UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-2214
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Columbia Funds Trust I
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Russell Kane, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3363
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Date of fiscal year end: 10/31/2003
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Date of reporting period: 10/31/2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Columbia Tax-Managed Funds
Annual Report
October 31, 2003
Photo of: Man and woman smiling at each other.
WE ARE COLUMBIA FUNDS!
INSIDE - MANAGEMENT'S DISCUSSION OF THE CHANGES EFFECTIVE OCTOBER 13, 2003.
President's Message
Photo of: Joseph R. Palombo
Dear Shareholder:
As you know, your fund has been part of a larger investment management
organization. Prior to 2001, it was part of Liberty Financial, whose affiliated
asset management companies included Colonial, Stein Roe and Newport. In 2001,
these companies became part of the asset management division of FleetBoston
Financial Corp., which you know as Columbia Management Group (CMG).
Earlier this year, six of the asset management firms brought together under the
CMG umbrella were consolidated and renamed Columbia Management Advisors, Inc. On
October 13, 2003, we took the natural next step in this process by changing the
name of our funds from Liberty to Columbia. We have also modified certain fund
names that existed under both the Liberty and Columbia brands. Here are the new
names:
FORMER NAME NEW NAME
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Liberty Tax-Managed Columbia Tax-Managed
Aggressive Growth Fund Aggressive Growth Fund
Liberty Tax-Managed Columbia Tax-Managed
Growth Fund Growth Fund
Liberty Tax Managed Columbia Tax Managed
Growth Fund II Growth Fund II
Liberty Tax-Managed Columbia Tax-Managed
Value Fund Value Fund
A complete list of new fund names and other information related to these changes
are available online at our new website address: www.columbiafunds.com.
A CONSOLIDATED IDENTITY
The consolidation of our management under a single organization and the renaming
of our funds are part of a larger effort to create a consistent identity. Having
taken these additional steps, we believe it will be easier for shareholders to
do business with us. All funds are now listed under "Columbia" in the mutual
fund listings section of your newspaper (depending on the newspaper's listing
requirements). All service inquiries are now handled by Columbia Funds Services,
Inc., the new name of our shareholder service organization.
What has not changed is our commitment to our mutual fund shareholders. We
remain committed to providing the best possible customer service and to offering
a wide variety of mutual funds to help you pursue your long-term financial
goals. Should you have questions, please call Columbia Funds at 800-345-6611.
In the report that follows, the portfolio managers of each fund discuss in depth
the investment strategies and other factors that affected your fund's
performance during the period. We encourage you to read the report carefully.
As always, we thank you for your business and we look forward to continuing to
serve your investment needs.
Sincerely,
/s/ Joseph R. Palombo
Joseph R. Palombo
President
Not FDIC Insured
May Lose Value
No Bank Guarantee
Economic and market conditions can change frequently. There is no assurance that
the trends described in this report will continue or commence.
No taxable income or capital gains distribution since inception
AVERAGE ANNUAL TOTAL RETURNS,
CLASS A SHARES WITH SALES CHARGE
FOR THE PERIOD THAT ENDED 10/31/03
1-YEAR 5-YEAR LIFE
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COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND (SINCE 8/1/00)
RETURNS BEFORE TAXES 14.49 N/A -13.00
RETURNS AFTER TAXES ON DISTRIBUTIONS 14.49 N/A -13.00
RETURNS AFTER TAXES ON DISTRIBUTIONS
AND SALE OF FUND SHARES 8.90 N/A -10.05
S&P MIDCAP 400 INDEX 30.73 N/A 4.55
RUSSELL MIDCAP GROWTH INDEX 39.30 N/A -11.38
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COLUMBIA TAX-MANAGED GROWTH FUND (SINCE 12/30/96)
RETURNS BEFORE TAXES 13.50 -1.62 3.00
RETURNS AFTER TAXES ON DISTRIBUTIONS 13.50 -1.62 3.00
RETURNS AFTER TAXES ON DISTRIBUTIONS
AND SALE OF FUND SHARES 8.29 -1.29 2.44
S&P 500 INDEX 20.80 0.53 6.55
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COLUMBIA TAX-MANAGED GROWTH FUND II (SINCE 3/7/00)
RETURNS BEFORE TAXES 13.18 N/A -10.96
RETURNS AFTER TAXES ON DISTRIBUTIONS 13.18 N/A -10.96
RETURNS AFTER TAXES ON DISTRIBUTIONS
AND SALE OF FUND SHARES 8.09 N/A -8.48
S&P 500 INDEX 20.80 N/A -5.36
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COLUMBIA TAX-MANAGED VALUE FUND (SINCE 6/1/99)
RETURNS BEFORE TAXES 7.08 N/A -5.11
RETURNS AFTER TAXES ON DISTRIBUTIONS 7.08 N/A -5.11
RETURNS AFTER TAXES ON DISTRIBUTIONS
AND SALE OF FUND SHARES 4.35 N/A -4.01
S&P 500 INDEX 20.80 N/A -3.24
RUSSELL 1000 VALUE INDEX 22.87 N/A 0.34
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Indexes do not reflect any deduction for fees, expenses or taxes. After-tax
returns are shown for class A shares only; after-tax returns for other share
classes will vary.
NO NEW TAXES
In keeping with our funds' objective, we once again can report returns without
passing taxable distributions to our shareholders. For those keeping track, this
marks the fourteenth consecutive report -- covering the past seven years for the
Columbia Tax-Managed Growth Fund, the eldest in our tax-managed family -- in
which we have been able to report that there has been no payment of taxable
distributions. We want to remind you that while we can't guarantee this will
always be the case, we are proud of our "non-taxing" track record and will
strive to continue the streak.
The chart on this page offers a comparison between pre-tax and after-tax returns
for the Columbia family of tax-managed funds. As you can see, the returns after
taxes on distributions retained the full percentage returns before taxes for the
time periods shown, assuming that shares were held through the end of the
period. In this case, total returns after taxes on distributions were the same
as the pre-tax returns because none of the funds distributed taxable gains
during the period.
In the future, the funds may be required to distribute taxable income and
capital gains from time to time. In addition, market conditions may limit the
funds' ability to generate tax losses or to avoid dividend income. Excessive
shareholder redemptions may also require the funds to sell securities and
realize gains. Finally, the ability to use certain tax-management techniques may
be curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the historically highest
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and the after-tax returns shown may
not be relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND
NET ASSET VALUE PER SHARE as of 10/31/03 ($)
Class A 7.82
Class B 7.63
Class C 7.63
Class Z 7.83
COLUMBIA TAX-MANAGED GROWTH FUND
NET ASSET VALUE PER SHARE as of 10/31/03 ($)
Class A 13.09
Class B 12.43
Class C 12.43
Class E 13.02
Class F 12.44
Class Z 13.24
COLUMBIA TAX-MANAGED GROWTH FUND II
NET ASSET VALUE PER SHARE as of 10/31/03 ($)
Class A 8.33
Class B 8.10
Class C 8.08
Class Z 8.39
COLUMBIA TAX-MANAGED VALUE FUND
NET ASSET VALUE PER SHARE as of 10/31/03 ($)
Class A 10.10
Class B 9.80
Class C 9.80
Class Z 10.22
1
Portfolio Manager's Report - Columbia Tax-Managed Aggressive Growth Fund
Top 10 holdings as of 10/31/03 (%)
Electronic Arts 2.7
Barr Laboratories 2.7
Education Management 2.5
Corporate Executive Board 2.3
Microchip Technology 2.2
Caremark Rx 1.9
UnitedHealth Group 1.9
Amphenol, Class A 1.7
Fair Isaac 1.7
Bed Bath & Beyond 1.6
Portfolio holdings are calculated as a percentage of total net assets. Since the
fund is actively managed, there can be no guarantee the fund will continue to
maintain the same portfolio holdings in the future.
For the 12-month period ended October 31, 2003, Columbia Tax-Managed Aggressive
Growth Fund class A shares returned 21.43% without sales charge. Although we are
pleased to report such strong absolute performance, the fund trailed both the
Russell Midcap Growth Index, which returned 39.30%, and the S&P MidCap 400
Index, which returned 30.73%.1 The fund also came out behind the 30.87% return
for the Lipper Mid-Cap Growth Funds Category.2
Our bias toward higher-quality stocks with consistent earnings records was a
handicap, as lower-quality stocks with more erratic earnings posted the biggest
gains. We lost additional ground by investing in companies at the larger end of
the mid-cap spectrum as smaller-cap names led the market rally. Weak stock
selection, particularly in the technology and consumer discretionary sectors,
and an above-average stake in energy further detracted from relative returns.
TECHNOLOGY AND INDUSTRIALS GAIN IN AN IMPROVING ECONOMY
Stocks made an amazing comeback, as interest rates stayed low and fears about
the economy and war with Iraq eased. Technology stocks were the strongest
gainers, buoyed by hopes that an improving economy would boost long-delayed
corporate spending. The fund's top performers included VERITAS Software and
Electronic Arts, a video game producer.3 Unfortunately, the fund's below-average
stake in technology early on and its focus on higher-quality names kept it from
fully participating in the sector's gains.
Later in the period, we increased the fund's technology weighting, adding more
cyclical stocks such as Amkor Technology, a leading manufacturer of packaging
for semiconductors, and Jabil Circuit, an electronic services manufacturer. Both
stocks generated strong returns as their prospects are closely linked to
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1 On October 13, 2003, the fund changed its benchmark from the Russell Midcap
Growth Index to the S&P MidCap 400 Index.
2 Lipper Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as those of the fund.
3 Holdings are disclosed as a percentage of net assets as of October 31, 2003
and are subject to change: VERITAS Software (1.5%), Electronic Arts (2.7%),
Amkor Technology (0.9%), Jabil Circuit (0.9%), Education Management (2.5%),
Barr Laboratories (2.7%), Caremark Rx (1.9%), Williams-Sonoma (1.5%) and
Bed Bath & Beyond (1.6%).
2
the economic outlook. Industrials also contributed positively to the fund's
return, led by for-profit education companies, such as Education Management,
which benefited from strong enrollment growth and the rise of online education.
STRONG GAINS FROM HEALTH CARE
Health care stocks produced strong absolute gains during the period, driven by
generic pharmaceutical medical equipment and biotech-related companies. Barr
Laboratories, a generic pharmaceutical company, and Caremark Rx, a pharmacy
benefits manager, were particular standouts for the fund. Our investment in
health maintenance organizations (HMOs), however, detracted from returns as
investors began to worry that health care premium rate increases had peaked. We
reduced the fund's overall stake in health care, trimming its investment in HMOs
and hospitals, and selling weak performers, such as Biovail, a generic
pharmaceutical company.
DISAPPOINTING RETURNS FROM CONSUMER AND ENERGY
Consumer discretionary stocks rallied as consumer spending remained strong and
the economy showed signs of recovery. However, the fund's positive return
trailed the sector's overall gain. The fund's focus was on traditional media
stocks, such as radio, at a time when the biggest winners were Internet-related
names, such as Amazon and Yahoo!, which the fund did not own. The fund also
missed out by not owning some of the better performing hotel, restaurant and
leisure stocks. We pared back on media names, but held on to retailers with
strong earnings growth, such as Williams-Sonoma and Bed Bath & Beyond.
The fund's above-average stake in energy stocks also hurt performance, as
exploration and production companies took a conservative approach to spending.
This dampened earnings prospects for oil service companies, leading to modest
gains for the sector.
OPTIMISTIC OUTLOOK FOR HIGH-QUALITY STOCKS
We expect a positive backdrop for stocks. Interest rates remain low and the
economy is improving, bolstered by strong consumer spending and higher corporate
spending. However, we think that only those companies that deliver on earnings
expectations will see their stock prices rise. We believe high-quality stocks,
which continue to make up the core of the fund's portfolio, will do well in this
environment.
We will continue to focus on tax efficiency by harvesting losses to offset
gains, and by maintaining a longer investing timeframe than is typical in most
mid-cap growth funds.
/s/ Richard J. Johnson
Richard J. Johnson, CFA, has managed Columbia Tax-Managed Aggressive Growth Fund
since March 2002.
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Investing in small- and mid-cap stocks may present special risks, including
possible illiquidity and greater price volatility than stocks of larger, more
established companies.
The fund's approach offers the potential for long-term growth, but also involves
the possibility of losses due to the sensitivity of growth stock prices to
changes in current or expected earnings.
Certain active tax-reduction techniques are used only if the fund's advisor
believes they will help the fund achieve its investment goals. The fund expects
to distribute taxable income and capital gains from time to time. Market
conditions may limit the fund's ability to generate tax losses or to avoid
dividend income. The ability to use certain tax-management techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
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Bar Chart:
TOP 5 SECTORS as of 10/31/03 (%)
Information technology 36.5
Health care 19.8
Consumer discretionary 15.8
Industrials 12.8
Energy 6.8
Sector breakdowns are calculated as a percentage of net assets. Since the fund
is actively managed, there can be no guarantee the fund will continue to
maintain these breakdowns in the future.
3
Performance Information - Columbia Tax-Managed Aggressive Growth Fund
Value of a $10,000 investment 8/1/00 - 10/31/03
Performance of a $10,000 investment
8/1/00 - 10/31/03 ($)
without with
sales sales
charge charge
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Class A 6,747 6,358
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Class B 6,583 6,386
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Class C 6,583 6,583
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Class Z 6,756 n/a
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Mountain Chart:
CLASS A SHARES CLASS A SHARES S&P RUSSELL
WITHOUT WITH SALES MIDCAP 400 MIDCAP
SALES CHARGE CHARGE INDEX INDEX
8/1/00 10000 9425 10000 10000
11648 10978 11117 11508
11709 11035 11041 10945
10664 10051 10667 10197
8335 7856 9862 7981
8914 8401 10616 8401
9500 8954 10853 8881
7723 7279 10233 7345
6757 6368 9473 6294
7343 6921 10518 7343
7516 7083 10763 7308
7809 7360 10720 7312
7334 6912 10560 6819
6842 6448 10215 6325
5815 5480 8944 5279
6048 5700 9339 5834
6557 6180 10034 6463
6877 6481 10553 6708
6825 6433 10498 6490
6575 6196 10511 6122
6963 6563 11262 6589
6877 6481 11209 6241
6756 6367 11020 6055
6342 5977 10213 5386
5660 5334 9222 4863
5565 5245 9270 4846
5366 5058 8522 4461
5556 5237 8891 4807
5694 5366 9406 5183
5392 5082 9020 4870
5358 5050 8756 4822
5254 4952 8548 4780
5254 4952 8620 4869
5539 5220 9245 5201
5988 5643 10012 5701
6109 5757 10139 5783
6238 5879 10499 5989
6566 6189 10976 6319
6239 5880 10808 6196
10/31/03 6747 6358 11556 6753
MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM
FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future
investment results. The principal value and investment returns will fluctuate,
resulting in a gain or loss on sale. On October 13, 2003, the fund's primary
benchmark was changed to the Russell Midcap Growth Index. During the reporting
period, the fund's primary benchmark was the S&P MidCap 400 Index. The S&P
MidCap 400 Index tracks the performance of mid-capitalization US stocks. The
Russell Midcap Growth Index is an unmanaged index that measures the performance
of those Russell Midcap companies with higher price-to-book ratios and higher
forecasted growth values. Unlike the fund, indices are not investments, do not
incur fees, expenses or taxes, and are not professionally managed. It is not
possible to invest directly in an index. Securities in the fund may not match
those in an index. Index performance is from August 1, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%)
Share class A B C Z
Inception date 8/1/00 8/1/00 8/1/00 8/1/00
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without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
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1-year 21.43 14.49 20.54 15.54 20.54 19.54 21.77
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Life -11.40 -13.00 -12.06 -12.88 -12.06 -12.06 -11.36
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AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%)
Share class A B C Z
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without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
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1-year 16.24 9.55 15.52 10.52 15.36 14.36 16.75
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Life -13.84 -15.45 -14.45 -15.27 -14.49 -14.49 -13.77
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Past performance is no guarantee of future investment results. The principal
value and investment returns will fluctuate, resulting in a gain or loss on
sale. All results shown assume reinvestment of distributions. The graph and
tables do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or redemption of fund shares. The "with sales charge" returns
include the maximum 5.75% sales charge for class A shares, the appropriate class
B contingent deferred sales charge for the holding period after purchase as
follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%,
fifth year - 2%, sixth year - 1%, thereafter - 0% and the class C contingent
deferred sales charge of 1% for the first year only.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Performance for
different share classes varies based on differences in sales charges and fees
associated with each class.
