UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09095
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Columbia Funds Trust IX
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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 L. 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: 1-617-426-3363
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Date of fiscal year end: June 30, 2004
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Date of reporting period: December 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 HIGH YIELD
MUNICIPAL FUND
SEMIANNUAL REPORT
DECEMBER 31, 2003
photo of: woman in playground
WE ARE COLUMBIA FUNDS!
INSIDE - Management's discussion of the name changes effective October 13, 2003
PRESIDENT'S MESSAGE
Columbia High Yield Municipal Fund
photo of: Joseph R. Palombo
DEAR SHAREHOLDER:
As you know, your fund has long been associated with a larger investment
management organization. In the 1990s, it was associated with 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 Corporation, which you know as Columbia Management
Group (CMG).
In 2003, 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. For example, Liberty High Yield
Municipal Fund was changed to Columbia High Yield Municipal Fund. We have also
modified certain fund names that existed under both the Liberty and Columbia
brands. 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, portfolio manager Maureen Newman discusses 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
Table of Contents
Fund Profile ................................1
Performance Information .....................2
Economic Update .............................3
Portfolio Manager's Report ..................4
Financial Statements ........................6
Investment Portfolio .....................7
Statement of Assets and Liabilities .....34
Statement of Operations .................35
Statement of Changes in Net Assets ......36
Notes to Financial Statements ...........38
Financial Highlights ....................44
Important Information
About This Report ..........................48
Columbia Funds .............................49
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
Not FDIC Insured o May Lose Value o No Bank Guarantee
FUND PROFILE
Columbia High Yield Municipal Fund
The information below gives you a snapshot of your fund at the end of
the reporting period. Because your fund is actively managed, there is no
guarantee that these breakdowns and percentages will be maintained in the
future.
QUALITY BREAKDOWN AS OF 12/31/03 (%)
AAA 24.6
AA 1.5
A 11.0
BBB 18.6
BB 4.7
B 0.7
CCC 1.0
CC 0.3
Non-rated 33.3
Cash equivalent 4.3
[bar chart]
MATURITY BREAKDOWN AS OF 12/31/03 (%)
0-1 years 0.2
1-3 years 0.6
3-5 years 5.3
5-7 years 5.3
7-10 years 7.2
10-15 years 18.8
15-20 years 21.2
20-25 years 17.7
25 years and over 19.4
Cash equivalent 4.3
Quality and maturity breakdowns are calculated as a percentage of total
investments including short term obligations. Ratings shown in the quality
breakdown represent the highest rating assigned to a particular bond by one of
the following nationally-recognized rating agencies: Standard & Poor's
Corporation, Moody's Investors Service, Inc. or Fitch Investors Service, Inc.
Maturity breakdown is based on each security's effective maturity, which
reflects pre-refundings, mandatory puts and other conditions that affect a
bond's maturity.
(C) 2004 Morningstar, Inc. All Rights Reserved. The information contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2) may
not be copied or distributed; and (3) is not warranted to be accurate, complete
or timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past performance is
no guarantee of future results.
The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data are gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
12/31/2003.
sidebar:
SUMMARY
o For the six-month period ended December 31, 2003, the fund's class A shares
(without sales charge) returned 2.48%.
o The fund beat the 1.45% return of its benchmark, the Lehman Brothers
Municipal Bond Index, but fell behind the 3.08% average return of its peer
group, the Lipper Current High Yield Municipal Debt Fund Category.
o The fund benefited from strong security selection and high income, but we
believe it was hindered by below-average stakes in the top performing
airlines and tobacco sectors.
OBJECTIVE
Seeks high level of total return
consisting of current income exempt
from federal income tax and
opportunities for
capital appreciation
TOTAL NET ASSETS
$451.4 million
artwork: 2 arrows up
LEHMAN BROTHERS MUNICIPAL
CLASS A SHARES BOND INDEX
2.48% 1.45%
style box: Long Maturity; Med Quality
1
PERFORMANCE INFORMATION
Columbia High Yield Municipal Fund
Value of a $10,000 investment 01/01/94 - 12/31/03
mountain chart:
Class A shares Class A Shares Lehman Brothers
without with Municipal
sales charge sale charge Bond Index
01/1994 $10,000 $9,525 $10,000
10,098 9,618 10,114
9,889 9,419 9,852
9,488 9,038 9,451
9,553 9,099 9,531
9,677 9,218 9,614
9,681 9,221 9,556
9,798 9,333 9,731
9,837 9,370 9,765
9,726 9,264 9,621
9,587 9,132 9,450
9,413 8,966 9,279
9,598 9,142 9,483
9,946 9,473 9,754
10,182 9,699 10,038
10,270 9,782 10,153
10,284 9,796 10,166
10,597 10,093 10,490
10,510 10,011 10,399
10,610 10,106 10,497
10,719 10,210 10,631
10,779 10,267 10,698
10,955 10,434 10,853
11,159 10,629 11,033
11,298 10,761 11,139
11,375 10,835 11,224
11,282 10,746 11,147
11,154 10,624 11,005
11,121 10,592 10,974
11,137 10,608 10,969
11,231 10,697 11,089
11,287 10,751 11,189
11,314 10,777 11,186
11,469 10,924 11,343
11,596 11,046 11,471
11,782 11,222 11,681
11,804 11,244 11,632
11,834 11,272 11,654
11,929 11,362 11,761
11,824 11,262 11,605
11,912 11,346 11,702
12,097 11,522 11,879
12,229 11,648 12,006
12,519 11,924 12,339
12,462 11,870 12,223
12,586 11,988 12,368
12,666 12,064 12,447
12,755 12,149 12,521
12,932 12,318 12,704
13,056 12,436 12,835
13,077 12,456 12,838
13,082 12,461 12,850
13,054 12,434 12,792
13,223 12,595 12,994
13,248 12,619 13,045
13,285 12,654 13,078
13,446 12,808 13,280
13,548 12,905 13,446
13,529 12,887 13,446
13,577 12,932 13,493
13,615 12,968 13,527
13,732 13,080 13,688
13,696 13,046 13,628
13,736 13,083 13,647
13,785 13,131 13,681
13,813 13,157 13,602
13,671 13,021 13,406
13,710 13,059 13,454
13,575 12,930 13,346
13,554 12,910 13,352
13,370 12,735 13,208
13,457 12,818 13,348
13,322 12,689 13,247
13,216 12,588 13,189
13,323 12,690 13,342
13,503 12,861 13,633
13,478 12,838 13,553
13,407 12,770 13,482
13,644 12,996 13,839
13,802 13,147 14,032
13,986 13,322 14,248
13,937 13,275 14,174
14,016 13,351 14,328
14,051 13,384 14,437
14,247 13,570 14,794
14,325 13,645 14,940
14,335 13,654 14,988
14,430 13,744 15,123
14,281 13,603 14,960
14,415 13,731 15,121
14,538 13,847 15,222
14,791 14,088 15,448
15,177 14,456 15,703
15,010 14,297 15,649
15,160 14,440 15,835
15,072 14,356 15,702
14,970 14,259 15,553
15,134 14,415 15,822
15,287 14,561 16,012
15,056 14,341 15,698
15,342 14,614 16,004
15,396 14,665 16,102
15,545 14,807 16,273
15,668 14,924 16,483
15,792 15,042 16,681
15,972 15,213 17,046
15,662 14,918 16,763
15,733 14,985 16,692
15,915 15,159 17,045
15,877 15,123 17,002
16,098 15,333 17,240
16,103 15,338 17,250
16,267 15,494 17,364
16,574 15,787 17,771
16,571 15,784 17,696
16,167 15,399 17,077
16,278 15,505 17,205
16,609 15,820 17,710
16,629 15,839 17,622
16,858 16,057 17,805
12/2003 16,976 16,165 17,951
All results shown assume reinvestment of distributions. The graph and table do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or redemption of fund shares. The Lehman Brothers Municipal Bond
Index is a unmanaged index considered representative of the broad market for
investment-grade, tax-exempt bonds with a maturity of at least one year, issued
on or after January 1, 1991, with deal size greater than $50 million and a
maturity size of at least $5 million, and having a fixed rate coupon. 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.
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/03 (%)
SHARE CLASS A B C Z
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INCEPTION 7/31/00 7/15/02 7/15/02 3/5/84
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SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------
6-month cumulative 2.48 -2.38 2.09 -2.91 2.17 1.17 2.59
1-year 6.69 1.65 5.89 0.89 6.05 5.05 6.93
5-year 4.52 3.50 4.28 3.96 4.33 4.33 4.71
10-year 5.43 4.92 5.32 5.32 5.34 5.34 5.53
All results shown assume reinvestment of distributions. The "with sales charge"
returns include the maximum 4.75% charge for class A shares, the appropriate
class B contingent deferred sales charge for the holding period after purchase
as follows: through 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 for
different share classes will vary based on differences in sales charges and fees
associated with each class.
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.
Class A share (newer class shares) performance information includes returns of
the fund's class Z shares (the oldest existing fund class) for periods prior to
the inception of the newer class shares. Class B and C share (newer class
shares) performance information includes returns of the fund's class A shares
for periods prior to the inception of the newer class shares. These class A and
Z share returns are not restated to reflect any expense differential (e.g., rule
12b-1 fees) between class A and class Z shares and the newer class shares. Had
the expense differential been reflected, the returns for the periods prior to
the inception of class A, class B and class C shares would have been lower.
sidebar:
PERFORMANCE OF A $10,000 INVESTMENT
01/01/94 - 12/31/03 ($)
sales charge: without with
Class A 16,976 16,165
Class B 16,787 16,787
Class C 16,824 16,824
Class Z 17,132 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares may be worth
more or less than the original cost. Please visit www.columbiafunds.com for
daily and most recent month-end performance updates.
2
ECONOMIC UPDATE
Columbia High Yield Municipal Fund
After struggling for two years to maintain solid, forward movement,
the US economy steamed ahead during the six-month period ended December 31,
2003. The Federal Reserves Board's efforts to stimulate the economy through low
short-term interest rates were finally rewarded, but the significant upswing in
growth was the result of a combination of factors. A sizeable tax package gave
disposable income a boost. Income taxes fell across all tax brackets and many
taxpayers received rebate checks during the summer months. Corporate profits
rose sharply, and orders for durable goods exceeded expectations late in the
period. Consumer confidence continued to climb, although not without an
occasional setback. Generally speaking, consumer spending increased and spending
was strong going into the holiday season.
Early in the period, economists began to become optimistic that growth
for the third quarter of 2003 would reflect this renewed vigor. Yet, no one
seemed prepared for how extraordinary that growth might be. When gross domestic
product (GDP) for the third quarter was reported at 7.2%, then revised upward to
8.2%, it was clear that the economy was firing on all cylinders. The business
sector had finally kicked into gear. Industrial production rose in the second
half of 2003 and business spending--especially on technology-related
items--showed strength. Even the labor market improved by year end. After
unemployment peaked at 6.4% in June, it declined to 5.9%.
The US stock market, which had come to life at the end of March, headed sharply
higher in the second half of 2003. The S&P 500 Index returned 15.14% for the
six-month period as all major sectors of the market benefited from renewed
investor enthusiasm and rising corporate profits. Technology and consumer stocks
were the strongest sectors, but telecommunications and health care also picked
up in the last months of the period.
The US bond market experienced extraordinary volatility as interest rates rose
sharply in July as the economy improved and then came back down in September.
High-yield bonds continued to lead the fixed income markets. The CSFB High Yield
Index returned 9.05% for the six-month period compared to a negative 0.53%
return for the Lehman Brothers Government/Credit Bond Index. Treasury and
mortgage bonds suffered from the shift in interest rates early in the six-month
period, but picked up some ground in the final month of the period. Municipal
bonds also held onto modest gains. The Lehman Brothers Municipal Bond Index
returned 1.45% for the six-month period.
Money market fund yields fell below 1%, reflecting historically low short-term
interest rates. The Investment Company Institute, which tracks the movement of
assets in and out of mutual funds, reported that money continued to flow out of
money market funds during the year as investors sought alternatives to the low
yields offered by short-term cash equivalents. Net new cash flow to money market
funds turned negative in 2002 for the first time since 1993.
3
PORTFOLIO MANAGER'S REPORT
Columbia High Yield Municipal Fund
For the six-month period ended December 31, 2003, class A shares of Columbia
High Yield Municipal Fund returned 2.48% without sales charge. The fund beat the
1.45% return of its benchmark, the Lehman Brothers Municipal Bond Index, as
high-yield municipal bonds outpaced the higher-quality issues in the index. The
fund, however, came out behind the 3.08% average return of its peer group, the
Lipper Current High Yield Municipal Debt Fund Category.1 We believe the fund's
below-average stakes in the airline and tobacco sectors, which were strong
performers, hampered returns somewhat.
STRONG DEMAND FOR HIGH-YIELD MUNICIPAL BONDS
High-yield municipal bonds had the wind at their backs during the period, as an
improving economy and low interest rates bolstered investor demand. A brighter
economic outlook also helped credit quality for many issuers, in turn boosting
bond prices. High-yield municipal bonds, which are less sensitive to interest
rate changes than other bond sectors, held up particularly well in July as
interest rates rose sharply and taxable bond prices sank. For the six-month
period, high-yield municipal bonds beat both Treasuries and insured municipal
bonds.
POSITIVE SECURITY SELECTION AND HIGH INCOME
The fund benefited from good security selection in a number of sectors.
Standouts included bonds issued by HealthEast, a Minnesota hospital, which
rallied as financial performance improved. We later trimmed our position to 0.3%
of net assets.2 The fund also owned several airline bonds, including bonds
issued by US Airways and American Airlines (0.3% and 0.1% of net assets,
respectively) that rallied nicely during the period.
The fund's relatively high income further aided performance. Among its
higher-yielding holdings was Seminole Tribe Convention Center (0.6% of net
assets), a hotel and newly renovated casino in Florida. In addition, inverse
floaters--bonds with coupons (or stated interest rates) that move in the
opposite direction of short-term interest rates--were a good source of income
for the fund.
LESS FAVORABLE CONDITIONS FOR MULTI-FAMILY HOUSING AND NURSING HOME BONDS
Multi-family housing bonds, which are basically bonds issued to fund the
construction of apartment buildings, did poorly as low mortgage rates enabled
many renters to buy their own homes. With occupancy rates falling, issuers found
they had little ability to raise rents. We sold one bond, but kept the rest,
expecting that a lack of new apartment construction would eventually help the
group. Bonds issued by Metro Health also hurt performance due to the bankruptcy
of the nursing home. We sold one of the two issues we owned, reducing the
position to less than 0.1% of net assets by the end of the period.
1 Lipper Inc., a widely respected data provider in the industry, calculates an
average total return for mutual funds with similar investment objectives as
the fund.
2 Holdings are disclosed as of 12/31/03, and are subject to change.
sidebar:
NET ASSET VALUE PER SHARE
AS OF 12/31/03 ($)
Class A 11.26
Class B 11.26
Class C 11.26
Class Z 11.26
DISTRIBUTIONS DECLARED PER SHARE
7/1/03- 12/31/03 ($)
Class A 0.26
Class B 0.22
Class C 0.23
Class Z 0.28
A portion of the fund's income may be subject to the alternative minimum tax.
The fund may at times purchase municipal securities at a discount. Some or all
of this discount may be included in the fund's ordinary income, and is taxable
when distributed.
SEC YIELDS AS OF 12/31/03 (%)
Class A 4.83
Class B 4.27
Class C 4.44
Class Z 5.28
The 30-day SEC yields reflect the portfolio's earning power net of expenses,
expressed as an annualized percentage of the public offering price per share.
TAXABLE-EQUIVALENT SEC
YIELDS AS OF 12/31/03 (%)
Class A 7.43
Class B 6.57
Class C 6.83
Class Z 8.12
Taxable-equivalent SEC yields are based on the combined maximum effective 35.0%
federal and state income tax rate. This tax rate does not reflect the phase out
of exemption or the reduction of otherwise allowable deductions that occur when
adjusted gross income exceeds certain levels.
4
Columbia High Yield Municipal Fund
INCREASED EXPOSURE TO ECONOMICALLY SENSITIVE SECTORS
As new assets flowed into the fund, we added income by buying lower-quality
bonds. Our focus was on bonds that should have the potential to do well in an
economic recovery, including debt issued by paper companies such as Weyerhauser
and International Paper (0.6% and 0.5% of net assets, respectively). We also
boosted the fund's stake in electric utilities bonds that were trading at
attractive prices. In this regard, we bought bonds issued by Tampa Electric and
SCANA in South Carolina (0.3% and 0.4% of net assets, respectively). We made
some changes to our health care mix--trimming nursing home bonds, adding new
hospital bonds and eliminating debt issued by Pascack Valley Hospital, a New
Jersey hospital with credit concerns.
If the economy continues to improve gradually, with slowly rising interest rates
and a relatively decent supply of bonds, it would create a favorable environment
for high-yield municipal bonds. With that scenario in mind, we plan to increase
the fund's exposure to economically sensitive sectors while maintaining its
focus on generating high current income.
photo of: Maureen G. Newman
Maureen G. Newman has managed the Columbia High Yield Municipal Fund since
November 1998.
/s/ Maureen G. Newman
Tax-exempt investing offers current tax-free income, but it also involves
certain risks. Investing in high-yield bonds involves greater risk of loss due
to credit deterioration than higher-quality bonds. The value of the fund will be
affected by interest rate changes and the creditworthiness of issues held in the
fund. The manager seeks to identify opportunities and attempts to react quickly
to market changes.
callout
If the economy continues
to improve gradually,
with slowly rising interest
rates and a relatively
decent supply of bonds,
it would create a favorable
environment for high yield
municipal bonds.
5
FINANCIAL STATEMENTS
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
INVESTMENT A list of all of the fund's holdings and their market value as of
PORTFOLIO the last day of the reporting period. To show areas of
concentration and diversification, portfolio holdings are
organized by type of asset, industry and country or geographic
region (if applicable).
STATEMENT OF This statement shows the fund's net assets and share price for
ASSETS AND each share class. Net assets are calculated by subtracting all
LIABILITIES the fund's liabilities (including any unpaid expenses) from the
total of the fund's investment and non-investment assets. The
share price for each class is calculated by dividing net assets
for that class by the number of outstanding shares in that class.
STATEMENT OF This statement details both the type of income earned by the
OPERATIONS fund and the operating and non-operating expenses charged to the
fund. The Statement of Operations also shows any net gain or loss
the fund realized on the sales of its holdings during the period,
as well as any unrealized gains or losses over the reporting
period. The total of these results represents the fund's net
increase or decrease in net assets from operations.
STATEMENT OF This statement shows how the fund's net assets were affected
CHANGES IN by its operations results, distributions to shareholders and
NET ASSETS changes in the number of fund shares. The Statement of Changes in
Net Assets also reconciles changes in the number of shares
outstanding.
FINANCIAL The financial highlights provide an overview of the fund's
HIGHLIGHTS investment results, including per-share analytics, such as net
investment income or loss from operations and distributions;
ratios of expenses and net investment income to average net
assets. The financial highlights also detail the fund's portfolio
turnover rate, which is a measure of trading activity. A separate
table is provided for each share class.
NOTES TO These notes disclose information regarding certain fund
FINANCIAL background information, significant accounting policies of the
STATEMENTS fund, including security valuation and income accruals and
related party transactions.
6
INVESTMENT PORTFOLIO
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - 93.4%
EDUCATION - 4.7%
EDUCATION - 3.0%
Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CA California Statewide Communities
Development Authority:
Crossroads School, Series 1998,
6.000% 08/01/28 1,005,000 1,046,446
San Francisco Art Institute, Series 2002,
7.375% 04/01/32 750,000 767,767
CA Pasadena Community College District,
Election of 2002, Series 2003 A,
5.000% 06/01/19 1,290,000 1,377,823
IL State Development Finance
Authority, Latin School of Chicago
Project, Series 1998,
5.650% 08/01/28 1,725,000 1,747,511
IL University of Illinois, Certificate of
Participation, Utilities Infrastructure
Projects, Series 2001 A,
5.500% 08/15/16 1,425,000 1,576,990
MA Health & Educational Facilities
Authority, Massachusetts Institute of
Technology, Series 2002 K,
5.500% 07/01/32 2,160,000 2,487,780
MA State Development Finance Agency,
Western New England College, Series 2002,
6.125% 12/01/32 300,000 306,915
NH Business Finance Authority, Proctor
Academy Project, Series 1998 A,
5.400% 06/01/17 1,000,000 1,030,560
OH University of Cincinnati, Series 2003 C,
5.000% 06/01/21 1,000,000 1,056,080
WV State University, Series 2000 A:
(a) 04/01/19 1,250,000 602,800
(a) 04/01/25 2,750,000 906,345
VT State Education & Health Buildings
Agency, Vermont Law School Project,
Series 2003 A,
5.500% 01/01/33 500,000 481,100
-----------------------------------------------------------------------------
Education Total 13,388,117
STUDENT LOAN - 1.7%
- ------------------------------------------ -----------------------------------------------------------------------------
OH Student Loan Funding Corporation,
Series 1992 B,
6.750% 01/01/07 1,075,000 1,077,515
NE Nebhelp, Inc., Series 1993 A-6,
6.450% 06/01/18 4,000,000 4,393,480
See notes to investment portfolio.
7
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
EDUCATION - (CONTINUED)
STUDENT LOAN - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
NM State Educational Assistance
Foundation, Series 1996 A-2,
6.650% 11/01/25 1,955,000 1,961,021
TX Brazos Higher Educational Facilities
Authority, Series 1993 C-2,
5.875% 06/01/04 390,000 391,424
-----------------------------------------------------------------------------
Student Loan Total 7,823,440
-----------
EDUCATION TOTAL 21,211,557
HEALTHCARE - 24.4%
CONGREGATE CARE RETIREMENT - 7.7%
- ------------------------------------------ -----------------------------------------------------------------------------
CA La Verne, Brethren Hillcrest Homes,
Series 2003 B,
6.625% 02/15/25 685,000 681,082
CA Statewide Community Development
Authority, Eskaton Village - Grass
Valley, Series 2000,
8.250% 11/15/31 (b) 1,750,000 1,898,732
CT State Development Authority, The
Elim Park Baptist, Inc. Project,
Series 2003,
5.850% 12/01/33 660,000 670,283
FL Capital Projects Finance Authority,
Glenridge on Palmer Ranch, Series 2002 A,
8.000% 06/01/32 1,250,000 1,292,237
FL Lee County Industrial Development
Authority, Shell Point Village Project,
Series 1999 A,
5.500% 11/15/29 1,200,000 1,161,336
FL Orange County Health Facilities
Authority, Orlando Lutheran Towers, Inc.,
Series 1996,
8.625% 07/01/20 1,500,000 1,568,940
FL Palm Beach County Health Facilities
Authority Revenue, Abbey Delray
South, Series 2003,
5.350% 10/01/14 1,250,000 1,269,825
GA Savannah Economic Development Authority, 1st
Mortgage, Marshes of Skidaway, Series 2003 A,
7.400% 01/01/34 1,000,000 996,280
HI State Department of Budget & Finance,
Kahala Nui Project, Series 2003 A:
7.875% 11/15/23 250,000 252,892
8.000% 11/15/33 1,000,000 1,013,020
See notes to investment portfolio.
8
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
CONGREGATE CARE RETIREMENT - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
IL State Health Facilities Authority,
Lutheran Senior Ministries, Series 2001,
7.375% 08/15/31 550,000 569,041
Washington and Jane Smith Community
Series 2003 A,
7.000% 11/15/32 1,000,000 1,000,230
MA Boston Industrial Development Financing
Authority, Springhouse, Inc., Series 1998,
5.875% 07/01/20 235,000 232,817
MA State Development Finance Agency,
Loomis Community Project:
Series 1999 A,
5.625% 07/01/15 650,000 635,200
Series 2002 A,
6.900% 03/01/32 220,000 227,711
MO State Health & Educational Facilities Authority,
Lutheran Senior Services, Series 1997,
5.750% 02/01/17 2,000,000 2,059,280
NH State Higher Educational & Health Facilities
Authority, Rivermead at Peterborough, Series 1998:
5.625% 07/01/18 500,000 470,155
5.750% 07/01/28 1,665,000 1,499,416
NJ State Economic Development Authority:
Seabrook Village, Inc., Series 2000 A,
8.250% 11/15/30 1,125,000 1,210,973
Winchester Gardens, Series 1996 A,
8.625% 11/01/25 2,000,000 2,128,740
PA State Authority for Industrial Development,
Baptist Home of Philadelphia, Series 1998,
5.500% 11/15/18 530,000 483,800
PA Chartiers Valley Industrial & Commercial
Development Authority, Asbury Health Center:
Asbury Health Center, Series 1999,
6.375% 12/01/24 750,000 741,660
Friendship Village of South Hills, Series 2003 A,
5.750% 08/15/20 1,000,000 986,250
PA Delaware County Authority, Dunwoody
Village, Series 2003 A,
5.375% 04/01/17 750,000 780,143
PA Lancaster Industrial Development Authority,
Garden Spot Village Project, Series 2000 A,
7.625% 05/01/31 825,000 873,172
TN Metropolitan Government, Nashville and
Davidson County, Blakeford at Green Hills,
Series 1998,
5.650% 07/01/24 1,825,000 1,675,131
See notes to investment portfolio.
