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 811-01829
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Columbia Acorn Trust
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(Exact name of registrant as specified in charter)
227 West Monroe, Suite 3000, Chicago, Illinois 60606
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
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Date of fiscal year end: 12/31/2003
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Date of reporting period: 12/31/2003
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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.
[Photos of acorns]
COLUMBIA ACORN FAMILY OF FUNDS
CLASS Z SHARES 4
ANNUAL REPORT
DECEMBER 31, 2003
MANAGED BY COLUMBIA WANGER ASSET MANAGEMENT, L.P.
COLUMBIA ACORN FUND
COLUMBIA ACORN INTERNATIONAL
COLUMBIA ACORN USA
COLUMBIA ACORN INTERNATIONAL SELECT
COLUMBIA ACORN SELECT
COLUMBIA THERMOSTAT FUND
Columbia Acorn Family of Funds Annual Report 2003
Table of Contents
Columbia Acorn Family of Funds
Performance At A Glance 1
Squirrel Chatter: Don't Bet The Farm 2
COLUMBIA ACORN FUND
In a Nutshell 4
At a Glance 5
Major Portfolio Changes 16
Statement of Investments 18
COLUMBIA ACORN INTERNATIONAL
In a Nutshell 6
At a Glance 7
Major Portfolio Changes 30
Statement of Investments 32
Portfolio Diversification 36
COLUMBIA ACORN USA
In a Nutshell 8
At a Glance 9
Major Portfolio Changes 37
Statement of Investments 38
COLUMBIA ACORN INTERNATIONAL SELECT
In a Nutshell 10
At a Glance 11
Major Portfolio Changes 43
Statement of Investments 44
Portfolio Diversification 46
COLUMBIA ACORN SELECT
In a Nutshell 12
At a Glance 13
Major Portfolio Changes 47
Statement of Investments 48
COLUMBIA THERMOSTAT FUND
In a Nutshell 14
At a Glance 15
Statement of Investments 67
Statements of Assets and Liabilities 68
Statements of Operations 69
Statement of Changes in Net Assets 70
Financial Highlights 72
Notes to Financial Statements 73
COLUMBIA ACORN FAMILY OF FUNDS
Statements of Assets and Liabilities 50
Statements of Operations 51
Statements of Changes in Net Assets 52
Financial Highlights 56
Notes to Financial Statements 60
Report of Independent Auditors 78
Columbia Acorn Family of Funds Information 79
Board of Trustees and
Management of Acorn 80
> 2003 YEAR-END DISTRIBUTIONS
The following table details the funds' year-end distributions. The record and
ex-dividend date for COLUMBIA ACORN FUND and COLUMBIA ACORN SELECT was December
5, 2003 and the payable date was December 8, 2003. For COLUMBIA THERMOSTAT FUND,
the record and ex-dividend date was December 26, 2003 and the payable date was
December 29, 2003.
LONG-TERM SHORT-TERM
CAPITAL CAPITAL ORDINARY REINVESTMENT
GAINS GAINS INCOME PRICE
--------- ---------- ---------- -------------
Columbia Acorn Fund $ 0.0201 None None $ 21.87
Columbia Acorn Select $ 0.0890 $ 0.0452 None $ 17.71
Columbia Thermostat Fund None None $ 0.1508 $ 12.23
THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY
AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO
BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY
CHANGE AT ANY TIME WITHOUT NOTICE.
Columbia Acorn Family of Funds
>Performance At A Glance Class Z Average Annual Total Returns through
12/31/03
4TH * 1 3 5 10 LIFE
QUARTER YEAR YEARS YEARS YEARS OF FUND
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COLUMBIA ACORN
FUND (6/10/70) 14.45% 45.68% 10.26% 14.49% 13.58% 16.30%
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S&P 500 12.18% 28.69% -4.05% -0.57% 11.07% 12.12%
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Russell 2500 14.43% 45.51% 6.58% 9.40% 11.74% NA
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Russell 2000 14.52% 47.25% 6.27% 7.13% 9.47% NA
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Lipper Small-Cap
Core Funds Index 14.85% 40.90% 6.83% 9.39% 11.11% NA
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Lipper Mid-Cap
Core Funds Index 13.06% 36.58% 2.38% 7.89% 10.95% NA
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COLUMBIA ACORN
INTERNATIONAL (9/23/92) 17.35% 47.80% -0.73% 6.99% 7.44% 11.07%
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Citigroup EMI 15.97% 55.02% 7.19% 6.18% 4.74% 6.28%
Global ex-US
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MSCI EAFE 17.08% 38.59% -2.91% -0.05% 4.47% 6.16%
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Lipper Int'l Small- 14.77% 55.10% 5.45% 10.31% NA NA
Cap Funds Index
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COLUMBIA ACORN USA
(9/4/96) 13.57% 47.13% 12.67% 9.87% -- 14.00%
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Russell 2000 14.52% 47.25% 6.27% 7.13% -- 8.63%
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Lipper Small-Cap
Core Funds Index 14.85% 40.90% 6.83% 9.39% -- 9.90%
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S&P 500 12.18% 28.69% -4.05% -0.57% -- 9.12%
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COLUMBIA ACORN INT'L
SELECT + (11/23/98) 16.92% 41.79% -5.04% 6.14% -- 8.01%
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Citigroup World ex-US
Cap Range $2-10B 15.81% 49.65% 4.73% 5.92% -- 6.48%
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MSCI EAFE 17.08% 38.59% -2.91% -0.05% -- 0.75%
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Lipper International
Funds Index 15.45% 36.00% -1.85% 2.13% -- 2.51%
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COLUMBIA ACORN
SELECT+ (11/23/98) 4.97% 30.61% 9.15% 13.43% -- 14.66%
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S&P MidCap 400 13.19% 35.62% 4.84% 9.21% -- 11.28%
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Lipper Mid-Cap
Growth Index 10.98% 35.42% -8.56% 2.18% -- 4.78%
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S&P 500 12.18% 28.69% -4.05% -0.57% -- 0.55%
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COLUMBIA THERMOSTAT
FUND (9/25/02) 7.34% 19.79% -- -- -- 19.01%
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S&P 500 12.18% 28.69% -- -- -- 29.59%
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Lehman U.S. Credit
Intermediate Bond Index 0.40% 6.91% -- -- -- 7.95%
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Lehman U.S Govt.
Intermediate Bond Index -0.20% 2.29% -- -- -- 2.89%
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Lipper Flexible
Portfolio Funds Index 9.26% 23.03% -- -- -- 23.09%
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* Not annualized.
+ Liberty Acorn Foreign Forty was renamed Columbia Acorn International Select.
Liberty Acorn Twenty was renamed Columbia Acorn Select. Both changes went into
effect on October 13, 2003.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Current performance may be
lower or higher than the performance data collected. Visit columbiafunds.com for
daily performance updates. For complete information about Columbia Acorn Funds,
including objectives, risks, charges and expenses, refer to a copy of the
prospectus. Be sure to read it carefully before you invest.
DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S.
blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500.
RUSSELL 2000 is a market-weighted index of 2000 U.S. companies, formed by
taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL
2500 is the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI
GLOBAL EX-US is the bottom 20% of institutionally investable capital of
developed and emerging countries, selected by index sponsor, outside the U.S.
MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely
recognized international benchmark that comprises 20 major markets in proportion
to world stock market capitalization.
CITIGROUP WORLD EX-US CAP RANGE $2-10B is a subset of the Broad Market Index,
representing a mid-cap developed market index excluding the U.S. LIPPER INDEXES
include the largest funds tracked by Lipper, Inc. in the named category. LIPPER
MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX,
30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S.
funds, not including non-U.S. small cap funds; Lipper International SMALL-CAP
FUNDS INDEX, 10 largest non-U.S. funds investing in small cap companies,
including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30
largest small cap core funds, including Columbia Acorn Fund. LIPPER FLEXIBLE
PORTFOLIO FUNDS INDEX is an equal dollar weighted index of the 30 largest mutual
funds within the Flexible Portfolio fund classification, as defined by Lipper.
LEHMAN U.S. GOVERNMENT INTERMEDIATE BOND INDEX is made up of 1 to 10 year
treasury and agency bonds, excluding targeted investor notes and state and local
government series bonds. The LEHMAN U.S. CREDIT INTERMEDIATE BOND INDEX is the
intermediate component of the U.S. Credit Index. The U.S. Credit Index includes
publicly issued U.S. corporate and foreign debentures and secured notes that
meet specified maturity, liquidity, and quality requirements. All indexes are
unmanaged and returns include reinvested distributions. A more complete
description of each index is included in the Fund's statement of additional
information. It is not possible to invest directly in an index.
1
>Squirrel Chatter: DON'T BET THE FARM
Photo of Ralph Wanger
How do you run a mutual fund to get good results? Are the investing rules the
same for managing small-cap/mid-cap funds and large-cap funds? Here are some of
my personal opinions on these questions.
We believe some basic principles apply to any stock portfolio. (1)
Diversification reduces risk, so own mid-cap stocks (Columbia Acorn Select) and
a small-cap fund (Columbia Acorn USA). (2) International stocks add additional
beneficial diversification (Columbia Acorn International) 1. (3) The market
often over-values growth stocks, so pay close attention to valuation. (4) Big
winners take years to develop, so think long term.
So what are the differences in managing small-, mid-and large-cap funds?
Many large-company portfolios are run according to the rules expressed in
Charles Ellis's book, WINNING THE LOSER'S GAME. 2 He tells us to play it safe.
Start with a portfolio that mirrors the market and try to avoid big losers
(fraud such as Enron and WorldCom, overpriced growth such as Cisco at $80 3).
One could say he starts with the S&P 500 and reduces it to the Ellis 495 by
getting rid of some potential big losers.
The WINNING THE LOSER'S GAME strategy may work for a big-company
portfolio, but it is not the way I like to run a small-cap fund. Small-cap is a
winner's game. You want to be a Barry Bonds or a Sammy Sosa and hit 50 home
runs. If you get the homers, you are a hero; you can strike out a lot of times
but no one will care very much. As an example, International Game Technology
(IGT) has been a great long-term winner for the funds. In the 2003 season, IGT
hit a grand slam - an additional unrealized gain of $175 million! 4 Even if you
strike out more often than you would like, one big winner more than offsets a
half-dozen $10 million losers.
Some of our big winners are duly celebrated in the Scarlet A section. The
funds had fine results in 2003 due to the success we had in these stocks and
many others. Writing about success, however, is less colorful than writing about
failure; there are more plays about Nero than about Marcus Aurelius.
When it comes to investing, there are only a few ways to fail. You can buy
a company that runs into unexpected problems. Sometimes you buy into a
speculative company you know is high risk and the company just doesn't make it.
The unfortunate speculators who bought Cisco at $80 lost mere hundreds of
billions of dollars compared to the more unfortunate speculators gulled by the
Enron and WorldCom frauds. Of course bubbles and speculation have a long
history. The first overpricing bubble on record was the tulip-mania boom in
Holland in 1636. Tulips were a new "high-tech" flower in Europe but the price of
strangely colored varieties went way too high, creating a nasty collapse.
Tulip-bulb farming today is still important to the Dutch but it is no longer
high tech.
Farmers can fool you. About 25 years ago, I put some personal money into
Maine Sugar. The promoter was a potato processor in Aroostook County, Maine. He
believed that the climate and soil there was favorable for growing sugar beets.
He floated stock to build a sugar refinery and invited a planeload of New York
analysts to come see the sugar beet fields under cultivation. The analysts got
on a bus and were driven to a field where the CEO dug up a giant sugar beet. The
analysts had never seen such a large sugar beet (most of them had never seen a
farm, for that matter). They got back on the bus, and after another ten minutes
arrived at another field. The CEO dug up a sugar beet bigger than the first one.
The bus continued to another farm field where again an impressive beet was
unearthed. When the analysts arrived back in New York, they wrote buy reports
based on the great number of farms growing sugar beets. Maine Sugar dissolved a
few months later, and the city-boy analysts realized that they had been shown
the same field three times in a row. (Columbia Acorn Funds didn't own Maine
Sugar).
The latest foolish farm fraud is Parmalat, an Italian company in the milk
business. (Parma latte, get it?) The Columbia Acorn Funds lost a few million
dollars in Parmalat (see Pages 6 and 10). Big banks that did business with
Parmalat could lose hundreds of millions of dollars in bad loans. One of the
centerpieces of the fraud was a made-up bank deposit of 3.95 billion euros
(about $5 billion). The Parmalat officials allegedly handed the auditors a
hastily forged document purporting to be the bank's acknowledgement of the
deposit. The auditors appear to have accepted the false affidavit without making
their own inquiry ("Hey, we are facing a deadline and it's only five billion.")
and allowed the company to continue its fraud for a few more months, roping us
in.
How could we have avoided getting caught? Talking to company management
more often probably would have not helped at all; after all, the bank lenders,
the bond rating agencies, and auditor were fooled, and they had much freer
access to the company's internal records then any outside financial analyst
could ever get. One answer would have been to talk to Parmalat's suppliers, in
this case the dairy farmers. After the collapse, someone did ("Parma Farmers Had
One Rule: Don't Deal With Parmalat," BLOOMBERG NEWS, January 19, 2004). Achille
Coelli, director of the Union of Parma Farmers said, "Farmers here won't work
with Parmalat. Tanzi [the CEO] never had a good reputation. The company was a
slow payer, so only one
1-800-922-6769
2
percent of the milk produced in Parma province was sold to Parmalat." Obvious
red flag? Sure. Did any analyst do this check before the collapse? Don't think
so.
What conclusions do we want to draw from this crying over spilt milk,
besides the vaguely comforting notion that not all fraud occurs in the USA?
First, a smart crook can fool some of the people all of the time. Second, really
star-quality analytic work could help discover frauds sooner, but much of the
time that doesn't happen. Third, complete skepticism would have you avoid fraud,
but you would avoid the good investments too. An investor must balance
skepticism and credulity just as one balances risk/return or growth/value.
Fourth, diversification dilutes the negative effect of one bad stock. Since
fraud tends to hit you one at a time, it's a strike out, but it doesn't cost you
the season. The benefits you get from big winners far outweigh a few losers.
2003 SCARLET A WINNERS
HEAP HIGH THE GOLDEN CORN! 5
-- JOHN GREENLEAF WHITTIER
Our analysts and portfolio managers deserve a lot of credit for picking
exceptional stocks but we do not rely solely on our internal investment prowess.
Often we get sage advice from investment pros outside our Chicago office. We
honor and thank these individuals by presenting them with the coveted Scarlet A
certificate. In 2003, domestic stocks had to increase more than 150% and make
more than $40 million to be considered for a Scarlet A. The international stock
criteria was a return of at least 100% and a dollar gain of $20 million or more.
Our thanks to Greg Jackson of Blum Capital Partners for his help on
software company NOVELL. The stock was up 214% in 2003 and brought in a
firm-wide gain of over $101 million. Rural cellular service provider WESTERN
WIRELESS was up 250% in 2003 and provided a dollar gain of nearly $69 million.
Hats off to Thomas Lee of JPMorgan for his help with this 2003 winner. Thomas
confirmed our internal analysis that Western Wireless was generating free cash
flow and that fears that the company could go bust were unfounded. Natural gas
producer ULTRA PETROLEUM, up nearly 150%, brought in a dollar gain of over $50
million. Credit for this idea goes to Barry Sahgal of Brean Murray & Co. While
this is Barry's first Scarlet A win, this is not his first contribution to the
Columbia Acorn Funds. Barry also brought EVERGREEN RESOURCES to our attention in
1998, a stock that has increased over 270% during the five years we've held it
in our funds.
A repeat winner tops our international Scarlet A list. Ireland's ANGLO
IRISH BANK was up 142% in 2003 and provided a firm-wide dollar gain of nearly
$60 million. To David Smith of Davy Stockbrokers in Dublin: Thanks again! Stefan
Stalmann of Dresdner Kleinwort Wasserstein in Frankfurt, Germany, earns the
Scarlet A for his help with DEPFA BANK. The stock, up 139% with a $22 million
gain, provides international public-sector financing. While we had built a
position in Depfa Bank before speaking with Stefan, his understanding of the
company reinforced our conviction and we remained invested in the stock longer
than we might have on his advice, benefiting shareholders. It is noteworthy that
Robert Hurkmans, a Dresdner contact in New York, encouraged us to contact
Stefan. The best attributes of a good broker are credibility and being selective
about providing information and analyst contacts within their own organization.
So, to Robert Hurkmans, we offer kudos for darned good brokering.
COLUMBIA WAM NEWS
John Park has been named director of domestic research for Columbia Wanger Asset
Management, L.P. John joined the firm in 1993 and has managed Columbia Acorn
Select since its 1998 inception. He also became a co-manager on Columbia Acorn
Fund in 2003.
/s/ Ralph Wanger
Ralph Wanger
FOUNDER, ADVISOR AND TRUSTEE
COLUMBIA WANGER ASSET MANAGEMENT, L.P.
________________________________________________________________________________
1 For more information about Columbia Acorn Select, Columbia Acorn USA or
Columbia Acorn International, including management fees and expenses, please
call us at (800) 922-6769 or visit www.columbiafunds.com. Please read the
prospectus carefully before you invest or send money.
2 Ellis, Charles D., WINNING THE LOSER'S GAME: TIMELESS STRATEGIES FOR
SUCCESSFUL INVESTING, McGraw-Hill Trade, 4th Edition, March 14, 2002.
3 No fund advised by Columbia Wanger Asset Management, L.P., owns or has owned
Enron, WorldCom or Cisco.
4 The dollar gain for the one-year period ended December 31, 2003 reflects the
total gain in the stock across all funds/accounts advised by Columbia Wanger
Asset Management, L.P., that held IGT.
5 Whitter, John Greenleaf, THE CORN SONG, prior to 1872.
As of 12/31/03, fund positions, as a percent of net assets, in the holdings
mentioned were: Parmalat: Columbia Acorn International, 0.0%; Columbia Acorn
International Select, 0.0%. International Game Technology: Columbia Acorn Fund,
2.8%; Columbia Acorn Select, 2.3%. Novell: Columbia Acorn Fund, 0.9%; Columbia
Acorn USA, 2.0%. Western Wireless: Columbia Acorn Fund, 0.5%; Columbia Acorn
USA, 2.5%. Ultra Petroleum: Columbia Acorn Fund, 0.6%; Columbia Acorn USA, 0.8%.
Evergreen Resources: Columbia Acorn Fund, 0.4%. Anglo Irish Bank: Columbia Acorn
Fund, 0.5%; Columbia Acorn International, 2.2%; Columbia Acorn International
Select, 5.8%. Depfa Bank: Columbia Acorn Fund, 0.2%; Columbia Acorn
International, 0.9%; Columbia Acorn International Select, 2.5%.
3
Columbia Acorn Fund*
>In a Nutshell
Photo of Charles P. McQuaid
Photo of Robert A. Mohn
Photo of John H. Park
Columbia Acorn Fund surged 45.68% in 2003, our fourth best year ever. As
shown on Page 1, the Fund matched the Russell 2500, slightly underper-formed the
Russell 2000, handily beat many peers and substantially outperformed the large
cap S&P 500. During the fourth quarter, Columbia Acorn Fund's 14.45% gain
matched small-cap performance measures and moderately beat mid- and large-cap
benchmarks.
We've previously discussed buying good tech stocks at distressed prices,
and also purchasing select telecom and biotech stocks when we believed we were
being paid to take risk. Most of these stocks were up a lot, but given improved
tech demand, repaired telecom balance sheets, and biotech fundamental progress,
we believe additional gains seem plausible for many of the holdings. We
constantly review the Fund's portfolio, looking to swap into stocks that we
consider more attractive.
Aspect Communications, discussed separately on this page, was Columbia
Acorn Fund's biggest percentage winner, up 454% during the year. Barcode and
wireless ID systems maker Unova jumped 354% on improved earnings, while software
provider Novell, technology e-learning company Skillsoft Publishing, and
technology staff company Igate Capital each at least doubled. The Fund's biggest
loser was First Health Group, down over 20%, as competitors put pricing pressure
on the firm.
Columbia Acorn Fund's foreign stocks delivered an average 57.81% return
for the year. The leading percentage gainer was Korean auto parts maker Hyundai
Mobis, which cranked out a 171% gain on better than expected earnings. Anglo
Irish Bank, discussed on Page 6, appreciated 125% and was the Fund's largest
foreign winner in dollars. We continue to believe that foreign stocks on average
are better values than domestic securities, so we have increased the Fund's
foreign weighting to 12.7%. We currently don't expect it to exceed 15%.
Small caps have outperformed large caps for nearly five years and by most
measures small-cap valuations are now close to long-term average valuations
relative to large caps. While we continue to find companies that we believe are
attractive, the combination of fewer compelling new ideas and more existing
stocks approaching sell targets has caused the Board of Trustees to take
proactive steps to reduce cash inflows. Existing shareholders can continue to
buy shares in Columbia Acorn Fund. The minimum for NEW eligible accounts,
however, has been raised to $50,000 and several marketing channels have been
closed. Please see our recent prospectus supplement for additional details.
We'd like to take this opportunity to officially welcome John Emerson to
Columbia Wanger Asset Management's domestic analyst team. John joined us
mid-year to cover media stocks.
/s/ Charles P. McQuaid /s/ Robert A. Mohn
Charles P. McQuaid Robert A. Mohn
LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
/s/ John H. Park
John H. Park
CO-PORTFOLIO MANAGER
The Right Call
- --------------------------------------------------------------------------------
Columbia Wanger Asset Management's technology services and software analyst Ben
Andrews always believed that technology was driving a revolution in the
telecommunications industry. Though telecom-related stocks collapsed from early
2000 to early 2003, consumers worldwide still wanted hand-held devices and
broadband connections, while corporations wanted increased productivity and cost
savings. Call center software provider Aspect Communications suffered from
management, product, and financing transitions, but had a stable customer base
that generated plenty of revenue. As the economy improved, Aspect's next
generation products started to grow, and the company's financing and management
problems were worked out. Aspect became profitable and the stock rose over 450%
in 2003.
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL
RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
* LIBERTY ACORN FUND WAS RENAMED COLUMBIA ACORN FUND ON OCTOBER 13, 2003. ON
SEPTEMBER 30, 2003, RALPH WANGER RELINQUISHED HIS DAILY FIRM AND PORTFOLIO
MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME THE LEAD
PORTFOLIO MANAGER OF COLUMBIA ACORN FUND. MR. WANGER CONTINUES TO SERVE AS A
TRUSTEE OF COLUMBIA ACORN TRUST AND AS A MEMBER OF THE COLUMBIA THERMOSTAT
SUPERVISORY COMMITTEE, AND WILL REMAIN AFFILIATED WITH COLUMBIA WANGER ASSET
MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ASPECT COMMUNICATIONS, 0.6%; UNOVA, 0.3%; SKILLSOFT PUBLISHING,
0.8%; IGATE CAPITAL, 0.3%; FIRST HEALTH GROUP, 1.0%; HYUNDAI MOBIS, 0.2%; ANGLO
IRISH BANK, 0.5%; NOVELL, 0.9%.
1-800-922-6769
4
Columbia Acorn Fund
>At a Glance Ticker Symbol: ACRNX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2003
1 YEAR 5 YEARS 10 YEARS
- -----------------------------------------------------------
Returns before taxes 45.68% 14.49% 13.58%
- -----------------------------------------------------------
Returns after taxes 45.66 12.74 11.50
on distributions
- -----------------------------------------------------------
Returns after taxes 29.72 11.88 10.93
on distributions and
sale of fund shares
- -----------------------------------------------------------
S&P 500 (pretax) 28.69 -0.57 11.07
- -----------------------------------------------------------
Russell 2500 (pretax) 45.51 9.40 11.74
- -----------------------------------------------------------
Russell 2000 (pretax) 47.25 7.13 9.47
- -----------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
class Z shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value will fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
PIE CHART
Consumer 20.0%
Goods/Services
Industrial 12.2%
Goods/Services
Finance 11.6%
Other* 8.8%
Health Care 8.6%
Energy/Minerals 7.0%
Real Estate 4.3%
Information 27.5%
Software/Services 13.8%
Computer Related Hardware 8.9%
Media 2.3%
Telecommunications 2.5%
* Other includes cash and other assets less liabilities of 7.8%. Foreign
equities within the portfolio were 12.7% diversified by region as follows: 8.0%
Europe; 1.7% Asia without Japan; 1.7% Canada; 0.6% Japan; 0.3% Australia; 0.2%
Latin America; 0.2% New Zealand.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS Z)
>June 10, 1970 through December 31, 2003
This graph compares the results of $10,000 invested in Columbia Acorn Fund at
inception on June 10, 1970 to the S&P 500 Stock Index, a broad, market-weighted
average of U.S. blue-chip company stock performance. The index is unmanaged and
returns for both the index and the Fund include reinvested dividends and capital
gains. It is not possible to invest directly in an index. The graph and table do
not reflect tax deductions that a shareholder would pay on Fund distributions or
the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR
DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS,
INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE
PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST.
COLUMBIA ACORN FUND NAV ON 12/31/03: $22.56
TOTAL NET ASSETS: $11,168.8 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
45.68% 14.49% 13.58% 16.30%
MOUNTAIN CHART
COLUMBIA
ACORN FUND S&P 500
---------- -------
6/30/70 9694.96 9819.82
7/31/70 10517.20 10575.00
8/31/70 11223.10 11081.10
9/30/70 12022.80 11481.20
10/31/70 11916.20 11385.80
11/30/70 12169.40 11962.10
12/31/70 13586.70 12676.20
1/31/71 14953.40 13224.70
2/28/71 15837.70 13378.40
3/31/71 17020.50 13905.70
4/30/71 18230.50 14446.20
5/31/71 17275.90 13881.80
6/30/71 17397.30 13928.20
7/31/71 17289.40 13389.00
8/31/71 17640.10 13908.30
9/30/71 17571.50 13846.10
10/31/71 16516.40 13304.20
11/30/71 15677.70 13306.80
12/31/71 17828.50 14489.90
1/31/72 18652.50 14788.00
2/29/72 19648.80 15197.40
3/31/72 20119.20 15323.30
4/30/72 20672.70 15426.60
5/31/72 20824.90 15731.30
6/30/72 20562.00 15425.30
7/31/72 19521.50 15498.10
8/31/72 19129.90 16070.50
9/30/72 18962.10 16029.40
10/31/72 18920.10 16218.90
11/30/72 19745.20 17000.50
12/31/72 19367.60 17241.70
1/31/73 18270.10 16984.60
2/28/73 16883.50 16385.80
3/31/73 16563.50 16399.00
4/30/73 15055.00 15373.60
5/31/73 13637.80 15515.40
6/30/73 13637.80 15453.10
7/31/73 15214.60 16081.10
8/31/73 14555.10 15532.60
9/30/73 16825.00 16196.30
10/31/73 17469.20 16222.80
11/30/73 14877.20 14423.70
12/31/73 14769.80 14708.50
1/31/74 15110.60 14603.90
2/28/74 15188.10 14593.30
3/31/74 15017.60 14293.90
4/30/74 13824.30 13781.10
5/31/74 12925.40 13365.10
6/30/74 12506.90 13212.80
7/31/74 11718.20 12366.20
8/31/74 10621.60 11176.50
9/30/74 9697.29 9888.71
10/31/74 12015.90 11551.40
11/30/74 11436.20 10987.00
12/31/74 10684.30 10816.10
1/31/75 12371.50 12191.30
2/28/75 12895.60 12969.00
3/31/75 13022.60 13298.90
4/30/75 13642.00 13975.90
5/31/75 14928.40 14642.30
6/30/75 15944.80 15341.80
7/31/75 15106.10 14353.50
8/31/75 14224.10 14100.40
9/30/75 13646.80 13660.60
10/31/75 14160.00 14553.50
11/30/75 14224.10 14964.20
12/31/75 13951.50 14842.30
1/31/76 16285.70 16649.40
2/29/76 17970.90 16509.00
3/31/76 18959.40 17065.40
4/30/76 18943.20 16933.00
5/31/76 19461.80 16744.80
6/30/76 20498.90 17486.80
7/31/76 19796.30 17403.30
8/31/76 19861.60 17371.50
9/30/76 20727.30 17819.30
10/31/76 19926.90 17488.10
11/30/76 21217.30 17416.50
12/31/76 23046.60 18394.30
1/31/77 24091.10 17523.80
2/28/77 23235.40 17204.60
3/31/77 23910.10 17024.40
4/30/77 24486.10 17094.60
5/31/77 24979.70 16759.40
6/30/77 26608.90 17587.40
7/31/77 26441.50 17368.80
8/31/77 25778.00 17070.70
9/30/77 25628.70 17097.20
10/31/77 24666.60 16430.80
11/30/77 26740.10 16950.20
12/31/77 27171.40 17077.40
1/31/78 25528.80 16097.00
2/28/78 25780.50 15771.10
3/31/78 26754.00 16234.80
4/30/78 28919.20 17698.70
5/31/78 30094.10 17861.70
6/30/78 30094.10 17616.60
7/31/78 32149.90 18643.30
8/31/78 35492.20 19203.80
9/30/78 34745.70 19142.80
10/31/78 28519.30 17473.50
11/30/78 30826.60 17848.40
12/31/78 31776.70 18199.50
1/31/79 33357.00 19006.40
2/28/79 32583.80 18395.60
3/31/79 36376.10 19492.60
4/30/79 36504.90 19617.10
5/31/79 37057.20 19189.20
6/30/79 40131.50 20023.80
7/31/79 41505.20 20292.80
8/31/79 44852.30 21464.00
9/30/79 45298.60 21555.40
10/31/79 42063.00 20174.90
11/30/79 45614.80 21134.10
12/31/79 47790.40 21585.90
1/31/80 50478.20 22927.90
2/29/80 50602.40 22926.60
3/31/80 42258.40 20696.90
4/30/80 44556.60 21654.70
5/31/80 47393.20 22768.90
6/30/80 49111.70 23489.70
7/31/80 52126.70 25123.20
8/31/80 54232.80 25377.60
9/30/80 56697.00 26124.80
10/31/80 57876.40 26653.40
11/30/80 61793.80 29492.60
12/31/80 62594.10 28602.30
1/31/81 61405.10 27405.90
2/28/81 61124.80 27881.60
3/31/81 65118.90 28997.10
4/30/81 65445.90 28436.70
5/31/81 66637.10 28509.50
6/30/81 64184.60 28330.70
7/31/81 61688.10 28389.00
8/31/81 57933.60 26750.10
9/30/81 54131.50 25431.90
10/31/81 57600.90 26804.50
11/30/81 58955.30 27910.70
12/31/81 58004.80 27195.30
1/31/82 55855.50 26840.20
2/28/82 54397.10 25339.20
3/31/82 53546.40 25206.70
4/30/82 55247.80 26346.10
5/31/82 54299.90 25447.80
6/30/82 53692.20 25066.20
7/31/82 52745.60 24619.80
8/31/82 55713.30 27608.60
9/30/82 56586.10 27953.10
10/31/82 62596.40 31169.80
11/30/82 67559.20 32429.80
12/31/82 68207.60 33053.80
1/31/83 71999.10 34283.30
2/28/83 75490.60 35068.90
3/31/83 77580.20 36364.60
4/30/83 80463.40 39228.90
5/31/83 85065.80 38888.40
6/30/83 87777.20 40401.40
7/31/83 85603.50 39209.10
8/31/83 83886.10 39798.60
9/30/83 85388.90 40347.10
10/31/83 82356.50 39880.80
11/30/83 85254.70 40722.00
12/31/83 85388.90 40510.10
1/31/84 82835.90 40283.50
2/29/84 79613.70 38865.90
3/31/84 80298.10 39539.00
4/30/84 80212.50 39913.90
5/31/84 77304.00 37705.40
6/30/84 79416.90 38524.10
7/31/84 78263.90 38045.80
8/31/84 87574.80 42248.30
9/30/84 87718.90 42257.60
10/31/84 87978.40 42420.50
11/30/84 87401.90 41946.20
12/31/84 89045.00 43051.10
1/31/85 98794.40 46405.70
2/28/85 100452.00 46974.00
3/31/85 99746.10 47004.50
4/30/85 99838.20 46960.80
5/31/85 105733.00 49674.10
6/30/85 107107.00 50451.80
7/31/85 108625.00 50378.90
8/31/85 107665.00 49948.30
9/30/85 103142.00 48386.30
10/31/85 107696.00 50621.40
11/30/85 114788.00 54092.50
12/31/85 117142.00 56710.40
1/31/86 119848.00 57027.00
2/28/86 126521.00 61289.10
3/31/86 132668.00 64708.50
4/30/86 134936.00 63979.90
5/31/86 139176.00 67383.40
6/30/86 141429.00 68522.80
7/31/86 134782.00 64690.00
8/31/86 138982.00 69487.30
9/30/86 132005.00 63742.70
10/31/86 134914.00 67417.90
11/30/86 136502.00 69096.40
12/31/86 136843.00 67294.60
1/31/87 147564.00 76356.70
2/28/87 157864.00 79373.30
3/31/87 160298.00 81664.00
4/30/87 155055.00 80938.00
5/31/87 158913.00 81640.20
6/30/87 164942.00 85763.10
7/31/87 170980.00 90107.30
8/31/87 179878.00 93469.80
9/30/87 180519.00 91420.20
10/31/87 135087.00 71731.60
11/30/87 133089.00 65826.70
12/31/87 142923.00 70828.00
1/31/88 147022.00 73807.60
2/29/88 158881.00 77248.30
3/31/88 159366.00 74860.90
4/30/88 163642.00 75688.90
5/31/88 161394.00 76343.40
6/30/88 169946.00 79847.60
7/31/88 171144.00 79544.30
8/31/88 167856.00 76844.20
9/30/88 173543.00 80117.90
10/31/88 174832.00 82349.00
11/30/88 172344.00 81175.10
12/31/88 178370.00 82591.40
1/31/89 185925.00 88639.40
2/28/89 189702.00 86430.80
3/31/89 192253.00 88447.30
4/30/89 200936.00 93039.20
5/31/89 208099.00 96803.10
6/30/89 204223.00 96254.60
7/31/89 215945.00 104944.00
8/31/89 221422.00 106997.00
9/30/89 226493.00 106562.00
10/31/89 213358.00 104089.00
11/30/89 217568.00 106211.00
12/31/89 222681.00 108761.00
1/31/90 208258.00 101460.00
2/28/90 210852.00 102766.00
3/31/90 217234.00 105490.00
4/30/90 210956.00 102858.00
5/31/90 226002.00 112887.00
6/30/90 229686.00 112125.00
7/31/90 226379.00 111766.00
8/31/90 195903.00 101664.00
9/30/90 175081.00 96715.70
10/31/90 170959.00 96303.70
11/30/90 177743.00 102529.00
12/31/90 183674.00 105386.00
1/31/91 194615.00 109975.00
2/28/91 210518.00 117839.00
3/31/91 219033.00 120693.00
4/30/91 226082.00 120979.00
5/31/91 236741.00 126198.00
6/30/91 226533.00 120416.00
7/31/91 237001.00 126029.00
8/31/91 245977.00 129014.00
9/30/91 246204.00 126856.00
10/31/91 253986.00 128561.00
11/30/91 246772.00 123381.00
12/31/91 270641.00 137492.00
1/31/92 285157.00 134930.00
2/29/92 295551.00 136684.00
3/31/92 293460.00 134018.00
4/30/92 284576.00 137954.00
5/31/92 285796.00 138630.00
6/30/92 278828.00 136567.00
7/31/92 289313.00 142146.00
8/31/92 284681.00 139238.00
9/30/92 289723.00 140877.00
10/31/92 305027.00 141361.00
11/30/92 322837.00 146174.00
12/31/92 336210.00 147928.00
1/31/93 350678.00 149205.00
2/28/93 349705.00 151239.00
3/31/93 368610.00 154429.00
4/30/93 359370.00 150697.00
5/31/93 388973.00 154728.00
6/30/93 393411.00 155182.00
7/31/93 391413.00 154556.00
8/31/93 417246.00 160421.00
9/30/93 429428.00 159193.00
10/31/93 445772.00 162484.00
11/30/93 428938.00 160935.00
12/31/93 444889.00 162882.00
1/31/94 447121.00 168418.00
2/28/94 441700.00 163847.00
3/31/94 420332.00 156704.00
4/30/94 423840.00 158714.00
5/31/94 419057.00 161318.00
6/30/94 404705.00 157364.00
7/31/94 417781.00 162532.00
8/31/94 437059.00 169194.00
9/30/94 431588.00 165057.00
10/31/94 429979.00 168765.00
11/30/94 413243.00 162619.00
12/31/94 411750.00 165032.00
1/31/95 404013.00 169311.00
2/28/95 417133.00 175910.00
3/31/95 423188.00 181101.00
4/30/95 427897.00 186433.00
5/31/95 441017.00 193884.00
6/30/95 458846.00 198388.00
7/31/95 481143.00 204967.00
8/31/95 486243.00 205482.00
9/30/95 496104.00 214155.00
10/31/95 475362.00 213389.00
11/30/95 488963.00 222756.00
12/31/95 497407.00 227047.00
1/31/96 505453.00 234775.00
2/29/96 525203.00 236952.00
3/31/96 535444.00 239232.00
4/30/96 563972.00 242760.00
5/31/96 584087.00 249020.00
6/30/96 572749.00 249970.00
7/31/96 543209.00 238927.00
8/31/96 563988.00 243967.00
9/30/96 584766.00 257697.00
10/31/96 581798.00 264805.00
11/30/96 598124.00 284821.00
12/31/96 609569.00 279177.00
1/31/97 631050.00 296619.00
2/28/97 622944.00 297752.00
3/31/97 594573.00 286661.00
4/30/97 597816.00 303775.00
5/31/97 645235.00 322269.00
6/30/97 674822.00 336708.00
7/31/97 709392.00 363498.00
8/31/97 712680.00 343135.00
9/30/97 767344.00 361926.00
10/31/97 744739.00 349840.00
11/30/97 744739.00 366035.00
12/31/97 761852.00 372320.00
1/31/98 748400.00 376439.00
2/28/98 803106.00 403589.00
3/31/98 853328.00 424257.00
4/30/98 865884.00 428524.00
5/31/98 833150.00 421159.00
6/30/98 850978.00 438266.00
7/31/98 802766.00 433600.00
8/31/98 656313.00 370910.00
9/30/98 684967.00 394671.00
10/31/98 719533.00 426775.00
11/30/98 749097.00 452640.00
12/31/98 807685.00 478724.00
1/31/99 807206.00 498743.00
2/28/99 770776.00 483242.00
3/31/99 778925.00 502576.00
4/30/99 842677.00 522039.00
5/31/99 856098.00 509711.00
6/30/99 901844.00 537999.00
7/31/99 914942.00 521200.00
8/31/99 888260.00 518622.00
9/30/99 883409.00 504404.00
10/31/99 910091.00 536324.00
11/30/99 974612.00 547226.00
12/31/99 1077260.00 579455.00
1/31/00 1051090.00 550342.00
2/29/00 1129000.00 539924.00
3/31/00 1081910.00 592744.00
4/30/00 1044700.00 574911.00
5/31/00 1022610.00 563116.00
6/30/00 1062100.00 576998.00
7/31/00 1066420.00 567977.00
8/31/00 1144140.00 603257.00
9/30/00 1163260.00 571409.00
10/31/00 1133650.00 568993.00
11/30/00 1074010.00 524134.00
12/31/00 1185610.00 526699.00
1/31/01 1207650.00 545386.00
2/28/01 1177340.00 495657.00
3/31/01 1124300.00 464257.00
4/30/01 1223500.00 500334.00
5/31/01 1275170.00 503686.00
6/30/01 1293240.00 491427.00
7/31/01 1268730.00 486590.00
8/31/01 1218320.00 456128.00
9/30/01 1053070.00 419295.00
10/31/01 1097880.00 427290.00
11/30/01 1182610.00 460066.00
12/31/01 1258360.00 464097.00
1/31/02 1246390.00 457324.00
2/28/02 1230910.00 448504.00
3/31/02 1320990.00 465372.00
4/30/02 1318180.00 437158.00
5/31/02 1278770.00 433937.00
6/30/02 1214020.00 403024.00
7/31/02 1070450.00 371610.00
8/31/02 1079600.00 374050.00
9/30/02 1015550.00 333398.00
10/31/02 1058480.00 362743.00
11/30/02 1126750.00 384093.00
12/31/02 1090860.00 361529.00
1/31/03 1065520.00 352058.00
2/28/03 1048630.00 346776.00
3/31/03 1062000.00 350143.00
4/30/03 1154200.00 378984.00
5/31/03 1236540.00 398952.00
6/30/03 1274540.00 404041.00
7/31/03 1334360.00 411165.00
8/31/03 1404740.00 419183.00
9/30/03 1388550.00 414732.00
10/31/03 1501860.00 438193.00
11/30/03 1550420.00 442049.00
12/31/03 1589180.00 465234.00
COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. International Game Technology 2.8%
SLOT MACHINES & PROGRESSIVE JACKPOTS
2. XTO Energy 1.6%
NATURAL GAS PRODUCER
3. Expeditors International of Washington 1.0%
INTERNATIONAL FREIGHT FORWARDER
4. First Health Group 1.0%
PPO NETWORK
5. Coach 1.0%
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
6. Novell 0.9%
SECURITY & IDENTITY MANAGEMENT SOFTWARE
7. ITT Educational Services 0.9%
POSTSECONDARY DEGREE PROGRAMS
8. AmeriCredit 0.8%
AUTO LENDING
9. Chico's FAS 0.8%
WOMEN'S SPECIALTY RETAILER
10. TCF Financial 0.8%
GREAT LAKES BANK
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
5
Columbia Acorn International*
>In a Nutshell
Photo of P. Zachary Egan
Photo of Louis J. Mendes III
Columbia Acorn International finished 2003 on a strong note. The Fund was
up 17.35% for the quarter, outperforming both the 15.97% gain of the Citigroup
EMI Global ex-US Index and the 17.08% return of the MSCI EAFE Index. For the
year, the Fund's return of 47.80% fell short of the Citigroup EMI Global ex-US
return of 55.02% but beat the MSCI EAFE return of 38.59%. Stocks outside the
Fund's core strategy, mainly stocks in the basic materials sector, soared during
the year, dampening the Fund's return. Even though the Fund didn't beat the
benchmark Citigroup EMI Global ex-US Index, the absolute return for the year is
the third best in Columbia Acorn International's history.
The best stocks in the quarter and year came from a variety of industries.
ASE Test, a semiconductor packaging and testing company in Taiwan, rose 72% on a
recovery in demand for semiconductors. For the year, the stock was up 271%.
Improved sales drove home a 69% fourth quarter gain for South Korean auto parts
maker Hyundai Mobis and an annual gain of 197%. Other winners included Global
BioChem Technology Group, a maker of corn starch and corn gluten headquartered
in Hong Kong, up 64% in the quarter and 137% for the year; United Services
Group, a temporary staffing service in the Netherlands, up 57% in the quarter
and 114% for 2003; and Anglo Irish Bank, a niche middle-market bank in Ireland
and the Fund's largest holding, up 48% in the fourth quarter and 125% for the
year.
A problem stock for the quarter was Zapf Creation, a toy manufacturer in
Germany, down on weakness in its U.S. doll business. The company has made
changes to its U.S. sales organization and plans to introduce new products in
2004. We believe these changes should help Zapf regain traction in the important
U.S. market. The Fund's small position in Italian dairy producer Parmalat fell
55% in the quarter when it was revealed that a huge cash reserve on its books
was falsified. The Fund minimized losses in the stock by halving the position
when concerns first surfaced. Laggards for the year included Ireland's Waterford
Wedgewood, down 51%. Its highly leveraged position hurt the stock in a year when
luxury good purchases, particularly in the household goods sector, were subdued.
The stock was also hurt by the weakened U.S. dollar. Singapore's Star Cruises
also sank in the annual period, down 40%. The company's heavy reliance on Asian
gambling cruises to support its large debt worried investors following the SARS
outbreak and the expansion of gambling operations within Asia. We sold the
Fund's position in the stock.
We are pleased to introduce a new member to Columbia Wanger Asset
Management's international analyst team. Kenneth Wooden joined the firm in early
December to cover Japanese equities. Ken spent 17 years investing in Japan and
is a welcome addition to the team.
/s/ P. Zachary Egan /s/ Louis J. Mendes III
P. Zachary Egan Louis J. Mendes III
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
Anglo Irish Bank
- --------------------------------------------------------------------------------
Fills A Niche
Anglo Irish Bank is one of the only true niche banking franchises in Europe.
Specializing in middle-market banking, Anglo Irish Bank provides corporate
lending, commercial mortgages and structured finance arrangements to
corporations, partnerships and high net worth clients in Ireland and the UK. A
robust lending environment and strong asset quality helped boost the return 125%
in 2003 for Columbia Acorn International. Trading at just 11.8-times 2004's
earnings with a consistent 30% return on equity and above average earnings
growth, we believe the stock price still has room to grow.
INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR
ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS,
TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE
FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE
STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF
OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE,
MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE.
* LIBERTY ACORN INTERNATIONAL WAS RENAMED COLUMBIA ACORN INTERNATIONAL ON
OCTOBER 13, 2003. ON SEPTEMBER 30, 2003, LEAH ZELL RELINQUISHED HER DAILY FIRM
AND PORTFOLIO MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME
CHIEF INVESTMENT OFFICER OVERSEEING BOTH THE INTERNATIONAL AND DOMESTIC TEAMS.
MS. ZELL REMAINS AFFILIATED WITH COLUMBIA WANGER ASSET MANAGEMENT, LP, ACTING
IN AN ADVISORY CAPACITY.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ASE TEST, 1.0%; HYUNDAI MOBIS, 1.1%; GLOBAL BIO-CHEM TECHNOLOGY
GROUP, 1.3%; UNITED SERVICES GROUP, 0.9%; ANGLO IRISH BANK, 2.2%; ZAPF CREATION,
0.4%; PARMALAT, 0.0%; WATERFORD WEDGEWOOD, 0.0%; STAR CRUISES, 0.0%.
1-800-922-6769
6
Columbia Acorn International
>At a Glance Ticker Symbol: ACINX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2003
1 YEAR 5 YEARS 10 YEARS
- ---------------------------------------------------------------
Returns before taxes 47.80% 6.99% 7.44%
- ---------------------------------------------------------------
Returns after taxes 47.81 5.82 6.54
on distributions
- ---------------------------------------------------------------
Returns after taxes 31.27 5.71 6.21
on distributions and
sale of fund shares
- ---------------------------------------------------------------
Citigroup EMI Global 55.02 6.18 4.74
ex-US (pretax)
- ---------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
class Z shares only; after-tax returns for other share classes will vary. The
return after taxes on distributions may be higher than the return before taxes
due to qualified foreign tax credits. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value will fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
PIE CHART
Consumer 23.3%
Goods/Services
Finance 10.8%
Health Care 8.0%
Energy/Minerals 5.8%
Information 13.3%
Technology
Real Estate 1.7%
Transportation 3.5%
Other* 5.9%
Industrials 27.7%
* Other includes cash and other assets less liabilities of 4.5%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS Z)
>September 23, 1992 through December 31, 2003
This graph compares the results of $10,000 invested in Columbia Acorn
International at inception on September 23, 1992 to the Citigroup EMI Global
ex-US, Citigroup's index of the bottom 20% of institutionally investable capital
of developed and emerging countries, as selected by Citigroup, excluding the
U.S. The index is unmanaged and returns for both the index and Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. The graph and table do not reflect tax deductions that a shareholder
would pay on Fund distributions or the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM
FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN
FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE
PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST.
COLUMBIA ACORN INTERNATIONAL NAV
AS OF 12/31/03: $22.66
TOTAL NET ASSETS: $1,678.3 MILLION
AVERAGE ANNUAL TOTAL RETURN
----------------------------
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
47.80% 6.99% 7.44% 11.07%
MOUNTAIN CHART
COLUMBIA CITIGROUP
ACORN EMI GLOBAL
INTERNATIONAL EX-US
------------- ----------
9/30/92 10010.00 10000.00
10/31/92 10380.00 9383.91
11/30/92 10570.00 9403.64
12/31/92 10690.00 9537.99
1/31/93 10780.00 9623.14
2/28/93 11460.00 9965.42
3/31/93 12000.00 10968.70
4/30/93 12450.00 11975.90
5/31/93 12910.00 12611.20
6/30/93 12920.00 12126.90
7/31/93 12920.00 12500.40
8/31/93 13760.00 13145.40
9/30/93 13910.00 12871.10
10/31/93 14560.00 12825.70
11/30/93 14620.00 11753.50
12/31/93 15940.00 12508.70
1/31/94 16630.00 13759.70
2/28/94 16570.00 13855.90
3/31/94 15850.00 13629.20
4/30/94 15960.00 14036.90
5/31/94 15870.00 13834.00
6/30/94 15550.00 14122.60
7/31/94 15980.00 14289.40
8/31/94 16481.40 14451.90
9/30/94 16491.50 14040.50
10/31/94 16521.70 14277.80
11/30/94 15606.00 13454.40
12/31/94 15334.40 13537.60
1/31/95 14640.10 12974.20
2/28/95 14549.50 12760.30
3/31/95 14811.10 13250.60
4/30/95 15263.90 13662.70
5/31/95 15505.40 13487.70
6/30/95 15726.80 13338.70
7/31/95 16582.20 14086.10
8/31/95 16411.00 13752.70
9/30/95 16823.80 13845.30
10/31/95 16300.30 13431.40
11/30/95 16068.70 13547.00
12/31/95 16703.00 14056.20
1/31/96 17357.40 14388.00
2/29/96 17881.00 14556.00
3/31/96 18203.20 14862.80
4/30/96 18787.10 15629.20
5/31/96 19340.90 15506.80
6/30/96 19592.60 15499.60
7/31/96 18967.90 14897.90
8/31/96 19240.40 15045.70
9/30/96 19361.60 15129.60
10/31/96 19553.30 15033.30
11/30/96 20088.40 15292.80
12/31/96 20152.90 14905.90
1/31/97 20636.00 14691.40
2/28/97 20892.90 14986.40
3/31/97 20584.60 14800.10
4/30/97 20286.50 14599.20
5/31/97 21170.40 15460.10
6/30/97 21807.50 15852.60
7/31/97 21951.10 15699.60
8/31/97 20788.10 15012.50
9/30/97 21660.30 15252.50
10/31/97 20487.00 14513.10
11/30/97 20268.90 13840.70
12/31/97 20190.30 13552.80
1/31/98 20475.70 13978.20
2/28/98 22122.60 15035.10
3/31/98 23857.20 15762.10
4/30/98 24351.30 15889.60
5/31/98 24768.50 16024.60
6/30/98 24334.70 15459.90
7/31/98 24491.40 15362.20
8/31/98 21368.40 13343.30
9/30/98 20428.20 13047.60
10/31/98 21111.00 13946.60
11/30/98 22308.70 14427.10
12/31/98 23304.90 14732.80
1/31/99 23842.20 14630.10
2/28/99 23125.80 14356.00
3/31/99 23573.50 14978.00
4/30/99 24983.90 15891.60
5/31/99 25140.60 15500.90
6/30/99 27222.30 16103.90
7/31/99 28190.90 16623.50
8/31/99 29001.80 16916.00
9/30/99 29486.10 16839.10
10/31/99 30758.80 16685.50
11/30/99 35365.30 17285.70
12/31/99 41761.10 18462.30
1/31/00 41607.50 18110.40
2/29/00 48297.80 18807.10
3/31/00 46808.40 18890.60
4/30/00 41359.30 17650.20
5/31/00 38286.00 17281.10
6/30/00 40170.90 18330.80
7/31/00 39669.10 17723.40
8/31/00 40562.60 18230.90
9/30/00 38494.10 17294.80
10/31/00 35630.00 16248.40
11/30/00 32730.10 15532.40
12/31/00 33402.30 16139.40
1/31/01 34914.90 16439.90
2/28/01 32408.00 15801.20
3/31/01 29284.80 14577.40
4/30/01 30419.20 15531.50
5/31/01 30223.20 15500.30
6/30/01 28746.50 14974.40
7/31/01 27590.90 14535.30
8/31/01 27034.60 14495.40
9/30/01 23353.90 12608.10
10/31/01 24466.60 13120.40
11/30/01 25850.50 13659.80
12/31/01 26349.80 13772.30
1/31/02 25707.80 13522.90
2/28/02 25636.50 13749.30
3/31/02 26977.50 14645.10
4/30/02 27862.00 14950.10
5/31/02 27747.90 15428.50
6/30/02 26646.10 14826.70
7/31/02 23854.00 13559.50
8/31/02 23496.10 13478.20
9/30/02 21405.60 12234.10
10/31/02 21491.50 12510.60
11/30/02 22150.20 12978.10
12/31/02 22107.40 12823.60
1/31/03 21561.90 12608.10
2/28/03 20987.70 12383.20
3/31/03 20686.20 12262.50
4/30/03 22566.80 13418.60
5/31/03 24433.00 14562.40
6/30/03 25133.50 15105.90
7/31/03 25681.50 15644.00
8/31/03 26835.00 16392.10
9/30/03 27844.40 17141.50
10/31/03 29978.50 18388.40
11/30/03 30800.50 18723.10
12/31/03 32675.00 19879.20
COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 2.2%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Rhoen-Klinikum (Germany) 2.0%
HOSPITAL MANAGEMENT
3. Kerry Group (Ireland) 1.5%
FOOD INGREDIENTS
4. Housing Development 1.4%
Finance (INDIA)
MORTGAGE LOAN PROVIDER
5. Venture (Singapore) 1.3%
ELECTRONIC CONTRACT MANUFACTURER
6. Global BioChem
Technology Group (Hong Kong) 1.3%
CORN-BASED BIOCHEMICAL PRODUCTS
7. Grafton Group (Ireland) 1.3%
BUILDERS, WHOLESALERS & DIY RETAILING
8. Corus Entertainment (Canada) 1.3%
TV PROGRAMMING & RADIO STATIONS
9. Talisman Energy (Canada) 1.2%
OIL & GAS PRODUCER
10. Hunter Douglas (Netherlands) 1.2%
DECORATIVE WINDOW COVERINGS
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
7
Columbia Acorn USA*
>In a Nutshell
Photo of Robert A. Mohn
Columbia Acorn USA finished 2003 up 47.13%, performing in line with the
Russell 2000's 47.25% gain. During the fourth quarter, the Fund gained 13.57%
vs. a 14.52% gain for the benchmark. Small caps dominated large caps in 2003.
The S&P 500, up 28.69%, had a good year but did not come close to reaching
small-cap returns.
Technology stocks continued to lead the rally. In Columbia Acorn USA,
Novell and Micros Systems were among the top five moneymakers in the Fund for
the year and the quarter. Novell, up 97% for the quarter and 215% for the year,
is highlighted in the box below. Micros had a 93% annual gain and 27% rise in
the quarter. After years of waiting, hotels are finally starting to upgrade
their computer systems. Micros has been benefiting from this initiative with
revenue growth in its hotel and restaurant integration software up nearly 20%.
In the financial sector, AmeriCredit and World Acceptance posted top gains. Auto
lender AmeriCredit was up 104% for the year and 55% in the fourth quarter.
Credit loss reports showed that for the first time in 27 months AmeriCredit had
a year-over-year drop in losses in November. Personal lender World Acceptance
increased 162% in the year and 47% in the quarter largely due to the
strengthening economy. Freight forwarder Hub Group also bounced back with the
economy, up an impressive 349% for the year and 98% for the quarter. Aspect
Communications was another big percentage winner, up 310% for the year and 89%
in the quarter. See Page 4 for more on this stock.
The notable poor performer was First Health Group, down 20% in the year
and 26% in the quarter. First Health's competition aggressively lowered prices
during the year. Home health care service provider Lincare Holdings also fell as
the government moved to cut oxygen reimbursement rates, a major source of
revenue for Lincare Holdings. Disappointing sales marked down stock prices for
retailers Gadzooks and Abercrombie & Fitch in the quarter and for the year.
What a difference a year makes. Last year, all areas of the market -
small, mid, large - ended the year down in double digits. This year, small-cap
gains neared 50%, mid caps cleared 35% and large caps came in at about 30% (See
Page 1 for index returns). So, what's next? Small caps did so well in 2003 that
there is some concern that they are getting overpriced. We still believe that
small caps are in for a very long period of outperformance. As for valuations,
we have a list of stocks that we believe are attractive to buy at current
levels. Today that list is smaller than it was six months ago but we believe
there continue to be small-cap stocks to buy at good prices.
/s/ Robert A. Mohn
Robert A. Mohn
LEAD PORTFOLIO MANAGER
Novell Competes
- --------------------------------------------------------------------------------
Novell, the leading provider of network printer, directory, and file services,
is up against a formidable competitor, Microsoft. But Novell isn't backing down.
The company has invested capital and leveraged existing knowledge to go after
new markets. Security Identity Management and Linux are two fast-growing markets
in which Novell has been building a name for itself. Columbia Wanger Asset
Management's technology analyst Ben Andrews purchased Novell under the
assumption that at least one of these markets would drive Novell's revenue and
earnings over the next one to two years. Wall Street has become aware of
Novell's push into Linux and has doubled the price of its shares. Novell's
bottom line pay out has yet to come, but we believe it is on the right track.
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE.
* LIBERTY ACORN USA WAS RENAMED COLUMBIA ACORN USA ON OCTOBER 13, 2003.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: NOVELL, 2.0%; MICROS SYSTEMS, 3.3%; AMERICREDIT, 2.5%; WORLD
ACCEPTANCE, 1.5%; HUB GROUP, 1.1%; ASPECT COMMUNICATIONS, 0.2%; FIRST HEALTH
GROUP, 2.1%; LINCARE HOLDINGS, 1.1%; GADZOOKS, 0.1%; ABERCROMBIE & FITCH, 0.5%.
1-800-922-6769
8
Columbia Acorn USA
>At a Glance Ticker Symbol: AUSAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2003
1 YEAR 5 YEARS LIFE OF FUND
- ----------------------------------------------------------
Returns before taxes 47.13% 9.87% 14.00%
- ----------------------------------------------------------
Returns after taxes 47.13 9.32 13.20
on distributions
- ----------------------------------------------------------
Returns after taxes 30.63 8.34 12.03
on distributions and
sale of fund shares
- ----------------------------------------------------------
Russell 2000 (pretax) 47.25 7.13 8.63
- ----------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
class Z shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value will fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
PIE CHART
Health Care 14.6%
Consumer 14.2%
Goods/Services
Other* 7.5%
Finance 10.5%
Energy/Minerals 7.7%
Industrial 6.8%
Goods/Services
Information 38.7%
Software/Services 20.7%
Telecommunications 8.0%
Media 3.4%
Computer Related Hardware 6.6%
* Other includes cash and other assets less liabilities of 6.6%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS Z)
>September 4, 1996 through December 31, 2003
This graph compares the results of $10,000 invested in Columbia Acorn USA at
inception on September 4, 1996 to the Russell 2000 Index, a market-weighted
index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S.
companies and eliminating the largest 1,000. The index is unmanaged and returns
for both the index and the Fund include reinvested dividends and capital gains.
It is not possible to invest directly in an index. The graph and table do not
reflect tax deductions that a shareholder would pay on Fund distributions or the
sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM
FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN
FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE
PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST.
COLUMBIA ACORN USA NAV AS OF 12/31/03: $21.01
TOTAL NET ASSETS: $693.3 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------
1 YEAR 5 YEARS LIFE OF FUND
47.13% 9.87% 14.00%
MOUNTAIN CHART
COLUMBIA
ACORN USA RUSSELL 2000
---------- ------------
9/4/96 10000.00 10000.00
9/30/96 10720.00 10359.90
10/31/96 10810.00 10200.20
11/30/96 11260.00 10620.50
12/31/96 11650.00 10898.90
1/31/97 12210.00 11116.70
2/28/97 11920.00 10847.10
3/31/97 11480.00 10335.30
4/30/97 11420.00 10364.10
5/31/97 12510.00 11517.10
6/30/97 13320.00 12010.70
7/31/97 14000.00 12569.60
8/31/97 14350.00 12857.20
9/30/97 15340.00 13798.30
10/31/97 15140.00 13192.10
11/30/97 15170.00 13106.80
12/31/97 15413.10 13336.20
1/31/98 15076.70 13125.70
2/28/98 16320.40 14096.30
3/31/98 17400.90 14677.70
4/30/98 17992.10 14758.80
5/31/98 17227.60 13964.00
6/30/98 17525.00 13993.40
7/31/98 16591.90 12860.50
8/31/98 13936.00 10363.30
9/30/98 14151.30 11174.30
10/31/98 14653.80 11630.10
11/30/98 15402.40 12239.40
12/31/98 16305.10 12996.70
1/31/99 15776.20 13169.40
2/28/99 14894.90 12102.80
3/31/99 15016.10 12291.70
4/30/99 16095.70 13393.20
5/31/99 16734.70 13588.80
6/30/99 17650.20 14203.30
7/31/99 18047.90 13813.60
8/31/99 16821.80 13302.30
9/30/99 16866.00 13305.20
10/31/99 17860.10 13359.10
11/30/99 18810.00 14156.80
12/31/99 20059.00 15759.40
1/31/00 19053.10 15506.30
2/29/00 19867.40 18066.90
3/31/00 19819.50 16875.80
4/30/00 17568.10 15860.30
5/31/00 16526.20 14935.90
6/30/00 16834.00 16237.90
7/31/00 16748.30 15715.40
8/31/00 17765.20 16914.50
9/30/00 17642.60 16417.40
10/31/00 17654.90 15684.50
11/30/00 16625.70 14074.50
12/31/00 18255.20 15283.30
1/31/01 19406.90 16079.00
2/28/01 19370.10 15023.90
3/31/01 18904.60 14289.00
4/30/01 21195.70 15406.90
5/31/01 22384.10 15785.60
6/30/01 23008.90 16330.60
7/31/01 23254.00 15446.70
8/31/01 22616.90 14947.80
9/30/01 19345.60 12935.60
10/31/01 19394.60 13692.60
11/30/01 20546.30 14752.60
12/31/01 21770.20 15663.20
1/31/02 22031.20 15500.30
2/28/02 21285.60 15075.50
3/31/02 23099.80 16287.10
4/30/02 23447.70 16435.60
5/31/02 22130.60 15706.10
6/30/02 20801.00 14926.80
7/31/02 17967.90 12672.40
8/31/02 17706.90 12640.10
9/30/02 16389.80 11732.40
10/31/02 17172.60 12108.60
11/30/02 18663.70 13189.20
12/31/02 17744.20 12454.80
1/31/03 17483.30 12110.10
2/28/03 17247.20 11744.20
3/31/03 17284.50 11895.40
4/30/03 18974.40 13023.30
5/31/03 20962.50 14420.90
6/30/03 21298.00 14681.90
7/31/03 22304.50 15600.50
8/31/03 23534.70 16315.80
9/30/03 22988.00 16014.60
10/31/03 25348.90 17359.50
11/30/03 25908.10 17975.50
12/31/03 26106.90 18340.20
COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Micros Systems 3.3%
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
2. ITT Educational Services 2.6%
POSTSECONDARY DEGREE PROGRAMS
3. AmeriCredit 2.5%
AUTO LENDING
4. Edwards Lifesciences 2.5%
HEART VALVES
5. Western Wireless 2.5%
RURAL CELLULAR PHONE FRANCHISES
6. JDA Software 2.3%
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
7. First Health Group 2.1%
PPO NETWORK
8. Novell 2.0%
SECURITY & IDENTITY MANAGEMENT SOFTWARE
9. Commonwealth Telephone 2.0%
RURAL PHONE FRANCHISES & CLEC
10. HCC Insurance Holdings 2.0%
AVIATION INSURANCE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
9
Columbia Acorn International Select*
>In a Nutshell
Photo of Todd M. Narter
Photo of Christopher J. Olson
After three years of posting dreary results, the international markets rose
sharply in 2003. Columbia Acorn International Select finished the year up
41.79% vs. a 49.65% gain for the benchmark Citigroup World ex-US Cap Range
$2-10B Index and a 38.59% return for the large-cap MSCI EAFE Index. In the
fourth quarter, the Fund gained 16.92%, outperforming the benchmark return of
15.81% and nearing the MSCI EAFE gain of 17.08%. Market interest in Japan and in
more speculative stocks in general cooled in the fourth quarter, benefiting the
Fund's relative return. But the Fund's more conservative stance toward Japan and
higher-risk stocks dampened annual performance. Still, an annual return of
nearly 42%,achieved without speculative maneuvering, should delight most
shareholders.
For the quarter, three of the four biggest winners in the Fund were banks
offering niche services. Anglo Irish Bank, the Fund's largest holding, finished
up 48% in the quarter. The corporate lending environment in the United
Kingdom remains robust and Anglo Irish Bank continued to benefit. For the year,
shares were up over 125%. Another winner in Columbia Acorn International Select
was Den Norske Bank, a full-service commercial bank in Norway. Shares finished
up 39% in the quarter and up 52% for the year. Ireland's Depfa Bank, a provider
of public-sector financing, finished the quarter up 31%. For the year, shares
were up 156%.
The Fund's worst stocks for the quarter included Parmalat, the big dairy
producer in Italy. Shares fell 55% when it was revealed that a huge cash reserve
on its books was falsified. We limited the Fund's downside risk early on by
halving its position in the stock when concerns first surfaced, selling those
shares for a slight gain. We sold out of the Fund's remaining position shortly
before the company went bankrupt. Another stock dragging down performance this
quarter was Terumo, a maker of pharmaceuticals and medical supplies in Japan.
Continued cuts in drug reimbursements and a steady decline in the number of new
drugs coming to market slowed growth in pharmaceutical sales. The share price
fell 3% during the quarter and we sold the Fund's position in the stock.
/s/ Todd M. Narter /s/ Christopher J. Olson
Todd M. Narter Christopher J. Olson
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
More Than The Name
- --------------------------------------------------------------------------------
You Know
The Swatch brand name conjures up an image of a colorful, plastic watch that was
a must-have for trendy teens in the '80s. While the Swatch watch continues to
attract buyers, the earnings growth for this Swiss watchmaker is coming from its
higher-end brands Omega and Brequet. Demand for the pricier lines is increasing
in China and in the rest of the Asia Pacific region. We added the stock to
Columbia Acorn International Select because we believe Swatch has a solid brand
and is a low cost producer. Valuations are also good. After appreciating 27% in
the quarter, the shares still sell at a discount to its peers.
MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS
OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS,
INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
* LIBERTY ACORN FOREIGN FORTY WAS RENAMED COLUMBIA ACORN INTERNATIONAL SELECT ON
OCTOBER 13, 2003.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ANGLO IRISH BANK, 5.8%; DEN NORSKE BANK, 3.2%; DEPFA BANK, 2.5%;
PARMALAT, 0.0%; TERUMO, 0.0%; SWATCH GROUP, 2.5%.
1-800-922-6769
10
Columbia Acorn International Select
>At a Glance Ticker Symbol: ACFFX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2003
1 YEAR 5 YEARS LIFE OF FUND
- -----------------------------------------------------------
Returns before taxes 41.79% 6.14% 8.01%
- -----------------------------------------------------------
Returns after taxes 41.94 6.06 7.92
on distributions
- -----------------------------------------------------------
Returns after taxes 27.34 5.28 6.92
on distributions and
sale of fund shares
- -----------------------------------------------------------
Citigroup World ex-US 49.65 5.92 6.48
$2-10B (pretax)
- -----------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
class Z shares only; after-tax returns for other share classes will vary. The
return after taxes on distributions may be higher than the return before taxes
due to qualified foreign tax credits. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value will fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
PIE CHART
Consumer 21.6%
Goods/Services
Industrial 19.1%
Goods/Services
Other* 8.4%
Health Care 11.4%
Finance 17.0%
Energy/Minerals 6.7%
Information Technology 15.8%
* Other includes cash and other assets less liabilities of 4.8%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT
(CLASS Z)
>November 23, 1998 through December 31, 2003
This graph compares the results of $10,000 invested in Columbia Acorn
International Select at inception on November 23, 1998 to the Citigroup World
ex-US $2-10B Index, a subset of Citigroup's Broad Market Index, representing a
mid-cap developed market index excluding the U.S. The index and Fund returns
include reinvested dividends and capital gains. It is not possible to invest
directly in an index. The graph and table do not reflect tax deductions that a
shareholder would pay on Fund distributions or the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR
DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS,
INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE
PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST.
COLUMBIA ACORN INTERNATIONAL SELECT NAV
ON 12/31/03: $14.58
TOTAL NET ASSETS: $43.4 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------
1 YEAR 5 YEARS LIFE OF FUND
41.79% 6.14% 8.01%
MOUNTAIN CHART
CITIGROUP
COLUMBIA ACORN WORLD EX-US CAP
INTERNATIONAL RANGE
SELECT $2-$10B
-------------- ---------------
11/23/98 10000.00 10000.00
11/30/98 10140.00 10045.10
12/31/98 11000.00 10338.80
1/31/99 11790.00 10309.80
2/28/99 11590.00 10051.80
3/31/99 11980.00 10449.20
4/30/99 12240.00 11032.40
5/31/99 12170.00 10566.60
6/30/99 13109.80 10952.70
7/31/99 13510.80 11362.00
8/31/99 13771.30 11489.60
9/30/99 13621.00 11529.70
10/31/99 14132.20 11535.10
11/30/99 16998.70 11864.40
12/31/99 19975.50 12771.70
1/31/00 19664.80 12154.30
2/29/00 24245.20 12310.70
3/31/00 23092.60 12679.70
4/30/00 21258.40 12171.70
5/31/00 18923.10 11975.80
6/30/00 19852.50 12610.80
7/31/00 19469.00 12203.10
8/31/00 20266.30 12586.30
9/30/00 19236.90 12168.00
10/31/00 18479.90 11791.00
11/30/00 16128.30 11439.80
12/31/00 17309.10 11998.20
1/31/01 17874.30 11938.60
2/28/01 15825.50 11505.00
3/31/01 13706.00 10607.50
4/30/01 14412.50 11390.60
5/31/01 14382.20 11293.20
6/30/01 13763.20 10999.40
7/31/01 13062.40 10723.40
8/31/01 12778.00 10626.20
9/30/01 10624.60 9391.94
10/31/01 11305.10 9769.16
11/30/01 11924.70 10118.30
12/31/01 12280.20 10140.20
1/31/02 11650.50 9840.78
2/28/02 11508.30 9990.63
3/31/02 11914.60 10562.20
4/30/02 12290.40 10755.60
5/31/02 12432.60 11097.30
6/30/02 12046.60 10712.10
7/31/02 10746.50 9752.72
8/31/02 10949.60 9729.61
9/30/02 10147.20 8859.06
10/31/02 10126.90 9017.25
11/30/02 10380.80 9476.41
12/31/02 10451.90 9209.34
1/31/03 9944.05 8978.22
2/28/03 9527.60 8810.27
3/31/03 9629.18 8659.79
4/30/03 10533.20 9425.05
5/31/03 11447.30 10100.90
6/30/03 11526.70 10389.10
7/31/03 11709.60 10806.10
8/31/03 12217.90 11429.10
9/30/03 12675.30 11900.10
10/31/03 13620.60 12818.90
11/30/03 13905.20 12926.80
12/31/03 14820.00 13781.40
COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 5.8%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Kerry Group (Ireland) 3.9%
FOOD INGREDIENTS
3. Rhoen-Klinikum (Germany) 3.9%
HOSPITAL MANAGEMENT
4. BG Group (United Kingdom) 3.5%
OIL & GAS PRODUCER
5. Den Norske Bank (Norway) 3.2%
LARGEST NORWEGIAN BANK
6. Talisman Energy (Canada) 3.1%
OIL & GAS PRODUCER
7. Neopost (France) 2.9%
POSTAGE METERS
8. Compass Group (United Kingdom) 2.9%
INTERNATIONAL CONCESSION & CONTRACT CATERING
9. Lion Nathan (Australia) 2.7%
AUSTRALIAN BEER BREWER/DISTRIBUTOR
10. Grafton Group (Ireland) 2.7%
BUILDERS, WHOLESALERS & DIY RETAILING
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
11
Columbia Acorn Select*
>In a Nutshell
Photo of John H. Park
Columbia Acorn Select returned 4.97% during the fourth quarter, behind the
benchmark S&P MidCap 400's 13.19% return and the S&P 500's 12.18% gain. For
2003, the Fund was up 30.61%, trailing the S&P MidCap 400's 35.62% return but
beating the S&P 500's 28.69% gain. While we are pleased with the Fund's absolute
result, we are disappointed that Columbia Acorn Select underper-formed since it
was leading its primary benchmark through the first three quarters of the year.
