UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number811-04367
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)
Christopher O. Petersen, Esq.
c/o Columbia Management Investment Advisers, LLC
225 Franklin Street
Boston, Massachusetts 02110
Ryan C. Larrenaga, Esq.
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, 2019
FormN-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 Rule30e-1 under the Investment Company Act of 1940 (17 CFR270.30e-1). The Commission may use the information provided on FormN-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by FormN-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in FormN-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, 100 F Street, NE, Washington, DC 20549. 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, 2019
Columbia Large Cap Growth Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified by mail and provided with a website address to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank guarantee • May lose value
Columbia Large Cap Growth Fund | Annual Report 2019
Investment objective
Columbia Large Cap Growth Fund (the Fund) seeks long-term capital appreciation.
Portfolio management
John Wilson, CFA
Lead Portfolio Manager
Managed Fund since 2005
Tchintcia Barros, CFA
Portfolio 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.
© 2019 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, 2019) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/01/98 | 7.84 | 12.90 | 14.30 |
| | Including sales charges | | 1.63 | 11.57 | 13.63 |
| Advisor Class* | 11/08/12 | 8.11 | 13.18 | 14.59 |
| Class C | Excluding sales charges | 11/18/02 | 7.03 | 12.06 | 13.45 |
| | Including sales charges | | 6.06 | 12.06 | 13.45 |
| Class E | Excluding sales charges | 09/22/06 | 7.71 | 12.79 | 14.18 |
| | Including sales charges | | 2.86 | 11.75 | 13.66 |
| Institutional Class | 12/14/90 | 8.11 | 13.18 | 14.58 |
| Institutional 2 Class* | 03/07/11 | 8.17 | 13.28 | 14.70 |
| Institutional 3 Class | 07/15/09 | 8.24 | 13.34 | 14.78 |
| Class R* | 09/27/10 | 7.57 | 12.62 | 14.01 |
| Class V | Excluding sales charges | 12/14/90 | 7.84 | 12.90 | 14.27 |
| | Including sales charges | | 1.64 | 11.57 | 13.59 |
| Russell 1000 Growth Index | | 10.82 | 14.25 | 15.74 |
Returns for Class A and Class V shares are shown with and without the maximum initial sales charge of 5.75%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. Returns for Class E shares are shown with and without the maximum sales charge of 4.50%. The Fund’s other share 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 share 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 columbiathreadneedleus.com/investor/ 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, Institutional Class shares were used. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investor/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.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Columbia Large Cap Growth Fund | Annual Report 2019
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (July 31, 2009 — July 31, 2019)
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, 2019) |
| Microsoft Corp. | 6.6 |
| Amazon.com, Inc. | 5.9 |
| Apple, Inc. | 5.4 |
| Facebook, Inc., Class A | 4.0 |
| Visa, Inc., Class A | 3.6 |
| Alphabet, Inc., Class C | 3.1 |
| Adobe, Inc. | 3.0 |
| Alphabet, Inc., Class A | 2.9 |
| PayPal Holdings, Inc. | 2.4 |
| Nike, Inc., Class B | 2.2 |
Percentages indicated are based upon total investments excluding Money Market Funds and investments in derivatives, if any.
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, 2019) |
| Common Stocks | 99.5 |
| Money Market Funds | 0.5 |
| Total | 100.0 |
Percentages indicated are based upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
| Equity sector breakdown (%) (at July 31, 2019) |
| Communication Services | 14.5 |
| Consumer Discretionary | 16.0 |
| Consumer Staples | 2.6 |
| Financials | 3.5 |
| Health Care | 15.9 |
| Industrials | 8.1 |
| Information Technology | 36.3 |
| Materials | 1.5 |
| Real Estate | 1.6 |
| Total | 100.0 |
Percentages indicated are based upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Manager Discussion of Fund Performance
For the 12-month period that ended July 31, 2019, the Fund’s Class A shares returned 7.84% excluding sales charges. The Fund underperformed its benchmark, the Russell 1000 Growth Index, which returned 10.82% over the same period. Industrials, technology and consumer staples stocks were major contributors to the Fund’s gains. Disappointing results from consumer discretionary, communication services and materials holdings generally accounted for the Fund’s shortfall relative to the benchmark.
Trade concerns, interest rates drove financial markets
Optimism prevailed early in the 12-month period ended July 31, 2019 as positive global economic conditions, the impact of broad U.S. corporate tax cuts and moves to reduce regulation in a number of industries buoyed confidence. The labor markets added 164,000 jobs per month, on average, and manufacturing activity remained solid. Unemployment fell to a 50-year low of 3.7%.
However, the economic backdrop looked less rosy as the period wore on. U.S. growth slowed from above 3.0% to 2.3% (annualized). European economies transitioned to a slower pace of growth, struggling with rising interest rates, trade tensions and uncertainty surrounding the U.K.’s departure from the European Union (Brexit). At the same time, China’s economic conditions weakened and emerging markets came under pressure, driven by trade and tariff concerns and a rising U.S. dollar.
With global uncertainties on the rise, investors sold stocks and other risky assets late in 2018. Stock markets rebounded early in 2019, as the Federal Reserve (the Fed) backed away from additional rate hikes, then dipped again in the final months of the period as trade concerns amplified. On the last day of the period, the Fed lowered its key short-term borrowing rate by 25 basis points (a basis point is one hundredth of one percent).
Bonds generally outperformed equities for the 12-month period. The Bloomberg Barclays U.S. Aggregate Bond Index, a broad measure of investment-grade bonds, returned 8.08%. The S&P 500 Index, a broad measure of U.S. stock returns, gained 7.99%, led by growth stocks, which solidly outperformed value stocks for the period.
Contributors and detractors
Gains from industrials, technology and consumer staples stocks boosted relative results for the period. In the industrials sector, the Fund benefited from a position in L3Technologies, a leading defense communications systems company. It completed a merger with Harris Corporation, which we believe has the potential to strengthen the newly combined company’s long-term growth prospects. The transaction was viewed favorably by investors. A position in Ingersoll-Rand PLC, a leading manufacturer of heating and cooling equipment, did well on the announcement that it would sell its industrial division, a smaller and less profitable arm of the company. That left Ingersoll-Rand as a pure play on the heating, ventilation and air conditioning (HVAC) market, which investors seemed to favor. Finally, the Fund had no exposure to Boeing or 3M. Boeing slid on issues related to two crashes and subsequent worldwide grounding of the 737 Max airplane and questions about its certification process. Shares of 3M declined after a profit warning.
In the technology sector, Pay Pal Holdings, Inc., Visa, Inc. and Zebra Technologies Corp. were solid contributors to relative performance. The Fund was overweight in the payment services industry, where Pay Pal and Visa were standout performers. Both companies delivered strong revenue and earnings in a favorable industry environment, driven by strong global demand. Zebra Technologies is the leading provider of barcoding and hand-held scanning equipment, inventory management and tracking applications. Strong revenue and profit growth helped Zebra gain market share. We trimmed the Fund’s position as the stock moved closer to our price target.
The Fund’s returns from consumer discretionary, communications services and materials stocks lagged the benchmark. In the consumer discretionary sector, Alibaba Group Holdings Ltd., ADR, the leading China-based internet retailer, underperformed on concerns about China’s currency and sustainability of underlying e-commerce growth. We continue to hold the position, believing the company’s longer term business prospects remain strong, based partially on the shift to a more consumer driven Chinese economy. The Fund lost ground with a position in luxury brand retailer PVH Corp. Softness across Calvin Klein, which is one of PVH’s most lucrative brands, hurt overall results. We sold the stock. The Fund had no exposure
Columbia Large Cap Growth Fund | Annual Report 2019
| 5 |
Manager Discussion of Fund Performance (continued)
to either Starbucks or McDonalds, which enjoyed solid results for the period. A position in Canada Goose Holdings, Inc. also detracted from relative returns, as investors bid shares lower on a disappointing quarterly report. We continue to believe the brand is well positioned with solid long-term prospects in the specialty retailing market, and we continue to own the stock.
In the communication services sector, a position in Electronic Arts, Inc. weighed on relative performance. A long-term Fund holding, the company did not live up to expectations with several new game titles and faced increased competition. However, we remain confident in the company’s prospects and continue to hold the stock. Alphabet, Inc. (Google) underperformed as concerns mounted that the company might be facing increased regulation. The Fund has more exposure to Alphabet than the benchmark, which amplified the impact of its modest loss for the period. In the materials sector, which accounts for just 1.75% of the benchmark, the Fund lost ground with positions in Albemarle Corp. and Eastman Chemical Co., neither of which is in the benchmark. Albemarle is the leading provider of lithium for electric vehicle batteries. Concerns about the impact of weaker economic conditions on the roll-out of electric vehicles in China weighed on Albemarle shares. However, we believe the long-term outlook for the industry is strong and continue to own the stock. Eastman Chemical, a specialty chemical company, was hurt by broad economic concerns and a weaker profit outlook. We trimmed the Fund’s position but continue to own the stock.
At period’s end
At the close out the reporting period, 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 strong management and an attractive risk/return profile. We seek opportunities in companies that we believe have the potential to drive consistent organic revenue and earnings growth and where those growth prospects may be underestimated by the market.
Marketrisk may affect a single issuer, sector of the economy, industry or the market as a whole.Growthsecurities, at times, may not perform as well as value securities or the stock market in general and may be out of favor with investors.Foreigninvestments 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 particularsector, 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.
| 6 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund 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 $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2019 — July 31, 2019 |
| | Account value at the
beginning of the
period ($) | 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 | 1,132.20 | 1,019.64 | 5.50 | 5.21 | 1.04 |
| Advisor Class | 1,000.00 | 1,000.00 | 1,133.50 | 1,020.88 | 4.18 | 3.96 | 0.79 |
| Class C | 1,000.00 | 1,000.00 | 1,128.00 | 1,015.92 | 9.44 | 8.95 | 1.79 |
| Class E | 1,000.00 | 1,000.00 | 1,131.70 | 1,019.14 | 6.03 | 5.71 | 1.14 |
| Institutional Class | 1,000.00 | 1,000.00 | 1,133.60 | 1,020.88 | 4.18 | 3.96 | 0.79 |
| Institutional 2 Class | 1,000.00 | 1,000.00 | 1,134.00 | 1,021.12 | 3.92 | 3.71 | 0.74 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 1,134.40 | 1,021.42 | 3.60 | 3.41 | 0.68 |
| Class R | 1,000.00 | 1,000.00 | 1,131.00 | 1,018.40 | 6.82 | 6.46 | 1.29 |
| Class V | 1,000.00 | 1,000.00 | 1,132.10 | 1,019.64 | 5.50 | 5.21 | 1.04 |
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.
Columbia Large Cap Growth Fund | Annual Report 2019
| 7 |
Portfolio of Investments
July 31, 2019
(Percentages represent value of investments compared to net assets)
Investments in securities
| Common Stocks 99.5% |
| Issuer | Shares | Value ($) |
| Communication Services 14.4% |
| Entertainment 2.8% |
| Electronic Arts, Inc.(a) | 480,105 | 44,409,713 |
| Walt Disney Co. (The) | 398,400 | 56,975,184 |
| Total | | 101,384,897 |
| Interactive Media & Services 9.9% |
| Alphabet, Inc., Class A(a) | 86,419 | 105,275,626 |
| Alphabet, Inc., Class C(a) | 91,273 | 111,050,033 |
| Facebook, Inc., Class A(a) | 749,973 | 145,667,256 |
| Total | | 361,992,915 |
| Media 0.6% |
| DISH Network Corp., Class A(a) | 609,048 | 20,622,365 |
| Wireless Telecommunication Services 1.1% |
| T-Mobile U.S.A., Inc.(a) | 519,900 | 41,451,627 |
| Total Communication Services | 525,451,804 |
| Consumer Discretionary 15.9% |
| Hotels, Restaurants & Leisure 0.3% |
| Norwegian Cruise Line Holdings Ltd.(a) | 242,302 | 11,979,411 |
| Internet & Direct Marketing Retail 9.0% |
| Alibaba Group Holding Ltd., ADR(a) | 300,342 | 51,992,204 |
| Amazon.com, Inc.(a) | 113,705 | 212,262,220 |
| Booking Holdings, Inc.(a) | 31,594 | 59,605,556 |
| Chewy, Inc., Class A(a) | 59,622 | 2,000,914 |
| Total | | 325,860,894 |
| Multiline Retail 1.0% |
| Target Corp. | 424,000 | 36,633,600 |
| Specialty Retail 2.6% |
| Burlington Stores, Inc.(a) | 205,200 | 37,089,900 |
| Ulta Beauty, Inc.(a) | 164,800 | 57,556,400 |
| Total | | 94,646,300 |
| Textiles, Apparel & Luxury Goods 3.0% |
| Canada Goose Holdings, Inc.(a) | 326,324 | 15,268,700 |
| Nike, Inc., Class B | 916,000 | 78,803,480 |
| Tapestry, Inc. | 502,900 | 15,554,697 |
| Total | | 109,626,877 |
| Total Consumer Discretionary | 578,747,082 |
| Common Stocks (continued) |
| Issuer | Shares | Value ($) |
| Consumer Staples 2.6% |
| Food & Staples Retailing 1.5% |
| Costco Wholesale Corp. | 204,100 | 56,256,083 |
| Food Products 1.1% |
| Mondelez International, Inc., Class A | 731,800 | 39,143,982 |
| Total Consumer Staples | 95,400,065 |
| Financials 3.5% |
| Banks 1.1% |
| Citigroup, Inc. | 546,000 | 38,853,360 |
| Capital Markets 1.1% |
| BlackRock, Inc. | 84,739 | 39,630,736 |
| Insurance 1.3% |
| Allstate Corp. (The) | 439,400 | 47,191,560 |
| Total Financials | 125,675,656 |
| Health Care 15.8% |
| Biotechnology 3.2% |
| Alexion Pharmaceuticals, Inc.(a) | 318,134 | 36,041,401 |
| BioMarin Pharmaceutical, Inc.(a) | 305,800 | 24,256,056 |
| Exact Sciences Corp.(a) | 190,800 | 21,962,988 |
| Vertex Pharmaceuticals, Inc.(a) | 202,065 | 33,668,070 |
| Total | | 115,928,515 |
| Health Care Equipment & Supplies 6.4% |
| Abbott Laboratories | 765,200 | 66,648,920 |
| Baxter International, Inc. | 625,800 | 52,548,426 |
| Danaher Corp. | 195,143 | 27,417,591 |
| Edwards Lifesciences Corp.(a) | 231,767 | 49,331,606 |
| Medtronic PLC | 370,300 | 37,748,382 |
| Total | | 233,694,925 |
| Health Care Providers & Services 1.9% |
| Guardant Health, Inc.(a) | 216,300 | 20,330,037 |
| Humana, Inc. | 160,100 | 47,509,675 |
| Total | | 67,839,712 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Common Stocks (continued) |
| Issuer | Shares | Value ($) |
| Life Sciences Tools & Services 2.5% |
| Bio-Techne Corp. | 122,800 | 25,806,420 |
| Illumina, Inc.(a) | 97,400 | 29,159,612 |
| Thermo Fisher Scientific, Inc. | 129,748 | 36,028,425 |
| Total | | 90,994,457 |
| Pharmaceuticals 1.8% |
| Allergan PLC | 109,600 | 17,590,800 |
| Bristol-Myers Squibb Co. | 1,096,500 | 48,695,565 |
| Total | | 66,286,365 |
| Total Health Care | 574,743,974 |
| Industrials 8.0% |
| Aerospace & Defense 2.7% |
| L3 Harris Technologies, Inc. | 237,380 | 49,280,088 |
| Northrop Grumman Corp. | 142,600 | 49,278,282 |
| Total | | 98,558,370 |
| Electrical Equipment 1.0% |
| AMETEK, Inc. | 430,500 | 38,577,105 |
| Industrial Conglomerates 1.6% |
| Honeywell International, Inc. | 333,300 | 57,480,918 |
| Machinery 1.2% |
| Ingersoll-Rand PLC | 352,500 | 43,590,150 |
| Road & Rail 1.5% |
| Norfolk Southern Corp. | 278,200 | 53,169,584 |
| Total Industrials | 291,376,127 |
| Information Technology 36.2% |
| Electronic Equipment, Instruments & Components 1.6% |
| Corning, Inc. | 768,800 | 23,640,600 |
| Zebra Technologies Corp., Class A(a) | 156,101 | 32,920,140 |
| Total | | 56,560,740 |
| IT Services 8.5% |
| Fidelity National Information Services, Inc. | 208,100 | 27,729,325 |
| Fiserv, Inc.(a) | 269,100 | 28,371,213 |
| FleetCor Technologies, Inc.(a) | 32,006 | 9,095,145 |
| PayPal Holdings, Inc.(a) | 792,700 | 87,514,080 |
| Square, Inc., Class A(a) | 306,100 | 24,613,501 |
| Visa, Inc., Class A | 730,426 | 130,015,828 |
| Total | | 307,339,092 |
| Common Stocks (continued) |
| Issuer | Shares | Value ($) |
| Semiconductors & Semiconductor Equipment 5.9% |
| Broadcom, Inc. | 150,331 | 43,594,487 |
| Lam Research Corp. | 231,800 | 48,355,798 |
| NVIDIA Corp. | 320,760 | 54,118,627 |
| NXP Semiconductors NV | 436,700 | 45,150,413 |
| Teradyne, Inc. | 427,000 | 23,796,710 |
| Total | | 215,016,035 |
| Software 14.8% |
| Adobe, Inc.(a) | 360,600 | 107,768,916 |
| Microsoft Corp. | 1,745,338 | 237,837,209 |
| Palo Alto Networks, Inc.(a) | 211,700 | 47,958,518 |
| PTC, Inc.(a) | 192,763 | 13,065,476 |
| Salesforce.com, Inc.(a) | 361,105 | 55,790,723 |
| ServiceNow, Inc.(a) | 151,467 | 42,015,431 |
| VMware, Inc., Class A | 205,400 | 35,840,246 |
| Total | | 540,276,519 |
| Technology Hardware, Storage & Peripherals 5.4% |
| Apple, Inc. | 923,462 | 196,734,344 |
| Total Information Technology | 1,315,926,730 |
| Materials 1.5% |
| Chemicals 1.5% |
| Albemarle Corp. | 356,800 | 26,032,128 |
| Eastman Chemical Co. | 394,959 | 29,760,161 |
| Total | | 55,792,289 |
| Total Materials | 55,792,289 |
| Real Estate 1.6% |
| Equity Real Estate Investment Trusts (REITS) 1.6% |
| American Tower Corp. | 161,100 | 34,091,982 |
| Equinix, Inc. | 48,700 | 24,452,270 |
| Total | | 58,544,252 |
| Total Real Estate | 58,544,252 |
Total Common Stocks
(Cost $2,108,830,836) | 3,621,657,979 |
|
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 9 |
Portfolio of Investments (continued)
July 31, 2019
| Money Market Funds 0.4% |
| | Shares | Value ($) |
| Columbia Short-Term Cash Fund, 2.361%(b),(c) | 16,742,368 | 16,740,694 |
Total Money Market Funds
(Cost $16,742,664) | 16,740,694 |
Total Investments in Securities
(Cost: $2,125,573,500) | 3,638,398,673 |
| Other Assets & Liabilities, Net | | 2,482,075 |
| Net Assets | 3,640,880,748 |
Notes to Portfolio of Investments
| (a) | Non-income producing investment. |
| (b) | The rate shown is the seven-day current annualized yield at July 31, 2019. |
| (c) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended July 31, 2019 are as follows: |
| Issuer | Beginning
shares | Shares
purchased | Shares
sold | Ending
shares | Realized gain
(loss) —
affiliated
issuers ($) | Net change in
unrealized
appreciation
(depreciation) —
affiliated
issuers ($) | Dividends —
affiliated
issuers ($) | Value —
affiliated
issuers
at end of
period ($) |
| Columbia Short-Term Cash Fund, 2.361% |
| | 44,882,689 | 623,746,234 | (651,886,555) | 16,742,368 | (2,241) | 2,380 | 1,297,442 | 16,740,694 |
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.
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.
| 10 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
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.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2019:
| | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) |
| Investments in Securities | | | | |
| Common Stocks | | | | |
| Communication Services | 525,451,804 | — | — | 525,451,804 |
| Consumer Discretionary | 578,747,082 | — | — | 578,747,082 |
| Consumer Staples | 95,400,065 | — | — | 95,400,065 |
| Financials | 125,675,656 | — | — | 125,675,656 |
| Health Care | 574,743,974 | — | — | 574,743,974 |
| Industrials | 291,376,127 | — | — | 291,376,127 |
| Information Technology | 1,315,926,730 | — | — | 1,315,926,730 |
| Materials | 55,792,289 | — | — | 55,792,289 |
| Real Estate | 58,544,252 | — | — | 58,544,252 |
| Total Common Stocks | 3,621,657,979 | — | — | 3,621,657,979 |
| Money Market Funds | 16,740,694 | — | — | 16,740,694 |
| Total Investments in Securities | 3,638,398,673 | — | — | 3,638,398,673 |
See the Portfolio of Investments for all investment classifications not indicated in the table.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 11 |
Statement of Assets and Liabilities
July 31, 2019
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $2,108,830,836) | $3,621,657,979 |
| Affiliated issuers (cost $16,742,664) | 16,740,694 |
| Cash | 87,208 |
| Receivable for: | |
| Investments sold | 31,864,328 |
| Capital shares sold | 526,489 |
| Dividends | 794,420 |
| Prepaid expenses | 25,035 |
| Trustees’ deferred compensation plan | 353,389 |
| Other assets | 43,170 |
| Total assets | 3,672,092,712 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 28,365,191 |
| Capital shares purchased | 2,061,892 |
| Management services fees | 66,248 |
| Distribution and/or service fees | 17,309 |
| Transfer agent fees | 244,463 |
| Compensation of chief compliance officer | 113 |
| Other expenses | 103,359 |
| Trustees’ deferred compensation plan | 353,389 |
| Total liabilities | 31,211,964 |
| Net assets applicable to outstanding capital stock | $3,640,880,748 |
| Represented by | |
| Paid in capital | 1,926,794,537 |
| Total distributable earnings (loss) (Note 2) | 1,714,086,211 |
| Total - representing net assets applicable to outstanding capital stock | $3,640,880,748 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Statement of Assets and Liabilities (continued)
July 31, 2019
| Class A | |
| Net assets | $1,932,367,182 |
| Shares outstanding | 44,495,792 |
| Net asset value per share | $43.43 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $46.08 |
| Advisor Class | |
| Net assets | $12,088,431 |
| Shares outstanding | 260,352 |
| Net asset value per share | $46.43 |
| Class C | |
| Net assets | $78,292,771 |
| Shares outstanding | 2,209,639 |
| Net asset value per share | $35.43 |
| Class E | |
| Net assets | $15,874,578 |
| Shares outstanding | 367,858 |
| Net asset value per share | $43.15 |
| Maximum sales charge | 4.50% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class E shares) | $45.18 |
| Institutional Class | |
| Net assets | $975,663,517 |
| Shares outstanding | 21,501,613 |
| Net asset value per share | $45.38 |
| Institutional 2 Class | |
| Net assets | $13,783,265 |
| Shares outstanding | 303,353 |
| Net asset value per share | $45.44 |
| Institutional 3 Class | |
| Net assets | $394,049,397 |
| Shares outstanding | 8,643,937 |
| Net asset value per share | $45.59 |
| Class R | |
| Net assets | $13,233,310 |
| Shares outstanding | 308,352 |
| Net asset value per share | $42.92 |
| Class V | |
| Net assets | $205,528,297 |
| Shares outstanding | 4,778,409 |
| Net asset value per share | $43.01 |
| Maximum sales charge | 5.75% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class V shares) | $45.63 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 13 |
Statement of Operations
Year Ended July 31, 2019
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $31,984,439 |
| Dividends — affiliated issuers | 1,297,442 |
| Interest | 6,057 |
| Interfund lending | 326 |
| Foreign taxes withheld | (29,835) |
| Total income | 33,258,429 |
| Expenses: | |
| Management services fees | 23,352,733 |
| Distribution and/or service fees | |
| Class A | 4,690,124 |
| Class C | 762,133 |
| Class E | 55,149 |
| Class R | 71,018 |
| Class T | 691 |
| Class V | 494,681 |
| Transfer agent fees | |
| Class A | 2,157,948 |
| Advisor Class | 14,615 |
| Class C | 87,710 |
| Class E | 18,127 |
| Institutional Class | 1,082,500 |
| Institutional 2 Class | 7,753 |
| Institutional 3 Class | 29,060 |
| Class R | 16,351 |
| Class T | 315 |
| Class V | 227,569 |
| Compensation of board members | 62,734 |
| Custodian fees | 23,291 |
| Printing and postage fees | 207,424 |
| Registration fees | 148,104 |
| Audit fees | 32,936 |
| Legal fees | 75,257 |
| Compensation of chief compliance officer | 1,394 |
| Other | 121,005 |
| Total expenses | 33,740,622 |
| Net investment loss | (482,193) |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 286,205,699 |
| Investments — affiliated issuers | (2,241) |
| Foreign currency translations | (516) |
| Net realized gain | 286,202,942 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | (22,809,796) |
| Investments — affiliated issuers | 2,380 |
| Foreign currency translations | 364 |
| Net change in unrealized appreciation (depreciation) | (22,807,052) |
| Net realized and unrealized gain | 263,395,890 |
| Net increase in net assets resulting from operations | $262,913,697 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2019 | Year Ended
July 31, 2018 |
| Operations | | |
| Net investment loss | $(482,193) | $(1,616,179) |
| Net realized gain | 286,202,942 | 251,807,025 |
| Net change in unrealized appreciation (depreciation) | (22,807,052) | 333,931,469 |
| Net increase in net assets resulting from operations | 262,913,697 | 584,122,315 |
| Distributions to shareholders | | |
| Net investment income and net realized gains | | |
| Class A | (147,850,760) | |
| Advisor Class | (1,038,548) | |
| Class C | (7,122,236) | |
| Class E | (1,257,746) | |
| Institutional Class | (71,433,534) | |
| Institutional 2 Class | (946,487) | |
| Institutional 3 Class | (30,691,913) | |
| Class R | (1,153,898) | |
| Class T | (57,006) | |
| Class V | (15,653,992) | |
| Net investment income | | |
| Advisor Class | | (22,659) |
| Institutional Class | | (1,508,466) |
| Institutional 2 Class | | (62,104) |
| Institutional 3 Class | | (1,081,036) |
| Net realized gains | | |
| Class A | | (112,241,817) |
| Advisor Class | | (855,291) |
| Class C | | (7,326,924) |
| Class E | | (992,652) |
| Institutional Class | | (53,828,606) |
| Institutional 2 Class | | (1,668,444) |
| Institutional 3 Class | | (24,933,309) |
| Class K | | (4,285) |
| Class R | | (1,580,732) |
| Class T | | (52,395) |
| Class V | | (12,101,679) |
| Total distributions to shareholders (Note 2) | (277,206,120) | (218,260,399) |
| Decrease in net assets from capital stock activity | (91,690,891) | (152,557,783) |
| Total increase (decrease) in net assets | (105,983,314) | 213,304,133 |
| Net assets at beginning of year | 3,746,864,062 | 3,533,559,929 |
| Net assets at end of year | $3,640,880,748 | $3,746,864,062 |
| Excess of distributions over net investment income | $(2,363,876) | $(3,685,921) |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 15 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2019 | July 31, 2018 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions | 1,426,450 | 57,174,126 | 2,102,312 | 89,098,132 |
| Distributions reinvested | 3,747,968 | 141,673,196 | 2,745,341 | 107,425,195 |
| Redemptions | (5,735,870) | (233,967,816) | (5,885,043) | (243,404,688) |
| Net decrease | (561,452) | (35,120,494) | (1,037,390) | (46,881,361) |
| Advisor Class | | | | |
| Subscriptions | 102,168 | 4,406,560 | 208,562 | 9,112,391 |
| Distributions reinvested | 22,737 | 917,219 | 19,245 | 797,718 |
| Redemptions | (178,940) | (7,737,359) | (188,110) | (8,398,940) |
| Net increase (decrease) | (54,035) | (2,413,580) | 39,697 | 1,511,169 |
| Class B | | | | |
| Redemptions | — | — | (74) | (2,385) |
| Net decrease | — | — | (74) | (2,385) |
| Class C | | | | |
| Subscriptions | 521,838 | 17,351,564 | 400,529 | 14,085,343 |
| Distributions reinvested | 213,974 | 6,631,057 | 209,315 | 6,886,462 |
| Redemptions | (593,560) | (19,909,665) | (1,535,106) | (55,326,412) |
| Net increase (decrease) | 142,252 | 4,072,956 | (925,262) | (34,354,607) |
| Class E | | | | |
| Subscriptions | 1,887 | 73,512 | 1,585 | 66,866 |
| Distributions reinvested | 33,469 | 1,257,746 | 25,479 | 992,652 |
| Redemptions | (54,195) | (2,208,191) | (55,739) | (2,298,436) |
| Net decrease | (18,839) | (876,933) | (28,675) | (1,238,918) |
| Class F | | | | |
| Redemptions | — | — | (76) | (2,621) |
| Net decrease | — | — | (76) | (2,621) |
| Institutional Class | | | | |
| Subscriptions | 1,438,810 | 61,794,580 | 1,902,143 | 81,613,462 |
| Distributions reinvested | 1,681,110 | 66,286,145 | 1,257,477 | 51,028,399 |
| Redemptions | (3,500,069) | (148,204,061) | (8,751,776) | (363,040,287) |
| Net decrease | (380,149) | (20,123,336) | (5,592,156) | (230,398,426) |
| Institutional 2 Class | | | | |
| Subscriptions | 112,453 | 4,784,662 | 212,123 | 9,197,173 |
| Distributions reinvested | 23,971 | 946,152 | 42,628 | 1,730,288 |
| Redemptions | (111,991) | (4,720,036) | (604,968) | (26,497,611) |
| Net increase (decrease) | 24,433 | 1,010,778 | (350,217) | (15,570,150) |
| Institutional 3 Class | | | | |
| Subscriptions | 510,725 | 21,835,021 | 6,212,215 | 254,221,819 |
| Distributions reinvested | 374,684 | 14,829,998 | 292,172 | 11,885,552 |
| Redemptions | (1,624,010) | (69,881,542) | (1,583,443) | (68,842,946) |
| Net increase (decrease) | (738,601) | (33,216,523) | 4,920,944 | 197,264,425 |
| Class K | | | | |
| Distributions reinvested | — | — | 101 | 4,118 |
| Redemptions | — | — | (1,805) | (80,309) |
| Net decrease | — | — | (1,704) | (76,191) |
| Class R | | | | |
| Subscriptions | 124,132 | 4,823,223 | 138,681 | 5,589,740 |
| Distributions reinvested | 10,431 | 390,237 | 5,896 | 229,133 |
| Redemptions | (192,102) | (7,708,150) | (530,901) | (21,760,491) |
| Net decrease | (57,539) | (2,494,690) | (386,324) | (15,941,618) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2019 | July 31, 2018 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Class T | | | | |
| Distributions reinvested | 1,498 | 56,748 | 1,332 | 52,258 |
| Redemptions | (19,011) | (696,978) | (10,607) | (435,208) |
| Net decrease | (17,513) | (640,230) | (9,275) | (382,950) |
| Class V | | | | |
| Subscriptions | 103,032 | 3,910,111 | 88,665 | 3,488,181 |
| Distributions reinvested | 311,108 | 11,644,762 | 232,297 | 9,008,492 |
| Redemptions | (428,066) | (17,443,712) | (462,579) | (18,980,823) |
| Net decrease | (13,926) | (1,888,839) | (141,617) | (6,484,150) |
| Total net decrease | (1,675,369) | (91,690,891) | (3,512,129) | (152,557,783) |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 17 |
The following table is intended to help you understand the Fund’s financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. Per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total return assumes reinvestment of all dividends and distributions, if any. Total return does not reflect payment of sales charges, if any. Total return and portfolio turnover are not annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments and certain derivatives, if any. If such transactions were included, the Fund’s portfolio turnover rate may be higher.
| | 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 | Total
distributions to
shareholders |
| Class A |
| Year Ended 7/31/2019 | $43.86 | (0.04) | 2.98 | 2.94 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $39.81 | (0.05) | 6.62 | 6.57 | — | (2.52) | (2.52) |
| Year Ended 7/31/2017 | $33.82 | 0.06 | 6.47 | 6.53 | (0.08) | (0.46) | (0.54) |
| Year Ended 7/31/2016 | $37.69 | 0.00(d) | (0.36) | (0.36) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $34.51 | 0.03 | 7.24 | 7.27 | (0.09) | (4.00) | (4.09) |
| Advisor Class |
| Year Ended 7/31/2019 | $46.53 | 0.07 | 3.20 | 3.27 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $42.06 | 0.05 | 7.00 | 7.05 | (0.06) | (2.52) | (2.58) |
| Year Ended 7/31/2017 | $35.69 | 0.15 | 6.84 | 6.99 | (0.16) | (0.46) | (0.62) |
| Year Ended 7/31/2016 | $39.49 | 0.07 | (0.36) | (0.29) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $35.98 | 0.06 | 7.63 | 7.69 | (0.18) | (4.00) | (4.18) |
| Class C |
| Year Ended 7/31/2019 | $36.70 | (0.29) | 2.39 | 2.10 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $33.95 | (0.30) | 5.57 | 5.27 | — | (2.52) | (2.52) |
| Year Ended 7/31/2017 | $29.06 | (0.18) | 5.53 | 5.35 | — | (0.46) | (0.46) |
| Year Ended 7/31/2016 | $33.11 | (0.21) | (0.33) | (0.54) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $30.90 | (0.21) | 6.42 | 6.21 | — | (4.00) | (4.00) |
| Class E |
| Year Ended 7/31/2019 | $43.65 | (0.08) | 2.95 | 2.87 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $39.67 | (0.10) | 6.60 | 6.50 | — | (2.52) | (2.52) |
| Year Ended 7/31/2017 | $33.70 | 0.02 | 6.45 | 6.47 | (0.04) | (0.46) | (0.50) |
| Year Ended 7/31/2016 | $37.60 | (0.03) | (0.36) | (0.39) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $34.44 | (0.00)(d) | 7.22 | 7.22 | (0.06) | (4.00) | (4.06) |
| Institutional Class |
| Year Ended 7/31/2019 | $45.56 | 0.06 | 3.13 | 3.19 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $41.23 | 0.06 | 6.86 | 6.92 | (0.07) | (2.52) | (2.59) |
| Year Ended 7/31/2017 | $35.00 | 0.15 | 6.70 | 6.85 | (0.16) | (0.46) | (0.62) |
| Year Ended 7/31/2016 | $38.79 | 0.09 | (0.37) | (0.28) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $35.41 | 0.13 | 7.43 | 7.56 | (0.18) | (4.00) | (4.18) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Class A |
| Year Ended 7/31/2019 | $43.43 | 7.84% | 1.04% | 1.04% | (0.10%) | 35% | $1,932,367 |
| Year Ended 7/31/2018 | $43.86 | 17.26% | 1.05% | 1.05%(c) | (0.13%) | 32% | $1,976,097 |
| Year Ended 7/31/2017 | $39.81 | 19.61% | 1.09% | 1.09%(c) | 0.16% | 29% | $1,835,075 |
| Year Ended 7/31/2016 | $33.82 | (0.99%) | 1.10% | 1.10%(c) | 0.01% | 45% | $1,809,727 |
| Year Ended 7/31/2015 | $37.69 | 22.51% | 1.11% | 1.11%(c) | 0.09% | 59% | $1,870,452 |
| Advisor Class |
| Year Ended 7/31/2019 | $46.43 | 8.11% | 0.79% | 0.79% | 0.15% | 35% | $12,088 |
| Year Ended 7/31/2018 | $46.53 | 17.52% | 0.80% | 0.80%(c) | 0.12% | 32% | $14,629 |
| Year Ended 7/31/2017 | $42.06 | 19.92% | 0.84% | 0.84%(c) | 0.40% | 29% | $11,552 |
| Year Ended 7/31/2016 | $35.69 | (0.76%) | 0.85% | 0.85%(c) | 0.21% | 45% | $9,217 |
| Year Ended 7/31/2015 | $39.49 | 22.80% | 0.86% | 0.86%(c) | 0.17% | 59% | $6,506 |
| Class C |
| Year Ended 7/31/2019 | $35.43 | 7.03% | 1.79% | 1.79% | (0.86%) | 35% | $78,293 |
| Year Ended 7/31/2018 | $36.70 | 16.37% | 1.80% | 1.80%(c) | (0.87%) | 32% | $75,872 |
| Year Ended 7/31/2017 | $33.95 | 18.72% | 1.84% | 1.84%(c) | (0.58%) | 29% | $101,600 |
| Year Ended 7/31/2016 | $29.06 | (1.73%) | 1.86% | 1.86%(c) | (0.74%) | 45% | $109,092 |
| Year Ended 7/31/2015 | $33.11 | 21.59% | 1.86% | 1.86%(c) | (0.67%) | 59% | $85,724 |
| Class E |
| Year Ended 7/31/2019 | $43.15 | 7.71% | 1.14% | 1.14% | (0.20%) | 35% | $15,875 |
| Year Ended 7/31/2018 | $43.65 | 17.14% | 1.15% | 1.15%(c) | (0.23%) | 32% | $16,877 |
| Year Ended 7/31/2017 | $39.67 | 19.50% | 1.19% | 1.19%(c) | 0.06% | 29% | $16,478 |
| Year Ended 7/31/2016 | $33.70 | (1.08%) | 1.20% | 1.20%(c) | (0.09%) | 45% | $14,797 |
| Year Ended 7/31/2015 | $37.60 | 22.37% | 1.21% | 1.21%(c) | (0.00%)(d) | 59% | $16,539 |
| Institutional Class |
| Year Ended 7/31/2019 | $45.38 | 8.11% | 0.79% | 0.79% | 0.15% | 35% | $975,664 |
| Year Ended 7/31/2018 | $45.56 | 17.54% | 0.80% | 0.80%(c) | 0.13% | 32% | $996,845 |
| Year Ended 7/31/2017 | $41.23 | 19.92% | 0.84% | 0.84%(c) | 0.40% | 29% | $1,132,702 |
| Year Ended 7/31/2016 | $35.00 | (0.74%) | 0.85% | 0.85%(c) | 0.26% | 45% | $957,955 |
| Year Ended 7/31/2015 | $38.79 | 22.80% | 0.86% | 0.86%(c) | 0.34% | 59% | $1,049,380 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 19 |
Financial Highlights (continued)
| | 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 | Total
distributions to
shareholders |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $45.59 | 0.09 | 3.13 | 3.22 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $41.25 | 0.08 | 6.87 | 6.95 | (0.09) | (2.52) | (2.61) |
| Year Ended 7/31/2017 | $35.02 | 0.18 | 6.70 | 6.88 | (0.19) | (0.46) | (0.65) |
| Year Ended 7/31/2016 | $38.77 | 0.09 | (0.33) | (0.24) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $35.39 | 0.09 | 7.51 | 7.60 | (0.22) | (4.00) | (4.22) |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $45.70 | 0.11 | 3.15 | 3.26 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $41.35 | 0.09 | 6.88 | 6.97 | (0.10) | (2.52) | (2.62) |
| Year Ended 7/31/2017 | $35.10 | 0.16 | 6.76 | 6.92 | (0.21) | (0.46) | (0.67) |
| Year Ended 7/31/2016 | $38.83 | 0.13 | (0.35) | (0.22) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $35.44 | 0.07 | 7.57 | 7.64 | (0.25) | (4.00) | (4.25) |
| Class R |
| Year Ended 7/31/2019 | $43.49 | (0.14) | 2.94 | 2.80 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $39.59 | (0.14) | 6.56 | 6.42 | — | (2.52) | (2.52) |
| Year Ended 7/31/2017 | $33.65 | (0.04) | 6.44 | 6.40 | — | (0.46) | (0.46) |
| Year Ended 7/31/2016 | $37.60 | (0.07) | (0.37) | (0.44) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $34.44 | (0.07) | 7.24 | 7.17 | (0.01) | (4.00) | (4.01) |
| Class V |
| Year Ended 7/31/2019 | $43.47 | (0.04) | 2.95 | 2.91 | — | (3.37) | (3.37) |
| Year Ended 7/31/2018 | $39.48 | (0.05) | 6.56 | 6.51 | — | (2.52) | (2.52) |
| Year Ended 7/31/2017 | $33.55 | 0.06 | 6.41 | 6.47 | (0.08) | (0.46) | (0.54) |
| Year Ended 7/31/2016 | $37.41 | 0.00(d) | (0.35) | (0.35) | — | (3.51) | (3.51) |
| Year Ended 7/31/2015 | $34.27 | 0.03 | 7.19 | 7.22 | (0.08) | (4.00) | (4.08) |
| 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. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $45.44 | 8.17% | 0.74% | 0.74% | 0.20% | 35% | $13,783 |
| Year Ended 7/31/2018 | $45.59 | 17.63% | 0.73% | 0.73% | 0.19% | 32% | $12,715 |
| Year Ended 7/31/2017 | $41.25 | 20.02% | 0.74% | 0.74% | 0.49% | 29% | $25,954 |
| Year Ended 7/31/2016 | $35.02 | (0.64%) | 0.76% | 0.76% | 0.28% | 45% | $21,789 |
| Year Ended 7/31/2015 | $38.77 | 22.95% | 0.75% | 0.75% | 0.25% | 59% | $3,879 |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $45.59 | 8.24% | 0.69% | 0.69% | 0.26% | 35% | $394,049 |
| Year Ended 7/31/2018 | $45.70 | 17.65% | 0.69% | 0.69% | 0.20% | 32% | $428,819 |
| Year Ended 7/31/2017 | $41.35 | 20.09% | 0.69% | 0.69% | 0.41% | 29% | $184,471 |
| Year Ended 7/31/2016 | $35.10 | (0.58%) | 0.69% | 0.69% | 0.39% | 45% | $24,530 |
| Year Ended 7/31/2015 | $38.83 | 23.03% | 0.71% | 0.71% | 0.19% | 59% | $2,750 |
| Class R |
| Year Ended 7/31/2019 | $42.92 | 7.57% | 1.29% | 1.29% | (0.35%) | 35% | $13,233 |
| Year Ended 7/31/2018 | $43.49 | 16.96% | 1.30% | 1.30%(c) | (0.35%) | 32% | $15,911 |
| Year Ended 7/31/2017 | $39.59 | 19.29% | 1.34% | 1.34%(c) | (0.10%) | 29% | $29,781 |
| Year Ended 7/31/2016 | $33.65 | (1.22%) | 1.36% | 1.36%(c) | (0.22%) | 45% | $24,920 |
| Year Ended 7/31/2015 | $37.60 | 22.20% | 1.36% | 1.36%(c) | (0.20%) | 59% | $5,421 |
| Class V |
| Year Ended 7/31/2019 | $43.01 | 7.84% | 1.04% | 1.04% | (0.11%) | 35% | $205,528 |
| Year Ended 7/31/2018 | $43.47 | 17.25% | 1.05% | 1.05%(c) | (0.13%) | 32% | $208,329 |
| Year Ended 7/31/2017 | $39.48 | 19.59% | 1.09% | 1.09%(c) | 0.16% | 29% | $194,803 |
| Year Ended 7/31/2016 | $33.55 | (0.97%) | 1.11% | 1.11%(c) | 0.01% | 45% | $179,935 |
| Year Ended 7/31/2015 | $37.41 | 22.49% | 1.13% | 1.13%(c) | 0.08% | 59% | $197,026 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Large Cap Growth Fund | Annual Report 2019
| 21 |
Notes to Financial Statements
July 31, 2019
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). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. 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. Each share class has its own expense and sales charge structure. Different share classes may have different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s prospectus, Class A and Class C shares are offered to the general public for investment. Advisor Class, Institutional Class, Institutional 2 Class, Institutional 3 Class and Class R shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional and to certain other investors as also described in the Fund’s prospectus. Class E shares are trust shares which are held in an irrevocable trust until the specified trust termination date and are closed to new investors and new accounts. Class C shares automatically convert to Class A shares after 10 years. Effective December 14, 2018, Class T shares merged, in a tax-free transaction, into Class A shares of the Fund and are no longer offered for sale. Class V shares are available only to investors who received (and who continuously held) Class V shares in connection with previous fund reorganizations.
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 official closing price on the principal exchange or market on which they trade. 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 determined at the scheduled closing time of the New York Stock Exchange. 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
| 22 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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.
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.
Columbia Large Cap Growth Fund | Annual Report 2019
| 23 |
Notes to Financial Statements (continued)
July 31, 2019
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 investment company taxable income and net capital gain, 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 ordinary income, capital gain net income 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 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 pronouncements
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. Management does not expect the implementation of this guidance to have a material impact on the financial statement amounts and footnote disclosures.
Accounting Standards Update 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
| 24 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. After evaluation, Management determined to adopt the ASU effective for periods ending July 31, 2019 and all subsequent periods. As a result of the amendments, management implemented disclosure changes which include removal of the amount and reasons for transfers between level 1 and level 2 of the fair value hierarchy, removal of the policy for the timing of transfers between levels, removal of the description of the level 3 valuation processes, as well as modifications to the measurement uncertainty disclosure.
Disclosure Update and Simplification
In September 2018, the Securities and Exchange Commission (SEC) released Final Rule 33-10532, Disclosure Update and Simplification, which amends certain financial statement disclosure requirements that the SEC determined to be redundant, outdated, or superseded in light of other SEC disclosure requirements, GAAP, or changes in the information environment. As a result of the amendments, management implemented disclosure changes which included removing the components of distributable earnings presented on the Statement of Assets and Liabilities and combining income and gain distributions paid to shareholders as presented on the Statement of Changes in Net Assets. Any values presented to meet prior year requirements were left unchanged. The amendments had no effect on the Fund’s net assets or results of operation.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund has 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, 2019 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 Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Deferred 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. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
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 DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
Columbia Large Cap Growth Fund | Annual Report 2019
| 25 |
Notes to Financial Statements (continued)
July 31, 2019
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, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class 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.
For the year ended July 31, 2019, 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 | 0.12 |
| Advisor Class | 0.12 |
| Class C | 0.12 |
| Class E | 0.12 |
| Institutional Class | 0.12 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
| Class R | 0.12 |
| Class T | 0.04(a) |
| Class V | 0.12 |
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 expired on January 31, 2019. SDC is owned by six associated investment companies, including the Fund. The Fund’s ownership interest in SDC at July 31, 2019 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, 2019, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into 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 C, Class E 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%, 0.10%, 0.50% and 0.25% of the average daily net assets attributable to Class A, Class C, Class E, Class R and Class T shares of the Fund, respectively. As a result of all Class T shares of the Fund being redeemed or converted to Class A shares, December 14, 2018 was the last day the Fund paid a distribution and shareholder services fee for Class T shares.
| 26 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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 have paid 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, 2019, if any, are listed below:
| | Front End (%) | CDSC (%) | Amount ($) |
| Class A | 5.75 | 0.50 - 1.00(a) | 606,438 |
| Class C | — | 1.00(b) | 6,804 |
| Class E | 4.50 | 1.00(b) | 1,306 |
| Class T | 2.50 | — | — |
| Class V | 5.75 | 0.50 - 1.00(a) | 14,663 |
| (a) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share classes are not subject to sales charges.
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, 2018
through
November 30, 2019 | Prior to
December 1, 2018 |
| Class A | 1.15% | 1.19% |
| Advisor Class | 0.90 | 0.94 |
| Class C | 1.90 | 1.94 |
| Class E | 1.25 | 1.29 |
| Institutional Class | 0.90 | 0.94 |
| Institutional 2 Class | 0.84 | 0.87 |
| Institutional 3 Class | 0.80 | 0.83 |
| Class R | 1.40 | 1.44 |
| Class V | 1.15 | 1.19 |
Columbia Large Cap Growth Fund | Annual Report 2019
| 27 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019, these differences were primarily due to differing treatment for deferral/reversal of wash sale losses, post-October capital losses, late-year ordinary losses, trustees’ deferred compensation, foreign currency transactions and net operating loss reclassification. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications were made:
Excess of distributions
over net investment
income ($) | Accumulated
net realized
gain ($) | Paid in
capital ($) |
| 1,804,238 | (1,613,605) | (190,633) |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2019 | Year Ended July 31, 2018 |
Ordinary
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Long-term
capital gains ($) | Total ($) |
| — | 277,206,120 | 277,206,120 | 7,462,707 | 210,797,692 | 218,260,399 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2019, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 213,791,277 | — | 1,507,404,750 |
At July 31, 2019, the cost of all 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) ($) | Net unrealized
appreciation ($) |
| 2,130,993,923 | 1,563,180,037 | (55,775,287) | 1,507,404,750 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
| 28 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year. As of July 31, 2019, the Fund will elect to treat the following late-year ordinary losses and post-October capital losses as arising on August 1, 2019.
Late year
ordinary losses ($) | Post-October
capital losses ($) |
| 2,005,769 | 4,745,940 |
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 $1,236,653,984 and $1,562,690,896, respectively, for the year ended July 31, 2019. 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. The Affiliated MMF prices its shares with a floating net asset value. 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. Interfund lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and, except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject to certain restrictions.
Interfund loans are subject to the risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the Interfund Program during the year ended July 31, 2019 was as follows:
| Borrower or lender | Average loan
balance ($) | Weighted average
interest rate (%) | Days
outstanding |
| Lender | 1,000,000 | 2.93 | 4 |
Interest income earned by the Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at July 31, 2019.
Note 8. 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
Columbia Large Cap Growth Fund | Annual Report 2019
| 29 |
Notes to Financial Statements (continued)
July 31, 2019
funds managed by the Investment Manager or an affiliated 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 federal funds effective rate, (ii) the one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 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 unused 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. This agreement expires annually in December unless extended or renewed.
The Fund had no borrowings during the year ended July 31, 2019.
Note 9. Significant risks
Shareholder concentration risk
At July 31, 2019, affiliated shareholders of record owned 41.0% 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 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 and noted 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
| 30 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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 Large Cap Growth Fund | Annual Report 2019
| 31 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Columbia Funds Series Trust I and Shareholders of Columbia Large Cap Growth Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia Large Cap Growth Fund (one of the funds constituting Columbia Funds Series Trust I, hereafter referred to as the "Fund") as of July 31, 2019, the related statement of operations for the year ended July 31, 2019, the statement of changes in net assets for each of the two years in the period ended July 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended July 31, 2019 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2019, 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 ended July 31, 2019 and the financial highlights for each of the five years in the period ended July 31, 2019 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2019 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 20, 2019
We have served as the auditor of one or more investment companies within the Columbia Funds Complex since 1977.
| 32 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2019. Shareholders will be notified in early 2020 of the amounts for use in preparing 2019 income tax returns.
Capital
gain
dividend | |
| $304,561,785 | |
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.