9
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
CONGREGATE CARE RETIREMENT - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
TN Shelby County Health Educational &
Housing Facilities Board, Germantown
Village, Series 2003 A,
7.250% 12/01/34 1,350,000 1,346,490
TX Abilene Health Facilities Development Corp.,
Sears Methodist Retirement Obligation Group:
Series 1998 A,
5.900% 11/15/25 1,350,000 1,273,698
Series 2003 A,
7.000% 11/15/33 300,000 305,154
WI State Health & Educational Facilities Authority:
Attic Angel Obligated Group, Series 1998,
5.750% 11/15/27 2,125,000 1,913,350
Clement Manor, Series 1998,
5.750% 08/15/24 2,200,000 1,996,808
Lutheran Program for the Aging, Series 1998,
5.700% 03/01/28 750,000 677,122
Three Pillars Senior Living Communities,
Series 2003,
5.600% 08/15/23 790,000 786,224
-----------------------------------------------------------------------------
Congregate Care Retirement Total 34,677,192
HEALTH SERVICES - 0.7%
- ------------------------------------------ -----------------------------------------------------------------------------
IL State Health Facilities Authority,
Midwest Physicians Group, Ltd., Series 1998,
5.500% 11/15/19 90,000 71,151
MA State Development Finance Agency, Boston
Biomedical Research Institute, Series 1999:
5.650% 02/01/19 370,000 359,026
5.750% 02/01/29 550,000 546,502
MA State Health & Educational Facilities Authority,
Civic Investments, Inc., Series 2002 A,
9.000% 12/15/15 1,500,000 1,715,760
MN Minneapolis & St. Paul Housing Redevelopment
Authority, Healthpartners Project, Series 2003,
5.875% 12/01/29 400,000 403,716
-----------------------------------------------------------------------------
Health Services Total 3,096,155
HOSPITALS - 11.3%
- ------------------------------------------ -----------------------------------------------------------------------------
AZ Health Facilities Authority, Phoenix Memorial
Hospital, Series 1991,
8.125% 06/01/12 (c) 2,167,774 346,844
AZ Yavapai County Industrial Development Authority,
Yavapai Regional Medical Center, Series 2003 A,
6.000% 08/01/33 425,000 434,290
See notes to investment portfolio.
10
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
HOSPITALS - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CA Abag Finance Authority for Nonprofit Corps.,
San Diego Hospital Association, Series 2003 C,
5.375% 03/01/21 500,000 498,020
CA State Health Facilities Financing Authority
Revenue, Stanford Hospital & Clinics Project,
Series 2003 A,
5.000% 11/15/23 (d) 1,500,000 1,512,720
CA Whittier Health Facilities Revenue, Presbyterian
Intercommunity Hospital, Series 2002,
5.750% 06/01/31 1,000,000 1,025,630
CO La Junta, Arkansas Valley Regional Medical
Center Project, Series 1999,
6.100% 04/01/24 900,000 903,852
CO State Health Care Facilities Authority:
National Jewish Medical & Research Center,
Series 1998,
5.375% 01/01/23 1,080,000 1,074,276
Parkview Medical Center, Inc. Project,
Series 2001,
6.600% 09/01/25 300,000 315,372
FL Hillsborough County Industrial Development
Authority, Tampa General Hospital Project,
Series 2003 B,
5.250% 10/01/34 1,000,000 969,950
FL Miami Health Facilities Authority,
Catholic Health East, Series 2003 B,
5.125% 11/15/24 1,000,000 991,710
FL Orange County Health Facilities Authority,
Orlando Regional Healthcare System:
Series 1999 E,
6.000% 10/01/26 875,000 911,855
Series 2002,
5.750% 12/01/32 350,000 360,308
FL South Lake County Hospital District,
South Lake Hospital, Inc., Series 2003:
6.375% 10/01/28 750,000 761,047
6.375% 10/01/34 500,000 506,560
FL West Orange Healthcare District,
Series 2001 A,
5.650% 02/01/22 1,450,000 1,467,733
IL Southwestern Illinois Development Authority,
Anderson Hospital, Series 1999:
5.500% 08/15/20 500,000 495,135
5.625% 08/15/29 250,000 241,595
IL State Health Facilities Authority, Thorek
Hospital & Medical Center, Series 1998,
5.375% 08/15/28 500,000 445,575
See notes to investment portfolio.
11
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
HOSPITALS - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
MA State Health & Educational Facilities Authority:
Jordan Hospital:
Series 1998 D,
01/05/00 10/01/18 600,000 534,804
Series 2003 E,
6.750% 10/01/33 750,000 738,735
Milford-Whitinsville Hospital, Series 2002 D,
6.350% 07/15/32 500,000 502,040
MDState Health & Higher
Educational Facilities
Authority, Adventist
HealthCare, Series 2003 A:
5.000% 01/01/16 400,000 398,216
5.750% 01/01/25 600,000 606,822
MI Dickinson County, Series 1999,
5.800% 11/01/24 1,000,000 994,410
MI Flint Hospital Building Authority,
Hurley Medical Center:
Series 1998 A,
5.375% 07/01/20 465,000 406,898
Series 1998 B,
5.375% 07/01/28 1,050,000 859,320
MI State Hospital Finance Authority,
Oakwood Obligated Group, Series 2003,
5.500% 11/01/18 1,600,000 1,655,152
MN State Medical Center Gross Revenue, Weiner
Memorial Medical Center Project, Series 2003 A,
6.000% 11/01/28 500,000 510,370
MN St. Paul Housing & Redevelopment Authority,
HealthEast Project, Series 1993 B,
6.625% 11/01/17 240,000 240,722
MN Washington Housing & Redevelopment
Authority, HealthEast Project, Series 1998,
5.250% 11/15/12 1,100,000 1,075,074
MO State Health & Educational Facilities Authority,
Lake Regional Health System Project, Series 2003,
5.700% 02/15/34 1,000,000 1,007,570
NC State Medical Care Commission,
Stanly Memorial Hospital Project, Series 1999,
6.375% 10/01/29 1,000,000 1,075,410
NH State Higher Educational & Health Facilities
Authority, Littleton Hospital Assoc., Inc.:
Series 1998 A:
5.900% 05/01/18 500,000 435,940
6.000% 05/01/28 1,000,000 837,560
Series 1998 B,
5.900% 05/01/28 675,000 557,807
Catholic Medical Center, Series 2002 A,
6.125% 07/01/32 400,000 407,912
See notes to investment portfolio.
12
>PAGE>
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
Municipal Bonds - (continued)
HEALTHCARE - (continued)
Hospitals - (continued) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
NJ State Health Care Facilities Financing
Authority Revenue, Health Systems,
Series 2003 A,
5.750% 07/01/23 (d) 1,250,000 1,294,388
NV Henderson Health Care Facilities
Revenue, Catholic Healthcare West,
Series 1998:
5.125% 07/01/28 540,000 490,023
5.375% 07/01/26 790,000 744,322
NY State Dormitory Authority Revenue:
Memorial Sloan-Kettering Cancer Center,
Series 2001-1:
(a) 07/01/25 3,600,000 1,268,748
(a) 07/01/26 4,400,000 1,474,044
North Shore - Long Island Jewish
Medical Center, Series 2003,
5.500% 05/01/33 400,000 415,012
Winthrop/South Nassau Health
University Hospital, Series 2003,
5.500% 07/01/23 650,000 666,926
OH Belmont County Health Systems
Revenue, Ohio Valley Medical Center,
Inc., Series 1998,
5.700% 01/01/13 1,500,000 1,337,340
OH Highland County Joint Township
Hospital District, Series 1999,
6.750% 12/01/29 1,900,000 1,808,154
OH Lakewood Hospital Improvement
Revenue, Lakewood Hospital
Association, Series 2003,
5.500% 02/15/15 1,250,000 1,330,100
OH Miami County, Upper Valley
Medical Center, Inc.:
Series 1996 A,
6.250% 05/15/16 500,000 521,075
Series 1996 C,
6.250% 05/15/13 285,000 298,974
Series 1996 D,
6.375% 05/15/26 1,015,000 1,039,918
OH Sandusky County,
Memorial Hospital, Series 1998,
5.150% 01/01/10 250,000 247,840
OK State Development Finance
Authority, Duncan Regional Hospital
Project, Series 2003 A,
5.125% 12/01/23 (d) 2,000,000 1,974,120
See notes to investment portfolio.
13
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
HOSPITALS - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
OK Stillwater Medical Center Authority,
Series 2003,
5.625% 05/15/23 1,000,000 988,890
PA Allegheny County Hospital
Development Authority, Ohio Valley
General Hospital, Series 1997,
5.450% 01/01/28 1,550,000 1,447,886
PA Pottsville Hospital Authority,
Pottsville Hospital & Warne Clinic,
Series 1998,
5.625% 07/01/24 800,000 691,800
TX Knox County Health, Educational &
Housing Facilities Board, Revenue, East
Tennessee Hospital, Series 2003 B,
5.750% 07/01/33 250,000 254,207
TX Richardson Hospital Authority, Baylor
Richardson Medical Center, Series 1998,
5.625% 12/01/28 450,000 454,208
TX Tyler Health Facilities Development
Corp., Mother Frances Hospital,
Series 2001,
6.000% 07/01/31 750,000 766,763
VA Augusta County Industrial
Development Authority, Augusta
Health Care, Inc., Series 2003,
5.250% 09/01/19 2,000,000 2,169,560
WA Skagit County Public Hospital District
No. 1, Series 2003,
6.000% 12/01/23 1,000,000 996,490
WA State Health Care Facilities Authority,
Kadlec Medical Center, Series 2001,
5.875% 12/01/21 600,000 651,144
WI State Health & Educational Facilities
Authority: Aurora Health Care Inc.,
Series 2003,
6.400% 04/15/33 700,000 737,051
Wheaton Franciscan Services, Series 2002,
5.750% 08/15/30 1,050,000 1,092,231
-----------------------------------------------------------------------------
Hospitals Total 51,268,448
INTERMEDIATE CARE FACILITIES - 1.2%
- ------------------------------------------ -----------------------------------------------------------------------------
IL State Development Finance Authority,
Hoosier Care, Inc. Project, Series 1999 A,
7.125% 06/01/34 1,470,000 1,213,353
IN State Health Facilities Financing
Authority, Hoosier Care, Inc. Project,
Series 1999 A,
7.125% 06/01/34 1,210,000 998,746
See notes to investment portfolio.
14
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
INTERMEDIATE CARE FACILITIES - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
LA State Public Facilities Authority
Revenue, Progressive Healthcare
Providers, Inc., Series 1998,
6.375% 10/01/28 2,000,000 1,468,140
PA State Economic Development Financing
Authority, Northwestern Human Services,
Series 1998 A,
5.250% 06/01/14 2,150,000 1,851,086
-----------------------------------------------------------------------------
Intermediate Care Facilities Total 5,531,325
NURSING HOME - 3.5%
- ------------------------------------------ -----------------------------------------------------------------------------
AK Juneau, St. Ann's Care Center Project,
Series 1999,
6.875% 12/01/25 1,750,000 1,786,295
CO State Health Facilities Authority,
Volunteers of America Care Facilities, Inc.:
Series 1998 A,
5.750% 07/01/20 700,000 632,478
Series 1999 A:
5.750% 07/01/10 890,000 874,550
6.000% 07/01/29 520,000 465,764
DE State Economic Development
Authority, Churchman's Village Project,
Series 1991,
10.000% 03/01/21 680,000 681,360
DE Sussex County, State Healthcare
Facilities Project, Series 1999,
7.600% 01/01/24 955,000 816,334
IA State Finance Authority, Care
Initiatives Project:
Series 1996,
9.250% 07/01/25 495,000 590,837
Series 1998 B:
5.500% 07/01/08 480,000 478,416
5.750% 07/01/18 600,000 538,458
5.750% 07/01/28 1,475,000 1,264,414
MA State Development Finance
Agency, Alliance Health Care Facilities,
Series 1999 A,
7.100% 07/01/32 2,250,000 2,193,323
MA State Industrial Finance Agency,
GF/Mass. Inc., Series 1994,
8.300% 07/01/23 895,000 908,962
MI Cheboygan, Metro Health
Foundation, Inc. Project, Series 1993,
11.000% 11/01/22 (c) 600,000 156,000
MN Carlton, Inter-Faith Social Services, Inc.
Project, Series 2000:
7.500% 04/01/19 250,000 260,395
7.750% 04/01/29 275,000 288,241
See notes to investment portfolio.
15
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HEALTHCARE - (CONTINUED)
NURSING HOME - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
MN Sartell, Foundation for Healthcare
Project, Series 1999 A,
6.625% 09/01/29 1,500,000 1,439,820
PA Chester County Industrial
Development Authority, RHA/PA
Nursing Home, Series 2002,
8.500% 05/01/32 400,000 390,136
PA Delaware County Authority, Main
Line & Haverford Nursing, Series 1992,
9.000% 08/01/22 (c) 50,000 30,000
PA Lackawanna County Industry
Development Authority, Greenridge
Nursing Center Project, Series 1990,
10.500% 12/01/10 145,000 129,556
PA Luzerne County Industrial
Development Authority, Millville
Nursing Center Project, Series 1990,
10.500% 12/01/12 185,000 164,822
TX Kirbyville Health Facilities Development Corp.,
Heartway III:
Series 1997 A,
10.000% 03/20/18 (e) 539,213 323,528
Series 1997 B,
6.000% 03/20/04 (e) 100,000 5,000
WA Kitsap County Consolidated
Housing Authority, Martha and Mary
Health Services, Series 1996,
7.100% 02/20/36 1,000,000 1,204,830
-----------------------------------------------------------------------------
Nursing Homes Total 15,623,519
-----------
HEALTHCARE TOTAL 110,196,639
HOUSING - 6.2%
ASSISTED LIVING/SENIOR - 2.8%
- ------------------------------------------ -----------------------------------------------------------------------------
CA Abag Finance Authority for Nonprofit Corps.,
Eskaton Gold River Lodge, Series 1998:
6.375% 11/15/15 (b) 710,000 671,695
6.375% 11/15/28 (b) 550,000 489,445
DE Kent County Assisted Living Facilities,
Heritage at Dover Project, Series 1999,
7.625% 01/01/30 2,445,000 2,064,876
GA Columbus Housing Authority,
The Gardens at Calvary Project, Series 1999,
7.000% 11/15/29 2,000,000 1,582,640
IL State Development Finance Authority,
Care Institute, Inc., Series 1995,
8.250% 06/01/25 1,915,000 1,900,446
MN Roseville Elderly Care Facility,
Care Institute, Inc. Project, Series 1993,
7.750% 11/01/23 (e) 1,270,000 825,500
See notes to investment portfolio.
16
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HOUSING - (CONTINUED)
ASSISTED LIVING/SENIOR - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
NC State Medical Care Commission, DePaul
Community Facilities Project, Series 1999,
7.625% 11/01/29 1,965,000 2,030,395
NY Huntington Housing Authority, Gurwin
Jewish Senior Center, Series 1999 A:
5.875% 05/01/19 1,900,000 1,753,168
6.000% 05/01/29 625,000 559,212
TX Bell County Health Facility Development Corp.,
Care Institute, Inc., Series 1994,
9.000% 11/01/24 945,000 957,493
-----------------------------------------------------------------------------
Assisted Living/Senior Total 12,834,870
MULTI-FAMILY - 3.1%
- ------------------------------------------ -----------------------------------------------------------------------------
CO State Health Facilities Authority,
Birchwood Manor Project, Series 1991 A,
7.250% 04/01/11 460,000 462,121
DE Wilmington, Electra Arms Senior
Association Project, Series 1994 A,
6.250% 06/01/28 945,000 769,532
FL Broward County Housing Finance Authority,
Chaves Lake Apartment Project, Series 2000 A,
7.500% 07/01/40 1,250,000 1,265,587
FL Clay County Housing Finance Authority, Madison
Commons Apartments Project, Series 2000 A,
7.450% 07/01/40 1,245,000 1,260,550
GA Clayton County Housing Authority, Magnolia
Park Apartments Project, Series 1999 A,
6.250% 06/01/30 1,750,000 1,099,385
IL State Development Finance Authority,
Catholic Charities Housing Development Corp.,
Series 1993 C,
5.950% 01/01/09 1,400,000 1,433,586
IN New Castle,
Raintree Apartments, Series 1988 B,
(a) 03/01/18 30,625,000 76,563
MN Lakeville Multi-Family Revenue,
Series 1989,
9.875% 02/01/20 700,000 700,742
MN Washington County Housing & Redevelopment
Authority, Cottages of Aspen Project, Series 1992,
9.250% 06/01/22 460,000 470,566
MN White Bear Lake Multi-Family Revenue,
Series 1989,
9.750% 07/15/19 750,000 753,352
See notes to investment portfolio.
17
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
HOUSING - (CONTINUED)
MULTI-FAMILY - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
NCRaleigh Multi-Family
Revenue, Cedar Point
Apartments, Series 1999 A:
5.100% 11/01/10 250,000 134,392
5.875% 11/01/24 200,000 119,552
Pass Through Certificates, Series 1993,
8.500% 12/01/16 455,481 450,271
SC State Housing Finance &
Development Authority, Westbridge
Apartments Project, Series 1990,
9.500% 09/01/20 579,000 578,734
TN Franklin Industrial Development Board,
Landings Apartment Project, Series 1996 B,
8.750% 04/01/27 1,595,000 1,655,626
TX El Paso County Housing Finance Corp.,
American Village Communities:
Series 2000 C,
8.000% 12/01/32 585,000 593,857
Series 2000 D,
10.000% 12/01/32 690,000 712,805
TX State Affordable Housing Corp.,
NHT/GTEX LLC Project, Series 2001 C,
10.000% 10/01/31 (e) 1,565,000 937,294
VA Alexandria Redevelopment & Housing
Authority, Article 1 Associates LLP,
Series 1990 A,
10.000% 01/01/21 500,000 429,060
-----------------------------------------------------------------------------
Multi-Family Total 13,903,575
SINGLE FAMILY - 0.3%
- ------------------------------------------ -----------------------------------------------------------------------------
CO Housing and Finance Authority:
Series 1995 D-1,
7.375% 06/01/26 405,000 406,596
Series 1997 A-2,
7.250% 05/01/27 155,000 159,008
IA State Housing Finance Authority,
Series 1984 A,
(a) 09/01/16 920,000 225,483
ID State Housing Agency,
Series 1990 B,
7.500% 07/01/24 440,000 440,000
-----------------------------------------------------------------------------
Single Family Total 1,231,087
-----------
HOUSING TOTAL 27,969,532
INDUSTRIAL - 6.0%
FOOD PRODUCTS - 1.4%
- ------------------------------------------ -----------------------------------------------------------------------------
IN Hammond, American Maize
Products Co. Project, Series 1994 A,
8.000% 12/01/24 1,760,000 1,896,558
See notes to investment portfolio.
18
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
INDUSTRIAL - (CONTINUED)
FOOD PRODUCTS - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
LA Port Lake Charles, Continental Grain Co.,
Project, Series 1993,
7.500% 07/01/13 2,000,000 2,033,400
MI State Strategic Fund, Michigan Sugar Co.:
Carollton Project, Series 1998 C,
6.550% 11/01/25 1,500,000 1,302,330
Sebewaing Project, Series 1998 A,
6.250% 11/01/15 1,000,000 938,510
-----------------------------------------------------------------------------
Food Products Total 6,170,798
FOREST PRODUCTS - 2.3%
- ------------------------------------------ -----------------------------------------------------------------------------
AL Camden Industrial Development Board,
Weyerhaeuser Company, Series 2003 B,
6.375% 12/01/24 275,000 295,254
AL Courtland Industrial Development Board
International Paper Co., Series 2003 B,
6.250% 08/01/25 2,000,000 2,118,860
GA Rockdale County Development Authority, Solid
Waste Disposal, Visy Paper, Inc., Series 1993,
7.500% 01/01/26 2,800,000 2,835,812
LA Beauregard Parish, Boise Cascade Project,
Series 2002,
6.800% 02/01/27 1,750,000 1,756,737
MI Delta County Economic Development Corp.,
Mead Westvaco Escambia Project, Series 2002 B,
6.450% 04/15/23 750,000 783,142
MS Lowndes County,
Weyerhaeuser Corp., Series 1992 A,
6.800% 04/01/22 1,995,000 2,351,646
VA Bedford County Industrial Development Revenue,
Nekoosa Packaging Corp. Project, Series 1998,
5.600% 12/01/25 400,000 337,880
-----------------------------------------------------------------------------
Forest Products Total 10,479,331
MANUFACTURING - 0.6%
- ------------------------------------------ -----------------------------------------------------------------------------
IL Will-Kankakee Regional Development Authority,
Flanders Corp./Precisionaire, Series 1997,
6.500% 12/15/17 815,000 808,496
KS Wichita Airport Authority, Cessna Citation
Service Center, Series 2002 A,
6.250% 06/15/32 1,875,000 1,988,906
-----------------------------------------------------------------------------
Manufacturing Total 2,797,402
METALS & MINING - 0.3%
- ------------------------------------------ -----------------------------------------------------------------------------
NV State Department of Business & Industry,
Wheeling-Pittsburgh Steel Corp., Series 1999 A,
8.000% 09/01/14 500,000 383,260
See notes to investment portfolio.
19
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
INDUSTRIAL - (CONTINUED)
METALS & Mining - (continued) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
VA Greensville County Industrial Development
Authority, Wheeling Steel, Series 1999 A:
6.375% 04/01/04 160,000 158,144
7.000% 04/01/14 930,000 713,022
-----------------------------------------------------------------------------
Metals & Mining Total 1,254,426
OIL AND GAS - 1.4%
- ------------------------------------------ -----------------------------------------------------------------------------
NV Clark County Industrial Development Revenue,
Southwest Gas Corp. Project, Series 2003 E,
5.800% 03/01/38 1,750,000 1,889,878
TX Gulf Coast Industrial Development Authority,
Citgo Petroleum Project, Series 1998,
8.000% 04/01/28 875,000 908,976
TX Texas City Industrial Development Corp.,
Arco Pipe Line Co. Project, Series 1990,
7.375% 10/01/20 2,000,000 2,619,440
VI Government of United States Virgin Islands,
Hovensa Coker Project, Series 2002,
6.500% 07/01/21 125,000 130,551
VI Public Finance Authority, Hovensa
Refinery, Series 2003,
6.125% 07/01/22 875,000 893,156
-----------------------------------------------------------------------------
Oil and Gas Total 6,442,001
-----------
INDUSTRIAL TOTAL 27,143,958
OTHER - 7.2%
OTHER - 1.7%
- ------------------------------------------ -----------------------------------------------------------------------------
CA Golden State Tobacco Securitization Authority:
Series 2003 A-1:
6.250% 06/01/33 1,225,000 1,171,100
6.750% 06/01/39 235,000 231,191
Series 2003 B,
5.500% 06/01/43 1,250,000 1,228,188
LA Tobacco Settlement Financing Corp.,
Series 2001 B,
5.875% 05/15/39 1,000,000 871,660
NJ State Economic Development Authority, Motor
Vehicle Commission, Series 2003 A,
(a) 07/01/14 2,500,000 1,624,175
NY Convention Center Operating Corp.,
Yale Building Project, Series 2003,
(a) 06/01/08 2,100,000 1,657,530
SC Tobacco Settlement Revenue Management
Authority, Series 2001 B,
6.375% 05/15/28 1,000,000 940,390
-----------------------------------------------------------------------------
Other Total 7,724,234
See notes to investment portfolio.
20
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
OTHER - (CONTINUED)
REFUNDED/ESCROWED (F) - 5.5% Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CO Adams County, Series 1991 B:
11.250% 09/01/11 (g) 905,000 1,342,416
11.250% 09/01/12 1,440,000 2,273,069
CO State Department of Transportation Revenue:
Series 2001 832R-B,
9.630% 06/15/15 2,000,000 2,678,160
CT State Development Authority,
New Haven Residuals, Series 1996,
8.250% 12/01/06 460,000 518,908
FL Tampa Bay, Utility Systems Revenue,
Series 1999,
5.750% 10/01/23 (h) 7,500,000 10,181,550
GA Forsyth County Hospital Authority,
Baptist Hospital Worth County, Series 1998,
6.000% 10/01/08 755,000 831,610
GA State Municipal Electric Authority,
Series 1991 V,
6.600% 01/01/18 690,000 865,557
NC Eastern Municipal Power Agency,
Series 1991 A,
6.500% 01/01/18 3,320,000 4,252,787
NC Lincoln County, Lincoln County Hospital
Project, Series 1991,
9.000% 05/01/07 160,000 180,525
TN Shelby County Health Educational & Housing
Facilities Board, Open Arms Care Corp.:
Series 1992 A,
9.750% 08/01/19 290,000 365,397
Series 1992 C,
9.750% 08/01/19 290,000 365,472
WV State Hospital Finance Authority,
Charleston Medical Center, Series 2000 A,
6.750% 09/01/30 925,000 1,146,861
-----------------------------------------------------------------------------
Refunded/Escrow Total 25,002,312
-----------
OTHER TOTAL 32,726,546
OTHER REVENUE - 1.5%
HOTEL - 0.5%
- ------------------------------------------ -----------------------------------------------------------------------------
PA Philadelphia Authority for Industrial Development,
Doubletree Project, Series 1997 A,
6.500% 10/01/27 2,000,000 1,990,460
-----------------------------------------------------------------------------
Hotel Total 1,990,460
RECREATION - 0.9%
- ------------------------------------------ -----------------------------------------------------------------------------
CA Agua Caliente Band of Cahuilla Indians,
Series 2003,
6.000% 07/01/18 1,000,000 1,009,730
See notes to investment portfolio.