Electronic Arts gained 97% in 2003, as sales and earnings consistently
beat expectations. Guidant, the Fund's largest position, returned 92% as
investors came to appreciate the company's fast growing defibrillator business
as well as its potential growth making drug-eluting stents. (A stent is a little
wire-mesh tube that keeps an artery open after an angioplasty procedure.)
On the downside, First Health Group, one of the Fund's biggest positions,
fell 20% for the year as the company lowered its sales and earnings for 2004 due
to increased competition in the managed-care industry. While obviously
disappointed, we believe the long-term outlook remains sound and we have added
to the Fund's position.
Most other losses for the year were relatively small in position size
or percentages. In fact, all losses combined contributed to just a 3.16% drop
for the Fund in 2003. Perhaps our biggest detractor was the conservative nature
of Columbia Acorn Select; only five of the Fund's stocks were up 70% or more.
While the market has rewarded the Fund's more conservative stance in the past,
highly speculative stocks had the most impressive gains in 2003 and Columbia
Acorn Select did not keep pace. Furthermore, as the market has bounced back, we
have seen few opportunities to buy such stocks at prices that fairly compensate
us for the risks incurred.
I am justifiably proud of the terrific efforts put forth by our investment
team in 2003. My thanks to Ralph Wanger, Chuck McQuaid, Rob Mohn, Ben Andrews,
Susie Hultquist, Harold Lichtenstein, Grant McKay, Rob Chalupnik, Todd
Griesbach, David Frank, and John Emerson for their invaluable contributions. I
am also grateful to Shelley Maish and Mike Olah for providing Herculean efforts
in trading throughout the year. Finally, thank you for your continued support as
a Columbia Acorn Select shareholder.
/s/ John H. Park
John H. Park
LEAD PORTFOLIO MANAGER
Weight Watchers --
- --------------------------------------------------------------------------------
A Winning Loser
The first question you ask a successful dieter is, "How did you lose the
weight?" This marketing has contributed to Weight Watchers' unique business
model by which its customers actually perpetuate the success of the business.
With over 40 years in the business, the Weight Watchers' brand has become
synonymous with healthy weight loss. Demand is more robust than ever with
obesity rates at an all time high both domestically and in international
markets. The company generates significant free cash flow due to fat profit
margins and slim capital expenditure requirements, which it has been using to
acquire franchises, pay down debt and repurchase stock -- all accretive to
earnings. The stock has been under pressure recently as attendance growth has
moderated due to the current popularity of the Atkins/high protein diet. History
has shown us though that diet fads come and go, similar to excess weight, and we
believe the sensibility of the Weight Watchers' program is one that dieters will
return to, as will investors to the stock.
COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS
HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE
FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND
TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES.
* LIBERTY ACORN TWENTY WAS RENAMED COLUMBIA ACORN SELECT ON OCTOBER 13, 2003.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ELECTRONIC ARTS, 3.9%; GUIDANT, 8.9%; FIRST HEALTH GROUP, 7.1%;
WEIGHT WATCHERS, 3.1%.
1-800-922-6769
12
Columbia Acorn Select
>At a Glance Ticker Symbol: ACTWX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2003
1 YEAR 5 YEARS LIFE OF FUND
- -----------------------------------------------------------
Returns before taxes 30.61% 13.43% 14.66%
- -----------------------------------------------------------
Returns after taxes 30.43 12.86 14.09
on distributions
- -----------------------------------------------------------
Returns after taxes 20.05 11.47 12.59
on distributions and
sale of fund shares
- -----------------------------------------------------------
S&P MidCap 35.62 9.21 11.28
400 (pretax)
- -----------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
class Z shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value will fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
PIE CHART
Information 27.3%
Health Care 20.2%
Finance 13.5%
Industrial Goods/Services 3.7%
Other* 6.9%
Consumer 28.4%
Goods/Services
* Cash and other assets less liabilities.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS Z)
>November 23, 1998 through December 31, 2003
This graph compares the results of $10,000 invested in Columbia Acorn Select at
inception on November 23, 1998 to the S&P MidCap 400, a broad, market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500. The
Index is unmanaged and returns for both the index and the Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. The graph and table do not reflect tax deductions that a shareholder
would pay on Fund distributions or the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR
DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS,
INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE
PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST.
COLUMBIA ACORN SELECT NAV ON 12/31/03: $18.20
TOTAL NET ASSETS: $740.6 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------
1 YEAR 5 YEARS LIFE OF FUND
30.61% 13.43% 14.66%
MOUNTAIN CHART
COLUMBIA
ACORN S&P MID
SELECT CAP 400
-------- ---------
11/23/98 10000.00 10000.00
11/30/98 10030.00 9911.29
12/31/98 10710.00 11108.90
1/31/99 11000.00 10676.20
2/28/99 10710.00 10117.20
3/31/99 11480.00 10399.90
4/30/99 12710.00 11220.20
5/31/99 12730.00 11268.80
6/30/99 13040.00 11872.20
7/31/99 13190.00 11619.90
8/31/99 12060.00 11221.70
9/30/99 12110.00 10875.10
10/31/99 12970.00 11429.30
11/30/99 13250.00 12029.20
12/31/99 13848.00 12744.10
1/31/00 13474.00 12385.20
2/29/00 13554.90 13252.00
3/31/00 14171.50 14361.10
4/30/00 13463.90 13859.60
5/31/00 13100.00 13686.70
6/30/00 14319.80 13887.70
7/31/00 13931.30 14107.10
8/31/00 15431.30 15682.20
9/30/00 15798.20 15574.80
10/31/00 15927.70 15046.70
11/30/00 14381.60 13910.90
12/31/00 15465.20 14975.10
1/31/01 15913.90 15308.60
2/28/01 14983.60 14435.00
3/31/01 14403.50 13361.80
4/30/01 15454.20 14835.80
5/31/01 16297.00 15181.30
6/30/01 16023.40 15120.00
7/31/01 15870.20 14894.80
8/31/01 15125.90 14407.60
9/30/01 14206.50 12615.50
10/31/01 14513.00 13173.50
11/30/01 16023.40 14153.50
12/31/01 16702.50 14884.70
1/31/02 16373.50 14807.30
2/28/02 16022.60 14825.60
3/31/02 16581.90 15885.40
4/30/02 15682.60 15811.10
5/31/02 16143.20 15544.40
6/30/02 15869.00 14406.70
7/31/02 14860.10 13011.20
8/31/02 15222.00 13076.60
9/30/02 14520.10 12023.10
10/31/02 15320.70 12544.10
11/30/02 16088.40 13269.80
12/31/02 15397.50 12724.50
1/31/03 15331.70 12352.70
2/28/03 15375.50 12058.50
3/31/03 15682.60 12160.10
4/30/03 16581.90 13043.00
5/31/03 17481.20 14123.90
6/30/03 17941.80 14303.90
7/31/03 18808.10 14811.50
8/31/03 19586.80 15483.30
9/30/03 19159.10 15246.30
10/31/03 19861.00 16399.10
11/30/03 19718.40 16970.50
12/31/03 20110.90 17256.80
COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Guidant 8.9%
STENTS, DEFIBRILLATORS & OTHER CARDIAC
MEDICAL DEVICES
2. First Health Group 7.1%
PPO NETWORK
3. Interpublic Group 5.3%
ADVERTISING
4. Synopsys 5.1%
SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS
5. PeopleSoft 4.5%
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
6. TCF Financial 4.5%
GREAT LAKES BANK
7. Harley-Davidson 4.0%
MOTORCYCLES & RELATED MERCHANDISE
8. Electronic Arts 3.9%
ENTERTAINMENT SOFTWARE
9. Moody's 3.8%
RATING SERVICE FOR CREDIT OBLIGATIONS
10. Herman Miller 3.8%
OFFICE FURNITURE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
13
Columbia Thermostat Fund
>In a Nutshell
Photo of Ralph Wanger
Photo of Charles P. McQuaid
Photo of Harvery Hirschhorn
The Columbia Thermostat Fund completed its first full year of operations in
2003. The Fund rebal- ances between five stock funds and three bond funds
according to a simple mechanical rule, quite like the way your home thermostat
keeps the room temperature steady. The logical construction of the Fund appealed
to many people, so assets at year-end were nearly $128 million, what we believe
to be a very good number for a start-up fund.
Investment performance for the Fund was satisfactory, up 7.34% in the fourth
quarter and 19.79% for the year (see Page 1 for index comparisons).
Equities
FOURTH QUARTER 1-YEAR
WEIGHTING TOTAL RETURN TOTAL RETURN
FUND IN SECTOR 2003 2003
- ------------------------------------------------------------------
Columbia 20% 14.45% 45.68%
Acorn Fund
- ------------------------------------------------------------------
Columbia 15% 4.97% 30.61%
Acorn Select
- ------------------------------------------------------------------
Columbia Growth 25% 9.42% 26.47%
Stock Fund
- ------------------------------------------------------------------
Columbia Growth 25% 11.77% 19.51%
& Income Fund
- ------------------------------------------------------------------
Columbia Mid Cap 15% 13.90% 27.82%
Value Fund
- ------------------------------------------------------------------
WEIGHTED AVERAGE 100% 11.02% 29.40%
- ------------------------------------------------------------------
Fixed Income
FOURTH QUARTER 1-YEAR
WEIGHTING TOTAL RETURN TOTAL RETURN
FUND IN SECTOR 2003 2003
- ------------------------------------------------------------------
Columbia Federal 30% 0.11% 2.26%
Securities Fund
- ------------------------------------------------------------------
Columbia Intermediate 50% 1.46% 9.50%
Bond Fund
- ------------------------------------------------------------------
Columbia High
Yield Fund 20% 2.89% 11.49%
- ------------------------------------------------------------------
WEIGHTED AVERAGE 100% 1.34% 7.73%
- ------------------------------------------------------------------
Columbia Thermostat Fund
Rebalancing in 2003
- ------------------------------------------------------------------
Stock/Fixed Income
allocation 01/01/03: 70% stock, 30% fixed income
Stock/Fixed Income
allocation 12/31/03: 50% stock, 50% fixed income
FOURTH QUARTER 1-YEAR
2003 2003
- ------------------------------------------------------------------
Times stocks increased 0 3
- ------------------------------------------------------------------
Times stocks decreased 3 9
- ------------------------------------------------------------------
TOTAL 3 12
By construction, the Fund should be expected to have a return somewhere
between the stock market and the bond market, and it did. The Fund's equity
portfolio had a 29.40% return for the year, and the fixed income piece was up
7.73%. Thermostat's equity funds were 50% in small-cap, mid-cap and value funds,
which was an overweighting in these categories vs. the entire market; this was a
good idea in 2003, as these funds outperformed the large-company index as
measured by the S&P 500 Index.
The Fund's rebalancing system added some moderate value, but as the year
unfolded, a high equity weighting throughout the year would have worked out
better. The Thermostat system is likely to produce its best results in a market
with lots of up-and-down moves. In 2003, the last 10 months of the year featured
a steady uptrend for stocks, so shareholders would have done better by having
all their money in an equity fund such as Columbia Acorn Fund. Of course, one
cannot know that at the beginning of the year, which is why Columbia Thermostat
makes sense for conservative investors.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
/s/ Harvery Hirschhorn
Harvery Hirschhorn
CO-PORTFOLIO MANAGER
THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF
THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG
THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS,
INCLUDING STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND
BUSINESS DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC
VOLATILITY ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL-AND
MID-CAP STOCKS MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND
GREATER PRICE VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES.
CHANGES IN INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF
LOWER-RATED BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO
SUBJECT TO THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET
CLASSES AND PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY,
RESULTING IN A FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION,
THE FUND MAY BUY AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY
RESULT IN HIGHER TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN
OFFER OF THE SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN.
1-800-922-6769
14
Columbia Thermostat Fund
>At a Glance Ticker Symbol: COTZX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2003
1 YEAR LIFE OF FUND
- ------------------------------------------------------------
Returns before taxes 19.79% 19.01%
- ------------------------------------------------------------
Returns after taxes
on distributions 19.26 18.59
- ------------------------------------------------------------
Returns after taxes on distribu-
tions and sale of fund shares 12.87 15.97
- ------------------------------------------------------------
S&P 500 (pretax) 28.69 29.59
- ------------------------------------------------------------
Lehman U.S. Credit Intermediate
Bond Index (pretax) 6.91 7.95
- ------------------------------------------------------------
Lehman U.S. Govt. Intermediate
Bond Index (pretax) 2.29 2.89
- ------------------------------------------------------------
Lipper Flexible Portfolio Funds
Index (pretax) 23.03 23.09
- ------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
class Z shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value will fluctuate, resulting in a gain or
loss on sale.
COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS
>as a % of assets in each investment category, as of December 31, 2003
STOCK MUTUAL FUNDS
PIE CHART
Columbia 20%
Acorn Fund
Columbia 15%
Acorn Select
Columbia 25%
Growth Stock
Fund
Columbia 25%
Growth &
Income Fund
Columbia 15%
Mid Cap
Value Fund
BOND MUTUAL FUNDS
PIE CHART
Columbia 30%
Federal
Securities
Fund
Columbia 50%
Intermediate
Bond Fund
Columbia 20%
High Yield
Fund
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS Z)
>September 25, 2002 through December 31, 2003
This graph compares the results of $10,000 invested in Columbia Thermostat Fund
at inception on September 25, 2002 to three indexes. The S&P 500 is a broad,
market-weighted average of U.S. blue-chip company stock performance. The Lehman
U.S. Govt. Bond Index is comprised of 1 to 10 year treasury and agency bonds,
excluding targeted investor notes and state and local government series bonds.
The Lehman U.S. Credit Intermediate Bond Index is the intermediate component of
the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S.
corporate and foreign debentures and secured notes that meet specified maturity,
liquidity, and quality requirements. The Indexes are unmanaged and returns for
the indexes and the Fund include reinvested dividends and capital gains. It is
not possible to invest directly in an index. The graph and table do not reflect
tax deductions that a shareholder would pay on Fund distributions or the sale of
Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY
PERFORMANCE UPDATES. FOR MORE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING
OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO COPY OF THE PROSPECTUS. BE
SURE TO READ IT CAREFULLY BEFORE YOU INVEST.
COLUMBIA THERMOSTAT FUND NAV ON 12/31/03: $12.31
TOTAL NET ASSETS: $127.9 MILLION
AVERAGE ANNUAL TOTAL RETURN
- ---------------------------
1 YEAR LIFE OF FUND
19.79% 19.01%
MOUNTAIN CHART
LEHMAN
COLUMBIA LEHMAN U.S. GOVT.
THERMOSTAT U.S. CREDIT INTERMEDIATE
FUND S&P 500 INTERMEDIATE BOND BOND
---------- ------- ----------------- ------------
9/25/02 10000.00 10000.00 10000.00 10000.00
9/30/02 9850.00 9955.60 10042.80 10038.80
10/31/02 10220.00 10831.90 9962.13 10032.00
11/30/02 10700.00 11469.40 10044.60 9952.60
12/31/02 10410.00 10795.60 10306.80 10136.50
1/31/03 10260.00 10512.80 10335.10 10114.10
2/28/03 10100.00 10355.10 10517.50 10228.30
3/31/03 10190.00 10455.60 10539.30 10230.50
4/30/03 10710.00 11316.80 10683.90 10259.20
5/31/03 11200.00 11913.10 10956.80 10420.30
6/30/03 11348.00 12065.10 10962.70 10403.20
7/31/03 11418.00 12277.80 10626.40 10150.40
8/31/03 11648.20 12517.20 10658.60 10168.70
9/30/03 11618.20 12384.30 10976.00 10389.10
10/31/03 12018.40 13084.90 10878.30 10287.30
11/30/03 12148.50 13200.00 10911.20 10288.10
12/31/03 12470.60 13892.30 11019.40 10368.30
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION
>as a % of net assets, as of December 31, 2003
PIE CHART
Stock Mutual Funds 49.5%
Bond Mutual Funds 49.6%
Cash and Other Assets 0.9%
Less Liabilities
15
Columbia Acorn Fund
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
INFORMATION
3Com 0 2,000,000
Actuate 4,534,000 6,000,000
Alliance Atlantis Communications
(Canada) 500,000 750,000
Andrew 1,000,000 1,600,000
Crown Castle International 3,000,000 3,500,000
DoubleClick 0 2,000,000
Igate 4,500,000 4,550,000
Integrated Circuit Systems 1,005,000 1,120,000
Intralot (Greece) 0 345,000
InVision Technologies 0 255,000
IXYS 1,000,000 1,250,000
Kronos 1,180,000 1,770,000
Northeast Utilities 0 850,000
Peoplesoft 3,300,000 3,400,000
Pericom Semiconductor 318,000 404,000
Perot Systems 0 900,000
Pinnacle Systems 0 1,250,000
Regent Communications 0 241,000
SES Global (Luxembourg) 332,000 560,000
Spanish Broadcasting System 700,000 1,006,000
Sybase 1,221,000 1,521,000
Symmetricom 0 1,051,000
Tellabs 1,000,000 5,000,000
THQ 1,000,000 1,200,000
Venture (Singapore) 1,840,000 2,710,000
Watts Water Technologies 0 475,000
- ----------------------------------------------------------------------------
HEALTH CARE
Applied Molecular Evolution 0 252,000
CTI Molecular Imaging 674,000 1,900,000
Diagnostic Products 920,000 989,000
Enzon 1,115,000 1,665,000
Essilor International (France) 265,000 365,000
First Health Group 5,046,000 5,586,000
Gambro (Sweden) 2,100,000 2,500,000
OPG Groep (Netherlands) 365,000 420,000
Patheon 0 433,600
Smith & Nephew 2,000,000 2,600,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Abercrombie & Fitch 495,000 895,000
Aeropostale 1,085,000 1,510,000
AFC Enterprises 1,500,000 2,000,000
American Woodmark 375,000 422,000
Autogrill (Italy) 1,217,000 1,447,000
BearingPoint 0 3,100,000
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
- ----------------------------------------------------------------------------
Billabong International
(Australia) 2,950,000 3,000,000
Chico's FAS 2,095,000 2,495,000
Christopher & Banks 3,328,000 3,743,000
Genesco 565,000 700,000
Leapfrog Enterprises 0 1,250,000
Lion Nathan 3,000,000 4,000,000
Nobia (Sweden) 810,000 1,160,000
Orkla (Norway) 810,000 950,000
Oxford Industries 282,000 564,000
Pegasus Solutions 0 300,000
Petco Animal Supplies 815000 1,015,000
R.H. Donnelley 46,000 150,000
Sky City Entertainment
(New Zealand) 1,500,000 5,000,000
Urban Outfitters 688,000 788,000
Weight Watchers 320,000 695,000
Winn-Dixie Stores 1,750,000 4,500,000
- ----------------------------------------------------------------------------
FINANCE
AmeriCredit 5,531,000 5,831,000
Anglo Irish Bank (Ireland) 2,910,000 3,200,000
BOK Financial 445,000 825,000
CityBank Lynnwood 128,000 159,000
Concord EFS 0 1,485,000
Corpbanca 0 186,000
Depfa Bank (Ireland) 125,000 185,000
DNB NOR ASA (Norway) 0 2,800,000
First Mutual Bancshares 0 46,000
Gables Residential Trust 287,000 400,000
Great Southern Bancorp 0 73,000
Intermediate Capital
(United Kingdom) 350,000 500,000
Investment Technology Group 300,000 1,215,000
Irish Life & Permanent 700,000 1,000,000
Jardine Lloyd Thompson 0 1,000,000
Republic Bancorp 1,634,000 1,798,000
Southwest Bancorp 0 303,000
TCF Financial 1,551,000 1,751,000
United National Group 0 595,000
West Coast Bancorp 472,000 700,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Aalberts Industries 310,000 510,000
AM (Netherlands) 0 133,000
Amer Group (Finland) 250,000 370,000
Bilfinger Berger (Germany) 375,000 525,000
Central Parking 0 900,000
Esco 950,000 1,050,000
Esprit Holdings 0 1,500,000
Gibraltar Steel 1,300,000 1,900,000
1-800-922-6769
16
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Additions, continued
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES (CONTINUED)
Grafton Group (Ireland) 3,400,000 3,800,000
Grupo Aeroportuario del Sureste 0 500,000
Imerys (France) 0 50,000
Intermagnetics General 363,000 500,000
Masonite International (Canada) 263,700 440,000
Novozymes (Denmark) 316,600 450,000
Pentair 118,000 420,000
Schindler (Switzerland) 40,000 60,000
Shimano 0 579,000
Ushio (Japan) 500,000 825,000
Waste Connections 377,000 533,000
Wienerberger (Austria) 0 700,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Airgas 650,000 975,000
Enerflex Systems 850,000 1,050,000
FMC Technologies 1,700,000 1,900,000
Nexen 0 400,000
Oneok 500,000 1,250,000
Quicksilver 544,000 600,000
Talisman Energy (Canada) 365,000 565,000
Tullow Oil 3,000,000 9,165,000
Westport Resources 342,000 517,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
General Growth Properties 615,000 1,845,000
Highland Hospitality 0 380,000
Kobenhavns Lufthavne (Denmark) 100,000 140,000
LNR Property 0 291,000
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
INFORMATION
Deutsche Boerse (Germany) 275,000 175,000
Information Holdings 800,000 600,000
RealNetworks 1,200,000 --
Torex (United Kingdom) 600,000 --
- ----------------------------------------------------------------------------
HEALTH CARE
Omega Pharma (Belgium) 426,000 296,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Hyundai Mobis (South Korea) 575,000 465,000
ITT Educational Services 2,200,000 2,111,000
Parmalat Finanziaria (Italy) 3,500,000 --
Steiner Leisure 1,260,000 894,000
- ----------------------------------------------------------------------------
FINANCE
Neuberger Berman 900,000 --
Texas Regional Bancshares 990,000 700,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Newpark Resources 4,500,000 4,750,000
Saipem (Italy) 3,200,000 2,200,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Unisource Energy 1,200,000 1,100,000
17
Columbia Acorn Fund
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
SECURITIES: 92.2%
- ----------------------------------------------------------------------------
INFORMATION: 27.5%
MEDIA
>TV/SATELLITE BROADCASTING: 0.4%
1,400,000 Gray Television $ 21,168
MID MARKET AFFILIATED TV STATIONS
3,300,000 TVB (Hong Kong) 16,662
TELEVISION PROGRAMMING & BROADCASTING
560,000 SES Global (Luxembourg) 5,645
SATELLITE BROADCASTING SERVICES
200,000 Young Broadcasting (b) 4,008
TELEVISION STATIONS
- ----------------------------------------------------------------------------
47,483
>RADIO BROADCASTING: 0.7%
1,200,000 Cumulus Media, Cl. A (b) 26,400
RADIO STATIONS IN SMALL CITIES
850,000 Salem Communications (b) 23,052
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
935,000 Saga Communications (b)(c) 17,326
RADIO STATIONS IN SMALL & MID-SIZED CITIES
1,006,000 Spanish Broadcasting (b) 10,563
SPANISH LANGUAGE RADIO STATIONS
241,000 Regent Communications (b) 1,530
RADIO STATIONS IN SMALL & MID-SIZED CITIES
- ----------------------------------------------------------------------------
78,871
>TELEVISION PROGRAMMING/CATV: 1.2%
2,605,000 Liberty Media (b) 30,973
CATV PROGRAMMING & MEDIA COMPANY HOLDINGS
2,500,000 Mediacom Communications (b) 21,675
CABLE TELEVISION FRANCHISES
1,000,000 Corus Entertainment (Canada) 21,279
TELEVISION PROGRAMMING & RADIO STATIONS
1,700,000 Insight Communications (b) 17,527
CATV FRANCHISES IN MIDWEST
2,750,000 Hit Entertainment (United Kingdom) 14,457
TELEVISION SHOWS FOR CHILDREN
1,500,000 United Global Com (b) 12,720
VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA
750,000 Alliance Atlantis Communication (b)
(Canada) 11,502
TV/MOVIE PRODUCTION/DISTRIBUTION & CATV
CHANNELS
- ----------------------------------------------------------------------------
130,133
TELECOMMUNICATIONS
>TELECOMMUNICATIONS/WIRELINE
COMMUNICATIONS: 0.3%
900,000 Commonwealth Telephone (b) 33,975
RURAL PHONE FRANCHISES & CLEC
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS EQUIPMENT: 0.9%
5,000,000 Tellabs (b) 42,150
TELECOMMUNICATIONS & CABLE EQUIPMENT
830,000 Plantronics (b) 27,100
COMMUNICATION HEADSETS
1,600,000 Andrew (b) 18,416
WIRELESS INFRASTRUCTURE EQUIPMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,051,000 Symmetricom (b) $ 7,651
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
95,317
>MOBILE COMMUNICATIONS: 1.3%
2,800,000 Western Wireless (b) 51,408
RURAL CELLULAR PHONE SERVICES
3,500,000 Crown Castle International (b) 38,605
COMMUNICATION TOWERS IN USA & UK
520,000 Telephone & Data Systems 32,526
CELLULAR & TELEPHONE SERVICES
1,500,000 American Tower (b) 16,230
COMMUNICATION TOWERS IN USA & MEXICO
533,000 COMARCO (b)(c) 5,863
WIRELESS NETWORK TESTING
- ----------------------------------------------------------------------------
144,632
COMPUTER RELATED HARDWARE
>COMPUTER HARDWARE/RELATED SYSTEMS: 2.5%
2,500,000 Seachange International (b)(c) 38,500
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
980,000 Avocent (b) 35,790
COMPUTER CONTROL SWITCHES
494,000 Zebra Technologies (b) 32,787
BAR CODE PRINTERS
1,400,000 Unova (b) 32,130
BARCODE & WIRELESS LAN SYSTEMS
431,900 Neopost (France) 21,767
POSTAGE METERS
625,000 Excel Technologies (b)(c) 20,538
LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS
445,000 Rogers (b) 19,633
PCB LAMINATES & HIGH PERFORMANCE FOAMS
2,000,000 3Com (b) 16,340
NETWORKING EQUIPMENT
1,575,000 Cable Design Technologies (b) 14,159
NETWORKING & SPECIALTY CABLES
535,000 II VI (b) 13,803
LASER COMPONENTS
1,055,000 CTS 12,132
ELECTRONIC COMPONENTS, SENSORS & EMS
2,325,000 Concurrent Computer (b) 10,160
VIDEO ON DEMAND SYSTEMS & SERVICES
230,000 Applied Films (b) 7,595
THIN-FILM GLASS COATING EQUIPMENT
- ----------------------------------------------------------------------------
275,334
>GAMING EQUIPMENT: 3.0%
8,768,000 International Game Technology 313,018
SLOT MACHINES & PROGRESSIVE JACKPOTS
827,000 Shuffle Master (b) 28,631
CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES
- ----------------------------------------------------------------------------
341,649
>CONTRACT MANUFACTURING: 0.8%
1,170,000 Jabil Circuit (b) 33,111
ELECTRONIC MANUFACTURING SERVICES
2,710,000 Venture (Singapore) 31,914
ELECTRONIC MANUFACTURING SERVICES
1-800-922-6769
18
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONTRACT MANUFACTURING--CONTINUED
1,300,000 Plexus (b) $ 22,321
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
87,346
>INSTRUMENTATION: 1.4%
836,000 Dionex (b) 38,473
ION & LIQUID CHROMATOGRAPHY
810,000 Mettler Toledo (b) 34,190
LABORATORY EQUIPMENT
900,000 Trimble Navigation (b) 33,516
GPS-BASED INSTRUMENTS
668,000 Varian (b) 27,876
ANALYTICAL INSTRUMENTS
2,300,000 Spectris (United Kingdom) 17,480
ELECTRONIC INSTRUMENTATION & CONTROLS
255,000 Invision Technologies (b) 8,560
MANUFACTURER OF EXPLOSIVE DETECTION SYSTEMS
- ----------------------------------------------------------------------------
160,095
>SEMICONDUCTORS/RELATED EQUIPMENT: 1.2%
1,120,000 Integrated Circuit Systems (b) 31,909
SILICON TIMING DEVICES
685,000 Littelfuse (b) 19,742
LITTLE FUSES
800,000 Semtech (b) 18,184
ANALOG SEMICONDUCTORS
519,000 Microsemi (b) 12,757
ANALOG/MIXED SIGNAL SEMICONDUCTORS
1,250,000 IXYS (b) 11,688
POWER SEMICONDUCTORS
664,000 Asyst Technologies (b) 11,520
SEMICONDUCTOR FAB AUTOMATION EQUIPMENT
565,000 Supertex (b) 10,792
MIXED-SIGNAL SEMICONDUCTORS
361,000 Actel (b) 8,700
FIELD PROGRAMMABLE GATE ARRAYS
404,000 Pericom Semiconductor (b) 4,307
SEMICONDUCTORS: INTERFACE INTEGRATED CIRCUITS
- ----------------------------------------------------------------------------
129,599
SOFTWARE/SERVICES
>BUSINESS SOFTWARE: 7.0%
9,900,000 Novell (b) 104,148
SECURITY & IDENTITY MANAGEMENT SOFTWARE
3,400,000 PeopleSoft (b) 77,520
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
1,600,000 Avid Technology (b)(c) 76,800
DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS
1,770,000 Kronos (b)(c) 70,110
LABOR MANAGEMENT SOLUTIONS
4,000,000 Aspect Communications (b)(c) 63,040
CALL CENTER SOFTWARE
3,050,000 Systems & Computer Technology (b)(c) 49,868
ENTERPRISE SOFTWARE & SERVICES
1,050,000 Micros Systems (b)(c) 45,528
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
5,700,000 E.Piphany (b)(c) 41,097
CRM SOFTWARE
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
2,200,000 JDA Software Group (b)(c) $ 36,322
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,521,000 Sybase (b) 31,302
DATABASE SOFTWARE
2,200,000 MAPICS (b)(c) 28,798
MID MARKET ERP SOFTWARE
2,035,000 MRO Software (b)(c) 27,391
ENTERPRISE MAINTENANCE SOFTWARE
3,000,000 Lawson Software (b) 24,690
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
6,000,000 Actuate (b)(c) 18,660
INFORMATION DELIVERY SOFTWARE & SOLUTIONS
550,000 Hyperion Solutions (b) 16,577
BUSINESS ANALYSIS SOFTWARE
1,760,000 Witness Systems (b)(c) 16,421
CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE
5,000,000 Indus International (b)(c) 15,000
ENTERPRISE ASSET MANAGEMENT SOFTWARE
1,125,000 Radiant Systems (b) 9,461
POINT OF SALE SYSTEMS FOR CONVENIENCE STORES
500,000 SPSS (b) 8,940
STATISTICAL/BUSINESS ANALYSIS SOFTWARE
1,200,000 ScanSoft (b) 6,384
SOFTWARE TO INCORPORATE SPEECH & IMAGES TO TEXT
1,400,000 ClickSoftware Technologies (b)(c) 5,712
SERVICE CHAIN OPTIMIZATION SOFTWARE
3,300,000 BSQUARE (b)(c) 4,719
SOFTWARE TO HELP DESIGN MOBILE DEVICES
70,000 Group 1 Software (b) 1,233
ADDRESS VERIFICATION SOFTWARE
- ----------------------------------------------------------------------------
779,721
>CONSUMER SOFTWARE: 0.4%
1,200,000 THQ (b) 20,292
ENTERTAINMENT SOFTWARE
750,000 Activision (b) 13,650
ENTERTAINMENT SOFTWARE
1,250,000 Pinnacle Systems (b) 10,663
VIDEO EDITING SOFTWARE & HARDWARE
- ----------------------------------------------------------------------------
44,605
>COMPUTER SERVICES: 1.5%
4,550,000 Igate Capital (b)(c) 35,718
TECHNOLOGY STAFFING SERVICES
3,100,000 Bearing Point (b) 31,279
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
3,469,000 Ciber (b)(c) 30,042
SOFTWARE SERVICES & STAFFING
4,600,000 AnswerThink Consulting (b)(c) 25,530
IT INTEGRATOR FOR FORTUNE 2000
900,000 Perot Systems (b) 12,132
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
560,000 American Management Systems (b) 8,439
SOFTWARE DEVELOPMENT SERVICES
2,300,000 Analysts International (b)(c) 7,751
TECHNOLOGY STAFFING SERVICES
500,000 Pomeroy Computer Resources (b) 7,370
NETWORK INTEGRATION SERVICES
1,025,000 New Horizons Worldwide (b)(c) 5,831
COMPUTER TRAINING SERVICES
- ----------------------------------------------------------------------------
164,092
19
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BUSINESS INFORMATION/MARKETING
SERVICES/PUBLISHING: 1.5%
1,200,000 Getty Images (b) $ 60,156
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
1,336,000 Navigant Consulting (b) 25,197
CONSULTING FIRM
2,685,000 InfoUSA (b)(c) 19,923
BUSINESS DATA FOR SALES LEADS
1,000,000 Moore: Wallace (Canada) (b) 18,733
COMMERCIAL PRINTING
950,000 Administaff (b) 16,511
PROFESSIONAL EMPLOYER ORGANIZATION
600,000 Information Holdings (b) 13,260
PATENT & OTHER BUSINESS INFORMATION
300,000 Proquest (b) 8,835
INFORMATION SERVICES FOR EDUCATION &
AUTOMOTIVE MARKETS
150,000 RH Donnelley (b) 5,976
YELLOW PAGES PUBLISHER
1,700,000 PRIMEDIA (b) 4,811
SPECIALTY MAGAZINES & OTHER PUBLICATIONS
- ----------------------------------------------------------------------------
173,402
>INTERNET: 1.3%
9,900,000 Skillsoft Publishing (b)(c) 85,635
PROVIDER OF WEB-BASED LEARNING SOLUTIONS
(E-LEARNING)
2,500,000 RSA Security (b) 35,500
ENTERPRISE SECURITY SOFTWARE
2,000,000 DoubleClick (b) 20,440
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
1,051,030 Vital Stream, Cl. C (b) 694
828,778 Vital Stream, Cl. B (b)(e) 520
STREAMING SERVICES FOR THE INTERNET
250,000 NeoPlanet, Series A (b)(e) 29
53,376 NeoPlanet, Series B (b)(e) 11
WEB BROWSER
- ----------------------------------------------------------------------------
142,829
>ELECTRONICS DISTRIBUTION: 0.7%
1,695,000 Avnet (b) 36,714
ELECTRONIC COMPONENTS DISTRIBUTION
780,000 Tech Data (b) 30,958
I/T DISTRIBUTOR
1,410,000 Agilysys 15,721
I/T DISTRIBUTOR
- ----------------------------------------------------------------------------
83,393
>TRANSACTION PROCESSORS: 1.4%
1,487,000 Global Payments 70,067
CREDIT CARD PROCESSOR
1,485,000 Concord EFS (b) 22,037
CREDIT CARD PROCESSOR
725,000 Euronext (France) 18,333
TRADING SERVICES FOR FINANCIAL MARKETS
600,000 Cubic 13,800
REVENUE COLLECTION & DEFENSE SYSTEMS
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
5,000,000 Hong Kong Exchanges &
Clearing (Hong Kong) $ 10,820
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
175,000 Deutsche Boerse (Germany) 9,558
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
406,000 Euronet Worldwide (b) 7,308
ATM PROCESSOR
300,000 Pegasus Systems (b) 3,141
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
155,064
------------
INFORMATION: TOTAL 3,067,540
- ----------------------------------------------------------------------------
HEALTH CARE: 8.6%
>BIOTECHNOLOGY/DRUG DELIVERY: 2.1%
519,000 Martek Biosciences (b) 33,719
FATTY ACIDS FOR BABY FORMULA & OTHER FOODS
2,055,000 Nektar Therapeutics (b) 27,969
PULMONARY DRUG DELIVERY
1,665,000 Enzon (b) 19,980
POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS
1,708,000 Ciphergen Biosystems (b)(c) 19,198
PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY
426,000 NPS Pharmaceuticals (b) 13,095
SMALL MOLECULE DRUGS
900,000 Applera Celera Genomics (b) 12,519
DIAGNOSTICS & DRUG DEVELOPMENT
2,000,000 Medarex (b) 12,460
HUMANIZED ANTIBODIES
608,000 Protein Design Labs (b) 10,883
COMPUTER DESIGNED MONOCLONAL ANTIBODIES
2,800,000 Sequenom (b)(c) 8,904
HIGH SPEED DNA ANALYSIS INSTRUMENTS
1,600,000 Sangamo Biosciences (b)(c) 8,864
DRUG DISCOVERY
1,875,000 Locus Discovery, Series D Pfd. (b)(e) 7,500
HIGH THROUGHPUT RATIONAL DRUG DESIGN
1,982,000 Aclara Biosciences (b)(c) 7,234
MICROFLUIDIC SYSTEMS FOR DRUG DEVELOPMENT
635,000 Maxygen (b) 6,750
MOLECULAR BREEDING
638,000 Diversa (b) 5,901
MOLECULAR BREEDING
389,000 Atherogenic (b) 5,816
DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID
ARTHRITIS, ASTHMA
865,000 Arena Pharmaceuticals (b) 5,363
NOVEL DRUG TARGETING TECHNOLOGY
304,000 Alexion Pharmaceuticals (b) 5,174
MONOCLONAL ANTIBODIES
252,000 Applied Molecular Evolution (b) 4,486
MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION
528,000 Pharmacyclics (b) 3,907
LIGHT ACTIVATED DRUGS FOR CANCER &
VASCULAR DISEASES
461,000 SYRRX, Series C (b)(e) 2,397
X-RAY CRYSTALLOGRAPHY
1-800-922-6769
20
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
320,000 Incyte Genomics (b) $ 2,189
BIOINFORMATICS & DRUG DEVELOPMENT
316,000 Guilford Pharmaceuticals (b) 2,142
DRUG DELIVERY & NEUROLOGY DRUGS
160,000 Myriad Genetics (b) 2,058
GENE DISCOVERY & DIAGNOSTIC PRODUCTS
1,249,999 Perlegen Sciences (b)(e) 1,950
LARGE SCALE GENE SEQUENCING
210,000 Gene Logic (b) 1,090
GENE EXPRESSION DATABASE
359,944 Microdose (b)(e) 180
DRUG INHALERS
- ----------------------------------------------------------------------------
231,728
>MEDICAL EQUIPMENT/LABORATORY
SUPPLIES: 2.6%
1,629,000 Edwards Lifesciences (b) 49,000
HEART VALVES
989,000 Diagnostic Products 45,405
IMMUNODIAGNOSTIC KITS
1,900,000 CTI Molecular Imaging (b) 32,129
MEDICAL DIAGNOSTIC DEVICES
583,000 Orthofix International (b) 28,555
BONE FIXATION & STIMULATION DEVICES
2,600,000 Smith & Nephew (United Kingdom) 21,779
MEDICAL EQUIPMENT & SUPPLIES
20,000 Synthes-Stratec (Switzerland) 19,785
PRODUCTS FOR ORTHOPEDIC SURGERY
365,000 Essilor International (France) 18,855
EYEGLASS LENSES
875,000 Viasys Healthcare (b) 18,025
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
770,000 VISX (b) 17,826
LASER EYE SURGERY EQUIPMENT
520,000 ICU Medical (b) 17,826
INTRAVENOUS THERAPY PRODUCTS
600,000 Sola International (b) 11,280
SPECIALTY EYEGLASS LENSES
350,000 Haemonetics (b) 8,362
BLOOD & PLASMA COLLECTION EQUIPMENT
1,495,000 Novoste (b)(c) 7,161
RADIATION CATHETERS FOR IN-STENT RESTENOSIS
- ----------------------------------------------------------------------------
295,988
>PHARMACEUTICALS: 0.1%
138,000 Yuhan (South Korea) 7,853
ETHICAL DRUG PRODUCER
433,600 Patheon (Canada) (b) 3,905
PHARMACEUTICAL CONTRACT MANUFACTURER
- ----------------------------------------------------------------------------
11,758
>HOSPITAL MANAGEMENT: 0.2%
387,000 Rhoen-Klinikum (Germany) 19,992
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>MEDICAL SUPPLIES: 0.4%
686,000 Techne (b) $ 25,917
CYTOKINES, ANTIBODIES, OTHER REAGENTS
FOR LIFE SCIENCES
650,000 Owens & Minor 14,242
DISTRIBUTION OF MEDICAL SUPPLIES
- ----------------------------------------------------------------------------
40,159
>SERVICES: 3.2%
5,586,000 First Health Group (b)(c) 108,704
PPO NETWORK
2,491,000 Lincare Holdings (b) 74,805
HOME HEALTH CARE SERVICES
2,592,000 NDCHealth Group (c) 66,407
HEALTH CLAIMS PROCESSING & DRUG
MARKETING SERVICES
640,000 Charles River Laboratories (b) 21,971
PHARMACEUTICAL RESEARCH
1,333,000 Dendrite International (b) 20,888
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
2,500,000 Gambro (Sweden) 20,680
PRODUCTS/SERVICES FOR RENAL CARE
420,000 OPG Groep (Netherlands) 19,077
PHARMACEUTICAL WHOLESALER & RETAILER
550,000 Serologicals (b) 10,230
BLOOD COLLECTION & ANTIBODY PRODUCTION
296,000 Omega Pharma (Belgium) 9,398
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
440,000 Medquist (b) 7,066
MEDICAL TRANSCRIPTION SERVICES
700,000 Nestor Healthcare (United Kingdom) 2,574
HEALTHCARE STAFFING COMPANY
- ----------------------------------------------------------------------------
361,800
------------
HEALTH CARE: TOTAL 961,425
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 19.9%
GOODS
>LEISURE VEHICLES: 1.3%
1,745,000 Harley-Davidson 82,940
MOTORCYCLES & RELATED MERCHANDISE
1,495,000 Monaco Coach (b)(c) 35,581
RECREATIONAL VEHICLES
275,000 Polaris Industries 24,360
MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS
2,850,000 Ducati Motor (Italy) (b) 4,930
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
147,811
>FURNITURE/TEXTILES: 1.7%
1,275,000 Hon Industries 55,233
OFFICE FURNITURE & FIREPLACES
740,000 Mohawk Industries (b) 52,200
CARPET & FLOORING
1,900,000 Herman Miller 46,113
OFFICE FURNITURE
510,000 Furniture Brands International 14,958
FURNITURE
1,160,000 Nobia (Sweden) 12,095
KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION
21
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>FURNITURE/TEXTILES--CONTINUED
440,000 Masonite International (Canada) (b) $ 11,780
DOOR MANUFACTURER
- ----------------------------------------------------------------------------
192,379
>FOOD & BEVERAGES: 0.7%
1,600,000 Kerry Group (Ireland) 30,037
FOOD INGREDIENTS
950,000 Orkla (Norway) 21,235
DIVERSIFIED CONSUMER GOODS
4,000,000 Lion Nathan (Australia) 18,191
BEER BREWER/DISTRIBUTOR
180,000 Davide Campari (Italy) 8,731
SPIRITS & WINE
- ----------------------------------------------------------------------------
78,194
>NONDURABLES: 1.1%
2,300,000 Helen of Troy (b)(c) 53,245
HAIRDRYERS & CURLING IRONS
895,000 Scotts Company (b) 52,948
CONSUMER LAWN & GARDEN PRODUCTS
255,000 Uni-Charm (Japan) 12,544
INFANT HYGIENE & FEMININE CARE PRODUCTS
601,000 First Years (c) 8,979
INFANT & TODDLER PRODUCTS
- ----------------------------------------------------------------------------
127,716
>DURABLE GOODS: 1.3%
1,511,000 SCP Pool (b) 49,379
DISTRIBUTOR OF SWIMMING POOL SUPPLIES
605,000 Hunter Douglas (Netherlands) 28,288
WINDOW SHADES & VENETIAN BLINDS
465,000 Hyundai Mobis (South Korea) 25,016
AUTO PARTS
422,000 American Woodmark (c) 23,231
KITCHEN CABINETS
5,000,000 Techtronic Industries (Hong Kong) 13,846
POWER TOOL MANUFACTURER
579,000 Shimano (Japan) 11,998
BICYCLE COMPONENTS & FISHING TACKLE
- ----------------------------------------------------------------------------
151,758
>APPAREL: 2.0%
2,840,000 Coach (b) 107,210
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
1,370,000 Jones Apparel 48,265
WOMEN'S APPAREL
564,000 Oxford Industries 19,108
BRANDED & PRIVATE LABEL APPAREL
828,000 Steven Madden (b)(c) 16,891
WHOLESALER/RETAILER OF FASHION FOOTWEAR
3,000,000 Billabong International (Australia) 16,106
SURFWEAR APPAREL MANUFACTURER
200,000 Columbia Sportswear (b) 10,900
ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES
- ----------------------------------------------------------------------------
218,480
NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SERVICES
>RETAIL: 5.4%
2,495,000 Chico's FAS (b) $ 92,190
WOMEN'S SPECIALTY RETAIL
3,743,000 Christopher & Banks (c) 73,101
WOMEN'S APPAREL RETAILER
1,600,000 Michaels Stores 70,720
CRAFT & HOBBY SPECIALTY RETAILER
4,500,000 Winn Dixie Stores 44,775
SUPERMARKETS IN THE SOUTHEAST US
1,510,000 Aeropostale (b) 41,404
MALL BASED TEEN RETAILER
500,000 Whole Foods Market 33,565
NATURAL FOOD SUPERMARKETS
1,070,000 Hot Topic (b) 31,522
MUSIC INSPIRED RETAILER OF APPAREL,
ACCESSORIES & GIFTS
1,015,000 Petco Animal Supplies (b) 30,907
PET SUPPLIES & SERVICES
1,400,000 Borders Group 30,688
BOOKSTORES
788,000 Urban Outfitters (b) 29,195
ECLECTIC HOME & APPAREL RETAILER
536,000 Zale (b) 28,515
SPECIALTY RETAILER OF JEWELRY
895,000 Abercrombie & Fitch (b) 22,115
TEEN APPAREL RETAILER
450,000 Ann Taylor (b) 17,550
WOMEN'S APPAREL RETAILER
500,000 Pier 1 Imports 10,930
IMPORTED FURNITURE & TCHOTCHKES
700,000 Genesco (b) 10,591
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
3,100,000 The Warehouse Group (New Zealand) 10,399
WAREHOUSE CLUB
1,015,000 Burberry Group (United Kingdom) 6,622
APPAREL RETAILER
850,000 Gaiam (b)(c) 5,058
HEALTHY LIVING CATALOG & E-COMMERCE
1,500,000 Esprit Holdings (Hong Kong) 4,985
GLOBAL APPAREL BRAND MANAGER
$ 6,000,000 Gadzooks 5.00% Convertible (e) 4,485
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
599,317
>TRAVEL: 0.8%
2,024,500 Intrawest (Canada) 37,440
OWNER/OPERATOR OF SKI RESORTS
3,380,000 LaQuinta (b) 21,666
OWNER/FRANCHISER OF MID-PRICED HOTELS
950,000 Vail Resorts (b) 16,150
OWNER/OPERATOR OF SKI RESORTS
725,000 Navigant International (b) 10,041
CORPORATE TRAVEL AGENCY
720,000 Jurys Doyle Hotel (Ireland) 8,799
HOTEL GROUP
- ----------------------------------------------------------------------------
94,096
1-800-922-6769
22
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSUMER SERVICES: 1.9%
2,111,000 ITT Educational Services (b) $ 99,154
POSTSECONDARY DEGREE PROGRAMS
695,000 Weight Watchers (b) 26,667
WEIGHT LOSS PROGRAM
1,290,000 Coinstar (b)(c) 23,297
OWNER/OPERATOR OF COIN COUNTING MACHINES
260,000 USS (Japan) 18,395
USED CAR AUCTIONEER
1,750,000 Princeton Review (b)(c) 17,063
COLLEGE PREPARATION COURSES
2,350,000 Bally Total Fitness (b)(c) 16,450
NATIONAL CHAIN OF FITNESS CENTERS
900,000 Central Parking 13,437
OWNER, OPERATOR & MANAGER OF PARKING
LOTS & GARAGES
- ----------------------------------------------------------------------------
214,463
>ENTERTAINMENT/LEISURE PRODUCTS: 1.5%
805,000 International Speedway Motors 35,951
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
1,250,000 Leapfrog Enterprises (b) 33,163
EDUCATIONAL TOYS
1,276,000 Action Performance (c) 25,010
MOTORSPORT COLLECTIBLES & MERCHANDISING
2,765,000 Six Flags (b) 20,793
WORLDWIDE THEME PARK OPERATOR
370,000 Amer Group (Finland) 16,013
BRANDED SPORTING GOODS
363,000 Speedway Motors 10,498
MOTORSPORT RACETRACK OWNER & OPERATOR
1,750,000 Magna Entertainment, Cl. A (Canada) (b) 8,873
OWNER/OPERATOR OF THOROUGHBRED RACETRACKS
334,000 RC2 6,931
COLLECTIBLES & TOYS
345,000 Intralot (Greece) 6,729
LOTTERY & GAMING SYSTEMS & SERVICES
- ----------------------------------------------------------------------------
163,961
>CASINOS: 1.3%
2,010,000 Alliance Gaming (b) 49,546
DIVERSIFIED GAMING COMPANY
890,000 Station Casinos 27,261
CASINOS & RIVERBOATS
875,000 Argosy Gaming (b) 22,741
REGIONAL RIVERBOAT CASINOS
1,925,000 Pinnacle Entertainment (b)(c) 17,941
REGIONAL RIVERBOAT CASINOS
5,000,000 Sky City Entertainment (New Zealand) 15,102
CASINO/ENTERTAINMENT COMPLEX
635,000 Monarch Casino & Resort (b)(c) 7,004
CASINO/HOTEL IN RENO
113,000 Lakes Entertainment (b) 1,825
GAMING ENTREPRENEUR
- ----------------------------------------------------------------------------
141,420
>RESTAURANTS: 0.6%
2,000,000 AFC Enterprises (b)(c) 39,000
POPEYES, CHURCHES FRIED CHICKEN
1,447,000 Autogrill (Italy) (b) 20,675
TOLLWAY RESTAURANTS
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
243,000 Cheesecake Factory (b) $ 10,699
CASUAL DINING RESTAURANT
7,000 Kappa Create (Japan) 591
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
70,965
>CRUISE LINES: 0.3%
400,000 Carnival 15,892
LARGEST CRUISE LINE
894,000 Steiner Leisure (b)(c) 12,784
SPAS & HAIR/SKIN PRODUCTS ON CRUISE SHIPS
- ----------------------------------------------------------------------------
28,676
------------
CONSUMER GOODS/SERVICES: TOTAL 2,229,236
- ----------------------------------------------------------------------------
FINANCE: 11.6%
>BANKS: 4.2%
1,751,000 TCF Financial 89,914
GREAT LAKES BANK
1,608,000 Associated Banc-Corp 68,581
MIDWEST BANK
3,200,000 Anglo Irish Bank (Ireland) 50,438
SMALL BUSINESS & MIDDLE MARKET BANKING
1,122,000 Glacier Bancorp (c) 36,353
MOUNTAIN STATES BANK
825,000 BOK Financial (b) 31,944
OKLAHOMA BANK
700,000 Texas Regional Bancshares 25,900
SOUTH TEXAS BANK
1,798,000 Republic 24,255
MICHIGAN BANK
185,000 Depfa Bank (Ireland) 23,332
INTERNATIONAL PUBLIC SECTOR FINANCE
605,000 Chittenden 20,352
VERMONT & WESTERN MASSACHUSETTS BANK
2,800,000 Den Norske Bank (Norway) 18,650
LARGEST NORWEGIAN BANK
660,000 Hawthorne Financial (b)(c) 18,467
REAL ESTATE LENDER
356,000 Bank of Bermuda 16,002
OFFSHORE BANK
700,000 West Coast Bancorp 14,938
PORTLAND SMALL BUSINESS LENDER
303,000 Southwest Bancorp 5,418
OKLAHOMA SMALL BUSINESS BANK
159,000 CityBank Lynnwood 5,167
SEATTLE REAL ESTATE LENDER
186,000 CorpBanca (Chile) (b) 4,849
CHILE'S 3RD LARGEST LOCAL BANK
82,000 BankFirst 4,814
OKLAHOMA COMMUNITY BANK
170,000 Midwest Bank 3,783
CHICAGO BANK
82,000 First Financial BankShares 3,419
WEST TEXAS COMMUNITY BANK
73,000 Great Southern Bancorp 3,385
MISSOURI REAL ESTATE LENDER
46,000 First Mutual Bancshares 1,127
SEATTLE COMMUNITY BANK
23
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BANKS--CONTINUED
29,000 Cascade Financial $ 562
SEATTLE COMMUNITY BANK
- ----------------------------------------------------------------------------
471,650
>SAVINGS & LOANS: 2.1%
2,184,000 Peoples Bank Bridgeport 71,198
CONNECTICUT SAVINGS & LOAN
947,000 Downey Financial 46,687
CALIFORNIA HOME LENDER
1,228,000 Anchor Bancorp Wisconsin (c) 30,577
WISCONSIN THRIFT
1,700,000 Housing Development Finance (India) 24,075
LEADING PROVIDER OF MORTGAGES IN INDIA
497,000 Quaker City Bancorp (c) 23,135
LA REAL ESTATE LENDER
1,000,000 Irish Life & Permanent (Ireland) 16,127
SAVINGS PRODUCTS
700,000 First Federal Capital 15,764
WISCONSIN THRIFT
190,000 Washington Federal 5,396
OLD FASHIONED MORTGAGE LENDER
- ----------------------------------------------------------------------------
232,959
>INSURANCE: 2.9%
870,000 Philadelphia Consolidated Holding (b) 42,482
SPECIALTY INSURANCE
1,320,000 HCC Insurance Holdings 41,976
AVIATION INSURANCE
826,000 Leucadia National 38,079
INSURANCE HOLDING COMPANY
1,000,000 RLI 37,460
SPECIALTY INSURANCE
138,000 Markel (b) 34,984
SPECIALTY INSURANCE
995,000 Protective Life 33,671
LIFE INSURANCE
700,000 Harleysville Group 13,923
COMMERCIAL & PERSONAL LINES INSURANCE
800,000 Ohio Casualty (b) 13,888
COMMERCIAL & PERSONAL LINES INSURANCE
650,000 Scottish Re Group (formerly known
as Scottish Annuity & Life) 13,507
LIFE REINSURER
210,000 StanCorp Financial 13,205
GROUP LIFE, DISABILITY & 401K
400,000 Selective Insurance Group 12,944
COMMERCIAL & PERSONAL LINES INSURANCE
595,000 United National Group (b) 10,514
SPECIALTY INSURANCE
1,000,000 Jardine Lloyd Thompson
(United Kingdom) 9,416
BUSINESS INSURANCE BROKER
355,000 Northbridge Financial (Canada) (b) 5,741
PROPERTY & CASUALTY INSURANCE
200,000 Kingsway Financial (Canada) (b) 2,259
AUTO & SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
324,049
>MONEY MANAGEMENT: 1.0%
2,390,000 SEI Investments 72,823
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
855,000 Eaton Vance $ 31,327
SPECIALTY MUTUAL FUNDS
123,000 Affiliated Managers Group (b) 8,560
ASSET MANAGEMENT HOLDING COMPANY
200,000 The Investment Company of
China (China) (b)(e) 246
CLOSED-END FUND
- ----------------------------------------------------------------------------
112,956
>BROKERAGE: 0.2%
1,215,000 Investment Technology Group (b) 19,622
ELECTRONIC TRADING
- ----------------------------------------------------------------------------
>FINANCE COMPANIES: 1.2%
5,831,000 AmeriCredit (b) 92,888
AUTO LENDING
1,820,000 World Acceptance (b)(c) 36,236
PERSONAL LOANS
500,000 Intermediate Capital (United Kingdom) 9,425
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
900,000 DVI Health Services (b)(c) 36
LEASES BIG MEDICAL EQUIPMENT
- ----------------------------------------------------------------------------
138,585
------------
FINANCE: TOTAL 1,299,821
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 12.2%
>STEEL: 0.8%
1,900,000 Gibraltar Steel (c) 47,785
STEEL PROCESSING
1,050,000 Worthington Industries 18,932
STEEL PROCESSING
550,000 Tenaris (Luxembourg) (b) 18,326
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
85,043
>INDUSTRIAL GOODS: 1.3%
1,400,000 Clarcor (c) 61,740
MOBILE & INDUSTRIAL FILTERS
750,000 Donaldson 44,370
INDUSTRIAL AIR FILTRATION
268,000 Mine Safety Appliances 21,309
SAFETY EQUIPMENT
500,000 Intermagnetics General (b) 11,080
SUPERCONDUCTING WIRE
100,000 Bacou Dalloz (France) 7,812
SAFETY EQUIPMENT
- ----------------------------------------------------------------------------
146,311
>INDUSTRIAL DISTRIBUTION: 1.1%
1,525,000 Watsco (c) 34,663
HVAC DISTRIBUTION
600,000 Hughes Supply 29,772
INDUSTRIAL DISTRIBUTION
3,800,000 Grafton Group (Ireland) 26,189
BUILDERS, WHOLESALERS & DIY RETAILING
975,000 Airgas 20,943
INDUSTRIAL GAS DISTRIBUTOR
900,000 Nuco2 (b)(c) 11,403
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
- ----------------------------------------------------------------------------
122,970
1-800-922-6769
24
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSTRUCTION: 0.9%
488,000 Simpson $ 24,820
WALL JOINT MAKER
425,000 Florida Rock Industries 23,311
CONCRETE & AGGREGATES
700,000 Wienerberger (Austria) 18,680
BRICKS & CLAY ROOFING TILES
380,000 Daito Trust Construction (Japan) 11,279
APARTMENT BUILDER
3,000,000 Consorcio (Mexico) (b) 7,449
LOW/MEDIUM INCOME HOUSE BUILDER
750,000 McCarthy & Stone (United Kingdom) 6,922
BUILDER OF RETIREMENT APARTMENTS
216,000 Northwest Pipe Company (b) 2,877
WATER TRANSMISSION PIPE
- ----------------------------------------------------------------------------
95,338
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 1.3%
1,850,000 Spartech (c) 45,584
PLASTICS DISTRIBUTION & COMPOUNDING
47,000 Geberit International (Switzerland) 23,095
PLUMBING SUPPLIES
1,000,000 Schulman 21,320
PLASTICS DISTRIBUTION & COMPOUNDING
37,000 Givaudan (Switzerland) 19,198
INDUSTRIAL FRAGRANCES & FLAVORS
450,000 Novozymes (Denmark) 16,408
INDUSTRIAL ENZYMES
50,000 Imerys (France) 10,514
INDUSTRIAL MINERALS PRODUCER
347,000 SYMYX (b) 7,131
MATERIALS & CHEMICALS
- ----------------------------------------------------------------------------
143,250
>MACHINERY: 1.2%
1,025,000 Ametek 49,466
AEROSPACE/INDUSTRIAL INSTRUMENTS
1,050,000 Esco Technologies (b)(c) 45,832
FILTRATION & TEST EQUIPMENT
420,000 Pentair 19,194
PUMPS, WATER TREATMENT & TOOLS
500,000 Cobham (United Kingdom) 10,416
AEROSPACE
285,000 Gardner Denver (b) 6,803
AIR COMPRESSORS, BLOWERS & PUMPS
150,000 Tennant 6,495
NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT
- ----------------------------------------------------------------------------
138,206
>OUTSOURCING SERVICES & TRAINING: 0.6%
1,900,000 Labor Ready (b) 24,890
TEMPORARY MANUAL LABOR
525,000 Bilfinger Berger (Germany) 17,860
CONSTRUCTION & RELATED SERVICES
9,500,000 Li & Fung (Hong Kong) 16,274
SOURCING OF CONSUMER GOODS
600,000 GP Strategies (b) 4,800
TRAINING PROGRAMS
- ----------------------------------------------------------------------------
63,824
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONGLOMERATES: 0.2%
5,550 Pargesa (Switzerland) $ 14,802
INDUSTRIAL & MEDIA HOLDINGS
510,000 Aalberts Industrie (Netherlands) 13,192
FLOW CONTROL & HEAT TREATMENT
- ----------------------------------------------------------------------------
27,994
>INDUSTRIAL SUPPLIERS: 0.2%
1,800,000 Xstrata (United Kingdom) 20,242
DIVERSIFIED MINING HOLDING COMPANY
- ----------------------------------------------------------------------------
>LOGISTICS: 2.2%
2,900,000 Expeditors International of
Washington 109,214
INTERNATIONAL FREIGHT FORWARDER
900,000 UTI Worldwide 34,137
INTERNATIONAL FREIGHT FORWARDER
1,000,000 Forward Air (b) 27,500
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
1,800,000 Exel (United Kingdom) 23,729
GLOBAL LOGISTICS & FREIGHT FORWARDING
40,000,000 Sinotrans (China) 18,033
INTEGRATED LOGISTICS IN CHINA
759,000 Hub Group (b)(c) 16,349
TRUCK & RAIL FREIGHT FORWARDER
11,000,000 Sembcorp Logistics (Singapore) 12,954
LOGISTIC SERVICES FOR MARINE TRANSPORT
- ----------------------------------------------------------------------------
241,916
>WATER: 1.3%
2,400,000 Tetra Tech (b) 59,664
RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING
856,000 Cuno (b)(c) 38,546
FILTRATION & FLUIDS CLARIFICATION
900,000 Pall 24,147
FILTRATION & FLUIDS CLARIFICATION
900,000 Insituform Technologies (b) 14,850
WATER/SEWER PIPE REPAIR
475,000 Watts Water Technologies 10,545
WATER, VALVES, REGULATORS & FILTRATION
- ----------------------------------------------------------------------------
147,752
>OTHER INDUSTRIAL SERVICES: 1.1%
1,500,000 Clark/Bardes Consulting (b)(c) 28,860
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
725,000 G&K Services 26,644
UNIFORM RENTAL
825,000 Mobile Mini (b)(c) 16,269
LEASES PORTABLE STORAGE UNITS
590,000 Munters (Sweden) 14,273
MOISTURE & HUMIDITY CONTROL
60,000 Schindler (Switzerland) (b) 14,645
ELEVATOR MANUFACTURER & SERVICE PROVIDER
665,500 Zardoya Otis (Spain) 13,835
ELEVATOR MANUFACTURER & SERVICE PROVIDER
825,000 Ushio (Japan) 13,699
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
128,225
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 1,361,071
25
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 7.0%
>INDEPENDENT POWER: 0.2%
570,000 Gamesa (Spain) $ 18,737
SPANISH WIND TURBINES
720,000 Millennium Cell (b) 1,678
FUEL CELL TECHNOLOGY
- ----------------------------------------------------------------------------
20,415
>OIL/GAS PRODUCERS: 4.3%
6,300,000 XTO Energy 178,290
NATURAL GAS PRODUCER
2,550,000 Ultra Petroleum (b) 62,781
NATURAL GAS PRODUCER
1,200,000 Western Gas 56,700
OIL PRODUCER & COAL SEAM GAS PRODUCER
1,460,000 Evergreen Resources (b) 47,465
COAL SEAM GAS PRODUCER
565,000 Talisman Energy (Canada) 32,142
OIL & GAS PRODUCER
1,200,000 Southwestern Energy (b) 28,680
NATURAL GAS PRODUCER
600,000 Quicksilver (b) 19,380
NATURAL GAS & COAL SEAM GAS PRODUCER
517,000 Westport Resources (b) 15,438
OIL & GAS PRODUCER
400,000 Nexen (Canada) 14,522
OIL & GAS PRODUCER
9,165,000 Tullow Oil (United Kingdom) 14,029
OIL & GAS PRODUCER
500,000 McMoran Exploration (b) 9,375
NATURAL GAS PRODUCERS & LNG DEVELOPER
2,265,000 Tipperary (b)(c) 6,908
COAL SEAM GAS PRODUCER
- ----------------------------------------------------------------------------
485,710
>DISTRIBUTION/MARKETING/REFINING: 1.0%
1,260,000 Equitable Resources 54,079
NATURAL GAS UTILITY & PRODUCER
1,250,000 Oneok 27,600
NATURAL GAS UTILITY, MARKETING & PROCESSING
761,000 Atmos Energy 18,492
NATURAL GAS UTILITY
1,270,000 Aquila (b)(e) 8,941
ELECTRIC UTILITY HOLDING COMPANY
- ----------------------------------------------------------------------------
109,112
>OIL SERVICES: 1.5%
1,900,000 FMC Technologies (b) 44,270
OIL & GAS WELL HEAD MANUFACTURER
730,000 Carbo Ceramics 37,412
NATURAL GAS WELL STIMULANTS
4,750,000 Newpark Resources (b)(c) 22,753
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
1,750,000 Key Energy Services (b) 18,043
OIL & GAS WELL WORKOVER SERVICES
2,200,000 Saipem (Italy) 17,768
OFFSHORE CONSTRUCTION & DRILLING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,050,000 Enerflex Systems (Canada) $ 16,412
NATURAL GAS COMPRESSOR
800,000 Hanover Compressor (b) 8,920
NATURAL GAS COMPRESSOR RENTAL
- ----------------------------------------------------------------------------
165,578
------------
ENERGY/MINERALS: TOTAL 780,815
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 5.3%
>REAL ESTATE: 4.3%
1,160,000 The Rouse Company 54,520
REGIONAL SHOPPING MALLS
1,845,000 General Growth Properties 51,199
REGIONAL SHOPPING MALLS
875,000 SL Green Realty 35,919
MANHATTAN OFFICE BUILDINGS
800,000 Macerich Company 35,600
REGIONAL SHOPPING MALLS
699,000 Forest City Enterprises, Cl. B 33,762
COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER
725,000 Mills 31,900
REGIONAL SHOPPING MALLS
690,000 Federal Realty Investment Trust 26,489
SHOPPING CENTERS
700,000 Manufactured Home Communities 26,355
MANUFACTURED HOME COMMUNITIES
1,375,000 Crescent Real Estate Equities 23,554
CLASS A OFFICE BUILDINGS
400,000 Chelsea Properties Group 21,924
OUTLET MALLS
975,000 Glimcher Realty Trust 21,821
REGIONAL SHOPPING MALLS
540,000 AMB Property 17,755
INDUSTRIAL PROPERTIES
700,000 Keystone Property Trust 15,463
INDUSTRIAL PROPERTIES
291,000 LNR Property 14,407
DISTRESSED PROPERTY FINANCE
400,000 Gables Residential Trust 13,896
APARTMENTS
200,000 Essex Property Trust 12,844
WEST COAST APARTMENTS
650,000 United Dominion Realty 12,480
APARTMENTS
574,000 LaSalle Hotel Properties 10,648
UPSCALE/FULL SERVICE HOTELS
190,000 Consolidated Tomoka 6,213
FLORIDA LAND OWNER
299,275 Security Capital European
Realty (Luxembourg) (b)(e) 5,315
SELF STORAGE PROPERTIES
380,000 Highland Hospitality (b) 4,142
HOTEL REAL ESTATE INVESTMENT TRUST
133,000 Am NV (Netherlands) 1,032
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
477,238
1-800-922-6769
26
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>WASTE MANAGEMENT: 0.2%
533,000 Waste Connections (b) $ 20,131
SOLID WASTE MANAGEMENT
- ----------------------------------------------------------------------------
>TRANSPORTATION: 0.3%
140,000 Kobenhavns Lufthavne (Denmark) 16,392
COPENHAGEN AIRPORT AUTHORITY
500,000 Grupo Aeroportaurio Del Sureste
(Mexico) 8,800
CANCUN & COZUMEL AIRPORT OPERATOR
15,000,000 Comfort Group (Singapore) 7,198
TAXI SERVICE
- ----------------------------------------------------------------------------
32,390
>REGULATED UTILITIES: 0.5%
1,100,000 Unisource Energy 27,126
ELECTRIC UTILITY IN ARIZONA
850,000 Northeast Utilities 17,145
REGULATED ELECTRIC UTILITY
899,800 Red Electrica (Spain) 14,737
SPANISH POWER GRID
- ----------------------------------------------------------------------------
59,008
------------
OTHER INDUSTRIES: TOTAL 588,767
Total Common Stocks and Other ------------
EQUITY-LIKE SECURITIES: 92.1% 10,288,675
(COST: $6,468,313)
PRINCIPAL AMOUNT(000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 7.8%
Yield 0.88% - 1.15%
Due 1/02/04 - 2/14/04
$ 75,000 John Hancock Financial $ 74,936
75,000 Citicorp 74,911
74,000 Household Finance 73,966
74,000 General Electric Capital 73,917
70,000 American Express Credit 69,939
62,000 Virginia Electric & Power 61,979
59,000 Schering Plough 58,991
58,000 State Street Bank & Trust 57,955
52,000 Toyota Credit 51,955
50,193 Cambell Soup 50,183
50,000 Bayer 49,951
49,000 Marshall & IIsley 48,964
48,000 Cargill 47,983
37,000 AIG Funding 36,994
10,000 US Treasury Bill 9,998
32,863 Repurchase Agreement with State
Street Bank & Trust Co., dated
12/31/03, due 1/02/04 at 0.85%
collateralized by Federal
National Mortgage Association
Notes maturing 1/15/06, Market
Value $33,523 (repurchase
proceeds: $32,865) 32,863
- ----------------------------------------------------------------------------
(AMORTIZED COST: $875,485) 875,485
------------
TOTAL INVESTMENTS: 99.9% 11,164,160
(COST: $7,343,798) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 4,655
------------
TOTAL NET ASSETS: 100% $ 11,168,815
============================================================================
27
Columbia Acorn Fund
>Statement of Investments, continued
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
was $7,338,384 and net unrealized appreciation was $3,825,776 consisting of
gross unrealized appreciation of $4,118,963 and gross unrealized
depreciation of $293,187.
(b) Non-income producing security.
(c) On December 31, 2003, the fund held the following percentages of the
outstanding voting shares of the companies listed below:
AnswerThink Consulting 10.34%
Christopher & Banks 9.90%
Gibraltar Steel 9.88%
New Horizons Worldwide 9.87%
World Acceptance 9.85%
Hub Group 9.83%
Skillsoft Publishing 9.80%
Actuate 9.77%
Indus International 9.63%
Analysts International 9.50%
Gaiam 9.24%
Seachange International 9.19%
Novoste 9.16%
MAPICS 8.84%
BSQUARE 8.81%
Igate Capital 8.79%
Systems & Computer Technology 8.78%
Nuco2 8.46%
MRO Software 8.22%
Helen of Troy 8.18%
Esco Technologies 8.17%
Clark/Bardes Consulting 8.12%
Witness Systems 7.96%
Quaker City Bancorp 7.94%
E.Piphany 7.66%
JDA Software Group 7.58%
COMARCO 7.39%
NDCHealth Group 7.26%
First Years 7.24%
AFC Enterprises 7.15%
Aspect Communications 7.13%
Sequenom 7.00%
Action Performance 6.98%
Bally Total Fitness 6.91%
Monarch Casino & Resort 6.80%
Watsco 6.77%
Sangamo Biosciences 6.45%
Princeton Review 6.40%
Steven Madden 6.32%
Coinstar 6.07%
Pinnacle Entertainment 6.03%
DVI Health Services 5.93%
First Health Group 5.92%
Ciphergen Biosystems 5.92%
Spartech 5.92%
Newpark Resources 5.87%
Glacier Bancorp 5.80%
Micros Systems 5.79%
Tipperary 5.77%
Mobile Mini 5.75%
Kronos 5.75%
Hawthorne Financial 5.71%
Aclara Biosciences 5.53%
Clarcor 5.53%
Ciber 5.44%
Steiner Leisure 5.43%
Anchor Bancorp Wisconsin 5.31%
ClickSoftware Technologies 5.29%
Excel Technologies 5.25%
American Woodmark 5.23%
Avid Technology 5.21%
InfoUSA 5.14%
Monaco Coach 5.14%
Cuno 5.07%
Saga Communications 5.05%
The aggregate cost and value of these companies at December 31, 2003, was
$1,322,612 and $1,914,723 respectively. Investments in affiliate companies
represent 17.14% of total net assets at December 31, 2003. Investment
activity and income amounts relating to affiliates during the year ended
December 31, 2003 were as follows:
Dividend Income $ 4,319
Net realized loss $ (225)
Change in unrealized loss $ 708,696
Purchases $ 344,232
Proceeds from sales $ 89,746
In addition, additional purchases of existing portfolio holdings that were
not considered affiliates in prior years, resulted in the fund owning more
than 5% of the outstanding shares of certain issues at December 31, 2003.
Therefore, the cost and market value affiliate disclosure amounts include
both acquisitions of new investments in affiliates during the year, as well
as prior year investment holdings that became affiliates during the
current year.