Columbia Large Cap Growth Fund | Annual Report 2019
| 33 |
The Board oversees the Fund’s operations and 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 as of the printing of this report, 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), September 2007-October 2018 | 69 | 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, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 69 | Spartan Nash Company, (food distributor); former Director, Nash Finch Company (food distributor), 2005-2013; Aircastle Limited (aircraft leasing); former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; 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), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 69 | 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 | 69 | Director, CSX Corporation (transportation suppliers); 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 |
| 34 | Columbia Large Cap Growth Fund | Annual Report 2019 |
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 |
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, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 69 | 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, 1988-2014 | 69 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
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, 1994-1997, President – Application Systems Division, 1991-1994, Chief Financial Officer – US Marketing & Services, 1988-1991, and Chief Information Officer, 1987-1988, IBM Corporation (computer and technology) | 69 | Former Director, Enesco Group, Inc. (producer of giftware and home and garden decor products), 2001-2006 |
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; Adjunct Professor of Finance, Bentley University since November 2017; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2009-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 69 | Director, The Autism Project since March 2015; former Trustee, New Century Portfolios, March 2015-December 2017; formerly on Board of Governors, Gateway Healthcare, January 2016 – December 2017 |
Columbia Large Cap Growth Fund | Annual Report 2019
| 35 |
TRUSTEES AND OFFICERS (continued)
Consultants to the 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 Funds complex overseen | Other directorships held by Trustee during the past five years |
Olive Darragh
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street,
Mail Drop BX32 05228,
Boston, MA 02110
1962 | Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio (an investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 69 | Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
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 Portfolio Solutions LLC (asset management and consulting services) since January 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 69 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions) |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. 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, Ms. Darragh 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 | 190 | 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, August 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, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
| 36 | Columbia Large Cap Growth Fund | Annual Report 2019 |
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 as of the printing of this report, 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 | Chief Financial Officer (Principal Financial Officer) (2009) and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 - May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously Treasurer and Chief Accounting Officer, January 2009 - January 2019 and December 2015 - January 2019, respectively). |
Joseph Beranek
5890 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Treasurer and Chief Accounting Officer (Principal Accounting Officer) (2019) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
Paul B. Goucher
485 Lexington 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); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
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. |
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 Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); 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. |
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 Large Cap Growth Fund | Annual Report 2019
| 37 |
Board Consideration and Approval of Management
Agreement
On June 12, 2019, 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, among themselves, with the management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant 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 5, 2019, April 25, 2019 and June 11, 2019 and at Board meetings held on March 6, 2019 and June 12, 2019. In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet 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 with other investment personnel at various times throughout the year. The Committee and the Board also consulted with the 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 11, 2019, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 12, 2019, 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, 2019 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 accounts and collective trusts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| 38 | Columbia Large Cap Growth Fund | Annual Report 2019 |
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 funds using an investment strategy similar to that used by the Investment Manager for the Fund. 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 the resources dedicated by the Investment Manager and its affiliates to risk management, 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, 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 information and analysis 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 support 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, 2018, the Fund’s performance was in the eighty-fifth, ninetieth and sixty-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.
Columbia Large Cap Growth Fund | Annual Report 2019
| 39 |
Board Consideration and Approval of Management
Agreement (continued)
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 support 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, 2018, the Fund’s actual management fee and net total expense ratio were 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 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, supported 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, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
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 2018 to profitability levels realized in 2017. 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.
| 40 | Columbia Large Cap Growth Fund | Annual Report 2019 |
Board Consideration and Approval of Management
Agreement (continued)
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 noted 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 considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. 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 Large Cap Growth Fund | Annual Report 2019
| 41 |
The Fund mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. 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/investor/; 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/investor/, 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-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, 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/investor/ 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 219104
Kansas City, MO 64121-9104
| 42 | Columbia Large Cap Growth Fund | Annual Report 2019 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Large Cap Growth Fund
P.O. Box 219104
Kansas City, MO 64121-9104
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/investor/. 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.
© 2019 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Annual Report
July 31, 2019
Columbia Oregon Intermediate Municipal Bond Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified by mail and provided with a website address to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank guarantee • May lose value
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
Investment objective
Columbia Oregon Intermediate Municipal 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
Paul Fuchs, CFA
Lead Portfolio Manager
Managed Fund since 2016
Anders Myhran
Portfolio Manager
Managed Fund since May 2019
Deborah Vargo
Portfolio Manager
Managed Fund since 2017
| Average annual total returns (%) (for the period ended July 31, 2019) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/01/02 | 5.94 | 2.50 | 3.19 |
| | Including sales charges | | 2.72 | 1.87 | 2.87 |
| Advisor Class* | 03/19/13 | 6.21 | 2.77 | 3.45 |
| Class C | Excluding sales charges | 10/13/03 | 5.46 | 2.04 | 2.75 |
| | Including sales charges | | 4.46 | 2.04 | 2.75 |
| Institutional Class | 07/02/84 | 6.20 | 2.75 | 3.45 |
| Institutional 2 Class* | 11/08/12 | 6.33 | 2.81 | 3.48 |
| Institutional 3 Class* | 03/01/17 | 6.37 | 2.79 | 3.47 |
| Bloomberg Barclays 3-15 Year Blend Municipal Bond Index | | 7.03 | 3.36 | 4.10 |
Returns for Class A shares are shown with and without the maximum initial sales charge of 3.00%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share 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 share 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 columbiathreadneedleus.com/investor/ 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 columbiathreadneedleus.com/investor/investment-products /mutual-funds/appended-performance for more information. |
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index is an unmanaged index that tracks the performance of municipal bonds issued after December 31, 1990, with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (July 31, 2009 — July 31, 2019)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia Oregon Intermediate Municipal Bond Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares.
| Quality breakdown (%) (at July 31, 2019) |
| AAA rating | 9.5 |
| AA rating | 55.4 |
| A rating | 23.5 |
| BBB rating | 3.9 |
| BB rating | 0.7 |
| C rating | 1.8 |
| Not rated | 5.2 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments.
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Manager Discussion of Fund Performance
For the 12-month period ended July 31, 2019, Class A shares of the Fund returned 5.94% excluding sales charges. Institutional Class shares of the Fund returned 6.20%. The Fund underperformed its benchmark, the Bloomberg Barclays 3-15 Year Blend Municipal Bond Index, which gained 7.03% for the same time period.
Market overview
Municipal bonds generated healthy gains in the 12-month reporting period, with the bulk of the rally occurring from November 2018 onward. After an initial advance in August 2018, the tax-exempt market moved lower over the next two months. During this time, U.S. Treasury yields climbed on indications that the U.S. Federal Reserve (Fed) would take a more aggressive approach to raising interest rates in 2019 than investors had been expecting. (Prices and yields move in opposite directions.)
Sentiment turned positive in early November, causing yields to fall sharply through the end of 2018. The fixed-income markets were boosted by the combination of slowing global growth, volatility in higher risk assets, and expectations that the Fed would in fact adopt a more accommodative stance. In addition, various geopolitical factors — including the U.S-China trade dispute, negotiations surrounding Brexit (the U.K.’s exit from the European Union), and the U.S. government shutdown — fueled a “flight to quality” into bonds. Municipals rallied as a result, helping the national indexes finish 2018 in positive territory.
The rally continued into the New Year, leading to the largest first-quarter gain for the tax-exempt market since 2014. The first quarter was also the sixth-best for municipals in the past 30 years, due in part to the backdrop of slow global growth and the increasingly accommodative policies of the world’s major central banks. Supply-and-demand factors were highly favorable as well. Municipal bond mutual funds experienced record inflows, fueled by strong demand resulting from the cap on state and local tax deductions in the Tax Cuts and Jobs Act of 2017. At the same time, new-issue supply was limited. Trends in the Treasury market were also supportive, as yields fell in anticipation of a more accommodative Fed. These developments propelled municipals higher through the spring and into July 2019, helping them post a solid gain for the full 12 months.
Longer term bonds outpaced shorter term issues in the annual period, while lower quality securities outperformed their higher rated counterparts. The “risk-on” environment of January 2019 to May 2019 contributed to robust investor demand for higher yielding, lower rated debt. This trend reversed in June and July 2019, however, as growing investor risk aversion led to outperformance for higher quality issues.
Oregon municipal bond market posted a healthy gain
Oregon intermediate-term municipal bonds performed closely in line with the national index. The state has a higher quality credit profile, which was a headwind in the environment of the past 12 months, but this factor was offset by the market’s higher average maturity and longer duration (interest-rate sensitivity). The national index also had the benefit of very strong return contributions from lower quality states such as New Jersey, Connecticut and Illinois.
Although Oregon’s economic expansion slowed somewhat, it remained at a pace that matched the country as a whole. Since China is now the top destination for the state’s exports, the intensifying trade war began to have some impact on the economy. The state’s fiscal condition remained on solid ground, with a significant budget surplus in the 2017-2019 interval, but its latest economic forecast had a more cautious tone. On the positive side, both job growth and housing prices continued to outperform the national averages.
We will be keeping a close eye on a 2020 ballot measure to increase the cigarette tax from $1.33 to $3.33 per pack and impose a tax on nicotine inhalant delivery systems, such as e-cigarettes. The measure, if approved, would dedicate the revenues to the Oregon Health Authority for medical and health programs, potentially strengthening the state’s financial position.
Contributors and detractors
The Fund’s short duration (interest rate sensitivity) compared to the benchmark, which is national in scope, detracted from relative performance. The Fund also had just under 5% of net assets in pre-refunded and/or escrowed-to-maturity bonds. Most of these securities mature in one to two years and are of the highest credit quality, since they are backed by either
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 5 |
Manager Discussion of Fund Performance (continued)
U.S. Treasuries or U.S. government agency bonds. This portion of the portfolio was very low yielding and contributed little to total return, which detracted from performance in the rising market. We reduced the Fund’s weighting in this area from about 9.5% of net assets to 5% during the course of the period.
Positions in the hospital and education sectors detracted from relative performance as well. On the other hand, the Fund benefited by having its three largest sector weightings in the strong-performing local general obligation, transportation and water & sewer categories. Positions in bonds rated below-investment-grade also performed well. An overweight in zero-coupon issues was a further benefit, as their longer duration was beneficial at a time of falling yields.
Fund positioning
We continued to emphasize bottom-up, issue-by-issue credit research and maintaining a competitive dividend yield for shareholders. As always, we closely analyzed what effect new purchases would have on the portfolio, while seeking to manage capital gains in order to minimize tax consequences.
We added market exposure over the period by lengthening the Fund’s average maturity by approximately 0.5 years. Much of the catalyst for this move was the shift in the Fed’s policy stance. As part of the change, we reduced the portfolio’s holdings in bonds with maturities of two years and less. We had been holding an above-average weighting in this area in response to the Fed’s tightening cycle, but we saw less of a benefit in maintaining the position following the Fed’s pivot to a more accommodative posture.
We continued to take a cautious approach with regard to security selection given the ongoing uncertainty surrounding the U.S. economic outlook. The Fund’s overall quality and sector positioning was relatively stable over the course of the reporting period. We closed the period with an average credit quality of AA, which compared with AA- for the state as a whole.
Fixed-income securities presentissuerdefault risk. The Fund invests substantially inmunicipal 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 moregeographically diversifiedfund.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 ininterest ratesmay 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.Marketrisk may affect a single issuer, sector of the economy, industry or the market as a whole. Federal and statetaxrules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state or local taxes.Liquidityrisk is associated with the difficulty of selling underlying investments at a desirable time or price. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund 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 $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2019 — July 31, 2019 |
| | Account value at the
beginning of the
period ($) | 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 | 1,040.20 | 1,020.73 | 4.15 | 4.11 | 0.82 |
| Advisor Class | 1,000.00 | 1,000.00 | 1,041.50 | 1,021.97 | 2.89 | 2.86 | 0.57 |
| Class C | 1,000.00 | 1,000.00 | 1,037.90 | 1,018.50 | 6.42 | 6.36 | 1.27 |
| Institutional Class | 1,000.00 | 1,000.00 | 1,041.50 | 1,021.97 | 2.89 | 2.86 | 0.57 |
| Institutional 2 Class | 1,000.00 | 1,000.00 | 1,042.50 | 1,022.12 | 2.73 | 2.71 | 0.54 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 1,042.70 | 1,022.36 | 2.48 | 2.46 | 0.49 |
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.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 7 |
Portfolio of Investments
July 31, 2019
(Percentages represent value of investments compared to net assets)
Investments in securities
| Floating Rate Notes 2.4% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Variable Rate Demand Notes 2.4% |
| City of Minneapolis/St. Paul Housing & Redevelopment Authority(a),(b) |
| Revenue Bonds |
| Allina Health Systems |
| Series 2009B-2 (JPMorgan Chase Bank) |
| 11/15/2035 | 1.480% | | 1,600,000 | 1,600,000 |
| New York City Water & Sewer System(a),(b) |
| Revenue Bonds |
| 2nd General Resolution |
| Series 2013 (JPMorgan Chase Bank) |
| 06/15/2050 | 1.480% | | 1,655,000 | 1,655,000 |
| Series 2016BB (State Street Bank and Trust Co.) |
| 06/15/2049 | 1.490% | | 1,000,000 | 1,000,000 |
| 06/15/2049 | 1.490% | | 1,000,000 | 1,000,000 |
| Ohio Higher Educational Facility Commission(a),(b) |
| Revenue Bonds |
| Cleveland Clinic Health System Obligation |
| Series 2013 (Wells Fargo Bank) |
| 01/01/2039 | 1.420% | | 1,000,000 | 1,000,000 |
| Triborough Bridge & Tunnel Authority(a),(b) |
| Refunding Revenue Bonds |
| General |
| Subordinated Series 2018-B-3 (State Street Bank and Trust Co.) |
| 01/01/2032 | 1.450% | | 1,400,000 | 1,400,000 |
| Series 2018C (State Street Bank and Trust Co.) |
| 01/01/2032 | 1.450% | | 1,000,000 | 1,000,000 |
| Total | 8,655,000 |
Total Floating Rate Notes
(Cost $8,655,000) | 8,655,000 |
|
| Municipal Bonds 96.3% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Airport 3.7% |
| Port of Portland |
| Refunding Revenue Bonds |
| Portland International Airport |
| Series 2015-23 |
| 07/01/2028 | 5.000% | | 1,240,000 | 1,485,222 |
| 07/01/2031 | 5.000% | | 1,750,000 | 2,067,993 |
| 07/01/2032 | 5.000% | | 2,000,000 | 2,355,600 |
| Revenue Bonds |
| Passenger Facility Charge |
| Series 2011 |
| 07/01/2027 | 5.500% | | 6,635,000 | 7,195,923 |
| Total | 13,104,738 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Charter Schools 0.2% |
| Oregon State Facilities Authority(c) |
| Revenue Bonds |
| Redmond Proficiency Academy Project |
| Series 2015 |
| 06/15/2025 | 4.750% | | 200,000 | 208,514 |
| 06/15/2035 | 5.500% | | 540,000 | 563,593 |
| Total | 772,107 |
| Higher Education 4.6% |
| City of Forest Grove |
| Refunding Revenue Bonds |
| Campus Improvement Pacific University Project |
| Series 2014 |
| 05/01/2034 | 5.250% | | 1,000,000 | 1,073,510 |
| Series 2015 |
| 05/01/2030 | 5.000% | | 550,000 | 623,161 |
| 05/01/2036 | 5.000% | | 1,500,000 | 1,663,725 |
| Oak Tree Foundation Project |
| Series 2017 |
| 03/01/2024 | 5.000% | | 250,000 | 277,115 |
| 03/01/2025 | 5.000% | | 200,000 | 225,334 |
| Oregon Health & Science University(d) |
| Revenue Bonds |
| Capital Appreciation-Independent School District |
| Series 1996A (NPFGC) |
| 07/01/2021 | 0.000% | | 3,515,000 | 3,351,096 |
| Oregon Health & Science University |
| Revenue Bonds |
| Series 2012E |
| 07/01/2032 | 5.000% | | 7,000,000 | 7,680,750 |
| Oregon State Facilities Authority |
| Refunding Revenue Bonds |
| Reed College Project |
| Series 2017A |
| 07/01/2032 | 4.000% | | 250,000 | 285,142 |
| University of Portland |
| Series 2015A |
| 04/01/2030 | 5.000% | | 500,000 | 583,070 |
| 04/01/2031 | 5.000% | | 530,000 | 615,950 |
| Total | 16,378,853 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Hospital 11.7% |
| Astoria Hospital Facilities Authority |
| Refunding Revenue Bonds |
| Columbia Memorial Hospital |
| Series 2012 |
| 08/01/2021 | 4.000% | | 725,000 | 760,387 |
| 08/01/2026 | 5.000% | | 1,200,000 | 1,309,236 |
| 08/01/2027 | 5.000% | | 1,260,000 | 1,371,611 |
| 08/01/2031 | 5.000% | | 2,860,000 | 3,089,029 |
| Hospital Facilities Authority of Multnomah County |
| Revenue Bonds |
| Adventist Health West |
| Series 2009A |
| 09/01/2021 | 5.000% | | 3,685,000 | 3,696,350 |
| Klamath Falls Intercommunity Hospital Authority |
| Refunding Revenue Bonds |
| Sky Lakes Medical Center Project |
| Series 2012 |
| 09/01/2022 | 5.000% | | 500,000 | 552,250 |
| Series 2016 |
| 09/01/2028 | 5.000% | | 265,000 | 319,087 |
| 09/01/2030 | 5.000% | | 830,000 | 990,572 |
| 09/01/2031 | 5.000% | | 500,000 | 592,290 |
| 09/01/2032 | 5.000% | | 270,000 | 318,476 |
| Oregon Health & Science University |
| Refunding Revenue Bonds |
| Series 2016B |
| 07/01/2034 | 5.000% | | 7,500,000 | 8,943,900 |
| Oregon State Facilities Authority |
| Refunding Revenue Bonds |
| Legacy Health Project |
| Series 2011A |
| 05/01/2020 | 5.250% | | 5,000,000 | 5,148,200 |
| Series 2016A |
| 06/01/2033 | 5.000% | | 1,600,000 | 1,904,368 |
| 06/01/2034 | 5.000% | | 3,185,000 | 3,778,875 |
| PeaceHealth Project |
| Series 2014A |
| 11/15/2029 | 5.000% | | 1,600,000 | 1,847,440 |
| Samaritan Health Services Project |
| Series 2010A |
| 10/01/2022 | 5.000% | | 3,450,000 | 3,606,940 |
| Salem Hospital Facility Authority |
| Refunding Revenue Bonds |
| Salem Health Project |
| Series 2016A |
| 05/15/2029 | 5.000% | | 1,000,000 | 1,200,480 |
| 05/15/2030 | 5.000% | | 1,000,000 | 1,194,800 |
| 05/15/2031 | 5.000% | | 1,025,000 | 1,214,840 |
| Total | 41,839,131 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Independent Power 1.7% |
| Western Generation Agency |
| Revenue Bonds |
| Wauna Cogeneration Project |
| Series 2006A |
| 01/01/2020 | 5.000% | | 3,235,000 | 3,235,259 |
| 01/01/2021 | 5.000% | | 3,000,000 | 3,000,150 |
| Total | 6,235,409 |
| Local General Obligation 36.0% |
| Benton & Linn Counties Consolidated School District No. 509J & 509A Corvallis(d) |
| Unlimited General Obligation Bonds |
| Series 2018A |
| 06/15/2038 | 0.000% | | 500,000 | 588,200 |
| Blue Mountain Community College District |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 06/15/2029 | 4.000% | | 1,000,000 | 1,127,940 |
| Boardman Park & Recreation District |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 06/15/2035 | 5.250% | | 3,400,000 | 3,800,588 |
| Canyonville South Umpqua Rural Fire Protection District |
| Unlimited General Obligation Bonds |
| Series 2001 |
| 07/01/2031 | 5.400% | | 610,000 | 611,074 |
| Central Oregon Community College |
| Limited General Obligation Bonds |
| Series 2014 |
| 06/01/2029 | 5.000% | | 500,000 | 580,820 |
| Unlimited General Obligation Bonds |
| Series 2010 |
| 06/15/2024 | 4.750% | | 2,580,000 | 2,660,780 |
| Chemeketa Community College |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 06/15/2026 | 5.000% | | 1,100,000 | 1,287,847 |
| Chemeketa Community College District |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 06/15/2026 | 4.000% | | 1,745,000 | 2,000,503 |
| City of Hillsboro |
| Limited General Obligation Refunding Bonds |
| Series 2012 |
| 06/01/2025 | 4.000% | | 1,875,000 | 2,017,969 |
| City of Lebanon |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 06/01/2026 | 5.000% | | 1,675,000 | 1,992,881 |
| 06/01/2027 | 5.000% | | 1,715,000 | 2,033,767 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 9 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Madras |
| Unlimited General Obligation Refunding Bonds |
| Series 2013 |
| 02/15/2024 | 4.000% | | 660,000 | 706,504 |
| 02/15/2027 | 4.500% | | 500,000 | 547,625 |
| City of Portland |
| Limited General Obligation Bonds |
| Limited Tax Sellwood Bridge Project |
| Series 2014 |
| 06/01/2024 | 5.000% | | 1,985,000 | 2,343,630 |
| Limited Tax General Obligation Refunding Bonds |
| Series 2011A |
| 06/01/2023 | 5.000% | | 6,140,000 | 6,573,054 |
| Unlimited General Obligation Refunding Bonds |
| Public Safety Projects and Emergency Facilities |
| Series 2014 |
| 06/15/2024 | 5.000% | | 1,885,000 | 2,228,108 |
| City of Portland(d) |
| Limited Tax General Obligation Bonds |
| Series 2001B |
| 06/01/2020 | 0.000% | | 4,000,000 | 3,961,440 |
| City of Redmond |
| Limited General Obligation Bonds |
| Series 2014A |
| 06/01/2027 | 5.000% | | 685,000 | 795,484 |
| City of Salem |
| Unlimited General Obligation Refunding Bonds |
| Series 2017 |
| 06/01/2030 | 4.000% | | 2,000,000 | 2,317,160 |
| City of Sisters |
| Limited General Obligation Refunding Bonds |
| Series 2016 |
| 12/01/2035 | 4.000% | | 620,000 | 682,384 |
| Clackamas Community College District(d) |
| Unlimited General Obligation Bonds |
| Convertible Deferred Interest |
| Series 2017A |
| 06/15/2038 | 0.000% | | 760,000 | 873,886 |
| Clackamas County School District No. 108 Estacada |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (AGM) |
| 06/15/2025 | 5.500% | | 2,485,000 | 3,080,505 |
| Clackamas County School District No. 12 North Clackamas |
| Unlimited General Obligation Bonds |
| Series 2017B |
| 06/15/2033 | 5.000% | | 3,500,000 | 4,296,005 |
| Unlimited General Obligation Refunding Bonds |
| Series 2014 |
| 06/15/2029 | 5.000% | | 1,500,000 | 1,750,215 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Clatsop County School District No. 1-C |
| Unlimited General Obligation Bonds |
| Astoria |
| 06/15/2035 | 5.000% | | 1,000,000 | 1,257,040 |
| Clatsop County School District No. 30 Warrenton-Hammond(d) |
| Unlimited General Obligation Bonds |
| Deferred Interest |
| 06/15/2035 | 0.000% | | 1,000,000 | 601,360 |
| Coos County School District No. 9 Coos Bay |
| Unlimited General Obligation Bonds |
| Series 2018 |
| 06/15/2034 | 5.000% | | 500,000 | 622,650 |
| 06/15/2035 | 5.000% | | 1,000,000 | 1,240,650 |
| Deschutes & Jefferson Counties School District No. 2J Redmond(d) |
| Unlimited General Obligation Bonds |
| Series 2004B (NPFGC) |
| 06/15/2022 | 0.000% | | 2,335,000 | 2,246,480 |
| Jackson County School District No. 4(d) |
| Unlimited General Obligation Bonds |
| Series 2018A |
| 06/15/2033 | 0.000% | | 1,000,000 | 648,560 |
| Jackson County School District No. 5 Ashland |
| Unlimited General Obligation Bonds |
| Series 2019 |
| 06/15/2036 | 5.000% | | 3,000,000 | 3,781,560 |
| Jackson County School District No. 549C Medford |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 12/15/2023 | 5.000% | | 1,000,000 | 1,163,550 |
| Jackson County School District No. 6 Central Point |
| Unlimited General Obligation Bonds |
| Series 2019A |
| 06/15/2036 | 4.000% | | 1,145,000 | 1,312,926 |
| Jackson County School District No. 9 Eagle Point |
| Unlimited General Obligation Refunding Bonds |
| Series 2005 (NPFGC) |
| 06/15/2020 | 5.500% | | 1,000,000 | 1,037,600 |
| 06/15/2021 | 5.500% | | 1,410,000 | 1,522,828 |
| Jefferson County School District No. 509J |
| Unlimited General Obligation Bonds |
| Madras |
| Series 2013B |
| 06/15/2028 | 5.000% | | 2,095,000 | 2,383,335 |
| Klamath Falls City Schools |
| Unlimited General Obligation Refunding Bonds |
| Series 2015A |
| 06/15/2028 | 4.000% | | 500,000 | 561,260 |
| Lane Community College |
| Unlimited General Obligation Bonds |
| Series 2012 |
| 06/15/2023 | 5.000% | | 1,000,000 | 1,109,210 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Lane County School District No. 1 Pleasant Hill(d) |
| Unlimited General Obligation Bonds |
| Series 2014B |
| 06/15/2029 | 0.000% | | 1,775,000 | 1,438,655 |
| Lane County School District No. 19 Springfield |
| Unlimited General Obligation Bonds |
| Series 2015A |
| 06/15/2031 | 5.000% | | 2,000,000 | 2,364,920 |
| Lane County School District No. 19 Springfield(d) |
| Unlimited General Obligation Bonds |
| Series 2015B |
| 06/15/2033 | 0.000% | | 3,770,000 | 2,585,692 |
| Unlimited General Obligation Refunding Bonds |
| Series 2015D |
| 06/15/2024 | 0.000% | | 2,305,000 | 2,136,435 |
| 06/15/2028 | 0.000% | | 1,480,000 | 1,225,248 |
| Linn & Benton Counties School District No. 8J Greater Albany |
| Unlimited General Obligation Bonds |
| Series 2017 |
| 06/15/2030 | 5.000% | | 1,000,000 | 1,247,790 |
| Marion County School District No. 15 North Marion |
| Unlimited General Obligation Bonds |
| Series 2018B |
| 06/15/2032 | 5.000% | | 1,000,000 | 1,258,120 |
| 06/15/2033 | 5.000% | | 240,000 | 300,965 |
| Multnomah & Clackamas Counties School District No. 10JT Gresham-Barlow(d) |
| Unlimited General Obligation Bonds |
| Series 2017A |
| 06/15/2033 | 0.000% | | 4,000,000 | 2,568,280 |
| Multnomah & Clackamas Counties School District No. 10JT Gresham-Barlow |
| Unlimited General Obligation Bonds |
| Series 2017B |
| 06/15/2031 | 5.000% | | 3,000,000 | 3,704,310 |
| Multnomah County School District No. 7 Reynolds(d) |
| Unlimited General Obligation Bonds |
| Deferred Interest |
| Series 2015B |
| 06/15/2030 | 0.000% | | 4,000,000 | 2,853,560 |
| Oregon City School District No. 62 |
| Unrefunded Unlimited General Obligation Refunding Revenue Bonds |
| School Building Guaranty |
| Series 2014 |
| 06/01/2034 | 5.000% | | 990,000 | 1,132,491 |
| Polk Marion & Benton Counties School District No. 13J Central |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 |
| 02/01/2027 | 4.000% | | 750,000 | 849,877 |
| 02/01/2028 | 4.000% | | 1,000,000 | 1,123,490 |
| Portland Community College District |
| Unlimited General Obligation Bonds |
| Series 2018 |
| 06/15/2029 | 5.000% | | 1,000,000 | 1,225,430 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Unlimited General Obligation Refunding Bonds |
| Series 2016 |
| 06/15/2027 | 5.000% | | 2,100,000 | 2,584,743 |
| Salem-Keizer School District No. 24J |
| Unlimited General Obligation Bonds |
| Series 2018 |
| 06/15/2035 | 4.000% | | 1,000,000 | 1,146,710 |
| Umatilla County School District No. 16R Pendleton |
| Unlimited General Obligation Bonds |
| Series 2014A |
| 06/15/2030 | 5.000% | | 1,110,000 | 1,287,134 |
| 06/15/2031 | 5.000% | | 2,890,000 | 3,348,758 |
| Umatilla County School District No. 8R Hermiston |
| Unlimited General Obligation Bonds |
| Series 2010 |
| 06/15/2029 | 4.500% | | 2,360,000 | 2,421,313 |
| Union County School District No. 1 La Grande |
| Unlimited General Obligation Bonds |
| Series 2015 |
| 06/15/2030 | 4.000% | | 1,000,000 | 1,114,230 |
| Washington & Multnomah Counties School District No. 48J Beaverton |
| Unlimited General Obligation Bonds |
| Series 2014 |
| 06/15/2033 | 5.000% | | 4,000,000 | 4,610,800 |
| Unlimited General Obligation Refunding Bonds |
| Series 2012-B |
| 06/15/2023 | 4.000% | | 4,090,000 | 4,422,721 |
| Washington Clackamas & Yamhill Counties School District No. 88J(d) |
| Unlimited General Obligation Bonds |
| Deferred Interest |
| Series 2018A |
| 06/15/2037 | 0.000% | | 3,500,000 | 1,879,885 |
| Washington Clackamas & Yamhill Counties School District No. 88J |
| Unlimited General Obligation Bonds |
| Sherwood College |
| Series 2017B |
| 06/15/2031 | 5.000% | | 4,500,000 | 5,582,565 |
| Washington County School District No. 1 West Union |
| Unlimited General Obligation Bonds |
| Hillsboro School District No. 1J |
| Series 2017 |
| 06/15/2035 | 5.000% | | 2,500,000 | 3,045,125 |
| Washington County School District No. 15 Forest Grove |
| Unlimited General Obligation Bonds |
| Series 2012A |
| 06/15/2024 | 5.000% | | 1,780,000 | 1,977,064 |
| 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 | 1,080,020 |
| Total | 128,863,709 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 11 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Multi-Family 1.1% |
| Oregon State Facilities Authority |
| Refunding Revenue Bonds |
| College Housing Northwest Projects |
| Series 2013A |
| 10/01/2019 | 4.000% | | 780,000 | 782,784 |
| 10/01/2020 | 4.000% | | 810,000 | 829,092 |
| 10/01/2022 | 4.000% | | 875,000 | 923,414 |
| Oregon State Facilities Authority(c) |
| Revenue Bonds |
| College Housing Northwest Projects |
| Series 2016A |
| 10/01/2026 | 4.000% | | 500,000 | 507,465 |
| 10/01/2036 | 5.000% | | 1,000,000 | 1,049,630 |
| Total | 4,092,385 |
| Municipal Power 2.1% |
| Central Lincoln People’s Utility District JATC, Inc. |
| Revenue Bonds |
| Series 2016 |
| 12/01/2033 | 5.000% | | 350,000 | 414,848 |
| 12/01/2034 | 5.000% | | 400,000 | 472,440 |
| 12/01/2035 | 5.000% | | 410,000 | 483,226 |
| 12/01/2036 | 5.000% | | 440,000 | 517,519 |
| City of Eugene Electric Utility System |
| Revenue Bonds |
| Series 2017 |
| 08/01/2029 | 5.000% | | 530,000 | 664,747 |
| 08/01/2030 | 5.000% | | 420,000 | 523,114 |
| 08/01/2031 | 5.000% | | 450,000 | 556,096 |
| 08/01/2032 | 5.000% | | 250,000 | 307,673 |
| Northern Wasco County Peoples Utility District |
| Revenue Bonds |
| Series 2016 |
| 12/01/2031 | 5.000% | | 1,455,000 | 1,746,189 |
| 12/01/2036 | 5.000% | | 1,545,000 | 1,820,242 |
| Total | 7,506,094 |
| Other Bond Issue 0.6% |
| Oregon State Business Development Commission |
| Revenue Bonds |
| Intel Corp. Project |
| Series 2018-232 |
| 12/01/2040 | 2.400% | | 2,000,000 | 2,070,880 |
| Pool / Bond Bank 0.7% |
| Oregon State Bond Bank |
| Refunding Revenue Bonds |
| Series 2018A |
| 01/01/2028 | 5.000% | | 850,000 | 1,032,002 |
| 01/01/2029 | 5.000% | | 1,120,000 | 1,356,387 |
| Total | 2,388,389 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Ports 1.1% |
| Port of Morrow |
| Limited General Obligation Refunding Bonds |
| Series 2016 |
| 12/01/2027 | 5.000% | | 615,000 | 691,469 |
| 12/01/2028 | 5.000% | | 645,000 | 724,941 |
| 12/01/2029 | 5.000% | | 340,000 | 381,466 |
| 12/01/2030 | 5.000% | | 335,000 | 375,197 |
| 12/01/2031 | 5.000% | | 375,000 | 418,815 |
| 12/01/2036 | 5.000% | | 1,160,000 | 1,284,190 |
| Total | 3,876,078 |
| Refunded / Escrowed 4.3% |
| City of Eugene Electric Utility System |
| Prerefunded 08/01/21 Revenue Bonds |
| Series 2011A |
| 08/01/2029 | 5.000% | | 3,410,000 | 3,673,423 |
| County of Lane |
| Prerefunded 11/01/19 Limited General Obligation Bonds |
| Series 2009A |
| 11/01/2025 | 5.000% | | 1,140,000 | 1,151,092 |
| Oregon City School District No. 62 |
| Prerefunded 06/01/24 Unlimited General Obligation Refunding Revenue Bonds |
| School Building Guaranty |
| Series 2014 |
| 06/01/2034 | 5.000% | | 780,000 | 918,286 |
| Puerto Rico Public Finance Corp.(e) |
| Unrefunded Revenue Bonds |
| Commonwealth Appropriation |
| Series 2002E Escrowed to Maturity |
| 08/01/2026 | 6.000% | | 5,000,000 | 6,435,600 |
| Tri-County Metropolitan Transportation District of Oregon |
| Prerefunded 10/01/21 Revenue Bonds |
| Capital Grant Receipt |
| Series 2011A |
| 10/01/2025 | 5.000% | | 3,000,000 | 3,247,440 |
| Total | 15,425,841 |
| Retirement Communities 3.6% |
| Clackamas County Hospital Facility Authority |
| Revenue Bonds |
| Mary’s Woods at Marylhurst, Inc. |
| Series 2018 |
| 05/15/2025 | 3.200% | | 765,000 | 767,639 |
| 05/15/2038 | 5.000% | | 220,000 | 240,130 |
| Hospital Facilities Authority of Multnomah County |
| Refunding Revenue Bonds |
| Mirabella at South Waterfront |
| Series 2014A |
| 10/01/2034 | 5.125% | | 4,000,000 | 4,341,840 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Terwilliger Plaza, Inc. |
| Series 2012 |
| 12/01/2020 | 5.000% | | 655,000 | 672,849 |
| 12/01/2022 | 5.000% | | 500,000 | 549,970 |
| Series 2016 |
| 12/01/2030 | 5.000% | | 325,000 | 376,467 |
| 12/01/2036 | 5.000% | | 900,000 | 1,016,946 |
| Medford Hospital Facilities Authority |
| Refunding Revenue Bonds |
| Rogue Valley Manor |
| Series 2013 |
| 10/01/2022 | 5.000% | | 625,000 | 690,169 |
| 10/01/2023 | 5.000% | | 645,000 | 730,340 |
| 10/01/2024 | 5.000% | | 455,000 | 513,704 |
| Polk County Hospital Facility Authority |
| Revenue Bonds |
| Dallas Retirement Village Project |
| Series 2015A |
| 07/01/2035 | 5.125% | | 1,240,000 | 1,314,115 |
| Salem Hospital Facility Authority |
| Revenue Bonds |
| Capital Manor Project |
| Series 2018 |
| 05/15/2033 | 5.000% | | 555,000 | 648,423 |
| 05/15/2038 | 5.000% | | 500,000 | 576,305 |
| Yamhill County Hospital Authority |
| Refunding Revenue Bonds |
| Friendsview Retirement Community |
| Series 2016 |
| 11/15/2026 | 4.000% | | 500,000 | 532,345 |
| Total | 12,971,242 |
| Single Family 1.5% |
| State of Oregon Housing & Community Services Department |
| Revenue Bonds |
| Series 2017D |
| 07/01/2032 | 3.150% | | 2,900,000 | 3,031,747 |
| Single Family Mortgage Program |
| Series 2010A |
| 07/01/2027 | 5.250% | | 55,000 | 56,064 |
| Series 2011A |
| 07/01/2025 | 5.250% | | 2,045,000 | 2,107,966 |
| Series 2011B |
| 07/01/2028 | 5.250% | | 235,000 | 241,984 |
| Total | 5,437,761 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Special Non Property Tax 5.9% |
| Metro |
| Revenue Bonds |
| Convention Center Hotel |
| Series 2017 |
| 06/15/2030 | 5.000% | | 435,000 | 535,568 |
| 06/15/2031 | 5.000% | | 725,000 | 887,458 |
| 06/15/2032 | 5.000% | | 780,000 | 951,280 |
| Oregon State Lottery |
| Refunding Revenue Bonds |
| Series 2014B |
| 04/01/2027 | 5.000% | | 1,750,000 | 2,039,345 |
| Series 2015D |
| 04/01/2027 | 5.000% | | 2,500,000 | 2,992,675 |
| Revenue Bonds |
| Series 2019A |
| 04/01/2036 | 5.000% | | 1,000,000 | 1,260,550 |
| State of Oregon Department of Transportation |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2017B |
| 11/15/2026 | 5.000% | | 4,000,000 | 5,014,760 |
| Senior Lien User Tax |
| Series 2017C |
| 11/15/2026 | 5.000% | | 1,000,000 | 1,253,690 |
| Tri-County Metropolitan Transportation District of Oregon |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2016 |
| 09/01/2031 | 4.000% | | 1,000,000 | 1,140,410 |
| 09/01/2032 | 4.000% | | 1,250,000 | 1,426,400 |
| Revenue Bonds |
| Senior Lien Payroll Tax |
| Series 2017A |
| 09/01/2032 | 5.000% | | 1,595,000 | 1,945,517 |
| Series 2018A |
| 09/01/2034 | 5.000% | | 550,000 | 678,414 |
| 09/01/2035 | 5.000% | | 800,000 | 982,784 |
| Total | 21,108,851 |
| Special Property Tax 3.0% |
| City of Keizer |
| Special Assessment Bonds |
| Keizer Station Area |
| Series 2008A |
| 06/01/2031 | 5.200% | | 2,440,000 | 2,447,515 |
| City of Portland |
| Refunding Tax Allocation Bonds |
| Series 2015 |
| 06/15/2024 | 5.000% | | 1,480,000 | 1,578,035 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 13 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Tax Allocation Bonds |
| Central Eastside |
| Series 2011B |
| 06/15/2026 | 5.000% | | 1,580,000 | 1,682,542 |
| 06/15/2027 | 5.000% | | 1,370,000 | 1,458,379 |
| Lents Town Center |
| Series 2010B |
| 06/15/2025 | 5.000% | | 1,550,000 | 1,598,716 |
| 06/15/2026 | 5.000% | | 1,440,000 | 1,485,259 |
| Veneta Urban Renewal Agency |
| Revenue Bonds |
| Urban Renewal |
| Series 2001 |
| 02/15/2021 | 5.625% | | 475,000 | 475,637 |
| Total | 10,726,083 |
| State General Obligation 4.4% |
| State of Oregon |
| Unlimited General Obligation Bonds |
| Article XI-Q State Project |
| Series 2017A |
| 05/01/2026 | 5.000% | | 1,250,000 | 1,545,738 |
| Series 2015F |
| 05/01/2030 | 5.000% | | 5,565,000 | 6,626,802 |
| Series 2019 |
| 06/01/2038 | 5.000% | | 3,000,000 | 3,766,860 |
| Series 2019G |
| 08/01/2033 | 5.000% | | 1,320,000 | 1,694,761 |
| Unlimited General Obligation Notes |
| Higher Education |
| Series 2016C |
| 08/01/2033 | 5.000% | | 750,000 | 909,720 |
| Series 2016A |
| 08/01/2031 | 3.500% | | 500,000 | 546,050 |
| 08/01/2032 | 3.500% | | 500,000 | 540,945 |
| Total | 15,630,876 |
| Transportation 3.3% |
| Tri-County Metropolitan Transportation District of Oregon |
| Refunding Revenue Bonds |
| Series 2017 |
| 10/01/2026 | 5.000% | | 1,235,000 | 1,522,323 |
| 10/01/2027 | 5.000% | | 1,485,000 | 1,860,363 |
| Revenue Bonds |
| Series 2018A |
| 10/01/2032 | 5.000% | | 6,800,000 | 8,362,504 |
| Total | 11,745,190 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Water & Sewer 6.8% |
| City of Albany |
| Limited General Obligation Refunding Bonds |
| Series 2013 |
| 08/01/2022 | 4.000% | | 1,240,000 | 1,342,933 |
| 08/01/2023 | 4.000% | | 1,290,000 | 1,428,430 |
| City of Beaverton Water |
| Revenue Bonds |
| Series 2018 |
| 04/01/2034 | 5.000% | | 1,125,000 | 1,405,406 |
| City of Eugene Water Utility System |
| Refunding Revenue Bonds |
| Utility System |
| Series 2016 |
| 08/01/2032 | 4.000% | | 500,000 | 562,230 |
| City of Portland Water System |
| Refunding Revenue Bonds |
| 1st Lien |
| Series 2016A |
| 04/01/2030 | 4.000% | | 7,375,000 | 8,433,091 |
| Revenue Bonds |
| Series 2014A |
| 05/01/2028 | 4.000% | | 3,390,000 | 3,776,121 |
| City of Springfield Sewer System |
| Refunding Revenue Bonds |
| Series 2017 |
| 04/01/2025 | 4.000% | | 200,000 | 229,306 |
| 04/01/2026 | 4.000% | | 250,000 | 290,940 |
| 04/01/2027 | 4.000% | | 270,000 | 317,806 |
| City of Woodburn Wastewater |
| Refunding Revenue Bonds |
| Series 2011A |
| 03/01/2022 | 5.000% | | 4,620,000 | 5,054,003 |
| Clackamas River Water |
| Revenue Bonds |
| Series 2016 |
| 11/01/2032 | 5.000% | | 200,000 | 234,428 |
| 11/01/2033 | 5.000% | | 265,000 | 310,516 |
| 11/01/2034 | 5.000% | | 250,000 | 291,835 |
| 11/01/2035 | 5.000% | | 225,000 | 262,004 |
| 11/01/2036 | 5.000% | | 200,000 | 232,222 |
| Total | 24,171,271 |
Total Municipal Bonds
(Cost $325,377,047) | 344,344,888 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Money Market Funds 0.6% |
| | Shares | Value ($) |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 1.310%(f) | 212,311 | 212,311 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Class, 1.264%(f) | 1,787,753 | 1,787,753 |
Total Money Market Funds
(Cost $2,000,064) | 2,000,064 |
Total Investments in Securities
(Cost: $336,032,111) | 354,999,952 |
| Other Assets & Liabilities, Net | | 2,676,736 |
| Net Assets | 357,676,688 |
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) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of July 31, 2019. |
| (c) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission 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, 2019, the total value of these securities amounted to $2,329,202, which represents 0.65% of total net assets. |
| (d) | Zero coupon bond. |
| (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, 2019, the total value of these securities amounted to $6,435,600, which represents 1.80% of total net assets. |
| (f) | The rate shown is the seven-day current annualized yield at July 31, 2019. |
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). |
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.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 15 |
Portfolio of Investments (continued)
July 31, 2019
Fair value measurements (continued)
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2019:
| | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) |
| Investments in Securities | | | | |
| Floating Rate Notes | — | 8,655,000 | — | 8,655,000 |
| Municipal Bonds | — | 344,344,888 | — | 344,344,888 |
| Money Market Funds | 2,000,064 | — | — | 2,000,064 |
| Total Investments in Securities | 2,000,064 | 352,999,888 | — | 354,999,952 |
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.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Statement of Assets and Liabilities
July 31, 2019
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $336,032,111) | $354,999,952 |
| Receivable for: | |
| Capital shares sold | 769,726 |
| Interest | 3,045,845 |
| Expense reimbursement due from Investment Manager | 13 |
| Prepaid expenses | 2,525 |
| Trustees’ deferred compensation plan | 87,644 |
| Total assets | 358,905,705 |
| Liabilities | |
| Due to custodian | 199 |
| Payable for: | |
| Capital shares purchased | 320,648 |
| Distributions to shareholders | 755,106 |
| Management services fees | 4,583 |
| Distribution and/or service fees | 464 |
| Transfer agent fees | 23,782 |
| Compensation of chief compliance officer | 13 |
| Other expenses | 36,578 |
| Trustees’ deferred compensation plan | 87,644 |
| Total liabilities | 1,229,017 |
| Net assets applicable to outstanding capital stock | $357,676,688 |
| Represented by | |
| Paid in capital | 337,923,187 |
| Total distributable earnings (loss) (Note 2) | 19,753,501 |
| Total - representing net assets applicable to outstanding capital stock | $357,676,688 |
| Class A | |
| Net assets | $44,184,963 |
| Shares outstanding | 3,527,825 |
| Net asset value per share | $12.52 |
| Maximum sales charge | 3.00% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $12.91 |
| Advisor Class | |
| Net assets | $1,919,376 |
| Shares outstanding | 153,262 |
| Net asset value per share | $12.52 |
| Class C | |
| Net assets | $8,434,453 |
| Shares outstanding | 673,433 |
| Net asset value per share | $12.52 |
| Institutional Class | |
| Net assets | $270,831,134 |
| Shares outstanding | 21,624,372 |
| Net asset value per share | $12.52 |
| Institutional 2 Class | |
| Net assets | $25,397,433 |
| Shares outstanding | 2,030,966 |
| Net asset value per share | $12.51 |
| Institutional 3 Class | |
| Net assets | $6,909,329 |
| Shares outstanding | 550,929 |
| Net asset value per share | $12.54 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 17 |
Statement of Operations
Year Ended July 31, 2019
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $24,197 |
| Interest | 11,896,223 |
| Total income | 11,920,420 |
| Expenses: | |
| Management services fees | 1,683,285 |
| Distribution and/or service fees | |
| Class A | 99,694 |
| Class C | 123,014 |
| Transfer agent fees | |
| Class A | 36,008 |
| Advisor Class | 1,017 |
| Class C | 11,174 |
| Institutional Class | 247,873 |
| Institutional 2 Class | 14,545 |
| Institutional 3 Class | 547 |
| Compensation of board members | 17,625 |
| Custodian fees | 3,743 |
| Printing and postage fees | 18,978 |
| Registration fees | 8,117 |
| Audit fees | 32,250 |
| Legal fees | 7,610 |
| Compensation of chief compliance officer | 142 |
| Other | 18,449 |
| Total expenses | 2,324,071 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (42,894) |
| Fees waived by distributor | |
| Class C | (36,904) |
| Total net expenses | 2,244,273 |
| Net investment income | 9,676,147 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 674,982 |
| Net realized gain | 674,982 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 10,707,691 |
| Net change in unrealized appreciation (depreciation) | 10,707,691 |
| Net realized and unrealized gain | 11,382,673 |
| Net increase in net assets resulting from operations | $21,058,820 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2019 | Year Ended
July 31, 2018 |
| Operations | | |
| Net investment income | $9,676,147 | $11,244,424 |
| Net realized gain | 674,982 | 1,438,852 |
| Net change in unrealized appreciation (depreciation) | 10,707,691 | (12,012,467) |
| Net increase in net assets resulting from operations | 21,058,820 | 670,809 |
| Distributions to shareholders | | |
| Net investment income and net realized gains | | |
| Class A | (1,065,368) | |
| Advisor Class | (32,345) | |
| Class C | (279,988) | |
| Institutional Class | (8,072,205) | |
| Institutional 2 Class | (748,321) | |
| Institutional 3 Class | (195,268) | |
| Net investment income | | |
| Class A | | (1,023,646) |
| Advisor Class | | (17,973) |
| Class B | | (2) |
| Class C | | (434,858) |
| Institutional Class | | (8,614,649) |
| Institutional 2 Class | | (1,057,248) |
| Institutional 3 Class | | (85,509) |
| Total distributions to shareholders (Note 2) | (10,393,495) | (11,233,885) |
| Decrease in net assets from capital stock activity | (36,881,807) | (49,946,991) |
| Total decrease in net assets | (26,216,482) | (60,510,067) |
| Net assets at beginning of year | 383,893,170 | 444,403,237 |
| Net assets at end of year | $357,676,688 | $383,893,170 |
| Undistributed net investment income | $347,830 | $336,818 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 19 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2019 | July 31, 2018 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions | 1,452,519 | 17,705,440 | 852,699 | 10,424,739 |
| Distributions reinvested | 85,608 | 1,044,486 | 81,921 | 1,003,849 |
| Redemptions | (1,297,009) | (15,713,457) | (1,132,314) | (13,889,439) |
| Net increase (decrease) | 241,118 | 3,036,469 | (197,694) | (2,460,851) |
| Advisor Class | | | | |
| Subscriptions | 149,943 | 1,834,930 | 27,082 | 332,076 |
| Distributions reinvested | 2,636 | 32,335 | 1,466 | 17,973 |
| Redemptions | (53,666) | (656,558) | (27,543) | (338,174) |
| Net increase | 98,913 | 1,210,707 | 1,005 | 11,875 |
| Class B | | | | |
| Redemptions | — | — | (838) | (10,465) |
| Net decrease | — | — | (838) | (10,465) |
| Class C | | | | |
| Subscriptions | 99,484 | 1,208,215 | 146,660 | 1,803,274 |
| Distributions reinvested | 21,139 | 257,128 | 32,949 | 403,964 |
| Redemptions | (644,053) | (7,885,811) | (936,705) | (11,465,559) |
| Net decrease | (523,430) | (6,420,468) | (757,096) | (9,258,321) |
| Institutional Class | | | | |
| Subscriptions | 1,223,749 | 14,943,926 | 1,605,164 | 19,718,945 |
| Distributions reinvested | 512,722 | 6,251,233 | 536,443 | 6,573,596 |
| Redemptions | (4,289,357) | (51,966,747) | (4,734,172) | (58,181,728) |
| Net decrease | (2,552,886) | (30,771,588) | (2,592,565) | (31,889,187) |
| Institutional 2 Class | | | | |
| Subscriptions | 654,326 | 7,980,093 | 1,234,296 | 15,174,745 |
| Distributions reinvested | 61,454 | 748,012 | 86,278 | 1,056,972 |
| Redemptions | (1,279,743) | (15,428,770) | (2,158,353) | (26,518,434) |
| Net decrease | (563,963) | (6,700,665) | (837,779) | (10,286,717) |
| Institutional 3 Class | | | | |
| Subscriptions | 447,178 | 5,385,704 | 369,381 | 4,578,378 |
| Distributions reinvested | 10,044 | 122,566 | 6,973 | 85,219 |
| Redemptions | (224,766) | (2,744,532) | (58,694) | (716,922) |
| Net increase | 232,456 | 2,763,738 | 317,660 | 3,946,675 |
| Total net decrease | (3,067,792) | (36,881,807) | (4,067,307) | (49,946,991) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
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Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 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.
