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 811-4978
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Columbia Funds Trust XI
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
- ------------------------------------------------------------------------------
(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: September 30, 2004
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Date of reporting period: March 31, 2004
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
COLUMBIA
YOUNG INVESTOR
FUND
SEMIANNUAL REPORT
MARCH 31, 2004
logo: Columbia Funds
COLUMBIAFUNDS
A Member of Columbia Management Group
Table of Contents
Fund Profile .................................... 1
Performance Information ......................... 2
Economic Update ................................. 3
Portfolio Managers' Report ...................... 4
Financial Statements ............................ 6
Investment Portfolio ......................... 7
Statement of Assets and Liabilities ..........12
Statement of Operations ......................13
Statements of Changes in Net Assets ..........14
Notes to Financial Statements ................15
Financial Highlights .........................20
Important Information
About This Report ...............................24
Columbia Funds ..................................25
Activity Pages .................................. I
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
Not FDIC Insured
May Lose Value
No Bank Guarantee
TO OUR FELLOW SHAREHOLDERS
Columbia Young Investor Fund
DEAR SHAREHOLDER:
We are pleased to let you know that FleetBoston Financial Corporation and Bank
of America Corporation have merged, effective April 1, 2004. As a result of the
merger, Columbia Management Group became part of the Bank of America family of
companies. Looking ahead, we believe this merger will be a real benefit to our
shareholders. Preserving and leveraging our strengths, the combined organization
intends to deliver additional research and management capabilities, as well as
new products to you.
There are no immediate changes planned for fund names or customer service
contacts. As always, we will provide you with updates at www.columbiafunds.com
or through other communications, such as newsletters and shareholder reports.
As you might know, on March 15, 2004, FleetBoston Financial announced an
agreement in principle with the staff of the Securities and Exchange Commission
("SEC") and the New York Attorney General to settle charges involving market
timing in Columbia Management mutual funds. (Bank of America came to a similar
settlement in principle at the same time.) The agreement requires the final
approval of the SEC. This action reflects our full cooperation with the
investigation and our strong wish to put this regrettable situation behind us.
Columbia Management has taken and will continue to take steps to strengthen
policies, procedures and oversight to curb frequent trading of Columbia fund
shares.
We want you to know that all of the members of your fund's Board of Trustees are
independent of the fund's advisor and its affiliates. In addition, the board has
been energetic over the past year in strengthening its capacity to oversee the
Columbia funds. Recently, the Board of Trustees:
o appointed a chief compliance officer of the Columbia funds, who reports
directly to each fund's audit committee. Trustees were also assigned to four
separate investment oversight committees, each dedicated to monitoring
performance of individual funds.
o voted to double the required investment by each trustee in the Columbia funds
-- to further align the interests of the trustees with those of our fund
shareholders. At the same time, new policies were instituted requiring all
investment personnel and trustees to hold their Columbia fund shares for a
minimum of one year (unless extraordinary circumstances warrant an exception
to be granted by senior executives of the advisor for investment personnel
and by a designated committee for the board).
Both your fund's trustees and Columbia Management are committed to serving the
interests of our shareholders, and we will continue to work hard to help you
achieve your financial goals.
In the pages that follow, you'll find valuable information about the economic
environment during the period and the performance of your Columbia fund. These
discussions are followed by financial statements for your fund. We hope that you
will take time to read this report and discuss it with your financial advisor if
you have any questions.
As always, thank you for choosing Columbia funds. It is a privilege to play a
role in your financial future.
Sincerely,
/s/ Thomas C. Theobald /s/ J. Kevin Connaughton
Thomas C. Theobald J. Kevin Connaughton
Chairman, Board of Trustees President, Columbia Funds
J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004.
Summary
o For the six-month period ended March 31, 2004, the fund's class A shares
returned 12.89% without sales charge.
o The fund's return was lower than the Russell 3000 Index. It also trailed its
peer group, the Morningstar(R) Large Blend Category.
o The fund's investments in small- and mid-cap stocks and in value stocks
helped the fund to a double-digit return. But the fund trailed its benchmark
because it emphasized large companies with relatively predictable profit
growth. Large companies did not return as much as the stocks of smaller, more
speculative companies.