21
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
OTHER REVENUE - (CONTINUED)
RECREATION - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CT Mohegan Indians Tribe, Gaming Authority,
Series 2001,
6.250% 01/01/31 475,000 504,113
FL Capital Trust Agency, Seminole Tribe
Convention Center, Series 2002 A,
10.000% 10/01/33 2,050,000 2,538,925
NM Red River Sports Facilities Revenue,
Red River Ski Area Project, Series 1998,
6.450% 06/01/07 170,000 172,676
-----------------------------------------------------------------------------
Recreation Total 4,225,444
RETAIL - 0.1%
- ------------------------------------------ -----------------------------------------------------------------------------
OH Lake County, North Madison Properties, Ltd.
Project, Series 1993,
8.819% 09/01/11 485,000 481,649
-----------------------------------------------------------------------------
Retail Total 481,649
-----------
OTHER REVENUE TOTAL 6,697,553
RESOURCE RECOVERY - 1.3%
DISPOSAL - 0.5%
- ------------------------------------------ -----------------------------------------------------------------------------
IL Development Finance Authority,
Waste Management, Inc. Project, Series 1997,
5.050% 01/01/10 250,000 259,757
MA State Development Finance Agency, Peabody
Monofill Associates, Inc. Project, Series 1994,
9.000% 09/01/05 330,000 342,167
UT Carbon County, Solid Waste Disposal Revenue,
Laidlaw Environmental, Series 1997 A,
7.450% 07/01/17 1,500,000 1,534,065
-----------------------------------------------------------------------------
Disposal Total 2,135,989
RESOURCE RECOVERY - 0.8%
- ------------------------------------------ -----------------------------------------------------------------------------
MA State Development Finance Agency,
Ogden Haverhill Project:
Series 1998 A,
5.500% 12/01/13 500,000 497,965
Series 1999 A,
6.700% 12/01/14 750,000 795,263
PA Delaware County Industrial Development
Authority, American Ref-Fuel Co., Series 1997 A,
6.200% 07/01/19 2,225,000 2,304,143
-----------------------------------------------------------------------------
Resource Recovery Total 3,597,371
-----------
RESOURCE RECOVERY TOTAL 5,733,360
TAX-BACKED - 17.6%
LOCAL APPROPRIATED - 1.6%
- ------------------------------------------ -----------------------------------------------------------------------------
CA Compton Certificates of Participation, Civic
Center & Captial Improvements, Series 1997 A,
5.500% 09/01/15 1,500,000 1,572,660
See notes to investment portfolio.
22
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
TAX-BACKED - (CONTINUED)
LOCAL APPROPRIATED - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CA Southeast Resource Recovery Facilities
Authority, Series 2003 B,
5.375% 12/01/18 2,000,000 2,148,280
MO St. Louis Industrial Development Authority,
St. Louis Convention Center Hotel, Series 2000,
(a) 07/15/18 3,000,000 1,526,610
SC Berkeley County School District, Securing
Assets for Education, Series 2003,
5.000% 12/01/28 2,000,000 1,991,160
-----------------------------------------------------------------------------
Local Appropriated Total 7,238,710
LOCAL GENERAL OBLIGATIONS - 5.0%
- ------------------------------------------ -----------------------------------------------------------------------------
CA East Side Union High School District,
Series 2003 B,
5.100% 02/01/20 1,320,000 1,461,121
CA Empire Union School District, Series 1987-1 A,
(a) 10/01/21 1,665,000 690,575
CA Los Angeles Community College District,
Series 2003 B,
5.000% 08/01/19 2,000,000 2,138,120
CA Los Angeles Unified School District:
Series 1997 E,
5.125% 01/01/27 3,800,000 3,944,476
Series 2002,
5.750% 07/01/16 800,000 947,944
CA Modesto High School District,
Series 2002 A,
(a) 08/01/19 2,650,000 1,259,651
CA Rocklin Unified School District,
Election of 2002, Series 2003,
(a) 08/01/17 3,130,000 1,678,619
CA William S. Hart Union High School District,
Series 2003 A,
5.000% 09/01/19 1,625,000 1,737,986
CO Red Sky Ranch Metropolitan District,
Series, 2003,
6.050% 12/01/33 1,000,000 1,003,350
NY New York City:
Series 1995 B,
7.250% 08/15/07 1,000,000 1,160,650
Series 2003 J,
5.500% 06/01/18 1,500,000 1,642,980
OH Dublin City School District,
Series 2003,
5.000% 12/01/20 2,450,000 2,607,560
TX Dallas County Flood Control District,
Series 2002,
7.250% 04/01/32 1,000,000 1,027,840
See notes to investment portfolio.
23
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
TAX-BACKED - (CONTINUED)
LOCAL GENERAL OBLIGATIONS - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
WA Clark County School District #37
Vancouver, Series 2001B,
(a) 12/01/18 2,500,000 1,239,325
-----------------------------------------------------------------------------
Local General Obligations Total 22,540,197
SPECIAL NON-PROPERTY TAX - 3.6%
- ------------------------------------------ -----------------------------------------------------------------------------
CO State Department of Transportation
Revenue, Series 2001 832R-A,
9.630% 06/15/14 3,000,000 3,853,410
FL Northern Palm Beach County
Improvement District, Series 1999:
5.900% 08/01/19 500,000 565,265
6.000% 08/01/29 750,000 850,493
MO St. Louis County Industrial
Development Authority, Kiel Center
Arena, Series 1992,
7.875% 12/01/24 3,000,000 3,066,990
NY State Thruway Authority,
Series 2003 A,
5.000% 03/15/20 3,500,000 3,719,975
PR Commonwealth Highway &
Transportation Authority,
Series 2003 AA:
5.500% 07/01/18 1,225,000 1,430,114
5.500% 07/01/19 2,320,000 2,707,370
-----------------------------------------------------------------------------
Special Non-Property Tax Total 16,193,617
SPECIAL PROPERTY TAX - 4.4%
- ------------------------------------------ -----------------------------------------------------------------------------
CA Carson Improvement Board Act 1915,
Series 1992,
7.375% 09/02/22 140,000 141,729
CA Huntington Beach Community
Facilities District, Grand Coast Resort,
Series 2000-1,
6.450% 09/01/31 1,250,000 1,294,350
CA Irvine Improvement Bond Act 1915,
No. 00-18-GRP 3, Series 2003,
5.550% 09/02/26 500,000 502,930
CA Oceanside Community Development
Commissions, Downtown
Redevelopment Project, Series 2003,
5.700% 09/01/25 500,000 501,650
CA Orange County Community Facilities District,
Ladera Ranch:
Series 1999 A,
6.500% 08/15/21 1,000,000 1,046,870
Series 2003 A,
5.550% 08/15/33 1,000,000 995,610
See notes to investment portfolio.
24
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
TAX-BACKED - (CONTINUED)
SPECIAL PROPERTY TAX - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CA Orange County Improvement Bond
Act 1915, Phase IV, No. 01-1-B,
Series 2003,
5.750% 09/02/33 1,000,000 1,012,470
CA Pleasanton Joint Powers Financing
Authority, Series 1993 B,
6.750% 09/02/17 1,740,000 1,789,590
CA Redwood City Community Facilities
District, 1 Redwood, Series 2003 B,
6.000% 09/01/33 700,000 718,501
CA Temecula Valley Unified School District,
Series 2003,
6.125% 09/01/33 600,000 608,226
FL Brandy Creek Community
Development District, Series 2003 A,
6.350% 05/01/34 1,000,000 1,010,220
FL Celebration Community Development
District, Series 2003A,
6.400% 05/01/34 1,000,000 1,028,540
FL Colonial Country Club Community
Development District, Series 2003,
6.400% 05/01/33 750,000 772,628
FL Double Branch Community
Development District:
Series 2002 A,
6.700% 05/01/34 700,000 729,932
Series 2003 B,
5.375% 05/01/08 1,190,000 1,205,327
FL Heritage Palms Community
Development District, Series 1999,
6.250% 11/01/04 475,000 479,346
FL Islands at Doral Southwest
Community Development District,
Series 2003,
6.375% 05/01/35 770,000 791,460
FL Lexington Oaks Community
Development District:
Series 1998 A,
6.125% 05/01/19 260,000 264,293
Series 1998 B,
5.500% 05/01/05 130,000 130,861
Series 2000 A:
7.200% 05/01/30 685,000 721,880
6.700% 05/01/33 250,000 260,432
FL Orlando, Conroy Road Interchange Project,
Series 1998 A:
5.500% 05/01/10 325,000 333,408
5.800% 05/01/26 600,000 605,394
See notes to investment portfolio.
25
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
TAX-BACKED - (CONTINUED)
SPECIAL PROPERTY TAX - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
FL Stoneybrook Community Development District:
Series 1998 A,
6.100% 05/01/19 805,000 818,669
Series 1998 B,
5.700% 05/01/08 105,000 106,210
FL Westchester Community Development District,
Series 2003,
6.125% 05/01/35 800,000 793,856
MI Pontiac Finance Authority,
Development Area No. 3, Series 2002,
6.375% 06/01/31 1,000,000 1,008,330
-----------------------------------------------------------------------------
Special Property Tax Total 19,672,712
STATE APPROPRIATED - 0.5%
- ------------------------------------------ -----------------------------------------------------------------------------
NY Triborough Bridge & Tunnel Authority, Javits
Convention Center Project, Series 1990 E,
7.250% 01/01/10 2,000,000 2,309,100
-----------------------------------------------------------------------------
State Appropriated Total 2,309,100
STATE GENERAL OBLIGATIONS - 2.5%
- ------------------------------------------ -----------------------------------------------------------------------------
CA State, Series 2003:
5.250% 02/01/18 2,000,000 2,144,320
5.250% 02/01/20 (d) 2,000,000 2,125,420
MA Massachusetts Bay Transportation Authority,
Series 1992 B,
6.200% 03/01/16 5,825,000 7,101,257
-----------------------------------------------------------------------------
State General Obligations Total 11,370,997
-----------
TAX-BACKED TOTAL 79,325,333
TRANSPORTATION - 8.0%
AIR TRANSPORTATION - 3.3%
- ------------------------------------------ -----------------------------------------------------------------------------
CA Los Angeles Regional Airports Improvement
Corp., American Airlines, Inc., Series 2002 C,
7.500% 12/01/24 500,000 495,260
FL Capital Trust Agency, Air Cargo Orlando Project,
Series 2003,
6.750% 01/01/32 650,000 617,091
IL Chicago O'Hare International Airport,
United Airlines, Inc., Series 2000 A,
6.750% 11/01/11 (c) 1,600,000 438,032
IN Indianapolis Airport Authority, Federal
Express Corp. Project, Series 1994,
7.100% 01/15/17 1,000,000 1,044,720
KY Kenton County Airport Board,
Delta Airlines, Inc. Project, Series 1992,
7.500% 02/01/20 500,000 499,035
MA State Port Authority, Delta Airlines, Inc.,
Series 2001 A,
5.500% 01/01/16 2,935,000 3,162,228
See notes to investment portfolio.
26
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
TRANSPORTATION - (CONTINUED)
AIR TRANSPORTATION - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
MN Minneapolis & St. Paul Metropolitan Airports
Commission, Northwest Airlines Project:
Series 2001 A,
7.000% 04/01/25 825,000 775,162
Series 2001 B,
6.500% 04/01/25 500,000 486,555
NC Charlotte, US Airway, Inc.:
Series 1998,
5.600% 07/01/27 500,000 326,750
Series 2000,
7.750% 02/01/28 1,250,000 1,130,150
NJ State Economic Development Authority,
Continental Airlines, Inc. Project, Series 2003,
9.000% 06/01/33 1,000,000 1,070,790
PA Philadelphia Authority for Industrial
Development, Aero Philadelphia, Series 1999:
5.250% 01/01/09 350,000 329,462
5.500% 01/01/24 1,000,000 794,660
TX Alliance Airport Authority, AMR Corp.,
Series 1991,
7.000% 12/01/11 2,070,000 1,880,098
TX Houston Industrial Development Corp.,
United Parcel Service, Series 2002,
6.000% 03/01/23 1,100,000 1,117,105
WA Port Seattle, Northwest Airlines, Inc. Project,
Series 2001,
7.250% 04/01/30 925,000 881,913
-----------------------------------------------------------------------------
Air Transportation Total 15,049,011
AIRPORT - 1.4%
- ------------------------------------------ -----------------------------------------------------------------------------
DC Metropolitan Washington Airports Authority,
Series 2003 A,
5.000% 10/01/33 1,500,000 1,518,360
NC Charlotte Airport Revenue,
Series 1999,
10.680% 04/20/19 (g) 4,000,000 4,941,280
-----------------------------------------------------------------------------
Airport Total 6,459,640
PORTS - 1.5%
- ------------------------------------------ -----------------------------------------------------------------------------
WA Port of Seattle:
Series 2000 A,
10.580% 02/01/10 1,250,000 1,623,375
Series 2000 B,
10.580% 02/01/11 3,750,000 4,895,475
-----------------------------------------------------------------------------
Ports Total 6,518,850
See notes to investment portfolio.
27
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
TRANSPORTATION - (CONTINUED)
TOLL FACILITIES - 1.4% Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CO E-470 Public Highway
Authority, Series 2000 B:
(a) 09/01/18 4,000,000 2,012,440
(a) 09/01/35 17,500,000 1,706,600
CO Northwest Parkway Public Highway Authority,
Series 2001 D,
7.125% 06/15/41 1,750,000 1,784,667
MA State Turnpike Authority, Series 1997 C
(a) 01/01/20 2,000,000 939,860
-----------------------------------------------------------------------------
Toll Facilities Total 6,443,567
TRANSPORTATION - 0.4%
- ------------------------------------------ -----------------------------------------------------------------------------
NV State Department of Business &
Industry, Las Vegas Monorail Project,
Series 2000,
7.375% 01/01/40 1,750,000 1,750,297
-----------------------------------------------------------------------------
Transportation Total 1,750,297
-----------
TRANSPORTATION TOTAL 36,221,365
UTILITY - 16.5%
INDEPENDENT POWER PRODUCER - 4.1%
- ------------------------------------------ -----------------------------------------------------------------------------
MI Midland County Economic Development Corp.,
Series 2000 A,
6.875% 07/23/09 1,650,000 1,721,148
NY Port Authority of New York & New Jersey,
KAIC Power Project, Series 1996,
6.750% 10/01/11 1,000,000 1,049,780
PA Carbon City Industrial Development Panther
Creek Partners Project, Series 2000,
6.650% 05/01/10 1,000,000 1,086,450
PA State Economic Development Financing
Authority, Colver Project, Series 1994 D,
7.150% 12/01/18 1,650,000 1,719,515
PA State Economic Development Financing
Authority, Northampton Generating:
Series 1994 A,
6.500% 01/01/13 3,000,000 3,049,560
Series 1994 B,
6.750% 01/01/07 3,000,000 3,094,890
VA Pittsylvania County Industrial
Development Authority, Multi-trade of
Pittsylvania, Series 1994 A:
7.450% 01/01/09 3,500,000 3,508,260
7.500% 01/01/14 500,000 498,950
7.550% 01/01/19 2,600,000 2,586,532
-----------------------------------------------------------------------------
Independent Power Producer Total 18,315,085
See notes to investment portfolio.
28
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
UTILITY - (CONTINUED)
INVESTOR OWNED - 4.1% Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
AZ Maricopa County Pollution Control Corp.,
El Paso Electric Co. Project, Series 2002 A,
6.250% 05/01/37 1,000,000 1,047,860
FL Polk County Industrial Development Authority,
Tampa Electric Co. Project, Series 1996,
5.850% 12/01/30 1,500,000 1,500,795
IL State Development Finance Authority Pollution
Control Revenue, Peoples Gas Light & Coke Co.,
Series 2003 E,
4.875% 11/01/38 2,500,000 2,547,300
IN Petersburg, Indiana Power & Light Co.:
Series 1991,
5.750% 08/01/21 1,000,000 987,640
Series 1995,
6.625% 12/01/24 255,000 261,168
LA Calcasieu Parish Industrial Development Board,
Entergy Gulf States, Inc., Series 1999,
5.450% 07/01/10 500,000 503,635
LA West Feliciana Parish, Entergy Gulf States, Inc.,
Series 1999 B,
6.600% 09/01/28 250,000 254,767
MS State Business Finance Corp., Systems Energy
Resources, Inc. Project, Series 1999,
5.900% 05/01/22 1,500,000 1,503,840
MT Forsyth Pollution Control
Revenue, Portland General Electric Co.,
Series 1998 A,
5.200% 05/01/33 375,000 387,731
NM Farmington Pollution Control
Revenue, Tucson Electric Power Co.,
Series 1997 A,
6.950% 10/01/20 2,000,000 2,099,700
PA Beaver County Industrial
Development Authority, Toledo Edison Co.
Project, Series 1995,
7.625% 05/01/20 2,000,000 2,152,840
SC Berkeley County Pollution Control Facilities
Revenue, South Carolina Generating Co. Project,
Series 2003,
4.875% 10/01/14 1,500,000 1,594,785
TX Brazos River Authority, Texas Utilities
Electric Co. Project:
Series 2001 C,
5.750% 05/01/36 650,000 681,226
Series 2003 C,
6.750% 10/01/38 1,650,000 1,743,192
See notes to investment portfolio.
29
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
UTILITY - (CONTINUED)
INVESTOR OWNED - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
WY Converse County Pollution Control
Revenue, PacifiCorp, Series 1988,
3.900% 01/01/14 1,500,000 1,461,480
-----------------------------------------------------------------------------
Investor Owned Total 18,727,959
JOINT POWER AUTHORITY - 1.6%
- ------------------------------------------ -----------------------------------------------------------------------------
GA State Municipal Electric Authority,
Series 1991 V,
6.600% 01/01/18 3,375,000 4,151,318
NC Eastern Municipal Power Agency:
Series 1991 A,
6.500% 01/01/18 1,680,000 2,001,031
Series 2003 C,
5.375% 01/01/17 1,000,000 1,057,350
-----------------------------------------------------------------------------
Joint Power Authority Total 7,209,699
MUNICIPAL ELECTRIC - 5.0%
- ------------------------------------------ -----------------------------------------------------------------------------
MN Western Municipal Power Agency,
Series 2003 B,
5.000% 01/01/15 (d) 500,000 557,825
NY Long Island Power Authority:
Series 1998-8 C,
5.000% 04/01/10 2,000,000 2,233,340
Series 2003 A,
5.000% 06/01/09 2,000,000 2,187,040
PR Electric Power Authority,
Series 1998 NN,
5.500% 07/01/20 1,005,000 1,131,198
TX Lower Colorado River Authority,
Series 1999 A,
5.500% 05/15/21 15,000,000 16,488,300
-----------------------------------------------------------------------------
Municipal Electric Total 22,597,703
WATER & SEWER - 1.7%
- ------------------------------------------ -----------------------------------------------------------------------------
CA State Department of Water
Resources, Cent Valley Project, Series
Series 2002 X,
5.500% 12/01/17 1,300,000 1,512,576
FL Key West Sewer Revenue,
Series 2003,
5.250% 10/01/18 1,000,000 1,111,130
MO Water System Revenue, V Lakes
Utility District, Series 1994,
8.250% 07/15/24 400,000 390,488
NH State Industrial Development
Authority, Pennichuck Water Works,
Inc. Project, Series 1988,
7.500% 07/01/18 470,000 529,573
See notes to investment portfolio.
30
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
MUNICIPAL BONDS - (CONTINUED)
UTILITY - (CONTINUED)
WATER & SEWER - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
PA Dauphin County Industrial
Development Authority, Dauphin Water
Supply Co., Series 1992 A,
6.900% 06/01/24 3,200,000 3,990,176
-----------------------------------------------------------------------------
Water & Sewer Total 7,533,943
-----------
UTILITY TOTAL 74,384,389
TOTAL MUNICIPAL BONDS
(COST OF $412,570,380) 421,610,232
MUNICIPAL PREFERRED STOCKS - 0.8%
HOUSING - 0.8%
MULTI-FAMILY - 0.8% Shares
- ------------------------------------------ -----------------------------------------------------------------------------
Charter Municipal Mortgage Acceptance Co.:
6.625% 06/30/49 (i) 2,000,000 2,137,380
7.600% 11/30/50 (i) 1,500,000 1,640,040
TOTAL MUNICIPAL PREFERRED STOCKS
(COST OF $3,500,000) 3,777,420
SHORT-TERM OBLIGATIONS - 4.2%
VARIABLE RATE DEMAND NOTES (J) - 4.2% Par ($)
- ------------------------------------------ -----------------------------------------------------------------------------
AZ Phoenix Industrial Development Authority,
Valley of the Sun YMCA Project, Series 2001,
1.370% 01/01/31 1,400,000 1,400,000
IA Hills Healthcare Revenue, Mercy
Hospital Project, Series 2002,
1.320% 08/01/32 10,000 10,000
IA State Finance Authority, Drake
University Project, Series 2001,
1.370% 07/01/31 800,000 800,000
Village Court Associates:
Series 1985 A,
1.300% 11/01/15 300,000 300,000
Series 1985 B,
1.300% 11/01/15 100,000 100,000
IA Woodbury County, Siouxland Medical
Education Foundation, Series 1996,
1.350% 11/01/16 1,500,000 1,500,000
ID State Health Facilities Authority Revenue,
St. Luke's Regional Medical Center Project,
Series 1995,
1.320% 05/01/22 200,000 200,000
IL Quad Cities Regional Economic
Development Authority, Two Rivers
YMCA Project, Series 2002
1.370% 12/01/31 1,900,000 1,900,000
See notes to investment portfolio.
31
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
SHORT-TERM OBLIGATIONS - (CONTINUED)
VARIABLE RATE DEMAND NOTES (J) - (CONTINUED) Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
IL State Health Facilities Authority
Revenue: Bromenn Healthcare Inc.,
Series 2002,
1.320% 08/15/32 700,000 700,000
OSF Healthcare System, Series 2002,
1.330% 11/15/27 1,500,000 1,500,000
IN State Development Financing
Authority Revenue, Cathedral High
School, Series 2001,
1.370% 09/02/26 600,000 600,000
IN State Health Facilities Financing
Authority Revenue, Fayette Memorial
Hospital Association, Series 2002 A,
1.370% 10/01/32 3,400,000 3,400,000
MN State Department of Revenue:
Brooklyn Center, Brookdale Corp. II Project,
Series 2001,
1.370% 12/01/14 900,000 900,000
Mankato, Bethany Lutheran College,
Series 2000 B,
1.370% 11/01/15 400,000 400,000
MO State Health & Education Facilities
Revenue, Washington University,
Series 1996 C,
1.320% 09/01/30 1,500,000 1,500,000
ND Ward County Health Care Facilities
Revenue, Trinity Health, Series 2002 A,
1.370% 07/01/29 195,000 195,000
NY New York City,
Series 1993 A-4,
1.300% 08/01/22 300,000 300,000
UT Eagle Mountain Gas & Electric Revenue,
Series 2001,
1.300% 12/01/25 700,000 700,000
WI State Health & Education Facilities
Authority: ProHealth Care Inc.,
Series 2001 B,
1.320% 08/15/30 400,000 400,000
Riverview Hospital Association, Series 2001,
1.370% 10/01/30 600,000 600,000
WY Lincoln County Pollution Control
Revenue, Exxon Project, Series 1984 D,
1.140% 11/01/04 1,000,000 1,000,000
WY Uinta County Pollution Control
Revenue, Chevron Corporation,
Series 1992,
1.300% 12/01/22 600,000 600,000
-----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(COST OF $19,005,000) 19,005,000
See notes to investment portfolio.
32
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
TOTAL INVESTMENTS - 98.4%
(COST OF $435,075,380)(K) 444,392,652
OTHER ASSETS & Liabilities, Net - 1.6% 6,960,229
Net Assets - 100.0% 451,352,881
Notes To Investment Portfolio:
(a) Zero coupon bond.
(b) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At December 31, 2003, the value of these
securities amounted to $3,059,872, which represents 0.7% of net assets.
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------------------------
CA Abag Finance Authority for Nonprofit Corps.,
Eskaton Gold River Lodge, Series 1998:
6.375% 11/15/15 07/30/98 $ 706,431
6.375% 11/15/28 07/30/98 541,288
CA Statewide Community Development Authority,
Eskaton Village - Grass Valley, Series 2000,
8.250% 11/15/31 09/08/00 1,750,000
---------
$2,997,719
=========
(c) As of December 31, 2003, the Fund held securities of certain issuers that
have filed for bankruptcy protection under Chapter 11, representing 0.2% of
net assets. These issuers are in default of certain debt covenants. Income
is not being accrued.
(d) Security purchased on a delayed delivery basis.
(e) This issuer is in default of certain debt covenants. Income is not being
fully accrued.
(f) The fund has been informed that each issuer has placed direct obligations of
the U.S. Government in an irrevocable trust solely for the purpose of the
payment of principal and interest.