(d) On December 31, 2003, the market value of foreign securities (in thousands)
represents 12.65% of total net assets. The Fund's foreign portfolio was
diversified as follows:
VALUE PERCENT
==================================================
Canada $ 184,588 1.65%
United Kingdom 157,091 1.41
Ireland 154,922 1.39
Switzerland 91,525 0.82
France 77,281 0.69
Japan 68,506 0.61
Hong Kong 62,587 0.56
Netherlands 61,589 0.55
Italy 52,104 0.47
Singapore 52,066 0.47
Germany 47,410 0.42
Spain 47,310 0.42
Sweden 47,048 0.42
Norway 39,885 0.36
VALUE PERCENT
==================================================
Australia 34,297 0.31
South Korea 32,869 0.30
Denmark 32,800 0.29
Luxembourg 29,286 0.26
New Zealand 25,501 0.23
India 24,075 0.22
Austria 18,680 0.17
China 18,279 0.16
Mexico 16,249 0.15
Finland 16,013 0.14
Belgium 9,398 0.08
Greece 6,729 0.06
Chile 4,849 0.04
---------- -------
Total Foreign Portfolio $1,412,937 12.65%
========== =======
1-800-922-6769
28
(e) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. These securities are valued in good faith
by the Board of Trustees. At December 31, 2003, these securities amounted
to $31,574, which represents 0.3% of total net assets.
Additional information on these securities is as follows:
ACQUISITION
SECURITY DATES SHARES/PAR COST VALUE
- ----------------------------------------------------------------------------------------
Locus Discovery, Series D Pfd. 09/05/01 1,875 $ 7,500 $ 7,500
Security Capital European Realty 08/20/98-11/12/99 299 5,985 5,315
Aquila 04/23/01-12/19/01 1,270 28,382 8,941
Perlegen Sciences 03/30/01 1,250 5,000 1,950
SYRRX, Series C 01/08/01 461 2,997 2,397
The Investment Company of China 10/22/92-03/15/00 200 1,690 246
Microdose 11/24/00 360 2,005 180
Gadzooks 5.00% Convertible 10/08/03 $ 6,000 6,000 4,485
NeoPlanet, Series A 02/12/99 250 2,000 29
NeoPlanet, Series B 02/17/00 53 641 11
Vital Stream, Cl. B 10/03/01-09/30/02 829 290 520
--------- -------
$ 62,490 $31,574
========= =======
29
Columbia Acorn International
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
EUROPE
>GERMANY/AUSTRIA
Wienerberger AG (Austria) 0 300,000
Zapf Creation 240,000 300,000
>NORWAY
Den Norske Bank 2,190,000 2,610,000
>SWEDEN
Hexagon 250,000 293,000
>FRANCE
Camaieu 0 34,000
Imerys 0 40,000
>UNITED KINGDOM/IRELAND
Business Post 600,000 800,000
Expro International 2,500,000 2,700,000
Intermediate Capital 200,000 300,000
Irish Life & Permanent (Ireland) 1,000,000 1,100,000
Jardine Lloyd Thompson
Group PLC 0 600,000
Kensington Group 0 1,000,000
Nestor Healthcare 1,360,000 1,520,000
Smith & Nephew 1,400,000 1,550,000
Tullow Oil 6,500,000 8,000,000
>NETHERLANDS
AM NV 0 133,000
Sligro Food 7,768 362,000
Vopak 800,000 900,000
>ITALY
Amplifon 0 90,000
>FINLAND
Sponda Oyj 0 816,000
>GREECE
Intralot 0 465,000
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
Esprit Holdings 0 1,500,000
>JAPAN
Nissin Healthcare Food Service 0 260,000
Park24 0 413,000
Shimano 0 543,000
>SINGAPORE
Venture 1,480,000 1,920,000
>INDONESIA
PT Perusahaan Gas Negara 0 30,000,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>CHILE
Corpbanca 0 186,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>AUSTRALIA/NEW ZEALAND
Sky City Entertainment
(New Zealand) 2,000,000 4,000,000
Tabcorp 0 400,000
>CANADA
Masonite International 240,000 420,000
Nexen 0 300,000
Patheon 600,000 1,261,000
>UNITED STATES
Central European Distribution 19,700 134,600
1-800-922-6769
30
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
EUROPE
>GERMANY/AUSTRIA
Deutsche Boerse 275,000 175,000
Software AG (Austria) 655,000 0
>SWEDEN
Castellum 520,000 470,000
>FRANCE/BELGIUM
Neopost 500,000 390,000
Omega Pharma (Belgium) 445,000 244,000
>UNITED KINGDOM/IRELAND
Hit Entertainment 3,650,000 3,500,000
Marconi 1,075,000 0
Torex 700,000 0
Xstrata 800,000 0
>SPAIN
Gamesa 530,000 435,000
Zardoya Otis 376,000 0
>NETHERLANDS
Hunter Douglas 545,000 433,000
OPG Groep 377,000 349,000
>LUXEMBOURG
Tenaris 424,000 400,000
>FINLAND
Amer Group 384,000 185,000
>ITALY
Parmalat Finanziaria 2,700,000 0
Saipem 1,500,000 0
NUMBER OF SHARES
-------------------------
09/30/03 12/31/03
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
Television Broadcasts 3,000,000 2,000,000
>INDIA
Housing Development Finance 2,000,000 1,700,000
>JAPAN
ARRK 220,000 180,000
>SOUTH KOREA
Cheil Communications 70,000 0
S1 Corporation 500,000 0
>SINGAPORE
Comfort Group 27,000,000 1,500,000
>TAIWAN
Chroma Ate 6,582,972 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>AUSTRALIA/NEW ZEALAND
Computershare 5,000,000 0
Jupiters 2,500,000 0
The Warehouse Group
(New Zealand) 3,500,000 2,000,000
>CANADA
Altagas 728,100 0
Kingsway Financial 600,000 0
Moore - Wallace 450,000 0
31
Columbia Acorn International
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 95.5%
- ----------------------------------------------------------------------------
EUROPE: 61.0%
>GERMANY/AUSTRIA: 7.8%
335,000 Rhoen-Klinikum Pfd. $ 18,783
300,000 Rhoen-Klinikum 15,497
HOSPITAL MANAGEMENT
500,000 GFK 14,376
MARKET RESEARCH SERVICES
550,000 Hugo Boss Designs 11,053
FASHION APPAREL
300,000 Bilfinger Berger 10,206
CONSTRUCTION & RELATED SERVICES
175,000 Deutsche Boerse 9,558
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
200,000 Flughafen Wien (Austria) 9,374
VIENNA AIRPORT AUTHORITY
325,000 Kali & Salz 8,910
POTASH PRODUCTS, FERTILIZERS, SALT & WASTE
MANAGEMENT
300,000 Wienerberger (Austria) 8,006
BRICKS & CLAY ROOFING TILES
1,000,000 Takkt 7,434
MAIL ORDER RETAILER OF OFFICE & WAREHOUSE
DURABLES
300,000 Zapf Creation 7,231
TOY MANUFACTURER
75,000 Beru 4,886
AUTO PARTS & ELECTRONICS
35,300 Mayr-Melnhof (Austria) 4,239
CARTONBOARD & PACKAGING
200,000 Lion Bioscience (b) 816
BIOINFORMATICS
- ----------------------------------------------------------------------------
130,369
>DENMARK: 0.7%
100,000 Kobenhavns Lufthavne 11,709
COPENHAGEN AIRPORT AUTHORITY
- ----------------------------------------------------------------------------
>NORWAY: 2.5%
2,610,000 Den Norske Bank 17,384
LARGEST NORWEGIAN BANK
566,000 Orkla 12,651
DIVERSIFIED CONSUMER GOODS
1,200,000 Tomra Systems 7,219
REVERSE VENDING MACHINES
220,000 Ekornes 4,059
NICHE FURNITURE MANUFACTURER
- ----------------------------------------------------------------------------
41,313
>FINLAND: 1.5%
385,000 Jaakko Poyry 10,575
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
185,000 Amer Group 8,007
BRANDED SPORTING GOODS
816,000 Sponda 6,796
OFFICE & WAREHOUSE PROPERTY COMPANY
- ----------------------------------------------------------------------------
25,378
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>SWEDEN: 3.2%
2,800,000 Intrum Justitia $ 14,793
RECEIVABLES MANAGEMENT & DEBT COLLECTION
470,000 Castellum 11,108
OFFICE, WAREHOUSE & RETAIL PROPERTY COMPANY
950,000 Nobia 9,906
KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION
400,000 Munters 9,676
MOISTURE & HUMIDITY CONTROL
293,000 Hexagon 7,984
DIVERSIFIED ENGINEERING
- ----------------------------------------------------------------------------
53,467
>FRANCE/BELGIUM: 6.5%
390,000 Neopost 19,655
POSTAGE METER MACHINES
575,000 Euronext 14,540
TRADING SERVICES FOR FINANCIAL MARKETS
270,000 Essilor International 13,948
EYEGLASS LENSES
500,000 Fininfo 11,774
DATA FEEDS FOR FRENCH BANKS & BROKERS
130,000 Bacou Dalloz 10,155
SAFETY EQUIPMENT
40,000 Imerys 8,411
INDUSTRIAL MINERALS PRODUCER
90,000 Bonduelle 8,216
PRODUCER OF CANNED, FROZEN & FRESH VEGETABLES
244,000 Omega Pharma (Belgium) 7,747
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
90,000 Vallourec 7,484
SEAMLESS TUBES
50,000 Groupe Bourbon 5,153
FOOD RETAILER
34,000 Camaieu 2,635
WOMEN'S APPAREL RETAILER
- ----------------------------------------------------------------------------
109,718
>GREECE: 0.5%
465,000 Intralot 9,069
LOTTERY & GAMING SYSTEMS & SERVICES
- ----------------------------------------------------------------------------
>UNITED KINGDOM/IRELAND: 17.8%
2,310,000 Anglo Irish Bank (Ireland) 36,410
SMALL BUSINESS & MIDDLE MARKET BANKING
1,300,000 Kerry Group (Ireland) 24,405
FOOD INGREDIENTS
3,100,000 Grafton Group (Ireland) 21,365
BUILDERS, WHOLESALERS & DIY RETAILING
3,500,000 Hit Entertainment 18,399
TELEVISION SHOWS FOR CHILDREN
1,100,000 Irish Life & Permanent (Ireland) 17,740
SAVINGS PRODUCTS
1,300,000 Exel 17,137
GLOBAL LOGISTICS & FREIGHT FORWARDING
5,800,000 RPS Group 15,245
ENVIRONMENTAL CONSULTING
120,000 Depfa Bank (Ireland) 15,135
INTERNATIONAL PUBLIC SECTOR FINANCE
2,700,000 Expro International 13,013
OFFSHORE OIL FIELD SERVICES
1-800-922-6769
32
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>UNITED KINGDOM/IRELAND--CONTINUED
1,550,000 Smith & Nephew $ 12,983
MEDICAL EQUIPMENT & SUPPLIES
600,000 Cobham 12,499
AEROSPACE
8,000,000 Tullow Oil 12,246
OIL & GAS PRODUCER
1,600,000 Bunzl 12,188
DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY
1,420,000 Spectris 10,792
ELECTRONIC INSTRUMENTS & CONTROLS
1,400,000 Euro Money Institutional Investor 9,790
FINANCIAL PUBLICATIONS
740,000 Jurys Doyle Hotel (Ireland) 9,044
HOTEL GROUP
800,000 Business Post 7,369
PARCEL & EXPRESS MAIL SERVICE
1,010,000 Burberry 6,590
APPAREL RETAILER
1,000,000 Kensington 5,846
NON-CONFORMING MORTGAGE COMPANY
300,000 Intermediate Capital 5,655
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
600,000 Jardine Lloyd Thompson 5,650
BUSINESS INSURANCE BROKER
1,520,000 Nestor Healthcare 5,589
HEALTHCARE STAFFING COMPANY
450,000 McCarthy & Stone 4,153
BUILDER OF RETIREMENT APARTMENTS
- ----------------------------------------------------------------------------
299,243
>SWITZERLAND: 6.4%
40,000 Geberit International 19,656
PLUMBING SUPPLIES
80,000 Kaba Holdings 16,164
BUILDING SECURITY SYSTEMS
30,000 Givaudan 15,566
INDUSTRIAL FRAGRANCES & FLAVORS
33,500 BKW Energie 12,969
ELECTRIC UTILITY
13,000 Synthes-Stratec 12,860
PRODUCTS FOR ORTHOPEDIC SURGERY
40,000 Schindler (b) 9,763
ELEVATOR MANUFACTURER & SERVICE PROVIDER
3,000 Pargesa 8,001
INDUSTRIAL & MEDIA CONGLOMERATE
18,000 Sika 7,769
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION
110,000 Bachem 5,641
PEPTIDES
- ----------------------------------------------------------------------------
108,389
>ITALY: 2.2%
1,200,000 Autogrill (b) 17,145
RESTAURANTS & CATERING FOR TRAVELERS
212,000 Davide Campari 10,284
BEVERAGES
1,700,000 De Longhi 7,111
CONSUMER APPLIANCES FOR HEATING, AIR
CONDITIONING & COOKING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
90,000 Amplifon $ 2,557
HEARING AID RETAILER
- ----------------------------------------------------------------------------
37,097
>SPAIN: 3.3%
2,000,000 Abengoa 14,540
ENGINEERING & CONSTRUCTION
435,000 Gamesa 14,299
WIND TURBINES
1,139,100 Cortefiel 10,477
APPAREL RETAILER
600,000 Red Electrica 9,828
SPANISH POWER GRID
400,000 Prosegur 6,501
SECURITY GUARDS
- ----------------------------------------------------------------------------
55,645
>NETHERLANDS: 7.0%
433,000 Hunter Douglas 20,246
DECORATIVE WINDOW COVERINGS
900,000 Vopak 16,896
OIL & CHEMICAL STORAGE
349,000 OPG Groep 15,852
PHARMACEUTICAL WHOLESALER & RETAILER
687,000 United Services Group 15,710
TEMPORARY STAFFING SERVICES
585,000 IM Tech 15,169
TECHNICAL ENGINEERING
362,000 Sligro Food Group 11,152
FOOD SERVICE & WHOLESALING
420,000 Aalberts Industrie 10,864
FLOW CONTROL & HEAT TREATMENT
200,000 Fugro 10,281
SURVEY & GPS SERVICES
133,000 Am NV 1,032
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
117,202
>LUXEMBOURG: 1.6%
400,000 Tenaris (b) 13,328
STEEL PIPE FOR OIL WELLS & PIPELINES
1,280,000 SES Global 12,902
SATELLITE BROADCASTING SERVICES
- ----------------------------------------------------------------------------
26,230
------------
EUROPE: TOTAL 1,024,829
- ----------------------------------------------------------------------------
ASIA: 22.4%
>HONG KONG/CHINA: 6.6%
35,000,000 Global Bio-Chem Technology Group 21,639
CORN-BASED BIO-CHEMICAL PRODUCTS
5,000,000 Techtronic Industries 13,846
POWER TOOL MANUFACTURER
2,000,000 TVB 10,098
TELEVISION PROGRAMMING & BROADCASTING
20,000,000 Sinotrans (China) 9,016
INTEGRATED LOGISTICS IN CHINA
4,000,000 Hong Kong Exchanges & Clearing 8,656
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
11,000,000 Zhejiang Expressway 7,722
TOLL ROAD BUILDER & OPERATOR
33
Columbia Acorn International
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>HONG KONG/CHINA-CONTINUED
12,000,000 Jiangsu Expressway $ 6,414
TOLL ROAD BUILDER & OPERATOR
15,000,000 Linmark 6,134
APPAREL/HARD GOODS SOURCING AGENT
14,500,000 Ngai Lik Industrial 5,977
CHINA BASED ELECTRONICS CONTRACT MANUFACTURER
8,000,000 Hainan Meilan Airport 5,564
CHINESE AIRPORT OPERATOR
5,000,000 Lianhua Supermarket (b) 5,281
CHINESE SUPERMARKET CHAIN
1,500,000 Esprit Holdings 4,985
GLOBAL APPAREL BRAND MANAGER
25,000,000 Lerado Group 4,830
BABY PARAPHERNALIA
803,000 Clear Media (b) 517
CHINA'S LARGEST OUTDOOR ADVERTISER
- ----------------------------------------------------------------------------
110,679
>JAPAN: 8.5%
190,000 USS 13,443
USED CAR AUCTIONEER
180,000 ARRK 11,643
PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT
1,031,000 Toyo Technica 11,404
VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION
679,900 Ushio 11,290
INDUSTRIAL LIGHT SOURCES
543,000 Shimano 11,252
BICYCLE COMPONENTS & FISHING TACKLE
346,300 Daito Trust Construction 10,279
APARTMENT BUILDER
413,000 Park 24 9,464
PARKING LOT OPERATOR
135,000 Sugi Pharmacy 9,337
DRUGSTORES
700,000 NIFCO 8,788
MOLDED PLASTIC COMPONENTS
172,000 Uni-Charm 8,461
INFANT HYGIENE & FEMININE CARE PRODUCTS
35,000 Bellsystem24 7,155
CALL CENTERS
150,000 Eneserve 6,020
POWER GENERATORS
260,000 Nissin Healthcare 5,291
MEAL PREPARATION
385,000 Daiseki 5,257
WASTE DISPOSAL & RECYCLING
325,000 Aderans 5,245
HAIR PIECES
1,150,000 OMC Card (b) 4,669
CREDIT CARD ISSUER
100,000 Taisei Lamick 2,184
PACKAGING MATERIALS & MACHINERY
7,000 Kappa Create 591
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
141,773
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TAIWAN: 1.0%
1,130,000 ASE Test (b) $ 16,916
SEMICONDUCTOR PACKAGING & TEST SERVICES
- ----------------------------------------------------------------------------
>SOUTH KOREA: 2.2%
355,000 Hyundai Mobis 19,098
AUTO PARTS
165,000 Yuhan 9,389
ETHICAL DRUG PRODUCER
100,000 Samsung Fire & Marine 5,749
NON-LIFE INSURANCE
315,000 Samyoung Heat Exchange 2,522
POWER PLANT RELATED MACHINERY
- ----------------------------------------------------------------------------
36,758
>INDONESIA: 0.3%
30,000,000 PT Perusahaan Gas Negara (b) 5,521
GAS PIPELINE OPERATOR
- ----------------------------------------------------------------------------
>SINGAPORE: 2.4%
1,920,000 Venture 22,611
ELECTRONIC CONTRACT MANUFACTURER
9,000,000 Sembcorp Logistics 10,599
LOGISTIC SERVICES FOR MARINE TRANSPORT
15,000,000 Comfort Group 7,198
TAXI SERVICE
- ----------------------------------------------------------------------------
40,408
>INDIA: 1.4%
1,700,000 Housing Development Finance 24,075
MORTGAGE LOAN PROVIDER
------------
ASIA: TOTAL 376,130
- ----------------------------------------------------------------------------
LATIN AMERICA: 1.4%
>MEXICO: 1.1%
600,000 Grupo Aeroportuario 10,560
MEXICAN AIRPORT AUTHORITY
3,000,000 Consorcio ARA (b) 7,449
LOW/MEDIUM INCOME HOUSE BUILDER
- ----------------------------------------------------------------------------
18,009
>CHILE: 0.3%
186,000 CorpBanca (b) 4,849
CHILE'S 3RD LARGEST LOCAL BANK
------------
LATIN AMERICA: TOTAL 22,858
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 10.7%
>AUSTRALIA/NEW ZEALAND: 3.6%
3,000,000 Billabong International 16,106
SURFWEAR APPAREL MANUFACTURER
4,000,000 Sky City Entertainment (New Zealand) 12,082
CASINO/ENTERTAINMENT COMPLEX
2,500,000 Lion Nathan 11,370
AUSTRALIAN BEER BREWER/DISTRIBUTOR
350,000 Perpetual Trustees 11,227
INVESTMENT MANAGEMENT
2,000,000 The Warehouse Group (New Zealand) 6,709
WAREHOUSE CLUB
400,000 Tabcorp Holdings 3,382
AUSTRALIA'S LARGEST GAMING COMPANY
- ----------------------------------------------------------------------------
60,876
1-800-922-6769
34
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CANADA: 6.8%
1,000,000 Corus Entertainment $ 21,279
TV PROGRAMMING & RADIO STATIONS
365,000 Talisman Energy 20,764
OIL & GAS PRODUCER
300,000 Power Financial 11,498
LIFE INSURANCE & MUTUAL FUNDS
1,261,000 Patheon (b) 11,358
PHARMACEUTICAL CONTRACT MANUFACTURER
420,000 Masonite International (b) 11,245
DOOR MANUFACTURER
300,000 Nexen 10,892
OIL & GAS PRODUCER
5,000,000 Esprit Exploration (b) 10,756
NATURAL GAS PRODUCER
700,000 Shawcor 8,444
OIL & GAS PIPELINE PRODUCTS
450,000 Intrawest 8,322
OWNER/OPERATOR OF SKI RESORTS
- ----------------------------------------------------------------------------
114,558
>UNITED STATES: 0.3%
134,600 Central European Distribution (b) 4,253
SPIRITS & WINE DISTRIBUTION
- ----------------------------------------------------------------------------
------------
OTHER: TOTAL 179,687
TOTAL COMMON STOCKS AND OTHER
------------
EQUITY-LIKE SECURITIES: 95.5% 1,603,504
(COST: $1,163,943)
PRINCIPAL AMOUNT(000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 3.8%
$ 33,000 Toyota Motor Credit 1.02%
Due 1/06/04 $ 32,995
30,563 Repurchase Agreement with
State Street Bank & Trust
Co., dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
1/15/06, Market Value $31,176
(repurchase proceeds: $30,564) 30,563
- ----------------------------------------------------------------------------
(AMORTIZED COST: $63,558) 63,558
------------
TOTAL INVESTMENTS (d): 99.3% 1,667,062
(COST: $1,227,501) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.7% 11,270
------------
TOTAL NET ASSETS: 100% $ 1,678,332
============================================================================
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investment
was $1,230,952 and net unrealized appreciation was $436,110 consisting of
gross unrealized appreciation of $488,906 and gross unrealized depreciation
of $52,796.
(b) Non-income producing security.
(c) On December 31, 2003, the fund did not have any investments in affiliate
companies. There were sales proceeds of $1,187, resulting in net realized
losses of $2,588 in affiliate companies during the year ended December 31,
2003. There was no other investment activity.
(d) On December 31, 2003, the Fund's total investments were denominated in
currencies as follows:
% OF
CURRENCY VALUE NET ASSETS
--------------------------------------------------------------------
Euro $ 621,599 37.0%
British Pounds 175,144 10.4
Japanese Yen 141,773 8.5
Canadian Dollars 114,682 6.8
Hong Kong Dollars 110,680 6.6
Swiss Francs 108,389 6.5
Other currencies less than
5% of total net assets 394,795 23.5
---------- ------
$1,667,062 99.3%
========== ======
35
Columbia Acorn International
>Portfolio Diversification
At December 31, 2003, the Fund's portfolio investments as a percent of net
assets was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION TECHNOLOGY
Business Information and
Marketing Services $ 48,550 2.9%
Television Programming 39,678 2.4
Financial Processors 32,754 1.9
Contract Manufacturing 28,588 1.7
Instrumentation 23,012 1.4
Semiconductors and Related
Equipment 16,916 1.0
Satellite Broadcasting 12,902 0.8
Television Broadcasting 10,098 0.6
Publishing 9,790 0.6
Advertising 517 0.0
- ----------------------------------------------------------------------------
222,805 13.3
>HEALTHCARE
Medical Equipment 39,791 2.4
Services 34,479 2.1
Hospital Management 34,280 2.0
Pharmaceuticals 20,747 1.2
Biotechnology/ Drug Delivery 5,641 0.3
- ----------------------------------------------------------------------------
134,938 8.0
>CONSUMER GOODS/SERVICES
Food 83,216 5.0
Retail 48,571 2.9
Furniture and Textiles 45,456 2.7
Durables Goods 37,095 2.2
Apparels 33,293 2.0
Beverage 21,654 1.3
Other Consumer Services 19,539 1.2
Restaurants 17,736 1.1
Consumer Goods Distribution 17,696 1.0
Travel 17,366 1.0
Casinos 15,464 0.9
Nondurables 10,645 0.6
Gaming 9,069 0.5
Leisure Products 8,007 0.5
Other Entertainment 7,231 0.4
- ----------------------------------------------------------------------------
392,038 23.3
>FINANCE
Banks 73,778 4.4
Insurance 29,139 1.7
Other Finance Companies 26,294 1.6
Savings and Loans 24,075 1.4
Money Management 22,725 1.4
Credit Cards 4,669 0.3
- ----------------------------------------------------------------------------
180,680 10.8
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 113,640 6.8%
Industrial Materials 76,536 4.6
Outsourcing and Training Services 64,220 3.8
Conglomerates 41,389 2.5
Electrical Components 38,088 2.3
Construction 35,772 2.1
Machinery 29,396 1.7
Speciality Chemicals 23,335 1.4
Industrial Distribution 21,365 1.3
Steel 20,812 1.2
- ----------------------------------------------------------------------------
464,553 27.7
>ENERGY/MINERALS
Oil/Gas Producers 54,658 3.2
Oil Services 31,738 1.9
Independent Power 6,020 0.4
Refining/Marketing/Distribution 5,521 0.3
- ----------------------------------------------------------------------------
97,937 5.8
>OTHER INDUSTRIES
Transportation 58,541 3.5
Real Estate 29,215 1.7
Regulated Utilities 22,797 1.4
- ----------------------------------------------------------------------------
110,553 6.6
TOTAL COMMON STOCKS AND ---------------------------
OTHER EQUITY-LIKE SECURITIES: 1,603,504 95.5
SHORT-TERM OBLIGATIONS: 63,558 3.8
---------------------------
TOTAL INVESTMENTS: 1,667,062 99.3
CASH AND OTHER ASSETS
LESS LIABILITIES: 11,270 0.7
---------------------------
TOTAL NET ASSETS: $ 1,678,332 100.0%
============================================================================
1-800-922-6769
36
Columbia Acorn USA
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
INFORMATION
Andrew 100,000 480,000
AnswerThink Consulting 670,000 1,005,500
Commonwealth Telephone 293,800 363,800
Crown Castle International 955,000 1,005,000
DoubleClick 0 925,600
Igate Capital 0 200,000
Integrated Circuit Systems 175,300 365,300
Kronos 221,100 331,650
Symmetricon 0 270,500
Unova 115,000 180,000
- ----------------------------------------------------------------------------
HEALTH CARE
CTI Molecular Imaging 178,900 245,000
Enzon 211,400 311,500
First Health Group 714,000 744,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Aeropostale 150,500 290,500
Coinstar 85,000 435,000
Leapfrog Enterprises 0 50,000
Petco Animal Supplies 25,000 95,000
Spanish Broadcasting System 150,000 603,200
Winn Dixie Stores 0 710,000
- ----------------------------------------------------------------------------
FINANCE
HCC Insurance Holdings 350,000 430,000
TCF Financial 79,500 131,500
United National Group 0 71,400
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Central Parking 0 181,700
Esco Technologies 59,000 282,000
Gibraltar Steel 0 50,000
Pentair 0 63,400
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 166,700 401,700
Newpark Resources 651,000 905,600
Northeast Utilities 0 90,000
Quicksilver Resources 208,800 305,000
Western Gas 123,000 136,000
37
Columbia Acorn USA
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 93.4%
- ----------------------------------------------------------------------------
INFORMATION: 38.7%
>BROADCASTING: 2.7%
333,100 Salem Communications (b) $ 9,034
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
603,200 Spanish Broadcasting (b) 6,334
SPANISH LANGUAGE RADIO STATIONS
138,500 Gray Television 2,094
MID MARKET AFFILIATED TV STATIONS
57,000 Saga Communications (b) 1,056
RADIO STATIONS IN SMALL & MID-SIZED CITIES
- ----------------------------------------------------------------------------
18,518
>TELEVISION PROGRAMMING: 0.7%
600,000 Mediacom Communications (b) 5,202
CABLE TELEVISION FRANCHISES
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS/WIRELINE
COMMUNICATIONS: 2.8%
363,800 Commonwealth Telephone (b) 13,733
RURAL PHONE FRANCHISES & CLEC
480,000 Andrew (b) 5,525
WIRELESS INFRASTRUCTURE EQUIPMENT
- ----------------------------------------------------------------------------
19,258
>TELECOMMUNICATION EQUIPMENT: 0.3%
270,500 Symmetricom (b) 1,969
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
>MOBILE COMMUNICATIONS: 4.9%
927,000 Western Wireless (b) 17,020
RURAL CELLULAR PHONE SERVICES
1,005,000 Crown Castle International (b) 11,085
COMMUNICATION TOWERS IN USA & UK
60,000 Telephone & Data Systems 3,753
CELLULAR & TELEPHONE SERVICES
182,700 COMARCO (b) 2,010
WIRELESS NETWORK TESTING
- ----------------------------------------------------------------------------
33,868
>COMPUTER SERVICES: 2.7%
786,000 RCM Technologies (b)(c) 5,793
TECHNOLOGY ENGINEERING SERVICES
1,005,500 AnswerThink Consulting (b) 5,581
IT INTEGRATOR FOR FORTUNE 2000
232,000 American Management Systems (b) 3,496
SOFTWARE DEVELOPMENT SERVICES
200,000 Igate Capital (b) 1,570
TECHNOLOGY STAFFING SERVICES
149,600 Ciber (b) 1,296
SOFTWARE SERVICES & STAFFING
256,600 Analysts International (b) 865
TECHNOLOGY STAFFING SERVICES
- ----------------------------------------------------------------------------
18,601
>BUSINESS/CONSUMER SOFTWARE: 13.6%
527,600 Micros Systems (b) 22,877
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
974,000 JDA Software (b) 16,081
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,330,000 Novell (b) 13,992
SECURITY & IDENTITY MANAGEMENT SOFTWARE
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
331,650 Kronos (b) $ 13,137
LABOR MANAGEMENT SOLUTIONS
304,991 PeopleSoft (b) 6,954
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
473,500 MRO Software (b) 6,373
ENTERPRISE MAINTENANCE SOFTWARE
653,200 E.Piphany (b) 4,710
CRM SOFTWARE
206,000 Group 1 Software (b) 3,630
ADDRESS VERIFICATION SOFTWARE
140,000 SPSS (b) 2,503
STATISTICAL ANALYSIS SOFTWARE
100,000 Aspect Communications (b) 1,576
CALL CENTER SOFTWARE
64,000 THQ (b) 1,082
ENTERTAINMENT SOFTWARE
65,000 MAPICS (b) 851
MID MARKET ERP SOFTWARE
34,000 Activision (b) 619
ENTERTAINMENT SOFTWARE
- ----------------------------------------------------------------------------
94,385
>INTERNET: 1.4%
925,600 DoubleClick (b) 9,460
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
- ----------------------------------------------------------------------------
>TRANSACTION PROCESSORS: 1.8%
211,640 Global Payments 9,972
CREDIT CARD PROCESSOR
140,000 Euronet Worldwide (b) 2,520
ATM PROCESSOR
21,000 Pegasus Systems (b) 220
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
12,712
>BUSINESS INFORMATION/MARKETING
SERVICES/PUBLISHING: 1.2%
102,800 Getty Images (b) 5,153
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
110,000 Navigant Consulting (b) 2,075
CONSULTING FIRM
58,600 Information Holdings (b) 1,295
PATENT & OTHER BUSINESS INFORMATION
- ----------------------------------------------------------------------------
8,523
>CONTRACT MANUFACTURING: 0.3%
140,000 Plexus (b) 2,404
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
>INSTRUMENTATION: 0.3%
60,000 Trimble Navigation (b) 2,234
GPS-BASED INSTRUMENTS
- ----------------------------------------------------------------------------
>COMPUTER HARDWARE/SEMICONDUCTORS/
RELATED EQUIPMENT: 6.0%
186,000 Zebra Technologies (b) 12,345
BAR CODE PRINTERS
365,300 Integrated Circuit Systems (b) 10,407
SILICON TIMING DEVICES
424,100 Seachange International (b) 6,531
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
1-800-922-6769
38
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>COMPUTER HARDWARE/SEMICONDUCTORS/
RELATED EQUIPMENT-CONTINUED
180,000 Unova (b) $ 4,131
BARCODE & WIRELESS LAN SYSTEMS
70,000 Littelfuse (b) 2,017
LITTLE FUSES
50,000 Avocent (b) 1,826
COMPUTER CONTROL SWITCHES
200,000 Cable Design Technologies (b) 1,798
NETWORKING & SPECIALTY CABLES
40,000 Rogers (b) 1,765
PCB LAMINATES & HIGH PERFORMANCE FOAMS
70,000 IXYS (b) 654
POWER SEMICONDUCTORS
- ----------------------------------------------------------------------------
41,474
------------
INFORMATION: TOTAL 268,608
- ----------------------------------------------------------------------------
HEALTH CARE: 14.6%
>BIOTECHNOLOGY/DRUG DELIVERY: 2.9%
720,000 Nektar Therapeutics (b) 9,799
PULMONARY DRUG DELIVERY
311,500 Enzon (b) 3,738
POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS
245,000 Applera Celera Genomics (b) 3,408
DIAGNOSTICS & DRUG DEVELOPMENT
375,000 Locus Discovery, Series D Pfd. (b)(d) 1,500
HIGH THROUGHPUT RATIONAL DRUG DESIGN
154,000 SYRRX, Series C (b)(d) 801
X-RAY CRYSTALLOGRAPHY
32,600 Applied Molecular Evolution (b) 580
MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION
363,636 Metabolex, Series F (b)(d) 53
DRUGS FOR DIABETES
- ----------------------------------------------------------------------------
19,879
>MEDICAL EQUIPMENT: 5.3%
573,000 Edwards Lifesciences (b) 17,236
HEART VALVES
220,000 Viasys Healthcare (b) 4,532
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
245,000 CTI Molecular Imaging (b) 4,143
MEDICAL DIAGNOSTIC DEVICES
98,500 ICU Medical (b) 3,377
INTRAVENOUS THERAPY PRODUCTS
135,600 VISX (b) 3,139
LASER EYE SURGERY
66,300 Diagnostic Products 3,044
IMMUNODIAGNOSTIC KITS
345,000 Novoste (b) 1,653
RADIATION CATHETERS FOR IN-STENT RESTENOSIS
- ----------------------------------------------------------------------------
37,124
>MEDICAL SUPPLIES: 1.2%
222,800 Techne (b) 8,417
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
- ----------------------------------------------------------------------------
>SERVICES: 5.2%
744,000 First Health Group (b) 14,478
PPO NETWORK
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
423,800 NDCHealth Group $ 10,858
HEALTH CLAIMS PROCESSING & DRUG MARKETING
SERVICES
246,800 Lincare Holdings (b) 7,411
HOME HEALTH CARE SERVICES
100,000 Dendrite International (b) 1,567
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
40,000 Charles River Laboratories (b) 1,373
PHARMACEUTICAL RESEARCH
26,000 Medquist (b) 418
MEDICAL TRANSCRIPTION SERVICES
- ----------------------------------------------------------------------------
36,105
------------
HEALTH CARE: TOTAL 101,525
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 14.2%
>CONSUMER SERVICES: 4.2%
387,000 ITT Educational Services (b) 18,177
POSTSECONDARY DEGREE PROGRAMS
435,000 Coinstar (b) 7,856
OWNER/OPERATOR OF COIN COUNTING MACHINES
181,700 Central Parking 2,713
OWNER, OPERATOR & MANAGER OF PARKING
LOTS & GARAGES
48,900 Bally Total Fitness (b) 342
NATIONAL CHAIN OF FITNESS CENTERS
- ----------------------------------------------------------------------------
29,088
>APPAREL: 1.2%
197,600 Steven Madden (b) 4,031
WHOLESALER/RETAILER OF FASHION FOOTWEAR
64,000 Coach (b) 2,416
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
59,200 Oxford Industries 2,006
BRANDED & PRIVATE LABEL APPAREL
- ----------------------------------------------------------------------------
8,453
>ENTERTAINMENT/LEISURE PRODUCTS: 1.0%
91,300 International Speedway Motors 4,077
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
70,000 Action Performance 1,372
MOTORSPORT COLLECTIBLES & MERCHANDISING
50,000 Leapfrog Enterprises (b) 1,327
EDUCATIONAL TOYS
- ----------------------------------------------------------------------------
6,776
>DURABLE GOODS: 0.2%
30,000 American Woodmark 1,651
KITCHEN CABINETS
- ----------------------------------------------------------------------------
>FURNITURE: 0.5%
85,000 Herman Miller 2,063
OFFICE FURNITURE
20,000 Mohawk Industries (b) 1,411
CARPET & FLOORING
- ----------------------------------------------------------------------------
3,474
>NONDURABLES: 1.4%
167,200 Scotts Company (b) 9,892
CONSUMER LAWN & GARDEN PRODUCTS
- ----------------------------------------------------------------------------
39
Columbia Acorn USA
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>RETAIL: 5.7%
290,500 Aeropostale (b) $ 7,966
MALL BASED TEEN RETAILER
710,000 Winn Dixie Stores 7,064
SUPERMARKETS IN THE SOUTHEAST US
343,750 Christopher & Banks 6,713
WOMEN'S APPAREL RETAILER
116,600 Urban Outfitters (b) 4,320
MULTI CHANNEL LIFESTYLE RETAILER
130,000 Abercrombie & Fitch (b) 3,212
TEEN APPAREL RETAILER
95,000 Petco Animal Supplies (b) 2,893
PET SUPPLIES & SERVICES
50,000 Michaels Stores 2,210
CRAFT & HOBBY SPECIALTY RETAILER
50,000 Ann Taylor (b) 1,950
WOMEN'S APPAREL RETAILER
95,000 Genesco (b) 1,437
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
547,000 Gadzooks (b)(c) 848
TEEN APPAREL RETAILER
20,000 Chico's FAS (b) 739
WOMEN'S SPECIALTY RETAIL
- ----------------------------------------------------------------------------
39,352
------------
CONSUMER GOODS/SERVICES: TOTAL 98,686
- ----------------------------------------------------------------------------
FINANCE: 10.5%
>BANKS: 1.7%
131,500 TCF Financial 6,753
GREAT LAKES BANK
158,125 Chittenden 5,319
VERMONT & WEST MASSACHUSETTS BANK
- ----------------------------------------------------------------------------
12,072
>FINANCE COMPANIES: 4.0%
1,091,500 AmeriCredit (b) 17,388
AUTO LENDING
520,200 World Acceptance (b) 10,357
PERSONAL LOANS
- ----------------------------------------------------------------------------
27,745
>SAVINGS & LOAN: 1.3%
110,000 Downey Financial 5,423
CALIFORNIA HOME LENDER
116,400 Anchor Bancorp Wisconsin 2,898
WISCONSIN THRIFT
16,500 Peoples Bank Bridgeport 538
CONNECTICUT SAVINGS & LOAN
- ----------------------------------------------------------------------------
8,859
>MONEY MANAGEMENT: 0.2%
40,000 SEI Investments 1,219
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
- ----------------------------------------------------------------------------
>INSURANCE: 3.3%
430,000 HCC Insurance Holdings 13,674
AVIATION INSURANCE
17,000 Markel (b) 4,310
SPECIALTY INSURANCE
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
97,000 Harleysville Group $ 1,929
COMMERCIAL & PERSONAL LINES INSURANCE
35,000 Philadelphia Consolidated Holding (b) 1,709
SPECIALTY INSURANCE
71,400 United National Group (b) 1,262
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
22,884
------------
FINANCE: TOTAL 72,779
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 6.8%
>SPECIALTY CHEMICALS/INDUSTRIAL
MATERIALS: 0.6%
95,000 Spartech 2,341
PLASTICS DISTRIBUTION & COMPOUNDING
70,000 Schulman 1,492
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
3,833
>STEEL: 0.2%
50,000 Gibraltar Steel 1,257
STEEL PROCESSING
- ----------------------------------------------------------------------------
>INDUSTRIAL DISTRIBUTION: 0.3%
100,000 Nuco2 (b) 1,267
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
50,000 Airgas 1,074
INDUSTRIAL GAS DISTRIBUTOR
- ----------------------------------------------------------------------------
2,341
>CONSTRUCTION: 0.2%
30,000 Florida Rock Industries 1,645
CONCRETE & AGGREGATES
- ----------------------------------------------------------------------------
>MACHINERY: 2.6%
282,000 Esco Technologies (b) 12,309
FILTRATION & TEST EQUIPMENT
63,400 Pentair 2,898
PUMPS, WATER TREATMENT & TOOLS
55,000 Ametek 2,654
AEROSPACE/INDUSTRIAL INSTRUMENTS
- ----------------------------------------------------------------------------
17,861
>WATER: 0.9%
134,000 Cuno (b) 6,034
FILTRATION & FLUIDS CLARIFICATION
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS: 0.0%
10,300 Intermagnetics General (b) 228
SUPERCONDUCTING WIRE
- ----------------------------------------------------------------------------
>LOGISTICS: 1.3%
346,000 Hub Group (b) 7,453
TRUCK & RAIL FREIGHT FORWARDER
59,600 Forward Air (b) 1,639
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
- ----------------------------------------------------------------------------
9,092
1-800-922-6769
40
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>INDUSTRIAL SERVICES: 0.7%
206,900 Insurance Auto Auctions (b) $ 2,700
AUTO SALVAGE SERVICES
95,000 Clark/Bardes Consulting (b) 1,828
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
- ----------------------------------------------------------------------------
4,528
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 46,819
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 7.7%
>OIL SERVICES: 2.6%
401,700 FMC Technologies (b) 9,360
OIL & GAS WELL HEAD MANUFACTURER
905,600 Newpark Resources (b) 4,338
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
61,000 Carbo Ceramics 3,126
NATURAL GAS WELL STIMULANTS
135,000 Key Energy Services (b) 1,392
OIL & GAS WELL WORKOVER SERVICES
- ----------------------------------------------------------------------------
18,216
>OIL & GAS PRODUCERS: 3.4%
305,000 Quicksilver (b) 9,851
NATURAL GAS & COAL SEAM GAS PRODUCER
136,000 Western Gas 6,426
OIL & COAL SEAM GAS PRODUCER
215,000 Ultra Petroleum (b) 5,293
NATURAL GAS PRODUCER
82,100 Southwestern Energy (b) 1,962
NATURAL GAS PRODUCER
- ----------------------------------------------------------------------------
23,532
>DISTRIBUTION/MARKETING/REFINING: 1.7%
193,000 Atmos Energy 4,690
NATURAL GAS UTILITY
99,600 Equitable Resources 4,275
NATURAL GAS UTILITY & PRODUCER
75,000 Oneok 1,656
NATURAL GAS UTILITY, MARKETING & PROCESSING
115,000 Aquila (b)(d) 810
ELECTRIC UTILITY HOLDING COMPANY
- ----------------------------------------------------------------------------
11,431
------------
ENERGY/MINERALS: TOTAL 53,179
NUMBER OF SHARES
PRINCIPAL AMOUNT(000) VALUE (000)
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 0.9%
>REAL ESTATE: 0.6%
47,000 The Rouse Company $ 2,209
REGIONAL SHOPPING MALLS
100,000 Crescent Real Estate Equities 1,713
CLASS A OFFICE BUILDINGS
35,000 Highland Hospitality (b) 381
HOTEL REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------------------------------
4,303
>REGULATED UTILITIES: 0.3%
90,000 Northeast Utilities 1,815
REGULATED ELECTRIC UTILITY
- ----------------------------------------------------------------------------
------------
OTHER INDUSTRIES: TOTAL 6,118
------------
TOTAL COMMON STOCKS: 93.4% 647,714
(COST: $489,314)
SHORT-TERM OBLIGATIONS: 6.4%
$ 22,000 American General Finance
Yield 1.04% Due 1/06/04 21,997
22,529 Repurchase Agreement with State
Street Bank & Trust Co., dated
12/31/03, due 1/02/04 at 0.85%
collateralized by Federal National
Mortgage Association Notes
maturing 1/15/06, Market Value
$22,981 (repurchase
proceeds: $22,530) 22,529
- ----------------------------------------------------------------------------
(AMORTIZED COST: $44,526) 44,526
------------
TOTAL INVESTMENTS: 99.8% 692,240
(COST: $533,840) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.2% 1,034
------------
TOTAL NET ASSETS: 100% $ 693,274
============================================================================
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investment is
$533,937 and net unrealized appreciation was $158,303 consisting of gross
unrealized appreciation of $190,029 and gross unrealized depreciation of
$31,726.
(b) Non-income producing security.
(c) On December 31, 2003, the fund held the following percentages of the
outstanding voting shares of the companies listed below:
RCM Technologies 7.38%
Gadzooks 5.97%
The aggregate cost and value of these companies at December 31, 2003, were
$9,999 and $6,641, respectively. Investments in affiliate companies
represent 0.96% of total net assets at December 31, 2003. The change in
unrealized gain in these companies amounted to $795 during the year ended
December 31, 2003. There were purchases of $1,032 in affiliated companies
during the year.
41
Columbia Acorn USA
>Statement of Investments, continued
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. These securities are valued in good faith
by the Board of Trustees. At December 31, 2003, these securities amounted
to $3,164, which represents 0.5% of total net assets.
Additional information on these securities is as follows:
ACQUISITION
SECURITY DATES SHARES COST VALUE
- ------------------------------------------------------------------------------
Locus Discovery, Series D Pfd. 09/05/01 375 $ 1,500 $ 1,500
SYRRX, Series C 01/04/01 154 1,001 801
Aquila 10/25/01-11/14/01 115 2,433 810
Metabolex, Series F 02/11/00 364 2,000 53
------- -------
$ 6,934 $ 3,164
======= =======
1-800-922-6769
42
Columbia Acorn International Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
EUROPE
>NORWAY
Orkla 19,000 38,000
>UNITED KINGDOM/IRELAND
BG Group 200,000 300,000
Irish Life & Permanent (Ireland) 45,000 70,000
Jardine Lloyd Thompson 0 45,000
Smith & Nephew 75,000 90,000
>NORWAY
DNB NOR ASA 201,000 209,500
>SWEDEN
Gambro 0 58,000
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
Esprit Holdings 0 200,000
>JAPAN
Shimano 0 33,800
Ushio 0 26,000
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Hit Entertainment 190,000 90,000
Marconi 54,000 0
Reed Elsevier 90,000 0
>NETHERLANDS
Wolters Kluwer 28,000 0
>ITALY
Parmalat Finanziaria 230,000 0
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
Television Broadcasts 210,000 40,000
>JAPAN
Terumo 34,000 0
43
Columbia Acorn International Select
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 95.2%
- ----------------------------------------------------------------------------
EUROPE: 70.9%
>GERMANY: 5.4%
30,000 Rhoen-Klinikum $ 1,682
HOSPITAL MANAGEMENT
12,000 Deutsche Boerse 655
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
- ----------------------------------------------------------------------------
2,337
>NORWAY: 5.2%
209,500 Den Norske Bank 1,395
LARGEST NORWEGIAN BANK
38,000 Orkla 849
DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
2,244
>SWEDEN: 1.1%
58,000 Gambro 480
PRODUCTS/SERVICES FOR RENAL CARE
- ----------------------------------------------------------------------------
>FRANCE/BELGIUM: 8.5%
25,000 Neopost 1,260
POSTAGE METER MACHINES
22,000 Essilor International 1,136
EYEGLASS LENSES
35,000 Euronext 885
TRADING SERVICES FOR FINANCIAL MARKETS
2,000 Imerys 421
INDUSTRIAL MINERALS PRODUCER
- ----------------------------------------------------------------------------
3,702
>UNITED KINGDOM/IRELAND: 35.6%
160,000 Anglo Irish Bank (Ireland) 2,522
SMALL BUSINESS & MIDDLE MARKET BANKING
90,000 Kerry Group (Ireland) 1,690
FOOD INGREDIENTS
300,000 BG Group 1,536
OIL & GAS PRODUCER
185,000 Compass Group 1,255
INTERNATIONAL CONCESSION & CONTRACT CATERER
170,000 Grafton Group (Ireland) 1,172
BUILDERS, WHOLESALERS & DIY RETAILING
70,000 Irish Life & Permanent (Ireland) 1,129
SAVINGS PRODUCTS
8,700 Depfa Bank (Ireland) 1,097
INTERNATIONAL PUBLIC SECTOR FINANCE
120,000 Bunzl 914
DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY
40,000 Cobham 833
AEROSPACE
90,000 Smith & Nephew 754
MEDICAL EQUIPMENT & SUPPLIES
60,000 British Sky Broadcasting (b) 753
DIGITAL SATELLITE BROADCASTING
45,000 Exel 593
GLOBAL LOGISTICS & FREIGHT FORWARDING
90,000 Hit Entertainment 473
TELEVISION SHOWS FOR CHILDREN
45,000 Jardine Lloyd Thompson 424
BUSINESS INSURANCE BROKER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
48,000 Burberry $ 313
APPAREL RETAILER
- ----------------------------------------------------------------------------
15,458
>SWITZERLAND: 8.8%
9,000 Swatch Group 1,080
WATCH & ELECTRONICS MANUFACTURER
4,000 Schindler (b) 976
ELEVATOR MANUFACTURER & SERVICE PROVIDER
900 Synthes-Stratec 890
PRODUCTS FOR ORTHOPEDIC SURGERY
1,700 Givaudan 882
INDUSTRIAL FRAGRANCES & FLAVORS
- ----------------------------------------------------------------------------
3,828
>ITALY: 2.1%
65,000 Autogrill (b) 929
RESTAURANTS & CATERING FOR TRAVELERS
- ----------------------------------------------------------------------------
>SPAIN: 2.3%
60,000 Red Electrica 983
SPANISH POWER GRID
- ----------------------------------------------------------------------------
>LUXEMBOURG: 1.9%
25,000 Tenaris 833
STEEL PIPE FOR OIL WELLS & PIPELINES
------------
EUROPE: TOTAL 30,794
- ----------------------------------------------------------------------------
ASIA: 14.1%
>HONG KONG: 2.0%
200,000 Esprit Holdings 665
GLOBAL APPAREL BRAND MANAGER
40,000 TVB 202
TELEVISION PROGRAMMING & BROADCASTING
- ----------------------------------------------------------------------------
867
>JAPAN: 9.5%
10,000 Hoya 918
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
8,000 Nidec 764
ELECTRIC MOTORS
10,000 USS 708
USED CAR AUCTIONEER
33,800 Shimano 700
BICYCLE COMPONENTS & FISHING TACKLE
19,700 Daito Trust Construction 585
APARTMENT BUILDER
26,000 Ushio 432
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
4,107
>SINGAPORE: 2.6%
96,000 Venture 1,131
ELECTRONIC CONTRACT MANUFACTURER
------------
ASIA: TOTAL 6,105
1-800-922-6769
44
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 10.2%
>AUSTRALIA: 2.7%
260,000 Lion Nathan $ 1,182
AUSTRALIAN BEER BREWER/DISTRIBUTOR
- ----------------------------------------------------------------------------
>CANADA: 7.5%
24,000 Talisman Energy 1,365
OIL & GAS PRODUCER
52,000 Corus Entertainment 1,106
TELEVISION PROGRAMMING & RADIO STATIONS
20,000 Power Financial 767
LIFE INSURANCE & MUTUAL FUNDS
- ----------------------------------------------------------------------------
3,238
------------
OTHER: TOTAL 4,420
------------
TOTAL COMMON STOCKS: 95.2% 41,319
(COST: $28,565)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 4.4%
$ 1,930 Repurchase Agreement with
State Street Bank & Trust Co.,
dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
8/15/04, Market Value $1,970
(repurchase proceeds: $1,930) $ 1,930
- ----------------------------------------------------------------------------
(AMORTIZED COST: $1,930) 1,930
------------
TOTAL INVESTMENTS (c): 99.6% 43,249
(COST: $30,495) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.4% 157
------------
TOTAL NET ASSETS: 100% $ 43,406
============================================================================
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
is $30,741 and net unrealized appreciation was $12,508, consisting
of gross unrealized appreciation of $12,513 and gross unrealized
depreciation of $5.
(b) Non-income producing security.
(c) On December 31, 2003, the Fund's total investments were denominated in
currencies as follows:
%OF
CURRENCY VALUE NET ASSETS
- -----------------------------------------------------------
Euro $ 15,560 35.8%
British Pounds 7,848 18.1
Japanese Yen 4,107 9.5
Swiss Francs 3,829 8.8
Canadian Dollars 3,246 7.5
Norwegian Krone 2,245 5.2
Other currencies less than
5% of total net assets 6,414 14.7
-------- ------
$ 43,249 99.6%
======== ======
45
Columbia Acorn International Select
>Portfolio Diversification
At December 31, 2003, the Fund's portfolio investments as a percent of net
assets was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION TECHNOLOGY
Television Programming $ 1,579 3.6%
Financial Processors 1,540 3.5
Contract Manufacturing 1,131 2.6
Television Broadcasting 955 2.2
Semiconductors and Related
Equipment 918 2.1
Computer Hardware and
Related Equipment 764 1.8
- ----------------------------------------------------------------------------
6,887 15.8
>HEALTHCARE
Medical Equipment 2,780 6.4
Hospital Management 1,682 3.9
Services 480 1.1
- ----------------------------------------------------------------------------
4,942 11.4
>CONSUMER GOODS/SERVICES
Food 2,539 5.9
Restaurants 2,184 5.0
Durable Goods 1,780 4.1
Beverage 1,182 2.7
Retail 978 2.3
Consumer Goods Distribution 708 1.6
- ----------------------------------------------------------------------------
9,371 21.6
>FINANCE
Banks 5,014 11.6
Insurance 1,553 3.6
Money Management 767 1.8
- ----------------------------------------------------------------------------
7,334 17.0
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 1,569 3.6%
Electrical Components 1,265 2.9
Machinery 1,260 2.9
Industrial Distribution 1,172 2.7
Outsourcing and Training Services 914 2.1
Speciality Chemicals 882 2.0
Steel 833 1.9
Industrial Materials 421 1.0
- ----------------------------------------------------------------------------
8,316 19.1
>ENERGY/MINERALS
Oil/Gas Producers 2,901 6.7
- ----------------------------------------------------------------------------
2,901 6.7
>OTHER INDUSTRIES
Regulated Utilities 983 2.3
Real Estate 585 1.3
- ----------------------------------------------------------------------------
1,568 3.6
---------------------------
TOTAL COMMON STOCKS: 41,319 95.2
---------------------------
SHORT-TERM OBLIGATIONS: 1,930 4.4
---------------------------
TOTAL INVESTMENTS: 43,249 99.6
CASH AND OTHER ASSETS
LESS LIABILITIES: 157 0.4
---------------------------
NET ASSETS: $ 43,406 100.0%
============================================================================
1-800-922-6769
46
Columbia Acorn Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
INFORMATION
PeopleSoft 1,330,000 1,475,000
Synopsys 1,060,000 1,120,000
- ----------------------------------------------------------------------------
HEALTH CARE
First Health Group 2,150,000 2,700,000
Guidant 1,070,000 1,090,000
Lincare Holdings 480,000 490,000
Techne 415,000 440,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Abercrombie & Fitch 640,000 660,000
Interpublic Group 2,500,000 2,520,000
Weight Watchers 0 600,000
- ----------------------------------------------------------------------------
FINANCE
Markel 87,000 110,000
TCF Financial 480,000 650,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Herman Miller 1,060,000 1,160,000
NUMBER OF SHARES
--------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Safeway 1,150,000 1,050,000
47
Columbia Acorn Select
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 93.1%
- ----------------------------------------------------------------------------
INFORMATION: 27.3%
>INSTRUMENTATION: 2.4%
560,000 Tektronix $ 17,696
ANALYTICAL INSTRUMENTS
- ----------------------------------------------------------------------------
>GAMING EQUIPMENT: 2.3%
470,000 International Game Technology 16,779
SLOT MACHINES & PROGRESSIVE JACKPOTS
- ----------------------------------------------------------------------------
>CONSUMER SOFTWARE: 3.9%
600,000 Electronic Arts (b) 28,668
ENTERTAINMENT SOFTWARE
- ----------------------------------------------------------------------------
>BUSINESS SOFTWARE: 9.6%
1,120,000 Synopsys (b) 37,811
SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS
1,475,000 PeopleSoft 33,630
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
- ----------------------------------------------------------------------------
71,441
>ADVERTISING: 5.3%
2,520,000 Interpublic Group (b) 39,312
ADVERTISING
- ----------------------------------------------------------------------------
>BUSINESS INFORMATION: 3.8%
470,000 Moody's 28,459
RATINGS SERVICE FOR CREDIT OBLIGATIONS
------------
INFORMATION: TOTAL 202,355
- ----------------------------------------------------------------------------
HEALTH CARE: 20.2%
>MEDICAL EQUIPMENT: 8.9%
1,090,000 Guidant 65,618
STENTS, DEFIBRILLATORS & OTHER CARDIAC
MEDICAL DEVICES
- ----------------------------------------------------------------------------
>SERVICES: 9.1%
2,700,000 First Health Group (b) 52,542
PPO NETWORK
490,000 Lincare Holdings (b) 14,715
HOME HEALTH CARE SERVICES
- ----------------------------------------------------------------------------
67,257
>HOSPITAL/LABORATORY SUPPLIES: 2.2%
440,000 Techne (b) 16,623
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
------------
HEALTH CARE: TOTAL 149,498
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 28.4%
>LEISURE VEHICLES: 4.0%
620,000 Harley-Davidson 29,469
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
>CONSUMER SERVICES: 3.1%
600,000 Weight Watchers (b) 23,022
WEIGHT LOSS PROGRAM
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>RETAIL: 8.6%
660,000 Costco $ 24,539
WAREHOUSE SUPERSTORES
1,050,000 Safeway (b) 23,005
RETAIL FOOD & DRUG STORES
660,000 Abercrombie & Fitch (b) 16,309
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
63,853
>ENTERTAINMENT: 2.6%
440,000 International Speedway Motors 19,650
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
- ----------------------------------------------------------------------------
>FURNITURE & MANUFACTURERS: 10.1%
1,160,000 Herman Miller 28,153
OFFICE FURNITURE
350,000 Mohawk Industries (b) 24,689
CARPET & FLOORING
580,000 Coach (b) 21,895
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
- ----------------------------------------------------------------------------
74,737
------------
>CONSUMER GOODS/SERVICES: TOTAL 210,731
- ----------------------------------------------------------------------------
FINANCE: 13.5%
>BANKS: 7.4%
650,000 TCF Financial 33,377
GREAT LAKES BANK
500,000 Associated Banc-Corp 21,325
MIDWEST BANK
- ----------------------------------------------------------------------------
54,702
>INSURANCE: 3.8%
110,000 Markel (b) 27,886
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
>MONEY MANAGEMENT: 2.3%
570,000 SEI Investments 17,368
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
------------
FINANCE: TOTAL 99,956
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 3.7%
>LOGISTICS: 3.7%
720,000 Expeditors International of
Washington 27,115
INTERNATIONAL FREIGHT FORWARDER
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 27,115
------------
TOTAL COMMON STOCKS: 93.1% 689,655
(COST: $579,443)
1-800-922-6769
48
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 5.6%
$ 18,000 American General Finance
Yield 1.00% Due 1/05/04 $ 17,998
23,170 Repurchase Agreement with State
Street Bank & Trust Co.,
dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
1/15/06, Market Value $23,635
(repurchase proceeds: $23,171) 23,170
- ----------------------------------------------------------------------------
(AMORTIZED COST: $41,168) 41,168
------------
TOTAL INVESTMENTS: 98.7% 730,823
(COST: $620,611)
CASH AND OTHER ASSETS LESS LIABILITIES: 1.3% 9,796
------------
TOTAL NET ASSETS: 100% $ 740,619
============================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
is $620,847 and net unrealized appreciation was $109,976, consisting of
gross unrealized appreciation of $132,180 and gross unrealized
depreciation of $22,204.
(b) Non-income producing security.
49
Columbia Acorn Family of Funds
>Statements of Assets and Liabilities
COLUMBIA COLUMBIA COLUMBIA
ACORN ACORN ACORN
DECEMBER 31, 2003 FUND INTERNATIONAL USA
- ------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS
Investments, at Cost $ 7,343,798 $ 1,227,501 $ 533,840
- ------------------------------------------------------------------------------------------------------------
Investment, at Value $ 11,164,160 $ 1,667,062 $ 692,240
Cash 4,064 -- 1
Foreign currency (cost: Columbia Acorn
Fund $5,413; Columbia Acorn
International $13,096; Columbia Acorn
International Select $7) 5,405 13,251 --
Receivable for:
Investments sold 812 -- 206
Fund shares sold 28,319 1,278 1,764
Dividends and interest 4,645 2,632 83
Expense reimbursement due from Advisor -- -- --
Deferred Trustees' Compensation Investments 924 396 64
Other assets -- -- 2
- ------------------------------------------------------------------------------------------------------------
Total Assets 11,208,329 1,684,619 694,360
LIABILITIES
Payable for:
Investments purchased 14,534 2,601 162
Fund shares redeemed 18,617 2,125 623
Foreign capital gains tax 1,515 813 --
Custodian 58 58 2
Management fee -- 4 --
12b-1 Service & Distribution fees 2,524 65 111
Legal & audit fees 109 66 25
Reports to shareholders 252 53 23
Deferred Trustees' fees 924 396 64
Transfer agent fee 884 103 74
Other liabilities 97 3 2
- ------------------------------------------------------------------------------------------------------------
Total Liabilities 39,514 6,287 1,086
- ------------------------------------------------------------------------------------------------------------
NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274
============================================================================================================
COMPOSITION OF NET ASSETS
Paid in capital $ 7,331,293 $ 1,462,493 $ 548,134
Undistributed net investment income
(Accumulated net investment loss) 6,955 16,493 92
Accumulated net realized gain (loss) 11,734 (238,525) (13,352)
Net unrealized appreciation (depreciation) on:
Investments (net of unrealized PFIC
gains of $1,215 for Columbia
Acorn International) 3,820,362 438,346 158,400
Foreign currency transactions (1,529) (475) --
- ------------------------------------------------------------------------------------------------------------
NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274
============================================================================================================
Net asset value per share -- Class A (a) $ 22.20 $ 22.45 $ 20.74
(Net assets/shares) ($1,982,260/89,282) ($52,872/2,355) ($89,650/4,322)
Maximum offering price
per share -- Class A (b) $ 23.55 $ 23.82 $ 22.01
(Net asset value per share/
front-end sales charge) ($22.20/.9425) ($22.45/.9425) ($20.74/.9425)
Net asset value and offering
price per share -- Class B (a) $ 21.75 $ 22.07 $ 20.36
(Net assets/shares) ($1,221,931/56,168) ($39,800/1,803) ($66,175/3,250)
Net asset value and offering
price per share -- Class C (a) $ 21.75 $ 22.06 $ 20.36
(Net assets/shares) ($900,016/41,377) ($22,990/1,042) ($35,662/1,752)
Net asset value, offering price and
redemption price per share -- Class Z $ 22.56 $ 22.66 $ 21.01
(Net assets/shares) ($7,064,608/313,127) ($1,562,670/68,955) ($501,787/23,886)
COLUMBIA
ACORN COLUMBIA
INTERNATIONAL ACORN
DECEMBER 31, 2003 SELECT SELECT
- -----------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS
Investments, at Cost $ 30,495 $ 620,611
- -----------------------------------------------------------------------------------
Investment, at Value $ 43,249 $ 730,823
Cash 1 --
Foreign currency (cost: Columbia Acorn
Fund $5,413; Columbia Acorn
International $13,096; Columbia Acorn
International Select $7) 7 --
Receivable for:
Investments sold -- --
Fund shares sold 122 10,986
Dividends and interest 123 43
Expense reimbursement due from Advisor 29 --
Deferred Trustees' Compensation Investments -- --
Other assets -- 7
- -----------------------------------------------------------------------------------
Total Assets 43,531 741,859
LIABILITIES
Payable for:
Investments purchased 27 --
Fund shares redeemed 45 879
Foreign capital gains tax -- --
Custodian 6 1
Management fee -- --
12b-1 Service & Distribution fees 5 245
Legal & audit fees 17 --
Reports to shareholders 14 22
Deferred Trustees' fees -- 25
Transfer agent fee 8 65
Other liabilities 3 3
- -----------------------------------------------------------------------------------
Total Liabilities 125 1,240
- -----------------------------------------------------------------------------------
NET ASSETS $ 43,406 $ 740,619
===================================================================================
COMPOSITION OF NET ASSETS
Paid in capital $ 68,842 $ 630,664
Undistributed net investment income
(Accumulated net investment loss) 142 (21)
Accumulated net realized gain (loss) (38,346) (236)
Net unrealized appreciation (depreciation) on:
Investments (net of unrealized PFIC
gains of $1,215 for Columbia
Acorn International) 12,754 110,212
Foreign currency transactions 14 --
- -----------------------------------------------------------------------------------
NET ASSETS $ 43,406 $ 740,619
===================================================================================
Net asset value per share -- Class A (a) $ 14.45 $ 18.01
(Net assets/shares) ($2,557/177) ($264,679/14,700)
Maximum offering price
per share -- Class A (b) $ 15.33 $ 19.11
(Net asset value per share/
front-end sales charge) ($14.45/.9425) ($18.01/.9425)
Net asset value and offering
price per share -- Class B (a) $ 14.12 $ 17.64
(Net assets/shares) ($3,162/224) ($118,064/6,694)
Net asset value and offering
price per share -- Class C (a) $ 14.14 $ 17.64
(Net assets/shares) ($3,691/261) ($64,212/3,641)
Net asset value, offering price and
redemption price per share -- Class Z $ 14.58 $ 18.20
(Net assets/shares) ($33,996/2,331) ($293,664/16,138)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See accompanying notes to financial statements
1-800-922-6769
50
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN ACORN ACORN INTERNATIONAL ACORN
(IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend income $ 70,311 33,963 $ 1,380 $ 745 $ 1,767
Interest income 7,373 717 406 15 294
- -------------------------------------------------------------------------------------------------------------------
77,684 34,680 1,786 760 2,061
Foreign taxes withheld (1,354) (3,216) -- (62) --
- -------------------------------------------------------------------------------------------------------------------
Total Investment Income 76,330 31,464 1,786 698 2,061
EXPENSES:
Management fees 52,118 11,792 4,194 330 3,817
Administration fees 3,905 703 227 17 212
12b-1 Service & Distribution fees 18,497 588 884 59 1,375
Custody fees 794 950 11 45 18
Legal and audit fees 488 121 66 24 42
Transfer agent fees 8,051 923 496 60 690
Trustees' fees 369 70 21 4 14
Registration and blue sky fees 316 76 116 94 140
Reports to shareholders 1,419 267 161 68 148
Other expenses 288 40 18 8 24
- -------------------------------------------------------------------------------------------------------------------
Total expenses 86,245 15,530 6,194 709 6,480
Less custody fees paid indirectly (4) --* --* --* --
Less reimbursement of expenses by Advisor -- -- -- (147) --
- -------------------------------------------------------------------------------------------------------------------
Net Expenses 86,241 15,530 6,194 562 6,480
- -------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (9,911) 15,934 (4,408) 136 (4,419)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Investments 90,703 (7,250) 7,301 (445) 8,643
Foreign currency transactions (21) 106 -- 20 --
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 90,682 (7,144) 7,301 (425) 8,643
===================================================================================================================
Net change in net unrealized appreciation/
depreciation on:
Investments 2,975,943 562,281 172,313 12,936 95,023
Foreign currency transactions (1,268) (291) -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/
depreciation 2,974,675 561,990 172,313 12,936 95,023
===================================================================================================================
Net realized and unrealized gain 3,065,357 554,846 179,614 12,511 103,666
- -------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets resulting from
Operations $ 3,055,446 $ 570,780 $ 175,206 $ 12,647 $ 99,247
===================================================================================================================
* Rounds to less than $500.
See accompanying notes to financial statements.