Class A shares
artwork: arrow up
12.89%
Russell 3000 Index
artwork: arrow up
14.94%
Objective
Seeks long-term
growth of capital
Total net assets
$833.3 million
artwork: Morningstar style box
shaded box represents Style-Blend; Size-Large
FUND PROFILE
Columbia Young Investor Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed and the composition of its
portfolio will change over time.
Top 5 sectors as of 03/31/04 (%)
Information technology 20.3
Financials 19.4
Consumer discretionary 14.3
Health care 13.9
Consumer staples 7.8
Top 10 holdings as of 03/31/04 (%)
Exxon Mobil 2.5
Citigroup 2.4
American International Group 2.1
Microsoft 2.1
Pfizer 2.0
Wells Fargo 2.0
General Electric 1.7
Procter & Gamble 1.7
Viacom 1.7
Medtronic 1.5
Sector breakdowns and portfolio holdings are calculated as a percentage of net
assets.
(C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein:
(1) is proprietary to Morningstar and/or its content providers; (2) may not be
copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past performance is
no guarantee of future results.
The Morningstar Style BoxTM reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data are gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
03/31/2004.
1
Performance of a $10,000 investment
04/29/94 - 03/31/04 ($)
sales charge: without with
Class A 26,902 25,355
Class B 26,583 26,583
Class C 26,606 26,606
Class Z 26,877 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares may be worth
more or less than original cost. Please visit www.columbiafunds.com for daily
and most recent month-end performance updates.
PERFORMANCE INFORMATION
Columbia Young Investor Fund
Value of a $10,000 investment 04/29/94 - 03/31/04 Line Chart:
Class A shares
Class A shares Russell 3000 S&P 500 without
with sales charge Index Index sales charge
4/1994 $9,425 $10,000 $10,000 $10,000
9,425 10,000 10,000 10,000
9,463 10,110 10,164 10,040
9,142 9,833 9,915 9,700
9,293 10,138 10,240 9,860
9,707 10,580 10,660 10,299
9,651 10,354 10,399 10,240
10,047 10,525 10,633 10,660
9,849 10,141 10,246 10,450
10,121 10,299 10,397 10,738
10,159 10,525 10,667 10,779
10,397 10,954 11,083 11,031
10,757 11,227 11,410 11,414
10,881 11,520 11,745 11,545
11,062 11,938 12,215 11,737
11,992 12,283 12,498 12,724
12,714 12,777 12,913 13,490
12,875 12,891 12,946 13,661
13,568 13,390 13,492 14,396
13,293 13,275 13,443 14,104
14,052 13,864 14,033 14,909
14,147 14,090 14,304 15,010
14,700 14,499 14,791 15,597
14,897 14,713 14,928 15,806
15,519 14,862 15,071 16,465
16,565 15,144 15,293 17,575
17,363 15,532 15,688 18,422
17,698 15,482 15,747 18,778
16,525 14,672 15,051 17,533
17,265 15,117 15,369 18,318
18,389 15,939 16,234 19,511
18,645 16,231 16,682 19,782
19,376 17,375 17,943 20,558
19,112 17,167 17,588 20,278
20,001 18,116 18,687 21,221
19,481 18,136 18,833 20,669
18,183 17,316 18,059 19,293
19,000 18,170 19,137 20,159
20,470 19,411 20,303 21,719
21,451 20,218 21,212 22,759
22,942 21,804 22,901 24,341
22,155 20,918 21,618 23,506
23,238 22,104 22,803 24,656
22,564 21,362 22,041 23,941
23,126 22,180 23,062 24,537
24,134 22,623 23,458 25,607
24,279 22,741 23,719 25,760
26,226 24,367 25,429 27,826
27,241 25,576 26,731 28,903
27,552 25,826 27,001 29,233
26,610 25,188 26,536 28,233
28,132 26,040 27,614 29,848
27,209 25,566 27,321 28,869
22,162 21,649 23,370 23,514
23,498 23,126 24,868 24,932
25,115 24,881 26,890 26,647
26,596 26,404 28,520 28,219
28,392 28,083 30,163 30,124
29,709 29,038 31,423 31,522
28,657 28,010 30,446 30,406
30,898 29,038 31,664 32,783
31,683 30,347 32,889 33,616
30,590 29,771 32,113 32,456
32,086 31,274 33,895 34,044
30,389 30,327 32,838 32,243
29,772 29,981 32,677 31,588
29,114 29,213 31,782 30,890
31,513 31,045 33,793 33,435
33,508 31,914 34,479 35,552
37,384 33,950 36,510 39,665
36,517 32,619 34,677 38,745
39,862 32,923 34,022 42,294
41,042 35,501 37,349 43,546
37,656 34,251 36,225 39,953
