Redemptions | (14,845,965) | (200,603,463) | (19,889,227) | (278,353,277) |
| Net increase | 594,888 | 8,107,960 | 4,401,624 | 60,872,612 |
| Total net increase (decrease) | (22,731,622) | (305,297,981) | 6,560,173 | 91,507,214 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
| (b) | Effective July 17, 2017, Class B shares were automatically converted to Class A shares. |
| (c) | Includes conversions of Class B shares to Class A shares, if any. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2017
| 37 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class A |
| 7/31/2017 | $14.25 | 0.55 | (0.66) | (0.11) | (0.54) |
| 7/31/2016 | $13.84 | 0.56 | 0.41 | 0.97 | (0.56) |
| 7/31/2015 | $13.82 | 0.59 | 0.02 | 0.61 | (0.59) |
| 7/31/2014 | $13.38 | 0.60 | 0.43 | 1.03 | (0.59) |
| 7/31/2013 | $14.27 | 0.57 | (0.89) | (0.32) | (0.57) |
| Class B |
| 7/31/2017 | $14.24 | 0.45 | (0.66) | (0.21) | (0.44) |
| 7/31/2016 | $13.83 | 0.46 | 0.41 | 0.87 | (0.46) |
| 7/31/2015 | $13.81 | 0.48 | 0.02 | 0.50 | (0.48) |
| 7/31/2014 | $13.37 | 0.50 | 0.43 | 0.93 | (0.49) |
| 7/31/2013 | $14.26 | 0.46 | (0.89) | (0.43) | (0.46) |
| Class C |
| 7/31/2017 | $14.24 | 0.46 | (0.65) | (0.19) | (0.45) |
| 7/31/2016 | $13.84 | 0.47 | 0.40 | 0.87 | (0.47) |
| 7/31/2015 | $13.82 | 0.51 | 0.01 | 0.52 | (0.50) |
| 7/31/2014 | $13.37 | 0.54 | 0.44 | 0.98 | (0.53) |
| 7/31/2013 | $14.26 | 0.49 | (0.89) | (0.40) | (0.49) |
| Class R4 |
| 7/31/2017 | $14.25 | 0.57 | (0.65) | (0.08) | (0.57) |
| 7/31/2016 | $13.84 | 0.59 | 0.41 | 1.00 | (0.59) |
| 7/31/2015 | $13.82 | 0.62 | 0.01 | 0.63 | (0.61) |
| 7/31/2014 | $13.37 | 0.63 | 0.44 | 1.07 | (0.62) |
| 7/31/2013 (h) | $14.23 | 0.22 | (0.86) | (0.64) | (0.22) |
| Class R5 |
| 7/31/2017 | $14.25 | 0.58 | (0.66) | (0.08) | (0.57) |
| 7/31/2016 | $13.84 | 0.60 | 0.41 | 1.01 | (0.60) |
| 7/31/2015 | $13.82 | 0.63 | 0.01 | 0.64 | (0.62) |
| 7/31/2014 (j) | $13.27 | 0.41 | 0.54 | 0.95 | (0.40) |
| Class Y |
| 7/31/2017 (k) | $13.45 | 0.23 | 0.19 (l) | 0.42 | (0.23) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 38 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Total
distributions to
shareholders | Proceeds from
regulatory
settlements | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.54) | — | $13.60 | (0.70%) | 0.72% (c),(d) | 0.72% (c),(d),(e) | 3.98% | 13% | $2,882,268 |
| (0.56) | — | $14.25 | 7.19% | 0.76% (c) | 0.76% (c),(e) | 4.04% | 14% | $3,344,274 |
| (0.59) | 0.00 (f) | $13.84 | 4.41% (g) | 0.77% (c) | 0.77% (c),(e) | 4.21% | 13% | $3,238,956 |
| (0.59) | — | $13.82 | 7.89% | 0.77% (c) | 0.77% (c),(e) | 4.44% | 10% | $3,314,256 |
| (0.57) | — | $13.38 | (2.42%) | 0.76% (c) | 0.76% (c),(e) | 4.02% | 8% | $3,546,639 |
| |
| (0.44) | — | $13.59 | (1.44%) | 1.47% (c),(d) | 1.47% (c),(d),(e) | 3.23% | 13% | $10 |
| (0.46) | — | $14.24 | 6.39% | 1.51% (c) | 1.51% (c),(e) | 3.30% | 14% | $1,049 |
| (0.48) | 0.00 (f) | $13.83 | 3.63% (g) | 1.52% (c) | 1.52% (c),(e) | 3.46% | 13% | $2,041 |
| (0.49) | — | $13.81 | 7.09% | 1.52% (c) | 1.52% (c),(e) | 3.69% | 10% | $3,442 |
| (0.46) | — | $13.37 | (3.15%) | 1.51% (c) | 1.51% (c),(e) | 3.26% | 8% | $5,836 |
| |
| (0.45) | — | $13.60 | (1.27%) | 1.47% (c),(d) | 1.37% (c),(d),(e) | 3.33% | 13% | $105,081 |
| (0.47) | — | $14.24 | 6.42% | 1.51% (c) | 1.41% (c),(e) | 3.38% | 14% | $120,031 |
| (0.50) | 0.00 (f) | $13.84 | 3.80% (g) | 1.52% (c) | 1.36% (c),(e) | 3.63% | 13% | $99,273 |
| (0.53) | — | $13.82 | 7.48% | 1.52% (c) | 1.22% (c),(e) | 3.99% | 10% | $92,689 |
| (0.49) | — | $13.37 | (2.97%) | 1.51% (c) | 1.31% (c),(e) | 3.47% | 8% | $105,414 |
| |
| (0.57) | — | $13.60 | (0.50%) | 0.52% (c),(d) | 0.52% (c),(d),(e) | 4.20% | 13% | $6,997 |
| (0.59) | — | $14.25 | 7.40% | 0.56% (c) | 0.56% (c),(e) | 4.23% | 14% | $5,303 |
| (0.61) | 0.00 (f) | $13.84 | 4.62% (g) | 0.57% (c) | 0.57% (c),(e) | 4.42% | 13% | $1,634 |
| (0.62) | — | $13.82 | 8.18% | 0.57% (c) | 0.57% (c),(e) | 4.63% | 10% | $1,340 |
| (0.22) | — | $13.37 | (4.56%) | 0.56% (c),(i) | 0.56% (c),(e),(i) | 4.39% (i) | 8% | $104 |
| |
| (0.57) | — | $13.60 | (0.47%) | 0.51% (c),(d) | 0.51% (c),(d) | 4.21% | 13% | $1,990 |
| (0.60) | — | $14.25 | 7.47% | 0.50% (c) | 0.50% (c) | 4.30% | 14% | $893 |
| (0.62) | 0.00 (f) | $13.84 | 4.69% (g) | 0.50% (c) | 0.50% (c) | 4.51% | 13% | $622 |
| (0.40) | — | $13.82 | 7.24% | 0.51% (c),(i) | 0.51% (c),(i) | 4.69% (i) | 10% | $312 |
| |
| (0.23) | — | $13.64 | 3.17% | 0.49% (i),(m) | 0.49% (i),(m) | 4.19% (i) | 13% | $71 |
Columbia Tax-Exempt Fund | Annual Report 2017
| 39 |
Financial Highlights (continued)
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class Z |
| 7/31/2017 | $14.25 | 0.57 | (0.65) | (0.08) | (0.57) |
| 7/31/2016 | $13.84 | 0.59 | 0.41 | 1.00 | (0.59) |
| 7/31/2015 | $13.82 | 0.62 | 0.01 | 0.63 | (0.61) |
| 7/31/2014 | $13.38 | 0.63 | 0.43 | 1.06 | (0.62) |
| 7/31/2013 | $14.27 | 0.60 | (0.90) | (0.30) | (0.59) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Ratios include interest and fee expense related to the participation in certain inverse floater programs which is less than 0.01%. 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. |
| (d) | Expenses have been reduced due to a reimbursement of expenses overbilled by a third party. If the reimbursement had been excluded, the expense ratios would have been higher by the percentages shown for each class in the table below. All fee waivers and expense reimbursements by the Investment Manager and its affiliates were applied before giving effect to this third party reimbursement. |
| | Class A | Class B | Class C | Class R4 | Class R5 | Class Z |
| 07/31/2017 | 0.01 % | 0.01 % | 0.01 % | 0.01 % | 0.01 % | 0.01 % |
| (e) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (f) | Rounds to zero. |
| (g) | The Fund received proceeds from regulatory settlements. Had the Fund not received these proceeds, the total return would have been lower by 0.03%. |
| (h) | Class R4 shares are based on operations from March 19, 2013 (commencement of operations) through the stated period end. |
| (i) | Annualized. |
| (j) | Class R5 shares are based on operations from December 11, 2013 (commencement of operations) through the stated period end. |
| (k) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (l) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (m) | Ratios include interest and fee expense related to the participation in certain inverse floater programs. If interest and fee expense related to the participation in certain inverse floater programs had been excluded, expenses would have been lower by 0.01%. 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 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 40 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Total
distributions to
shareholders | Proceeds from
regulatory
settlements | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.57) | — | $13.60 | (0.50%) | 0.52% (c),(d) | 0.52% (c),(d),(e) | 4.18% | 13% | $807,282 |
| (0.59) | — | $14.25 | 7.40% | 0.56% (c) | 0.56% (c),(e) | 4.24% | 14% | $837,239 |
| (0.61) | 0.00 (f) | $13.84 | 4.62% (g) | 0.57% (c) | 0.57% (c),(e) | 4.41% | 13% | $752,369 |
| (0.62) | — | $13.82 | 8.10% | 0.57% (c) | 0.57% (c),(e) | 4.63% | 10% | $569,243 |
| (0.59) | — | $13.38 | (2.22%) | 0.56% (c) | 0.56% (c),(e) | 4.21% | 8% | $652,839 |
Columbia Tax-Exempt Fund | Annual Report 2017
| 41 |
Notes to Financial Statements
July 31, 2017
Note 1. Organization
Columbia Tax-Exempt Fund (the Fund), a series of Columbia Funds Series Trust I (the Trust), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased without an initial sales charge are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase.
When available, Class B shares were subject to a maximum CDSC of 5.00% based upon the holding period after purchase. However, as of July 31, 2017 the Fund’s Class B investors, having held their shares for the requisite time period, were no longer subject to a CDSC upon redemption of their shares. Effective July 17, 2017, Class B shares were automatically converted to Class A shares, and the Fund no longer accepts investments by new or existing investors in Class B shares. On August 4, 2017, the capital owned by Columbia Management Investment Advisers, LLC in Class B shares was redeemed.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class R5 shares are not subject to sales charges and are generally available only to investors purchasing through authorized investment professionals and omnibus retirement plans as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund received a reimbursement for expenses overbilled by a third party. Such reimbursement is included as an offset to other expenses on the Statement of Operations. All fee waivers and expense reimbursements by Columbia Management Investment Advisers, LLC and its affiliates were applied before giving effect to the third party reimbursement.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
| 42 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset value.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities, currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract; therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers (including the Fund), potentially resulting in losses to the Fund.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund
Columbia Tax-Exempt Fund | Annual Report 2017
| 43 |
Notes to Financial Statements (continued)
July 31, 2017
and a counterparty that governs over-the-counter derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights if the counterparty fails to meet certain terms of the ISDA Master Agreement. In addition to considering counterparty credit risk, the Fund would consider terminating the derivatives contracts based on whether termination would result in a net liability owed from the counterparty.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve exposure of the Fund versus the benchmark. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
| 44 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Effects of derivative transactions in the financial statements
The following tables are intended to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table indicates the effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended July 31, 2017:
| Amount of realized gain (loss) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | (3,480,539) |
The following table is a summary of the average outstanding volume by derivative instrument for the year ended July 31, 2017:
| Derivative instrument | Average notional
amounts ($)* |
| Futures contracts — short | 20,887,109 |
| * | Based on the ending quarterly outstanding amounts for the year ended July 31, 2017. |
Delayed delivery securities
The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” or "forward commitment" basis. This may increase risk to the Fund since the other party to the transaction may fail to deliver, which could cause the Fund to subsequently invest at less advantageous prices. The Fund designates cash or liquid securities in an amount equal to the delayed delivery commitment.
Inverse floater program transactions
The Fund may enter into transactions in which it transfers to trusts fixed rate municipal bonds in exchange for cash and residual interests in the trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The trusts fund the purchases of the municipal bonds by issuing short-term floating rate notes to third parties. The residual interests held by the Fund (inverse floating rate securities) include the right of the Fund (i) to cause the holders of the short-term floating rate notes to tender their notes at par, and (ii) to transfer the municipal bonds from the trusts to the Fund, thereby collapsing the trusts. The municipal bonds transferred to the trusts, if any, remain in the Fund’s investments in securities and the related short-term floating rate notes are reflected as Fund liabilities under the caption “Short-term floating rate notes outstanding” in the Statement of Assets and Liabilities. The liability approximates the fair market value of the short-term notes. The notes issued by the trusts have interest rates that are multi-modal, which means that they can be reset to a new or different mode at the reset date (e.g., mode can be daily, weekly, monthly, or a fixed specific date) at the discretion of the holder of the inverse floating rate security. The floating rate note holders have the option to tender their notes to the trusts for redemption at par at each reset date. The income received by the inverse floating rate security holder varies inversely with the short-term rate paid to the floating rate note holders, and in most circumstances the inverse floating rate security holder bears substantially all of the underlying bond’s downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond’s value. The inverse floating rate security holder will be subject to greater interest rate risk than if they were to hold the underlying bond because the interest rate is dependent on both the fixed coupon rate of the underlying bond and the short-term interest rate paid on the floating rate notes. The inverse floating rate security holder is also subject to the credit risk, liquidity risk and market risk associated with the underlying bond. The bonds held by the trusts serve as collateral for the short-term floating rate notes outstanding. Contractual maturities and interest rates of the municipal bonds held in trusts, if any, at July 31, 2017 are presented in the Portfolio of Investments. Interest and fee expense related to the short-term floating rate notes, which is accrued daily, is presented in the Statement of Operations
Columbia Tax-Exempt Fund | Annual Report 2017
| 45 |
Notes to Financial Statements (continued)
July 31, 2017
and corresponds to an equal increase in interest income from the fixed rate municipal bonds held in trust. For the year ended July 31, 2017, the average value of short-term floating rate notes outstanding was $10,153,846 and the average interest rate and fees related to these short-term floating rate notes were 0.72% and 0.52%, respectively.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains) and capital gains, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Accounting Standards Update 2017-08 Premium Amortization on Purchased Callable Debt Securities
| 46 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017-08 Premium Amortization on Purchased Callable Debt Securities. ASU No. 2017-08 updates the accounting standards to shorten the amortization period for certain purchased callable debt securities, held at a premium, to be amortized to the earliest call date. The update applies to securities with explicit, noncontingent call features that are callable at fixed prices and on preset dates. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. At this time, management is evaluating the implication of this guidance and the impact it will have on the financial statement amounts and footnote disclosures, if any.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X are effective for periods on or after August 1, 2017. Management has reviewed the requirements and believes the adoption of the amendments to Regulation S-X will not have a material impact on the Fund’s financial statements and related disclosures.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to a percentage of the Fund’s daily net assets that declines from 0.48% to 0.29% as the Fund’s net assets increase. The effective management services fee rate for the year ended July 31, 2017 was 0.43% of the Fund’s average daily net assets.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. These members of the Board of Trustees may participate in a Deferred Compensation Plan (the Plan) which may be terminated at any time. Obligations of the Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per
Columbia Tax-Exempt Fund | Annual Report 2017
| 47 |
Notes to Financial Statements (continued)
July 31, 2017
account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Effective August 1, 2017, total transfer agency fees for Class R5 and Class Y shares are subject to an annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. From January 1, 2017 to July 31, 2017, these limitations were 0.075% for Class R5 shares and 0.025% for Class Y shares; and prior to January 1, 2017, the limitation was 0.05% for Class R5 shares.