51
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
(IN THOUSANDS) 2003 2002 2003 2002
OPERATIONS:
Net investment income (loss) $ (9,911) $ (5,079) $ 15,934 $ 11,854
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency transactions 90,682 (57,609) (7,144) (88,618)
Change in net unrealized appreciation (depreciation) of
investments, forward foreign currency contracts and
foreign currency transactions 2,974,675 (778,655) 561,990 (188,391)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Operations 3,055,446 (841,343) 570,780 (265,155)
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (106) (24)
Net realized gain -- Class A (1,752) -- -- --
Net investment income -- Class B -- -- -- --
Net realized gain -- Class B (1,116) -- -- --
Net investment income -- Class C -- -- -- --
Net realized gain -- Class C (813) -- -- --
Net investment income -- Class Z -- -- (5,829) (9,265)
Net realized gain -- Class Z (6,236) -- -- --
- -------------------------------------------------------------------------------------------------------------------
Total Distribution to Shareholders (9,917) -- (5,935) (9,289)
SHARE TRANSACTIONS:
Subscriptions -- Class A 1,041,782 645,380 45,279 264,875
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- -- -- --
Distributions reinvested -- Class A 1,584 -- 80 17
Redemptions -- Class A (259,438) (134,555) (42,948) (251,764)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A 783,928 510,825 2,411 13,128
Subscriptions -- Class B 364,144 490,366 11,463 15,847
Distributions reinvested -- Class B 1,018 -- -- --
Redemptions -- Class B (88,744) (67,763) (5,639) (6,194)
- -------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 276,418 422,603 5,824 9,653
Subscriptions -- Class C 375,513 330,698 14,870 43,176
Distributions reinvested -- Class C 673 -- -- --
Redemptions -- Class C (73,548) (53,861) (13,396) (40,348)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)-- Class C 302,638 276,837 1,474 2,828
Subscriptions -- Class Z 1,682,204 917,983 220,802 649,314
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- -- -- --
Distributions reinvested -- Class Z 5,443 -- 5,336 8,562
Redemptions -- Class Z (667,986) (509,628) (434,204) (768,033)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)-- Class Z 1,019,661 408,355 (208,066) (110,157)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Share Transactions 2,382,645 1,618,620 (198,357) (84,548)
- -------------------------------------------------------------------------------------------------------------------
Redemption Fees -- -- 400 --
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 5,428,174 777,277 366,888 (358,992)
NET ASSETS:
Beginning of period 5,740,641 4,963,364 1,311,444 1,670,436
- -------------------------------------------------------------------------------------------------------------------
End of period $ 11,168,815 $ 5,740,641 $ 1,678,332 $ 1,311,444
===================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED
NET INVESTMENT LOSS OR OVERDISTRIBUTED NET
INVESTMENT INCOME) $ 6,955 $ 3,601 $ 16,493 $ 5,460
===================================================================================================================
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
(IN THOUSANDS) 2003 2002 2003 2002
OPERATIONS:
Net investment income (loss) $ (4,408) $ (2,949) $ 136 $ 39
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency transactions 7,301 (17,552) (425) (6,845)
Change in net unrealized appreciation (depreciation) of
investments, forward foreign currency contracts and
foreign currency transactions 172,313 (56,039) 12,936 1,151
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Operations 175,206 (76,540) 12,647 (5,655)
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- -- --
Net realized gain -- Class A -- -- -- --
Net investment income -- Class B -- -- -- --
Net realized gain -- Class B -- -- -- --
Net investment income -- Class C -- -- -- --
Net realized gain -- Class C -- -- -- --
Net investment income -- Class Z -- -- (19) --
Net realized gain -- Class Z -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Total Distribution to Shareholders -- -- (19) --
SHARE TRANSACTIONS:
Subscriptions -- Class A 60,457 35,469 2,350 54,708
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- 22 -- --
Distributions reinvested -- Class A -- -- -- --
Redemptions -- Class A (23,188) (15,616) (3,212) (54,724)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A 37,269 19,875 (862) (16)
Subscriptions -- Class B 19,327 33,711 1,577 2,363
Distributions reinvested -- Class B -- -- -- --
Redemptions -- Class B (8,053) (13,914) (989) (2,245)
- -------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 11,274 19,797 588 118
Subscriptions -- Class C 13,056 14,839 3,211 5,117
Distributions reinvested -- Class C -- -- -- --
Redemptions -- Class C (4,575) (5,070) (3,564) (5,510)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)-- Class C 8,481 9,769 (353) (393)
Subscriptions -- Class Z 221,496 125,400 23,389 72,837
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- 10,075 -- --
Distributions reinvested -- Class Z -- -- 18 --
Redemptions -- Class Z (83,975) (75,563) (25,393) (79,344)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)-- Class Z 137,521 59,912 (1,986) (6,507)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Share Transactions 194,545 109,353 (2,613) (6,798)
- -------------------------------------------------------------------------------------------------------------------
Redemption Fees -- -- 39 --
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 369,751 32,813 10,054 (12,453)
NET ASSETS:
Beginning of period 323,523 290,710 33,352 45,805
- -------------------------------------------------------------------------------------------------------------------
End of period $ 693,274 $ 323,523 $ 43,406 $ 33,352
===================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED
NET INVESTMENT LOSS OR OVERDISTRIBUTED NET
INVESTMENT INCOME) $ 92 $ (50) $ 142 $ 5
===================================================================================================================
COLUMBIA
ACORN SELECT
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
(IN THOUSANDS) 2003 2002
OPERATIONS:
Net investment income (loss) $ (4,419) $ (1,224)
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency transactions 8,643 (508)
Change in net unrealized appreciation (depreciation) of
investments, forward foreign currency contracts and
foreign currency transactions 95,023 (7,857)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) from Operations 99,247 (9,589)
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- --
Net realized gain -- Class A (1,172) --
Net investment income -- Class B -- --
Net realized gain -- Class B (563) --
Net investment income -- Class C -- --
Net realized gain -- Class C (301) --
Net investment income -- Class Z -- --
Net realized gain -- Class Z (2,145) --
- -------------------------------------------------------------------------------------
Total Distribution to Shareholders (4,181) --
SHARE TRANSACTIONS:
Subscriptions -- Class A 237,520 31,504
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- --
Distributions reinvested -- Class A 1,096 --
Redemptions -- Class A (30,378) (10,199)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A 208,238 21,305
Subscriptions -- Class B 78,641 27,565
Distributions reinvested -- Class B 507 --
Redemptions -- Class B (9,321) (5,862)
- -------------------------------------------------------------------------------------
Net Increase -- Class B 69,827 21,703
Subscriptions -- Class C 50,838 8,806
Distributions reinvested -- Class C 257 --
Redemptions -- Class C (4,391) (2,268)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 46,704 6,538
Subscriptions -- Class Z 301,467 46,496
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- --
Distributions reinvested -- Class Z 1,920 --
Redemptions -- Class Z (150,913) (17,872)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 152,474 28,624
- -------------------------------------------------------------------------------------
Net Increase (Decrease) from Share Transactions 477,243 78,170
- -------------------------------------------------------------------------------------
Redemption Fees -- --
- -------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 572,309 68,581
NET ASSETS:
Beginning of period 168,310 99,729
- -------------------------------------------------------------------------------------
End of period $ 740,619 $ 168,310
=====================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED
NET INVESTMENT LOSS OR OVERDISTRIBUTED NET
INVESTMENT INCOME) $ (21) $ (11)
=====================================================================================
See accompanying notes to financial statements
1-800-922-6769
52-53 Spread
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets, continued
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST:
(IN THOUSANDS) 2003 2002 2003 2002
NUMBER OF FUND SHARES OF BENEFICIAL INTEREST:
Subscriptions -- Class A 56,202 38,478 2,734 15,488
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- -- -- --
Shares issued in reinvestment and capital
gains -- Class A 73 -- 5 1
Less shares redeemed -- Class A (14,204) (8,482) (2,590) (14,677)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A 42,071 29,996 149 812
Subscriptions -- Class B 20,371 29,099 653 923
Shares issued in reinvestment and
capital gains -- Class B 48 -- -- --
Less shares redeemed-- Class B (5,154) (4,407) (343) (376)
- -------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 15,265 24,692 310 547
Subscriptions -- Class C 20,690 19,804 911 2,573
Shares issued in reinvestment and
capital gains -- Class C 32 -- -- --
Less shares redeemed -- Class C (4,207) (3,475) (833) (2,396)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 16,515 16,329 78 177
Subscriptions -- Class Z 89,984 54,769 13,104 38,166
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- -- -- --
Shares issued in reinvestment and capital
gains -- Class Z 249 -- 313 484
Less shares redeemed -- Class Z (36,502) (31,314) (25,027) (45,408)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 53,731 23,455 (11,610) (6,758)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of Beneficial Interest 127,582 94,472 (11,073) (5,222)
- -------------------------------------------------------------------------------------------------------------------
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST:
(IN THOUSANDS) 2003 2002 2003 2002
NUMBER OF FUND SHARES OF BENEFICIAL INTEREST:
Subscriptions -- Class A 3,345 2,124 216 4,749
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- 2 -- --
Shares issued in reinvestment and capital
gains -- Class A -- -- -- --
Less shares redeemed -- Class A (1,309) (1,009) (294) (4,731)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)-- Class A 2,036 1,117 (78) 18
Subscriptions-- Class B 1,087 2,019 137 220
Shares issued in reinvestment and
capital gains -- Class B -- -- -- --
Less shares redeemed-- Class B (512) (937) (95) (211)
- -------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 575 1,082 42 9
Subscriptions -- Class C 724 892 311 459
Shares issued in reinvestment and
capital gains -- Class C -- -- -- --
Less shares redeemed -- Class C (279) (335) (339) (495)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 445 557 (28) (36)
Subscriptions -- Class Z 12,184 7,498 2,239 6,884
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- 724 -- --
Shares issued in reinvestment and capital
gains -- Class Z -- -- 2 --
Less shares redeemed -- Class Z (4,772) (4,844) (2,435) (7,419)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 7,412 3,378 (194) (535)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of Beneficial Interest 10,468 6,134 (258) (544)
- -------------------------------------------------------------------------------------------------------------------
COLUMBIA
ACORN SELECT
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST:
(IN THOUSANDS) 2003 2002
NUMBER OF FUND SHARES OF BENEFICIAL INTEREST:
Subscriptions -- Class A 14,227 2,229
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- --
Shares issued in reinvestment and capital
gains -- Class A 63 --
Less shares redeemed-- Class A (1,869) (735)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A 12,421 1,494
Subscriptions -- Class B 4,854 1,955
Shares issued in reinvestment and
capital gains -- Class B 30 --
Less shares redeemed -- Class B (601) (431)
- -------------------------------------------------------------------------------------
Net Increase -- Class B 4,283 1,524
Subscriptions -- Class C 3,102 630
Shares issued in reinvestment and
capital gains -- Class C 15 --
Less shares redeemed -- Class C (271) (164)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 2,846 466
Subscriptions -- Class Z 18,117 3,286
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- --
Shares issued in reinvestment and capital
gains -- Class Z 108 --
Less shares redeemed -- Class Z (8,676) (1,263)
- -------------------------------------------------------------------------------------
Net Increase (Decrease)-- Class Z 9,549 2,023
- -------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of Beneficial Interest 29,099 5,507
- -------------------------------------------------------------------------------------
See accompanying notes to financial statements
1-800-922-6769
54-55 Spread
Columbia Acorn Family of Funds
>Financial Highlights
COLUMBIA ACORN FUND CLASS Z YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.50 $ 17.88 $ 17.21 $ 18.53 $ 16.85
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.03 0.02 0.05 0.10 0.09
Net realized and unrealized gain (loss) 7.05 (2.40) 1.01 1.55 5.22
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 7.08 (2.38) 1.06 1.65 5.31
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- (0.04) (0.11) (0.09)
From net realized gains (0.02) -- (0.35) (2.86) (3.54)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.02) -- (0.39) (2.97) (3.63)
================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 22.56 $ 15.50 $ 17.88 $ 17.21 $ 18.53
================================================================================================================================
Total Return (b) 45.68% (13.31)% 6.14% 10.06% 33.40%
================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 0.80% 0.82% 0.82% 0.83% 0.85%
Net investment income (c) 0.17% 0.15% 0.28% 0.55% 0.49%
Portfolio turnover rate 10% 13% 20% 29% 34%
Net assets at end of period (IN MILLIONS) $ 7,065 $ 4,022 $ 4,220 $ 3,983 $ 3,921
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN INTERNATIONAL CLASS Z YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.40 $ 18.47 $ 23.85 $ 35.33 $ 20.82
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.21 0.14 0.12 0.01 0.83
Net realized and unrealized gain (loss) 7.13 (3.10) (5.11) (6.73) 15.45
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 7.34 (2.96) (4.99) (6.72) 16.28
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.08) (0.11) -- (0.66) (0.22)
From net realized gains -- -- (0.39) (4.10) (1.55)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.08) (0.11) (0.39) (4.76) (1.77)
================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 22.66 $ 15.40 $ 18.47 $ 23.85 $ 35.33
================================================================================================================================
Total Return (b) 47.80% (16.10)% (21.11)% (20.02)% 79.20%
================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 1.05% 1.06% 1.06% 1.05% 1.11%
Net investment income (c) 1.19% 0.80% 0.62% 0.02% 0.12%
Portfolio turnover rate 40% 52% 45% 63% 46%
Net assets at end of period (IN MILLIONS) $ 1,563 $ 1,241 $ 1,613 $ 2,459 $ 2,868
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN USA CLASS Z YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.28 $ 17.52 $ 14.90 $ 16.75 $ 14.80
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) (0.13) (0.10) (0.08) (0.05) 0.00(b)
Net realized and unrealized gain (loss) 6.86 (3.14) 2.94 (1.48) 3.32
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.73 (3.24) 2.86 (1.53) 3.32
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.00)(b) --
From net realized gains -- -- (0.24) (0.32) (1.37)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders -- -- (0.24) (0.32) (1.37)
================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 21.01 $ 14.28 $ 17.52 $ 14.90 $ 16.75
================================================================================================================================
Total Return (c) 47.13% (18.49)% 19.25% (8.99)% 23.00%
================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 1.11% 1.17% 1.17% 1.15% 1.15%
Net investment income (loss) (d) (0.72)% (0.64)% (0.46)% (0.32)% 0.00%(e)
Portfolio turnover rate 7% 31% 24% 45% 49%
Net assets at end of period (IN MILLIONS) $ 502 $ 235 $ 229 $ 222 $ 371
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) The benefits derived from custody fees paid indirectly had no impact.
(e) Rounds to less than 0.01%.
See accompanying notes to financial statements.
1-800-922-6769
56-57 Spread
Columbia Acorn Family of Funds
>Financial Highlights
COLUMBIA ACORN INTERNATIONAL SELECT CLASS Z YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.29 $ 12.09 $ 17.15 $ 19.93 $ 11.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) 0.06 0.03 (0.05) (0.11) (0.02)
Net realized and unrealized gain (loss) 4.24 (1.83) (4.92) (2.53) 8.98
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.30 (1.80) (4.97) (2.64) 8.96
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.01) -- (0.01) (0.04) --
From net realized gains -- -- (0.08) (0.10) (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.01) -- (0.09) (0.14) (0.03)
===============================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 14.58 $ 10.29 $ 12.09 $ 17.15 $ 19.93
===============================================================================================================================
Total Return (b) 41.79%(c) (14.89)%(c) (29.05)%(c) (13.35)% 81.60%(c)
===============================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses 1.45%(d) 1.45%(d) 1.45%(d) 1.33%(d) 1.48%(e)
Net investment income (loss) 0.56%(d) 0.26%(d) (0.32)%(d) (0.42)%(d) (0.17)%(e)
Reimbursement 0.42% 0.33% 0.01% -- 0.09%
Portfolio turnover rate 69% 102% 82% 79% 60%
Net assets at end of period (IN MILLIONS) $ 34 $ 26 $ 37 $ 130 $ 107
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(d) The benefits derived from custody fees paid indirectly had no impact.
(e) In accordance with a requirement of the Securities and Exchange Commission,
the ratios reflect total expenses prior to the reduction of custody fees for
cash balances it maintains with the custodian ("custody fees paid
indirectly"). The ratios of expenses to average daily net assets and net
investment income to average daily net assets net of custody fees paid
indirectly would have been 1.45% and (0.14)%, respectively for the year
ended December 31, 1999.
COLUMBIA ACORN SELECT CLASS Z YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.04 $ 15.23 $ 14.13 $ 13.70 $ 10.71
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) (0.10) (0.10) (0.05) (0.07) (0.08)
Net realized and unrealized gain (loss) 4.39 (1.09) 1.18 1.59 3.21
- -------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.29 (1.19) 1.13 1.52 3.13
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01) --
From net realized gains (0.13) -- (0.03) (1.08) (0.14)
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.13) -- (0.03) (1.09) (0.14)
===============================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 18.20 $ 14.04 $ 15.23 $ 14.13 $ 13.70
===============================================================================================================================
Total Return (b) 30.61% (7.81)%(c) 8.00%(c) 11.68% 29.30%(c)
===============================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses 1.12%(d) 1.26%(d) 1.35% 1.34%(e) 1.37%(e)
Net investment income (loss) (0.63)%(d) (0.67)%(d) (0.44)% (0.52)%(e) (0.62)%(e)
Reimbursement -- 0.01% 0.03% -- 0.04%
Portfolio turnover rate 16% 40% 82% 116% 101%
Net assets at end of period (IN MILLIONS) $ 294 $ 93 $ 70 $ 67 $ 68
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(d) The benefits derived from custody fees paid indirectly had no impact.
(e) In accordance with a requirement of the Securities and Exchange Commission,
the ratios reflect total expenses prior to the reduction of custody fees for
cash balances it maintains with the custodian ("custody fees paid
indirectly"). The ratios of expenses to average daily net assets and net
investment income to average daily net assets net of custody fees paid
indirectly would have been 1.32% and (0.50)%, respectively for the year
ended December 31, 2000, 1.35% and (0.60)%, respectively for the year ended
December 31, 1999.
See accompanying notes to financial statements.
1-800-922-6769
58-59 Spread
Columbia Acorn Family of Funds
>Notes to Financial Statements
1. Nature of Operations
Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia
Acorn International Select and Columbia Acorn Select (the "Funds") are series of
Columbia Acorn Trust (the "Trust"), an open-end management investment company
organized as a Massachusetts business trust. The investment objective of each
Fund is to seek long-term growth of capital. The Funds may issue an unlimited
number of shares. The Funds offer four classes of shares: Class A, Class B,
Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a contingent deferred sales charge. Class B
shares will convert to Class A shares in three, four or eight years after
purchase, depending on the program under which shares are purchased.
Class C shares are subject to a contingent deferred sales charge on
redemptions made 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. Generally, you may
exchange your Class Z or Class A shares of the Fund for shares of another fund
at no additional charge. However, if you exchange Class Z shares of Columbia
Acorn International or Columbia Acorn International Select that you have owned
60 days or less for Class Z shares of a fund distributed by Columbia Funds
Distributor, Inc., that does not have a redemption fee (including Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a
redemption fee of 2% of the redemption proceeds. Exchanges between Columbia
Acorn International and Columbia Acorn International Select (or a fund
distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will
not be subject to the 2% redemption fee. In addition, if you redeem shares of
Columbia Acorn International or Columbia Acorn International Select that you
have owned 60 days or less, the Fund will charge you a redemption fee of 2% of
redemption proceeds, with certain exceptions. See "Fund Policy on Trading of
Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for
more information.
The financial highlights for Class A, Class B and Class C shares are
presented in a separate annual report. The annual financial statements for the
Columbia Thermostat Fund, another Fund of the Trust, begin on page 67 of this
report.
Effective October 13, 2003, the Funds changed their name from Liberty Acorn
Fund to Columbia Acorn Fund, Liberty Acorn International to Columbia Acorn
International, Liberty Acorn USA to Columbia Acorn USA, Liberty Acorn Foreign
Forty to Columbia Acorn International Select and Liberty Acorn Twenty to
Columbia Acorn Select. Also on that date, the Trust changed its name from
Liberty Acorn Trust to Columbia Acorn Trust.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
On July 26, 2002, Columbia Acorn USA acquired all of the net assets of the
Stein Roe Small Company Growth Fund ("Stein Roe Fund") pursuant to a plan of
reorganization approved by the Stein Roe Fund shareholders on June 28, 2002. The
acquisition was accomplished by a tax-free exchange of 1,139,488 shares of the
Stein Roe Fund (valued at $10,096,640) for 726,123 shares of Columbia Acorn USA.
The net assets of the Stein Roe Fund were combined with the net assets of
Columbia Acorn USA on the acquisition date and included $3,125,202 of unrealized
depreciation on investment. The aggregate net assets of Columbia Acorn USA
immediately before and after acquisition were $306,945,066 and $317,041,706,
respectively.
2. Significant Accounting Policies
>Security valuation
Investments are stated at fair value. Securities traded on securities exchanges
or in over-the-counter markets in which transaction prices are reported are
valued at the last sales price at the time of valuation. If a security is traded
principally on the Nasdaq Stock Market Inc., the SEC-approved Nasdaq Official
Closing Price will be applied. Securities for which there are no reported sales
on the valuation date are valued at the latest bid quotation. Money market
instruments having a maturity of 60 days or less from the valuation date are
valued on an amortized cost basis, which approximates fair value. Securities for
which
1-800-922-6769
60
quotations are not available are valued at a fair value as determined in good
faith by the Board of Trustees.
>Repurchase agreements
The Funds may engage in repurchase agreement transactions. The Funds, through
their custodians, receive delivery of underlying securities collateralizing
repurchase agreements. The Funds' investment advisor determines that the value
of the underlying securities is at all times at least equal to the resale price.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and long-term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis.
Awards from class action litigation may be recorded as a reduction of cost.
If the Funds no longer own the applicable securities, the proceeds are recorded
as realized gains.
The Funds estimate components of distributions from Real Estate Investment
Trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. Results of operations for the
year reflect a change in estimate of these components using more current tax
reporting received from REIT investments. The change in estimate had no impact
on each of the Fund's net assets.
>Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" in the Statements of Operations. Additionally, each Fund,
except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio
hedging with respect to changes in foreign currency exchange rates by entering
into forward foreign currency contracts to purchase or sell foreign currencies.
The Statements of Operations reflect gains and losses as realized for closed
forward foreign currency contracts and unrealized for open contracts. The Funds
bear the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
None of the Funds entered into any futures contracts or forward foreign
currency contracts during the year ended December 31, 2003.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading. All income,
expenses (other than the Class A, Class B and Class C 12b-1 and distribution
fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fees) and
realized and unrealized gains (losses) of a fund are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class. Redemption fees are allocated to paid-in-capital of each class
proportionately for the purposes of determining net asset value of each class.
>Custody fees
Custody fees are reduced based on each Fund's cash balances maintained with the
custodian. The amount is disclosed as a reduction of total expenses in the
Statement of Operations.
1-800-922-6769
61
Columbia Acorn Family of Funds
>Notes to Financial Statements continued
>Federal income taxes
The Funds have complied with the special provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all their taxable income, as well as any net realized gain on sales
of investments and foreign currency transactions reportable for federal income
tax purposes. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from accounting principles generally accepted
in the United States of America. These differences are primarily due to
differing treatments for deferral of losses from wash sales, straddle deferrals,
mark-to-market on futures contracts, current year distribution payable, foreign
currency transactions, net operating losses, passive foreign investment
companies, capital loss carryforwards, post-October losses and non-deductible
expenses. Reclassifications are made to the Funds' capital accounts to reflect
income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.
For the year ended December 31, 2003, permanent items identified and
reclassified among the components of net assets are as follows:
UNDISTRIBUTED
NET INVESTMENT
INCOME
(ACCUMULATED
NET ACCUMULATED NET
INVESTMENT NET REALIZED PAID-IN UNREALIZED
LOSS) GAIN (LOSS) CAPITAL APPRECIATION
- -----------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn
Fund $ 13,265 $ (13,067) $ (607) $ 409
Columbia Acorn
International 1,034 (7,045) -- 6,011
Columbia Acorn
USA 4,550 3,217 (7,767) --
Columbia Acorn
International
Select 20 (20) -- --
Columbia Acorn
Select 4,409 (4,146) (263) --
Net investment income, net realized gains (losses) and net assets were not
affected by this reclassification.
The tax character of distributions paid during the years ended December 31,
2003 and December 31, 2002 were as follows:
LONG-TERM
ORDINARY CAPITAL
DECEMBER 31, 2003 INCOME GAINS
- -----------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ -- $ 9,917
Columbia Acorn International 5,935 --
Columbia Acorn USA -- --
Columbia Acorn International
Select 19 --
Columbia Acorn Select 736 3,445
ORDINARY
DECEMBER 31, 2002 INCOME
- --------------------------------
(IN THOUSANDS)
Columbia Acorn
International $ 9,289
As of December 31, 2003, the components of distributable earnings on a tax basis
were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- --------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn
Fund $ -- $ 14,205 $ 3,824,239
Columbia Acorn
International 16,894 -- 435,632
Columbia Acorn
USA -- -- 158,303
Columbia Acorn
International
Select 154 -- 12,522
Columbia Acorn
Select -- -- 109,976
*The difference between book-basis and tax-basis unrealized appreciation, if
applicable, is attributable primarily to the tax deferral of losses on wash
sales, REITs adjustments and foreign currency transactions.
For the year ended December 31, 2003, the following capital loss carryforwards
are available to reduce taxable income arising from future net realized gains on
investments, if any, to the extent permitted by the Internal Revenue Code:
1-800-922-6769
62
YEAR OF COLUMBIA COLUMBIA ACORN COLUMBIA
EXPIRATION ACORN FUND INTERNATIONAL ACORN USA
- --------------------------------------------------------
(IN THOUSANDS)
2008 $ -- $ -- $ --
2009 -- 111,479 3,035
2010 -- 76,335 10,064
2011 -- 48,476 --
- --------------------------------------------------------
TOTAL $ -- $236,290 $13,099
COLUMBIA ACORN COLUMBIA
YEAR OF INTERNATIONAL ACORN
EXPIRATION SELECT SELECT
- --------------------------------------------------------
(IN THOUSANDS)
2008 $ -- $ --
2009 23,084 --
2010 12,528 --
2011 2,488 --
- --------------------------------------------------------
TOTAL $38,100 $ --
Capital loss carryforwards utilized during the year ended December 31,
2003, were as follows:
Columbia Acorn $38,258
Columbia Acorn USA 5,383
Columbia Acorn Select 530
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
Columbia Acorn Fund and Columbia Acorn International have elected to
mark-to-market their investments in Passive Foreign Investment Companies
("PFIC's") for federal income tax purposes. Gains and losses relating to PFIC's
are treated as ordinary income for federal income tax purposes. A summary of
transactions relating to PFIC's is as follows (in thousands):
COLUMBIA ACORN FUND
- --------------------------------------------------------
(IN THOUSANDS)
Cumulative unrealized appreciation
on PFIC's recognized in prior years
at December 31, 2002 $ 409
Unrealized appreciation (depreciation)
on PFIC's recognized for federal income
tax purposes during 2003 --
Unrealized appreciation recognized in
prior years on PFIC's sold during 2003 (409)
---------
Cumulative unrealized appreciation on
PFIC's carried forward at December 31, 2003 $ --
---------
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------
(IN THOUSANDS)
Cumulative unrealized appreciation
on PFIC's recognized in prior years
at December 31, 2002 $ 7,225
Unrealized appreciation (depreciation)
on PFIC's recognized for federal income
tax purposes during 2003 1,215
Unrealized appreciation recognized in
prior years on PFIC's sold during 2003 (7,225)
---------
Cumulative unrealized appreciation on
PFIC's carried forward at December 31, 2003 $ 1,215
---------
4. Transactions with Affiliates
Effective October 13, 2003, the Fund's investment advisor changed its name from
Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P.
("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management
Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank,
which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation
("Fleet"), furnishes continuing investment supervision to each Fund and is
responsible for the overall management of the Funds' business affairs.
Under the Funds' investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rates shown in the table below
for each fund.
COLUMBIA ACORN FUND
- --------------------------------------------------------
Net asset value:
On the first $700 million .75%
Next $1.3 billion .70%
Net assets in excess of $2 billion .65%
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------
Net asset value:
On the first $100 million 1.20%
Next $400 million .95%
Net assets in excess of $500 million .75%
COLUMBIA ACORN USA
- --------------------------------------------------------
Net asset value:
On the first $200 million .95%
Net assets in excess of $200 million .90%
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------
On average daily net assets: .95%
COLUMBIA ACORN SELECT
- --------------------------------------------------------
On average daily net assets: .90%
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63
Columbia Acorn Family of Funds
>Notes to Financial Statements continued
>Expense Limit
Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses
(exclusive of distribution and service fees, interest, taxes and extraordinary
expenses, if any) exceeding 1.45% of the average annual net assets for Columbia
Acorn International Select Class Z shares and 1.35% of the average annual net
assets for Columbia Acorn Select Class Z shares.
Columbia WAM also provides administrative services to each Fund at an
annual rate of .05% of average daily net assets.
Effective October 13, 2003, Liberty Funds Distributor, Inc. changed its
name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an
indirect subsidiary of Fleet, is each Fund's principal underwriter and receives
no compensation on the sale of Class Z shares.
Each Fund has adopted a 12b-1 plan which requires it to pay the Distributor
a service and distribution fee on the net assets attributable to Class A, Class
B and Class C shares.
Effective October 13, 2003, Liberty Funds Services, Inc. changed its name
to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an
affiliate of the investment advisor, provides shareholder services to the Funds
and receives reimbursement for out-of-pocket expenses.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers or trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses for the year ended
December 31, 2003 are as follows:
- --------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $369
Columbia Acorn International 70
Columbia Acorn USA 20
Columbia Acorn International Select 4
Columbia Acorn Select 14
- --------------------------------------------------------
The Trust provides a deferred compensation plan for its trustees. Under
that plan, a trustee may elect to defer all or a portion of his or her
compensation. Amounts deferred are retained by the Trust and represent an
unfunded obligation of the Trust. The value of amounts deferred is determined by
reference to the change in value of Class Z shares of one or more series of the
Trust or a money market fund as specified by the trustee. Benefits under the
deferred compensation plan are payable upon retirement.
During the year ended December 31, 2003, the Funds engaged in purchase and
sale transactions with funds that have a common investment adviser (or
affiliated investment advisers), common Directors/Trustees, and/or common
Officers. Those transactions complied with Rule 17a-7 under the Investment
Company Act of 1940 and were as follows:
FUNDS PURCHASES SALES
- --------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $32,474 $ 5,329
Columbia Acorn International 7,022 33,552
Columbia Acorn USA 1,032 --
Columbia Acorn International Select -- 45
Columbia Acorn Select -- 1,204
- --------------------------------------------------------
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered
into to facilitate portfolio liquidity. No amounts have been borrowed under this
facility for the year ended December 31, 2003.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2003 were:
COLUMBIA ACORN FUND
- --------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases $ 2,754,813
Proceeds from sales 692,955
- --------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 533,515
Proceeds from sales 712,236
- --------------------------------------------------------
COLUMBIA ACORN USA
- --------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 198,615
Proceeds from sales 29,091
- --------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 22,844
Proceeds from sales 25,103
- --------------------------------------------------------
COLUMBIA ACORN SELECT
- --------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 490,046
Proceeds from sales 62,409
- --------------------------------------------------------
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64
7. Legal Proceedings
The Securities and Exchange Commission (the "SEC"), the New York Attorney
General and various other regulatory authorities are investigating late trading
and market timing in mutual fund shares, and have sent information requests and
subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG")
(collectively, "Columbia"). These affiliates include the Distributor, Columbia
Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P.
("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not
the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered
any instances where Columbia entities were knowingly involved in late trading of
mutual fund shares. Columbia has identified a limited number of investors who
had informal arrangements for trading shares of various funds managed by
subsidiaries of CMG between 1998 and 2003. A majority of the transactions in
connection with these arrangements occurred in one international fund and two
domestic funds in the Columbia Family of Funds. A 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 exist today.
Information relating to those trading arrangements has been supplied to various
regulatory authorities.
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 the Distributor and CMA
alleging that they have violated certain provisions of the federal securities
laws. Columbia believes that those allegations are based principally on the
trading arrangements referred to above. Columbia WAM has not been named in these
notices. The Distributor and CMA 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 the Distributor or CMA,
and structural changes in the conduct of their business.
Although Columbia does not believe that these regulatory developments or
their resolution will have a material adverse effect on the Funds, or on the
ability of the Distributor or Columbia WAM to provide services to the Funds,
there can be no assurance that these matters or any publicity relating to these
matters or other developments resulting from them will not adversely effect
sales or redemptions of Fund shares or otherwise effect the Funds.
Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a
lawsuit that seeks certification of a plaintiff class consisting of all persons
in the United States who held shares in Columbia Acorn International Fund
("International Fund") for a period of more than 14 days during the five years
prior to the filing of the lawsuit. The suit seeks compensatory and punitive
damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in
summary, that the Trust and Columbia WAM exposed International Fund shareholders
to trading by market timers by allegedly (a) failing to properly evaluate daily
whether a significant event affecting the value of International Fund's
securities had occurred after foreign markets had closed but before the
calculation of the Fund's net asset value ("NAV"); (b) failing to implement
International Fund's portfolio valuation and share pricing policies and
procedures; (c) allowing portfolio valuation and share policies and procedures
that benefited market timers at the expense of long-term shareholders; and (d)
failing to know and implement applicable rules and regulations concerning the
calculation of NAV.
The Trust and Columbia WAM also are defendants in a lawsuit that seeks
certification of a plaintiff class consisting of all persons in the United
States who held shares in International Fund for a period of more than 14 days,
without any stated limitation on the duration of the class period. The suit
seeks compensatory and punitive damages, as well as interest, costs and
attorney's fees. This suit contains allegations and counts similar to those
described above, and also includes an additional count under Section 36(a) of
the Investment Company Act of 1940.
The Trust, on behalf of International Fund, and Columbia WAM intend to
defend both suits vigorously. The Trust does not believe that the pending
actions will have a material adverse affect on the financial statements of any
Fund, and Columbia WAM does not believe that the pending actions will have a
material adverse affect on its ability to perform under its contracts with the
Funds.
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Columbia Acorn Family of Funds
>Unaudited Information
FEDERAL INCOME TAX INFORMATION:
COLUMBIA ACORN FUND
For the fiscal year ended December 31, 2003, the Fund designates long-term
capital gains of $24,122.
COLUMBIA ACORN INTERNATIONAL FUND
Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to
$3,216 ($0.04 per share) are expected to be passed through to shareholders as
100% allowable foreign tax credits on Form 1099-DIV for the year ended December
31, 2003.
Gross income derived from sources within foreign countries amounted to
$33,962 ($0.46 per share) for the fiscal year ended December 31, 2003.
COLUMBIA ACORN INTERNATIONAL SELECT FUND
Foreign taxes paid during the fiscal year ended December 31, 2003, amounted
to $62 ($0.02 per share) are expected to be passed through to shareholders as
100% allowable foreign tax credits on Form 1099-DIV for the year ended December
31, 2003.
Gross income derived from sources within foreign countries amounted to $745
($0.25 per share) for the fiscal year ended December 31, 2003.
COLUMBIA ACORN SELECT FUND
For the fiscal year ended December 31, 2003, the Fund designates long-term
capital gains of $3,445. 100% of the ordinary income distributed by the Fund, in
the year ended December 31, 2003, qualifies for the corporate dividends received
deduction.
For non-corporate shareholders 100%, or the maximum amount allowable under
the Job and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period January 1, 2003 to December 31, 2003 may represent
qualified dividend income. Final information will be provided in your 2003
1099-DIV form.
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66
Columbia Thermostat Fund
>Statement of Investments, December 31, 2003
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
>STOCK FUNDS: 49.5%
981 Columbia Growth & Income Fund,
Class Z $ 15,899
1,719 Columbia Growth Stock Fund,
Class Z (b) 15,870
559 Columbia Acorn Fund, Class Z 12,613
393 Columbia Mid Cap Value Fund, Class Z 9,502
522 Columbia Acorn Select, Class Z (b) 9,501
- --------------------------------------------------------------------------------
TOTAL STOCK FUNDS (COST: $54,614) 63,385
>BOND FUNDS: 49.6%
3,469 Columbia Intermediate Bond
Fund, Class Z 31,739
1,775 Columbia Federal Securities
Fund, Class Z 19,061
1,453 Columbia High Yield Fund, Class Z 12,696
- --------------------------------------------------------------------------------
TOTAL BOND FUNDS (COST: $62,988) 63,496
>SHORT-TERM OBLIGATION: 0.8%
$ 972 Repurchase Agreement with State
Street Bank & Trust Co.,
dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
6/17/05, Market Value $996
(repurchase proceeds: $972) 972
- --------------------------------------------------------------------------------
(COST: $972) 972
-----------
TOTAL INVESTMENTS: 99.9% 127,853
(COST: $118,574)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 76
-----------
TOTAL NET ASSETS: 100% $ 127,929
================================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
was $118,600 and net unrealized appreciation was $9,253, consisting of
gross unrealized appreciation of $9,349 and gross unrealized depreciation
of $96.
(b) Non-income producing.
67
Columbia Thermostat Fund
>Statements of Assets and Liabilities
DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS
Investments, at value (cost: $118,574) $ 127,853
Cash 8
Receivable for:
Fund shares sold 1,655
Dividends 219
Expense reimbursement due from Advisor 167
- -----------------------------------------------------------------------------------------
Total Assets 129,902
LIABILITIES
Payable for:
Investments purchased 1,782
Fund shares redeemed 53
Transfer agent fees 29
Custody fees 2
Reports to shareholders 19
12b-1 Service & Distribution fees 74
Other liabilities 14
- -----------------------------------------------------------------------------------------
Total Liabilities 1,973
- -----------------------------------------------------------------------------------------
NET ASSETS $ 127,929
=========================================================================================
COMPOSITION OF NET ASSETS
Paid in capital $ 118,444
Accumulated net realized gain 206
Net unrealized appreciation on investments 9,279
- -----------------------------------------------------------------------------------------
NET ASSETS $ 127,929
=========================================================================================
Net asset value per share -- Class A (a) $ 12.30
(Net assets/shares) ($42,271/3,437)
Maximum offering price per share -- Class A (b) $ 13.05
(Net asset value per share/front-end sales charge) ($12.30/0.9425)
Net asset value and offering price per share -- Class B (a) $ 12.32
(Net assets/shares) ($51,501/4,179)
Net asset value and offering price per share -- Class C (a) $ 12.32
(Net assets/shares) ($20,087/1,631)
Net asset value, offering price and redemption price per share -- Class Z $ 12.31
(Net assets/shares) ($14,070/1,143)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See accompanying notes to financial statements.
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68
COLUMBIA THERMOSTAT FUND
>STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(IN THOUSANDS)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends from investment company shares $ 1,135
Interest income 27
- -------------------------------------------------------------------------------
Total Investment Income 1,162
EXPENSES:
Management fees 49
Administration fees 25
12b-1 Services & Distribution fees 299
Transfer agent fees 134
Trustees fees --*
Custody fees 28
Registration and blue sky fees 159
Reports to shareholders 85
Other expenses 37
- -------------------------------------------------------------------------------
Total expenses 816
Less custody fees paid indirectly --*
Less reimbursement of expenses by Advisor (350)
- -------------------------------------------------------------------------------
Net Expenses 466
- -------------------------------------------------------------------------------
Net Investment Income 696
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain distributions from investment company shares 272
Net unrealized appreciation on investments 9,219
- -------------------------------------------------------------------------------
Net realized and unrealized gain 9,491
- -------------------------------------------------------------------------------
Net Increase in Net Assets resulting
from Operations $ 10,187
===============================================================================
* Rounds to less than $500.
See accompanying notes to financial statements.
69
Columbia Thermostat Fund
>Statement of Changes in Net Assets
YEAR ENDED PERIOD ENDED
INCREASE IN NET ASSETS DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------
(IN THOUSANDS) 2003 (a) 2002 (b)
OPERATIONS:
Net investment income $ 696 $ 9
Net realized gain on investments 272 10
Net unrealized appreciation 9,219 60
- -------------------------------------------------------------------------------------
Net Increase from Operations 10,187 79
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A (395) --
Net realized gain -- Class A (21) --
Net investment income -- Class B (108) --
Net realized gain -- Class B (30) --
Net investment income -- Class C (43) --
Net realized gain -- Class C (10) --
Net investment income -- Class Z (160) --
Net realized gain -- Class Z (14) --
- -------------------------------------------------------------------------------------
Total Distribution to Shareholders (781) --
SHARE TRANSACTIONS:
Subscriptions -- Class A 40,815 --
Distributions reinvested -- Class A 373 --
Redemptions -- Class A (1,441) --
- -------------------------------------------------------------------------------------
Net Increase -- Class A 39,747 --
Subscriptions -- Class B 48,741 --
Distributions reinvested -- Class B 125 --
Redemptions -- Class B (1,176) --
- -------------------------------------------------------------------------------------
Net Increase -- Class B 47,690 --
Subscriptions -- Class C 19,668 --
Distributions reinvested -- Class C 44 --
Redemptions -- Class C (1,015) --
- -------------------------------------------------------------------------------------
Net Increase -- Class C 18,697 --
Subscriptions -- Class Z 9,094 4,089
Distributions reinvested -- Class Z 166 --
Redemptions -- Class Z (1,023) (16)
- -------------------------------------------------------------------------------------
Net Increase -- Class Z 8,237 4,073
- -------------------------------------------------------------------------------------
Net Increase from Share Transactions 114,371 4,073
- -------------------------------------------------------------------------------------
Total Increase in Net Assets 123,777 4,152
- -------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 4,152 --
- -------------------------------------------------------------------------------------
End of period $ 127,929 $ 4,152
=====================================================================================
OVERDISTRIBUTED (UNDISTRIBUTED) NET INVESTMENT INCOME $ -- $ 9
=====================================================================================
(a) Class A, Class B, and Class D commenced operations March 3, 2003. On October
13, 2003, Class D was redesignated Class C.
(b) Class Z commenced operations September 25, 2002.
See accompanying notes to financial statements.
1-800-922-6769
70
Columbia Thermostat Fund
>Statement of Changes in Net Assets continued
YEAR ENDED PERIOD ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31,
- ---------------------------------------------------------------------------------------------
(IN THOUSANDS) 2003 (a) 2002 (b)
Subscriptions -- Class A 3,529 --
Shares issued in reinvestment and capital gains -- Class A 31 --
Less shares redeemed -- Class A (123) --
- ---------------------------------------------------------------------------------------------
Net Increase -- Class A 3,437 --
Subscriptions -- Class B 4,268 --
Shares issued in reinvestment and capital gains -- Class B 10 --
Less shares redeemed -- Class B (99) --
- ---------------------------------------------------------------------------------------------
Net Increase -- Class B 4,179 --
Subscriptions -- Class C 1,712 --
Shares issued in reinvestment and capital gains -- Class C 4 --
Less shares redeemed -- Class C (85) --
- ---------------------------------------------------------------------------------------------
Net Increase -- Class C 1,631 --
Subscriptions -- Class Z 821 400
Shares issued in reinvestment and capital gains -- Class Z 14 --
Less shares redeemed -- Class Z (91) (1)
- ---------------------------------------------------------------------------------------------
Net Increase -- Class Z 744 399
- ---------------------------------------------------------------------------------------------
Net Increase in Shares of Beneficial Interest 9,991 399
- ---------------------------------------------------------------------------------------------
(a) Class A, Class B, Class D commenced operations March 3, 2003. On October 13,
2003, Class D was redesignated Class C.
(b) Class Z commenced operations September 25, 2002.
See accompanying notes to financial statements.
71
Columbia Thermostat Fund
>Financial Highlights
INCEPTION
SEPTEMBER 25,
YEAR ENDED 2002 THROUGH
CLASS Z DECEMBER 31, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.41 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.19 0.04
Net realized and unrealized gain 1.87 0.37
- -------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.06 0.41
- -------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.16) --
From net realized gains 0.00(b) --
- -------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.16) --
- -------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.31 $ 10.41
=======================================================================================================
Total Return (c) 19.79% 4.10%(d)
=======================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 0.38%(f) 0.62%(g)(h)
Net investment income 1.64%(f) 1.41%(g)(h)
Reimbursement 0.88% 19.94%(g)
Portfolio turnover rate 61% 11%(d)
Net assets at end of period (IN MILLIONS) $ 14 $ 4
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(d) Not annualized.
(e) Does not include expenses of the investment companies in which the Fund
invests.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) In accordance with a requirement of the Securities and Exchange Commission,
the ratios reflect total expenses prior to the reduction of custody fees for
cash balances it maintains with the custodian ("custody fees paid
indirectly"). The ratios of expenses to average daily net assets and net
investment income to average daily net assets net of custody fees paid
indirectly would have been 0.60% and 1.43%, respectively for the period
ended December 31, 2002.
See accompanying notes to financial statements.
1-800-922-6769
72
Columbia Thermostat Fund
>Notes to Financial Statements
1. Nature of Operations
Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust
(the "Trust"), an open-end management investment company organized as a
Massachusetts business trust, commenced operations September 25, 2002. The Fund
may issue an unlimited number of shares. The Fund currently offers four classes
of shares: Class A, Class B, Class C and Class Z. On October 13, 2003, Class D
was redesignated Class C.
Class A shares are sold with a front-end sales charge.A contingent
deferred sales charge may be assessed to Class A shares purchased without an
initial sales charge on redemptions made within eighteen months on an original
purchase of $1 million to $25 million.
Class B shares are subject to a contingent deferred sales charge. Class B
shares will convert to Class A shares in three, four or eight years after
purchase, depending on the program under which shares are purchased.
Class C shares are subject to a contingent deferred sales charge on
redemptions made 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.
The financial highlights for Class A, Class B and Class C shares are
presented in a separate annual report. The annual report for the other series of
the Trust is also included in this report.
The investment objective of the Fund is to provide long-term total return.
The Fund pursues its investment objective by investing in shares of other mutual
funds. As a `fund of funds', under normal circumstances, the Fund allocates at
least 95% of its net assets among a selected group of stock and bond mutual
funds (the "Portfolio Funds") according to the current level of the Standard &
Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's
investment adviser. As of December 31, 2003, the Fund invested in five stock
Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia
Growth & Income Fund, Columbia Mid Cap Value Fund, Columbia Growth Stock Fund)
and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia
Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest
up to 5% of its net assets plus any cash received that day in cash, repurchase
agreements, high quality short-term paper and government securities.
2. Significant Accounting Policies
>Security valuation
Investments in Portfolio Funds are valued at their net asset value as reported
by the underlying funds. High quality short-term paper and government securities
having a maturity of 60 days or less from the valuation date are valued on an
amortized cost basis, which approximates fair value.
>Repurchase agreements
The Fund may engage in repurchase agreement transactions. The Fund, through
its custodian, receives delivery of underlying securities collateralizing each
repurchase agreement. The Fund's investment advisor determines that the value of
the underlying securities is at all times at least equal to the resale price. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Security transactions and investment income
Portfolio Fund transactions are accounted for on the trade date (date the order
to buy or sell is executed). Dividend income and realized gain distributions
from other funds are recorded on the ex-dividend date. Interest income is
recorded on the accrual basis and includes amortization of discounts on money
market instruments and short-term debt instruments when required for federal
income tax purposes. Realized gains and losses from security transactions are
reported on an identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Fund no longer owns the applicable securities, the proceeds are
recorded as realized gains.
>Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading.
>Custody fees
The custody fees are reduced based on the Fund's cash balance maintained with
the custodian. The amount is disclosed as a reduction of total expenses in the
Statement of Operations.
73
Columbia Thermostat Fund
>Notes to Financial Statements, continued
>Federal income taxes
The Fund has complied with the special provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distributes all of its taxable income, as well as any net realized gain on sales
of Portfolio Fund shares and any distributions of net realized gains received by
the Fund from its Portfolio Funds, reportable for federal income tax purposes.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from accounting principles generally accepted
in the United States of America. These differences are primarily due to
differing treatments of non-deductible expenses. Reclassifications are made to
the Fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryforwards) under income tax
regulations.
For the year ended December 31, 2003, permanent items identified and
reclassified among the components of net assets are as follows:
OVERDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN CAPITAL
- -----------------------------------------------------------
(IN THOUSANDS)
$ 1 $ (1) $ --
Net investment income, net realized gains (losses) and net assets were not
affected by this reclassification. The tax character of distributions paid
during the year ended December 31, 2003 was as follows:
LONG-TERM TAX
ORDINARY CAPITAL RETURN OF
INCOME GAINS CAPITAL
- ----------------------------------------------------
(IN THOUSANDS)
$ 771 $ 10 $ --
As of December 31, 2003, the components of distributable earnings on a tax basis
were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- -----------------------------------------------------------------
(IN THOUSANDS)
$ 197 $ 36 $ 9,253
* The difference between book-basis and tax-basis unrealized appreciation
(depreciation), if applicable, is attributable primarily to the tax deferral
of losses on wash sales.
4. Transactions with Affiliates
Effective October 13, 2003, the Fund's investment advisor changed its name from
Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P.
("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management
Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank,
which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation
("Fleet"), furnishes continuing investment supervision to each Fund and is
responsible for the overall management of the Fund's business affairs.
Under the Funds' investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's
average daily net assets.
>Expense Limit
Columbia WAM has agreed to voluntarily reimburse the direct operating
expenses (exclusive of interest and fees on borrowings and expenses associated
with the Fund's investment in other investment companies) exceeding 0.60% of the
average annual net assets of the Fund's Class Z shares. Effective August 1,
2003, Columbia WAM has agreed to contractually reimburse the direct operating
expenses (exclusive of interest and fees on borrowings and expenses associated
with the Fund's investment in other investment companies) exceeding 0.25% of the
average annual net assets of the Fund's Class Z shares.
Columbia WAM has also contracted to provide administrative services at an
annual rate of .05% of the Fund's average daily net assets.
Effective October 13, 2003 Liberty Funds Distributor, Inc., changed its
name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an
indirect subsidiary of Fleet, is the Fund's principal underwriter and receives
no compensation on the sale of Class Z shares.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor
a service and distribution fee on net assets attributable to Class A, Class B
and Class C shares.
Effective October 13, 2003, Liberty Funds Services, Inc., changed its name
to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an
affiliate of the investment advisor, provides shareholder services to the Fund
and receives reimbursement for out-of-pocket expenses.
1-800-922-6769
74
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses for the year ended
December 31, 2003, were $270.
5. Borrowing Arrangements
The Trust participates in a $150,000,000 credit facility which was entered into
to facilitate portfolio liquidity. No amounts have been borrowed under this
facility for the year ended December 31, 2003.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2003 were:
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Purchases $ 144,197
Proceeds from sales $ 30,493
================================================================================
7. Legal Proceedings
The Securities and Exchange Commission (the "SEC"), the New York Attorney
General and various other regulatory authorities are investigating late trading
and market timing in mutual fund shares, and have sent information requests and
subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG")
(collectively, "Columbia"). These affiliates include the Distributor, Columbia
Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P.
("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not
the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered
any instances where Columbia entities were knowingly involved in late trading of
mutual fund shares. Columbia has identified a limited number of investors who
had informal arrangements for trading shares of various funds managed by
subsidiaries of CMG between 1998 and 2003. A majority of the transactions in
connection with these arrangements occurred in one international fund and two
domestic funds in the Columbia Family of Funds. A 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 exist today.
Information relating to those trading arrangements has been supplied to various
regulatory authorities.
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 the Distributor and CMA
alleging that they have violated certain provisions of the federal securities
laws. Columbia believes that those allegations are based principally on the
trading arrangements referred to above. Columbia WAM has not been named in these
notices. The Distributor and CMA 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 the Distributor or CMA,
and structural changes in the conduct of their business.
Although Columbia does not believe that these regulatory developments or
their resolution will have a material adverse effect on the Funds, or on the
ability of the Distributor or Columbia WAM to provide services to the Funds,
there can be no assurance that these matters or any publicity relating to these
matters or other developments resulting from them will not adversely effect
sales or redemptions of Fund shares or otherwise effect the Funds.
Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a
lawsuit that seeks certification of a plaintiff class consisting of all persons
in the United States who held shares in Columbia Acorn International Fund
("International Fund") for a period of more than 14 days during the five years
prior to the filing of the lawsuit. The suit seeks compensatory and punitive
damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in
summary, that the Trust and Columbia WAM exposed International Fund shareholders
to trading by market timers by allegedly (a) failing to properly evaluate daily
whether a significant event affecting the value of International Fund's
securities had occurred after foreign markets had closed but before the
calculation of the Fund's net asset value ("NAV"); (b) failing to implement
International Fund's portfolio valuation and share pricing policies and
procedures; (c) allowing portfolio valuation and share policies and procedures
that benefited market timers at the expense of long-term shareholders; and (d)
failing to know and implement applicable rules and regulations concerning the
calculation of NAV.
75
Columbia Thermostat Fund
>Notes to Financial Statements, continued
The Trust and Columbia WAM also are defendants in a lawsuit that seeks
certification of a plaintiff class consisting of all persons in the United
States who held shares in International Fund for a period of more than 14 days,
without any stated limitation on the duration of the class period. The suit
seeks compensatory and punitive damages, as well as interest, costs and
attorney's fees. This suit contains allegations and counts similar to those
described above, and also includes an additional count under Section 36(a) of
the Investment Company Act of 1940.
The Trust, on behalf of International Fund, and Columbia WAM intend to
defend both suits vigorously. The Trust does not believe that the pending
actions will have a material adverse affect on the financial statements of any
Fund, and Columbia WAM does not believe that the pending actions will have a
material adverse affect on its ability to perform under its contracts with the
Funds.
1-800-922-6769
76
Columbia Thermostat Fund
>Unaudited Information (in thousands)
FEDERAL INCOME TAX INFORMATION:
For the fiscal year ended December 31, 2003, the Fund designates long-term
capital gains of $36.
30.23% of the ordinary income distributed by the Fund, in the year ended
December 31, 2003, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 30.23%, of the maximum amount allowable
under the Jobs and Growth Tax Reconciliation Act of 2003, of income earned by
the Fund for the period January 1, 2003 to December 31, 2003 may represent
qualified dividend income. Final information will be provided in your 2003
1099-DIV From.
77
Report of Independent Auditors
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
COLUMBIA ACORN TRUST
We have audited the accompanying statements of assets and liabilities, including
the statements of investments of Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn International Select, Columbia
Acorn Select and Columbia Thermostat Fund, comprising the Columbia Acorn Trust,
as of December 31, 2003, the related statements of operations, changes in net
assets, and the financial highlights for the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of December 31, 2003, by correspondence
with the custodian and brokers or other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of the Columbia Acorn Trust as of December 31, 2003, the
results of their operations and changes in their net assets and financial
highlights for the periods indicated therein, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
Chicago, Illinois
February 6, 2004
1-800-922-6769
78
Columbia Acorn Family of Funds Class Z Share Information
MINIMUM INITIAL INVESTMENT IN COLUMBIA
ACORN INTERNATIONAL, COLUMBIA ACORN
INTERNATIONAL SELECT, COLUMBIA ACORN
SELECT, COLUMBIA THERMOSTAT FUND $ 1,000
$ 1,000 FOR AN IRA
MINIMUM INITIAL INVESTMENT IN COLUMBIA
ACORN FUND AND COLUMBIA ACORN USA $ 50,000
MINIMUM SUBSEQUENT INVESTMENT $ 50
EXCHANGE FEE NONE
COLUMBIA ACORN FUND ACRNX
Management Fee 0.67%
12b-1 Fee None
Other Expenses 0.13%
--------
Expense Ratio 0.80%
COLUMBIA ACORN INTERNATIONAL ACINX
Management Fee 0.84%
12b-1 Fee None
Other Expenses 0.21%
--------
Expense Ratio 1.05%
COLUMBIA ACORN USA AUSAX
Management Fee 0.92%
12b-1 Fee None
Other Expenses 0.19%
--------
Expense Ratio 1.11%
COLUMBIA ACORN INTERNATIONAL SELECT ACFFX
Management Fee 0.95%
12b-1 Fee None
Other Expenses 0.50%
--------
Net Expense Ratio 1.45%
COLUMBIA ACORN SELECT ACTWX
Management Fee 0.90%
12b-1 Fee None
Other Expenses 0.22%
--------
Expense Ratio 1.12%
COLUMBIA THERMOSTAT FUND COTZX
Management Fee 0.10%
12b-1 Fee None
Other Expenses 0.28%
--------
Net Expense Ratio 0.38%
Fees and expenses are for the year ended December 31, 2003 and for
Columbia Acorn International Select and Columbia Thermostat Fund include the
effect of Columbia Wanger Asset Management's undertaking to reimburse those
funds for any ordinary operating expenses, net of custody fees paid indirectly,
exceeding 1.45% and 0.25% of their average net assets, respectively. Prior to
August 1, 2003, the reimbursement for Columbia Thermostat Fund was based on
0.60%. The expense limitation for Columbia Acorn International Select is
voluntary and can be terminated by either the Fund or Columbia Wanger Asset
Management, L.P. on 30 days' notice.
79
BOARD OF TRUSTEES AND MANAGEMENT OF COLUMBIA ACORN FUNDS
The board of trustees serve indefinite terms of unlimited duration provided
that a majority of trustees always has been elected by shareholders. The
trustees appoint their own successors, provided that at least two-thirds of the
trustees, after such appointment, have been elected by shareholders.
Shareholders may remove a trustee, with or without cause, upon the vote of
two-thirds of Acorn's outstanding shares at any meeting called for that purpose.
A trustee may be removed, with or without cause, upon the vote of a majority of
the trustees. The names of the trustees and officers of Acorn, the date each was
first elected or appointed to office, their principal business occupations and
other directorships they have held during at least the last five years, are
shown below. Each trustee serves in such capacity for each of the six series of
Acorn. Mr. Wanger also serves as a trustee for each of the four series of the
Wanger Advisors Trust.
NUMBER OF
PORTFOLIOS
YEAR FIRST IN FUND
NAME, POSITION(s) ELECTED OR COMPLEX
WITH COLUMBIA ACORN AND APPOINTED PRINCIPAL OCCUPATION(s) DURING OVERSEEN
AGE AT JANUARY 1, 2004 TO OFFICE* PAST FIVE YEARS BY TRUSTEE OTHER DIRECTORSHIPS
------------------------ ---------- ------------------------------ ---------- -------------------
TRUSTEES WHO ARE NOT INTERESTED
PERSONS OF COLUMBIA ACORN:
MARGARET EISEN, 50, 2002 Chair, Institute for Financial Markets; 6 Antigenics, Inc.
TRUSTEE formerly managing director, (biotechnology
DeGuardiola Advisors; formerly and drugs); Global
managing director, North American Financial Group
Equities at General Motors Asset (venture capital fund
Management; prior thereto, director of funds).
of Worldwide Pension Investments for
DuPont Asset Management.
LEO A. GUTHART, 66, 1994 Executive vice president, Honeywell 6 AptarGroup, Inc.
TRUSTEE International (home and building control); (producer of dispensing
chairman, Cylink valves, pumps and
Corporation (supplier of encryption closures); Symbol
equipment); former chairman of the Technologies, Inc.
board of trustees, Hofstra (manufacturer of bar code
University; chairman and chief scanning equipment).
executive officer, Topspin Partners, L.P.
JEROME KAHN, JR., 69, TRUSTEE 1987 Former president, William Harris 6 None.
Investors, Inc. (investment adviser).
STEVEN N. KAPLAN, 44, TRUSTEE 1999 Neubauer Family Professor of 6 None.
Entrepreneurship and Finance,
Graduate School of Business, University
of Chicago.
DAVID C. KLEINMAN, 68, 1972 Adjunct professor of 6 Sonic Foundry, Inc.
TRUSTEE strategic management, University (software);
of Chicago Graduate School of AT&T Latin America.
Business; Business
consultant.
ALLAN B. MUCHIN, 67, 1998 Chairman emeritus, Katten Muchin 6 Alberto-Culver Company
TRUSTEE Zavis Rosenman (law firm). (toiletries).
ROBERT E. NASON, 67, 1998 Consultant and private investor since 6 None.
TRUSTEE AND CHAIRMAN 1998; from 1990-1998, executive
partner and chief executive officer,
member of the executive committee
of Grant Thornton, LLP (public
accounting firm) and member of the
policy board of Grant Thornton International.
JOHN A. WING, 68, 2002 Frank Wakely Gunsaulus Professor 6 AmerUs Life Holdings
TRUSTEE of Law and Finance, and chairman (life insurance); LDF,
of the Center for the Study of Law Inc. and Labe Federal
and Financial Markets, Illinois Bank (banking); Margo
Institute of Technology; prior thereto, Caribe, Inc. (farming).
chairman of the board and chief
executive officer of ABN-AMRO
Incorporated, formerly The Chicago
Corporation, and chief
executive officer
of Market Liquidity Network, LLC.
TRUSTEES WHO ARE INTERESTED
PERSONS OF COLUMBIA ACORN:
CHARLES P. MCQUAID, 50, Chief investment officer of 6 None.
TRUSTEE, 1992 Columbia WAM since September
TRUSTEE AND PRESIDENT (1) 2003 30, 2003; portfolio manager since 1995 and
director of research from July
1992 through December 2003 of
Columbia WAM; principal, WAM from July
1995 to September 29, 2000;
president, Wanger Advisors Trust.
RALPH WANGER, 69, 1970 Founder, former president, chief 10 Wanger Advisors Trust
TRUSTEE(1) investment officer and portfolio (4 portfolios).
manager, Columbia WAM (1992-2003);
principal, WAM from July 1992
until September 29, 2000; president,
WAM Ltd. from July 1992 to
September 29, 2000; president and
director, WAM Acquisition GP, Inc.
since September 29, 2000;
former president, Wanger Advisors
Trust; director, Wanger Investment Company plc.
OFFICERS OF COLUMBIA ACORN:
J. KEVIN CONNAUGHTON, 39, 2001 Treasurer of the Columbia Funds and 10 None.
ASSISTANT TREASURER of the Columbia All-Star Funds since
December 2000 (formerly
controller and chief accounting officer
of the Columbia Funds and of the
Columbia All-Star Funds from
February 1998 to October 2000);
treasurer of the Stein Roe Funds
since February 2001 (formerly chief
accounting officer and controller
from May 2000 to February 2001);
treasurer of the Galaxy Funds since
September 2002; senior vice
president of Columbia Funds Group
since January 2001; (formerly vice
president of Colonial Management
Associates from February 1998 to
October 2000).
P. ZACHARY EGAN, 39, 2003 Analyst and portfolio manager, 6 None.
VICE PRESIDENT Columbia WAM since 1999; prior
thereto, a research fellow
with the Robert
Bosch Foundation.
KENNETH A. KALINA, 44, 1995 Chief financial officer, 10 None.
ASSISTANT TREASURER Columbia WAM since April
2000; assistant treasurer, Wanger
Advisors Trust; fund
controller, Columbia WAM since
September 1995; director,
New Americas Small Cap Fund.
BRUCE H. LAUER, 46, 1995 Chief operating officer, Columbia 10 None.
VICE PRESIDENT, SECRETARY WAM since April 1995; principal,
AND TREASURER WAM from January 2000 to
September 29, 2000; vice
president, treasurer and secretary,
Wanger Advisors Trust; director, Wanger
Investment Company plc and
New Americas Small Cap Fund.
ROBERT A. MOHN, 42, 1997 Analyst and portfolio manager, 10 None.
VICE PRESIDENT Columbia WAM since August
1992; principal, WAM from 1995 to
September 29, 2000; vice president,
Wanger Advisors Trust.
LOUIS J. MENDES, 39, 2003 Analyst and portfolio manager, 6 None.
VICE PRESIDENT Columbia WAM since 2001; prior thereto,
analyst and portfolio manager,
Merrill Lynch.
TODD NARTER, 39, 2001 Analyst and portfolio manager, 10 None.
VICE PRESIDENT Columbia WAM since June 1997; vice
president, Wanger Advisors Trust.
CHRISTOPHER OLSON, 39, 2001 Analyst and portfolio manager, 10 None.
VICE PRESIDENT Columbia WAM since January 2001;
vice president, Wanger Advisors Trust;
prior thereto, director and portfolio
strategy analyst with UBS Asset
Management/Brinson Partners.
JOHN H. PARK, 36, 1998 Director of domestic research 10 None.
VICE PRESIDENT since December 2003; analyst and
portfolio manager, Columbia WAM since
July 1993; principal, WAM from
1998 to September 29, 2000; vice
president, Wanger Advisors Trust.
VINCENT P. PIETROPAOLO, 38, 2001 Vice president and senior 10 None.
ASSISTANT SECRETARY counsel, Columbia Funds Group since
December 1999; associate, Morgan Lewis
& Bockius, October 1998 to
December 1999; product manager,
Putnam Investments from April 1997 to
October 1998.
DAVID A. ROZENSON, 49, 2003 Secretary of the Columbia Funds 10 None.
CHIEF LEGAL OFFICER and of the Columbia All-Star Funds
since December 2003; senior counsel,
Fleet Boston Financial Corporation
since January 1996; associate general
counsel, Columbia Management
Group since November 2002.
* Dates prior to April 1992 correspond to the date first elected or
appointed as a director or officer of Acorn Fund Inc., the Trust's
predecessor.
(1) Trustee who is an "interested person" of the Trust and of Columbia WAM,
as defined in the Investment Company Act of 1940, because he is an
officer of the Trust and an employee of Columbia WAM. Effective September
30, 2003, Mr. Wanger no longer serves as president of the Trust and
president, chief investment officer and portfolio manager of Columbia WAM.
As of that date, Mr. McQuaid became chief investment officer of Columbia
WAM, and Mr. Wanger continues to serve as an interested Trustee of the
Trust and remains affiliated with Columbia WAM, acting in an advisory
capacity.
The address for the trustees and officers of the Trust is Columbia Wanger
Asset Management, L.P., 227 West Monroe Street, Suite 3000, Chicago, Illinois
60606.
The SAI includes additional information about Fund trustees and is available,
without charge, upon request by calling 1-800-345-6611.
80
INVESTMENT ADVISOR
Columbia Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-922-6769
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston, Massachusetts 02111-2621
TRANSFER AGENT, DIVIDEND DISBURSING AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston, Massachusetts 02266-8081
1-800-345-6611
LEGAL COUNSEL
Bell, Boyd & Lloyd LLC
Chicago, Illinois
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, Illinois
THIS REPORT, INCLUDING THE SCHEDULES OF
INVESTMENTS, IS SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF COLUMBIA
ACORN TRUST. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED
BY A PROSPECTUS.
FIND OUT WHAT'S NEW - VISIT OUR WEB SITE AT:
WWW.COLUMBIAFUNDS.COM
OUR E-MAIL ADDRESS IS:
SERVICEINQUIRIES@COLUMBIAMANAGEMENT.COM
SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL
INFORMATION SUCH AS ACCOUNT NUMBERS, SOCIAL
SECURITY NUMBERS OR TAXPAYER IDENTIFICATION
NUMBERS IN E-MAIL. WE ARE UNABLE TO ACCEPT
ACCOUNT TRANSACTIONS SENT VIA E-MAIL.
[Photo of acorns]
[EAGLE HEAD LOGO APPEARS HERE]
COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(c) 2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER BOSTON, MA 0211-2621
ACN-02/728Q-1203 (02/04) 04/0210
PHOTO OF A WOMAN HOLDING FILE
COLUMBIA ACORN
FUNDS
ANNUAL REPORT
DECEMBER 31, 2003
COLUMBIA ACORN FUND
COLUMBIA ACORN INTERNATIONAL
COLUMBIA ACORN USA
COLUMBIA ACORN INTERNATIONAL SELECT
COLUMBIA ACORN SELECT
COLUMBIA THERMOSTAT FUND
Not FDIC May Lose Value
Insured No Bank Guarantee
> 2003 YEAR-END DISTRIBUTIONS
The following table details the funds' year-end distributions. The record and
ex-dividend date for COLUMBIA ACORN FUND and COLUMBIA ACORN SELECT was December
5, 2003 and the payable date was December 8, 2003. For COLUMBIA THERMOSTAT FUND,
the record and ex-dividend date was December 26, 2003 and the payable date was
December 29, 2003.
LONG-TERM SHORT-TERM
CAPITAL CAPITAL ORDINARY REINVESTMENT
GAINS GAINS INCOME PRICE
- ----------------------------------------------------------------------------------------------------
Columbia Acorn Fund Class A $0.0201 None None $21.53
- ----------------------------------------------------------------------------------------------------
Columbia Acorn Fund Class B and C $0.0201 None None $21.10
- ----------------------------------------------------------------------------------------------------
Columbia Acorn Select Class A $0.0890 None None $17.53
- ----------------------------------------------------------------------------------------------------
Columbia Acorn Select Class B and C $0.0890 None None $17.18
- ----------------------------------------------------------------------------------------------------
Columbia Thermostat Fund Class A None None $0.1237 $12.23
- ----------------------------------------------------------------------------------------------------
Columiba Thermostat Fund Class B and C None None $0.0315 $12.25
- ----------------------------------------------------------------------------------------------------
THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY
AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO
BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY
CHANGE AT ANY TIME WITHOUT NOTICE.
Columbia Acorn Family of Funds Annual Report 2003
TABLE OF CONTENTS
COLUMBIA ACORN FAMILY OF FUNDS
Share Class Performance 2
Fund Performance vs. Benchmarks 3
Squirrel Chatter: Don't Bet The Farm 4
COLUMBIA ACORN FUND
In a Nutshell 6
At a Glance 7
Major Portfolio Changes 18
Statement of Investments 20
COLUMBIA ACORN INTERNATIONAL
In a Nutshell 8
At a Glance 9
Major Portfolio Changes 32
Statement of Investments 34
Portfolio Diversification 38
COLUMBIA ACORN USA
In a Nutshell 10
At a Glance 11
Major Portfolio Changes 39
Statement of Investments 40
COLUMBIA ACORN INTERNATIONAL SELECT
In a Nutshell 12
At a Glance 13
Major Portfolio Changes 45
Statement of Investments 46
Portfolio Diversification 48
COLUMBIA ACORN SELECT
In a Nutshell 14
At a Glance 15
Major Portfolio Changes 49
Statement of Investments 50
COLUMBIA THERMOSTAT FUND
In a Nutshell 16
At a Glance 17
Statement of Investments 71
Statement of Assets and Liabilities 72
Statement of Operations 73
Statement of Changes in Net Assets 74
Financial Highlights 76
Notes to Financial Statements 77
COLUMBIA ACORN FAMILY OF FUNDS
Statements of Assets and Liabilities 52
Statements of Operations 53
Statements of Changes in Net Assets 54
Financial Highlights 58
Notes to Financial Statements 64
Report of Independent Auditors 82
Board of Trustees and
Management of Columbia Acorn Funds 84
>Net Asset Value Per Share as of 12/31/03
COLUMBIA COLUMBIA ACORN COLUMBIA
COLUMBIA ACORN COLUMBIA INTERNATIONAL COLUMBIA THERMOSTAT
ACORN FUND INTERNATIONAL ACORN USA SELECT ACORN SELECT FUND
- -----------------------------------------------------------------------------------------------
Class A $ 22.20 $ 22.45 $ 20.74 $ 14.45 $ 18.01 $ 12.30
- -----------------------------------------------------------------------------------------------
Class B $ 21.75 $ 22.07 $ 20.36 $ 14.12 $ 17.64 $ 12.32
- -----------------------------------------------------------------------------------------------
Class C $ 21.75 $ 22.06 $ 20.36 $ 14.14 $ 17.64 $ 12.32*
- -----------------------------------------------------------------------------------------------
*On October 13, 2003, Columbia Thermostat Fund Class D shares were renamed Class
C shares.
There is no assurance that the trends described in this report will continue or
come to pass because, in part, economic and market conditions change frequently.
An investment in any of these Funds presents certain risks, including stock
market fluctuations due to economic and business developments.
1
Columbia Acorn Family of Funds
>Share Class Performance Average Annual Total Returns through 12/31/03
CLASS A CLASS B CLASS C
WITHOUT WITH WITHOUT WITH WITHOUT WITH
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
FUND (6/10/70)
- ------------------------------------------------------------------------------------------------------------------
3 months* 14.30% 7.73% 14.10% 9.10% 14.16% 13.16%
- ------------------------------------------------------------------------------------------------------------------
1 year 44.85% 36.53% 43.89% 38.89% 43.99% 42.99%
- ------------------------------------------------------------------------------------------------------------------
5 years 14.08% 12.74% 13.62% 13.38% 13.62% 13.62%
- ------------------------------------------------------------------------------------------------------------------
10 years 13.37% 12.70% 13.14% 13.14% 13.14% 13.14%
- ------------------------------------------------------------------------------------------------------------------
Life of fund 16.24% 16.03% 16.17% 16.17% 16.17% 16.17%
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (9/23/92)
- ------------------------------------------------------------------------------------------------------------------
3 months* 17.11% 10.38% 17.02% 12.02% 16.97% 15.97%
- ------------------------------------------------------------------------------------------------------------------
1 year 46.94% 38.49% 46.06% 41.06% 46.00% 45.00%
- ------------------------------------------------------------------------------------------------------------------
5 years 6.64% 5.38% 6.21% 5.89% 6.20% 6.20%
- ------------------------------------------------------------------------------------------------------------------
10 years 7.26% 6.63% 7.05% 7.05% 7.04% 7.04%
- ------------------------------------------------------------------------------------------------------------------
Life of fund 10.91% 10.33% 10.71% 10.71% 10.71% 10.71%
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(9/4/96)
- ------------------------------------------------------------------------------------------------------------------
3 months* 13.40% 6.88% 13.24% 8.24% 13.24% 12.24%
- ------------------------------------------------------------------------------------------------------------------
1 year 46.26% 37.85% 45.32% 40.32% 45.32% 44.32%
- ------------------------------------------------------------------------------------------------------------------
5 years 9.47% 8.18% 9.04% 8.76% 9.04% 9.04%
- ------------------------------------------------------------------------------------------------------------------
Life of fund 13.71% 12.80% 13.41% 13.41% 13.41% 13.41%
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN INT'L
SELECT+ (11/23/98)
- ------------------------------------------------------------------------------------------------------------------
3 months* 16.91% 10.19% 16.60% 11.60% 16.57% 15.57%
- ------------------------------------------------------------------------------------------------------------------
1 year 41.11% 33.00% 40.08% 35.08% 40.14% 39.14%
- ------------------------------------------------------------------------------------------------------------------
5 years 5.94% 4.69% 5.45% 5.12% 5.48% 5.48%
- ------------------------------------------------------------------------------------------------------------------
Life of fund 7.80% 6.56% 7.32% 7.17% 7.35% 7.35%
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT+ (11/23/98)
- ------------------------------------------------------------------------------------------------------------------
3 months* 4.81% -1.21% 4.67% -0.33% 4.67% 3.67%
- ------------------------------------------------------------------------------------------------------------------
1 year 29.95% 22.47% 29.14% 24.14% 29.14% 28.14%
- ------------------------------------------------------------------------------------------------------------------
5 years 13.14% 11.80% 12.67% 12.42% 12.67% 12.67%
- ------------------------------------------------------------------------------------------------------------------
Life of fund 14.37% 13.05% 13.91% 13.79% 13.91% 13.91%
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND++ (9/25/02)
- ------------------------------------------------------------------------------------------------------------------
3 months* 7.20% 1.04% 7.03% 2.03% 7.03% 6.03%
- ------------------------------------------------------------------------------------------------------------------
1 year 19.43% 12.57% 18.74% 13.74% 18.74% 17.74%
- ------------------------------------------------------------------------------------------------------------------
Life of fund 18.73% 13.31% 18.18% 15.16% 18.18% 18.18%
- ------------------------------------------------------------------------------------------------------------------
*Not annualized.
+Liberty Acorn Foreign Forty was renamed Columbia Acorn International Select and
Liberty Acorn Twenty was renamed Columbia Acorn Select on 10/13/03.