4
Portfolio Managers' Report - Columbia Tax-Managed Growth Funds
COLUMBIA TAX-MANAGED GROWTH FUND
TOP 10 HOLDINGS as of 10/31/03 (%)
Wal-Mart 3.0
St. Jude Medical 2.7
AstraZeneca 2.7
Citigroup 2.6
Cisco Systems 2.6
RenaissanceRe Holdings 2.6
Fannie Mae 2.5
Texas Instruments 2.5
Zimmer Holdings 2.5
Nabors Industries 2.5
COLUMBIA TAX-MANAGED GROWTH FUND II
TOP 10 HOLDINGS as of 10/31/03 (%)
Wal-Mart 3.0
RenaissanceRe Holdings 2.8
AstraZeneca 2.7
Lowe's Companies 2.6
St. Jude Medical 2.6
Cisco Systems 2.6
Texas Instruments 2.5
Citigroup 2.5
Microchip Technology 2.5
Zimmer Holdings 2.5
Portfolio holdings are calculated as a percentage of total net assets. Since the
fund is actively managed, there can be no guarantee the fund will continue to
maintain the same portfolio holdings in the future.
For the 12-month period ended October 31, 2003, Columbia Tax-Managed Growth Fund
class A shares returned 20.42% without sales charge. Columbia Tax-Managed Growth
Fund II class A shares returned 20.03% without sales charge. These investment
returns, while solidly positive, slightly trailed their benchmark, the S&P 500
Index, which returned 20.80%.
STOCKS RECOVER ON RENEWED INVESTOR CONFIDENCE
The stock market experienced a strong rebound from its mid-March lows, as
investors gained increasing confidence that the economy and corporate profits
would recover. Higher quality large capitalization stocks, such as those
represented by the funds' core holdings, participated in the recovery but
generally lagged the performance of small- and mid-cap stocks as investors
became more comfortable with taking on additional risk.
BASIC MATERIALS, HEALTH CARE AND TECHNOLOGY SECTORS ENJOY GAINS
During the course of the last fiscal year, we positioned the funds for an
economic and stock market recovery. Yet we maintained significant exposure to
core longer-term growth holdings. Initially, we built up the funds' positions in
consumer and financial stocks, which typically benefit from expectations of a
strengthening in the economy. Then, as economic activity picked up and the
outlook for business spending improved, we increased the funds' holdings in such
economically sensitive sectors as basic materials and technology. Phelps Dodge,
Cisco Systems, Texas Instruments and Xilinx were standouts in these sectors.1 We
also lowered
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1 Holdings are disclosed as a percentage of net assets as of October 31, 2003
and are subject to change: Phelps Dodge (1.1% in Growth, 1.2% in Growth II),
Cisco Systems (2.6% in Growth, 2.6% in Growth II), Texas Instruments (2.5% in
Growth, 2.5% in Growth II), Xilinx (1.1% in Growth, 1.0% in Growth II), Amgen
(2.0% in Growth, 2.1% in Growth II), Medtronic (2.3% in Growth, 2.2% in Growth
II), St. Jude Medical (2.7% in Growth, 2.6% in Growth II), Zimmer Holdings (2.5%
in Growth, 2.5% in Growth II), AstraZeneca (2.7% in Growth, 2.7% in Growth II),
Comcast (2.1% in Growth, 2.1% in Growth II), Lowe's Companies (2.5% in Growth,
2.6% in Growth II), Viacom (2.4% in Growth, 2.3% in Growth II) and Kohl's (2.1%
in Growth, 2.2% in Growth II).
5
our exposure to consumer discretionary and financial stocks during the course of
the year because we were concerned that investors might rotate out of these
former leaders as the economic rebound broadened to other sectors.
Among the funds' core longer-term growth holdings, we maintained significant
exposure to health care, particularly biotechnology leader Amgen and medical
equipment stocks such as Medtronic, St. Jude Medical and Zimmer Holdings. We
believe the long-term growth potential for these companies remains attractive.
Additionally, we purchased pharmaceutical company AstraZeneca because we feel
its new product pipeline is promising. Overall, health care was a strong
contributor to the funds' investment results.
INSURERS AND RETAILERS DISAPPOINT
Although we trimmed our overall stake in financial stocks, we maintained an
above-average investment in the insurance area. Our insurance investments did
not pay off during the period, although we believe that valuations and earnings
prospects remain attractive. Consumer discretionary holdings also detracted from
performance, as favorable performances by Comcast and Lowe's Companies were
offset by disappointing returns from Viacom and Kohl's. Energy stocks turned in
weak returns, as investors questioned the sustainability of recent high
commodity prices.
EXPECTATIONS FOR CONTINUED ECONOMIC RECOVERY
The economy and the stock market climate have improved considerably since the
sharp market downturn during 2000-2002. We believe there is considerable
evidence that a much-awaited economic recovery is indeed occurring, and that
investor confidence in equities is in the process of being restored. There are
likely to be periods ahead when investors question the sustainability of the
economic recovery, but we expect higher business spending and a better
employment outlook to help fuel continued growth. If interest rates remain low
and corporate profits rise, we believe there should be further upside potential
for the equity markets. A rotation back to larger capital ization stocks would
also be a welcome development for growth stock investors.
PRESERVING TAX EFFICIENCY
During the year, we have actively harvested significant realized losses that
resulted from the stock market's weak returns between 2000 and 2002. The funds,
therefore, have no capital gains to report for the period. We believe that they
should be able to sustain their record of tax efficiency for some time to come.
/s/ William M. Hughes
William M. Hughes is a senior equity analyst at Stein Roe Investment Counsel,
LLC, sub-advisor to the funds. He is also a member of the investment management
team for Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund
II. No single individual has primary management responsibility over the funds'
portfolio securities.
- --------------------------------------------------------------------------------
The funds' approach offers the potential for long-term growth, but also involves
the possibility of losses due to the sensitivity of growth stock prices to
changes in current or expected earnings.
Certain active tax-reduction techniques are used only if the funds' advisor
believes they will help the funds achieve their investment goals. The funds
expect to distribute taxable income and capital gains from time to time. Market
conditions may limit the funds' ability to generate tax losses or to avoid
dividend income. The ability to use certain tax-management techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
- --------------------------------------------------------------------------------
6
COLUMBIA TAX-MANAGED GROWTH FUND
TOP 5 SECTORS as of 10/31/03 (%)
INFORMATION TECHNOLOGY 20.6
FINANCIALS 19.9
HEALTH CARE 18.1
CONSUMER DISCRETIONARY 14.4
INDUSTRIALS 9.6
COLUMBIA TAX-MANAGED GROWTH FUND II
TOP 5 SECTORS as of 10/31/03 (%)
INFORMATION TECHNOLOGY 20.7
FINANCIALS 20.0
HEALTH CARE 17.9
CONSUMER DISCRETIONARY 14.6
INDUSTRIALS 9.6
Sector breakdowns are calculated as a percentage of net assets. Since the funds
are actively managed, there can be no guarantee the funds will continue to
maintain these breakdowns in the future.
7
Performance Information - Columbia Tax-Managed Growth Fund
Value of a $10,000 investment 12/30/96 - 10/31/03
Performance of a $10,000 investment 12/30/96 - 10/31/03 ($)
without with
sales sales
charge charge
- --------------------------------
Class A 12,986 12,239
- --------------------------------
Class B 12,331 12,331
- --------------------------------
Class C 12,331 12,331
- --------------------------------
Class E 12,917 12,335
- --------------------------------
Class F 12,341 12,341
- --------------------------------
Class Z 13,135 n/a
- --------------------------------
CLASS A SHARES CLASS A SHARES
WITHOUT WITH S&P 500
SALES CHARGE SALES CHARGE INDEX
12/30/96 10000 9425 10000
9960 9387 9827
10386 9789 10441
10227 9639 10523
9672 9116 10090
9959 9387 10693
10723 10107 11344
11239 10593 11852
12131 11434 12795
11595 10928 12079
12349 11639 12741
11943 11256 12315
12221 11518 12885
12389 11677 13107
12627 11901 13252
13500 12724 14208
14086 13276 14935
14076 13267 15086
13728 12939 14827
14036 13229 15429
13926 13125 15265
11674 11003 13058
12429 11714 13895
13281 12517 15025
14204 13387 15935
15048 14183 16853
15227 14351 17557
15029 14165 17011
15743 14838 17692
16080 15155 18376
15732 14828 17943
17002 16024 18939
16575 15622 18348
16456 15510 18258
16148 15220 17757
17051 16071 18882
17240 16249 19265
19275 18166 20400
18342 17287 19375
18510 17446 19009
19532 18409 20868
18720 17643 20240
17827 16802 19825
18709 17633 20315
18670 17596 19998
19900 18756 21240
18907 17820 20118
18232 17184 20034
16130 15203 18455
16319 15380 18546
17459 16456 19204
15366 14482 17453
14166 13351 16346
15187 14314 17616
15128 14258 17734
14821 13969 17303
14673 13829 17134
13681 12894 16061
12183 11482 14763
12580 11857 15045
13642 12857 16199
13691 12904 16342
13354 12586 16103
13136 12381 15793
13672 12886 16386
12829 12091 15393
12749 12016 15280
11608 10941 14192
10825 10202 13086
10913 10286 13171
9892 9323 11739
10785 10165 12773
11460 10801 13525
10666 10053 12731
10527 9922 12397
10478 9875 12211
10617 10007 12330
11520 10857 13346
11986 11297 14049
11877 11194 14229
12205 11503 14479
12522 11802 14762
12254 11550 14605
10/31/03 12986 12239 15425
MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM
FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future
investment results. The principal value and investment returns will fluctuate,
resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of
500 widely held, large-capitalization US stocks. Unlike the fund, indices are
not investments, do not incur fees, expenses, or taxes and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index. Index performance is
from December 30, 1996.
AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%)
Share class A B C E F Z
Inception date 12/30/96 12/30/96 12/30/96 12/30/96 12/30/96 1/11/99
- ----------------------------------------------------------------------------------------------------------------------
without with without with without with without with without with without
sales sales sales sales sales sales sales sales sales sales sales
charge charge charge charge charge charge charge charge charge charge charge
- ----------------------------------------------------------------------------------------------------------------------
1-year 20.42 13.50 19.63 14.63 19.63 18.63 20.33 14.92 19.50 14.50 20.80
- ----------------------------------------------------------------------------------------------------------------------
5-year -0.45 -1.62 -1.19 -1.59 -1.19 -1.19 -0.51 -1.43 -1.19 -1.59 -0.23
- ----------------------------------------------------------------------------------------------------------------------
Life 3.90 3.00 3.11 3.11 3.11 3.11 3.82 3.12 3.13 3.13 4.07
- ----------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%)
Share class A B C E F Z
- ----------------------------------------------------------------------------------------------------------------------
without with without with without with without with without with without
sales sales sales sales sales sales sales sales sales sales sales
charge charge charge charge charge charge charge charge charge charge charge
- ----------------------------------------------------------------------------------------------------------------------
1-year 23.87 16.75 22.93 17.93 22.93 21.93 23.77 18.20 22.91 17.91 24.25
- ----------------------------------------------------------------------------------------------------------------------
5-year -0.29 -1.46 -1.02 -1.42 -1.02 -1.02 -0.34 -1.25 -1.02 -1.42 -0.05
- ----------------------------------------------------------------------------------------------------------------------
Life 3.05 2.15 2.28 2.28 2.28 2.28 2.98 2.28 2.30 2.30 3.24
- ----------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal
value and investment returns will fluctuate, resulting in a gain or loss on
sale. All results shown assume reinvestment of distributions. The graph and
tables do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or redemption of fund shares. The "with sales charge" returns
include the maximum 5.75% sales charge for class A shares, 4.50% for class E
shares, the appropriate class B and class F contingent deferred sales charge for
the holding period after purchase as follows: first year - 5%, second year - 4%,
third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter
- - 0% and the class C contingent deferred sales charge of 1% for the first year
only.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Performance for
different share classes varies based on differences in sales charges and fees
associated with each class.
Class Z share performance information includes returns for the fund's class A
shares (as its expense structure more closely resembles that of the newer class)
for periods prior to the inception of the newer class of shares. These class A
share returns were not restated to reflect any expense differential (e.g., Rule
12b-1 fees) between class A and class Z shares. Had the expense differential
been reflected, the returns for the periods prior to the inception of the class
Z shares would have been higher.
8
Performance Information - Columbia Tax-Managed Growth Fund II
Value of a $10,000 investment
3/7/00 - 10/31/03
Performance of a $10,000 investment 3/7/00 - 10/31/03 ($)
without with
sales sales
charge charge
- --------------------------------
Class A 6,942 6,544
- --------------------------------
Class B 6,750 6,548
- --------------------------------
Class C 6,733 6,733
- --------------------------------
Class Z 6,992 n/a
- --------------------------------
CLASS A SHARES CLASS A SHARES
WITHOUT WITH S&P 500
SALES CHARGE SALES CHARGE INDEX
3/7/00 10000 9425 10000
10450 9849 10778
9859 9292 10454
9442 8899 10239
9866 9299 10492
9883 9315 10329
10492 9889 10970
10017 9441 10391
9625 9072 10347
8516 8027 9532
8666 8168 9578
9266 8733 9918
8091 7626 9014
7499 7068 8442
8075 7610 9098
8008 7547 9159
7832 7382 8937
7732 7287 8849
7207 6793 8295
6457 6086 7625
6599 6219 7771
7224 6808 8367
7307 6887 8440
7065 6659 8317
6990 6588 8157
7307 6887 8463
6865 6471 7950
6824 6431 7891
6257 5897 7330
5832 5497 6759
5849 5513 6803
5308 5002 6063
5783 5450 6597
6141 5788 6985
5700 5372 6575
5649 5325 6403
5608 5285 6307
5691 5364 6368
6158 5804 6893
6399 6031 7256
6341 5976 7349
6516 6141 7478
6691 6307 7624
6550 6173 7543
10/31/03 6942 6544 8177
MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM
FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future
investment results. The principal value and investment returns will fluctuate,
resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of
500 widely held large-capitalization US stocks. Unlike the fund, indices are not
investments, do not incur fees or expenses, and are not professionally managed.
It is not possible to invest directly in an index. Securities in the fund may
not match those in an index. Index performance is from March 7, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%)
Share class A B C Z
Inception date 3/7/00 3/7/00 3/7/00 3/7/00
- -------------------------------------------------------------------------------------------------------------------
without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
- -------------------------------------------------------------------------------------------------------------------
1-year 20.03 13.18 19.12 14.12 19.17 18.17 20.37
- -------------------------------------------------------------------------------------------------------------------
Life -9.51 -10.96 -10.20 -10.95 -10.26 -10.26 -9.33
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%)
Share class A B C Z
- -------------------------------------------------------------------------------------------------------------------
without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
- -------------------------------------------------------------------------------------------------------------------
1-year 23.39 16.27 22.60 17.60 22.47 21.47 23.75
- -------------------------------------------------------------------------------------------------------------------
Life -11.19 -12.64 -11.86 -12.61 -11.92 -11.92 -11.00
- -------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal
value and investment returns will fluctuate, resulting in a gain or loss on
sale. All results shown assume reinvestment of distributions. The graph and
tables do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or redemption of fund shares. The "with sales charge" returns
include the maximum 5.75% sales charge for class A shares, the appropriate class
B contingent deferred sales charge for the holding period after purchase as
follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%,
fifth year - 2%, sixth year - 1%, thereafter - 0% and the class C contingent
deferred sales charge of 1% for the first year only.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Performance for
different share classes varies based on differences in sales charges and fees
associated with each class.
9
Portfolio Managers' Report - Columbia Tax-Managed Value Fund
TOP 10 HOLDINGS as of 10/31/03 (%)
Citigroup 6.5
Exxon Mobil 2.7
Bank of America 2.6
U.S. Bancorp 2.1
Berkshire Hathaway, Class A 2.1
Wells Fargo 2.1
Waste Management 2.1
Lincoln National 2.1
American International Group 2.1
ConocoPhillips 2.0
Portfolio holdings are calculated as a percentage of total net assets. Since the
fund is actively managed, there can be no guarantee the fund will continue to
maintain the same portfolio holdings in the future.
For the 12-month period that ended October 31, 2003, Columbia Tax-Managed Value
Fund class A shares returned 13.61% without sales charge. The fund did not
perform as well as the Russell 1000 Value Index, which returned 22.87%, or the
S&P 500 Index, which returned 20.80% for the period.1 It also trailed the Lipper
Multi-Cap Value Category average, which returned 24.72%.2 Poor stock selection
in the consumer staples and telecommunications sectors hurt returns during the
first half of the period, accounting for the bulk of the fund's
underperformance. The fund's emphasis on higher-quality, large-cap value stocks
also restrained its gains when markets rallied sharply and aggressive stocks
were the best performers.
ECONOMIC GROWTH TOOK HOLD IN SECOND HALF
Stocks made little headway during the first part of 2003, weighed down by
economic uncertainty and a lack of investor confidence leading up to the war
with Iraq. The market finally bottomed in mid-March, then started to rally in
April as major military conflict came to a swift end. The economy quickly began
showing more definite signs of recovery, while earnings at many companies
strengthened. Investors grew more optimistic, fueling a strong rally in stock
prices.