For the year ended July 31, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.08 |
| Class B | 0.08 |
| Class C | 0.08 |
| Class R4 | 0.08 |
| Class R5 | 0.062 |
| Class Y | 0.025 (a) |
| Class Z | 0.08 |
The Fund and certain other associated investment companies have severally, but not jointly, guaranteed the performance and observance of all the terms and conditions of a lease entered into by Seligman Data Corp. (SDC), the former transfer agent, including the payment of rent by SDC (the Guaranty). SDC was the legacy Seligman funds’ former transfer agent.
The lease and the Guaranty expire in January 2019. At July 31, 2017, the Fund’s total potential future obligation over the life of the Guaranty is $181,160. The liability remaining at July 31, 2017 for non-recurring charges associated with the lease amounted to $99,296 and is recorded as a part of the payable for other expenses in the Statement of Assets and Liabilities.
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended July 31, 2017, these minimum account balance fees reduced total expenses of the Fund by $4,040.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly service fee to the Distributor at the maximum annual rate of 0.20% of the average daily net assets attributable to Class A, Class B and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly distribution fee to the Distributor at the maximum annual rates of 0.75% of the average daily net assets attributable to Class B and Class C shares of the Fund.
The Distributor has voluntarily agreed to waive a portion of the distribution fee for Class C shares so that the distribution fee does not exceed 0.65% annually of the average daily net assets attributable to Class C shares. This arrangement may be modified or terminated by the Distributor at any time.
| 48 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended July 31, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 952,988 |
| Class C | 11,576 |
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rate(s) as a percentage of the class’ average daily net assets:
| | December 1, 2016
through
November 30, 2017 | Prior to
December 1, 2016 |
| Class A | 0.83% | 0.81% |
| Class B | 1.58 | 1.56 |
| Class C | 1.58 | 1.56 |
| Class R4 | 0.63 | 0.61 |
| Class R5 | 0.63 | 0.58 |
| Classs Y | 0.58* | — |
| Class Z | 0.63 | 0.61 |
*Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through November 30, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods. Class C distribution fees waived by the Distributor, as discussed above, are in addition to the waiver/reimbursement commitment under the agreement.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At July 31, 2017, these differences are primarily due to differing treatment for tax straddles, capital loss carryforwards, trustees’ deferred compensation, distributions and principal and/or interest from fixed income securities. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
Columbia Tax-Exempt Fund | Annual Report 2017
| 49 |
Notes to Financial Statements (continued)
July 31, 2017
In the Statement of Assets and Liabilities the following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| 521,816 | (521,816) | — |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by these reclassifications.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2017 | Year Ended July 31, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 2,531,011 | 156,356,797 | — | 158,887,808 | 1,239,737 | 168,047,203 | — | 169,286,940 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 31,556,791 | — | (23,446,035) | 210,622,085 |
At July 31, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 3,576,642,904 | 263,434,180 | (52,812,095) | 210,622,085 |
The following capital loss carryforwards, determined at July 31, 2017, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended July 31, 2017, capital loss carryforwards utilized, expired unused and permanently lost, if any, were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | 7,286,973 | 8,117,805 | 8,041,257 | 23,446,035 | — | — | — |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $499,873,674 and $825,810,417, respectively, for the year ended July 31, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
| 50 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Note 6. Regulatory settlements
During the year ended July 31, 2015, the Fund recorded a receivable of $1,138,577 as a result of a regulatory settlement proceeding brought by the Securities and Exchange Commission against a third party relating to market timing and/or late trading of mutual funds. This amount represented the Fund’s portion of the proceeds from the settlement (neither the Fund nor the Investment Manager were a party to the proceeding) and is disclosed as a receivable on the Statement of Assets and Liabilities.
Note 7. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
The Fund had no borrowings during the year ended July 31, 2017.
Note 8. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Shareholder concentration risk
At July 31, 2017, one unaffiliated shareholder of record owned 10.8% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated shareholders of record owned 40.1% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a
Columbia Tax-Exempt Fund | Annual Report 2017
| 51 |
Notes to Financial Statements (continued)
July 31, 2017
large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Note 9. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 1 and Note 3 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Note 10. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is 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 Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, 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.
| 52 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of Columbia Tax-Exempt Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia Tax-Exempt Fund (the “Fund”, a series of Columbia Funds Series Trust I) as of July 31, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of July 31, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
September 21, 2017
Columbia Tax-Exempt Fund | Annual Report 2017
| 53 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 98.41% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
| 54 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. The year set forth beneath Length of Service in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve terms of indefinite duration.
Independent trustees
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Janet Langford Carrig
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1957 | Trustee
1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company) since September 2007 | 57 | None |
Douglas A. Hacker
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee and Chairman of the Board
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 | 57 | Spartan Nash Company, (food distributor); Nash Finch Company (food distributor) from 2005 to 2013; Aircastle Limited (aircraft leasing); SeaCube Container Leasing Ltd. (container leasing) from 2010 to 2013; and Travelport Worldwide Limited (travel information technology) |
Nancy T. Lukitsh
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1956 | Trustee
2011 | Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser) from 1997 to 2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools) from 2007 to 2010; Director, Wellington Trust Company, NA and other Wellington affiliates from 1997 to 2010 | 57 | None |
David M. Moffett
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee
2011 | Retired. Consultant to Bridgewater and Associates | 57 | Director, CSX Corporation; Genworth Financial, Inc. (financial and insurance products and services); PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
Columbia Tax-Exempt Fund | Annual Report 2017
| 55 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Charles R. Nelson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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 | 57 | None |
John J. Neuhauser
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee
1984 | President, Saint Michael’s College since August 2007; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; 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 | 57 | Liberty All-Star Equity Fund and Liberty All- Star Growth Fund (closed-end funds) |
Patrick J. Simpson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee
2000 | Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP from 1988 to 2014 | 57 | None |
Anne-Lee Verville
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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) | 57 | Enesco Group, Inc. (producer of giftware and home and garden decor products) from 2001 to 2006 |
| 56 | Columbia Tax-Exempt Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds complex overseen | Other directorships held by Trustee during the past five years |
J. Kevin Connaughton
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1964 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since March 2016; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC from May 2010 to February 2015; President, Columbia Funds from 2009 to 2015; and senior officer of Columbia Funds and affiliated funds from 2003 to 2015 | 57 | Board of Governors, Gateway Healthcare since January 2016; Trustee, New Century Portfolios since March 2015; and Director, The Autism Project since March 2015 |
Natalie A. Trunow
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1967 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Partners (investment consulting services to institutions) since January 2016; Director of Investments, Casey Family Programs from April 2016 to September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments from August 2008 to January 2016; Section Head and Portfolio Manager, General Motors Asset Management from June 1997 to August 2008 | 57 | Healthcare Services for Children with Special Needs |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Shareholders of the Funds are expected to be asked to elect each of Mr. Connaughton and Ms. Trunow as a Trustee at a future shareholder meeting. |
Interested trustee affiliated with Investment Manager*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex overseen | Other directorships held by Trustee during the past five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
1960 | Trustee
2012 | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010-September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006-August 2012 | 179 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006 - January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available, without charge, upon request by calling 800.345.6611 or contacting your financial intermediary.
Columbia Tax-Exempt Fund | Annual Report 2017
| 57 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
| 58 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement
On June 14, 2017, the Board of Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) with respect to Columbia Tax-Exempt Fund (the Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, both among themselves and with the management team of the Investment Manager, materials provided by the Investment Manager and others before determining to approve the continuation of the Management Agreement.
In connection with their deliberations regarding the continuation of the Management Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Management Agreement, and discussed these materials with representatives of the Investment Manager at Committee meetings held on March 27, 2017, April 26, 2017 and June 13, 2017 and at Board meetings held on March 28, 2017 and June 14, 2017. In addition, the Board considers matters bearing on the Management Agreement at most of its other meetings throughout the year and meets regularly with senior management of the Trust and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and other investment personnel at various times throughout the year. The Committee and the Board also consulted with its independent fee consultant, Fund counsel and the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board in their deliberations. On June 13, 2017, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 14, 2017, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement for the Fund.
The Committee and the Board considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the Management Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement for the Fund included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through November 30, 2018 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Management Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager under the Management Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding the management fees of similarly-managed portfolios of other clients of the Investment Manager, including institutional separate accounts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
Columbia Tax-Exempt Fund | Annual Report 2017
| 59 |
Board Consideration and Approval of Management
Agreement (continued)
| • | Information regarding the capabilities of the Investment Manager with respect to compliance monitoring services, including an assessment of the Investment Manager’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of services provided under the Management Agreement
The Committee and the Board considered the nature, extent and quality of services provided to the Fund by the Investment Manager and its affiliates under the Management Agreement and under separate agreements for the provision of transfer agency and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager and its affiliates. The Committee and the Board considered, among other things, the Investment Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management, reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s investment research capabilities and trade execution services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.
The Committee and the Board also considered the professional experience and qualifications of the senior personnel of the Investment Manager, which included consideration of the Investment Manager’s experience with similarly-structured funds. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the activities of the Fund’s other service providers. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
Investment performance
The Committee and the Board reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks and information that compared the performance of the Fund to the performance of a group of comparable mutual funds as determined by the independent third-party data provider, and data provided by the independent fee consultant. The Committee and the Board also reviewed a description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Committee and the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the Management Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted that, through December 31, 2016, the Fund’s performance was in the ninety-first, forty-sixth and thirty-sixth percentile (where the best performance would be in the first percentile) of its category selected by the independent third-party data provider for the purposes of performance comparisons for the one-, three- and five-year periods, respectively.
The Committee and the Board also considered the Investment Manager’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the Fund and the Investment Manager was sufficient, in light of other considerations, to warrant the continuation of the Management Agreement.
| 60 | Columbia Tax-Exempt Fund | Annual Report 2017 |
Board Consideration and Approval of Management
Agreement (continued)
Investment management fee rates and other expenses
The Committee and the Board considered the management fees charged to the Fund under the Management Agreement as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent third-party data provider and the independent fee consultant. The Committee and the Board noted that, as of December 31, 2016, the Fund’s actual management fee and net total expense ratio are ranked in the third and second quintiles, respectively, (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for purposes of expense comparison. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also received and considered information about the management fees charged by the Investment Manager to institutional separate accounts. In considering the fees charged to those accounts, the Committee and the Board took into account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, warranted the continuation of the Management Agreement.
Costs of services provided and profitability
The Committee and the Board also took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund.
The Committee and the Board also considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of profitability levels realized in 2016 to profitability levels realized in 2015. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard, the Committee and the Board also considered data provided by the independent fee consultant.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement.
Economies of scale
The Committee and the Board considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate on assets above specified threshold levels.
Columbia Tax-Exempt Fund | Annual Report 2017
| 61 |
Board Consideration and Approval of Management
Agreement (continued)
In considering these matters, the Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as discussed above. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the continuation of the Management Agreement.
Other benefits to the Investment Manager
The Committee and the Board received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the Board also considered the benefits of research made available to the Investment Manager by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed information about the Investment Manager’s practices with respect to allocating portfolio transactions for brokerage and research services. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower without these benefits.
Conclusion
The Committee and the Board reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement.
| 62 | Columbia Tax-Exempt Fund | Annual Report 2017 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
Columbia Tax-Exempt Fund | Annual Report 2017
| 63 |
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Columbia Tax-Exempt Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
Annual Report
July 31, 2017
Columbia U.S. Social Bond Fund
Not FDIC Insured • No bank guarantee • May lose value
Dear Shareholders,
The current outlook for financial markets is clouded by two primary concerns: the high valuation of equities and the direction of interest rates. Following the U.S. presidential election, U.S. equities rallied based on the assumption that the new administration’s policies would stimulate growth quickly. Unfortunately it’s unclear whether those measures will get passed, much less passed quickly. In fixed income, uncertainty stems from the possibility that interest rates won’t rise as rapidly as expected if the administration’s proposed growth policies are not implemented.
Given this uncertainty, investors value a consistent approach more than ever. Investors want strong, repeatable risk-adjusted returns. Consistency — not surprises. As a leading global asset manager, we believe our consistent, collaborative investment approach enables us to deliver the dependable experience your portfolio demands. So, how do we strive to deliver a consistent investment experience?
Better insights
Your portfolio benefits from the investment insights uncovered by our talented investment teams around the world.
Better decisions
Our collaborative, interactive environment enables our investment teams to construct portfolios that take advantage of the best investment ideas.
Better outcomes
We aim to deliver a consistent experience, which means fewer surprises, dependable insights, and products designed to do the thing you want.
Whether you’re trying to save money to help your children go to college or for your own retirement, it’s the consistency of the return that is most essential. People who chase higher returns are usually also the first to sell when that investment goes through a bad patch. We try to combat this behavioral tendency by offering strategies that aim for a more consistent return. Our goal is for investors to panic less during periods of volatility, which can have a significant effect on their long-term results.
Nothing is more important to us than making sure those who have entrusted us to protect and grow their assets can do what matters most to them: build a nest egg, leave a legacy, and live confidently — now and throughout retirement. It’s why our talented professionals around the world work together to uncover uncommon opportunities and why our process encourages challenge and debate around our most compelling ideas to ensure better informed investment decisions, which hopefully lead to better outcomes for you.
Your success is our priority. Talk to your financial advisor about how working with Columbia Threadneedle Investments may help you position your portfolio for consistent, sustainable outcomes, no matter the market conditions.
Sincerely,
Christopher O. Petersen
President, Columbia Funds
Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a free prospectus and summary prospectus, which contains this and other important information about a fund, visit investor.columbiathreadneedleus.com. The prospectus should be read carefully before investing.
Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
© 2017 Columbia Management Investment Advisers, LLC. All rights reserved.
Columbia U.S. Social Bond Fund | Annual Report 2017
Columbia U.S. Social Bond Fund | Annual Report 2017
Investment objective
Columbia U.S. Social Bond Fund (the Fund) seeks total return, consisting of current income and capital appreciation, through investments that seek to support and fund socially beneficial activities and developments, primarily in the U.S.