(g) These securities, or a portion thereof, with a total market value of
$1,832,665 are being used to collateralized open futures contracts.
(h) Variable rate security. The rate reported is the rate in effect at December
31, 2003.
(i) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
December 31, 2003, the value of these securities amounted to $3,777,420 or
0.8% of net assets.
(j) Variable rate demand notes (VRDN) are considered short-term obligations.
Interest rates change periodically on specified dates. These securities are
payable on demand and are secured either by letters of credits or other
credit support agreements from banks. The rates listed are as of December
31, 2003.
(k) Cost for federal income tax purposes is $434,789,943.
Short futures contracts open at December 31, 2003:
PAR VALUE UNREALIZED
COVERED BY EXPIRATION DEPRECIATION
TYPE CONTRACTS MONTH AT 12/31/03
----------------------------------------------------------------------------
10 Year U.S. Treasury Notes $94,600,000 Mar-04 $(905,949)
ACRONYM NAME
-------------------------------------------------------------
Abag Association of Bay Area Government
See notes to financial statements.
33
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
($)
- ------------------------------------------ ----------------------------------------------------------------------------
ASSETS Investments, at cost 435,075,380
Investments, at value 444,392,652
Cash 1,987,638
Receivable for:
Fund shares sold 1,723,307
Interest 7,329,330
Deferred Trustees' compensation plan 10,891
Other assets 29,498
-----------
Total Assets 455,473,316
LIABILITIES Payable for:
Investments purchased on a delayed delivery basis 1,969,810
Fund shares repurchased 475,867
Futures variation margin 147,812
Distributions 970,668
Investment advisory fee 154,981
Administration fee 43,243
Transfer agent fee 45,164
Registration fee 210,856
Distribution and service fees 53,719
Deferred Trustees' fees 10,891
Other liabilities 37,424
-----------
Total Liabilities 4,120,435
NET ASSETS 451,352,881
----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 465,394,651
Undistributed net investment income 40,183
Accumulated net realized loss (22,493,276)
Net unrealized appreciation (depreciation) on:
Investments 9,317,272
Futures contracts (905,949)
NET ASSETS 451,352,881
----------------------------------------------------------------------------
CLASS A Net assets 80,319,967
Shares outstanding 7,132,129
Net asset value per share 11.26
Maximum offering price per share ($11.26/0.9525) 11.82
CLASS B Net assets 46,604,781
Shares outstanding 4,138,297
Net asset value and offering price per share 11.26
CLASS C Net assets 10,903,896
Shares outstanding 968,241
Net asset value and offering price per share 11.26
CLASS Z Net assets 313,524,237
Shares outstanding 27,840,543
Net asset value, offering and redemption price per share 11.26
See notes to financial statements.
34
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
($)
- ------------------------------------------ ----------------------------------------------------------------------------
INVESTMENT INCOME Dividends 5,023
Interest 12,650,568
-----------
Total Investment Income 12,655,591
----------------------------------------------------------------------------
EXPENSES Investment advisory fee 877,622
Administration fee 247,684
Distribution fee:
Class B 184,818
Class C 37,599
Service fee:
Class A 78,476
Class B 49,285
Class C 9,979
Transfer agent fee 281,951
Pricing and bookkeeping fees 69,695
Trustees' fees 7,144
Custody fee 9,720
Other expenses 127,320
-----------
Total Operating Expenses 1,981,293
Fees waived by Distributor - Class C (7,660)
Custody earnings credit (1,616)
-----------
Net Expenses 1,972,017
-----------
Net Investment Income 10,683,574
----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED Net realized gain (loss) on:
GAIN (LOSS) ON INVESTMENTS Investments (3,170,618)
AND FUTURES CONTRACTS Futures contracts 1,681,240
-----------
Net realized loss (1,489,378)
Net change in unrealized
appreciation/depreciation on:
Investments 3,467,587
Futures contracts (1,096,199)
-----------
Net change in unrealized appreciation/depreciation 2,371,388
-----------
Net Gain 882,010
-----------
Net Increase in Net Assets from Operations 11,565,584
See notes to financial statements.
35
STATEMENT OF CHANGES IN NET ASSETS
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
DECEMBER 31, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS: 2003($) 2003(A)($)
- ------------------------------------------ -----------------------------------------------------------------------------
OPERATIONS: Net investment income 10,683,574 18,325,751
Net realized loss on investments
and futures contracts (1,489,378) (3,496,306)
Net change in unrealized appreciation/depreciation
on investments and futures contracts 2,371,388 6,334,881
----------- -----------
Net Increase from Operations 11,565,584 21,164,326
-----------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income:
Class A (1,846,315) (4,696,423)
Class B (974,031) (3,013,907)
Class C (203,843) (296,718)
Class Z (6,972,273) (13,994,707)
----------- -----------
Total Distributions Declared to Shareholders (9,996,462) (22,001,755)
-----------------------------------------------------------------------------
SHARE TRANSACTIONS: Class A:
Subscriptions 8,571,169 18,354,905
Proceeds received in connection with merger -- 76,068,209
Distributions reinvested 769,996 2,010,003
Redemptions (7,481,767) (17,674,390)
----------- -----------
Net Increase 1,859,398 78,758,727
Class B:
Subscriptions 2,848,179 7,804,555
Proceeds received in connection with merger -- 58,601,899
Distributions reinvested 413,031 1,355,241
Redemptions (7,943,781) (16,111,056)
----------- -----------
Net Increase (Decrease) (4,682,571) 51,650,639
Class C:
Subscriptions 2,943,876 6,010,197
Proceeds received in connection with merger -- 4,760,489
Distributions reinvested 87,734 110,517
Redemptions (1,283,105) (1,770,277)
----------- -----------
Net Increase 1,748,505 9,110,926
Class Z:
Subscriptions 99,281,622 81,763,744
Distributions reinvested 3,403,668 10,235,595
Redemptions (35,348,314) (60,473,287)
----------- -----------
Net Increase 67,336,976 31,526,052
Net Increase from Share Transactions 66,262,308 171,046,344
Total Increase in Net Assets 67,831,430 170,208,915
-----------------------------------------------------------------------------
(a) On July 29, 2002, the existing Fund Class S shares were redesignated Class Z
shares. Class B and Class C shares were initially offered on July 15, 2002.
See notes to financial statements.
36
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
DECEMBER 31, JUNE 30,
2003($) 2003(A)($)
- ------------------------------------------ -----------------------------------------------------------------------------
NET ASSETS: Beginning of period 383,521,451 213,312,536
End of period (including undistributed
(overdistributed) net investment income
of $40,183 and $(646,929), respectively) 451,352,881 383,521,451
-----------------------------------------------------------------------------
CHANGES IN SHARES: Class A:
Subscriptions 771,628 1,639,804
Issued in connection with merger -- 6,725,748
Issued for distributions reinvested 69,364 177,053
Redemptions (674,660) (1,580,530)
----------- -----------
Net Increase 166,332 6,962,075
Class B:
Subscriptions 256,745 696,631
Issued in connection with merger -- 5,181,423
Issued for distributions reinvested 37,226 121,313
Redemptions (716,223) (1,438,818)
----------- -----------
Net Increase (Decrease) (422,252) 4,560,549
Class C:
Subscriptions 265,157 537,281
Issued in connection with merger -- 420,910
Issued for distributions reinvested 7,900 9,891
Redemptions (114,835) (158,063)
----------- -----------
Net Increase 158,222 810,019
Class Z:
Subscriptions 8,955,250 7,296,394
Issued for distributions reinvested 306,739 915,399
Redemptions (3,188,886) (5,385,102)
----------- -----------
Net Increase 6,073,103 2,826,691
(a) On July 29, 2002, the existing Fund Class S shares were redesignated Class Z
shares. Class B and Class C shares were initially offered on July 15, 2002.
See notes to financial statements.
37
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
NOTE 1. ORGANIZATION
Columbia High Yield Municipal Fund (the "Fund"), a series of Columbia Funds
Trust IX (the "Trust"), is a non-diversified portfolio. The Trust is a
Massachusetts business trust registered under the Investment Company Act of
1940, as amended, as an open-end management investment company.
INVESTMENT GOAL
The Fund seeks a high level of total return consisting of current income exempt
from federal income tax and opportunities for capital appreciation.
FUND SHARES
The Fund may issue an unlimited number of shares, and offers four classes of
shares: Class A, Class B, Class C 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 4.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. 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 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, the Fund changed its name from Liberty High Yield
Municipal Fund to Columbia High Yield Municipal Fund. Also on that date, the
Trust changed its name from Liberty-Stein Roe Funds Municipal Trust to Columbia
Funds Trust IX.
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 policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Debt securities generally are valued by a pricing service approved by the
Trust's Board of Trustees, based upon market transactions for normal,
institutional-size trading units of similar securities. The services may use
various pricing techniques which take into account appropriate factors such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other data, as well as broker quotes. Debt securities for which quotations
are readily available are valued at an over-the-counter or exchange bid
quotation. Certain securities, which tend to be more thinly traded and of lesser
quality, are priced based on fundamental analysis of the financial condition of
the issuer and the estimated value of any collateral. Valuations developed
through pricing techniques may vary from the actual amounts realized upon sale
of the securities, and the potential variation may be greater for those
securities valued using fundamental analysis.
Short-term obligations maturing within 60 days are valued at amortized cost,
which approximates market 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.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Fund or
in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such
38
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
restricted securities may be determined to be liquid under criteria established
by the Board of Trustees. The Fund will not incur any registration costs upon
such resale.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
FUTURES CONTRACTS
The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund
will invest in these instruments to hedge against the effects of changes in the
value of portfolio securities due to anticipated changes in interest rates
and/or market conditions, for duration management, or when the transactions are
economically appropriate to the reduction of risk inherent in the management of
the Fund and not for trading purposes. The use of futures contracts involves
certain risks, which include: (1) imperfect correlation between the price
movement of the instruments and the underlying securities, (2) inability to
close out positions due to differing trading hours, or the temporary absence of
a liquid market, for either the instrument or the underlying securities, or (3)
an inaccurate prediction by Columbia Management Advisors, Inc. of the future
direction of interest rates. Any of these risks may involve amounts exceeding
the variation margin recorded in the Fund's Statement of Assets and Liabilities
at any given time.
Upon entering into a futures contract, the Fund deposits cash or securities with
the broker in an amount sufficient to meet the initial margin requirement.
Subsequent payments are made or received by the Fund equal to the daily change
in the contract value and are recorded as variation margin payable or receivable
and offset in unrealized gains or losses. The Fund also identifies portfolio
securities as segregated with the custodian in a separate account in an amount
equal to the futures contract. The Fund recognizes a realized gain or loss when
the contract is closed or expires.
DELAYED DELIVERY SECURITIES
The Fund may trade securities on other than normal settlement terms, including
securities purchased or sold on a "when-issued" basis. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
to subsequently invest at less advantageous prices. The Fund identifies cash or
liquid portfolio securities as segregated with the custodian in an amount equal
to the delayed delivery commitment.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, for purposes of
determining the net asset value of each class. Income and expenses are allocated
to each class based on the settled shares method, while realized and unrealized
gains (losses) are allocated based on relative net assets of each class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable 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, the Fund will not be
subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually. Income and
capital gains dividends are determined in accordance with income tax regulations
and 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 the Fund's capital
39
<PaGE>
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
accounts for permanent tax differences to reflect income and gains available for
distribution (or available capital loss carryforwards) under income tax
regulations.
The tax character of distributions paid for the year ended June 30, 2003 was as
follows:
2003
- ----------------------------------------------------------
Tax-Exempt Income $21,999,954
Ordinary Income 1,801
As of June 30, 2003, the components of distributable earnings on a tax basis
were as follows:
Undistributed
Tax-Exempt Unrealized
Income Appreciation
- ----------------------------------------------------------
$520,746 $6,188,889
Unrealized appreciation and depreciation at December 31, 2003, based on cost of
investments for federal income tax purposes and excluding any unrealized
appreciation and depreciation from changes in the value of assets and
liabilities resulting from changes in exchange rates was:
Unrealized appreciation $ 23,228,167
Unrealized depreciation (13,625,458)
- ----------------------------------------------------------
Net unrealized appreciation $ 9,602,709
The following capital loss carryforwards determined as of June 30, 2003 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:
Year of Capital Loss
Expiration Carryforward
- ----------------------------------------------------------
2005 $ 1,525,965
2006 5,933,974
2007 1,931,613
2008 2,738,332
2009 1,928,565
2010 1,780,434
2011 697,947
Total $16,536,830
Of the capital loss carryforwards attributable to Columbia High Yield Municipal
Fund, $9,056,612 ($684,212 expired June 30, 2003, $1,525,965 expiring June 30,
2005, $1,931,613 expiring June 30, 2007, $2,738,332 expiring June 30, 2008,
$1,081,414 expiring June 30, 2009 and $1,095,076 expiring June 30, 2010) was
obtained in the merger with Liberty High Yield Municipal Fund, of which
$8,372,400 remains (See note 8).
Utilization of the Fund's capital loss carryforwards above could be subject to
limitations imposed by the Internal Revenue Code.
Expired capital loss carryforwards, if any are treated as a reduction in paid-in
capital.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, Inc. ("Columbia"), an indirect, wholly-owned
subsidiary of FleetBoston Financial Corporation, is the investment advisor to
the Fund and receives a monthly fee based on the Fund's average daily net assets
at the following annual rates:
Average Daily Net Assets Fee Rate
- ----------------------------------------------------------
First $100 million 0.450%
Next $100 million 0.425%
Over $200 million 0.400%
For the six months ended December 31, 2003, the Fund's annualized effective
investment advisory fee rate was 0.42%.
ADMINISTRATION FEE
Columbia provides administrative and other services for a monthly fee based on
the Fund's average daily net assets at the following annual rates:
Average Daily Net Assets Fee Rate
- ----------------------------------------------------------
First $100 million 0.150%
Next $100 million 0.125%
Over $200 million 0.100%
For the six months ended December 31, 2003, the Fund's annualized effective
administration fee rate was 0.12%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
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"). Columbia pays the total fees collected to State
Street under the Outsourcing Agreement.
40
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the 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 the Fund for that month. The Fund also pays
additional fees for pricing services. For the six months ended December 31,
2003, the effective pricing and bookkeeping fee rate was 0.033%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Fund
Services, Inc., an affiliate of Columbia, provides shareholder services for an
annual fee of $34.00 per open account. The Transfer Agent also receives
reimbursement for certain out-of-pocket expenses.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee at the annual rate of 0.06% of the Fund's average daily net
assets plus flat-rate charges based on the number of shareholder accounts and
transactions. For the six months ended December 31, 2003, the annualized
effective transfer agent fee rate was 0.09%.
The Transfer Agent was also entitled to receive reimbursement for certain
out-of-pocket expenses.
Effective October 13, 2003, Liberty Funds Services, Inc. changed its name to
Columbia Funds Services, Inc.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. Prior to October 13, 2003, Columbia
Funds Distributor, Inc., was known as Liberty Funds Distributor, Inc. For the
six months ended December 31, 2003, the Distributor has retained net
underwriting discounts of $10,604 on sales of the Fund's Class A shares and
received CDSC of $62,743 and $2,408 on Class B and Class C share redemptions,
respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor. The service fee is equal to 0.20%
annually of the average daily net assets attributable to Class A, Class B and
Class C shares.
The Plan also requires the payment of a monthly distribution fee to the
Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only. The Distributor has voluntarily
agreed to waive a portion of the Class C share distribution fee so that it will
not exceed 0.60% annually.
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.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund's 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
Fund's assets.
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the six months ended December 31, 2003, the
cost of purchases and proceeds from sales of securities, excluding short-term
obligations, were $89,163,601 and $54,794,116, respectively.
NOTE 6. LINE OF CREDIT
The Fund 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 the Fund based on its borrowings. In
addition, the 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 Statement of Operations. For the six months ended December 31,
2003, the Fund did not borrow under these arrangements.
41
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS
AND CONTINGENCIES
HIGH-YIELD SECURITIES
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. Government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk bonds." Economic
downturns may disrupt the high yield market and impair the ability of issuers to
repay principal and interest. Also, an increase in interest rates would likely
have an adverse impact on the value of such obligations. Moreover, high-yield
securities may be less liquid due to the extent that there is no established
retail secondary market and because of a decline in the value of such
securities.
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
Columbia, the Distributor and certain of their affiliates (collectively, "the
Columbia Group") have received information requests and subpoenas from various
regulatory authorities, including the Securities and Exchange Commission ("SEC")
and the New York Attorney General, in connection with their investigations of
late trading and market timing in mutual funds. The Columbia Group has not
uncovered any instances where Columbia or the Distributor was knowingly involved
in late trading of mutual fund shares. The Columbia Group has identified a
limited number of investors who had informal arrangements for trading certain
Columbia Fund shares between 1998 and 2003. A substantial majority of the
trading had ended by October 2002. None of these arrangements exists today.
Information relating to those trading arrangements has been supplied to various
regulatory authorities. To the extent that any Columbia Fund, whose shares were
involved in those trading activities, was harmed by them, the Columbia Group has
undertaken to reimburse such fund.
The SEC staff has issued notices to the effect that it has made a preliminary
determination to recommend that the SEC bring civil enforcement actions,
including injunctive proceedings, against Columbia and the Distributor, alleging
that they have violated certain provisions of the federal securities laws. The
Columbia Group believes that those allegations are based principally on the
trading arrangements referred to above. Columbia and the Distributor are engaged
in discussions with the SEC staff in an effort to reach a satisfactory
resolution of these matters. However, there can be no assurance that such a
resolution will be reached. Any potential resolution of these matters may
include, but not be limited to, sanctions, financial penalties, damages or
injunctions regarding Columbia or the Distributor, and structural changes in the
conduct of their business.
Although the Columbia Group does not believe that these regulatory developments
or their resolution will have a material adverse effect on the Columbia Funds,
or on the ability of Columbia and the Distributor to provide services to the
Columbia Funds, there can be no assurance that these matters or any adverse
publicity or other developments resulting from them will not result in increased
redemptions or reduced sales of Columbia Fund shares, which could increase
transactions costs or operating expenses, or other consequences for the Columbia
Funds.
NOTE 8. BUSINESS COMBINATIONS AND MERGERS
FUND MERGERS
As of the end of business on July 12, 2002, the Stein Roe High-Yield Municipals
Fund acquired all the net assets of Liberty High Yield Municipal Fund pursuant
to a plan of reorganization approved by Liberty High Yield Municipal Fund
shareholders on June 28, 2002. All assets of Liberty High Yield Municipal Fund
were transferred to Stein Roe High-Yield Municipals Fund in a tax-free exchange
and shareholders of Liberty High Yield Municipal Fund received shares of Stein
Roe High-Yield Municipals Fund in exchange for their shares as follows:
Stein Roe Liberty High
High-Yield Yield Municipal
Municipals Fund Fund Net Unrealized
Shares Issued Assets Received Depreciation1
- ----------------------------------------------------------
12,328,081 $139,430,597 $(2,726,785)
* Unrealized depreciation is included in the Net Assets Received amount shown
above.
42
December 31, 2003 (Unaudited)
Columbia High Yield Municipal Fund
Net Assets Net Assets
Net Assets of Liberty of Stein Roe
of Stein Roe High Yield High-Yield
High-Yield Municipal Fund Municipals Fund
Municipals Fund Immediately Immediately
Prior to Prior to After
Combination Combination Combination
- ----------------------------------------------------------
$218,007,534 $139,430,597 $357,438,131
CHANGE IN FUND STRUCTURE
Prior to July 15, 2002, the Fund invested substantially all of its assets in the
SR&F High-Yield Municipals Portfolio (the "Portfolio") as part of a
master/feeder structure. The Portfolio allocated income, expenses, realized and
unrealized gains (losses) to its investors on a daily basis, based on methods in
compliance with the Internal Revenue Service. Prior to the reorganization
described above, the Fund's pro-rata share of the Portfolio was distributed to
Stein Roe High-Yield Municipals Fund based on allocation methods in compliance
with the Internal Revenue Service.
43
FINANCIAL HIGHLIGHTS
Columbia High Yield Municipal Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS PERIOD
ENDED YEAR ENDED JUNE 30, ENDED
DECEMBER 31, ---------------------- JUNE 30,
CLASS A SHARES 2003 2003 2002 2001 (A)
====================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 11.26 $ 11.13 $ 11.11
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.28 0.60 0.61(c) 0.58
Net realized and unrealized gain on investments
and futures contracts (0.01) 0.11 0.15(c) 0.01
-------- -------- -------- --------
Total from Investment Operations 0.27 0.71 0.76 0.59
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.26) (0.72) (0.63) (0.57)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.26 $ 11.25 $ 11.26 $ 11.13
Total return (d) 2.48%(e) 6.58% 6.93% 5.42%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 0.97%(g) 1.07% 1.13% 1.06%(g)
Net investment income (f) 5.04%(g) 5.39% 5.41%(c) 5.65%(g)
Portfolio turnover rate 14%(e) 17% 16%(h) 16%(h)
Net assets, end of period (000's) $80,320 $78,335 $ 42 $ 1
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class A shares were initially offered on July 31, 2000. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective July 1, 2001, the Fund adopted the provisions of the AICPA Audit
and Accounting Guide for Investment Companies and began amortizing premium
and accreting discount on all debt securities. The effect of this change for
the year ended June 30, 2002, was to increase the ratio of net investment
income to average net assets from 5.37% to 5.41%. The impact to the net
investment income and the net realized and unrealized gain was less than
$0.01. Per share data and ratios for periods prior to June 30, 2002, have
not been restated to reflect this change in presentation.
(d) Total return at net asset value assuming all distributions reinvested and 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) Portfolio turnover disclosed is for the SR&F High-Yield Municipals
Portfolio.
44
Columbia High Yield Municipal Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS PERIOD
ENDED ENDED
DECEMBER 31, JUNE 30,
CLASS B SHARES 2003 2003 (A)
====================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 11.31
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.24 0.51
Net realized and unrealized gain (loss) on investments and futures contracts (0.01) 0.05
-------- --------
Total from Investment Operations 0.23 0.56
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.22) (0.62)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.26 $ 11.25
Total return (c)(d) 2.09% 5.14%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (e)(f) 1.72% 1.81%
Net investment income (e)(f) 4.29% 4.70%
Portfolio turnover rate 14%(d) 17%
Net assets, end of period (000's) $46,605 $51,292
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class B shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(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.
45
Columbia High Yield Municipal Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS PERIOD
ENDED ENDED
DECEMBER 31, JUNE 30,
CLASS C SHARES 2003 2003 (A)
====================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 11.31
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.25 0.51
Net realized and unrealized gain (loss) on investments and futures contracts (0.01) 0.07
-------- --------
Total from Investment Operations 0.24 0.58
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.23) (0.64)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.26 $ 11.25
Total return (c)(d)(e) 2.17% 5.29%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f)(g) 1.56% 1.67%
Net investment income (f)(g) 4.40% 4.75%
Waiver/reimbursement (g) 0.15% 0.15%
Portfolio turnover rate 14%(e) 17%
Net assets, end of period (000's) $10,904 $ 9,110
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class C shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(d) Had the Distributor not waived 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.
46
Columbia High Yield Municipal Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------------------
CLASS Z SHARES 2003 2003 (A) 2002 2001 2000 1999
====================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 11.26 $ 11.12 $ 11.04 $ 11.71 $ 11.97
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.29(b) 0.63(b) 0.64(b)(c) 0.65(b) 0.65 0.63
Net realized and unrealized
gain (loss) on investments
and futures contracts -- 0.11 0.15(c) 0.08 (0.68) (0.25)
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 0.29 0.74 0.79 0.73 (0.03) 0.38
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.28) (0.75) (0.65) (0.65) (0.64) (0.64)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.26 $ 11.25 $ 11.26 $ 11.12 $ 11.04 $ 11.71
Total return (d) 2.59%(e) 6.82% 7.30% 6.78% (0.16)% 3.18%(f)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) 0.77%(h) 0.86% 0.88% 0.81% 0.78% 0.77%
Net investment income (g) 5.23%(h) 5.59% 5.66%(c) 5.86% 5.82% 5.26%
Portfolio turnover rate 14%(e) 17% 16%(i) 16%(i) 14%(i) 19%(i)
Net assets, end of period (000's) $313,524 $244,784 $213,271 $224,950 $253,787 $297,874
- ------------------------------------------------------------------------------------------------------------------------------------
(a) On July 15, 2002, the existing Fund Class S shares were redesignated Class Z
shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective July 1, 2001, the Fund adopted the provisions of the AICPA Audit
and Accounting Guide for Investment Companies and began amortizing premium
and accreting discount on all debt securities. The effect of this change for
the year ended June 30, 2002, was to increase the ratio of net investment
income to average net assets from 5.62% to 5.66%. The impact to the net
investment income and the net realized and unrealized gain was less than
$0.01. Per share data and ratios for periods prior to June 30, 2002, have
not been restated to reflect this change in presentation.
(d) Total return at net asset value assuming all distributions reinvested.
(e) Not annualized.
(f) 0.50% of the return is attributable to a one time revaluation of portfolio
security reflecting the restructuring of this security. Absent this
revaluation, total return would have been 2.68%.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Portfolio turnover disclosed is for the SR&F High Yield Municipals
Portfolio.