ALLOCATIONS ADJUSTED TO MATCH INDEX MORE CLOSELY
We took several steps during the period to bring some sector weightings closer
to the Russell 1000 Value Index. Beginning in April, the fund modified its
sector allocations to take advantage of improving market conditions.
Specifically, we added to the fund's financial holdings, focusing on stocks with
attractive valuations such as U.S. Bancorp and State Street Corp.3 We also
increased the fund's exposure to large-cap, high-quality value companies in
basic materials, consumer discretionary and industrials--three sectors that tend
to respond well to a growing economy.
- ----------------
1 On October 13, 2003, the fund changed its benchmark from the S&P 500 Index
to the Russell 1000 Value Index.
2 Lipper Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as those of the fund.
3 Holdings are disclosed as of October 31, 2003, as a percentage of net
assets and are subject to change: U.S. Bancorp (2.1%), State Street Corp.
(0.8%), ConAgra Foods (1.0%), Textron (1.8%), Dover Corp. (1.1%), Citigroup
(6.5%), J.P. Morgan Chase (2.0%) and Wendy's International (1.6%).
10
We also reduced the fund's overweight positions in sectors that tend to lag when
the economy improves, such as health care, telecommunications and consumer
staples.
CONSUMER STAPLES HURT, INDUSTRIALS HELPED PERFORMANCE
In the first part of the period, sizable holdings in ConAgra Foods, Sara Lee and
Safeway in the consumer staples sector detracted from performance when they were
hit hard by poor earnings results. We later eliminated Sara Lee and Safeway from
the portfolio. In the industrial group, improving economic conditions helped
generate strong returns from manufacturing companies Textron and Dover Corp.,
both on an absolute basis and relative to the sector's performance in the
Russell benchmark. Textron's products range from golf carts to Cessna airplanes
and Bell helicopters. Dover manages more than 50 companies including
manufacturers of garbage trucks and can-making machinery as well as electronic
components and ink-jet printers. Both of these companies trade at modest
valuations and should benefit from an expanding economy.
FINANCIALS AND CONSUMER DISCRETIONARY FARED WELL
In the financial area, Citigroup, a large holding, and J.P. Morgan Chase were
both strong contributors to fund performance. Earnings at both companies
benefited from improved credit quality and renewed strength in the capital
markets. The fund also benefited from its position in McDonald's Corp. when the
company's revitalized menu offerings led to improved sales momentum and a rising
share price. McDonald's rebounded after being severely depressed during the
first few months of 2003, and we sold the fund's shares at a profit. We
initiated a position in Wendy's International, which experienced a dramatic
increase in same-store sales during the period. We believe that well-managed
fast food restaurants have the potential to do well as the economy recovers.
VALUE OPPORTUNITIES
Despite the relatively high valuations in the market today, we remain confident
that equities will provide long-term investors with good relative returns.
Recent evidence points to an expanding economy, which has the potential to lead
to higher corporate earnings in years to come. We expect the fund's increased
exposure to industrial and basic materials to contribute to strong returns if
the economy continues to expand.
/s/ Gregory M. Miller
/s/ Richard Dahlberg
Gregory M. Miller has co-managed the fund since April 2003. Richard Dahlberg
became a co-manager of the fund in October 2003. In November 2003, Brian
Cunningham also became a co-manager of the fund.
- --------------------------------------------------------------------------------
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor. If the advisor's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
advisor has placed on it.
Certain active tax-reduction techniques are used only if the fund's advisor
believes they will help the fund achieve its investment goals. The fund expects
to distribute taxable income and capital gains from time to time. Market
conditions may limit the fund's ability to generate tax losses or to avoid
dividend income. The ability to use certain tax-management techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
- --------------------------------------------------------------------------------
COLUMBIA TAX-MANAGED VALUE FUND
TOP 5 SECTORS as of 10/31/03 (%)
FINANCIALS 33.3
ENERGY 12.1
INDUSTRIALS 9.2
CONSUMER DISCRETIONARY 8.2
CONSUMER STAPLES 7.1
Sector breakdowns are calculated as a percentage of net assets. Since the fund
is actively managed, there can be no guarantee the fund will continue to
maintain these breakdowns in the future.
11
Performance Information - Columbia Tax-Managed Value Fund
Value of a $10,000 investment
6/1/99 - 10/31/03
Value of a $10,000 investment
6/1/99 - 10/31/03 ($)
without with
sales sales
charge charge
- -------------------------------
Class A 8,417 7,933
- -------------------------------
Class B 8,167 8,003
- -------------------------------
Class C 8,167 8,167
- -------------------------------
Class Z 8,517 n/a
- -------------------------------
CLASS A CLASS A
SHARES SHARES RUSSELL S&P S&P
WITHOUT WITH 1000 500 500/BARRA
SALES CHARGE SALES CHARGE VALUE INDEX VALUE INDEX
6/1/99 10000 9425 10000 10000 10000
10200 9614 10290 10555 10427
9733 9173 9989 10226 10107
9358 8820 9618 10176 9851
8641 8144 9282 9897 9466
8866 8356 9817 10523 10001
8799 8294 9740 10737 9942
8749 8246 9787 11369 10316
8357 7877 9468 10799 9988
7741 7295 8765 10594 9363
8624 8128 9834 11631 10340
8774 8269 9720 11280 10271
9215 8685 9822 11049 10303
8724 8222 9373 11322 9896
8607 8112 9490 11146 10094
9090 8567 10018 11838 10771
9124 8599 10110 11213 10769
9507 8960 10359 11166 10970
9440 8897 9974 10286 10408
9982 9408 10474 10336 10944
9940 9369 10514 10703 11406
9906 9337 10222 9727 10650
9565 9015 9861 9110 10229
9698 9140 10344 9818 10923
9881 9313 10577 9884 11038
9614 9061 10342 9644 10680
9864 9297 10320 9549 10495
9814 9249 9906 8951 9889
9447 8903 9209 8228 8949
9497 8951 9130 8385 8949
9863 9296 9660 9028 9517
9938 9367 9888 9108 9662
9722 9163 9812 8975 9397
9596 9044 9828 8802 9314
10088 9507 10293 9133 9791
9655 9100 9940 8579 9300
9621 9068 9989 8516 9337
8530 8039 9416 7909 8748
7822 7372 8540 7293 7802
7897 7443 8605 7341 7856
6780 6391 7648 6543 6958
7405 6979 8215 7118 7536
7997 7537 8732 7538 8066
7630 7192 8353 7095 7647
7347 6925 8151 6909 7437
6923 6525 7934 6806 7235
6898 6501 7947 6872 7226
7414 6988 8646 7438 7940
8014 7553 9205 7830 8525
8198 7726 9320 7930 8587
8156 7687 9459 8070 8778
8289 7812 9607 8227 8967
8122 7655 9512 8140 8805
10/31/03 8417 7933 10151 8647 9406
MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM
FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future
investment results. The principal value and investment returns will fluctuate,
resulting in a gain or loss on sale. On October 13, 2003, the fund's primary
benchmark was changed to the Russell 1000 Value Index. During the reporting
period, the fund's primary benchmark was S&P 500 Index. The S&P 500 Index tracks
the performance of 500 widely held large-capitalization US stocks. The Russell
1000 Value Index is an unmanaged index that measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The value index contains firms with lower price-to-book ratios.
The S&P 500/Barra Value Index is constructed by dividing the stocks in the S&P
500 Index by a single attribute: price-to-book ratio. The value index contains
firms with lower price-to-book ratios. Unlike the fund, indices are not
investments, do not incur fees, expenses or taxes, and are not professionally
managed. It is not possible to invest directly in an index. Securities in the
fund may not match those in an index. Index performance is from June 1, 1999.
AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%)
Share class A B C Z
Inception date 6/1/99 6/1/99 6/1/99 6/1/99
- -------------------------------------------------------------------------------------------------------------------
without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
- -------------------------------------------------------------------------------------------------------------------
1-year 13.61 7.08 12.90 7.90 12.90 11.90 14.06
- -------------------------------------------------------------------------------------------------------------------
Life -3.83 -5.11 -4.48 -4.92 -4.48 -4.48 -3.57
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%)
Share class A B C Z
- -------------------------------------------------------------------------------------------------------------------
without with without with without with without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
- -------------------------------------------------------------------------------------------------------------------
1-year 19.78 12.89 18.99 13.99 18.99 17.99 20.24
- -------------------------------------------------------------------------------------------------------------------
Life -4.68 -5.97 -5.34 -5.78 -5.34 -5.34 -4.43
- -------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal
value and investment returns will fluctuate, resulting in a gain or loss on
sale. All results shown assume reinvestment of distributions. The graph and
tables do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or redemption of fund shares. The "with sales charge" returns
include the maximum 5.75% sales charge for class A shares, the appropriate class
B contingent deferred sales charge for the holding period after purchase as
follows: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%,
fifth year - 2%, sixth year - 1%, thereafter - 0% and the class C contingent
deferred sales charge of 1% for the first year only.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Performance for
different share classes varies based on differences in sales charges and fees
associated with each class.
12
Investment Portfolio -- Columbia Tax-Managed Aggressive Growth Fund
October 31, 2003
Common Stocks - 96.0% Shares Value
- ----------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 15.8%
Auto Components - 0.9%
Gentex Corp. 3,310 $ 129,255
-----------
Distributors - 1.3%
CDW Corp. 3,100 186,155
-----------
Hotels, Restaurants & Leisure - 2.1%
Brinker International, Inc. (a) 3,020 96,127
Hilton Hotels Corp. 8,100 128,304
MGM Mirage 1,920 68,160
-----------
292,591
-----------
Household Durables - 1.4%
Garmin Ltd. 4,000 200,120
-----------
Internet & Catalog Retail - 1.1%
InterActive Corp. (a) 4,260 156,385
-----------
Leisure Equipment & Products - 0.5%
Brunswick Corp. 2,500 74,175
-----------
Media - 2.5%
Cox Radio, Inc., Class A (a) 6,080 134,490
Univision Communications, Inc.,
Class A (a) 3,440 116,788
Westwood One, Inc. (a) 3,320 99,368
-----------
350,646
-----------
Multi-Line Retail - 1.7%
Dollar Tree Stores, Inc. (a) 2,910 111,104
Family Dollar Stores, Inc. 2,870 125,161
-----------
236,265
-----------
Specialty Retail - 3.4%
Bed Bath & Beyond, Inc. (a) 5,380 227,251
Rent-A-Center, Inc. (a) 1,400 43,764
Williams-Sonoma, Inc. (a) 5,940 209,860
-----------
480,875
-----------
Textiles, Apparel & Luxury Goods - 0.9%
Reebok International Ltd. 3,200 124,640
-----------
- ----------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.3%
Food & Drug Retailing - 0.8%
Whole Foods Market, Inc. (a) 1,870 110,779
-----------
Food Products - 0.5%
Dean Foods Co. (a) 2,400 72,600
-----------
- ----------------------------------------------------------------------------------------
ENERGY - 6.8%
Energy Equipment & Services - 4.1%
BJ Services Co. (a) 4,080 133,865
Nabors Industries Ltd. (a) 2,050 77,490
National-Oilwell, Inc. (a) 5,850 111,560
Noble Corp. (a) 3,160 108,483
Patterson-UTI Energy, Inc. (a) 4,990 142,664
-----------
574,062
-----------
Shares Value
- ----------------------------------------------------------------------------------------
Oil & Gas - 2.7%
Apache Corp. 2,150 $ 149,898
Murphy Oil Corp. 2,090 123,268
XTO Energy, Inc. 4,760 112,669
-----------
385,835
-----------
- ----------------------------------------------------------------------------------------
FINANCIALS - 3.0%
Insurance - 3.0%
Ambac Financial Group, Inc. 2,890 204,439
Axis Capital Holdings Ltd. 3,340 83,667
StanCorp Financial Group, Inc. 2,160 136,188
-----------
424,294
-----------
- ----------------------------------------------------------------------------------------
HEALTH CARE - 19.8%
Biotechnology - 2.2%
Amylin Pharmaceuticals, Inc. (a) 2,400 65,592
Gilead Sciences, Inc. (a) 2,100 114,618
ICOS Corp. (a) 2,970 138,758
-----------
318,968
-----------
Health Care Equipment & Supplies - 2.2%
Boston Scientific Corp. (a) 1,590 107,675
Hillenbrand Industries, Inc. 1,220 72,627
Varian Medical Systems, Inc. (a) 2,090 133,635
-----------
313,937
-----------
Health Care Providers & Services - 12.1%
Anthem, Inc. (a) 2,210 151,230
Caremark Rx, Inc. (a) 10,740 269,037
Community Health Systems,
Inc. (a) 5,580 134,032
DaVita, Inc. (a) 5,350 187,785
First Health Group Corp. (a) 3,990 97,396
Health Management Associates, Inc. 4,900 108,535
Lincare Holdings, Inc. (a) 3,410 132,785
Manor Care, Inc. 4,300 143,104
Renal Care Group, Inc. (a) 3,900 146,289
UnitedHealth Group, Inc. 5,280 268,646
WellChoice, Inc. (a) 2,200 71,500
-----------
1,710,339
-----------
Pharmaceuticals - 3.3%
Barr Laboratories, Inc. (a) 4,920 377,708
Teva Pharmaceutical Industries
Ltd., ADR 1,430 81,353
-----------
459,061
-----------
- ----------------------------------------------------------------------------------------
INDUSTRIALS - 12.8%
Aerospace & Defense - 0.9%
Raytheon Co. 4,620 122,338
-----------
See notes to investment portfolio.
13
Investment Portfolio -- Columbia Tax-Managed Aggressive Growth Fund (continued)
October 31, 2003
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------------------
INDUSTRIALS (continued)
Commercial Services & Supplies - 8.9%
Allied Waste Industries, Inc. (a) 11,700 $ 131,976
CheckFree Corp. (a) 2,700 74,331
Cintas Corp. 1,850 78,921
Corporate Executive Board Co. (a) 6,400 326,464
DST Systems, Inc. (a) 1,800 68,076
Education Management Corp. (a) 5,690 359,494
Monster Worldwide, Inc. (a) 5,600 142,632
Robert Half International, Inc. (a) 3,330 78,621
-----------
1,260,515
-----------
Electrical Equipment - 1.1%
American Power Conversion
Corp. (a) 7,790 157,592
-----------
Trading Companies & Distributors - 1.9%
Fastenal Co. 3,860 171,654
Grainger (W.W.), Inc. 2,160 98,885
-----------
270,539
-----------
- ----------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 36.5%
Communications Equipment - 3.0%
3Com Corp. (a) 20,090 144,648
Comverse Technology, Inc. (a) 6,220 112,209
Scientific-Atlanta, Inc. 3,700 109,520
UTStarcom, Inc. (a) 1,990 62,685
-----------
429,062
-----------
Computers & Peripherals - 1.1%
Lexmark International, Inc. (a) 2,040 150,164
-----------
Electronic Equipment & Instruments - 6.4%
Agilent Technologies, Inc. (a) 4,300 107,156
Amphenol Corp., Class A (a) 4,150 243,812
AU Optronics Corp., ADR 6,575 89,288
Jabil Circuit, Inc. (a) 4,800 133,680
Sanmina-SCI Corp. (a) 11,900 125,545
Symbol Technologies, Inc. 6,960 86,930
Vishay Intertechnology, Inc. (a) 6,600 123,750
-----------
910,161
-----------
Semiconductor Equipment & Products - 12.4%
Agere Systems, Inc., Class A (a) 38,410 133,667
Altera Corp. (a) 3,870 78,290
Amkor Technology, Inc. (a) 6,800 128,180
ASML Holding NV, New York
Shares (a) 4,400 77,220
Fairchild Semiconductor
International, Inc., (a) 8,190 185,094
Marvell Technology Group
Ltd. (a) 3,430 150,474
MEMC Electronic Materials
Inc. (a) 5,700 63,840
Microchip Technology, Inc. 9,580 313,362
Shares Value
- ----------------------------------------------------------------------------------------
National Semiconductor Corp. (a) 2,560 $ 104,013
Novellus Systems, Inc. (a) 2,660 109,831
QLogic Corp. (a) 1,300 72,865
Taiwan Semiconductor
Manufacturing Co., Ltd.,
ADR (a) 16,694 184,636
Teradyne, Inc. (a) 6,390 145,564
-----------
1,747,036
-----------
Software - 13.6%
Amdocs Ltd. (a) 9,820 210,737
BEA Systems, Inc. (a) 8,100 112,590
BMC Software, Inc. (a) 6,920 120,270
Electronic Arts, Inc. (a) 3,850 381,304
Fair Isaac Corp. 3,700 235,986
Intuit, Inc. (a) 2,540 126,949
Mercury Interactive Corp. (a) 4,000 185,760
PeopleSoft, Inc. (a) 3,700 76,812
Siebel Systems, Inc. (a) 11,610 146,170
Symantec Corp. (a) 1,570 104,640
VERITAS Software Corp. (a) 6,040 218,346
-----------
1,919,564
-----------
Total Common Stocks
(Cost of $10,810,360) 13,567,953
-----------
Investment Company - 0.7%
- ----------------------------------------------------------------------------------------
MSCI Japan Index Fund,
IShares Inc.