Portfolio management
James Dearborn
Co-manager
Managed Fund since 2015
Chad Farrington, CFA
Co-manager
Managed Fund since 2015
Tom Murphy, CFA
Co-manager
Managed Fund since 2015
| Average annual total returns (%) (for the period ended July 31, 2017) |
| | | Inception | 1 Year | Life |
| Class A | Excluding sales charges | 03/26/15 | -0.31 | 2.46 |
| | Including sales charges | | -3.28 | 1.13 |
| Class C | Excluding sales charges | 03/26/15 | -1.16 | 1.69 |
| | Including sales charges | | -2.13 | 1.69 |
| Class R4 | 03/26/15 | -0.06 | 2.72 |
| Class R5 | 03/26/15 | -0.05 | 2.69 |
| Class Y* | 03/01/17 | -0.21 | 2.50 |
| Class Z | 03/26/15 | -0.06 | 2.71 |
| Bloomberg Barclays Municipal Bond Index | | 0.26 | 2.94 |
Returns for Class A are shown with and without the maximum initial sales charge of 3.00%. Returns for Class C are shown with and without the applicable contingent deferred sales charge (CDSC) of 1.00% in the first year. The Fund’s other classes are not subject to sales charges and have limited eligibility. Please see the Fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results reflect the effect of any fee waivers or reimbursements of Fund expenses by Columbia Management Investment Advisers, LLC and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting investor.columbiathreadneedleus.com or calling 800.345.6611.
| * | The returns shown for periods prior to the share class inception date (including returns for the Life of the Fund, if shown, which are since Fund inception) include the returns of the Fund’s oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Since the Fund launched more than one share class at its inception, Class A shares were used. Please visit investor.columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information. |
The Bloomberg Barclays Municipal Bond Index is an unmanaged index considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
| 2 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (March 26, 2015 — July 31, 2017)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia U.S. Social Bond Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares.
| Portfolio breakdown (%) (at July 31, 2017) |
| Corporate Bonds & Notes | 9.6 |
| Floating Rate Notes | 4.9 |
| Municipal Bonds | 85.5 |
| Total | 100.0 |
Percentages indicated are based upon total investments. The Fund’s portfolio composition is subject to change.
| Quality breakdown (%) (at July 31, 2017) |
| AAA rating | 5.4 |
| AA rating | 40.2 |
| A rating | 24.7 |
| BBB rating | 23.5 |
| BB rating | 0.7 |
| Not rated | 5.5 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments (excluding Money Market Funds).
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 3 |
Manager Discussion of Fund Performance
The Fund’s Class A shares returned -0.31% excluding sales charges during the 12-month period that ended July 31, 2017. Class Z shares of the Fund returned -0.06% for the same time period. The Fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, returned 0.26% for the 12 months. The Fund’s performance versus its benchmark was aided by an overweight to the housing sector and exposure to issues rated BBB and below. The Fund’s longer duration versus the benchmark and correspondingly greater interest rate sensitivity constrained returns during a period when interest rates rose.
Market overview
Municipal bond prices in aggregate declined for the 12-month period ended July 31, 2017, as municipal yields bounced off the historical lows achieved in July 2016 to finish more than 50 basis points higher across the yield curve. An increase in municipal supply in late 2016 coupled with growing confidence in stronger economic growth following the U.S. elections caused bond yields to rise. Following a strong sell-off after the elections, high demand for municipal bonds and somewhat more limited supply generated positive performance that led to outperformance versus U.S. Treasuries. With interest rates at historically low levels, strong demand for yield led to tighter credit spreads. In addition, the yield curve steepened modestly as investors moved into shorter maturities to protect against the potential for rising interest rates, limiting yield increases on the front end of the curve.
Contributors and detractors
Due to the social and environmental impact focus of the Fund, the Fund typically held overweight positions in sectors such as healthcare, housing, education and water/sewer. An overweight to the housing sector contributed to relative performance for the 12 month period ended July 31, 2017, as the relatively defensive sector performed well in a period of rising interest rates. The Fund’s exposure to issues rated BBB and below helped performance versus the benchmark, as spreads tightened and lower quality segments generally outperformed. In addition, the Fund was overweight bonds in the 5-10-year maturity range that held up relatively well. In terms of individual holdings, a position in a Chicago Water bond added to performance, as sentiment improved with respect to Chicago-related debt following passage of the Illinois budget. Finally, the Fund maintained a somewhat elevated cash position, which helped performance as rates increased and prices of outstanding bonds declined.
The leading detractor from relative performance was the Fund’s longer duration versus the benchmark and correspondingly greater interest rate sensitivity, which constrained returns during a period when interest rates rose. The default of a Louisiana-based wood pellet manufacturing facility also detracted from performance. Wood pellets are considered to be a “carbon-neutral” source of energy and are deployed by electric utilities seeking to comply with renewable energy mandates.
The Fund maintained a short position in U.S. Treasury futures to offset duration from new purchases with longer call dates that have created a long structural bias versus the benchmark due to the relatively recent launch of the Fund. The short positioning was utilized solely as a hedge and not as a speculative call on future interest rate moves. The hedge positively contributed to performance as U.S. Treasury rates moved higher.
Fund positioning
At the close of the reporting period, we continued to be positive regarding the municipal market overall due to stable credit conditions and limited signs of strong growth or inflation that would drive interest rates materially higher. State and local government finances have generally remained stable, with most municipalities having recovered from the financial crisis and making gradual progress toward rebuilding reserves. We believe that there remain pockets of budgetary stress due either to concentrated economic focus, such as oil, or growing unfunded pension liabilities. However, we continue to believe that stressed situations remain relatively rare and associated with somewhat unique circumstances. We believe, by and large, state and local governments have the capacity to deal with their budgetary challenges, and we view default rates as likely to remain extremely low.
High municipal market valuations and very low rates supported the Fund’s neutral stance with respect to duration and corresponding interest rate sensitivity. There was a lack of lower quality supply that helped lead to tight credit spreads. In addition, there was concern that we were in the late stages of economic recovery. As a result, the Fund was focusing new purchases on somewhat higher quality bonds at the close of the reporting period.
| 4 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Manager Discussion of Fund Performance (continued)
Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Social impact investing may increase risk due to the limitations and constraints involved in investment selection and, as a result, the Fund may underperform other funds that do not consider the social impact. Fixed-income securities present issuer default risk. A rise in interest rates may result in a price decline of fixed-income instruments held by the Fund, negatively impacting its performance and NAV. Falling rates may result in the Fund investing in lower yielding debt instruments, lowering the funds income and yield. These risks may be heightened for longer maturity and duration securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Prepayment and extension risk exists because the timing of payments on a loan, bond or other investment may accelerate when interest rates fall or decelerate when interest rates rise which may reduce investment opportunities and potential returns. The Fund invests substantially in municipal securities and will be affected by tax, legislative, regulatory, demographic or political changes, as well as changes impacting a states financial, economic or other conditions. A relatively small number of tax-exempt issuers may necessitate the Fund investing more heavily in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The Fund may invest significantly in issuers within a particular sector which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. Market or other (e.g., interest rate) environments may adversely affect the liquidity of fund investments, negatively impacting their price. Generally, the less liquid the market at the time the Fund sells a holding, the greater the risk of loss or decline of value to the Fund. As a non-diversified fund, fewer investments could have a greater effect on performance. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 5 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing costs, which generally include management fees, distribution and/or service fees, and other fund expenses. The following information is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to help you compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your Fund’s expenses
To illustrate these ongoing costs, we have provided examples and calculated the expenses paid by investors in each share class of the Fund during the period. The actual and hypothetical information in the table is based on an initial investment of $1,000 at the beginning of the period indicated and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the Fund’s actual operating expenses and total return for the period. You may use the Actual information, together with the amount invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2017 — July 31, 2017 |
| | Account value at the
beginning of the
period ($) | Account value at the
end of the
period ($) | Expenses paid during
the period ($) | Fund’s annualized
expense ratio (%) |
| | Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual |
| Class A | 1,000.00 | 1,000.00 | 1,040.50 | 1,021.32 | 3.54 | 3.51 | 0.70 |
| Class C | 1,000.00 | 1,000.00 | 1,035.60 | 1,017.60 | 7.32 | 7.25 | 1.45 |
| Class R4 | 1,000.00 | 1,000.00 | 1,041.80 | 1,022.56 | 2.28 | 2.26 | 0.45 |
| Class R5 | 1,000.00 | 1,000.00 | 1,040.80 | 1,022.61 | 2.23 | 2.21 | 0.44 |
| Class Y | 1,000.00 | 1,000.00 | 1,037.60 (a) | 1,022.61 | 1.85 (a) | 2.21 | 0.44 (a) |
| Class Z | 1,000.00 | 1,000.00 | 1,041.80 | 1,022.56 | 2.28 | 2.26 | 0.45 |
(a) Based on operations from March 1, 2017 (commencement of operations) through the stated period end.
Expenses paid during the period are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period and then multiplied by the number of days in the Fund’s most recent fiscal half year and divided by 365.
Expenses do not include fees and expenses incurred indirectly by the Fund from its investment in underlying funds, including affiliated and non-affiliated pooled investment vehicles, such as mutual funds and exchange-traded funds.
Had Columbia Management Investment Advisers, LLC and/or certain of its affiliates not waived/reimbursed certain fees and expenses, account value at the end of the period would have been reduced.
| 6 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Portfolio of Investments
July 31, 2017
(Percentages represent value of investments compared to net assets)
| Corporate Bonds & Notes 9.1% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Mexico 0.8% |
| Grupo Bimbo SAB de CV(a) |
| 01/25/2022 | 4.500% | | 300,000 | 321,449 |
| United States 8.3% |
| Apple, Inc. |
| Green Bond |
| 02/23/2023 | 2.850% | | 250,000 | 256,189 |
| AT&T, Inc. |
| 06/30/2022 | 3.000% | | 250,000 | 253,014 |
| ConAgra Foods, Inc. |
| 01/25/2023 | 3.200% | | 196,000 | 199,450 |
| CSX Corp. |
| 06/01/2021 | 4.250% | | 250,000 | 266,931 |
| CVS Health Corp. |
| 06/01/2021 | 2.125% | | 250,000 | 248,560 |
| Five Corners Funding Trust(a) |
| 11/15/2023 | 4.419% | | 250,000 | 271,748 |
| Kellogg Co. |
| 12/01/2023 | 2.650% | | 300,000 | 299,343 |
| Local Initiatives Support Corp. |
| 03/01/2037 | 4.649% | | 400,000 | 404,351 |
| Scripps Networks Interactive, Inc. |
| 06/15/2020 | 2.800% | | 500,000 | 505,059 |
| Sysco Corp. |
| 07/15/2021 | 2.500% | | 250,000 | 252,944 |
| Time Warner, Inc. |
| 03/15/2020 | 4.875% | | 250,000 | 268,261 |
| Verizon Communications, Inc. |
| 11/01/2022 | 2.450% | | 250,000 | 245,833 |
| Total | 3,471,683 |
Total Corporate Bonds & Notes
(Cost $3,731,994) | 3,793,132 |
|
| Floating Rate Notes 4.7% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Massachusetts 2.3% |
| Massachusetts Health & Educational Facilities Authority(b),(c) |
| Revenue Bonds |
| Baystate Medical Center |
| VRDN Series 2012G (Wells Fargo Bank NA) |
| 07/01/2026 | 0.720% | | 455,000 | 455,000 |
| Floating Rate Notes (continued) |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Massachusetts Health & Educational Facilities Authority(c) |
| Revenue Bonds |
| Childrens Hospital |
| VRDN Series 2013-N4 |
| 10/01/2049 | 0.740% | | 500,000 | 500,000 |
| Total | 955,000 |
| New York 1.2% |
| New York City Water & Sewer System(b),(c) |
| Revenue Bonds |
| VRDN Series 2010 (U.S. Bank) |
| 06/15/2043 | 0.750% | | 250,000 | 250,000 |
| State of New York Mortgage Agency(b),(c),(d) |
| Revenue Bonds |
| VRDN Series 2006-139 (JPMorgan Chase Bank) AMT |
| 10/01/2037 | 0.810% | | 240,000 | 240,000 |
| Total | 490,000 |
| Pennsylvania 1.2% |
| Hospitals & Higher Education Facilities Authority of Philadelphia (The)(b),(c) |
| Revenue Bonds |
| Childrens Hospital |
| VRDN Series 2012 (Wells Fargo Bank) |
| 07/01/2041 | 0.720% | | 500,000 | 500,000 |
Total Floating Rate Notes
(Cost $1,945,000) | 1,945,000 |
|
| Municipal Bonds 81.3% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Alabama 3.4% |
| Alabama Special Care Facilities Financing Authority |
| Refunding Revenue Bonds |
| Children’s Hospital of Alabama |
| Series 2015 |
| 06/01/2027 | 5.000% | | 250,000 | 296,995 |
| Butler County Board of Education |
| Refunding Revenue Bonds |
| Series 2015 (AGM) |
| 07/01/2026 | 5.000% | | 250,000 | 292,255 |
| Calhoun County Board of Education |
| Special Tax Bonds |
| School Warrants |
| Series 2016 (BAM) |
| 02/01/2029 | 5.000% | | 250,000 | 290,405 |
| Tuscaloosa City Board of Education |
| Revenue Bonds |
| Series 2016 |
| 08/01/2030 | 5.000% | | 200,000 | 237,782 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 7 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Water Works Board of the City of Birmingham (The) |
| Refunding Revenue Bonds |
| Subordinated Series 2016B |
| 01/01/2030 | 5.000% | | 250,000 | 299,132 |
| Total | 1,416,569 |
| Arizona 2.1% |
| Industrial Development Authority of the County of Pima (The)(a) |
| Refunding Revenue Bonds |
| American Leadership Academy |
| Series 2015 |
| 06/15/2035 | 5.375% | | 250,000 | 253,023 |
| La Paz County Industrial Development Authority |
| Revenue Bonds |
| Charter School Solutions - Harmony Public |
| Series 2016 |
| 02/15/2036 | 5.000% | | 100,000 | 107,246 |