34,180 33,289 35,483 36,266
37,342 34,274 36,359 39,620
36,730 33,667 35,792 38,970
40,406 36,165 38,014 42,871
38,519 34,527 36,007 40,869
37,244 34,037 35,856 39,516
32,570 30,899 33,031 34,557
33,629 31,418 33,192 35,680
35,290 32,492 34,371 37,443
31,659 29,522 31,236 33,590
29,211 27,598 29,256 30,993
31,981 29,811 31,529 33,932
31,782 30,049 31,740 33,721
30,613 29,496 30,969 32,480
28,608 29,010 30,665 30,353
26,677 27,298 28,746 28,304
23,083 24,891 26,423 24,492
23,870 25,470 26,928 25,327
26,000 27,432 28,993 27,586
26,234 27,818 29,248 27,834
25,520 27,471 28,821 27,077
24,844 26,910 28,265 26,359
26,320 28,089 29,328 27,925
24,719 26,614 27,551 26,227
24,227 26,306 27,347 25,705
22,493 24,412 25,400 23,865
20,522 22,471 23,421 21,774
20,416 22,576 23,573 21,661
18,272 20,204 21,011 19,387
19,752 21,812 22,860 20,957
21,231 23,132 24,206 22,527
19,794 21,825 22,785 21,002
19,386 21,290 22,188 20,569
19,086 20,939 21,855 20,250
19,258 21,158 22,067 20,432
20,737 22,887 23,886 22,002
21,829 24,270 25,145 23,161
21,893 24,597 25,466 23,228
22,363 25,160 25,915 23,728
23,050 25,719 26,420 24,456
22,451 25,439 26,140 23,820
23,845 26,978 27,619 25,300
24,188 27,350 27,863 25,664
25,197 28,600 29,323 26,734
25,477 29,198 29,862 27,031
25,647 29,592 30,277 27,212
3/2004 25,355 29,243 29,809 26,902
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or redemption of fund shares. The Russell 3000
Index is an unmanaged index that tracks the performance of 3000 of the largest
US companies, based on market capitalization. The Standard & Poor's (S&P) 500
Index, also an unmanaged index, tracks the performance of 500 widely held,
large-capitalization US stocks. As reported in the annual report dated September
30, 2003, the fund's previous benchmark was the S&P 500 Index. Unlike the fund,
indices are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index. Index performance is
from April 29, 1994.
WHAT DOES AVERAGE ANNUAL TOTAL RETURN MEAN?
The average annual total return is given for periods greater than a year.
Calculated as a percentage, this figure represents the average yearly return for
the time period specified. The chart below includes average annual returns for
the following periods: one year, five years and the life of the fund. Returns
for periods less than one year are known as cumulative returns. A cumulative
return is the percentage that the fund has grown or shrunk in the number of
months indicated.
Average annual total return as of 03/31/04 (%)
Share class A B C Z
- ----------------------------------------------------------------------------------------
Inception 7/29/02 7/29/02 7/29/02 4/29/94
- ----------------------------------------------------------------------------------------
Sales charge without with without with without with without
========================================================================================
6-month
(cumulative) 12.89 6.39 12.42 7.42 12.51 11.51 12.71
========================================================================================
1-year 31.63 24.03 30.65 25.65 30.61 29.61 31.50
========================================================================================
5-year -3.88 -5.02 -4.11 -4.44 -4.09 -4.09 -3.90
========================================================================================
Life 10.49 9.83 10.36 10.36 10.37 10.37 10.48
========================================================================================
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 for different share classes varies based on differences in sales
charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class A, B, and C share (newer class shares) performance information includes
returns for the fund's class Z shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. 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 the newer class
shares would have been lower.