47
IMPORTANT INFORMATION ABOUT THIS REPORT
Columbia High Yield Municipal Fund
TRANSFER AGENT The fund mails one shareholder report
Columbia Funds Services, Inc. to each shareholder address. If you
P.O. Box 8081 would like more than one report,
Boston MA 02266-8081 please call shareholder services at
800.345.6611 800-345-6611 and additional reports
will be sent to you.
DISTRIBUTOR
Columbia Funds Distributor, Inc. This report has been prepared for
One Financial Center shareholders of Columbia High Yield
Boston MA 02111 Municipal Fund. This report may also
be used as sales literature when
INVESTMENT ADVISOR preceded or accompanied by the current
Columbia Management Advisors, Inc. prospectus which provides details of
100 Federal Street sales charges, investment objectives
Boston MA 02111 and operating policies of the fund
and with the most recent copy of the
Columbia Funds Performance Update.
A description of the policies and
procedures that the fund uses to
determine how to vote proxies relating
to its portfolio securities is
available (i) without charge, upon
request, by calling 800-345-6611 and
(ii) on the Securities and Exchange
Commissionwebsite at
http://www.sec.gov.
48
COLUMBIA FUNDS
Columbia High Yield Municipal Fund
LARGE GROWTH Columbia Common Stock
Columbia Growth
Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II
Columbia Young Investor
------------------------------------
LARGE VALUE Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value
------------------------------------
MIDCAP GROWTH Columbia Acorn-Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive
Growth
------------------------------------
MIDCAP VALUE Columbia Dividend Income
Columbia Mid Cap
Columbia Strategic Investor
------------------------------------
SMALL GROWTH Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
------------------------------------
SMALL VALUE Columbia Small Cap
Columbia Small Cap Value
------------------------------------
BALANCED Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
------------------------------------
SPECIALTY Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
------------------------------------
TAXABLE FIXED-INCOME Columbia Contrarian Income
Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income
Columbia Intermediate Bond
Columbia Intermediate Government
Income
Columbia Quality Plus Bond
Columbia Short Term Bond
Columbia Strategic Income
------------------------------------
FLOATING RATE Columbia Floating Rate
Columbia Floating Rate Advantage
------------------------------------
TAX EXEMPT Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt
Bond
Columbia Managed Municipals
Columbia National Municipal Bond
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
49
Columbia High Yield Municipal Fund
SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt
Columbia Connecticut Intermediate
Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate
Municipal Bond
Columbia Massachusetts Intermediate
Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate
Municipal Bond
Columbia New York Intermediate
Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate
Municipal Bond
Columbia Rhode Island Intermediate
Municipal Bond
------------------------------------
MONEY MARKET Columbia Money Market
Columbia Municipal Money Market
INTERNATIONAL/GLOBAL Columbia Acorn International
Columbia Acorn International Select
Columbia Europe
Columbia Global Equity
Columbia International Stock
Columbia Newport Asia Pacific
Columbia Newport Greater China
Columbia Newport Tiger
------------------------------------
Index Funds Columbia Large Company Index
Columbia Small Company Index
Columbia U.S. Treasury Index
Columbia funds are offered only by
prospectus. Please see your
financial advisor for a prospectus,
which describes in detail fund
objectives, investment policies,
risks, sales charges, fees,
liquidity and other matters of
interest. Please read the prospectus
carefully before you invest or send
money.
For complete product information on
any Columbia fund, visit our website
at www.columbiafunds.com.
Columbia Management Group and
Columbia Management refer
collectively to the various
investment advisory subsidiaries of
Columbia Management Group, including
Columbia Management Advisors, Inc.,
the registered investment advisor,
and to Columbia Funds Distributor,
Inc.
50
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photo of: hands on keyboard
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia High Yield Municipal Fund Semiannual Report, December 31, 2003
logo:columbia funds
ColumbiaFunds
A Member of Columbia Management Group
(c) 2004 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
752-03/734Q-1203 (02/04) 04/0216
COLUMBIA MANAGED
MUNICIPALS FUND
Semiannual Report
December 31, 2003
WE ARE COLUMBIA FUNDS!
Inside - Management's discussion of the changes effective October 13, 2003.
PRESIDENT'S MESSAGE Columbia Managed Municipals Fund
[Joseph R. Palombo Photo]
Table of Contents
Fund Profile................................................ 1
Performance Information..................................... 2
Economic Update............................................. 3
Portfolio Manager's Report.................................. 4
Financial Statements........................................ 6
Investment Portfolio...................................... 7
Statement of Assets and Liabilities....................... 24
Statement of Operations................................... 25
Statement of Changes in Net Assets........................ 26
Notes to Financial Statements............................. 28
Financial Highlights...................................... 33
Important Information About This Report..................... 37
Columbia Funds.............................................. 38
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
- ---------------------------
Not FDIC May Lose Value
Insured ----------------
No Bank Guarantee
- ---------------------------
Dear Shareholder:
As you know, your fund has long been associated with a
larger investment management organization. In the 1990s, it
was associated with 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 Corporation,
which you know as Columbia Management Group (CMG).
In 2003, 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.
For example, Liberty Managed Municipals Fund was changed to Columbia Managed
Municipals Fund. We have also modified certain fund names that existed under
both the Liberty and Columbia brands. 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, portfolio manager Kim Campbell discusses 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
FUND PROFILE Columbia Managed Municipals Fund
Summary
- - For the six-month period ended December 31, 2003, the fund's class A shares
returned 0.64% without sales charge.
- - The fund's return lagged that of its benchmark as well as the average return
of its peer group, the Lipper General Municipal Debt Fund Category.
- - We believe that the fund's longer-than-average duration hurt performance as
all but the short-term interest rates rose slightly during the period.
Objective
Seeks high level of total return consisting of current income exempt from
federal income
tax and opportunities for
capital appreciation
Total Net Assets
$467.1 million
Class A Shares Lehman Brothers Municipal Bond Index
0.64% 1.45%
[Arrow Graphics]
[Fund Ratings Graphic]
The information below gives you a snapshot of your fund at the end of the
reporting period. Because your fund is actively managed, there is no guarantee
that breakdowns, sectors and percentages will be maintained in the future.
Quality breakdown as of 12/31/03 (%)
AAA 66.3
- ---------------------------------------
AA 9.0
- ---------------------------------------
A 8.8
- ---------------------------------------
BBB 7.2
- ---------------------------------------
BB 0.1
- ---------------------------------------
B 0.6
- ---------------------------------------
CCC 0.3
- ---------------------------------------
CC 0.3
- ---------------------------------------
Non-rated 6.7
- ---------------------------------------
Cash equivalent 0.7
- ---------------------------------------
Top 5 sectors as of 12/31/03 (%)
Local general obligations 14.8
- ---------------------------------------------
State general obligations 11.8
- ---------------------------------------------
Joint power authority 10.3
- ---------------------------------------------
Refunded/escrowed 10.1
- ---------------------------------------------
Water & sewer 7.6
- ---------------------------------------------
Maturity breakdown as of 12/31/03 (%)
[Bar Chart]
0-1 years 0.0
1-3 years 0.4
3-5 years 4.3
5-7 years 9.0
7-10 years 12.9
10-15 years 40.3
15-20 years 18.0
20-25 years 6.5
25+ years 7.9
Cash equivalent 0.7
Quality and maturity breakdowns are calculated as a percentage of total
investments, including short-term obligations. Sector breakdowns are calculated
as a percentage of net assets. Ratings shown in the quality breakdown represent
the highest rating assigned to a particular bond by one of the following
nationally-recognized rating agencies: Standard & Poor's Corporation, Moody's
Investors Service, Inc. or Fitch Investors Service, Inc. Maturity breakdown is
based on each security's effective maturity, which reflects pre-refundings,
mandatory puts and other conditions that affect a bond's maturity.
(C) 2004 Morningstar, Inc. All Rights Reserved. The information contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2) may
not be copied or distributed; and (3) is not warranted to be accurate, complete
or timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past performance is
no guarantee of future results.
The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data are gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
12/31/2003.
1
PERFORMANCE INFORMATION Columbia Managed Municipals Fund
Performance of a $10,000 investment
01/01/94 - 12/31/03
sales charge: without with
- ---------------------------------
Class A 17,192 16,370
- ---------------------------------
Class B 17,045 17,045
- ---------------------------------
Class C 17,104 17,104
- ---------------------------------
Class Z 17,235 n/a
- ---------------------------------
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares may be worth
more or less than the original cost. Please visit www.columbiafunds.com for
daily and most recent month-end performance updates.
Value of a $10,000 investment 01/01/94 - 12/31/03
[Performance Graph]
Class A without sales charge Class A with sales charge
10000.00 9525.00
12/01/1993 - 12/31/1993 10119.00 9638.00
01/01/1994 - 01/31/1994 9852.00 9384.00
02/01/1994 - 02/28/1994 9476.00 9025.00
03/01/1994 - 03/31/1994 9520.00 9068.00
04/01/1994 - 04/30/1994 9598.00 9142.00
05/01/1994 - 05/31/1994 9556.00 9102.00
06/01/1994 - 06/30/1994 9690.00 9229.00
07/01/1994 - 07/31/1994 9726.00 9264.00
08/01/1994 - 08/31/1994 9595.00 9139.00
09/01/1994 - 09/30/1994 9442.00 8993.00
10/01/1994 - 10/31/1994 9288.00 8847.00
11/01/1994 - 11/30/1994 9461.00 9011.00
12/01/1994 - 12/31/1994 9737.00 9274.00
01/01/1995 - 01/31/1995 9974.00 9501.00
02/01/1995 - 02/28/1995 10068.00 9590.00
03/01/1995 - 03/31/1995 10058.00 9580.00
04/01/1995 - 04/30/1995 10350.00 9858.00
05/01/1995 - 05/31/1995 10236.00 9750.00
06/01/1995 - 06/30/1995 10309.00 9819.00
07/01/1995 - 07/31/1995 10428.00 9933.00
08/01/1995 - 08/31/1995 10511.00 10011.00
09/01/1995 - 09/30/1995 10678.00 10170.00
10/01/1995 - 10/31/1995 10903.00 10385.00
11/01/1995 - 11/30/1995 11035.00 10511.00
12/01/1995 - 12/31/1995 11108.00 10580.00
01/01/1996 - 01/31/1996 10972.00 10451.00
02/01/1996 - 02/29/1996 10792.00 10280.00
03/01/1996 - 03/31/1996 10756.00 10245.00
04/01/1996 - 04/30/1996 10768.00 10257.00
05/01/1996 - 05/31/1996 10878.00 10362.00
06/01/1996 - 06/30/1996 10977.00 10456.00
07/01/1996 - 07/31/1996 10965.00 10444.00
08/01/1996 - 08/31/1996 11138.00 10609.00
09/01/1996 - 09/30/1996 11277.00 10741.00
10/01/1996 - 10/31/1996 11500.00 10954.00
11/01/1996 - 11/30/1996 11452.00 10908.00
12/01/1996 - 12/31/1996 11465.00 10921.00
01/01/1997 - 01/31/1997 11575.00 11026.00
02/01/1997 - 02/28/1997 11411.00 10869.00
03/01/1997 - 03/31/1997 11500.00 10954.00
04/01/1997 - 04/30/1997 11681.00 11126.00
05/01/1997 - 05/31/1997 11809.00 11248.00
06/01/1997 - 06/30/1997 12160.00 11582.00
07/01/1997 - 07/31/1997 12030.00 11458.00
08/01/1997 - 08/31/1997 12190.00 11611.00
09/01/1997 - 09/30/1997 12257.00 11674.00
10/01/1997 - 10/31/1997 12322.00 11736.00
11/01/1997 - 11/30/1997 12521.00 11926.00
12/01/1997 - 12/31/1997 12641.00 12041.00
01/01/1998 - 01/31/1998 12622.00 12023.00
02/01/1998 - 02/28/1998 12610.00 12011.00
03/01/1998 - 03/31/1998 12554.00 11958.00
04/01/1998 - 04/30/1998 12758.00 12152.00
05/01/1998 - 05/31/1998 12797.00 12189.00
06/01/1998 - 06/30/1998 12825.00 12216.00
07/01/1998 - 07/31/1998 13032.00 12413.00
08/01/1998 - 08/31/1998 13182.00 12556.00
09/01/1998 - 09/30/1998 13140.00 12516.00
10/01/1998 - 10/31/1998 13179.00 12553.00
11/01/1998 - 11/30/1998 13209.00 12582.00
12/01/1998 - 12/31/1998 13378.00 12743.00
01/01/1999 - 01/31/1999 13275.00 12645.00
02/01/1999 - 02/28/1999 13275.00 12645.00
03/01/1999 - 03/31/1999 13329.00 12695.00
04/01/1999 - 04/30/1999 13227.00 12599.00
05/01/1999 - 05/31/1999 13012.00 12394.00
06/01/1999 - 06/30/1999 13057.00 12437.00
07/01/1999 - 07/31/1999 12928.00 12314.00
08/01/1999 - 08/31/1999 12897.00 12284.00
09/01/1999 - 09/30/1999 12737.00 12132.00
10/01/1999 - 10/31/1999 12838.00 12228.00
11/01/1999 - 11/30/1999 12755.00 12150.00
12/01/1999 - 12/31/1999 12662.00 12061.00
01/01/2000 - 01/31/2000 12836.00 12226.00
02/01/2000 - 02/29/2000 13109.00 12487.00
03/01/2000 - 03/31/2000 13013.00 12395.00
04/01/2000 - 04/30/2000 12905.00 12292.00
05/01/2000 - 05/31/2000 13255.00 12626.00
06/01/2000 - 06/30/2000 13453.00 12814.00
07/01/2000 - 07/31/2000 13695.00 13044.00
08/01/2000 - 08/31/2000 13569.00 12924.00
09/01/2000 - 09/30/2000 13724.00 13072.00
10/01/2000 - 10/31/2000 13877.00 13218.00
11/01/2000 - 11/30/2000 14350.00 13669.00
12/01/2000 - 12/31/2000 14432.00 13747.00
01/01/2001 - 01/31/2001 14519.00 13829.00
02/01/2001 - 02/28/2001 14628.00 13933.00
03/01/2001 - 03/31/2001 14253.00 13576.00
04/01/2001 - 04/30/2001 14443.00 13757.00
05/01/2001 - 05/31/2001 14600.00 13907.00
06/01/2001 - 06/30/2001 14970.00 14259.00
07/01/2001 - 07/31/2001 15341.00 14612.00
08/01/2001 - 08/31/2001 15189.00 14468.00
09/01/2001 - 09/30/2001 15464.00 14729.00
10/01/2001 - 10/31/2001 15130.00 14411.00
11/01/2001 - 11/30/2001 14895.00 14188.00
12/01/2001 - 12/31/2001 15181.00 14460.00
01/01/2002 - 01/31/2002 15417.00 14684.00
02/01/2002 - 02/28/2002 14996.00 14284.00
03/01/2002 - 03/31/2002 15363.00 14634.00
04/01/2002 - 04/30/2002 15454.00 14720.00
05/01/2002 - 05/31/2002 15632.00 14889.00
06/01/2002 - 06/30/2002 15811.00 15060.00
07/01/2002 - 07/31/2002 15974.00 15215.00
08/01/2002 - 08/31/2002 16366.00 15588.00
09/01/2002 - 09/30/2002 15965.00 15206.00
10/01/2002 - 10/31/2002 15859.00 15106.00
11/01/2002 - 11/30/2002 16310.00 15535.00
12/01/2002 - 12/31/2002 16155.00 15387.00
01/01/2003 - 01/30/2003 16520.00 15735.00
02/01/2003 - 02/28/2003 16472.00 15690.00
03/01/2003 - 03/31/2003 16673.00 15881.00
04/01/2003 - 04/30/2003 17255.00 16435.00
05/01/2003 - 05/31/2003 17091.00 16279.00
06/01/2003 - 06/30/2003 16199.00 15429.00
07/01/2003 - 07/31/2003 16364.00 15587.00
08/01/2003 - 08/31/2003 16987.00 16181.00
09/01/2003 - 09/30/2003 16823.00 16024.00
10/01/2003 - 10/31/2003 17065.00 16254.00
11/01/2003 - 11/30/2003 17192.00 16370.00
Lehman Brothers Municipal Bond Index
10000.00
12/01/1993 - 12/31/1993 10114.00
01/01/1994 - 01/31/1994 9852.00
02/01/1994 - 02/28/1994 9451.00
03/01/1994 - 03/31/1994 9531.00
04/01/1994 - 04/30/1994 9614.00
05/01/1994 - 05/31/1994 9556.00
06/01/1994 - 06/30/1994 9731.00
07/01/1994 - 07/31/1994 9765.00
08/01/1994 - 08/31/1994 9621.00
09/01/1994 - 09/30/1994 9450.00
10/01/1994 - 10/31/1994 9279.00
11/01/1994 - 11/30/1994 9483.00
12/01/1994 - 12/31/1994 9754.00
01/01/1995 - 01/31/1995 10038.00
02/01/1995 - 02/28/1995 10153.00
03/01/1995 - 03/31/1995 10166.00
04/01/1995 - 04/30/1995 10490.00
05/01/1995 - 05/31/1995 10399.00
06/01/1995 - 06/30/1995 10497.00
07/01/1995 - 07/31/1995 10631.00
08/01/1995 - 08/31/1995 10698.00
09/01/1995 - 09/30/1995 10853.00
10/01/1995 - 10/31/1995 11033.00
11/01/1995 - 11/30/1995 11139.00
12/01/1995 - 12/31/1995 11224.00
01/01/1996 - 01/31/1996 11147.00
02/01/1996 - 02/29/1996 11005.00
03/01/1996 - 03/31/1996 10974.00
04/01/1996 - 04/30/1996 10969.00
05/01/1996 - 05/31/1996 11089.00
06/01/1996 - 06/30/1996 11189.00
07/01/1996 - 07/31/1996 11186.00
08/01/1996 - 08/31/1996 11343.00
09/01/1996 - 09/30/1996 11471.00
10/01/1996 - 10/31/1996 11681.00
11/01/1996 - 11/30/1996 11632.00
12/01/1996 - 12/31/1996 11654.00
01/01/1997 - 01/31/1997 11761.00
02/01/1997 - 02/28/1997 11605.00
03/01/1997 - 03/31/1997 11702.00
04/01/1997 - 04/30/1997 11879.00
05/01/1997 - 05/31/1997 12006.00
06/01/1997 - 06/30/1997 12339.00
07/01/1997 - 07/31/1997 12223.00
08/01/1997 - 08/31/1997 12368.00
09/01/1997 - 09/30/1997 12447.00
10/01/1997 - 10/31/1997 12521.00
11/01/1997 - 11/30/1997 12704.00
12/01/1997 - 12/31/1997 12835.00
01/01/1998 - 01/31/1998 12838.00
02/01/1998 - 02/28/1998 12850.00
03/01/1998 - 03/31/1998 12792.00
04/01/1998 - 04/30/1998 12994.00
05/01/1998 - 05/31/1998 13045.00
06/01/1998 - 06/30/1998 13078.00
07/01/1998 - 07/31/1998 13280.00
08/01/1998 - 08/31/1998 13446.00
09/01/1998 - 09/30/1998 13446.00
10/01/1998 - 10/31/1998 13493.00
11/01/1998 - 11/30/1998 13527.00
12/01/1998 - 12/31/1998 13688.00
01/01/1999 - 01/31/1999 13628.00
02/01/1999 - 02/28/1999 13647.00
03/01/1999 - 03/31/1999 13681.00
04/01/1999 - 04/30/1999 13602.00
05/01/1999 - 05/31/1999 13406.00
06/01/1999 - 06/30/1999 13454.00
07/01/1999 - 07/31/1999 13346.00
08/01/1999 - 08/31/1999 13352.00
09/01/1999 - 09/30/1999 13208.00
10/01/1999 - 10/31/1999 13348.00
11/01/1999 - 11/30/1999 13247.00
12/01/1999 - 12/31/1999 13189.00
01/01/2000 - 01/31/2000 13342.00
02/01/2000 - 02/29/2000 13633.00
03/01/2000 - 03/31/2000 13553.00
04/01/2000 - 04/30/2000 13482.00
05/01/2000 - 05/31/2000 13839.00
06/01/2000 - 06/30/2000 14032.00
07/01/2000 - 07/31/2000 14248.00
08/01/2000 - 08/31/2000 14174.00
09/01/2000 - 09/30/2000 14328.00
10/01/2000 - 10/31/2000 14437.00
11/01/2000 - 11/30/2000 14794.00
12/01/2000 - 12/31/2000 14940.00
01/01/2001 - 01/31/2001 14988.00
02/01/2001 - 02/28/2001 15123.00
03/01/2001 - 03/31/2001 14960.00
04/01/2001 - 04/30/2001 15121.00
05/01/2001 - 05/31/2001 15222.00
06/01/2001 - 06/30/2001 15448.00
07/01/2001 - 07/31/2001 15703.00
08/01/2001 - 08/31/2001 15649.00
09/01/2001 - 09/30/2001 15835.00
10/01/2001 - 10/31/2001 15702.00
11/01/2001 - 11/30/2001 15553.00
12/01/2001 - 12/31/2001 15822.00
01/01/2002 - 01/31/2002 16012.00
02/01/2002 - 02/28/2002 15698.00
03/01/2002 - 03/31/2002 16004.00
04/01/2002 - 04/30/2002 16102.00
05/01/2002 - 05/31/2002 16273.00
06/01/2002 - 06/30/2002 16483.00
07/01/2002 - 07/31/2002 16681.00
08/01/2002 - 08/31/2002 17046.00
09/01/2002 - 09/30/2002 16763.00
10/01/2002 - 10/31/2002 16692.00
11/01/2002 - 11/30/2002 17045.00
12/01/2002 - 12/31/2002 17002.00
01/01/2003 - 01/30/2003 17240.00
02/01/2003 - 02/28/2003 17250.00
03/01/2003 - 03/31/2003 17364.00
04/01/2003 - 04/30/2003 17771.00
05/01/2003 - 05/31/2003 17696.00
06/01/2003 - 06/30/2003 17077.00
07/01/2003 - 07/31/2003 17205.00
08/01/2003 - 08/31/2003 17710.00
09/01/2003 - 09/30/2003 17622.00
10/01/2003 - 10/31/2003 17805.00
11/01/2003 - 11/30/2003 17951.00
All results shown assume reinvestment of distributions. The graph and table do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The Lehman Brothers Municipal
Bond Index is a broad-based, unmanaged index that tracks the performance of
high-yield bonds. 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.
Average annual total return as of 12/31/03 (%)
Share class A B
- ----------------------------------------------------------------------------------------------------------------
Inception date 11/1/02 11/1/02
- ----------------------------------------------------------------------------------------------------------------
Sales charge without with without with
- ----------------------------------------------------------------------------------------------------------------
6-month
(cumulative) 0.64 -4.14 0.27 -4.58
- ----------------------------------------------------------------------------------------------------------------
1-year 5.47 0.46 4.69 -0.29
- ----------------------------------------------------------------------------------------------------------------
5-year 5.42 4.40 5.24 4.92
- ----------------------------------------------------------------------------------------------------------------
10-year 5.57 5.05 5.48 5.48
- ----------------------------------------------------------------------------------------------------------------
Share class C Z
- -------------------- --------------------------------------------------------------------------
Inception date 11/1/02 2/23/77
- -------------------- --------------------------------------------------------------------------
Sales charge without with without
- -------------------- --------------------------------------------------------------------------
6-month
(cumulative) 0.42 -0.55 0.73
- ----------------------------------------------------------------------------------------------------------------
1-year 5.00 4.01 5.66
- ----------------------------------------------------------------------------------------------------------------
5-year 5.31 5.31 5.47
- ----------------------------------------------------------------------------------------------------------------
10-year 5.51 5.51 5.59
- ----------------------------------------------------------------------------------------------------------------
All results shown assume reinvestment of distributions. The "with sales charge"
returns include the maximum 4.75% charge for class A shares, the appropriate
class B contingent deferred sales charge for the holding period after purchase
as follows: through 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 for different
share classes will vary based on differences in sales charges and fees
associated with each class.
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.
Class A, B and C share (newer class shares) performance information includes
returns of the fund's class Z shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. These class Z share
returns are not restated to reflect any expense differential (e.g., rule 12b-1
fees) between class Z shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of class A, B and C shares would have been lower.
2
ECONOMIC UPDATE Columbia Managed Municipals Fund
After struggling for two years to maintain
solid, forward movement, the US economy steamed
ahead during the six-month period ended December
31, 2003. The Federal Reserve Board's efforts to
stimulate the economy through low short-term
interest rates were finally rewarded, but the
significant upswing in growth was the result of
a combination of factors. A sizeable tax package
gave disposable income a boost. Income taxes
fell across all tax brackets and many taxpayers
received rebate checks during the summer months.
Corporate profits rose sharply, and orders for
durable goods exceeded expectations late in the
period. Consumer confidence continued to climb,
although not without an occasional setback.
Generally speaking, consumer spending increased
and spending was strong going into the holiday
season.
Early in the period, economists began to become
optimistic that growth for the third quarter of
2003 would reflect this renewed vigor. Yet, no
one seemed prepared for how extraordinary that
growth might be. When gross domestic product
(GDP) for the third quarter was reported at
7.2%, then revised upward to 8.2%, it was clear
that the economy was firing on all cylinders.