| | 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 | Total
distributions to
shareholders |
| Class A |
| Year Ended 7/31/2019 | $12.14 | 0.30 | 0.41 | 0.71 | (0.31) | (0.02) | (0.33) |
| Year Ended 7/31/2018 | $12.45 | 0.31 | (0.31) | 0.00(c) | (0.31) | — | (0.31) |
| Year Ended 7/31/2017 | $12.82 | 0.32 | (0.37) | (0.05) | (0.32) | — | (0.32) |
| Year Ended 7/31/2016 | $12.54 | 0.33 | 0.28 | 0.61 | (0.33) | — | (0.33) |
| Year Ended 7/31/2015 | $12.61 | 0.34 | (0.07) | 0.27 | (0.34) | — | (0.34) |
| Advisor Class |
| Year Ended 7/31/2019 | $12.14 | 0.33 | 0.41 | 0.74 | (0.34) | (0.02) | (0.36) |
| Year Ended 7/31/2018 | $12.45 | 0.34 | (0.31) | 0.03 | (0.34) | — | (0.34) |
| Year Ended 7/31/2017 | $12.82 | 0.35 | (0.37) | (0.02) | (0.35) | — | (0.35) |
| Year Ended 7/31/2016 | $12.54 | 0.36 | 0.28 | 0.64 | (0.36) | — | (0.36) |
| Year Ended 7/31/2015 | $12.60 | 0.37 | (0.06) | 0.31 | (0.37) | — | (0.37) |
| Class C |
| Year Ended 7/31/2019 | $12.14 | 0.25 | 0.40 | 0.65 | (0.25) | (0.02) | (0.27) |
| Year Ended 7/31/2018 | $12.45 | 0.25 | (0.31) | (0.06) | (0.25) | — | (0.25) |
| Year Ended 7/31/2017 | $12.83 | 0.26 | (0.38) | (0.12) | (0.26) | — | (0.26) |
| Year Ended 7/31/2016 | $12.54 | 0.27 | 0.29 | 0.56 | (0.27) | — | (0.27) |
| Year Ended 7/31/2015 | $12.61 | 0.29 | (0.07) | 0.22 | (0.29) | — | (0.29) |
| Institutional Class |
| Year Ended 7/31/2019 | $12.14 | 0.33 | 0.41 | 0.74 | (0.34) | (0.02) | (0.36) |
| Year Ended 7/31/2018 | $12.45 | 0.34 | (0.31) | 0.03 | (0.34) | — | (0.34) |
| Year Ended 7/31/2017 | $12.82 | 0.35 | (0.37) | (0.02) | (0.35) | — | (0.35) |
| Year Ended 7/31/2016 | $12.54 | 0.36 | 0.28 | 0.64 | (0.36) | — | (0.36) |
| Year Ended 7/31/2015 | $12.61 | 0.37 | (0.07) | 0.30 | (0.37) | — | (0.37) |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $12.12 | 0.34 | 0.41 | 0.75 | (0.34) | (0.02) | (0.36) |
| Year Ended 7/31/2018 | $12.43 | 0.34 | (0.31) | 0.03 | (0.34) | — | (0.34) |
| Year Ended 7/31/2017 | $12.81 | 0.35 | (0.38) | (0.03) | (0.35) | — | (0.35) |
| Year Ended 7/31/2016 | $12.53 | 0.37 | 0.28 | 0.65 | (0.37) | — | (0.37) |
| Year Ended 7/31/2015 | $12.59 | 0.38 | (0.06) | 0.32 | (0.38) | — | (0.38) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Class A |
| Year Ended 7/31/2019 | $12.52 | 5.94% | 0.84% | 0.83% | 2.49% | 8% | $44,185 |
| Year Ended 7/31/2018 | $12.14 | 0.01% | 0.84% | 0.84%(d) | 2.53% | 10% | $39,896 |
| Year Ended 7/31/2017 | $12.45 | (0.39%) | 0.83%(e) | 0.83%(d),(e) | 2.53% | 15% | $43,387 |
| Year Ended 7/31/2016 | $12.82 | 4.92% | 0.86% | 0.85%(d) | 2.60% | 9% | $50,750 |
| Year Ended 7/31/2015 | $12.54 | 2.17% | 0.87% | 0.83%(d) | 2.71% | 11% | $41,121 |
| Advisor Class |
| Year Ended 7/31/2019 | $12.52 | 6.21% | 0.59% | 0.57% | 2.73% | 8% | $1,919 |
| Year Ended 7/31/2018 | $12.14 | 0.25% | 0.59% | 0.59%(d) | 2.78% | 10% | $660 |
| Year Ended 7/31/2017 | $12.45 | (0.14%) | 0.59%(e) | 0.59%(d),(e) | 2.80% | 15% | $664 |
| Year Ended 7/31/2016 | $12.82 | 5.18% | 0.61% | 0.61%(d) | 2.85% | 9% | $307 |
| Year Ended 7/31/2015 | $12.54 | 2.50% | 0.62% | 0.58%(d) | 2.97% | 11% | $130 |
| Class C |
| Year Ended 7/31/2019 | $12.52 | 5.46% | 1.59% | 1.28% | 2.05% | 8% | $8,434 |
| Year Ended 7/31/2018 | $12.14 | (0.44%) | 1.59% | 1.29%(d) | 2.07% | 10% | $14,530 |
| Year Ended 7/31/2017 | $12.45 | (0.91%) | 1.58%(e) | 1.28%(d),(e) | 2.09% | 15% | $24,330 |
| Year Ended 7/31/2016 | $12.83 | 4.53% | 1.61% | 1.30%(d) | 2.15% | 9% | $28,438 |
| Year Ended 7/31/2015 | $12.54 | 1.73% | 1.62% | 1.26%(d) | 2.27% | 11% | $24,863 |
| Institutional Class |
| Year Ended 7/31/2019 | $12.52 | 6.20% | 0.59% | 0.58% | 2.74% | 8% | $270,831 |
| Year Ended 7/31/2018 | $12.14 | 0.25% | 0.59% | 0.59%(d) | 2.77% | 10% | $293,485 |
| Year Ended 7/31/2017 | $12.45 | (0.14%) | 0.58%(e) | 0.58%(d),(e) | 2.79% | 15% | $333,321 |
| Year Ended 7/31/2016 | $12.82 | 5.18% | 0.61% | 0.60%(d) | 2.85% | 9% | $374,062 |
| Year Ended 7/31/2015 | $12.54 | 2.42% | 0.62% | 0.58%(d) | 2.96% | 11% | $366,351 |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $12.51 | 6.33% | 0.56% | 0.54% | 2.77% | 8% | $25,397 |
| Year Ended 7/31/2018 | $12.12 | 0.28% | 0.56% | 0.56% | 2.80% | 10% | $31,451 |
| Year Ended 7/31/2017 | $12.43 | (0.18%) | 0.55%(e) | 0.55%(e) | 2.85% | 15% | $42,681 |
| Year Ended 7/31/2016 | $12.81 | 5.24% | 0.55% | 0.55% | 2.90% | 9% | $24,844 |
| Year Ended 7/31/2015 | $12.53 | 2.54% | 0.55% | 0.55% | 3.00% | 11% | $18,712 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 23 |
Financial Highlights (continued)
| | 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 | Total
distributions to
shareholders |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $12.15 | 0.34 | 0.42 | 0.76 | (0.35) | (0.02) | (0.37) |
| Year Ended 7/31/2018 | $12.47 | 0.35 | (0.32) | 0.03 | (0.35) | — | (0.35) |
| Year Ended 7/31/2017(f) | $12.30 | 0.15 | 0.17(g) | 0.32 | (0.15) | — | (0.15) |
| Notes to Financial Highlights |
| (a) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
| (b) | Total net expenses include the impact of certain fee waivers/expense reimbursements made by the Investment Manager and certain of its affiliates, if applicable. |
| (c) | Rounds to zero. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | 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. |
| Year Ended | Class A | Advisor
Class | Class C | Institutional
Class | Institutional 2
Class |
| 07/31/2017 | 0.02% | 0.01% | 0.02% | 0.02% | 0.01% |
| (f) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (g) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (h) | Annualized. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $12.54 | 6.37% | 0.51% | 0.49% | 2.82% | 8% | $6,909 |
| Year Ended 7/31/2018 | $12.15 | 0.26% | 0.51% | 0.51% | 2.90% | 10% | $3,871 |
| Year Ended 7/31/2017(f) | $12.47 | 2.59% | 0.53%(h) | 0.53%(h) | 2.84%(h) | 15% | $10 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 25 |
Notes to Financial Statements
July 31, 2019
Note 1. Organization
Columbia Oregon Intermediate Municipal Bond Fund (formerly known as 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.
Effective May 14, 2019, Columbia AMT-Free Oregon Intermediate Muni Bond Fund was renamed Columbia Oregon Intermediate Municipal Bond Fund.
Fund shares
The Trust may issue an unlimited number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. 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. Each share class has its own expense and sales charge structure. Different share classes may have different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s prospectus, Class A and Class C shares are offered to the general public for investment. Advisor Class, Institutional Class, Institutional 2 Class and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional and to certain other investors as also described in the Fund’s prospectus. Class C shares automatically convert to Class A shares after 10 years.
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.
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.
| 26 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed following the Fund’s Portfolio of Investments.
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income recognition
Interest income is recorded on an accrual basis. Market premiums and discounts, including original issue discounts, are amortized and accreted, respectively, over the expected life of the security on all debt securities, unless otherwise noted.
The Fund may place a debt security on non-accrual status and reduce related interest income when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated. A defaulted debt security is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Dividend income is recorded on the ex-dividend date.
Expenses
General expenses of the Trust are allocated to the Fund and other funds of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of class net asset value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown in the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its net tax-exempt and investment company taxable income and net capital gain, 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 ordinary income, capital gain net income 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.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 27 |
Notes to Financial Statements (continued)
July 31, 2019
Recent accounting pronouncements
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. Management does not expect the implementation of this guidance to have a material impact on the financial statement amounts and footnote disclosures.
Accounting Standards Update 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. After evaluation, Management determined to adopt the ASU effective for periods ending July 31, 2019 and all subsequent periods. As a result of the amendments, management implemented disclosure changes which include removal of the amount and reasons for transfers between level 1 and level 2 of the fair value hierarchy, removal of the policy for the timing of transfers between levels, removal of the description of the level 3 valuation processes, as well as modifications to the measurement uncertainty disclosure.
Disclosure Update and Simplification
In September 2018, the Securities and Exchange Commission (SEC) released Final Rule 33-10532, Disclosure Update and Simplification, which amends certain financial statement disclosure requirements that the SEC determined to be redundant, outdated, or superseded in light of other SEC disclosure requirements, GAAP, or changes in the information environment. As a result of the amendments, management implemented disclosure changes which included removing the components of distributable earnings presented on the Statement of Assets and Liabilities and combining income and gain distributions paid to shareholders as presented on the Statement of Changes in Net Assets. Any values presented to meet prior year requirements were left unchanged. The amendments had no effect on the Fund’s net assets or results of operation.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund has 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 0.47% to 0.31% as the Fund’s net assets increase. The effective management services fee rate for the year ended July 31, 2019 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 Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund.
| 28 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Compensation of Chief Compliance Officer
The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Transactions with affiliates
For the year ended July 31, 2019, the Fund engaged in purchase and/or sale transactions with affiliates and/or accounts that have a common investment manager (or affiliated investment managers), common directors/trustees, and/or common officers. Those purchase and sale transactions complied with provisions of Rule 17a-7 under the 1940 Act and were $3,908,275 and $0, respectively.
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 DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST 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, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class 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.
For the year ended July 31, 2019, 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 | 0.09 |
| Advisor Class | 0.09 |
| Class C | 0.09 |
| Institutional Class | 0.09 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
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, 2019, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into 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 Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 29 |
Notes to Financial Statements (continued)
July 31, 2019
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 0.10% and 0.75% of the average daily net assets attributable to Class A 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, 2019, if any, are listed below:
| | Front End (%) | CDSC (%) | Amount ($) |
| Class A | 3.00 | 0.75(a) | 30,268 |
| Class C | — | 1.00(b) | 240 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share classes are not subject to sales charges.
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, 2018
through
November 30, 2019 | Prior to
December 1, 2018 |
| Class A | 0.82% | 0.84% |
| Advisor Class | 0.57 | 0.59 |
| Class C | 1.57 | 1.59 |
| Institutional Class | 0.57 | 0.59 |
| Institutional 2 Class | 0.54 | 0.56 |
| Institutional 3 Class | 0.49 | 0.52 |
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.
| 30 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019, these differences were primarily due to differing treatment for trustees’ deferred compensation, distributions and principal and/or interest from fixed income securities. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The Fund did not have any permanent differences; therefore, no reclassifications were made.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2019 | Year Ended July 31, 2018 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 11 | 9,665,124 | 728,360 | 10,393,495 | 9 | 11,233,876 | — | 11,233,885 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2019, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| 293 | 437,537 | — | 19,024,376 |
At July 31, 2019, the cost of all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 335,975,576 | 19,073,016 | (48,640) | 19,024,376 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
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 $27,693,845 and $64,993,274, respectively, for the year ended July 31, 2019. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and, except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject to certain restrictions.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 31 |
Notes to Financial Statements (continued)
July 31, 2019
Interfund loans are subject to the risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend money under the Interfund Program during the year ended July 31, 2019.
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 or an affiliated 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 federal funds effective rate, (ii) the one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 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 unused 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. This agreement expires annually in December unless extended or renewed.
The Fund had no borrowings during the year ended July 31, 2019.
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 defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower rated or unrated debt instruments held by the Fund may present increased credit risk as compared to higher-rated debt instruments.
Geographic concentration risk
Because the Fund invests substantially in municipal securities issued by the state identified in the Fund’s name and political sub-divisions of that state, the Fund will be particularly affected by adverse tax, legislative, regulatory, demographic or political changes as well as changes impacting the state’s financial, economic or other condition and prospects. In addition, because of the relatively small number of issuers of tax-exempt securities in the state, the Fund may invest a higher percentage of assets in a single issuer and, therefore, be more exposed to the risk of loss than a fund that invests more broadly. The value of municipal and other securities owned by the Fund also may be adversely affected by future changes in federal or state income tax laws.
Interest rate risk
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise. Changes in interest rates may also affect the liquidity of the Fund’s investments in debt instruments. In general, the longer the maturity or duration of a debt instrument, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the Fund’s performance. 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.
| 32 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019, one unaffiliated shareholder of record owned 14.7% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Subscription and redemption activity by concentrated accounts may have a significant effect on the operations of the Fund. In the case of a large redemption, the Fund may be forced to sell investments at inopportune times, including its liquid 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.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 33 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Columbia Funds Series Trust I and Shareholders of Columbia Oregon Intermediate Municipal Bond Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia Oregon Intermediate Municipal Bond Fund (formerly known as Columbia AMT-Free Oregon Intermediate Muni Bond Fund) (one of the funds constituting Columbia Funds Series Trust I, hereafter referred to as the "Fund") as of July 31, 2019, the related statement of operations for the year ended July 31, 2019, the statement of changes in net assets for each of the two years in the period ended July 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2019, 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 ended July 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2019 by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 20, 2019
We have served as the auditor of one or more investment companies within the Columbia Funds Complex since 1977.
| 34 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2019. Shareholders will be notified in early 2020 of the amounts for use in preparing 2019 income tax returns.
Capital
gain
dividend | Exempt-
interest
dividends |
| $708,423 | 100.00% |
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes.
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 35 |
The Board oversees the Fund’s operations and 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 as of the printing of this report, 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), September 2007-October 2018 | 69 | 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, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 69 | Spartan Nash Company, (food distributor); former Director, Nash Finch Company (food distributor), 2005-2013; Aircastle Limited (aircraft leasing); former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; 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), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 69 | 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 | 69 | Director, CSX Corporation (transportation suppliers); 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 Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
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 |
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, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 69 | 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, 1988-2014 | 69 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
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, 1994-1997, President – Application Systems Division, 1991-1994, Chief Financial Officer – US Marketing & Services, 1988-1991, and Chief Information Officer, 1987-1988, IBM Corporation (computer and technology) | 69 | Former Director, Enesco Group, Inc. (producer of giftware and home and garden decor products), 2001-2006 |
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; Adjunct Professor of Finance, Bentley University since November 2017; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2009-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 69 | Director, The Autism Project since March 2015; former Trustee, New Century Portfolios, March 2015-December 2017; formerly on Board of Governors, Gateway Healthcare, January 2016 – December 2017 |
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 37 |
TRUSTEES AND OFFICERS (continued)
Consultants to the 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 Funds complex overseen | Other directorships held by Trustee during the past five years |
Olive Darragh
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street,
Mail Drop BX32 05228,
Boston, MA 02110
1962 | Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio (an investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 69 | Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
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 Portfolio Solutions LLC (asset management and consulting services) since January 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 69 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions) |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. 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, Ms. Darragh 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 | 190 | 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, August 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, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
| 38 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
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 as of the printing of this report, 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 | Chief Financial Officer (Principal Financial Officer) (2009) and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 - May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously Treasurer and Chief Accounting Officer, January 2009 - January 2019 and December 2015 - January 2019, respectively). |
Joseph Beranek
5890 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Treasurer and Chief Accounting Officer (Principal Accounting Officer) (2019) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
Paul B. Goucher
485 Lexington 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); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
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. |
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 Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); 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. |
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 Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 39 |
Board Consideration and Approval of Management
Agreement
On June 12, 2019, 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 Oregon Intermediate Municipal Bond Fund (the Fund) (formerly, Columbia AMT-Free Oregon Intermediate Muni Bond 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, among themselves, with the management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant 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 5, 2019, April 25, 2019 and June 11, 2019 and at Board meetings held on March 6, 2019 and June 12, 2019. In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet 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 with other investment personnel at various times throughout the year. The Committee and the Board also consulted with the 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 11, 2019, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 12, 2019, 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, 2019 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 accounts and collective trusts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| 40 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
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 funds using an investment strategy similar to that used by the Investment Manager for the Fund. 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 the resources dedicated by the Investment Manager and its affiliates to risk management, 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, 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 information and analysis 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, 2018, the Fund’s performance was in the thirtieth, thirtieth and forty-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 support 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, 2018, the Fund’s actual management fee and net total expense ratio were ranked in the fifth and fourth quintiles,
Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 41 |
Board Consideration and Approval of Management
Agreement (continued)
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 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, supported 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, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
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 2018 to profitability levels realized in 2017. 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 noted 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 Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
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 considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. 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 Oregon Intermediate Municipal Bond Fund | Annual Report 2019
| 43 |
The Fund mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. 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/investor/; 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/investor/, 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-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, 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/investor/ 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 219104
Kansas City, MO 64121-9104
| 44 | Columbia Oregon Intermediate Municipal Bond Fund | Annual Report 2019 |
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Columbia Oregon Intermediate Municipal Bond Fund
P.O. Box 219104
Kansas City, MO 64121-9104
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/investor/. 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.
© 2019 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Annual Report
July 31, 2019
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified by mail and provided with a website address to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank guarantee • May lose value
Columbia Tax-Exempt Fund | Annual Report 2019
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
Lead Portfolio Manager
Managed Fund since 2002
Catherine Stienstra
Portfolio Manager
Managed Fund since 2018
| Average annual total returns (%) (for the period ended July 31, 2019) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A | Excluding sales charges | 11/21/78 | 6.51 | 3.86 | 5.04 |
| | Including sales charges | | 3.34 | 3.22 | 4.73 |
| Advisor Class* | 03/19/13 | 6.72 | 4.06 | 5.18 |
| Class C | Excluding sales charges | 08/01/97 | 5.82 | 3.20 | 4.42 |
| | Including sales charges | | 4.82 | 3.20 | 4.42 |
| Institutional Class | 09/16/05 | 6.80 | 4.08 | 5.26 |
| Institutional 2 Class* | 12/11/13 | 6.81 | 4.12 | 5.19 |
| Institutional 3 Class* | 03/01/17 | 6.78 | 3.98 | 5.11 |
| Bloomberg Barclays Municipal Bond Index | | 7.31 | 3.77 | 4.63 |
Returns for Class A shares are shown with and without the maximum initial sales charge of 3.00%. Returns for Class C shares are shown with and without the 1.00% contingent deferred sales charge for the first year only. The Fund’s other share 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 share 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 columbiathreadneedleus.com/investor/ 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 columbiathreadneedleus.com/investor/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.
Columbia Tax-Exempt Fund | Annual Report 2019
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (July 31, 2009 — July 31, 2019)
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, 2019) |
| AAA rating | 4.7 |
| AA rating | 18.8 |
| A rating | 41.8 |
| BBB rating | 21.7 |
| BB rating | 2.2 |
| B rating | 1.2 |
| C rating | 0.1 |
| Not rated | 9.5 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments.
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
Top Ten States/Territories (%)
(at July 31, 2019) |
| Illinois | 12.3 |
| Texas | 9.9 |
| Pennsylvania | 8.2 |
| California | 7.5 |
| Florida | 7.1 |
| New York | 6.3 |
| Michigan | 5.1 |
| New Jersey | 3.6 |
| Colorado | 3.3 |
| Minnesota | 3.0 |
Percentages indicated are based upon total investments excluding Money Market Funds and investments in derivatives, if any.
For further detail about these holdings, please refer to the section entitled “Portfolio of Investments.”
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.
| 4 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Manager Discussion of Fund Performance
For the 12-month period that ended July 31, 2019, the Fund’s Class A shares returned 6.51% excluding sales charges. Institutional Class shares of the Fund returned 6.80%. The Fund underperformed its benchmark, the Bloomberg Barclays Municipal Bond Index, which returned 7.31% over the same period. The Fund benefited from its yield curve and credit positioning, its focus on revenue bonds and security selection, particularly in the hospitals and transportation sectors. Pre-refunded bonds, special tax and resource recovery sectors detracted from relative returns.
Tax-exempt bond market gained amid slowing economies and shifting monetary policies
Municipal bonds generated healthy gains during the reporting period, with the bulk of the rally occurring from November 2018 onward. Municipal bonds had performed reasonably well from May through August 2018 on the strength of falling U.S. Treasury yields and the combination of strong investor demand and reduced new issue supply in the tax-exempt bond market. Conditions became less favorable in September 2018, when U.S. Treasury yields climbed on indications of ongoing strength in the U.S. economy and fears about inflation pressures that could result from a trade war with China. The negative trend persisted in October, as U.S. Treasury yields continued to rise on concerns the U.S. Federal Reserve (Fed) would take a more aggressive approach to increasing interest rates in 2019 than investors had been expecting.
Sentiment again shifted abruptly in early November 2018, causing U.S. Treasury yields to fall sharply through the end of calendar year 2018. The broad fixed-income markets rallied significantly due to signs of slowing global economic growth, volatility in traditionally higher risk assets, and expectations the Fed would shift its policy and adopt a more accommodative stance. In addition, various geopolitical factors, including uncertainty surrounding U.S./China trade disputes, negotiations regarding the U.K.’’s exit from the European Union (Brexit) and the U.S. federal government shutdown, fueled a “flight to quality” into bonds. Municipal bonds rallied as a result, pushing the major national municipal bond indices into positive territory for calendar year 2018.
The rally continued into early 2019, leading to the largest first quarter gain for the tax-exempt bond market since 2014. The first calendar quarter was also the sixth best quarter for municipal bonds in the past 30 years. During these months, municipal bonds were well supported by a backdrop of slower global economic growth and increasingly accommodative monetary policies from the world’s major central banks. Technicals, or supply/demand factors, also remained highly favorable. Record municipal bond mutual fund inflows, fueled by strong demand as a result of state and local tax deductions capped by the Tax Cuts and Jobs Act of 2017, combined with meager new issue supply to propel municipal bonds to post solid gains through the spring and mid-summer months of 2019.
For the annual period overall, longer term AAA-rated municipal bonds outpaced shorter term AAA-rated municipal issues, mirroring trends in the U.S. Treasury market, and lower quality municipal bonds outperformed their higher rated counterparts. The “risk on” environment of January to May 2019 led to robust investor demand for higher risk issues, lifting the returns of higher yielding municipal bonds until June and July 2019, when higher quality issues outperformed.
Contributors and detractors
The Fund’s positioning along the yield curve was a positive contributor to relative results. An overweight in the 15- to 30-year maturity range, which is the Fund’s focus, helped performance as yields declined during the period. Credit positioning was another significant contributor to results, as securities rated A and BBB were the best performers for the Fund. Overweights in securities rated A and BBB amplified the positive impact on relative results. Security selection was an additional plus for the Fund. Exposure to and selection within the hospitals sector boosted returns. The yield provided by the health care sector is an important component of returns for this diversified portfolio. Overweights in transportation, where we believe fundamentals remain positive, and in housing benefited performance. We view housing bonds as fundamentally stable, particularly in communities that are economically viable, as housing tends to be less sensitive to shifts in economic activity. Even though the Fund was underweight in general obligation bonds (GOs), security selection among GOs aided results, mostly because of Illinois-related credits. Exposure to Chicago GO bonds, in particular, helped the Fund’s return.
An overweight in pre-refunded bonds, which typically have short maturities, weighed on relative results as yields declined and prices rose more for longer maturity bonds. We sold a position in below-investment-grade special tax bonds on the continued weakening of credit fundamentals. The loss incurred detracted from returns. Positions in longer maturity bonds with shorter call features, especially those that were callable within four years, also detracted from returns. Within the resource recovery sector, a position in an industrial issuer that experienced a significantly longer than expected ramp-up period for production
Columbia Tax-Exempt Fund | Annual Report 2019
| 5 |
Manager Discussion of Fund Performance (continued)
resulted in a restructuring of the bonds at a lower price, which hampered returns. Also in the resource recovery sector, an emphasis on shorter duration bonds, which underperformed longer duration bonds, weighed on relative results. (Duration is a measure of interest rate sensitivity.)
Portfolio activity
During the period, we took advantage of narrowing credit spreads and strong demand for high-yield bonds by reducing exposure to lower quality issues whose credit fundamentals had the potential to weaken, particularly if economic growth should slow. We sold below-investment-grade charter school bonds at relatively narrow spreads as the demand for high-yield securities grew during the period. We reinvested the proceeds in long-term bonds with 10-year call protection, many of which were rated A and AA. We believe that bonds of this quality and duration have the potential to hold up well in an environment of slowing economic growth. We also added to bonds rated A and AA because we believed them to be a better relative value as credit spreads on lower rated securities had compressed. And, we reduced our exposure to shorter maturity bonds, including pre-refunded bonds, as well as bonds with longer maturities and short call features that were priced to their short call dates. With the proceeds we added to longer maturity bonds with longer call features.
During the period, we increased exposure to airport, toll road, transportation, housing, state GO and health care bonds. We also added modestly to tobacco and education. We continue to believe that active management is key to navigating the municipal market in an environment of shifting interest rates and uncertain Fed actions. 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 for the additional income it offers. Long-term bonds have higher yields and tend to be less vulnerable to Fed interest rate hikes than short maturity bonds.
Finally, we continue to look for opportunities to purchase bonds that are subject to the Alternative Minimum Tax, mindful of the 20% limit on such bonds in the Fund.
Fixed-income securities presentissuerdefault risk. The Fund invests substantially inmunicipal 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.Marketrisk may affect a single issuer, sector of the economy, industry or the market as a whole. A rise ininterest 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 statetaxrules apply to capital gain distributions and any gains or losses on sales. Income may be subject to state, local or alternative minimum taxes.Liquidityrisk is associated with the difficulty of selling underlying investments at a desirable time or price. Investing inderivativesis 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.
| 6 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund 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 $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2019 — July 31, 2019 |
| | Account value at the
beginning of the
period ($) | 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 | 1,055.10 | 1,021.17 | 3.72 | 3.66 | 0.73 |
| Advisor Class | 1,000.00 | 1,000.00 | 1,056.90 | 1,022.17 | 2.70 | 2.66 | 0.53 |
| Class C | 1,000.00 | 1,000.00 | 1,052.50 | 1,017.95 | 7.02 | 6.90 | 1.38 |
| Institutional Class | 1,000.00 | 1,000.00 | 1,056.90 | 1,022.17 | 2.70 | 2.66 | 0.53 |
| Institutional 2 Class | 1,000.00 | 1,000.00 | 1,057.00 | 1,022.22 | 2.65 | 2.61 | 0.52 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 1,057.10 | 1,022.51 | 2.35 | 2.31 | 0.46 |
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.
Columbia Tax-Exempt Fund | Annual Report 2019
| 7 |
Portfolio of Investments
July 31, 2019
(Percentages represent value of investments compared to net assets)
Investments in securities
| Corporate Bonds & Notes 0.0% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| United States 0.0% |
| Anuvia Florida LLC(a),(b) |
| 01/01/2029 | 5.000% | | 514,219 | 462,798 |
Total Corporate Bonds & Notes
(Cost $514,220) | 462,798 |
|
| Floating Rate Notes 2.0% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| New Hampshire 0.1% |
| New Hampshire Health & Education Facilities Authority Act(c),(d) |
| Revenue Bonds |
| University of New Hampshire |
| Series 2012B-2 (Wells Fargo Bank) |
| 07/01/2033 | 1.500% | | 3,180,000 | 3,180,000 |
| New York 1.9% |
| City of New York(c),(d) |
| Unlimited General Obligation Notes |
| Subordinated Series 2013-D3 (JPMorgan Chase Bank) |
| 08/01/2038 | 1.480% | | 7,685,000 | 7,685,000 |
| New York City Transitional Finance Authority(c),(d) |
| Revenue Bonds |
| Future Tax Secured |
| Subordinated Series 2012C (JPMorgan Chase Bank) |
| 11/01/2036 | 1.480% | | 3,000,000 | 3,000,000 |
| Subordinated Series 2015 (JPMorgan Chase Bank) |
| 02/01/2045 | 1.480% | | 5,150,000 | 5,150,000 |
| New York City Water & Sewer System(c),(d) |
| Revenue Bonds |
| 2nd General Resolution |
| Series 2013 (JPMorgan Chase Bank) |
| 06/15/2050 | 1.480% | | 13,000,000 | 13,000,000 |
| 06/15/2050 | 1.480% | | 6,165,000 | 6,165,000 |
| Series 2016BB (State Street Bank and Trust Co.) |
| 06/15/2049 | 1.490% | | 18,390,000 | 18,390,000 |
| 06/15/2049 | 1.490% | | 3,145,000 | 3,145,000 |
| Triborough Bridge & Tunnel Authority(d) |
| Refunding Revenue Bonds |
| General |
| Subordinated Series 2018-B-3 (State Street Bank and Trust Co.) |
| 01/01/2032 | 1.450% | | 4,000,000 | 4,000,000 |
| Series 2018C (State Street Bank and Trust Co.) |
| 01/01/2032 | 1.450% | | 3,500,000 | 3,500,000 |
| Total | 64,035,000 |
Total Floating Rate Notes
(Cost $67,215,000) | 67,215,000 |
|
| Municipal Bonds 98.7% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Alabama 0.6% |
| Lower Alabama Gas District (The) |
| Revenue Bonds |
| Series 2016A |
| 09/01/2046 | 5.000% | | 16,000,000 | 21,753,920 |
| Arizona 1.7% |
| Arizona Health Facilities Authority |
| Refunding Revenue Bonds |
| Scottsdale Lincoln Hospital Project |
| Series 2014 |
| 12/01/2042 | 5.000% | | 7,000,000 | 7,871,990 |
| Revenue Bonds |
| Banner Health |
| Series 2014A |
| 01/01/2044 | 5.000% | | 15,000,000 | 16,657,350 |
| Arizona Industrial Development Authority |
| Revenue Bonds |
| Great Lakes Senior Living Community |
| Series 2019 |
| 01/01/2039 | 4.250% | | 1,000,000 | 1,072,850 |
| 01/01/2040 | 4.250% | | 750,000 | 802,305 |
| Glendale Industrial Development Authority |
| Revenue Bonds |
| Midwestern University |
| Series 2010 |
| 05/15/2035 | 5.000% | | 13,750,000 | 14,114,512 |
| Industrial Development Authority of the County of Pima (The)(e) |
| Revenue Bonds |
| GNMA Mortgage-Backed Securities |
| Series 1989 Escrowed to Maturity AMT |
| 09/01/2021 | 8.200% | | 2,225,000 | 2,420,155 |
| Industrial Development Authority of the County of Yavapai (The)(f) |
| Refunding Revenue Bonds |
| Yavapai Regional Medical Center |
| Series 2019 |
| 08/01/2038 | 4.000% | | 1,000,000 | 1,099,000 |
| La Paz County Industrial Development Authority |
| Revenue Bonds |
| Charter School Solutions -Harmony Public |
| Series 2018 |
| 02/15/2038 | 5.000% | | 825,000 | 946,696 |
| Maricopa County Industrial Development Authority(g) |
| Revenue Bonds |
| Christian Care Surprise, Inc. |
| Series 2016 |
| 01/01/2036 | 5.750% | | 2,000,000 | 2,103,260 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Salt Verde Financial Corp. |
| Revenue Bonds |
| Series 2007 |
| 12/01/2032 | 5.000% | | 7,170,000 | 9,206,352 |
| Tempe Industrial Development Authority(g) |
| Revenue Bonds |
| Mirabella at ASU Project |
| Series 2017A |
| 10/01/2052 | 6.125% | | 1,400,000 | 1,582,476 |
| Total | 57,876,946 |
| Arkansas 0.2% |
| Pulaski County Public Facilities Board |
| Revenue Bonds |
| Series 2014 |
| 12/01/2039 | 5.000% | | 4,000,000 | 4,445,000 |
| 12/01/2042 | 5.000% | | 2,000,000 | 2,214,380 |
| Total | 6,659,380 |
| California 7.6% |
| ABAG Finance Authority for Nonprofit Corps. |
| Refunding Revenue Bonds |
| Episcopal Senior Communities |
| Series 2011 |
| 07/01/2026 | 6.125% | | 3,420,000 | 3,745,481 |
| 07/01/2041 | 6.125% | | 7,015,000 | 7,540,915 |
| California Health Facilities Financing Authority |
| Refunding Revenue Bonds |
| Sutter Health |
| Series 2016B |
| 11/15/2041 | 4.000% | | 10,000,000 | 10,857,500 |
| Revenue Bonds |
| Kaiser Permanente |
| Subordinated Series 2017A-2 |
| 11/01/2044 | 4.000% | | 15,000,000 | 16,432,500 |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
| Community Medical Centers |
| Series 2017A |
| 02/01/2036 | 5.000% | | 1,500,000 | 1,757,040 |
| 02/01/2037 | 5.000% | | 1,000,000 | 1,167,770 |
| California Municipal Finance Authority(e) |
| Revenue Bonds |
| Senior Lien |
| Series 2018A AMT |
| 12/31/2043 | 5.000% | | 500,000 | 586,225 |
| California Municipal Finance Authority(e),(g),(h) |
| Revenue Bonds |
| UTS Renewable Energy-Waste Water Facilities |
| Series 2011 AMT |
| 12/01/2032 | 0.000% | | 1,830,000 | 274,500 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| California Public Finance Authority |
| Refunding Revenue Bonds |
| Sharp Healthcare |
| Series 2017A |
| 08/01/2047 | 4.000% | | 10,000,000 | 10,898,100 |
| California School Finance Authority(g) |
| Revenue Bonds |
| River Springs Charter School Project |
| Series 2015 |
| 07/01/2046 | 6.375% | | 2,000,000 | 2,331,360 |
| 07/01/2046 | 6.375% | | 150,000 | 174,855 |
| California State Public Works Board |
| Revenue Bonds |
| Various Capital Projects |
| Series 2012A |
| 04/01/2037 | 5.000% | | 4,660,000 | 5,093,473 |
| Various Correctional Facilities |
| Series 2014A |
| 09/01/2039 | 5.000% | | 7,000,000 | 8,041,390 |
| California Statewide Communities Development Authority(g) |
| Refunding Revenue Bonds |
| 899 Charleston Project |
| Series 2014A |
| 11/01/2029 | 5.000% | | 1,650,000 | 1,844,716 |
| 11/01/2034 | 5.000% | | 3,700,000 | 4,081,211 |
| Revenue Bonds |
| California Baptist University |
| Series 2014A |
| 11/01/2033 | 6.125% | | 1,560,000 | 1,810,349 |
| 11/01/2043 | 6.375% | | 1,035,000 | 1,196,967 |
| Lancer Plaza Project |
| Series 2013 |
| 11/01/2043 | 5.875% | | 1,875,000 | 2,110,687 |
| California Statewide Communities Development Authority |
| Revenue Bonds |
| Loma Linda University Medical Center |
| Series 2014 |
| 12/01/2044 | 5.250% | | 3,500,000 | 3,874,010 |
| Castaic Lake Water Agency(i) |
| Certificate of Participation |
| Capital Appreciation-Water System Improvement Project |
| Series 1999 (AMBAC) |
| 08/01/2024 | 0.000% | | 9,445,000 | 8,787,345 |
| Chino Public Financing Authority |
| Refunding Special Tax Bonds |
| Series 2012 |
| 09/01/2025 | 5.000% | | 790,000 | 861,795 |
| 09/01/2026 | 5.000% | | 1,230,000 | 1,339,310 |
| 09/01/2027 | 5.000% | | 1,280,000 | 1,391,155 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 9 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Los Angeles Department of Airports(e) |
| Revenue Bonds |
| Subordinated Series 2017A AMT |
| 05/15/2042 | 5.000% | | 4,375,000 | 5,152,131 |
| City of Pomona |
| Refunding Revenue Bonds |
| Mortgage-Backed Securities |
| Series 1990A Escrowed to Maturity (GNMA / FNMA) |
| 05/01/2023 | 7.600% | | 3,535,000 | 3,980,269 |
| Foothill-Eastern Transportation Corridor Agency |
| Refunding Revenue Bonds |
| Junior Lien |
| Series 2014C |
| 01/15/2033 | 6.250% | | 3,845,000 | 4,523,604 |
| Series 2014A |
| 01/15/2046 | 5.750% | | 19,005,000 | 22,001,138 |
| Golden State Tobacco Securitization Corp. |
| Refunding Revenue Bonds |
| Series 2018A-1 |
| 06/01/2047 | 5.000% | | 1,000,000 | 1,009,990 |
| Series 2018A-2 |
| 06/01/2047 | 5.000% | | 9,500,000 | 9,594,905 |
| Los Angeles County Schools Regionalized Business Services Corp.(i) |
| Certificate of Participation |
| Capital Appreciation-Pooled Financing |
| Series 1999A (AMBAC) |
| 08/01/2022 | 0.000% | | 2,180,000 | 2,071,959 |
| Norwalk-La Mirada Unified School District(i) |
| Unlimited General Obligation Bonds |
| Capital Appreciation |
| Series 2005B (NPFGC) |
| 08/01/2023 | 0.000% | | 9,790,000 | 9,240,585 |
| Palomar Health |
| Refunding Revenue Bonds |
| Series 2016 |
| 11/01/2036 | 5.000% | | 4,605,000 | 5,266,324 |
| Perris Community Facilities District |
| Special Tax Bonds |
| Series 1991-90-2 Escrowed to Maturity |
| 10/01/2021 | 8.750% | | 6,165,000 | 7,193,815 |
| San Francisco City & County Airport Commission - San Francisco International Airport(e) |
| Revenue Bonds |
| Series 2014A AMT |
| 05/01/2044 | 5.000% | | 24,000,000 | 27,160,800 |
| State of California |
| Unlimited General Obligation Bonds |
| Series 2019 |
| 04/01/2032 | 5.000% | | 5,000,000 | 6,452,950 |
| Various Purpose |
| Series 2009 |
| 11/01/2039 | 5.500% | | 15,520,000 | 15,685,754 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2010 |
| 03/01/2033 | 6.000% | | 5,000,000 | 5,141,650 |
| 03/01/2040 | 5.500% | | 17,200,000 | 17,624,324 |
| Series 2012 |
| 04/01/2035 | 5.250% | | 11,000,000 | 12,192,510 |