2
Summary
For the six-month period
ended March 31, 2004
o Stock markets around the world benefited from a pick-up in economic growth
and an increase in corporate profits. The S&P 500 Index and the MSCI EAFE
Index posted double-digit returns this period.
S&P 500 Index
artwork: arrow up
14.08%
MSCI EAFE Index
artwork: arrow up
22.16%
o Performance in the fixed-income universe was led by high-yield bonds. As
measured by the Merrill Lynch US High Yield, Cash Pay Index, this sector
posted a return more than five percentage points higher than the return for
investment-grade bonds, as measured by the Lehman Brothers Aggregate Bond
Index.
Merrill Lynch Index
artwork: arrow up
8.21%
Lehman Index
artwork: arrow up
2.98%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The MSCI EAFE Index is an unmanaged, market-weighted index composed of companies
representative of the market structure of 21 developed market countries in
Europe, Australasia and the Far East.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds. The Lehman
Brothers Aggregate Bond Index is a market value-weighted index that tracks
fixed-rate, publicly placed, dollar-denominated, and non-convertible investment
grade debt issues.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks fixed-rate, publicly placed, dollar-denominated, and non-convertible
investment grade debt issues.
ECONOMIC UPDATE
Columbia Young Investor Fund
The US economy moved ahead during the six-month reporting period that began
October 1, 2003 and ended March 31, 2004. A burst of strength in the third
quarter of 2003, for which annualized GDP was reported at 8.2%, was followed by
fourth quarter growth of 4.1%. That was still comfortably ahead of the economy's
long-term average growth rate of 3.0%. GDPgrowth for first quarter of 2004 was
4.2%.
Although job growth was slow to catch on, the economy showed signs of
improvement on all fronts. Consumer spending rose as a sizeable package of tax
cuts, implemented in 2003, gave disposable income a boost. Low interest rates
spurred a new round of mortgage refinancing late in the period. Consumer
confidence slipped late in the period as the outlook for the labor market
remained clouded despite a significant pick-up in the number of new jobs added
in March. Nevertheless, housing and retail sales showed steady gains throughout
the period.
After two years of holding back, the business sector began to show signs of
improvement late in 2003. Business spending on technology-related items rose as
corporate profits improved. Spending on capital equipment also picked up.
US STOCKS HEADED HIGHER
The US stock market snapped a three-year losing streak in 2003, but its rate of
return slowed early in 2004 in response to a mixed job outlook and renewed fears
about terrorism. The S&P 500 Index returned 14.08% for this six-month period.
Small company stocks were even stronger. The Russell 2000 Index, an unmanaged
index that tracks the performance of 2,000 small US companies based on total
market capitalizations, returned 21.69% for the period.
INTERNATIONAL STOCK MARKETS REPORTED STRONG RETURNS
A modest rebound in economic growth and a declining US dollar helped
international stock markets post strong returns. The MSCI EAFE Index, a broad
measure of performance of 21 developed equity markets in Europe, Australasia
(which includes Australia and New Zealand) and the Far East, returned 22.16% for
the period. European stock markets responded to improving economic data and
relatively low interest rates. Japan's economy continued to report steady but
modest growth, and its improvement was reflected in strong stock market returns.
The stock markets of Korea, Malaysia and Taiwan scored double-digit gains during
the period as did those of Colombia and Mexico.
BONDS DELIVERED RESPECTABLE GAINS
A growing economy continued to boost investor enthusiasm for high-yield bonds,
which led the fixed-income markets during the period. The six-month return for
the Merrill Lynch US High Yield, Cash Pay Index was 8.21%. However, high-yield
bonds slipped in the second half of this reporting period. US Treasury bonds
gained ground and other segments of the bond market also delivered respectable
gains as interest rates declined. The Lehman Brothers Aggregate Bond Index, a
broad measure of investment-grade bond performance, returned 2.98%. However,
money market fund yields remained below 1%.
3
PORTFOLIO MANAGERS' REPORT
Columbia Young Investor Fund
HOW DID THE FUND PERFORM?