| 02/15/2046 | 5.000% | | 210,000 | 219,645 |
| Pinal County Union High School District No. 82 Casa Grande |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 (AGM) |
| 07/01/2026 | 5.000% | | 250,000 | 299,602 |
| Total | 879,516 |
| California 9.0% |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
| Community Medical Centers |
| Series 2017A |
| 02/01/2037 | 5.000% | | 300,000 | 340,776 |
| Harbor Regional Center Project |
| Series 2015 |
| 11/01/2024 | 5.000% | | 250,000 | 296,905 |
| California School Finance Authority(a) |
| Refunding Revenue Bonds |
| Aspire Public Schools |
| Series 2016 |
| 08/01/2036 | 5.000% | | 250,000 | 274,505 |
| Revenue Bonds |
| Green Dot Public School Project |
| Series 2015A |
| 08/01/2025 | 4.000% | | 250,000 | 263,475 |
| California Statewide Communities Development Authority |
| Refunding Revenue Bonds |
| Adventist Health System West |
| Series 2015 |
| 03/01/2025 | 5.000% | | 250,000 | 303,845 |
| Jurupa Unified School District |
| Unlimited General Obligation Bonds |
| Series 2015A |
| 08/01/2023 | 5.000% | | 225,000 | 272,241 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Lammersville Joint Unified School District |
| Refunding Special Tax Bonds |
| Community Facilities District #2002 |
| Series 2017 |
| 09/01/2033 | 5.000% | | 400,000 | 454,236 |
| Monterey Regional Waste Management Authority(d) |
| Revenue Bonds |
| Series 2015B AMT |
| 04/01/2021 | 4.000% | | 250,000 | 272,543 |
| Pajaro Valley Water Management Agency |
| Refunding Revenue Bonds |
| Series 2015 (AGM) |
| 03/01/2022 | 5.000% | | 250,000 | 290,185 |
| San Francisco City & County Redevelopment Agency |
| Refunding Tax Allocation Bonds |
| Mission Bay Housing Project |
| Subordinated Series 2017 (AGM) |
| 08/01/2025 | 3.250% | | 300,000 | 302,160 |
| Tuolumne Wind Project Authority |
| Refunding Revenue Bonds |
| Tuolumne Wind Project |
| Series 2016A |
| 01/01/2029 | 5.000% | | 300,000 | 368,223 |
| West Kern Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2015A (AGM) |
| 11/01/2024 | 5.000% | | 250,000 | 305,337 |
| Total | 3,744,431 |
| Colorado 0.7% |
| Colorado Health Facilities Authority |
| Refunding Revenue Bonds |
| Parkview Medical Center |
| Series 2015B |
| 09/01/2026 | 5.000% | | 250,000 | 293,748 |
| Connecticut 0.6% |
| State of Connecticut Clean Water Fund-State Revolving Fund |
| Revenue Bonds |
| Green Bonds |
| Series 2015A |
| 03/01/2019 | 5.000% | | 250,000 | 265,955 |
| District of Columbia 1.3% |
| District of Columbia |
| Refunding Revenue Bonds |
| Children’s Hospital |
| Series 2015 |
| 07/15/2023 | 5.000% | | 250,000 | 297,167 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Friendship Public Charter School |
| Series 2016 |
| 06/01/2041 | 5.000% | | 250,000 | 267,668 |
| Total | 564,835 |
| Florida 3.1% |
| City of Tallahassee |
| Revenue Bonds |
| Tallahassee Memorial Healthcare, Inc. Project |
| Series 2016 |
| 12/01/2055 | 5.000% | | 250,000 | 268,838 |
| Florida Development Finance Corp.(a) |
| Revenue Bonds |
| Renaissance Charter School Inc. Projects |
| Series 2015 |
| 06/15/2025 | 5.000% | | 150,000 | 153,024 |
| Miami-Dade County Health Facilities Authority |
| Refunding Revenue Bonds |
| Nicklaus Childrens Hospital |
| Series 2017 |
| 08/01/2037 | 5.000% | | 500,000 | 572,815 |
| School District of Broward County |
| Refunding Certificate of Participation |
| Series 2016A |
| 07/01/2032 | 5.000% | | 250,000 | 292,912 |
| Total | 1,287,589 |
| Georgia 1.9% |
| Cedartown Polk County Hospital Authority |
| Revenue Bonds |
| RAC Series 2016 |
| 07/01/2039 | 5.000% | | 250,000 | 274,087 |
| Georgia Housing & Finance Authority(d) |
| Refunding Revenue Bonds |
| Series 2015A-2 AMT |
| 06/01/2020 | 2.000% | | 500,000 | 507,020 |
| Total | 781,107 |
| Guam 0.7% |
| Guam Government Waterworks Authority(e) |
| Refunding Revenue Bonds |
| Series 2014A |
| 07/01/2035 | 5.000% | | 150,000 | 164,291 |
| Revenue Bonds |
| Series 2016 |
| 07/01/2036 | 5.000% | | 100,000 | 110,434 |
| Total | 274,725 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Idaho 1.2% |
| Idaho Health Facilities Authority |
| Refunding Revenue Bonds |
| Madison Memorial Hospital |
| Series 2016 |
| 09/01/2028 | 5.000% | | 250,000 | 278,238 |
| Idaho Housing & Finance Association |
| Revenue Bonds |
| Series 2015A-1 |
| 07/01/2025 | 3.200% | | 230,000 | 244,078 |
| Total | 522,316 |
| Illinois 6.6% |
| Chicago Park District |
| Limited General Obligation Bonds |
| Series 2016A |
| 01/01/2032 | 5.000% | | 300,000 | 335,103 |
| Chicago Transit Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/01/2021 | 5.000% | | 250,000 | 279,300 |
| City of Chicago Wastewater Transmission |
| Revenue Bonds |
| Second Lien |
| Series 2017A |
| 01/01/2031 | 5.000% | | 300,000 | 338,136 |
| City of Chicago Waterworks |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2001 (AMBAC) |
| 11/01/2030 | 5.750% | | 585,000 | 691,488 |
| Cook County Community High School District No. 212 Leyden |
| Revenue Bonds |
| Series 2016C (BAM) |
| 12/01/2034 | 5.000% | | 250,000 | 280,760 |
| Illinois Housing Development Authority |
| Revenue Bonds |
| Series 2016A |
| 10/01/2036 | 3.450% | | 250,000 | 252,480 |
| Metropolitan Water Reclamation District of Greater Chicago |
| Unlimited General Obligation Bonds |
| Green Bond |
| Series 2016E |
| 12/01/2035 | 5.000% | | 500,000 | 571,235 |
| Total | 2,748,502 |
| Indiana 2.0% |
| Indiana Finance Authority |
| Taxable Revenue Bonds |
| Series 2016A |
| 07/01/2027 | 2.816% | | 250,000 | 243,348 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 9 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Ivy Tech Community College of Indiana |
| Refunding Revenue Bonds |
| Student Fee |
| Series 2015T |
| 07/01/2024 | 5.000% | | 250,000 | 300,007 |
| Northern Indiana Commuter Transportation District |
| Revenue Bonds |
| Series 2016 |
| 07/01/2032 | 5.000% | | 250,000 | 289,070 |
| Total | 832,425 |
| Kentucky 1.6% |
| Kentucky Economic Development Finance Authority |
| Refunding Revenue Bonds |
| Owensboro Health System |
| Series 2017A |
| 06/01/2026 | 5.000% | | 350,000 | 403,837 |
| Kentucky Housing Corp. |
| Taxable Refunding Revenue Bonds |
| Series 2016A |
| 07/01/2031 | 3.499% | | 250,000 | 251,872 |
| Total | 655,709 |
| Louisiana 3.0% |
| City of Shreveport Water & Sewer |
| Revenue Bonds |
| Junior Lien |
| Series 2017B (AGM) |
| 12/01/2041 | 5.000% | | 400,000 | 459,492 |
| Louisiana Local Government Environmental Facilities & Community Development Authority |
| Refunding Revenue Bonds |
| Ragin’ Cajun Facilities, Inc. |
| Series 2017 (AGM) |
| 10/01/2039 | 5.000% | | 300,000 | 341,232 |
| Louisiana Public Facilities Authority |
| Refunding Revenue Bonds |
| Ochsner Clinic Foundation Project |
| Series 2017 |
| 05/15/2034 | 5.000% | | 400,000 | 457,188 |
| Total | 1,257,912 |
| Maine 0.6% |
| Maine State Housing Authority |
| Revenue Bonds |
| Series 2016A |
| 11/15/2035 | 3.300% | | 250,000 | 246,608 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Maryland 4.9% |
| City of Baltimore |
| Refunding Revenue Bonds |
| East Baltimore Research Park |
| Series 2017 |
| 09/01/2038 | 5.000% | | 300,000 | 319,299 |
| Howard County Housing Commission |
| Revenue Bonds |
| Woodfield Oxford Square Apartments |
| Series 2017 |
| 12/01/2037 | 5.000% | | 300,000 | 343,485 |
| Maryland Economic Development Corp.(d) |
| Revenue Bonds |
| Purple Line Light Rail Project |
| Series 2016 AMT |
| 03/31/2036 | 5.000% | | 250,000 | 282,527 |
| Maryland Health & Higher Educational Facilities Authority |
| Refunding Revenue Bonds |
| Meritus Medical Center Issue |
| Series 2015 |
| 07/01/2023 | 5.000% | | 250,000 | 293,560 |
| The John Hopkins Health System |
| Series 2015 |
| 05/15/2019 | 5.000% | | 250,000 | 267,593 |
| Revenue Bonds |
| Medlantic/Helix Issue |
| Series 1998A (AGM) |
| 08/15/2038 | 5.250% | | 425,000 | 527,510 |
| Total | 2,033,974 |
| Massachusetts 2.1% |
| Marthas Vineyard Land Bank |
| Refunding Revenue Bonds |
| Green Bonds |
| Series 2017 (BAM) |
| 05/01/2036 | 5.000% | | 300,000 | 352,044 |
| Massachusetts Development Finance Agency |
| Revenue Bonds |
| Green Bonds - Boston Medical Center |
| Series 2015 |
| 07/01/2044 | 5.000% | | 250,000 | 273,555 |
| Massachusetts Housing Finance Agency |
| Refunding Revenue Bonds |
| Series 2016-181 |
| 12/01/2036 | 3.600% | | 250,000 | 252,820 |
| Total | 878,419 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Michigan 1.3% |
| Michigan Finance Authority |
| Revenue Bonds |
| Local Government Loan Program - Great Lakes Water Authority |
| Series 2015 |
| 07/01/2032 | 5.000% | | 250,000 | 278,103 |
| Local Government Loan Program-Great Lakes |
| Series 2015 (BAM) |
| 07/01/2033 | 5.000% | | 250,000 | 287,655 |
| Total | 565,758 |
| Minnesota 2.1% |
| Dakota County Community Development Agency |
| Refunding Revenue Bonds |
| Series 2015B |
| 01/01/2021 | 5.000% | | 250,000 | 282,875 |
| Revenue Bonds |
| Sanctuary at West St. Paul Project |
| Series 2015 |
| 08/01/2030 | 5.750% | | 100,000 | 101,061 |
| Northwest Multi-County Housing & Redevelopment Authority |
| Refunding Revenue Bonds |
| Pooled Housing Program |
| Series 2015 |
| 07/01/2024 | 4.000% | | 250,000 | 250,385 |
| St. Cloud Housing & Redevelopment Authority |
| Taxable Revenue Bonds |
| Sanctuary St. Cloud Project |
| Series 2016 |
| 08/01/2036 | 6.000% | | 250,000 | 239,890 |
| Total | 874,211 |
| Mississippi 2.1% |
| Biloxi Public School District |
| Revenue Bonds |
| Trust Certificates |
| Series 2016 (BAM) |
| 04/01/2029 | 5.000% | | 250,000 | 294,215 |
| City of Gulfport |
| Unlimited General Obligation Refunding Bonds |
| Water & Sewer |
| Series 2015 |
| 07/01/2021 | 5.000% | | 250,000 | 283,262 |
| Mississippi Development Bank |
| Revenue Bonds |
| Mississippi Gulf Coast Community College District |
| Series 2016F |
| 12/01/2032 | 4.000% | | 300,000 | 318,972 |
| Total | 896,449 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Missouri 1.0% |
| Missouri Housing Development Commission |
| Revenue Bonds |
| 1st Place Homeownership Loan Project |
| Series 2015 |
| 11/01/2027 | 3.250% | | 205,000 | 213,633 |
| St. Louis County Industrial Development Authority |
| Improvement Refunding Revenue Bonds |
| Ranken-Jordan Project |
| Series 2016 |
| 11/15/2028 | 5.000% | | 200,000 | 212,402 |
| Total | 426,035 |
| Nebraska 0.6% |
| Nebraska Investment Finance Authority |
| Single Family Housing Revenue Bonds |
| Series 2015 (GNMA / FNMA) |
| 09/01/2030 | 3.450% | | 250,000 | 257,718 |
| Nevada 0.7% |
| Las Vegas Valley Water District |
| Limited General Obligation Refunding Bonds |
| Water Improvement |
| Series 2016A |
| 06/01/2041 | 5.000% | | 250,000 | 290,643 |
| New Jersey 0.7% |
| New Jersey Housing & Mortgage Finance Agency(d) |
| Refunding Revenue Bonds |
| Series 2017D AMT |
| 11/01/2032 | 3.900% | | 300,000 | 306,690 |
| New Mexico 0.7% |
| New Mexico Hospital Equipment Loan Council |
| Revenue Bonds |
| Presbyterian Healthcare Services |
| Series 2015 |
| 08/01/2021 | 5.000% | | 250,000 | 285,205 |
| New York 8.6% |
| Build NYC Resource Corp. |
| Revenue Bonds |
| Series 2015 |
| 07/01/2028 | 5.000% | | 250,000 | 292,970 |
| Housing Development Corp. |
| Refunding Revenue Bonds |
| Sustainable Neighborhood |
| Series 2015S |
| 05/01/2026 | 3.400% | | 500,000 | 542,575 |
| Revenue Bonds |
| Sustainable Neighborhood Bonds |
| Series 2016 |
| 11/01/2031 | 3.600% | | 300,000 | 312,033 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 11 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Metropolitan Transportation Authority |
| Refunding Revenue Bonds |
| Series 2015D-1 |
| 11/15/2026 | 5.000% | | 250,000 | 304,807 |
| Revenue Bonds |
| Green Bonds |
| Series 2016A-1 |
| 11/15/2033 | 5.000% | | 250,000 | 293,642 |
| New York City Water & Sewer System |
| Refunding Revenue Bonds |
| Series 2017EE |
| 06/15/2037 | 5.000% | | 300,000 | 356,574 |
| New York State Housing Finance Agency |
| Revenue Bonds |
| Green Bond - Affordable Housing |
| Series 2017 (GNMA) |
| 11/01/2042 | 4.000% | | 300,000 | 309,837 |
| Niagara Falls Public Water Authority |
| Refunding Revenue Bonds |
| Series 2016A |
| 07/15/2027 | 5.000% | | 300,000 | 360,300 |
| Onondaga Civic Development Corp. |
| Refunding Revenue Bonds |
| Community College Housing Bonds |
| Series 2015 |
| 10/01/2023 | 5.000% | | 250,000 | 286,658 |
| State of New York Mortgage Agency(d) |
| Refunding Revenue Bonds |
| Series 2016-196 AMT |
| 10/01/2035 | 3.650% | | 250,000 | 250,823 |
| Westchester County Local Development Corp. |
| Refunding Revenue Bonds |
| Westchester Medical Center |
| Series 2016 |
| 11/01/2034 | 5.000% | | 250,000 | 279,125 |
| Total | 3,589,344 |
| North Dakota 0.9% |
| North Dakota Housing Finance Agency |
| Revenue Bonds |
| Housing Finance Program-Home Mortgage Financing |
| Series 2017 |
| 07/01/2034 | 3.700% | | 365,000 | 373,015 |
| Ohio 3.0% |
| American Municipal Power, Inc. |
| Green Revenue Bonds |
| Meldahl Hydroelectric Project |
| Series 2016 |
| 02/15/2027 | 5.000% | | 250,000 | 298,425 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Akron |
| Refunding Revenue Bonds |
| Community Learning Centers |
| Series 2016 |
| 12/01/2029 | 5.000% | | 300,000 | 358,653 |
| City of Cleveland Water Pollution Control |
| Revenue Bonds |
| Green Bonds |
| Series 2016 |
| 11/15/2041 | 5.000% | | 250,000 | 284,868 |
| Columbus City School District |
| Unlimited General Obligation Refunding Bonds |
| School Facilities Construction & Improvement |
| Series 2016 |
| 12/01/2032 | 5.000% | | 250,000 | 298,162 |
| Total | 1,240,108 |
| Pennsylvania 4.1% |
| Capital Region Water |
| Refunding Revenue Bonds |
| Series 2016A (BAM) |
| 07/15/2029 | 5.000% | | 250,000 | 292,487 |
| City of Philadelphia Water & Wastewater |
| Refunding Revenue Bonds |
| Series 2016 |
| 10/01/2028 | 5.000% | | 300,000 | 372,918 |
| Montgomery County Industrial Development Authority |
| Refunding Revenue Bonds |
| Albert Einstein HealthCare Network |
| Series 2015 |
| 01/15/2022 | 5.000% | | 250,000 | 278,717 |
| Pennsylvania Turnpike Commission |
| Refunding Subordinated Revenue Bonds |
| Mass Transit Projects |
| Series 2016A-1 |
| 12/01/2041 | 5.000% | | 200,000 | 222,124 |
| Redevelopment Authority of the City of Philadelphia |
| Refunding Revenue Bonds |
| Series 2015A |
| 04/15/2028 | 5.000% | | 250,000 | 286,485 |
| Scranton School District |
| Limited General Obligation Refunding Bonds |
| Series 2017D (NPFGC) |
| 06/01/2037 | 4.250% | | 250,000 | 261,518 |
| Total | 1,714,249 |
| Rhode Island 1.5% |
| Rhode Island Health & Educational Building Corp. |
| Refunding Revenue Bonds |
| Series 2017A (AGM) |
| 05/15/2028 | 5.000% | | 300,000 | 354,966 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Rhode Island Housing & Mortgage Finance Corp.(d) |
| Refunding Revenue Bonds |
| Homeownership Opportunity |
| Series 2015 AMT |
| 10/01/2025 | 3.550% | | 250,000 | 261,867 |
| Total | 616,833 |
| South Carolina 0.7% |
| SCAGO Educational Facilities Corp. for Colleton School District |
| Refunding Revenue Bonds |
| Series 2015 |
| 12/01/2020 | 5.000% | | 250,000 | 278,730 |
| Tennessee 0.6% |
| Tennessee Housing Development Agency |
| Revenue Bonds |
| Series 2015-1C |
| 01/01/2022 | 2.450% | | 230,000 | 238,103 |
| Texas 4.0% |
| Arlington Higher Education Finance Corp. |
| Revenue Bonds |
| Harmony Public Schools |
| Series 2016A |
| 02/15/2031 | 5.000% | | 250,000 | 294,420 |
| Austin Community College District Public Facility Corp. |
| Refunding Revenue Bonds |
| Series 2015 |
| 08/01/2019 | 5.000% | | 250,000 | 268,100 |
| Harris County Cultural Education Facilities Finance Corp. |
| Refunding Revenue Bonds |