| Unrefunded Unlimited General Obligation Bonds |
| Series 2004 |
| 04/01/2029 | 5.300% | | 6,000 | 6,021 |
| Temecula Public Financing Authority |
| Refunding Special Tax Bonds |
| Wolf Creek Community Facilities District |
| Series 2012 |
| 09/01/2027 | 5.000% | | 1,275,000 | 1,372,844 |
| 09/01/2028 | 5.000% | | 1,315,000 | 1,411,153 |
| 09/01/2029 | 5.000% | | 1,405,000 | 1,500,807 |
| 09/01/2030 | 5.000% | | 1,480,000 | 1,576,777 |
| 09/01/2031 | 5.000% | | 1,555,000 | 1,657,164 |
| West Contra Costa Unified School District |
| Unlimited General Obligation Refunding Bonds |
| Series 2001B (NPFGC) |
| 08/01/2024 | 6.000% | | 1,735,000 | 1,950,331 |
| Total | 259,966,459 |
| Colorado 3.4% |
| Arista Metropolitan District |
| Limited General Obligation Refunding & Improvement Bonds |
| Special Revenue |
| Series 2018 |
| 12/01/2038 | 5.000% | | 620,000 | 647,801 |
| City & County of Denver Airport System(e) |
| Refunding Revenue Bonds |
| Subordinated Series 2018-A AMT |
| 12/01/2048 | 4.000% | | 11,500,000 | 12,386,535 |
| Colorado Bridge Enterprise(e) |
| Revenue Bonds |
| Central 70 Project |
| Series 2017 AMT |
| 06/30/2051 | 4.000% | | 9,240,000 | 9,630,113 |
| Colorado Educational & Cultural Facilities Authority(g) |
| Improvement Refunding Revenue Bonds |
| Skyview Charter School |
| Series 2014 |
| 07/01/2034 | 5.125% | | 1,525,000 | 1,609,149 |
| 07/01/2044 | 5.375% | | 2,100,000 | 2,207,499 |
| 07/01/2049 | 5.500% | | 925,000 | 975,339 |
| Colorado Health Facilities Authority |
| Improvement Refunding Revenue Bonds |
| Bethesda Project |
| 09/15/2048 | 5.000% | | 15,000,000 | 16,669,200 |
| 09/15/2053 | 5.000% | | 10,000,000 | 11,071,400 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Prerefunded 01/01/23 Revenue Bonds |
| Catholic Health Initiatives |
| Series 2013A |
| 01/01/2045 | 5.250% | | 7,000,000 | 7,897,750 |
| Prerefunded 06/01/27 Revenue Bonds |
| Evangelical Lutheran Good Samaritan Society |
| Series 2017 |
| 06/01/2047 | 5.000% | | 4,445,000 | 5,523,446 |
| Refunding Revenue Bonds |
| Covenant Retirement Communities |
| Series 2012A |
| 12/01/2033 | 5.000% | | 5,500,000 | 5,951,000 |
| Series 2015 |
| 12/01/2035 | 5.000% | | 3,800,000 | 4,265,500 |
| Colorado Health Facilities Authority(f) |
| Refunding Revenue Bonds |
| AdventHealth Obligated |
| Series 2019 |
| 11/15/2043 | 4.000% | | 6,000,000 | 6,626,580 |
| Colorado High Performance Transportation Enterprise |
| Revenue Bonds |
| C-470 Express Lanes |
| Series 2017 |
| 12/31/2051 | 5.000% | | 2,500,000 | 2,732,400 |
| 12/31/2056 | 5.000% | | 2,300,000 | 2,506,632 |
| Colorado Housing & Finance Authority |
| Revenue Bonds |
| Series 2018 (GNMA) |
| 11/01/2038 | 3.600% | | 5,000,000 | 5,284,000 |
| E-470 Public Highway Authority(i) |
| Revenue Bonds |
| Capital Appreciation |
| Series 1997B (NPFGC) |
| 09/01/2022 | 0.000% | | 6,515,000 | 6,207,687 |
| University of Colorado Hospital Authority |
| Prerefunded 11/15/19 Revenue Bonds |
| Series 2009A |
| 11/15/2029 | 6.000% | | 5,000,000 | 5,069,800 |
| Revenue Bonds |
| Series 2012A |
| 11/15/2042 | 5.000% | | 7,325,000 | 8,047,758 |
| Total | 115,309,589 |
| Connecticut 0.7% |
| Bridgeport Housing Authority |
| Revenue Bonds |
| Custodial Receipts Energy Performance |
| Series 2009 |
| 06/01/2030 | 5.600% | | 1,000,000 | 1,000,040 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of New Haven |
| Unlimited General Obligation Bonds |
| Series 2002C Escrowed to Maturity (NPFGC) |
| 11/01/2020 | 5.000% | | 10,000 | 10,032 |
| Connecticut State Health & Educational Facility Authority(g) |
| Revenue Bonds |
| Church Home of Hartford, Inc. |
| Series 2016 |
| 09/01/2046 | 5.000% | | 1,250,000 | 1,325,588 |
| Connecticut State Health & Educational Facility Authority |
| Revenue Bonds |
| Connecticut College |
| Series 2011H-1 |
| 07/01/2041 | 5.000% | | 1,625,000 | 1,713,952 |
| Western Connecticut Health |
| Series 2011M |
| 07/01/2041 | 5.375% | | 1,500,000 | 1,589,400 |
| Harbor Point Infrastructure Improvement District |
| Prerefunded 04/01/20 Tax Allocation Bonds |
| Harbor Point Project |
| Series 2010A |
| 04/01/2039 | 7.875% | | 8,750,000 | 9,138,412 |
| State of Connecticut |
| Unlimited General Obligation Bonds |
| Series 2018E |
| 09/15/2037 | 5.000% | | 500,000 | 602,270 |
| Series 2018-E |
| 09/15/2034 | 5.000% | | 2,000,000 | 2,435,500 |
| Series 2019A |
| 04/15/2034 | 5.000% | | 1,000,000 | 1,229,430 |
| 04/15/2039 | 5.000% | | 4,235,000 | 5,101,777 |
| Total | 24,146,401 |
| Delaware 0.3% |
| Delaware State Economic Development Authority |
| Refunding Revenue Bonds |
| Gas Facilities-Delmarva Power |
| Series 2010 |
| 02/01/2031 | 5.400% | | 5,000,000 | 5,176,750 |
| Revenue Bonds |
| Newark Charter School |
| Series 2012 |
| 09/01/2032 | 4.625% | | 2,000,000 | 2,102,300 |
| 09/01/2042 | 5.000% | | 1,350,000 | 1,420,187 |
| Total | 8,699,237 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 11 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| District of Columbia 0.4% |
| District of Columbia |
| Prerefunded 07/01/23 Revenue Bonds |
| KIPP Charter School |
| Series 2013 |
| 07/01/2033 | 6.000% | | 250,000 | 296,378 |
| 07/01/2048 | 6.000% | | 1,150,000 | 1,363,337 |
| Refunding Revenue Bonds |
| Children’s Hospital |
| Series 2015 |
| 07/15/2044 | 5.000% | | 9,090,000 | 10,316,695 |
| Friendship Public Charter School |
| Series 2016 |
| 06/01/2046 | 5.000% | | 1,385,000 | 1,546,117 |
| Revenue Bonds |
| Ingleside RockCreek Project |
| Series 2017 |
| 07/01/2037 | 5.000% | | 500,000 | 537,705 |
| 07/01/2042 | 5.000% | | 1,000,000 | 1,065,830 |
| Total | 15,126,062 |
| Florida 7.1% |
| Capital Trust Agency, Inc.(g) |
| Revenue Bonds |
| 1st Mortgage Tallahassee Tapestry Senior Housing Project |
| Series 2015 |
| 12/01/2045 | 7.000% | | 3,165,000 | 3,277,168 |
| 12/01/2050 | 7.125% | | 1,000,000 | 1,035,560 |
| Central Florida Expressway Authority |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2016B |
| 07/01/2039 | 4.000% | | 10,500,000 | 11,419,695 |
| City of Atlantic Beach |
| Revenue Bonds |
| Fleet Landing Project |
| 11/15/2048 | 5.000% | | 2,500,000 | 2,821,350 |
| City of Lakeland |
| Revenue Bonds |
| Lakeland Regional Health |
| Series 2015 |
| 11/15/2045 | 5.000% | | 22,000,000 | 24,492,820 |
| County of Broward Airport System(e) |
| Revenue Bonds |
| Series 2015A AMT |
| 10/01/2045 | 5.000% | | 14,000,000 | 15,882,160 |
| County of Miami-Dade Aviation(e) |
| Refunding Revenue Bonds |
| Series 2014A AMT |
| 10/01/2033 | 5.000% | | 15,000,000 | 17,132,550 |
| 10/01/2036 | 5.000% | | 21,400,000 | 24,363,686 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2017B AMT |
| 10/01/2040 | 5.000% | | 11,250,000 | 13,234,163 |
| Florida Development Finance Corp.(e),(g) |
| Refunding Revenue Bonds |
| Virgin Trains USA Pass |
| Series 2019 AMT |
| 01/01/2049 | 6.375% | | 4,000,000 | 3,822,080 |
| Florida Development Finance Corp.(g) |
| Revenue Bonds |
| Miami Arts Charter School Project |
| Series 2014A |
| 06/15/2034 | 5.875% | | 420,000 | 422,524 |
| 06/15/2044 | 6.000% | | 3,100,000 | 3,072,875 |
| Renaissance Charter School |
| Series 2015 |
| 06/15/2046 | 6.125% | | 3,920,000 | 4,271,036 |
| Renaissance Charter School Inc. Projects |
| Series 2015 |
| 06/15/2035 | 6.000% | | 4,000,000 | 4,405,840 |
| Florida Development Finance Corp. |
| Revenue Bonds |
| Renaissance Charter School Projects |
| Series 2013A |
| 06/15/2044 | 8.500% | | 15,000,000 | 17,211,000 |
| Florida Housing Finance Corp. |
| Revenue Bonds |
| Series 2018 (GNMA) |
| 07/01/2043 | 3.800% | | 6,550,000 | 6,896,495 |
| Greater Orlando Aviation Authority(e) |
| Revenue Bonds |
| Priority |
| Subordinated Series 2017A AMT |
| 10/01/2047 | 5.000% | | 2,665,000 | 3,112,001 |
| Hillsborough County Aviation Authority(e) |
| Revenue Bonds |
| Tampa International |
| Subordinated Series 2018 AMT |
| 10/01/2048 | 5.000% | | 9,300,000 | 10,967,397 |
| Hillsborough County Aviation Authority |
| Revenue Bonds |
| Tampa International Airport |
| Series 2015A |
| 10/01/2044 | 5.000% | | 11,115,000 | 12,619,304 |
| Miami-Dade County Expressway Authority |
| Revenue Bonds |
| Series 2014A |
| 07/01/2044 | 5.000% | | 5,000,000 | 5,582,900 |
| Mid-Bay Bridge Authority |
| Prerefunded 10/01/21 Revenue Bonds |
| Series 2011A |
| 10/01/2040 | 7.250% | | 7,000,000 | 7,888,930 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Refunding Revenue Bonds |
| Series 2015A |
| 10/01/2035 | 5.000% | | 3,765,000 | 4,270,489 |
| Revenue Bonds |
| Series 1991A Escrowed to Maturity |
| 10/01/2022 | 6.875% | | 1,665,000 | 1,815,666 |
| Orange County Industrial Development Authority(e),(g) |
| Revenue Bonds |
| Anuvia Florida LLC Project |
| Series 2018-A AMT |
| 07/01/2048 | 4.000% | | 9,840,000 | 6,123,038 |
| Palm Beach County Health Facilities Authority |
| Refunding Revenue Bonds |
| Boca Raton Community Hospital Obligation Group |
| Series 2014 |
| 12/01/2031 | 5.000% | | 1,500,000 | 1,730,865 |
| Revenue Bonds |
| Sinai Residences of Boca Raton |
| Series 2014 |
| 06/01/2034 | 7.250% | | 685,000 | 768,604 |
| Polk County Industrial Development Authority |
| Refunding Revenue Bonds |
| Carpenter’s Home Estates |
| Series 2019 |
| 01/01/2039 | 5.000% | | 1,700,000 | 1,904,799 |
| Putnam County Development Authority |
| Refunding Revenue Bonds |
| Seminole Project |
| Series 2018A |
| 03/15/2042 | 5.000% | | 6,665,000 | 7,850,170 |
| Sarasota County Public Hospital District |
| Refunding Revenue Bonds |
| Sarasota Memorial Hospital |
| Series 1998B (NPFGC) |
| 07/01/2028 | 5.500% | | 6,980,000 | 8,648,150 |
| Tampa Sports Authority |
| Sales Tax Revenue Bonds |
| Tampa Bay Arena Project |
| Series 1995 (NPFGC) |
| 10/01/2025 | 5.750% | | 2,500,000 | 2,875,425 |
| Tampa-Hillsborough County Expressway Authority |
| Refunding Revenue Bonds |
| Series 2017B |
| 07/01/2042 | 4.000% | | 12,785,000 | 14,072,577 |
| Total | 243,991,317 |
| Georgia 1.2% |
| Brookhaven Development Authority(f) |
| Revenue Bonds |
| Children’s Healthcare of Atlanta |
| Series 2019 |
| 07/01/2049 | 4.000% | | 10,500,000 | 11,515,455 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Floyd County Development Authority |
| Revenue Bonds |
| Spires Berry College Project |
| 12/01/2053 | 6.500% | | 6,600,000 | 6,897,660 |
| Fulton County Development Authority |
| Revenue Bonds |
| RAC Series 2017 |
| 04/01/2047 | 5.000% | | 3,000,000 | 3,465,750 |
| Fulton County Residential Care Facilities for the Elderly Authority |
| Refunding Revenue Bonds |
| Lenbrook Square Foundation, Inc. |
| Series 2016 |
| 07/01/2036 | 5.000% | | 3,500,000 | 3,843,210 |
| Gainesville & Hall County Hospital Authority |
| Unrefunded Revenue Bonds |
| Northeast Georgia Health System, Inc. Project |
| Series 2010A |
| 02/15/2045 | 5.500% | | 6,925,000 | 7,070,425 |
| Georgia State Road & Tollway Authority(g),(i) |
| Revenue Bonds |
| I-75 S Express Lanes Project |
| Series 2014 |
| 06/01/2024 | 0.000% | | 625,000 | 478,138 |
| Glynn-Brunswick Memorial Hospital Authority |
| Revenue Bonds |
| SE Georgia Health System Anticipation Certificates |
| Series 2017 |
| 08/01/2047 | 5.000% | | 2,145,000 | 2,435,819 |
| Metropolitan Atlanta Rapid Transit Authority |
| Refunding Revenue Bonds |
| Series 1992P Escrowed to Maturity (AMBAC) |
| 07/01/2020 | 6.250% | | 510,000 | 532,139 |
| Series 2007A (AMBAC) |
| 07/01/2026 | 5.250% | | 1,000,000 | 1,256,110 |
| Oconee County Industrial Development Authority |
| Revenue Bonds |
| Presbyterian Village Athens Project |
| 12/01/2048 | 6.250% | | 2,945,000 | 3,095,489 |
| Total | 40,590,195 |
| Hawaii 0.2% |
| State of Hawaii Department of Budget & Finance |
| Prerefunded 11/15/19 Revenue Bonds |
| 15 Craigside Project |
| Series 2009A |
| 11/15/2029 | 8.750% | | 825,000 | 842,655 |
| 11/15/2044 | 9.000% | | 3,000,000 | 3,066,000 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 13 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Refunding Revenue Bonds |
| Special Purpose - Kahala Nui |
| Series 2012 |
| 11/15/2032 | 5.125% | | 1,300,000 | 1,438,073 |
| 11/15/2037 | 5.250% | | 1,945,000 | 2,147,222 |
| Total | 7,493,950 |
| Idaho 0.7% |
| Idaho Health Facilities Authority |
| Refunding Revenue Bonds |
| St. Luke’s Health System Project |
| Series 2018 |
| 03/01/2038 | 4.000% | | 3,650,000 | 3,888,089 |
| Revenue Bonds |
| Terraces of Boise Project |
| Series 2014A |
| 10/01/2034 | 7.750% | | 9,135,000 | 10,220,969 |
| 10/01/2044 | 8.000% | | 5,635,000 | 6,362,648 |
| 10/01/2049 | 8.125% | | 4,365,000 | 4,942,577 |
| Total | 25,414,283 |
| Illinois 12.4% |
| Chicago Board of Education(g) |
| Unlimited General Obligation Bonds |
| Dedicated |
| Series 2017A |
| 12/01/2046 | 7.000% | | 10,765,000 | 13,427,184 |
| Chicago Board of Education |
| Unlimited General Obligation Bonds |
| Series 2018 |
| 12/01/2046 | 5.000% | | 5,000,000 | 5,478,700 |
| Chicago Midway International Airport(e) |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2014A AMT |
| 01/01/2041 | 5.000% | | 10,000,000 | 11,090,400 |
| Series 2016A AMT |
| 01/01/2033 | 4.000% | | 3,500,000 | 3,781,785 |
| Chicago O’Hare International Airport(e) |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2018A AMT |
| 01/01/2048 | 5.000% | | 7,455,000 | 8,750,008 |
| Revenue Bonds |
| General Senior Lien |
| Series 2017D AMT |
| 01/01/2047 | 5.000% | | 7,000,000 | 8,016,260 |
| 01/01/2052 | 5.000% | | 17,620,000 | 20,093,496 |
| Series 2015C AMT |
| 01/01/2046 | 5.000% | | 12,525,000 | 13,941,202 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| TriPs Obligated Group |
| Series 2018 AMT |
| 07/01/2048 | 5.000% | | 2,400,000 | 2,767,656 |
| Chicago O’Hare International Airport |
| Revenue Bonds |
| Series 2015D |
| 01/01/2046 | 5.000% | | 7,310,000 | 8,222,727 |
| Chicago Park District |
| Limited General Obligation Bonds |
| Series 2016A |
| 01/01/2033 | 5.000% | | 1,000,000 | 1,135,140 |
| 01/01/2034 | 5.000% | | 1,000,000 | 1,132,120 |
| 01/01/2036 | 5.000% | | 1,000,000 | 1,125,960 |
| City of Chicago |
| Unlimited General Obligation Bonds |
| Project |
| Series 2011A |
| 01/01/2040 | 5.000% | | 2,000,000 | 2,046,420 |
| Series 2015A |
| 01/01/2033 | 5.500% | | 8,350,000 | 9,320,186 |
| 01/01/2039 | 5.500% | | 1,500,000 | 1,652,775 |
| Series 2017A |
| 01/01/2038 | 6.000% | | 13,080,000 | 15,312,102 |
| Unlimited General Obligation Refunding Bonds |
| Project |
| Series 2014A |
| 01/01/2030 | 5.250% | | 4,200,000 | 4,590,054 |
| 01/01/2033 | 5.250% | | 10,250,000 | 11,111,410 |
| Series 2005D |
| 01/01/2040 | 5.500% | | 2,000,000 | 2,200,200 |
| Series 2007E |
| 01/01/2042 | 5.500% | | 1,000,000 | 1,097,570 |
| City of Chicago Wastewater Transmission |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2015C |
| 01/01/2034 | 5.000% | | 1,250,000 | 1,399,488 |
| 01/01/2039 | 5.000% | | 2,970,000 | 3,283,662 |
| Revenue Bonds |
| 2nd Lien |
| Series 2014 |
| 01/01/2039 | 5.000% | | 4,000,000 | 4,332,000 |
| 01/01/2044 | 5.000% | | 4,000,000 | 4,331,840 |
| City of Chicago Waterworks |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2016 |
| 11/01/2026 | 5.000% | | 935,000 | 1,121,841 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| 2nd Lien |
| Series 2014 |
| 11/01/2034 | 5.000% | | 1,000,000 | 1,123,180 |
| 11/01/2039 | 5.000% | | 2,000,000 | 2,215,440 |
| 11/01/2044 | 5.000% | | 2,850,000 | 3,140,700 |
| Cook County Community College District No. 508 |
| Unlimited General Obligation Bonds |
| Chicago City Colleges |
| Series 2017 (BAM) |
| 12/01/2047 | 5.000% | | 9,400,000 | 10,658,566 |
| County of Champaign |
| Unlimited General Obligation Bonds |
| Public Safety Sales Tax |
| Series 1999 (NPFGC) |
| 01/01/2020 | 8.250% | | 1,015,000 | 1,043,308 |
| 01/01/2023 | 8.250% | | 1,420,000 | 1,726,124 |
| Illinois Development Finance Authority(i) |
| Subordinated Revenue Bonds |
| Regency |
| Series 1990-RMK Escrowed to Maturity |
| 04/15/2020 | 0.000% | | 68,000,000 | 67,379,160 |
| Illinois Finance Authority |
| Prerefunded 04/01/21 Revenue Bonds |
| CHF-Normal LLC-Illinois State University |
| Series 2011 |
| 04/01/2043 | 7.000% | | 5,550,000 | 6,076,639 |
| Refunding Revenue Bonds |
| Northwest Community Hospital |
| Series 2016A |
| 07/01/2038 | 4.000% | | 5,000,000 | 5,338,900 |
| Rush University Medical Center |
| Series 2015A |
| 11/15/2038 | 5.000% | | 20,145,000 | 22,663,528 |
| Series 2015B |
| 11/15/2039 | 5.000% | | 6,590,000 | 7,392,794 |
| Silver Cross Hospital & Medical Centers |
| Series 2015C |
| 08/15/2044 | 5.000% | | 9,400,000 | 10,459,662 |
| Revenue Bonds |
| Series 2013 |
| 10/01/2049 | 4.000% | | 5,575,000 | 5,835,854 |
| Unrefunded Revenue Bonds |
| Riverside Health System |
| Series 2009 |
| 11/15/2035 | 6.250% | | 3,260,000 | 3,303,554 |
| Illinois State Toll Highway Authority |
| Revenue Bonds |
| Series 2014C |
| 01/01/2036 | 5.000% | | 5,000,000 | 5,706,050 |
| 01/01/2039 | 5.000% | | 5,000,000 | 5,664,700 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2019A |
| 01/01/2044 | 4.000% | | 5,000,000 | 5,457,300 |
| Metropolitan Pier & Exposition Authority |
| Revenue Bonds |
| McCormick Place Expansion Project |
| Series 2017 |
| 06/15/2057 | 5.000% | | 7,725,000 | 8,517,817 |
| Metropolitan Water Reclamation District of Greater Chicago |
| Limited General Obligation Refunding Bonds |
| Series 2007C |
| 12/01/2033 | 5.250% | | 13,210,000 | 17,503,382 |
| Railsplitter Tobacco Settlement Authority |
| Prerefunded 06/01/21 Revenue Bonds |
| Series 2010 |
| 06/01/2028 | 6.000% | | 15,000,000 | 16,308,000 |
| Regional Transportation Authority |
| Revenue Bonds |
| Series 1994C (NPFGC) |
| 06/01/2020 | 7.750% | | 1,000,000 | 1,053,170 |
| Series 2002A (NPFGC) |
| 07/01/2031 | 6.000% | | 5,400,000 | 7,504,596 |
| State of Illinois |
| Revenue Bonds |
| 1st Series 2002 (NPFGC) |
| 06/15/2023 | 6.000% | | 4,000,000 | 4,531,160 |
| Unlimited General Obligation Bonds |
| 1st Series 2001 (NPFGC) |
| 11/01/2026 | 6.000% | | 3,000,000 | 3,529,740 |
| Series 2013 |
| 07/01/2038 | 5.500% | | 4,125,000 | 4,461,765 |
| Series 2013A |
| 04/01/2036 | 5.000% | | 8,000,000 | 8,448,800 |
| Series 2014 |
| 02/01/2039 | 5.000% | | 15,000,000 | 15,908,400 |
| Series 2016 |
| 11/01/2030 | 5.000% | | 5,975,000 | 6,679,930 |
| Unlimited General Obligation Refunding Bonds |
| Series 2018-A |
| 10/01/2033 | 5.000% | | 6,000,000 | 6,784,440 |
| Total | 427,178,845 |
| Indiana 0.2% |
| Indiana Finance Authority |
| Revenue Bonds |
| BHI Senior Living |
| Series 2011 |
| 11/15/2031 | 5.500% | | 1,175,000 | 1,257,038 |
| 11/15/2041 | 5.750% | | 5,655,000 | 6,040,445 |
| Total | 7,297,483 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 15 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Iowa 1.3% |
| Iowa Finance Authority |
| Revenue Bonds |
| Council Bluffs, Inc. Project |
| Series 2018 |
| 08/01/2033 | 5.000% | | 500,000 | 531,620 |
| 08/01/2038 | 5.000% | | 500,000 | 527,520 |
| Lifespace Communities, Inc. |
| Series 2018A |
| 05/15/2048 | 5.000% | | 9,275,000 | 10,205,932 |
| Iowa Student Loan Liquidity Corp.(e) |
| Revenue Bonds |
| Series 2011A-2 AMT |
| 12/01/2026 | 5.600% | | 580,000 | 606,245 |
| 12/01/2027 | 5.700% | | 395,000 | 412,956 |
| PEFA, Inc. |
| Revenue Bonds |
| Series 2019 |
| 09/01/2049 | 5.000% | | 27,500,000 | 32,658,450 |
| Total | 44,942,723 |
| Kansas 1.0% |
| University of Kansas Hospital Authority |
| Improvement Refunding Revenue Bonds |
| Kansas University Health System |
| Series 2015 |
| 09/01/2045 | 5.000% | | 29,000,000 | 32,870,920 |
| Kentucky 0.3% |
| Kentucky Economic Development Finance Authority |
| Refunding Revenue Bonds |
| Owensboro Health System |
| Series 2017A |
| 06/01/2041 | 5.000% | | 1,750,000 | 1,965,967 |
| Kentucky Municipal Power Agency |
| Refunding Revenue Bonds |
| Series 2015A |
| 09/01/2042 | 5.000% | | 6,600,000 | 7,551,852 |
| Kentucky State Property & Building Commission |
| Revenue Bonds |
| Project #119 |
| Series 2018 (BAM) |
| 05/01/2034 | 5.000% | | 2,000,000 | 2,424,760 |
| Total | 11,942,579 |
| Louisiana 2.3% |
| Louisiana Local Government Environmental Facilities & Community Development Authority |
| Revenue Bonds |
| Westlake Chemical Corp. |
| Series 2010A-2 |
| 11/01/2035 | 6.500% | | 6,250,000 | 6,606,500 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Louisiana Public Facilities Authority |
| Prerefunded 05/15/26 Revenue Bonds |
| Ochsner Clinic Foundation Project |
| Series 2016 |
| 05/15/2035 | 4.000% | | 25,000 | 28,931 |
| 05/15/2041 | 4.000% | | 25,000 | 28,931 |
| 05/15/2047 | 5.000% | | 15,000 | 18,321 |
| Refunding Revenue Bonds |
| Ochsner Clinic Foundation Project |
| Series 2016 |
| 05/15/2047 | 5.000% | | 1,185,000 | 1,339,453 |
| Series 2017 |
| 05/15/2036 | 5.000% | | 1,750,000 | 2,035,652 |
| 05/15/2046 | 5.000% | | 15,000,000 | 17,163,000 |
| Revenue Bonds |
| Provident Group - Flagship Properties |
| Series 2017 |
| 07/01/2047 | 5.000% | | 1,400,000 | 1,610,434 |
| 07/01/2052 | 5.000% | | 1,600,000 | 1,821,728 |
| Louisiana Public Facilities Authority(e) |
| Revenue Bonds |
| Impala Warehousing LLC Project |
| Series 2013 AMT |
| 07/01/2036 | 6.500% | | 17,695,000 | 19,477,417 |
| New Orleans Aviation Board(e) |
| Revenue Bonds |
| General Airport-North Terminal |
| Series 2017B AMT |
| 01/01/2048 | 5.000% | | 3,725,000 | 4,243,408 |
| Series 2015B AMT |
| 01/01/2045 | 5.000% | | 21,150,000 | 23,503,149 |
| Total | 77,876,924 |
| Maryland 1.5% |
| City of Brunswick |
| Special Tax Bonds |
| Brunswick Crossing Special Taxing |
| Series 2006 |
| 07/01/2036 | 5.500% | | 6,194,000 | 6,199,760 |
| Maryland Community Development Administration |
| Refunding Revenue Bonds |
| Series 2019B |
| 09/01/2034 | 3.000% | | 3,000,000 | 3,059,190 |
| 09/01/2042 | 3.350% | | 3,000,000 | 3,050,880 |
| Maryland Economic Development Corp. |
| Revenue Bonds |
| Salisbury University Project |
| Series 2012 |
| 06/01/2030 | 5.000% | | 400,000 | 421,092 |
| Towson University Project |
| Series 2012 |
| 07/01/2029 | 5.000% | | 650,000 | 703,125 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Maryland Health & Higher Educational Facilities Authority |
| Refunding Revenue Bonds |
| Mercy Medical Center |
| Series 2016A |
| 07/01/2042 | 4.000% | | 5,250,000 | 5,501,947 |
| Meritus Medical Center Issue |
| Series 2015 |
| 07/01/2045 | 5.000% | | 3,000,000 | 3,366,300 |
| Western Maryland Health System |
| Series 2014 |
| 07/01/2034 | 5.250% | | 6,885,000 | 7,750,513 |
| Revenue Bonds |
| University of Maryland Medical System |
| Series 2017 |
| 07/01/2048 | 4.000% | | 7,335,000 | 7,878,964 |
| State of Maryland |
| Unlimited General Obligation Bonds |
| State and Local Facilities Loan |
| Series 2019 |
| 03/15/2032 | 5.000% | | 10,000,000 | 12,854,900 |
| Total | 50,786,671 |
| Massachusetts 2.3% |
| Commonwealth of Massachusetts |
| Refunding Revenue Bonds |
| Series 2005 (NPFGC) |
| 01/01/2027 | 5.500% | | 4,500,000 | 5,735,475 |
| 01/01/2030 | 5.500% | | 2,500,000 | 3,352,525 |
| Massachusetts Bay Transportation Authority |
| Revenue Bonds |
| Series 2005B (NPFGC) |
| 07/01/2026 | 5.500% | | 1,500,000 | 1,908,840 |
| Series 2008B |
| 07/01/2027 | 5.250% | | 710,000 | 910,447 |
| Unrefunded Revenue Bonds |
| General Transportation |
| Series 1991 (NPFGC) |
| 03/01/2021 | 7.000% | | 395,000 | 420,205 |
| Massachusetts Clean Water Trust (The) |
| Refunding Revenue Bonds |
| Pool Program |
| Series 2006 |
| 08/01/2030 | 5.250% | | 1,000,000 | 1,355,520 |
| Massachusetts Development Finance Agency |
| Prerefunded 07/01/22 Revenue Bonds |
| Boston Medical Center |
| Series 2012 |
| 07/01/2029 | 5.000% | | 80,000 | 88,727 |
| Refunding Revenue Bonds |
| 1st Mortgage-VOA Concord |
| Series 2007 |
| 11/01/2041 | 5.200% | | 1,145,000 | 1,145,710 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| Adventcare Project |
| Series 2007A |
| 10/15/2028 | 6.650% | | 4,605,000 | 4,607,349 |
| UMass Boston Student Housing Project |
| Series 2016 |
| 10/01/2048 | 5.000% | | 6,360,000 | 7,152,456 |
| WGBH Educational Foundation |
| Series 2002A (AMBAC) |
| 01/01/2042 | 5.750% | | 2,000,000 | 2,913,320 |
| Massachusetts Development Finance Agency(i) |
| Revenue Bonds |
| Linden Ponds, Inc. Facility |
| Subordinated Series 2011B |
| 11/15/2056 | 0.000% | | 767,588 | 214,495 |
| Massachusetts Educational Financing Authority(e) |
| Refunding Revenue Bonds |
| Issue K |
| Subordinated Series 2017B AMT |
| 07/01/2046 | 4.250% | | 4,500,000 | 4,785,615 |
| Series 2016J AMT |
| 07/01/2033 | 3.500% | | 4,070,000 | 4,209,520 |
| Revenue Bonds |
| Education Loan |
| Series 2014-I AMT |
| 01/01/2025 | 5.000% | | 6,000,000 | 7,016,700 |
| 01/01/2027 | 5.000% | | 3,000,000 | 3,465,690 |
| Issue I |
| Series 2010B AMT |
| 01/01/2031 | 5.700% | | 2,435,000 | 2,470,064 |
| Series 2011J AMT |
| 07/01/2033 | 5.625% | | 830,000 | 872,438 |
| Series 2012J AMT |
| 07/01/2025 | 4.625% | | 2,700,000 | 2,797,524 |
| 07/01/2028 | 4.900% | | 360,000 | 378,158 |
| Massachusetts Educational Financing Authority |
| Revenue Bonds |
| Series 2009I |
| 01/01/2028 | 6.000% | | 170,000 | 172,523 |
| Massachusetts Health & Educational Facilities Authority |
| Revenue Bonds |
| Milford Regional Medical Center |
| Series 2007E |
| 07/15/2037 | 5.000% | | 500,000 | 504,885 |
| Tufts University |
| Series 2009M |
| 02/15/2028 | 5.500% | | 1,000,000 | 1,319,940 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 17 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Massachusetts Housing Finance Agency(e) |
| Revenue Bonds |
| Housing |
| Series 2011A AMT |
| 12/01/2036 | 5.250% | | 720,000 | 739,987 |
| Series 2010C AMT |
| 12/01/2030 | 5.000% | | 270,000 | 271,814 |
| Massachusetts Housing Finance Agency |
| Revenue Bonds |
| Special Obligations |
| Series 2017D |
| 12/01/2047 | 3.850% | | 10,000,000 | 10,532,400 |
| Massachusetts Port Authority(e) |
| Revenue Bonds |
| Bosfuel Project |
| Series 2007 (NPFGC) AMT |
| 07/01/2032 | 5.000% | | 2,000,000 | 2,006,680 |
| Massachusetts State College Building Authority(i) |
| Revenue Bonds |
| Capital Appreciation |
| Series 1999A Escrowed to Maturity (NPFGC) |
| 05/01/2023 | 0.000% | | 3,000,000 | 2,841,900 |
| Metropolitan Boston Transit Parking Corp. |
| Revenue Bonds |
| Series 2011 |
| 07/01/2036 | 5.250% | | 3,000,000 | 3,211,590 |
| Total | 77,402,497 |
| Michigan 5.1% |
| City of Detroit Sewage Disposal System |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2012A |
| 07/01/2039 | 5.250% | | 11,925,000 | 12,968,080 |
| City of Detroit Water Supply System |
| Revenue Bonds |
| Senior Lien |
| Series 2011A |
| 07/01/2036 | 5.000% | | 4,105,000 | 4,311,317 |
| 07/01/2041 | 5.250% | | 8,765,000 | 9,318,159 |
| Unrefunded Revenue Bonds |
| Senior Lien |
| Series 2003A (NPFGC) |
| 07/01/2034 | 5.000% | | 5,000 | 5,015 |
| Grand Traverse County Hospital Finance Authority |
| Revenue Bonds |
| Munson Healthcare |
| Series 2014A |
| 07/01/2047 | 5.000% | | 1,200,000 | 1,319,604 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Great Lakes Water Authority Water Supply System |
| Revenue Bonds |
| 2nd Lien |
| Series 2016B |
| 07/01/2046 | 5.000% | | 15,385,000 | 17,646,287 |
| Michigan Finance Authority |
| Refunding Revenue Bonds |
| Henry Ford Health System |
| Series 2016 |
| 11/15/2046 | 4.000% | | 9,420,000 | 10,086,653 |
| Senior Lien - Great Lakes Water Authority |
| Series 2014C-6 |
| 07/01/2033 | 5.000% | | 1,070,000 | 1,215,788 |
| Trinity Health Corp. |
| Series 2017 |
| 12/01/2036 | 4.000% | | 2,000,000 | 2,217,820 |
| Revenue Bonds |
| Beaumont Health Credit Group |
| Series 2016S |
| 11/01/2044 | 5.000% | | 16,760,000 | 19,054,444 |
| Henry Ford Health System |
| Series 2019A |
| 11/15/2050 | 4.000% | | 4,400,000 | 4,732,552 |
| Local Government Loan Program - Great Lakes Water Authority |
| Series 2015 |
| 07/01/2034 | 5.000% | | 7,095,000 | 8,201,962 |
| 07/01/2035 | 5.000% | | 4,830,000 | 5,568,990 |
| Senior Lien - Great Lakes Water Authority |
| Series 2014C-1 |
| 07/01/2044 | 5.000% | | 2,000,000 | 2,148,620 |
| Michigan Finance Authority(e) |
| Revenue Bonds |
| Senior Lien - Great Lakes Water Authority |
| Series 2014C-2 AMT |
| 07/01/2044 | 5.000% | | 1,500,000 | 1,611,030 |
| Michigan State Housing Development Authority |
| Revenue Bonds |
| Series 2018A |
| 10/01/2048 | 4.050% | | 5,000,000 | 5,310,200 |
| Michigan Strategic Fund |
| Refunding Revenue Bonds |
| Collateral Detroit Fund-Pollution |
| Series 1991BB (AMBAC) |
| 05/01/2021 | 7.000% | | 2,505,000 | 2,742,098 |
| Michigan Strategic Fund(e) |
| Revenue Bonds |
| I-75 Improvement Project |
| Series 2018 AMT |
| 12/31/2043 | 5.000% | | 8,000,000 | 9,389,840 |
| 06/30/2048 | 5.000% | | 3,000,000 | 3,503,310 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Paw Paw Public Schools |
| Unlimited General Obligation Refunding Bonds |
| Series 1998 (NPFGC) (Qualified School Board Loan Fund) |
| 05/01/2025 | 5.000% | | 1,020,000 | 1,167,818 |
| Royal Oak Hospital Finance Authority |
| Refunding Revenue Bonds |
| William Beaumont Hospital |
| Series 2014D |
| 09/01/2039 | 5.000% | | 9,425,000 | 10,489,177 |
| St. John’s Public Schools |
| Unlimited General Obligation Refunding Bonds |
| Series 1998 (NPFGC) (Qualified School Bond Loan Fund) |
| 05/01/2025 | 5.100% | | 1,790,000 | 2,064,550 |
| Wayne County Airport Authority(e) |
| Refunding Revenue Bonds |
| Series 2015F AMT |
| 12/01/2033 | 5.000% | | 11,495,000 | 13,319,716 |
| Revenue Bonds |
| Series 2017B AMT |
| 12/01/2047 | 5.000% | | 1,000,000 | 1,161,710 |
| Wayne County Airport Authority |
| Revenue Bonds |
| Series 2015D |
| 12/01/2045 | 5.000% | | 21,445,000 | 24,651,457 |
| Williamston Community School District |
| Unlimited General Obligation Bonds |
| Series 1996 (NPFGC) (Qualified School Bond Loan Fund) |
| 05/01/2025 | 5.500% | | 605,000 | 684,080 |
| Total | 174,890,277 |
| Minnesota 3.0% |
| City of Blaine |
| Refunding Revenue Bonds |
| Crest View Senior Community Project |
| Series 2015 |
| 07/01/2045 | 6.125% | | 11,775,000 | 11,993,073 |
| City of Brooklyn Center |
| Revenue Bonds |
| Sanctuary Brooklyn Center Project |
| Series 2016 |
| 11/01/2035 | 5.500% | | 4,000,000 | 4,092,920 |
| City of Minneapolis |
| Revenue Bonds |
| Fairview Health Services |
| Series 2018-A |
| 11/15/2048 | 4.000% | | 5,000,000 | 5,380,000 |
| City of Wayzata(f) |
| Refunding Revenue Bonds |
| Folkstone Senior Living Co. |
| Series 2019 |
| 08/01/2049 | 5.000% | | 1,000,000 | 1,088,900 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Housing & Redevelopment Authority of The City of St. Paul |
| Prerefunded 11/15/25 Revenue Bonds |
| HealthEast Care System Project |
| Series 2015 |
| 11/15/2030 | 5.000% | | 900,000 | 1,094,292 |
| 11/15/2040 | 5.000% | | 935,000 | 1,136,848 |
| Refunding Revenue Bonds |
| Fairview Health Services |
| Series 2017 |
| 11/15/2047 | 5.000% | | 3,000,000 | 3,502,260 |
| Southern Minnesota Municipal Power Agency(i) |
| Revenue Bonds |
| Capital Appreciation |
| Series 1994A (NPFGC) |
| 01/01/2022 | 0.000% | | 27,500,000 | 26,624,675 |
| 01/01/2023 | 0.000% | | 26,500,000 | 25,249,995 |
| 01/01/2025 | 0.000% | | 17,500,000 | 16,062,550 |
| St. Cloud Housing & Redevelopment Authority |
| Revenue Bonds |
| Sanctuary St. Cloud Project |
| Series 2016A |
| 08/01/2036 | 5.250% | | 7,135,000 | 6,463,739 |
| Total | 102,689,252 |
| Mississippi 0.2% |
| County of Lowndes |
| Refunding Revenue Bonds |
| Weyerhaeuser Co. Project |
| Series 1992A |
| 04/01/2022 | 6.800% | | 2,470,000 | 2,750,197 |
| Medical Center Educational Building Corp. |
| Refunding Revenue Bonds |
| University of Mississippi Medical Center |
| Series 1998B (AMBAC) |
| 12/01/2023 | 5.500% | | 3,985,000 | 4,392,586 |
| Total | 7,142,783 |
| Missouri 2.2% |
| Cape Girardeau County Industrial Development Authority |
| Refunding Revenue Bonds |
| SoutheastHEALTH |
| Series 2017 |
| 03/01/2032 | 5.000% | | 500,000 | 576,555 |
| 03/01/2036 | 5.000% | | 1,250,000 | 1,422,463 |
| City of Manchester |
| Refunding Tax Allocation Bonds |
| Highway 141/Manchester Road Project |
| Series 2010 |
| 11/01/2025 | 6.000% | | 70,000 | 70,055 |
| 11/01/2039 | 6.875% | | 1,500,000 | 1,503,600 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 19 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Health & Educational Facilities Authority |
| Refunding Revenue Bonds |
| Mosaic Health System |
| Series 2019 |
| 02/15/2049 | 4.000% | | 3,200,000 | 3,488,896 |
| Health & Educational Facilities Authority of the State of Missouri |
| Revenue Bonds |
| Lutheran Senior Services |
| Series 2010 |
| 02/01/2042 | 5.500% | | 2,000,000 | 2,026,980 |
| Series 2011 |
| 02/01/2031 | 5.750% | | 1,730,000 | 1,820,064 |
| 02/01/2041 | 6.000% | | 2,600,000 | 2,730,286 |
| Series 2014 |
| 02/01/2035 | 5.000% | | 7,350,000 | 8,011,426 |
| 02/01/2044 | 5.000% | | 12,725,000 | 13,682,429 |
| Kirkwood Industrial Development Authority |
| Prerefunded 05/15/20 Revenue Bonds |
| Aberdeen Heights Project |
| Series 2010A |
| 05/15/2039 | 8.250% | | 12,000,000 | 12,651,720 |
| Refunding Revenue Bonds |
| Aberdeen Heights Project |
| Series 2017 |
| 05/15/2037 | 5.250% | | 2,205,000 | 2,475,465 |
| 05/15/2042 | 5.250% | | 2,290,000 | 2,541,167 |
| Missouri Development Finance Board(e) |
| Revenue Bonds |
| Procter & Gamble Paper Products |
| Series 1999 AMT |
| 03/15/2029 | 5.200% | | 6,385,000 | 8,094,839 |
| Missouri Joint Municipal Electric Utility Commission |
| Refunding Revenue Bonds |
| Series 2016A |
| 12/01/2041 | 4.000% | | 10,000,000 | 10,860,000 |
| St. Louis County Industrial Development Authority |
| Revenue Bonds |
| Friendship Village Sunset Hills |
| Series 2013A |
| 09/01/2033 | 5.500% | | 2,750,000 | 3,023,213 |
| Total | 74,979,158 |
| Montana 0.0% |
| City of Kalispell |
| Refunding Revenue Bonds |
| Immanuel Lutheran Corp. Project |
| Series 2017 |
| 05/15/2052 | 5.250% | | 1,080,000 | 1,149,412 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Nebraska 1.1% |
| Douglas County Hospital Authority No. 2 |
| Revenue Bonds |
| Health Facilities-Immanuel Obligation Group |
| Series 2010 |
| 01/01/2040 | 5.625% | | 875,000 | 889,193 |
| Madonna Rehabilitation Hospital |
| Series 2014 |
| 05/15/2028 | 5.000% | | 2,025,000 | 2,288,371 |
| 05/15/2029 | 5.000% | | 2,125,000 | 2,394,535 |
| 05/15/2030 | 5.000% | | 2,000,000 | 2,242,020 |
| 05/15/2036 | 5.000% | | 1,000,000 | 1,100,970 |
| 05/15/2044 | 5.000% | | 6,400,000 | 6,968,128 |
| Douglas County Hospital Authority No. 3 |
| Refunding Revenue Bonds |
| Health Facilities - Nebraska Methodist Health System |
| Series 2015 |
| 11/01/2045 | 5.000% | | 12,500,000 | 14,001,125 |
| Nebraska Investment Finance Authority |
| Refunding Revenue Bonds |
| Series 2017A (GNMA) |
| 09/01/2032 | 3.125% | | 3,000,000 | 3,136,200 |
| Revenue Bonds |
| Series 2018-C (GNMA) |
| 09/01/2038 | 3.750% | | 3,980,000 | 4,226,004 |
| Total | 37,246,546 |
| Nevada 0.9% |
| Carson City |
| Refunding Revenue Bonds |
| Carson Tahoe Regional Medical Center |
| Series 2012 |
| 09/01/2033 | 5.000% | | 2,500,000 | 2,704,450 |
| City of Carson City |
| Refunding Revenue Bonds |
| Carson Tahoe Regional Medical Center |
| Series 2017 |
| 09/01/2042 | 5.000% | | 1,120,000 | 1,281,930 |
| Revenue Bonds |
| Carson Tahoe Regional Medical Center |
| Series 2017 |
| 09/01/2047 | 5.000% | | 2,320,000 | 2,640,763 |
| City of Sparks(g) |
| Tax Anticipation Revenue Bonds |
| Sales |
| Series 2008A |
| 06/15/2028 | 6.750% | | 2,000,000 | 2,002,360 |
| County of Clark Department of Aviation |
| Revenue Bonds |
| Las Vegas-McCarran International Airport |
| Series 2010A |
| 07/01/2034 | 5.125% | | 18,750,000 | 19,034,625 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| State of Nevada Department of Business & Industry(g) |
| Revenue Bonds |
| Somerset Academy |
| Series 2015A |
| 12/15/2035 | 5.000% | | 1,025,000 | 1,103,566 |
| Series 2018A |
| 12/15/2038 | 5.000% | | 835,000 | 892,640 |
| Total | 29,660,334 |
| New Hampshire 0.2% |
| New Hampshire Health & Education Facilities Authority Act |
| Refunding Revenue Bonds |
| Elliot Hospital |
| Series 2016 |
| 10/01/2038 | 5.000% | | 3,150,000 | 3,623,445 |
| New Hampshire Health and Education Facilities Authority Act |
| Revenue Bonds |
| Hillside Village |
| Series 2017A |
| 07/01/2037 | 6.125% | | 1,750,000 | 1,891,120 |
| 07/01/2042 | 6.250% | | 1,000,000 | 1,083,300 |
| Total | 6,597,865 |
| New Jersey 3.6% |
| City of Atlantic City |
| Unlimited General Obligation Bonds |
| Tax Appeal |
| Series 2017B (AGM) |
| 03/01/2037 | 5.000% | | 910,000 | 1,063,899 |
| Middlesex County Improvement Authority(h) |
| Revenue Bonds |
| Heldrich Center Hotel |
| Series 2005C |
| 01/01/2037 | 0.000% | | 1,500,000 | 15 |
| Subordinated Revenue Bonds |
| Heldrich Center Hotel |
| Series 2005B |
| 01/01/2037 | 0.000% | | 4,000,000 | 42,000 |
| New Jersey Economic Development Authority |
| Refunding Revenue Bonds |
| School Facilities Construction |
| Series 2005N-1 (AGM) |
| 09/01/2025 | 5.500% | | 14,500,000 | 17,559,935 |
| Series 2005N-1 (NPFGC) |
| 09/01/2027 | 5.500% | | 5,000,000 | 6,182,050 |
| Subordinated Series 2017A |
| 07/01/2034 | 4.000% | | 1,750,000 | 1,863,032 |
| Revenue Bonds |
| Lions Gate Project |
| Series 2014 |
| 01/01/2034 | 5.000% | | 1,000,000 | 1,035,150 |
| 01/01/2044 | 5.250% | | 750,000 | 776,513 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Provident Group-Rowan Properties LLC |
| Series 2015 |
| 01/01/2048 | 5.000% | | 7,200,000 | 7,713,576 |
| Series 2015WW |
| 06/15/2040 | 5.250% | | 2,750,000 | 3,064,875 |
| Series 2017DDD |
| 06/15/2042 | 5.000% | | 1,250,000 | 1,403,637 |
| New Jersey Economic Development Authority(e) |
| Revenue Bonds |
| Continental Airlines, Inc. Project |
| Series 1999 AMT |
| 09/15/2023 | 5.125% | | 5,000,000 | 5,421,350 |
| 09/15/2029 | 5.250% | | 2,500,000 | 2,744,600 |
| New Jersey Transportation Trust Fund Authority |
| Refunding Revenue Bonds |
| Federal Highway Reimbursement |
| Series 2018 |
| 06/15/2031 | 5.000% | | 5,500,000 | 6,401,175 |
| Transportation System |
| Series 2018-A |
| 12/15/2034 | 5.000% | | 6,000,000 | 7,023,180 |
| Revenue Bonds |
| Transportation Program |
| Series 2019 |
| 06/15/2046 | 5.000% | | 3,500,000 | 3,976,805 |
| Transportation System |
| Series 2011B |
| 06/15/2031 | 5.500% | | 7,250,000 | 7,710,665 |
| New Jersey Turnpike Authority |
| Refunding Revenue Bonds |
| Series 2005A (AGM) |
| 01/01/2030 | 5.250% | | 2,000,000 | 2,684,220 |
| Series 2017G |
| 01/01/2043 | 4.000% | | 12,000,000 | 13,184,760 |
| Revenue Bonds |
| Series 2004C-2 (AMBAC) |
| 01/01/2025 | 5.500% | | 2,500,000 | 3,054,575 |
| Tobacco Settlement Financing Corp. |
| Refunding Revenue Bonds |
| Series 2018A |
| 06/01/2046 | 5.000% | | 7,220,000 | 8,065,318 |
| 06/01/2046 | 5.250% | | 2,000,000 | 2,280,020 |
| Subordinated Series 2018B |
| 06/01/2046 | 5.000% | | 3,845,000 | 4,160,098 |
| Union County Utilities Authority(e) |
| Refunding Revenue Bonds |
| Covanta Union |
| Series 2011 AMT |
| 12/01/2031 | 5.250% | | 15,000,000 | 16,271,250 |
| Total | 123,682,698 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 21 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New Mexico 0.3% |
| New Mexico Hospital Equipment Loan Council |
| Revenue Bonds |
| La Vida Expansion Project |
| Series 2019 |
| 07/01/2049 | 5.000% | | 3,375,000 | 3,777,030 |
| New Mexico Mortgage Finance Authority |
| Revenue Bonds |
| Single Family Mortgage Program |
| Series 2019C Class I (GNMA) |
| 07/01/2034 | 3.050% | | 2,200,000 | 2,279,354 |
| 07/01/2039 | 3.350% | | 1,845,000 | 1,910,221 |
| 07/01/2044 | 3.600% | | 3,845,000 | 3,976,691 |
| Total | 11,943,296 |
| New York 4.4% |
| Build NYC Resource Corp.(e),(g) |
| Refunding Revenue Bonds |
| Pratt Paper, Inc. Project |
| Series 2014 AMT |
| 01/01/2025 | 4.500% | | 500,000 | 555,435 |
| Housing Development Corp. |
| Revenue Bonds |
| Sustainable Neighborhood |
| Series 2017G |
| 11/01/2042 | 3.600% | | 4,000,000 | 4,150,120 |
| New York City Housing Development Corp. |
| Revenue Bonds |
| Sustainable Neighborhood |
| Series 2019 |
| 11/01/2044 | 3.150% | | 8,000,000 | 8,059,040 |
| New York City Industrial Development Agency |
| Revenue Bonds |
| Pilot-Yankee Stadium-Payment I |
| Series 2006I (FGIC) |
| 03/01/2046 | 5.000% | | 2,000,000 | 2,011,260 |
| New York City Transitional Finance Authority |
| Revenue Bonds |
| Future Tax Secured |
| Subordinated Series 2019 |
| 11/01/2038 | 4.000% | | 7,000,000 | 7,927,290 |
| New York Counties Tobacco Trust VI |
| Tobacco Settlement Pass-Through Bonds |
| Series 2016 |
| 06/01/2045 | 5.000% | | 1,860,000 | 1,973,534 |
| New York State Dormitory Authority |
| Refunding Revenue Bonds |
| Catholic Health System Obligation Group |
| Series 2019 |
| 07/01/2045 | 4.000% | | 1,000,000 | 1,084,430 |
| Series 2019A3 |
| 03/15/2041 | 5.000% | | 15,000,000 | 18,390,000 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| Consolidated City University System 2nd Generation |
| Series 1993A |
| 07/01/2020 | 6.000% | | 6,835,000 | 7,141,823 |
| Independent School District-Educational Housing Services |
| Series 2005 (AMBAC) |
| 07/01/2030 | 5.250% | | 3,000,000 | 3,748,860 |
| New York Transportation Development Corp.(e) |
| Revenue Bonds |
| Delta Air Lines, Inc. - LaGuardia Airport |
| Series 2018 AMT |
| 01/01/2036 | 4.000% | | 10,050,000 | 10,833,096 |
| Delta Air Lines, Inc., LaGuardia |
| Series 2018 AMT |
| 01/01/2036 | 5.000% | | 2,000,000 | 2,357,760 |
| Laguardia Airport Terminal B Redevelopment Project |
| Series 2016 AMT |
| 01/01/2050 | 5.250% | | 7,500,000 | 8,333,175 |
| LaGuardia Airport Terminal B Redevelopment Project |
| Series 2016 AMT |
| 07/01/2046 | 4.000% | | 14,000,000 | 14,564,480 |
| Port Authority of New York & New Jersey(e) |
| Refunding Revenue Bonds |
| Series 2016-197 AMT |
| 11/15/2033 | 5.000% | | 6,545,000 | 7,806,745 |
| Revenue Bonds |
| 5th Installment-Special Project |
| Series 1996-4 AMT |
| 10/01/2019 | 6.750% | | 1,500,000 | 1,534,305 |
| JFK International Air Terminal Special Project |
| Series 1997 (NPFGC) AMT |
| 12/01/2022 | 5.750% | | 5,335,000 | 5,545,359 |
| Port Authority of New York & New Jersey |
| Revenue Bonds |
| JFK International Air Terminal |
| Series 2010 |
| 12/01/2036 | 6.000% | | 7,000,000 | 7,409,360 |
| State of New York Mortgage Agency |
| Refunding Revenue Bonds |
| Series 2018-211 |
| 10/01/2043 | 3.750% | | 11,620,000 | 12,190,891 |
| Suffolk County Industrial Development Agency(e) |
| Revenue Bonds |
| Nissequogue Cogen Partners Facility |
| Series 1998 AMT |
| 01/01/2023 | 5.500% | | 4,000,000 | 4,002,760 |
| Triborough Bridge & Tunnel Authority |
| Revenue Bonds |
| General Purpose |
| Series 1992Y Escrowed to Maturity |
| 01/01/2021 | 6.125% | | 6,210,000 | 6,429,275 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Ulster County Capital Resource Corp.(g) |
| Refunding Revenue Bonds |
| Woodland Pond at New Paltz |
| Series 2017 |
| 09/15/2042 | 5.250% | | 2,480,000 | 2,530,766 |
| 09/15/2047 | 5.250% | | 3,025,000 | 3,076,818 |
| 09/15/2053 | 5.250% | | 6,240,000 | 6,321,931 |
| Westchester County Local Development Corp. |
| Refunding Revenue Bonds |
| Westchester Medical Center |
| Series 2016 |
| 11/01/2046 | 5.000% | | 4,000,000 | 4,466,040 |
| Total | 152,444,553 |
| North Carolina 1.2% |
| Durham Housing Authority(e) |
| Prerefunded 01/31/23 Revenue Bonds |
| Magnolia Pointe Apartments |
| Series 2005 AMT |
| 02/01/2038 | 5.650% | | 2,958,791 | 3,383,377 |
| North Carolina Department of Transportation(e) |
| Revenue Bonds |
| I-77 Hot Lanes Project |
| Series 2015 AMT |
| 06/30/2054 | 5.000% | | 10,000,000 | 10,940,700 |
| North Carolina Eastern Municipal Power Agency |
| Prerefunded 01/01/22 Revenue Bonds |
| Series 1988A |
| 01/01/2026 | 6.000% | | 1,940,000 | 2,166,805 |
| North Carolina Medical Care Commission |
| Revenue Bonds |
| Novant Health Obligated Group |
| Series 2019 |
| 11/01/2049 | 4.000% | | 20,600,000 | 22,497,466 |
| North Carolina Turnpike Authority(i) |
| Revenue Bonds |
| Series 2017C |
| 07/01/2030 | 0.000% | | 445,000 | 309,707 |
| 07/01/2034 | 0.000% | | 1,135,000 | 625,022 |
| Total | 39,923,077 |
| North Dakota 0.6% |
| County of McLean |
| Revenue Bonds |
| Great River Energy |
| Series 2010B |
| 07/01/2040 | 5.150% | | 7,900,000 | 8,116,855 |
| North Dakota Housing Finance Agency |
| Revenue Bonds |
| Housing Finance Program |
| Series 2017 (FHA) |
| 07/01/2037 | 3.450% | | 2,295,000 | 2,392,446 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Housing Finance Program-Home Mortgage Finance |
| Series 2018 |
| 07/01/2042 | 3.950% | | 10,055,000 | 10,776,044 |
| Total | 21,285,345 |
| Ohio 2.5% |
| American Municipal Power, Inc. |
| Revenue Bonds |
| AMP Fremont Energy Center Project |
| Series 2012 |
| 02/15/2037 | 5.000% | | 13,220,000 | 14,268,743 |
| Buckeye Tobacco Settlement Financing Authority |
| Asset-Backed Senior Turbo Revenue Bonds |
| Series 2007A-2 |
| 06/01/2047 | 5.875% | | 24,500,000 | 24,036,950 |
| City of Middleburg Heights |
| Revenue Bonds |
| Southwest General Facilities |
| Series 2011 |
| 08/01/2036 | 5.250% | | 2,380,000 | 2,540,959 |
| 08/01/2041 | 5.250% | | 6,900,000 | 7,352,571 |
| Lake County Port & Economic Development Authority(g) |
| Revenue Bonds |
| 1st Mortgage - Tapestry Wickliffe LLC |
| Series 2017 |
| 12/01/2037 | 6.500% | | 6,000,000 | 6,217,680 |
| Ohio Air Quality Development Authority(e),(g) |
| Revenue Bonds |
| Pratt Paper LLC Project |
| Series 2017 AMT |
| 01/15/2038 | 4.250% | | 1,000,000 | 1,065,760 |
| Ohio Turnpike & Infrastructure Commission |
| Refunding Revenue Bonds |
| Series 1998A (NPFGC) |
| 02/15/2026 | 5.500% | | 3,000,000 | 3,700,140 |
| State of Ohio |
| Refunding Revenue Bonds |
| Cleveland Clinic Health System |
| Series 2017 |
| 01/01/2036 | 4.000% | | 4,500,000 | 5,042,880 |
| State of Ohio(e) |
| Revenue Bonds |
| Portsmouth Bypass Project |
| Series 2015 AMT |
| 06/30/2053 | 5.000% | | 9,835,000 | 10,666,549 |
| Toledo-Lucas County Port Authority |
| Refunding Revenue Bonds |
| CSX Transportation, Inc. Project |
| Series 1992 |
| 12/15/2021 | 6.450% | | 3,950,000 | 4,366,922 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 23 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Revenue Bonds |
| University of Toledo Project |
| Series 2014 |
| 07/01/2046 | 5.000% | | 5,000,000 | 5,347,400 |
| Special Assessment Bonds |
| Town Square - Levis Commons Project |
| Series 2016 |
| 11/01/2036 | 5.400% | | 1,553,411 | 1,553,427 |
| Total | 86,159,981 |
| Oklahoma 0.1% |
| Tulsa County Industrial Authority |
| Refunding Revenue Bonds |
| Montereau, Inc. Project |
| Series 2017 |
| 11/15/2045 | 5.250% | | 2,000,000 | 2,254,660 |
| Oregon 0.4% |
| City of Forest Grove |
| Refunding Revenue Bonds |
| Campus Improvement Pacific University Project |
| Series 2014 |