During the six-month period ended March 31, 2004, the fund's class A shares
returned 12.89%. This return was calculated before the sales charge was
deducted. The fund didn't return as much as the Russell 3000 Index, which
measures the performance of small-, medium- and large-company stocks. Its gain
was 14.94%. The fund also came out behind the 13.54% average return of its peer
group, the Morningstar(R) Large Blend Category.1 Small- and mid-cap stocks, as
well as value stocks, were the fund's best performers. However, its investments
in higher quality, large growth companies did not do as well. In addition, the
fund's sizable stake in technology stocks lost ground early in 2004. Technology
was a good performer in 2003, but recently investors have become concerned that
stock prices have climbed too high, too fast.
HOW WERE YOU INVESTED?
We invested roughly one-third of the fund's assets in large-company growth
stocks, one-third in large-company value stocks and one-third in the stocks of
small- and mid-size companies. In the growth part of the portfolio, we
concentrated on large companies with superior long-term growth and profit
potential. In the value part of the portfolio, we targeted large companies whose
stock prices were less than what we thought they were really worth. In the
small- and mid-size portion of the portfolio, we used special computer programs
to help us screen for stocks with higher quality financial characteristics,
reasonable prices relative to their industry peers and improving business
trends.
HOW DID TECHNOLOGY STOCKS PERFORM?
We found some of the best opportunities for rapid earnings and revenue growth in
technology stocks. These companies create new products that appeal to both their
existing and new customers. That's why we invested in Fairchild Semiconductor
International, a small company that makes semiconductor chips for cell phones
and DVD players. We also invested in Lexmark International, a mid-size company
that makes printers. Both stocks generated profits that were higher than
investors expected, and were among the fund's top performers. At the end of the
period we sold Fairchild Semiconductor because of increased uncertainty about
its future earnings. Unfortunately, some other tech investments were
disappointing. Microsoft underperformed because investors were concerned about
the outcome of lawsuits in the United States and Europe. Novellus Systems was
another disappointment during the past few months, even though customer orders
were improving. This company produces sophisticated equipment used to make
computer chips.
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied or
redistributed for any purpose and may only be used for noncommercial, personal
purposes. The information contained herein is not represented or warranted to be
accurate, correct, complete or timely. Morningstar, Inc. shall not be
responsible for investment decisions, damages or other losses resulting from the
use of this information. Past performance is no guarantee of future performance.
Morningstar, Inc. has not granted consent for it to be considered or deemed an
"expert" under the Securities Act of 1933.
sidebar:
Net asset value per share
as of 03/31/04 ($)
==========================================
Class A 11.82
==========================================
Class B 11.68
==========================================
Class C 11.69
==========================================
Class Z 10.29
Holdings discussed in this report
as of 03/31/04 (%)
==========================================
Lexmark International 1.3
==========================================
Microsoft 2.1
==========================================
Novellus Systems 0.9
==========================================
Citigroup 2.4
==========================================
American International Group 2.1
==========================================
GreenPoint Financial 0.9
==========================================
Comcast 0.9
==========================================
Viacom 1.7
==========================================
Cisco Systems 1.4
==========================================
Wendy's International 0.6
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
DID YOU KNOW?
Value investors tend to focus more on the present than on the future. Their
biggest concern is what they're paying for a stock relative to measures such as
the company's earnings. Think of them as bargain shoppers. But for us, value
stocks have to be more than inexpensive. They also need to have the potential to
improve--a new product launch, new management or a cost-cutting program that is
expected to boost profits. We liked Wendy's International, the fast food
restaurant, because its stock price seemed inexpensive relative to its
competitors. We also saw no major issues that might keep the company from
growing. Further, we liked that it has benefited from its emphasis on healthier
food.
4
sidebar:
An investment in the fund offers the potential for long-term growth but also
involves certain risks. The fund may be affected by stock market fluctuations
that occur in response to economic and business developments. Since the fund is
actively managed, there can be no guarantee that the fund will continue to
maintain the holdings described in this report.
The prices of small- and medium-sized companies may be more volatile than those
of larger, more established firms.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risk that have
caused the stocks to be out of favor. If the advisor's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
advisor has placed on it.
A concentration of investments in a specific sector, such as technology, may
cause a fund to experience increased volatility.
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
WHAT TYPES OF STOCKS DID THE BEST?
Financial stocks were the best performers. They were helped by low interest
rates, a growing economy and a pick-up in merger and acquisition activity.