++On 10/13/03, Columbia Thermostat Fund Class D shares were renamed Class C
shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: 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 of the different share classes will vary based on differences
in sales charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursements 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 for all funds
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. The new class
shares were launched October 16, 2000 for the five Columbia Acorn funds and
March 3, 2003 for Columbia Thermostat Fund. 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
>Fund Performance vs. Benchmarks Class A shares, without sales charge, Average
Annual Total Returns through 12/31/03+
4TH* 1 3 5 10 LIFE
QUARTER YEAR YEARS YEARS YEARS OF FUND
- ---------------------------------------------------------------------------------------------
COLUMBIA ACORN
FUND (6/10/70) 14.30% 44.85% 9.63% 14.08% 13.37% 16.24%
- ---------------------------------------------------------------------------------------------
S&P 500 12.18% 28.69% -4.05% -0.57% 11.07% 12.12%
- ---------------------------------------------------------------------------------------------
Russell 2500 14.43% 45.51% 6.58% 9.40% 11.74% NA
- ---------------------------------------------------------------------------------------------
Russell 2000 14.52% 47.25% 6.27% 7.13% 9.47% NA
- ---------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 14.85% 40.90% 6.83% 9.39% 11.11% NA
- ---------------------------------------------------------------------------------------------
Lipper Mid-Cap
Core Funds Index 13.06% 36.58% 2.38% 7.89% 10.95% NA
- ---------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (9/23/92) 17.11% 46.94% -1.26% 6.64% 7.26% 10.91%
- ---------------------------------------------------------------------------------------------
Citigroup EMI
Global ex-US 15.97% 55.02% 7.19% 6.18% 4.74% 6.28%
- ---------------------------------------------------------------------------------------------
MSCI EAFE 17.08% 38.59% -2.91% -0.05% 4.47% 6.16%
- ---------------------------------------------------------------------------------------------
Lipper Int'l Small-
Cap Funds Index 14.77% 55.10% 5.45% 10.31% NA NA
- ---------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(9/4/96) 13.40% 46.26% 12.03% 9.47% -- 13.71%
- ---------------------------------------------------------------------------------------------
Russell 2000 14.52% 47.25% 6.27% 7.13% -- 8.63%
- ---------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 14.85% 40.90% 6.83% 9.39% -- 9.90%
- ---------------------------------------------------------------------------------------------
S&P 500 12.18% 28.69% -4.05% -0.57% -- 9.12%
- ---------------------------------------------------------------------------------------------
COLUMBIA ACORN INT'L
SELECT (11/23/98) 16.91% 41.11% -5.35% 5.94% -- 7.80%
- ---------------------------------------------------------------------------------------------
Citigroup World ex-US
Cap Range $2-10B 15.81% 49.65% 4.73% 5.92% -- 6.48%
- ---------------------------------------------------------------------------------------------
MSCI EAFE 17.08% 38.59% -2.91% -0.05% -- 0.75%
- ---------------------------------------------------------------------------------------------
Lipper International
Funds Index 15.45% 36.00% -1.85% 2.13% -- 2.51%
- ---------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT (11/23/98) 4.81% 29.95% 8.71% 13.14% -- 14.37%
- ---------------------------------------------------------------------------------------------
S&P MidCap 400 13.19% 35.62% 4.84% 9.21% -- 11.28%
- ---------------------------------------------------------------------------------------------
Lipper Mid-Cap
Growth Index 10.98% 35.42% -8.56% 2.18% -- 4.78%
- ---------------------------------------------------------------------------------------------
S&P 500 12.18% 28.69% -4.05% -0.57% -- 0.55%
- ---------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND (9/25/02) 7.20% 19.43% -- -- -- 18.73%
- ---------------------------------------------------------------------------------------------
S&P 500 12.18% 28.69% -- -- -- 29.59%
- ---------------------------------------------------------------------------------------------
Lehman U.S. Credit
Intermediate Bond Index 0.40% 6.91% -- -- -- 7.95%
- ---------------------------------------------------------------------------------------------
Lehman U.S Govt.
Intermediate Bond Index -0.20% 2.29% -- -- -- 2.89%
- ---------------------------------------------------------------------------------------------
Lipper Flexible
Portfolio Funds Index 9.26% 23.03% -- -- -- 23.09%
- ---------------------------------------------------------------------------------------------
*Not annualized.
+Class A shares (newer class shares) performance information includes returns of
the Funds' Class Z shares (the oldest existing Fund class) for periods prior to
the inception of the newer class shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Current performance may be
lower or higher than the performance data collected. Visit columbiafunds.com for
daily performance updates. For complete information about Columbia Acorn Funds,
including objectives, risks, charges and expenses, refer to a copy of the
prospectus. Be sure to read it carefully before you invest.
DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S.
blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500.
RUSSELL 2000 is a market-weighted index of 2000 U.S. companies, formed by taking
the largest 3,000 companies and eliminating the largest 1,000. RUSSELL 2500 is
the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI GLOBAL
EX-US is the bottom 20% of institutionally investable capital of developed and
emerging countries, selected by index sponsor, outside the U.S. MSCI EAFE is
Morgan Stanley's Europe, Australasia and Far East Index, a widely recognized
international benchmark that comprises 20 major markets in proportion to world
stock market capitalization.
CITIGROUP WORLD EX-US CAP RANGE $2-10B is a subset of the Broad Market
Index, representing a mid-cap developed market index excluding the U.S. LIPPER
INDEXES include the largest funds tracked by Lipper, Inc. in the named category.
LIPPER MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS
INDEX, 30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest
non-U.S. funds, not including non-U.S. small cap funds; LIPPER INTERNATIONAL
SMALL-CAP FUNDS INDEX, 10 largest non-U.S. funds investing in small cap
companies, including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS
INDEX, 30 largest small cap core funds, including Columbia Acorn Fund. LIPPER
FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar weighted index of the 30
largest mutual funds within the Flexible Portfolio fund classification, as
defined by Lipper. LEHMAN U.S. GOVERNMENT INTERMEDIATE BOND INDEX is made up of
1 to 10 year treasury and agency bonds, excluding targeted investor notes and
state and local government series bonds. The LEHMAN U.S. CREDIT INTERMEDIATE
BOND INDEX is the intermediate component of the U.S. Credit Index. The U.S.
Credit Index includes publicly issued U.S. corporate and foreign debentures and
secured notes that meet specified maturity, liquidity, and quality requirements.
All indexes are unmanaged and returns include reinvested distributions. A more
complete description of each index is included in the Fund's statement of
additional information. It is not possible to invest directly in an index.
3
>Squirrel Chatter: DON'T BET THE FARM
Photo of Ralph Wanger
How do you run a mutual fund to get good results? Are the investing rules the
same for managing small-cap/mid-cap funds and large-cap funds? Here are some of
my personal opinions on these questions.
We believe some basic principles apply to any stock portfolio. (1)
Diversification reduces risk, so own mid-cap stocks (Columbia Acorn Select) and
a small-cap fund (Columbia Acorn USA). (2) International stocks add additional
beneficial diversification (Columbia Acorn International)1. (3) The market often
over-values growth stocks, so pay close attention to valuation. (4) Big winners
take years to develop, so think long term.
So what are the differences in managing small-, mid- and large-cap funds?
Many large-company portfolios are run according to the rules expressed in
Charles Ellis's book, WINNING THE LOSER'S GAME. 2 He tells us to play it safe.
Start with a portfolio that mirrors the market and try to avoid big losers
(fraud such as Enron and WorldCom, overpriced growth such as Cisco at $80 3).
One could say he starts with the S&P 500 and reduces it to the Ellis 495 by
getting rid of some potential big losers.
The WINNING THE LOSER'S GAME strategy may work for a big-company portfolio,
but it is not the way I like to run a small-cap fund. Small-cap is a winner's
game. You want to be a Barry Bonds or a Sammy Sosa and hit 50 home runs. If you
get the homers, you are a hero; you can strike out a lot of times but no one
will care very much. As an example, International Game Technology (IGT) has been
a great long-term winner for the funds. In the 2003 season, IGT hit a grand slam
- - an additional unrealized gain of $175 million!4 Even if you strike out more
often than you would like, one big winner more than offsets a half-dozen $10
million losers.
Some of our big winners are duly celebrated in the Scarlet A section. The
funds had fine results in 2003 due to the success we had in these stocks and
many others. Writing about success, however, is less colorful than writing about
failure; there are more plays about Nero than about Marcus Aurelius.
When it comes to investing, there are only a few ways to fail. You can buy
a company that runs into unexpected problems. Sometimes you buy into a
speculative company you know is high risk and the company just doesn't make it.
The unfortunate speculators who bought Cisco at $80 lost mere hundreds of
billions of dollars compared to the more unfortunate speculators gulled by the
Enron and WorldCom frauds. Of course bubbles and speculation have a long
history. The first overpricing bubble on record was the tulip-mania boom in
Holland in 1636. Tulips were a new "high-tech" flower in Europe but the price of
strangely colored varieties went way too high, creating a nasty collapse.
Tulip-bulb farming today is still important to the Dutch but it is no longer
high tech.
Farmers can fool you. About 25 years ago, I put some personal money into
Maine Sugar. The promoter was a potato processor in Aroostook County, Maine. He
believed that the climate and soil there was favorable for growing sugar beets.
He floated stock to build a sugar refinery and invited a planeload of New York
analysts to come see the sugar beet fields under cultivation. The analysts got
on a bus and were driven to a field where the CEO dug up a giant sugar beet. The
analysts had never seen such a large sugar beet (most of them had never seen a
farm, for that matter). They got back on the bus, and after another ten minutes
arrived at another field. The CEO dug up a sugar beet bigger than the first one.
The bus continued to another farm field where again an impressive beet was
unearthed. When the analysts arrived back in New York, they wrote buy reports
based on the great number of farms growing sugar beets. Maine Sugar dissolved a
few months later, and the city-boy analysts realized that they had been shown
the same field three times in a row. (Columbia Acorn Funds didn't own Maine
Sugar).
The latest foolish farm fraud is Parmalat, an Italian company in the milk
business. (Parma latte, get it?) The Columbia Acorn Funds lost a few million
dollars in Parmalat (see Pages 8 and 12). Big banks that did business with
Parmalat could lose hundreds of millions of dollars in bad loans. One of the
centerpieces of the fraud was a made-up bank deposit of 3.95 billion euros
(about $5 billion). The Parmalat officials allegedly handed the auditors a
hastily forged document purporting to be the bank's acknowledgement of the
deposit. The auditors appear to have accepted the false affidavit without making
their own inquiry ("Hey, we are facing a deadline and it's only five billion.")
and allowed the company to continue its fraud for a few more months, roping us
in.
How could we have avoided getting caught? Talking to company management
more often probably would have not helped at all; after all, the bank lenders,
the bond rating agencies, and auditor were fooled, and they had much freer
access to the company's internal records then any outside financial analyst
could ever get. One answer would have been to talk to Parmalat's suppliers, in
this case the dairy farmers. After the collapse, someone did ("Parma Farmers Had
One Rule: Don't Deal With Parmalat," BLOOMBERG NEWS, January 19, 2004). Achille
Coelli, director of the Union of Parma Farmers said, "Farmers here won't work
with Parmalat. Tanzi [the CEO] never had a good reputation. The company was a
slow payer, so only one
1-800-922-6769
4
percent of the milk produced in Parma province was sold to Parmalat." Obvious
red flag? Sure. Did any analyst do this check before the collapse? Don't think
so.
What conclusions do we want to draw from this crying over spilt milk,
besides the vaguely comforting notion that not all fraud occurs in the USA?
First, a smart crook can fool some of the people all of the time. Second, really
star-quality analytic work could help discover frauds sooner, but much of the
time that doesn't happen. Third, complete skepticism would have you avoid fraud,
but you would avoid the good investments too. An investor must balance
skepticism and credulity just as one balances risk/return or growth/value.
Fourth, diversification dilutes the negative effect of one bad stock. Since
fraud tends to hit you one at a time, it's a strike out, but it doesn't cost you
the season. The benefits you get from big winners far outweigh a few losers.
2003 SCARLET A WINNERS
HEAP HIGH THE GOLDEN CORN! 5
-- JOHN GREENLEAF WHITTIER
Our analysts and portfolio managers deserve a lot of credit for picking
exceptional stocks but we do not rely solely on our internal investment prowess.
Often we get sage advice from investment pros outside our Chicago office. We
honor and thank these individuals by presenting them with the coveted Scarlet A
certificate. In 2003, domestic stocks had to increase more than 150% and make
more than $40 million to be considered for a Scarlet A. The international stock
criteria was a return of at least 100% and a dollar gain of $20 million or more.
Our thanks to Greg Jackson of Blum Capital Partners for his help on
software company NOVELL. The stock was up 214% in 2003 and brought in a
firm-wide gain of over $101 million. Rural cellular service provider WESTERN
WIRELESS was up 250% in 2003 and provided a dollar gain of nearly $69 million.
Hats off to Thomas Lee of JPMorgan for his help with this 2003 winner. Thomas
confirmed our internal analysis that Western Wireless was generating free cash
flow and that fears that the company could go bust were unfounded. Natural gas
producer ULTRA PETROLEUM, up nearly 150%, brought in a dollar gain of over $50
million. Credit for this idea goes to Barry Sahgal of Brean Murray & Co. While
this is Barry's first Scarlet A win, this is not his first contribution to the
Columbia Acorn Funds. Barry also brought EVERGREEN RESOURCES to our attention in
1998, a stock that has increased over 270% during the five years we've held it
in our funds.
A repeat winner tops our international Scarlet A list. Ireland's ANGLO
IRISH BANK was up 142% in 2003 and provided a firm-wide dollar gain of nearly
$60 million. To David Smith of Davy Stockbrokers in Dublin: Thanks again! Stefan
Stalmann of Dresdner Kleinwort Wasserstein in Frankfurt, Germany, earns the
Scarlet A for his help with DEPFA BANK. The stock, up 139% with a $22 million
gain, provides international public-sector financing. While we had built a
position in Depfa Bank before speaking with Stefan, his understanding of the
company reinforced our conviction and we remained invested in the stock longer
than we might have on his advice, benefiting shareholders. It is noteworthy that
Robert Hurkmans, a Dresdner contact in New York, encouraged us to contact
Stefan. The best attributes of a good broker are credibility and being selective
about providing information and analyst contacts within their own organization.
So, to Robert Hurkmans, we offer kudos for darned good brokering.
COLUMBIA WAM NEWS
John Park has been named director of domestic research for Columbia Wanger Asset
Management, L.P. John joined the firm in 1993 and has managed Columbia Acorn
Select since its 1998 inception. He also became a co-manager on Columbia Acorn
Fund in 2003.
/s/ Ralph Wanger
Ralph Wanger
FOUNDER, ADVISOR AND TRUSTEE
COLUMBIA WANGER ASSET MANAGEMENT, L.P.
________________________________________________________________________________
1 For more information about Columbia Acorn Select, Columbia Acorn USA or
Columbia Acorn International, including management fees and expenses, please
call us at (800) 922-6769 or visit www.columbiafunds.com. Please read the
prospectus carefully before you invest or send money.
2 Ellis, Charles D., WINNING THE LOSER'S GAME: TIMELESS STRATEGIES FOR
SUCCESSFUL INVESTING, McGraw-Hill Trade, 4th Edition, March
14, 2002.
3 No fund advised by Columbia Wanger Asset Management, L.P., owns or has owned
Enron, WorldCom or Cisco.
4 The dollar gain for the one-year period ended December 31, 2003 reflects the
total gain in the stock across all funds/accounts advised by Columbia Wanger
Asset Management, L.P., that held IGT.
5 Whitter, John Greenleaf, THE CORN SONG, prior to 1872.
As of 12/31/03, fund positions, as a percent of net assets, in the holdings
mentioned were: Parmalat: Columbia Acorn International, 0.0%; Columbia Acorn
International Select, 0.0%. International Game Technology: Columbia Acorn Fund,
2.8%; Columbia Acorn Select, 2.3%. Novell: Columbia Acorn Fund, 0.9%; Columbia
Acorn USA, 2.0%. Western Wireless: Columbia Acorn Fund, 0.5%; Columbia Acorn
USA, 2.5%. Ultra Petroleum: Columbia Acorn Fund, 0.6%; Columbia Acorn USA, 0.8%.
Evergreen Resources: Columbia Acorn Fund, 0.4%. Anglo Irish Bank: Columbia Acorn
Fund, 0.5%; Columbia Acorn International, 2.2%; Columbia Acorn International
Select, 5.8%. Depfa Bank: Columbia Acorn Fund, 0.2%; Columbia Acorn
International, 0.9%; Columbia Acorn International Select, 2.5%.
5
Columbia Acorn Fund*
>In a Nutshell
Photo of Charles P. McQuaid
Photo of Robert A. Mohn
Photo of John H. Park
Columbia Acorn Fund surged 44.85% (Class A shares, without sales charge) in
2003, our fourth best year ever. As shown on Page 3, the Fund matched the
Russell 2500, slightly underperformed the Russell 2000, handily beat many peers
and substantially outperformed the large-cap S&P 500. During the fourth quarter,
Columbia Acorn Fund's 14.30% gain matched small-cap performance measures and
moderately beat mid- and large-cap benchmarks.
We've previously discussed buying good tech stocks at distressed prices,
and also purchasing select telecom and biotech stocks when we believed we were
being paid to take risk. Most of these stocks were up a lot, but given improved
tech demand, repaired telecom balance sheets, and biotech fundamental progress,
we believe additional gains seem plausible for many of the holdings. We
constantly review the Fund's portfolio, looking to swap into stocks that we
consider more attractive.
Aspect Communications, discussed separately on this page, was Columbia
Acorn Fund's biggest percentage winner, up 454% during the year. Barcode and
wireless ID systems maker Unova jumped 354% on improved earnings, while software
provider Novell, technology e-learning company Skillsoft Publishing, and
technology staff company Igate Capital each at least doubled. The Fund's biggest
loser was First Health Group, down over 20%, as competitors put pricing pressure
on the firm.
Columbia Acorn Fund's foreign stocks delivered an average 57.81% return for
the year. The leading percentage gainer was Korean auto parts maker Hyundai
Mobis, which cranked out a 171% gain on better than expected earnings. Anglo
Irish Bank, discussed on Page 8, appreciated 125% and was the Fund's largest
foreign winner in dollars. We continue to believe that foreign stocks on average
are better values than domestic securities, so we have increased the Fund's
foreign weighting to 12.7%. We currently don't expect it to exceed 15%.
Small caps have outperformed large caps for nearly five years and by most
measures small-cap valuations are now close to long-term average valuations
relative to large caps. While we continue to find companies that we believe are
attractive, the combination of fewer compelling new ideas and more existing
stocks approaching sell targets has caused the Board of Trustees to take
proactive steps to reduce cash inflows. Existing shareholders can continue to
buy shares in Columbia Acorn Fund. The minimum for NEW eligible accounts,
however, has been raised to $50,000 and several marketing channels have been
closed. Please see our recent prospectus supplement for additional details.
We'd like to take this opportunity to officially welcome John Emerson to
Columbia Wanger Asset Management's domestic analyst team. John joined us
mid-year to cover media stocks.
/s/ Charles P. McQuaid /s/ Robert A. Mohn
Charles P. McQuaid Robert A. Mohn
LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
/s/ John H. Park
John H. Park
CO-PORTFOLIO MANAGER
The Right Call
- ---------------
Columbia Wanger Asset Management's technology services and software analyst Ben
Andrews always believed that technology was driving a revolution in the
telecommunications industry. Though telecom-related stocks collapsed from early
2000 to early 2003, consumers worldwide still wanted hand-held devices and
broadband connections, while corporations wanted increased productivity and cost
savings. Call center software provider Aspect Communications suffered from
management, product, and financing transitions, but had a stable customer base
that generated plenty of revenue. As the economy improved, Aspect's next
generation products started to grow, and the company's financing and management
problems were worked out. Aspect became profitable and the stock rose over 450%
in 2003.
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL
RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
*LIBERTY ACORN FUND WAS RENAMED COLUMBIA ACORN FUND ON OCTOBER 13, 2003. ON
SEPTEMBER 30, 2003, RALPH WANGER RELINQUISHED HIS DAILY FIRM AND PORTFOLIO
MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME THE LEAD
PORTFOLIO MANAGER OF COLUMBIA ACORN FUND. MR. WANGER CONTINUES TO SERVE AS A
TRUSTEE OF COLUMBIA ACORN TRUST AND AS A MEMBER OF THE COLUMBIA THERMOSTAT
SUPERVISORY COMMITTEE, AND WILL REMAIN AFFILIATED WITH COLUMBIA WANGER ASSET
MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ASPECT COMMUNICATIONS, 0.6%; UNOVA, 0.3%; SKILLSOFT PUBLISHING,
0.8%; IGATE CAPITAL, 0.3%; FIRST HEALTH GROUP, 1.0%; HYUNDAI MOBIS, 0.2%; ANGLO
IRISH BANK, 0.5%; NOVELL, 0.9%.
1-800-922-6769
6
Columbia Acorn Fund
>At a Glance Ticker Symbol: LACAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2003
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
Returns before NAV 44.85% 14.08% 13.37%
taxes POP 36.53 12.74 12.70
- -------------------------------------------------------------------
Returns after taxes NAV 44.83 12.35 11.31
on distributions POP 36.51 11.03 10.65
- -------------------------------------------------------------------
Returns after taxes NAV 29.18 11.54 10.76
on distributions and POP 23.77 10.34 10.14
sale of fund shares
- -------------------------------------------------------------------
S&P 500 (pretax) 28.69 -0.57 11.07
- -------------------------------------------------------------------
Russell 2500 (pretax) 45.51 9.40 11.74
- -------------------------------------------------------------------
Russell 2000 (pretax) 47.25 7.13 9.47
- -------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
Class A shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain
or loss on sale. Public offering price (POP) returns include the maximum sales
charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include
sales charges or contingent deferred sales charges (CDSC).
COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
(PIE CHART)
Consumer
Goods/Services 19.9%
Industrial
Goods/Services 12.2%
Finance 11.6%
Other* 8.9%
Health Care 8.6%
Energy/Minerals 7.0%
Real Estate 4.3%
Information 27.5%
Software/Services 13.8%
Computer Related Hardware 8.9%
Media 2.3%
Telecommunications 2.5%
*Other includes cash and other assets less liabilities of 7.9%. Foreign equities
within the portfolio were 12.7% diversified by region as follows: 8.0% Europe;
1.7% Asia without Japan; 1.7% Canada; 0.6% Japan; 0.3% Australia; 0.2% Latin
America; 0.2% New Zealand.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN FUND
>December 31, 1993 through December 31, 2003
Illustration is based on a hypothetical $10,000 investment in Class A shares of
the Fund, which includes the 5.75% maximum initial sales charge. The Fund
commenced operations on 6/10/1970, but until 10/16/2000, offered only the shares
that are now designated Class Z shares. The historical performance of Class A, B
and C shares (newer class shares) for the period prior to 10/16/2000 is based on
the performance of Class Z shares. The Class A, B and C share returns are not
restated to reflect any expense differential (e.g., Rule 12b-1 fees) between
Class A, B and C and Class Z. Had the expense differential been reflected, the
returns for periods prior to the inception of the newer class shares would have
been lower. Performance may reflect any voluntary waiver or reimbursement of
Fund expenses by the Advisor or its affiliates. Absent these waivers or
reimbursement arrangements, performance results would have been lower. The S&P
500 is a broad, market-weighted average of U.S. blue-chip company stock
performance. The Russell 2000 is a market-weighted index of 2,000 smaller U.S.
companies formed by taking the largest 3,000 U.S. companies and eliminating the
largest 1,000. The Russell 2500 is the smallest 2,500 U.S. companies taken from
this same group. Indexes are unmanaged and returns for the indexes and the Fund
include reinvested dividends and capital gains. It is not possible to invest
directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
TOTAL NET ASSETS: $11,168.8 MILLION
WITHOUT CLASS A CLASS B CLASS C CLASS Z
SALES CHARGE $35,080 $34,373 $34,373 $35,721
- ------------------------------------------------------------
WITH
SALES CHARGE $33,066 $34,373 $34,373 N/A
(MOUNTAIN CHART)
COLUMBIA
COLUMBIA ACORN
ACORN FUND - A
FUND - A WITH SALES RUSSELL RUSSELL
AT NAV CHARGE 2000 S&P 500 2500
----------- ----------- -------- -------- --------
12/31/93 10000.00 9425.00 10000.00 10000.00 10000.00
10050.00 9472.13 10313.50 10339.90 10316.50
9928.40 9357.51 10276.20 10059.30 10279.20
9447.86 8904.61 9733.67 9620.72 9777.62
9526.28 8978.52 9791.52 9744.11 9834.47
9418.63 8877.06 9681.58 9904.02 9733.35
9096.51 8573.46 9352.82 9661.23 9430.47
9390.33 8850.39 9506.49 9978.53 9686.05
9823.23 9258.39 10036.20 10387.60 10209.80
9700.44 9142.66 10002.60 10133.60 10106.20
9664.54 9108.83 9963.13 10361.20 10123.80
9288.59 8754.50 9560.75 9983.90 9685.05
12/31/94 9255.15 8722.98 9817.62 10132.00 9895.35
9081.16 8558.99 9693.76 10394.70 9875.73
9376.29 8837.16 10097.00 10799.90 10371.30
9512.25 8965.30 10270.90 11118.60 10625.90
9617.84 9064.81 10499.30 11446.00 10815.00
9913.10 9343.10 10679.80 11903.40 11044.00
10313.60 9720.56 11233.80 12179.90 11573.80
10814.80 10193.00 11881.00 12583.80 12256.50
10929.50 10301.00 12126.70 12615.40 12452.70
11151.30 10510.10 12343.30 13147.90 12685.60
10685.20 10070.80 11791.20 13100.90 12288.70
10990.80 10358.80 12286.60 13675.90 12814.00
12/31/95 11181.00 10538.00 12610.80 13939.40 13032.30
11362.10 10708.80 12597.30 14413.80 13124.90
11806.30 11127.50 12989.90 14547.50 13520.30
12036.60 11344.50 13254.30 14687.50 13795.50
12678.10 11949.10 13963.00 14904.10 14433.50
13130.70 12375.70 14513.30 15288.40 14825.40
12876.00 12135.60 13917.30 15346.70 14370.10
12211.60 11509.40 12701.70 14668.80 13318.10
12679.30 11950.20 13439.00 14978.20 14083.80
13145.90 12390.00 13964.40 15821.10 14694.10
13078.80 12326.80 13749.20 16257.50 14597.50
13446.40 12673.20 14315.70 17486.40 15302.90
12/31/96 13703.20 12915.20 14690.90 17139.90 15512.70
14185.50 13369.90 14984.50 18210.70 15941.30
14004.00 13198.70 14621.20 18280.30 15704.40
13366.80 12598.20 13931.20 17599.40 14993.50
13440.30 12667.50 13970.10 18650.00 15183.10
14506.10 13672.00 15524.20 19785.50 16580.80
15171.90 14299.60 16189.60 20671.90 17258.50
15948.80 15031.70 16942.90 22316.70 18269.80
16022.10 15100.80 17330.60 21066.50 18524.30
17251.00 16259.10 18599.10 22220.20 19735.40
16742.10 15779.40 17782.00 21478.20 18848.40
16742.10 15779.40 17667.00 22472.50 18932.90
12/31/97 17127.20 16142.40 17976.20 22858.30 19291.10
16824.00 15856.60 17692.50 23111.20 18996.30
18053.90 17015.80 19000.80 24778.10 20375.80
19182.20 18079.20 19784.50 26047.00 21269.40
19464.20 18345.00 19893.90 26308.90 21349.90
18728.50 17651.60 18822.40 25856.80 20358.70
19129.20 18029.30 18862.00 26907.00 20382.90
18044.60 17007.00 17335.00 26620.50 18982.70
14753.30 13905.00 13969.00 22771.80 15402.00
15398.00 14512.60 15062.10 24230.60 16495.80
16175.60 15245.50 15676.50 26201.60 17397.40
16840.40 15872.10 16497.80 27789.50 18259.20
12/31/98 18157.30 17113.30 17518.60 29390.90 19365.60
18146.40 17103.00 17751.50 30620.00 19332.40
17328.00 16331.70 16313.70 29668.30 18062.00
17511.70 16504.80 16568.40 30855.30 18448.40
18944.20 17854.90 18053.00 32050.20 20098.60
19245.40 18138.80 18316.80 31293.40 20411.00
20273.10 19107.40 19145.00 33030.10 21473.10
20567.00 19384.40 18619.70 31998.70 21051.00
19966.50 18818.40 17930.60 31840.50 20392.40
19856.70 18714.90 17934.50 30967.50 20089.00
20456.30 19280.10 18007.10 32927.20 20528.80
21906.70 20647.10 19082.40 33596.50 21688.00
12/31/99 24213.50 22821.20 21242.50 35575.30 24041.00
23625.10 22266.60 20901.30 33787.80 23488.10
25375.70 23916.60 24352.90 33148.30 26880.20
24317.50 22919.30 22747.30 36391.10 26468.80
23481.00 22130.80 21378.50 35296.30 25045.30
22985.60 21663.90 20132.50 34572.10 23843.60
23872.80 22500.10 21887.50 35424.40 25410.00
23970.70 22592.40 21183.30 34870.60 24762.90
25718.20 24239.30 22799.60 37036.50 26895.30
26147.60 24644.20 22129.50 35081.20 26020.30
25467.80 24003.40 21141.60 34932.90 25306.30
24128.20 22740.80 18971.40 32178.80 23079.20
12/31/00 26620.60 25090.00 20600.70 32336.30 25067.00
27099.80 25541.60 21673.30 33483.60 25890.70
26403.30 24885.20 20251.20 30430.50 24223.50
25196.70 23747.90 19260.60 28502.70 22894.60
27411.50 25835.30 20767.30 30717.70 24916.50
28573.80 26930.80 21277.80 30923.50 25666.00
28948.10 27283.50 22012.50 30170.80 26030.40
28380.70 26748.80 20821.00 29873.80 25099.50
27248.30 25681.50 20148.50 28003.70 24277.10
23537.10 22183.70 17436.20 25742.30 21135.40
24544.50 23133.20 18456.60 26233.20 22228.20
26414.80 24895.90 19885.50 28245.50 24025.90
12/31/01 28100.00 26484.30 21112.90 28492.90 25372.80
27816.20 26216.80 20893.30 28077.10 25057.80
27451.80 25873.30 20320.70 27535.60 24619.10
29455.80 27762.10 21953.90 28571.20 26321.20
29376.30 27687.10 22154.00 26839.00 26254.30
28477.30 26839.90 21170.70 26641.30 25484.80
27025.00 25471.10 20120.30 24743.40 24048.60
23803.60 22434.90 17081.50 22814.70 21178.70
23994.00 22614.40 17038.00 22964.50 21242.70
22556.80 21259.80 15814.40 20468.80 19559.70
23504.20 22152.70 16321.50 22270.30 20197.20
25020.20 23581.50 17778.10 23581.20 21846.10
12/31/02 24214.60 22822.20 16788.20 22195.80 20857.70
23631.00 22272.20 16323.60 21614.40 20303.50
23252.90 21915.90 15830.30 21290.10 19815.60
23536.60 22183.20 16034.20 21496.80 20004.50
25572.50 24102.10 17554.50 23267.50 21787.30
27372.80 25798.90 19438.30 24493.40 23930.10
28210.40 26588.30 19790.10 24805.80 24387.30
29519.40 27822.00 21028.40 25243.20 25698.10
31051.40 29266.00 21992.50 25735.50 26887.30
30688.10 28923.60 21586.50 25462.20 26521.50
33183.10 31275.00 23399.30 26902.60 28617.10
34258.20 32288.30 24229.70 27139.30 29694.40
12/31/03 35080.30 33063.00 24721.30 28562.70 30349.80
COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. International Game
Technology 2.8%
SLOT MACHINES & PROGRESSIVE JACKPOTS
2. XTO Energy 1.6%
NATURAL GAS PRODUCER
3. Expeditors International of Washington 1.0%
INTERNATIONAL FREIGHT FORWARDER
4. First Health Group 1.0%
PPO NETWORK
5. Coach 1.0%
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
6. Novell 0.9%
SECURITY & IDENTITY MANAGEMENT SOFTWARE
7. ITT Educational Services 0.9%
POSTSECONDARY DEGREE PROGRAMS
8. AmeriCredit 0.8%
AUTO LENDING
9. Chico's FAS 0.8%
WOMEN'S SPECIALTY RETAILER
10. TCF Financial 0.8%
GREAT LAKES BANK
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
7
Columbia Acorn International*
>In a Nutshell
Photo of P.ZACHARY EGAN
Photo of LOUIS J.MENDES III
Columbia Acorn International finished 2003 on a strong note. The Fund was
up 17.11% (Class A shares, without sales charge) for the quarter, outperforming
both the 15.97% gain of the Citigroup EMI Global ex-US Index and the 17.08%
return of the MSCI EAFE Index. For the year, the Fund's return of 46.94% fell
short of the Citigroup EMI Global ex-US return of 55.02% but beat the MSCI EAFE
return of 38.59%. Stocks outside the Fund's core strategy, mainly stocks in the
basic materials sector, soared during the year, dampening the Fund's return.
Even though the Fund didn't beat the benchmark Citigroup EMI Global ex-US Index,
the absolute return for the year is the third best in Columbia Acorn
International's history.
The best stocks in the quarter and year came from a variety of industries.
ASE Test, a semiconductor packaging and testing company in Taiwan, rose 72% on a
recovery in demand for semiconductors. For the year, the stock was up 271%.
Improved sales drove home a 69% fourth quarter gain for South Korean auto parts
maker Hyundai Mobis and an annual gain of 197%. Other winners included Global
Bio-Chem Technology Group, a maker of corn starch and corn gluten headquartered
in Hong Kong, up 64% in the quarter and 137% for the year; United Services
Group, a temporary staffing service in the Netherlands, up 57% in the quarter
and 114% for 2003; and Anglo Irish Bank, a niche middle-market bank in Ireland
and the Fund's largest holding, up 48% in the fourth quarter and 125% for the
year.
A problem stock for the quarter was Zapf Creation, a toy manufacturer in
Germany, down on weakness in its U.S. doll business. The company has made
changes to its U.S. sales organization and plans to introduce new products in
2004. We believe these changes should help Zapf regain traction in the important
U.S. market. The Fund's small position in Italian dairy producer Parmalat fell
55% in the quarter when it was revealed that a huge cash reserve on its books
was falsified. The Fund minimized losses in the stock by halving the position
when concerns first surfaced. Laggards for the year included Ireland's Waterford
Wedgewood, down 51%. Its highly leveraged position hurt the stock in a year when
luxury good purchases, particularly in the household goods sector, were subdued.
The stock was also hurt by the weakened U.S. dollar. Singapore's Star Cruises
also sank in the annual period, down 40%. The company's heavy reliance on Asian
gambling cruises to support its large debt worried investors following the SARS
outbreak and the expansion of gambling operations within Asia. We sold the
Fund's position in the stock.
We are pleased to introduce a new member to Columbia Wanger Asset
Management's international analyst team. Kenneth Wooden joined the firm in early
December to cover Japanese equities. Ken spent 17 years investing in Japan and
is a welcome addition to the team.
/s/ P. Zachary Egan /s/ Louis J. Mendes III
P. Zachary Egan Louis J. Mendes III
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
Anglo Irish Bank
- --------------------------------
Fills A Niche
Anglo Irish Bank is one of the only true niche banking franchises in Europe.
Specializing in middle-market banking, Anglo Irish Bank provides corporate
lending, commercial mortgages and structured finance arrangements to
corporations, partnerships and high net worth clients in Ireland and the UK. A
robust lending environment and strong asset quality helped boost the return 125%
in 2003 for Columbia Acorn International. Trading at just 11.8-times 2004's
earnings with a consistent 30% return on equity and above average earnings
growth, we believe the stock price still has room to grow.
INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR
ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS,
TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE
FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE
STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF
OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE,
MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE.
* LIBERTY ACORN INTERNATIONAL WAS RENAMED COLUMBIA ACORN INTERNATIONAL ON
OCTOBER 13, 2003. ON SEPTEMBER 30, 2003, LEAH ZELL RELINQUISHED HER DAILY
FIRM AND PORTFOLIO MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID
BECAME CHIEF INVESTMENT OFFICER OVERSEEING BOTH THE INTERNATIONAL AND
DOMESTIC TEAMS. MS. ZELL REMAINS AFFILIATED WITH COLUMBIA WANGER ASSET
MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ASE TEST, 1.0%; HYUNDAI MOBIS, 1.1%; GLOBAL BIO-CHEM TECHNOLOGY
GROUP, 1.3%; UNITED SERVICES GROUP, 0.9%; ANGLO IRISH BANK, 2.2%; ZAPF CREATION,
0.4%; PARMALAT, 0.0%; WATERFORD WEDGEWOOD, 0.0%; STAR CRUISES, 0.0%.
1-800-922-6769
8
Columbia Acorn International
> At a Glance Ticker Symbol: LAIAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2003
1 YEAR 5 YEARS 10 YEARS
------- ------- ---------
Returns before NAV 46.94% 6.64% 7.26%
taxes POP 38.49 5.38 6.63
- -----------------------------------------------------------------------
Returns after taxes NAV 47.04 5.53 6.40
on distributions POP 38.59 4.29 5.77
- -----------------------------------------------------------------------
Returns after taxes NAV 30.73 5.45 6.08
on distributions and POP 25.22 4.35 5.51
sale of fund shares
- -----------------------------------------------------------------------
Citigroup EMI Global 55.02 6.18 4.74
ex-US (pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
Class A shares only; after-tax returns for other share classes will vary. The
return after taxes on distributions may be higher than the return before taxes
due to qualified foreign tax credits. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain
or loss on sale. Public offering price (POP) returns include the maximum sales
charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include
sales charges or contingent deferred sales charges (CDSC).
COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
(PIE CHART)
Consumer
Goods/Services 23.3%
Finance 10.8%
Health Care 8.0%
Energy/Minerals 5.8%
Information
Technology 13.3%
Real Estate 1.7%
Transportation 3.5%
Other* 5.9%
Industrials 27.7%
*Other includes cash and other assets less liabilities of 4.5%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL
>December 31, 1993 through December 31, 2003
Illustration is based on a hypothetical $10,000 investment in Class A
shares of the Fund, which includes the 5.75% maximum initial sales charge. The
Fund commenced operations on 9/23/1992, but until 10/16/2000, offered only the
shares that are now designated Class Z shares. The historical performance of
Class A, B and C shares (newer class shares) for the period prior to 10/16/2000
is based on the performance of Class Z shares. The Class A, B and C share
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A, B, and C and Class Z. Had the expense differential been
reflected, the returns for periods prior to the inception of the newer class
shares would have been lower. Performance may reflect any voluntary waiver or
reimbursement of Fund expenses by the Advisor or its affiliates. Absent these
waivers or reimbursement arrangements, performance results would have been
lower.
The EMI Global ex-US is Citigroup's index of the bottom 20% of institutionally
investable capital of developed and emerging countries, as selected by
Citigroup, excluding the U.S. The index is unmanaged and returns for both the
index and Fund include reinvested dividends and capital gains. It is not
possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY
UPDATES.
TOTAL NET ASSETS: $1,678.3 MILLION
WITHOUT CLASS A CLASS B CLASS C CLASS Z
SALES CHARGE $20,162 $19,756 $19,747 $20,499
- -------------------------------------------------------
WITH
SALES CHARGE $19,003 $19,756 $19,747 N/A
(MOUNTAIN CHART)
COLUMBIA
COLUMBIA ACORN
ACORN INTERNATIONAL - A CITIGROUP
INTERNATIONAL - A WITH SALES EMI GLOBAL
AT NAV CHARGE EX-US
----------------- ----------------- ----------
12/31/93 10000.00 9425.00 10000.00
10433.00 9833.10 11000.10
10395.40 9797.70 11077.00
9943.24 9371.50 10895.80
10011.90 9436.17 11221.70
9955.78 9383.32 11059.50
9754.67 9193.78 11290.20
10024.90 9448.45 11423.50
10339.70 9745.13 11553.50
10345.90 9750.98 11224.50
10364.50 9768.53 11414.20
9790.29 9227.35 10756.00
12/31/94 9619.94 9066.80 10822.50
9184.16 8656.07 10372.10
9127.22 8602.40 10201.10
9291.51 8757.25 10593.10
9575.83 9025.22 10922.50
9727.13 9167.82 10782.60
9866.22 9298.92 10663.50
10403.00 9804.78 11261.00
10295.80 9703.79 10994.50
10555.20 9948.32 11068.50
10227.00 9638.93 10737.60
10081.80 9502.06 10830.00
12/31/95 10480.00 9877.39 11237.10
10890.80 10264.60 11502.30
11219.70 10574.60 11636.60
11421.70 10764.90 11882.00
11788.30 11110.50 12494.70
12136.00 11438.20 12396.80
12293.80 11586.90 12391.00
11901.60 11217.30 11910.00
12073.00 11378.80 12028.10
12149.10 11450.50 12095.20
12269.40 11563.90 12018.20
12605.50 11880.70 12225.70
12/31/96 12645.90 11918.80 11916.40
12949.40 12204.80 11744.90
13111.20 12357.40 11980.70
12917.20 12174.50 11831.80
12729.90 11997.90 11671.20
13284.90 12521.00 12359.40
13684.80 12897.90 12673.20
13775.10 12983.10 12550.90
13045.00 12295.00 12001.60
13592.90 12811.30 12193.50
12856.20 12117.00 11602.40
12719.90 11988.50 11064.80
12/31/97 12670.30 11941.80 10834.60
12849.00 12110.10 11174.70
13882.00 13083.80 12019.70
14970.40 14109.60 12600.90
15280.30 14401.60 12702.80
15541.60 14647.90 12810.70
15269.60 14391.60 12359.30
15367.30 14483.70 12281.10
13408.00 12637.00 10667.20
12818.00 12081.00 10430.80
13246.10 12484.50 11149.50
13997.20 13192.40 11533.60
12/31/98 14622.90 13782.10 11778.00
14960.70 14100.40 11695.90
14511.80 13677.40 11476.80
14793.40 13942.80 11974.00
15678.00 14776.50 12704.40
15776.80 14869.60 12392.10
17083.10 16100.80 12874.20
17691.30 16674.00 13289.50
18200.80 17154.20 13523.30
18504.70 17440.70 13461.90
19304.10 18194.10 13339.10
22195.90 20919.60 13818.90
12/31/99 26208.90 24701.90 14759.50
26111.90 24610.50 14478.20
30310.70 28567.90 15035.20
29377.20 27688.00 15102.00
25957.70 24465.10 14110.30
24029.00 22647.30 13815.20
25211.20 23761.60 14654.40
24896.10 23464.60 14168.90
25456.20 23992.50 14574.50
24158.00 22768.90 13826.20
22360.60 21074.90 12989.60
20531.50 19351.00 12417.20
12/31/00 20952.40 19747.70 12902.50
21893.20 20634.30 13142.80
20310.30 19142.50 12632.10
18350.40 17295.20 11653.70
19053.20 17957.60 12416.50
18921.70 17833.70 12391.60
17987.00 16952.70 11971.20
17262.10 16269.50 11620.10
16904.80 15932.80 11588.20
14593.90 13754.80 10079.50
15282.70 14404.00 10489.00
16134.00 15206.30 10920.20
12/31/01 16429.20 15484.50 11010.20
16026.70 15105.20 10810.80
15972.20 15053.80 10991.70
16796.40 15830.60 11707.90
17342.30 16345.10 11951.70
17262.50 16269.90 12334.10
16554.70 15602.80 11853.10
14799.90 13948.90 10840.00
14558.70 13721.60 10775.00
13251.30 12489.40 9780.43
13313.60 12548.10 10001.50
13717.00 12928.30 10375.20
12/31/02 13726.60 12937.30 10251.70
13386.20 12616.50 10079.50
13019.40 12270.80 9899.61
12822.80 12085.50 9803.18
13987.10 13182.90 10727.40
15134.10 14263.90 11641.80
15562.40 14667.50 12076.30
15895.40 14981.40 12506.40
16596.40 15642.10 13104.50
17225.40 16234.90 13703.60
18538.00 17472.00 14700.40
19032.90 17938.50 14968.00
12/31/03 20162.00 19002.70 15892.20
COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 2.2%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Rhoen-Klinikum (Germany) 2.0%
HOSPITAL MANAGEMENT
3. Kerry Group (Ireland) 1.5%
FOOD INGREDIENTS
4. Housing Development
Finance (India) 1.4%
MORTGAGE LOAN PROVIDER
5. Venture (Singapore) 1.3%
ELECTRONIC CONTRACT MANUFACTURER
6. Global Bio-Chem
Technology Group (Hong Kong) 1.3%
CORN-BASED BIOCHEMICAL PRODUCTS
7. Grafton Group (Ireland) 1.3%
BUILDERS, WHOLESALERS & DIY RETAILING
8. Corus Entertainment 1.3%
(Canada)
TV PROGRAMMING & RADIO STATIONS
9. Talisman Energy (Canada) 1.2%
OIL & GAS PRODUCER
10. Hunter Douglas (Netherlands) 1.2%
DECORATIVE WINDOW COVERINGS
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
9
Columbia Acorn USA*
>In a Nutshell
Photo OF Robert A. Mohn
Columbia Acorn USA finished 2003 up 46.26% (Class A shares, without sales
charge), performing in line with the Russell 2000's 47.25% gain. During the
fourth quarter, the Fund gained 13.40% vs. a 14.52% gain for the benchmark.
Small caps dominated large caps in 2003. The S&P 500, up 28.69%, had a good year
but did not come close to reaching small-cap returns.
Technology stocks continued to lead the rally. In Columbia Acorn USA,
Novell and Micros Systems were among the top five moneymakers in the Fund for
the year and the quarter. Novell, up 97% for the quarter and 215% for the year,
is highlighted in the box below. Micros had a 93% annual gain and 27% rise in
the quarter. After years of waiting, hotels are finally starting to upgrade
their computer systems. Micros has been benefiting from this initiative with
revenue growth in its hotel and restaurant integration software up nearly 20%.
In the financial sector, AmeriCredit and World Acceptance posted top gains. Auto
lender AmeriCredit was up 104% for the year and 55% in the fourth quarter.
Credit loss reports showed that for the first time in 27 months AmeriCredit had
a year-over-year drop in losses in November. Personal lender World Acceptance
increased 162% in the year and 47% in the quarter largely due to the
strengthening economy. Freight forwarder Hub Group also bounced back with the
economy, up an impressive 349% for the year and 98% for the quarter. Aspect
Communications was another big percentage winner, up 310% for the year and 89%
in the quarter. See Page 6 for more on this stock.
The notable poor performer was First Health Group, down 20% in the year and
26% in the quarter. First Health's competition aggressively lowered prices
during the year. Home health care service provider Lincare Holdings also fell as
the government moved to cut oxygen reimbursement rates, a major source of
revenue for Lincare Holdings. Disappointing sales marked down stock prices for
retailers Gadzooks and Abercrombie & Fitch in the quarter and for the year.
What a difference a year makes. Last year, all areas of the market - small,
mid, large - ended the year down in double digits. This year, small-cap gains
neared 50%, mid caps cleared 35% and large caps came in at about 30% (See Page 3
for index returns). So, what's next? Small caps did so well in 2003 that there
is some concern that they are getting overpriced. We still believe that small
caps are in for a very long period of outperformance. As for valuations, we have
a list of stocks that we believe are attractive to buy at current levels. Today
that list is smaller than it was six months ago but we believe there continue to
be small-cap stocks to buy at good prices.
/s/ Robert A. Mohn
Robert A. Mohn
LEAD PORTFOLIO MANAGER
Novell Competes
- -----------------
Novell, the leading provider of network printer, directory, and file services,
is up against a formidable competitor, Microsoft. But Novell isn't backing down.
The company has invested capital and leveraged existing knowledge to go after
new markets. Security Identity Management and Linux are two fast-growing markets
in which Novell has been building a name for itself. Columbia Wanger Asset
Management's technology analyst Ben Andrews purchased Novell under the
assumption that at least one of these markets would drive Novell's revenue and
earnings over the next one to two years. Wall Street has become aware of
Novell's push into Linux and has doubled the price of its shares. Novell's
bottom line pay out has yet to come, but we believe it is on the right track.
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE.
* LIBERTY ACORN USA WAS RENAMED COLUMBIA ACORN USA ON OCTOBER 13, 2003.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: NOVELL, 2.0%; MICROS SYSTEMS, 3.3%; AMERICREDIT, 2.5%; WORLD
ACCEPTANCE, 1.5%; HUB GROUP, 1.1%; ASPECT COMMUNICATIONS, 0.2%; FIRST HEALTH
GROUP, 2.1%; LINCARE HOLDINGS, 1.1%; GADZOOKS, 0.1%; ABERCROMBIE & FITCH, 0.5%.
1-800-922-6769
10
Columbia Acorn USA
>At a Glance Ticker Symbol: LAUAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2003
LIFE OF
1 YEAR 5 YEARS FUND
------ ------ ------
Returns before NAV 46.26% 9.47% 13.71%
taxes POP 37.85 8.18 12.80
- -------------------------------------------------------------------
Returns after taxes NAV 46.26 8.96 12.95
on distributions POP 37.85 7.68 12.04
- -------------------------------------------------------------------
Returns after taxes NAV 30.07 8.02 11.80
on distributions and POP 24.60 6.88 10.96
- -------------------------------------------------------------------
sale of fund shares
- -------------------------------------------------------------------
Russell 2000 (pretax) 47.25 7.13 8.63
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
Class A shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain
or loss on sale. Public offering price (POP) returns include the maximum sales
charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include
sales charges or contingent deferred sales charges (CDSC).
COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
(PIE CHART)
Health Care 14.6%
Consumer
Goods/Services 14.2%
Other* 7.5%
Finance 10.5%
Energy/Minerals 7.7%
Industrial
Goods/Services 6.8%
Information 38.7%
Software/Services 20.7%
Telecommunications 8.0%
Media 3.4%
Computer Related Hardware 6.6%
*Other includes cash and other assets less liabilities of 6.6%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN USA
>September 4, 1996 through December 31, 2003
Illustration is based on a hypothetical $10,000 investment in Class A shares of
the Fund, which includes the 5.75% maximum initial sales charge. The Fund
commenced operations on 9/4/1996, but until 10/16/2000, offered only the shares
that are now designated Class Z shares. The historical performance of Class A, B
and C shares (newer class shares) for the period prior to 10/16/2000 is based on
the performance of Class Z shares. The Class A, B and C share returns are not
restated to reflect any expense differential (e.g., Rule 12b-1 fees) between the
Class A, B, and C and Class Z. Had the expense differential been reflected, the
returns for periods prior to the inception of the newer class shares would have
been lower. Performance may reflect any voluntary waiver or reimbursement of
Fund expenses by the Advisor or its affiliates. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
The Russell 2000 is a market-weighted index of 2,000 smaller U.S. companies
formed by taking the largest 3,000 U.S. companies and eliminating the largest
1,000. The index is unmanaged and returns for both the index and the Fund
include reinvested dividends and capital gains. It is not possible to invest
directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
TOTAL NET ASSETS: $693.3 MILLION
WITHOUT CLASS A CLASS B CLASS C CLASS Z
SALES CHARGE $25,636 $25,138 $25,138 $26,107
- ------------------------------------------------------
WITH
SALES CHARGE $24,162 $25,138 $25,138 N/A
(MOUNTAIN CHART)
COLUMBIA
COLUMBIA ACORN USA - A
ACORN USA - A WITH SALES RUSSELL
AT NAV CHARGE 2000
------------- ------------- --------
09/04/96 10000.00 9425.00 10000.00
09/30/96 10720.00 10103.60 10359.90
10810.00 10188.50 10200.20
11259.80 10612.30 10620.50
12/31/96 11649.30 10979.50 10898.90
12209.70 11507.60 11116.70
11919.10 11233.70 10847.10
03/31/97 11479.30 10819.20 10335.30
11419.60 10762.90 10364.10
12509.00 11789.70 11517.10
06/30/97 13318.30 12552.50 12010.70
13998.90 13194.00 12569.60
14348.90 13523.80 12857.20
09/30/97 15338.90 14457.00 13798.30
15139.50 14269.00 13192.10
15169.80 14297.50 13106.80
12/31/97 15412.50 14526.30 13336.20
15076.50 14209.60 13125.70
16320.40 15381.90 14096.30
03/31/98 17400.80 16400.20 14677.70
17992.40 16957.80 14758.80
17227.70 16237.10 13964.00
06/30/98 17525.80 16518.00 13993.40
16593.40 15639.30 12860.50
13936.80 13135.40 10363.30
09/30/98 14152.80 13339.00 11174.30
14655.20 13812.50 11630.10
15404.10 14518.40 12239.40
12/31/98 16306.80 15369.10 12996.70
15778.40 14871.20 13169.40
14896.40 14039.90 12102.80
03/31/99 15017.10 14153.60 12291.70
16096.80 15171.20 13393.20
16735.90 15773.50 13588.80
06/30/99 17651.30 16636.40 14203.30
18048.50 17010.70 13813.60
16823.00 15855.70 13302.30
09/30/99 16866.70 15896.90 13305.20
17860.20 16833.20 13359.10
18810.30 17728.70 14156.80
12/31/99 20059.30 18905.90 15759.40
19054.40 17958.70 15506.30
19868.00 18725.60 18066.90
03/31/00 19820.30 18680.60 16875.80
17568.70 16558.50 15860.30
16526.90 15576.60 14935.90
06/30/00 16834.30 15866.30 16237.90
16748.40 15785.40 15715.40
17765.10 16743.60 16914.50
09/30/00 17642.50 16628.00 16417.40
17642.50 16628.00 15684.50
16613.90 15658.60 14074.50
12/31/00 18230.50 17182.20 15283.30
19382.60 18268.10 16079.00
19320.60 18209.70 15023.90
03/31/01 18866.60 17781.70 14289.00
21145.70 19929.80 15406.90
22321.30 21037.90 15785.60
06/30/01 22933.00 21614.30 16330.60
23164.60 21832.60 15446.70
22516.00 21221.30 14947.80
09/30/01 19257.90 18150.60 12935.60
19306.00 18196.00 13692.60
20433.50 19258.60 14752.60
12/31/01 21628.90 20385.20 15663.20
21875.50 20617.60 15500.30
21120.80 19906.30 15075.50
03/31/02 22911.80 21594.40 16287.10
23246.30 21909.60 16435.60
21923.60 20663.00 15706.10
06/30/02 20601.60 19417.00 14926.80
17783.30 16760.80 12672.40
17511.20 16504.30 12640.10
09/30/02 16201.40 15269.80 11732.40
16967.70 15992.10 12108.60
18438.80 17378.60 13189.20
12/31/02 17524.20 16516.60 12454.80
17252.60 16260.60 12110.10
17005.90 16028.10 11744.20
03/31/03 17043.30 16063.30 11895.40
18711.80 17635.90 13023.30
20652.30 19464.80 14420.90
06/30/03 20974.50 19768.40 14681.90
21951.90 20689.60 15600.50
23150.40 21819.30 16315.80
09/30/03 22606.40 21306.50 16014.60
24916.80 23484.00 17359.50
25447.50 23984.30 17975.50
12/31/03 25636.10 24162.00 18340.20
COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Micros Systems 3.3%
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
2. ITT Educational Services 2.6%
POSTSECONDARY DEGREE PROGRAMS
3. AmeriCredit 2.5%
AUTO LENDING
4. Edwards Lifesciences 2.5%
HEART VALVES
5. Western Wireless 2.5%
RURAL CELLULAR PHONE SERVICES
6. JDA Software 2.3%
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
7. First Health Group 2.1%
PPO NETWORK
8. Novell 2.0%
SECURITY & IDENTITY MANAGEMENT SOFTWARE
9. Commonwealth Telephone 2.0%
RURAL PHONE FRANCHISES & CLEC
10. HCC Insurance Holdings 2.0%
AVIATION INSURANCE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
11
Columbia Acorn International Select*
>In a Nutshell
Photo of Todd M. Narter
Photo of Christopher J. Olson
After three years of posting dreary results, the international markets rose
sharply in 2003. Columbia Acorn International Select finished the year up 41.11%
(Class A shares, without sales charge) vs. a 49.65% gain for the benchmark
Citigroup World ex-US Cap Range $2-10B Index and a 38.59% return for the
large-cap MSCI EAFE Index. In the fourth quarter, the Fund gained 16.91%,
outperforming the benchmark return of 15.81% and nearing the MSCI EAFE gain of
17.08%. Market interest in Japan and in more speculative stocks in general
cooled in the fourth quarter, benefiting the Fund's relative return. But the
Fund's more conservative stance toward Japan and higher-risk stocks dampened
annual performance. Still, an annual return of nearly 42%, achieved without
speculative maneuvering, should delight most shareholders.
For the quarter, three of the four biggest winners in the Fund were banks
offering niche services. Anglo Irish Bank, the Fund's largest holding, finished
up 48% in the quarter. The corporate lending environment in the United Kingdom
remains robust and Anglo Irish Bank continued to benefit. For the year, shares
were up over 125%. Another winner in Columbia Acorn International Select was Den
Norske Bank, a full-service commercial bank in Norway. Shares finished up 39% in
the quarter and up 52% for the year. Ireland's Depfa Bank, a provider of
public-sector financing, finished the quarter up 31%. For the year, shares were
up 156%.
The Fund's worst stocks for the quarter included Parmalat, the big dairy
producer in Italy. Shares fell 55% when it was revealed that a huge cash reserve
on its books was falsified. We limited the Fund's downside risk early on by
halving its position in the stock when concerns first surfaced, selling those
shares for a slight gain. We sold out of the Fund's remaining position shortly
before the company went bankrupt. Another stock dragging down performance this
quarter was Terumo, a maker of pharmaceuticals and medical supplies in Japan.
Continued cuts in drug reimbursements and a steady decline in the number of new
drugs coming to market slowed growth in pharmaceutical sales. The share price
fell 3% during the quarter and we sold the Fund's position in the stock.
/s/ Todd M. Narter /s/ Christopher J. Olson
Todd M. Narter Christopher J. Olson
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
More Than The Name
- -------------------------
You Know
The Swatch brand name conjures up an image of a colorful, plastic watch that was
a must-have for trendy teens in the '80s. While the Swatch watch continues to
attract buyers, the earnings growth for this Swiss watchmaker is coming from its
higher-end brands Omega and Brequet. Demand for the pricier lines is increasing
in China and in the rest of the Asia Pacific region. We added the stock to
Columbia Acorn International Select because we believe Swatch has a solid brand
and is a low cost producer. Valuations are also good. After appreciating 27% in
the quarter, the shares still sell at a discount to its peers.
MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS
OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS,
INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
* LIBERTY ACORN FOREIGN FORTY WAS RENAMED COLUMBIA ACORN INTERNATIONAL SELECT
ON OCTOBER 13, 2003.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ANGLO IRISH BANK, 5.8%; DEN NORSKE BANK, 3.2%; DEPFA BANK, 2.5%;
PARMALAT, 0.0%; TERUMO, 0.0%; SWATCH GROUP, 2.5%.
1-800-922-6769
12
Columbia Acorn International Select
>At a Glance Ticker Symbol: LAFAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2003
LIFE OF
1 YEAR 5 YEARS FUND
------ ------- ------
Returns before NAV 41.11% 5.94% 7.80%
taxes POP 33.00 4.69 6.56
- ----------------------------------------------------------------
Returns after taxes NAV 41.30 5.86 7.72
on distributions POP 33.17 4.61 6.48
- ----------------------------------------------------------------
Returns after taxes NAV 26.90 5.10 6.75
on distributions and POP 21.62 4.01 5.65
sale of fund shares
- ----------------------------------------------------------------
Citigroup World 49.65 5.92 6.48
ex-US Cap Range
$2-$10B (pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
Class A shares only; after-tax returns for other share classes will vary. The
return after taxes on distributions may be higher than the return before taxes
due to qualified foreign tax credits. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain
or loss on sale. Public offering price (POP) returns include the maximum sales
charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include
sales charges or contingent deferred sales charges (CDSC).
COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2003
(PIE CHART)
Consumer
Goods/Services 21.6%
Industrial
Goods/Services 19.1%
Other* 8.4%
Health Care 11.4%
Finance 17.0%
Energy/Minerals 6.7%
Information Technology 15.8%
*Other includes cash and other assets less liabilities of 4.8%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT
>November 23, 1998 through December 31, 2003
Illustration is based on a hypothetical $10,000 investment in Class A shares of
the Fund, which includes the 5.75% maximum initial sales charge. The Fund
commenced operations on 11/23/1998, but until 10/16/2000, offered only the
shares that are now designated Class Z shares. The historical performance of
Class A, B and C shares (newer class shares) for the period prior to 10/16/2000
is based on the performance of Class Z shares. The Class A, B and C share
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A, B and C and Class Z. Had the expense differential been
reflected, the returns for periods prior to the inception of the newer class
shares would have been lower. Performance may reflect any voluntary waiver or
reimbursement of Fund expenses by the Advisor or its affiliates. Absent these
waivers or reimbursement arrangements, performance results would have been
lower.
Citigroup World ex-US Cap Range $2-$10B is a subset of Citigroup's Broad Market
Index, representing a mid-cap developed market index excluding the U.S. The
index is unmanaged and returns for the index and Fund include reinvested
dividends and capital gains. It is not possible to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER
TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
TOTAL NET ASSETS: $43.4 MILLION
CLASS A CLASS B CLASS C CLASS Z
WITHOUT
SALES CHARGE $14,677 $14,343 $14,363 $14,820
- ------------------------------------------------------
WITH
SALES CHARGE $13,833 $14,243 $14,363 N/A
(MOUNTAIN CHART)
COLUMBIA
COLUMBIA ACORN
ACORN INTERNATIONAL CITIGROUP
INTERNATIONAL SELECT - A WORLD EX-US
SELECT - A WITH SALES CAP RANGE
AT NAV CHARGE $2-$10B
------------- ------------- ----------
11/23/98 10000.00 9425.00 10000.00
10140.00 9556.95 10045.10
12/31/98 10999.90 10367.40 10338.80
11789.70 11111.80 10309.80
11589.20 10922.90 10051.80
03/31/99 11978.60 11289.90 10449.20
12238.60 11534.90 11032.40
12168.80 11469.10 10566.60
06/30/99 13108.20 12354.50 10952.70
13509.40 12732.60 11362.00
13770.10 12978.30 11489.60
09/30/99 13620.00 12836.90 11529.70
14130.70 13318.20 11535.10
16996.50 16019.20 11864.40
12/31/99 19972.50 18824.10 12771.70
19661.00 18530.50 12154.30
24240.00 22846.20 12310.70
03/31/00 23088.60 21761.00 12679.70
21255.40 20033.20 12171.70
18919.40 17831.50 11975.80
06/30/00 19848.30 18707.10 12610.80
19465.30 18346.00 12203.10
20263.30 19098.20 12586.30
09/30/00 19234.00 18128.00 12168.00
18487.70 17424.70 11791.00
16126.80 15199.50 11439.80
12/31/00 17307.30 16312.10 11998.20
17862.90 16835.80 11938.60
15814.00 14904.70 11505.00
03/31/01 13694.90 12907.50 10607.50
14411.20 13582.50 11390.60
14370.80 13544.50 11293.20
06/30/01 13761.50 12970.20 10999.40
13040.40 12290.60 10723.40
12766.50 12032.50 10626.20
09/30/01 10612.80 10002.60 9391.94
11283.50 10634.80 9769.16
11903.00 11218.60 10118.30
12/31/01 12258.90 11554.00 10140.20
11628.80 10960.20 9840.78
11486.90 10826.40 9990.63
03/31/02 11893.60 11209.70 10562.20
12258.70 11553.80 10755.60
12380.10 11668.20 11097.30
06/30/02 11993.80 11304.20 10712.10
10704.50 10089.00 9752.72
10897.20 10270.60 9729.61
09/30/02 10104.90 9523.90 8859.06
10084.70 9504.86 9017.25
10328.80 9734.87 9476.41
12/31/02 10400.00 9802.04 9209.34
9892.52 9323.70 8978.22
9476.05 8931.18 8810.27
03/31/03 9557.54 9007.98 8659.79
10451.20 9850.23 9425.05
11355.20 10702.30 10100.90
06/30/03 11426.70 10769.70 10389.10
11609.60 10942.00 10806.10
12107.60 11411.40 11429.10
09/30/03 12554.40 11832.50 11900.10
13488.40 12712.90 12818.90
13773.00 12981.10 12926.80
12/31/03 14677.50 13833.50 13781.40
COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 5.8%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Kerry Group (Ireland) 3.9%
FOOD INGREDIENTS
3. Rhoen-Klinikum (Germany) 3.9%
HOSPITAL MANAGEMENT
4. BG Group (United Kingdom) 3.5%
OIL & GAS PRODUCER
5. Den Norske Bank (Norway) 3.2%
LARGEST NORWEGIAN BANK
6. Talisman Energy (Canada) 3.1%
OIL & GAS PRODUCER
7. Neopost (France) 2.9%
POSTAGE METER MACHINES
8. Compass Group (United Kingdom) 2.9%
INTERNATIONAL CONCESSION & CONTRACT CATERING
9. Lion Nathan (Australia) 2.7%
AUSTRALIAN BEER BREWER/DISTRIBUTOR
10. Grafton Group (Ireland) 2.7%
BUILDERS, WHOLESALERS & DIY RETAILING
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
13
Columbia Acorn Select*
>In a Nutshell
Photo of John H. Park
Columbia Acorn Select returned 4.81% (Class A shares, without sales charge)
during the fourth quarter, behind the benchmark S&P MidCap 400's 13.19% return
and the S&P 500's 12.18% gain. For 2003, the Fund was up 29.95%, trailing the
S&P MidCap 400's 35.62% return but beating the S&P 500's 28.69% gain. While we
are pleased with the Fund's absolute result, we are disappointed that Columbia
Acorn Select underperformed since it was leading its primary benchmark through
the first three quarters of the year.
Electronic Arts gained 97% in 2003, as sales and earnings consistently beat
expectations. Guidant, the Fund's largest position, returned 92% as investors
came to appreciate the company's fast growing defibrillator business as well as
its potential growth making drug-eluting stents. (A stent is a little wire-mesh
tube that keeps an artery open after an angioplasty procedure.)
On the downside, First Health Group, one of the Fund's biggest positions,
fell 20% for the year as the company lowered its sales and earnings for 2004 due
to increased competition in the managed-care industry. While obviously
disappointed, we believe the long-term outlook remains sound and we have added
to the Fund's position.
Most other losses for the year were relatively small in position size or
percentages. In fact, all losses combined contributed to just a 3.16% drop for
the Fund in 2003. Perhaps our biggest detractor was the conservative nature of
Columbia Acorn Select; only five of the Fund's stocks were up 70% or more. While
the market has rewarded the Fund's more conservative stance in the past, highly
speculative stocks had the most impressive gains in 2003 and Columbia Acorn
Select did not keep pace. Furthermore, as the market has bounced back, we have
seen few opportunities to buy such stocks at prices that fairly compensate us
for the risks incurred.
I am justifiably proud of the terrific efforts put forth by our investment
team in 2003. My thanks to Ralph Wanger, Chuck McQuaid, Rob Mohn, Ben Andrews,
Susie Hultquist, Harold Lichtenstein, Grant McKay, Rob Chalupnik, Todd
Griesbach, David Frank, and John Emerson for their invaluable contributions. I
am also grateful to Shelley Maish and Mike Olah for providing Herculean efforts
in trading throughout the year. Finally, thank you for your continued support as
a Columbia Acorn Select shareholder.
/s/ John H. Park
John H. Park
LEAD PORTFOLIO MANAGER
Weight Watchers --
- ----------------------------------------
A Winning Loser
The first question you ask a successful dieter is, "How did you lose the
weight?" This marketing has contributed to Weight Watchers' unique business
model by which its customers actually perpetuate the success of the
business. With over 40 years in the business, the Weight Watchers' brand has
become synonymous with healthy weight loss. Demand is more robust than ever with
obesity rates at an all time high both domestically and in international
markets. The company generates significant free cash flow due to fat profit
margins and slim capital expenditure requirements, which it has been using to
acquire franchises, pay down debt and repurchase stock -- all accretive to
earnings. The stock has been under pressure recently as attendance growth has
moderated due to the current popularity of the Atkins/high protein diet. History
has shown us though that diet fads come and go, similar to excess weight, and we
believe the sensibility of the Weight Watchers' program is one that dieters will
return to, as will investors to the stock.
COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS
HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE
FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND
TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES.
* LIBERTY ACORN TWENTY WAS RENAMED COLUMBIA ACORN SELECT ON OCTOBER 13, 2003.
AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS
MENTIONED WERE: ELECTRONIC ARTS, 3.9%; GUIDANT, 8.9%; FIRST HEALTH GROUP, 7.1%;
WEIGHT WATCHERS, 3.1%.
1-800-922-6769
14
Columbia Acorn Select
>At a Glance Ticker Symbol: LTFAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2003
LIFE OF
1 YEAR 5 YEARS FUND
------ ------- -------
Returns before NAV 29.95% 13.14% 14.37%
taxes POP 22.47 11.80 13.05
- ------------------------------------------------------------------
Returns after taxes NAV 29.81 12.57 13.81
on distributions POP 22.35 11.25 12.50
- ------------------------------------------------------------------
Returns after taxes NAV 19.56 11.21 12.33
on distributions and POP 14.70 10.02 11.15
sale of fund shares
- ------------------------------------------------------------------
S&P MidCap 35.62 9.21 11.28
400 (pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
Class A shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain
or loss on sale. Public offering price (POP) returns include the maximum sales
charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include
sales charges or contingent deferred sales charges (CDSC).
COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION
as a % of net assets, as of December 31, 2003
(PIE CHART)
Information 27.3%
Health Care 20.2%
Finance 13.5%
Industrial Good/Service 3.7%
Other* 6.9%
Consumer
Goods/Services 28.4%
*Cash and other assets less liabilities.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT
>November 23, 1998 through December 31, 2003
Illustration is based on a hypothetical $10,000 investment in Class A
shares of the Fund, which includes the 5.75% maximum initial sales charge. The
Fund commenced operations on 11/23/1998, but until 10/16/2000, offered only the
shares that are now designated Class Z shares. The historical performance of
Class A, B and C shares (newer class shares) for the period prior to 10/16/2000
is based on the performance of Class Z shares. The Class A, B and C share
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A, B and C and Class Z. Had the expense differential been
reflected, the returns for periods prior to the inception of the newer class
shares would have been lower. Performance may reflect any voluntary waiver or
reimbursement of Fund expenses by the Advisor or its affiliates. Absent these
waivers or reimbursement arrangements, performance results would have been
lower.
The S&P MidCap 400 is a broad, market-weighted index of 400 stocks that are
in the next size/tier down from the S&P 500. The index is unmanaged and returns
for the index and the Fund include reinvested dividends and capital gains. It is
not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY
UPDATES.
TOTAL NET ASSETS: $740.6 MILLION
WITHOUT CLASS A CLASS B CLASS C CLASS Z
SALES CHARGE $19,852 $19,446 $19,447 $20,111
- ------------------------------------------------------
WITH
SALES CHARGE $18,710 $19,346 $19,447 N/A
(MOUNTAIN CHART)
COLUMBIA
COLUMBIA ACORN
ACORN SELECT - A
SELECT - A WITH SALES S&P
AT NAV CHARGE MIDCAP 400
---------- ----------- ----------
11/23/98 10000.00 9425.00 10000.00
11/30/98 10030.00 9453.28 9911.29
12/31/98 10710.00 10094.20 11108.90
11000.30 10367.80 10676.20
10709.90 10094.00 10117.20
03/31/99 11479.90 10819.80 10399.90
12709.40 11978.60 11220.20
12729.70 11997.80 11268.80
06/30/99 13040.40 12290.50 11872.20
13190.30 12431.90 11619.90
12059.90 11366.50 11221.70
09/30/99 12109.40 11413.10 10875.10
12969.10 12223.40 11429.30
13249.20 12487.40 12029.20
12/31/99 13846.80 13050.60 12744.10
13472.90 12698.20 12385.20
13553.80 12774.40 13252.00
03/31/00 14170.50 13355.60 14361.10
13463.40 12689.20 13859.60
13099.80 12346.60 13686.70
06/30/00 14319.40 13496.10 13887.70
13931.40 13130.30 14107.10
15431.80 14544.50 15682.20
09/30/00 15799.10 14890.60 15574.80
15928.60 15012.70 15046.70
14382.00 13555.00 13910.90
12/31/00 15454.80 14566.20 14975.10
15903.00 14988.60 15308.60
14972.70 14111.80 14435.00
03/31/01 14381.30 13554.40 13361.80
15421.00 14534.30 14835.80
16263.00 15327.90 15181.30
06/30/01 15989.80 15070.40 15120.00
15836.30 14925.70 14894.80
15092.00 14224.20 14407.60
09/30/01 14162.30 13348.00 12615.50
14458.30 13627.00 13173.50
15957.70 15040.10 14153.50
12/31/01 16637.50 15680.80 14884.70
16308.00 15370.30 14807.30
15957.40 15039.90 14825.60
03/31/02 16506.30 15557.20 15885.40
15606.80 14709.40 15811.10
16045.30 15122.70 15544.40
06/30/02 15770.90 14864.10 14406.70
14772.60 13923.20 13011.20
15124.20 14254.60 13076.60
09/30/02 14422.50 13593.20 12023.10
15212.80 14338.10 12544.10
15968.90 15050.70 13269.80
12/31/02 15277.40 14399.00 12724.50
15211.70 14337.10 12352.70
15233.00 14357.10 12058.50
03/31/03 15540.70 14647.10 12160.10
16429.70 15485.00 13043.00
17307.00 16311.90 14123.90
06/30/03 17757.00 16736.00 14303.90
18602.20 17532.60 14811.50
19370.50 18256.70 15483.30
09/30/03 18942.40 17853.20 15246.30
19633.80 18504.90 16399.10
19480.70 18360.50 16970.50
12/31/03 19851.70 18710.30 17256.80
COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Guidant 8.9%
STENTS, DEFIBRILLATORS & OTHER CARDIAC MEDICAL DEVICES
2. First Health Group 7.1%
PPO NETWORK
3. Interpublic Group 5.3%
ADVERTISING
4. Synopsys 5.1%
SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS
5. PeopleSoft 4.5%
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
6. TCF Financial 4.5%
GREAT LAKES BANK
7. Harley-Davidson 4.0%
MOTORCYCLES & RELATED MERCHANDISE
8. Electronic Arts 3.9%
ENTERTAINMENT SOFTWARE
9. Moody's 3.8%
RATING SERVICE FOR CREDIT OBLIGATIONS
10. Herman Miller 3.8%
OFFICE FURNITURE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
15
Columbia Thermostat Fund
In a Nutshell
Photo of Ralph Wanger
Photo of Charles P. McQuaid
Photo of Harvey Hirchhorn
The Columbia Thermostat Fund completed its first full year of operations in
2003. The Fund rebalances between five stock funds and three bond funds
according to a simple mechanical rule, quite like the way your home thermostat
keeps the room temperature steady. The logical construction of the Fund appealed
to many people, so assets at year-end were nearly $128 million, what we believe
to be a very good number for a start-up fund.