| 05/01/2040 | 5.000% | | 1,500,000 | 1,588,815 |
| Hospital Facilities Authority of Multnomah County |
| Refunding Revenue Bonds |
| Mirabella at South Waterfront |
| Series 2014A |
| 10/01/2044 | 5.400% | | 3,225,000 | 3,504,091 |
| Port of Portland Airport(e) |
| Revenue Bonds |
| Series 2017-24B AMT |
| 07/01/2034 | 5.000% | | 1,355,000 | 1,609,740 |
| 07/01/2042 | 5.000% | | 2,000,000 | 2,327,620 |
| State of Oregon Housing & Community Services Department |
| Revenue Bonds |
| Series 2017D |
| 01/01/2038 | 3.450% | | 5,480,000 | 5,727,696 |
| Total | 14,757,962 |
| Pennsylvania 8.2% |
| Commonwealth Financing Authority |
| Revenue Bonds |
| Tobacco Master Settlement Payment |
| Series 2018 |
| 06/01/2034 | 5.000% | | 1,000,000 | 1,208,470 |
| Commonwealth of Pennsylvania |
| Refunding Certificate of Participation |
| Series 2018A |
| 07/01/2043 | 5.000% | | 2,500,000 | 2,931,275 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Cumberland County Municipal Authority |
| Refunding Revenue Bonds |
| Diakon Lutheran Ministries |
| Series 2015 |
| 01/01/2038 | 5.000% | | 8,840,000 | 9,652,042 |
| Dauphin County Industrial Development Authority(e) |
| Revenue Bonds |
| Dauphin Consolidated Water Supply |
| Series 1992A AMT |
| 06/01/2024 | 6.900% | | 3,400,000 | 4,066,332 |
| Delaware Valley Regional Finance Authority |
| Revenue Bonds |
| Series 1997C (AMBAC) |
| 07/01/2027 | 7.750% | | 1,000,000 | 1,425,270 |
| Franklin County Industrial Development Authority |
| Refunding Revenue Bonds |
| Menno-Haven, Inc. Project |
| Series 2018 |
| 12/01/2048 | 5.000% | | 1,300,000 | 1,420,809 |
| Geisinger Authority |
| Refunding Revenue Bonds |
| Geisinger Health System |
| Series 2017 |
| 02/15/2039 | 4.000% | | 6,000,000 | 6,514,380 |
| Montgomery County Industrial Development Authority |
| Refunding Revenue Bonds |
| Albert Einstein HealthCare Network |
| Series 2015 |
| 01/15/2045 | 5.250% | | 11,150,000 | 12,437,156 |
| Meadowood Senior Living Project |
| Series 2018 |
| 12/01/2048 | 5.000% | | 2,000,000 | 2,223,500 |
| Northampton County General Purpose Authority |
| Refunding Revenue Bonds |
| St. Luke’s University Health Network |
| Series 2018 |
| 08/15/2048 | 4.000% | | 20,000,000 | 21,121,400 |
| Pennsylvania Economic Development Financing Authority |
| Refunding Revenue Bonds |
| Series 2017A |
| 11/15/2042 | 4.000% | | 30,000,000 | 32,372,100 |
| Revenue Bonds |
| Philadelphia Biosolids Facility |
| Series 2009 |
| 01/01/2032 | 6.250% | | 5,325,000 | 5,406,739 |
| Pennsylvania Economic Development Financing Authority(g) |
| Refunding Revenue Bonds |
| Tapestry Moon Senior Housing Project |
| Series 2018 |
| 12/01/2053 | 6.750% | | 6,000,000 | 6,111,420 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Pennsylvania Economic Development Financing Authority(e) |
| Revenue Bonds |
| PA Bridges Finco LP |
| Series 2015 AMT |
| 12/31/2038 | 5.000% | | 1,625,000 | 1,849,413 |
| 06/30/2042 | 5.000% | | 29,375,000 | 32,977,844 |
| Proctor & Gamble Paper Project |
| Series 2001 AMT |
| 03/01/2031 | 5.375% | | 1,000,000 | 1,292,970 |
| Pennsylvania Housing Finance Agency |
| Refunding Revenue Bonds |
| Series 2017-124B |
| 10/01/2037 | 3.500% | | 16,000,000 | 16,731,200 |
| Revenue Bonds |
| Series 2019-129 |
| 10/01/2039 | 3.150% | | 7,730,000 | 7,868,212 |
| Pennsylvania Turnpike Commission |
| Refunding Subordinated Revenue Bonds |
| Series 2015A-1 |
| 12/01/2045 | 5.250% | | 25,295,000 | 28,966,822 |
| Series 2016A-1 |
| 12/01/2046 | 5.000% | | 10,000,000 | 11,277,100 |
| Revenue Bonds |
| Series 2014B |
| 12/01/2044 | 5.250% | | 10,000,000 | 11,262,400 |
| Subordinated Series 2017B-1 |
| 06/01/2042 | 5.000% | | 15,000,000 | 17,330,550 |
| Subordinated Series 2018B |
| 12/01/2043 | 5.000% | | 7,000,000 | 8,346,240 |
| Subordinated Series 2019A |
| 12/01/2049 | 4.000% | | 5,700,000 | 6,128,298 |
| Subordinated Revenue Bonds |
| Series 2014A-1 |
| 12/01/2043 | 5.000% | | 16,940,000 | 18,871,838 |
| Philadelphia Authority for Industrial Development |
| Refunding Revenue Bonds |
| Wesley Enhanced Living |
| Series 2017 |
| 07/01/2042 | 5.000% | | 2,000,000 | 2,144,280 |
| Revenue Bonds |
| First Philadelphia Preparatory Charter School |
| Series 2014 |
| 06/15/2043 | 7.250% | | 5,475,000 | 6,317,657 |
| School District of Philadelphia (The) |
| Limited General Obligation Bonds |
| Series 2018A |
| 09/01/2037 | 5.000% | | 1,000,000 | 1,187,810 |
| Series 2018B |
| 09/01/2043 | 5.000% | | 985,000 | 1,154,617 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Westmoreland County Municipal Authority(i) |
| Revenue Bonds |
| Capital Appreciation |
| Series 1999A (NPFGC) |
| 08/15/2022 | 0.000% | | 2,000,000 | 1,899,580 |
| Total | 282,497,724 |
| Puerto Rico 0.2% |
| Puerto Rico Public Finance Corp.(j) |
| Revenue Bonds |
| Commonwealth Appropriation |
| Series 2002E Escrowed to Maturity (AMBAC) |
| 08/01/2027 | 5.500% | | 450,000 | 576,198 |
| Unrefunded Revenue Bonds |
| Commonwealth Appropriation |
| Series 2002E Escrowed to Maturity |
| 08/01/2026 | 6.000% | | 2,470,000 | 3,179,186 |
| Series 2002E Escrowed to Maturity (AMBAC) |
| 08/01/2027 | 5.500% | | 1,050,000 | 1,344,462 |
| Total | 5,099,846 |
| South Carolina 1.2% |
| Piedmont Municipal Power Agency |
| Refunding Revenue Bonds |
| Electric |
| Series 1991 (NPFGC) |
| 01/01/2021 | 6.250% | | 1,250,000 | 1,336,750 |
| Unrefunded Revenue Bonds |
| Series 1993 (NPFGC) |
| 01/01/2025 | 5.375% | | 11,070,000 | 13,139,094 |
| South Carolina Jobs-Economic Development Authority |
| Revenue Bonds |
| York Preparatory Academy Project |
| Series 2014A |
| 11/01/2023 | 5.750% | | 695,000 | 720,708 |
| 11/01/2033 | 7.000% | | 910,000 | 1,011,601 |
| 11/01/2045 | 7.250% | | 3,935,000 | 4,346,404 |
| South Carolina Ports Authority(e) |
| Revenue Bonds |
| Series 2015 AMT |
| 07/01/2050 | 5.250% | | 13,675,000 | 15,618,628 |
| Series 2018 AMT |
| 07/01/2048 | 5.000% | | 4,260,000 | 4,999,834 |
| 07/01/2055 | 5.000% | | 1,380,000 | 1,600,524 |
| Total | 42,773,543 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 25 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| South Dakota 0.5% |
| South Dakota Health & Educational Facilities Authority |
| Refunding Revenue Bonds |
| Sanford Obligated Group |
| Series 2015 |
| 11/01/2035 | 5.000% | | 2,500,000 | 2,879,650 |
| 11/01/2045 | 5.000% | | 6,920,000 | 7,831,295 |
| Revenue Bonds |
| Regional Health |
| Series 2017 |
| 09/01/2040 | 5.000% | | 6,500,000 | 7,611,175 |
| Total | 18,322,120 |
| Tennessee 1.0% |
| Chattanooga Health Educational & Housing Facility Board |
| Refunding Revenue Bonds |
| Student Housing - CDFI Phase I |
| Series 2015 |
| 10/01/2032 | 5.000% | | 1,300,000 | 1,463,436 |
| 10/01/2035 | 5.000% | | 645,000 | 716,466 |
| Greeneville Health & Educational Facilities Board |
| Refunding Revenue Bonds |
| Ballad Health Obligation Group |
| Series 2018 |
| 07/01/2035 | 5.000% | | 1,000,000 | 1,192,970 |
| 07/01/2040 | 4.000% | | 7,200,000 | 7,625,088 |
| Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board |
| Refunding Revenue Bonds |
| Lipscomb University Project |
| Series 2019 |
| 10/01/2058 | 5.250% | | 2,600,000 | 3,096,418 |
| Revenue Bonds |
| Vanderbilt University Medical Center |
| Series 2016 |
| 07/01/2046 | 5.000% | | 6,800,000 | 7,794,840 |
| Series 2017A |
| 07/01/2048 | 5.000% | | 1,665,000 | 1,916,215 |
| Tennessee Housing Development Agency |
| Revenue Bonds |
| 3rd Issue |
| Series 2017 |
| 07/01/2037 | 3.400% | | 1,135,000 | 1,188,765 |
| 07/01/2042 | 3.600% | | 750,000 | 787,350 |
| Issue 3 |
| Series 2018 |
| 01/01/2049 | 3.950% | | 7,935,000 | 8,355,873 |
| Total | 34,137,421 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Texas 9.9% |
| Bexar County Health Facilities Development Corp. |
| Unrefunded Revenue Bonds |
| Army Retirement Residence |
| Series 2010 |
| 07/01/2030 | 5.875% | | 215,000 | 222,493 |
| Capital Area Cultural Education Facilities Finance Corp. |
| Revenue Bonds |
| Roman Catholic Diocese |
| Series 2005B |
| 04/01/2045 | 6.125% | | 13,450,000 | 13,814,091 |
| Central Texas Regional Mobility Authority |
| Prerefunded 01/01/21 Revenue Bonds |
| Senior Lien |
| Series 2011 |
| 01/01/2041 | 6.000% | | 8,620,000 | 9,195,730 |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2013A |
| 01/01/2033 | 5.000% | | 2,700,000 | 2,957,769 |
| Series 2016 |
| 01/01/2046 | 5.000% | | 9,835,000 | 11,128,991 |
| Revenue Bonds |
| Senior Lien |
| Series 2015A |
| 01/01/2045 | 5.000% | | 3,000,000 | 3,372,630 |
| Central Texas Regional Mobility Authority(i) |
| Revenue Bonds |
| Capital Appreciation |
| Series 2010 |
| 01/01/2025 | 0.000% | | 2,000,000 | 1,788,100 |
| Central Texas Turnpike System |
| Refunding Revenue Bonds |
| 1st Tier |
| Series 2012A |
| 08/15/2041 | 5.000% | | 16,075,000 | 17,316,311 |
| Subordinated Series 2015C |
| 08/15/2042 | 5.000% | | 14,730,000 | 16,393,901 |
| Subordinated Refunding Revenue Bonds |
| Series 2015C |
| 08/15/2037 | 5.000% | | 10,000,000 | 11,207,900 |
| City of Austin Airport System(e) |
| Revenue Bonds |
| Series 2017B AMT |
| 11/15/2041 | 5.000% | | 1,000,000 | 1,161,540 |
| 11/15/2046 | 5.000% | | 3,000,000 | 3,461,130 |
| City of Austin Airport System(e),(f) |
| Revenue Bonds |
| Series 2019B AMT |
| 11/15/2044 | 5.000% | | 6,500,000 | 7,850,180 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 26 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| City of Houston Airport System(e) |
| Refunding Revenue Bonds |
| Special Facilities-United Airlines |
| Series 2011A AMT |
| 07/15/2030 | 6.500% | | 5,555,000 | 6,003,566 |
| United Airlines, Inc. |
| Series 2014 AMT |
| 07/01/2029 | 5.000% | | 4,000,000 | 4,478,560 |
| Subordinated Refunding Revenue Bonds |
| Lien |
| Series 2012A AMT |
| 07/01/2031 | 5.000% | | 5,000,000 | 5,454,850 |
| Clifton Higher Education Finance Corp. |
| Revenue Bonds |
| Idea Public Schools |
| Series 2012 |
| 08/15/2032 | 5.000% | | 2,165,000 | 2,322,201 |
| 08/15/2042 | 5.000% | | 5,575,000 | 5,905,709 |
| Series 2013 |
| 08/15/2033 | 6.000% | | 990,000 | 1,133,491 |
| International Leadership |
| Series 2015 |
| 08/15/2038 | 5.750% | | 3,000,000 | 3,300,960 |
| International Leadership of Texas |
| Series 2015 |
| 08/15/2045 | 5.750% | | 10,500,000 | 11,441,325 |
| Series 2015A |
| 12/01/2035 | 5.000% | | 2,200,000 | 2,429,944 |
| 12/01/2045 | 5.000% | | 1,100,000 | 1,195,964 |
| Dallas Love Field(e) |
| Revenue Bonds |
| Series 2017 AMT |
| 11/01/2034 | 5.000% | | 750,000 | 882,195 |
| 11/01/2035 | 5.000% | | 1,000,000 | 1,172,720 |
| Dallas/Fort Worth International Airport(e) |
| Refunding Revenue Bonds |
| Series 2014A AMT |
| 11/01/2032 | 5.000% | | 3,400,000 | 3,837,308 |
| Deaf Smith County Hospital District |
| Limited General Obligation Refunding Bonds |
| Series 2017 |
| 03/01/2030 | 5.000% | | 1,000,000 | 1,180,380 |
| 03/01/2031 | 5.000% | | 1,195,000 | 1,396,226 |
| 03/01/2034 | 5.000% | | 645,000 | 745,814 |
| 03/01/2040 | 4.000% | | 2,945,000 | 3,090,189 |
| Harris County Health Facilities Development Corp. |
| Revenue Bonds |
| St. Luke’s Episcopal Hospital Project |
| Series 1991 Escrowed to Maturity |
| 02/15/2021 | 6.750% | | 860,000 | 866,837 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Harris County Toll Road Authority (The) |
| Refunding Revenue Bonds |
| Senior Lien |
| Series 2018A |
| 08/15/2048 | 4.000% | | 4,000,000 | 4,417,200 |
| Houston Higher Education Finance Corp. |
| Prerefunded 05/15/21 Revenue Bonds |
| Harmony Public Schools |
| Series 2011A |
| 05/15/2041 | 6.875% | | 4,045,000 | 4,439,468 |
| New Hope Cultural Education Facilities Finance Corp. |
| Refunding Revenue Bonds |
| Texas Children’s Health System |
| Series 2017A |
| 08/15/2040 | 4.000% | | 7,015,000 | 7,640,247 |
| Revenue Bonds |
| Bridgemoor Plano Project |
| 12/01/2053 | 7.250% | | 10,000,000 | 10,488,800 |
| Cardinal Bay, Inc. - Village on the Park |
| Series 2016 |
| 07/01/2031 | 4.000% | | 1,000,000 | 1,082,670 |
| 07/01/2046 | 5.000% | | 5,435,000 | 6,037,905 |
| 07/01/2051 | 4.750% | | 2,715,000 | 2,956,879 |
| Collegiate Housing College Station |
| Series 2014 |
| 04/01/2046 | 5.000% | | 7,250,000 | 7,685,072 |
| Collegiate Housing Tarleton State University |
| Series 2015 |
| 04/01/2047 | 5.000% | | 2,995,000 | 3,193,748 |
| Texas A&M University - Corpus Christi |
| Series 2017 |
| 04/01/2042 | 5.000% | | 2,000,000 | 2,064,100 |
| New Hope Cultural Education Facilities Finance Corp.(g) |
| Revenue Bonds |
| Jubilee Academic Center Project |
| Series 2017 |
| 08/15/2037 | 5.000% | | 940,000 | 960,962 |
| North Texas Tollway Authority |
| Refunding Revenue Bonds |
| 1st Tier |
| Series 2011 |
| 01/01/2038 | 5.000% | | 5,500,000 | 5,747,610 |
| Series 2012B |
| 01/01/2042 | 5.000% | | 10,000,000 | 10,740,600 |
| 2nd Tier |
| Series 2015A |
| 01/01/2038 | 5.000% | | 9,230,000 | 10,541,583 |
| North Texas Tollway Authority(f) |
| Refunding Revenue Bonds |
| Series 2019A |
| 01/01/2037 | 4.000% | | 15,000,000 | 16,810,200 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 27 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Northside Independent School District |
| Unlimited General Obligation Refunding Bonds |
| Texas Permanent School Fund Program |
| Series 2019 |
| 08/15/2032 | 5.000% | | 4,905,000 | 6,147,535 |
| 08/15/2033 | 4.000% | | 2,535,000 | 2,914,895 |
| 08/15/2034 | 4.000% | | 3,265,000 | 3,723,896 |
| Pottsboro Higher Education Finance Corp. |
| Revenue Bonds |
| Series 2016A |
| 08/15/2036 | 5.000% | | 390,000 | 416,914 |
| Red River Health Facilities Development Corp. |
| Revenue Bonds |
| MRC Crossings Project |
| Series 2014A |
| 11/15/2034 | 7.500% | | 2,000,000 | 2,319,020 |
| 11/15/2044 | 7.750% | | 2,800,000 | 3,269,448 |
| Sanger Industrial Development Corp.(e),(g),(h) |
| Revenue Bonds |
| Texas Pellets Project |
| Series 2012B AMT |
| 07/01/2038 | 0.000% | | 34,645,000 | 8,661,250 |
| Tarrant County Cultural Education Facilities Finance Corp. |
| Refunding Revenue Bonds |
| Trinity Terrace Project |
| Series 2014 |
| 10/01/2044 | 5.000% | | 2,500,000 | 2,700,275 |
| 10/01/2049 | 5.000% | | 1,870,000 | 2,010,474 |
| Revenue Bonds |
| Buckner Senior Living Ventana Project |
| Series 2017 |
| 11/15/2047 | 6.750% | | 3,665,000 | 4,185,760 |
| CC Young Memorial Home |
| Series 2009A |
| 02/15/2038 | 8.000% | | 4,000,000 | 4,085,640 |
| Texas City Industrial Development Corp. |
| Refunding Revenue Bonds |
| Arco Pipe Line Co. Project |
| Series 1990 |
| 10/01/2020 | 7.375% | | 2,000,000 | 2,137,900 |
| Texas Private Activity Bond Surface Transportation Corp.(e),(f) |
| Revenue Bonds |
| Segment 3C Project |
| Series 2019 AMT |
| 06/30/2058 | 5.000% | | 4,000,000 | 4,639,520 |
| Texas Private Activity Bond Surface Transportation Corp.(e) |
| Revenue Bonds |
| Senior Lien - Blueridge Transportation |
| Series 2016 AMT |
| 12/31/2050 | 5.000% | | 7,750,000 | 8,565,687 |
| 12/31/2055 | 5.000% | | 13,250,000 | 14,604,150 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Texas Transportation Commission |
| Revenue Bonds |
| State Highway 249 System Toll |
| Series 2019 |
| 08/01/2057 | 5.000% | | 2,000,000 | 2,314,320 |
| University of Texas System (The) |
| Revenue Bonds |
| Series 2019B |
| 08/15/2049 | 5.000% | | 12,000,000 | 17,624,760 |
| Total | 341,837,493 |
| Utah 0.6% |
| Salt Lake City Corp. Airport(e) |
| Revenue Bonds |
| Series 2017A AMT |
| 07/01/2036 | 5.000% | | 4,000,000 | 4,742,360 |
| 07/01/2047 | 5.000% | | 11,500,000 | 13,352,190 |
| Series 2018-A AMT |
| 07/01/2048 | 5.000% | | 3,000,000 | 3,533,970 |
| Total | 21,628,520 |
| Virginia 1.3% |
| Chesapeake Bay Bridge & Tunnel District |
| Revenue Bonds |
| 1st Tier General Resolution |
| Series 2016 |
| 07/01/2046 | 5.000% | | 3,500,000 | 3,985,975 |
| City of Chesapeake Expressway Toll Road |
| Revenue Bonds |
| Transportation System |
| Series 2012A |
| 07/15/2047 | 5.000% | | 7,505,000 | 8,061,496 |
| Fredericksburg Economic Development Authority |
| Refunding Revenue Bonds |
| Mary Washington Healthcare Obligation |
| Series 2014 |
| 06/15/2030 | 5.000% | | 1,000,000 | 1,146,940 |
| 06/15/2031 | 5.000% | | 800,000 | 916,080 |
| 06/15/2033 | 5.000% | | 500,000 | 568,825 |
| Loudoun County Economic Development Authority(i) |
| Revenue Bonds |
| Howard Hughes Medical Institute |
| Series 2019 |
| 07/01/2049 | 0.000% | | 17,045,000 | 6,391,534 |
| Mosaic District Community Development Authority |
| Special Assessment Bonds |
| Series 2011A |
| 03/01/2026 | 6.625% | | 2,145,000 | 2,263,061 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 28 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Virginia Small Business Financing Authority(e) |
| Revenue Bonds |
| Transform 66 P3 Project |
| Series 2017 AMT |
| 12/31/2056 | 5.000% | | 20,300,000 | 22,956,661 |
| Total | 46,290,572 |
| Washington 1.9% |
| Greater Wenatchee Regional Events Center Public Facilities District |
| Revenue Bonds |
| Series 2012A |
| 09/01/2027 | 5.000% | | 1,540,000 | 1,588,679 |
| 09/01/2032 | 5.250% | | 1,000,000 | 1,027,970 |
| King County Housing Authority |
| Refunding Revenue Bonds |
| Series 2018 |
| 05/01/2038 | 3.750% | | 2,915,000 | 3,078,794 |
| King County Public Hospital District No. 4 |
| Revenue Bonds |
| Series 2015A |
| 12/01/2035 | 6.000% | | 1,300,000 | 1,371,604 |
| 12/01/2045 | 6.250% | | 2,500,000 | 2,629,325 |
| Port of Seattle(e) |
| Revenue Bonds |
| Series 2018A AMT |
| 05/01/2043 | 5.000% | | 8,000,000 | 9,278,960 |
| Washington Health Care Facilities Authority |
| Refunding Revenue Bonds |
| Multicare Health System |
| Series 2017B |
| 08/15/2041 | 4.000% | | 10,500,000 | 11,368,035 |
| Virginia Mason Medical Center |
| Series 2017 |
| 08/15/2042 | 4.000% | | 3,335,000 | 3,452,625 |
| Washington State Housing Finance Commission |
| Prerefunded 01/01/23 Revenue Bonds |
| Presbyterian Retirement |
| Series 2013 |
| 01/01/2028 | 5.000% | | 985,000 | 1,110,174 |
| Revenue Bonds |
| Heron’s Key |
| Series 2015A |
| 07/01/2030 | 6.500% | | 730,000 | 786,977 |
| 07/01/2035 | 6.750% | | 550,000 | 592,026 |
| 07/01/2045 | 7.000% | | 1,800,000 | 1,929,006 |
| 07/01/2050 | 7.000% | | 1,250,000 | 1,336,337 |
| Washington State Housing Finance Commission(g) |
| Refunding Revenue Bonds |
| Bayview Manor Homes |
| Series 2016A |
| 07/01/2046 | 5.000% | | 2,475,000 | 2,642,285 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Nonprofit Housing-Mirabella |
| Series 2012 |
| 10/01/2032 | 6.500% | | 9,600,000 | 10,291,200 |
| 10/01/2047 | 6.750% | | 1,000,000 | 1,075,050 |
| Skyline 1st Hill Project |
| Series 2015 |
| 01/01/2020 | 4.125% | | 130,000 | 130,234 |
| 01/01/2025 | 5.000% | | 770,000 | 775,413 |
| 01/01/2035 | 5.750% | | 575,000 | 590,002 |
| 01/01/2045 | 6.000% | | 2,325,000 | 2,394,006 |
| Unrefunded Revenue Bonds |
| Presbyterian Retirement |
| Series 2013 |
| 01/01/2023 | 5.000% | | 500,000 | 525,215 |
| 01/01/2028 | 5.000% | | 1,030,000 | 1,103,264 |
| 01/01/2033 | 5.000% | | 1,315,000 | 1,387,456 |
| 01/01/2043 | 5.250% | | 3,870,000 | 4,080,915 |
| Total | 64,545,552 |
| West Virginia 0.8% |
| West Virginia Economic Development Authority |
| Refunding Revenue Bonds |
| Appalachian Power Co.-Amos Project |
| Series 2010A |
| 12/01/2038 | 5.375% | | 3,850,000 | 4,030,565 |
| West Virginia Hospital Finance Authority |
| Refunding Revenue Bonds |
| Cabell Huntington Hospital Obligation |
| Series 2018 |
| 01/01/2047 | 4.125% | | 5,000,000 | 5,274,900 |
| Revenue Bonds |
| West Virginia University Health System Obligation |
| Series 2018 |
| 06/01/2052 | 5.000% | | 15,000,000 | 17,378,100 |
| Total | 26,683,565 |
| Wisconsin 1.7% |
| City of La Crosse(e) |
| Refunding Revenue Bonds |
| Northern States Power Co. Project |
| Series 1996 AMT |
| 11/01/2021 | 6.000% | | 6,000,000 | 6,531,540 |
| Public Finance Authority(g) |
| Refunding Revenue Bonds |
| Mary’s Woods at Marylhurst |
| Series 2017 |
| 05/15/2042 | 5.250% | | 820,000 | 898,425 |
| 05/15/2047 | 5.250% | | 1,105,000 | 1,206,439 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 29 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Public Finance Authority(e) |
| Refunding Revenue Bonds |
| TRIPS Senior Obligation Group |
| Series 2012B AMT |
| 07/01/2028 | 5.250% | | 4,000,000 | 4,358,600 |
| 07/01/2042 | 5.000% | | 2,000,000 | 2,132,660 |
| Wisconsin Health & Educational Facilities Authority |
| Refunding Revenue Bonds |
| Ascension Health Credit Group |
| Series 2016 |
| 11/15/2046 | 4.000% | | 5,000,000 | 5,357,350 |
| Revenue Bonds |
| Beaver Dam Community Hospitals |
| Series 2013A |
| 08/15/2028 | 5.125% | | 6,750,000 | 7,393,207 |
| 08/15/2034 | 5.250% | | 8,000,000 | 8,666,480 |
| Covenant Communities, Inc. Project |
| Series 2018A |
| 07/01/2048 | 4.000% | | 2,335,000 | 2,412,475 |
| 07/01/2053 | 4.125% | | 5,000,000 | 5,190,950 |
| Series 2018B |
| 07/01/2038 | 4.375% | | 1,250,000 | 1,287,913 |
| 07/01/2043 | 4.500% | | 1,375,000 | 1,415,081 |
| 07/01/2048 | 5.000% | | 500,000 | 533,120 |
| St. John’s Communities, Inc. Project |
| Series 2018A |
| 09/15/2050 | 5.000% | | 3,750,000 | 3,917,025 |
| Wisconsin Housing & Economic Development Authority |
| Revenue Bonds |
| Series 2019A (FNMA) |
| 09/01/2035 | 3.500% | | 5,000,000 | 5,348,350 |
| Total | 56,649,615 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Wyoming 0.2% |
| County of Campbell |
| Refunding Revenue Bonds |
| Basin Electric Power Cooperative |
| Series 2019 |
| 07/15/2039 | 3.625% | | 7,600,000 | 8,000,976 |
Total Municipal Bonds
(Cost $3,199,480,474) | 3,392,600,527 |
| Money Market Funds 0.0% |
| | Shares | Value ($) |
| Dreyfus AMT-Free Tax Exempt Cash Management Fund, Institutional Shares, 1.310%(k) | 200,155 | 200,155 |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Class, 1.264%(k) | 1,328,777 | 1,328,777 |
Total Money Market Funds
(Cost $1,528,926) | 1,528,932 |
Total Investments in Securities
(Cost $3,268,738,620) | 3,461,807,257 |
| Other Assets & Liabilities, Net | | (24,642,112) |
| Net Assets | $3,437,165,145 |
Notes to Portfolio of Investments
| (a) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. At July 31, 2019, the total value of these securities amounted to $462,798, which represents 0.01% of total net assets. |
| (b) | Valuation based on significant unobservable inputs. |
| (c) | The Fund is entitled to receive principal and interest from the guarantor after a day or a week’s notice or upon maturity. The maturity date disclosed represents the final maturity. |
| (d) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of July 31, 2019. |
| (e) | Income from this security may be subject to alternative minimum tax. |
| (f) | Represents a security purchased on a when-issued basis. |
| (g) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission 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, 2019, the total value of these securities amounted to $130,563,891, which represents 3.80% of total net assets. |
| (h) | Represents securities that have defaulted on payment of interest. The Fund has stopped accruing interest on these securities. At July 31, 2019, the total value of these securities amounted to $8,977,765, which represents 0.26% of total net assets. |
| (i) | Zero coupon bond. |
| (j) | 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, 2019, the total value of these securities amounted to $5,099,846, which represents 0.15% of total net assets. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 30 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
Notes to Portfolio of Investments (continued)
| (k) | The rate shown is the seven-day current annualized yield at July 31, 2019. |
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| AMT | Alternative Minimum Tax |
| BAM | Build America Mutual Assurance Co. |
| FGIC | Financial Guaranty Insurance Corporation |
| FHA | Federal Housing Authority |
| FNMA | Federal National Mortgage Association |
| GNMA | Government National Mortgage Association |
| 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). |
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 31 |
Portfolio of Investments (continued)
July 31, 2019
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2019:
| | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) |
| Investments in Securities | | | | |
| Corporate Bonds & Notes | — | — | 462,798 | 462,798 |
| Floating Rate Notes | — | 67,215,000 | — | 67,215,000 |
| Municipal Bonds | — | 3,392,600,527 | — | 3,392,600,527 |
| Money Market Funds | 1,528,932 | — | — | 1,528,932 |
| Total Investments in Securities | 1,528,932 | 3,459,815,527 | 462,798 | 3,461,807,257 |
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.
The Fund does not hold any significant investments (greater than one percent of net assets) categorized as Level 3.
The accompanying Notes to Financial Statements are an integral part of this statement.
| 32 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Statement of Assets and Liabilities
July 31, 2019
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $3,268,738,620) | $3,461,807,257 |
| Receivable for: | |
| Investments sold | 81,315 |
| Capital shares sold | 11,004,800 |
| Interest | 30,615,359 |
| Prepaid expenses | 24,286 |
| Trustees’ deferred compensation plan | 566,052 |
| Total assets | 3,504,099,069 |
| Liabilities | |
| Due to custodian | 2,876 |
| Payable for: | |
| Investments purchased on a delayed delivery basis | 49,302,165 |
| Capital shares purchased | 4,828,654 |
| Distributions to shareholders | 11,847,940 |
| Management services fees | 41,321 |
| Distribution and/or service fees | 15,311 |
| Transfer agent fees | 184,222 |
| Compensation of board members | 38,692 |
| Compensation of chief compliance officer | 122 |
| Other expenses | 106,569 |
| Trustees’ deferred compensation plan | 566,052 |
| Total liabilities | 66,933,924 |
| Net assets applicable to outstanding capital stock | $3,437,165,145 |
| Represented by | |
| Paid in capital | 3,242,467,068 |
| Total distributable earnings (loss) (Note 2) | 194,698,077 |
| Total - representing net assets applicable to outstanding capital stock | $3,437,165,145 |
| Class A | |
| Net assets | $2,548,777,004 |
| Shares outstanding | 186,952,549 |
| Net asset value per share | $13.63 |
| Maximum sales charge | 3.00% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $14.05 |
| Advisor Class | |
| Net assets | $21,407,011 |
| Shares outstanding | 1,570,467 |
| Net asset value per share | $13.63 |
| Class C | |
| Net assets | $59,113,949 |
| Shares outstanding | 4,337,362 |
| Net asset value per share | $13.63 |
| Institutional Class | |
| Net assets | $781,833,649 |
| Shares outstanding | 57,339,095 |
| Net asset value per share | $13.64 |
| Institutional 2 Class | |
| Net assets | $8,977,694 |
| Shares outstanding | 658,427 |
| Net asset value per share | $13.64 |
| Institutional 3 Class | |
| Net assets | $17,055,838 |
| Shares outstanding | 1,247,441 |
| Net asset value per share | $13.67 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 33 |
Statement of Operations
Year Ended July 31, 2019
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $91,865 |
| Interest | 151,261,969 |
| Total income | 151,353,834 |
| Expenses: | |
| Management services fees | 14,926,550 |
| Distribution and/or service fees | |
| Class A | 5,069,885 |
| Class C | 610,971 |
| Transfer agent fees | |
| Class A | 1,759,745 |
| Advisor Class | 11,959 |
| Class C | 44,640 |
| Institutional Class | 523,912 |
| Institutional 2 Class | 4,087 |
| Institutional 3 Class | 976 |
| Compensation of board members | 62,242 |
| Custodian fees | 23,552 |
| Printing and postage fees | 121,209 |
| Registration fees | 123,228 |
| Audit fees | 39,412 |
| Legal fees | 71,973 |
| Compensation of chief compliance officer | 1,343 |
| Other | 125,597 |
| Total expenses | 23,521,281 |
| Fees waived by distributor | |
| Class C | (64,313) |
| Total net expenses | 23,456,968 |
| Net investment income | 127,896,866 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 6,273,590 |
| Futures contracts | (453,732) |
| Net realized gain | 5,819,858 |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 80,250,915 |
| Net change in unrealized appreciation (depreciation) | 80,250,915 |
| Net realized and unrealized gain | 86,070,773 |
| Net increase in net assets resulting from operations | $213,967,639 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 34 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2019 | Year Ended
July 31, 2018 |
| Operations | | |
| Net investment income | $127,896,866 | $144,961,923 |
| Net realized gain | 5,819,858 | 22,914,482 |
| Net change in unrealized appreciation (depreciation) | 80,250,915 | (91,368,820) |
| Net increase in net assets resulting from operations | 213,967,639 | 76,507,585 |
| Distributions to shareholders | | |
| Net investment income and net realized gains | | |
| Class A | (107,554,985) | |
| Advisor Class | (767,489) | |
| Class C | (2,306,645) | |
| Institutional Class | (33,538,246) | |
| Institutional 2 Class | (311,942) | |
| Institutional 3 Class | (525,035) | |
| Net investment income | | |
| Class A | | (108,098,896) |
| Advisor Class | | (423,016) |
| Class C | | (3,173,964) |
| Institutional Class | | (32,367,202) |
| Institutional 2 Class | | (160,991) |
| Institutional 3 Class | | (272,644) |
| Total distributions to shareholders (Note 2) | (145,004,342) | (144,496,713) |
| Decrease in net assets from capital stock activity | (148,964,746) | (218,543,884) |
| Total decrease in net assets | (80,001,449) | (286,533,012) |
| Net assets at beginning of year | 3,517,166,594 | 3,803,699,606 |
| Net assets at end of year | $3,437,165,145 | $3,517,166,594 |
| Undistributed net investment income | $4,408,955 | $19,384,999 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 35 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2019 | July 31, 2018 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions | 8,499,687 | 113,164,962 | 7,507,417 | 101,344,454 |
| Distributions reinvested | 7,531,359 | 100,322,587 | 7,467,365 | 100,639,378 |
| Redemptions | (26,978,991) | (358,134,010) | (28,969,561) | (390,960,942) |
| Net decrease | (10,947,945) | (144,646,461) | (13,994,779) | (188,977,110) |
| Advisor Class | | | | |
| Subscriptions | 1,107,511 | 14,714,485 | 693,016 | 9,354,381 |
| Distributions reinvested | 57,452 | 766,484 | 31,402 | 422,347 |
| Redemptions | (624,279) | (8,299,068) | (209,142) | (2,826,783) |
| Net increase | 540,684 | 7,181,901 | 515,276 | 6,949,945 |
| Class B | | | | |
| Redemptions | — | — | (724) | (9,858) |
| Net decrease | — | — | (724) | (9,858) |
| Class C | | | | |
| Subscriptions | 603,112 | 8,072,681 | 660,041 | 8,913,325 |
| Distributions reinvested | 156,092 | 2,077,491 | 214,497 | 2,890,039 |
| Redemptions | (1,826,850) | (24,296,605) | (3,197,926) | (42,987,361) |
| Net decrease | (1,067,646) | (14,146,433) | (2,323,388) | (31,183,997) |
| Institutional Class | | | | |
| Subscriptions | 10,960,209 | 145,803,802 | 8,184,215 | 110,330,571 |
| Distributions reinvested | 978,691 | 13,040,245 | 942,893 | 12,705,430 |
| Redemptions | (12,665,853) | (167,712,504) | (10,401,231) | (140,508,503) |
| Net decrease | (726,953) | (8,868,457) | (1,274,123) | (17,472,502) |
| Institutional 2 Class | | | | |
| Subscriptions | 326,980 | 4,358,241 | 455,530 | 6,146,184 |
| Distributions reinvested | 23,336 | 311,492 | 11,949 | 160,579 |
| Redemptions | (159,160) | (2,107,683) | (146,558) | (1,982,948) |
| Net increase | 191,156 | 2,562,050 | 320,921 | 4,323,815 |
| Institutional 3 Class | | | | |
| Subscriptions | 912,700 | 12,171,960 | 750,262 | 10,228,851 |
| Distributions reinvested | 35,939 | 481,761 | 20,175 | 272,065 |
| Redemptions | (278,626) | (3,701,067) | (198,228) | (2,675,093) |
| Net increase | 670,013 | 8,952,654 | 572,209 | 7,825,823 |
| Total net decrease | (11,340,691) | (148,964,746) | (16,184,608) | (218,543,884) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 36 | Columbia Tax-Exempt Fund | Annual Report 2019 |
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Columbia Tax-Exempt Fund | Annual Report 2019
| 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.
| | 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 | Total
distributions to
shareholders |
| Class A |
| Year Ended 7/31/2019 | $13.35 | 0.50 | 0.34 | 0.84 | (0.55) | (0.01) | (0.56) |
| Year Ended 7/31/2018 | $13.60 | 0.53 | (0.25) | 0.28 | (0.53) | — | (0.53) |
| Year Ended 7/31/2017 | $14.25 | 0.55 | (0.66) | (0.11) | (0.54) | — | (0.54) |
| Year Ended 7/31/2016 | $13.84 | 0.56 | 0.41 | 0.97 | (0.56) | — | (0.56) |
| Year Ended 7/31/2015 | $13.82 | 0.59 | 0.02 | 0.61 | (0.59) | — | (0.59) |
| Advisor Class |
| Year Ended 7/31/2019 | $13.35 | 0.52 | 0.35 | 0.87 | (0.58) | (0.01) | (0.59) |
| Year Ended 7/31/2018 | $13.60 | 0.56 | (0.25) | 0.31 | (0.56) | — | (0.56) |
| Year Ended 7/31/2017 | $14.25 | 0.57 | (0.65) | (0.08) | (0.57) | — | (0.57) |
| Year Ended 7/31/2016 | $13.84 | 0.59 | 0.41 | 1.00 | (0.59) | — | (0.59) |
| Year Ended 7/31/2015 | $13.82 | 0.62 | 0.01 | 0.63 | (0.61) | — | (0.61) |
| Class C |
| Year Ended 7/31/2019 | $13.35 | 0.41 | 0.35 | 0.76 | (0.47) | (0.01) | (0.48) |
| Year Ended 7/31/2018 | $13.60 | 0.44 | (0.25) | 0.19 | (0.44) | — | (0.44) |
| Year Ended 7/31/2017 | $14.24 | 0.46 | (0.65) | (0.19) | (0.45) | — | (0.45) |
| Year Ended 7/31/2016 | $13.84 | 0.47 | 0.40 | 0.87 | (0.47) | — | (0.47) |
| Year Ended 7/31/2015 | $13.82 | 0.51 | 0.01 | 0.52 | (0.50) | — | (0.50) |
| Institutional Class |
| Year Ended 7/31/2019 | $13.35 | 0.52 | 0.36 | 0.88 | (0.58) | (0.01) | (0.59) |
| Year Ended 7/31/2018 | $13.60 | 0.56 | (0.25) | 0.31 | (0.56) | — | (0.56) |
| Year Ended 7/31/2017 | $14.25 | 0.57 | (0.65) | (0.08) | (0.57) | — | (0.57) |
| Year Ended 7/31/2016 | $13.84 | 0.59 | 0.41 | 1.00 | (0.59) | — | (0.59) |
| Year Ended 7/31/2015 | $13.82 | 0.62 | 0.01 | 0.63 | (0.61) | — | (0.61) |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $13.35 | 0.52 | 0.36 | 0.88 | (0.58) | (0.01) | (0.59) |
| Year Ended 7/31/2018 | $13.60 | 0.56 | (0.25) | 0.31 | (0.56) | — | (0.56) |
| Year Ended 7/31/2017 | $14.25 | 0.58 | (0.66) | (0.08) | (0.57) | — | (0.57) |
| Year Ended 7/31/2016 | $13.84 | 0.60 | 0.41 | 1.01 | (0.60) | — | (0.60) |
| Year Ended 7/31/2015 | $13.82 | 0.63 | 0.01 | 0.64 | (0.62) | — | (0.62) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 38 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Class A |
| Year Ended 7/31/2019 | — | $13.63 | 6.51% | 0.73% | 0.73% | 3.74% | 20% | $2,548,777 |
| Year Ended 7/31/2018 | — | $13.35 | 2.08% | 0.72% | 0.72%(c) | 3.93% | 17% | $2,642,009 |
| Year Ended 7/31/2017 | — | $13.60 | (0.70%) | 0.72%(d),(e) | 0.72%(c),(d),(e) | 3.98% | 13% | $2,882,268 |
| Year Ended 7/31/2016 | — | $14.25 | 7.19% | 0.76%(d) | 0.76%(c),(d) | 4.04% | 14% | $3,344,274 |
| Year Ended 7/31/2015 | 0.00(f) | $13.84 | 4.41%(g) | 0.77%(d) | 0.77%(c),(d) | 4.21% | 13% | $3,238,956 |
| Advisor Class |
| Year Ended 7/31/2019 | — | $13.63 | 6.72% | 0.53% | 0.53% | 3.93% | 20% | $21,407 |
| Year Ended 7/31/2018 | — | $13.35 | 2.29% | 0.52% | 0.52%(c) | 4.16% | 17% | $13,745 |
| Year Ended 7/31/2017 | — | $13.60 | (0.50%) | 0.52%(d),(e) | 0.52%(c),(d),(e) | 4.20% | 13% | $6,997 |
| Year Ended 7/31/2016 | — | $14.25 | 7.40% | 0.56%(d) | 0.56%(c),(d) | 4.23% | 14% | $5,303 |
| Year Ended 7/31/2015 | 0.00(f) | $13.84 | 4.62%(g) | 0.57%(d) | 0.57%(c),(d) | 4.42% | 13% | $1,634 |
| Class C |
| Year Ended 7/31/2019 | — | $13.63 | 5.82% | 1.48% | 1.38% | 3.09% | 20% | $59,114 |
| Year Ended 7/31/2018 | — | $13.35 | 1.42% | 1.47% | 1.37%(c) | 3.27% | 17% | $72,134 |
| Year Ended 7/31/2017 | — | $13.60 | (1.27%) | 1.47%(d),(e) | 1.37%(c),(d),(e) | 3.33% | 13% | $105,081 |
| Year Ended 7/31/2016 | — | $14.24 | 6.42% | 1.51%(d) | 1.41%(c),(d) | 3.38% | 14% | $120,031 |
| Year Ended 7/31/2015 | 0.00(f) | $13.84 | 3.80%(g) | 1.52%(d) | 1.36%(c),(d) | 3.63% | 13% | $99,273 |
| Institutional Class |
| Year Ended 7/31/2019 | — | $13.64 | 6.80% | 0.53% | 0.53% | 3.94% | 20% | $781,834 |
| Year Ended 7/31/2018 | — | $13.35 | 2.29% | 0.52% | 0.52%(c) | 4.13% | 17% | $775,309 |
| Year Ended 7/31/2017 | ��� | $13.60 | (0.50%) | 0.52%(d),(e) | 0.52%(c),(d),(e) | 4.18% | 13% | $807,282 |
| Year Ended 7/31/2016 | — | $14.25 | 7.40% | 0.56%(d) | 0.56%(c),(d) | 4.24% | 14% | $837,239 |
| Year Ended 7/31/2015 | 0.00(f) | $13.84 | 4.62%(g) | 0.57%(d) | 0.57%(c),(d) | 4.41% | 13% | $752,369 |
| Institutional 2 Class |
| Year Ended 7/31/2019 | — | $13.64 | 6.81% | 0.52% | 0.52% | 3.94% | 20% | $8,978 |
| Year Ended 7/31/2018 | — | $13.35 | 2.29% | 0.51% | 0.51% | 4.16% | 17% | $6,239 |
| Year Ended 7/31/2017 | — | $13.60 | (0.47%) | 0.51%(d),(e) | 0.51%(d),(e) | 4.21% | 13% | $1,990 |
| Year Ended 7/31/2016 | — | $14.25 | 7.47% | 0.50%(d) | 0.50%(d) | 4.30% | 14% | $893 |
| Year Ended 7/31/2015 | 0.00(f) | $13.84 | 4.69%(g) | 0.50%(d) | 0.50%(d) | 4.51% | 13% | $622 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 39 |
Financial Highlights (continued)
| | 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 | Total
distributions to
shareholders |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $13.39 | 0.53 | 0.35 | 0.88 | (0.59) | (0.01) | (0.60) |
| Year Ended 7/31/2018 | $13.64 | 0.57 | (0.26) | 0.31 | (0.56) | — | (0.56) |
| Year Ended 7/31/2017(h) | $13.45 | 0.23 | 0.19(i) | 0.42 | (0.23) | — | (0.23) |
| 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) | 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. |
| (e) | 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. |
| Year Ended | Class A | Advisor
Class | Class C | Institutional
Class | Institutional 2
Class |
| 07/31/2017 | 0.01% | 0.01% | 0.01% | 0.01% | 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) | Institutional 3 Class shares commenced operations on March 1, 2017. Per share data and total return reflect activity from that date. |
| (i) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain (loss) presented in the Statement of Operations due to the timing of subscriptions and redemptions of Fund shares in relation to fluctuations in the market value of the portfolio. |
| (j) | Annualized. |
| (k) | 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 2019 |
Financial Highlights (continued)
| | 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) |
| Institutional 3 Class |
| Year Ended 7/31/2019 | — | $13.67 | 6.78% | 0.47% | 0.47% | 3.97% | 20% | $17,056 |
| Year Ended 7/31/2018 | — | $13.39 | 2.35% | 0.47% | 0.47% | 4.25% | 17% | $7,731 |
| Year Ended 7/31/2017(h) | — | $13.64 | 3.17% | 0.49%(j),(k) | 0.49%(j),(k) | 4.19%(j) | 13% | $71 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Tax-Exempt Fund | Annual Report 2019
| 41 |
Notes to Financial Statements
July 31, 2019
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). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. 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. Each share class has its own expense and sales charge structure. Different share classes may have different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s prospectus, Class A and Class C shares are offered to the general public for investment. Advisor Class, Institutional Class, Institutional 2 Class and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional and to certain other investors as also described in the Fund’s prospectus. Class C shares automatically convert to Class A shares after 10 years.
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.
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.
| 42 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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 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 for most over-the-counter derivatives are subject to regulatory requirements to exchange variation margin with trading counterparties and may have contract specific margin terms as well. 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 may also pay interest expense on cash collateral received from the
Columbia Tax-Exempt Fund | Annual Report 2019
| 43 |
Notes to Financial Statements (continued)
July 31, 2019
broker. Any interest expense paid by the Fund is shown on the Statement of Operations. 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 determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, 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.
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, 2019:
| Amount of realized gain (loss) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | (453,732) |
| 44 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
The following table is a summary of the average outstanding volume by derivative instrument for the year ended July 31, 2019:
| Derivative instrument | Average notional
amounts ($)* |
| Futures contracts — short | 26,874,048 |
| * | Based on the ending daily outstanding amounts for the year ended July 31, 2019. |
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.
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 net tax-exempt and investment company taxable income and net capital gain, 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 ordinary income, capital gain net income and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
Columbia Tax-Exempt Fund | Annual Report 2019
| 45 |
Notes to Financial Statements (continued)
July 31, 2019
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 pronouncements
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. Management does not expect the implementation of this guidance to have a material impact on the financial statement amounts and footnote disclosures.
Accounting Standards Update 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. After evaluation, Management determined to adopt the ASU effective for periods ending July 31, 2019 and all subsequent periods. As a result of the amendments, management implemented disclosure changes which include removal of the amount and reasons for transfers between level 1 and level 2 of the fair value hierarchy, removal of the policy for the timing of transfers between levels, removal of the description of the level 3 valuation processes, as well as modifications to the measurement uncertainty disclosure.
Disclosure Update and Simplification
In September 2018, the Securities and Exchange Commission (SEC) released Final Rule 33-10532, Disclosure Update and Simplification, which amends certain financial statement disclosure requirements that the SEC determined to be redundant, outdated, or superseded in light of other SEC disclosure requirements, GAAP, or changes in the information environment. As a result of the amendments, management implemented disclosure changes which included removing the components of distributable earnings presented on the Statement of Assets and Liabilities and combining income and gain distributions paid to shareholders as presented on the Statement of Changes in Net Assets. Any values presented to meet prior year requirements were left unchanged. The amendments had no effect on the Fund’s net assets or results of operation.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund has 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, 2019 was 0.44% of the Fund’s average daily net assets.
| 46 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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 Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Deferred 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. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
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 DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST 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, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class 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.
For the year ended July 31, 2019, 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 | 0.07 |
| Advisor Class | 0.07 |
| Class C | 0.07 |
| Institutional Class | 0.07 |
| Institutional 2 Class | 0.06 |
| Institutional 3 Class | 0.01 |
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, 2019, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into 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
Columbia Tax-Exempt Fund | Annual Report 2019
| 47 |
Notes to Financial Statements (continued)
July 31, 2019
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 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 rate of 0.75% of the average daily net assets attributable to 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.
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, 2019, if any, are listed below:
| | Front End (%) | CDSC (%) | Amount ($) |
| Class A | 3.00 | 0.75(a) | 711,104 |
| Class C | — | 1.00(b) | 4,686 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share classes are not subject to sales charges.
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, 2018
through
November 30, 2019 | Prior to
December 1, 2018 |
| Class A | 0.80% | 0.80% |
| Advisor Class | 0.60 | 0.60 |
| Class C | 1.55 | 1.55 |
| Institutional Class | 0.60 | 0.60 |
| Institutional 2 Class | 0.59 | 0.59 |
| Institutional 3 Class | 0.54 | 0.55 |
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.
| 48 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019, these differences were primarily due to differing treatment for tax straddles, trustees’ deferred compensation, distributions and principal and/or interest from fixed income securities. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| 561,488 | (561,488) | — |
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, 2019 | Year Ended July 31, 2018 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 994,268 | 142,440,130 | 1,569,944 | 145,004,342 | 1,986,538 | 142,510,175 | — | 144,496,713 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2019, 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 ($) |
| 3,037,246 | 24,864,280 | 4,400,313 | — | 174,856,058 |
At July 31, 2019, the cost of all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($) | Gross unrealized
appreciation ($) | Gross unrealized
(depreciation) ($) | Net unrealized
appreciation ($) |
| 3,286,951,199 | 205,719,700 | (30,863,642) | 174,856,058 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
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 $659,826,439 and $804,643,620, respectively, for the year ended July 31, 2019. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Columbia Tax-Exempt Fund | Annual Report 2019
| 49 |
Notes to Financial Statements (continued)
July 31, 2019
Note 6. Interfund lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and, except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject to certain restrictions.