| Texas Children’s Hospital |
| Series 2015 |
| 10/01/2021 | 5.000% | | 250,000 | 287,172 |
| New Hope Cultural Education Facilities Finance Corp. |
| Revenue Bonds |
| Cardinal Bay, Inc. - Village on the Park |
| Series 2016 |
| 07/01/2046 | 5.000% | | 250,000 | 268,588 |
| San Antonio Independent School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 (Permenant School Fund Guarantee) |
| 02/15/2022 | 5.000% | | 250,000 | 291,287 |
| Texas State Technical College |
| Refunding Revenue Bonds |
| Improvements |
| Series 2016 (AGM) |
| 10/15/2030 | 4.000% | | 250,000 | 267,903 |
| Total | 1,677,470 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Washington 1.9% |
| Energy Northwest |
| Wind Project Refunding Revenue Bonds |
| Series 2015 |
| 07/01/2029 | 4.000% | | 250,000 | 266,862 |
| King County Public Hospital District No. 4 |
| Revenue Bonds |
| Series 2015A |
| 12/01/2035 | 6.000% | | 200,000 | 197,422 |
| Washington Health Care Facilities Authority |
| Revenue Bonds |
| Seattle Childrens Hospital |
| Series 2017 |
| 10/01/2047 | 5.000% | | 300,000 | 347,037 |
| Total | 811,321 |
| Wisconsin 2.0% |
| Milwaukee Redevelopment Authority |
| Revenue Bonds |
| Milwaukee Public Schools |
| Series 2016A |
| 11/15/2026 | 5.000% | | 220,000 | 266,248 |
| Series 2017 |
| 11/15/2033 | 5.000% | | 250,000 | 290,703 |
| Public Finance Authority |
| Revenue Bonds |
| FFAH NC & MO Portfolio |
| Series 2015 |
| 12/01/2035 | 4.750% | | 250,000 | 262,080 |
| Total | 819,031 |
Total Municipal Bonds
(Cost $33,214,291) | 33,945,253 |
Total Investments
(Cost $38,891,285) | 39,683,385 |
| Other Assets & Liabilities, Net | | 2,066,253 |
| Net Assets | $41,749,638 |
At July 31, 2017, securities and/or cash totaling $49,050 were pledged as collateral.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 13 |
Portfolio of Investments (continued)
July 31, 2017
Investments in derivatives
Futures contracts outstanding at July 31, 2017
| Short futures contracts outstanding |
| Contract description | Number of
contracts | Trading
currency | Notional market
value ($) | Expiration date | Unrealized
appreciation ($) | Unrealized
depreciation ($) |
| U.S. Long Bond | (6) | USD | (917,813) | 09/2017 | — | (5,719) |
| U.S. Treasury 10-Year Note | (27) | USD | (3,399,047) | 09/2017 | — | (8,911) |
| Total | | | (4,316,860) | | — | (14,630) |
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Trustees. At July 31, 2017, the value of these securities amounted to $1,537,224, which represents 3.68% of net assets. |
| (b) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (c) | Variable rate security. |
| (d) | Income from this security may be subject to alternative minimum tax. |
| (e) | Municipal obligations include debt obligations issued by or on behalf of territories, possessions, or sovereign nations within the territorial boundaries of the United States. At July 31, 2017, the value of these securities amounted to $274,725, which represents 0.66% of net assets. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| AMT | Alternative Minimum Tax |
| BAM | Build America Mutual Assurance Co. |
| FNMA | Federal National Mortgage Association |
| GNMA | Government National Mortgage Association |
| NPFGC | National Public Finance Guarantee Corporation |
| VRDN | Variable Rate Demand Note |
Currency Legend
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
| • | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
| • | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
| • | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Portfolio of Investments (continued)
July 31, 2017
Fair value measurements (continued)
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
For investments categorized as Level 3, the Committee monitors information similar to that described above, which may include: (i) data specific to the issuer or comparable issuers, (ii) general market or specific sector news and (iii) quoted prices and specific or similar security transactions. The Committee considers this data and any changes from prior periods in order to assess the reasonableness of observable and unobservable inputs, any assumptions or internal models used to value those securities and changes in fair value. This data is also used to corroborate, when available, information received from approved pricing vendors and brokers. Various factors impact the frequency of monitoring this information (which may occur as often as daily). However, the Committee may determine that changes to inputs, assumptions and models are not required as a result of the monitoring procedures performed.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2017:
| | Level 1
quoted prices in active
markets for identical
assets ($) | Level 2
other significant
observable inputs ($) | Level 3
significant
unobservable inputs ($) | Total ($) |
| Investments | | | | |
| Corporate Bonds & Notes | — | 3,793,132 | — | 3,793,132 |
| Floating Rate Notes | — | 1,945,000 | — | 1,945,000 |
| Municipal Bonds | — | 33,945,253 | — | 33,945,253 |
| Total Investments | — | 39,683,385 | — | 39,683,385 |
| Derivatives | | | | |
| Liability | | | | |
| Futures Contracts | (14,630) | — | — | (14,630) |
| Total | (14,630) | 39,683,385 | — | 39,668,755 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets.
Derivative instruments are valued at unrealized appreciation (depreciation).
There were no transfers of financial assets between levels during the period.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 15 |
Statement of Assets and Liabilities
July 31, 2017
| Assets | |
| Investments, at cost | |
| Unaffiliated issuers, at cost | $38,891,285 |
| Total investments, at cost | 38,891,285 |
| Investments, at value | |
| Unaffiliated issuers, at value | 39,683,385 |
| Total investments, at value | 39,683,385 |
| Cash | 1,745,090 |
| Margin deposits | 49,050 |
| Receivable for: | |
| Investments sold | 10,061 |
| Capital shares sold | 53,185 |
| Interest | 360,387 |
| Variation margin for futures contracts | 3,000 |
| Expense reimbursement due from Investment Manager | 2,069 |
| Prepaid expenses | 307 |
| Trustees’ deferred compensation plan | 7,289 |
| Other assets | 10,019 |
| Total assets | 41,923,842 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 43,195 |
| Distributions to shareholders | 81,141 |
| Management services fees | 1,648 |
| Distribution and/or service fees | 202 |
| Transfer agent fees | 1,023 |
| Compensation of chief compliance officer | 1 |
| Audit fees | 32,535 |
| Other expenses | 7,170 |
| Trustees’ deferred compensation plan | 7,289 |
| Total liabilities | 174,204 |
| Net assets applicable to outstanding capital stock | $41,749,638 |
| Represented by | |
| Paid in capital | 41,258,972 |
| Undistributed net investment income | 6,913 |
| Accumulated net realized loss | (293,717) |
| Unrealized appreciation (depreciation) on: | |
| Investments - unaffiliated issuers | 792,100 |
| Futures contracts | (14,630) |
| Total - representing net assets applicable to outstanding capital stock | $41,749,638 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Statement of Assets and Liabilities (continued)
July 31, 2017
| Class A | |
| Net assets | $5,184,227 |
| Shares outstanding | 509,469 |
| Net asset value per share | $10.18 |
| Maximum offering price per share(a) | $10.49 |
| Class C | |
| Net assets | $1,165,192 |
| Shares outstanding | 114,531 |
| Net asset value per share | $10.17 |
| Class R4 | |
| Net assets | $10,177 |
| Shares outstanding | 1,000 |
| Net asset value per share | $10.18 |
| Class R5 | |
| Net assets | $1,122,661 |
| Shares outstanding | 110,287 |
| Net asset value per share | $10.18 |
| Class Y | |
| Net assets | $10,270 |
| Shares outstanding | 1,006 |
| Net asset value per share | $10.21 |
| Class Z | |
| Net assets | $34,257,111 |
| Shares outstanding | 3,366,340 |
| Net asset value per share | $10.18 |
| (a) | The maximum offering price per share is calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge of 3.00% for Class A. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 17 |
Statement of Operations
Year Ended July 31, 2017
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $549 |
| Interest | 998,392 |
| Total income | 998,941 |
| Expenses: | |
| Management services fees | 177,410 |
| Distribution and/or service fees | |
| Class A | 9,416 |
| Class C | 7,169 |
| Transfer agent fees | |
| Class A | 982 |
| Class C | 192 |
| Class R4 | 3 |
| Class R5 | 507 |
| Class Y | 1 |
| Class Z | 7,807 |
| Compensation of board members | 19,092 |
| Custodian fees | 17,903 |
| Printing and postage fees | 11,046 |
| Registration fees | 84,789 |
| Audit fees | 32,935 |
| Legal fees | 967 |
| Compensation of chief compliance officer | 15 |
| Other | 18,325 |
| Total expenses | 388,559 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (207,641) |
| Fees waived by transfer agent | |
| Class R5 | (387) |
| Total net expenses | 180,531 |
| Net investment income | 818,410 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (293,280) |
| Futures contracts | 14,263 |
| Net realized loss | (279,017) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (373,919) |
| Futures contracts | 8,680 |
| Net change in unrealized appreciation (depreciation) | (365,239) |
| Net realized and unrealized loss | (644,256) |
| Net increase in net assets resulting from operations | $174,154 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2017 (a) | Year Ended
July 31, 2016 |
| Operations | | |
| Net investment income | $818,410 | $441,684 |
| Net realized loss | (279,017) | (4,822) |
| Net change in unrealized appreciation (depreciation) | (365,239) | 1,184,781 |
| Net increase in net assets resulting from operations | 174,154 | 1,621,643 |
| Distributions to shareholders | | |
| Net investment income | | |
| Class A | (79,245) | (14,420) |
| Class C | (10,091) | (396) |
| Class R4 | (239) | (187) |
| Class R5 | (19,378) | (805) |
| Class Y | (103) | — |
| Class Z | (700,784) | (427,709) |
| Total distributions to shareholders | (809,840) | (443,517) |
| Increase in net assets from capital stock activity | 10,986,569 | 10,232,273 |
| Total increase in net assets | 10,350,883 | 11,410,399 |
| Net assets at beginning of year | 31,398,755 | 19,988,356 |
| Net assets at end of year | $41,749,638 | $31,398,755 |
| Undistributed (excess of distributions over) net investment income | $6,913 | $(1,657) |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 19 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2017 (a) | July 31, 2016 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions | 596,251 | 6,005,695 | 287,239 | 2,947,532 |
| Distributions reinvested | 7,778 | 78,275 | 1,380 | 14,260 |
| Redemptions | (372,715) | (3,694,507) | (11,464) | (118,097) |
| Net increase | 231,314 | 2,389,463 | 277,155 | 2,843,695 |
| Class C | | | | |
| Subscriptions | 99,846 | 996,648 | 21,847 | 226,123 |
| Distributions reinvested | 990 | 9,946 | 30 | 315 |
| Redemptions | (9,156) | (91,039) | (27) | (282) |
| Net increase | 91,680 | 915,555 | 21,850 | 226,156 |
| Class R5 | | | | |
| Subscriptions | 101,410 | 1,010,000 | 5,905 | 60,000 |
| Distributions reinvested | 1,911 | 19,139 | 61 | 623 |
| Net increase | 103,321 | 1,029,139 | 5,966 | 60,623 |
| Class Y | | | | |
| Subscriptions | 1,006 | 10,000 | — | — |
| Net increase | 1,006 | 10,000 | — | — |
| Class Z | | | | |
| Subscriptions | 1,002,491 | 10,022,825 | 694,458 | 7,105,050 |
| Distributions reinvested | 8,983 | 90,620 | 869 | 9,011 |
| Redemptions | (346,430) | (3,471,033) | (1,178) | (12,262) |
| Net increase | 665,044 | 6,642,412 | 694,149 | 7,101,799 |
| Total net increase | 1,092,365 | 10,986,569 | 999,120 | 10,232,273 |
| (a) | Class Y shares are based on operations from March 1, 2017 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
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Columbia U.S. Social Bond Fund | Annual Report 2017
| 21 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| Year ended | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income |
| Class A |
| 7/31/2017 | $10.43 | 0.22 | (0.26) | (0.04) | (0.21) |
| 7/31/2016 | $9.94 | 0.17 | 0.48 | 0.65 | (0.16) |
| 7/31/2015 (c) | $10.00 | 0.02 | (0.06) | (0.04) | (0.02) |
| Class C |
| 7/31/2017 | $10.43 | 0.14 | (0.26) | (0.12) | (0.14) |
| 7/31/2016 | $9.94 | 0.09 | 0.48 | 0.57 | (0.08) |
| 7/31/2015 (c) | $10.00 | 0.01 | (0.06) | (0.05) | (0.01) |
| Class R4 |
| 7/31/2017 | $10.43 | 0.24 | (0.25) | (0.01) | (0.24) |
| 7/31/2016 | $9.94 | 0.19 | 0.49 | 0.68 | (0.19) |
| 7/31/2015 (c) | $10.00 | 0.03 | (0.06) | (0.03) | (0.03) |
| Class R5 |
| 7/31/2017 | $10.43 | 0.25 | (0.26) | (0.01) | (0.24) |
| 7/31/2016 | $9.94 | 0.19 | 0.48 | 0.67 | (0.18) |
| 7/31/2015 (c) | $10.00 | 0.03 | (0.06) | (0.03) | (0.03) |
| Class Y |
| 7/31/2017 (e) | $9.94 | 0.10 | 0.27 (f) | 0.37 | (0.10) |
| Class Z |
| 7/31/2017 | $10.43 | 0.24 | (0.25) | (0.01) | (0.24) |
| 7/31/2016 | $9.94 | 0.19 | 0.49 | 0.68 | (0.19) |
| 7/31/2015 (c) | $10.00 | 0.04 | (0.07) | (0.03) | (0.03) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Based on operations from March 26, 2015 (fund commencement of operations) through the stated period end. |
| (d) | Annualized. |
| (e) | Class Y shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (f) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Total
distributions to
shareholders | Net
asset
value,
end of
period | Total
return | Total gross
expense
ratio to
average
net assets(a) | Total net
expense
ratio to
average
net assets(a),(b) | Net investment
income
ratio to
average
net assets | Portfolio
turnover | Net
assets,
end of
period
(000’s) |
| |
| (0.21) | $10.18 | (0.31%) | 1.31% | 0.72% | 2.12% | 20% | $5,184 |
| (0.16) | $10.43 | 6.60% | 1.72% | 0.81% | 1.72% | 26% | $2,901 |
| (0.02) | $9.94 | (0.38%) | 1.72% (d) | 0.80% (d) | 0.67% (d) | 11% | $10 |
| |
| (0.14) | $10.17 | (1.16%) | 2.05% | 1.46% | 1.42% | 20% | $1,165 |
| (0.08) | $10.43 | 5.80% | 2.47% | 1.56% | 0.93% | 26% | $238 |
| (0.01) | $9.94 | (0.54%) | 2.47% (d) | 1.45% (d) | 0.02% (d) | 11% | $10 |
| |
| (0.24) | $10.18 | (0.06%) | 1.06% | 0.47% | 2.38% | 20% | $10 |
| (0.19) | $10.43 | 6.87% | 1.47% | 0.56% | 1.83% | 26% | $10 |
| (0.03) | $9.94 | (0.29%) | 1.47% (d) | 0.55% (d) | 0.92% (d) | 11% | $10 |
| |
| (0.24) | $10.18 | (0.05%) | 1.10% | 0.44% | 2.48% | 20% | $1,123 |
| (0.18) | $10.43 | 6.82% | 1.51% | 0.60% | 1.85% | 26% | $73 |
| (0.03) | $9.94 | (0.31%) | 1.52% (d) | 0.60% (d) | 0.87% (d) | 11% | $10 |
| |
| (0.10) | $10.21 | 3.76% | 1.02% (d) | 0.44% (d) | 2.46% (d) | 20% | $10 |
| |
| (0.24) | $10.18 | (0.06%) | 1.06% | 0.47% | 2.39% | 20% | $34,257 |
| (0.19) | $10.43 | 6.86% | 1.48% | 0.56% | 1.85% | 26% | $28,176 |
| (0.03) | $9.94 | (0.29%) | 1.47% (d) | 0.55% (d) | 1.14% (d) | 11% | $19,949 |
Columbia U.S. Social Bond Fund | Annual Report 2017
| 23 |
Notes to Financial Statements
July 31, 2017
Note 1. Organization
Columbia U.S. Social Bond Fund (the Fund), a series of Columbia Funds Series Trust I (the Trust), is a non-diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
Fund shares
The Trust may issue an unlimited number of shares (without par value). Although all share classes generally have identical voting, dividend and liquidation rights, each share class votes separately when required by the Trust’s organizational documents or by law. Different share classes pay different distribution amounts to the extent the expenses of such share classes differ, and distributions in liquidation will be proportional to the net asset value of each share class. Each share class has its own expense and sales charge structure. The Fund offers each of the share classes identified below.