Investment performance for the Fund was satisfactory, up 7.20% (Class A
shares, without sales charge) in the fourth quarter and 19.43% for the year
Equities
FOURTH
QUARTER 1-YEAR
WEIGHTING TOTAL RETURN TOTAL RETURN
FUND IN SECTOR 2003 2003
- ---------------------------------------------------------
Columbia 20% 14.45% 45.68%
Acorn Fund
- ---------------------------------------------------------
Columbia 15% 4.97% 30.61%
Acorn Select
- ---------------------------------------------------------
Columbia Growth 25% 9.42% 26.47%
Stock Fund
- ---------------------------------------------------------
Columbia Growth 25% 11.77% 19.51%
& Income Fund
- ---------------------------------------------------------
Columbia Mid Cap 15% 13.90% 27.82%
Value Fund
- ---------------------------------------------------------
WEIGHTED AVERAGE 100% 11.02% 29.40%
- ---------------------------------------------------------
Fixed Income
FOURTH 1-YEAR
QUARTER
WEIGHTI TOTAL RETURN TOTAL RETURN
FUND IN SECTOR 2003 2003
- ---------------------------------------------------------
Columbia Federal 30% 0.11% 2.26%
Securities Fund
- ---------------------------------------------------------
Columbia 50% 1.46% 9.50%
Intermediate
Bond Fund
- ---------------------------------------------------------
Columbia High
Yield Fund 20% 2.89% 11.49%
- ---------------------------------------------------------
WEIGHTED AVERAGE 100% 1.34% 7.73%
- ---------------------------------------------------------
Columbia Thermostat Fund
Rebalancing in 2003
- ---------------------------------------------------------
Stock/Fixed Income
allocation 01/01/03: 70% stock, 30% fixed income
Stock/Fixed Income
allocation 12/31/03: 50% stock, 50% fixed income
FOURTH QUARTER 1-YEAR
2003 2003
- -------------------------------------------------
Times stocks increased 0 3
- -------------------------------------------------
Times stocks decreased 3 9
- -------------------------------------------------
TOTAL 3 12
(see Page 3 for index comparisons). By construction, the Fund should be
expected to have a return somewhere between the stock market and the bond
market, and it did. The Fund's equity portfolio had a 29.40% return for the
year, and the fixed income piece was up 7.73%. Thermostat's equity funds were
50% in small-cap, mid-cap and value funds, which was an overweighting in these
categories vs. the entire market; this was a good idea in 2003, as these funds
outperformed the large-company index as measured by the S&P 500 Index.
The Fund's rebalancing system added some moderate value, but as the year
unfolded, a high equity weighting throughout the year would have worked out
better. The Thermostat system is likely to produce its best results in a market
with lots of up-and-down moves. In 2003, the last 10 months of the year featured
a steady uptrend for stocks, so shareholders would have done better by having
all their money in an equity fund such as Columbia Acorn Fund. Of course, one
cannot know that at the beginning of the year, which is why Columbia Thermostat
makes sense for conservative investors.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
/s/ Harvey Hirchhorn
Harvey Hirchhorn
CO-PORTFOLIO MANAGER
THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE
PERFORMANCE OF THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S
ASSETS AMONG THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN
RISKS, INCLUDING STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC
AND BUSINESS DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND
ECONOMIC VOLATILITY ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN
SMALL-AND MID-CAP STOCKS MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE
ILLIQUIDITY AND GREATER PRICE VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED
COMPANIES. CHANGES IN INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF
ISSUERS OF LOWER-RATED BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE
FUND IS ALSO SUBJECT TO THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS
REGARDING ASSET CLASSES AND PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS
SUCCESSFULLY, RESULTING IN A FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN.
IN ADDITION, THE FUND MAY BUY AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY.
THIS MAY RESULT IN HIGHER TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS
IS NOT AN OFFER OF THE SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN.
1-800-922-6769
16
Columbia Thermostat Fund
>At a Glance Ticker Symbol: COTZX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2003
LIFE OF
1 YEAR FUND
------ -------
Returns before taxes NAV 19.43% 18.73%
POP 12.57 13.31
- ------------------------------------------------------------
Returns after taxes NAV 19.06 18.44
on distributions POP 12.21 13.08
- ------------------------------------------------------------
Returns after taxes NAV 12.70 15.83
on distributions and POP 8.23 11.21
sale of fund shares
- ------------------------------------------------------------
S&P 500 (pretax) 28.69 29.59
- ------------------------------------------------------------
Lehman U.S. Credit
Intermediate Bond 6.91 7.95
Index (pretax)
- ------------------------------------------------------------
Lehman U.S. Govt.
Intermediate Bond 2.29 2.89
Index (pretax)
- ------------------------------------------------------------
Lipper Flexible Portfolio 23.03 23.09
Funds Index (pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. After-tax returns are not relevant to
investors who hold their fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts. After-tax returns are shown for
Class A shares only; after-tax returns for other share classes will vary.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain
or loss on sale. Public offering price (POP) returns include the maximum sales
charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include
sales charges or contingent deferred sales charges (CDSC).
COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS
as a % of assets in each investment category, as of December 31, 2003
(PIE CHART)
STOCK MUTUAL FUNDS BOND MUTUAL FUNDS
Columbia Columbia
Acorn Fund 20% Federal
Securities
Fund 30%
Columbia
Acorn Select 15% Columbia
Intermediate
Columbia Bond Fund 50%
Growth Stock
Fund 25% Columbia
High Yield
Columbia Fund 20%
Growth &
Income Fund 25%
Columbia
Mid Cap
Value Fund 15%
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND
>September 25, 2002 through December 31, 2003
Illustration is based on a hypothetical $10,000 investment in Class A shares of
the Fund, which includes the 5.75% maximum initial sales charge. The Fund
commenced operations on 9/25/2002, but until 3/3/2003, offered only Class Z
shares. The historical performance of Class A, B, and C shares (newer class
shares) for the period prior to 3/3/2003 is based on the performance of Class Z
shares. The Class A, B and C share returns are not restated to reflect any
expense differential (e.g. Rule 12b-1 fees) between Class A, B and C and Class
Z. Had the expense differential been reflected, the returns for periods prior to
the inception of the newer class shares would have been lower. Performance may
reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or
its affiliates. Absent these waivers or reimbursement arrangements, performance
results would have been lower.
The S&P 500 is a broad, market-weighted average of U.S. blue-chip company
stock performance. The Lehman U.S. Govt. Intermediate Bond Index is made up of 1
to 10 year treasury and agency bonds, excluding targeted investor notes and
state and local government series bonds. The Lehman U.S. Credit Intermediate
Bond Index is the intermediate component of the U.S. Credit Index. The U.S.
Credit Index includes publicly issued U.S. corporate and foreign debentures and
secured notes that meet specified maturity, liquidity, and quality requirements.
The indexes are unmanaged and returns for the indexes and the Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
TOTAL NET ASSETS: $127.9 MILLION
WITHOUT CLASS A CLASS B CLASS C CLASS Z
SALES CHARGE $12,433 $12,360 $12,360 $12,471
- --------------------------------------------------------
WITH
SALES CHARGE $11,718 $11,960 $12,360 N/A
(MOUNTAIN CHART)
COLUMBIA
THERMOSTAT COLUMBIA LEHMAN LEHMAN
FUND - A THERMOSTAT U.S. GOVT. U.S. CREDIT
WITH SALES FUND - A INTERMEDIATE INTERMEDIATE
CHARGE AT NAV S&P 500 BOND BOND
---------- ---------- -------- ------------ ------------
09/25/02 9425.00 10000.00 10000.00 10000.00 10000.00
09/30/02 9283.63 9850.00 9955.60 10038.80 10042.80
9632.69 10220.40 10831.90 10032.00 9962.13
10085.40 10700.70 11469.40 9952.60 10044.60
12/31/02 9812.11 10410.70 10795.60 10136.50 10306.80
9670.82 10260.80 10512.80 10114.10 10335.10
9519.95 10100.70 10355.10 10228.30 10517.50
03/31/03 9604.68 10190.60 10455.60 10230.50 10539.30
10094.50 10710.40 11316.80 10259.20 10683.90
10546.80 11190.20 11913.10 10420.30 10956.80
06/30/03 10686.00 11337.90 12065.10 10403.20 10962.70
10742.60 11398.00 12277.80 10150.40 10626.40
10959.60 11628.20 12517.20 10168.70 10658.60
09/30/03 10931.10 11598.00 12384.30 10389.10 10976.00
11298.40 11987.70 13084.90 10287.30 10878.30
11430.60 12127.90 13200.00 10288.10 10911.20
12/31/03 11718.20 12433.20 13892.30 10368.30 11019.40
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION
>as a % of net assets, as of December 31, 2003
(PIE CHART)
Stock Mutual Funds 49.5%
Bond Mutual Funds 49.6%
Cash and Other
Assets
Less Liabilities 0.9%
17
Columbia Acorn Fund
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
INFORMATION
3Com 0 2,000,000
Actuate 4,534,000 6,000,000
Alliance Atlantis Communications
(Canada) 500,000 750,000
Andrew 1,000,000 1,600,000
Bearing Point 0 3,100,000
Crown Castle International 3,000,000 3,500,000
DoubleClick 0 2,000,000
Igate Capital 4,500,000 4,550,000
Integrated Circuit Systems 1,005,000 1,120,000
Invision Technologies 0 255,000
IXYS 1,000,000 1,250,000
Kronos 1,180,000 1,770,000
Northeast Utilities 0 850,000
Pegasus Systems 0 300,000
PeopleSoft 3,300,000 3,400,000
Pericom Semiconductor 318,000 404,000
Perot Systems 0 900,000
Pinnacle Systems 0 1,250,000
Regent Communications 0 241,000
SES Global (Luxembourg) 332,000 560,000
Spanish Broadcasting System 700,000 1,006,000
Sybase 1,221,000 1,521,000
Symmetricom 0 1,051,000
Tellabs 1,000,000 5,000,000
THQ 1,000,000 1,200,000
Venture (Singapore) 1,840,000 2,710,000
- ----------------------------------------------------------------------------
HEALTH CARE
Applied Molecular Evolution 0 252,000
CTI Molecular Imaging 674,000 1,900,000
Diagnostic Products 920,000 989,000
Enzon 1,115,000 1,665,000
Essilor International (France) 265,000 365,000
First Health Group 5,046,000 5,586,000
Gambro (Sweden) 2,100,000 2,500,000
OPG Groep (Netherlands) 365,000 420,000
Patheon (Canada) 0 433,600
Smith & Nephew
(United Kingdom) 2,000,000 2,600,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Abercrombie & Fitch 495,000 895,000
Aeropostale 1,085,000 1,510,000
AFC Enterprises 1,500,000 2,000,000
Amer Group (Finland) 250,000 370,000
American Woodmark 375,000 422,000
Autogrill (Italy) 1,217,000 1,447,000
Billabong International
(Australia) 2,950,000 3,000,000
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
- ----------------------------------------------------------------------------
Central Parking 0 900,000
Chico's FAS 2,095,000 2,495,000
Christopher & Banks 3,328,000 3,743,000
Genesco 565,000 700,000
Intralot (Greece) 0 345,000
Leapfrog Enterprises 0 1,250,000
Lion Nathan (Australia) 3,000,000 4,000,000
Masonite International (Canada) 263,700 440,000
Nobia (Sweden) 810,000 1,160,000
Orkla (Norway) 810,000 950,000
Oxford Industries 282,000 564,000
Petco Animal Supplies 815000 1,015,000
RH Donnelley 46,000 150,000
Shimano (Japan) 0 579,000
Sky City Entertainment
(New Zealand) 1,500,000 5,000,000
Urban Outfitters 688,000 788,000
Weight Watchers 320,000 695,000
Winn Dixie Stores 1,750,000 4,500,000
- ----------------------------------------------------------------------------
FINANCE
AmeriCredit 5,531,000 5,831,000
Anglo Irish Bank (Ireland) 2,910,000 3,200,000
BOK Financial 445,000 825,000
CityBank Lynnwood 128,000 159,000
Concord EFS 0 1,485,000
CorpBanca (Chile) 0 186,000
Depfa Bank (Ireland) 125,000 185,000
Den Norske Bank (Norway) 0 2,800,000
First Mutual Bancshares 0 46,000
Great Southern Bancorp 0 73,000
Intermediate Capital
(United Kingdom) 350,000 500,000
Investment Technology Group 300,000 1,215,000
Irish Life & Permanent (Ireland) 700,000 1,000,000
Jardine Lloyd Thompson
(United Kingdom) 0 1,000,000
Republic 1,634,000 1,798,000
Southwest Bancorp 0 303,000
TCF Financial 1,551,000 1,751,000
United National Group 0 595,000
West Coast Bancorp 472,000 700,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Aalberts Industrie (Netherlands) 310,000 510,000
Airgas 650,000 975,000
Bilfinger Berger (Germany) 375,000 525,000
Esco Technologies 950,000 1,050,000
Esprit Holdings (Hong Kong) 0 1,500,000
Gibraltar Steel 1,300,000 1,900,000
1-800-922-6769
18
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Additions, continued
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES (CONTINUED)
Grafton Group (Ireland) 3,400,000 3,800,000
Imerys (France) 0 50,000
Intermagnetics General 363,000 500,000
Novozymes (Denmark) 316,600 450,000
Pentair 118,000 420,000
Schindler (Switzerland) 40,000 60,000
Ushio (Japan) 500,000 825,000
Watts Water Technologies 0 475,000
Wienerberger (Austria) 0 700,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Enerflex Systems (Canada) 850,000 1,050,000
FMC Technologies 1,700,000 1,900,000
Nexen (Canada) 0 400,000
Oneok 500,000 1,250,000
Quicksilver 544,000 600,000
Talisman Energy (Canada) 365,000 565,000
Tullow Oil (United Kingdom) 3,000,000 9,165,000
Westport Resources 342,000 517,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
AM NV (Netherlands) 0 133,000
Gables Residential Trust 287,000 400,000
General Growth Properties 615,000 1,845,000
Grupo Aeroportuario del
Sureste (Mexico) 0 500,000
Highland Hospitality 0 380,000
Kobenhavns Lufthavne (Denmark) 100,000 140,000
LNR Property 0 291,000
Waste Connections 377,000 533,000
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
INFORMATION
Deutsche Boerse (Germany) 275,000 175,000
Information Holdings 800,000 600,000
RealNetworks 1,200,000 --
Torex (United Kingdom) 600,000 --
- ----------------------------------------------------------------------------
HEALTH CARE
Omega Pharma (Belgium) 426,000 296,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Hyundai Mobis (South Korea) 575,000 465,000
ITT Educational Services 2,200,000 2,111,000
Parmalat Finanziaria (Italy) 3,500,000 --
Steiner Leisure 1,260,000 894,000
- ----------------------------------------------------------------------------
FINANCE
Neuberger Berman 900,000 --
Texas Regional Bancshares 990,000 700,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Newpark Resources 4,500,000 4,750,000
Saipem (Italy) 3,200,000 2,200,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Unisource Energy 1,200,000 1,100,000
19
Columbia Acorn Fund
- ----------------------------------------------------------------------------
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
SECURITIES: 92.1%
- ----------------------------------------------------------------------------
INFORMATION: 27.5%
MEDIA
>TV/SATELLITE BROADCASTING: 0.4%
1,400,000 Gray Television $ 21,168
MID MARKET AFFILIATED TV STATIONS
3,300,000 TVB (Hong Kong) 16,662
TELEVISION PROGRAMMING & BROADCASTING
560,000 SES Global (Luxembourg) 5,645
SATELLITE BROADCASTING SERVICES
200,000 Young Broadcasting (b) 4,008
TELEVISION STATIONS
- ----------------------------------------------------------------------------
47,483
>RADIO BROADCASTING: 0.7%
1,200,000 Cumulus Media, Cl. A (b) 26,400
RADIO STATIONS IN SMALL CITIES
850,000 Salem Communications (b) 23,052
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
935,000 Saga Communications (b)(c) 17,326
RADIO STATIONS IN SMALL & MID-SIZED CITIES
1,006,000 Spanish Broadcasting (b) 10,563
SPANISH LANGUAGE RADIO STATIONS
241,000 Regent Communications (b) 1,530
RADIO STATIONS IN SMALL & MID-SIZED CITIES
- ----------------------------------------------------------------------------
78,871
>TELEVISION PROGRAMMING/CATV: 1.2%
2,605,000 Liberty Media (b) 30,973
CATV PROGRAMMING & MEDIA COMPANY HOLDINGS
2,500,000 Mediacom Communications (b) 21,675
CABLE TELEVISION FRANCHISES
1,000,000 Corus Entertainment (Canada) 21,279
TELEVISION PROGRAMMING & RADIO STATIONS
1,700,000 Insight Communications (b) 17,527
CATV FRANCHISES IN MIDWEST
2,750,000 Hit Entertainment (United Kingdom) 14,457
TELEVISION SHOWS FOR CHILDREN
1,500,000 United Global Com (b) 12,720
VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA
750,000 Alliance Atlantis Communication (b) 11,502
(Canada)
TV/MOVIE PRODUCTION/DISTRIBUTION & CATV CHANNELS
- ----------------------------------------------------------------------------
130,133
TELECOMMUNICATIONS
>TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3%
900,000 Commonwealth Telephone (b) 33,975
RURAL PHONE FRANCHISES & CLEC
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS EQUIPMENT: 0.9%
5,000,000 Tellabs (b) 42,150
TELECOMMUNICATIONS & CABLE EQUIPMENT
830,000 Plantronics (b) 27,100
COMMUNICATION HEADSETS
1,600,000 Andrew (b) 18,416
WIRELESS INFRASTRUCTURE EQUIPMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,051,000 Symmetricom (b) $ 7,651
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
95,317
>MOBILE COMMUNICATIONS: 1.3%
2,800,000 Western Wireless (b) 51,408
RURAL CELLULAR PHONE SERVICES
3,500,000 Crown Castle International (b) 38,605
COMMUNICATION TOWERS IN USA & UK
520,000 Telephone & Data Systems 32,526
CELLULAR & TELEPHONE SERVICES
1,500,000 American Tower (b) 16,230
COMMUNICATION TOWERS IN USA & MEXICO
533,000 COMARCO (b)(c) 5,863
WIRELESS NETWORK TESTING
- ----------------------------------------------------------------------------
144,632
COMPUTER RELATED HARDWARE
>COMPUTER HARDWARE/RELATED SYSTEMS: 2.5%
2,500,000 Seachange International (b)(c) 38,500
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
980,000 Avocent (b) 35,790
COMPUTER CONTROL SWITCHES
494,000 Zebra Technologies (b) 32,787
BAR CODE PRINTERS
1,400,000 Unova (b) 32,130
BARCODE & WIRELESS LAN SYSTEMS
431,900 Neopost (France) 21,767
POSTAGE METERS
625,000 Excel Technologies (b)(c) 20,538
LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS
445,000 Rogers (b) 19,633
PCB LAMINATES & HIGH PERFORMANCE FOAMS
2,000,000 3Com (b) 16,340
NETWORKING EQUIPMENT
1,575,000 Cable Design Technologies (b) 14,159
NETWORKING & SPECIALTY CABLES
535,000 II VI (b) 13,803
LASER COMPONENTS
1,055,000 CTS 12,132
ELECTRONIC COMPONENTS, SENSORS & EMS
2,325,000 Concurrent Computer (b) 10,160
VIDEO ON DEMAND SYSTEMS & SERVICES
230,000 Applied Films (b) 7,595
THIN-FILM GLASS COATING EQUIPMENT
- ----------------------------------------------------------------------------
275,334
>GAMING EQUIPMENT: 3.0%
8,768,000 International Game Technology 313,018
SLOT MACHINES & PROGRESSIVE JACKPOTS
827,000 Shuffle Master (b) 28,631
CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES
- ----------------------------------------------------------------------------
341,649
>CONTRACT MANUFACTURING: 0.8%
1,170,000 Jabil Circuit (b) 33,111
ELECTRONIC MANUFACTURING SERVICES
2,710,000 Venture (Singapore) 31,914
ELECTRONIC MANUFACTURING SERVICES
1-800-922-6769
20
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONTRACT MANUFACTURING--CONTINUED
1,300,000 Plexus (b) $ 22,321
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
87,346
>INSTRUMENTATION: 1.4%
836,000 Dionex (b) 38,473
ION & LIQUID CHROMATOGRAPHY
810,000 Mettler Toledo (b) 34,190
LABORATORY EQUIPMENT
900,000 Trimble Navigation (b) 33,516
GPS-BASED INSTRUMENTS
668,000 Varian (b) 27,876
ANALYTICAL INSTRUMENTS
2,300,000 Spectris (United Kingdom) 17,480
ELECTRONIC INSTRUMENTATION & CONTROLS
255,000 Invision Technologies (b) 8,560
MANUFACTURER OF EXPLOSIVE DETECTION SYSTEMS
- ----------------------------------------------------------------------------
160,095
>SEMICONDUCTORS/RELATED EQUIPMENT: 1.2%
1,120,000 Integrated Circuit Systems (b) 31,909
SILICON TIMING DEVICES
685,000 Littelfuse (b) 19,742
LITTLE FUSES
800,000 Semtech (b) 18,184
ANALOG SEMICONDUCTORS
519,000 Microsemi (b) 12,757
ANALOG/MIXED SIGNAL SEMICONDUCTORS
1,250,000 IXYS (b) 11,688
POWER SEMICONDUCTORS
664,000 Asyst Technologies (b) 11,520
SEMICONDUCTOR FAB AUTOMATION EQUIPMENT
565,000 Supertex (b) 10,792
MIXED-SIGNAL SEMICONDUCTORS
361,000 Actel (b) 8,700
FIELD PROGRAMMABLE GATE ARRAYS
404,000 Pericom Semiconductor (b) 4,307
SEMICONDUCTORS: INTERFACE INTEGRATED CIRCUITS
- ----------------------------------------------------------------------------
129,599
SOFTWARE/SERVICES
>BUSINESS SOFTWARE: 7.0%
9,900,000 Novell (b) 104,148
SECURITY & IDENTITY MANAGEMENT SOFTWARE
3,400,000 PeopleSoft (b) 77,520
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
1,600,000 Avid Technology (b)(c) 76,800
DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS
1,770,000 Kronos (b)(c) 70,110
LABOR MANAGEMENT SOLUTIONS
4,000,000 Aspect Communications (b)(c) 63,040
CALL CENTER SOFTWARE
3,050,000 Systems & Computer Technology (b)(c) 49,868
ENTERPRISE SOFTWARE & SERVICES
1,050,000 Micros Systems (b)(c) 45,528
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
5,700,000 E.Piphany (b)(c) 41,097
CRM SOFTWARE
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
2,200,000 JDA Software Group (b)(c) $ 36,322
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,521,000 Sybase (b) 31,302
DATABASE SOFTWARE
2,200,000 MAPICS (b)(c) 28,798
MID MARKET ERP SOFTWARE
2,035,000 MRO Software (b)(c) 27,391
ENTERPRISE MAINTENANCE SOFTWARE
3,000,000 Lawson Software (b) 24,690
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
6,000,000 Actuate (b)(c) 18,660
INFORMATION DELIVERY SOFTWARE & SOLUTIONS
550,000 Hyperion Solutions (b) 16,577
BUSINESS ANALYSIS SOFTWARE
1,760,000 Witness Systems (b)(c) 16,421
CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE
5,000,000 Indus International (b)(c) 15,000
ENTERPRISE ASSET MANAGEMENT SOFTWARE
1,125,000 Radiant Systems (b) 9,461
POINT OF SALE SYSTEMS FOR CONVENIENCE STORES
500,000 SPSS (b) 8,940
STATISTICAL/BUSINESS ANALYSIS SOFTWARE
1,200,000 ScanSoft (b) 6,384
SOFTWARE TO INCORPORATE SPEECH & IMAGES TO TEXT
1,400,000 ClickSoftware Technologies (b)(c) 5,712
SERVICE CHAIN OPTIMIZATION SOFTWARE
3,300,000 BSQUARE (b)(c) 4,719
SOFTWARE TO HELP DESIGN MOBILE DEVICES
70,000 Group 1 Software (b) 1,233
ADDRESS VERIFICATION SOFTWARE
- ----------------------------------------------------------------------------
779,721
>CONSUMER SOFTWARE: 0.4%
1,200,000 THQ (b) 20,292
ENTERTAINMENT SOFTWARE
750,000 Activision (b) 13,650
ENTERTAINMENT SOFTWARE
1,250,000 Pinnacle Systems (b) 10,663
VIDEO EDITING SOFTWARE & HARDWARE
- ----------------------------------------------------------------------------
44,605
>COMPUTER SERVICES: 1.5%
4,550,000 Igate Capital (b)(c) 35,718
TECHNOLOGY STAFFING SERVICES
3,100,000 Bearing Point (b) 31,279
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
3,469,000 Ciber (b)(c) 30,042
SOFTWARE SERVICES & STAFFING
4,600,000 AnswerThink Consulting (b)(c) 25,530
IT INTEGRATOR FOR FORTUNE 2000
900,000 Perot Systems (b) 12,132
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
560,000 American Management Systems (b) 8,439
SOFTWARE DEVELOPMENT SERVICES
2,300,000 Analysts International (b)(c) 7,751
TECHNOLOGY STAFFING SERVICES
500,000 Pomeroy Computer Resources (b) 7,370
NETWORK INTEGRATION SERVICES
1,025,000 New Horizons Worldwide (b)(c) 5,831
COMPUTER TRAINING SERVICES
- ----------------------------------------------------------------------------
164,092
21
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BUSINESS INFORMATION/MARKETING
SERVICES/PUBLISHING: 1.5%
1,200,000 Getty Images (b) $ 60,156
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
1,336,000 Navigant Consulting (b) 25,197
CONSULTING FIRM
2,685,000 InfoUSA (b)(c) 19,923
BUSINESS DATA FOR SALES LEADS
1,000,000 Moore: Wallace (Canada) (b) 18,733
COMMERCIAL PRINTING
950,000 Administaff (b) 16,511
PROFESSIONAL EMPLOYER ORGANIZATION
600,000 Information Holdings (b) 13,260
PATENT & OTHER BUSINESS INFORMATION
300,000 Proquest (b) 8,835
INFORMATION SERVICES FOR EDUCATION &
AUTOMOTIVE MARKETS
150,000 RH Donnelley (b) 5,976
YELLOW PAGES PUBLISHER
1,700,000 PRIMEDIA (b) 4,811
SPECIALTY MAGAZINES & OTHER PUBLICATIONS
- ----------------------------------------------------------------------------
173,402
>INTERNET: 1.3%
9,900,000 Skillsoft Publishing (b)(c) 85,635
PROVIDER OF WEB-BASED LEARNING SOLUTIONS
(E-LEARNING)
2,500,000 RSA Security (b) 35,500
ENTERPRISE SECURITY SOFTWARE
2,000,000 DoubleClick (b) 20,440
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
1,051,030 Vital Stream, Cl. C (b) 694
828,778 Vital Stream, Cl. B (b)(e) 520
STREAMING SERVICES FOR THE INTERNET
250,000 NeoPlanet, Series A (b)(e) 29
53,376 NeoPlanet, Series B (b)(e) 11
WEB BROWSER
- ----------------------------------------------------------------------------
142,829
>ELECTRONICS DISTRIBUTION: 0.7%
1,695,000 Avnet (b) 36,714
ELECTRONIC COMPONENTS DISTRIBUTION
780,000 Tech Data (b) 30,958
I/T DISTRIBUTOR
1,410,000 Agilysys 15,721
I/T DISTRIBUTOR
- ----------------------------------------------------------------------------
83,393
>TRANSACTION PROCESSORS: 1.4%
1,487,000 Global Payments 70,067
CREDIT CARD PROCESSOR
1,485,000 Concord EFS (b) 22,037
CREDIT CARD PROCESSOR
725,000 Euronext (France) 18,333
TRADING SERVICES FOR FINANCIAL MARKETS
600,000 Cubic 13,800
REVENUE COLLECTION & DEFENSE SYSTEMS
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
5,000,000 Hong Kong Exchanges &
Clearing (Hong Kong) $ 10,820
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
175,000 Deutsche Boerse (Germany) 9,558
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
406,000 Euronet Worldwide (b) 7,308
ATM PROCESSOR
300,000 Pegasus Systems (b) 3,141
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
155,064
-----------
INFORMATION: TOTAL 3,067,540
- ----------------------------------------------------------------------------
HEALTH CARE: 8.6%
>BIOTECHNOLOGY/DRUG DELIVERY: 2.1%
519,000 Martek Biosciences (b) 33,719
FATTY ACIDS FOR BABY FORMULA & OTHER FOODS
2,055,000 Nektar Therapeutics (b) 27,969
PULMONARY DRUG DELIVERY
1,665,000 Enzon (b) 19,980
POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS
1,708,000 Ciphergen Biosystems (b)(c) 19,198
PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY
426,000 NPS Pharmaceuticals (b) 13,095
SMALL MOLECULE DRUGS
900,000 Applera Celera Genomics (b) 12,519
DIAGNOSTICS & DRUG DEVELOPMENT
2,000,000 Medarex (b) 12,460
HUMANIZED ANTIBODIES
608,000 Protein Design Labs (b) 10,883
COMPUTER DESIGNED MONOCLONAL ANTIBODIES
2,800,000 Sequenom (b)(c) 8,904
HIGH SPEED DNA ANALYSIS INSTRUMENTS
1,600,000 Sangamo Biosciences (b)(c) 8,864
DRUG DISCOVERY
1,875,000 Locus Discovery, Series D Pfd. (b)(e) 7,500
HIGH THROUGHPUT RATIONAL DRUG DESIGN
1,982,000 Aclara Biosciences (b)(c) 7,234
MICROFLUIDIC SYSTEMS FOR DRUG DEVELOPMENT
635,000 Maxygen (b) 6,750
MOLECULAR BREEDING
638,000 Diversa (b) 5,901
MOLECULAR BREEDING
389,000 Atherogenic (b) 5,816
DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID
ARTHRITIS, ASTHMA
865,000 Arena Pharmaceuticals (b) 5,363
NOVEL DRUG TARGETING TECHNOLOGY
304,000 Alexion Pharmaceuticals (b) 5,174
MONOCLONAL ANTIBODIES
252,000 Applied Molecular Evolution (b) 4,486
MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION
528,000 Pharmacyclics (b) 3,907
LIGHT ACTIVATED DRUGS FOR CANCER &
VASCULAR DISEASES
461,000 SYRRX, Series C (b)(e) 2,397
X-RAY CRYSTALLOGRAPHY
1-800-922-6769
22
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
320,000 Incyte Genomics (b) $ 2,189
BIOINFORMATICS & DRUG DEVELOPMENT
316,000 Guilford Pharmaceuticals (b) 2,142
DRUG DELIVERY & NEUROLOGY DRUGS
160,000 Myriad Genetics (b) 2,058
GENE DISCOVERY & DIAGNOSTIC PRODUCTS
1,249,999 Perlegen Sciences (b)(e) 1,950
LARGE SCALE GENE SEQUENCING
210,000 Gene Logic (b) 1,090
GENE EXPRESSION DATABASE
359,944 Microdose (b)(e) 180
DRUG INHALERS
- ----------------------------------------------------------------------------
231,728
>MEDICAL EQUIPMENT/LABORATORY
SUPPLIES: 2.6%
1,629,000 Edwards Lifesciences (b) 49,000
HEART VALVES
989,000 Diagnostic Products 45,405
IMMUNODIAGNOSTIC KITS
1,900,000 CTI Molecular Imaging (b) 32,129
MEDICAL DIAGNOSTIC DEVICES
583,000 Orthofix International (b) 28,555
BONE FIXATION & STIMULATION DEVICES
2,600,000 Smith & Nephew (United Kingdom) 21,779
MEDICAL EQUIPMENT & SUPPLIES
20,000 Synthes-Stratec (Switzerland) 19,785
PRODUCTS FOR ORTHOPEDIC SURGERY
365,000 Essilor International (France) 18,855
EYEGLASS LENSES
875,000 Viasys Healthcare (b) 18,025
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
770,000 VISX (b) 17,826
LASER EYE SURGERY EQUIPMENT
520,000 ICU Medical (b) 17,826
INTRAVENOUS THERAPY PRODUCTS
600,000 Sola International (b) 11,280
SPECIALTY EYEGLASS LENSES
350,000 Haemonetics (b) 8,362
BLOOD & PLASMA COLLECTION EQUIPMENT
1,495,000 Novoste (b)(c) 7,161
RADIATION CATHETERS FOR IN-STENT RESTENOSIS
- ----------------------------------------------------------------------------
295,988
>PHARMACEUTICALS: 0.1%
138,000 Yuhan (South Korea) 7,853
ETHICAL DRUG PRODUCER
433,600 Patheon (Canada) (b) 3,905
PHARMACEUTICAL CONTRACT MANUFACTURER
- ----------------------------------------------------------------------------
11,758
>HOSPITAL MANAGEMENT: 0.2%
387,000 Rhoen-Klinikum (Germany) 19,992
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>MEDICAL SUPPLIES: 0.4%
686,000 Techne (b) $ 25,917
CYTOKINES, ANTIBODIES, OTHER REAGENTS
FOR LIFE SCIENCES
650,000 Owens & Minor 14,242
DISTRIBUTION OF MEDICAL SUPPLIES
- ----------------------------------------------------------------------------
40,159
>SERVICES: 3.2%
5,586,000 First Health Group (b)(c) 108,704
PPO NETWORK
2,491,000 Lincare Holdings (b) 74,805
HOME HEALTH CARE SERVICES
2,592,000 NDCHealth Group (c) 66,407
HEALTH CLAIMS PROCESSING & DRUG
MARKETING SERVICES
640,000 Charles River Laboratories (b) 21,971
PHARMACEUTICAL RESEARCH
1,333,000 Dendrite International (b) 20,888
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
2,500,000 Gambro (Sweden) 20,680
PRODUCTS/SERVICES FOR RENAL CARE
420,000 OPG Groep (Netherlands) 19,077
PHARMACEUTICAL WHOLESALER & RETAILER
550,000 Serologicals (b) 10,230
BLOOD COLLECTION & ANTIBODY PRODUCTION
296,000 Omega Pharma (Belgium) 9,398
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
440,000 Medquist (b) 7,066
MEDICAL TRANSCRIPTION SERVICES
700,000 Nestor Healthcare (United Kingdom) 2,574
HEALTHCARE STAFFING COMPANY
- ----------------------------------------------------------------------------
361,800
-----------
HEALTH CARE: TOTAL 961,425
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 19.9%
GOODS
>LEISURE VEHICLES: 1.3%
1,745,000 Harley-Davidson 82,940
MOTORCYCLES & RELATED MERCHANDISE
1,495,000 Monaco Coach (b)(c) 35,581
RECREATIONAL VEHICLES
275,000 Polaris Industries 24,360
MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS
2,850,000 Ducati Motor (Italy) (b) 4,930
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
147,811
>FURNITURE/TEXTILES: 1.7%
1,275,000 Hon Industries 55,233
OFFICE FURNITURE & FIREPLACES
740,000 Mohawk Industries (b) 52,200
CARPET & FLOORING
1,900,000 Herman Miller 46,113
OFFICE FURNITURE
510,000 Furniture Brands International 14,958
FURNITURE
1,160,000 Nobia (Sweden) 12,095
KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION
23
Columbia Acorn Fund
- ----------------------------------------------------------------------------
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>FURNITURE/TEXTILES--CONTINUED
440,000 Masonite International (Canada) (b) $ 11,780
DOOR MANUFACTURER
- ----------------------------------------------------------------------------
192,379
>FOOD & BEVERAGES: 0.7%
1,600,000 Kerry Group (Ireland) 30,037
FOOD INGREDIENTS
950,000 Orkla (Norway) 21,235
DIVERSIFIED CONSUMER GOODS
4,000,000 Lion Nathan (Australia) 18,191
BEER BREWER/DISTRIBUTOR
180,000 Davide Campari (Italy) 8,731
SPIRITS & WINE
- ----------------------------------------------------------------------------
78,194
>NONDURABLES: 1.1%
2,300,000 Helen of Troy (b)(c) 53,245
HAIRDRYERS & CURLING IRONS
895,000 Scotts Company (b) 52,948
CONSUMER LAWN & GARDEN PRODUCTS
255,000 Uni-Charm (Japan) 12,544
INFANT HYGIENE & FEMININE CARE PRODUCTS
601,000 First Years (c) 8,979
INFANT & TODDLER PRODUCTS
- ----------------------------------------------------------------------------
127,716
>DURABLE GOODS: 1.3%
1,511,000 SCP Pool (b) 49,379
DISTRIBUTOR OF SWIMMING POOL SUPPLIES
605,000 Hunter Douglas (Netherlands) 28,288
WINDOW SHADES & VENETIAN BLINDS
465,000 Hyundai Mobis (South Korea) 25,016
AUTO PARTS
422,000 American Woodmark (c) 23,231
KITCHEN CABINETS
5,000,000 Techtronic Industries (Hong Kong) 13,846
POWER TOOL MANUFACTURER
579,000 Shimano (Japan) 11,998
BICYCLE COMPONENTS & FISHING TACKLE
- ----------------------------------------------------------------------------
151,758
>APPAREL: 2.0%
2,840,000 Coach (b) 107,210
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
1,370,000 Jones Apparel 48,265
WOMEN'S APPAREL
564,000 Oxford Industries 19,108
BRANDED & PRIVATE LABEL APPAREL
828,000 Steven Madden (b)(c) 16,891
WHOLESALER/RETAILER OF FASHION FOOTWEAR
3,000,000 Billabong International (Australia) 16,106
SURFWEAR APPAREL MANUFACTURER
200,000 Columbia Sportswear (b) 10,900
ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES
- ----------------------------------------------------------------------------
218,480
NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SERVICES
>RETAIL: 5.4%
2,495,000 Chico's FAS (b) $ 92,190
WOMEN'S SPECIALTY RETAIL
3,743,000 Christopher & Banks (c) 73,101
WOMEN'S APPAREL RETAILER
1,600,000 Michaels Stores 70,720
CRAFT & HOBBY SPECIALTY RETAILER
4,500,000 Winn Dixie Stores 44,775
SUPERMARKETS IN THE SOUTHEAST US
1,510,000 Aeropostale (b) 41,404
MALL BASED TEEN RETAILER
500,000 Whole Foods Market 33,565
NATURAL FOOD SUPERMARKETS
1,070,000 Hot Topic (b) 31,522
MUSIC INSPIRED RETAILER OF APPAREL,
ACCESSORIES & GIFTS
1,015,000 Petco Animal Supplies (b) 30,907
PET SUPPLIES & SERVICES
1,400,000 Borders Group 30,688
BOOKSTORES
788,000 Urban Outfitters (b) 29,195
ECLECTIC HOME & APPAREL RETAILER
536,000 Zale (b) 28,515
SPECIALTY RETAILER OF JEWELRY
895,000 Abercrombie & Fitch (b) 22,115
TEEN APPAREL RETAILER
450,000 Ann Taylor (b) 17,550
WOMEN'S APPAREL RETAILER
500,000 Pier 1 Imports 10,930
IMPORTED FURNITURE & TCHOTCHKES
700,000 Genesco (b) 10,591
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
3,100,000 The Warehouse Group (New Zealand) 10,399
WAREHOUSE CLUB
1,015,000 Burberry Group (United Kingdom) 6,622
APPAREL RETAILER
850,000 Gaiam (b)(c) 5,058
HEALTHY LIVING CATALOG & E-COMMERCE
1,500,000 Esprit Holdings (Hong Kong) 4,985
GLOBAL APPAREL BRAND MANAGER
$ 6,000 Gadzooks 5.00% Convertible (e) 4,485
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
599,317
>TRAVEL: 0.8%
2,024,500 Intrawest (Canada) 37,440
OWNER/OPERATOR OF SKI RESORTS
3,380,000 LaQuinta (b) 21,666
OWNER/FRANCHISER OF MID-PRICED HOTELS
950,000 Vail Resorts (b) 16,150
OWNER/OPERATOR OF SKI RESORTS
725,000 Navigant International (b) 10,041
CORPORATE TRAVEL AGENCY
720,000 Jurys Doyle Hotel (Ireland) 8,799
HOTEL GROUP
- ----------------------------------------------------------------------------
94,096
1-800-922-6769
24
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSUMER SERVICES: 1.9%
2,111,000 ITT Educational Services (b) $ 99,154
POSTSECONDARY DEGREE PROGRAMS
695,000 Weight Watchers (b) 26,667
WEIGHT LOSS PROGRAM
1,290,000 Coinstar (b)(c) 23,297
OWNER/OPERATOR OF COIN COUNTING MACHINES
260,000 USS (Japan) 18,395
USED CAR AUCTIONEER
1,750,000 Princeton Review (b)(c) 17,063
COLLEGE PREPARATION COURSES
2,350,000 Bally Total Fitness (b)(c) 16,450
NATIONAL CHAIN OF FITNESS CENTERS
900,000 Central Parking 13,437
OWNER, OPERATOR & MANAGER OF PARKING
LOTS & GARAGES
- ----------------------------------------------------------------------------
214,463
>ENTERTAINMENT/LEISURE PRODUCTS: 1.5%
805,000 International Speedway Motors 35,951
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
1,250,000 Leapfrog Enterprises (b) 33,163
EDUCATIONAL TOYS
1,276,000 Action Performance (c) 25,010
MOTORSPORT COLLECTIBLES & MERCHANDISING
2,765,000 Six Flags (b) 20,793
WORLDWIDE THEME PARK OPERATOR
370,000 Amer Group (Finland) 16,013
BRANDED SPORTING GOODS
363,000 Speedway Motors 10,498
MOTORSPORT RACETRACK OWNER & OPERATOR
1,750,000 Magna Entertainment, Cl. A (Canada) (b) 8,873
OWNER/OPERATOR OF THOROUGHBRED RACETRACKS
334,000 RC2 6,931
COLLECTIBLES & TOYS
345,000 Intralot (Greece) 6,729
LOTTERY & GAMING SYSTEMS & SERVICES
- ----------------------------------------------------------------------------
163,961
>CASINOS: 1.3%
2,010,000 Alliance Gaming (b) 49,546
DIVERSIFIED GAMING COMPANY
890,000 Station Casinos 27,261
CASINOS & RIVERBOATS
875,000 Argosy Gaming (b) 22,741
REGIONAL RIVERBOAT CASINOS
1,925,000 Pinnacle Entertainment (b)(c) 17,941
REGIONAL RIVERBOAT CASINOS
5,000,000 Sky City Entertainment (New Zealand) 15,102
CASINO/ENTERTAINMENT COMPLEX
635,000 Monarch Casino & Resort (b)(c) 7,004
CASINO/HOTEL IN RENO
113,000 Lakes Entertainment (b) 1,825
GAMING ENTREPRENEUR
- ----------------------------------------------------------------------------
141,420
>RESTAURANTS: 0.6%
2,000,000 AFC Enterprises (b)(c) 39,000
POPEYES, CHURCHES FRIED CHICKEN
1,447,000 Autogrill (Italy) (b) 20,675
TOLLWAY RESTAURANTS
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
243,000 Cheesecake Factory (b) $ 10,699
CASUAL DINING RESTAURANT
7,000 Kappa Create (Japan) 591
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
70,965
>CRUISE LINES: 0.3%
400,000 Carnival 15,892
LARGEST CRUISE LINE
894,000 Steiner Leisure (b)(c) 12,784
SPAS & HAIR/SKIN PRODUCTS ON CRUISE SHIPS
- ----------------------------------------------------------------------------
28,676
-----------
CONSUMER GOODS/SERVICES: TOTAL 2,229,236
- ----------------------------------------------------------------------------
FINANCE: 11.6%
>BANKS: 4.2%
1,751,000 TCF Financial 89,914
GREAT LAKES BANK
1,608,000 Associated Banc-Corp 68,581
MIDWEST BANK
3,200,000 Anglo Irish Bank (Ireland) 50,438
SMALL BUSINESS & MIDDLE MARKET BANKING
1,122,000 Glacier Bancorp (c) 36,353
MOUNTAIN STATES BANK
825,000 BOK Financial (b) 31,944
OKLAHOMA BANK
700,000 Texas Regional Bancshares 25,900
SOUTH TEXAS BANK
1,798,000 Republic 24,255
MICHIGAN BANK
185,000 Depfa Bank (Ireland) 23,332
INTERNATIONAL PUBLIC SECTOR FINANCE
605,000 Chittenden 20,352
VERMONT & WESTERN MASSACHUSETTS BANK
2,800,000 Den Norske Bank (Norway) 18,650
LARGEST NORWEGIAN BANK
660,000 Hawthorne Financial (b)(c) 18,467
REAL ESTATE LENDER
356,000 Bank of Bermuda 16,002
OFFSHORE BANK
700,000 West Coast Bancorp 14,938
PORTLAND SMALL BUSINESS LENDER
303,000 Southwest Bancorp 5,418
OKLAHOMA SMALL BUSINESS BANK
159,000 CityBank Lynnwood 5,167
SEATTLE REAL ESTATE LENDER
186,000 CorpBanca (Chile) (b) 4,849
CHILE'S 3RD LARGEST LOCAL BANK
82,000 BankFirst 4,814
OKLAHOMA COMMUNITY BANK
170,000 Midwest Bank 3,783
CHICAGO BANK
82,000 First Financial BankShares 3,419
WEST TEXAS COMMUNITY BANK
73,000 Great Southern Bancorp 3,385
MISSOURI REAL ESTATE LENDER
46,000 First Mutual Bancshares 1,127
SEATTLE COMMUNITY BANK
25
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BANKS--CONTINUED
29,000 Cascade Financial $ 562
SEATTLE COMMUNITY BANK
- ----------------------------------------------------------------------------
471,650
>SAVINGS & LOANS: 2.1%
2,184,000 Peoples Bank Bridgeport 71,198
CONNECTICUT SAVINGS & LOAN
947,000 Downey Financial 46,687
CALIFORNIA HOME LENDER
1,228,000 Anchor Bancorp Wisconsin (c) 30,577
WISCONSIN THRIFT
1,700,000 Housing Development Finance (India) 24,075
LEADING PROVIDER OF MORTGAGES IN INDIA
497,000 Quaker City Bancorp (c) 23,135
LA REAL ESTATE LENDER
1,000,000 Irish Life & Permanent (Ireland) 16,127
SAVINGS PRODUCTS
700,000 First Federal Capital 15,764
WISCONSIN THRIFT
190,000 Washington Federal 5,396
OLD FASHIONED MORTGAGE LENDER
- ----------------------------------------------------------------------------
232,959
>INSURANCE: 2.9%
870,000 Philadelphia Consolidated Holding (b) 42,482
SPECIALTY INSURANCE
1,320,000 HCC Insurance Holdings 41,976
AVIATION INSURANCE
826,000 Leucadia National 38,079
INSURANCE HOLDING COMPANY
1,000,000 RLI 37,460
SPECIALTY INSURANCE
138,000 Markel (b) 34,984
SPECIALTY INSURANCE
995,000 Protective Life 33,671
LIFE INSURANCE
700,000 Harleysville Group 13,923
COMMERCIAL & PERSONAL LINES INSURANCE
800,000 Ohio Casualty (b) 13,888
COMMERCIAL & PERSONAL LINES INSURANCE
650,000 Scottish Re Group (formerly known
as Scottish Annuity & Life) 13,507
LIFE REINSURER
210,000 StanCorp Financial 13,205
GROUP LIFE, DISABILITY & 401K
400,000 Selective Insurance Group 12,944
COMMERCIAL & PERSONAL LINES INSURANCE
595,000 United National Group (b) 10,514
SPECIALTY INSURANCE
1,000,000 Jardine Lloyd Thompson
(United Kingdom) 9,416
BUSINESS INSURANCE BROKER
355,000 Northbridge Financial (Canada) (b) 5,741
PROPERTY & CASUALTY INSURANCE
200,000 Kingsway Financial (Canada) (b) 2,259
AUTO & SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
324,049
>MONEY MANAGEMENT: 1.0%
2,390,000 SEI Investments 72,823
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
855,000 Eaton Vance $ 31,327
SPECIALTY MUTUAL FUNDS
123,000 Affiliated Managers Group (b) 8,560
ASSET MANAGEMENT HOLDING COMPANY
200,000 The Investment Company of
China (China) (b)(e) 246
CLOSED-END FUND
- ----------------------------------------------------------------------------
112,956
>BROKERAGE: 0.2%
1,215,000 Investment Technology Group (b) 19,622
ELECTRONIC TRADING
- ----------------------------------------------------------------------------
>FINANCE COMPANIES: 1.2%
5,831,000 AmeriCredit (b) 92,888
AUTO LENDING
1,820,000 World Acceptance (b)(c) 36,236
PERSONAL LOANS
500,000 Intermediate Capital (United Kingdom) 9,425
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
900,000 DVI Health Services (b)(c) 36
LEASES BIG MEDICAL EQUIPMENT
- ----------------------------------------------------------------------------
138,585
-----------
FINANCE: TOTAL 1,299,821
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 12.2%
>STEEL: 0.8%
1,900,000 Gibraltar Steel (c) 47,785
STEEL PROCESSING
1,050,000 Worthington Industries 18,932
STEEL PROCESSING
550,000 Tenaris (Luxembourg) (b) 18,326
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
85,043
>INDUSTRIAL GOODS: 1.3%
1,400,000 Clarcor (c) 61,740
MOBILE & INDUSTRIAL FILTERS
750,000 Donaldson 44,370
INDUSTRIAL AIR FILTRATION
268,000 Mine Safety Appliances 21,309
SAFETY EQUIPMENT
500,000 Intermagnetics General (b) 11,080
SUPERCONDUCTING WIRE
100,000 Bacou Dalloz (France) 7,812
SAFETY EQUIPMENT
- ----------------------------------------------------------------------------
146,311
>INDUSTRIAL DISTRIBUTION: 1.1%
1,525,000 Watsco (c) 34,663
HVAC DISTRIBUTION
600,000 Hughes Supply 29,772
INDUSTRIAL DISTRIBUTION
3,800,000 Grafton Group (Ireland) 26,189
BUILDERS, WHOLESALERS & DIY RETAILING
975,000 Airgas 20,943
INDUSTRIAL GAS DISTRIBUTOR
900,000 Nuco2 (b)(c) 11,403
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
- ----------------------------------------------------------------------------
122,970
1-800-922-6769
26
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSTRUCTION: 0.9%
488,000 Simpson $ 24,820
WALL JOINT MAKER
425,000 Florida Rock Industries 23,311
CONCRETE & AGGREGATES
700,000 Wienerberger (Austria) 18,680
BRICKS & CLAY ROOFING TILES
380,000 Daito Trust Construction (Japan) 11,279
APARTMENT BUILDER
3,000,000 Consorcio (Mexico) (b) 7,449
LOW/MEDIUM INCOME HOUSE BUILDER
750,000 McCarthy & Stone (United Kingdom) 6,922
BUILDER OF RETIREMENT APARTMENTS
216,000 Northwest Pipe Company (b) 2,877
WATER TRANSMISSION PIPE
- ----------------------------------------------------------------------------
95,338
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 1.3%
1,850,000 Spartech (c) 45,584
PLASTICS DISTRIBUTION & COMPOUNDING
47,000 Geberit International (Switzerland) 23,095
PLUMBING SUPPLIES
1,000,000 Schulman 21,320
PLASTICS DISTRIBUTION & COMPOUNDING
37,000 Givaudan (Switzerland) 19,198
INDUSTRIAL FRAGRANCES & FLAVORS
450,000 Novozymes (Denmark) 16,408
INDUSTRIAL ENZYMES
50,000 Imerys (France) 10,514
INDUSTRIAL MINERALS PRODUCER
347,000 SYMYX (b) 7,131
MATERIALS & CHEMICALS
- ----------------------------------------------------------------------------
143,250
>MACHINERY: 1.2%
1,025,000 Ametek 49,466
AEROSPACE/INDUSTRIAL INSTRUMENTS
1,050,000 Esco Technologies (b)(c) 45,832
FILTRATION & TEST EQUIPMENT
420,000 Pentair 19,194
PUMPS, WATER TREATMENT & TOOLS
500,000 Cobham (United Kingdom) 10,416
AEROSPACE
285,000 Gardner Denver (b) 6,803
AIR COMPRESSORS, BLOWERS & PUMPS
150,000 Tennant 6,495
NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT
- ----------------------------------------------------------------------------
138,206
>OUTSOURCING SERVICES & TRAINING: 0.6%
1,900,000 Labor Ready (b) 24,890
TEMPORARY MANUAL LABOR
525,000 Bilfinger Berger (Germany) 17,860
CONSTRUCTION & RELATED SERVICES
9,500,000 Li & Fung (Hong Kong) 16,274
SOURCING OF CONSUMER GOODS
600,000 GP Strategies (b) 4,800
TRAINING PROGRAMS
- ----------------------------------------------------------------------------
63,824
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONGLOMERATES: 0.2%
5,550 Pargesa (Switzerland) $ 14,802
INDUSTRIAL & MEDIA HOLDINGS
510,000 Aalberts Industrie (Netherlands) 13,192
FLOW CONTROL & HEAT TREATMENT
- ----------------------------------------------------------------------------
27,994
>INDUSTRIAL SUPPLIERS: 0.2%
1,800,000 Xstrata (United Kingdom) 20,242
DIVERSIFIED MINING HOLDING COMPANY
- ----------------------------------------------------------------------------
>LOGISTICS: 2.2%
2,900,000 Expeditors International of
Washington 109,214
INTERNATIONAL FREIGHT FORWARDER
900,000 UTI Worldwide 34,137
INTERNATIONAL FREIGHT FORWARDER
1,000,000 Forward Air (b) 27,500
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
1,800,000 Exel (United Kingdom) 23,729
GLOBAL LOGISTICS & FREIGHT FORWARDING
40,000,000 Sinotrans (China) 18,033
INTEGRATED LOGISTICS IN CHINA
759,000 Hub Group (b)(c) 16,349
TRUCK & RAIL FREIGHT FORWARDER
11,000,000 Sembcorp Logistics (Singapore) 12,954
LOGISTIC SERVICES FOR MARINE TRANSPORT
- ----------------------------------------------------------------------------
241,916
>WATER: 1.3%
2,400,000 Tetra Tech (b) 59,664
RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING
856,000 Cuno (b)(c) 38,546
FILTRATION & FLUIDS CLARIFICATION
900,000 Pall 24,147
FILTRATION & FLUIDS CLARIFICATION
900,000 Insituform Technologies (b) 14,850
WATER/SEWER PIPE REPAIR
475,000 Watts Water Technologies 10,545
WATER, VALVES, REGULATORS & FILTRATION
- ----------------------------------------------------------------------------
147,752
>OTHER INDUSTRIAL SERVICES: 1.1%
1,500,000 Clark/Bardes Consulting (b)(c) 28,860
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
725,000 G&K Services 26,644
UNIFORM RENTAL
825,000 Mobile Mini (b)(c) 16,269
LEASES PORTABLE STORAGE UNITS
590,000 Munters (Sweden) 14,273
MOISTURE & HUMIDITY CONTROL
60,000 Schindler (Switzerland) (b) 14,645
ELEVATOR MANUFACTURER & SERVICE PROVIDER
665,500 Zardoya Otis (Spain) 13,835
ELEVATOR MANUFACTURER & SERVICE PROVIDER
825,000 Ushio (Japan) 13,699
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
128,225
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 1,361,071
- ----------------------------------------------------------------------------
27
Columbia Acorn Fund
- ----------------------------------------------------------------------------
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 7.0%
>INDEPENDENT POWER: 0.2%
570,000 Gamesa (Spain) $ 18,737
SPANISH WIND TURBINES
720,000 Millennium Cell (b) 1,678
FUEL CELL TECHNOLOGY
- ----------------------------------------------------------------------------
20,415
>OIL/GAS PRODUCERS: 4.3%
6,300,000 XTO Energy 178,290
NATURAL GAS PRODUCER
2,550,000 Ultra Petroleum (b) 62,781
NATURAL GAS PRODUCER
1,200,000 Western Gas 56,700
OIL PRODUCER & COAL SEAM GAS PRODUCER
1,460,000 Evergreen Resources (b) 47,465
COAL SEAM GAS PRODUCER
565,000 Talisman Energy (Canada) 32,142
OIL & GAS PRODUCER
1,200,000 Southwestern Energy (b) 28,680
NATURAL GAS PRODUCER
600,000 Quicksilver (b) 19,380
NATURAL GAS & COAL SEAM GAS PRODUCER
517,000 Westport Resources (b) 15,438
OIL & GAS PRODUCER
400,000 Nexen (Canada) 14,522
OIL & GAS PRODUCER
9,165,000 Tullow Oil (United Kingdom) 14,029
OIL & GAS PRODUCER
500,000 McMoran Exploration (b) 9,375
NATURAL GAS PRODUCERS & LNG DEVELOPER
2,265,000 Tipperary (b)(c) 6,908
COAL SEAM GAS PRODUCER
- ----------------------------------------------------------------------------
485,710
>DISTRIBUTION/MARKETING/REFINING: 1.0%
1,260,000 Equitable Resources 54,079
NATURAL GAS UTILITY & PRODUCER
1,250,000 Oneok 27,600
NATURAL GAS UTILITY, MARKETING & PROCESSING
761,000 Atmos Energy 18,492
NATURAL GAS UTILITY
1,270,000 Aquila (b)(e) 8,941
ELECTRIC UTILITY HOLDING COMPANY
- ----------------------------------------------------------------------------
109,112
>OIL SERVICES: 1.5%
1,900,000 FMC Technologies (b) 44,270
OIL & GAS WELL HEAD MANUFACTURER
730,000 Carbo Ceramics 37,412
NATURAL GAS WELL STIMULANTS
4,750,000 Newpark Resources (b)(c) 22,753
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
1,750,000 Key Energy Services (b) 18,043
OIL & GAS WELL WORKOVER SERVICES
2,200,000 Saipem (Italy) 17,768
OFFSHORE CONSTRUCTION & DRILLING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,050,000 Enerflex Systems (Canada) $ 16,412
NATURAL GAS COMPRESSOR
800,000 Hanover Compressor (b) 8,920
NATURAL GAS COMPRESSOR RENTAL
- ----------------------------------------------------------------------------
165,578
-----------
ENERGY/MINERALS: TOTAL 780,815
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 5.3%
>REAL ESTATE: 4.3%
1,160,000 The Rouse Company 54,520
REGIONAL SHOPPING MALLS
1,845,000 General Growth Properties 51,199
REGIONAL SHOPPING MALLS
875,000 SL Green Realty 35,919
MANHATTAN OFFICE BUILDINGS
800,000 Macerich Company 35,600
REGIONAL SHOPPING MALLS
699,000 Forest City Enterprises, Cl. B 33,762
COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER
725,000 Mills 31,900
REGIONAL SHOPPING MALLS
690,000 Federal Realty Investment Trust 26,489
SHOPPING CENTERS
700,000 Manufactured Home Communities 26,355
MANUFACTURED HOME COMMUNITIES
1,375,000 Crescent Real Estate Equities 23,554
CLASS A OFFICE BUILDINGS
400,000 Chelsea Properties Group 21,924
OUTLET MALLS
975,000 Glimcher Realty Trust 21,821
REGIONAL SHOPPING MALLS
540,000 AMB Property 17,755
INDUSTRIAL PROPERTIES
700,000 Keystone Property Trust 15,463
INDUSTRIAL PROPERTIES
291,000 LNR Property 14,407
DISTRESSED PROPERTY FINANCE
400,000 Gables Residential Trust 13,896
APARTMENTS
200,000 Essex Property Trust 12,844
WEST COAST APARTMENTS
650,000 United Dominion Realty 12,480
APARTMENTS
574,000 LaSalle Hotel Properties 10,648
UPSCALE/FULL SERVICE HOTELS
190,000 Consolidated Tomoka 6,213
FLORIDA LAND OWNER
299,275 Security Capital European
Realty (Luxembourg) (b)(e) 5,315
SELF STORAGE PROPERTIES
380,000 Highland Hospitality (b) 4,142
HOTEL REAL ESTATE INVESTMENT TRUST
133,000 Am NV (Netherlands) 1,032
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
477,238
1-800-922-6769
28
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>WASTE MANAGEMENT: 0.2%
533,000 Waste Connections (b) $ 20,131
SOLID WASTE MANAGEMENT
- ----------------------------------------------------------------------------
>TRANSPORTATION: 0.3%
140,000 Kobenhavns Lufthavne (Denmark) 16,392
COPENHAGEN AIRPORT AUTHORITY
500,000 Grupo Aeroportaurio Del Sureste
(Mexico) 8,800
CANCUN & COZUMEL AIRPORT OPERATOR
15,000,000 Comfort Group (Singapore) 7,198
TAXI SERVICE
- ----------------------------------------------------------------------------
32,390
>REGULATED UTILITIES: 0.5%
1,100,000 Unisource Energy 27,126
ELECTRIC UTILITY IN ARIZONA
850,000 Northeast Utilities 17,145
REGULATED ELECTRIC UTILITY
899,800 Red Electrica (Spain) 14,737
SPANISH POWER GRID
- ----------------------------------------------------------------------------
59,008
-----------
OTHER INDUSTRIES: TOTAL 588,767
TOTAL COMMON STOCKS AND OTHER
-----------
EQUITY-LIKE SECURITIES: 92.1% 10,288,675
(COST: $6,468,313)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 7.8%
Yield 0.88% - 1.15%
Due 1/02/04 - 2/14/04
$ 75,000 John Hancock Financial $ 74,936
75,000 Citicorp 74,911
74,000 Household Finance 73,966
74,000 General Electric Capital 73,917
70,000 American Express Credit 69,939
62,000 Virginia Electric & Power 61,979
59,000 Schering Plough 58,991
58,000 State Street Bank & Trust 57,955
52,000 Toyota Credit 51,955
50,193 Cambell Soup 50,183
50,000 Bayer 49,951
49,000 Marshall & IIsley 48,964
48,000 Cargill 47,983
37,000 AIG Funding 36,994
10,000 US Treasury Bill 9,998
32,863 Repurchase Agreement with State
Street Bank & Trust Co., dated
12/31/03, due 1/02/04 at 0.85%
collateralized by Federal
National Mortgage Association
Notes maturing 1/15/06, Market
Value $33,523 (repurchase
proceeds: $32,865) 32,863
- ----------------------------------------------------------------------------
(AMORTIZED COST: $875,485) 875,485
-----------
TOTAL INVESTMENTS: 99.9% 11,164,160
(COST: $7,343,798) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 4,655
-----------
TOTAL NET ASSETS: 100% $11,168,815
============================================================================
29
Columbia Acorn Fund
>Statement of Investments, continued
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
was $7,338,384 and net unrealized appreciation was $3,825,776 consisting
of gross unrealized appreciation of $4,118,963 and gross unrealized
depreciation of $293,187.
(b) Non-income producing security.
(c) On December 31, 2003, the fund held the following percentages of the
outstanding voting shares of the companies listed below:
AnswerThink Consulting 10.34%
Christopher & Banks 9.90%
Gibraltar Steel 9.88%
New Horizons Worldwide 9.87%
World Acceptance 9.85%
Hub Group 9.83%
Skillsoft Publishing 9.80%
Actuate 9.77%
Indus International 9.63%
Analysts International 9.50%
Gaiam 9.24%
Seachange International 9.19%
Novoste 9.16%
MAPICS 8.84%
BSQUARE 8.81%
Igate Capital 8.79%
Systems & Computer Technology 8.78%
Nuco2 8.46%
MRO Software 8.22%
Helen of Troy 8.18%
Esco Technologies 8.17%
Clark/Bardes Consulting 8.12%
Witness Systems 7.96%
Quaker City Bancorp 7.94%
E.Piphany 7.66%
JDA Software Group 7.58%
COMARCO 7.39%
NDCHealth Group 7.26%
First Years 7.24%
AFC Enterprises 7.15%
Aspect Communications 7.13%
Sequenom 7.00%
Action Performance 6.98%
Bally Total Fitness 6.91%
Monarch Casino & Resort 6.80%
Watsco 6.77%
Sangamo Biosciences 6.45%
Princeton Review 6.40%
Steven Madden 6.32%
Coinstar 6.07%
Pinnacle Entertainment 6.03%
DVI Health Services 5.93%
First Health Group 5.92%
Ciphergen Biosystems 5.92%
Spartech 5.92%
Newpark Resources 5.87%
Glacier Bancorp 5.80%
Micros Systems 5.79%
Tipperary 5.77%
Mobile Mini 5.75%
Kronos 5.75%
Hawthorne Financial 5.71%
Aclara Biosciences 5.53%
Clarcor 5.53%
Ciber 5.44%
Steiner Leisure 5.43%
Anchor Bancorp Wisconsin 5.31%
ClickSoftware Technologies 5.29%
Excel Technologies 5.25%
American Woodmark 5.23%
Avid Technology 5.21%
InfoUSA 5.14%
Monaco Coach 5.14%
Cuno 5.07%
Saga Communications 5.05%
The aggregate cost and value of these companies at December 31, 2003, was
$1,322,612 and $1,914,723 respectively. Investments in affiliate companies
represent 17.14% of total net assets at December 31, 2003. Investment
activity and income amounts relating to affiliates during the year ended
December 31, 2003 were as follows:
Dividend Income $ 4,319
Net realized loss $ (225)
Change in unrealized loss $ 708,696
Purchases $ 344,232
Proceeds from sales $ 89,746
In addition, additional purchases of existing portfolio holdings that were
not considered affiliates in prior years, resulted in the fund owning more
than 5% of the outstanding shares of certain issues at December 31, 2003.
Therefore, the cost and market value affiliate disclosure amounts include
both acquisitions of new investments in affiliates during the year, as
well as prior year investment holdings that became affiliates during the
current year.
(d) On December 31, 2003, the market value of foreign securities (in thousands)
represents 12.65% of total net assets. The Fund's foreign portfolio was
diversified as follows:
VALUE PERCENT
============ =======
Canada $ 184,588 1.65%
United Kingdom 157,091 1.41
Ireland 154,922 1.39
Switzerland 91,525 0.82
France 77,281 0.69
Japan 68,506 0.61
Hong Kong 62,587 0.56
Netherlands 61,589 0.55
Italy 52,104 0.47
Singapore 52,066 0.47
Germany 47,410 0.42
Spain 47,310 0.42
Sweden 47,048 0.42
Norway 39,885 0.36
VALUE PERCENT
============ =======
Australia $ 34,297 0.31%
South Korea 32,869 0.30
Denmark 32,800 0.29
Luxembourg 29,286 0.26
New Zealand 25,501 0.23
India 24,075 0.22
Austria 18,680 0.17
China 18,279 0.16
Mexico 16,249 0.15
Finland 16,013 0.14
Belgium 9,398 0.08
Greece 6,729 0.06
Chile 4,849 0.04
------------ -------
Total Foreign Portfolio $ 1,412,937 12.65%
============ =======
1-800-922-6769
30
(e) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. These securities are valued in good faith
by the Board of Trustees. At December 31, 2003, these securities (in
thousands) amounted to $31,574, which represents 0.3% of total net assets.