The business sector had finally kicked into
gear. Industrial production rose in the second
half of 2003 and business spending--especially
on technology-related items--showed strength.
Even the labor market improved by year end.
After unemployment peaked at 6.4% in June, it
declined to 5.9%.
The US stock market, which had come to life at
the end of March, headed sharply higher in the
second half of 2003. The S&P 500 Index returned
15.14% for the six-month period as all major
sectors of the market benefited from renewed
investor enthusiasm and rising corporate
profits. Technology and consumer stocks were the
strongest sectors, but telecommunications and
health care picked up in the last months of the
period.
The US bond market experienced extraordinary
volatility as interest rates fell early in the
period, rose sharply as the economy improved and
then came back down in the final months of the
reporting period. High yield bonds continued to
lead the fixed income markets. The CSFB High
Yield Index returned 9.05% for the six-month
period compared to a negative .53% return for
the Lehman Government/Credit Bond Index.
Treasury and mortgage bonds suffered from the
shift in interest rates early in the six-month
period, but picked up some ground in the final
month of the period. Municipal bonds also held
on to modest gains. The Lehman Brothers
Municipal Bond Index returned 1.45% for the
six-month period.
Money market fund yields fell below 1%,
reflecting historically low short-term interest
rates. The Investment Company Institute, which
tracks the movement of assets in and out of
mutual funds, reported that money continued to
flow out of money market funds during the year
as investors sought alternatives to the low
yields offered by short-term cash equivalents.
Net new cash flow to money market funds turned
negative in 2002 for the first time since 1993.
3
PORTFOLIO MANAGER'S REPORT
Columbia Managed Municipals Fund
Net asset value per share
as of 12/31/03 ($)
Class A 9.10
- ----------------------------------------------------------------------
Class B 9.10
- ----------------------------------------------------------------------
Class C 9.10
- ----------------------------------------------------------------------
Class Z 9.10
- ----------------------------------------------------------------------
Distributions declared per share 07/01/03 - 12/31/03 ($)
Class A 0.33
- ----------------------------------------------------------------------
Class B 0.30
- ----------------------------------------------------------------------
Class C 0.31
- ----------------------------------------------------------------------
Class Z 0.34
- ----------------------------------------------------------------------
A portion of the fund's income may be subject to the alternative minimum tax.
The fund may at times purchase municipal securities at a discount. Some or all
of this discount may be included in the fund's ordinary income, and is taxable
when distributed.
SEC yields as of 12/31/03 (%)
Class A 3.26
- ----------------------------------------------------------------------
Class B 2.67
- ----------------------------------------------------------------------
Class C 2.97
- ----------------------------------------------------------------------
Class Z 3.63
- ----------------------------------------------------------------------
The 30-day SEC yields reflect the portfolio earning power net of expenses,
expressed as an annualized percentage of public offering price per share.
Taxable equivalent SEC yields as of 12/31/03 (%)
Class A 5.02
- ----------------------------------------------------------------------
Class B 4.11
- ----------------------------------------------------------------------
Class C 4.57
- ----------------------------------------------------------------------
Class Z 5.58
- ----------------------------------------------------------------------
Taxable-equivalent SEC yields are based on the maximum effective 35% federal and
state income tax rate. This tax rate does not reflect the phase out of
exemptions or the reduction of otherwise allowable deductions that occur when
adjusted gross income exceeds certain levels.
For the six-month period ended December 31, 2003, Columbia Managed Municipals
Fund class A shares returned 0.64% without sales charge. The fund underperformed
its benchmark, the Lehman Brothers Municipal Bond Index, which returned 1.45%
for the same period. The fund also underperformed the 1.33% average return of
the Lipper General Municipal Debt Fund Category.(1) The fund's duration, which
was longer than that of its peers, detracted from performance as municipal bond
yields rose and their prices fell. The fund also was hampered by its holdings of
ten-year bonds, because yields in this maturity range tended to rise more than
longer maturities. Although the fund's concentration on zero-coupon and
non-callable bonds helped performance as interest rates fell in the second
quarter of 2003, this position hurt performance as yields on most municipal
bonds ended the six-month period slightly higher.
Economic gains pushed bond prices down
The US economy picked up the pace of growth over the past six months. In the
beginning of the period, consumer confidence and spending generally increased.
Businesses continued to increase their capital spending. This economic upswing
raised concerns about inflation early in the summer. As a result, yields on
municipal and Treasury securities rose and their prices declined, because yields
and prices move in opposite directions. Yet, this growth did not give rise to
inflationary pressures and combined with the uncertainty of job creation,
economic expectations cooled. As a result, municipal yields generally declined
from the middle of the period, but closed the period slightly higher than where
they began.
High-yield bonds benefited the fund
The fund's investments in high-yield bonds contributed positively to
performance. Historically, high-yield bonds have been less sensitive to interest
rate changes than higher quality bonds, and that pattern was repeated during the
period. The fund's airline bonds also performed well as that industry's
performance improved along with the economy and an increase in travel.
We continued to own intermediate maturity (10-20 year) bonds, which provided the
potential for good returns. In addition, we purchased higher-yielding municipal
bonds, which have the potential to add income and diversity to the portfolio.
(1) Lipper Inc., a widely respected data provider in the industry, calculates an
average total return for mutual funds with similar investment objectives as
the fund.
4
- --------------------------------------------------------------------------------
Columbia Managed Municipals Fund
Duration is a measure, expressed in years, of interest-rate sensitivity. We use
duration as a tactical tool to anticipate or respond to interest rate changes.
Because bond prices move in the opposite direction of interest rates, we lower
duration when we expect interest rates to rise. We raise duration when we expect
interest rates to fall. These adjustments provide the potential to benefit
performance. If we are wrong and interest rates rise after we lengthen duration
or fall after we shorten duration, fund performance could be hurt.
Monitoring interest rates for the period ahead
If the economy continues to recover gradually and inflationary pressures are
muted, we expect interest rates to stay relatively low. Since consumer spending
did not decrease sharply during the economic slowdown, the strong demand that
typically fuels a recovery period has not been available to sustain a strong
economic expansion. As a result, we believe that economic growth could be
uneven, restrained by limited pricing power, global competition, high
productivity and a reluctance on the part of business to hire permanent
employees. However, if the pace of growth is greater than expected, interest
rates could move higher in anticipation of inflationary pressures. As usual, we
will monitor and manage the fund's sensitivity to interest rate changes. We
expect to focus on intermediate-maturity bonds with structures that we believe
offer potential for good return. In addition, we will look to purchase
higher-yielding bonds on a selective basis.
[Kimberly A. Kimberly A. Campbell has managed the Columbia
Campbell Photo] Managed Municipals Fund since December 2001.
From 1995 to 2001, Kim was the chief trader
for municipal investments of the advisor. She
has 23 years of experience in the municipal
investment industry.
/s/ KIMBERLY A. CAMPBELL
Tax-exempt investing offers current tax-free income, but it also involves
certain risks. Investing in high yield bonds involves greater risk of loss due
to credit deterioration than higher-quality bonds. The value of the fund will be
affected by interest rate changes and the creditworthiness of issues held in the
fund. The manager seeks to identify opportunities and attempts to react quickly
to market changes.
5
FINANCIAL STATEMENTS Columbia Managed Municipals Fund
December 31, 2003 (Unaudited)
A guide to understanding the fund's financial
statements
- --------------------------------------------------------------------------------
Investment Portfolio A list of all of the fund's holdings and their
market value as of the last day of the reporting
period. To show areas of concentration and
diversification, portfolio holdings are
organized by type of asset, industry and country
or geographic region (if applicable).
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
This statement shows the fund's net assets and
share price for each share class. Net assets are
calculated by subtracting all the fund's
liabilities (including any unpaid expenses) from
the total of the fund's investment and
non-investment assets. The share price for each
class is calculated by dividing net assets for
that class by the number of outstanding shares
in that class.
- --------------------------------------------------------------------------------
Statement of Operations This statement details both the type of income
earned by the fund and the operating and
non-operating expenses charged to the fund. The
Statement of Operations also shows any net gain
or loss the fund realized on the sales of its
holdings during the period, as well as any
unrealized gains or losses over the reporting
period. The total of these results represents
the fund's net increase or decrease in net
assets from operations.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
This statement shows how the fund's net assets
were affected by its operations results,
distributions to shareholders and changes in the
number of fund shares. The Statement of Changes
in Net Assets also reconciles changes in the
number of shares outstanding.
- --------------------------------------------------------------------------------
Financial Highlights The financial highlights provide an overview of
the fund's investment results, including
per-share analytics, such as net investment
income or loss from operations and
distributions; ratios of expenses and net
investment income to average net assets. The
financial highlights also detail the fund's
portfolio turnover rate, which is a measure of
trading activity. A separate table is provided
for each share class.
- --------------------------------------------------------------------------------
Notes to Financial Statements These notes disclose information regarding
certain fund background information, significant
accounting policies of the fund, including
security valuation and income accruals and
related party transactions.
6
INVESTMENT PORTFOLIO Columbia Managed Municipals Fund
December 31, 2003 (Unaudited)
Municipal Bonds - 97.6%
EDUCATION - 3.8% Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
Education - 3.1% CA State Educational Facilities Authority, Loyola
Marymount University,
Series 2001 A,
(a), 10/01/20 1,000,000 442,300
MA State Health & Educational Facilities
Authority, Mass Institute of Technology,
Series 2002 K,
5.500%, 07/01/22 1,000,000 1,154,830
MI State, University of Mississippi Medical
Center,
Series 1998 B,
5.500%, 12/01/23 1,000,000 1,132,010
OH State, University of Akron,
Series 1999,
5.750%, 01/01/12 1,000,000 1,141,770
OH State Higher Educational Facilities Reserve,
Case Western Reserve University,
Series 1994,
6.250%, 10/01/17 4,340,000 5,375,220
SC Berkeley County School District, Installment
Lease, Securing Assets for Education,
Series 2003,
5.000%, 12/01/28 1,000,000 995,580
VA State College Building Authority, Washington
and Lee University,
Series 2001,
5.375%, 01/01/21 2,000,000 2,278,260
WV State University,
Series 2000 A,
(a), 04/01/18 3,800,000 1,957,380
--------------
Education Total 14,477,350
-------------------------------------------------------------------------------
Student Loan - 0.7% ME State Educational Loan Marketing Corp.,
Series 1994 B-1,
6.500%, 11/01/09 3,000,000 3,345,780
--------------
Student Loan Total 3,345,780
--------------
EDUCATION TOTAL 17,823,130
HEALTHCARE - 8.3%
- ------------------------------------------ -------------------------------------------------------------------------------
Congregate Care Retirement - 0.2% FL Capital Project Finance Authority, Glenridge on
Palmer Ranch,
Series 2002 A,
8.000%, 06/01/32 500,000 516,895
OH Hamilton County Health Care Facilities Revenue,
Twin Towers,
Series 1998 A,
5.125%, 10/01/18 500,000 470,105
--------------
Congregate Care Retirement Total 987,000
-------------------------------------------------------------------------------
See notes to investment portfolio. 7
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
HEALTHCARE - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
Health Services - 0.5% MA State Development Finance Agency, Boston
Biomedical Research Institute,
Series 1999,
5.650%, 02/01/19 310,000 300,805
WI State Health & Educational Facilities
Authority, Marshfield Clinic,
Series 1999,
6.250%, 02/15/29 1,600,000 1,826,624
--------------
Health Services Total 2,127,429
-------------------------------------------------------------------------------
Hospital - 6.8% Abag Finance Authority for Nonprofit Corps., San
Diego Hospital Association,
Series 2003 C,
5.375%, 03/01/20 1,320,000 1,322,455
FL Hillsborough County Industrial Development
Authority, Tampa General Hospital Project,
Series 2003 A:
5.000%, 10/01/18 825,000 824,084
5.250%, 10/01/24 800,000 788,008
FL West Orange Healthcare District,
Series 2001 A,
5.650%, 02/01/22 1,050,000 1,062,841
ID State Health Facilities Authority Revenue,
Intermountain Health Care Hospitals, Inc.,
Series 1992,
6.650%, 02/15/21 1,200,000 1,534,788
IL State Development Finance Authority, Adventist
Health System,
Series 1999,
5.500%, 11/15/20 1,650,000 1,680,475
IL State Health Facilities Authority, Swedish
American Hospital,
Series 2000,
6.875%, 11/15/30 1,000,000 1,090,470
LA State Public Facilities Authority, Touro
Infirmary,
Series 1999 A,
5.625%, 08/15/29 1,240,000 1,248,420
MA State Health & Educational Facilities
Authority: Massachusetts General Hospital,
Series 1992 F,
6.250%, 07/01/12 5,750,000 6,764,128
South Shore Hospital,
Series 1999 F:
5.625%, 07/01/19 1,000,000 1,035,400
5.750%, 07/01/29 2,500,000 2,550,300
MD State Health & Educational Facilities
Authority, University of Maryland Medical
System,
Series 2000, 6.750%, 07/01/30 500,000 566,235
MO State Health & Educational Facilities
Authority, Lake Regional Health Systems,
Series 2003,
5.600%, 02/15/25 625,000 624,956
NV Henderson, Catholic Healthcare West,
Series 1999 A,
6.750%, 07/01/20 1,000,000 1,079,690
8 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
HEALTHCARE - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
NY State Dormitory Authorization Revenue, Memorial
Sloan-Kettering Cancer Center,
Series 2003-1,
(a) 07/01/25 600,000 211,458
OH Belmont County, Ohio Valley Medical Center,
Inc.,
Series 1998,
5.700%, 01/01/13 500,000 445,780
OH Green Springs Health Care Facilities, St.
Francis Health Care Center Project,
Series 1994 A,
7.000%, 05/15/04 190,000 189,525
OH Highland County Joint Township Hospital
District,
Series 1999,
6.750%, 12/01/29 480,000 456,797
OH Miami County Hospital Facilities Revenue, Upper
Valley Medical Center,
Series 1996 C,
6.000%, 05/15/06 770,000 821,497
OH Montgomery County, Franciscan Sisters of the
Poor,
Series 1985 B-1,
8.100%, 07/01/18 410,000 451,467
OK Development Finance Authority, Duncan Regional
Hospital,
Series 2003 A,
5.125%, 12/01/23 (b) 1,000,000 987,060
TN Knox County Health and Educational Facilities
Authority, East Tennessee Hospital,
Series 2003 B,
5.750%, 07/01/33 750,000 762,622
VA Prince William County, Industrial Development
Authority, Potomac Hospital Corp.,
Series 2003,
5.200%, 10/01/26 1,000,000 997,270
WI State Health & Educational Facilities
Authority: Aurora Health Care,
Series 2003,
6.400%, 04/15/33 1,075,000 1,131,900
Wheaton Franciscan Services,
Series 2002,
5.750%, 08/15/30 900,000 936,198
WV State Hospital Finance Authority, Charlestown
Area Medical Center,
Series 2000 A,
6.750%, 09/01/30 1,610,000 1,996,158
--------------
Hospital Total 31,559,982
-------------------------------------------------------------------------------
See notes to investment portfolio. 9
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
HEALTHCARE - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
Intermediate Care Facilities - 0.6% IN State Health Facilities Financing Authority,
Hoosier Care, Inc.,
Series 1999 A,
7.125%, 06/01/34 2,415,000 1,993,365
TN Shelby County, Health, Education & Housing
Facilities Board, Germantown Village,
Series 2003 A,
7.250%, 12/01/34 1,000,000 997,400
--------------
Intermediate Care Facilities Total 2,990,765
-------------------------------------------------------------------------------
Nursing Home - 0.2% HI State Department of Budget and Finance, Kahala
Senior Living Community Project,
Series 2003 A,
7.875%, 11/15/23 1,000,000 1,011,570
--------------
Nursing Home Total 1,011,570
--------------
HEALTHCARE TOTAL 38,676,746
HOUSING - 2.4%
- ------------------------------------------ -------------------------------------------------------------------------------
Multi-Family - 1.8% FL Broward County Housing Finance Authority,
Chaves Lake Apartment Project,
Series 2000 A,
7.500%, 07/01/40 1,500,000 1,518,705
FL Clay County Housing Finance Authority, Madison
Commons Apartments,
Series 2000 A,
7.450%, 07/01/40 730,000 739,118
FL Orange County Housing Finance Authority, Palms
at Brentwood Apartments,
Series 1998 K,
6.500%, 12/01/34 1,935,000 1,752,433
IL State Development Finance Authority, Catholic
Charities Housing Development Corp.,
Series 1993 C,
5.950%, 01/01/09 1,450,000 1,484,786
Municipal Mortgage & Equity LLC,
7.750%, 11/01/10 (c) 2,000,000 2,201,500
OH Lake County, North Madison Properties, Ltd.
Project, Series 1993,
8.819%, 09/01/11 180,000 178,756
RI State Housing & Mortgage Finance Corp.,
Series 1988,
7.550%, 10/01/22 515,000 515,654
--------------
Multi-Family Total 8,390,952
-------------------------------------------------------------------------------
Single Family - 0.6% ID State Housing Agency,
Series 1990 E,
7.875%, 07/01/24 465,000 465,000
NM State Mortgage Finance Authority,
Series 2000 A-2,
7.100%, 09/01/30 1,125,000 1,255,894
10 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
HOUSING - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
NV State Housing Division,
Series 1991 A-2,
7.750%, 04/01/22 430,000 430,744
OH Housing Finance Agency:
Series 1994 B-2,
6.700%, 03/01/25 90,000 92,632
Series 1997 A-1,
6.050%, 09/01/17 625,000 662,913
--------------
Single Family Total 2,907,183
--------------
HOUSING TOTAL 11,298,135
INDUSTRIAL - 4.2%
- ------------------------------------------ -------------------------------------------------------------------------------
Food Products - 2.6% GA Cartersville Development Authority, Anheuser
Busch Companies., Inc.,
Series 1989 A,
7.375%, 05/01/09 9,000,000 10,845,000
MI State Strategic Funding, Michigan Sugar Co.,
Carollton Project:
Series 1998 B,
6.450%, 11/01/25 700,000 600,467
Series 1998 C,
6.550%, 11/01/25 800,000 694,576
--------------
Food Products Total 12,140,043
-------------------------------------------------------------------------------
Forest Products - 1.2% WA Port Longview Industrial Development Corp.,
Weyerhaeuser Corp.,
Series 1992,
6.875%, 10/01/08 4,750,000 5,406,593
--------------
Forest Products Total 5,406,593
-------------------------------------------------------------------------------
Manufacturing - 0.4% MO State Development Finance Board, Procter &
Gamble Co.,
Series 1999,
5.200%, 03/15/29 1,000,000 1,055,030
NM Albuquerque Industrial Development Authority,
Motorola, Inc.,
Series 1983 A,
10.000%, 06/01/13 1,000,000 1,004,520
--------------
Manufacturing Total 2,059,550
--------------
INDUSTRIAL TOTAL 19,606,186
OTHER - 10.6%
- ------------------------------------------ -------------------------------------------------------------------------------
Other - 0.5% NJ Tobacco Settlement Financing Corp.,
Series 2003,
6.750%, 06/01/39 1,415,000 1,392,063
Virgin Islands Public Finance Authority, Hovensa
Refinery, Series 2003,
6.125%, 07/01/22 875,000 893,156
--------------
Other Total 2,285,219
-------------------------------------------------------------------------------
See notes to investment portfolio. 11
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
OTHER - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
Refunded/Escrowed (d) - 10.1% CA Foothill/Eastern Transportation Corridor
Agency,
Series 1995 A,
(a), 01/01/18 10,000,000 5,326,700
CA Southern California Public Power Authority,
Southern Transmission Project,
Series 1988 A,
(a), 07/01/14 8,155,000 5,358,324
CA State,
Series 2003,
5.250%, 02/01/23 2,000,000 2,083,520
FL State, Jacksonville Transportation Authority,
Series 1985,
9.200%, 01/01/15 2,000,000 2,840,680
GA State Municipal Electric Authority,
Series 1991,
6.600%, 01/01/18 3,600,000 4,532,148
GA Fulton County,
Series 1992,
6.375%, 01/01/14 13,270,000 15,947,355
MI State, Certificate of Participation,
Series 2000,
(a), 06/01/21 1,000,000 430,650
NC Eastern Municipal Power Agency,
Series 1991 A,
6.500%, 01/01/18 4,315,000 5,527,342
NJ Cape May County Municipal Utilities Authority,
Series 2002 A,
5.750%, 01/01/16 1,000,000 1,180,160
SC Calhoun County, Solid Waste Disposal
Facilities, Eastman Kodak Co.,
Series 1992,
6.750%, 05/01/17 3,000,000 3,785,310
TX State Municipal Power Agency,
Series 1989,
(a), 09/01/08 75,000 66,290
--------------
Refunded/Escrowed Total 47,078,479
--------------
OTHER TOTAL 49,363,698
OTHER REVENUE - 0.9%
- ------------------------------------------ -------------------------------------------------------------------------------
Recreation - 0.7% CA Agua Caliente Band Cahuilla Indians,
Series 2003,
6.000%, 07/01/18 350,000 353,406
FL Capital Trust Agency, Seminole Tribe Convention
Center,
Series 2002 A,
10.000%, 10/01/33 1,500,000 1,857,750
OH Hamilton County Sales Tax Revenue,
Series 2000 B,
(a), 12/01/20 2,000,000 906,920
--------------
Recreation Total 3,118,076
-------------------------------------------------------------------------------
12 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
OTHER REVENUE - (continued) Shares Value
- ------------------------------------------ -------------------------------------------------------------------------------
Retail - 0.2% NJ State Economic Development Authority, Glimcher
Properties L.P. Project,
Series 1998,
6.000%, 11/01/28 850,000 864,441
--------------
Retail Total 864,441
--------------
OTHER REVENUE TOTAL 3,982,517
RESOURCE RECOVERY - 0.9%
- ------------------------------------------ -------------------------------------------------------------------------------
Disposal - 0.5% IL Development Finance Authority, Waste
Management, Inc.,
Series 1997,
5.050%, 01/01/10 500,000 519,515
MI State Strategic Fund, United Waste Systems,
Inc.,
Series 1995,
5.200%, 04/01/10 500,000 527,060
OH State Air Quality Development Authority, JMG
Funding Ltd. Project,
Series 1997, 5.625%,
01/01/23 1,000,000 1,076,090
--------------
Disposal Total 2,122,665
-------------------------------------------------------------------------------
Resource Recovery - 0.4% PA Carbon County Industrial Development Authority,
Panther Creek Partners Project,
Series 2000,
6.650%, 05/01/10 900,000 977,805
NV State Department of Business & Industry,
Republic Services, Inc. Project,
Series 2003,
5.625%, 12/01/26 500,000 507,635
WY Lincoln County, Environmental Improvement
Revenue, Pacificorp Project,
Series 1995,
4.125%, 11/01/25 500,000 490,605
--------------
Resource Recovery Total 1,976,045
--------------
RESOURCE RECOVERY TOTAL 4,098,710
TAX-BACKED - 35.1%
- ------------------------------------------ -------------------------------------------------------------------------------
Local Appropriated - 2.1% CA San Bernardino County,
Series 2002 A,
5.000%, 07/01/15 2,210,000 2,455,222
IL Chicago Board of Education,
Series 1992 A,
6.000%, 01/01/16 5,000,000 5,972,100
IN Crown Point School Building Corp.,
Series 2000:
(a), 01/15/18 1,550,000 804,078
(a), 01/15/19 1,665,000 811,071
--------------
Local Appropriated Total 10,042,471
-------------------------------------------------------------------------------
Local General Obligations -- 14.8% AK North Slope Borough:
Series 1999 A, (a), 06/30/10 2,515,000 2,019,293
Series 2000 B, (a), 06/30/10 2,000,000 1,603,340
Series 2001 A, (a), 06/30/12 5,000,000 3,587,500
See notes to investment portfolio. 13
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
TAX-BACKED - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
CA Golden West School Financing Authority,
Series 1999 A,
(a), 08/01/15 1,500,000 902,955
CA Los Angeles Unified School District,
Series 2002,
5.750%, 07/01/16 400,000 473,972
CA Union Elementary School District,
Series 1999 A,
(a), 09/01/17 2,300,000 1,228,775
CA West Contra Costa Unified School District,
Series 2001 B,
6.000%, 08/01/24 465,000 557,256
CA Yuba City Unified School District,
Series 2000,
(a), 09/01/18 1,160,000 583,526
IL Champaign County,
Series 1999,
8.250%, 01/01/20 1,015,000 1,453,866
IL Chicago Board of Education:
Series 1996,
6.250%, 12/01/12 2,500,000 3,036,925
Series 1998 B-1:
(a), 12/01/21 1,500,000 610,590
(a), 12/01/22 3,000,000 1,144,410
(a), 12/01/23 2,500,000 893,550
IL Chicago Emergency Telephone System,
Series 1999,
5.500%, 01/01/23 2,250,000 2,550,847
IL Chicago Public Building Commission,
Series 1999 B,
5.250%, 12/01/18 2,000,000 2,252,300
IL Coles & Cumberland County's Unified School
District,
Series 2000,
(a), 12/01/13 3,120,000 2,091,929
IL Cook County School District No. 102,
Series 2001,
(a), 12/01/20 3,065,000 1,334,072
IL Will County Community Unit School District No.