Interfund loans are subject to the risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend money under the Interfund Program during the year ended July 31, 2019.
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 or an affiliated 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 federal funds effective rate, (ii) the one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 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 unused 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. This agreement expires annually in December unless extended or renewed.
The Fund had no borrowings during the year ended July 31, 2019.
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 defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower rated or unrated debt instruments held by the Fund may present increased credit risk as compared to higher-rated debt instruments.
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. Changes in interest rates may also affect the liquidity of the Fund’s investments in debt instruments. In general, the longer the maturity or duration of a debt instrument, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the Fund’s performance. 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.
| 50 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019, two unaffiliated shareholders of record owned 21.3% 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 37.5% 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.
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.
Columbia Tax-Exempt Fund | Annual Report 2019
| 51 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Columbia Funds Series Trust I and Shareholders of Columbia Tax-Exempt Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia Tax-Exempt Fund (one of the funds constituting Columbia Funds Series Trust I, hereafter referred to as the "Fund") as of July 31, 2019, the related statement of operations for the year ended July 31, 2019, the statement of changes in net assets for each of the two years in the period ended July 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2019, 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 ended July 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2019 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 20, 2019
We have served as the auditor of one or more investment companies within the Columbia Funds Complex since 1977.
| 52 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2019. Shareholders will be notified in early 2020 of the amounts for use in preparing 2019 income tax returns.
Capital
gain
dividend | Exempt-
interest
dividends |
| $4,697,991 | 99.31% |
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Exempt-interest dividends. The percentage of net investment income distributed during the fiscal year that qualifies as exempt-interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
Columbia Tax-Exempt Fund | Annual Report 2019
| 53 |
The Board oversees the Fund’s operations and 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 as of the printing of this report, 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), September 2007-October 2018 | 69 | 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, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 69 | Spartan Nash Company, (food distributor); former Director, Nash Finch Company (food distributor), 2005-2013; Aircastle Limited (aircraft leasing); former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; 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), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 69 | 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 | 69 | Director, CSX Corporation (transportation suppliers); 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 |
| 54 | Columbia Tax-Exempt Fund | Annual Report 2019 |
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 |
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, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 69 | 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, 1988-2014 | 69 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
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, 1994-1997, President – Application Systems Division, 1991-1994, Chief Financial Officer – US Marketing & Services, 1988-1991, and Chief Information Officer, 1987-1988, IBM Corporation (computer and technology) | 69 | Former Director, Enesco Group, Inc. (producer of giftware and home and garden decor products), 2001-2006 |
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; Adjunct Professor of Finance, Bentley University since November 2017; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2009-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 69 | Director, The Autism Project since March 2015; former Trustee, New Century Portfolios, March 2015-December 2017; formerly on Board of Governors, Gateway Healthcare, January 2016 – December 2017 |
Columbia Tax-Exempt Fund | Annual Report 2019
| 55 |
TRUSTEES AND OFFICERS (continued)
Consultants to the 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 Funds complex overseen | Other directorships held by Trustee during the past five years |
Olive Darragh
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street,
Mail Drop BX32 05228,
Boston, MA 02110
1962 | Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio (an investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 69 | Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
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 Portfolio Solutions LLC (asset management and consulting services) since January 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 69 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions) |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. 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, Ms. Darragh 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 | 190 | 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, August 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, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
| 56 | Columbia Tax-Exempt Fund | Annual Report 2019 |
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 as of the printing of this report, 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 | Chief Financial Officer (Principal Financial Officer) (2009) and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 - May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously Treasurer and Chief Accounting Officer, January 2009 - January 2019 and December 2015 - January 2019, respectively). |
Joseph Beranek
5890 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Treasurer and Chief Accounting Officer (Principal Accounting Officer) (2019) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
Paul B. Goucher
485 Lexington 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); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
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. |
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 Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); 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. |
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 Tax-Exempt Fund | Annual Report 2019
| 57 |
Board Consideration and Approval of Management
Agreement
On June 12, 2019, 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, among themselves, with the management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant 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 5, 2019, April 25, 2019 and June 11, 2019 and at Board meetings held on March 6, 2019 and June 12, 2019. In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet 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 with other investment personnel at various times throughout the year. The Committee and the Board also consulted with the 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 11, 2019, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 12, 2019, 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, 2019 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 accounts and collective trusts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
| 58 | Columbia Tax-Exempt Fund | Annual Report 2019 |
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 funds using an investment strategy similar to that used by the Investment Manager for the Fund. 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 the resources dedicated by the Investment Manager and its affiliates to risk management, 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, 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 information and analysis 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 support 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, 2018, the Fund’s performance was in the fiftieth, fifty-third and forty-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.
Columbia Tax-Exempt Fund | Annual Report 2019
| 59 |
Board Consideration and Approval of Management
Agreement (continued)
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 support 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, 2018, the Fund’s actual management fee and net total expense ratio were 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 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, supported 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, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
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 2018 to profitability levels realized in 2017. 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.
| 60 | Columbia Tax-Exempt Fund | Annual Report 2019 |
Board Consideration and Approval of Management
Agreement (continued)
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 noted 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 considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. 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 Tax-Exempt Fund | Annual Report 2019
| 61 |
The Fund mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. 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/investor/; 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/investor/, 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-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, 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/investor/ 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 219104
Kansas City, MO 64121-9104
| 62 | Columbia Tax-Exempt Fund | Annual Report 2019 |
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Tax-Exempt Fund
P.O. Box 219104
Kansas City, MO 64121-9104
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/investor/. 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.
© 2019 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Annual Report
July 31, 2019
Columbia Ultra Short Term Bond Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified by mail and provided with a website address to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank guarantee • May lose value
Columbia Ultra Short Term Bond Fund | Annual Report 2019
Investment objective
Columbia 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
Gregory Liechty
Co-Portfolio Manager
Managed Fund since 2016
Ronald Stahl, CFA
Co-Portfolio Manager
Managed Fund since 2015
| Average annual total returns (%) (for the period ended July 31, 2019) |
| | | Inception | 1 Year | 5 Years | 10 Years |
| Class A* | 02/20/19 | 2.53 | 1.04 | 0.94 |
| Advisor Class* | 12/03/18 | 2.78 | 1.21 | 1.10 |
| Institutional Class* | 12/03/18 | 2.79 | 1.21 | 1.11 |
| Institutional 3 Class | 03/08/04 | 2.91 | 1.32 | 1.22 |
| Bloomberg Barclays U.S. Short-Term Government/Corporate Index | | 2.67 | 1.15 | 0.80 |
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 series 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/investor/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 columbiathreadneedleus.com/investor/investment-products/mutual-funds/appended-performance for more information.
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.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (July 31, 2009 — July 31, 2019)
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia 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, 2019) |
| Asset-Backed Securities — Non-Agency | 28.2 |
| Commercial Mortgage-Backed Securities - Non-Agency | 3.4 |
| Corporate Bonds & Notes | 52.8 |
| Foreign Government Obligations | 1.1 |
| Money Market Funds | 2.4 |
| Residential Mortgage-Backed Securities - Agency | 0.0(a) |
| Residential Mortgage-Backed Securities - Non-Agency | 4.1 |
| U.S. Government & Agency Obligations | 4.0 |
| U.S. Treasury Obligations | 4.0 |
| Total | 100.0 |
Percentages indicated are based upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
| Quality breakdown (%) (at July 31, 2019) |
| AAA rating | 28.6 |
| AA rating | 13.0 |
| A rating | 30.6 |
| BBB rating | 24.5 |
| Not rated | 3.3 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments.
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Manager Discussion of Fund Performance
At July 31, 2019, approximately 29.78% of the Fund’s shares were owned in the aggregate by affiliated funds-of-funds managed by Columbia Management Investment Advisers, LLC (the Investment Manager). As a result of asset allocation decisions by the Investment Manager, it is possible that the Fund may experience relatively large purchases or redemptions from affiliated funds-of-funds. The Investment Manager seeks to minimize the impact of these transactions by structuring them over a reasonable period of time. The Fund may experience increased expenses as it buys and sells securities as a result of purchases or redemptions by affiliated funds-of-funds.
For the 12-month period that ended July 31, 2019, Class A shares of the Fund returned 2.53%. The Fund underperformed its benchmark, the Bloomberg Barclays U.S. Short Term Government/Corporate Index, which returned 2.67% for the same period. The Fund benefited from its exposure to sectors that trade on their yield relative to U.S. Treasuries, as spread sectors outperformed U.S. Treasuries for the period. Overweights in corporate and securitized sectors aided relative results as did exposure to floating-rate notes during the second half of 2018, as the Federal Reserve (the Fed) increased its overnight lending rate by 0.25 percentage points in both September and December. The Fund’s allocation to U.S. government securities (U.S. Treasuries and agencies), detracted from performance during the period.
Trade concerns, interest rates drove financial markets
Optimism prevailed early in the 12-month period ended July 31, 2019 as positive global economic conditions, broad U.S. corporate tax cuts and moves to reduce regulation in a number of industries buoyed confidence. However, the economic backdrop looked less rosy as the period wore on. U.S. economic growth, which had risen above 3.0% (annualized) in the second half of 2018, slowed in 2019, averaging 2.3% (annualized) for the 12-month period. European economies transitioned to a slower pace of growth, struggling with rising interest rates, trade tensions and uncertainty surrounding the U.K.’s departure from the European Union (Brexit). At the same time, China’s economic conditions weakened and emerging markets came under pressure, driven by trade and tariff concerns and a rising U.S dollar.
Against this backdrop, the Fed hiked short-term interest rates twice in the second half of 2018, then cut the target on its overnight rate by 25 basis points on July 31st, 2019. Rates of three months and shorter rose during the period, while longer rates fell as parts of the yield curve inverted on the expectation of a cooling economy and a pause by the Fed.
Most sectors within both corporate and structured products produced returns in excess of similar-duration U.S. Treasuries. Lower rated bonds outperformed in most spread sectors in a predominantly risk-on environment, the result of strong investor demand for yield in a global environment of relatively low interest rates. However, volatility picked up in the fourth quarter of 2018, as the equity market sold off and spread sectors responded by widening. Equities rebounded and spreads narrowed in the first quarter of 2019 as relatively solid economic fundamentals increased investor risk appetites. Rate volatility escalated again during the last two months of the period, as trade tensions and tariffs weighed on global growth expectations and the market began to anticipate the Fed’s July rate cut.
Contributors and detractors
The Fund’s overweight in spread sectors made a positive contribution to performance for the period, as almost all short-term spread sectors outperformed similarly maturing U.S. Treasury securities. Overweights in both corporate bonds and asset-backed securities (ABS), were the largest contributors to performance. The Bloomberg Barclays Short-Term Corporate Index outperformed similar duration Treasuries by 44 basis points, led by finance, real estate investment trusts (REITs), basic industry and wireless sectors. An overweight in BBB-rated credits also was positive, as lower rated credits outperformed. With approximately 28% of the Fund invested in ABS, the Fund got a significant boost as ABS outperformed similar-duration Treasuries by 80 basis points, as measured by the Bloomberg Barclays Asset Backed Securities AAA Index.
U.S. government securities (U.S. Treasuries and agencies), which accounted for approximately 10% of Fund assets, were the most significant detractors from performance. As investors sought to add yield in a low rate environment, almost all spread products outperformed similar-duration U.S. government securities.
Over the 12-month period, we increased the Fund’s allocation to ABS and non-agency CMOs by a combined 7%, mostly in lieu of cash and/or U.S. government securities. We used a small allocation to U.S. Treasury futures contracts to help manage the Fund’s duration.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 5 |
Manager Discussion of Fund Performance (continued)
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. The portfolio managers and analysts 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. Mortgage- and asset-backed securities are affected by interest rates, financial health of issuers/originators, creditworthiness of entities providing credit enhancements and the value of underlying assets. 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 Fund’s income and yield. These risks may be heightened for longer maturity and duration 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. Investing in derivatives is a specialized activity involves special risks, which may result in significant losses. 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. See the Fund’s prospectus for more information on these and other risks.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are shareholder transaction costs, which may include redemption fees. There are also ongoing fund 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 $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2019 — July 31, 2019 |
| | Account value at the
beginning of the
period ($) | 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 | 1,012.70(a) | 1,022.71 | 1.85(a) | 2.11 | 0.42(a) |
| Advisor Class | 1,000.00 | 1,000.00 | 1,015.70 | 1,023.46 | 1.35 | 1.35 | 0.27 |
| Institutional Class | 1,000.00 | 1,000.00 | 1,015.80 | 1,023.31 | 1.50 | 1.51 | 0.30 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 1,016.30 | 1,023.60 | 1.20 | 1.20 | 0.24 |
| (a) | Based on operations from February 20, 2019 (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.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 7 |
Portfolio of Investments
July 31, 2019
(Percentages represent value of investments compared to net assets)
Investments in securities
| Asset-Backed Securities — Non-Agency 28.1% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Ally Auto Receivables Trust |
| Series 20 16-3 Class A4 |
| 04/15/2021 | 1.720% | | 3,231,175 | 3,226,833 |
| American Credit Acceptance Receivables Trust(a) |
| Series 2018-3 Class A |
| 08/12/2021 | 2.920% | | 1,097,145 | 1,097,605 |
| Subordinated Series 2018-3 Class B |
| 06/13/2022 | 3.490% | | 2,565,000 | 2,574,151 |
| Subordinated Series 2018-4 Class B |
| 09/12/2022 | 3.780% | | 5,000,000 | 5,037,649 |
| Subordinated Series 2019-2 Class B |
| 05/12/2023 | 3.050% | | 4,000,000 | 4,019,129 |
| Ascentium Equipment Receivables Trust(a) |
| Series 2017-2A Class A2 |
| 05/11/2020 | 2.000% | | 1,615,686 | 1,614,594 |
| Avant Loans Funding Trust(a) |
| Series 2018-B Class A |
| 01/18/2022 | 3.420% | | 3,597,751 | 3,606,189 |
| Series 2019-A Class A |
| 07/15/2022 | 3.480% | | 3,026,393 | 3,037,141 |
| CarMax Auto Owner Trust |
| Series 2019-3 Class A1 |
| 08/17/2020 | 2.257% | | 10,000,000 | 10,000,107 |
| Carvana Auto Receivables Trust(a) |
| Series 2019-1A Class A3 |
| 11/15/2022 | 3.080% | | 5,075,000 | 5,111,398 |
| CCG Receivables Trust(a) |
| Series 20 18-1 Class A2 |
| 06/16/2025 | 2.500% | | 883,812 | 884,837 |
| Series 2017-1 Class A2 |
| 11/14/2023 | 1.840% | | 1,315,679 | 1,312,323 |
| Series 2019-1 Class A2 |
| 09/14/2026 | 2.800% | | 6,375,000 | 6,407,775 |
| Chesapeake Funding II LLC(a) |
| Series 2016-2A Class A1 |
| 06/15/2028 | 1.880% | | 1,301,413 | 1,299,345 |
| Series 2017-4A Class A1 |
| 11/15/2029 | 2.120% | | 3,755,676 | 3,742,720 |
| Chesapeake Funding II LLC(a),(b) |
| Series 2017-2A Class A2 |
1-month USD LIBOR + 0.450%
Floor 0.450%
05/15/2029 | 2.775% | | 3,140,542 | 3,139,616 |
| CNH Equipment Trust |
| Series 20 16-C Class A3 |
| 12/15/2021 | 1.440% | | 3,255,362 | 3,242,654 |
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Series 2016-C Class A4 |
| 09/15/2023 | 1.760% | | 1,985,000 | 1,970,586 |
| Conn’s Receivables Funding LLC(a) |
| Series 2018-A Class A |
| 01/15/2023 | 3.250% | | 441,842 | 443,155 |
| Series 2019-A Class A |
| 10/16/2023 | 3.400% | | 1,883,063 | 1,888,220 |
| Consumer Lending Receivables Trust(a) |
| Series 2019-A Class A |
| 04/15/2026 | 3.520% | | 4,356,685 | 4,375,624 |
| DLL Securitization Trust(a) |
| Series 2017-A Class A2 |
| 07/15/2020 | 1.890% | | 97,061 | 97,039 |
| Drive Auto Receivables Trust |
| Series 2018-4 Class C |
| 11/15/2024 | 3.660% | | 4,000,000 | 4,035,571 |
| Subordinated Series 2018-4 Class D |
| 01/15/2026 | 4.090% | | 2,325,000 | 2,388,525 |
| DT Auto Owner Trust(a) |
| Series 2018-2A Class A |
| 09/15/2021 | 2.840% | | 1,052,501 | 1,052,805 |
| Series 2018-2A Class C |
| 03/15/2024 | 3.670% | | 9,429,000 | 9,556,441 |
| Series 2019-1A Class A |
| 09/15/2022 | 3.080% | | 2,116,500 | 2,123,703 |
| Series 2019-3A Class B |
| 05/15/2023 | 2.600% | | 3,650,000 | 3,645,739 |
| Enterprise Fleet Financing LLC(a) |
| Series 2017-3 Class A3 |
| 05/20/2023 | 2.360% | | 1,548,000 | 1,537,546 |
| Series 2019-2 Class A1 |
| 08/20/2020 | 2.267% | | 10,000,000 | 10,000,000 |
| Exeter Automobile Receivables Trust(a) |
| Series 2017-3A Class A |
| 12/15/2021 | 2.050% | | 394,311 | 393,806 |
| Series 2019-2A Class A |
| 07/15/2022 | 2.930% | | 2,983,802 | 2,990,287 |
| Subordinated Series 2018-4A Class C |
| 09/15/2023 | 3.970% | | 7,835,000 | 7,987,714 |
| Subordinated Series 2019-1A Class B |
| 02/15/2023 | 3.450% | | 3,000,000 | 3,026,953 |
| Fifth Third Auto Trust |
| Series 2017-1 Class A4 |
| 07/15/2024 | 2.030% | | 5,500,000 | 5,477,862 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| First Investors Auto Owner Trust(a) |
| Series 2017-2A Class A1 |
| 10/15/2021 | 1.860% | | 140,336 | 140,299 |
| Ford Credit Auto Lease Trust |
| Series 2019-B Class A2A |
| 02/15/2022 | 2.280% | | 9,275,000 | 9,269,431 |
| Ford Credit Auto Owner Trust(a) |
| Series 2015-2 Class A |
| 01/15/2027 | 2.440% | | 11,000,000 | 11,012,477 |
| Ford Credit Floorplan Master Owner Trust A |
| Series 2016-5 Class 1A |
| 11/15/2021 | 1.950% | | 9,404,000 | 9,371,126 |
| GM Financial Automobile Leasing Trust |
| Series 2018-3 Class A3 |
| 06/21/2021 | 3.180% | | 1,850,000 | 1,864,381 |
| GreatAmerica Leasing Receivables Funding LLC(a) |
| Series 20 18-1 Class A2 |
| 05/15/2020 | 2.350% | | 446,823 | 446,624 |
| Hertz Fleet Lease Funding LP(a),(b) |
| Series 2016-1 Class A1 |
1-month USD LIBOR + 1.100%
Floor 1.100%
04/10/2030 | 3.479% | | 903,830 | 904,110 |
| Series 2017-1 Class A1 |
1-month USD LIBOR + 0.650%
Floor 0.650%
04/10/2031 | 3.029% | | 4,785,892 | 4,793,468 |
| Hertz Fleet Lease Funding LP(a) |
| Series 2016-1 Class A2 |
| 04/10/2030 | 1.960% | | 852,424 | 851,912 |
| Honda Auto Receivables Owner Trust |
| Series 2016-4 Class A3 |
| 12/18/2020 | 1.210% | | 802,512 | 799,797 |
| Huntington Auto Trust |
| Series 2016-1 Class A3 |
| 11/16/2020 | 1.590% | | 637,424 | 637,217 |
| Kubota Credit Owner Trust(a) |
| Series 20 18-1A Class A2 |
| 02/16/2021 | 2.800% | | 1,927,235 | 1,930,001 |
| Marlette Funding Trust(a) |
| Series 2019-2A Class A |
| 07/16/2029 | 3.130% | | 3,608,162 | 3,628,755 |
| MMAF Equipment Finance LLC(a) |
| Series 2017-B Class A2 |
| 10/15/2020 | 1.930% | | 314,159 | 314,055 |
| Navient Private Education Refi Loan Trust(a) |
| Series 2018-A Class A1 |
| 02/18/2042 | 2.530% | | 1,746,231 | 1,748,179 |
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New York City Tax Lien Trust(a) |
| Series 2017-A Class A |
| 11/10/2030 | 1.870% | | 1,138,334 | 1,136,714 |
| Nissan Auto Lease Trust |
| Series 2017-A Class A3 |
| 04/15/2020 | 1.910% | | 573,779 | 573,579 |
| Ocwen Master Advance Receivables Trust(a) |
| Series 2018-T1 Class AT1 |
| 08/15/2049 | 3.301% | | 4,510,000 | 4,510,452 |
| OneMain Direct Auto Receivables Trust(a) |
| Series 2018-1A Class A |
| 12/16/2024 | 3.430% | | 5,939,000 | 6,034,047 |
| Prosper Marketplace Issuance Trust(a) |
| Series 2018-1A Class A |
| 06/17/2024 | 3.110% | | 497,594 | 497,721 |
| Series 2019-2A Class B |
| 09/15/2025 | 3.690% | | 2,400,000 | 2,405,773 |
| Series 2019-3A Class A |
| 07/15/2025 | 3.190% | | 5,276,945 | 5,290,541 |
| SCF Equipment Leasing LLC(a) |
| Series 2019-1A Class A1 |
| 03/20/2023 | 3.040% | | 2,574,611 | 2,583,162 |
| SLM Student Loan Trust(a),(b) |
| Series 2004-8A Class A5 |
3-month USD LIBOR + 0.500%
Cap 18.000%
04/25/2024 | 2.776% | | 1,094,821 | 1,095,625 |
| SoFi Consumer Loan Program LLC(a) |
| Series 2017-4 Class A |
| 05/26/2026 | 2.500% | | 3,382,218 | 3,381,796 |
| SoFi Consumer Loan Program LLC(a),(c) |
| Subordinated Series 2016-5 Class B |
| 09/25/2028 | 4.550% | | 2,900,000 | 2,975,734 |
| SoFi Consumer Loan Program Trust(a) |
| Series 2018-1 Class A1 |
| 02/25/2027 | 2.550% | | 350,107 | 349,699 |
| Series 2018-1 Class A2 |
| 02/25/2027 | 3.140% | | 5,000,000 | 5,033,918 |
| Series 2019-2 Class A |
| 04/25/2028 | 3.010% | | 4,841,916 | 4,852,995 |
| Series 2019-3 Class A |
| 05/25/2028 | 2.900% | | 7,044,221 | 7,065,072 |
| SoFi Professional Loan Program LLC(a) |
| Series 2017-C Class A2A |
| 07/25/2040 | 1.750% | | 458,302 | 457,209 |
| Series 2017-F Class A1FX |
| 01/25/2041 | 2.050% | | 1,262,833 | 1,258,362 |
| Series 2018-A Class A2A |
| 02/25/2042 | 2.390% | | 1,737,349 | 1,736,061 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 9 |
Portfolio of Investments (continued)
July 31, 2019
| Asset-Backed Securities — Non-Agency (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| TCF Auto Receivables Owner Trust(a) |
| Series 2016-PT1A Class A |
| 06/15/2022 | 1.930% | | 2,013,827 | 2,007,468 |
| Verizon Owner Trust(a) |
| Series 2016-1A Class A |
| 01/20/2021 | 1.420% | | 277,647 | 277,361 |
| Series 2016-2A Class A |
| 05/20/2021 | 1.680% | | 3,135,851 | 3,131,390 |
| Series 2017-1A Class A |
| 09/20/2021 | 2.060% | | 980,876 | 979,462 |
| Series 2017-2A Class A |
| 12/20/2021 | 1.920% | | 9,849,127 | 9,831,880 |
| Volvo Financial Equipment LLC(a) |
| Series 20 18-1A Class A2 |
| 09/15/2020 | 2.260% | | 968,780 | 968,420 |
| Volvo Financial Equipment Master Owner Trust(a),(b) |
| Series 2017-A Class A |
1-month USD LIBOR + 0.500%
11/15/2022 | 2.825% | | 2,750,000 | 2,757,753 |
| Wachovia Student Loan Trust(b) |
| Series 2005-1 Class A5 |
3-month USD LIBOR + 0.130%
Floor 0.130%
01/26/2026 | 2.406% | | 225,011 | 224,850 |
| Westlake Automobile Receivables Trust(a) |
| Series 2018-1A Class A2A |
| 12/15/2020 | 2.240% | | 456,666 | 456,573 |
| Series 2018-3A Class B |
| 10/16/2023 | 3.320% | | 8,700,000 | 8,766,653 |
| Series 2019-1A Class C |
| 03/15/2024 | 3.450% | | 7,315,000 | 7,407,915 |
| Westlake Automobile Receivables Trust(a),(b) |
| Series 2018-3A Class A2B |
1-month USD LIBOR + 0.350%
01/18/2022 | 2.675% | | 4,822,229 | 4,823,169 |
| Wheels SPV 2 LLC(a) |
| Series 2018-1A Class A2 |
| 04/20/2027 | 3.060% | | 945,517 | 949,561 |
| World Omni Auto Receivables Trust |
| Series 2017-A Class A3 |
| 09/15/2022 | 1.930% | | 4,358,551 | 4,344,865 |
| World Omni Automobile Lease Securitization Trust |
| Series 20 18-A Class A2 |
| 11/16/2020 | 2.590% | | 1,776,322 | 1,777,273 |
Total Asset-Backed Securities — Non-Agency
(Cost $269,232,754) | 270,000,527 |
|
| Commercial Mortgage-Backed Securities - Non-Agency 3.4% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| CFCRE Commercial Mortgage Trust |
| Series 2016-C4 Class A1 |
| 05/10/2058 | 1.501% | | 1,120,483 | 1,111,368 |
| DBUBS Mortgage Trust(a) |
| Series 2011-LC2A Class A1 |
| 07/10/2044 | 3.527% | | 581,589 | 585,524 |
| GS Mortgage Securities Corp. II |
| Series 2015-GC30 Class A1 |
| 05/10/2050 | 1.439% | | 1,358,259 | 1,352,590 |
| Home Partners of America Trust(a),(b) |
| Series 2018-1 Class A |
1-month USD LIBOR + 0.900%
Floor 0.900%
07/17/2037 | 3.200% | | 4,931,048 | 4,926,145 |
| UBS Commercial Mortgage Trust |
| Series 2012-C1 Class AAB |
| 05/10/2045 | 3.002% | | 5,209,228 | 5,233,521 |
| Wells Fargo Commercial Mortgage Trust |
| Series 2012-LC5 Class ASB |
| 10/15/2045 | 2.528% | | 4,423,161 | 4,434,152 |
| Wells Fargo Commercial Mortgage Trust(a),(b) |
| Series 2017-SMP Class A |
1-month USD LIBOR + 0.750%
Floor 0.750%
12/15/2034 | 3.075% | | 11,000,000 | 10,986,195 |
| WFRBS Commercial Mortgage Trust |
| Series 2012-C8 Class ASB |
| 08/15/2045 | 2.559% | | 4,365,975 | 4,375,513 |
Total Commercial Mortgage-Backed Securities - Non-Agency
(Cost $32,983,962) | 33,005,008 |
|
| Corporate Bonds & Notes 52.7% |
| | | | |
| Aerospace & Defense 1.7% |
| General Dynamics Corp. |
| 05/11/2020 | 2.875% | | 5,000,000 | 5,025,690 |
| L3Harris Technologies, Inc.(a) |
| 02/15/2021 | 4.950% | | 1,636,000 | 1,685,146 |
| Lockheed Martin Corp. |
| 11/15/2019 | 4.250% | | 4,958,000 | 4,983,127 |
| Northrop Grumman Corp. |
| 10/15/2020 | 2.080% | | 4,935,000 | 4,917,056 |
| Total | 16,611,019 |
| Automotive 1.0% |
| Ford Motor Credit Co. LLC |
| 01/09/2020 | 2.681% | | 5,000,000 | 4,995,700 |
| Toyota Motor Credit Corp. |
| 10/18/2019 | 1.550% | | 5,005,000 | 4,996,917 |
| Total | 9,992,617 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Banking 15.8% |
| American Express Credit Corp.(b) |
3-month USD LIBOR + 1.050%
09/14/2020 | 3.478% | | 5,878,000 | 5,931,296 |
| Australia & New Zealand Banking Group Ltd.(a),(b) |
3-month USD LIBOR + 0.660%
09/23/2019 | 3.003% | | 4,000,000 | 4,003,746 |
| Bank of America Corp.(b) |
3-month USD LIBOR + 1.420%
04/19/2021 | 3.723% | | 6,500,000 | 6,621,394 |
| Bank of Montreal(b) |
3-month USD LIBOR + 0.400%
01/22/2021 | 2.678% | | 5,000,000 | 5,012,535 |
| Bank of New York Mellon Corp. (The)(b) |
3-month USD LIBOR + 0.300%
12/04/2020 | 2.803% | | 5,000,000 | 5,004,190 |
| Bank of Nova Scotia (The)(b) |
3-month USD LIBOR + 0.420%
01/25/2021 | 2.696% | | 5,000,000 | 5,016,125 |
| Barclays Bank PLC |
| 01/11/2021 | 2.650% | | 5,000,000 | 5,002,865 |
| BB&T Corp. |
| 06/29/2020 | 2.625% | | 5,000,000 | 5,011,575 |
| Capital One NA(b) |
3-month USD LIBOR + 0.765%
09/13/2019 | 3.215% | | 5,000,000 | 5,002,027 |
| Citigroup Inc.(b) |
3-month USD LIBOR + 0.790%
Floor 0.790%
01/10/2020 | 3.128% | | 8,000,000 | 8,019,008 |
| Commonwealth Bank of Australia |
| 09/06/2019 | 2.300% | | 5,000,000 | 5,000,526 |
| Cooperatieve Rabobank UA |
| 01/14/2020 | 2.250% | | 5,000,000 | 4,999,360 |
| Discover Bank |
| 06/04/2020 | 3.100% | | 4,000,000 | 4,017,920 |
| Goldman Sachs Group, Inc. (The)(b) |
3-month USD LIBOR + 1.160%
04/23/2020 | 3.419% | | 8,000,000 | 8,044,384 |
| HSBC Holdings PLC |
| 03/08/2021 | 3.400% | | 5,300,000 | 5,368,540 |
| ING Bank NV(a) |
| 08/17/2020 | 2.700% | | 4,000,000 | 4,011,532 |
| JPMorgan Chase Bank NA(b) |
SOFR + 0.550%
10/19/2020 | 2.400% | | 7,000,000 | 6,988,023 |
| Lloyds Bank PLC |
| 08/17/2020 | 2.700% | | 4,675,000 | 4,688,997 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Manufacturers & Traders Trust Co. |
| 08/17/2020 | 2.050% | | 4,000,000 | 3,989,208 |
| Morgan Stanley(b) |
3-month USD LIBOR + 0.550%
02/10/2021 | 3.095% | | 6,000,000 | 6,006,150 |
| PNC Bank NA(b) |
3-month USD LIBOR + 0.350%
03/12/2021 | 2.786% | | 6,000,000 | 6,006,474 |
| Regions Financial Corp. |
| 02/08/2021 | 3.200% | | 4,500,000 | 4,545,014 |
| Royal Bank of Canada(b) |
3-month USD LIBOR + 0.400%
01/25/2021 | 2.676% | | 5,500,000 | 5,513,409 |
| State Street Corp. |
| 08/18/2020 | 2.550% | | 5,000,000 | 5,013,190 |
| Toronto-Dominion Bank (The)(b) |
3-month USD LIBOR + 0.260%
09/17/2020 | 2.670% | | 5,000,000 | 5,009,265 |
| US Bank NA |
| 02/04/2021 | 3.000% | | 6,000,000 | 6,059,736 |
| Wells Fargo & Co.(b) |
3-month USD LIBOR + 0.880%
07/22/2020 | 3.158% | | 7,000,000 | 7,046,669 |
| Westpac Banking Corp.(b) |
3-month USD LIBOR + 0.430%
03/06/2020 | 2.904% | | 4,885,000 | 4,896,455 |
| Total | 151,829,613 |
| Cable and Satellite 1.5% |
| NBCUniversal Enterprise, Inc.(a),(b) |
3-month USD LIBOR + 0.400%
04/01/2021 | 2.719% | | 5,000,000 | 5,015,930 |
| Sky PLC(a) |
| 09/16/2019 | 2.625% | | 5,000,000 | 4,999,935 |
| Time Warner Cable LLC |
| 02/01/2020 | 5.000% | | 4,135,000 | 4,183,338 |
| Total | 14,199,203 |
| Chemicals 0.5% |
| DowDuPont, Inc. |
| 11/15/2020 | 3.766% | | 5,000,000 | 5,084,030 |
| Construction Machinery 1.1% |
| Caterpillar Financial Services Corp.(b) |
3-month USD LIBOR + 0.250%
08/26/2020 | 2.771% | | 5,000,000 | 5,008,075 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 11 |
Portfolio of Investments (continued)
July 31, 2019
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| John Deere Capital Corp.(b) |
3-month USD LIBOR + 0.180%
01/07/2020 | 2.483% | | 5,000,000 | 5,002,710 |
| Total | 10,010,785 |
| Diversified Manufacturing 1.4% |
| General Electric Capital Corp.(b) |
3-month USD LIBOR + 0.620%
01/09/2020 | 2.931% | | 6,473,000 | 6,476,832 |
| Honeywell International, Inc. |
| 10/30/2019 | 1.800% | | 108,000 | 107,878 |
| Honeywell International, Inc.(b) |
3-month USD LIBOR + 0.280%
10/30/2019 | 2.546% | | 1,983,000 | 1,984,279 |
| United Technologies Corp. |
| 05/04/2020 | 1.900% | | 5,000,000 | 4,981,430 |
| Total | 13,550,419 |
| Electric 3.8% |
| American Electric Power Co., Inc. |
| 11/13/2020 | 2.150% | | 5,000,000 | 4,981,370 |
| Dominion Energy, Inc. |
| 08/15/2019 | 1.600% | | 4,000,000 | 3,998,173 |
| 08/15/2021 | 2.000% | | 1,172,000 | 1,158,781 |
| Duke Energy Florida LLC |
| 04/01/2020 | 4.550% | | 4,814,000 | 4,881,155 |
| Exelon Corp. |
| 06/15/2020 | 2.850% | | 5,000,000 | 5,016,500 |
| National Rural Utilities Cooperative Finance Corp. |
| 11/01/2019 | 1.500% | | 2,500,000 | 2,494,175 |
| NextEra Energy Capital Holdings, Inc.(b) |
3-month USD LIBOR + 0.315%
09/03/2019 | 2.835% | | 4,005,000 | 4,005,558 |
| Southern Power Co. |
| 12/15/2019 | 1.950% | | 5,000,000 | 4,990,230 |
| WEC Energy Group, Inc. |
| 06/15/2020 | 2.450% | | 5,000,000 | 4,995,120 |
| Total | 36,521,062 |
| Food and Beverage 1.8% |
| Anheuser-Busch InBev Finance, Inc.(b) |
3-month USD LIBOR + 1.260%
02/01/2021 | 3.513% | | 4,750,000 | 4,817,089 |
| Conagra Brands, Inc.(b) |
3-month USD LIBOR + 0.500%
10/09/2020 | 2.811% | | 417,000 | 416,281 |
| Diageo Capital PLC(b) |
3-month USD LIBOR + 0.240%
05/18/2020 | 2.760% | | 5,000,000 | 5,003,590 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Kraft Heinz Foods Co. (The)(b) |
3-month USD LIBOR + 0.570%
02/10/2021 | 3.115% | | 5,185,000 | 5,178,804 |
| PepsiCo, Inc. |
| 01/15/2020 | 4.500% | | 1,560,000 | 1,575,419 |
| Total | 16,991,183 |
| Health Care 3.2% |
| Becton Dickinson and Co. |
| 06/05/2020 | 2.404% | | 5,000,000 | 4,993,690 |
| Cardinal Health, Inc. |
| 12/15/2020 | 4.625% | | 5,000,000 | 5,130,620 |
| CVS Health Corp. |
| 03/09/2020 | 3.125% | | 5,000,000 | 5,022,585 |
| Halfmoon Parent, Inc.(a) |
| 09/17/2020 | 3.200% | | 5,000,000 | 5,036,390 |
| McKesson Corp. |
| 11/30/2020 | 3.650% | | 5,000,000 | 5,074,510 |
| Medtronic, Inc.(b) |
3-month USD LIBOR + 0.800%
03/15/2020 | 3.210% | | 5,000,000 | 5,021,825 |
| Total | 30,279,620 |
| Healthcare Insurance 1.1% |
| Anthem, Inc. |
| 08/15/2020 | 4.350% | | 5,000,000 | 5,098,420 |
| UnitedHealth Group, Inc. |
| 07/15/2020 | 2.700% | | 4,988,000 | 5,009,049 |
| Total | 10,107,469 |
| Independent Energy 0.1% |
| Woodside Finance Ltd.(a) |
| 05/10/2021 | 4.600% | | 1,100,000 | 1,129,135 |
| Integrated Energy 1.1% |
| BP Capital Markets PLC |
| 02/13/2020 | 2.315% | | 5,965,000 | 5,962,859 |
| Chevron Corp.(b) |
3-month USD LIBOR + 0.210%
03/03/2020 | 2.730% | | 5,000,000 | 5,005,195 |
| Total | 10,968,054 |
| Life Insurance 2.1% |
| American International Group, Inc. |
| 03/01/2021 | 3.300% | | 5,000,000 | 5,063,185 |
| Metropolitan Life Global Funding I(a),(b) |
3-month USD LIBOR + 0.220%
09/19/2019 | 2.639% | | 4,000,000 | 4,001,905 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Principal Life Global Funding II(a) |
| 01/10/2020 | 2.150% | | 5,000,000 | 4,990,040 |
| Prudential Financial, Inc. |
| 06/21/2020 | 5.375% | | 5,865,000 | 6,023,619 |
| Total | 20,078,749 |
| Media and Entertainment 0.5% |
| Discovery Communications LLC(b) |
3-month USD LIBOR + 0.710%
09/20/2019 | 3.097% | | 5,000,000 | 5,003,269 |
| Midstream 2.0% |
| Enterprise Products Operating LLC |
| 10/15/2019 | 2.550% | | 5,000,000 | 4,999,395 |
| Kinder Morgan, Inc. |
| 12/01/2019 | 3.050% | | 5,394,000 | 5,399,847 |
| Plains All American Pipeline LP/Finance Corp. |
| 01/15/2020 | 5.750% | | 3,784,000 | 3,832,163 |
| Williams Companies, Inc. (The) |
| 03/15/2020 | 5.250% | | 5,000,000 | 5,081,550 |
| Total | 19,312,955 |
| Office REIT 0.5% |
| Boston Properties LP |
| 11/15/2020 | 5.625% | | 5,000,000 | 5,166,040 |
| Pharmaceuticals 3.0% |
| AbbVie, Inc. |
| 05/14/2020 | 2.500% | | 5,000,000 | 5,002,805 |
| Amgen, Inc. |
| 10/01/2020 | 3.450% | | 4,833,000 | 4,888,584 |
| Bristol-Myers Squibb Co.(a),(b) |
3-month USD LIBOR + 0.200%
11/16/2020 | 2.725% | | 5,000,000 | 5,004,265 |
| Gilead Sciences, Inc. |
| 09/20/2019 | 1.850% | | 5,000,000 | 4,996,401 |
| Merck & Co., Inc.(b) |
3-month USD LIBOR + 0.375%
02/10/2020 | 2.920% | | 1,570,000 | 1,572,967 |
| Roche Holdings, Inc.(a),(b) |
3-month USD LIBOR + 0.340%
09/30/2019 | 2.670% | | 3,400,000 | 3,401,941 |
| Shire Acquisitions Investments Ireland DAC |
| 09/23/2019 | 1.900% | | 4,000,000 | 3,996,183 |
| Total | 28,863,146 |
| Property & Casualty 1.1% |
| Chubb INA Holdings, Inc. |
| 11/03/2020 | 2.300% | | 5,000,000 | 5,000,480 |
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Hartford Financial Services Group, Inc. (The) |
| 03/30/2020 | 5.500% | | 5,000,000 | 5,101,565 |
| Total | 10,102,045 |
| Railroads 0.5% |
| CSX Corp. |
| 10/30/2020 | 3.700% | | 5,000,000 | 5,068,760 |
| Retail REIT 1.2% |
| Kimco Realty Corp. |
| 05/01/2021 | 3.200% | | 5,000,000 | 5,053,280 |
| Simon Property Group LP |
| 03/01/2021 | 4.375% | | 6,000,000 | 6,161,670 |
| Total | 11,214,950 |
| Retailers 1.2% |
| Lowe’s Companies, Inc.(b) |
3-month USD LIBOR + 0.420%
Floor 0.420%
09/10/2019 | 2.873% | | 2,009,000 | 2,010,048 |
| Target Corp. |
| 07/15/2020 | 3.875% | | 5,000,000 | 5,079,165 |
| Walmart, Inc. |
| 10/09/2019 | 1.750% | | 4,715,000 | 4,709,516 |
| Total | 11,798,729 |
| Supermarkets 0.5% |
| Kroger Co. (The) |
| 09/30/2019 | 1.500% | | 5,000,000 | 4,991,525 |
| Technology 2.9% |
| Apple, Inc.(b) |
3-month USD LIBOR + 0.140%
08/02/2019 | 2.705% | | 4,000,000 | 4,000,045 |
3-month USD LIBOR + 0.300%
05/06/2020 | 2.835% | | 1,687,000 | 1,690,138 |
| Broadcom Corp./Cayman Finance Ltd. |
| 01/15/2020 | 2.375% | | 5,000,000 | 4,992,945 |
| Cisco Systems, Inc. |
| 06/15/2020 | 2.450% | | 4,000,000 | 4,009,876 |
| IBM Credit LLC |
| 11/30/2020 | 3.450% | | 4,605,000 | 4,673,937 |
| Oracle Corp. |
| 07/15/2020 | 3.875% | | 4,713,000 | 4,788,040 |
| QUALCOMM, Inc.(b) |
3-month USD LIBOR + 0.550%
05/20/2020 | 3.070% | | 3,347,000 | 3,353,028 |
| Total | 27,508,009 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 13 |
Portfolio of Investments (continued)
July 31, 2019
| Corporate Bonds & Notes (continued) |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Transportation Services 0.5% |
| ERAC U.S.A. Finance LLC(a) |
| 10/15/2019 | 2.350% | | 5,000,000 | 4,998,230 |
| Wireless 0.5% |
| American Tower Corp. |
| 06/01/2020 | 2.800% | | 4,500,000 | 4,509,607 |
| Wirelines 2.1% |
| AT&T, Inc. |
| 06/30/2020 | 2.450% | | 6,000,000 | 5,999,814 |
| Deutsche Telekom International Finance BV(a) |
| 01/17/2020 | 2.225% | | 5,000,000 | 4,990,840 |
| Orange SA |
| 11/03/2019 | 1.625% | | 3,628,000 | 3,619,101 |
| Verizon Communications, Inc. |
| 03/15/2021 | 3.450% | | 5,000,000 | 5,092,995 |
| Total | 19,702,750 |
Total Corporate Bonds & Notes
(Cost $504,189,785) | 505,592,973 |
|
| Foreign Government Obligations(d) 1.1% |
| | | | |
| Canada 1.1% |
| Province of Ontario |
| 05/21/2020 | 1.875% | | 5,000,000 | 4,987,945 |
| Province of Quebec |
| 07/29/2020 | 3.500% | | 5,000,000 | 5,066,805 |
| Total | 10,054,750 |
Total Foreign Government Obligations
(Cost $9,996,591) | 10,054,750 |
|
| Residential Mortgage-Backed Securities - Agency 0.0% |
| | | | |
| Federal Home Loan Mortgage Corp.(b) |
1-year CMT + 2.255%
Cap 11.187%
02/01/2036 | 4.883% | | 78,009 | 81,831 |
| Federal National Mortgage Association(b) |
12-month USD LIBOR + 2.130%
Floor 2.130%, Cap 10.130%
03/01/2034 | 5.130% | | 122,408 | 125,008 |
Total Residential Mortgage-Backed Securities - Agency
(Cost $199,411) | 206,839 |
|
| Residential Mortgage-Backed Securities - Non-Agency 4.1% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Bellemeade Re Ltd.(a),(b) |
| CMO Series 2019-1A Class M1A |
1-month USD LIBOR + 1.300%
Floor 1.300%
03/25/2029 | 3.566% | | 2,963,229 | 2,963,758 |
| CMO Series 2019-2A Class M1A |
1-month USD LIBOR + 1.000%
Floor 1.000%
04/25/2029 | 3.266% | | 3,125,000 | 3,126,831 |
| CMO Series 2019-3A Class M1A |
1-month USD LIBOR + 1.100%
Floor 1.100%
07/25/2029 | 3.490% | | 3,425,000 | 3,425,558 |
| Mill City Mortgage Loan Trust(a),(c) |
| CMO Series 2018-4 Class A1A |
| 04/25/2066 | 3.500% | | 2,741,339 | 2,740,903 |
| Preston Ridge Partners Mortgage LLC(a) |
| CMO Series 2019-2A Class A1 |
| 04/25/2024 | 3.967% | | 3,232,986 | 3,269,663 |
| Radnor Re Ltd.(a),(b) |
| CMO Series 2019-2 Class M1A |
1-month USD LIBOR + 1.200%
Floor 1.200%
06/25/2029 | 3.466% | | 8,500,000 | 8,496,414 |
| RCO V Mortgage LLC(a) |
| CMO Series 2019-1 Class A1 |
| 05/24/2024 | 3.721% | | 2,842,288 | 2,842,285 |
| Verus Securitization Trust(a),(c) |
| CMO Series 2018-3 Class A3 |
| 10/25/2058 | 4.282% | | 6,809,398 | 6,968,252 |
| CMO Series 2019-1 Class A2 |
| 02/25/2059 | 3.938% | | 3,539,087 | 3,578,979 |
| CMO Series 2019-INV1 Class A3 |
| 12/25/2059 | 3.658% | | 2,043,522 | 2,081,367 |
Total Residential Mortgage-Backed Securities - Non-Agency
(Cost $39,218,199) | 39,494,010 |
|
| U.S. Government & Agency Obligations 4.0% |
| | | | |
| Federal Farm Credit Banks(b) |
1-month USD LIBOR + 0.050%
02/21/2020 | 2.322% | | 38,350,000 | 38,358,322 |
Total U.S. Government & Agency Obligations
(Cost $38,350,381) | 38,358,322 |
|
| U.S. Treasury Obligations 4.0% |
| | | | |
| U.S. Treasury |
| 08/31/2019 | 1.000% | | 38,500,000 | 38,458,399 |
Total U.S. Treasury Obligations
(Cost $38,446,927) | 38,458,399 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Money Market Funds 2.4% |
| | Shares | Value ($) |
| Columbia Short-Term Cash Fund, 2.361%(e),(f) | 23,246,313 | 23,243,988 |
Total Money Market Funds
(Cost $23,243,988) | 23,243,988 |
Total Investments in Securities
(Cost: $955,861,998) | 958,414,816 |
| Other Assets & Liabilities, Net | | 1,696,145 |
| Net Assets | 960,110,961 |
At July 31, 2019, securities and/or cash totaling $106,000 were pledged as collateral.
| Short futures contracts |
| Description | Number of
contracts | Expiration
date | Trading
currency | Notional
amount | Value/Unrealized
appreciation ($) | Value/Unrealized
depreciation ($) |
| U.S. Treasury 2-Year Note | (200) | 09/2019 | USD | (42,881,250) | — | (27,169) |
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission 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, 2019, the total value of these securities amounted to $320,056,779, which represents 33.34% of total net assets. |
| (b) | Variable rate security. The interest rate shown was the current rate as of July 31, 2019. |
| (c) | Variable or floating rate security, the interest rate of which adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. The interest rate shown was the current rate as of July 31, 2019. |
| (d) | Principal and interest may not be guaranteed by the government. |
| (e) | The rate shown is the seven-day current annualized yield at July 31, 2019. |
| (f) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the year ended July 31, 2019 are as follows: |
| Issuer | Beginning
shares | Shares
purchased | Shares
sold | Ending
shares | Realized gain
(loss) —
affiliated
issuers ($) | Net change in
unrealized
appreciation
(depreciation) —
affiliated
issuers ($) | Dividends —
affiliated
issuers ($) | Value —
affiliated
issuers
at end of
period ($) |
| Columbia Short-Term Cash Fund, 2.361% |
| | 44,442,065 | 716,963,765 | (738,159,517) | 23,246,313 | 1,210 | — | 941,353 | 23,243,988 |
Abbreviation Legend
| CMO | Collateralized Mortgage Obligation |
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.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 15 |
Portfolio of Investments (continued)
July 31, 2019
Fair value measurements (continued)
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.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2019:
| | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) |
| Investments in Securities | | | | |
| Asset-Backed Securities — Non-Agency | — | 270,000,527 | — | 270,000,527 |
| Commercial Mortgage-Backed Securities - Non-Agency | — | 33,005,008 | — | 33,005,008 |
| Corporate Bonds & Notes | — | 505,592,973 | — | 505,592,973 |
| Foreign Government Obligations | — | 10,054,750 | — | 10,054,750 |
| Residential Mortgage-Backed Securities - Agency | — | 206,839 | — | 206,839 |
| Residential Mortgage-Backed Securities - Non-Agency | — | 39,494,010 | — | 39,494,010 |
| U.S. Government & Agency Obligations | — | 38,358,322 | — | 38,358,322 |
| U.S. Treasury Obligations | 38,458,399 | — | — | 38,458,399 |
| Money Market Funds | 23,243,988 | — | — | 23,243,988 |
| Total Investments in Securities | 61,702,387 | 896,712,429 | — | 958,414,816 |
| Investments in Derivatives | | | | |
| Liability | | | | |
| Futures Contracts | (27,169) | — | — | (27,169) |
| Total | 61,675,218 | 896,712,429 | — | 958,387,647 |
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).