Higher prices translated into higher profits. Companies that depend on investor
trading activity, such as stock brokers, also saw business improve. We owned a
number of stocks that benefited from these trends: Citigroup, a global
diversified financial services company; American International Group, a large
insurance company and GreenPoint Financial, a mortgage and consumer lending
company that was bought out during the period. Energy investments--a small part
of the overall portfolio--helped performance as oil and natural gas prices rose
during the period.
WHICH STOCKS HURT THE FUND'S PERFORMANCE?
Media stocks, such as Viacom had a difficult time because companies didn't
increase their spending on advertising as rapidly as expected. In the cable
industry, Comcast declined because investors weren't happy that the company was
bidding to acquire The Walt Disney Company at a relatively high price. In health
care, pharmaceutical companies encountered a difficult environment. Drug
companies have been struggling to develop new products, but investors were
worried there may not be enough products in development to replace the lost
revenues from brand name drugs facing patent expirations.
WHAT'S YOUR OUTLOOK?
Going forward, we expect continued improvements in the economy and corporate
profits to benefit stock returns. In each of the three disciplines we follow, we
continue to find good investment opportunities. Our plan is to continue to
invest in the best companies we can find. By dividing the fund's investments
among all segments of the stock market--large, medium and small companies and
both growth and value companies--we hope to be represented in the
best-performing sectors, no matter which ones they may be.
photos: Greg Miller; Michael A. Welhoelter; Paul A. Blaustein
/s/ Greg Miller
/s/ Michael A. Welhoelter
/s/ Paul A. Blaustein
Greg Miller, Michael A. Welhoelter, CFA, and Paul A. Blaustein, CFA, lead the
team of portfolio managers who manage the portfolio of Columbia Young Investor
Fund. Mr. Miller and Mr. Welhoelter have been co-managing the fund since June
2003. Mr. Blaustein has been co-managing the fund since November 2003.
5
Financial Statements
- --------------------------------------------------------------------------------
March 31, 2004 Columbia Young Investor Fund
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
-----------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market
value as of the last day of the reporting period. Portfolio holdings are organized by
type of asset, industry, country or geographic region (if applicable) to demonstrate
areas of concentration and diversification.
-----------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price for
each share class as of the last day of the reporting period. Net assets are calculated by
subtracting all the fund's liabilities (including any unpaid expenses) from the total of
the fund's investment and non-investment assets. The share price for each class is
calculated by dividing net assets for that class by the number of shares outstanding in
that class as of the last day of the reporting period.
-----------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund
during the reporting period. The Statement of Operations also shows any net gain or loss
the fund realized on the sales of its holdings during the period, as well as any
unrealized gains or losses recognized over the period. The total of these results
represents the fund's net increase or decrease in net assets from operations.
-----------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating
results, distributions to shareholders and shareholder transactions (e.g., subscriptions,
redemptions and dividend reinvestments) during the reporting period. The Statement of
Changes in Net Assets also details changes in the number of shares outstanding.
-----------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income recognition
and distributions to shareholders), federal tax information, fees and compensation paid
to affiliates and significant risks and contingencies.
-----------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was
affected by the fund's operating results. The financial highlights table also discloses
the classes' performance and certain key ratios (e.g., class expenses and net investment
income as a percentage of average net assets).
See notes to investment portfolio.