(Cost of $103,452) 11,100 102,564
-----------
Short-Term Obligation - 4.3% Par
- ----------------------------------------------------------------------------------------
Repurchase agreement with State
Street Bank & Trust Co., dated
10/31/03, due 11/03/03 at 0.930%
collateralized by a U.S. Treasury
Bond maturing 08/21/21 market
value $626,750 (repurchase
proceeds $609,047)
(Cost of $609,000) $609,000 609,000
-----------
Total Investments - 101.0%
(Cost of $11,522,812) (b) 14,279,517
-----------
Other Assets & Liabilities, Net - (1.0%) (146,599)
- ----------------------------------------------------------------------------------------
NET ASSETS - 100.0% $14,132,918
===========
Notes to Investment Portfolio:
(a) Non-income producing.
(b) Cost for federal income tax purposes is $11,578,764.
Acronym Name
------- ----
ADR American Depositary Receipt
See notes to financial statements.
14
Investment Portfolio -- Columbia Tax-Managed Growth Fund
October 31, 2003
Common Stocks - 96.9% Shares Value
- ----------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 14.4%
Media - 6.8%
Comcast Corp., Class A (a) 210,000 $ 6,850,200
Univision Communications, Inc.,
Class A (a) 230,000 7,808,500
Viacom, Inc., Class B (a) 198,872 7,929,027
------------
22,587,727
------------
Multi-Line Retail - 5.1%
Kohl's Corp. (a) 125,000 7,008,750
Wal-Mart Stores, Inc. 167,800 9,891,810
------------
16,900,560
------------
Specialty Retail - 2.5%
Lowe's Companies, Inc. 138,000 8,132,340
------------
- ----------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.4%
Beverages - 2.3%
PepsiCo, Inc. 157,800 7,545,996
------------
Food & Drug Retailing - 2.2%
Walgreen Co. 213,000 7,416,660
------------
Household Products - 1.9%
Procter & Gamble Co. 64,500 6,339,705
------------
- ----------------------------------------------------------------------------------------
ENERGY - 5.3%
Energy Equipment & Services - 3.4%
Nabors Industries Ltd. (a) 218,000 8,240,400
Noble Corp. (a) 90,000 3,089,700
------------
11,330,100
------------
Oil & Gas - 1.9%
Exxon Mobil Corp. 166,000 6,072,280
------------
- ----------------------------------------------------------------------------------------
FINANCIALS - 19.9%
Banks - 2.0%
Bank of America Corp. 86,300 6,535,499
------------
Diversified Financials - 9.4%
Citigroup, Inc. 181,155 8,586,747
Fannie Mae 116,200 8,330,378
Lehman Brothers Holdings, Inc. 108,775 7,831,800
Merrill Lynch & Co., Inc. 111,030 6,572,976
------------
31,321,901
------------
Insurance - 8.5%
American International Group, Inc. 121,854 7,412,379
Chubb Corp. 85,700 5,725,617
RenaissanceRe Holdings Ltd. 187,980 8,455,340
XL Capital Ltd., Class A 93,800 6,519,100
------------
28,112,436
------------
- ----------------------------------------------------------------------------------------
HEALTH CARE - 18.1%
Biotechnology - 2.0%
Amgen, Inc. (a) 105,200 6,497,152
------------
Shares Value
- ----------------------------------------------------------------------------------------
Health Care Equipment & Supplies - 7.6%
Medtronic, Inc. 168,500 $ 7,678,545
St. Jude Medical, Inc. (a) 155,000 9,014,800
Zimmer Holdings, Inc. (a) 130,000 8,295,300
------------
24,988,645
------------
Health Care Providers & Services - 1.7%
Express Scripts, Inc., Class A (a) 102,600 5,634,792
------------
Pharmaceuticals - 6.8%
Abbott Laboratories 140,417 5,984,573
AstraZeneca PLC, ADR 187,500 8,940,000
Pfizer, Inc. 243,250 7,686,700
------------
22,611,273
------------
- ----------------------------------------------------------------------------------------
INDUSTRIALS - 9.6%
Electrical Equipment - 2.2%
Emerson Electric Co. 128,300 7,281,025
------------
Industrial Conglomerates - 1.8%
General Electric Co. 211,910 6,147,509
------------
Machinery - 5.6%
Deere & Co. 103,000 6,243,860
Eaton Corp. 58,000 5,813,920
Illinois Tool Works, Inc. 87,000 6,398,850
------------
18,456,630
------------
- ----------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 20.6%
Communications Equipment - 2.6%
Cisco Systems, Inc. (a) 404,700 8,490,606
------------
Computers & Peripherals - 5.0%
Dell, Inc. (a) 100,000 3,612,000
Hewlett-Packard Co. 290,000 6,469,900
Lexmark International, Inc. (a) 90,000 6,624,900
------------
16,706,800
------------
IT Consulting & Services - 2.0%
Affiliated Computer Services, Inc.,
Class A (a) 133,000 6,507,690
------------
Semiconductor Equipment & Products - 7.1%
Intel Corp. 100,000 3,305,000
Microchip Technology, Inc. 248,900 8,141,519
Texas Instruments, Inc. 286,975 8,299,317
Xilinx, Inc. (a) 115,000 3,645,500
------------
23,391,336
------------
Software - 3.9%
Microsoft Corp. 281,400 7,358,610
Symantec Corp. (a) 85,000 5,665,250
------------
13,023,860
------------
- ----------------------------------------------------------------------------------------
MATERIALS - 2.6%
Metals & Mining - 1.1%
Phelps Dodge Corp. (a) 60,000 3,704,400
------------
See notes to investment portfolio.
15
Investment Portfolio -- Columbia Tax-Managed Growth Fund (continued)
October 31, 2003
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------------------
MATERIALS (continued)
Paper & Forest Products - 1.5%
International Paper Co. 121,500 $ 4,781,025
------------
Total Common Stocks
(Cost of $259,190,000) 320,517,947
------------
Short-Term Obligation - 2.9% Par
- ----------------------------------------------------------------------------------------
Repurchase agreement with State
Street Bank & Trust Co., dated
10/31/03, due 11/03/03 at 0.930%
collateralized by a U.S. Treasury
Bond maturing 08/15/17 market
value $9,930,656 (repurchase
proceeds $9,731,754)
(Cost of $9,731,000) $9,731,000 9,731,000
------------
Total Investments - 99.8%
(Cost of $268,921,000) (b) 330,248,947
------------
Other Assets & Liabilities, Net - 0.2% 646,474
- ----------------------------------------------------------------------------------------
Net Assets - 100.0% $330,895,421
============
Notes to Investment Portfolio:
(a) Non-income producing.
(b) Cost for federal income tax purposes is $271,873,415.
Acronym Name
------- ----
ADR American Depositary Receipt
See notes to financial statements.
16
Investment Portfolio -- Columbia Tax-Managed Growth Fund II
October 31, 2003
Common Stocks - 97.1% Shares Value
- ----------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 14.6%
Media - 6.8%
Comcast Corp., Class A (a) 29,800 $ 972,076
Univision Communications, Inc.,
Class A (a) 33,030 1,121,368
Viacom, Inc., Class B (a) 26,800 1,068,516
-----------
3,161,960
-----------
Multi-Line Retail - 5.2%
Kohl's Corp. (a) 17,900 1,003,653
Wal-Mart Stores, Inc. 23,470 1,383,557
-----------
2,387,210
-----------
Specialty Retail - 2.6%
Lowe's Companies, Inc. 20,800 1,225,744
-----------
- ----------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.5%
Beverages - 2.3%
PepsiCo, Inc. 22,500 1,075,950
-----------
Food & Drug Retailing - 2.2%
Walgreen Co. 28,500 992,370
-----------
Household Products - 2.0%
Procter & Gamble Co. 9,500 933,755
-----------
- ----------------------------------------------------------------------------------------
ENERGY - 5.2%
Energy Equipment & Services - 3.3%
Nabors Industries Ltd. (a) 29,400 1,111,320
Noble Corp. (a) 12,500 429,125
-----------
1,540,445
-----------
Oil & Gas - 1.9%
Exxon Mobil Corp. 24,000 877,920
-----------
- ----------------------------------------------------------------------------------------
FINANCIALS - 20.0%
Banks - 2.0%
Bank of America Corp. 12,100 916,333
-----------
Diversified Financials - 9.5%
Citigroup, Inc. 24,795 1,175,283
Fannie Mae 15,585 1,117,289
Lehman Brothers Holdings, Inc. 15,425 1,110,600
Merrill Lynch & Co., Inc. 16,700 988,640
-----------
4,391,812
-----------
Insurance - 8.5%
American International Group, Inc. 17,463 1,062,274
Chubb Corp. 11,600 774,996
RenaissanceRe Holdings Ltd. 28,400 1,277,432
XL Capital Ltd., Class A 12,200 847,900
-----------
3,962,602
-----------
- ----------------------------------------------------------------------------------------
HEALTH CARE - 17.9%
Biotechnology - 2.1%
Amgen, Inc. (a) 16,000 988,160
-----------
Shares Value
- ----------------------------------------------------------------------------------------
Health Care Equipment & Supplies - 7.3%
Medtronic, Inc. 22,400 $ 1,020,768
St. Jude Medical, Inc. (a) 21,000 1,221,360
Zimmer Holdings, Inc. (a) 18,000 1,148,580
-----------
3,390,708
-----------
- ----------------------------------------------------------------------------------------
Health Care Providers & Services - 1.7%
Express Scripts, Inc., Class A (a) 14,200 779,864
-----------
Pharmaceuticals - 6.8%
Abbott Laboratories 19,800 843,876
AstraZeneca PLC, ADR 26,500 1,263,520
Pfizer, Inc. 33,287 1,051,869
-----------
3,159,265
-----------
- ----------------------------------------------------------------------------------------
INDUSTRIALS - 9.6%
Electrical Equipment - 2.2%
Emerson Electric Co. 17,700 1,004,475
-----------
Industrial Conglomerates - 2.3%
General Electric Co. 37,155 1,077,867
-----------
Machinery - 5.1%
Deere & Co. 11,200 678,944
Eaton Corp. 8,000 801,920
Illinois Tool Works, Inc. 12,000 882,600
-----------
2,363,464
-----------
- ----------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 20.7%
Communications Equipment - 2.6%
Cisco Systems, Inc. (a) 56,495 1,185,265
-----------
Computers & Peripherals - 5.2%
Dell, Inc. (a) 14,000 505,680
Hewlett-Packard Co. 44,000 981,640
Lexmark International, Inc. (a) 12,600 927,486
-----------
2,414,806
-----------
IT Consulting & Services - 2.0%
Affiliated Computer Services,
Inc., Class A (a) 19,000 929,670
-----------
Semiconductor Equipment & Products - 7.1%
Intel Corp. 15,000 495,750
Microchip Technology, Inc. 35,425 1,158,752
Texas Instruments, Inc. 40,750 1,178,490
Xilinx, Inc. (a) 15,000 475,500
-----------
3,308,492
-----------
Software - 3.8%
Microsoft Corp. 36,400 951,860
Symantec Corp. (a) 12,000 799,800
-----------
1,751,660
-----------
- ----------------------------------------------------------------------------------------
See notes to investment portfolio.
17
Investment Portfolio -- Columbia Tax-Managed Growth Fund II (continued)
October 31, 2003
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------------------
MATERIALS - 2.6%
Metals & Mining - 1.2%
Phelps Dodge Corp. (a) 8,700 $ 537,138
-----------
Paper & Forest Products - 1.4%
International Paper Co. 17,000 668,950
-----------
Total Common Stocks
(Cost of $40,228,931) 45,025,885
-----------
Short-Term Obligation - 2.6% Par
- ----------------------------------------------------------------------------------------
Repurchase agreement with State
Street Bank & Trust Co., dated
10/31/03, due 11/03/03 at 0.930%
collateralized by a U.S. Treasury
Bond maturing 08/15/20 market
value $1,219,750 (repurchase
proceeds $1,195,093)
(Cost of $1,195,000) $1,195,000 1,195,000
-----------
Total Investments - 99.7%
(Cost of $41,423,931) (b) 46,220,885
-----------
Other Assets & Liabilities, Net - 0.3% 125,620
- ----------------------------------------------------------------------------------------
Net Assets - 100.0% $46,346,505
===========
Notes to Investment Portfolio:
(a) Non-income producing.
(b) Cost for federal income tax purposes is $41,917,597.
Acronym Name
------- ----
ADR American Depositary Receipt
See notes to financial statements.
18
Investment Portfolio -- Columbia Tax-Managed Value Fund
October 31, 2003
Common Stocks - 95.5% Shares Value
- ----------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.2%
Auto Components - 0.9%
Delphi Corp. 84,600 $ 752,940
-----------
Hotels, Restaurants & Leisure - 1.6%
Wendy's International, Inc. 33,400 1,237,470
-----------
Leisure Equipment & Products - 0.5%
Mattel, Inc. 20,900 404,624
-----------
Media - 4.2%
Gannett Co., Inc. 5,000 420,550
Interpublic Group of Companies,
Inc. 57,800 860,064
McGraw-Hill Companies, Inc. 13,100 877,045
Time Warner, Inc. (a) 55,700 851,653
Viacom Inc., Class A 9,800 390,432
-----------
3,399,744
-----------
Specialty Retail - 1.0%
Office Depot, Inc. (a) 54,800 818,164
-----------
- ----------------------------------------------------------------------------------------
CONSUMER STAPLES - 7.1%
Beverages - 1.7%
PepsiCo, Inc. 28,200 1,348,524
-----------
Food Products - 2.0%
ConAgra Foods, Inc. 34,800 829,632
Kraft Foods, Inc., Class A 26,800 779,880
-----------
1,609,512
-----------
Household Products - 3.4%
Clorox Co. 18,300 828,990
Kimberly-Clark Corp. 16,500 871,365
Procter & Gamble Co. 10,500 1,032,045
-----------
2,732,400
-----------
- ----------------------------------------------------------------------------------------
ENERGY - 12.1%
Energy Equipment & Services - 2.9%
Baker Hughes, Inc. 29,100 822,366
Halliburton Co. 64,100 1,530,708
-----------
2,353,074
-----------
Oil & Gas - 9.2%
BP PLC 36,900 1,563,822
ConocoPhillips 28,230 1,613,345
Exxon Mobil Corp. 60,000 2,194,800
Marathon Oil Corp. 41,300 1,221,241
Royal Dutch Petroleum Co. 17,800 789,964
-----------
7,383,172
-----------
- ----------------------------------------------------------------------------------------
Shares Value
- ----------------------------------------------------------------------------------------
FINANCIALS - 33.3%
Banks - 10.7%
Bank of America Corp. 27,500 $ 2,082,575
Bank of New York Co., Inc. 38,000 1,185,220
Bank One Corp. 34,500 1,464,525
Fifth Third Bancorp 8,300 481,068
U.S. Bancorp 63,600 1,731,192
Wells Fargo & Co. 30,000 1,689,600
-----------
8,634,180
-----------
Diversified Financials - 13.2%
American Express Co. 17,100 802,503
Citigroup, Inc. 109,900 5,209,260
Countrywide Financial Corp. 5,700 599,184
Freddie Mac 24,300 1,363,959
J.P. Morgan Chase & Co. 44,800 1,608,320
Morgan Stanley 7,500 411,525
State Street Corp. 11,700 612,612
-----------
10,607,363
-----------
Insurance - 9.4%
AFLAC, Inc. 11,900 434,112
Ambac Financial Group, Inc. 11,400 806,436
American International Group, Inc. 27,400 1,666,742
Berkshire Hathaway, Inc.,
Class A (a) 22 1,711,820
Lincoln National Corp. 42,000 1,677,060
Travelers Property Casualty
Corp. 50,600 828,322
Willis Group Holdings Ltd. 13,700 456,210
-----------
7,580,702
-----------
- ----------------------------------------------------------------------------------------
HEALTH CARE - 6.6%
Health Care Providers & Services - 2.9%
Aetna, Inc. 25,900 1,486,919
McKesson Corp. 27,500 832,425
-----------
2,319,344
-----------
Pharmaceuticals - 3.7%
Bristol-Myers Squibb Co. 30,300 768,711
Johnson & Johnson 7,800 392,574
Merck & Co., Inc. 20,700 915,975
Pfizer, Inc. 28,200 891,120
-----------
2,968,380
-----------
- ----------------------------------------------------------------------------------------
INDUSTRIALS - 9.2%
Aerospace & Defense - 3.7%
General Dynamics Corp. 10,000 837,000
Honeywell International, Inc. 29,200 893,812
Raytheon Co. 31,100 823,528
United Technologies Corp. 4,900 414,981
-----------
2,969,321
-----------
See notes to investment portfolio.