Additional information on these securities is as follows:
ACQUISITION SHARES/
SECURITY DATES PAR (000) COST (000) VALUE (000)
- -------------------------------------------------------------------------------------------
Locus Discovery, Series D Pfd. 09/05/01 1,875 $ 7,500 $ 7,500
Security Capital European Realty 08/20/98-11/12/99 299 5,985 5,315
Aquila 04/23/01-12/19/01 1,270 28,382 8,941
Perlegen Sciences 03/30/01 1,250 5,000 1,950
SYRRX, Series C 01/08/01 461 2,997 2,397
The Investment Company of China 10/22/92-03/15/00 200 1,690 246
Microdose 11/24/00 360 2,005 180
Gadzooks 5.00% Convertible 10/08/03 $ 6,000 6,000 4,485
NeoPlanet, Series A 02/12/99 250 2,000 29
NeoPlanet, Series B 02/17/00 53 641 11
Vital Stream, Cl. B 10/03/01-09/30/02 829 290 520
--------- -----------
$ 62,490 $ 31,574
========= ===========
31
Columbia Acorn International
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
EUROPE
>GERMANY/AUSTRIA
Wienerberger (Austria) 0 300,000
Zapf Creation 240,000 300,000
>NORWAY
Den Norske Bank 2,190,000 2,610,000
>SWEDEN
Hexagon 250,000 293,000
>FRANCE
Camaieu 0 34,000
Imerys 0 40,000
>UNITED KINGDOM/IRELAND
Business Post 600,000 800,000
Expro International 2,500,000 2,700,000
Intermediate Capital 200,000 300,000
Irish Life & Permanent (Ireland) 1,000,000 1,100,000
Jardine Lloyd Thompson 0 600,000
Kensington 0 1,000,000
Nestor Healthcare 1,360,000 1,520,000
Smith & Nephew 1,400,000 1,550,000
Tullow Oil 6,500,000 8,000,000
>NETHERLANDS
AM NV 0 133,000
Sligro Food Group 7,768 362,000
Vopak 800,000 900,000
>ITALY
Amplifon 0 90,000
>FINLAND
Sponda 0 816,000
>GREECE
Intralot 0 465,000
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
Esprit Holdings 0 1,500,000
>JAPAN
Nissin Healthcare 0 260,000
Park 24 0 413,000
Shimano 0 543,000
>SINGAPORE
Venture 1,480,000 1,920,000
>INDONESIA
PT Perusahaan Gas Negara 0 30,000,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>CHILE
CorpBanca 0 186,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>AUSTRALIA/NEW ZEALAND
Sky City Entertainment
(New Zealand) 2,000,000 4,000,000
Tabcorp Holdings 0 400,000
>CANADA
Masonite International 240,000 420,000
Nexen 0 300,000
Patheon 600,000 1,261,000
>UNITED STATES
Central European Distribution 19,700 134,600
1-800-922-6769
32
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
EUROPE
>GERMANY/AUSTRIA
Deutsche Boerse 275,000 175,000
Software AG (Austria) 655,000 0
>SWEDEN
Castellum 520,000 470,000
>FRANCE/BELGIUM
Neopost 500,000 390,000
Omega Pharma (Belgium) 445,000 244,000
>UNITED KINGDOM/IRELAND
Hit Entertainment 3,650,000 3,500,000
Marconi 1,075,000 0
Torex 700,000 0
Xstrata 800,000 0
>SPAIN
Gamesa 530,000 435,000
Zardoya Otis 376,000 0
>NETHERLANDS
Hunter Douglas 545,000 433,000
OPG Groep 377,000 349,000
>LUXEMBOURG
Tenaris 424,000 400,000
>FINLAND
Amer Group 384,000 185,000
>ITALY
Parmalat Finanziaria 2,700,000 0
Saipem 1,500,000 0
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
TVB 3,000,000 2,000,000
>INDIA
Housing Development Finance 2,000,000 1,700,000
>JAPAN
ARRK 220,000 180,000
>SOUTH KOREA
Cheil Communications 70,000 0
S1 Corporation 500,000 0
>SINGAPORE
Comfort Group 27,000,000 1,500,000
>TAIWAN
Chroma Ate 6,582,972 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>AUSTRALIA/NEW ZEALAND
Computershare 5,000,000 0
Jupiters 2,500,000 0
The Warehouse Group
(New Zealand) 3,500,000 2,000,000
>CANADA
Altagas 728,100 0
Kingsway Financial 600,000 0
Moore - Wallace 450,000 0
33
Columbia Acorn International
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 95.5%
- ----------------------------------------------------------------------------
EUROPE: 61.0%
>GERMANY/AUSTRIA: 7.8%
335,000 Rhoen-Klinikum Pfd. $ 18,783
300,000 Rhoen-Klinikum 15,497
HOSPITAL MANAGEMENT
500,000 GFK 14,376
MARKET RESEARCH SERVICES
550,000 Hugo Boss Designs 11,053
FASHION APPAREL
300,000 Bilfinger Berger 10,206
CONSTRUCTION & RELATED SERVICES
175,000 Deutsche Boerse 9,558
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
200,000 Flughafen Wien (Austria) 9,374
VIENNA AIRPORT AUTHORITY
325,000 Kali & Salz 8,910
POTASH PRODUCTS, FERTILIZERS, SALT & WASTE
MANAGEMENT
300,000 Wienerberger (Austria) 8,006
BRICKS & CLAY ROOFING TILES
1,000,000 Takkt 7,434
MAIL ORDER RETAILER OF OFFICE & WAREHOUSE
DURABLES
300,000 Zapf Creation 7,231
TOY MANUFACTURER
75,000 Beru 4,886
AUTO PARTS & ELECTRONICS
35,300 Mayr-Melnhof (Austria) 4,239
CARTONBOARD & PACKAGING
200,000 Lion Bioscience (b) 816
BIOINFORMATICS
- ----------------------------------------------------------------------------
130,369
>DENMARK: 0.7%
100,000 Kobenhavns Lufthavne 11,709
COPENHAGEN AIRPORT AUTHORITY
- ----------------------------------------------------------------------------
>NORWAY: 2.5%
2,610,000 Den Norske Bank 17,384
LARGEST NORWEGIAN BANK
566,000 Orkla 12,651
DIVERSIFIED CONSUMER GOODS
1,200,000 Tomra Systems 7,219
REVERSE VENDING MACHINES
220,000 Ekornes 4,059
NICHE FURNITURE MANUFACTURER
- ----------------------------------------------------------------------------
41,313
>FINLAND: 1.5%
385,000 Jaakko Poyry 10,575
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
185,000 Amer Group 8,007
BRANDED SPORTING GOODS
816,000 Sponda 6,796
OFFICE & WAREHOUSE PROPERTY COMPANY
- ----------------------------------------------------------------------------
25,378
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>SWEDEN: 3.2%
2,800,000 Intrum Justitia $ 14,793
RECEIVABLES MANAGEMENT & DEBT COLLECTION
470,000 Castellum 11,108
OFFICE, WAREHOUSE & RETAIL PROPERTY COMPANY
950,000 Nobia 9,906
KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION
400,000 Munters 9,676
MOISTURE & HUMIDITY CONTROL
293,000 Hexagon 7,984
DIVERSIFIED ENGINEERING
- ----------------------------------------------------------------------------
53,467
>FRANCE/BELGIUM: 6.5%
390,000 Neopost 19,655
POSTAGE METER MACHINES
575,000 Euronext 14,540
TRADING SERVICES FOR FINANCIAL MARKETS
270,000 Essilor International 13,948
EYEGLASS LENSES
500,000 Fininfo 11,774
DATA FEEDS FOR FRENCH BANKS & BROKERS
130,000 Bacou Dalloz 10,155
SAFETY EQUIPMENT
40,000 Imerys 8,411
INDUSTRIAL MINERALS PRODUCER
90,000 Bonduelle 8,216
PRODUCER OF CANNED, FROZEN & FRESH VEGETABLES
244,000 Omega Pharma (Belgium) 7,747
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
90,000 Vallourec 7,484
SEAMLESS TUBES
50,000 Groupe Bourbon 5,153
FOOD RETAILER
34,000 Camaieu 2,635
WOMEN'S APPAREL RETAILER
- ----------------------------------------------------------------------------
109,718
>GREECE: 0.5%
465,000 Intralot 9,069
LOTTERY & GAMING SYSTEMS & SERVICES
- ----------------------------------------------------------------------------
>UNITED KINGDOM/IRELAND: 17.8%
2,310,000 Anglo Irish Bank (Ireland) 36,410
SMALL BUSINESS & MIDDLE MARKET BANKING
1,300,000 Kerry Group (Ireland) 24,405
FOOD INGREDIENTS
3,100,000 Grafton Group (Ireland) 21,365
BUILDERS, WHOLESALERS & DIY RETAILING
3,500,000 Hit Entertainment 18,399
TELEVISION SHOWS FOR CHILDREN
1,100,000 Irish Life & Permanent (Ireland) 17,740
SAVINGS PRODUCTS
1,300,000 Exel 17,137
GLOBAL LOGISTICS & FREIGHT FORWARDING
5,800,000 RPS Group 15,245
ENVIRONMENTAL CONSULTING
120,000 Depfa Bank (Ireland) 15,135
INTERNATIONAL PUBLIC SECTOR FINANCE
2,700,000 Expro International 13,013
OFFSHORE OIL FIELD SERVICES
1-800-922-6769
34
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>UNITED KINGDOM/IRELAND--CONTINUED
1,550,000 Smith & Nephew $ 12,983
MEDICAL EQUIPMENT & SUPPLIES
600,000 Cobham 12,499
AEROSPACE
8,000,000 Tullow Oil 12,246
OIL & GAS PRODUCER
1,600,000 Bunzl 12,188
DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY
1,420,000 Spectris 10,792
ELECTRONIC INSTRUMENTS & CONTROLS
1,400,000 Euro Money Institutional Investor 9,790
FINANCIAL PUBLICATIONS
740,000 Jurys Doyle Hotel (Ireland) 9,044
HOTEL GROUP
800,000 Business Post 7,369
PARCEL & EXPRESS MAIL SERVICE
1,010,000 Burberry 6,590
APPAREL RETAILER
1,000,000 Kensington 5,846
NON-CONFORMING MORTGAGE COMPANY
300,000 Intermediate Capital 5,655
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
600,000 Jardine Lloyd Thompson 5,650
BUSINESS INSURANCE BROKER
1,520,000 Nestor Healthcare 5,589
HEALTHCARE STAFFING COMPANY
450,000 McCarthy & Stone 4,153
BUILDER OF RETIREMENT APARTMENTS
- ----------------------------------------------------------------------------
299,243
>SWITZERLAND: 6.4%
40,000 Geberit International 19,656
PLUMBING SUPPLIES
80,000 Kaba Holdings 16,164
BUILDING SECURITY SYSTEMS
30,000 Givaudan 15,566
INDUSTRIAL FRAGRANCES & FLAVORS
33,500 BKW Energie 12,969
ELECTRIC UTILITY
13,000 Synthes-Stratec 12,860
PRODUCTS FOR ORTHOPEDIC SURGERY
40,000 Schindler (b) 9,763
ELEVATOR MANUFACTURER & SERVICE PROVIDER
3,000 Pargesa 8,001
INDUSTRIAL & MEDIA CONGLOMERATE
18,000 Sika 7,769
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION
110,000 Bachem 5,641
PEPTIDES
- ----------------------------------------------------------------------------
108,389
>ITALY: 2.2%
1,200,000 Autogrill (b) 17,145
RESTAURANTS & CATERING FOR TRAVELERS
212,000 Davide Campari 10,284
BEVERAGES
1,700,000 De Longhi 7,111
CONSUMER APPLIANCES FOR HEATING, AIR
CONDITIONING & COOKING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
90,000 Amplifon $ 2,557
HEARING AID RETAILER
- ----------------------------------------------------------------------------
37,097
>SPAIN: 3.3%
2,000,000 Abengoa 14,540
ENGINEERING & CONSTRUCTION
435,000 Gamesa 14,299
WIND TURBINES
1,139,100 Cortefiel 10,477
APPAREL RETAILER
600,000 Red Electrica 9,828
SPANISH POWER GRID
400,000 Prosegur 6,501
SECURITY GUARDS
- ----------------------------------------------------------------------------
55,645
>NETHERLANDS: 7.0%
433,000 Hunter Douglas 20,246
DECORATIVE WINDOW COVERINGS
900,000 Vopak 16,896
OIL & CHEMICAL STORAGE
349,000 OPG Groep 15,852
PHARMACEUTICAL WHOLESALER & RETAILER
687,000 United Services Group 15,710
TEMPORARY STAFFING SERVICES
585,000 IM Tech 15,169
TECHNICAL ENGINEERING
362,000 Sligro Food Group 11,152
FOOD SERVICE & WHOLESALING
420,000 Aalberts Industrie 10,864
FLOW CONTROL & HEAT TREATMENT
200,000 Fugro 10,281
SURVEY & GPS SERVICES
133,000 Am NV 1,032
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
117,202
>LUXEMBOURG: 1.6%
400,000 Tenaris (b) 13,328
STEEL PIPE FOR OIL WELLS & PIPELINES
1,280,000 SES Global 12,902
SATELLITE BROADCASTING SERVICES
- ----------------------------------------------------------------------------
26,230
-----------
EUROPE: TOTAL 1,024,829
- ----------------------------------------------------------------------------
ASIA: 22.4%
>HONG KONG/CHINA: 6.6%
35,000,000 Global Bio-Chem Technology Group 21,639
CORN-BASED BIOCHEMICAL PRODUCTS
5,000,000 Techtronic Industries 13,846
POWER TOOL MANUFACTURER
2,000,000 TVB 10,098
TELEVISION PROGRAMMING & BROADCASTING
20,000,000 Sinotrans (China) 9,016
INTEGRATED LOGISTICS IN CHINA
4,000,000 Hong Kong Exchanges & Clearing 8,656
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
11,000,000 Zhejiang Expressway 7,722
TOLL ROAD BUILDER & OPERATOR
35
Columbia Acorn International
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>HONG KONG/CHINA--CONTINUED
12,000,000 Jiangsu Expressway $6,414
TOLL ROAD BUILDER & OPERATOR
15,000,000 Linmark 6,134
APPAREL/HARD GOODS SOURCING AGENT
14,500,000 Ngai Lik Industrial 5,977
CHINA BASED ELECTRONICS CONTRACT MANUFACTURER
8,000,000 Hainan Meilan Airport 5,564
CHINESE AIRPORT OPERATOR
5,000,000 Lianhua Supermarket (b) 5,281
CHINESE SUPERMARKET CHAIN
1,500,000 Esprit Holdings 4,985
GLOBAL APPAREL BRAND MANAGER
25,000,000 Lerado Group 4,830
BABY PARAPHERNALIA
803,000 Clear Media (b) 517
CHINA'S LARGEST OUTDOOR ADVERTISER
- ----------------------------------------------------------------------------
110,679
>JAPAN: 8.5%
190,000 USS 13,443
USED CAR AUCTIONEER
180,000 ARRK 11,643
PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT
1,031,000 Toyo Technica 11,404
VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION
679,900 Ushio 11,290
INDUSTRIAL LIGHT SOURCES
543,000 Shimano 11,252
BICYCLE COMPONENTS & FISHING TACKLE
346,300 Daito Trust Construction 10,279
APARTMENT BUILDER
413,000 Park 24 9,464
PARKING LOT OPERATOR
135,000 Sugi Pharmacy 9,337
DRUGSTORES
700,000 NIFCO 8,788
MOLDED PLASTIC COMPONENTS
172,000 Uni-Charm 8,461
INFANT HYGIENE & FEMININE CARE PRODUCTS
35,000 Bellsystem24 7,155
CALL CENTERS
150,000 Eneserve 6,020
POWER GENERATORS
260,000 Nissin Healthcare 5,291
MEAL PREPARATION
385,000 Daiseki 5,257
WASTE DISPOSAL & RECYCLING
325,000 Aderans 5,245
HAIR PIECES
1,150,000 OMC Card (b) 4,669
CREDIT CARD ISSUER
100,000 Taisei Lamick 2,184
PACKAGING MATERIALS & MACHINERY
7,000 Kappa Create 591
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
141,773
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TAIWAN: 1.0%
1,130,000 ASE Test (b) $16,916
SEMICONDUCTOR PACKAGING & TEST SERVICES
- ----------------------------------------------------------------------------
>SOUTH KOREA: 2.2%
355,000 Hyundai Mobis 19,098
AUTO PARTS
165,000 Yuhan 9,389
ETHICAL DRUG PRODUCER
100,000 Samsung Fire & Marine 5,749
NON-LIFE INSURANCE
315,000 Samyoung Heat Exchange 2,522
POWER PLANT RELATED MACHINERY
- ----------------------------------------------------------------------------
36,758
>INDONESIA: 0.3%
30,000,000 PT Perusahaan Gas Negara (b) 5,521
GAS PIPELINE OPERATOR
- ----------------------------------------------------------------------------
>SINGAPORE: 2.4%
1,920,000 Venture 22,611
ELECTRONIC CONTRACT MANUFACTURER
9,000,000 Sembcorp Logistics 10,599
LOGISTIC SERVICES FOR MARINE TRANSPORT
15,000,000 Comfort Group 7,198
TAXI SERVICE
- ----------------------------------------------------------------------------
40,408
>INDIA: 1.4%
1,700,000 Housing Development Finance 24,075
MORTGAGE LOAN PROVIDER
-------
ASIA: TOTAL 376,130
- ----------------------------------------------------------------------------
LATIN AMERICA: 1.4%
>MEXICO: 1.1%
600,000 Grupo Aeroportuario 10,560
MEXICAN AIRPORT AUTHORITY
3,000,000 Consorcio ARA (b) 7,449
LOW/MEDIUM INCOME HOUSE BUILDER
- ----------------------------------------------------------------------------
18,009
>CHILE: 0.3%
186,000 CorpBanca (b) 4,849
CHILE'S 3RD LARGEST LOCAL BANK
-------
LATIN AMERICA: TOTAL 22,858
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 10.7%
>AUSTRALIA/NEW ZEALAND: 3.6%
3,000,000 Billabong International 16,106
SURFWEAR APPAREL MANUFACTURER
4,000,000 Sky City Entertainment (New Zealand) 12,082
CASINO/ENTERTAINMENT COMPLEX
2,500,000 Lion Nathan 11,370
AUSTRALIAN BEER BREWER/DISTRIBUTOR
350,000 Perpetual Trustees 11,227
INVESTMENT MANAGEMENT
2,000,000 The Warehouse Group (New Zealand) 6,709
WAREHOUSE CLUB
400,000 Tabcorp Holdings 3,382
AUSTRALIA'S LARGEST GAMING COMPANY
- ----------------------------------------------------------------------------
60,876
1-800-922-6769
36
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CANADA: 6.8%
1,000,000 Corus Entertainment $21,279
TV PROGRAMMING & RADIO STATIONS
365,000 Talisman Energy 20,764
OIL & GAS PRODUCER
300,000 Power Financial 11,498
LIFE INSURANCE & MUTUAL FUNDS
1,261,000 Patheon (b) 11,358
PHARMACEUTICAL CONTRACT MANUFACTURER
420,000 Masonite International (b) 11,245
DOOR MANUFACTURER
300,000 Nexen 10,892
OIL & GAS PRODUCER
5,000,000 Esprit Exploration (b) 10,756
NATURAL GAS PRODUCER
700,000 Shawcor 8,444
OIL & GAS PIPELINE PRODUCTS
450,000 Intrawest 8,322
OWNER/OPERATOR OF SKI RESORTS
- ----------------------------------------------------------------------------
114,558
>UNITED STATES: 0.3%
134,600 Central European Distribution (b) 4,253
SPIRITS & WINE DISTRIBUTION
- ----------------------------------------------------------------------------
-------
OTHER: TOTAL 179,687
TOTAL COMMON STOCKS AND OTHER ---------
EQUITY-LIKE SECURITIES: 95.5% 1,603,504
(COST: $1,163,943)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 3.8%
$ 33,000 Toyota Motor Credit 1.02%
Due 1/06/04 $32,995
30,563 Repurchase Agreement with
State Street Bank & Trust
Co., dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
1/15/06, Market Value $31,176
(repurchase proceeds: $30,564) 30,563
- ----------------------------------------------------------------------------
(AMORTIZED COST: $63,558) 63,558
---------
TOTAL INVESTMENTS (D): 99.3% 1,667,062
(COST: $1,227,501) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.7% 11,270
----------
TOTAL NET ASSETS: 100% $1,678,332
============================================================================
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investment
was $1,230,952 and net unrealized appreciation was $436,110 consisting of
gross unrealized appreciation of $488,906 and gross unrealized depreciation
of $52,796.
(b) Non-income producing security.
(c) On December 31, 2003, the fund did not have any investments in affiliate
companies. There were sales proceeds of $1,187, resulting in net realized
losses of $2,588 in affiliate companies during the year ended December 31,
2003. There was no other investment activity.
(d) On December 31, 2003, the Fund's total investments were denominated in
currencies as follows:
% OF
CURRENCY VALUE NET ASSETS
- ----------------------------------------------------------------------------
Euro $621,599 37.0%
British Pounds 175,144 10.4
Japanese Yen 141,773 8.5
Canadian Dollars 114,682 6.8
Hong Kong Dollars 110,680 6.6
Swiss Francs 108,389 6.5
Other currencies less than
5% of total net assets 394,795 23.5
---------- -------
$1,667,062 99.3%
========== =======
37
Columbia Acorn International
>Portfolio Diversification
At December 31, 2003, the Fund's portfolio investments as a percent of net
assets was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION TECHNOLOGY
Business Information and
Marketing Services $48,550 2.9%
Television Programming 39,678 2.4
Financial Processors 32,754 1.9
Contract Manufacturing 28,588 1.7
Instrumentation 23,012 1.4
Semiconductors and Related
Equipment 16,916 1.0
Satellite Broadcasting 12,902 0.8
Television Broadcasting 10,098 0.6
Publishing 9,790 0.6
Advertising 517 0.0
- ----------------------------------------------------------------------------
222,805 13.3
>HEALTHCARE
Medical Equipment 39,791 2.4
Services 34,479 2.1
Hospital Management 34,280 2.0
Pharmaceuticals 20,747 1.2
Biotechnology/ Drug Delivery 5,641 0.3
- ----------------------------------------------------------------------------
134,938 8.0
>CONSUMER GOODS/SERVICES
Food 83,216 5.0
Retail 48,571 2.9
Furniture and Textiles 45,456 2.7
Durables Goods 37,095 2.2
Apparels 33,293 2.0
Beverage 21,654 1.3
Other Consumer Services 19,539 1.2
Restaurants 17,736 1.1
Consumer Goods Distribution 17,696 1.0
Travel 17,366 1.0
Casinos 15,464 0.9
Nondurables 10,645 0.6
Gaming 9,069 0.5
Leisure Products 8,007 0.5
Other Entertainment 7,231 0.4
- ----------------------------------------------------------------------------
392,038 23.3
>FINANCE
Banks 73,778 4.4
Insurance 29,139 1.7
Other Finance Companies 26,294 1.6
Savings and Loans 24,075 1.4
Money Management 22,725 1.4
Credit Cards 4,669 0.3
- ----------------------------------------------------------------------------
180,680 10.8
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $113,640 6.8%
Industrial Materials 76,536 4.6
Outsourcing and Training Services 64,220 3.8
Conglomerates 41,389 2.5
Electrical Components 38,088 2.3
Construction 35,772 2.1
Machinery 29,396 1.7
Speciality Chemicals 23,335 1.4
Industrial Distribution 21,365 1.3
Steel 20,812 1.2
- ----------------------------------------------------------------------------
464,553 27.7
>ENERGY/MINERALS
Oil/Gas Producers 54,658 3.2
Oil Services 31,738 1.9
Independent Power 6,020 0.4
Refining/Marketing/Distribution 5,521 0.3
- ----------------------------------------------------------------------------
97,937 5.8
>OTHER INDUSTRIES
Transportation 58,541 3.5
Real Estate 29,215 1.7
Regulated Utilities 22,797 1.4
- ----------------------------------------------------------------------------
110,553 6.6
TOTAL COMMON STOCKS AND --------- -------
OTHER EQUITY-LIKE SECURITIES: 1,603,504 95.5
SHORT-TERM OBLIGATIONS: 63,558 3.8
--------- -------
TOTAL INVESTMENTS: 1,667,062 99.3
CASH AND OTHER ASSETS
LESS LIABILITIES: 11,270 0.7
---------- -------
TOTAL NET ASSETS: $1,678,332 100.0%
==============================================================================
1-800-922-6769
38
Columbia Acorn USA
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
---------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
INFORMATION
Andrew 100,000 480,000
AnswerThink Consulting 670,000 1,005,500
Commonwealth Telephone 293,800 363,800
Crown Castle International 955,000 1,005,000
DoubleClick 0 925,600
Igate Capital 0 200,000
Integrated Circuit Systems 175,300 365,300
Kronos 221,100 331,650
Spanish Broadcasting System 150,000 603,200
Symmetricon 0 270,500
Unova 115,000 180,000
- ----------------------------------------------------------------------------
HEALTH CARE
CTI Molecular Imaging 178,900 245,000
Enzon 211,400 311,500
First Health Group 714,000 744,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Aeropostale 150,500 290,500
Central Parking 0 181,700
Coinstar 85,000 435,000
Leapfrog Enterprises 0 50,000
Petco Animal Supplies 25,000 95,000
Winn Dixie Stores 0 710,000
- ----------------------------------------------------------------------------
FINANCE
HCC Insurance Holdings 350,000 430,000
TCF Financial 79,500 131,500
United National Group 0 71,400
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Esco Technologies 59,000 282,000
Gibraltar Steel 0 50,000
Pentair 0 63,400
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 166,700 401,700
Newpark Resources 651,000 905,600
Quicksilver 208,800 305,000
Western Gas 123,000 136,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Northeast Utilities 0 90,000
39
Columbia Acorn USA
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 93.4%
- ----------------------------------------------------------------------------
INFORMATION: 38.7%
>BROADCASTING: 2.7%
333,100 Salem Communications (b) $9,034
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
603,200 Spanish Broadcasting (b) 6,334
SPANISH LANGUAGE RADIO STATIONS
138,500 Gray Television 2,094
MID MARKET AFFILIATED TV STATIONS
57,000 Saga Communications (b) 1,056
RADIO STATIONS IN SMALL & MID-SIZED CITIES
- ----------------------------------------------------------------------------
18,518
>TELEVISION PROGRAMMING: 0.7%
600,000 Mediacom Communications (b) 5,202
CABLE TELEVISION FRANCHISES
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS/WIRELINE
COMMUNICATIONS: 2.8%
363,800 Commonwealth Telephone (b) 13,733
RURAL PHONE FRANCHISES & CLEC
480,000 Andrew (b) 5,525
WIRELESS INFRASTRUCTURE EQUIPMENT
- ----------------------------------------------------------------------------
19,258
>TELECOMMUNICATION EQUIPMENT: 0.3%
270,500 Symmetricom (b) 1,969
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
>MOBILE COMMUNICATIONS: 4.9%
927,000 Western Wireless (b) 17,020
RURAL CELLULAR PHONE SERVICES
1,005,000 Crown Castle International (b) 11,085
COMMUNICATION TOWERS IN USA & UK
60,000 Telephone & Data Systems 3,753
CELLULAR & TELEPHONE SERVICES
182,700 COMARCO (b) 2,010
WIRELESS NETWORK TESTING
- ----------------------------------------------------------------------------
33,868
>COMPUTER SERVICES: 2.7%
786,000 RCM Technologies (b)(c) 5,793
TECHNOLOGY ENGINEERING SERVICES
1,005,500 AnswerThink Consulting (b) 5,581
IT INTEGRATOR FOR FORTUNE 2000
232,000 American Management Systems (b) 3,496
SOFTWARE DEVELOPMENT SERVICES
200,000 Igate Capital (b) 1,570
TECHNOLOGY STAFFING SERVICES
149,600 Ciber (b) 1,296
SOFTWARE SERVICES & STAFFING
256,600 Analysts International (b) 865
TECHNOLOGY STAFFING SERVICES
- ----------------------------------------------------------------------------
18,601
>BUSINESS/CONSUMER SOFTWARE: 13.6%
527,600 Micros Systems (b) 22,877
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
974,000 JDA Software (b) 16,081
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,330,000 Novell (b) 13,992
SECURITY & IDENTITY MANAGEMENT SOFTWARE
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
331,650 Kronos (b) $13,137
LABOR MANAGEMENT SOLUTIONS
304,991 PeopleSoft (b) 6,954
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
473,500 MRO Software (b) 6,373
ENTERPRISE MAINTENANCE SOFTWARE
653,200 E.Piphany (b) 4,710
CRM SOFTWARE
206,000 Group 1 Software (b) 3,630
ADDRESS VERIFICATION SOFTWARE
140,000 SPSS (b) 2,503
STATISTICAL ANALYSIS SOFTWARE
100,000 Aspect Communications (b) 1,576
CALL CENTER SOFTWARE
64,000 THQ (b) 1,082
ENTERTAINMENT SOFTWARE
65,000 MAPICS (b) 851
MID MARKET ERP SOFTWARE
34,000 Activision (b) 619
ENTERTAINMENT SOFTWARE
- ----------------------------------------------------------------------------
94,385
>INTERNET: 1.4%
925,600 DoubleClick (b) 9,460
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
- ----------------------------------------------------------------------------
>TRANSACTION PROCESSORS: 1.8%
211,640 Global Payments 9,972
CREDIT CARD PROCESSOR
140,000 Euronet Worldwide (b) 2,520
ATM PROCESSOR
21,000 Pegasus Systems (b) 220
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
12,712
>BUSINESS INFORMATION/MARKETING
SERVICES/PUBLISHING: 1.2%
102,800 Getty Images (b) 5,153
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
110,000 Navigant Consulting (b) 2,075
CONSULTING FIRM
58,600 Information Holdings (b) 1,295
PATENT & OTHER BUSINESS INFORMATION
- ----------------------------------------------------------------------------
8,523
>CONTRACT MANUFACTURING: 0.3%
140,000 Plexus (b) 2,404
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
>INSTRUMENTATION: 0.3%
60,000 Trimble Navigation (b) 2,234
GPS-BASED INSTRUMENTS
- ----------------------------------------------------------------------------
>COMPUTER HARDWARE/SEMICONDUCTORS/
RELATED EQUIPMENT: 6.0%
186,000 Zebra Technologies (b) 12,345
BAR CODE PRINTERS
365,300 Integrated Circuit Systems (b) 10,407
SILICON TIMING DEVICES
424,100 Seachange International (b) 6,531
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
1-800-922-6769
40
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>COMPUTER HARDWARE/SEMICONDUCTORS/
RELATED EQUIPMENT--CONTINUED
180,000 Unova (b) $4,131
BARCODE & WIRELESS LAN SYSTEMS
70,000 Littelfuse (b) 2,017
LITTLE FUSES
50,000 Avocent (b) 1,826
COMPUTER CONTROL SWITCHES
200,000 Cable Design Technologies (b) 1,798
NETWORKING & SPECIALTY CABLES
40,000 Rogers (b) 1,765
PCB LAMINATES & HIGH PERFORMANCE FOAMS
70,000 IXYS (b) 654
POWER SEMICONDUCTORS
- ----------------------------------------------------------------------------
41,474
-----------
INFORMATION: TOTAL 268,608
- ----------------------------------------------------------------------------
HEALTH CARE: 14.6%
>BIOTECHNOLOGY/DRUG DELIVERY: 2.9%
720,000 Nektar Therapeutics (b) 9,799
PULMONARY DRUG DELIVERY
311,500 Enzon (b) 3,738
POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS
245,000 Applera Celera Genomics (b) 3,408
DIAGNOSTICS & DRUG DEVELOPMENT
375,000 Locus Discovery, Series D Pfd. (b)(d) 1,500
HIGH THROUGHPUT RATIONAL DRUG DESIGN
154,000 SYRRX, Series C (b)(d) 801
X-RAY CRYSTALLOGRAPHY
32,600 Applied Molecular Evolution (b) 580
MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION
363,636 Metabolex, Series F (b)(d) 53
DRUGS FOR DIABETES
- ----------------------------------------------------------------------------
19,879
>MEDICAL EQUIPMENT: 5.3%
573,000 Edwards Lifesciences (b) 17,236
HEART VALVES
220,000 Viasys Healthcare (b) 4,532
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
245,000 CTI Molecular Imaging (b) 4,143
MEDICAL DIAGNOSTIC DEVICES
98,500 ICU Medical (b) 3,377
INTRAVENOUS THERAPY PRODUCTS
135,600 VISX (b) 3,139
LASER EYE SURGERY
66,300 Diagnostic Products 3,044
IMMUNODIAGNOSTIC KITS
345,000 Novoste (b) 1,653
RADIATION CATHETERS FOR IN-STENT RESTENOSIS
- ----------------------------------------------------------------------------
37,124
>MEDICAL SUPPLIES: 1.2%
222,800 Techne (b) 8,417
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
- ----------------------------------------------------------------------------
>SERVICES: 5.2%
744,000 First Health Group (b) 14,478
PPO NETWORK
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
423,800 NDCHealth Group $10,858
HEALTH CLAIMS PROCESSING & DRUG MARKETING
SERVICES
246,800 Lincare Holdings (b) 7,411
HOME HEALTH CARE SERVICES
100,000 Dendrite International (b) 1,567
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
40,000 Charles River Laboratories (b) 1,373
PHARMACEUTICAL RESEARCH
26,000 Medquist (b) 418
MEDICAL TRANSCRIPTION SERVICES
- ----------------------------------------------------------------------------
36,105
-------
HEALTH CARE: TOTAL 101,525
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 14.2%
>-CONSUMER SERVICES: 4.2%
387,000 ITT Educational Services (b) 18,177
POSTSECONDARY DEGREE PROGRAMS
435,000 Coinstar (b) 7,856
OWNER/OPERATOR OF COIN COUNTING MACHINES
181,700 Central Parking 2,713
OWNER, OPERATOR & MANAGER OF PARKING
LOTS & GARAGES
48,900 Bally Total Fitness (b) 342
NATIONAL CHAIN OF FITNESS CENTERS
- ----------------------------------------------------------------------------
29,088
>APPAREL: 1.2%
197,600 Steven Madden (b) 4,031
WHOLESALER/RETAILER OF FASHION FOOTWEAR
64,000 Coach (b) 2,416
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
59,200 Oxford Industries 2,006
BRANDED & PRIVATE LABEL APPAREL
- ----------------------------------------------------------------------------
8,453
>ENTERTAINMENT/LEISURE PRODUCTS: 1.0%
91,300 International Speedway Motors 4,077
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
70,000 Action Performance 1,372
MOTORSPORT COLLECTIBLES & MERCHANDISING
50,000 Leapfrog Enterprises (b) 1,327
EDUCATIONAL TOYS
- ----------------------------------------------------------------------------
6,776
>DURABLE GOODS: 0.2%
30,000 American Woodmark 1,651
KITCHEN CABINETS
- ----------------------------------------------------------------------------
>FURNITURE: 0.5%
85,000 Herman Miller 2,063
OFFICE FURNITURE
20,000 Mohawk Industries (b) 1,411
CARPET & FLOORING
- ----------------------------------------------------------------------------
3,474
>NONDURABLES: 1.4%
167,200 Scotts Company (b) 9,892
CONSUMER LAWN & GARDEN PRODUCTS
- ----------------------------------------------------------------------------
41
Columbia Acorn USA
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>RETAIL: 5.7%
290,500 Aeropostale (b) $7,966
MALL BASED TEEN RETAILER
710,000 Winn Dixie Stores 7,064
SUPERMARKETS IN THE SOUTHEAST US
343,750 Christopher & Banks 6,713
WOMEN'S APPAREL RETAILER
116,600 Urban Outfitters (b) 4,320
MULTI CHANNEL LIFESTYLE RETAILER
130,000 Abercrombie & Fitch (b) 3,212
TEEN APPAREL RETAILER
95,000 Petco Animal Supplies (b) 2,893
PET SUPPLIES & SERVICES
50,000 Michaels Stores 2,210
CRAFT & HOBBY SPECIALTY RETAILER
50,000 Ann Taylor (b) 1,950
WOMEN'S APPAREL RETAILER
95,000 Genesco (b) 1,437
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
547,000 Gadzooks (b)(c) 848
TEEN APPAREL RETAILER
20,000 Chico's FAS (b) 739
WOMEN'S SPECIALTY RETAIL
- ----------------------------------------------------------------------------
39,352
-----------
CONSUMER GOODS/SERVICES: TOTAL 98,686
- ----------------------------------------------------------------------------
FINANCE: 10.5%
>BANKS: 1.7%
131,500 TCF Financial 6,753
GREAT LAKES BANK
158,125 Chittenden 5,319
VERMONT & WEST MASSACHUSETTS BANK
- ----------------------------------------------------------------------------
12,072
>FINANCE COMPANIES: 4.0%
1,091,500 AmeriCredit (b) 17,388
AUTO LENDING
520,200 World Acceptance (b) 10,357
PERSONAL LOANS
- ----------------------------------------------------------------------------
27,745
>SAVINGS & LOAN: 1.3%
110,000 Downey Financial 5,423
CALIFORNIA HOME LENDER
116,400 Anchor Bancorp Wisconsin 2,898
WISCONSIN THRIFT
16,500 Peoples Bank Bridgeport 538
CONNECTICUT SAVINGS & LOAN
- ----------------------------------------------------------------------------
8,859
>MONEY MANAGEMENT: 0.2%
40,000 SEI Investments 1,219
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
- ----------------------------------------------------------------------------
>INSURANCE: 3.3%
430,000 HCC Insurance Holdings 13,674
AVIATION INSURANCE
17,000 Markel (b) 4,310
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
97,000 Harleysville Group $1,929
COMMERCIAL & PERSONAL LINES INSURANCE
35,000 Philadelphia Consolidated Holding (b) 1,709
SPECIALTY INSURANCE
71,400 United National Group (b) 1,262
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
22,884
-----------
FINANCE: TOTAL 72,779
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 6.8%
>SPECIALTY CHEMICALS/INDUSTRIAL
MATERIALS: 0.6%
95,000 Spartech 2,341
PLASTICS DISTRIBUTION & COMPOUNDING
70,000 Schulman 1,492
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
3,833
>STEEL: 0.2%
50,000 Gibraltar Steel 1,257
STEEL PROCESSING
- ----------------------------------------------------------------------------
>INDUSTRIAL DISTRIBUTION: 0.3%
100,000 Nuco2 (b) 1,267
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
50,000 Airgas 1,074
INDUSTRIAL GAS DISTRIBUTOR
- ----------------------------------------------------------------------------
2,341
>CONSTRUCTION: 0.2%
30,000 Florida Rock Industries 1,645
CONCRETE & AGGREGATES
- ----------------------------------------------------------------------------
>MACHINERY: 2.6%
282,000 Esco Technologies (b) 12,309
FILTRATION & TEST EQUIPMENT
63,400 Pentair 2,898
PUMPS, WATER TREATMENT & TOOLS
55,000 Ametek 2,654
AEROSPACE/INDUSTRIAL INSTRUMENTS
- ----------------------------------------------------------------------------
17,861
>WATER: 0.9%
134,000 Cuno (b) 6,034
FILTRATION & FLUIDS CLARIFICATION
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS: 0.0%
10,300 Intermagnetics General (b) 228
SUPERCONDUCTING WIRE
- ----------------------------------------------------------------------------
>LOGISTICS: 1.3%
346,000 Hub Group (b) 7,453
TRUCK & RAIL FREIGHT FORWARDER
59,600 Forward Air (b) 1,639
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
- ----------------------------------------------------------------------------
9,092
1-800-922-6769
42
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>INDUSTRIAL SERVICES: 0.7%
206,900 Insurance Auto Auctions (b) $ 2,700
AUTO SALVAGE SERVICES
95,000 Clark/Bardes Consulting (b) 1,828
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
- ----------------------------------------------------------------------------
4,528
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 46,819
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 7.7%
>OIL SERVICES: 2.6%
401,700 FMC Technologies (b) 9,360
OIL & GAS WELL HEAD MANUFACTURER
905,600 Newpark Resources (b) 4,338
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
61,000 Carbo Ceramics 3,126
NATURAL GAS WELL STIMULANTS
135,000 Key Energy Services (b) 1,392
OIL & GAS WELL WORKOVER SERVICES
- ----------------------------------------------------------------------------
18,216
>OIL & GAS PRODUCERS: 3.4%
305,000 Quicksilver (b) 9,851
NATURAL GAS & COAL SEAM GAS PRODUCER
136,000 Western Gas 6,426
OIL & COAL SEAM GAS PRODUCER
215,000 Ultra Petroleum (b) 5,293
NATURAL GAS PRODUCER
82,100 Southwestern Energy (b) 1,962
NATURAL GAS PRODUCER
- ----------------------------------------------------------------------------
23,532
>DISTRIBUTION/MARKETING/REFINING: 1.7%
193,000 Atmos Energy 4,690
NATURAL GAS UTILITY
99,600 Equitable Resources 4,275
NATURAL GAS UTILITY & PRODUCER
75,000 Oneok 1,656
NATURAL GAS UTILITY, MARKETING & PROCESSING
115,000 Aquila (b)(d) 810
ELECTRIC UTILITY HOLDING COMPANY
- ----------------------------------------------------------------------------
11,431
-----------
ENERGY/MINERALS: TOTAL 53,179
NUMBER OF SHARES OR
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 0.9%
>REAL ESTATE: 0.6%
47,000 The Rouse Company $2,209
REGIONAL SHOPPING MALLS
100,000 Crescent Real Estate Equities 1,713
CLASS A OFFICE BUILDINGS
35,000 Highland Hospitality (b) 381
HOTEL REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------------------------------
4,303
>REGULATED UTILITIES: 0.3%
90,000 Northeast Utilities 1,815
REGULATED ELECTRIC UTILITY
- ----------------------------------------------------------------------------
-----------
OTHER INDUSTRIES: TOTAL 6,118
-----------
TOTAL COMMON STOCKS: 93.4% 647,714
(COST: $489,314)
SHORT-TERM OBLIGATIONS: 6.4%
$22,000 American General Finance
Yield 1.04% Due 1/06/04 21,997
22,529 Repurchase Agreement with State
Street Bank & Trust Co., dated
12/31/03, due 1/02/04 at 0.85%
collateralized by Federal National
Mortgage Association Notes
maturing 1/15/06, Market Value
$22,981 (repurchase
proceeds: $22,530) 22,529
- ----------------------------------------------------------------------------
(AMORTIZED COST: $44,526) 44,526
-----------
TOTAL INVESTMENTS: 99.8% 692,240
(COST: $533,840) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.2% 1,034
-----------
TOTAL NET ASSETS: 100% $ 693,274
============================================================================
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investment is
$533,937 and net unrealized appreciation was $158,303 consisting of gross
unrealized appreciation of $190,029 and gross unrealized depreciation of
$31,726.
(b) Non-income producing security.
(c) On December 31, 2003, the fund held the following percentages of the
outstanding voting shares of the companies listed below:
RCM Technologies 7.38%
Gadzooks 5.97%
The aggregate cost and value of these companies at December 31, 2003, were
$9,999 and $6,641, respectively. Investments in affiliate companies
represent 0.96% of total net assets at December 31, 2003. The change in
unrealized gain in these companies amounted to $795 during the year ended
December 31, 2003. There were purchases of $1,032 in affiliated companies
during the year.
43
Columbia Acorn USA
>Statement of Investments, continued
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. These securities are valued in good faith by
the Board of Trustees. At December 31, 2003, these securities (in thousands)
amounted to $3,164, which represents 0.5% of total net assets.
Additional information on these securities is as follows:
ACQUISITION
SECURITY DATES SHARES (000) COST (000) VALUE (000)
- ------------------------------------------------------------------------------
Locus Discovery, Series D Pfd. 09/05/01 375 $1,500 $1,500
SYRRX, Series C 01/04/01 154 1,001 801
Aquila 10/25/01-11/14/01 115 2,433 810
Metabolex, Series F 02/11/00 364 2,000 53
--------- -------
$6,934 $3,164
========= =======
1-800-922-6769
44
Columbia Acorn International Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
---------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
EUROPE
>NORWAY
Den Norske Bank 201,000 209,500
Orkla 19,000 38,000
>SWEDEN
Gambro 0 58,000
>UNITED KINGDOM/IRELAND
BG Group 200,000 300,000
Irish Life & Permanent (Ireland) 45,000 70,000
Jardine Lloyd Thompson 0 45,000
Smith & Nephew 75,000 90,000
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
Esprit Holdings 0 200,000
>JAPAN
Shimano 0 33,800
Ushio 0 26,000
NUMBER OF SHARES
---------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Hit Entertainment 190,000 90,000
Marconi 54,000 0
Reed Elsevier 90,000 0
>NETHERLANDS
Wolters Kluwer 28,000 0
>ITALY
Parmalat Finanziaria 230,000 0
- ----------------------------------------------------------------------------
ASIA
>HONG KONG
TVB 210,000 40,000
>JAPAN
Terumo 34,000 0
45
Columbia Acorn International Select
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 95.2%
- ----------------------------------------------------------------------------
EUROPE: 70.9%
>GERMANY: 5.4%
30,000 Rhoen-Klinikum $1,682
HOSPITAL MANAGEMENT
12,000 Deutsche Boerse 655
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
- ----------------------------------------------------------------------------
2,337
>NORWAY: 5.2%
209,500 Den Norske Bank 1,395
LARGEST NORWEGIAN BANK
38,000 Orkla 849
DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
2,244
>SWEDEN: 1.1%
58,000 Gambro 480
PRODUCTS/SERVICES FOR RENAL CARE
- ----------------------------------------------------------------------------
>FRANCE/BELGIUM: 8.5%
25,000 Neopost 1,260
POSTAGE METER MACHINES
22,000 Essilor International 1,136
EYEGLASS LENSES
35,000 Euronext 885
TRADING SERVICES FOR FINANCIAL MARKETS
2,000 Imerys 421
INDUSTRIAL MINERALS PRODUCER
- ----------------------------------------------------------------------------
3,702
>UNITED KINGDOM/IRELAND: 35.6%
160,000 Anglo Irish Bank (Ireland) 2,522
SMALL BUSINESS & MIDDLE MARKET BANKING
90,000 Kerry Group (Ireland) 1,690
FOOD INGREDIENTS
300,000 BG Group 1,536
OIL & GAS PRODUCER
185,000 Compass Group 1,255
INTERNATIONAL CONCESSION & CONTRACT CATERER
170,000 Grafton Group (Ireland) 1,172
BUILDERS, WHOLESALERS & DIY RETAILING
70,000 Irish Life & Permanent (Ireland) 1,129
SAVINGS PRODUCTS
8,700 Depfa Bank (Ireland) 1,097
INTERNATIONAL PUBLIC SECTOR FINANCE
120,000 Bunzl 914
DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY
40,000 Cobham 833
AEROSPACE
90,000 Smith & Nephew 754
MEDICAL EQUIPMENT & SUPPLIES
60,000 British Sky Broadcasting (b) 753
DIGITAL SATELLITE BROADCASTING
45,000 Exel 593
GLOBAL LOGISTICS & FREIGHT FORWARDING
90,000 Hit Entertainment 473
TELEVISION SHOWS FOR CHILDREN
45,000 Jardine Lloyd Thompson 424
BUSINESS INSURANCE BROKER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
48,000 Burberry $313
APPAREL RETAILER
- ----------------------------------------------------------------------------
15,458
>SWITZERLAND: 8.8%
9,000 Swatch Group 1,080
WATCH & ELECTRONICS MANUFACTURER
4,000 Schindler (b) 976
ELEVATOR MANUFACTURER & SERVICE PROVIDER
900 Synthes-Stratec 890
PRODUCTS FOR ORTHOPEDIC SURGERY
1,700 Givaudan 882
INDUSTRIAL FRAGRANCES & FLAVORS
- ----------------------------------------------------------------------------
3,828
>ITALY: 2.1%
65,000 Autogrill (b) 929
RESTAURANTS & CATERING FOR TRAVELERS
- ----------------------------------------------------------------------------
>SPAIN: 2.3%
60,000 Red Electrica 983
SPANISH POWER GRID
- ----------------------------------------------------------------------------
>LUXEMBOURG: 1.9%
25,000 Tenaris 833
STEEL PIPE FOR OIL WELLS & PIPELINES
-----------
EUROPE: TOTAL 30,794
- ----------------------------------------------------------------------------
ASIA: 14.1%
>HONG KONG: 2.0%
200,000 Esprit Holdings 665
GLOBAL APPAREL BRAND MANAGER
40,000 TVB 202
TELEVISION PROGRAMMING & BROADCASTING
- ----------------------------------------------------------------------------
867
>JAPAN: 9.5%
10,000 Hoya 918
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
8,000 Nidec 764
ELECTRIC MOTORS
10,000 USS 708
USED CAR AUCTIONEER
33,800 Shimano 700
BICYCLE COMPONENTS & FISHING TACKLE
19,700 Daito Trust Construction 585
APARTMENT BUILDER
26,000 Ushio 432
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
4,107
>SINGAPORE: 2.6%
96,000 Venture 1,131
ELECTRONIC CONTRACT MANUFACTURER
-----------
ASIA: TOTAL 6,105
1-800-922-6769
46
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 10.2%
>AUSTRALIA: 2.7%
260,000 Lion Nathan $ 1,182
AUSTRALIAN BEER BREWER/DISTRIBUTOR
- ----------------------------------------------------------------------------
>CANADA: 7.5%
24,000 Talisman Energy 1,365
OIL & GAS PRODUCER
52,000 Corus Entertainment 1,106
TELEVISION PROGRAMMING & RADIO STATIONS
20,000 Power Financial 767
LIFE INSURANCE & MUTUAL FUNDS
- ----------------------------------------------------------------------------
3,238
-----------
OTHER: TOTAL 4,420
-----------
TOTAL COMMON STOCKS: 95.2% 41,319
(COST: $28,565)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 4.4%
$ 1,930 Repurchase Agreement with
State Street Bank & Trust Co.,
dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
8/15/04, Market Value $1,970
(repurchase proceeds: $1,930) $ 1,930
- ----------------------------------------------------------------------------
(AMORTIZED COST: $1,930) 1,930
-----------
TOTAL INVESTMENTS (c): 99.6% 43,249
(COST: $30,495) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.4% 157
TOTAL NET ASSETS: 100% $ 43,406
============================================================================
________________________________________________________________________________
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
is $30,741 and net unrealized appreciation was $12,508, consisting of gross
unrealized appreciation of $12,513 and gross unrealized depreciation of $5.
(b) Non-income producing security.
(c) On December 31, 2003, the Fund's total investments were denominated in
currencies as follows:
% OF
CURRENCY VALUE NET ASSETS
-----------------------------------------------------------------
Euro $15,560 35.8%
British Pounds 7,848 18.1
Japanese Yen 4,107 9.5
Swiss Francs 3,829 8.8
Canadian Dollars 3,246 7.5
Norwegian Krone 2,245 5.2
Other currencies less than
5% of total net assets 6,414 14.7
------- ------
$43,249 99.6%
======= ======
47
Columbia Acorn International Select
>Portfolio Diversification
At December 31, 2003, the Fund's portfolio investments as a percent of net
assets was diversified as follows:
VALUE(000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION TECHNOLOGY
Television Programming $ 1,579 3.6%
Financial Processors 1,540 3.5
Contract Manufacturing 1,131 2.6
Television Broadcasting 955 2.2
Semiconductors and Related
Equipment 918 2.1
Computer Hardware and
Related Equipment 764 1.8
- ----------------------------------------------------------------------------
6,887 15.8
>HEALTHCARE
Medical Equipment 2,780 6.4
Hospital Management 1,682 3.9
Services 480 1.1
- ----------------------------------------------------------------------------
4,942 11.4
>CONSUMER GOODS/SERVICES
Food 2,539 5.9
Restaurants 2,184 5.0
Durable Goods 1,780 4.1
Beverage 1,182 2.7
Retail 978 2.3
Consumer Goods Distribution 708 1.6
- ----------------------------------------------------------------------------
9,371 21.6
>FINANCE
Banks 5,014 11.6
Insurance 1,553 3.6
Money Management 767 1.8
- ----------------------------------------------------------------------------
7,334 17.0
VALUE(000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $1,569 3.6%
Electrical Components 1,265 2.9
Machinery 1,260 2.9
Industrial Distribution 1,172 2.7
Outsourcing and Training Services 914 2.1
Speciality Chemicals 882 2.0
Steel 833 1.9
Industrial Materials 421 1.0
- ----------------------------------------------------------------------------
8,316 19.1
>ENERGY/MINERALS
Oil/Gas Producers 2,901 6.7
- ----------------------------------------------------------------------------
2,901 6.7
>OTHER INDUSTRIES
Regulated Utilities 983 2.3
Real Estate 585 1.3
- ----------------------------------------------------------------------------
1,568 3.6
---------- -----------
TOTAL COMMON STOCKS: 41,319 95.2
---------- -----------
SHORT-TERM OBLIGATIONS: 1,930 4.4
---------- -----------
TOTAL INVESTMENTS: 43,249 99.6
CASH AND OTHER ASSETS
LESS LIABILITIES: 157 0.4
---------- -----------
NET ASSETS: $ 43,406 100.0%
============================================================================
1-800-922-6769
48
Columbia Acorn Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Additions
- ----------------------------------------------------------------------------
INFORMATION
Interpublic Group 2,500,000 2,520,000
PeopleSoft 1,330,000 1,475,000
Synopsys 1,060,000 1,120,000
- ----------------------------------------------------------------------------
HEALTH CARE
First Health Group 2,150,000 2,700,000
Guidant 1,070,000 1,090,000
Lincare Holdings 480,000 490,000
Techne 415,000 440,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Abercrombie & Fitch 640,000 660,000
Herman Miller 1,060,000 1,160,000
Weight Watchers 0 600,000
- ----------------------------------------------------------------------------
FINANCE
Markel 87,000 110,000
TCF Financial 480,000 650,000
NUMBER OF SHARES
---------------------------
09/30/03 12/31/03
Sales
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Safeway 1,150,000 1,050,000
49
Columbia Acorn Select
>Statement of Investments, December 31, 2003
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 93.1%
- ----------------------------------------------------------------------------
INFORMATION: 27.3%
>INSTRUMENTATION: 2.4%
560,000 Tektronix $ 17,696
ANALYTICAL INSTRUMENTS
- ----------------------------------------------------------------------------
>GAMING EQUIPMENT: 2.3%
470,000 International Game Technology 16,779
SLOT MACHINES & PROGRESSIVE JACKPOTS
- ----------------------------------------------------------------------------
>CONSUMER SOFTWARE: 3.9%
600,000 Electronic Arts (b) 28,668
ENTERTAINMENT SOFTWARE
- ----------------------------------------------------------------------------
>BUSINESS SOFTWARE: 9.6%
1,120,000 Synopsys (b) 37,811
SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS
1,475,000 PeopleSoft 33,630
HR, ERP, CRM & SUPPLY CHAIN SOFTWARE
- ----------------------------------------------------------------------------
71,441
>ADVERTISING: 5.3%
2,520,000 Interpublic Group (b) 39,312
ADVERTISING
- ----------------------------------------------------------------------------
>BUSINESS INFORMATION: 3.8%
470,000 Moody's 28,459
RATINGS SERVICE FOR CREDIT OBLIGATIONS
-----------
INFORMATION: TOTAL 202,355
- ----------------------------------------------------------------------------
HEALTH CARE: 20.2%
>MEDICAL EQUIPMENT: 8.9%
1,090,000 Guidant 65,618
STENTS, DEFIBRILLATORS & OTHER CARDIAC
MEDICAL DEVICES
- ----------------------------------------------------------------------------
>SERVICES: 9.1%
2,700,000 First Health Group (b) 52,542
PPO NETWORK
490,000 Lincare Holdings (b) 14,715
HOME HEALTH CARE SERVICES
- ----------------------------------------------------------------------------
67,257
>HOSPITAL/LABORATORY SUPPLIES: 2.2%
440,000 Techne (b) 16,623
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
-----------
HEALTH CARE: TOTAL 149,498
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 28.4%
>LEISURE VEHICLES: 4.0%
620,000 Harley-Davidson 29,469
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
>CONSUMER SERVICES: 3.1%
600,000 Weight Watchers (b) 23,022
WEIGHT LOSS PROGRAM
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>RETAIL: 8.6%
660,000 Costco $ 24,539
WAREHOUSE SUPERSTORES
1,050,000 Safeway (b) 23,005
RETAIL FOOD & DRUG STORES
660,000 Abercrombie & Fitch (b) 16,309
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
63,853
>ENTERTAINMENT: 2.6%
440,000 International Speedway Motors 19,650
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
- ----------------------------------------------------------------------------
>FURNITURE & MANUFACTURERS: 10.1%
1,160,000 Herman Miller 28,153
OFFICE FURNITURE
350,000 Mohawk Industries (b) 24,689
CARPET & FLOORING
580,000 Coach (b) 21,895
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
- ----------------------------------------------------------------------------
74,737
-----------
>CONSUMER GOODS/SERVICES: TOTAL 210,731
- ----------------------------------------------------------------------------
FINANCE: 13.5%
>BANKS: 7.4%
650,000 TCF Financial 33,377
GREAT LAKES BANK
500,000 Associated Banc-Corp 21,325
MIDWEST BANK
- ----------------------------------------------------------------------------
54,702
>INSURANCE: 3.8%
110,000 Markel (b) 27,886
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
>MONEY MANAGEMENT: 2.3%
570,000 SEI Investments 17,368
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
-----------
FINANCE: TOTAL 99,956
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 3.7%
>LOGISTICS: 3.7%
720,000 Expeditors International of
Washington 27,115
INTERNATIONAL FREIGHT FORWARDER
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 27,115
-----------
TOTAL COMMON STOCKS: 93.1% 689,655
(COST: $579,443)
1-800-922-6769
50
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 5.6%
$ 18,000 American General Finance
Yield 1.00% Due 1/05/04 $ 17,998
23,170 Repurchase Agreement with State
Street Bank & Trust Co.,
dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
1/15/06, Market Value $23,635
(repurchase proceeds: $23,171) 23,170
- ----------------------------------------------------------------------------
(AMORTIZED COST: $41,168) 41,168
-----------
TOTAL INVESTMENTS: 98.7% 730,823
(COST: $620,611)
CASH AND OTHER ASSETS LESS LIABILITIES: 1.3% 9,796
-----------
TOTAL NET ASSETS: 100% $ 740,619
============================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
is $620,847 and net unrealized appreciation was $109,976, consisting of
gross unrealized appreciation of $132,180 and gross unrealized
depreciation of $22,204.
(b) Non-income producing security.
51
Columbia Acorn Family of Funds
>Statements of Assets and Liabilities
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN ACORN ACORN INTERNATIONAL ACORN
DECEMBER 31, 2003 FUND INTERNATIONAL USA SELECT SELECT
------------------ ----------------- --------------- ------------- ---------------
(IN THOUSANDS)
ASSETS
Investments, at Cost $ 7,343,798 $ 1,227,501 $ 533,840 $ 30,495 $ 620,611
------------------ ----------------- --------------- ------------- ---------------
Investment, at Value $ 11,164,160 $ 1,667,062 $ 692,240 $ 43,249 $ 730,823
Cash 4,064 -- 1 1 --
Foreign currency (cost: Columbia Acorn
Fund $5,413; Columbia Acorn
International $13,096; Columbia Acorn
International Select $7) 5,405 13,251 -- 7 --
Receivable for:
Investments sold 812 -- 206 -- --
Fund shares sold 28,319 1,278 1,764 122 10,986
Dividends and interest 4,645 2,632 83 123 43
Expense reimbursement due from
Advisor -- -- -- 29 --
Deferred Trustees' Compensation
Investments 924 396 64 -- --
Other assets -- -- 2 -- 7
------------------ ----------------- --------------- ------------- ---------------
Total Assets 11,208,329 1,684,619 694,360 43,531 741,859
LIABILITIES
Payable for:
Investments purchased 14,534 2,601 162 27 --
Fund shares redeemed 18,617 2,125 623 45 879
Foreign capital gains tax 1,515 813 -- -- --
Custodian 58 58 2 6 1
Management fee -- 4 -- -- --
12b-1 Service & Distribution fees 2,524 65 111 5 245
Legal & audit fees 109 66 25 17 --
Reports to shareholders 252 53 23 14 22
Deferred Trustees' fees 924 396 64 -- 25
Transfer agent fee 884 103 74 8 65
Other liabilities 97 3 2 3 3
------------------ ----------------- --------------- ------------- ---------------
Total Liabilities 39,514 6,287 1,086 125 1,240
------------------ ----------------- --------------- ------------- ---------------
NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274 $ 43,406 $ 740,619
================== ================= =============== ============= ===============
COMPOSITION OF NET ASSETS
Paid in capital $ 7,331,293 $ 1,462,493 $ 548,134 $ 68,842 $ 630,664
Undistributed net investment income
(Accumulated net investment loss) 6,955 16,493 92 142 (21)
Accumulated net realized gain (loss) 11,734 (238,525) (13,352) (38,346) (236)
Net unrealized appreciation
(depreciation) on:
Investments (net of unrealized PFIC
gains of $1,215 for Columbia
Acorn International) 3,820,362 438,346 158,400 12,754 110,212
Foreign currency transactions (1,529) (475) -- 14 --
------------------ ----------------- --------------- ------------- ---------------
NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274 $ 43,406 $ 740,619
================== ================= =============== ============= ===============
Net asset value per share -- Class A (a) $ 22.20 $ 22.45 $ 20.74 $ 14.45 $ 18.01
(Net assets/shares) ($1,982,260/89,282) ($52,872/2,355) ($89,650/4,322) ($2,557/177) ($264,679/14,700)
Maximum offering price
per share -- Class A (b) $ 23.55 $ 23.82 $ 22.01 $ 15.33 $ 19.11
(Net asset value per share/
front-end sales charge) ($22.20/.9425) ($22.45/.9425) ($20.74/.9425) ($14.45/.9425) ($18.01/.9425)
Net asset value and offering
price per share -- Class B (a) $ 21.75 $ 22.07 $ 20.36 $ 14.12 $ 17.64
(Net assets/shares) ($1,221,931/56,168) ($39,800/1,803) ($66,175/3,250) ($3,162/224) ($118,064/6,694)
Net asset value and offering
price per share -- Class C (a) $ 21.75 $ 22.06 $ 20.36 $ 14.14 $ 17.64
(Net assets/shares) ($900,016/41,377) ($22,990/1,042) ($35,662/1,752) ($3,691/261) ($64,212/3,641)
Net asset value, offering price and
redemption price per share
-- Class Z $ 22.56 $ 22.66 $ 21.01 $ 14.58 $ 18.20
(Net assets/shares) ($7,064,608/313,127) ($1,562,670/68,955) ($501,787/23,886)($33,996/2,331) ($293,664/16,138)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See accompanying notes to financial statements.
See accompanying notes to financial statements.
1-800-922-6769
52
Columbia Acorn Family of Funds
>Statements of Operations
For the Year Ended December 31, 2003
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN ACORN ACORN INTERNATIONAL ACORN
(IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT
----------- ----------- ----------- ----------- -----------
INVESTMENT INCOME:
Dividend income $ 70,311 33,963 $ 1,380 $ 745 $ 1,767
Interest income 7,373 717 406 15 294
----------- ----------- ----------- ----------- -----------
77,684 34,680 1,786 760 2,061
Foreign taxes withheld (1,354) (3,216) -- (62) --
----------- ----------- ----------- ----------- -----------
Total Investment Income 76,330 31,464 1,786 698 2,061
EXPENSES:
Management fees 52,118 11,792 4,194 330 3,817
Administration fees 3,905 703 227 17 212
12b-1 Service & Distribution fees 18,497 588 884 59 1,375
Custody fees 794 950 11 45 18
Legal and audit fees 488 121 66 24 42
Transfer agent fees 8,051 923 496 60 690
Trustees' fees 369 70 21 4 14
Registration and blue sky fees 316 76 116 94 140
Reports to shareholders 1,419 267 161 68 148
Other expenses 288 40 18 8 24
----------- ----------- ----------- ----------- -----------
Total expenses 86,245 15,530 6,194 709 6,480
Less custody fees paid indirectly (4) --* --* --* --
Less reimbursement of expenses by Advisor -- -- -- (147) --
----------- ----------- ----------- ----------- -----------
Net Expenses 86,241 15,530 6,194 562 6,480
----------- ----------- ----------- ----------- -----------
Net Investment Income (Loss) (9,911) 15,934 (4,408) 136 (4,419)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Investments 90,703 (7,250) 7,301 (445) 8,643
Foreign currency transactions (21) 106 -- 20 --
----------- ----------- ----------- ----------- -----------
Net realized gain (loss) 90,682 (7,144) 7,301 (425) 8,643
=========== =========== =========== =========== ===========
Net change in net unrealized appreciation/
depreciation on:
Investments 2,975,943 562,281 172,313 12,936 95,023
Foreign currency transactions (1,268) (291) -- -- --
----------- ----------- ----------- ----------- -----------
Net change in unrealized appreciation/
depreciation 2,974,675 561,990 172,313 12,936 95,023
=========== =========== =========== =========== ===========
Net realized and unrealized gain 3,065,357 554,846 179,614 12,511 103,666
----------- ----------- ----------- ----------- -----------
Net Increase in Net Assets resulting from
Operations $ 3,055,446 $ 570,780 $ 175,206 $ 12,647 $ 99,247
=========== =========== =========== =========== ===========
* Rounds to less than $500.
See accompanying notes to financial statements.
53
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------ ------------ ------------ ------------
(IN THOUSANDS) 2003 2002 2003 2002
OPERATIONS:
Net investment income (loss) $ (9,911) $ (5,079) $ 15,934 $ 11,854
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency transactions 90,682 (57,609) (7,144) (88,618)
Change in net unrealized appreciation (depreciation) of
investments, forward foreign currency contracts and
foreign currency transactions 2,974,675 (778,655) 561,990 (188,391)
------------ ------------ ------------ ------------
Net Increase (Decrease) from Operations 3,055,446 (841,343) 570,780 (265,155)
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (106) (24)
Net realized gain -- Class A (1,752) -- -- --
Net investment income -- Class B -- -- -- --
Net realized gain -- Class B (1,116) -- -- --
Net investment income -- Class C -- -- -- --
Net realized gain -- Class C (813) -- -- --
Net investment income -- Class Z -- -- (5,829) (9,265)
Net realized gain -- Class Z (6,236) -- -- --
------------ ------------ ------------ ------------
Total Distribution to Shareholders (9,917) -- (5,935) (9,289)
SHARE TRANSACTIONS:
Subscriptions -- Class A 1,041,782 645,380 45,279 264,875
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- -- -- --
Distributions reinvested -- Class A 1,584 -- 80 17
Redemptions -- Class A (259,438) (134,555) (42,948) (251,764)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class A 783,928 510,825 2,411 13,128
Subscriptions -- Class B 364,144 490,366 11,463 15,847
Distributions reinvested -- Class B 1,018 -- -- --
Redemptions -- Class B (88,744) (67,763) (5,639) (6,194)
------------ ------------ ------------ ------------
Net Increase -- Class B 276,418 422,603 5,824 9,653
Subscriptions -- Class C 375,513 330,698 14,870 43,176
Distributions reinvested -- Class C 673 -- -- --
Redemptions -- Class C (73,548) (53,861) (13,396) (40,348)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class C 302,638 276,837 1,474 2,828
Subscriptions -- Class Z 1,682,204 917,983 220,802 649,314
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- -- -- --
Distributions reinvested -- Class Z 5,443 -- 5,336 8,562
Redemptions -- Class Z (667,986) (509,628) (434,204) (768,033)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class Z 1,019,661 408,355 (208,066) (110,157)
------------ ------------ ------------ ------------
Net Increase (Decrease) from Share Transactions 2,382,645 1,618,620 (198,357) (84,548)
------------ ------------ ------------ ------------
Redemption Fees -- -- 400 --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets 5,428,174 777,277 366,888 (358,992)
NET ASSETS:
Beginning of period 5,740,641 4,963,364 1,311,444 1,670,436
------------ ------------ ------------ ------------
End of period $ 11,168,815 $ 5,740,641 $ 1,678,332 $ 1,311,444
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED
NET INVESTMENT LOSS OR OVERDISTRIBUTED NET
INVESTMENT INCOME) $ 6,955 $ 3,601 $ 16,493 $ 5,460
============ ============ ============ ============
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
INCREASE (DECREASE) IN NET ASSETS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------ ------------ ------------ ------------
(in thousands) 2003 2002 2003 2002
OPERATIONS:
Net investment income (loss) $ (4,408) $ (2,949) $ 136 $ 39
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency transactions 7,301 (17,552) (425) (6,845)
Change in net unrealized appreciation (depreciation) of
investments, forward foreign currency contracts and
foreign currency transactions 172,313 (56,039) 12,936 1,151
------------ ------------ ------------ ------------
Net Increase (Decrease) from Operations 175,206 (76,540) 12,647 (5,655)
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- -- --
Net realized gain -- Class A -- -- -- --
Net investment income -- Class B -- -- -- --
Net realized gain -- Class B -- -- -- --
Net investment income -- Class C -- -- -- --
Net realized gain -- Class C -- -- -- --
Net investment income -- Class Z -- -- (19) --
Net realized gain -- Class Z -- -- -- --
------------ ------------ ------------ ------------
Total Distribution to Shareholders -- -- (19) --
SHARE TRANSACTIONS:
Subscriptions -- Class A 60,457 35,469 2,350 54,708
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- 22 -- --
Distributions reinvested -- Class A -- -- -- --
Redemptions -- Class A (23,188) (15,616) (3,212) (54,724)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class A 37,269 19,875 (862) (16)
Subscriptions -- Class B 19,327 33,711 1,577 2,363
Distributions reinvested -- Class B -- -- -- --
Redemptions -- Class B (8,053) (13,914) (989) (2,245)
------------ ------------ ------------ ------------
Net Increase -- Class B 11,274 19,797 588 118
Subscriptions -- Class C 13,056 14,839 3,211 5,117
Distributions reinvested -- Class C -- -- -- --
Redemptions -- Class C (4,575) (5,070) (3,564) (5,510)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class C 8,481 9,769 (353) (393)
Subscriptions -- Class Z 221,496 125,400 23,389 72,837
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- 10,075 -- --
Distributions reinvested -- Class Z -- -- 18 --
Redemptions -- Class Z (83,975) (75,563) (25,393) (79,344)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class Z 137,521 59,912 (1,986) (6,507)
------------ ------------ ------------ ------------
Net Increase (Decrease) from Share Transactions 194,545 109,353 (2,613) (6,798)
------------ ------------ ------------ ------------
Redemption Fees -- -- 39 --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets 369,751 32,813 10,054 (12,453)
NET ASSETS:
Beginning of period 323,523 290,710 33,352 45,805
------------ ------------ ------------ ------------
End of period $ 693,274 $ 323,523 $ 43,406 $ 33,352
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED
NET INVESTMENT LOSS OR OVERDISTRIBUTED NET
INVESTMENT INCOME) $ 92 $ (50) $ 142 $ 5
============ ============ ============ ============
COLUMBIA
ACORN SELECT
INCREASE (DECREASE) IN NET ASSETS YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
(in thousands) 2003 2002
OPERATIONS:
Net investment income (loss) $ (4,419) $ (1,224)
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency transactions 8,643 (508)
Change in net unrealized appreciation (depreciation) of
investments, forward foreign currency contracts and
foreign currency transactions 95,023 (7,857)
------------ ------------
Net Increase (Decrease) from Operations 99,247 (9,589)
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- --
Net realized gain -- Class A (1,172) --
Net investment income -- Class B -- --
Net realized gain -- Class B (563) --
Net investment income -- Class C -- --
Net realized gain -- Class C (301) --
Net investment income -- Class Z -- --
Net realized gain -- Class Z (2,145) --
------------ ------------
Total Distribution to Shareholders (4,181) --
SHARE TRANSACTIONS:
Subscriptions -- Class A 237,520 31,504
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- --
Distributions reinvested -- Class A 1,096 --
Redemptions -- Class A (30,378) (10,199)
------------ ------------
Net Increase (Decrease) -- Class A 208,238 21,305
Subscriptions -- Class B 78,641 27,565
Distributions reinvested -- Class B 507 --
Redemptions -- Class B (9,321) (5,862)
------------ ------------
Net Increase -- Class B 69,827 21,703
Subscriptions -- Class C 50,838 8,806
Distributions reinvested -- Class C 257 --
Redemptions -- Class C (4,391) (2,268)
------------ ------------
Net Increase (Decrease) -- Class C 46,704 6,538
Subscriptions -- Class Z 301,467 46,496
Proceeds from shares issued in connection
with the tax-free transfer of assets from
Stein Roe Small Company Growth Fund -- --
Distributions reinvested -- Class Z 1,920 --
Redemptions -- Class Z (150,913) (17,872)
------------ ------------
Net Increase (Decrease) -- Class Z 152,474 28,624
------------ ------------
Net Increase (Decrease) from Share Transactions 477,243 78,170
------------ ------------
Redemption Fees -- --
------------ ------------
Total Increase (Decrease) in Net Assets 572,309 68,581
NET ASSETS:
Beginning of period 168,310 99,729
------------ ------------
End of period $ 740,619 $ 168,310
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED
NET INVESTMENT LOSS OR OVERDISTRIBUTED NET
INVESTMENT INCOME) $ (21) $ (11)
============ ============
See accompanying notes to financial statements.
1-800-922-6769
54-55 Spread
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets, continued
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------ ------------ ------------ ------------
(IN THOUSANDS) 2003 2002 2003 2002
NUMBER OF FUND SHARES OF BENEFICIAL INTEREST:
Subscriptions -- Class A 56,202 38,478 2,734 15,488
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- -- -- --
Shares issued in reinvestment and capital
gains -- Class A 73 -- 5 1
Less shares redeemed -- Class A (14,204) (8,482) (2,590) (14,677)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class A 42,071 29,996 149 812
Subscriptions -- Class B 20,371 29,099 653 923
Shares issued in reinvestment and
capital gains -- Class B 48 -- -- --
Less shares redeemed -- Class B (5,154) (4,407) (343) (376)
------------ ------------ ------------ ------------
Net Increase -- Class B 15,265 24,692 310 547
Subscriptions -- Class C 20,690 19,804 911 2,573
Shares issued in reinvestment and
capital gains -- Class C 32 -- -- --
Less shares redeemed -- Class C (4,207) (3,475) (833) (2,396)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class C 16,515 16,329 78 177
Subscriptions -- Class Z 89,984 54,769 13,104 38,166
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- -- -- --
Shares issued in reinvestment and capital
gains -- Class Z 249 -- 313 484
Less shares redeemed -- Class Z (36,502) (31,314) (25,027) (45,408)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class Z 53,731 23,455 (11,610) (6,758)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Shares of Beneficial Interest 127,582 94,472 (11,073) (5,222)
------------ ------------ ------------ ------------
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------ ------------ ------------ ------------
(IN THOUSANDS) 2003 2002 2003 2002
NUMBER OF FUND SHARES OF BENEFICIAL INTEREST:
Subscriptions -- Class A 3,345 2,124 216 4,749
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- 2 -- --
Shares issued in reinvestment and capital
gains -- Class A -- -- -- --
Less shares redeemed -- Class A (1,309) (1,009) (294) (4,731)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class A 2,036 1,117 (78) 18
Subscriptions -- Class B 1,087 2,019 137 220
Shares issued in reinvestment and
capital gains -- Class B -- -- -- --
Less shares redeemed -- Class B (512) (937) (95) (211)
------------ ------------ ------------ ------------
Net Increase -- Class B 575 1,082 42 9
Subscriptions -- Class C 724 892 311 459
Shares issued in reinvestment and
capital gains -- Class C -- -- -- --
Less shares redeemed -- Class C (279) (335) (339) (495)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class C 445 557 (28) (36)
Subscriptions -- Class Z 12,184 7,498 2,239 6,884
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- 724 -- --
Shares issued in reinvestment and capital
gains -- Class Z -- -- 2 --
Less shares redeemed -- Class Z (4,772) (4,844) (2,435) (7,419)
------------ ------------ ------------ ------------
Net Increase (Decrease) -- Class Z 7,412 3,378 (194) (535)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Shares of Beneficial Interest 10,468 6,134 (258) (544)
------------ ------------ ------------ ------------
COLUMBIA
ACORN SELECT
YEAR ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31,
------------ ------------
(IN THOUSANDS) 2003 2002
NUMBER OF FUND SHARES OF BENEFICIAL INTEREST:
Subscriptions -- Class A 14,227 2,229
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- --
Shares issued in reinvestment and capital
gains -- Class A 63 --
Less shares redeemed -- Class A (1,869) (735)
------------ ------------
Net Increase (Decrease) -- Class A 12,421 1,494
Subscriptions -- Class B 4,854 1,955
Shares issued in reinvestment and
capital gains -- Class B 30 --
Less shares redeemed -- Class B (601) (431)
------------ ------------
Net Increase -- Class B 4,283 1,524
Subscriptions -- Class C 3,102 630
Shares issued in reinvestment and
capital gains -- Class C 15 --
Less shares redeemed -- Class C (271) (164)
------------ ------------
Net Increase (Decrease) -- Class C 2,846 466
Subscriptions -- Class Z 18,117 3,286
Proceeds from shares issued in connection with
the tax-free transfer of assets from Stein Roe
Small Company Growth Fund -- --
Shares issued in reinvestment and capital
gains -- Class Z 108 --
Less shares redeemed -- Class Z (8,676) (1,263)
------------ ------------
Net Increase (Decrease) -- Class Z 9,549 2,023
------------ ------------
Net Increase (Decrease) in Shares of Beneficial Interest 29,099 5,507
------------ ------------
See accompanying notes to financial statements.