6
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
March 31, 2004 (unaudited) Columbia Young Investor Fund
COMMON STOCKS - 99.8%
CONSUMER DISCRETIONARY - 14.3%
SHARES VALUE ($)
- ------------------------------------------ ----------------------------------------------------------------------------
AUTO COMPONENTS - 0.3% Autoliv, Inc. 59,300 2,431,300
Auto Components Total 2,431,300
----------------------------------------------------------------------------
AUTOMOBILES - 0.3% General Motors Corp. 52,745 2,484,289
Automobiles Total 2,484,289
----------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 1.1% Cedar Fair LP 71,400 2,496,858
Starwood Hotels & Resorts Worldwide, Inc., Class B 49,400 2,000,700
Wendy's International, Inc. 118,600 4,825,834
Hotels, Restaurants & Leisure Total 9,323,392
----------------------------------------------------------------------------
HOUSEHOLD DURABLES - 0.2% Applica, Inc. 166,900 1,875,956
Household Durables Total 1,875,956
----------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS - 0.9% Marvel Enterprises, Inc. (a) 206,700 3,966,573
Mattel, Inc. 196,166 3,617,301
Leisure Equipment & Products Total 7,583,874
----------------------------------------------------------------------------
MEDIA - 8.7% Clear Channel Communications, Inc. 71,982 3,048,438
Comcast Corp., Class A (a) 273,300 7,854,642
Gannett Co., Inc. 32,369 2,853,004
Getty Images, Inc. (a) 126,600 6,833,868
Lee Enterprises, Inc. 64,200 2,900,556
Liberty Media Corp., Class A (a) 449,700 4,924,215
McClatchy Co., Class A 76,100 5,406,144
McGraw-Hill Companies, Inc. 37,600 2,862,864
NetFlix, Inc. (a) 125,100 4,268,412
News Corp Ltd., ADR 127,600 4,591,048
NTL, Inc. (a) 53,300 3,168,685
Time Warner, Inc. (a) 394,800 6,656,328
Viacom, Inc., Class B 353,800 13,872,498
Westwood One, Inc. (a) 94,800 2,791,860
Media Total 72,032,562
----------------------------------------------------------------------------
MULTILINE RETAIL - 1.1% May Department Stores Co. 66,300 2,292,654
Sears, Roebuck and Co. 141,600 6,083,136
Multiline Retail Total 8,375,790
----------------------------------------------------------------------------
SPECIALTY RETAIL - 1.2% Home Depot, Inc. 123,200 4,602,752
Limited Brands 90,200 1,804,000
Lowe's Companies, Inc. 65,500 3,676,515
Specialty Retail Total 10,083,267
----------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS - 0.5% Kellwood Co. 112,100 4,399,925
Textiles, Apparel & Luxury Goods Total 4,399,925
-----------
CONSUMER DISCRETIONARY TOTAL 118,590,355
CONSUMER STAPLES - 7.8%
- ------------------------------------------ ----------------------------------------------------------------------------
BEVERAGES - 0.8% PepsiCo, Inc. 123,300 6,639,705
Beverages Total 6,639,705
----------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 3.0% Costco Wholesale Corp. (a) 335,535 12,602,695
Wal-Mart Stores, Inc. 206,800 12,343,892
Food & Staples Retailing Total 24,946,587
----------------------------------------------------------------------------
See notes to investment portfolio.
7
- --------------------------------------------------------------------------------
March 31, 2004 (unaudited) Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
CONSUMER STAPLES - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ ----------------------------------------------------------------------------
FOOD PRODUCTS - 0.8% Chiquita Brands International, Inc. (a) 158,900 3,313,065
ConAgra Foods, Inc. 113,900 3,068,466
Food Products Total 6,381,531
----------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 3.2% Clorox Co. 57,700 2,822,107
Colgate-Palmolive Co. 176,800 9,741,680
Procter & Gamble Co. 131,500 13,791,720
Household Products Total 26,355,507
-----------
CONSUMER STAPLES TOTAL 64,323,330
ENERGY - 7.3%
- ------------------------------------------ ----------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 1.6% Halliburton Co. 90,208 2,741,421
Schlumberger Ltd. 164,300 10,490,555
Energy Equipment & Services Total 13,231,976
----------------------------------------------------------------------------
OIL & GAS - 5.7% BP PLC, ADR 118,392 6,061,670
ConocoPhillips 120,800 8,433,048
Exxon Mobil Corp. 503,500 20,940,565
Houston Exploration Co. (a) 47,500 2,124,675
Newfield Exploration Co. (a) 100,900 4,836,137
Stone Energy Corp. (a) 103,200 5,104,272
Oil & Gas Total 47,500,367
-----------
ENERGY TOTAL 60,732,343
FINANCIALS - 19.4%
- ------------------------------------------ ----------------------------------------------------------------------------
CAPITAL MARKETS - 4.0% A.G. Edwards, Inc. 176,300 6,896,856
Bank of New York Co., Inc. 162,500 5,118,750
JP Morgan Chase & Co. 145,200 6,091,140
Merrill Lynch & Co., Inc. 167,402 9,970,463
Morgan Stanley 96,800 5,546,640
Capital Markets Total 33,623,849
----------------------------------------------------------------------------
COMMERCIAL BANKS - 4.3% Bank One Corp. 63,700 3,472,924
City National Corp. 66,000 3,953,400
Texas Regional Bancshares, Inc., Class A 60,700 2,582,785
U.S. Bancorp 203,700 5,632,305
UnionBanCal Corp. 59,900 3,138,161
Wells Fargo & Co. 301,300 17,074,671
Commercial Banks Total 35,854,246
----------------------------------------------------------------------------
CONSUMER FINANCE - 0.4% MBNA Corp. 101,248 2,797,482
Consumer Finance Total 2,797,482
----------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 2.4% Citigroup, Inc. 392,909 20,313,395
Diversified Financial Services Total 20,313,395
----------------------------------------------------------------------------
INSURANCE - 5.8% AFLAC, Inc. 101,600 4,078,224
Ambac Financial Group, Inc. 99,400 7,333,732
American International Group, Inc. 241,328 17,218,753
MBIA, Inc. 116,200 7,285,740
Travelers Property Casualty Corp., Class B 251,400 4,341,678
Willis Group Holdings Ltd. 138,450 5,150,340
XL Capital Ltd., Class A 36,653 2,787,094
Insurance Total 48,195,561
----------------------------------------------------------------------------
See notes to investment portfolio.