19
Investment Portfolio -- Columbia Tax-Managed Value Fund (continued)
October 31, 2003
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------------------
INDUSTRIALS (continued)
Commercial Services & Supplies - 2.6%
Avery Dennison Corp. 7,700 $ 404,866
Waste Management, Inc. 64,770 1,678,838
-----------
2,083,704
-----------
Industrial Conglomerates - 1.8%
Textron, Inc. 29,100 1,445,979
-----------
Machinery - 1.1%
Dover Corp. 23,200 905,264
-----------
- ----------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 6.0%
Communications Equipment - 1.2%
Nokia Oyj, ADR 56,800 965,032
-----------
Computers & Peripherals - 1.0%
International Business Machines
Corp. 9,100 814,268
-----------
IT Consulting & Services - 1.8%
Accenture Ltd., Class A (a) 60,800 1,422,720
-----------
Office Electronics - 1.6%
Xerox Corp. (a) 120,500 1,265,250
-----------
Software - 0.4%
Microsoft Corp. 13,400 350,410
-----------
- ----------------------------------------------------------------------------------------
MATERIALS - 2.8%
Chemicals - 1.1%
Air Products & Chemicals, Inc. 20,200 917,282
-----------
Paper & Forest Products - 1.7%
MeadWestvaco Corp. 32,200 834,624
Weyerhaeuser Co. 8,100 487,863
-----------
1,322,487
-----------
- ----------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 4.9%
Diversified Telecommunication Services - 4.9%
BellSouth Corp. 49,200 1,294,452
CenturyTel, Inc. 5,600 200,200
SBC Communications, Inc. 52,900 1,268,542
Verizon Communications, Inc. 36,400 1,223,040
-----------
3,986,234
-----------
- ----------------------------------------------------------------------------------------
UTILITIES - 5.3%
Electric Utilities - 4.4%
American Electric Power Co., Inc. 26,600 749,854
Consolidated Edison, Inc. 30,400 1,230,288
PG&E Corp. (a) 27,500 672,375
TXU Corp. 39,300 896,826
-----------
3,549,343
-----------
Shares Value
- ----------------------------------------------------------------------------------------
Multi-Utilities & Unregulated Power - 0.9%
Duke Energy Corp. 42,600 $ 773,190
-----------
Total Common Stocks
(Cost of $68,666,940) 76,920,077
-----------
Investment Company - 0.7%
- ----------------------------------------------------------------------------------------
Russel 1000 Value Index, IShares
(Cost of $527,680) 9,700 530,202
-----------
Short-Term Obligation - 3.4% Par
- ----------------------------------------------------------------------------------------
Repurchase agreement with State
Street Bank & Trust Co., dated
10/31/03, due 11/03/03 at 0.930%
collateralized by a U.S. Treasury
Bond maturing 08/15/17 market
value $2,833,263 (repurchase
proceeds $2,774,215)
(Cost of $2,774,000) $2,774,000 2,774,000
-----------
Total Investments - 99.6%
(Cost of $71,968,620) (b) 80,224,279
-----------
Other Assets & Liabilities, Net - 0.4% 322,598
- ----------------------------------------------------------------------------------------
NET ASSETS - 100.0% $80,546,877
===========
Notes to Investment Portfolio:
(a) Non-income producing.
(b) Cost for federal income tax purposes is $72,112,642.
Acronym Name
------- ----
ADR American Depositary Receipt
See notes to financial statements.
20
Statements of Assets & Liabilities
October 31, 2003
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
AGGRESSIVE GROWTH FUND GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at cost $ 11,522,812 $268,921,000
------------ ------------
Investments, at value 14,279,517 330,248,947
Cash $ 526 $ 72
Receivables for:
Investments sold 170,508 3,293,052
Fund shares sold 117,650 103,291
Dividends 1,182 290,186
Interest 16 251
Expense reimbursement due from Investment
Advisor/Administrator 24,890 --
Deferred Trustees' compensation plan 726 12,025
Other assets 60 --
----------- ----------
Total Assets 14,595,075 333,947,824
------------ ------------
LIABILITIES:
Payable for:
Investments purchased 389,409 1,661,891
Fund shares repurchased 12,780 763,189
Investment advisory fee 9,460 171,491
Administration fee 2,269 73,665
Transfer agent fee 8,065 126,552
Pricing and bookkeeping fees 1,717 12,958
Audit fee 20,000 19,800
Distribution and service fees 8,712 206,122
Deferred Trustees' fees 726 12,025
Other liabilities 9,019 4,710
----------- ----------
Total Liabilities 462,157 3,052,403
------------ ------------
NET ASSETS $ 14,132,918 $330,895,421
============ ============
COMPOSITION OF NET ASSETS:
Paid-in capital $ 25,886,939 $460,153,541
Accumulated net investment loss (986) (16,158)
Accumulated net realized loss (14,509,740) (190,569,909)
Net unrealized appreciation on investments 2,756,705 61,327,947
------------ ------------
NET ASSETS $ 14,132,918 $330,895,421
============ ============
CLASS A:
Net assets $ 3,838,024 $ 69,764,044
Shares outstanding 491,102 5,329,784
============ ============
Net asset value per share $ 7.82(a) $ 13.09(a)
============ ============
Maximum offering price per share (net asset value/0.9425) $ 8.30(b) $ 13.89(b)
============ ============
CLASS B:
Net assets $ 8,632,371 $213,481,017
Shares outstanding 1,131,294 17,177,706
============ ============
Net asset value and offering price per share $ 7.63(a) $ 12.43(a)
============ ============
CLASS C:
Net assets $ 1,644,309 $ 30,035,491
Shares outstanding 215,558 2,417,233
============ ============
Net asset value and offering price per share $ 7.63(a) $ 12.43(a)
============ ============
CLASS E:
Net assets $ -- $ 6,908,071
Shares outstanding -- 530,617
============ ============
Net asset value and redemption price per share $ -- $ 13.02
============ ============
Maximum offering price per share (net asset value/0.9550) $ -- $ 13.63(b)
============ ============
CLASS F:
Net assets $ -- $ 10,265,234
Shares outstanding -- 824,945
============ ============
Net asset value and offering price per share $ -- $ 12.44(a)
============ ============
CLASS Z:
Net assets $ 18,214 $ 441,564
Shares outstanding 2,325 33,342
============ ============
Net asset value, offering and redemption price per share $ 7.83 $ 13.24
============ ============
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
21
Statements of Assets & Liabilities (continued)
October 31, 2003 COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
GROWTH FUND II VALUE FUND
- --------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at cost $ 41,423,931 $ 71,968,620
------------ ------------
Investments, at value 46,220,885 80,224,279
Cash $ 948 $ 608
Receivables for:
Investments sold 463,979 461,580
Fund shares sold 27,913 83,849
Dividends 39,635 177,903
Interest 31 72
Deferred Trustees' compensation plan 1,855 3,157
----------- ----------
Total Assets 46,755,246 80,951,448
------------ ------------
LIABILITIES:
Expense reimbursement due to Investment
Advisor/Administrator 10,483 --
Payable for:
Investments purchased 229,466 --
Fund shares repurchased 50,759 211,912
Investment advisory fee 31,914 56,022
Administration fee 8,224 14,525
Transfer agent fee 18,173 30,795
Pricing and bookkeeping fees 1,334 4,222
Trustees' fees -- 255
Audit fee 24,000 23,090
Distribution and service fees 30,897 52,374
Deferred Trustees' fees 1,855 3,157
Other liabilities 1,636 8,219
----------- ----------
Total Liabilities 408,741 404,571
------------ ------------
NET ASSETS $ 46,346,505 $ 80,546,877
============ ============
COMPOSITION OF NET ASSETS:
Paid-in capital $ 73,936,978 $ 99,155,925
Undistributed net investment income
(accumulated net investment loss) (2,387) 141,865
Accumulated net realized loss (32,385,040) (27,006,572)
Net unrealized appreciation on investments 4,796,954 8,255,659
------------ ------------
NET ASSETS $ 46,346,505 $ 80,546,877
============ ============
CLASS A:
Net assets $ 7,515,112 $ 16,724,554
Shares outstanding 902,323 1,656,061
============ ============
Net asset value per share $ 8.33(a) $ 10.10(a)
============ ============
Maximum offering price per share (net asset value/0.9425) $ 8.84(b) $ 10.72(b)
============ ============
CLASS B:
Net assets $ 31,556,583 $ 50,116,915
Shares outstanding 3,897,546 5,115,563
============ ============
Net asset value and offering price per share $ 8.10(a) $ 9.80(a)
============ ============
CLASS C:
Net assets 6,443,762 $ 13,673,612
Shares outstanding 797,618 1,395,895
============ ============
Net asset value and offering price per share $ 8.08(a) $ 9.80(a)
============ ============
CLASS Z:
Net assets $ 831,048 $ 31,796
Shares outstanding 99,028 3,111
============ ============
Net asset value, offering and redemption price per share $ 8.39 $ 10.22
============ ============
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
22
Statements of Operations
For the Year Ended October 31, 2003
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
AGGRESSIVE GROWTH FUND GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 31,741 $ 3,535,545
Interest 5,596 76,770
Other income -- 3,366
----------- -------------
Total Investment Income (net of foreign taxes
withheld of $471 and $11,473, respectively) 37,337 3,615,681
----------- -------------
EXPENSES:
Investment advisory fee $ 98,583 $ 1,906,575
Administration fee 24,646 794,406
Service fee:
Class A 7,180 162,307
Class B 19,821 519,012
Class C 3,782 74,018
Class E -- 15,352
Class F -- 23,066
Distribution fee:
Class A 1,436 --
Class B 59,464 1,557,036
Class C 11,347 222,055
Class E -- 6,141
Class F -- 69,199
Transfer agent fee 44,148 724,312
Pricing and bookkeeping fees 13,622 107,345
Trustees' fees 5,925 14,569
Custody fee 6,768 7,371
Audit fee 28,141 23,550
Registration fee 49,248 63,335
Other expenses 9,223 61,318
----------- -----------
Total Expenses 383,334 6,350,967
Fees and expenses waived or reimbursed by
Investment Advisor/Administrator (126,247) --
Custody earnings credit (21) (19)
----------- -----------
Net Expenses 257,066 6,350,948
----------- -------------
Net Investment Loss (219,729) (2,735,267)
----------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investments 39,575 (14,431,179)
Net change in unrealized appreciation/depreciation
on investments 2,524,929 73,959,918
----------- -------------
Net Gain 2,564,504 59,528,739
----------- -------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,344,775 $ 56,793,472
=========== =============
See notes to financial statements.
23
Statements of Operations (continued)
For the Year Ended October 31, 2003
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
GROWTH FUND II VALUE FUND
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 491,023 $ 2,006,840
Interest 12,162 15,531
Other income 13,974 --
----------- -------------
Total Investment Income (net of foreign taxes
withheld of $1,739 and $23,671, respectively) 517,159 2,022,371
----------- -------------
EXPENSES:
Investment advisory fee $ 354,298 $ 667,173
Administration fee 88,575 166,836
Service fee:
Class A 17,993 44,339
Class B 75,320 125,831
Class C 15,463 38,317
Distribution fee:
Class A -- 8,868
Class B 225,960 377,494
Class C 46,388 114,950
Transfer agent fee 111,368 186,045
Pricing and bookkeeping fees 11,442 37,168
Trustees' fees 7,264 9,322
Custody fee 3,394 7,106
Other expenses 86,109 94,017
---------- ----------
Total Expenses 1,043,574 1,877,466
Fees and expenses waived or reimbursed by
Investment Advisor/Administrator (108,703) --
Custody earnings credit (96) (13)
---------- ----------
Net Expenses 934,775 1,877,453
----------- -------------
Net Investment Income (Loss) (417,616) 144,918
----------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments (2,632,362) (11,323,355)
Net change in unrealized appreciation/depreciation
on investments 10,813,804 21,142,163
----------- -------------
Net Gain 8,181,442 9,818,808
----------- -------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,763,826 $ 9,963,726
=========== =============
See notes to financial statements.
24
Statements of Changes in Net Assets
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
AGGRESSIVE GROWTH FUND GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss $ (219,729) $ (308,001) $ (2,735,267) $ (3,370,720)
Net realized gain (loss) on investments 39,575 (2,855,344) (14,431,179) (56,235,239)
Net change in unrealized appreciation/depreciation
on investments 2,524,929 1,853,314 73,959,918 (3,638,348)
----------- ----------- ------------ ------------
Net Increase (Decrease) from Operations 2,344,775 (1,310,031) 56,793,472 (63,244,307)
----------- ----------- ------------ ------------
SHARE TRANSACTIONS:
Class A:
Subscriptions 2,125,101 918,229 6,638,498 8,721,673
Redemptions (1,688,965) (1,895,664) (15,690,904) (32,084,446)
----------- ----------- ------------ ------------
Net Increase (Decrease) 436,136 (977,435) (9,052,406) (23,362,773)
----------- ----------- ------------ ------------
Class B:
Subscriptions 671,525 1,187,026 6,283,356 13,151,957
Redemptions (1,759,818) (3,112,236) (46,212,326) (81,597,675)
----------- ----------- ------------ ------------
Net Decrease (1,088,293) (1,925,210) (39,928,970) (68,445,718)
----------- ----------- ------------ ------------
Class C:
Subscriptions 81,847 529,404 2,908,437 5,562,656
Redemptions (418,954) (1,152,931) (8,956,641) (15,790,888)
----------- ----------- ------------ ------------
Net Decrease (337,107) (623,527) (6,048,204) (10,228,232)
----------- ----------- ------------ ------------
Class E:
Subscriptions -- -- 105,637 224,389
Redemptions -- -- (150,292) (238,932)
----------- ----------- ------------ ------------
Net Decrease -- -- (44,655) (14,543)
----------- ----------- ------------ ------------
Class F:
Subscriptions -- -- 197,836 527,180
Redemptions -- -- (330,673) (353,318)
----------- ----------- ------------ ------------
Net Increase (Decrease) -- -- (132,837) 173,862
----------- ----------- ------------ ------------
Class Z:
Subscriptions 11,910 408,190 482,349 --
Redemptions -- (397,190) (154,915) (850,740)
----------- ----------- ------------ ------------
Net Increase (Decrease) 11,910 11,000 327,434 (850,740)
----------- ----------- ------------ ------------
Net Decrease from Share Transactions (977,354) (3,515,172) (54,879,638) (102,728,144)
----------- ----------- ------------ ------------
Total Increase (Decrease) in Net Assets 1,367,421 (4,825,203) 1,913,834 (165,972,451)
NET ASSETS:
Beginning of period 12,765,497 17,590,700 328,981,587 494,954,038
----------- ----------- ------------ ------------
End of period $14,132,918 $12,765,497 $330,895,421 $328,981,587
=========== =========== ============ ============
Accumulated net investment loss $ (986) $ (505) $ (16,158) $ (13,849)
=========== =========== ============ ============
See notes to financial statements.
25
Statements of Changes in Net Assets (continued)
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
AGGRESSIVE GROWTH FUND GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------------------------------
CHANGES IN SHARES:
Class A:
Subscriptions 306,687 120,292 560,514 680,896
Redemptions (254,160) (258,069) (1,375,186) (2,614,841)
----------- ----------- ------------ ------------
Net Increase (Decrease) 52,527 (137,777) (814,672) (1,933,945)
----------- ----------- ------------ ------------
Class B:
Subscriptions 105,120 161,551 587,037 1,049,853
Redemptions (274,407) (440,359) (4,268,593) (7,007,740)
----------- ----------- ------------ ------------
Net Decrease (169,287) (278,808) (3,681,556) (5,957,887)
----------- ----------- ------------ ------------
Class C:
Subscriptions 12,186 70,516 270,413 455,735
Redemptions (64,957) (163,218) (820,762) (1,341,588)
----------- ----------- ------------ ------------
Net Decrease (52,771) (92,702) (550,349) (885,853)
----------- ----------- ------------ ------------
Class E:
Subscriptions -- -- 8,644 17,655
Redemptions -- -- (13,658) (21,839)
----------- ----------- ------------ ------------
Net Decrease -- -- (5,014) (4,184)
----------- ----------- ------------ ------------
Class F:
Subscriptions -- -- 17,598 42,623
Redemptions -- -- (29,586) (31,434)
----------- ----------- ------------ ------------
Net Increase (Decrease) -- -- (11,988) 11,189
----------- ----------- ------------ ------------
Class Z:
Subscriptions 1,861 51,745 40,880 --
Redemptions -- (59,967) (14,872) (64,379)
----------- ----------- ------------ ------------
Net Increase (Decrease) 1,861 (8,222) 26,008 (64,379)
----------- ----------- ------------ ------------
See notes to financial statements.