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Statement of Assets and Liabilities
July 31, 2019
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $932,618,010) | $935,170,828 |
| Affiliated issuers (cost $23,243,988) | 23,243,988 |
| Cash | 854,276 |
| Margin deposits on: | |
| Futures contracts | 106,000 |
| Receivable for: | |
| Investments sold | 219 |
| Capital shares sold | 4,051,276 |
| Dividends | 108,610 |
| Interest | 3,801,522 |
| Foreign tax reclaims | 5,411 |
| Variation margin for futures contracts | 35,938 |
| Prepaid expenses | 6,279 |
| Trustees’ deferred compensation plan | 115,432 |
| Total assets | 967,499,779 |
| Liabilities | |
| Payable for: | |
| Investments purchased | 4,261,203 |
| Capital shares purchased | 938,463 |
| Distributions to shareholders | 2,017,994 |
| Management services fees | 5,508 |
| Distribution and/or service fees | 479 |
| Transfer agent fees | 4,066 |
| Compensation of chief compliance officer | 37 |
| Other expenses | 45,636 |
| Trustees’ deferred compensation plan | 115,432 |
| Total liabilities | 7,388,818 |
| Net assets applicable to outstanding capital stock | $960,110,961 |
| Represented by | |
| Paid in capital | 969,480,552 |
| Total distributable earnings (loss) (Note 2) | (9,369,591) |
| Total - representing net assets applicable to outstanding capital stock | $960,110,961 |
| Class A | |
| Net assets | $118,624,700 |
| Shares outstanding | 13,135,607 |
| Net asset value per share | $9.03 |
| Advisor Class | |
| Net assets | $12,063 |
| Shares outstanding | 1,335 |
| Net asset value per share | $9.04 |
| Institutional Class | |
| Net assets | $61,044,044 |
| Shares outstanding | 6,754,556 |
| Net asset value per share | $9.04 |
| Institutional 3 Class | |
| Net assets | $780,430,154 |
| Shares outstanding | 86,340,675 |
| Net asset value per share | $9.04 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 17 |
Statement of Operations
Year Ended July 31, 2019
| Net investment income | |
| Income: | |
| Dividends — affiliated issuers | $941,353 |
| Interest | 24,457,378 |
| Interfund lending | 4,024 |
| Total income | 25,402,755 |
| Expenses: | |
| Management services fees | 2,159,802 |
| Distribution and/or service fees | |
| Class A(a) | 20,132 |
| Transfer agent fees | |
| Class A(a) | 3,615 |
| Advisor Class(b) | 20 |
| Institutional Class(c) | 5,394 |
| Institutional 3 Class | 48,457 |
| Compensation of board members | 26,610 |
| Custodian fees | 13,403 |
| Printing and postage fees | 15,489 |
| Registration fees | 62,200 |
| Audit fees | 31,501 |
| Legal fees | 14,478 |
| Compensation of chief compliance officer | 316 |
| Other | 18,115 |
| Total expenses | 2,419,532 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (25,752) |
| Total net expenses | 2,393,780 |
| Net investment income | 23,008,975 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | (524,685) |
| Investments — affiliated issuers | 1,210 |
| Futures contracts | (77,331) |
| Net realized loss | (600,806) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 4,075,999 |
| Futures contracts | (27,169) |
| Net change in unrealized appreciation (depreciation) | 4,048,830 |
| Net realized and unrealized gain | 3,448,024 |
| Net increase in net assets resulting from operations | $26,456,999 |
| (a) | Class A shares are based on operations from February 20, 2019 (commencement of operations) through the stated period end. |
| (b) | Advisor Class shares are based on operations from December 3, 2018 (commencement of operations) through the stated period end. |
| (c) | Institutional Class shares are based on operations from December 3, 2018 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2019(a),(b),(c) | Year Ended
July 31, 2018 |
| Operations | | |
| Net investment income | $23,008,975 | $21,512,339 |
| Net realized gain (loss) | (600,806) | 676,781 |
| Net change in unrealized appreciation (depreciation) | 4,048,830 | (2,929,510) |
| Net increase in net assets resulting from operations | 26,456,999 | 19,259,610 |
| Distributions to shareholders | | |
| Net investment income and net realized gains | | |
| Class A | (326,442) | |
| Advisor Class | (191) | |
| Institutional Class | (255,532) | |
| Institutional 3 Class | (22,427,336) | |
| Net investment income | | |
| Institutional 3 Class | | (21,812,017) |
| Total distributions to shareholders (Note 2) | (23,009,501) | (21,812,017) |
| Decrease in net assets from capital stock activity | (171,412,189) | (604,400,478) |
| Total decrease in net assets | (167,964,691) | (606,952,885) |
| Net assets at beginning of year | 1,128,075,652 | 1,735,028,537 |
| Net assets at end of year | $960,110,961 | $1,128,075,652 |
| Undistributed net investment income | $248,539 | $111,309 |
| | Year Ended | Year Ended |
| | July 31, 2019(a),(b),(c) | July 31, 2018 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions | 14,136,619 | 127,637,753 | — | — |
| Distributions reinvested | 36,126 | 326,317 | — | — |
| Redemptions | (1,037,138) | (9,366,739) | — | — |
| Net increase | 13,135,607 | 118,597,331 | — | — |
| Advisor Class | | | | |
| Subscriptions | 1,335 | 12,000 | — | — |
| Net increase | 1,335 | 12,000 | — | — |
| Institutional Class | | | | |
| Subscriptions | 7,322,723 | 66,145,725 | — | — |
| Distributions reinvested | 28,257 | 255,340 | — | — |
| Redemptions | (596,424) | (5,390,562) | — | — |
| Net increase | 6,754,556 | 61,010,503 | — | — |
| Institutional 3 Class | | | | |
| Subscriptions | 35,005,996 | 315,411,229 | 41,832,597 | 376,869,925 |
| Distributions reinvested | 663,644 | 5,984,855 | 294,923 | 2,655,532 |
| Redemptions | (74,649,129) | (672,428,107) | (109,224,275) | (983,925,935) |
| Net decrease | (38,979,489) | (351,032,023) | (67,096,755) | (604,400,478) |
| Total net decrease | (19,087,991) | (171,412,189) | (67,096,755) | (604,400,478) |
| (a) | Class A shares are based on operations from February 20, 2019 (commencement of operations) through the stated period end. |
| (b) | Advisor Class shares are based on operations from December 3, 2018 (commencement of operations) through the stated period end. |
| (c) | Institutional Class shares are based on operations from December 3, 2018 (commencement of operations) through the stated period end. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 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.
| | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Total
distributions to
shareholders |
| Class A |
| Year Ended 7/31/2019(c) | $9.01 | 0.09 | 0.02 | 0.11 | (0.09) | (0.09) |
| Advisor Class |
| Year Ended 7/31/2019(e) | $8.99 | 0.14 | 0.05 | 0.19 | (0.14) | (0.14) |
| Institutional Class |
| Year Ended 7/31/2019(f) | $8.99 | 0.15 | 0.04 | 0.19 | (0.14) | (0.14) |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $9.00 | 0.22 | 0.04 | 0.26 | (0.22) | (0.22) |
| Year Ended 7/31/2018 | $9.02 | 0.14 | (0.01) | 0.13 | (0.15) | (0.15) |
| Year Ended 7/31/2017 | $9.01 | 0.10 | 0.01 | 0.11 | (0.10) | (0.10) |
| Year Ended 7/31/2016 | $9.00 | 0.06 | 0.01 | 0.07 | (0.06) | (0.06) |
| Year Ended 7/31/2015 | $9.00 | 0.03 | (0.00)(g) | 0.03 | (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) | Class A shares commenced operations on February 20, 2019. Per share data and total return reflect activity from that date. |
| (d) | Annualized. |
| (e) | Advisor Class shares commenced operations on December 3, 2018. Per share data and total return reflect activity from that date. |
| (f) | Institutional Class shares commenced operations on December 3, 2018. Per share data and total return reflect activity from that date. |
| (g) | Rounds to zero. |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Class A |
| Year Ended 7/31/2019(c) | $9.03 | 1.27% | 0.42%(d) | 0.42%(d) | 2.43%(d) | 95% | $118,625 |
| Advisor Class |
| Year Ended 7/31/2019(e) | $9.04 | 2.16% | 0.27%(d) | 0.27%(d) | 2.52%(d) | 95% | $12 |
| Institutional Class |
| Year Ended 7/31/2019(f) | $9.04 | 2.18% | 0.30%(d) | 0.30%(d) | 2.63%(d) | 95% | $61,044 |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $9.04 | 2.91% | 0.25% | 0.25% | 2.40% | 95% | $780,430 |
| Year Ended 7/31/2018 | $9.00 | 1.40% | 0.26% | 0.25% | 1.56% | 66% | $1,128,076 |
| Year Ended 7/31/2017 | $9.02 | 1.19% | 0.26% | 0.25% | 1.08% | 111% | $1,735,029 |
| Year Ended 7/31/2016 | $9.01 | 0.77% | 0.26% | 0.25% | 0.65% | 82% | $1,472,360 |
| Year Ended 7/31/2015 | $9.00 | 0.37% | 0.26% | 0.25% | 0.37% | 62% | $1,519,180 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 21 |
Notes to Financial Statements
July 31, 2019
Note 1. Organization
Columbia Ultra Short Term Bond Fund (formerly known as 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.
Effective December 3, 2018, CMG Ultra Short Term Bond Fund was renamed Columbia Ultra Short Term Bond Fund.
Columbia Ultra Short Term Bond Fund must be purchased through financial intermediaries that, by written agreement with Columbia Management Investment Distributors, Inc., are specifically authorized to sell the Fund’s shares.
Fund shares
The Trust may issue an unlimited number of shares (without par value). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. 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. Each share class has its own expense and sales charge structure. Different share classes may have different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s prospectus, Class A and Class C shares are offered to the general public for investment. Advisor Class, Institutional Class and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional and to certain other investors as also described in the Fund’s prospectus. Class C shares automatically convert to Class A shares after 10 years. Class A shares commenced operations on February 20, 2019. Advisor Class and Institutional Class shares commenced operations on December 3, 2018. Prior to December 1, 2018 Institutional 3 Class shares were known as unnamed class of shares.
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.
| 22 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Investments in open-end investment companies, including money market funds, are valued at their latest net asset 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 Ultra Short Term Bond Fund | Annual Report 2019
| 23 |
Notes to Financial Statements (continued)
July 31, 2019
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 for most over-the-counter derivatives are subject to regulatory requirements to exchange variation margin with trading counterparties and may have contract specific margin terms as well. 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 may also pay interest expense on cash collateral received from the broker. Any interest expense paid by the Fund is shown on the Statement of Operations. 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 determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, 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.
| 24 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019:
| | Liability derivatives | |
Risk exposure
category | Statement
of assets and liabilities
location | Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized depreciation on futures contracts | 27,169* |
| * | 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, 2019:
| Amount of realized gain (loss) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | (77,331) |
| |
| Change in unrealized appreciation (depreciation) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | (27,169) |
The following table is a summary of the average outstanding volume by derivative instrument for the year ended July 31, 2019:
| Derivative instrument | Average notional
amounts ($)* |
| Futures contracts — short | 17,110,547 |
| * | Based on the ending quarterly outstanding amounts for the year ended July 31, 2019. |
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.
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.
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| 25 |
Notes to Financial Statements (continued)
July 31, 2019
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 investment company taxable income and net capital gain, 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 ordinary income, capital gain net income 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 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 pronouncements
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. Management does not expect the implementation of this guidance to have a material impact on the financial statement amounts and footnote disclosures.
| 26 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Accounting Standards Update 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. After evaluation, Management determined to adopt the ASU effective for periods ending July 31, 2019 and all subsequent periods. As a result of the amendments, management implemented disclosure changes which include removal of the amount and reasons for transfers between level 1 and level 2 of the fair value hierarchy, removal of the policy for the timing of transfers between levels, removal of the description of the level 3 valuation processes, as well as modifications to the measurement uncertainty disclosure.
Disclosure Update and Simplification
In September 2018, the Securities and Exchange Commission (SEC) released Final Rule 33-10532, Disclosure Update and Simplification, which amends certain financial statement disclosure requirements that the SEC determined to be redundant, outdated, or superseded in light of other SEC disclosure requirements, GAAP, or changes in the information environment. As a result of the amendments, management implemented disclosure changes which included removing the components of distributable earnings presented on the Statement of Assets and Liabilities and combining income and gain distributions paid to shareholders as presented on the Statement of Changes in Net Assets. Any values presented to meet prior year requirements were left unchanged. The amendments had no effect on the Fund’s net assets or results of operation.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund has 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. Prior to December 1, 2018, the Fund paid a unified fee of 0.25% to the Investment Manager. The Investment Manager, out of the unified fee it received from the Fund, paid all operating costs and expenses of the Fund (other than the expenses described below), including accounting expenses (other than audit fees), legal fees for the Fund, transfer agent and custodian fees, and other expenses. The Fund paid the following 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. Shareholders of the then existing (unnamed) share class approved a proposal at a special meeting of shareholders on October 17, 2018 to unbundle the unified fee such that the Fund’s management fee would be reduced to the annual rate of 0.21% of the Fund’s average daily net assets, and the Fund would bear its own custody, transfer agency, legal, audit, registration and other expenses. The annualized effective management services fee rate for the year ended July 31, 2019 was 0.23% 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 Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Deferred 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. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 27 |
Notes to Financial Statements (continued)
July 31, 2019
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 DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST is not entitled to reimbursement for such fees from the Fund (with the exception of out-of-pocket fees).
Effective December 1, 2018, 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, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 3 Class shares are subject to an annual limitation of not more than 0.02% of the average daily net assets attributable to Institutional 3 Class shares.
Prior to December 1, 2018, the Investment Manager paid the transfer agent fees out of the unified fee it received from the Fund.
For the year ended July 31, 2019, 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(a) |
| Advisor Class | 0.03(a) |
| Institutional Class | 0.06(a) |
| Institutional 3 Class | 0.01 |
Distribution and service fees
The Fund has entered into an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly combined distribution and service fee to the Distributor at the maximum annual rate of 0.15% of the average daily net assets attributable to Class A shares of 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) for the period(s) disclosed below, unless sooner terminated at the sole discretion of the Board of Trustees for Class A, Advisor Class and Institutional Class and permanently for as long as the
| 28 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Investment Manager manages the Fund for Institutional 3 Class, 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:
| | Fee rate(s) contractual
through
November 30, 2019 |
| Class A | 0.52%* |
| Advisor Class | 0.37** |
| Institutional Class | 0.37** |
| Institutional 3 Class | 0.25 |
*Expense cap rate is contractual from February 20, 2019 (the commencement of operations of Class A shares) through November 30, 2019.
**Expense cap rate is contractual from December 3, 2018 (the commencement of operations of Advisor Class and Institutional Class shares) through November 30, 2019.
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. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share class) are waived proportionately across all share classes, but the Fund’s net operating expenses shall not exceed the contractual annual rates listed in the table above. This arrangement may be revised or discontinued at any time. Any fees waived and/or expenses reimbursed under the expense reimbursement arrangements described above are not recoverable by the Investment Manager or its affiliates in future periods.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At July 31, 2019, these differences were primarily due to differing treatment for deferral/reversal of wash sale losses, tax straddles, capital loss carryforwards, trustees’ deferred compensation, distributions and principal and/or interest from fixed income securities. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The following reclassifications were made:
Undistributed net
investment
income ($) | Accumulated
net realized
(loss) ($) | Paid in
capital ($) |
| 137,756 | 11,232,172 | (11,369,928) |
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2019 | Year Ended July 31, 2018 |
Ordinary
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Long-term
capital gains ($) | Total ($) |
| 23,009,501 | — | 23,009,501 | 21,812,017 | — | 21,812,017 |
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 29 |
Notes to Financial Statements (continued)
July 31, 2019
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2019, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| 2,381,965 | — | (12,104,513) | 2,486,383 |
At July 31, 2019, the cost of all 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) ($) | Net unrealized
appreciation ($) |
| 955,901,264 | 2,721,189 | (234,806) | 2,486,383 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss carryforwards, determined at July 31, 2019, 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, 2019, capital loss carryforwards utilized and expired unused, if any, were as follows:
No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) |
| 4,290,807 | 7,813,706 | 12,104,513 | — | 11,369,928 |
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 $883,170,912 and $1,029,979,239, respectively, for the year ended July 31, 2019, of which $130,717,272 and $213,315,282, respectively, were U.S. government securities. 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. The Affiliated MMF prices its shares with a floating net asset value. 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.
| 30 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Note 7. Interfund lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and, except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject to certain restrictions.
Interfund loans are subject to the risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund’s activity in the Interfund Program during the year ended July 31, 2019 was as follows:
| Borrower or lender | Average loan
balance ($) | Weighted average
interest rate (%) | Days
outstanding |
| Lender | 3,542,857 | 2.86 | 14 |
Interest income earned by the Fund is recorded as Interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at July 31, 2019.
Note 8. 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 or an affiliated 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 federal funds effective rate, (ii) the one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 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 unused 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. This agreement expires annually in December unless extended or renewed.
The Fund had no borrowings during the year ended July 31, 2019.
Note 9. 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 defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower rated or unrated debt instruments held by the Fund may present increased credit risk as compared to higher-rated debt instruments.
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. Changes in interest rates may also affect the liquidity of the Fund’s investments in debt instruments. In general, the longer the maturity or duration of a debt instrument, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the Fund’s performance. 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.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 31 |
Notes to Financial Statements (continued)
July 31, 2019
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, 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 liquidity risk and prepayment risk. A decline or flattening of housing values may cause delinquencies in the mortgages (especially sub-prime or non-prime mortgages) underlying mortgage-backed securities and thereby adversely affect the ability of the mortgage-backed securities issuer to make principal and/or interest payments to mortgage-backed securities holders, including the Fund. 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, 2019, one unaffiliated shareholder of record owned 51.5% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated shareholders of record owned 47.1% 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 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 10. 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 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.
| 32 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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 Ultra Short Term Bond Fund | Annual Report 2019
| 33 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Columbia Funds Series Trust I and Shareholders of Columbia Ultra Short Term Bond Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia Ultra Short Term Bond Fund (one of the funds constituting Columbia Funds Series Trust I, hereafter referred to as the "Fund") as of July 31, 2019, the related statement of operations for the year ended July 31, 2019, the statement of changes in net assets for each of the two years in the period ended July 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2019, 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 ended July 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2019 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 20, 2019
We have served as the auditor of one or more investment companies within the Columbia Funds Complex since 1977.
| 34 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
The Board oversees the Fund’s operations and 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 as of the printing of this report, 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), September 2007-October 2018 | 69 | 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, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 69 | Spartan Nash Company, (food distributor); former Director, Nash Finch Company (food distributor), 2005-2013; Aircastle Limited (aircraft leasing); former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; 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), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 69 | 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 | 69 | Director, CSX Corporation (transportation suppliers); 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 Ultra Short Term Bond Fund | Annual Report 2019
| 35 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during 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 |
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, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 69 | 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, 1988-2014 | 69 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
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, 1994-1997, President – Application Systems Division, 1991-1994, Chief Financial Officer – US Marketing & Services, 1988-1991, and Chief Information Officer, 1987-1988, IBM Corporation (computer and technology) | 69 | Former Director, Enesco Group, Inc. (producer of giftware and home and garden decor products), 2001-2006 |
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; Adjunct Professor of Finance, Bentley University since November 2017; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2009-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 69 | Director, The Autism Project since March 2015; former Trustee, New Century Portfolios, March 2015-December 2017; formerly on Board of Governors, Gateway Healthcare, January 2016 – December 2017 |
| 36 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
TRUSTEES AND OFFICERS (continued)
Consultants to the 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 Funds complex overseen | Other directorships held by Trustee during the past five years |
Olive Darragh
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street,
Mail Drop BX32 05228,
Boston, MA 02110
1962 | Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio (an investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 69 | Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
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 Portfolio Solutions LLC (asset management and consulting services) since January 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 69 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions) |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. 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, Ms. Darragh 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 | 190 | 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, August 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, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 37 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund as of the printing of this report, 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 | Chief Financial Officer (Principal Financial Officer) (2009) and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 - May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously Treasurer and Chief Accounting Officer, January 2009 - January 2019 and December 2015 - January 2019, respectively). |
Joseph Beranek
5890 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Treasurer and Chief Accounting Officer (Principal Accounting Officer) (2019) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
Paul B. Goucher
485 Lexington 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); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
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. |
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 Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); 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. |
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. |
| 38 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Board Consideration and Approval of Management
Agreement
On June 12, 2019, 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 Ultra Short Term Bond Fund (the Fund) (formerly, CMG Ultra Short Term Bond 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, among themselves, with the management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant 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 5, 2019, April 25, 2019 and June 11, 2019 and at Board meetings held on March 6, 2019 and June 12, 2019. In addition, the Board and its various committees consider matters bearing on the Management Agreement at other meetings throughout the year and in prior years and meet 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 with other investment personnel at various times throughout the year. The Committee and the Board also consulted with the 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 11, 2019, the Committee recommended that the Board approve the continuation of the Management Agreement. On June 12, 2019, 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 enchmarks; |
| • | 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, 2019 (and, with respect to Class Inst3, for as long as the Investment Manager manages the Fund) 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 accounts and collective trusts; |
| • | Information regarding the reputation, regulatory history and resources of the Investment Manager, including information regarding senior management, portfolio managers and other personnel; |
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 39 |
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 determined to be comparable to the Fund by an independent third-party data provider, as well as performance relative to bprofitability 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 funds using an investment strategy similar to that used by the Investment Manager for the Fund. 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 the resources dedicated by the Investment Manager and its affiliates to risk management, 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, 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 information and analysis 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 support 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, 2018, the Fund’s performance was in the thirtieth, sixty-second and fifty-eighth 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.
| 40 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
Board Consideration and Approval of Management
Agreement (continued)
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 support 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, 2018, the Fund’s actual management fee and net total expense ratio were 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 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, supported 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, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
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 2018 to profitability levels realized in 2017. 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.
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 41 |
Board Consideration and Approval of Management
Agreement (continued)
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.
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 noted 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. 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 considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. 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.
| 42 | Columbia Ultra Short Term Bond Fund | Annual Report 2019 |
The Fund mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. 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/investor/; 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/investor/, 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-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, 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/investor/ 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 219104
Kansas City, MO 64121-9104
Columbia Ultra Short Term Bond Fund | Annual Report 2019
| 43 |
Columbia Ultra Short Term Bond Fund
P.O. Box 219104
Kansas City, MO 64121-9104
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/investor/. 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
© 2019 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Annual Report
July 31, 2019
Columbia U.S. Social Bond Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (columbiathreadneedleus.com/investor/), and each time a report is posted you will be notified by mail and provided with a website address to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with the Fund, by calling 800.345.6611 or by enrolling in “eDelivery” by logging into your account at columbiathreadneedleus.com/investor/.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800.345.6611 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive paper reports will apply to all Columbia Funds held in your account if you invest through a financial intermediary or all Columbia Funds held with the fund complex if you invest directly with the Fund.
Not FDIC Insured • No bank guarantee • May lose value
Columbia U.S. Social Bond Fund | Annual Report 2019
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
Kimberly Campbell
Lead Portfolio Manager
Managed Fund since 2018
Tom Murphy, CFA
Portfolio Manager
Managed Fund since 2015
Malcolm (Mac) Ryerse
Portfolio Manager
Managed Fund since 2018
| Average annual total returns (%) (for the period ended July 31, 2019) |
| | | Inception | 1 Year | Life |
| Class A | Excluding sales charges | 03/26/15 | 7.33 | 3.24 |
| | Including sales charges | | 4.12 | 2.52 |
| Advisor Class | 03/26/15 | 7.60 | 3.50 |
| Class C | Excluding sales charges | 03/26/15 | 6.53 | 2.49 |
| | Including sales charges | | 5.53 | 2.49 |
| Institutional Class | 03/26/15 | 7.60 | 3.50 |
| Institutional 2 Class | 03/26/15 | 7.60 | 3.51 |
| Institutional 3 Class* | 03/01/17 | 7.61 | 3.42 |
| Bloomberg Barclays Municipal Bond Index | | 7.31 | 3.47 |
Returns for Class A shares are shown with and without the maximum initial sales charge of 3.00%. Returns for Class C shares are shown with and without the applicable contingent deferred sales charge of 1.00% in the first year. The Fund’s other share 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 share 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 columbiathreadneedleus.com/investor/ 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 columbiathreadneedleus.com/investor/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.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 3 |
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (March 26, 2015 — July 31, 2019)
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, 2019) |
| Corporate Bonds & Notes | 10.9 |
| Floating Rate Notes | 2.0 |
| Money Market Funds | 4.3 |
| Municipal Bonds | 82.8 |
| Total | 100.0 |
Percentages indicated are based upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
| Quality breakdown (%) (at July 31, 2019) |
| AAA rating | 2.8 |
| AA rating | 35.2 |
| A rating | 27.9 |
| BBB rating | 24.5 |
| BB rating | 2.5 |
| B rating | 0.8 |
| Not rated | 6.3 |
| Total | 100.0 |
Percentages indicated are based upon total fixed income investments.
Bond ratings apply to the underlying holdings of the Fund and not the Fund itself and are divided into categories ranging from highest to lowest credit quality, determined by using the middle rating of Moody’s, S&P and Fitch, after dropping the highest and lowest available ratings. When ratings are available from only two rating agencies, the lower rating is used. When a rating is available from only one rating agency, that rating is used. When a bond is not rated by any rating agency, it is designated as “Not rated.” Credit quality ratings assigned by a rating agency are subjective opinions, not statements of fact, and are subject to change, including daily. The ratings assigned by credit rating agencies are but one of the considerations that the Investment Manager and/or Fund’s subadviser incorporates into its credit analysis process, along with such other issuer-specific factors as cash flows, capital structure and leverage ratios, ability to de-leverage (repay) through free cash flow, quality of management, market positioning and access to capital, as well as such security-specific factors as the terms of the security (e.g., interest rate and time to maturity) and the amount and type of any collateral.
| 4 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Manager Discussion of Fund Performance
For the 12-month period that ended July 31, 2019, the Fund’s Class A shares returned 7.33% excluding sales charges. Institutional Class shares of the Fund returned 7.60%. The Fund edged out its benchmark, the Bloomberg Barclays Municipal Bond Index, which returned 7.31% over the same period. Security selection, credit positioning and yield curve positioning aided performance relative to the benchmark.
Tax-exempt bond market gained amid slowing economies and shifting monetary policies
Municipal bonds generated healthy gains during the reporting period, with the bulk of the rally occurring from November 2018 onward. Municipal bonds had performed reasonably well from May through August 2018 on the strength of falling U.S. Treasury yields and the combination of strong investor demand and reduced new issue supply in the tax-exempt bond market. Conditions became less favorable in September 2018, when U.S. Treasury yields climbed on indications of ongoing strength in the U.S. economy and fears about inflation pressures that could result from a trade war with China. The negative trend persisted in October, as U.S. Treasury yields continued to rise on concerns the U.S. Federal Reserve (Fed) would take a more aggressive approach to increasing interest rates in 2019 than investors had been expecting.
Sentiment again shifted abruptly in early November 2018, causing U.S. Treasury yields to fall sharply through the end of calendar year 2018. The broad fixed-income markets rallied significantly due to signs of slowing global economic growth, volatility in traditionally higher risk assets, and expectations the Fed would shift its policy and adopt a more accommodative stance. In addition, various geopolitical factors, including uncertainty surrounding U.S.-China trade disputes, negotiations regarding the U.K.’s exit from the European Union (Brexit) and the U.S. federal government shutdown, fueled a “flight to quality” into bonds. Municipal bonds rallied as a result, pushing the major national municipal bond indices into positive territory for calendar year 2018.
The rally continued into early 2019, leading to the largest first quarter gain for the tax-exempt bond market since 2014. The first calendar quarter was also the sixth best quarter for municipal bonds in the past 30 years. During these months, municipal bonds were well supported by a backdrop of slower global economic growth and increasingly accommodative monetary policies from the world’s major central banks. Technicals, or supply/demand factors, also remained highly favorable. Record municipal bond mutual fund inflows, fueled by strong demand as a result of state and local tax deductions capped by the Tax Cuts and Jobs Act of 2017, combined with meager new issue supply to propel municipal bonds to post solid gains through the spring and mid-summer months of 2019.
For the annual period overall, longer term AAA-rated municipal bonds outpaced shorter term AAA-rated municipal issues, mirroring trends in the U.S. Treasury market, and lower quality municipal bonds outperformed their higher rated counterparts. The “risk on” environment of January to May 2019 led to robust investor demand for higher risk issues, lifting the returns of higher yielding municipal bonds until June and July 2019, when higher quality issues outperformed.
Contributors and detractors
Security selection, yield curve positioning and credit positioning were positive contributors to relative results for the period. Security selection and overweights in the housing and hospital sectors boosted returns as did security selection in water and sewer, special tax and local general obligation bonds (GOs). Even though the Fund was underweight in GOs, security selection within the sector aided results, mostly because of Illinois-related credits, which improved after the passage of a relatively balanced on-time budget and recently strong tax collections.
The Fund was overweight in bonds in the 15- to 20-year range, which was a strong performer as yields declined during the period. Overweights in A, BBB-rated and below-investment-grade securities aided returns relative to the index. Below-investment-grade securities were the best performers for the Fund for the period.
The Fund’s main detractor was a position in 10-year U.S. Treasury futures, which we use to manage the Fund’s interest rate risk. As yields declined in the first half of the period, the position hampered returns. As we became more confident that rates would continue to decline in 2019, we removed all but a small exposure to Treasury futures, which benefited performance. An underweight in bonds maturing in 25 years+ also detracted somewhat from relative results as these bonds performed well. Corporate bonds within the Fund also were a modest detractor, mainly because of their shorter maturities.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 5 |
Manager Discussion of Fund Performance (continued)
At period’s end
The Fund aims to provide total return that is a combination of capital appreciation and tax-exempt income from issues that have the potential to deliver positive and measurable social and/or environmental benefits. We believe that income has the potential to be the major driver of total return and that it can dampen price sensitivity to shifts in interest rates. As such, the Fund’s yield curve positioning reflects where along the yield curve we have identified attractive risk-adjusted return potential in our view. At the end of the period, the Fund emphasized maturities in the 15- to 20-year range, where we believe there is adequate compensation for the longer duration, and underweight relative to the benchmark in maturities longer than 20 years as well as under 10 years. From a quality standpoint, the Fund is focused on bonds rated A, AA and BBB, in an effort to target the highest possible yields.
We aim to take risks that are calculated and quantifiable. To that end, we work closely with our municipal credit analysts, who evaluate issue risk, review bond covenants, analyze historical data and project the potential for future performance to help determine an independent internal rating as well as a socially responsible impact score for each issue.
The social and environmental focus of the Fund typically results in overweights relative to the benchmark in bonds that offer strong relative value in sectors where the use of proceeds has a positive and measurable impact, such as multi-family housing, hospital, local GOs, single family housing, water and sewer and education.
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 under perform other funds that do not consider the social impact. Fixed-income securities presentissuer default risk. A rise ininterest 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.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 inmunicipal 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 Fund may invest significantly in issuers within a particularsector, 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 theliquidity 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 anon-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.
| 6 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Understanding Your Fund’s Expenses
(Unaudited)
As an investor, you incur two types of costs. There are shareholder transaction costs, which generally include sales charges on purchases and may include redemption fees. There are also ongoing fund 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 $1,000 = 8.6), then multiply the results by the expenses paid during the period under the “Actual” column. The amount listed in the “Hypothetical” column assumes a 5% annual rate of return before expenses (which is not the Fund’s actual return) and then applies the Fund’s actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the period. See “Compare with other funds” below for details on how to use the hypothetical data.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the Fund with other funds. To do so, compare the hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund only and do not reflect any transaction costs, such as sales charges, or redemption or exchange fees. Therefore, the hypothetical calculations are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If transaction costs were included in these calculations, your costs would be higher.
| February 1, 2019 — July 31, 2019 |
| | Account value at the
beginning of the
period ($) | 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 | 1,056.90 | 1,021.32 | 3.57 | 3.51 | 0.70 |
| Advisor Class | 1,000.00 | 1,000.00 | 1,058.20 | 1,022.56 | 2.30 | 2.26 | 0.45 |
| Class C | 1,000.00 | 1,000.00 | 1,053.00 | 1,017.60 | 7.38 | 7.25 | 1.45 |
| Institutional Class | 1,000.00 | 1,000.00 | 1,058.20 | 1,022.56 | 2.30 | 2.26 | 0.45 |
| Institutional 2 Class | 1,000.00 | 1,000.00 | 1,058.20 | 1,022.61 | 2.25 | 2.21 | 0.44 |
| Institutional 3 Class | 1,000.00 | 1,000.00 | 1,058.30 | 1,022.76 | 2.09 | 2.06 | 0.41 |
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.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 7 |
Portfolio of Investments
July 31, 2019
(Percentages represent value of investments compared to net assets)
Investments in securities
| Corporate Bonds & Notes 10.5% |
| Issuer | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Mexico 0.6% |
| Grupo Bimbo SAB de CV(a) |
| 01/25/2022 | 4.500% | | 300,000 | 310,508 |
| United States 9.9% |
| Apple, Inc. |
| Green Bond |
| 02/23/2023 | 2.850% | | 250,000 | 255,758 |
| AT&T, Inc. |
| 06/30/2022 | 3.000% | | 250,000 | 253,815 |
| Capital One Financial Corp. |
| 01/30/2023 | 3.200% | | 500,000 | 510,206 |
| Cardinal Health, Inc. |
| 06/15/2022 | 2.616% | | 400,000 | 398,489 |
| ConAgra Foods, Inc. |
| 01/25/2023 | 3.200% | | 446,000 | 453,414 |
| CSX Corp. |
| 06/01/2021 | 4.250% | | 250,000 | 257,086 |
| CVS Health Corp. |
| 06/01/2021 | 2.125% | | 250,000 | 248,288 |
| 03/09/2023 | 3.700% | | 250,000 | 258,031 |
| Discovery Communications LLC |
| 06/15/2020 | 2.800% | | 500,000 | 500,601 |
| Five Corners Funding Trust(a) |
| 11/15/2023 | 4.419% | | 500,000 | 534,193 |
| Kellogg Co. |
| 12/01/2023 | 2.650% | | 300,000 | 303,147 |
| Local Initiatives Support Corp. |
| 03/01/2037 | 4.649% | | 400,000 | 420,614 |
| St. Joseph’s Hospital & Medical Center |
| 07/01/2027 | 4.584% | | 300,000 | 315,672 |
| Sysco Corp. |
| 07/15/2021 | 2.500% | | 250,000 | 250,437 |
| Verizon Communications, Inc. |
| 11/01/2022 | 2.450% | | 250,000 | 250,802 |
| Total | 5,210,553 |
Total Corporate Bonds & Notes
(Cost $5,382,469) | 5,521,061 |
|
| Floating Rate Notes 2.0% |
| Issue Description | Effective
Yield | | Principal
Amount ($) | Value ($) |
| Indiana 0.5% |
| Indiana Finance Authority(b),(c) |
| Unrefunded Revenue Bonds |
| Lease Appropriation |
| Series 2009A-2 (Wells Fargo Bank) |
| 02/01/2037 | 1.460% | | 280,000 | 280,000 |
| New York 1.0% |
| New York City Water & Sewer System(b),(c) |
| Revenue Bonds |
| 2nd General Resolution |
| Series 2013 (JPMorgan Chase Bank) |
| 06/15/2050 | 1.480% | | 250,000 | 250,000 |
| Triborough Bridge & Tunnel Authority(b),(c) |
| Refunding Revenue Bonds |
| Series 2018C (State Street Bank and Trust Co.) |
| 01/01/2032 | 1.450% | | 250,000 | 250,000 |
| Total | 500,000 |
| Utah 0.5% |
| City of Murray(b),(c) |
| Revenue Bonds |
| IHC Health Services, Inc. |
| Series 2005A (JPMorgan Chase Bank) |
| 05/15/2037 | 1.480% | | 250,000 | 250,000 |
Total Floating Rate Notes
(Cost $1,030,000) | 1,030,000 |
|
| Municipal Bonds 80.2% |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Alabama 2.1% |
| Alabama Special Care Facilities Financing Authority |
| Refunding Revenue Bonds |
| Children’s Hospital of Alabama |
| Series 2015 |
| 06/01/2027 | 5.000% | | 250,000 | 296,468 |
| Butler County Board of Education |
| Refunding Revenue Bonds |
| Series 2015 (AGM) |
| 07/01/2026 | 5.000% | | 250,000 | 293,675 |
| Calhoun County Board of Education |
| Special Tax Bonds |
| School Warrants |
| Series 2016 (BAM) |
| 02/01/2029 | 5.000% | | 250,000 | 297,005 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 8 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Tuscaloosa City Board of Education |
| Revenue Bonds |
| Series 2016 |
| 08/01/2030 | 5.000% | | 200,000 | 240,832 |
| Total | 1,127,980 |
| Arizona 1.2% |
| La Paz County Industrial Development Authority |
| Revenue Bonds |
| Charter School Solutions - Harmony Public |
| Series 2016 |
| 02/15/2036 | 5.000% | | 100,000 | 112,212 |
| 02/15/2046 | 5.000% | | 210,000 | 231,342 |
| Pinal County Union High School District No. 82 Casa Grande |
| Unlimited General Obligation Refunding Bonds |
| Series 2015 (AGM) |
| 07/01/2026 | 5.000% | | 250,000 | 297,988 |
| Total | 641,542 |
| California 7.0% |
| California Municipal Finance Authority |
| Refunding Revenue Bonds |
| Community Medical Centers |
| Series 2017A |
| 02/01/2037 | 5.000% | | 300,000 | 350,331 |
| Harbor Regional Center Project |
| Series 2015 |
| 11/01/2024 | 5.000% | | 250,000 | 296,522 |
| California Municipal Finance Authority(d) |
| Revenue Bonds |
| Senior Lien |
| Series 2018A AMT |
| 12/31/2034 | 5.000% | | 500,000 | 599,760 |
| California School Finance Authority(a) |
| Refunding Revenue Bonds |
| Aspire Public Schools |
| Series 2016 |
| 08/01/2036 | 5.000% | | 500,000 | 559,945 |
| Revenue Bonds |
| Green Dot Public School Project |
| Series 2015A |
| 08/01/2025 | 4.000% | | 250,000 | 277,975 |
| California Statewide Communities Development Authority |
| Refunding Revenue Bonds |
| Adventist Health System West |
| Series 2015 |
| 03/01/2025 | 5.000% | | 250,000 | 301,110 |
| Lammersville Joint Unified School District |
| Refunding Special Tax Bonds |
| Community Facilities District #2002 |
| Series 2017 |
| 09/01/2033 | 5.000% | | 400,000 | 471,468 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Placer County Public Financing Authority |
| Refunding Taxable Revenue Bonds |
| mPOWER Program |
| Series 2018 (BAM) |
| 10/01/2038 | 4.875% | | 445,000 | 484,761 |
| San Francisco City & County Redevelopment Agency |
| Refunding Tax Allocation Bonds |
| Mission Bay Housing Project |
| Subordinated Series 2017 (AGM) |
| 08/01/2025 | 3.250% | | 300,000 | 313,983 |
| Total | 3,655,855 |
| Colorado 0.6% |
| Colorado Health Facilities Authority |
| Refunding Revenue Bonds |
| Parkview Medical Center |
| Series 2015B |
| 09/01/2026 | 5.000% | | 250,000 | 296,048 |
| Connecticut 0.5% |
| Connecticut Housing Finance Authority |
| Refunding Revenue Bonds |
| Subordinated Series 2018B-1 |
| 05/15/2045 | 4.000% | | 225,000 | 239,274 |
| District of Columbia 0.5% |
| District of Columbia |
| Refunding Revenue Bonds |
| Friendship Public Charter School |
| Series 2016 |
| 06/01/2041 | 5.000% | | 250,000 | 280,750 |
| Florida 2.4% |
| City of Tallahassee |
| Revenue Bonds |
| Tallahassee Memorial Healthcare, Inc. Project |
| Series 2016 |
| 12/01/2055 | 5.000% | | 250,000 | 278,132 |
| Florida Development Finance Corp.(a) |
| Revenue Bonds |
| Renaissance Charter School Inc. Projects |
| Series 2015 |
| 06/15/2025 | 5.000% | | 100,000 | 105,203 |
| Miami-Dade County Health Facilities Authority |
| Refunding Revenue Bonds |
| Nicklaus Childrens Hospital |
| Series 2017 |
| 08/01/2037 | 5.000% | | 500,000 | 591,095 |
| School District of Broward County |
| Refunding Certificate of Participation |
| Series 2016A |
| 07/01/2032 | 5.000% | | 250,000 | 298,105 |
| Total | 1,272,535 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 9 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Georgia 1.1% |
| Cedartown Polk County Hospital Authority |
| Revenue Bonds |
| RAC Series 2016 |
| 07/01/2039 | 5.000% | | 250,000 | 282,220 |
| Georgia Housing & Finance Authority |
| Revenue Bonds |
| Single Family Mortgage Bonds |
| Series 2017C |
| 12/01/2038 | 3.500% | | 300,000 | 314,925 |
| Total | 597,145 |
| Idaho 1.0% |
| Idaho Health Facilities Authority |
| Refunding Revenue Bonds |
| Madison Memorial Hospital |
| Series 2016 |
| 09/01/2028 | 5.000% | | 250,000 | 288,312 |
| Idaho Housing & Finance Association |
| Revenue Bonds |
| Series 2015A-1 |
| 07/01/2025 | 3.200% | | 220,000 | 235,222 |
| Total | 523,534 |
| Illinois 6.6% |
| Chicago Board of Education |
| Unlimited General Obligation Bonds |
| Dedicated |
| Series 2017H |
| 12/01/2036 | 5.000% | | 335,000 | 372,423 |
| Chicago Park District |
| Limited General Obligation Bonds |
| Series 2016A |
| 01/01/2032 | 5.000% | | 300,000 | 341,421 |
| Chicago Transit Authority |
| Refunding Revenue Bonds |
| Series 2015 |
| 06/01/2021 | 5.000% | | 250,000 | 265,455 |
| City of Chicago Wastewater Transmission |
| Revenue Bonds |
| Second Lien |
| Series 2017A |
| 01/01/2031 | 5.000% | | 300,000 | 351,594 |
| City of Chicago Waterworks |
| Refunding Revenue Bonds |
| 2nd Lien |
| Series 2001 (AMBAC) |
| 11/01/2030 | 5.750% | | 585,000 | 735,000 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Cook County Community College District No. 508 |
| Unlimited General Obligation Bonds |
| Chicago City Colleges |
| Series 2017 (BAM) |
| 12/01/2047 | 5.000% | | 100,000 | 113,389 |
| Cook County Community High School District No. 212 Leyden |
| Revenue Bonds |
| Series 2016C (BAM) |
| 12/01/2034 | 5.000% | | 250,000 | 283,470 |
| Illinois Finance Authority |
| Refunding Revenue Bonds |
| Southern Illinois Healthcare, Inc. |
| Series 2017 |
| 03/01/2034 | 5.000% | | 150,000 | 175,122 |
| Illinois Housing Development Authority |
| Revenue Bonds |
| Series 2016A |
| 10/01/2036 | 3.450% | | 240,000 | 248,601 |
| Metropolitan Water Reclamation District of Greater Chicago |
| Unlimited General Obligation Bonds |
| Green Bond |
| Series 2016E |
| 12/01/2035 | 5.000% | | 500,000 | 583,835 |
| Total | 3,470,310 |
| Indiana 2.2% |
| Ball State University |
| Revenue Bonds |
| Housing and Dining |
| Series 2018 |
| 07/01/2038 | 5.000% | | 500,000 | 608,665 |
| Indiana Finance Authority |
| Taxable Revenue Bonds |
| Series 2016A |
| 07/01/2027 | 2.816% | | 250,000 | 255,565 |
| Northern Indiana Commuter Transportation District |
| Revenue Bonds |
| Series 2016 |
| 07/01/2032 | 5.000% | | 250,000 | 297,750 |
| Total | 1,161,980 |
| Kentucky 1.3% |
| Kentucky Economic Development Finance Authority |
| Refunding Revenue Bonds |
| Owensboro Health System |
| Series 2017A |
| 06/01/2026 | 5.000% | | 350,000 | 407,491 |
| Kentucky Housing Corp. |
| Taxable Refunding Revenue Bonds |
| Series 2016A |
| 07/01/2031 | 3.499% | | 250,000 | 261,450 |
| Total | 668,941 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 10 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Louisiana 4.7% |
| City of Shreveport Water & Sewer |
| Revenue Bonds |
| Junior Lien |
| Series 2017B (AGM) |
| 12/01/2041 | 5.000% | | 400,000 | 472,908 |
| Louisiana Local Government Environmental Facilities & Community Development Authority |
| Refunding Revenue Bonds |
| Act 391 Project |
| Series 2017 (BAM) |
| 10/01/2028 | 5.000% | | 300,000 | 376,965 |
| Ragin’ Cajun Facilities, Inc. - Student Housing |
| Series 2017 (AGM) |
| 10/01/2039 | 5.000% | | 300,000 | 352,743 |
| Revenue Bonds |
| Ragin Cajun Facilities, Inc. Student Housing |
| Series 2018 |
| 10/01/2043 | 5.000% | | 200,000 | 232,118 |
| Louisiana Public Facilities Authority |
| Refunding Revenue Bonds |
| Ochsner Clinic Foundation Project |
| Series 2017 |
| 05/15/2034 | 5.000% | | 400,000 | 469,200 |
| Revenue Bonds |
| LA Children’s Medical Center Project |
| Series 2018 |
| 06/01/2039 | 5.000% | | 500,000 | 590,490 |
| Total | 2,494,424 |
| Maine 1.0% |
| Maine State Housing Authority |
| Revenue Bonds |
| Series 2016A |
| 11/15/2035 | 3.300% | | 250,000 | 258,735 |
| Series 2018B |
| 11/15/2038 | 3.750% | | 250,000 | 264,633 |
| Total | 523,368 |
| Maryland 4.4% |
| City of Baltimore |
| Refunding Revenue Bonds |
| East Baltimore Research Park |
| Series 2017 |
| 09/01/2038 | 5.000% | | 300,000 | 326,799 |
| Enterprise Community Loan Fund, Inc. |
| Series 2018 |
| 11/01/2028 | 4.152% | | 500,000 | 517,975 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Howard County Housing Commission |
| Revenue Bonds |
| Woodfield Oxford Square Apartments |
| Series 2017 |
| 12/01/2037 | 5.000% | | 300,000 | 350,478 |
| Maryland Economic Development Corp.(d) |
| Revenue Bonds |
| Purple Line Light Rail Project |
| Series 2016 AMT |
| 03/31/2036 | 5.000% | | 250,000 | 289,345 |
| Maryland Health & Higher Educational Facilities Authority |
| Refunding Revenue Bonds |
| Meritus Medical Center Issue |
| Series 2015 |
| 07/01/2023 | 5.000% | | 250,000 | 283,047 |
| Revenue Bonds |
| MedStar Health |
| Series 1998A (AGM) |
| 08/15/2038 | 5.250% | | 425,000 | 561,132 |
| Total | 2,328,776 |
| Massachusetts 3.1% |
| Martha’s Vineyard Land Bank |
| Refunding Revenue Bonds |
| Green Bonds |
| Series 2017 (BAM) |
| 05/01/2036 | 5.000% | | 300,000 | 360,414 |
| Massachusetts Development Finance Agency |
| Revenue Bonds |
| Green Bond Boston Medical Center |
| Series 2017 |
| 07/01/2028 | 5.000% | | 200,000 | 240,090 |
| Green Bonds - Boston Medical Center |
| Series 2015 |
| 07/01/2044 | 5.000% | | 250,000 | 277,393 |
| Massachusetts Housing Finance Agency |
| Refunding Revenue Bonds |
| Series 2016-181 |
| 12/01/2036 | 3.600% | | 205,000 | 212,968 |
| Revenue Bonds |
| Special Obligations |
| Series 2017D |
| 12/01/2042 | 3.750% | | 500,000 | 525,960 |
| Total | 1,616,825 |
| Michigan 3.7% |
| Karegnondi Water Authority |
| Refunding Revenue Bonds |
| Series 2018 |
| 11/01/2045 | 5.000% | | 400,000 | 462,644 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 11 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Michigan Finance Authority |
| Revenue Bonds |
| Local Government Loan Program - Great Lakes Water Authority |
| Series 2015 |
| 07/01/2032 | 5.000% | | 250,000 | 290,490 |
| Local Government Loan Program-Great Lakes |
| Series 2015 (BAM) |
| 07/01/2033 | 5.000% | | 250,000 | 293,015 |
| Michigan State Housing Development Authority |
| Revenue Bonds |
| Series 2018A |
| 10/01/2033 | 3.550% | | 500,000 | 530,485 |
| 12/01/2033 | 3.600% | | 325,000 | 345,244 |
| Total | 1,921,878 |
| Minnesota 2.6% |
| City of Minneapolis |
| Revenue Bonds |
| Housing - 1500 Nicollet Apartments Project |
| Series 2017 |
| 05/01/2021 | 3.000% | | 100,000 | 99,986 |
| Housing & Redevelopment Authority of The City of St. Paul |
| Revenue Bonds |
| Millberry Apartments Project |
| Series 2018B |
| 03/01/2021 | 3.750% | | 500,000 | 500,180 |
| Union Flats Apartments Project |
| Series 2017B |
| 02/01/2022 | 2.750% | | 250,000 | 250,000 |
| Northwest Multi-County Housing & Redevelopment Authority |
| Refunding Revenue Bonds |
| Pooled Housing Program |
| Series 2015 |
| 07/01/2024 | 4.000% | | 250,000 | 261,515 |
| St. Cloud Housing & Redevelopment Authority |
| Taxable Revenue Bonds |
| Sanctuary St. Cloud Project |
| Series 2016 |
| 08/01/2036 | 6.000% | | 250,000 | 234,732 |
| Total | 1,346,413 |
| Mississippi 2.3% |
| Biloxi Public School District |
| Revenue Bonds |
| Trust Certificates |
| Series 2016 (BAM) |
| 04/01/2029 | 5.000% | | 250,000 | 297,377 |
| Mississippi Development Bank |
| Revenue Bonds |
| Mississippi Gulf Coast Community College District |
| Series 2016F |
| 12/01/2032 | 4.000% | | 300,000 | 331,998 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| West Rankin Utility Authority |
| Revenue Bonds |
| Series 2018 (AGM) |
| 01/01/2036 | 5.000% | | 500,000 | 572,525 |
| Total | 1,201,900 |
| Missouri 1.8% |
| Cape Girardeau County Industrial Development Authority |
| Refunding Revenue Bonds |
| SoutheastHEALTH |
| Series 2017 |
| 03/01/2031 | 5.000% | | 400,000 | 463,772 |
| Health & Educational Facilities Authority |
| Refunding Revenue Bonds |
| Mosaic Health System |
| Series 2019 |
| 02/15/2049 | 4.000% | | 300,000 | 327,084 |
| Missouri Housing Development Commission |
| Revenue Bonds |
| 1st Place Homeownership Loan Project |
| Series 2015 |
| 11/01/2027 | 3.250% | | 125,000 | 133,381 |
| Total | 924,237 |
| Nebraska 0.9% |
| Nebraska Investment Finance Authority |
| Revenue Bonds |
| Series 2018A |
| 09/01/2033 | 3.550% | | 200,000 | 213,456 |
| Single Family Housing Revenue Bonds |
| Series 2015 (GNMA / FNMA) |
| 09/01/2030 | 3.450% | | 250,000 | 264,320 |
| Total | 477,776 |
| Nevada 1.1% |
| City of Reno |
| Revenue Bonds |
| Reno Transportation 2nd Lien |
| Series 2018 (AGM) |
| 06/01/2038 | 5.000% | | 250,000 | 296,975 |
| State of Nevada Department of Business & Industry(a) |
| Revenue Bonds |
| Somerset Academy |
| Series 2018A |
| 12/15/2038 | 5.000% | | 250,000 | 267,258 |
| Total | 564,233 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 12 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| New Hampshire 0.9% |
| New Hampshire Health and Education Facilities Authority Act |
| Refunding Revenue Bonds |
| Dartmouth-Hitchcock Obligation |
| Series 2018 |
| 08/01/2036 | 5.000% | | 400,000 | 479,392 |
| New Jersey 0.6% |
| New Jersey Housing & Mortgage Finance Agency(d) |
| Refunding Revenue Bonds |
| Series 2017D AMT |
| 11/01/2032 | 3.900% | | 300,000 | 320,715 |
| New Mexico 0.5% |
| New Mexico Hospital Equipment Loan Council |
| Revenue Bonds |
| Presbyterian Healthcare Services |
| Series 2015 |
| 08/01/2021 | 5.000% | | 250,000 | 268,538 |
| New York 5.8% |
| Build NYC Resource Corp. |
| Revenue Bonds |
| Series 2015 |
| 07/01/2028 | 5.000% | | 250,000 | 296,947 |
| Housing Development Corp. |
| Refunding Revenue Bonds |
| Sustainable Neighborhood |
| Series 2015S |
| 05/01/2026 | 3.400% | | 500,000 | 538,295 |
| Revenue Bonds |
| Sustainable Neighborhood Bonds |
| Series 2016 |
| 11/01/2031 | 3.600% | | 300,000 | 321,093 |
| Metropolitan Transportation Authority |
| Revenue Bonds |
| Green Bonds |
| Series 2016A-1 |
| 11/15/2033 | 5.000% | | 250,000 | 296,335 |
| New York City Water & Sewer System |
| Refunding Revenue Bonds |
| Series 2017EE |
| 06/15/2037 | 5.000% | | 300,000 | 362,346 |
| New York State Housing Finance Agency |
| Revenue Bonds |
| Green Bond - Affordable Housing |
| Series 2017 (GNMA) |
| 11/01/2042 | 4.000% | | 300,000 | 318,426 |
| Niagara Falls Public Water Authority |
| Refunding Revenue Bonds |
| Series 2016A |
| 07/15/2027 | 5.000% | | 300,000 | 367,251 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Onondaga Civic Development Corp. |
| Refunding Revenue Bonds |
| Community College Housing Bonds |
| Series 2015 |
| 10/01/2023 | 5.000% | | 250,000 | 282,325 |
| State of New York Mortgage Agency(d) |
| Refunding Revenue Bonds |
| Series 2016-196 AMT |
| 10/01/2035 | 3.650% | | 250,000 | 260,305 |
| Total | 3,043,323 |
| North Carolina 1.3% |
| County of Scotland |
| Refunding Revenue Bonds |
| School Facilities |
| Series 2017 |
| 12/01/2030 | 5.000% | | 250,000 | 310,275 |
| North Carolina Capital Facilities Finance Agency |
| Refunding Revenue Bonds |
| The Arc of North Carolina |
| Series 2017 |
| 10/01/2028 | 5.000% | | 300,000 | 360,174 |
| Total | 670,449 |
| North Dakota 0.7% |
| North Dakota Housing Finance Agency |
| Revenue Bonds |
| Housing Finance Program-Home Mortgage Financing |
| Series 2017 |
| 07/01/2034 | 3.700% | | 360,000 | 382,936 |
| Ohio 1.5% |
| Columbus City School District |
| Unlimited General Obligation Refunding Bonds |
| School Facilities Construction & Improvement |
| Series 2016 |
| 12/01/2032 | 5.000% | | 250,000 | 300,413 |
| Miami Valley Career Technology Center |
| Unlimited General Obligation Bonds |
| Series 2018 |
| 12/01/2044 | 5.000% | | 400,000 | 478,044 |
| Total | 778,457 |
| Pennsylvania 4.3% |
| City of Philadelphia Water & Wastewater |
| Refunding Revenue Bonds |
| Series 2016 |
| 10/01/2028 | 5.000% | | 300,000 | 383,334 |
| Montgomery County Industrial Development Authority |
| Refunding Revenue Bonds |
| Albert Einstein HealthCare Network |
| Series 2015 |
| 01/15/2022 | 5.000% | | 250,000 | 268,640 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 13 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Pennsylvania Turnpike Commission |
| Refunding Subordinated Revenue Bonds |
| Mass Transit Projects |
| Series 2016A-1 |
| 12/01/2041 | 5.000% | | 200,000 | 227,264 |
| Redevelopment Authority of the City of Philadelphia |
| Refunding Revenue Bonds |
| Series 2015A |
| 04/15/2028 | 5.000% | | 250,000 | 293,130 |
| Reinvestment Fund, Inc. (The) |
| Series 2018 |
| 02/15/2028 | 3.930% | | 500,000 | 520,569 |
| School District of Philadelphia (The) |
| Limited General Obligation Bonds |
| Series 2018A |
| 09/01/2036 | 5.000% | | 100,000 | 119,139 |
| Scranton School District |
| Limited General Obligation Refunding Bonds |
| Series 2017D (NPFGC) |
| 06/01/2037 | 4.250% | | 250,000 | 272,650 |
| Series 2017E BAM |
| 12/01/2035 | 5.000% | | 150,000 | 178,866 |
| Total | 2,263,592 |
| Rhode Island 1.7% |
| Rhode Island Health & Educational Building Corp. |
| Refunding Revenue Bonds |
| Woonsocket Schools |
| Series 2017A (AGM) |
| 05/15/2028 | 5.000% | | 300,000 | 366,114 |
| Rhode Island Housing & Mortgage Finance Corp.(d) |
| Refunding Revenue Bonds |
| Homeownership Opportunity |
| Series 2015 AMT |
| 10/01/2025 | 3.550% | | 250,000 | 267,572 |
| Rhode Island Housing & Mortgage Finance Corp. |
| Revenue Bonds |
| Homeownership Opportunity |
| Series 2018-69-B (GNMA) |
| 10/01/2043 | 3.950% | | 250,000 | 264,928 |
| Total | 898,614 |
| South Carolina 0.6% |
| South Carolina Jobs-Economic Development Authority(a) |
| Revenue Bonds |
| Royal Live Oaks Academy Project |
| Series 2018 |
| 08/01/2020 | 3.000% | | 300,000 | 301,179 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Tennessee 1.1% |
| Greeneville Health & Educational Facilities Board |
| Refunding Revenue Bonds |
| Ballad Health Obligation Group |
| Series 2018 |
| 07/01/2037 | 5.000% | | 500,000 | 590,525 |
| Texas 3.4% |
| Arlington Higher Education Finance Corp. |
| Revenue Bonds |
| Harmony Public Schools |
| Series 2016A |
| 02/15/2031 | 5.000% | | 250,000 | 296,917 |
| Bexar County Hospital District |
| Limited General Obligation Bonds |
| Series 2018 |
| 02/15/2043 | 4.000% | | 300,000 | 328,701 |
| Deaf Smith County Hospital District |
| Limited General Obligation Refunding Bonds |
| Series 2017 |
| 03/01/2034 | 5.000% | | 500,000 | 578,150 |
| New Hope Cultural Education Facilities Finance Corp. |
| Revenue Bonds |
| Cardinal Bay, Inc. - Village on the Park |
| Series 2016 |
| 07/01/2046 | 5.000% | | 250,000 | 277,733 |
| Texas State Technical College |
| Refunding Revenue Bonds |
| Improvements |
| Series 2016 (AGM) |
| 10/15/2030 | 4.000% | | 250,000 | 281,930 |
| Total | 1,763,431 |
| Virginia 0.8% |
| Virginia Housing Development Authority |
| Revenue Bonds |
| Series 2018A |
| 03/01/2043 | 3.650% | | 400,000 | 419,028 |
| Washington 3.0% |
| Energy Northwest |
| Wind Project Refunding Revenue Bonds |
| Series 2015 |
| 07/01/2029 | 4.000% | | 250,000 | 277,112 |
| King County Housing Authority |
| Refunding Revenue Bonds |
| Series 2018 |
| 05/01/2038 | 3.750% | | 400,000 | 422,476 |
| King County Public Hospital District No. 4 |
| Revenue Bonds |
| Series 2015A |
| 12/01/2035 | 6.000% | | 200,000 | 211,016 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 14 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Seattle Housing Authority |
| Refunding Revenue Bonds |
| Pooled Housing |
| Series 2018 |
| 12/01/2047 | 3.750% | | 300,000 | 313,788 |
| Washington Health Care Facilities Authority |
| Revenue Bonds |
| Seattle Childrens Hospital |
| Series 2017 |
| 10/01/2047 | 5.000% | | 300,000 | 354,171 |
| Total | 1,578,563 |
| Wisconsin 0.9% |
| Public Finance Authority |
| Revenue Bonds |
| FFAH NC & MO Portfolio |
| Series 2015 |
| 12/01/2035 | 4.750% | | 250,000 | 249,985 |
| Wisconsin Health & Educational Facilities Authority |
| Revenue Bonds |
| Covenant Communities, Inc. Project |
| Series 2018B |
| 07/01/2053 | 5.000% | | 100,000 | 106,427 |
| Tomah Memorial Hospital, Inc. |
| BAN Series 2017A |
| 11/01/2020 | 2.650% | | 100,000 | 100,183 |
| Total | 456,595 |
| Municipal Bonds (continued) |
| Issue Description | Coupon
Rate | | Principal
Amount ($) | Value ($) |
| Wyoming 1.0% |
| Wyoming Community Development Authority |
| Refunding Revenue Bonds |
| Series 2018-1 |
| 12/01/2038 | 3.900% | | 500,000 | 533,135 |
Total Municipal Bonds
(Cost $39,663,708) | 42,084,196 |
| Money Market Funds 4.1% |
| | Shares | Value ($) |
| JPMorgan Institutional Tax Free Money Market Fund, Institutional Class, 1.264%(e) | 2,160,894 | 2,160,894 |
Total Money Market Funds
(Cost $2,160,894) | 2,160,894 |
Total Investments in Securities
(Cost $48,237,071) | 50,796,151 |
| Other Assets & Liabilities, Net | | 1,674,359 |
| Net Assets | $52,470,510 |
At July 31, 2019, securities and/or cash totaling $11,000 were pledged as collateral.