Class A shares are subject to a maximum front-end sales charge of 3.00% based on the initial investment amount. Class A shares purchased on or after August 8, 2016 are subject to a contingent deferred sales charge (CDSC) of 0.75% on certain investments of $500,000 or more if redeemed within 12 months after purchase. Redemptions of Class A shares purchased prior to August 8, 2016, without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a CDSC if the shares are sold within 18 months after purchase, charged as follows: 1.00% CDSC if redeemed within 12 months after purchase, and 0.50% CDSC if redeemed more than 12, but less than 18, months after purchase.
Class C shares are subject to a 1.00% CDSC on shares redeemed within 12 months after purchase.
Class R4 shares are not subject to sales charges and are generally available only to omnibus retirement plans and certain investors as described in the Fund’s prospectus.
Class R5 shares are not subject to sales charges and are generally available only to investors purchasing through authorized investment professionals and omnibus retirement plans as described in the Fund’s prospectus.
Class Y shares are not subject to sales charges and are available to institutional and certain other investors as described in the Fund’s prospectus. Class Y shares commenced operations on March 1, 2017.
Class Z shares are not subject to sales charges and are generally available only to eligible investors, which are subject to different investment minimums as described in the Fund’s prospectus.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Debt securities generally are valued by pricing services approved by the Board of Trustees based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques that take into account, as applicable, factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as approved independent broker-dealer quotes. Debt securities for which quotations are not readily available or
| 24 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
not believed to be reflective of market value may also be valued based upon a bid quote from an approved independent broker-dealer. Debt securities maturing in 60 days or less are valued primarily at amortized cost value, unless this method results in a valuation that management believes does not approximate market value.
Futures and options on futures contracts are valued based upon the settlement price at the close of regular trading on their principal exchanges or, in the absence of transactions, at the mean of the latest quoted bid and ask prices.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved by and under the general supervision of the Board of Trustees. If a security or class of securities (such as foreign securities) is valued at fair value, such value is likely to be different from the quoted or published price for the security.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Derivative instruments
The Fund invests in certain derivative instruments, as detailed below, to meet its investment objectives. Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more securities, currencies, commodities, indices, or other assets or instruments. Derivatives may be used to increase investment flexibility (including to maintain cash reserves while maintaining desired exposure to certain assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. Derivatives may involve various risks, including the potential inability of the counterparty to fulfill its obligations under the terms of the contract, the potential for an illiquid secondary market (making it difficult for the Fund to sell or terminate, including at favorable prices) and the potential for market movements which may expose the Fund to gains or losses in excess of the amount shown in the Statement of Assets and Liabilities. The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements.
A derivative instrument may suffer a marked-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform its obligations under the contract. The Fund’s risk of loss from counterparty credit risk on over-the-counter derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Fund and the amount of any variation margin held by the counterparty, plus any replacement costs or related amounts. With exchange-traded or centrally cleared derivatives, there is reduced counterparty credit risk to the Fund since the clearinghouse or central counterparty (CCP) provides some protection in the case of clearing member default. The clearinghouse or CCP stands between the buyer and the seller of the contract; therefore, additional counterparty credit risk is failure of the clearinghouse or CCP. However, credit risk still exists in exchange-traded or centrally cleared derivatives with respect to initial and variation margin that is held in a broker’s customer account. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the broker’s customers (including the Fund), potentially resulting in losses to the Fund.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or similar agreement with its derivatives contract counterparties. An ISDA Master Agreement is an agreement between the Fund and a counterparty that governs over-the-counter derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically
Columbia U.S. Social Bond Fund | Annual Report 2017
| 25 |
Notes to Financial Statements (continued)
July 31, 2017
permit a single net payment in the event of default (close-out netting), including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset or netting in bankruptcy, insolvency or other events.
Collateral (margin) requirements differ by type of derivative. Margin requirements are established by the clearinghouse or CCP for exchange-traded and centrally cleared derivatives. Brokers can ask for margin in excess of the minimum in certain circumstances. Collateral terms are contract specific for over-the-counter derivatives. For over-the-counter derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any variation margin currently pledged by the Fund and/or the counterparty. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g., $250,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements allow counterparties of over-the-counter derivatives transactions to terminate derivatives contracts prior to maturity in the event the Fund’s net asset value declines by a stated percentage over a specified time period or if the Fund fails to meet certain terms of the ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. The Fund also has termination rights if the counterparty fails to meet certain terms of the ISDA Master Agreement. In addition to considering counterparty credit risk, the Fund would consider terminating the derivatives contracts based on whether termination would result in a net liability owed from the counterparty.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Futures contracts
Futures contracts are exchange-traded and represent commitments for the future purchase or sale of an asset at a specified price on a specified date. The Fund bought and sold futures contracts to manage the duration and yield curve exposure of the Fund versus the benchmark and to manage exposure to movements in interest rates. These instruments may be used for other purposes in future periods. Upon entering into futures contracts, the Fund bears risks that it may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an illiquid market, and that a change in the value of the contract or option may not correlate with changes in the value of the underlying asset.
Upon entering into a futures contract, the Fund deposits cash or securities with the broker, known as a futures commission merchant (FCM), in an amount sufficient to meet the initial margin requirement. The initial margin deposit must be maintained at an established level over the life of the contract. Cash deposited as initial margin is recorded in the Statement of Assets and Liabilities as margin deposits. Securities deposited as initial margin are designated in the Portfolio of Investments. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily change in the contract value and are recorded as variation margin receivable or payable and are offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities.
Effects of derivative transactions in the financial statements
The following tables are intended to provide additional information about the effect of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the Statement of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any.
| 26 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
The following table is a summary of the fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) at July 31, 2017:
| | Liability derivatives | |
Risk exposure
category | Statement
of assets and liabilities
location | Fair value ($) |
| Interest rate risk | Net assets — unrealized depreciation on futures contracts | 14,630* |
| * | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
The following table indicates the effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the year ended July 31, 2017:
| Amount of realized gain (loss) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | 14,263 |
| |
| Change in unrealized appreciation (depreciation) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | 8,680 |
The following table is a summary of the average outstanding volume by derivative instrument for the year ended July 31, 2017:
| Derivative instrument | Average notional
amounts ($)* |
| Futures contracts — short | 3,147,145 |
| * | Based on the ending quarterly outstanding amounts for the year ended July 31, 2017. |
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 27 |
Notes to Financial Statements (continued)
July 31, 2017
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt and taxable income (including net short-term capital gains) and capital gains, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment income, if any, are declared and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Guarantees and indemnifications
Under the Trust’s organizational documents and, in some cases, by contract, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust or its funds. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Recent accounting pronouncement
Accounting Standards Update 2017-08 Premium Amortization on Purchased Callable Debt Securities
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017-08 Premium Amortization on Purchased Callable Debt Securities. ASU No. 2017-08 updates the accounting standards to shorten the amortization period for certain purchased callable debt securities, held at a premium, to be amortized to the earliest call date. The update applies to securities with explicit, noncontingent call features that are callable at fixed prices and on preset dates. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. At this time, management is evaluating the implication of this guidance and the impact it will have on the financial statement amounts and footnote disclosures, if any.
Investment company reporting modernization
In October 2016, the U.S. Securities and Exchange Commission adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The amendments to Regulation S-X are effective for periods on or after August 1, 2017. Management has reviewed the requirements and believes the adoption of the amendments to Regulation S-X will not have a material impact on the Fund’s financial statements and related disclosures.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting
| 28 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
services. Effective December 1, 2016, the management services fee is an annual fee that is equal to a percentage of the Fund’s daily net assets that declines from 0.48% to 0.29% as the Fund’s net assets increase. Prior to December 1, 2016, the management services fee was equal to a percentage of the Fund’s daily net assets that declined from 0.57% to 0.54%. The effective management services fee rate for the year ended July 31, 2017 was 0.51% of the Fund’s average daily net assets.
Subadvisory agreement
The Fund’s Board of Trustees has approved a subadvisory agreement between the Investment Manager and Threadneedle International Limited (Threadneedle), an affiliate of the Investment Manager and an indirect wholly-owned subsidiary of Ameriprise Financial. As of July 31, 2017, Threadneedle is not providing services to the Fund pursuant to the subadvisory agreement.
Compensation of board members
Members of the Board of Trustees, who are not officers or employees of the Investment Manager or Ameriprise Financial, are compensated for their services to the Fund as disclosed in the Statement of Operations. These members of the Board of Trustees may participate in a Deferred Compensation Plan (the Plan) which may be terminated at any time. Obligations of the Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Plan constitute a general unsecured obligation of the Fund.
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. A portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other affiliated funds governed by the Board of Trustees, based on relative net assets. The total amount allocated to all affiliated funds governed by the Board of Trustees will not exceed $40,000 annually.
Transfer agency fees
Under a Transfer and Dividend Disbursing Agent Agreement, Columbia Management Investment Services Corp. (the Transfer Agent), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, is responsible for providing transfer agency services to the Fund. The Transfer Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-transfer agent. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and BFDS is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
The Fund pays the Transfer Agent a monthly transfer agency fee based on the number or the average value of accounts, depending on the type of account. In addition, prior to October 1, 2016, the Transfer Agent also received sub-transfer agency fees based on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts (other than omnibus accounts for which American Enterprise Investment Services Inc. is the broker of record or accounts where the beneficial shareholder is a customer of Ameriprise Financial Services, Inc., for which the Transfer Agent receives a per account fee). Effective October 1, 2016, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Effective August 1, 2017, total transfer agency fees for Class R5 and Class Y shares are subject to an annual limitation of not more than 0.07% and 0.02%, respectively, of the average daily net assets attributable to each share class. From January 1, 2017 to July 31, 2017, these limitations were 0.075% for Class R5 shares and 0.025% for Class Y shares; and prior to January 1, 2017, the limitation was 0.05% for Class R5 shares. In addition, effective October 1, 2016, Class R5 shares included a voluntary transfer agency fee waiver of 0.05%, which became contractual effective December 1, 2016 through November 30, 2017.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 29 |
Notes to Financial Statements (continued)
July 31, 2017
For the year ended July 31, 2017, the Fund’s effective transfer agency fee rates as a percentage of average daily net assets of each class were as follows:
| | Effective rate (%) |
| Class A | 0.03 |
| Class C | 0.03 |
| Class R4 | 0.03 |
| Class R5 | 0.015 |
| Class Y | 0.025 (a) |
| Class Z | 0.03 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended July 31, 2017, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly distribution fee to the Distributor at the maximum annual rates of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended July 31, 2017, if any, are listed below:
| | Amount ($) |
| Class A | 32,349 |
| Class C | 1 |
| 30 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
Expenses waived/reimbursed by the Investment Manager and its affiliates
The Investment Manager and certain of its affiliates have contractually agreed to waive fees and/or reimburse expenses (excluding certain fees and expenses described below) for the period(s) disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees, so that the Fund’s net operating expenses, after giving effect to fees waived/expenses reimbursed and any balance credits and/or overdraft charges from the Fund’s custodian, do not exceed the following annual rate(s) as a percentage of the class’ average daily net assets:
| | December 1, 2016
through
November 30, 2017 | Prior to
December 1, 2016 |
| Class A | 0.70% | 0.95% |
| Class C | 1.45 | 1.70 |
| Class R4 | 0.45 | 0.70 |
| Class R5 | 0.44 | 0.60 |
| Class Y | 0.44* | — |
| Class Z | 0.45 | 0.70 |
*Expense cap rate is contractual from March 1, 2017 (the commencement of operations of Class Y shares) through November 30, 2017.
Under the agreement governing these fee waivers and/or expense reimbursement arrangements, the following fees and expenses are excluded from the waiver/reimbursement commitment, and therefore will be paid by the Fund, if applicable: taxes (including foreign transaction taxes), expenses associated with investments in affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange-traded funds), transaction costs and brokerage commissions, costs related to any securities lending program, dividend expenses associated with securities sold short, inverse floater program fees and expenses, transaction charges and interest on borrowed money, interest, infrequent and/or unusual expenses and any other expenses the exclusion of which is specifically approved by the Board of Trustees. This agreement may be modified or amended only with approval from the Investment Manager, certain of its affiliates and the Fund.
Reflected in the contractual cap commitment, effective December 1, 2016, is the Investment Manager’s contractual agreement to waive 0.05% of its Class R5 transfer agency fee, with this waiver agreement through November 30, 2017, unless sooner terminated at the sole discretion of the Board of Trustees.
In addition, between October 1, 2016 through November 30, 2016, the Fund’s expense ratio was subject to a voluntary expense reimbursement arrangement pursuant to which fees were waived and/or expenses reimbursed (excluding certain fees and expenses immediately described above), 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, did not exceed the annual rates of 0.70% for Class A, 1.45% for Class C, 0.45% for Class R4, 0.44% for Class R5 and 0.45% for Class Z. In addition, reflected in this voluntary cap commitment was the Investment Manager’s voluntary agreement to waive 0.05% of its Class R5 transfer agency fee.
Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At July 31, 2017, these differences are primarily due to differing treatment for tax straddles, capital loss carryforwards, trustees’ deferred compensation, distributions and principal and/or interest from fixed income securities. To the extent these differences are permanent, reclassifications are made among the components of the Fund’s net assets in the Statement of Assets and Liabilities. Temporary differences do not require reclassifications.
The Fund did not have any permanent differences; therefore, no reclassifications were made to the Statement of Assets and Liabilities.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 31 |
Notes to Financial Statements (continued)
July 31, 2017
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2017 | Year Ended July 31, 2016 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 99,885 | 709,955 | — | 809,840 | 46,676 | 396,841 | — | 443,517 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2017, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 91,782 | — | (258,025) | 796,540 |
At July 31, 2017, the cost of investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 38,886,845 | 926,593 | (130,053) | 796,540 |
The following capital loss carryforwards, determined at July 31, 2017, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code. Capital loss carryforwards with no expiration are required to be utilized prior to any capital losses which carry an expiration date. As a result of this ordering rule, capital loss carryforwards which carry an expiration date may be more likely to expire unused. In addition, for the year ended July 31, 2017, capital loss carryforwards utilized, expired unused and permanently lost, if any, were as follows:
| 2018 ($) | 2019 ($) | No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) | Permanently
lost ($) |
| — | — | 56,443 | 201,582 | 258,025 | — | — | — |
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $16,167,239 and $6,511,288, respectively, for the year ended July 31, 2017. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Line of credit
The Fund has access to a revolving credit facility with a syndicate of banks led by Citibank, N.A., HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A. whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $1 billion. Interest is charged to each participating fund based on its borrowings at a rate equal to the higher of (i) the overnight federal funds rate plus 1.00% or (ii) the one-month LIBOR rate plus 1.00%. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.15% per annum. The commitment fee is included in other expenses in the Statement of Operations.
| 32 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Notes to Financial Statements (continued)
July 31, 2017
The Fund had no borrowings during the year ended July 31, 2017.
Note 7. Significant risks
Credit risk
Credit risk is the risk that the value of debt securities in the Fund’s portfolio may decline because the issuer may default and fail to pay interest or repay principal when due. Rating agencies assign credit ratings to debt securities to indicate their credit risk. Lower rated or unrated debt securities held by the Fund may present increased credit risk as compared to higher-rated debt securities.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Actions by governments and central banking authorities can result in increases in interest rates. Increasing interest rates may negatively affect the value of debt securities held by the Fund, resulting in a negative impact on the Fund’s performance and net asset value per share. In general, the longer the maturity or duration of a debt security, the greater its sensitivity to changes in interest rates.
Liquidity risk
Liquidity risk is the risk associated with a lack of marketability of investments which may make it difficult to sell the investment at a desirable time or price. Changing regulatory, market or other conditions or environments (for example, the interest rate or credit environments) may adversely affect the liquidity of the Fund’s investments. The Fund may have to accept a lower selling price for the holding, sell other investments, or forego another, more appealing investment opportunity. Generally, the less liquid the market at the time the Fund sells a portfolio investment, the greater the risk of loss or decline of value to the Fund. A less liquid market can lead to an increase in Fund redemptions, which may negatively impact Fund performance and net asset value per share, including, for example, if the Fund is forced to sell securities in a down market.
Non-diversification risk
A non-diversified fund is permitted to invest a greater percentage of its total assets in fewer issuers than a diversified fund. The Fund may, therefore, have a greater risk of loss from a few issuers than a similar fund that invests more broadly.
Shareholder concentration risk
At July 31, 2017, affiliated shareholders of record owned 73.3% of the outstanding shares of the Fund in one or more accounts. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid positions, which may result in Fund losses and the Fund holding a higher percentage of less liquid positions. Large redemptions could result in decreased economies of scale and increased operating expenses for non-redeeming Fund shareholders.
Social impact risk
Social impact investing may increase risk due to the limitations and constraints involved in investment selection and, as a result, the Fund may underperform other funds that do not consider the social impact.
Note 8. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued. Other than as noted in Note 3 above, there were no items requiring adjustment of the financial statements or additional disclosure.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 33 |
Notes to Financial Statements (continued)
July 31, 2017
Note 9. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is 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 Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, 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.
| 34 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of Columbia U.S. Social Bond Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia U.S. Social Bond Fund (the “Fund”, a series of Columbia Funds Series Trust I) as of July 31, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of July 31, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, MN
September 21, 2017
Columbia U.S. Social Bond Fund | Annual Report 2017
| 35 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2017. Shareholders will be notified in early 2018 of the amounts for use in preparing 2017 income tax returns.
Exempt-
interest
dividends | |
| 87.67% | |
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
| 36 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Shareholders elect the Board that oversees the Fund’s operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Trustees, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. The year set forth beneath Length of Service in the table below is the year in which the Trustee was first appointed or elected as Trustee to any Fund currently in the Columbia Funds Complex or a predecessor thereof. Under current Board policy, members serve terms of indefinite duration.
Independent trustees
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Janet Langford Carrig
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1957 | Trustee
1996 | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (independent energy company) since September 2007 | 57 | None |
Douglas A. Hacker
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1955 | Trustee and Chairman of the Board
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 | 57 | Spartan Nash Company, (food distributor); Nash Finch Company (food distributor) from 2005 to 2013; Aircastle Limited (aircraft leasing); SeaCube Container Leasing Ltd. (container leasing) from 2010 to 2013; and Travelport Worldwide Limited (travel information technology) |
Nancy T. Lukitsh
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1956 | Trustee
2011 | Senior Vice President, Partner and Director of Marketing, Wellington Management Company, LLP (investment adviser) from 1997 to 2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools) from 2007 to 2010; Director, Wellington Trust Company, NA and other Wellington affiliates from 1997 to 2010 | 57 | None |
David M. Moffett
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1952 | Trustee
2011 | Retired. Consultant to Bridgewater and Associates | 57 | Director, CSX Corporation; Genworth Financial, Inc. (financial and insurance products and services); PayPal Holdings Inc. (payment and data processing services); Trustee, University of Oklahoma Foundation; former Director, eBay Inc. (online trading community), 2007-2015; and former Director, CIT Bank, CIT Group Inc. (commercial and consumer finance), 2010-2016 |
Columbia U.S. Social Bond Fund | Annual Report 2017
| 37 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Fund Complex overseen | Other directorships held by Trustee during the past five years |
Charles R. Nelson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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 | 57 | None |
John J. Neuhauser
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1943 | Trustee
1984 | President, Saint Michael’s College since August 2007; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; 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 | 57 | Liberty All-Star Equity Fund and Liberty All- Star Growth Fund (closed-end funds) |
Patrick J. Simpson
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
1944 | Trustee
2000 | Of Counsel, Perkins Coie LLP (law firm) since 2015; Partner, Perkins Coie LLP from 1988 to 2014 | 57 | None |
Anne-Lee Verville
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Mail Drop BX32 05228
Boston, MA 02110
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) | 57 | Enesco Group, Inc. (producer of giftware and home and garden decor products) from 2001 to 2006 |
| 38 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
TRUSTEES AND OFFICERS (continued)
Consultants to the Independent Trustees*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds complex overseen | Other directorships held by Trustee during the past five years |
J. Kevin Connaughton
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1964 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since March 2016; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC from May 2010 to February 2015; President, Columbia Funds from 2009 to 2015; and senior officer of Columbia Funds and affiliated funds from 2003 to 2015 | 57 | Board of Governors, Gateway Healthcare since January 2016; Trustee, New Century Portfolios since March 2015; and Director, The Autism Project since March 2015 |
Natalie A. Trunow
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street
Mail Drop BX32 05228,
Boston, MA 02110
1967 | Independent Trustee Consultant
2016 | Independent Trustee Consultant, Columbia Funds since September 2016; Chief Executive Officer, Millennial Partners (investment consulting services to institutions) since January 2016; Director of Investments, Casey Family Programs from April 2016 to September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments from August 2008 to January 2016; Section Head and Portfolio Manager, General Motors Asset Management from June 1997 to August 2008 | 57 | Healthcare Services for Children with Special Needs |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Natalie A. Trunow was appointed consultant to the Independent Trustees effective September 1, 2016. Shareholders of the Funds are expected to be asked to elect each of Mr. Connaughton and Ms. Trunow as a Trustee at a future shareholder meeting. |
Interested trustee affiliated with Investment Manager*
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during the past five years and other relevant professional experience | Number of Funds in the Columbia Funds Complex overseen | Other directorships held by Trustee during the past five years |
William F. Truscott
c/o Columbia Management
Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
1960 | Trustee
2012 | Chairman of the Board and President, Columbia Management Investment Advisers, LLC since May 2010 and February 2012, respectively; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc. since September 2012 (previously Chief Executive Officer, U.S. Asset Management & President, Annuities, May 2010-September 2012); Director and Chief Executive Officer, Columbia Management Investment Distributors, Inc. since May 2010 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006; Director, Threadneedle Asset Management Holdings, SARL since 2014; President and Chief Executive Officer, Ameriprise Certificate Company, 2006-August 2012 | 179 | Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010; Director, Columbia Management Investment Distributors, Inc. since May 2010; former Director, Ameriprise Certificate Company, 2006 - January 2013 |
| * | Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial. |
The Statement of Additional Information has additional information about the Fund’s Board members and is available,
without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting
investor.columbiathreadneedleus.com.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 39 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Truscott, who is Senior Vice President, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth | Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof | Principal occupation(s) during past five years |
Christopher O. Petersen
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1970 | President and Principal Executive Officer (2015) | Vice President and Lead Chief Counsel, Ameriprise Financial, Inc. since January 2015 (previously, Vice President and Chief Counsel, January 2010 - December 2014; officer of Columbia Funds and affiliated funds since 2007. |
Michael G. Clarke
225 Franklin Street
Boston, MA 02110
Born 1969 | Treasurer (2011), Chief Financial Officer (2009) and Chief Accounting Officer (2015) | Vice President — Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; senior officer of Columbia Funds and affiliated funds since 2002. |
Paul B. Goucher
100 Park Avenue
New York, NY 10017
Born 1968 | Senior Vice President (2011) and Assistant Secretary (2008) | Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc. since January 2017 (previously Vice President and Lead Chief Counsel, November 2008 - January 2017 and January 2013 - January 2017, respectively; and Chief Counsel, January 2010 - January 2013); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since May 2010. |
Thomas P. McGuire
225 Franklin Street
Boston, MA 02110
Born 1972 | Senior Vice President and Chief Compliance Officer (2012) | Vice President — Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Ameriprise Certificate Company since September 2010. |
Colin Moore
225 Franklin Street
Boston, MA 02110
Born 1958 | Senior Vice President (2010) | Executive Vice President and Global Chief Investment Officer, Ameriprise Financial, Inc., since July 2013; Executive Vice President and Global Chief Investment Officer, Columbia Management Investment Advisers, LLC since July 2013 (previously Director and Global Chief Investment Officer, 2010 - 2013). |
Ryan C. Larrenaga
225 Franklin Street
Boston, MA 02110
Born 1970 | Senior Vice President (2017), Chief Legal Officer (2017) and Secretary (2015) | Vice President and Group Counsel, Ameriprise Financial, Inc. since August 2011; officer of Columbia Funds and affiliated funds since 2005. |
Michael E. DeFao
225 Franklin Street
Boston, MA 02110
Born 1968 | Vice President (2011) and Assistant Secretary (2010) | Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010. |
Amy Johnson
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Vice President (2006) | Managing Director and Global Head of Operations, Columbia Management Investment Advisers, LLC since April 2016 (previously Managing Director and Chief Operating Officer, 2010 - 2016). |
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1960 | Vice President (2015) | President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer, Ameriprise Trust Company since August 2009. |
| 40 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management Agreement and Subadvisory Agreement
On June 14, 2017, the Board of Trustees (the Board) and the Trustees who are not interested persons (as defined in the Investment Company Act of 1940) (the Independent Trustees) of Columbia Funds Series Trust I (the Trust) unanimously approved the continuation of the Management Agreement (the Management Agreement) with Columbia Management Investment Advisers, LLC (the Investment Manager) and the Subadvisory Agreement (the Subadvisory Agreement) between the Investment Manager and Threadneedle International Limited (the Subadviser) with respect to Columbia U.S. Social Bond Fund (the Fund), a series of the Trust. As detailed below, the Board’s Advisory Fees and Expenses Committee (the Committee) and the Board met on multiple occasions to review and discuss, both among themselves and with the management team of the Investment Manager, materials provided by the Investment Manager and others before determining to approve the continuation of the Management Agreement and the Subadvisory Agreement (collectively, the Agreements).
In connection with their deliberations regarding the continuation of the Management Agreement and the Subadvisory Agreement, the Committee and the Board evaluated materials requested from the Investment Manager regarding the Fund and the Agreements, and discussed these materials with representatives of the Investment Manager at Committee meetings held on March 27, 2017, April 26, 2017 and June 13, 2017 and at Board meetings held on March 28, 2017 and June 14, 2017. In addition, the Board considers matters bearing on the Agreements at most of its other meetings throughout the year and meets regularly with senior management of the Trust and the Investment Manager. Through the Board’s Investment Oversight Committees, Trustees also meet with selected portfolio managers of the funds the Trustees oversee and other investment personnel at various times throughout the year. The Committee and the Board also consulted with its independent fee consultant, Fund counsel and the Independent Trustees’ independent legal counsel, who advised on various matters with respect to the Committee’s and the Board’s considerations and otherwise assisted the Committee and the Board in their deliberations. On June 13, 2017, the Committee recommended that the Board approve the continuation of the Management Agreement and the Subadvisory Agreement. On June 14, 2017, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement and the Subadvisory Agreement for the Fund.
The Committee and the Board considered all information that they, their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to determine whether to recommend for approval or approve the continuation of the Management Agreement and the Subadvisory Agreement. The information and factors considered by the Committee and the Board in recommending for approval or approving the continuation of the Management Agreement and the Subadvisory Agreement for the Fund included the following:
| • | Information on the investment performance of the Fund relative to the performance of a group of mutual funds determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to benchmarks; |
| • | Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable mutual funds, as determined by the independent third-party data provider; |
| • | The Investment Manager’s agreement to contractually limit or cap total operating expenses for the Fund through November 30, 2018 so that total operating expenses (excluding certain fees and expenses, such as transaction costs and certain other investment related expenses, interest, taxes, acquired fund fees and expenses, and infrequent and/or unusual expenses) would not exceed a specified annual rate, as a percentage of the Fund’s net assets; |
| • | The terms and conditions of the Agreements; |
| • | The subadvisory fees payable by the Investment Manager under the Subadvisory Agreement; |
| • | The current and proposed terms and conditions of other agreements and arrangements with affiliates of the Investment Manager relating to the operations of the Fund, including agreements with respect to the provision of distribution, transfer agency and shareholder services to the Fund; |
| • | Descriptions of various functions performed by the Investment Manager and the Subadviser under the Agreements, including portfolio management and portfolio trading practices; |
Columbia U.S. Social Bond Fund | Annual Report 2017
| 41 |
Board Consideration and Approval of Management Agreement and Subadvisory Agreement (continued)
| • | Information regarding the management fees of similarly-managed portfolios of other clients of the Investment Manager, including institutional separate accounts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager and Subadviser, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of the Investment Manager and the Subadviser with respect to compliance monitoring services, including an assessment of the Investment Manager’s and the Subadviser’s compliance system by the Fund’s Chief Compliance Officer; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, extent and quality of services provided under the agreements
The Committee and the Board considered the nature, extent and quality of services provided to the Fund by the Investment Manager, the Subadviser and the Investment Manager’s affiliates under the Agreements and under separate agreements for the provision of transfer agency and shareholder services, and the resources dedicated to the Fund and the other Columbia Funds by the Investment Manager, the Subadviser and the Investment Manager’s affiliates. The Committee and the Board considered, among other things, the Investment Manager’s ability to attract, motivate and retain highly qualified research, advisory and supervisory investment professionals (including compensation programs for personnel involved in fund management, reputation and other attributes), the portfolio management services provided by those investment professionals, and the quality of the Investment Manager’s and the Subadviser’s investment research capabilities and trade execution services. The Committee and the Board also considered the potential benefits to shareholders of investing in a mutual fund that is part of a fund complex offering exposure to a variety of asset classes and investment disciplines and providing a variety of fund and shareholder services.