26
Statements of Changes in Net Assets (continued)
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
GROWTH FUND II VALUE FUND
- ---------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $ (417,616) $ (530,798) $ 144,918 $ (248,818)
Net realized loss on investments (2,632,362) (9,333,607) (11,323,355) (15,507,933)
Net change in unrealized appreciation/depreciation
on investments 10,813,804 2,290,838 21,142,163 (14,402,670)
----------- ----------- ------------ ------------
Net Increase (Decrease) from Operations 7,763,826 (7,573,567) 9,963,726 (30,159,421)
----------- ----------- ------------ ------------
SHARE TRANSACTIONS:
Class A:
Subscriptions 1,444,961 2,585,072 3,592,454 10,989,897
Redemptions (2,899,754) (3,053,453) (8,719,434) (10,381,631)
----------- ----------- ------------ ------------
Net Increase (Decrease) (1,454,793) (468,381) (5,126,980) 608,266
----------- ----------- ------------ ------------
Class B:
Subscriptions 1,882,364 5,060,865 3,240,450 17,390,433
Redemptions (6,472,623) (11,451,939) (11,898,465) (16,719,891)
----------- ----------- ------------ ------------
Net Increase (Decrease) (4,590,259) (6,391,074) (8,658,015) 670,542
----------- ----------- ------------ ------------
Class C:
Subscriptions 713,546 2,105,388 1,542,556 9,058,575
Redemptions (1,816,426) (3,549,281) (7,135,678) (7,028,058)
----------- ----------- ------------ ------------
Net Increase (Decrease) (1,102,880) (1,443,893) (5,593,122) 2,030,517
----------- ----------- ------------ ------------
Class Z:
Subscriptions 41,354 434,351 28,960 --
Redemptions (248,762) (700,801) -- --
----------- ----------- ------------ ------------
Net Increase (Decrease) (207,408) (266,450) 28,960 --
----------- ----------- ------------ ------------
Net Increase (Decrease) from Share Transactions (7,355,340) (8,569,798) (19,349,157) 3,309,325
----------- ----------- ------------ ------------
Total Increase (Decrease) in Net Assets 408,486 (16,143,365) (9,385,431) (26,850,096)
NET ASSETS:
Beginning of period 45,938,019 62,081,384 89,932,308 116,782,404
----------- ----------- ------------ ------------
End of period $46,346,505 $45,938,019 $ 80,546,877 $ 89,932,308
=========== =========== ============ ============
Undistributed net investment income
(accumulated net investment loss) $ (2,387) $ (1,690) $ 141,865 $ (3,053)
=========== =========== ============ ============
See notes to financial statements.
27
Statements of Changes in Net Assets (continued)
COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED
GROWTH FUND II VALUE FUND
- ---------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------------------------------
CHANGES IN SHARES:
Class A:
Subscriptions 201,123 307,872 393,479 962,625
Redemptions (407,311) (396,592) (961,953) (990,919)
----------- ----------- ------------ ------------
Net Decrease (206,188) (88,720) (568,474) (28,294)
----------- ----------- ------------ ------------
Class B:
Subscriptions 266,693 618,499 359,993 1,548,507
Redemptions (911,307) (1,495,782) (1,316,603) (1,691,536)
----------- ----------- ------------ ------------
Net Decrease (644,614) (877,283) (956,610) (143,029)
----------- ----------- ------------ ------------
Class C:
Subscriptions 100,076 257,090 169,090 809,984
Redemptions (258,061) (453,851) (785,239) (702,641)
----------- ----------- ------------ ------------
Net Increase (Decrease) (157,985) (196,761) (616,149) 107,343
----------- ----------- ------------ ------------
Class Z:
Subscriptions 5,807 59,549 3,007 --
Redemptions (34,998) (83,691) -- --
----------- ----------- ------------ ------------
Net Increase (Decrease) (29,191) (24,142) 3,007 --
----------- ----------- ------------ ------------
See notes to financial statements.
28
Notes to Financial Statements
October 31, 2003
Note 1. Organization
Columbia Funds Trust I (the "Trust"), formerly Liberty Funds Trust I, is a
Massachusetts business trust registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. Information
presented in these financial statements pertains to the following diversified
portfolios (individually referred to as a "Fund", collectively referred to as
the "Funds"):
Columbia Tax-Managed Aggressive Growth Fund
("Aggressive Growth Fund"),
Formerly Liberty Tax-Managed Aggressive Growth Fund
Columbia Tax-Managed Growth Fund ("Growth Fund"),
Formerly Liberty Tax-Managed Growth Fund
Columbia Tax-Managed Growth Fund II
("Growth Fund II"),
Formerly Liberty Tax-Managed Growth Fund II
Columbia Tax-Managed Value Fund ("Value Fund"),
Formerly Liberty Tax-Managed Value Fund
Investment Goal
Each Fund seeks long-term capital growth while reducing shareholder exposure to
taxes. Aggressive Growth Fund invests primarily in common stocks of small
capitalization and middle capitalization companies that the Fund's investment
advisor believes have growth potential. Growth Fund, Growth Fund II and Value
Fund invest primarily in large capitalization and middle capitalization stocks.
Fund Shares
The Funds may issue an unlimited number of shares. Aggressive Growth Fund,
Growth Fund II, and Value Fund each offer four classes of shares: Class A, Class
B, Class C and Class Z. Growth Fund offers six classes of shares: Class A, Class
B, Class C, Class E, Class F and Class Z. Each share class has its own sales
charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge in accounts aggregating $1 million to $25 million at the time of
purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months of the time of purchase. Class B shares are
subject to a maximum CDSC of 5.00% based upon the holding period after purchase.
Class B shares will convert to Class A shares in a certain number of years after
purchase, depending on the program under which shares were purchased. Class C
shares are subject to a 1.00% CDSC on shares sold within one year after
purchase. Class E and Class F shares are trust shares. Such shares are held in
an irrevocable trust on behalf of the shareholder until a trust termination
date, as specified by the shareholder. At such time, the shares pass to the
shareholder's beneficiary. Class E shares are subject to a maximum front-end
sales charge of 4.50% based on the amount of initial investment. Class E shares
purchased without an initial sales charge in accounts aggregating $500,000 to $5
million at the time of purchase are subject to a 1.00% CDSC on shares sold
within eighteen months of the time of purchase. Class F shares are subject to a
maximum CDSC of 5.00% based upon the holding period after purchase. Class F
shares will convert into Class E shares after eight years. Class Z shares are
offered continuously at net asset value. There are certain restrictions on the
purchase of Class Z shares, as described in each Fund's prospectus.
Effective October 13, 2003, Liberty Tax-Managed Aggressive Growth Fund, Liberty
Tax-Managed Growth Fund, Liberty Tax-Managed Growth Fund II, and Liberty
Tax-Managed Value Fund changed their names to Columbia Tax-Managed Aggressive
Growth Fund, Columbia Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund
II, and Columbia Tax-Managed Value Fund, respectively. Also on that date, the
Trust changed its name from Liberty Funds Trust I to Columbia Funds Trust I.
Note 2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting
29
Notes to Financial Statements (continued)
October 31, 2003
policies consistently followed by the Funds in the preparation of their
financial statements.
Security Valuation
Equity securities are valued at the last sale price at the close of the
principal exchange on which they trade. Unlisted securities or listed securities
for which there were no sales during the day are valued at the closing bid price
on such exchanges or over-the-counter markets.
Short-term obligations maturing within 60 days are valued at amortized cost,
which approximates market value.
Investments in other investment companies are valued at net asset value.
Investments for which market quotations are not readily available are valued at
fair value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
Security Transactions
Security transactions are accounted for on the date the securities are
purchased, sold or mature. Cost is determined and gains (losses) are based upon
the specific identification method for both financial statement and federal
income tax purposes.
Repurchase Agreements
The Funds may engage in repurchase agreement transactions with institutions that
the Funds' investment advisor has determined are creditworthy. The Funds,
through their custodian, receive delivery of underlying securities
collateralizing a repurchase agreement. Collateral securities are
marked-to-market daily to ensure that their market value is at least equal, at
all times to the repurchase price. (In the event that the market value of the
collateral securities declines below the repurchase price of the repurchase
agreement, additional securities will be required to be segregated.) A
repurchase agreement transaction involves certain risks in the event of default
or insolvency of the counterparty, including possible delays or restrictions
upon each Fund's ability to dispose of the underlying securities, and a possible
decline in the value of the underlying securities during the period while the
Funds seek to assert their rights.
Income Recognition
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date.
Determination of Class Net Asset Values
All income, expenses (other than class-specific expenses, as shown on the
Statements of Operations), and realized and unrealized gains (losses), are
allocated to each class on a daily basis, based on the relative net assets of
each class, for purposes of determining the net asset value of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, by distributing
substantially all of its taxable or tax-exempt income, if any, for its tax year,
and as such will not be subject to federal income taxes. In addition, by
distributing in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, each Fund will not be
subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
Distributions to Shareholders
The Funds are managed using investment strategies that are designed to reduce
(but not eliminate) the Funds' payment of taxable distributions to shareholders.
From time to time, the Funds expect to distribute taxable income and capital
gains. Distributions to shareholders are recorded on ex-date. Net realized
capital gains, if any, are distributed at least annually. Income and capital
gains dividends are determined in accordance with income tax regulations which
may differ from GAAP.
Note 3. 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.
Reclassifications are made to each Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
30
Notes to Financial Statements (continued)
October 31, 2003
For the year ended October 31, 2003 permanent differences resulting primarily
from differing treatments for net operating losses were identified and
reclassified among the components of the Funds' net assets as follows:
UNDISTRIBUTED
(ACCUMULATED) ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME (LOSS) GAIN (LOSS) CAPITAL
--------------- ------------ -------
Aggressive
Growth
Fund ...... $ 219,248 $-- $ (219,248)
Growth
Fund ...... 2,732,958 1 (2,732,959)
Growth
Fund II 416,919 -- (416,919)
Value Fund .. -- 1 (1)
Net investment income (loss) and net realized gains (losses), as disclosed on
the Statements of Operations, and net assets were not affected by this
reclassification.
As of October 31, 2003, the components of distributable earnings on a tax basis
were as follows:
UNDISTRIBUTED UNDISTRIBUTED NET
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
--------------- ------------- -------------
Aggressive
Growth
Fund ...... $-- $-- $ 2,700,753
Growth
Fund ...... -- -- 58,375,532
Growth
Fund II -- -- 4,303,288
Value Fund .. 145,817 -- 8,111,637
* The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales.
Unrealized appreciation (depreciation) at October 31, 2003, based on cost of
investments for federal income tax purposes, was:
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
-------------- -------------- --------------
Aggressive
Growth
Fund ...... $ 2,836,332 $ (135,579) $ 2,700,753
Growth
Fund ...... 64,320,970 (5,945,438) 58,375,532
Growth
Fund II 6,889,134 (2,585,846) 4,303,288
Value Fund .. 9,680,590 (1,568,953) 8,111,637
The following capital loss carryforwards are available to reduce taxable income
arising from future net realized gains on investments, if any, to the extent
permitted by the Internal Revenue Code:
AGGRESSIVE
GROWTH GROWTH GROWTH VALUE
EXPIRING IN: FUND FUND FUND II FUND
- ------------ ----------- ------------ ----------- -----------
2005 $ -- $ 559,490 $ -- $ --
2006 -- 9,583,819 -- --
2007 -- 1,695,876 -- --
2008 599,602 16,678,334 1,602,453 96,769
2009 11,034,417 90,676,212 18,063,082 --
2010 2,819,769 55,723,137 9,577,005 15,493,033
2011 -- 12,700,626 2,648,834 11,272,748
----------- ------------ ----------- -----------
Total $14,453,788 $187,617,494 $31,891,374 $26,862,550
=========== ============ =========== ===========
Capital loss carryforwards of $49,141 were utilized and/or expired during the
year ended October 31, 2003 for the Aggressive Growth Fund. For the Growth Fund,
Growth FundII and Value Fund, no capital loss carryforwards were utilized and/or
expired for the year ended October 31, 2003. Expired capital loss carryforwards
are recorded as a reduction of paid-in capital.
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisor/Administrator Merger
On April 1, 2003, Stein Roe & Farnham Incorporated, the previous investment
advisor to the Funds, and Colonial Management Associates, Inc., the previous
administrator to the Funds, merged into Columbia Management Advisors, Inc.
("Columbia"), formerly known as Columbia Management Co., an indirect, wholly
owned subsidiary of FleetBoston Financial Corporation. As a result of the
merger, Columbia now serves as the Funds' investment advisor and administrator.
The merger did not change the way the Funds are managed, the investment
personnel assigned to manage the Funds or the fees paid by the Funds.
31
Notes to Financial Statements (continued)
October 31, 2003
Investment Advisory Fee
Columbia is the investment advisor of each of the Funds and receives a monthly
fee based on each Fund's average daily net assets at the following annual rates:
FEES ON AVERAGE
DAILY NET ASSETS
-----------------
Aggressive Growth Fund 0.80%
Growth Fund 0.60%
Value Fund 0.80%
FEES ON AVERAGE
FEES ON AVERAGE DAILY NET ASSETS
DAILY NET ASSETS OVER $500
UP TO $500 MILLION MILLION
------------------ -----------------
Growth Fund II 0.80% 0.75%
For the year ended October 31, 2003, the effective investment advisory fee rate
for Growth Fund II was 0.80%.
At a meeting held on October 8, 2003, the Board of Trustees approved a change of
the investment advisory fee structure for the Funds. Effective November 1, 2003,
Columbia will receive a monthly fee based on each Fund's average daily net as
follows:
FEES ON
AVERAGE DAILY
FEES ON NET ASSETS FEES ON
AVERAGE OF $500 AVERAGE
DAILY NET MILLION BUT DAILY NET
ASSETS UNDER LESS THAN ASSETS OVER
$500 MILLION $1 BILLION $1 BILLION
------------- ------------ ------------
Aggressive
Growth
Fund 0.80% 0.75% 0.70%
Growth
Fund 0.60% 0.55% 0.50%
Growth
Fund II 0.80% 0.75% 0.70%
Value Fund 0.80% 0.75% 0.70%
Stein Roe Investment Counsel LLC ("SRIC"), which is not affiliated with
Columbia, was retained by Columbia as sub-advisor to Growth Fund and Growth Fund
II. As sub-advisor, SRIC is responsible for daily investment operations,
including placing all orders for the purchase and sale of portfolio securities
for the two funds. Columbia pays SRIC a monthly sub-advisory fee equal to a base
rate of 0.20% annually of the average daily net assets for each of the two
funds. This base fee of 0.20% can be adjusted quarterly to an annual rate as
high as 0.25% or to an annual rate as low as 0.15% depending on the investment
performance, as determined by Morningstar, Inc.'s Large Blend category, of each
Fund over a specified period of time. In addition, Columbia's contract with SRIC
provides that SRIC shall not receive a fee less than $350,000 per annum in the
aggregate for managing both Growth Fund and Growth Fund II.
Administration Fee
Columbia provides administrative and other services for a monthly fee based on
each Fund's average daily net assets at the following annual rates:
Aggressive Growth Fund 0.20%
Growth Fund 0.25%
Growth Fund II 0.20%
Value Fund 0.20%
At a meeting held on October 8, 2003, the Board of Trustees approved an
administration fee reduction for the Funds to go into effect on November 1,
2003. As a result of the fee reduction, Columbia will receive a monthly fee
based on each Fund's average daily net assets at the following annual rates:
Aggressive Growth Fund 0.05%
Growth Fund 0.25%
Growth Fund II 0.05%
Value Fund 0.05%
Pricing and Bookkeeping Fees
Columbia is responsible for providing pricing and bookkeeping services to each
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street").
Under its pricing and bookkeeping agreement with the Funds, Columbia receives
from each Fund an annual flat fee of $10,000 paid monthly, and in any month that
a Fund's average daily net assets exceed $50 million, an additional monthly fee.
The additional fee rate is calculated by taking into account the fees payable to
State Street under the Outsourcing Agreement. This rate is applied to the
average daily net assets of each Fund for that month. The Funds also pay
out-of-pocket costs for
32
Notes to Financial Statements (continued)
October 31, 2003
pricing services. Columbia pay the total fees collected to State Street under
the Outsourcing Agreement. For the year ended October 31, 2003, the effective
pricing and bookkeeping fee rates were as follows:
FUND FEE RATE
- ---- --------
Aggressive Growth Fund 0.111%
Growth Fund 0.034%
Growth Fund II 0.026%
Value Fund 0.045%
Transfer Agent Fee
Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds
Services, Inc., an affiliate of Columbia, provides shareholder services for a
monthly fee equal to 0.06% annually of each Fund's average daily net assets plus
flat-rate charges based on the number of shareholder accounts and transactions.
For the year ended October 31, 2003, the effective transfer agent fee rates were
as follows:
Aggressive Growth Fund 0.22%
Growth Fund 0.14%
Growth Fund II 0.15%
Value Fund 0.13%
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses.