1-800-922-6769
56-57 Spread
Columbia Acorn Family of Funds
>Financial Highlights
COLUMBIA ACORN FUND
Class A Shares YEAR ENDED DECEMBER 31,
--------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.34 $ 17.80 $ 17.19 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.07) (0.07) (0.05) 0.01
Net realized and unrealized gain (loss) 6.95 (2.39) 1.01 1.22
----------- ---------- --------- ---------
Total from Investment Operations 6.88 (2.46) 0.96 1.23
----------- ---------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.06)
From net realized gains (0.02) -- (0.35) (1.86)
----------- ---------- --------- ---------
Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92)
----------- ---------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 22.20 $ 15.34 $ 17.80 $ 17.19
=========== ========== ========= =========
Total Return (c) 44.85% (13.82)% 5.56% 7.40%(d)
----------- ---------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.33% 1.42% 1.42% 1.25%(f)(g)
Net investment income (loss) (e) (0.36)% (0.45)% (0.33)% 0.17%(f)(g)
Portfolio turnover rate 10% 13% 20% 29%(d)
Net assets at end of period (000's) $ 1,982,260 $ 724,121 $ 306,405 $ 18,252
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.03% and 0.39% respectively, were revised to
reflect all class specific expenses in this period.
CLASS B SHARES YEAR ENDED DECEMBER 31,
--------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.13 $ 17.67 $ 17.17 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.18) (0.17) (0.16) (0.01)
Net realized and unrealized gain (loss) 6.82 (2.37) 1.01 1.22
----------- ---------- --------- ---------
Total from Investment Operations 6.64 (2.54) 0.85 1.21
----------- ---------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.06)
From net realized gains (0.02) -- (0.35) (1.86)
----------- ---------- --------- ---------
Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92)
----------- ---------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 21.75 $ 15.13 $ 17.67 $ 17.17
=========== ========== ========= =========
Total Return (c) 43.89% (14.37)% 4.92% 7.27%(d)
----------- ---------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.98% 2.07% 2.07% 1.90%(f)(g)
Net investment loss (e) (1.01)% (1.10)% (0.98)% (0.48)%(f)(g)
Portfolio turnover rate 10% 13% 20% 29%(d)
Net assets at end of period (000's)
$ 1,221,931 $ 618,727 $ 286,422 $ 15,951
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.68% and (0.26)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31,
--------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.12 $ 17.66 $ 17.17 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.18) (0.17) (0.17) (0.01)
Net realized and unrealized gain (loss) 6.83 (2.37) 1.01 1.22
----------- ---------- --------- ---------
Total from Investment Operations 6.65 (2.54) 0.84 1.21
----------- ---------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.06)
From net realized gains (0.02) -- (0.35) (1.86)
----------- ---------- --------- ---------
Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92)
----------- ---------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 21.75 $ 15.12 $ 17.66 $ 17.17
=========== ========== ========= =========
Total Return (c) 43.99% (14.38)% 4.86% 7.27%(d)
----------- ---------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.98% 2.07% 2.07% 1.90%(f)(g)
Net investment loss (e) (1.01)% (1.10)% (0.98)% (0.48)%(f)(g)
Portfolio turnover rate 10% 13% 20% 29%(d)
Net assets at end of period (000's) $ 900,016 $ 376,024 $ 150,727 $ 8,510
(a) Class C Shares were initially offered on October 16, 2000. Per share
data reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.68% and (0.26)% respectively, were revised to
reflect all class specific expenses in this period.
1-800-922-6769
See accompanying notes to financial statements
58
COLUMBIA ACORN INTERNATIONAL
Class A Shares YEAR ENDED DECEMBER 31,
------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.32 $ 18.35 $ 23.84 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) 0.10 0.05 0.01 0.02
Net realized and unrealized gain (loss) 7.08 (3.07) (5.11) (1.26)
--------- ---------- --------- --------
Total from Investment Operations 7.18 (3.02) (5.10) (1.24)
--------- ---------- --------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.05) (0.01) -- --
From net realized gains -- -- (0.39) (3.59)
--------- ---------- --------- --------
Total Distributions Declared to Shareholders (0.05) (0.01) (0.39) (3.59)
--------- ---------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 22.45 $ 15.32 $ 18.35 $ 23.84
========= ========== ========= ========
Total Return (c) 46.94% (16.46)% (21.59)% (4.85)%(d)
--------- ---------- --------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.59% 1.56% 1.65% 1.26%(f)(g)
Net investment income (e) 0.57% 0.30% 0.03% 0.73%(f)(g)
Portfolio turnover rate 40% 52% 45% 63%(d)
Net assets at end of period (000's) $ 52,872 $ 33,806 $ 25,587 $ 10,323
(a) Class A Shares were initially offered on October 16, 2000. Per share
data reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.59% and 0.40% respectively, were revised to
reflect all classes specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31,
------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 18.22 $ 23.81 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.02) (0.06) (0.12) 0.01
Net realized and unrealized gain (loss) 6.98 (3.05) (5.08) (1.28)
--------- ---------- --------- --------
Total from Investment Operations 6.96 (3.11) (5.20) (1.27)
--------- ---------- --------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains -- -- (0.39) (3.59)
--------- ---------- --------- --------
Total Distributions Declared to Shareholders -- -- (0.39) (3.59)
--------- ---------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 22.07 $ 15.11 $ 18.22 $ 23.81
========= ========== ========= ========
Total Return (c) 46.06% (17.07)% (22.04)% (4.97)%(d)
--------- ---------- --------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 2.24% 2.21% 2.30% 1.91%(f)(g)
Net investment income (loss) (e) (0.10)% (0.35)% (0.62)% 0.08%(f)(g)
Portfolio turnover rate 40% 52% 45% 63%(d)
Net assets at end of period (000's) $ 39,800 $ 22,560 $ 17,235 $ 5,675
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 2.24% and (0.25)% respectively, were revised to
reflect all classes specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31,
------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 18.21 $ 23.81 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.01) (0.06) (0.13) 0.01
Net realized and unrealized gain (loss) 6.96 (3.04) (5.08) (1.28)
--------- ---------- --------- --------
Total from Investment Operations 6.95 (3.10) (5.21) (1.27)
--------- ---------- --------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains -- -- (0.39) (3.59)
--------- ---------- --------- --------
Total Distributions Declared to Shareholders -- -- (0.39) (3.59)
--------- ---------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 22.06 $ 15.11 $ 18.21 $ 23.81
========= ========== ========= ========
Total Return (c) 46.00% (17.02)% (22.08)% (4.97)%(d)
--------- ---------- --------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 2.24% 2.21% 2.30% 1.91%(f)(g)
Net investment income (loss) (e) (0.06)% (0.35)% (0.62)% 0.08%(f)(g)
Portfolio turnover rate 40% 52% 45% 63%(d)
Net assets at end of period (000's) $ 22,990 $ 14,575 $ 14,327 $ 3,965
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 2.24% and (0.25)% respectively, were revised to
reflect all classes specific expenses in this period.
See accompanying notes to financial statements
59
Columbia Acorn Family of Funds
>Financial Highlights continued
COLUMBIA ACORN USA
Class A Shares YEAR ENDED DECEMBER 31,
------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.18 $ 17.50 $ 14.88 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.22) (0.19) (0.19) (0.01)
Net realized and unrealized gain (loss) 6.78 (3.13) 2.96 1.06
--------- ---------- --------- --------
Total from Investment Operations 6.56 (3.32) 2.77 1.05
--------- ---------- --------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains -- -- (0.15) --
--------- ---------- --------- --------
Total Distributions Declared to Shareholders -- -- (0.15) --
--------- ---------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 20.74 $ 14.18 $ 17.50 $ 14.88
========= ========== ========= ========
Total Return (c) 46.26% (18.97)% 18.65% 7.59%(d)
--------- ---------- --------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.65% 1.74% 1.84% 1.41%(f)(g)
Net investment loss (e) (1.26)% (1.21)% (1.13)% (0.73)%(f)(g)
Portfolio turnover rate 7% 31% 24% 45%(d)
Net assets at end of period (000's) $ 89,650 $ 32,422 $ 20,455 $ 798
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.17% and (0.49)% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31,
------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 17.40 $ 14.87 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.32) (0.29) (0.30) (0.03)
Net realized and unrealized gain (loss) 6.67 (3.10) 2.96 1.07
--------- ---------- --------- --------
Total from Investment Operations 6.35 (3.39) 2.66 1.04
--------- ---------- --------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains -- -- (0.13) --
--------- ---------- --------- --------
Total Distributions Declared to Shareholders -- -- (0.13) --
--------- ---------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87
========= ========== ========= ========
Total Return (c) 45.32% (19.48)% 17.92% 7.52%(d)
--------- ---------- --------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 2.30% 2.39% 2.49% 2.06%(f)(g)
Net investment loss (e) (1.91)% (1.86)% (1.78)% (1.38)%(f)(g)
Portfolio turnover rate 7% 31% 24% 45%(d)
Net assets at end of period (000's) $ 66,175 $ 37,478 $ 27,722 $ 685
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.82% and (1.14)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31,
------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 17.40 $ 14.87 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.32) (0.29) (0.30) (0.03)
Net realized and unrealized gain (loss) 6.67 (3.10) 2.96 1.07
--------- ---------- --------- --------
Total from Investment Operations 6.35 (3.39) 2.66 1.04
--------- ---------- --------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains -- -- (0.13) --
--------- ---------- --------- --------
Total Distributions Declared to Shareholders -- -- (0.13) --
--------- ---------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87
========= ========== ========= ========
Total Return (c) 45.32% (19.48)% 17.92% 7.52%(d)
--------- ---------- --------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 2.30% 2.39% 2.49% 2.06%(f)(g)
Net investment loss (e) (1.91)% (1.86)% (1.78)% (1.38)%(f)(g)
Portfolio turnover rate 7% 31% 24% 45%(d)
Net assets at end of period (000's) $ 35,662 $ 18,313 $ 13,049 $ 347
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects 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 fees paid indirectly had no impact.
(f) Annualized.
(g) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.82% and (1.14)% respectively, were revised to
reflect all class specific expenses in this period.
1-800-922-6769
See accompanying notes to financial statements
60
COLUMBIA ACORN INTERNATIONAL SELECT
Class A Shares YEAR ENDED DECEMBER 31,
--------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.24 $ 12.07 $ 17.15 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.03 (0.01) (0.09) (0.03)
Net realized and unrealized gain (loss) 4.18 (1.82) (4.90) (0.53)
-------- -------- -------- ---------
Total from Investment Operations 4.21 (1.83) (4.99) (0.56)
-------- -------- -------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- (0.01) --
From net realized gains -- -- (0.08) --
-------- -------- -------- ---------
Total Distributions Declared to Shareholders -- -- (0.09) --
-------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 14.45 $ 10.24 $ 12.07 $ 17.15
======== ======== ======== =========
Total Return (c) 41.11%(d) (15.16)%(d) (29.17)%(d) (3.16)%(e)
-------- -------- -------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 1.80% 1.80% 1.80% 1.68%(g)(h)
Net investment income (loss) (f) 0.24% (0.09)% (0.67)% (1.18)%(g)(h)
Reimbursement 0.44% 0.33% 0.23% --
Portfolio turnover rate 69% 102% 82% 79%(e)
Net assets at end of period (000's) $ 2,557 $ 2,612 $ 2,861 $ 3,172
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects 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) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.29% and (0.79)% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31,
--------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.08 $ 11.96 $ 17.13 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.06) (0.08) (0.18) (0.05)
Net realized and unrealized gain (loss) 4.10 (1.80) (4.90) (0.53)
-------- -------- -------- ---------
Total from Investment Operations 4.04 (1.88) (5.08) (0.58)
-------- -------- -------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- (0.01) --
From net realized gains -- -- (0.08) --
-------- -------- -------- ---------
Total Distributions Declared to Shareholders -- -- (0.09) --
-------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 14.12 $ 10.08 $ 11.96 $ 17.13
======== ======== ======== =========
Total Return (c) 40.08%(d) (15.72)%(d) (29.73)%(d) (3.27)%(e)
-------- -------- -------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.45% 2.45% 2.45% 2.33%(g)(h)
Net investment loss (f) (0.52)% (0.74)% (1.32)% (1.83)%(g)(h)
Reimbursement 0.44% 0.33% 0.23% --
Portfolio turnover rate 69% 102% 82% 79%(e)
Net assets at end of period (000's) $ 3,162 $ 1,835 $ 2,069 $ 1,551
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects 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) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.94% and (1.44)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31,
--------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.09 $ 11.97 $ 17.14 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.05) (0.08) (0.18) (0.05)
Net realized and unrealized gain (loss) 4.10 (1.80) (4.90) (0.52)
-------- -------- -------- ---------
Total from Investment Operations 4.05 (1.88) (5.08) (0.57)
-------- -------- -------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- (0.01) --
From net realized gains -- -- (0.08) --
-------- -------- -------- ---------
Total Distributions Declared to Shareholders -- -- (0.09) --
-------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 14.14 $ 10.09 $ 11.97 $ 17.14
======== ======== ======== =========
Total Return (c) 40.14%(d) (15.71)%(d) (29.71)%(d) (3.22)%(e)
-------- -------- -------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.45% 2.45% 2.45% 2.33%(g)(h)
Net investment loss (f) (0.41)% (0.74)% (1.32)% (1.83)%(g)(h)
Reimbursement 0.44% 0.33% 0.23% --
Portfolio turnover rate 69% 102% 82% 79%(e)
Net assets at end of period (000's) $ 3,691 $ 2,915 $ 3,885 $ 3,399
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects 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) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.94% and (1.44)% respectively, were revised to
reflect all class specific expenses in this period.
See accompanying notes to financial statements
61
Columbia Acorn Family of Funds
>Financial Highlights continued
COLUMBIA ACORN SELECT
Class A Shares Year Ended December 31,
----------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.93 $ 15.17 $ 14.12 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.20) (0.16) (0.10) (0.01)
Net realized and unrealized gain (loss) 4.37 (1.08) 1.18 0.86
-------- --------- --------- ----------
Total from Investment Operations 4.17 (1.24) 1.08 0.85
-------- --------- --------- ----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01)
From net realized gains (0.09) -- (0.03) (0.19)
-------- --------- --------- ----------
Total Distributions Declared to Shareholders (0.09) -- (0.03) (0.20)
-------- --------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 18.01 $ 13.93 $ 15.17 $ 14.12
======== ========= ========= ==========
Total Return (c) 29.95% (8.17)%(d) 7.65%(d) 6.32%(e)
-------- --------- --------- ----------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.63%(f) 1.70%(f) 1.70% 1.61%(f)(g)(h)
Net investment loss (1.15)%(f) (1.11)%(f) (0.79)% (0.62)%(f)(g)(h)
Reimbursement -- 0.10% 0.18% --
Portfolio turnover rate 16% 40% 82% 116%(e)
Net assets at end of period (000's) $264,679 $ 31,742 $ 11,900 $ 3,267
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects 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) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 0.76% and 0.23% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31,
------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD 13.73 $ 15.05 $ 14.10 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.29) (0.25) (0.20) (0.01)
Net realized and unrealized gain (loss) 4.29 (1.07) 1.18 0.84
--------- ---------- --------- ---------
Total from Investment Operations 4.00 (1.32) 0.98 0.83
--------- ---------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01)
From net realized gains (0.09) -- (0.03) (0.19)
--------- ---------- --------- ---------
Total Distributions Declared to Shareholders (0.09) -- (0.03) (0.20)
--------- ---------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10
========= ========== ========= =========
Total Return (c) 29.14% (8.77)%(d) 6.95%(d) 6.17%(e)
--------- ---------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h)
Net investment loss (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h)
Reimbursement -- 0.10% 0.18% --
Portfolio turnover rate 16% 40% 82% 116%(e)
Net assets at end of period (000's) $ 118,064 $ 33,106 $ 13,358 $ 4,249
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects 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) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.41% and (0.42)% respectively, were revised to
reflect all class specific expenses in this period.
1-800-922-6769
See accompanying notes to financial statements
62
COLUMBIA ACORN SELECT (continued)
Class C Shares YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.73 $ 15.05 $ 14.10 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.30) (0.25) (0.20) (0.01)
Net realized and unrealized gain (loss) 4.30 (1.07) 1.18 0.84
---------- ---------- ---------- ----------
Total from Investment Operations 4.00 (1.32) 0.98 0.83
---------- ---------- ---------- ----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01)
From net realized gains (0.09) -- (0.03) (0.19)
---------- ---------- ---------- ----------
Total Distributions Declared to Shareholders (0.09) -- (0.03) (0.20)
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10
========== ========== ========== ==========
Total Return (c) 29.14% (8.77)%(d) 6.95%(d) 6.17%(e)
---------- ---------- ---------- ----------
RATIOS TO AVERAGE NET ASSETS
Expenses 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h)
Net investment loss (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h)
Reimbursement -- 0.10% 0.18% --
Portfolio turnover rate 16% 40% 82% 116%(e)
Net assets at end of period (000's) $ 64,212 $ 10,919 $ 4,945 $ 1,070
(a) Class C Shares were initially offered on October 16, 2000. Per share
data reflects 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) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.41% and (0.42)% respectively, were revised to
reflect all class specific expenses in this period.
See accompanying notes to financial statements
63
Columbia Acorn Family of Funds
>Notes to Financial Statements
1. Nature of Operations
Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia
Acorn International Select and Columbia Acorn Select (the "Funds") are series of
Columbia Acorn Trust (the "Trust"), an open-end management investment company
organized as a Massachusetts business trust. The investment objective of each
Fund is to seek long-term growth of capital. The Funds may issue an unlimited
number of shares. The Funds offer four classes of shares: Class A, Class B,
Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a contingent deferred sales charge. Class B
shares will convert to Class A shares in three, four or eight years after
purchase, depending on the program under which shares are purchased.
Class C shares are subject to a contingent deferred sales charge on
redemptions made 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. Generally, you may
exchange your Class Z or Class A shares of the Fund for shares of another fund
at no additional charge. However, if you exchange Class Z shares of Columbia
Acorn International or Columbia Acorn International Select that you have owned
60 days or less for Class Z shares of a fund distributed by Columbia Funds
Distributor, Inc., that does not have a redemption fee (including Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a
redemption fee of 2% of the redemption proceeds. Exchanges between Columbia
Acorn International and Columbia Acorn International Select (or a fund
distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will
not be subject to the 2% redemption fee. In addition, if you redeem shares of
Columbia Acorn International or Columbia Acorn International Select that you
have owned 60 days or less, the Fund will charge you a redemption fee of 2% of
redemption proceeds, with certain exceptions. See "Fund Policy on Trading of
Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for
more information.
The financial highlights for Class Z shares are presented in a separate
annual report. The annual financial statements for the Columbia Thermostat Fund,
another Fund of the Trust, begin on page 71 of this report.
Effective October 13, 2003, the Funds changed their name from Liberty
Acorn Fund to Columbia Acorn Fund, Liberty Acorn International to Columbia Acorn
International, Liberty Acorn USA to Columbia Acorn USA, Liberty Acorn Foreign
Forty to Columbia Acorn International Select and Liberty Acorn Twenty to
Columbia Acorn Select. Also on that date, the Trust changed its name from
Liberty Acorn Trust to Columbia Acorn Trust.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
On July 26, 2002, Columbia Acorn USA acquired all of the net assets of the
Stein Roe Small Company Growth Fund ("Stein Roe Fund") pursuant to a plan of
reorganization approved by the Stein Roe Fund shareholders on June 28, 2002. The
acquisition was accomplished by a tax-free exchange of 1,139,488 shares of the
Stein Roe Fund (valued at $10,096,640) for 726,123 shares of Columbia Acorn USA.
The net assets of the Stein Roe Fund were combined with the net assets of
Columbia Acorn USA on the acquisition date and included $3,125,202 of unrealized
depreciation on investment. The aggregate net assets of Columbia Acorn USA
immediately before and after acquisition were $306,945,066 and $317,041,706,
respectively.
2. Significant Accounting Policies
>Security valuation
Investments are stated at fair value. Securities traded on securities exchanges
or in over-the-counter markets in which transaction prices are reported are
valued at the last sales price at the time of valuation. If a security is traded
principally on the Nasdaq Stock Market Inc., the SEC-approved Nasdaq Official
Closing Price will be applied. Securities for which there are no reported sales
on the valuation date are valued at the latest bid quotation. Money market
instruments having a maturity of 60 days or less from the valuation date are
valued on an amortized cost basis, which approximates fair value. Securities for
which quotations are not available are valued at a fair value as determined in
good faith by the Board of Trustees.
>Repurchase agreements
The Funds may engage in repurchase agreement transactions. The Funds, through
their custodians, receive delivery of underlying securities collateralizing
repurchase agreements. The Funds' investment advisor determines
1-800-922-6769
64
that the value of the underlying securities is at all times at least equal to
the resale price. In the event of default or bankruptcy by the other party to
the agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and long-term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Funds no longer own the applicable securities, the proceeds are
recorded as realized gains.
The Funds estimate components of distributions from Real Estate Investment
Trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. Results of operations for the
year reflect a change in estimate of these components using more current tax
reporting received from REIT investments. The change in estimate had no impact
on each of the Fund's net assets.
>Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" in the Statements of Operations. Additionally, each Fund,
except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio
hedging with respect to changes in foreign currency exchange rates by entering
into forward foreign currency contracts to purchase or sell foreign currencies.
The Statements of Operations reflect gains and losses as realized for closed
forward foreign currency contracts and unrealized for open contracts. The Funds
bear the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
None of the Funds entered into any futures contracts or forward foreign
currency contracts during the year ended December 31, 2003.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading. All income,
expenses (other than the Class A, Class B and Class C 12b-1 and distribution
fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fees) and
realized and unrealized gains (losses) of a fund are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class. Redemption fees are allocated to paid-in-capital of each class
proportionately for the purposes of determining net asset value of each class.
>Custody fees
Custody fees are reduced based on each Fund's cash balances maintained with the
custodian. The amount is disclosed as a reduction of total expenses in the
Statement of Operations.
>Federal income taxes
The Funds have complied with the special provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all their taxable income, as well as any net realized gain on sales
of investments and foreign currency transactions reportable for federal income
tax purposes. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
65
Columbia Acorn Family of Funds
>Notes to Financial Statements continued
3. Federal Tax Information
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from accounting principles generally accepted
in the United States of America. These differences are primarily due to
differing treatments for deferral of losses from wash sales, straddle deferrals,
mark-to-market on futures contracts, current year distribution payable, foreign
currency transactions, net operating losses, passive foreign investment
companies, capital loss carryforwards, post-October losses and non-deductible
expenses. Reclassifications are made to the Funds' capital accounts to reflect
income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.
For the year ended December 31, 2003, permanent items identified and
reclassified among the components of net assets are as follows:
UNDISTRIBUTED
NET INVESTMENT
INCOME
(ACCUMULATED
NET ACCUMULATED NET
INVESTMENT NET REALIZED PAID-IN UNREALIZED
LOSS) GAIN (LOSS) CAPITAL APPRECIATION
--------------- ------------ -------- ------------
(IN THOUSANDS)
Columbia Acorn
Fund $13,265 $(13,067) $ (607) $ 409
Columbia Acorn
International 1,034 (7,045) -- 6,011
Columbia Acorn
USA 4,550 3,217 (7,767) --
Columbia Acorn
International
Select 20 (20) -- --
Columbia Acorn
Select 4,409 (4,146) (263) --
Net investment income, net realized gains (losses) and net assets were not
affected by this reclassification.
The tax character of distributions paid during the years ended December 31, 2003
and December 31, 2002 were as follows:
LONG-TERM
ORDINARY CAPITAL
DECEMBER 31, 2003 INCOME GAINS
- ----------------- --------- ----------
(IN THOUSANDS)
Columbia Acorn Fund $ -- $9,917
Columbia Acorn Internationa l5,935 --
Columbia Acorn USA -- --
Columbia Acorn International
Select 19 --
Columbia Acorn Select 736 3,445
Ordinary
December 31, 2002 Income
- ----------------- ---------
(IN THOUSANDS)
Columbia Acorn
International $ 9,289
As of December 31, 2003, the components of distributable earnings on a tax basis
were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
-------------- ------------- -------------
(IN THOUSANDS)
Columbia Acorn
Fund $ -- $ 14,205 $ 3,824,239
Columbia Acorn
International 16,894 -- 435,632
Columbia Acorn
USA -- -- 158,303
Columbia Acorn
International
Select 154 -- 12,522
Columbia Acorn
Select -- -- 109,976
*The difference between book-basis and tax-basis unrealized appreciation, if
applicable, is attributable primarily to the tax deferral of losses on wash
sales, REIT adjustments and foreign currency transactions.
For the year ended December 31, 2003, the following capital loss carryforwards
are available to reduce taxable income arising from future net realized gains
on investments, if any, to the extent permitted by the Internal Revenue Code:
YEAR OF COLUMBIA COLUMBIA ACORN COLUMBIA
EXPIRATION ACORN FUND INTERNATIONAL ACORN USA
- ---------- ----------- -------------- ---------
(IN THOUSANDS)
2009 $ -- $ 111,479 $ 3,035
2010 -- 76,335 10,064
2011 -- 48,476 --
----------- -------------- ---------
TOTAL $ -- $ 236,290 $13,099
YEAR OF COLUMBIA ACORN COLUMBIA ACORN
EXPIRATION INTERNATIONAL SELECT SELECT
- ---------- -------------------- --------------
(IN THOUSANDS)
2009 $23,084 $ --
2010 12,528 --
2011 2,488 --
-------------------- --------------
TOTAL $38,100 $ --
Capital loss carryforwards utilized during the year ended December 31,
2003, were as follows:
Columbia Acorn $38,258
Columbia Acorn USA 5,383
Columbia Acorn Select 530
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
1-800-922-6769
66
Columbia Acorn Fund and Columbia Acorn
International have elected to mark-to-market their investments in Passive
Foreign Investment Companies ("PFIC's") for federal income tax purposes. Gains
and losses relating to PFIC's are treated as ordinary income for federal income
tax purposes. A summary of transactions relating to PFIC's is as follows (in
thousands):
COLUMBIA ACORN FUND
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Cumulative unrealized appreciation
on PFIC's recognized in prior years
at December 31, 2002 $ 409
Unrealized appreciation (depreciation)
on PFIC's recognized for federal income
tax purposes during 2003 --
Unrealized appreciation recognized in
prior years on PFIC's sold during 2003 (409)
----------
Cumulative unrealized appreciation on
PFIC's carried forward at December 31, 2003 $ --
----------
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Cumulative unrealized appreciation
on PFIC's recognized in prior years
at December 31, 2002 $ 7,225
Unrealized appreciation (depreciation)
on PFIC's recognized for federal income
tax purposes during 2003 1,215
Unrealized appreciation recognized in
prior years on PFIC's sold during 2003 (7,225)
----------
Cumulative unrealized appreciation on
PFIC's carried forward at December 31, 2003 $ 1,215
----------
4. Transactions with Affiliates
Effective October 13, 2003, the Fund's investment advisor changed its name from
Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P.
("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management
Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank,
which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation
("Fleet"), furnishes continuing investment supervision to each Fund and is
responsible for the overall management of the Funds' business affairs.
Under the Funds' investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rates shown in the table below
for each fund.
COLUMBIA ACORN FUND
- --------------------------------------------------------------------------------
Net asset value:
On the first $700 million .75%
Next $1.3 billion .70%
Net assets in excess of $2 billion .65%
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------------------------------
Net asset value:
On the first $100 million 1.20%
Next $400 million .95%
Net assets in excess of $500 million .75%
COLUMBIA ACORN USA
- --------------------------------------------------------------------------------
Net asset value:
On the first $200 million .95%
Net assets in excess of $200 million .90%
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------------------------------
On average daily net assets: .95%
COLUMBIA ACORN SELECT
- --------------------------------------------------------------------------------
On average daily net assets: .90%
>Expense Limit
Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses
(exclusive of distribution and service fees, interest, taxes and extraordinary
expenses, if any) exceeding 1.45% of the average annual net assets for Columbia
Acorn International Select Class A, B and C shares and 1.35% of the average
annual net assets for Columbia Acorn Select Class A, B and C shares.
Columbia WAM also provides administrative services to each Fund at an
annual rate of .05% of average daily net assets.
Effective October 13, 2003, Liberty Funds Distributor, Inc. changed its
name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an
indirect subsidiary of Fleet, is each Fund's principal underwriter and receives
no compensation on the sale of Class Z shares.
For the year ended December 31 2003, Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn International Select and
Columbia Acorn Select have been advised that the Distributor retained $1,525,281
in underwriting discounts on the sale of Class A shares and received contingent
deferred sales charges of $1,676,890, $90,066, $131,820, $9,893, $154,202,
respectively, on Class A, Class B and Class C share redemptions.
Each Fund has adopted a 12b-1 plan which requires it to pay the
Distributor a monthly service fee equal to 0.25% annually, of the average daily
net assets attributable to Class A, Class B and Class C shares. The 12b-1 plan
also requires each Fund to pay the Distributor a monthly distribution fee equal
to 0.10%, 0.75% and 0.75% annually, of the average daily net assets attributable
to Class A, Class B and Class C shares, respectively.
Effective October 13, 2003, Liberty Funds Services, Inc. changed its name
to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an
affiliate of the investment advisor, provides shareholder services to the
67
Columbia Acorn Family of Funds
>Notes to Financial Statements continued
Funds and receives reimbursement for out-of-pocket expenses. Transfer Agent fees
are comprised of 0.07% annually, of the average daily net assets attributable to
Class A, Class B and Class C shares plus charges based on the number of
shareholder accounts and transactions.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers or trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses for the year ended
December 31, 2003 are as follows:
- ----------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 369
Columbia Acorn International 70
Columbia Acorn USA 20
Columbia Acorn International Select 4
Columbia Acorn Select 14
- ----------------------------------------------------------------
The Trust provides a deferred compensation plan for its trustees. Under
that plan, a trustee may elect to defer all or a portion of his or her
compensation. Amounts deferred are retained by the Trust and represent an
unfunded obligation of the Trust. The value of amounts deferred is determined by
reference to the change in value of Class Z shares of one or more series of the
Trust or a money market fund as specified by the trustee. Benefits under the
deferred compensation plan are payable upon retirement.
During the year ended December 31, 2003, the Funds engaged in purchase and
sale transactions with funds that have a common investment adviser (or
affiliated investment advisers), common Directors/Trustees, and/or common
Officers. Those transactions complied with Rule 17a-7 under the Investment
Company Act of 1940 and were as follows:
FUNDS PURCHASES SALES
- ----------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 32,474 $ 5,329
Columbia Acorn International 7,022 33,552
Columbia Acorn USA 1,032 --
Columbia Acorn International Select -- 45
Columbia Acorn Select -- 1,204
- ----------------------------------------------------------------
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. No amounts have been borrowed under this
facility for the year ended December 31, 2003.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2003 were:
COLUMBIA ACORN FUND
- --------------------------------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases $2,754,813
Proceeds from sales 692,955
================================================================================
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 533,515
Proceeds from sales 712,236
================================================================================
COLUMBIA ACORN USA
- --------------------------------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 198,615
Proceeds from sales 29,091
================================================================================
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 22,844
Proceeds from sales 25,103
================================================================================
COLUMBIA ACORN SELECT
- --------------------------------------------------------------------------------
(IN THOUSANDS) 2003
Investment securities
Purchases 490,046
Proceeds from sales 62,409
================================================================================
7. Legal Proceedings
The Securities and Exchange Commission (the "SEC"), the New York Attorney
General and various other regulatory authorities are investigating late trading
and market timing in mutual fund shares, and have sent information requests and
subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG")
(collectively, "Columbia"). These affiliates include the Distributor, Columbia
Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P.
("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not
the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered
any instances where Columbia entities were knowingly involved in late trading of
mutual fund shares. Columbia has identified a limited number of investors who
had informal arrangements for trading shares of various funds managed by
subsidiaries of CMG between 1998 and 2003. A majority of the transactions in
connection with these arrangements occurred in one international fund and two
domestic funds
1-800-922-6769
68
in the Columbia Family of Funds. A 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 exist today.
Information relating to those trading arrangements has been supplied to various
regulatory authorities.
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 the Distributor and CMA
alleging that they have violated certain provisions of the federal securities
laws. Columbia believes that those allegations are based principally on the
trading arrangements referred to above. Columbia WAM has not been named in these
notices. The Distributor and CMA 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 the Distributor or CMA,
and structural changes in the conduct of their business.
Although Columbia does not believe that these regulatory developments or
their resolution will have a material adverse effect on the Funds, or on the
ability of the Distributor or Columbia WAM to provide services to the Funds,
there can be no assurance that these matters or any publicity relating to these
matters or other developments resulting from them will not adversely effect
sales or redemptions of Fund shares or otherwise effect the Funds.
Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a
lawsuit that seeks certification of a plaintiff class consisting of all persons
in the United States who held shares in Columbia Acorn International Fund
("International Fund") for a period of more than 14 days during the five years
prior to the filing of the lawsuit. The suit seeks compensatory and punitive
damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in
summary, that the Trust and Columbia WAM exposed International Fund shareholders
to trading by market timers by allegedly (a) failing to properly evaluate daily
whether a significant event affecting the value of International Fund's
securities had occurred after foreign markets had closed but before the
calculation of the Fund's net asset value ("NAV"); (b) failing to implement
International Fund's portfolio valuation and share pricing policies and
procedures; (c) allowing portfolio valuation and share policies and procedures
that benefited market timers at the expense of long-term shareholders; and (d)
failing to know and implement applicable rules and regulations concerning the
calculation of NAV.
The Trust and Columbia WAM also are defendants in a lawsuit that seeks
certification of a plaintiff class consisting of all persons in the United
States who held shares in International Fund for a period of more than 14 days,
without any stated limitation on the duration of the class period. The suit
seeks compensatory and punitive damages, as well as interest, costs and
attorney's fees. This suit contains allegations and counts similar to those
described above, and also includes an additional count under Section 36(a) of
the Investment Company Act of 1940.
The Trust, on behalf of International Fund, and Columbia WAM intend to
defend both suits vigorously. The Trust does not believe that the pending
actions will have a material adverse affect on the financial statements of any
Fund, and Columbia WAM does not believe that the pending actions will have a
material adverse affect on its ability to perform under its contracts with the
Funds.
69
Columbia Acorn Family of Funds
>Unaudited Information
FEDERAL INCOME TAX INFORMATION:
COLUMBIA ACORN FUND
For the fiscal year ended December 31, 2003, the Fund designates long-term
capital gains of $24,122.
COLUMBIA ACORN INTERNATIONAL FUND
Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to
$3,216 ($0.04 per share) are expected to be passed through to shareholders as
100% allowable foreign tax credits on Form 1099-DIV for the year ended December
31, 2003.
Gross income derived from sources within foreign countries amounted to
$33,962 ($0.46 per share) for the fiscal year ended December 31, 2003.
COLUMBIA ACORN INTERNATIONAL SELECT FUND
Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to
$62 ($0.02 per share) are expected to be passed through to shareholders as 100%
allowable foreign tax credits on Form 1099-DIV for the year ended December 31,
2003.
Gross income derived from sources within foreign countries amounted to
$745 ($0.25 per share) for the fiscal year ended December 31, 2003.
COLUMBIA ACORN SELECT FUND
For the fiscal year ended December 31, 2003, the Fund designates long-term
capital gains of $3,445.
100% of the ordinary income distributed by the Fund, in the year ended December
31, 2003, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 100%, or the maximum amount allowable under
the Job and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period January 1, 2003 to December 31, 2003 may represent
qualified dividend income. Final information will be provided in your 2003
1099-DIV form.
1-800-922-6769
70
Columbia Thermostat Fund
>Statement of Investments, December 31, 2003
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------
>STOCK FUNDS: 49.5%
981 Columbia Growth & Income Fund,
Class Z $ 15,899
1,719 Columbia Growth Stock Fund,
Class Z (b) 15,870
559 Columbia Acorn Fund, Class Z 12,613
393 Columbia Mid Cap Value Fund, Class Z 9,502
522 Columbia Acorn Select, Class Z (b) 9,501
- ----------------------------------------------------------------
TOTAL STOCK FUNDS (COST: $54,614) 63,385
>BOND FUNDS: 49.6%
3,469 Columbia Intermediate Bond
Fund, Class Z 31,739
1,775 Columbia Federal Securities
Fund, Class Z 19,061
1,453 Columbia High Yield Fund, Class Z 12,696
- ----------------------------------------------------------------
TOTAL BOND FUNDS (COST: $62,988) 63,496
>SHORT-TERM OBLIGATION: 0.8%
$ 972 Repurchase Agreement with State
Street Bank & Trust Co.,
dated 12/31/03, due 1/02/04
at 0.85% collateralized by
Federal National Mortgage
Association Notes maturing
6/17/05, Market Value $996
(repurchase proceeds: $972) 972
- ----------------------------------------------------------------
(COST: $972) 972
-----------
TOTAL INVESTMENTS: 99.9% 127,853
(COST: $118,574)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 76
-----------
TOTAL NET ASSETS: 100% $ 127,929
================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2003, for federal income tax purposes cost of investments
was $118,600 and net unrealized appreciation was $9,253, consisting of gross
unrealized appreciation of $9,349 and gross unrealized depreciation of $96.
(b) Non-income producing.
71
Columbia Thermostat Fund
>Statement of Assets and Liabilities
DECEMBER 31, 2003
- -----------------
(IN THOUSANDS)
ASSETS
Investments, at value (cost: $118,574) $ 127,853
Cash 8
Receivable for:
Fund shares sold 1,655
Dividends 219
Expense reimbursement due from Advisor 167
--------------
Total Assets 129,902
LIABILITIES
Payable for:
Investments purchased 1,782
Fund shares redeemed 53
Transfer agent fees 29
Custody fees 2
Reports to shareholders 19
12b-1 Service & Distribution fees 74
Other liabilities 14
--------------
Total Liabilities 1,973
--------------
NET ASSETS $ 127,929
==============
COMPOSITION OF NET ASSETS
Paid in capital $ 118,444
Accumulated net realized gain 206
Net unrealized appreciation on investments 9,279
--------------
NET ASSETS $ 127,929
==============
Net asset value per share-- Class A (a) $ 12.30
(Net assets/shares) ($42,271/3,437)
Maximum offering price per share-- Class A (b) $ 13.05
(Net asset value per share/front-end sales charge) ($12.30/0.9425)
Net asset value and offering price per share-- Class B (a) $ 12.32
(Net assets/shares) ($51,501/4,179)
Net asset value and offering price per share-- Class C (a) $ 12.32
(Net assets/shares) ($20,087/1,631)
Net asset value, offering price and redemption price per share-- Class Z $ 12.31
(Net assets/shares) ($14,070/1,143)
(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.
1-800-922-6769
See accompanying notes to financial statements.
72
Columbia Thermostat Fund
>Statement of Operations
For the Year Ended December 31, 2003
(IN THOUSANDS)
- --------------
INVESTMENT INCOME:
Dividends from investment company shares $ 1,135
Interest income 27
---------
Total Investment Income 1,162
EXPENSES:
Management fees 49
Administration fees 25
12b-1 Services & Distribution fees 299
Transfer agent fees 134
Trustees fees --*
Custody fees 28
Registration and blue sky fees 159
Reports to shareholders 85
Other expenses 37
---------
Total expenses 816
Less custody fees paid indirectly --*
Less reimbursement of expenses by Advisor (350)
---------
Net Expenses 466
---------
Net Investment Income 696
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain distributions from investment company shares 272
Net unrealized appreciation on investments 9,219
---------
Net realized and unrealized gain 9,491
---------
Net Increase in Net Assets resulting
from Operations $ 10,187
=========
*Rounds to less than $500.
See accompanying notes to financial statements.
73
Columbia Thermostat Fund
>Statement of Changes in Net Assets
YEAR ENDED PERIOD ENDED
INCREASE IN NET ASSETS DECEMBER 31, DECEMBER 31,
- ---------------------- ----------- -----------
(IN THOUSANDS) 2003 (a) 2002 (b)
OPERATIONS:
Net investment income $ 696 $ 9
Net realized gain on investments 272 10
Net unrealized appreciation 9,219 60
----------- ----------
Net Increase from Operations 10,187 79
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income-- Class A (395) --
Net realized gain-- Class A (21) --
Net investment income-- Class B (108) --
Net realized gain-- Class B (30) --
Net investment income-- Class C (43) --
Net realized gain-- Class C (10) --
Net investment income-- Class Z (160) --
Net realized gain-- Class Z (14) --
----------- ----------
Total Distribution to Shareholders (781) --
SHARE TRANSACTIONS:
Subscriptions-- Class A 40,815 --
Distributions reinvested-- Class A 373 --
Redemptions-- Class A (1,441) --
----------- ----------
Net Increase-- Class A 39,747 --
Subscriptions-- Class B 48,741 --
Distributions reinvested-- Class B 125 --
Redemptions-- Class B (1,176) --
----------- ----------
Net Increase-- Class B 47,690 --
Subscriptions-- Class C 19,668 --
Distributions reinvested-- Class C 44 --
Redemptions-- Class C (1,015) --
----------- ----------
Net Increase-- Class C 18,697 --
Subscriptions-- Class Z 9,094 4,089
Distributions reinvested-- Class Z 166 --
Redemptions-- Class Z (1,023) (16)
----------- ----------
Net Increase-- Class Z 8,237 4,073
----------- ----------
Net Increase from Share Transactions 114,371 4,073
----------- ----------
Total Increase in Net Assets 123,777 4,152
----------- ----------
NET ASSETS:
Beginning of period 4,152 --
----------- ----------
End of period $ 127,929 $ 4,152
=========== ==========
OVERDISTRIBUTED (UNDISTRIBUTED) NET
INVESTMENT INCOME $-- $9
=========== ==========
(a) Class A, Class B, and Class D commenced operations March 3, 2003. On
October 13, 2003, Class D was redesignated Class C.
(b) Class Z commenced operations September 25, 2002.
1-800-922-6769
See accompanying notes to financial statements.
74
YEAR ENDED PERIOD ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31,
- ----------------------------------------- ----------- -----------
(IN THOUSANDS) 2003 (a) 2002 (b)
Subscriptions-- Class A 3,529 --
Shares issued in reinvestment and capital gains-- Class A 31 --
Less shares redeemed-- Class A (123) --
----------- -----------
Net Increase-- Class A 3,437 --
Subscriptions-- Class B 4,268 --
Shares issued in reinvestment and capital gains-- Class B 10 --
Less shares redeemed-- Class B (99) --
----------- -----------
Net Increase-- Class B 4,179 --
Subscriptions-- Class C 1,712 --
Shares issued in reinvestment and capital gains-- Class C 4 --
Less shares redeemed-- Class C (85) --
----------- -----------
Net Increase-- Class C 1,631 --
Subscriptions-- Class Z 821 400
Shares issued in reinvestment and capital gains-- Class Z 14 --
Less shares redeemed-- Class Z (91) (1)
----------- -----------
Net Increase-- Class Z 744 399
----------- -----------
Net Increase in Shares of Beneficial Interest 9,991 399
----------- -----------
(a) Class A, Class B, Class D commenced operations March 3, 2003. On October
13, 2003, Class D was redesignated Class C.
(b) Class Z commenced operations September 25, 2002.
See accompanying notes to financial statements.
75
Columbia Thermostat Fund
>Financial Highlights
INCEPTION
MARCH 3, 2003
THROUGH
Class A Shares DECEMBER 31,
--------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE PERIOD 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.18
Net realized and unrealized gain 2.15
--------------
Total from Investment Operations 2.33
--------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.13)
From net realized gains (0.00)(b)
--------------
Total Distributions Declared to Shareholders (0.13)
--------------
NET ASSET VALUE, END OF PERIOD $ 12.30
==============
Total Return 23.10%(c)(d)
--------------
RATIOS TO AVERAGE NET ASSETS
Expenses (e)(f) 0.57%(g)
Net investment income (f) 1.86%(g)
Reimbursement (f) 0.66%(g)
Portfolio turnover rate 61%(c)
Net assets at end of period (000's) $ 42,271
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Represents less than $0.01.
(c) Not annualized.
(d) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Does not include expenses of the investment companies in which the
Fund invests.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
INCEPTION
MARCH 3, 2003
THROUGH
CLASS B SHARES DECEMBER 31,
-----------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE PERIOD 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.10
Net realized and unrealized gain 2.16
-----------
Total from Investment Operations 2.26
-----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.04)
From net realized gains (0.00)(b)
-----------
Total Distributions Declared to Shareholders (0.04)
-----------
NET ASSET VALUE, END OF PERIOD $ 12.32
===========
Total Return 22.38%(c)(d)
RATIOS TO AVERAGE NET ASSETS
Expenses (e)(f) 1.32%(g)
Net investment income (f) 1.06%(g)
Reimbursement (f) 0.66%(g)
Portfolio turnover rate 61%(c)
Net assets at end of period (000's) $ 51,501
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Represents less than $0.01.
(c) Not annualized.
(d) Had the Advisor not reimbursed a portion of expenses, total return would
have been reduced.
(e) Does not include expenses of the investment companies in which the Fund
invests.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
INCEPTION
MARCH 3, 2003
THROUGH
Class C Shares DECEMBER 31,
-----------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE PERIOD 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.11
Net realized and unrealized gain 2.15
-----------
Total from Investment Operations 2.26
-----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.04)
From net realized gains (0.00)(b)
-----------
Total Distributions Declared to Shareholders (0.04)
-----------
NET ASSET VALUE, END OF PERIOD $ 12.32
===========
Total Return 22.38%(c)(d)
-----------
RATIOS TO AVERAGE NET ASSETS
Expenses (e)(f) 1.32%(g)
Net investment income (f) 1.10%(g)
Reimbursement (f) 0.66%(g)
Portfolio turnover rate 61%(c)
Net assets at end of period (000's) $ 20,087
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Represents less than $0.01.
(c) Not annualized.
(d) Had the Advisor not reimbursed a portion of expenses, total return
would have been reduced.
(e) Does not include expenses of the investment companies in which the
Fund invests.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
1-800-922-6769
See accompanying notes to financial statements.
76
Columbia Thermostat Fund
>Notes to Financial Statements
1. Nature of Operations
Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust
(the "Trust"), an open-end management investment company organized as a
Massachusetts business trust, commenced operations September 25, 2002. The Fund
may issue an unlimited number of shares. The Fund currently offers four classes
of shares: Class A, Class B, Class C and Class Z. On October 13, 2003, Class D
was redesignated Class C.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge may be assessed to Class A shares purchased without an
initial sales charge on redemptions made within eighteen months on an original
purchase of $1 million to $25 million.
Class B shares are subject to a contingent deferred sales charge. Class B
shares will convert to Class A shares in three, four or eight years after
purchase, depending on the program under which shares are purchased.
Class C shares are subject to a contingent deferred sales charge on
redemptions made 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.
The financial highlights for Class Z shares are presented in a separate
annual report. The annual report for the other series of the Trust is also
included in this report.
The investment objective of the Fund is to provide long-term total return.
The Fund pursues its investment objective by investing in shares of other mutual
funds. As a `fund of funds', under normal circumstances, the Fund allocates at
least 95% of its net assets among a selected group of stock and bond mutual
funds (the "Portfolio Funds") according to the current level of the Standard &
Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's
investment adviser. As of December 31, 2003, the Fund invested in five stock
Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia
Growth & Income Fund, Columbia Mid Cap Value Fund, Columbia Growth Stock Fund)
and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia
Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest
up to 5% of its net assets plus any cash received that day in cash, repurchase
agreements, high quality short-term paper and government securities.
2. Significant Accounting Policies
>Security valuation
Investments in Portfolio Funds are valued at their net asset value as
reported by the underlying funds. High quality short-term paper and government
securities having a maturity of 60 days or less from the valuation date are
valued on an amortized cost basis, which approximates fair value.
>Repurchase agreements
The Fund may engage in repurchase agreement transactions. The Fund,
through its custodian, receives delivery of underlying securities
collateralizing each repurchase agreement. The Fund's investment advisor
determines that the value of the underlying securities is at all times at least
equal to the resale price. In the event of default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings.
>Security transactions and investment income
Portfolio Fund transactions are accounted for on the trade date (date the
order to buy or sell is executed). Dividend income and realized gain
distributions from other funds are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis and includes amortization of discounts
on money market instruments and short-term debt instruments when required for
federal income tax purposes. Realized gains and losses from security
transactions are reported on an identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Fund no longer owns the applicable securities, the proceeds are
recorded as realized gains.
>Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading.
>Custody fees
The custody fees are reduced based on the Fund's cash balance maintained
with the custodian. The amount is disclosed as a reduction of total expenses in
the Statement of Operations.
77
Columbia Thermostat Fund
>Notes to Financial Statements, Continued
>Federal income taxes
The Fund has complied with the special provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distributes all of its taxable income, as well as any net realized gain on sales
of Portfolio Fund shares and any distributions of net realized gains received by
the Fund from its Portfolio Funds, reportable for federal income tax purposes.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from accounting principles generally accepted
in the United States of America. These differences are primarily due to
differing treatments of non-deductible expenses. Reclassifications are made to
the Fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryforwards) under income tax
regulations.
For the year ended December 31, 2003, permanent items identified and
reclassified among the components of net assets are as follows:
OVERDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN CAPITAL
- --------------------------------------------------------------
(in thousands)
$ 1 $ (1) $ --
Net investment income, net realized gains (losses) and net assets were not
affected by this reclassification. The tax character of distributions paid
during the year ended December 31, 2003 was as follows:
LONG-TERM TAX
ORDINARY CAPITAL RETURN OF
INCOME GAINS CAPITAL
- --------------------------------------------------------------
(in thousands)
$ 771 $ 10 $ --
As of December 31, 2003, the components of distributable earnings on a tax basis
were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- --------------------------------------------------------------
(in thousands)
$ 197 $ 36 $ 9,253
* The difference between book-basis and tax-basis unrealized appreciation
(depreciation), if applicable, is attributable primarily to the tax deferral
of losses on wash sales.
4. Transactions with Affiliates
Effective October 13, 2003, the Fund's investment advisor changed its name from
Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P.
("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management
Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank,
which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation
("Fleet"), furnishes continuing investment supervision to each Fund and is
responsible for the overall management of the Fund's business affairs.
Under the Funds' investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's
average daily net assets.
>Expense Limit
Columbia WAM has agreed to voluntarily reimburse the direct operating
expenses (exclusive of distribution and service fees, interest, taxes,
extraordinary expenses, if any, and expenses associated with the Fund's
investment in other investment companies) exceeding 0.60% of the average annual
net assets of the Fund's Class A, B and C shares. Effective August 1, 2003,
Columbia WAM has agreed to contractually reimburse the direct operating expenses
(exclusive of distribution and service fees, interest, taxes, extraordinary
expenses, if any, and expenses associated with the Fund's investment in other
investment companies) exceeding 0.25% of the average annual net assets of the
Fund's Class A, B and C shares.
Columbia WAM has also contracted to provide administrative services at an
annual rate of .05% of the Fund's average daily net assets.
Effective October 13, 2003 Liberty Funds Distributor, Inc., changed its
name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an
indirect subsidiary of Fleet, is the Fund's principal underwriter and receives
no compensation on the sale of Class Z shares.
For the year ended December 31 2003, the Fund has been advised that the
Distributor retained $178,252 in underwriting discounts on the sale of Class A
and Class D shares prior to the share re-designation of Class D to Class C
shares. The Fund has been advised that the Distributor received contingent
deferred sales charges of $0, $26,208 and $557 on Class A, Class B and Class C
share redemptions, respectively.
1-800-922-6769
78
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor
a monthly service fee equal to 0.25% annually, of the average daily net assets
attributable to Class A, Class B and Class C shares. The 12b-1 plan also
requires the Fund to pay the Distributor a monthly distribution fee equal to
0.25%, 0.75% and 0.75% annually, of the average daily net assets attributable to
Class A, Class B and Class C shares, respectively.
Effective October 13, 2003, Liberty Funds Services, Inc., changed its name
to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an
affiliate of the investment advisor, provides shareholder services to the Fund
and receives reimbursement for out-of-pocket expenses. Transfer Agent fees are
comprised of 0.07% annually, of the average daily net assets attributable to
Class A, Class B and Class C shares plus charges based on the number of
shareholder accounts and transactions.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses for the year ended
December 31, 2003, were $270.
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. No amounts have been borrowed under this
facility for the year ended December 31, 2003.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2003 were:
- ------------------------------------------------------------
(in thousands)
Purchases $ 144,197
Proceeds from sales $ 30,493
============================================================
7. Legal Proceedings
The Securities and Exchange Commission (the "SEC"), the New York Attorney
General and various other regulatory authorities are investigating late trading
and market timing in mutual fund shares, and have sent information requests and
subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG")
(collectively, "Columbia"). These affiliates include the Distributor, Columbia
Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P.
("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not
the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered
any instances where Columbia entities were knowingly involved in late trading of
mutual fund shares. Columbia has identified a limited number of investors who
had informal arrangements for trading shares of various funds managed by
subsidiaries of CMG between 1998 and 2003. A majority of the transactions in
connection with these arrangements occurred in one international fund and two
domestic funds in the Columbia Family of Funds. A 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 exist today.
Information relating to those trading arrangements has been supplied to various
regulatory authorities.
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 the Distributor and CMA
alleging that they have violated certain provisions of the federal securities
laws. Columbia believes that those allegations are based principally on the
trading arrangements referred to above. Columbia WAM has not been named in these
notices. The Distributor and CMA 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 the Distributor or CMA,
and structural changes in the conduct of their business.
Although Columbia does not believe that these regulatory developments or
their resolution will have a material adverse effect on the Funds, or on the
ability of the Distributor or Columbia WAM to provide services to the Funds,
there can be no assurance that these matters or any publicity relating to these
matters or other developments resulting from them will not adversely effect
sales or redemptions of Fund shares or otherwise effect the Funds.
Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a
lawsuit that seeks certification of a plaintiff class consisting of all persons
in the United States who held shares in Columbia Acorn International Fund
("International Fund") for a period of more than 14 days during the five years
prior to the filing of the lawsuit. The suit seeks compensatory and punitive
damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in
summary, that the Trust and Columbia WAM exposed
79
Columbia Thermostat Fund
>Notes to Financial Statements, Continued
International Fund shareholders to trading by market timers by allegedly
(a) failing to properly evaluate daily whether a significant event affecting the
value of International Fund's securities had occurred after foreign markets had
closed but before the calculation of the Fund's net asset value ("NAV"); (b)
failing to implement International Fund's portfolio valuation and share pricing
policies and procedures; (c) allowing portfolio valuation and share policies and
procedures that benefited market timers at the expense of long-term
shareholders; and (d) failing to know and implement applicable rules and
regulations concerning the calculation of NAV.
The Trust and Columbia WAM also are defendants in a lawsuit that seeks
certification of a plaintiff class consisting of all persons in the United
States who held shares in International Fund for a period of more than 14 days,
without any stated limitation on the duration of the class period. The suit
seeks compensatory and punitive damages, as well as interest, costs and
attorney's fees. This suit contains allegations and counts similar to those
described above, and also includes an additional count under Section 36(a) of
the Investment Company Act of 1940.
The Trust, on behalf of International Fund, and Columbia WAM intend to
defend both suits vigorously. The Trust does not believe that the pending
actions will have a material adverse affect on the financial statements of any
Fund, and Columbia WAM does not believe that the pending actions will have a
material adverse affect on its ability to perform under its contracts with the
Funds.
1-800-922-6769
80
Columbia Thermostat Fund
>Unaudited Information (in thousands)
FEDERAL INCOME TAX INFORMATION:
For the fiscal year ended December 31, 2003, the Fund designates long-term
capital gains of $36.
30.23% of the ordinary income distributed by the Fund, in the year ended
December 31, 2003, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 30.23%, of the maximum amount allowable
under the Jobs and Growth Tax Reconciliation Act of 2003, of income earned by
the Fund for the period January 1, 2003 to December 31, 2003 may represent
qualified dividend income. Final information will be provided in your 2003
1099-DIV From.
81
REPORT OF INDEPENDENT AUDITORS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
COLUMBIA ACORN TRUST
We have audited the accompanying statements of assets and liabilities,
including the statements of investments of Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn International Select, Columbia
Acorn Select and Columbia Thermostat Fund, comprising the Columbia Acorn Trust,
as of December 31, 2003, the related statements of operations, changes in net
assets, and the financial highlights for the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of December 31, 2003, by correspondence
with the custodian and brokers or other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective Funds of the Columbia Acorn Trust as of December 31,
2003, the results of their operations and changes in their net assets and
financial highlights for the periods indicated therein, in conformity with
accounting principles generally accepted in the United States.
/s/ERNST & YOUNG LLP
Chicago, Illinois
February 6, 2004
1-800-922-6769
82
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83
BOARD OF TRUSTEES AND MANAGEMENT OF COLUMBIA ACORN FUNDS
The board of trustees serve indefinite terms of unlimited duration provided that
a majority of trustees always has been elected by shareholders. The trustees
appoint their own successors, provided that at least two-thirds of the trustees,
after such appointment, have been elected by shareholders. Shareholders may
remove a trustee, with or without cause, upon the vote of two-thirds of Acorn's
outstanding shares at any meeting called for that purpose. A trustee may be
removed, with or without cause, upon the vote of a majority of the trustees. The
names of the trustees and officers of Acorn, the date each was first elected or
appointed to office, their principal business occupations and other
directorships they have held during at least the last five years, are shown
below. Each trustee serves in such capacity for each of the six series of Acorn.
Mr. Wanger also serves as a trustee for each of the four series of the Wanger
Advisors Trust.
YEAR FIRST NUMBER OF
NAME, POSITION(S) WITH ELECTED OR PORTFOLIOS IN FUND
COLUMBIA ACORN AND AGE APPOINTED TO PRINCIPAL OCCUPATION(S) DURING COMPLEX OVERSEEN
AT JANUARY 1, 2004 OFFICE* PAST FIVE YEARS BY TRUSTEE/OFFICER OTHER DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
TRUSTEES WHO ARE NOT INTERESTED
PERSONS OF COLUMBIA ACORN:
Margaret Eisen, 50, 2002 Chair, Institute for Financial 6 Antigenics, Inc.
Trustee Markets; formerly managing (biotechnology and
director, DeGuardiola Advisors; drugs); Global
formerly managing director, Financial Group
North American Equities at (venture capital fund
General Motors Asset Management; of funds).
prior thereto, director of
Worldwide Pension Investments
for DuPont Asset Management.
Leo A. Guthart, 66, 1994 Executive vice president, 6 AptarGroup, Inc. (producer
Trustee Honeywell International of dispensing valves, pumps
(home and building control); and closures); Symbol
chairman, Cylink Corporation Technologies, Inc.
(supplier of encryption (manufacturer of bar
equipment); former chairman of code scanning equipment).
the board of trustees, Hofstra
University; chairman and chief
executive officer, Topspin
Partners, L.P.
Jerome Kahn, Jr., 1987 Former president, William Harris 6 None.
69, Trustee Investors, Inc.
(investment adviser).
Steven N. Kaplan, 44, 1999 Neubauer Family Professor of 6 None.
Trustee Entrepreneurship and Finance,
Graduate School of Business,
University of Chicago.
David C. Kleinman, 68, 1972 Adjunct professor of strategic 6 Sonic Foundry, Inc.
Trustee management, University of (software); AT&T Latin
Chicago Graduate School of America
Business; Business consultant.
Allan B. Muchin, 67, 1998 Chairman emeritus, Katten Muchin 6 Alberto-Culver Company
Trustee Zavis Rosenman (law firm). (toiletries).
Robert E. Nason, 67, 1998 Consultant and private investor 6 None.
Trustee and Chairman since 1998; from 1990-1998,
executive partner and chief
executive officer, member of
the executive committee of Grant
Thornton, LLP public accounting
(firm) and member of the policy
board of Grant Thornton
International.
John A. Wing, 68, 2002 Frank Wakely Gunsaulus Professor 6 AmerUs Life Holdings (life
Trustee of Law and Finance, and insurance); LDF, Inc. and
chairman of the Center for the Labe Federal Bank (banking);
Study of Law and Financial Margo Caribe, Inc. (farming).
of Technology; prior thereto,
chairman of the board and chief
executive officer of ABN-AMRO
Incorporated, formerly The
Chicago Corporation and chief
executive officer of Market
Liquidity Network, LLC.
TRUSTEES WHO ARE INTERESTED
PERSONS OF COLUMBIA ACORN:
Charles P. Chief investment officer of 10 None.
McQuaid, 50, Columbia WAM since September 30,
Trustee, 1992 2003; portfolio manager since
Trustee and President(1) 2003 1995 and director of research
from July 1992 through
December 2003 of Columbia WAM;
principal, WAM from July 1995
to September 29, 2000; president,
Wanger Advisors Trust.
Ralph Wanger, 69, 1970 Founder, former president, chief 10 Wanger Advisors Trust
Trustee(1) investment officer and portfolio (4 portfolios).
manager, Columbia WAM (1992-2003);
principal, WAM from July 1992
until September 29, 2000;
president, WAM Ltd. from July
1992 to September 29, 2000;
president and director, WAM
Acquisition GP, Inc. since
September 29, 2000; former
president, Wanger Advisors Trust;
director, Wanger Investment
Company plc.
OFFICERS OF COLUMBIA ACORN:
J. Kevin Connaughton, 39, 2001 Treasurer of the Columbia Funds 10 None.
Assistant Treasurer and of the Columbia All-Star Funds
since December 2000 (formerly
controller and chief accounting
officer of the Columbia Funds
and of the Columbia All-Star Funds
from February 1998 to October 2000);
treasurer of the Stein Roe Funds
since February 2001 (formerly
chief accounting officer and
controller from May 2000 to
February 2001); treasurer of the
Galaxy Funds since September 2002;
senior vice president of Columbia
Funds Group since January 2001;
(formerly vice president of
Colonial Management Associates
from February 1998 to October 2000)
P. Zachary Egan, 35, 2003 Analyst and portfolio manager, 6 None.
Vice President Columbia WAM since 1999; prior
thereto, a research fellow with
the Robert Bosch Foundation.
Kenneth A. Kalina, 44, 1995 Chief financial officer, Columbia 10 None.
Assistant Treasurer WAM since April 2000; assistant
treasurer, Wanger Advisors Trust;
fund controller, Columbia WAM
since September 1995; director,
New Americas Small Cap Fund.
Bruce H. Lauer, 46, 1995 Chief operating officer, Columbia 10 None.
Vice President, WAM since April 1995; principal,
Secretary WAM from January 2000 to
and Treasurer September 29, 2000; vice president,
treasurer and secretary, Wanger
Advisors Trust; director, Wanger
Investment Company plc and New
Americas Small Cap Fund.
Robert A. Mohn, 42, 1997 Analyst and portfolio manager, 10 None.
Vice President Columbia WAM since August
1992; principal, WAM from 1995
to September 29, 2000; vice
president, Wanger Advisors Trust.
Louis J. Mendes, 39, 2003 Analyst and portfolio manager, 6 None.
Vice President Columbia WAM since 2001; prior
thereto, analyst and portfolio
manager, Merrill Lynch.
Todd Narter, 39, 2001 Analyst and portfolio manager, 10 None.
Vice President Columbia WAM since June 1997;
vice president, Wanger Advisors
Trust.
Christopher Olson, 39, 2001 Analyst and portfolio manager, 10 None.
Vice President Columbia WAM since January 2001;
vice president, Wanger Advisors
Trust; prior thereto, director
and portfolio strategy analyst
with UBS Asset Management/Brinson
Partners.
John H. Park, 36, 1998 Director of domestic research 10 None.
Vice President since December 2003 ; analyst and
portfolio manager, Columbia WAM
since July 1993; principal,
WAM from 1998 to September
29, 2000; vice president, Wanger
Advisors Trust.
Vincent P. 2001 Vice president and senior counsel, 10 None.
Pietropaolo, 38, Columbia Funds Group since
Assistant Secretary December 1999; associate, Morgan
Lewis & Bockius, October 1998 to
December 1999; product manager,
Putnam Investments from April
1997 to October 1998.
David A. Rozenson, 49, 2003 Secretary of the Columbia Funds 10 None.
Chief Legal Officer and of the Columbia All-Star
Funds since December 2003;
senior counsel, Fleet Boston
Financial Corporation since
January 1996; associate general
counsel, Columbia Management Group
since November 2002.
* Dates prior to April 1992 correspond to the date first elected or appointed
as a director or officer of Acorn Fund Inc., the Trust's predecessor.
(1) Trustee who is an "interested person" of the Trust and of Columbia WAM, as
defined in the Investment Company Act of 1940, because he is an officer
of the Trust and an employee of Columbia WAM. Effective September 30, 2003,
Mr. Wanger no longer serves as president of the Trust and president, chief
investment officer and portfolio manager of Columbia WAM. As of that date,
Mr. McQuaid became chief investment officer of Columbia WAM, and Mr. Wanger
continues to serve as an interested Trustee of the Trust and remains
affiliated with Columbia WAM, acting in an advisory capacity.
The address for the trustees and officers of the Trust is Columbia Wanger
Asset Management, L.P., 227 West Monroe Street, Suite 3000, Chicago, Illinois
60606.
The SAI includes additional information about Fund trustees and is available,
without charge, upon request by calling 1-800-345-6611.
84
Columbia Acorn Funds ANNUAL REPORT, DECEMBER 31,2003 PRSRT STD
U.S. POSTAGE
[EAGLE HEAD LOGO APPEARS HERE] PAID
HOLLISTON, MA
COLUMBIAFUNDS PERMIT NO.20
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(c) 2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 0211-2621
800.345.6611 www.columbiafunds.com
ACN-02/729Q-1203 (02/04) 04/0529
ITEM 2. CODE OF ETHICS.
(a) The registrant has, as of the end of the period covered by this
report, adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.
(b) During the period covered by this report, there were not any
amendments to a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were not any waivers
or implicit waivers to a provision of the code of ethics adopted in
2(a) above.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that David C. Kleinman, Robert
E. Nason and John A. Wing, each of whom are members of the registrant's Board of
Trustees and Audit Committee, each qualify as an audit committee financial
expert. Mr. Kleinman, Mr. Nason and Mr. Wing are each independent trustees, as
defined in paragraph (a)(2) of this item's instructions.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
4(a) Aggregate Audit Fees billed to the registrant by the principal accountant
for professional services rendered during the fiscal years ended December 31,
2003 and December 31, 2002 are as follows:
2003 2002
$238,400 $224,200
Audit Fees include amounts related to the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Aggregate Audit-Related Fees billed to the registrant by the principal
accountant for professional services rendered during the fiscal years ended
December 31, 2003 and December 31, 2002 are as follows:
2003 2002
$24,000 $14,000
Audit-Related Fees include amounts for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported in Audit Fees
above. In fiscal year 2003, Audit-Related Fees relate to certain agreed-upon
procedures performed for semi-annual shareholder reports. Audit-Related Fees in
fiscal year 2002 relate to certain agreed-upon procedures conducted during the
conversion of the registrant's accounting system as well as agreed-upon
procedures relating to a fund merger.
The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X became effective on May 6, 2003. The percentage of Audit-Related
services to the registrant that were approved under the "de minimis" exception
during the fiscal years ended December 31, 2003 and December 31, 2002 are as
follows:
2003 2002
0% N/A
The pre-approval requirements for services to the investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year
ended December 31, 2003, there were no Audit-Related Fees that were approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
The percentage of Audit-Related fees required to be approved under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de
minimis" exception during the fiscal years ended December 31, 2003 and December
31, 2002 are as follows:
2003 2002
0% N/A
(c) Aggregate Tax Fees billed to the registrant by the principal accountant for
professional services rendered during the fiscal years ended December 31, 2003
and December 31, 2002 are as follows:
2003 2002
$35,300 $31,100
Tax Fees include amounts for professional services by the principal accountant
for tax compliance, tax advice and tax planning. Tax Fees in fiscal year 2003
primarily relate to the review of annual tax returns, the review of calculations
of required shareholder distributions and assistance with claims for foreign tax
refunds. Tax fees in fiscal year 2002 primarily relate to the review of annual
tax returns and the review of calculations of required shareholder
distributions.
The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X became effective on May 6, 2003. The percentage of Tax Fees
billed to the registrant that were approved under the "de minimis" exception
during the fiscal years ended December 31, 2003 and December 31, 2002 are as
follows:
2003 2002
4% N/A
The pre-approval requirements for services to the investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year
ended December 31, 2003, there were no Tax Fees that were approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
The percentage of Tax Fees required to be approved under paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception
during the fiscal years ended December 31, 2003 and December 31, 2002 are as
follows:
2003 2002
0% N/A
(d) Aggregate All Other Fees billed to the registrant by the principal
accountant for professional services rendered during the fiscal years ended
December 31, 2003 and December 31, 2002 are as follows:
2003 2002
$0 $0
All Other Fees include amounts for products and services provided by the
principal accountant, other than the services reported in (a)-(c) above.
The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X became effective on May 6, 2003. The percentage of All Other Fees
billed to the registrant that were approved under the "de minimis" exception
during the fiscal years ended December 31, 2003 and December 31, 2002 are as
follows:
2003 2002
0% N/A
The pre-approval requirements for services to the investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year
ended December 31, 2003, there were no All Other Fees that were approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
The percentage of All Other Fees required to be approved under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de
minimis" exception during the fiscal years ended December 31, 2003 and December
31, 2002 are as follows:
2003 2002
0% N/A
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The policy of the registrant's Audit Committee is to specifically pre-approve
(i) all audit and non-audit (including audit related, tax and all other)
services provided by the registrant's independent auditor to the registrant and
individual funds (collectively "Fund Services") and (ii) all non-audit services
provided by the registrant's independent auditor to the funds' adviser or a
control affiliate of the adviser, that relate directly to the funds' operations
and financial reporting (collectively "Fund-related Adviser Services"). A
"control affiliate" is an entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the funds, and the
term "adviser" is deemed to exclude any unaffiliated sub-adviser whose role is
primarily portfolio management and is sub-contracted or overseen by another
investment adviser.
If such Fund Services or Fund-related Adviser Services are required during the
period between the Audit Committee's regularly scheduled meetings, the Chairman
of the Audit Committee has the authority to pre-approve the service, with
reporting to the full Audit Committee at the next regularly scheduled meeting.
The Audit Committee will waive pre-approval of Fund Services or Fund-related
Adviser Services provided that the requirements under paragraph (c)(7)(i)(C) of
Rule 2-01 of Regulation S-X are met.
(f) Not applicable.
(g) All non-audit fees billed by the registrant's accountant for services
rendered to the registrant for the fiscal years ended December 31, 2003 and
December 31, 2002 are disclosed in 4(b)-(d) above.
All non-audit fees billed by the registrant's accountant for services rendered
to the registrant's investment adviser (not including any sub-adviser whose role
is primarily portfolio management and is subcontracted with or overseen by
another investment adviser) and any entity controlling, controlled by, or under
common control with the adviser that provides ongoing services to the registrant
for the fiscal years ended December 31, 2003 and December 31, 2002 are also
disclosed in 4(b)-(d) above. There were no such fees during the last two fiscal
years.
(h) The registrant's Audit Committee of the Board of Directors has considered
whether the provision of non-audit services that were rendered to the
registrant's adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X, is compatible with maintaining the principal accountant's
independence. The Audit Committee determined that the provision of such services
is compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. RESERVED.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable at this time.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, have concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR
attached hereto as Exhibit 99.CODE ETH
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Acorn Trust
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By (Signature and Title) /s/ Charles P. McQuaid
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Charles P. McQuaid, President
Date March 4, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Charles P. McQuaid
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Charles P. McQuaid, President
Date March 4, 2004
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By (Signature and Title) /s/ Bruce H. Lauer
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Bruce H. Lauer, Treasurer
Date March 4, 2004
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