365 Valley View,
Series 1999 B,
(a), 11/01/18 1,900,000 941,355
IL Will County Forest Preservation District,
Series 1999,
(a), 12/01/16 1,000,000 559,270
LA New Orleans,
Series 1991,
(a), 09/01/12 6,250,000 4,492,187
MO Springfield School District No. R-12,
Series 1991 B,
9.500%, 03/01/07 600,000 735,558
OH Adams County Ohio Valley Local School District,
Series 1995,
7.000%, 12/01/15 3,000,000 3,870,900
14 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
TAX-BACKED - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
OH Beavercreek Local School District,
Series 1996,
6.600%, 12/01/15 2,500,000 3,153,675
OH Crooksville Exempt Village School District,
Series 1986,
7.375%, 12/01/07 25,000 29,291
OH Cuyahoga County,
Series 1993 A,
(a), 10/01/12 1,000,000 721,840
OH Dublin City School District,
Series 1997,
(a), 12/01/11 900,000 678,213
OH Eastern Local School District Brown & Highland
Counties,
Series 1995,
6.250%, 12/01/17 1,160,000 1,435,024
OH Gahanna-Jefferson City School District,
Series 1993,
(a), 12/01/11 795,000 600,956
OH Hilliard School District:
Series 1995 A,
(a), 12/01/12 2,505,000 1,784,963
Series 2000,
5.750%, 12/01/24 1,000,000 1,123,070
OH Kings Local School District,
Series 1995,
7.500%, 12/01/16 2,110,000 2,854,345
OH Lakota Local School District,
Series 2001,
5.500%, 12/01/18 1,460,000 1,697,031
OH Massillion City School District,
Series 2002:
(a), 12/01/09 900,000 750,537
(a), 12/01/11 1,000,000 753,570
OH Monroe Local School District,
Series 2002,
5.750%, 12/01/19 1,195,000 1,422,241
OH North Fork Local School District,
Series 2001,
5.750%, 12/01/17 510,000 608,751
OH Northwest Local School District,
Series 1998,
6.000%, 12/01/13 1,030,000 1,243,478
OH Pickerington Local School District,
Series 2001,
(a), 12/01/16 1,340,000 767,632
OH Plain Local School District,
Series 2000,
(a), 12/01/27 1,315,000 391,646
OH Shaker Heights City School District,
Series 1990 A,
7.100%, 12/15/10 620,000 732,896
OH Southwest Licking Local School District,
Series 1999,
5.750%, 12/01/16 400,000 474,068
See notes to investment portfolio. 15
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
TAX-BACKED - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
OH Tri-County North Local School District,
Series 1986,
8.125%, 12/01/06 75,000 87,014
OH West Chester Township,
Series 2002,
5.750%, 12/01/20 1,000,000 1,189,010
PA Philadelphia School District,
Series 2002 B,
5.625%, 08/01/16 500,000 565,890
PA Pittsburgh School District,
Series 2002 A,
5.500%, 09/01/17 1,500,000 1,745,370
PR Puerto Rico Commonwealth,
Series 1998,
6.000%, 07/01/16 2,000,000 2,434,600
TX Hurst Euless Bedford Independent School
District,
Series 1998,
4.500%, 08/15/25 2,250,000 2,183,265
TX Houston,
Series 2000,
6.400%, 06/01/27 2,000,000 2,271,760
WA Clark County School District No. 037,
Series 2001 C,
(a), 12/01/20 1,150,000 501,630
--------------
Local General Obligations Total 69,126,142
-------------------------------------------------------------------------------
Special Non-Property Tax - 3.2% IL Metropolitan Pier & Exposition Authority,
Series 1996 A:
(a), 12/15/12 8,850,000 6,252,171
Pre-refunded, (a), 06/15/12 2,655,000 1,962,895
Unrefunded, (a), 06/15/12 2,345,000 1,678,434
MA State,
Series 2002 A,
5.500%, 06/01/15 1,000,000 1,160,270
NY State Local Government Assistance Corp.,
Series 1993 E,
5.000%, 04/01/21 1,000,000 1,088,410
PR Commonwealth of Puerto Rico, Public Building
Authority,
Series 2002 C,
5.500%, 07/01/15 1,000,000 1,130,290
WA Central Puget Sound Regional Transportation
Authority,
Series 1998,
5.250%, 02/01/21 1,500,000 1,665,345
--------------
Special Non-Property Tax Total 14,937,815
-------------------------------------------------------------------------------
Special Property Tax - 1.0% CA Huntington Beach Community Facilities District,
Grand Coast Resort,
Series 2001,
6.450%, 09/01/31 500,000 517,740
CA Santa Margarita Water District,
Series 1999,
6.250%, 09/01/29 750,000 770,738
FL Double Branch Community Development District,
Series 2002 A,
6.700%, 05/01/34 400,000 417,104
16 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
TAX-BACKED - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
FL Westchester Community Development District,
District No. 1 Special Assessment,
Series 2003,
6.000%, 05/01/23 560,000 558,673
IL State Sports Facilities Authority,
Series 2001,
(a), 06/15/18 1,000,000 510,190
OH River Valley School District, School Facilities
Construction & Improvement,
Series 2001,
5.250%, 11/01/23 500,000 555,110
TX Dallas County Flood Control District,
Series 2002,
7.250%, 04/01/32 1,500,000 1,541,760
--------------
Special State Property Tax Total 4,871,315
-------------------------------------------------------------------------------
State Appropriated - 2.2% KY State Turnpike Authority,
Series 1992,
(a), 01/01/10 7,500,000 6,173,625
UT State Building Ownership Authority,
Series 1998 C,
5.500%, 05/15/19 3,450,000 3,970,984
--------------
State Appropriated Total 10,144,609
-------------------------------------------------------------------------------
State General Obligations - 11.8% MA Massachusetts Bay Transportation Authority:
Series 1992 B, 6.200%, 03/01/16 9,825,000 11,977,658
Series 1994 A:
7.000%, 03/01/14 3,150,000 4,026,425
7.000%, 03/01/19 2,500,000 3,261,075
Series 1998 A,
4.500%, 03/01/26 3,805,000 3,726,351
Series 2003 A,
5.250%, 07/01/19 1,200,000 1,354,212
MA State College Building Authority Project:
Series 1994 A:
7.500%, 05/01/11 1,500,000 1,915,935
7.500%, 05/01/14 3,500,000 4,620,630
NJ State Transportation Trust Fund Authority,
Series 1999 A:
5.750%, 06/15/18 5,000,000 5,833,300
5.750% 06/15/20 1,000,000 1,164,580
OH State,
Series 1992,
6.100%, 08/01/12 380,000 457,980
OH State Turnpike Commission,
Series 1998 A,
5.500%, 02/15/17 1,690,000 1,956,158
PA State,
Series 1992-2,
6.250%, 07/01/12 7,200,000 8,736,408
See notes to investment portfolio. 17
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
TAX-BACKED - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
PR Commonwealth of Puerto Rico: Highway
Transportation Authority,
Series 2003 AA,
5.500%, 07/01/19 1,000,000 1,166,970
Series 2001 A,
5.500%, 07/01/16 4,230,000 4,949,481
--------------
State General Obligations Total 55,147,163
--------------
TAX-BACKED TOTAL 164,269,515
TRANSPORTATION - 7.4%
- ------------------------------------------ -------------------------------------------------------------------------------
Air Transportation - 1.7% IL Chicago O'Hare International Airport, United
Airlines, Inc.,
Series 2000 A,
6.750%, 11/01/11 (e) 1,600,000 438,032
IN Indianapolis Airport Authority, United Airlines
Project,
Series 1995 A,
6.500%, 11/15/31 (e) 3,000,000 1,002,690
KY Kenton County Airport Board, Delta Airlines,
Inc.,
Series 1992 A,
7.500%, 02/01/20 1,000,000 998,070
MN Minneapolis & St. Paul Metropolitan Airports
Commission, Northwest Airlines:
Series 2001 A,
7.000%, 04/01/25 1,250,000 1,174,487
Series 2001 B,
6.500% 04/01/25 500,000 486,555
NC Charlotte/Douglas International Airport, U.S.
Airways, Inc.:
Series 1998,
5.600%, 07/01/27 1,000,000 653,500
Series 2000,
7.750%, 02/01/28 1,000,000 904,120
NJ State Economic Development Authority,
Continental Airlines, Inc.,
Series 1999,
6.250%, 09/15/29 2,000,000 1,674,100
TN Memphis-Shelby County Airport Authority,
Federal Express Corp.,
Series 2002,
5.050%, 09/01/12 500,000 537,990
--------------
Air Transportation Total 7,869,544
-------------------------------------------------------------------------------
Airports - 0.3% MA State Port Authority Revenue,
Series 1999,
10.650%, 07/01/29 (f) 1,000,000 1,196,800
--------------
Airports Total 1,196,800
-------------------------------------------------------------------------------
Ports - 0.6%
WA Port of Seattle,
Series 1999,
5.500%, 09/01/17 2,445,000 2,819,721
--------------
Ports Total 2,819,721
-------------------------------------------------------------------------------
18 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
TRANSPORTATION - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
Railroad - 0.0% OH Cleveland-Cuyahoga County Port Authority,
Oglebay Northern Co. Project,
Series 1997-1,
6.000%, 03/01/07 180,000 195,808
--------------
Railroad Total 195,808
-------------------------------------------------------------------------------
Toll Facilities - 3.0%
CO E-470 Public Highway Authority,
Series 2000 B,
(a), 09/01/18 4,600,000 2,314,306
MA State Turnpike Authority:
Series 1993 A, 5.000%, 01/01/20 2,000,000 2,188,320
Series 1997 C, (a), 01/01/20 2,000,000 939,860
NY Triborough Bridge & Tunnel Authority:
Series 1992 Y, 6.125%, 01/01/21 5,500,000 6,699,055
Series 2002 E, 5.500%, 11/15/20 550,000 639,419
VA Richmond Metropolitan Authority,
Series 1998,
5.250%, 07/15/22 1,100,000 1,229,558
--------------
Toll Facilities Total 14,010,518
--------------
Transportation - 1.8% GA Metropolitan Atlanta Rapid Transit Authority,
Series 1992 P,
6.250%, 07/01/20 4,000,000 4,947,280
NV State Department of Business & Industry, Las
Vegas Monorail Project, Series 2000:
7.375%, 01/01/30 650,000 654,004
7.375%, 01/01/40 500,000 500,085
OH Toledo-Lucas County Port Authority, CSX
Transportation, Inc.,
Series 1992,
6.450%, 12/15/21 2,000,000 2,204,100
--------------
Transportation Total 8,305,469
--------------
TRANSPORTATION TOTAL 34,397,860
UTILITY - 24.0%
- ------------------------------------------ -------------------------------------------------------------------------------
Independent Power Producer - 0.5% FL Escambia County Environmental Improvement
Revenue,
Series 2003 A,
5.750%, 11/01/27 550,000 557,662
NY Suffolk County Industrial Development Agency,
Nissequogue Cogen Partners,
Series 1998,
5.500%, 01/01/23 1,000,000 938,050
PR Commonwealth of Puerto Rico Industrial,
Educational, Medical & Environmental
Cogeneration Facilities, AES Project,
Series 2000,
6.625%, 06/01/26 650,000 676,475
--------------
Independent Power Producer Total 2,172,187
-------------------------------------------------------------------------------
See notes to investment portfolio. 19
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
UTILITY - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
Investor Owned - 1.3%
IN Petersburg, Series 1995 C, 5.950%, 12/01/29 1,500,000 1,410,540
IN State Development Finance Authority,
Series 1999,
5.950%, 08/01/30 1,000,000 934,950
OH State Air Quality Development Authority,
Cleveland Electric Illuminating Co.,
Series 2002 A,
6.000%, 12/01/13 500,000 517,120
TX Brazos River Authority, Texas Utilities
Electric Co. Project:
Series 1999 B,
6.750%, 09/01/34 2,455,000 2,708,601
Series 2001 C,
5.750%, 05/01/36 500,000 524,020
--------------
Investor Owned Total 6,095,231
-------------------------------------------------------------------------------
Joint Power Authority - 10.3% GA State Municipal Electric Authority,
Series 1991,
6.600%, 01/01/18 17,700,000 21,961,275
MN Southern Minnesota Municipal Power Agency,
Series 2002 A,
5.250%, 01/01/17 2,000,000 2,271,100
NC Eastern Municipal Power Agency,
Series 1991 A,
6.500%, 01/01/18 2,185,000 2,602,532
Series 1992,
(a), 01/01/09 2,260,000 1,953,137
Series 1993,
6.000%, 01/01/18 7,000,000 8,372,910
OH State Municipal Electricity Generation Agency,
Series 2001,
(a), 02/15/29 3,000,000 832,170
WA State Public Power Supply System:
Nuclear Project No. 2,
Series 1992 A,
6.300%, 07/01/12 3,500,000 4,188,415
Nuclear Project No. 3,
Series 1989 B,
(a), 07/01/08 7,000,000 6,100,500
--------------
Joint Power Authority Total 48,282,039
--------------
Municipal Electric - 4.3% NC University of North Carolina at Chapel Hill,
Series 1997,
(a), 08/01/20 1,750,000 807,327
NY Long Island Power Authority,
Series 2000,
(a), 06/01/20 450,000 217,782
OH Cleveland Public Power System Revenue,
Series 1994 A,
(a), 11/15/13 2,000,000 1,367,660
PA Westmoreland County Municipal Authority,
Series 2000 A,
(a), 08/15/23 1,400,000 523,754
20 See notes to investment portfolio.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
UTILITY - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
PR Puerto Rico Electric Power Authority,
Series 2002 KK,
5.500%, 07/01/16 2,000,000 2,340,180
SD Heartland Consumers Power District,
Series 1992,
6.000%, 01/01/17 8,000,000 9,591,680
TX Austin Electric Utility Systems Revenue,
Series 2002,
5.500%, 11/15/16 1,000,000 1,157,370
TX Austin Financial Service Department,
Series 1998,
5.250%, 05/15/25 3,710,000 4,051,654
--------------
Municipal Electric Total 20,057,407
-------------------------------------------------------------------------------
Water & Sewer - 7.6% AZ Mesa Utility System Revenue,
Series 2002,
5.250%, 07/01/15 1,600,000 1,824,144
DE State Economic Development Authority, General
Waterworks Corp.,
Series 1992 B,
6.450%, 12/01/07 1,160,000 1,330,566
GA Atlanta Water & Wastewater Revenue:
Series 1999 A,
5.500%, 11/01/22 3,225,000 3,689,271
Series 2001 A,
5.500%, 11/01/27 1,500,000 1,693,635
GA Fulton County,
Series 1992,
6.375%, 01/01/14 430,000 520,343
OH Cleveland Waterworks Revenue,
Series 1993,
5.500%, 01/01/21 3,000,000 3,431,010
OH Lakewood Water Systems Revenue,
Series 1995,
5.850%, 07/01/20 2,405,000 2,877,775
OH State Water Development Authority:
Series 1990-1,
6.000%, 12/01/16 1,000,000 1,180,230
Series 1991 B,
5.500%, 06/01/18 1,000,000 1,160,710
OH Warren Waterworks Revenue,
Series 1997,
5.500%, 11/01/15 500,000 580,375
PA Allegheny County Sanitation Authority,
Series 1991 A,
(a), 06/01/07 2,370,000 2,188,624
PA Dauphin County Industrial Development
Authority, Dauphin Water Supply Co.,
Series 1992 A,
6.900%, 06/01/24 3,400,000 4,239,562
See notes to investment portfolio. 21
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Municipal Bonds - (continued)
UTILITY - (continued) Par ($) Value ($)
- ------------------------------------------ -------------------------------------------------------------------------------
TX Houston Water & Sewer System Revenue:
Series 1998,
(a), 12/01/23 3,500,000 1,254,155
Series 1991 C:
(a) 12/01/08 4,000,000 3,491,760
(a), 12/01/09 4,000,000 3,327,960
(a), 12/01/10 3,750,000 2,967,375
--------------
Water & Sewer Total 35,757,495
--------------
UTILITY TOTAL 112,364,359
--------------
TOTAL MUNICIPAL BONDS (COST OF $405,988,692) 455,880,856
Municipal Preferred Stocks - 0.5%
HOUSING - 0.5% Shares
- ------------------------------------------ -------------------------------------------------------------------------------
Multi-Family - 0.5% Charter Municipal Mortgage Acceptance Co.,
6.625%, 06/30/09, (c) 2,000,000 2,137,380
--------------
HOUSING TOTAL (COST OF $2,000,000) 2,137,380
Purchased Put Option - 0.0% Contracts
- ------------------------------------------ -------------------------------------------------------------------------------
10 Year U.S. Treasury Notes,
Strike Price 108, Expires 02/21/04 680,000 212,500
--------------
TOTAL PURCHASED PUT OPTIONS (COST OF $1,055,615) 212,500
Short-Term Obligations - 0.7% Par($)
- ------------------------------------------ -------------------------------------------------------------------------------
Variable Rate Demand Notes (g) - 0.7% AZ Phoenix Industrial Development Authority,
Valley of the Sun YMCA Project,
Series 2001,
1.370%, 01/01/31 200,000 200,000
CO Health & Hospital Authority,
Series 2001 B,
1.370%, 12/01/31 200,000 200,000
IA Healthcare Revenue, Mercy Hospital Project,
Series 2002,
1.320%, 08/01/32 400,000 400,000
ID Health Facilities Authority Revenue, St. Luke's
Regional Medical Center Project,
Series 1995,
1.320%, 05/01/22 500,000 500,000
IN Educational Facilities Authority, DePauw
University Project,
Series 2002,
1.320%, 07/01/32 200,000 200,000
MO State Health & Educational Facilities
Authority:
Rockhurst University,
Series 2002,
1.320%, 11/01/32 200,000 200,000
Washington University,
Series 1996 C,
1.320%, 09/01/30 300,000 300,000
22 See notes to financial statements.
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
Short-Term Obligations - (continued) Par($) Value($)
- ------------------------------------------ -------------------------------------------------------------------------------
NY New York City,
Series 1993 A,
1.300%, 08/01/22 700,000 700,000
OK Development Finance Authority, Continuing Care
Community,
Series 2002 C,
1.370%, 02/01/12 200,000 200,000
WY Lincoln County Pollution Control Revenue, Exxon
Corp. Project,
Series 1984 A,
3.300%, 11/01/14 300,000 300,000
--------------
TOTAL SHORT-TERM OBLIGATIONS
(COST OF $3,200,000) 3,200,000
Total Investments - 98.8%
(cost of $412,244,307) (h) 461,430,736
Other Assets & Liabilities, Net - 1.2% 5,705,411
Net Assets - 100.0% 467,136,147
NOTES TO INVESTMENT PORTFOLIO:
(a) Zero coupon bond.
(b) Settlement of this security is on a delayed
delivery basis.
(c) These securities are exempt from
registration under Rule 144A of the
Securities Act of 1933 and may be resold in
transactions exempt from registration,
normally to qualified institutional buyers.
At December 31, 2003, the value of these
securities amounted to $4,338,880, which
represents 0.9% of net assets.
(d) The fund has been informed that each issuer
has placed direct obligations of the U.S.
Government in an irrevocable trust solely
for the purpose of the payment of principal
and income.
(e) As of December 31, 2003, the Fund held
securities of certain issuers that have
filed for bankruptcy protection under
Chapter 11 representing 0.3% of net assets.
These issuers are in default of certain debt
covenants. Income is not being accrued.
(f) Denotes a restricted security, which is
subject to restrictions on resale under
federal securities laws. At December 31,
2003, this security amounted to $1,196,800
which represents 0.3% of net assets.
Additional information on this restricted
security is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
MA State
Port
Authority
Revenue,
Series
1999,
10.650%
07/01/29 11/17/99 1,001,580
(g) Variable rate demand notes (VRDN) are
considered short-term obligations. Interest
rates change periodically on specified
dates. These securities are payable on
demand and are secured either by letters of
credits or other credit support agreements
from banks. The rates listed are as of
December 31, 2003.
(h) Cost for federal income purposes is
$411,952,878.
See notes to financial statements. 23
STATEMENT OF ASSETS AND LIABILITIES Columbia Managed Municipals Fund
December 31, 2003 (Unaudited)
($)
-------------------------------------------------------------------------
Assets: Investments, at cost 412,244,307
Investments, at value 461,430,736
Cash 1,039,063
Receivable for:
Fund shares sold 28,168
Interest 6,597,070
Deferred Trustees' compensation plan 26,213
Other assets 12,740
------------
Total Assets 469,133,990
-------------------------------------------------------------------------
Liabilities: Payable for:
Investments purchased on a delayed delivery basis 984,905
Fund shares repurchased 98,233
Distributions 568,460
Investment advisory fee 150,566
Administration fee 40,679
Transfer agent fee 78,268
Pricing and bookkeeping fees 30,620
Custody fee 361
Distribution and service fees 15,970
Deferred Trustees' fees 26,213
Other liabilities 3,568
------------
Total Liabilities 1,997,843
Net Assets 467,136,147
-------------------------------------------------------------------------
Composition of Net Assets: Paid-in capital 420,936,005
Undistributed net investment income 1,304,337
Accumulated net realized loss (4,290,624)
Net unrealized appreciation on investments 49,186,429
------------
Net Assets 467,136,147
-------------------------------------------------------------------------
Class A: Net assets 51,540,324
Shares outstanding 5,665,035
Net asset value per share 9.10(a)
Maximum offering price per share ($9.10/0.9525) 9.55(b)
-------------------------------------------------------------------------
Class B: Net assets 7,846,941
Shares outstanding 862,464
Net asset value and offering price per share 9.10(a)
-------------------------------------------------------------------------
Class C: Net assets 1,624,496
Shares outstanding 178,562
Net asset value and offering price per share 9.10(a)
-------------------------------------------------------------------------
Class Z: Net assets 406,124,386
Shares outstanding 44,635,451
Net asset value, offering and redemption price per share 9.10
(a) Redemption price per share is equal to net
asset value less any applicable contingent
deferred sales charge.
(b) On sales of $50,000 or more the offering
price is reduced.
24 See notes to financial statements.
STATEMENT OF OPERATIONS Columbia Managed Municipals Fund
For the Six Months Ended December 31, 2003 (Unaudited)
($)
--------------------------------------------------------------------------
Investment Income: Interest 12,279,546
--------------------------------------------------------------------------
Expenses: Investment advisory fee 988,295
Administration fee 275,353
Distribution fee:
Class B 31,470
Class C 5,354
Service fee:
Class A 54,948
Class B 8,917
Class C 1,682
Transfer agent fee 309,087
Pricing and bookkeeping fees 90,821
Trustees' fees 8,690
Custody fee 10,194
Other expenses 82,635
-------------
Total Operating Expenses 1,867,446
Fees waived by Distributor -- Class C (2,384)
Custody earnings credit (566)
-------------
Net Expenses 1,864,496
-------------
Net Investment Income 10,415,050
--------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Net realized gain (loss) on:
Investments and Futures Contracts:
Investments (1,434,222)
Futures contracts 1,162,712
-------------
Net realized loss (271,510)
-------------
Net change in unrealized appreciation/depreciation on:
Investments (6,917,950)
Futures contracts (414,198)
-------------
Net change in unrealized appreciation/depreciation (7,332,148)
-------------
Net Loss (7,603,658)
-------------
Net Increase in Net Assets from Operations 2,811,392
See notes to financial statements. 25
STATEMENT OF CHANGES IN NET ASSETS Columbia Managed Municipals Fund
(Unaudited)
Six Months
Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets: 2003 ($) 2003 ($)
- ------------------------------------------ ----------------------------------------------------------------------------
Operations: Net investment income 10,415,050 22,129,688
Net realized gain (loss) on investments (271,510) 7,459,349
Net change in unrealized
appreciation/depreciation on investments and
futures contracts (7,332,148) 15,436,452
----------------------------
Net Increase from Operations 2,811,392 45,025,489
----------------------------------------------------------------------------
Distributions Declared to Shareholders: From net investment income:
Class A (1,034,861) (1,528,000)
Class B (135,942) (222,870)
Class C (28,125) (37,406)
Class Z (8,633,117) (19,508,563)
From net realized gains:
Class A (857,679) --
Class B (131,967) --
Class C (26,854) --
Class Z (6,747,258) --
----------------------------
Total Distributions Declared to
Shareholders (17,595,803) (21,296,839)
----------------------------------------------------------------------------
Share Transactions: Class A:
Subscriptions 1,444,841 2,335,628
Proceeds received in connection with merger -- 56,105,119
Distributions reinvested 1,221,799 890,534
Redemptions (3,486,825) (7,592,477)
----------------------------
Net Increase (Decrease) (820,185) 51,738,804
Class B:
Subscriptions 138,140 302,522
Proceeds received in connection with merger -- 10,260,711
Distributions reinvested 186,227 145,914
Redemptions (1,165,984) (2,149,839)
----------------------------
Net Increase (Decrease) (841,617) 8,559,308
Class C:
Subscriptions 155,971 349,095
Proceeds received in connection with merger -- 1,808,445
Distributions reinvested 44,250 28,468
Redemptions (108,669) (668,615)
----------------------------
Net Increase 91,552 1,517,393
Class Z:
Subscriptions 25,243,576 95,478,788
Distributions reinvested 11,081,020 13,852,730
Redemptions (49,755,320) (140,614,453)
----------------------------
Net Decrease (13,430,724) (31,282,935)
----------------------------
Net Increase (Decrease) from Share
Transactions (15,000,974) 30,532,570
----------------------------
Total Increase (Decrease) in Net Assets (29,785,385) 54,261,220
----------------------------------------------------------------------------
26 See notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS Columbia Managed Municipals Fund
(Unaudited)
Six Months
Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets: 2003 ($) 2003 ($)
- ------------------------------------------ ----------------------------------------------------------------------------
Net Assets: Beginning of period 496,921,532 442,660,312
End of period (including undistributed net
investment income of $1,304,337 and $721,332,
respectively) 467,136,147 496,921,532
----------------------------------------------------------------------------
Changes in Shares: Class A:
Subscriptions 159,443 252,043
Issued in connection with merger -- 6,240,857
Issued for distributions reinvested 134,335 97,035
Redemptions (385,182) (833,496)
----------------------------
Net Increase (Decrease) (91,404) 5,756,439
Class B:
Subscriptions 15,083 32,805
Issued in connection with merger -- 1,141,022
Issued for distributions reinvested 20,474 15,909
Redemptions (128,143) (234,686)
----------------------------
Net Increase (Decrease) (92,586) 955,050
Class C:
Subscriptions 17,263 37,731
Issued in connection with merger -- 201,082
Issued for distributions reinvested 4,865 3,099
Redemptions (12,040) (73,438)
----------------------------
Net Increase 10,088 168,474
Class Z:
Subscriptions 2,794,098 10,490,877
Issued for distributions reinvested 1,218,477 1,517,021
Redemptions (5,489,011) (15,369,022)
----------------------------
Net Decrease (1,476,436) (3,361,124)
----------------------------
(a) On July 29, 2002, the Stein Roe Managed
Municipal Fund was redesignated Liberty
Managed Municipal Fund, Class Z.