Effective October 13, 2003 Liberty Funds Services, Inc. changed its name to
Columbia Funds Services, Inc. At a meeting held on October 8, 2003, the Board of
Trustees approved a change of the transfer agent fee structure of the Funds.
Effective November 1, 2003, each Fund will be charged an annual fee of $28.00
per open account for transfer agent fees. The Transfer Agent will continue to
receive reimbursement for certain out-of-pocket expenses.
Underwriting Discounts, Service and Distribution Fees
Effective October 13, 2003, Liberty Funds Distributor, Inc. (the "Distributor"),
an affiliate of Columbia and the Funds' principal underwriter, changed its name
to Columbia Funds Distributor, Inc.
For the year ended October 31, 2003, the Distributor has retained net
underwriting discounts as follows:
FRONT-END
SALES CHARGE
------------------
CLASS A CLASS E
-------- -------
Aggressive Growth Fund $1,444 $--
Growth Fund 9,435 --
Growth Fund II 2,992 --
Value Fund 2,327 --
CDSC
--------------------------------------
CLASS A CLASS B CLASS C CLASS F
------- ------- ------- -------
Aggressive
Growth Fund $ -- $36,904 $ 32 $ --
Growth Fund -- 681,783 1,116 1,694
Growth Fund II 27 102,631 97 --
Value Fund 1,250 199,832 2,425 --
The Funds have adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly distribution and service fee to the Distributor. The fee rates for each
Fund, as a percentage of average daily net assets for each share class, are as
follows:
DISTRIBUTION FEES:
CLASS A CLASS B CLASS C CLASS E CLASS F
------- ------- ------- ------- -------
Aggressive
Growth
Fund 0.05% 0.75% 0.75% N/A N/A
Growth
Fund N/A 0.75% 0.75% 0.10% 0.75%
Growth
Fund II N/A 0.75% 0.75% N/A N/A
Value Fund 0.05% 0.75% 0.75% N/A N/A
SERVICE FEES:
CLASS A CLASS B CLASS C CLASS E CLASS F
------- ------- ------- ------- -------
Aggressive
Growth
Fund 0.25% 0.25% 0.25% N/A N/A
Growth
Fund 0.25% 0.25% 0.25% 0.25% 0.25%
Growth
Fund II 0.25% 0.25% 0.25% N/A N/A
Value Fund 0.25% 0.25% 0.25% N/A N/A
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
33
Notes to Financial Statements (continued)
October 31, 2003
Expense Limits and Fee Waivers
Columbia has voluntarily agreed to waive fees and reimburse the Funds for
certain expenses so that total expenses (exclusive of service fees, distribution
fees, brokerage commissions, interest, taxes and extraordinary expenses, if any)
would not exceed certain expense limitations. Columbia, at its discretion, may
revise or discontinue these arrangements any time. For the year ended October
31, 2003, total expenses were limited to the following percentages annually of
the Funds' average daily net assets:
AVERAGE
DAILY NET ASSETS
-----------------
Aggressive Growth Fund 1.25%
AVERAGE
AVERAGE DAILY NET ASSETS
DAILY NET ASSETS OVER
UP TO $100 MILLION $100 MILLION
------------------ ----------------
Growth Fund II 1.25% 1.50%
Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Funds could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if they had not entered into such an agreement.
Fees Paid to Officers and Trustees
The Funds pay no compensation to their officers, all of whom are employees of
Columbia or its affiliates. The Funds' Trustees may participate in a deferred
compensation plan which may be terminated at any time. Obligations of the plan
will be paid solely out of the Funds' assets.
Note 5. Portfolio Information
Purchases and Sales of Securities
For the year ended October 31, 2003, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were as follows:
PURCHASES SALES
--------- -----
Aggressive
Growth Fund $ 13,777,463 $ 15,149,974
Growth Fund 120,437,800 178,583,388
Growth Fund II 15,455,172 23,202,053
Value Fund 55,687,891 76,416,118
Note 6. Line of Credit
The Funds and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to each Fund based on its borrowings.
In addition, each Fund has agreed to pay commitment fees on its pro-rata portion
of the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statements of Operations. Prior to April 26, 2003, the Funds
participated in a separate credit agreement with terms similar to their existing
agreement. For the year ended October 31, 2003, the Funds did not borrow under
these agreements.
Note 7. Concentration of Credit Risk
The Funds may focus their investments in certain industries, subjecting them to
greater risk than funds that are more diversified.
34
Financial Highlights - Columbia Tax-Managed Aggressive Growth Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
-------------------------------------------------------------
Class A Shares 2003 2002 2001 2000(a)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.44 $ 7.01 $ 12.36 $ 11.59
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08) (0.09) (0.09) (0.04)
Net realized and unrealized gain (loss) on investments 1.46 (0.48) (5.26) 0.81
------- ------- -------- -------
Total from Investment Operations 1.38 (0.57) (5.35) 0.77
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 7.82 $ 6.44 $ 7.01 $ 12.36
======= ======= ======== =======
Total return (c)(d) 21.43% (8.13)% (43.28)% 6.64%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 1.55% 1.55% 1.55% 1.55%(g)
Net investment loss (f) (1.25)% (1.27)% (1.05)% (1.19)%(g)
Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(g)
Portfolio turnover rate 116% 121% 188% 47%(e)
Net assets, end of period (000's) $ 3,838 $ 2,825 $ 4,043 $ 5,227
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
Year Ended October 31,
----------------------------------------------------------
Class B Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.33 $ 6.95 $ 12.34 $ 11.59
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.13) (0.14) (0.15) (0.06)
Net realized and unrealized gain (loss) on investments 1.43 (0.48) (5.24) 0.81
------- ------- -------- -------
Total from Investment Operations 1.30 (0.62) (5.39) 0.75
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34
======= ======= ======== =======
Total return (c)(d) 20.54% (8.92)% (43.68)% 6.47%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.95)% (1.97)% (1.75)% (1.89)%(g)
Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(g)
Portfolio turnover rate 116% 121% 188% 47%(e)
Net assets, end of period (000's) $ 8,632 $ 8,238 $ 10,979 $ 18,080
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
35
Financial Highlights - Columbia Tax-Managed Aggressive Growth Fund (continued)
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
----------------------------------------------------------
Class C Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.33 $ 6.95 $ 12.34 $ 11.59
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.13) (0.14) (0.15) (0.06)
Net realized and unrealized gain (loss) on investments 1.43 (0.48) (5.24) 0.81
------- ------- -------- -------
Total from Investment Operations 1.30 (0.62) (5.39) 0.75
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34
======= ======= ======== =======
Total return (c)(d) 20.54% (8.92)% (43.68)% 6.47%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.95)% (1.97)% (1.75)% (1.89)%(g)
Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(g)
Portfolio turnover rate 116% 121% 188% 47%(e)
Net assets, end of period (000's) $ 1,644 $ 1,699 $ 2,508 $ 1,567
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
Year Ended October 31,
---------------------------------------------------------
Class Z Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.43 $ 7.03 $ 12.37 $ 11.59
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.07) (0.07) (0.07) (0.03)
Net realized and unrealized gain (loss) on investments 1.47 (0.53) (5.27) 0.81
------- ------- -------- -------
Total from Investment Operations 1.40 (0.60) (5.34) 0.78
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 7.83 $ 6.43 $ 7.03 $ 12.37
======= ======= ======== =======
Total return (c) 21.77% (8.53)% (43.17)% 6.73%(d)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (e) 1.25% 1.25% 1.25% 1.25%(f)
Net investment loss (e) (0.95)% (0.97)% (0.75)% (0.89)%(f)
Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(f)
Portfolio turnover rate 116% 121% 188% 47%(d)
Net assets, end of period (000's) $ 18 $ 3 $ 61 $ 128
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
36
Financial Highlights - Columbia Tax-Managed Growth Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
---------------------------------------------------------------------------
Class A Shares 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.87 $ 12.68 $ 18.38 $ 17.19 $ 13.39
------- -------- -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (a) (0.03) (0.02) (0.06) (0.12) (0.03)
Net realized and unrealized gain
(loss) on investments 2.25 (1.79) (5.64) 1.31 3.83
------- -------- -------- -------- -------
Total from Investment Operations 2.22 (1.81) (5.70) 1.19 3.80
------- -------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD $ 13.09 $ 10.87 $ 12.68 $ 18.38 $ 17.19
======= ======== ======== ======== =======
Total return (b) 20.42% (14.27)% (31.01)% 6.92% 28.38%
======= ======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (c) 1.42% 1.41% 1.39% 1.44% 1.64%
Net investment loss (c) (0.28)% (0.18)% (0.38)% (0.67)% (0.21)%
Portfolio turnover rate 39% 42% 82% 69% 80%
Net assets, end of period (000's) $69,764 $66,760 $102,403 $163,502 $97,531
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
Year Ended October 31,
---------------------------------------------------------------------------
Class B Shares 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.39 $ 12.22 $ 17.85 $ 16.82 $ 13.20
-------- -------- -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (a) (0.11) (0.11) (0.17) (0.26) (0.15)
Net realized and unrealized gain
(loss) on investments 2.15 (1.72) (5.46) 1.29 3.77
-------- -------- -------- -------- -------
Total from Investment Operations 2.04 (1.83) (5.63) 1.03 3.62
-------- -------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD $ 12.43 $ 10.39 $ 12.22 $ 17.85 $ 16.82
======== ======== ======== ======== ========
Total return (b) 19.63% (14.98)% (31.54)% 6.12% 27.42%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (c) 2.17% 2.16% 2.14% 2.19% 2.39%
Net investment loss (c) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)%
Portfolio turnover rate 39% 42% 82% 69% 80%
Net assets, end of period (000's) $213,481 $216,801 $327,645 $532,082 $303,726
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming no contingent deferred sales
charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
37
Financial Highlights - Columbia Tax-Managed Growth Fund (continued)
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
---------------------------------------------------------------------------
Class C Shares 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.39 $ 12.21 $ 17.85 $ 16.82 $ 13.20
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (a) (0.11) (0.11) (0.17) (0.26) (0.15)
Net realized and unrealized gain
(loss) on investments 2.15 (1.71) (5.47) 1.29 3.77
------- ------- ------- ------- -------
Total from Investment Operations 2.04 (1.82) (5.64) 1.03 3.62
------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 12.43 $ 10.39 $ 12.21 $ 17.85 $ 16.82
======= ======= ======= ======= =======
Total return (b) 19.63% (14.91)% (31.60)% 6.12% 27.42%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (c) 2.17% 2.16% 2.14% 2.19% 2.39%
Net investment loss (c) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)%
Portfolio turnover rate 39% 42% 82% 69% 80%
Net assets, end of period (000's) $30,035 $30,837 $47,069 $80,232 $46,869
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming no contingent deferred sales
charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
Year Ended October 31,
---------------------------------------------------------------------------
Class E Shares 2003 2002 2001 2000(a) 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.82 $ 12.63 $ 18.34 $ 17.17 $ 13.36
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (b) (0.04) (0.03) (0.07) (0.14) (0.05)
Net realized and unrealized gain
(loss) on investments 2.24 (1.78) (5.64) 1.31 3.83
------- ------- ------- ------- -------
Total from Investment Operations 2.20 (1.81) (5.71) 1.17 3.78
------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 13.02 $ 10.82 $ 12.63 $ 18.34 $ 17.14
======= ======= ======= ======= =======
Total return (c) 20.33% (14.33)% (31.13)% 6.81% 28.29%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (d) 1.52% 1.51% 1.49% 1.54% 1.74%
Net investment loss (d) (0.38)% (0.28)% (0.48)% (0.77)% (0.31)%
Portfolio turnover rate 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 6,908 $ 5,794 $ 6,820 $ 9,171 $ 1,089
(a) Class E shares were collapsed into Class G shares on February 28, 2000,
which were then redesignated Class E shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
38
Financial Highlights - Columbia Tax-Managed Growth Fund (continued)
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
---------------------------------------------------------------------------
Class F Shares 2003 2002 2001 2000(a) 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.41 $ 12.23 $ 17.87 $ 16.83 $ 13.21
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (b) (0.11) (0.11) (0.17) (0.26) (0.15)
Net realized and unrealized gain
(loss) on investments 2.14 (1.71) (5.47) 1.30 3.71
------- ------- ------- ------- -------
Total from Investment Operations 2.03 (1.82) (5.64) 1.04 3.56
------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 12.44 $ 10.41 $ 12.23 $ 17.87 $ 16.77
======= ======= ======= ======= =======
Total return (c) 19.50% (14.88)% (31.56)% 6.18% 26.95%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (d) 2.17% 2.16% 2.14% 2.19% 2.39%
Net investment loss (d) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)%
Portfolio turnover rate 39% 42% 82% 69% 80%
Net assets, end of period (000's) $10,265 $ 8,709 $10,101 $13,368 $ 2,025
(a) Class F shares were collapsed into Class H shares on February 28, 2000,
which were then redesignated Class F shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
Year Ended October 31,
---------------------------------------------------------------------------
Class Z Shares 2003 2002 2001 2000 1999(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.96 $ 12.76 $ 18.46 $ 17.23 $ 15.56
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) (b) (0.01) 0.01 (0.02) (0.08) (0.02)
Net realized and unrealized gain
(loss) on investments 2.29 (1.81) (5.68) 1.31 1.69
------- ------- ------- ------- -------
Total from Investment Operations 2.28 (1.80) (5.70) 1.23 1.67
------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 13.24 $ 10.96 $ 12.76 $ 18.46 $ 17.23
======= ======= ======= ======= =======
Total return 20.80% (14.11)% (30.88)% 7.14% 10.73%(c)
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (d) 1.17% 1.16% 1.14% 1.19% 0.79%(e)
Net investment income (loss) (d) (0.03)% 0.07% (0.13)% (0.42)% (0.13)%(e)
Portfolio turnover rate 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 442 $ 80 $ 915 $ 1,941 $ 1
(a) Class Z shares were initially offered on January 11, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e) Annualized.
39
Financial Highlights - Columbia Tax-Managed Growth Fund II
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
----------------------------------------------------------
Class A Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.94 $ 7.92 $ 11.55 $ 12.00
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.02) (0.02) (0.04) (0.07)
Net realized and unrealized gain (loss) on investments 1.41 (0.96) (3.59) (0.38)
------- ------- -------- -------
Total from Investment Operations 1.39 (0.98) (3.63) (0.45)
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 8.33 $ 6.94 $ 7.92 $ 11.55
======= ======= ======== =======
Total return (c)(d) 20.03% (12.37)% (31.43)% (3.75)%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 1.50% 1.50% 1.50% 1.50%(g)
Net investment loss (f) (0.33)% (0.29)% (0.42)% (0.84)%(g)
Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 7,515 $ 7,692 $ 9,486 $ 6,769
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
Year Ended October 31,
----------------------------------------------------------
Class B Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.80 $ 7.82 $ 11.51 $ 12.00
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08) (0.08) (0.11) (0.12)
Net realized and unrealized gain (loss) on investments 1.38 (0.94) (3.58) (0.37)
------- ------- -------- -------
Total from Investment Operations 1.30 (1.02) (3.69) (0.49)
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 8.10 $ 6.80 $ 7.82 $ 11.51
======= ======= ======== =======
Total return (c)(d) 19.12% (13.04)% (32.06)% (4.08)%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.08)% (1.04)% (1.17)% (1.59)%(g)
Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 36% 49% 90% 32%(e)
Net assets, end of period (000's) $31,557 $30,871 $ 42,391 $50,859
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
40
Financial Highlights - Columbia Tax-Managed Growth Fund II (continued)
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
----------------------------------------------------------
Class C Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.78 $ 7.80 $ 11.50 $ 12.00
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08) (0.08) (0.11) (0.12)
Net realized and unrealized gain (loss) on investments 1.38 (0.94) (3.59) (0.38)
------- ------- -------- -------
Total from Investment Operations 1.30 (1.02) (3.70) (0.50)
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 8.08 $ 6.78 $ 7.80 $ 11.50
======= ======= ======== =======
Total return (c)(d) 19.17% (13.08)% (32.17)% (4.17)%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.08)% (1.04)% (1.17)% (1.59)%(g)
Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 6,444 $ 6,481 $ 8,994 $ 5,801
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
Year Ended October 31,
----------------------------------------------------------
Class Z Shares 2003 2002 2001 2000(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.97 $ 7.95 $ 11.58 $ 12.00
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.01) --(c) (0.02) (0.05)
Net realized and unrealized gain (loss) on investments 1.43 (0.98) (3.61) (0.37)
------- ------- -------- -------
Total from Investment Operations 1.42 (0.98) (3.63) (0.42)
------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 8.39 $ 6.97 $ 7.95 $ 11.58
======= ======= ======== =======
Total return (d) 20.37% (12.33)% (31.35)% (3.50)%(e)
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 1.25% 1.25% 1.25% 1.25%(g)
Net investment loss (f) (0.08)% (0.04)% (0.17)% (0.59)%(g)
Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 831 $ 894 $ 1,211 $ 4,740
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
41
Financial Highlights - Columbia Tax-Managed Value Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
---------------------------------------------------------------------------
Class A Shares 2003 2002 2001 2000 1999(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.89 $ 11.40 $ 11.41 $ 10.64 $ 12.00
------- -------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.07 0.04 0.04 0.04 --(c)
Net realized and unrealized gain (loss)
on investments 1.14 (2.55) (0.05) 0.73 (1.36)
------- -------- -------- -------- -------
Total from Investment Operations 1.21 (2.51) (0.01) 0.77 (1.36)
------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 10.10 $ 8.89 $ 11.40 $ 11.41 $ 10.64
======= ======== ======== ======== =======
Total return (d) 13.61% (22.02)% (0.09)% 7.24% (11.33)%(e)
======= ======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 1.70% 1.61% 1.71% 1.80% 1.77%(g)
Net investment income (f) 0.72% 0.34% 0.32% 0.39% --%(g)(h)
Portfolio turnover rate 68% 72% 47% 76% 19%(e)
Net assets, end of period (000's) $16,725 $ 19,767 $ 25,694 $ 14,017 $ 7,528
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(h) Rounds to less than 0.01%.