The Committee and the Board also considered the professional experience and qualifications of the senior personnel of the Investment Manager and the Subadviser, which included consideration of the Investment Manager’s and the Subadviser’s experience with similarly-structured funds. The Committee and the Board noted the compliance programs of and the compliance-related resources provided to the Fund by the Investment Manager and its affiliates, and considered the Investment Manager’s ability to provide administrative services to the Fund and coordinate the activities of the Fund’s other service providers. The Board also noted that the Board had approved the Subadviser’s code of ethics and compliance program, and that the Chief Compliance Officer of the Funds reports to the Trustees on the Subadviser’s compliance program.
The Committee and the Board considered the diligence and selection process undertaken by the Investment Manager to select the Subadviser, including the Investment Manager’s rationale for recommending the continuation of the Subadvisory Agreement, and the process for monitoring the Subadviser’s ongoing performance of services for the Fund. As part of these deliberations, the Committee and the Board considered the ability of the Investment Manager, subject to the approval of the Board, to modify or enter into new subadvisory agreements without a shareholder vote pursuant to an exemptive order of the Securities and Exchange Commission. The Committee and the Board also considered the scope of services provided to the Fund by the Investment Manager that are distinct from and in addition to those provided by the Subadviser, including cash flow management, treasury services, risk oversight, investment oversight and Subadviser selection, oversight and transition management. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the nature, extent and quality of the services provided to the Fund under the Agreements supported the continuation of the Management Agreement and the Subadvisory Agreement.
Investment performance
The Committee and the Board reviewed information about the performance of the Fund over various time periods, including performance information relative to benchmarks and information that compared the performance of the Fund to the performance of a group of comparable mutual funds as determined by the independent third-party data provider, and data provided by the independent fee consultant. The Committee and the Board also reviewed a description of the third party’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons. Although the Fund’s performance lagged that of a relevant peer group for certain (although not necessarily all) periods, the Committee and
| 42 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management Agreement and Subadvisory Agreement (continued)
the Board concluded that other factors relevant to performance were sufficient, in light of other considerations, to warrant continuation of the Management Agreement and the Subadvisory Agreement. Those factors included one or more of the following: (i) that the Fund’s performance, although lagging in certain recent periods, was stronger over the longer term; (ii) that the underperformance was attributable, to a significant extent, to investment decisions that were reasonable and consistent with the Fund’s investment strategy and policies and that the Fund was performing within a reasonable range of expectations, given those investment decisions, market conditions and the Fund’s investment strategy; (iii) that the Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (iv) that the Investment Manager had taken or was taking steps designed to help improve the Fund’s investment performance, including, but not limited to, replacing portfolio managers, enhancing the resources supporting the portfolio managers, or modifying investment strategies.
The Committee and the Board noted that, through December 31, 2016, the Fund’s performance was in the seventy-second percentile (where the best performance would be in the first percentile) of its category selected by the independent third-party data provider for the purposes of performance comparisons for the one--year period.
The Committee and the Board also considered the Investment Manager’s and Subadviser’s performance and reputation generally, the Investment Manager’s historical responsiveness to Board concerns about performance, and the Investment Manager’s willingness to take steps intended to improve performance. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the performance of the Fund, the Investment Manager and the Subadviser were sufficient, in light of other considerations, to warrant the continuation of the Management Agreement and the Subadvisory Agreement.
Investment management fee rates and other expenses
The Committee and the Board considered the management fees charged to the Fund under the Management Agreement and the Subadvisory Agreement, as well as the total expenses incurred by the Fund. In assessing the reasonableness of the fees under the Management Agreement, the Committee and the Board considered, among other information, the Fund’s total expense ratio as a percentage of average daily net assets. The Committee and the Board considered data provided by the independent third-party data provider and by the independent fee consultant. The Committee and the Board noted that, as of December 31, 2016, the Fund’s actual management fee and net total expense ratio are both ranked in the first quintile (where the lowest fees and expenses would be in the first quintile) against the Fund’s expense universe as determined by the independent third-party data provider for purposes of expense comparison. The Committee and the Board also considered the fees that the Subadviser charges to its other clients, and noted that the Investment Manager pays the fees of the Subadviser. The Committee and the Board noted that the Subadviser was not currently managing any assets under the Subadvisory Agreement, but that the Investment Manager could, in the future, allocated investments to be managed by the Subadviser. The Committee and the Board also took into account the fee waiver and expense limitation arrangements agreed to by the Investment Manager, as noted above.
The Committee and the Board also received and considered information about the management fees charged by the Investment Manager to institutional separate accounts. In considering the fees charged to those accounts, the Committee and the Board took into account, among other things, the Investment Manager’s representations about the differences between managing mutual funds as compared to other types of accounts, including differences in the services provided, differences in the risk profile of such business for the Investment Manager and the additional resources required to manage mutual funds effectively. The Committee and the Board also received and considered information about the fees charged by the Investment Manager for sub-advisory services it provides to comparable unaffiliated funds. In evaluating the Fund’s management fees, the Committee and the Board also took into account the demands, complexity and quality of the investment management of the Fund.
After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the management fee rates and expenses of the Fund, in light of other considerations, warranted the continuation of the Management Agreement and the Subadvisory Agreement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 43 |
Board Consideration and Approval of Management Agreement and Subadvisory Agreement (continued)
Costs of services provided and profitability
The Committee and the Board also took note of the costs the Investment Manager and its affiliates incur in connection with the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund.
The Committee and the Board also considered the compensation directly or indirectly received by the Investment Manager’s affiliates in connection with their relationships with the Fund. The Committee and the Board reviewed information provided by management as to the profitability to the Investment Manager and its affiliates of their relationships with the Fund, information about the allocation of expenses used to calculate profitability, and comparisons of profitability levels realized in 2016 to profitability levels realized in 2015. When reviewing profitability, the Committee and the Board also considered court cases in which adviser profitability was an issue in whole or in part, the performance of similarly managed funds, the performance of the Fund, and the expense ratio of the Fund. In addition, the Committee and the Board considered information provided by the Investment Manager regarding the Investment Manager’s financial condition and comparing its profitability to that of other asset management firms that are, or are subsidiaries of, publicly traded companies. In this regard, the Committee and the Board also considered data provided by the independent fee consultant. Because the Subadvisory Agreement was negotiated at arms-length by the Investment Manager, which is responsible for payments to the Subadviser thereunder, the Committee and the Board did not consider the profitability to the Subadviser of its relationship with the Fund. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the costs of services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the continuation of the Management Agreement and the Subadvisory Agreement.
Economies of scale
The Committee and the Board considered the potential existence of economies of scale in the provision by the Investment Manager of services to the Fund, to groups of related funds, and to the Investment Manager’s investment advisory clients as a whole, and whether those economies of scale were shared with the Fund through breakpoints in investment management fees or other means, such as expense limitation arrangements and additional investments by the Investment Manager in investment, trading, compliance and other resources. The Committee and the Board noted that the management fee schedules for the Fund contained breakpoints that would reduce the fee rate on assets above specified threshold levels.
The Committee and the Board noted that the Subadvisory Agreement did not contain breakpoints. The Committee and the Board noted that absent a shareholder vote, the Investment Manager would bear any increase in fees payable under the Subadvisory Agreement. The Committee and the Board also noted the potential challenges of seeking to tailor the Management Agreement breakpoints to those of a subadvisory agreement in this context, and the effect that capacity constraints on a subadviser’s ability to manage assets could potentially have on the ability of the Investment Manager to achieve economies of scale, as new subadvisers may need to be added as the Fund grows, increasing the Investment Manager’s cost of compensating and overseeing the Fund’s subadvisers.
In considering these matters, the Committee and the Board also considered the costs of the services provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund, as discussed above. After reviewing these and related factors, the Committee and the Board concluded, within the context of their overall conclusions, that the extent to which any economies of scale were expected to be shared with the Fund supported the continuation of the Management Agreement and the Subadvisory Agreement.
Other benefits to the investment manager and subadviser
The Committee and the Board received and considered information regarding “fall-out” or ancillary benefits received by the Investment Manager and its affiliates as a result of their relationships with the Fund, such as the engagement of the Investment Manager’s affiliates to provide distribution, transfer agency and shareholder services to the Fund. In this regard, among other matters, the Committee and the Board considered that the Fund’s distributor retains a portion of the distribution fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares of the Fund. The Committee and the Board also considered the benefits of research made available to the Investment Manager and the Subadviser by reason of brokerage commissions generated by the Fund’s securities transactions, and reviewed
| 44 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
Board Consideration and Approval of Management Agreement and Subadvisory Agreement (continued)
information about the Investment Manager’s practices with respect to allocating portfolio transactions for brokerage and research services. The Committee and the Board recognized that the Investment Manager’s profitability would be somewhat lower without these benefits.
Conclusion
The Committee and the Board reviewed all of the above considerations in reaching their decisions to recommend or approve the continuation of the Management Agreement and the Subadvisory Agreement. In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees may have attributed different weights to the various factors. Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, voting separately, unanimously approved the continuation of the Management Agreement and the Subadvisory Agreement.
Columbia U.S. Social Bond Fund | Annual Report 2017
| 45 |
The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800.345.6611 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board of Trustees is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting investor.columbiathreadneedleus.com; or searching the website of the Securities and Exchange Commission (SEC) at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31st for the most recent 12-month period ending June 30th of that year, and is available without charge by visiting investor.columbiathreadneedleus.com, or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q, can also be obtained without charge, upon request, by calling 800.345.6611.
Additional Fund information
For more information about the Fund, please visit investor.columbiathreadneedleus.com or call 800.345.6611. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 7 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, MA 02110
Fund distributor
Columbia Management Investment Distributors, Inc.
225 Franklin Street
Boston, MA 02110
Fund transfer agent
Columbia Management Investment Services Corp.
P.O. Box 8081
Boston, MA 02266-8081
| 46 | Columbia U.S. Social Bond Fund | Annual Report 2017 |
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Columbia U.S. Social Bond Fund
P.O. Box 8081
Boston, MA 02266-8081
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus and summary prospectus, which contains this and other important information about the Fund, go to
investor.columbiathreadneedleus.com. The Fund is distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. All rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2017 Columbia Management Investment Advisers, LLC.
investor.columbiathreadneedleus.com
| | (a) | The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
| | (b) | During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. |
| | (c) | During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics described in 2(a) above that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
| Item 3. | Audit Committee Financial Expert. |
The registrant’s Board of Trustees has determined that Douglas A. Hacker, David M. Moffett and Anne-Lee Verville, each of whom are members of the registrant’s Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Hacker, Mr. Moffett and Ms. Verville are each independent trustees, as defined in paragraph (a)(2) of this item’s instructions.
| Item 4. | Principal Accountant Fees and Services. |
Fee information below is disclosed for the five series of the registrant whose reports to stockholders are included in this annual filing. One series liquidated on January 29, 2016 and the fees incurred by this series through its liquidation date are included in the response to this item.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended July 31, 2017 and July 31, 2016 are approximately as follows:
| | |
2017 | | 2016 |
| $148,100 | | $131,500 |
Audit Fees include amounts related to the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended July 31, 2017 and July 31, 2016 are approximately as follows:
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above. In fiscal years 2017 and 2016, Audit-Related Fees consist of agreed-upon procedures performed for semi-annual shareholder reports. Fiscal year 2017 also includes agreed-upon procedures for a fund merger.
During the fiscal years ended July 31, 2017 and July 31, 2016, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended July 31, 2017 and July 31, 2016 are approximately as follows:
Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning. Fiscal year 2016 also includes Tax Fees for agreed-upon procedures related to a fund liquidation and a final tax return.
During the fiscal years ended July 31, 2017 and July 31, 2016, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended July 31, 2017 and July 31, 2016 are approximately as follows:
All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended July 31, 2017 and July 31, 2016 are approximately as follows:
| | |
2017 | | 2016 |
| $225,000 | | $225,000 |
In fiscal years 2017 and 2016, All Other Fees primarily consists of fees billed for internal control examinations of the registrant’s transfer agent and investment adviser.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant’s Audit Committee is required to pre-approve the engagement of the registrant’s independent auditors to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser (the “Adviser”) or any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (a “Control Affiliate”) if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Auditors for Audit and Non-Audit Services (the “Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant (“Fund Services”); (ii) non-audit services to the registrant’s Adviser and any Control Affiliates, that relates directly to the operations and financial reporting of a Fund (“Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the registrant’s Adviser and its Control Affiliates. A service will require specific pre-approval by the Audit Committee if it is to be provided by the Fund’s independent auditor; provided, however, that pre-approval of non-audit services to the Fund, the Adviser or Control Affiliates may be waived if certain de minimis requirements set forth in the SEC’s rules are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee’s responsibilities with respect to the pre-approval of services performed by the independent auditor may not be delegated to management.
On an annual basis, at a regularly scheduled Audit Committee meeting, the Fund’s Treasurer or other Fund officer shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to specific pre-approval. This schedule will provide a description of each type of service that is subject to specific pre-approval, along with total projected fees for each service. The pre-approval will generally cover a one-year period. The Audit Committee will review and approve the types of services and the projected fees for the next one-year period and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. This specific approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform and the projected fees for each service.
The Fund’s Treasurer or other Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services provided since the last such report was rendered, including a description of the services, by category, with forecasted fees for the annual reporting period, proposed changes requiring specific pre-approval and a description of services provided by the independent auditor, by category, with actual fees during the current reporting period.
*****
(e)(2) 100% of the services performed for items (b) through (d) above during 2017 and 2016 were pre-approved by the registrant’s Audit Committee.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant during the fiscal years ended July 31, 2017 and July 31, 2016 are approximately as follows:
| | |
2017 | | 2016 |
| $250,000 | | $256,500 |
(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
Item 6. Investments
| | (a) | The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. |
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
| Item 11. | Controls and Procedures. |
| | (a) | The registrant’s principal executive officer and principal financial officer, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that material information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. |
| | (b) | There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| (registrant) | | Columbia Funds Series Trust I |
| | |
| By (Signature and Title) | | /s/ Christopher O. Petersen |
| | Christopher O. Petersen, President and Principal Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By (Signature and Title) | | /s/ Christopher O. Petersen |
| | Christopher O. Petersen, President and Principal Executive Officer |
| | |
| By (Signature and Title) | | /s/ Michael G. Clarke |
| | Michael G. Clarke, Treasurer and Chief Financial Officer |