Investments in derivatives
| Short futures contracts |
| Description | Number of
contracts | Expiration
date | Trading
currency | Notional
amount | Value/Unrealized
appreciation ($) | Value/Unrealized
depreciation ($) |
| U.S. Treasury 10-Year Note | (10) | 09/2019 | USD | (1,274,219) | 4,667 | — |
Notes to Portfolio of Investments
| (a) | Represents privately placed and other securities and instruments exempt from Securities and Exchange Commission 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, 2019, the total value of these securities amounted to $2,356,261, which represents 4.49% of total 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) | Represents a variable rate security where the coupon rate adjusts on specified dates (generally daily or weekly) using the prevailing money market rate. The interest rate shown was the current rate as of July 31, 2019. |
| (d) | Income from this security may be subject to alternative minimum tax. |
| (e) | The rate shown is the seven-day current annualized yield at July 31, 2019. |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 15 |
Portfolio of Investments (continued)
July 31, 2019
Abbreviation Legend
| AGM | Assured Guaranty Municipal Corporation |
| AMBAC | Ambac Assurance Corporation |
| AMT | Alternative Minimum Tax |
| BAM | Build America Mutual Assurance Co. |
| BAN | Bond Anticipation Note |
| FNMA | Federal National Mortgage Association |
| GNMA | Government National Mortgage Association |
| NPFGC | National Public Finance Guarantee Corporation |
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.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Under the direction of the Fund’s Board of Trustees (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the valuation procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation control policies and procedures (the Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation actions. The Committee reports to the Board, with members of the Committee meeting with the Board at each of its regularly scheduled meetings to discuss valuation matters and actions during the period, similar to those described earlier.
The following table is a summary of the inputs used to value the Fund’s investments at July 31, 2019:
| | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) |
| Investments in Securities | | | | |
| Corporate Bonds & Notes | — | 5,521,061 | — | 5,521,061 |
| Floating Rate Notes | — | 1,030,000 | — | 1,030,000 |
| Municipal Bonds | — | 42,084,196 | — | 42,084,196 |
| Money Market Funds | 2,160,894 | — | — | 2,160,894 |
| Total Investments in Securities | 2,160,894 | 48,635,257 | — | 50,796,151 |
| Investments in Derivatives | | | | |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 16 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Portfolio of Investments (continued)
July 31, 2019
Fair value measurements (continued)
| | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) |
| Asset | | | | |
| Futures Contracts | 4,667 | — | — | 4,667 |
| Total | 2,165,561 | 48,635,257 | — | 50,800,818 |
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).
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 17 |
Statement of Assets and Liabilities
July 31, 2019
| Assets | |
| Investments in securities, at value | |
| Unaffiliated issuers (cost $48,237,071) | $50,796,151 |
| Cash | 237,575 |
| Margin deposits on: | |
| Futures contracts | 11,000 |
| Receivable for: | |
| Investments sold | 5,041 |
| Capital shares sold | 1,157,637 |
| Interest | 462,758 |
| Expense reimbursement due from Investment Manager | 396 |
| Prepaid expenses | 349 |
| Trustees’ deferred compensation plan | 19,952 |
| Total assets | 52,690,859 |
| Liabilities | |
| Payable for: | |
| Capital shares purchased | 40,553 |
| Distributions to shareholders | 112,975 |
| Variation margin for futures contracts | 781 |
| Management services fees | 674 |
| Distribution and/or service fees | 124 |
| Transfer agent fees | 2,993 |
| Compensation of chief compliance officer | 2 |
| Audit fees | 32,500 |
| Other expenses | 9,795 |
| Trustees’ deferred compensation plan | 19,952 |
| Total liabilities | 220,349 |
| Net assets applicable to outstanding capital stock | $52,470,510 |
| Represented by | |
| Paid in capital | 50,311,039 |
| Total distributable earnings (loss) (Note 2) | 2,159,471 |
| Total - representing net assets applicable to outstanding capital stock | $52,470,510 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 18 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Statement of Assets and Liabilities (continued)
July 31, 2019
| Class A | |
| Net assets | $11,797,016 |
| Shares outstanding | 1,122,204 |
| Net asset value per share | $10.51 |
| Maximum sales charge | 3.00% |
| Maximum offering price per share (calculated by dividing the net asset value per share by 1.0 minus the maximum sales charge for Class A shares) | $10.84 |
| Advisor Class | |
| Net assets | $628,596 |
| Shares outstanding | 59,794 |
| Net asset value per share | $10.51 |
| Class C | |
| Net assets | $1,803,043 |
| Shares outstanding | 171,566 |
| Net asset value per share | $10.51 |
| Institutional Class | |
| Net assets | $31,708,064 |
| Shares outstanding | 3,016,566 |
| Net asset value per share | $10.51 |
| Institutional 2 Class | |
| Net assets | $3,018,473 |
| Shares outstanding | 286,978 |
| Net asset value per share | $10.52 |
| Institutional 3 Class | |
| Net assets | $3,515,318 |
| Shares outstanding | 333,256 |
| Net asset value per share | $10.55 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 19 |
Statement of Operations
Year Ended July 31, 2019
| Net investment income | |
| Income: | |
| Dividends — unaffiliated issuers | $1,117 |
| Interest | 1,633,064 |
| Total income | 1,634,181 |
| Expenses: | |
| Management services fees | 235,673 |
| Distribution and/or service fees | |
| Class A | 21,039 |
| Class C | 15,592 |
| Transfer agent fees | |
| Class A | 5,077 |
| Advisor Class | 149 |
| Class C | 932 |
| Institutional Class | 19,851 |
| Institutional 2 Class | 1,467 |
| Institutional 3 Class | 283 |
| Compensation of board members | 13,192 |
| Custodian fees | 17,892 |
| Printing and postage fees | 13,953 |
| Registration fees | 84,900 |
| Audit fees | 33,700 |
| Legal fees | 1,043 |
| Compensation of chief compliance officer | 20 |
| Other | 9,905 |
| Total expenses | 474,668 |
| Fees waived or expenses reimbursed by Investment Manager and its affiliates | (217,697) |
| Fees waived by transfer agent | |
| Institutional 2 Class | (614) |
| Total net expenses | 256,357 |
| Net investment income | 1,377,824 |
| Realized and unrealized gain (loss) — net | |
| Net realized gain (loss) on: | |
| Investments — unaffiliated issuers | 6,224 |
| Futures contracts | (290,626) |
| Net realized loss | (284,402) |
| Net change in unrealized appreciation (depreciation) on: | |
| Investments — unaffiliated issuers | 2,476,556 |
| Futures contracts | 9,894 |
| Net change in unrealized appreciation (depreciation) | 2,486,450 |
| Net realized and unrealized gain | 2,202,048 |
| Net increase in net assets resulting from operations | $3,579,872 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 20 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Statement of Changes in Net Assets
| | Year Ended
July 31, 2019 | Year Ended
July 31, 2018 |
| Operations | | |
| Net investment income | $1,377,824 | $1,164,221 |
| Net realized gain (loss) | (284,402) | 148,488 |
| Net change in unrealized appreciation (depreciation) | 2,486,450 | (700,173) |
| Net increase in net assets resulting from operations | 3,579,872 | 612,536 |
| Distributions to shareholders | | |
| Net investment income and net realized gains | | |
| Class A | (218,985) | |
| Advisor Class | (6,393) | |
| Class C | (28,891) | |
| Institutional Class | (959,909) | |
| Institutional 2 Class | (68,779) | |
| Institutional 3 Class | (82,700) | |
| Net investment income | | |
| Class A | | (141,700) |
| Advisor Class | | (540) |
| Class C | | (22,108) |
| Institutional Class | | (923,541) |
| Institutional 2 Class | | (35,585) |
| Institutional 3 Class | | (34,473) |
| Total distributions to shareholders (Note 2) | (1,365,657) | (1,157,947) |
| Increase in net assets from capital stock activity | 782,094 | 8,269,974 |
| Total increase in net assets | 2,996,309 | 7,724,563 |
| Net assets at beginning of year | 49,474,201 | 41,749,638 |
| Net assets at end of year | $52,470,510 | $49,474,201 |
| Undistributed net investment income | $25,355 | $13,188 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 21 |
Statement of Changes in Net Assets (continued)
| | Year Ended | Year Ended |
| | July 31, 2019 | July 31, 2018 |
| | Shares | Dollars ($) | Shares | Dollars ($) |
| Capital stock activity |
| Class A | | | | |
| Subscriptions | 574,050 | 5,880,264 | 428,122 | 4,320,938 |
| Distributions reinvested | 20,132 | 204,659 | 13,922 | 140,715 |
| Redemptions | (171,217) | (1,743,969) | (252,274) | (2,543,644) |
| Net increase | 422,965 | 4,340,954 | 189,770 | 1,918,009 |
| Advisor Class | | | | |
| Subscriptions | 63,494 | 654,021 | 7,492 | 75,332 |
| Distributions reinvested | 593 | 6,103 | 27 | 273 |
| Redemptions | (12,812) | (131,877) | — | — |
| Net increase | 51,275 | 528,247 | 7,519 | 75,605 |
| Class C | | | | |
| Subscriptions | 55,334 | 569,964 | 43,276 | 437,946 |
| Distributions reinvested | 2,762 | 28,049 | 2,171 | 21,931 |
| Redemptions | (32,829) | (336,127) | (13,679) | (137,807) |
| Net increase | 25,267 | 261,886 | 31,768 | 322,070 |
| Institutional Class | | | | |
| Subscriptions | 1,291,078 | 13,135,750 | 1,717,307 | 17,371,272 |
| Distributions reinvested | 49,171 | 500,282 | 29,904 | 302,022 |
| Redemptions | (1,992,916) | (20,236,288) | (1,444,318) | (14,625,922) |
| Net increase (decrease) | (652,667) | (6,600,256) | 302,893 | 3,047,372 |
| Institutional 2 Class | | | | |
| Subscriptions | 126,531 | 1,264,290 | 43,482 | 440,813 |
| Distributions reinvested | 6,709 | 68,488 | 3,493 | 35,318 |
| Redemptions | (3,511) | (36,158) | (13) | (129) |
| Net increase | 129,729 | 1,296,620 | 46,962 | 476,002 |
| Institutional 3 Class | | | | |
| Subscriptions | 130,810 | 1,332,951 | 245,888 | 2,502,353 |
| Distributions reinvested | 8,067 | 82,404 | 3,381 | 34,202 |
| Redemptions | (45,485) | (460,712) | (10,411) | (105,639) |
| Net increase | 93,392 | 954,643 | 238,858 | 2,430,916 |
| Total net increase | 69,961 | 782,094 | 817,770 | 8,269,974 |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 22 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
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Columbia U.S. Social Bond Fund | Annual Report 2019
| 23 |
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.
| | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Total
distributions to
shareholders |
| Class A |
| Year Ended 7/31/2019 | $10.05 | 0.27 | 0.45 | 0.72 | (0.26) | (0.26) |
| Year Ended 7/31/2018 | $10.18 | 0.24 | (0.13) | 0.11 | (0.24) | (0.24) |
| Year Ended 7/31/2017 | $10.43 | 0.22 | (0.26) | (0.04) | (0.21) | (0.21) |
| Year Ended 7/31/2016 | $9.94 | 0.17 | 0.48 | 0.65 | (0.16) | (0.16) |
| Year Ended 7/31/2015(c) | $10.00 | 0.02 | (0.06) | (0.04) | (0.02) | (0.02) |
| Advisor Class |
| Year Ended 7/31/2019 | $10.05 | 0.29 | 0.46 | 0.75 | (0.29) | (0.29) |
| Year Ended 7/31/2018 | $10.18 | 0.28 | (0.14) | 0.14 | (0.27) | (0.27) |
| Year Ended 7/31/2017 | $10.43 | 0.24 | (0.25) | (0.01) | (0.24) | (0.24) |
| Year Ended 7/31/2016 | $9.94 | 0.19 | 0.49 | 0.68 | (0.19) | (0.19) |
| Year Ended 7/31/2015(c) | $10.00 | 0.03 | (0.06) | (0.03) | (0.03) | (0.03) |
| Class C |
| Year Ended 7/31/2019 | $10.05 | 0.19 | 0.46 | 0.65 | (0.19) | (0.19) |
| Year Ended 7/31/2018 | $10.17 | 0.17 | (0.12) | 0.05 | (0.17) | (0.17) |
| Year Ended 7/31/2017 | $10.43 | 0.14 | (0.26) | (0.12) | (0.14) | (0.14) |
| Year Ended 7/31/2016 | $9.94 | 0.09 | 0.48 | 0.57 | (0.08) | (0.08) |
| Year Ended 7/31/2015(c) | $10.00 | 0.01 | (0.06) | (0.05) | (0.01) | (0.01) |
| Institutional Class |
| Year Ended 7/31/2019 | $10.05 | 0.29 | 0.46 | 0.75 | (0.29) | (0.29) |
| Year Ended 7/31/2018 | $10.18 | 0.27 | (0.13) | 0.14 | (0.27) | (0.27) |
| Year Ended 7/31/2017 | $10.43 | 0.24 | (0.25) | (0.01) | (0.24) | (0.24) |
| Year Ended 7/31/2016 | $9.94 | 0.19 | 0.49 | 0.68 | (0.19) | (0.19) |
| Year Ended 7/31/2015(c) | $10.00 | 0.04 | (0.07) | (0.03) | (0.03) | (0.03) |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $10.06 | 0.29 | 0.46 | 0.75 | (0.29) | (0.29) |
| Year Ended 7/31/2018 | $10.18 | 0.27 | (0.12) | 0.15 | (0.27) | (0.27) |
| Year Ended 7/31/2017 | $10.43 | 0.25 | (0.26) | (0.01) | (0.24) | (0.24) |
| Year Ended 7/31/2016 | $9.94 | 0.19 | 0.48 | 0.67 | (0.18) | (0.18) |
| Year Ended 7/31/2015(c) | $10.00 | 0.03 | (0.06) | (0.03) | (0.03) | (0.03) |
The accompanying Notes to Financial Statements are an integral part of this statement.
| 24 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Class A |
| Year Ended 7/31/2019 | $10.51 | 7.33% | 1.14% | 0.70% | 2.63% | 11% | $11,797 |
| Year Ended 7/31/2018 | $10.05 | 1.10% | 1.20% | 0.70% | 2.40% | 21% | $7,030 |
| Year Ended 7/31/2017 | $10.18 | (0.31%) | 1.31% | 0.72% | 2.12% | 20% | $5,184 |
| Year Ended 7/31/2016 | $10.43 | 6.60% | 1.72% | 0.81% | 1.72% | 26% | $2,901 |
| Year Ended 7/31/2015(c) | $9.94 | (0.38%) | 1.72%(d) | 0.80%(d) | 0.67%(d) | 11% | $10 |
| Advisor Class |
| Year Ended 7/31/2019 | $10.51 | 7.60% | 0.89% | 0.45% | 2.86% | 11% | $629 |
| Year Ended 7/31/2018 | $10.05 | 1.36% | 0.94% | 0.45% | 2.76% | 21% | $86 |
| Year Ended 7/31/2017 | $10.18 | (0.06%) | 1.06% | 0.47% | 2.38% | 20% | $10 |
| Year Ended 7/31/2016 | $10.43 | 6.87% | 1.47% | 0.56% | 1.83% | 26% | $10 |
| Year Ended 7/31/2015(c) | $9.94 | (0.29%) | 1.47%(d) | 0.55%(d) | 0.92%(d) | 11% | $10 |
| Class C |
| Year Ended 7/31/2019 | $10.51 | 6.53% | 1.89% | 1.45% | 1.88% | 11% | $1,803 |
| Year Ended 7/31/2018 | $10.05 | 0.45% | 1.95% | 1.45% | 1.65% | 21% | $1,470 |
| Year Ended 7/31/2017 | $10.17 | (1.16%) | 2.05% | 1.46% | 1.42% | 20% | $1,165 |
| Year Ended 7/31/2016 | $10.43 | 5.80% | 2.47% | 1.56% | 0.93% | 26% | $238 |
| Year Ended 7/31/2015(c) | $9.94 | (0.54%) | 2.47%(d) | 1.45%(d) | 0.02%(d) | 11% | $10 |
| Institutional Class |
| Year Ended 7/31/2019 | $10.51 | 7.60% | 0.90% | 0.45% | 2.88% | 11% | $31,708 |
| Year Ended 7/31/2018 | $10.05 | 1.36% | 0.95% | 0.45% | 2.65% | 21% | $36,887 |
| Year Ended 7/31/2017 | $10.18 | (0.06%) | 1.06% | 0.47% | 2.39% | 20% | $34,257 |
| Year Ended 7/31/2016 | $10.43 | 6.86% | 1.48% | 0.56% | 1.85% | 26% | $28,176 |
| Year Ended 7/31/2015(c) | $9.94 | (0.29%) | 1.47%(d) | 0.55%(d) | 1.14%(d) | 11% | $19,949 |
| Institutional 2 Class |
| Year Ended 7/31/2019 | $10.52 | 7.60% | 0.87% | 0.44% | 2.89% | 11% | $3,018 |
| Year Ended 7/31/2018 | $10.06 | 1.46% | 0.93% | 0.44% | 2.67% | 21% | $1,581 |
| Year Ended 7/31/2017 | $10.18 | (0.05%) | 1.10% | 0.44% | 2.48% | 20% | $1,123 |
| Year Ended 7/31/2016 | $10.43 | 6.82% | 1.51% | 0.60% | 1.85% | 26% | $73 |
| Year Ended 7/31/2015(c) | $9.94 | (0.31%) | 1.52%(d) | 0.60%(d) | 0.87%(d) | 11% | $10 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 25 |
Financial Highlights (continued)
| | Net asset value,
beginning of
period | Net
investment
income | Net
realized
and
unrealized
gain (loss) | Total from
investment
operations | Distributions
from net
investment
income | Total
distributions to
shareholders |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $10.09 | 0.30 | 0.45 | 0.75 | (0.29) | (0.29) |
| Year Ended 7/31/2018 | $10.21 | 0.27 | (0.12) | 0.15 | (0.27) | (0.27) |
| Year Ended 7/31/2017(e) | $9.94 | 0.10 | 0.27(f) | 0.37 | (0.10) | (0.10) |
| 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 Fund commenced operations on March 26, 2015. Per share data and total return reflect activity from that date. |
| (d) | Annualized. |
| (e) | Institutional 3 Class 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.
| 26 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Financial Highlights (continued)
| | 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) |
| Institutional 3 Class |
| Year Ended 7/31/2019 | $10.55 | 7.61% | 0.84% | 0.42% | 2.91% | 11% | $3,515 |
| Year Ended 7/31/2018 | $10.09 | 1.49% | 0.90% | 0.43% | 2.72% | 21% | $2,420 |
| Year Ended 7/31/2017(e) | $10.21 | 3.76% | 1.02%(d) | 0.44%(d) | 2.46%(d) | 20% | $10 |
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 27 |
Notes to Financial Statements
July 31, 2019
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). The Fund offers each of the share classes listed in the Statement of Assets and Liabilities. 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. Each share class has its own expense and sales charge structure. Different share classes may have different minimum initial investment amounts and pay different distribution amounts to the extent the expenses of distributing such share classes vary. Distributions to shareholders in a liquidation will be proportional to the net asset value of each share class.
As described in the Fund’s prospectus, Class A and Class C shares are offered to the general public for investment. Advisor Class, Institutional Class, Institutional 2 Class and Institutional 3 Class shares are available for purchase through authorized investment professionals to omnibus retirement plans or to institutional and to certain other investors as also described in the Fund’s prospectus. Class C shares automatically convert to Class A shares after 10 years.
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.
Investments in open-end investment companies, including money market funds, are valued at their latest net asset 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.
| 28 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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 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 for most over-the-counter derivatives are subject to regulatory requirements to exchange variation margin with trading counterparties and may have contract specific margin terms as well. 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 may also pay interest expense on cash collateral received from the
Columbia U.S. Social Bond Fund | Annual Report 2019
| 29 |
Notes to Financial Statements (continued)
July 31, 2019
broker. Any interest expense paid by the Fund is shown on the Statement of Operations. 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 determining whether to exercise such termination rights, the Fund would consider, in addition to counterparty credit risk, 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.
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, 2019:
| | Asset derivatives | |
Risk exposure
category | Statement
of assets and liabilities
location | Fair value ($) |
| Interest rate risk | Component of total distributable earnings (loss) — unrealized appreciation on futures contracts | 4,667* |
| * | 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. |
| 30 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019:
| Amount of realized gain (loss) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | (290,626) |
| |
| Change in unrealized appreciation (depreciation) on derivatives recognized in income |
| Risk exposure category | Futures
contracts
($) |
| Interest rate risk | 9,894 |
The following table is a summary of the average outstanding volume by derivative instrument for the year ended July 31, 2019:
| Derivative instrument | Average notional
amounts ($)* |
| Futures contracts — short | 5,215,469 |
| * | Based on the ending quarterly outstanding amounts for the year ended July 31, 2019. |
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 net tax-exempt and investment company taxable income and net capital gain, 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 ordinary income, capital gain net income and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 31 |
Notes to Financial Statements (continued)
July 31, 2019
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 pronouncements
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. Management does not expect the implementation of this guidance to have a material impact on the financial statement amounts and footnote disclosures.
Accounting Standards Update 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted. After evaluation, Management determined to adopt the ASU effective for periods ending July 31, 2019 and all subsequent periods. As a result of the amendments, management implemented disclosure changes which include removal of the amount and reasons for transfers between level 1 and level 2 of the fair value hierarchy, removal of the policy for the timing of transfers between levels, removal of the description of the level 3 valuation processes, as well as modifications to the measurement uncertainty disclosure.
Disclosure Update and Simplification
In September 2018, the Securities and Exchange Commission (SEC) released Final Rule 33-10532, Disclosure Update and Simplification, which amends certain financial statement disclosure requirements that the SEC determined to be redundant, outdated, or superseded in light of other SEC disclosure requirements, GAAP, or changes in the information environment. As a result of the amendments, management implemented disclosure changes which included removing the components of distributable earnings presented on the Statement of Assets and Liabilities and combining income and gain distributions paid to shareholders as presented on the Statement of Changes in Net Assets. Any values presented to meet prior year requirements were left unchanged. The amendments had no effect on the Fund’s net assets or results of operation.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund has 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
| 32 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2019 was 0.48% 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, 2019, 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 Deferred Plan) which may be terminated at any time. Obligations of the Deferred Plan will be paid solely out of the Fund’s assets, and all amounts payable under the Deferred 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. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment Manager and its affiliates, based on relative net assets.
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 DST Asset Manager Solutions, Inc. (DST) to serve as sub-transfer agent. The Transfer Agent pays the fees of DST for services as sub-transfer agent and DST 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, the Fund pays the Transfer Agent a fee for shareholder services based on the number of accounts or on a percentage of the average aggregate value of the Fund’s shares maintained in omnibus accounts up to the lesser of the amount charged by the financial intermediary or a cap established by the Board of Trustees from time to time.
The Transfer Agent also receives compensation from the Fund for various shareholder services and reimbursements for certain out-of-pocket fees. Total transfer agency fees for Institutional 2 Class and Institutional 3 Class 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. In addition, effective December 1, 2018 through November 30, 2019, Institutional 2 Class shares are subject to a contractual transfer agency fee annual limitation of not more than 0.04% of the average daily net assets attributable to Institutional 2 Class shares. Prior to December 1, 2018, Institutional 2 Class shares were subject to a contractual transfer agency fee annual limitation of not more than 0.02% of the average daily net assets attributable to Institutional 2 Class shares.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 33 |
Notes to Financial Statements (continued)
July 31, 2019
For the year ended July 31, 2019, 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 | 0.06 |
| Advisor Class | 0.06 |
| Class C | 0.06 |
| Institutional Class | 0.06 |
| Institutional 2 Class | 0.04 |
| Institutional 3 Class | 0.01 |
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the applicable share class’s initial minimum investment requirements to reduce the impact of small accounts on transfer agency fees. These minimum account balance fees are remitted to the Fund and recorded as part of expense reductions in the Statement of Operations. For the year ended July 31, 2019, no minimum account balance fees were charged by the Fund.
Distribution and service fees
The Fund has entered into an agreement with Columbia Management Investment Distributors, Inc. (the Distributor), an affiliate of the Investment Manager and a wholly-owned subsidiary of Ameriprise Financial, for distribution and shareholder services. The Board of Trustees has approved, and the Fund has adopted, distribution and shareholder service plans (the Plans) applicable to certain share classes, which set the distribution and service fees for the Fund. These fees are calculated daily and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors.
Under the Plans, the Fund pays a monthly service fee to the Distributor at the maximum annual rate of 0.25% of the average daily net assets attributable to Class A and Class C shares of the Fund. Also under the Plans, the Fund pays a monthly distribution fee to the Distributor at the maximum annual rate of 0.75% of the average daily net assets attributable to Class C shares of the Fund.
Sales charges (unaudited)
Sales charges, including front-end charges and CDSCs, received by the Distributor for distributing Fund shares for the year ended July 31, 2019, if any, are listed below:
| | Front End (%) | CDSC (%) | Amount ($) |
| Class A | 3.00 | 0.50 - 1.00(a) | 30,918 |
| Class C | — | 1.00(b) | 400 |
| (a) | This charge is imposed on certain investments of $500,000 or more if redeemed within 12 months after purchase. |
| (b) | This charge applies to redemptions within 12 months after purchase, with certain limited exceptions. |
The Fund’s other share classes are not subject to sales charges.
| 34 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
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, 2018
through
November 30, 2019 | Prior to
December 1, 2018 |
| Class A | 0.70% | 0.70% |
| Advisor Class | 0.45 | 0.45 |
| Class C | 1.45 | 1.45 |
| Institutional Class | 0.45 | 0.45 |
| Institutional 2 Class | 0.44 | 0.44 |
| Institutional 3 Class | 0.41 | 0.44 |
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. In addition to the contractual agreement, the Investment Manager and certain of its affiliates have voluntarily agreed to waive fees and/or reimburse Fund expenses (excluding certain fees and expenses described above) so that Fund level expenses (expenses directly attributable to the Fund and not to a specific share class) are waived proportionately across all share classes, but the Fund’s net operating expenses shall not exceed the contractual annual rates listed in the table above. This arrangement may be revised or discontinued at any time. Reflected in the contractual cap commitment, effective December 1, 2018 through November 30, 2019, is the Transfer Agent’s contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.04% for Institutional 2 Class of the average daily net assets attributable to Institutional 2 Class, unless sooner terminated at the sole discretion of the Board of Trustees. Reflected in the contractual cap commitment, prior to December 1, 2018, is the Transfer Agent’s contractual agreement to limit total transfer agency fees to an annual rate of not more than 0.02% for Institutional 2 Class of the average daily net assets attributable Institutional 2 Class. 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, 2019, these differences were 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 were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
The Fund did not have any permanent differences; therefore, no reclassifications were made.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 35 |
Notes to Financial Statements (continued)
July 31, 2019
The tax character of distributions paid during the years indicated was as follows:
| Year Ended July 31, 2019 | Year Ended July 31, 2018 |
Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) | Ordinary
income ($) | Tax-exempt
income ($) | Long-term
capital gains ($) | Total ($) |
| 215,481 | 1,150,176 | — | 1,365,657 | 151,034 | 1,006,913 | — | 1,157,947 |
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At July 31, 2019, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($) | Undistributed tax-
exempt income ($) | Undistributed
long-term
capital gains ($) | Capital loss
carryforwards ($) | Net unrealized
appreciation ($) |
| — | 140,053 | — | (36,636) | 2,191,814 |
At July 31, 2019, the cost of all 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) ($) | Net unrealized
appreciation ($) |
| 48,609,004 | 2,208,292 | (16,478) | 2,191,814 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
The following capital loss carryforwards, determined at July 31, 2019, 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, 2019, capital loss carryforwards utilized and expired unused, if any, were as follows:
No expiration
short-term ($) | No expiration
long-term ($) | Total ($) | Utilized ($) | Expired ($) |
| — | 36,636 | 36,636 | 84,525 | — |
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 $5,494,468 and $7,346,649, respectively, for the year ended July 31, 2019. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Interfund lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Fund participates in a program (the Interfund Program) allowing each participating Columbia Fund (each, a Participating Fund) to lend money directly to and, except for closed-end funds and money market funds, borrow money directly from other Participating Funds for temporary purposes. The amounts eligible for borrowing and lending under the Interfund Program are subject to certain restrictions.
| 36 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Notes to Financial Statements (continued)
July 31, 2019
Interfund loans are subject to the risk that the borrowing fund could be unable to repay the loan when due, and a delay in repayment to the lending fund could result in lost opportunities and/or additional lending costs. The exemptive order is subject to conditions intended to mitigate conflicts of interest arising from the Investment Manager’s relationship with each Participating Fund.
The Fund did not borrow or lend money under the Interfund Program during the year ended July 31, 2019.
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 or an affiliated 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 federal funds effective rate, (ii) the one-month LIBOR rate and (iii) the overnight bank funding rate, plus in each case, 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 unused 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. This agreement expires annually in December unless extended or renewed.
The Fund had no borrowings during the year ended July 31, 2019.
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 defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain debt instruments to indicate their credit risk. Lower rated or unrated debt instruments held by the Fund may present increased credit risk as compared to higher-rated debt instruments.
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. Changes in interest rates may also affect the liquidity of the Fund’s investments in debt instruments. In general, the longer the maturity or duration of a debt instrument, the greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the Fund’s performance. 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.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 37 |
Notes to Financial Statements (continued)
July 31, 2019
Non-diversification risk
A non-diversified fund is permitted to invest a greater percentage of its total assets in the securities of fewer issuers than a diversified fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of a more diversified fund.
Shareholder concentration risk
At July 31, 2019, three unaffiliated shareholders of record owned 40.7% of the outstanding shares of the Fund in one or more accounts. The Fund has no knowledge about whether any portion of those shares was owned beneficially. Affiliated shareholders of record owned 27.7% 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 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.
| 38 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Columbia Funds Series Trust I and Shareholders of Columbia U.S. Social Bond Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia U.S. Social Bond Fund (one of the funds constituting Columbia Funds Series Trust I, hereafter referred to as the "Fund") as of July 31, 2019, the related statement of operations for the year ended July 31, 2019, the statement of changes in net assets for each of the two years in the period ended July 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2019, 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 ended July 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2019 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 20, 2019
We have served as the auditor of one or more investment companies within the Columbia Funds Complex since 1977.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 39 |
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended July 31, 2019. Shareholders will be notified in early 2020 of the amounts for use in preparing 2019 income tax returns.
Exempt-
interest
dividends | |
| 84.22% | |
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.
| 40 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
The Board oversees the Fund’s operations and 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 as of the printing of this report, 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), September 2007-October 2018 | 69 | 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, December 2002-May 2006; President of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001 | 69 | Spartan Nash Company, (food distributor); former Director, Nash Finch Company (food distributor), 2005-2013; Aircastle Limited (aircraft leasing); former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; 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), 1997-2010; Chair, Wellington Management Portfolios (commingled non-U.S. investment pools), 2007-2010; Director, Wellington Trust Company, NA and other Wellington affiliates, 1997-2010 | 69 | 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 | 69 | Director, CSX Corporation (transportation suppliers); 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 2019
| 41 |
TRUSTEES AND OFFICERS (continued)
Independent trustees (continued)
| Name, address, year of birth | Position held with the Trust and length of service | Principal occupation(s) during 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 |
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, August 2007-June 2018; Director or Trustee of several non-profit organizations, including University of Vermont Medical Center; Academic Vice President and Dean of Faculties, Boston College, August 1999-October 2005; University Professor, Boston College, November 2005-August 2007 | 69 | 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, 1988-2014 | 69 | Former Director, M Fund, Inc. (M Funds mutual fund family), July 2018-July 2019 |
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, 1994-1997, President – Application Systems Division, 1991-1994, Chief Financial Officer – US Marketing & Services, 1988-1991, and Chief Information Officer, 1987-1988, IBM Corporation (computer and technology) | 69 | Former Director, Enesco Group, Inc. (producer of giftware and home and garden decor products), 2001-2006 |
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; Adjunct Professor of Finance, Bentley University since November 2017; Managing Director and General Manager of Mutual Fund Products, Columbia Management Investment Advisers, LLC, May 2010-February 2015; President, Columbia Funds, 2009-2015; and senior officer of Columbia Funds and affiliated funds, 2003-2015 | 69 | Director, The Autism Project since March 2015; former Trustee, New Century Portfolios, March 2015-December 2017; formerly on Board of Governors, Gateway Healthcare, January 2016 – December 2017 |
| 42 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
TRUSTEES AND OFFICERS (continued)
Consultants to the 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 Funds complex overseen | Other directorships held by Trustee during the past five years |
Olive Darragh
c/o Columbia
Management Investment
Advisers, LLC,
225 Franklin Street,
Mail Drop BX32 05228,
Boston, MA 02110
1962 | Independent Trustee Consultant 2019 | Independent Trustee Consultant, Columbia Funds since June 2019; Managing Director of Darragh Inc. (a strategy and talent management consulting firm) since 2010; Founder and CEO, Zolio (an investment management talent identification platform) since 2004; Partner, Tudor Investments, 2004-2010; Senior Partner, McKinsey & Company, 2001-2004 | 69 | Director, University of Edinburgh Business School; former Director, Boston Public Library Foundation |
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 Portfolio Solutions LLC (asset management and consulting services) since January 2016; Director of Investments, Casey Family Programs, April 2016-September 2016; Senior Vice President and Chief Investment Officer, Calvert Investments, August 2008-January 2016; Section Head and Portfolio Manager, General Motors Asset Management, June 1997-August 2008 | 69 | Director, Health Services for Children with Special Needs, Inc.; Director, Consumer Credit Counseling Services (formerly Guidewell Financial Solutions) |
| * | J. Kevin Connaughton was appointed consultant to the Independent Trustees effective March 1, 2016. Olive Darragh was appointed consultant to the Independent Trustees effective June 10, 2019. 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, Ms. Darragh 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 | 190 | 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, August 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, visiting columbiathreadneedleus.com/investor/ or contacting your financial intermediary.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 43 |
TRUSTEES AND OFFICERS (continued)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the Fund as of the printing of this report, 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 | Chief Financial Officer (Principal Financial Officer) (2009) and Senior Vice President (2019) | Vice President, Head of North American Operations, and Co-Head of Global Operations, Columbia Management Investment Advisers, LLC, since June 2019 (previously Vice President – Accounting and Tax, May 2010 - May 2019); senior officer of Columbia Funds and affiliated funds since 2002 (previously Treasurer and Chief Accounting Officer, January 2009 - January 2019 and December 2015 - January 2019, respectively). |
Joseph Beranek
5890 Ameriprise
Financial Center
Minneapolis, MN 55474
Born 1965 | Treasurer and Chief Accounting Officer (Principal Accounting Officer) (2019) | Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and March 2017, respectively (previously Vice President — Pricing and Corporate Actions, May 2010 - March 2017). |
Paul B. Goucher
485 Lexington 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); Vice President, Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since March 2015 (previously Vice President and Assistant Secretary, May 2010 – March 2015). |
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. |
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 Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously Vice President and Group Counsel, August 2011 - August 2018); 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. |
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. |
| 44 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Board Consideration and Approval of Management and Subadvisory Agreements
On June 12, 2019, 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, among themselves, with the management team of the Investment Manager and with an independent fee consultant, materials provided by the Investment Manager, the independent fee consultant 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 5, 2019, April 25, 2019 and June 11, 2019 and at Board meetings held on March 6, 2019 and June 12, 2019. In addition, the Board and its various committees consider matters bearing on the Agreements at other meetings throughout the year and in prior years and meet 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 with other investment personnel at various times throughout the year. The Committee and the Board also consulted with the 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 11, 2019, the Committee recommended that the Board approve the continuation of the Management Agreement and the Subadvisory Agreement. On June 12, 2019, 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, 2019 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 2019
| 45 |
Board Consideration and Approval of Management and Subadvisory Agreements (continued)
| • | Information regarding the management fees of similarly-managed portfolios of other clients of the Investment Manager, including institutional accounts and collective trusts; |
| • | 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 funds using an investment strategy similar to that used by the Investment Manager and the Subadviser for the Fund. 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 the resources dedicated by the Investment Manager and its affiliates to risk management, 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, based on information provided by the Investment Manager, 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.
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, 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 information and analysis 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, 2018, the Fund’s performance was in the forty-sixth and forty-third 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- and three-year periods, respectively.
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
| 46 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
Board Consideration and Approval of Management and Subadvisory Agreements (continued)
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 support 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 the independent fee consultant. The Committee and the Board noted that, as of December 31, 2018, the Fund’s actual management fee and net total expense ratio were ranked in the first 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 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 expected to manage any assets under its Subadvisory Agreement, but that the Investment Manager could, in the future, allocate 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 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, supported the continuation of the Management Agreement and the Subadvisory 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, and the efforts undertaken by the Investment Manager and its affiliates to manage efficiently their costs to provide such services.
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, including with respect to funds for which unaffiliated subadvisers provide services, information about the allocation of expenses used to calculate profitability, and comparisons of profitability levels realized in 2018 to profitability levels realized in 2017. 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 from its relationship with the Fund.
Columbia U.S. Social Bond Fund | Annual Report 2019
| 47 |
Board Consideration and Approval of Management and Subadvisory Agreements (continued)
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 noted 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 information about the Investment Manager’s practices with respect to considering brokerage and research services when allocating portfolio transactions. In this connection, the Board also noted that the amount of research made available to the Investment Manager by reason of brokerage commissions had been declining over time, and may decline further. 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.
| 48 | Columbia U.S. Social Bond Fund | Annual Report 2019 |
The Fund mails one shareholder report to each shareholder address, unless such shareholder elected to receive shareholder reports from the Fund electronically. 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/investor/; 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/investor/, 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-PORT, and for reporting periods ended prior to March 31, 2019, on Form N-Q. The Fund’s Form N-Q and Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-Q or Form N-PORT, 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/investor/ 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 219104
Kansas City, MO 64121-9104
Columbia U.S. Social Bond Fund | Annual Report 2019
| 49 |
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Columbia U.S. Social Bond Fund
P.O. Box 219104
Kansas City, MO 64121-9104
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/investor/. 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.
© 2019 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Item 2. Code of Ethics.
| | (a) | The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
| | (b) | During the period covered by this report, there were not any amendments to a provision of the code of ethics 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, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. |
| | (c) | During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics 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 that relates to one or more of the items set forth in paragraph (b) of this Item. |
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that Douglas A. Hacker, David M. Moffett andAnne-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 report to stockholders are included in this annual filing.
(a)Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended July 31, 2019 and July 31, 2018 are approximately as follows:
| | |
| 2019 | | 2018 |
| $164,800 | | $156,400 |
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, 2019 and July 31, 2018 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.
During the fiscal years ended July 31, 2019 and July 31, 2018, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including anysub-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, 2019 and July 31, 2018 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.
During the fiscal years ended July 31, 2019 and July 31, 2018, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including anysub-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, 2019 and July 31, 2018 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 anysub-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, 2019 and July 31, 2018 are approximately as follows:
| | |
| 2019 | | 2018 |
| $225,000 | | $225,000 |
In fiscal years 2019 and 2018, All Other Fees primarily consists of fees billed for internal control examinations of the registrant’s transfer agent and investment adviser.
(e)(1) Audit CommitteePre-Approval Policies and Procedures
The registrant’s Audit Committee is required topre-approve the engagement of the registrant’s independent auditors to provide audit andnon-audit services to the registrant andnon-audit services to its investment adviser (excluding anysub-adviser whose role is primarily portfolio management and issub-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 andNon-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 andnon-audit services to the registrant’s Adviser and its Control Affiliates. A service will require specificpre-approval by the Audit Committee if it is to be provided by the Fund’s independent auditor; provided, however, thatpre-approval ofnon-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 delegatepre-approval authority to anypre-designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, anypre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee’s responsibilities with respect to thepre-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 specificpre-approval. This schedule will provide a description of each type of service that is subject to specificpre-approval, along with total projected fees for each service. Thepre-approval will generally cover aone-year period. The Audit Committee will review and approve the types of services and the projected fees for the nextone-year period and may add to, or subtract from, the list ofpre-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 specificpre-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 2019 and 2018 werepre-approved by the registrant’s Audit Committee.
(f) Not applicable.
(g) The aggregatenon-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including anysub-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, 2019 and July 31, 2018 are approximately as follows:
| | |
| 2019 | | 2018 |
| $244,300 | | $248,400 |
(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision ofnon-audit services that were rendered to the registrant’s adviser (not including anysub-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 notpre-approved pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-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 CFR210.12-12) is included in Item 1 of this FormN-CSR. |
Item 7. Disclosure of Proxy Voting Policies and Procedures forClosed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers ofClosed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities byClosed-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 information required to be disclosed by the registrant in FormN-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 period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities forClosed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of FormN-CSR attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule30a-2(a) under the Investment Company Act of 1940 (17 CFR270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule30a-2(b) under the Investment Company Act of 1940 (17 CFR270.30a-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, Chief Financial Officer | | |