Year Ended October 31,
---------------------------------------------------------------------------
Class B Shares 2003 2002 2001 2000 1999(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00
------- -------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) --(c) (0.04) (0.04) (0.03) (0.04)
Net realized and unrealized gain (loss)
on investments 1.12 (2.50) (0.04) 0.72 (1.35)
------- -------- -------- -------- -------
Total from Investment Operations 1.12 (2.54) (0.08) 0.69 (1.39)
------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61
======= ======== ======== ======== =======
Total return (d) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e)
======= ======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 2.40% 2.31% 2.41% 2.50% 2.60%(g)
Net investment income (loss) (f) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g)
Portfolio turnover rate 68% 72% 47% 76% 19%(e)
Net assets, end of period (000's) $50,117 $ 52,701 $ 69,720 $ 49,112 $ 14,622
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming no contingent deferred sales
charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
42
Financial Highlights - Columbia Tax-Managed Value Fund (continued)
Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31,
---------------------------------------------------------------------------
Class C Shares 2003 2002 2001 2000 1999(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00
------- -------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) --(c) (0.04) (0.04) (0.03) (0.04)
Net realized and unrealized gain (loss)
on investments 1.12 (2.50) (0.04) 0.72 (1.35)
------- -------- -------- -------- -------
Total from Investment Operations 1.12 (2.54) (0.08) 0.69 (1.39)
------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61
======= ======== ======== ======== =======
Total return (d) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e)
======= ======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses (f) 2.40% 2.31% 2.41% 2.50% 2.60%(g)
Net investment income (loss) (f) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g)
Portfolio turnover rate 68% 72% 47% 76% 19%(e)
Net assets, end of period (000's) $13,674 $ 17,463 $ 21,367 $ 10,331 $ 4,137
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming no contingent deferred sales
charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
Year Ended October 31,
---------------------------------------------------------------------------
Class Z Shares 2003 2002 2001 2000 1999(a)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 8.96 $ 11.46 $ 11.43 $ 10.65 $ 12.00
------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income (b) 0.10 0.07 0.07 0.07 0.01
Net realized and unrealized gain (loss)
on investments 1.16 (2.57) (0.04) 0.71 (1.36)
------- -------- -------- -------- -------
Total from Investment Operations 1.26 (2.50) 0.03 0.78 (1.35)
------- -------- -------- -------- -------
Net Asset Value, End of Period $ 10.22 $ 8.96 $ 11.46 $ 11.43 $ 10.65
======= ======== ======== ======== =======
Total return 14.06% (21.82)% 0.26% 7.32% (11.25)%(c)
======= ======== ======== ======== =======
Ratios to Average Net Assets/
Supplemental Data:
Expenses (d) 1.40% 1.31% 1.41% 1.50% 1.50%(e)
Net investment income (d) 1.02% 0.64% 0.62% 0.69% 0.27%(e)
Portfolio turnover rate 68% 72% 47% 76% 19%(c)
Net assets, end of period (000's) $ 32 $ 1 $ 1 $ 1 $ 2,396
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e) Annualized.
43
Report of Ernst & Young LLP, Independent Auditors
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF COLUMBIA FUNDS TRUST I:
COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND
COLUMBIA TAX-MANAGED GROWTH FUND II
We have audited the accompanying statements of assets and liabilities, including
the Investment Portfolios, of Columbia Tax-Managed Aggressive Growth Fund and
Columbia Tax-Managed Growth Fund II (formerly Liberty Tax-Managed Aggressive
Growth Fund and Liberty Tax-Managed Growth Fund II, respectively) (collectively,
the "Funds") (two of the series constituting Columbia Funds Trust I (formerly
Liberty Funds Trust I)), as of October 31, 2003, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of October 31, 2003 by correspondence with the custodian and brokers,
or by other appropriate auditing procedures where replies from brokers were not
received. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Columbia Tax-Managed Aggressive Growth Fund and Columbia Tax-Managed Growth Fund
II (two of the series of Columbia Funds Trust I) at October 31, 2003, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein, in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 9, 2003
44
Report of Independent Auditors
TO THE TRUSTEES OF COLUMBIA TRUST I AND THE SHAREHOLDERS OF:
COLUMBIA TAX-MANAGED GROWTH FUND AND
COLUMBIA TAX-MANAGED VALUE FUND
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Tax-Managed Growth Fund
and Columbia Tax-Managed Value Fund (formerly Liberty Tax-Managed Growth Fund
and Liberty Tax-Managed Value Fund) (each a series of Columbia Funds Trust I,
formerly Liberty Funds Trust I) (collectively "the Funds") at October 31,2003,
and the results of their operations, the changes in their net assets, and their
financial highlights for the periods indicated, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at October 31, 2003 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 11, 2003
45
Trustees
Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were
appointed to the Board of Trustees of the Funds. Messrs. Simpson and Woolworth
had been directors/trustees of 15 Columbia Funds and 20 funds in the CMG Fund
Trust. Also effective October 8, 2003, the incumbent trustees of the Funds were
elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in
the CMG Fund Trust. The new combined Board of Trustees/Directors of the Funds
now oversees 124 funds in the Columbia Funds complex (including the former
Liberty Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of
these trustees/directors also serve on the Boards of other funds in the Columbia
Funds complex.
The Trustees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds complex. The Statement of Additional Information
(SAI) contains additional information about the Trustees and is available
without charge upon request by calling the Fund's distributor at 800-345-6611.
Number of
Year first portfolios in
elected or Columbia Funds Other
Position appointed Principal occupation(s) complex overseen directorships
Name, address and age with Funds to office1 during past five years by Trustee/Director held
- ----------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
Douglas A. Hacker (age 48) Trustee 1996 Executive Vice President-Strategy 124 Orbitz (an online
P.O. Box 66100 of United Airlines (airline) since ticket broker)
Chicago, IL 60666 December, 2002 (formerly President
of UAL Loyalty Services (airline) from
September, 2001 to December, 2002; Executive
Vice President and Chief Financial Officer of
United Airlines from March, 1993 to September,
2001; Senior Vice President and Chief Financial
Officer of UAL, Inc. prior thereto).
Janet Langford Kelly (age 45) Trustee 1996 Chief Administrative Officer and Senior Vice 124 None
3100 West Beaver Road President, Kmart Holding Corporation since
Troy, MI 48084-3163 September, 2003 (formerly Executive Vice
President-Corporate Development and
Administration, General Counsel and Secretary,
Kellogg Company (food manufacturer), from
September, 1999 to August, 2003; Senior Vice
President, Secretary and General Counsel,
Sara Lee Corporation (branded, packaged,
consumer-products manufacturer) from
January, 1995 to September, 1999).
Richard W. Lowry (age 67) Trustee 1995 Private Investor since August, 1987 (formerly 126(3) None
10701 Charleston Drive Chairman and Chief Executive Officer, U.S.
Vero Beach, FL 32963 Plywood Corporation (building products manufacturer)).
Charles R. Nelson (age 61) Trustee 1981 Professor of Economics, University of 124 None
Department of Economics Washington, since January, 1976; Ford and
University of Washington Louisa Van Voorhis Professor of Political Economy,
Seattle, WA 98195 University of Washington, since September, 1993;
Director, Institute for Economic Research,
University of Washington, since September,
2001; Adjunct Professor of Statistics,
University of Washington, since September, 1980;
Associate Editor, Journal of Money Credit and
Banking, since September, 1993; consultant on
econometric and statistical matters.
John J. Neuhauser (age 60) Trustee 1985 Academic Vice President and Dean of Faculties 127(3,4) Saucony, Inc.
84 College Road since August, 1999, Boston College (formerly (athletic footwear);
Chestnut Hill, MA 02467-3838 Dean, Boston College School of Management SkillSoft Corp
from September, 1977 to September, 1999). (e-learning)
Patrick J. Simpson (age 58) Trustee 2000 Partner, Perkins Coie L.L.P. (formerly Partner, 124 None
1211 S.W. 5th Avenue Stoel Rives Boley Jones & Grey).
Suite 1500
Portland, OR 97204
Thomas E. Stitzel (age 67) Trustee 1998 Business Consultant since 1999 (formerly 124 None
2208 Tawny Woods Place Professor of Finance from 1975 to 1999 and
Boise, ID 83706 Dean from 1977 to 1991, College of Business,
Boise State University); Chartered Financial
Analyst.
46
TRUSTEES (CONTINUED)
Number of
Year first portfolios in
elected or Columbia Funds Other
Position appointed Principal occupation(s) complex overseen directorships
Name, address and age with Funds to office1 during past five years by Trustee/Director held
- ----------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES (CONTINUED)
Thomas C. Theobald (age 66) Trustee 1996 Managing Director, William Blair Capital 124 Anixter
27 West Monroe Street, Partners (private equity investing) since International
Suite 3500 September, 1994 (formerly Chief Executive (network support
Chicago, IL 60606 Officer and Chairman of the Board of equipment
Directors, Continental Bank distributor), Jones
Corporation prior thereto). Lang LaSalle (real
estate management
services) and MONY
Group (life
insurance)
Anne-Lee Verville (age 58) Trustee 1998 Author and speaker on educational systems needs 125(4) Chairman of the
359 Stickney Hill Road (formerly General Manager, Global Education Board of Directors,
Hopkinton, NH 03229 Industry from 1994 to 1997, and President, Enesco Group, Inc.
Applications Solutions Division from 1991 to (designer, importer
1994, IBM Corporation (global education and and distributor of
global applications)). giftware and
collectibles)
Richard L. Woolworth (age 62) Trustee 1991 Chairman and Chief Executive Officer, The 124 NW Natural (natural
100 S.W. Market Street Regence Group (healthcare organization) gas maintenance
#1500 (formerly Chairman and Chief Executive service provider)
Portland, OR 97207 Officer, BlueCross BlueShield of Oregon;
Certified Public Accountant, Arthur Young
& Company).
INTERESTED TRUSTEES
William E. Mayer2 (age 63) Trustee 1994 Managing Partner, Park Avenue Equity Partners 126(3) Lee Enterprises
399 Park Avenue (private equity) since February, 1999 (formerly (print media),
Suite 3204 Founding Partner, Development Capital LLC WR Hambrecht + Co.
New York, NY 10022 from November 1996 to February, 1999; Dean and (financial service
Professor, College of Business and Management, provider) and
University of Maryland from October, 1992 to First Health
November, 1996). (healthcare)
Joseph R. Palombo2 (age 50) Trustee, 2000 Executive Vice President and Chief Operating 125(5) None
One Financial Center Chairman Officer of Columbia Management Group, Inc.
Boston, MA 02111 of the since December, 2001 and Director, Executive Vice
Board and President and Chief Operating Officer of Columbia
President Management Advisors, Inc. (Advisor) since April,
2003 (formerly Chief Operations Officer of Mutual
Funds, Liberty Financial Companies, Inc. from
August, 2000 to November, 2001; Executive Vice
President of Stein Roe & Farnham Incorporated
(Stein Roe) from April, 1999 to April, 2003;
Director of Colonial Management Associates, Inc.
(Colonial) from April, 1999 to April, 2003;
Director of Stein Roe from September, 2000 to
April, 2003) President of Columbia Funds and
Galaxy Funds since February, 2003 (formerly Vice
President from September 2002 to February 2003);
Manager of Stein Roe Floating Rate Limited Liability
Company since October, 2000; (formerly Vice President
of the Columbia Funds from April, 1999 to August,
2000; Chief Operating Officer and Chief Compliance
Officer, Putnam Mutual Funds from December, 1993
to March, 1999).
1 In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In October
2003, the trustees on the Liberty Board were elected to the boards of the
Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG
Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
2 Mr. Mayer is an "interested person" (as defined in the Investment Company Act
of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co. Mr.
Palombo is an interested person as an employee of the Advisor.
3 Messrs. Lowry, Neuhauser and Mayer each also serve as a director/trustee of
the All-Star Funds, currently consisting of 2 funds, which are advised by an
affiliate of the Advisor.
4 Mr. Neuhauser and Ms. Verville also serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Advisor.
5 Mr. Palombo also serves as an interested director of Columbia Management
Multi-Strategy Hedge Fund, LLC, which is advised by the Advisor.
47
[THIS PAGE INTENTIONALLY LEFT BLANK]
Officers and Transfer Agent
Year first
elected or
Position with appointed
Name, address and age Columbia Funds to office Principal occupation(s) during past five years
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICERS
Vicki L. Benjamin (Age 42) Chief 2001 Controller of the Columbia Funds and of the Liberty All-Star
One Financial Center Accounting Funds since May, 2002; Chief Accounting Officer of the Columbia
Boston, MA 02111 Officer and Funds and Liberty All-Star Funds since June, 2001; Controller
Controller and Chief Accounting Officer of Galaxy Funds since September,
2002 (formerly Vice President, Corporate Audit, State Street
Bank and Trust Company from May, 1998 to April, 2001; Audit
Manager from July, 1994 to June, 1997; Senior Audit Manager
from July, 1997 to May, 1998, Coopers & Lybrand, LLP).
J. Kevin Connaughton (Age 39) Treasurer 2000 Treasurer of the Columbia Funds and of the Liberty All-Star
One Financial Center Funds since December, 2000; Vice President of the Advisor since
Boston, MA 02111 April, 2003 (formerly Controller of the Liberty Funds and of the
Liberty All-Star Funds from February, 1998 to October, 2000);
Treasurer of the Galaxy Funds since September 2002; Treasurer,
Columbia Management Multi-Strategy Hedge Fund, LLC since
December, 2002 (formerly Vice President of Colonial from
February, 1998 to October, 2000 and Senior Tax Manager, Coopers
& Lybrand, LLP from April, 1996 to January, 1998).
David A. Rozenson (Age 49) Secretary 2003 Secretary of the Columbia Funds and of the Liberty All-Star
One Financial Center Funds since December, 2003; Senior Counsel, Fleet Boston
Boston, MA 02111 Financial Corporation since January, 1996. Associate General
Counsel, Columbia Management Group since November, 2002.
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Columbia Tax-Managed Funds is:
Columbia Funds Services, Inc.
P.O. Box 8081
Boston, MA 02266-8081
PLEASE NOTE OUR NEW NAME AS OF OCTOBER 13, 2003.
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Tax-Managed Funds.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus, which provides details of sales charges, investment
objectives and operating policies of the fund, and with the most recent copy of
the Columbia Funds Performance Update.
Annual Report:
Columbia Tax-Managed Funds
Columbia Tax-Managed Funds Annual Report, October 31, 2003
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
logo: Columbia Funds
Columbia Funds
A Member of Columbia Management Group
(C) 2003 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.426.3750 www.columbiafunds.com
TM-02/238Q-1003 (12/03) 03/3665
Item 2. Code of Ethics.
(a) The registrant has, as of the end of the period covered by this report,
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(b) During the period covered by this report, there were not any amendments to
a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were not any waivers or
implicit waivers to a provision of the code of ethics adopted in 2(a)
above.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that Douglas A. Hacker, Thomas
E. Stitzel and Anne-Lee Verville, each of whom are members of the registrant's
Board of Trustees and Audit Committee, each qualify as an audit committee
financial expert. Mr. Hacker, Mr. Stitzel 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.
Not applicable at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable at this time.
Item 10. 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 Form
N-CSR is accumulated and communicated to the registrant's management,
including the principal executive officer and principal financial officer,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 11. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR
attached hereto as Exhibit 99.CODE ETH
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust I
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By (Signature and Title) /s/ Joseph R. Palombo
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Joseph R. Palombo, President
Date December 23, 2003
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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/ Joseph R. Palombo
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Joseph R. Palombo, President
Date December 23, 2003
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By (Signature and Title) /s/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date December 23, 2003
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