See notes to financial statements. 27
NOTES TO FINANCIAL STATEMENTS Columbia Managed Municipals Fund
December 31, 2003 (Unaudited)
Note 1. Organization
Columbia Managed Municipals Fund (the "Fund"), a series of Columbia Funds Trust
IX (the "Trust"), is a diversified portfolio. The Trust is a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
Investment Goal
The Fund seeks a high level of total return consistent with prudent risk,
consisting of current income exempt from federal income tax and opportunities
for capital appreciation.
Fund Shares
The Fund may issue an unlimited number of shares, and offers four classes of
shares: Class A, Class B, Class C 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 4.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. 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 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, the Fund changed its name from Liberty Managed
Municipals Fund to Columbia Managed Municipals Fund. Also on that date, the
Trust changed its name from Liberty-Stein Roe Funds Municipal Trust to Columbia
Funds Trust IX.
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 policies consistently followed
by the Fund in the preparation of its financial statements.
Security Valuation
Debt securities generally are valued by a pricing service approved by the
Trust's Board of Trustees, based upon market transactions for normal,
institutional-size trading units of similar securities. The services may use
various pricing techniques which take into account appropriate factors such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other data, as well as broker quotes. Debt securities for which quotations
are readily available are valued at an over-the-counter or exchange bid
quotation. Certain securities, which tend to be more thinly traded and of lesser
quality, are priced based on fundamental analysis of the financial condition of
the issuer and the estimated value of any collateral. Valuations developed
through pricing techniques may vary from the actual amounts realized upon sale
of the securities, and the potential variation may be greater for those
securities valued using fundamental analysis.
Short-term obligations maturing within 60 days are valued at amortized cost,
which approximates market 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.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Fund or
in connection with another registered offering of the securities. Many
28
- --------------------------------------------------------------------------------
December 31, 2003 (Unaudited) Columbia Managed Municipals Fund
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Board of Trustees. The Trust will not
incur any registration costs upon such resale.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
Futures Contracts
The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund
will invest in these instruments to hedge against the effects of changes in the
value of portfolio securities due to anticipated changes in interest rates
and/or market conditions, for duration management, or when the transactions are
economically appropriate to the reduction of risk inherent in the management of
the Fund and not for trading purposes. The use of futures contracts involves
certain risks, which include: (1) imperfect correlation between the price
movement of the instruments and the underlying securities, (2) inability to
close out positions due to differing trading hours, or the temporary absence of
a liquid market, for either the instrument or the underlying securities, or (3)
an inaccurate prediction by Columbia Management Advisors, Inc. of the future
direction of interest rates. Any of these risks may involve amounts exceeding
the variation margin recorded in the Fund's Statement of Assets and Liabilities
at any given time.
Upon entering into a futures contract, the Fund deposits cash or securities with
the broker in an amount sufficient to meet the initial margin requirement.
Subsequent payments are made or received by the Fund equal to the daily change
in the contract value and are recorded as variation margin payable or receivable
and offset in unrealized gains or losses. The Fund also identifies portfolio
securities as segregated with the custodian in a separate account in an amount
equal to the futures contract. The Fund recognizes a realized gain or loss when
the contract is closed or expires.
Options
The Fund may write call and put options on futures it owns or in which it may
invest. Writing put options tends to increase the fund's exposure to the
underlying instrument. Writing call options tends to decrease the Fund's
exposure to the underlying instrument. When the Fund writes a call or put
option, an amount equal to the premium received is recorded as a liability and
subsequently marked-to-market to reflect the current value of the option
written. Premiums received from writing options which expire are treated as
realized gains. Premiums received from writing options which are exercised or
closed are added to the proceeds or offset against the amounts paid on the
underlying future transaction to determine the realized gain or loss. The Fund
as a writer of an option has no control over whether the underlying future may
be sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the future underlying the written option.
There is the risk the Fund may not be able to enter into a closing transaction
because of an illiquid market.
The Fund may also purchase put and call options. Purchasing call options tends
to increase the Fund's exposure to the underlying instrument. Purchasing put
options tends to decrease the Fund's exposure to the underlying instrument. The
Fund pays a premium, which is included in the Fund's Statement of Assets and
Liabilities as an investment and subsequently marked-to-market to reflect the
current value of the option. The risk associated with purchasing put and call
options is limited to the premium paid. Premiums paid for purchasing options
which expire are treated as realized losses. Premiums paid for purchasing
options which are exercised or closed are added to the amounts paid or offset
against the proceeds on the underlying future transaction to determine the
realized gain or loss. The Fund's custodian will set aside cash or liquid
portfolio securities equal to the amount of the written options contract
commitment in a separate account.
Delayed Delivery Securities
The Fund may trade securities on other than normal settlement terms, including
securities purchased or sold on a "when-issued" basis. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
to subsequently invest at less advantageous prices. The Fund identifies cash or
liquid
29
- --------------------------------------------------------------------------------
December 31, 2003 (Unaudited) Columbia Managed Municipals Fund
portfolio securities as segregated with the custodian in an amount equal to the
delayed delivery commitment.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities.
Determination of Class Net Asset Values
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, for purposes of
determining the net asset value of each class. Income and expenses are allocated
to each class based on the settled shares method, while realized and unrealized
gains (losses) are allocated based on relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable 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, the Fund will not be
subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
Distributions to Shareholders
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually. Income and
capital gains dividends are determined in accordance with income tax regulations
and 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 the 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.
The tax character of distributions paid for the year ended June 30, 2003 was as
follows:
2003
- -------------------------------------
Tax-Exempt Income $21,266,033
Ordinary Income 30,806
Long-Term Capital Gains --
- -------------------------------------
As of June 30, 2003, the components of distributable earnings on a tax basis
were as follows:
Undistributed Undistributed
Tax-Exempt Long-term Unrealized
Income Capital Gains Appreciations
- -------------------------------------------------------
$ 626,345 $ 7,760,057 $56,845,878
- -------------------------------------------------------
The estimated capital loss carryforward obtained from the Liberty Ohio
Tax-Exempt Fund was $1,612,102, of which all was utilized by the Liberty Managed
Municipals Fund for the year ended June 30, 2003.
Unrealized appreciation and depreciation at December 31, 2003, based on cost of
investments for federal income tax purposes and excluding any unrealized
appreciation and depreciation from changes in the value of assets and
liabilities resulting from changes in exchange rates was:
Unrealized appreciation $54,779,816
Unrealized depreciation (5,301,958)
-----------
Net unrealized appreciation $49,477,858
- ---------------------------------------------------
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
Columbia Management Advisors, Inc. ("Columbia"), an indirect, wholly-owned
subsidiary of FleetBoston Financial Corporation, is the investment advisor to
the Fund and receives a monthly fee based on the Fund's average daily net assets
at the following annual rates:
Average Daily Net Assets Fee Rate
- ---------------------------------------
First $100 million 0.450%
- ---------------------------------------
Next $100 million 0.425%
- ---------------------------------------
Next $800 million 0.400%
- ---------------------------------------
Over $1 billion 0.375%
- ---------------------------------------
For the six months ended December 31, 2003, the Fund's annualized effective
investment advisory fee rate was 0.42%.
30
- --------------------------------------------------------------------------------
December 31, 2003 (Unaudited) Columbia Managed Municipals Fund
Administration Fee
Columbia provides administrative and other services for a monthly fee based on
the Fund's average daily net assets at the following annual rates:
Average Daily Net Assets Fee Rate
- ---------------------------------------
First $100 million 0.150%
- ---------------------------------------
Next $100 million 0.125%
- ---------------------------------------
Next $800 million 0.100%
- ---------------------------------------
Over $1 billion 0.075%
- ---------------------------------------
For the six months ended December 31, 2003, the Fund's annualized effective
administration fee rate was 0.12%.
Pricing and Bookkeeping Fees
Columbia is responsible for providing pricing and bookkeeping services to the
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"). Columbia pays the total fees collected to State
Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the 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 the Fund for that month. The Fund also pays
additional fees for pricing services. For the six months ended December 31,
2003, the effective pricing and bookkeeping fee rate was 0.038%.
Transfer Agent Fee
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services for an annual fee of $34.00 per open account. The
Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee at the annual rate of 0.06% of the Fund's average daily net
assets plus flat-rate charges based on the number of shareholder accounts and
transactions. For the six months ended December 31, 2003, the annualized
effective transfer agent fee rate was 0.08%. The Transfer Agent was also
entitled to receive reimbursement for certain out-of-pocket expenses.
Effective October 13, 2003, Liberty Funds Services, Inc. changed its name to
Columbia Funds Services, Inc.
Underwriting Discounts, Service and Distribution Fees
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. Prior to October 13, 2003, Columbia
Funds Distributor, Inc. was known as Liberty Funds Distributor, Inc. For the six
months ended December 31, 2003, the Distributor has retained net underwriting
discounts of $2,036 on sales of the Fund's Class A shares and received CDSC of
$11,313 and $551 on Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") for its Class A, Class B and
Class C shares which requires the payment of a monthly service fee to the
Distributor. The service fee is equal to 0.10% annually of the net assets
attributable to shares of the Liberty Ohio Tax-Exempt Fund issued prior to
December 1, 1994 and 0.25% annually of the net assets attributable to shares
issued thereafter. This arrangement results in a service fee between the 0.10%
and 0.25% annual rates. For the six months ended December 31, 2003, annualized
effective service fee rates were 0.21%, 0.21% and 0.21% for Class A, Class B and
Class C shares, respectively.
The Plan also requires the payment of a monthly distribution fee to the
Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only. The Distributor has voluntarily
agreed to waive a portion of the Class C share distribution fee so that it will
not exceed 0.45% annually.
Prior to August 5, 2003, the Distributor has voluntarily agreed to waive a
portion of the Class C share distribution fee so that it would not exceed 0.05%
annually. For the six months period ended December 31, 2003, the Fund's
annualized effective distribution fee rate for Class C shares was 0.37%.
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.
31
- --------------------------------------------------------------------------------
December 31, 2003 (Unaudited) Columbia Managed Municipals Fund
Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
Fees Paid to Officers and Trustees
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund's 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
Fund's assets.
Note 5. Purchases and Sales of Securities
For the six months ended December 31, 2003, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $19,752,604 and
$39,328,542.
Note 6. Line of Credit
The Fund 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 the Fund based on its borrowings. In
addition, the 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 Statement of Operations. For the six months ended December 31,
2003, the Fund did not borrow under these arrangements.
Note 7. Disclosure of Significant Risks and Contingencies
High-Yield Securities
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. Government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk bonds." Economic
downturns may disrupt the high yield market and impair the ability of issuers to
repay principal and interest. Also, an increase in interest rates would likely
have an adverse impact on the value of such obligations. Moreover, high-yield
securities may be less liquid due to the extent that there is no established
retail secondary market and because of a decline in the value of such
securities.
Industry Focus
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
Legal Proceedings
Columbia, the Distributor and certain of their affiliates (collectively, "the
Columbia Group") have received information requests and subpoenas from various
regulatory authorities, including the Securities and Exchange Commission ("SEC")
and the New York Attorney General, in connection with their investigations of
late trading and market timing in mutual funds. The Columbia Group has informed
the Columbia Funds that it has not uncovered any instances where Columbia or the
Distributor was knowingly involved in late trading of mutual fund shares. The
Columbia Group has identified a limited number of investors who had informal
arrangements for trading certain Columbia Fund shares between 1998 and 2003. A
majority of the transactions in connection with these arrangements occurred in
one international fund and two domestic funds. The majority of the trading under
these arrangements was made by three entities. A substantial majority of the
trading had ended by October 2002. None of these arrangements exists today.
Information relating to those trading arrangements has been supplied to the New
York Attorney General and to the SEC and other regulatory authorities. To the
extent that any Columbia Fund, whose shares were involved in those trading
activities, was harmed by them, the Columbia Group has undertaken to reimburse
such fund.
On February 24, 2004, the SEC filed a civil complaint in the United States
District Court for the District of Massachusetts against Columbia and the
Distributor, alleging that they have violated certain provisions of the federal
securities laws. Also on February 24, 2004, the New York Attorney General filed
a civil complaint in New York Supreme Court, County of New York against Columbia
and the Distributor alleging that Columbia and the Distributor violated certain
New York anti-fraud statutes. Both complaints are based on arrangements between
1998 and 2003 with nine
32
- --------------------------------------------------------------------------------
December 31, 2003 (Unaudited) Columbia Managed Municipals Fund
investors for the trading of mutual fund shares. In their respective complaints,
the New York Attorney General and the SEC are seeking disgorgement of profits,
restitution, monetary penalties and permanent injunctions, including, in the
case of the SEC, a permanent injunction from serving or acting as investment
advisor or distributor of any registered fund.
Columbia and the Distributor are engaged in discussions with the SEC staff in an
effort to reach a satisfactory resolution of these matters. As a result of these
matters or any adverse publicity or other developments resulting from them,
there may be increased redemptions or reduced sales of Columbia Fund shares,
which could increase transactions costs or operating expenses, or other
consequences for the Columbia Funds.
Note 8. Business Combinations and Mergers
Fund Mergers
As of the end of business on November 1, 2002, the Fund acquired all the net
assets of Liberty Ohio Tax-Exempt Fund pursuant to a plan of reorganization. All
assets of Liberty Ohio Tax-Exempt Fund were transferred to the Fund in a
tax-free exchange and shareholders of Liberty Ohio Tax-Exempt Fund received
shares of Liberty Managed Municipals Fund in exchange for their shares as
follows:
Liberty Liberty Ohio
Managed Tax-Exempt
Municipals Fund Fund Net Unrealized
Shares Issued Assets Received Appreciation(1)
- -------------------------------------------------------
7,582,961 $68,174,275 $5,937,882
- -------------------------------------------------------
(1) Unrealized Appreciation is included in the Net Assets Received amount above.
Net Assets of
Net Assets of Net Assets of Liberty Liberty Managed
Liberty Managed Ohio Tax-Exempt Municipals Fund
Municipals Fund Fund Immediately Immediately
Prior to Combination Prior to Combination After Combination
- --------------------------------------------------------------------
$443,275,288 $68,174,275 $511,449,563
- --------------------------------------------------------------------
33
FINANCIAL HIGHLIGHTS Columbia Managed Municipals Fund
Selected data for a share outstanding throughout the period is as follows:
(Unaudited)
Six Months Ended Period Ended
December 31, June 30,
Class A Shares 2003 2003 (a)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 9.38 $ 9.01
- -----------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (b) 0.17 0.26
Net realized and unrealized gain (loss) on investments and
futures contracts (0.12) 0.37
------- -------
Total from Investment Operations 0.05 0.63
- -----------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.18) (0.26)
From net realized gains (0.15) --
------- -------
Total from Distributions Declared (0.33) (0.26)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.10 $ 9.38
Total return (c)(d) 0.64% 7.06%
- -----------------------------------------------------------------------------------------------------
Ratios to Average Net Asset/Supplemental Data:
Expenses (e)(f) 0.95% 0.97%
Net investment income (e)(f) 4.20% 4.27%
Portfolio turnover rate 4% 40%
Net assets, end of period (000's) $51,540 $53,979
- -----------------------------------------------------------------------------------------------------
(a) Class A shares were initially offered on November 1, 2002. Per share data
and total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(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.
34
- --------------------------------------------------------------------------------
Columbia Managed Municipals Fund
Selected data for a share outstanding throughout the period is as follows:
(Unaudited)
Six Months Ended Period Ended
December 31, June 30,
Class B Shares 2003 2003 (a)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 9.38 $ 9.01
- -----------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (b) 0.14 0.21
Net realized and unrealized gain (loss) on investments and
futures contracts (0.12) 0.37
------ ------
Total from Investment Operations 0.02 0.58
- -----------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.15) (0.21)
From net realized gains (0.15) --
------ ------
Total from Distributions Declared (0.30) (0.21)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.10 $ 9.38
Total return (c)(d) 0.27% 6.54%
- -----------------------------------------------------------------------------------------------------
Ratios to Average Net Asset/Supplemental Data:
Expenses (e)(f) 1.70% 1.72%
Net investment income (e)(f) 3.46% 3.52%
Portfolio turnover rate 4% 40%
Net assets, end of period (000's) $7,847 $8,956
- -----------------------------------------------------------------------------------------------------
(a) Class B shares were initially offered on November 1, 2002. Per share data
and total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(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.
35
- --------------------------------------------------------------------------------
Columbia Managed Municipals Fund
Selected data for a share outstanding throughout the period is as follows:
(Unaudited)
Six Months Ended Period Ended
December 31, June 30,
Class C Shares 2003 2003 (a)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 9.38 $ 9.01
- -----------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (b) 0.16 0.25
Net realized and unrealized gain (loss) on investments and
futures contracts (0.13) 0.35
------ ------
Total from Investment Operations 0.03 0.60
- -----------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.16) (0.23)
From net realized gains (0.15) --
------ ------
Total from Distributions Declared (0.31) (0.23)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.10 $ 9.38
Total return (c)(d)(e) 0.42% 6.75%
- -----------------------------------------------------------------------------------------------------
Ratios to Average Net Asset/Supplemental Data:
Expenses (f)(g) 1.32% 1.02%
Net investment income (f)(g) 3.82% 4.20%
Waiver/reimbursement (g) 0.30% 0.70%
Portfolio turnover rate 4% 40%
Net assets, end of period (000's) $1,624 $1,579
- -----------------------------------------------------------------------------------------------------
(a) Class C shares were initially offered on November 1, 2002. Per share data
and total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(d) Not annualized.
(e) Had the Distributor not waived a portion of expenses, total return would
have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
36
- --------------------------------------------------------------------------------
Columbia Managed Municipals Fund
Selected data for a share outstanding throughout the period is as follows:
(Unaudited)
Six Months
Ended
December 31, Year Ended June 30,
Class Z Shares 2003 2003 (a) 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 9.38 $ 8.95 $ 8.99 $ 8.65 $ 9.07 $ 9.38
- -----------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income 0.18(b) 0.42(b) 0.43(b)(c) 0.45(b) 0.47 0.47
Net realized and
unrealized gain (loss)
on investments and
futures contracts (0.12) 0.41 0.18(c) 0.41 (0.32) (0.31)
-------- -------- -------- -------- -------- --------
Total from Investment
Operations 0.06 0.83 0.61 0.86 0.15 0.16
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to
Shareholders:
From net investment
income (0.19) (0.40) (0.44) (0.45) (0.47) (0.47)
From net realized
gains (0.15) -- (0.21) (0.07) (0.10) --
-------- -------- -------- -------- -------- --------
Total from
Distributions Declared (0.34) (0.40) (0.65) (0.52) (0.57) (0.47)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End
of Period $ 9.10 $ 9.38 $ 8.95 $ 8.99 $ 8.65 $ 9.07
Total return (d) 0.73%(e) 9.50% 7.06% 10.13% 1.86% 1.67%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Asset/ Supplemental
Data:
Expenses (f) 0.74%(g) 0.76% 0.76% 0.74% 0.69% 0.72%
Net investment income
(f) 4.41%(g) 4.58% 4.82%(c) 5.07% 5.39% 5.02%
Portfolio turnover
rate 4% 40% 17% 17% 19% 17%
Net assets, end of
period (000's) $406,124 $432,407 $442,660 $454,366 $458,205 $538,322
- -----------------------------------------------------------------------------------------------------------------------------
(a) On July 29, 2002, the Fund's existing shares were redesignated Class Z
shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective July 1, 2001, the Fund adopted the provisions of the AICPA Audit
and Accounting Guide for Investment Companies and began amortizing and
accreting premium and discount on all debt securities. The effect of this
change for the year ended June 30, 2002, was to increase the ratio of
investment income to average net assets from 4.81% to 4.82%. The impact to
net investment income and net realized and unrealized gain was less than
$0.01. Per share data and ratios for periods prior to June 30, 2002, have
not been restated to reflect this change in presentation.
(d) Total return at net asset value assuming all distributions reinvested.
(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.
37
IMPORTANT INFORMATION ABOUT THIS REPORT Columbia Managed Municipals Fund
Transfer Agent
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
Distributor
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
Investment Advisor
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02111
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 Managed Municipals
Fund. 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.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to its portfolio securities is available (i) without
charge, upon request, by calling 800-345-6611 and (ii) on the Securities and
Exchange Commission's website at http://www.sec.gov.
38
COLUMBIA FUNDS Columbia Managed Municipals Fund
December 31, 2003
- ------------------------------------------ ------------------------------------------------------------
Large Growth Columbia Common Stock
Columbia Equity Growth
Columbia Growth
Columbia Growth Stock
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II
Columbia Young Investor
------------------------------------------------------------
Large Value Columbia Equity Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value
------------------------------------------------------------
Midcap Growth Columbia Acorn Select
Columbia Special
Columbia Tax-Managed Aggressive Growth
------------------------------------------------------------
Midcap Value Columbia Select Value
Columbia Strategic Equity
Columbia Strategic Value
------------------------------------------------------------
Small Growth Columbia Acorn Fund
Columbia Acorn USA
Columbia Small Company Equity
------------------------------------------------------------
Small Value Columbia Small Cap
Columbia Small Cap Value
------------------------------------------------------------
Balanced Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
------------------------------------------------------------
Specialty Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
------------------------------------------------------------
Taxable Fixed-Income Columbia Contrarian Income
Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Securities
Columbia Income
Columbia Intermediate Bond
Columbia Intermediate Government Income
Columbia Quality Plus Bond
Columbia Short Term Bond
Columbia Strategic Income
------------------------------------------------------------
Floating Rate Columbia Floating Rate
Columbia Floating Rate Advantage
------------------------------------------------------------
Tax Exempt Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals
Columbia National Municipal Bond
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
39
- --------------------------------------------------------------------------------
December 31, 2003 Columbia Managed Municipals Fund
- ------------------------------------------ ------------------------------------------------------------
Single State Tax Exempt Columbia California Tax-Exempt
Columbia Connecticut Intermediate Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate Municipal Bond
Columbia Massachusetts Intermediate Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate Municipal Bond
Columbia New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate Municipal Bond
Columbia Rhode Island Intermediate Municipal Bond
------------------------------------------------------------
Money Market Columbia Money Market
Columbia Municipal Money Market
------------------------------------------------------------
International/Global Columbia Acorn International
Columbia Acorn International Select
Columbia International Equity
Columbia International Stock
Columbia Newport Asia Pacific
Columbia Newport Europe
Columbia Newport Global Equity
Columbia Newport Greater China
Columbia Newport Tiger
------------------------------------------------------------
Index Funds Columbia Large Company Index
Columbia Small Company Index
Columbia US Treasury Index
Columbia funds are offered only by prospectus.
Please see your financial advisor for a
prospectus, which describes in detail fund
objectives, investment policies, risks, sales
charges, fees, liquidity and other matters of
interest. Please read the prospectus carefully
before you invest or send money.
For complete product information on any Columbia
fund, visit our website at
www.columbiafunds.com.
Columbia Management Group and Columbia
Management refer collectively to the various
investment advisory subsidiaries of Columbia
Management Group, including Columbia Management
Advisors, Inc., the registered investment
advisor, and to Columbia Funds Distributor, Inc.
40
photo of: hands on keyboard
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Managed Municipals Fund Semiannual Report, December 31, 2003
logo:columbia funds
ColumbiaFunds
A Member of Columbia Management Group
(c) 2004 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
798-03/732Q-1203 (02/04) 04/0204
ITEM 2. CODE OF ETHICS.
Note applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Note applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Note 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: Not
applicable at this time.
(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 IX
------------------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date March 4, 2004
--------------------------------------------------------------------------
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/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date March 4, 2004
--------------------------------------------------------------------------