8
- --------------------------------------------------------------------------------
March 31, 2004 (unaudited) Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ ----------------------------------------------------------------------------
REAL ESTATE - 1.2% AvalonBay Communities, Inc., REIT 70,800 3,793,464
Kimco Realty Corp., REIT 114,300 5,827,014
Real Estate Total 9,620,478
----------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE - 1.3% Freddie Mac 62,600 3,697,156
GreenPoint Financial Corp. 169,650 7,415,401
Thrifts & Mortgage Finance Total 11,112,557
-----------
FINANCIALS TOTAL 161,517,568
HEALTH CARE - 13.9%
- ------------------------------------------ ----------------------------------------------------------------------------
BIOTECHNOLOGY - 1.0% Amgen, Inc. (a) 149,800 8,713,866
Biotechnology Total 8,713,866
----------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.6% Beckman Coulter, Inc. 66,200 3,610,548
Becton Dickinson & Co. 105,000 5,090,400
Medtronic, Inc. 266,900 12,744,475
Health Care Equipment & Supplies Total 21,445,423
----------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 4.8% Aetna, Inc. 63,331 5,682,057
Cardinal Health, Inc. 154,100 10,617,490
CIGNA Corp. 130,300 7,690,306
Coventry Health Care, Inc. (a) 155,750 6,592,898
IMS Health, Inc. 328,600 7,643,236
Tenet Healthcare Corp. (a) 126,800 1,415,088
Health Care Providers & Services Total 39,641,075
----------------------------------------------------------------------------
PHARMACEUTICALS - 5.5% Bradley Pharmaceuticals, Inc. (a) 195,400 4,920,172
Bristol-Myers Squibb Co. 101,100 2,449,653
Johnson & Johnson 184,500 9,357,840
Merck & Co, Inc. 65,200 2,881,188
Novartis AG, ADR 239,800 10,215,480
Pfizer, Inc. 464,100 16,266,705
Pharmaceuticals Total 46,091,038
-----------
HEALTH CARE TOTAL 115,891,402
INDUSTRIALS - 7.2%
- ------------------------------------------ ----------------------------------------------------------------------------
AEROSPACE & DEFENSE - 1.5% Honeywell International, Inc. 138,600 4,691,610
United Technologies Corp. 91,700 7,913,710
Aerospace & Defense Total 12,605,320
----------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 2.7% Avery Dennison Corp. 69,100 4,298,711
Convergys Corp. (a) 96,000 1,459,200
Paychex, Inc. 159,200 5,667,520
Pitney Bowes, Inc. 120,400 5,130,244
Waste Management, Inc. 198,685 5,996,313
Commercial Services & Supplies Total 22,551,988
----------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 2.3% 3M Co. 54,100 4,429,167
General Electric Co. 474,000 14,466,480
Industrial Conglomerates Total 18,895,647
----------------------------------------------------------------------------
MACHINERY - 0.4% Briggs & Stratton Corp. 54,300 3,663,621
Machinery Total 3,663,621
See notes to investment portfolio.
9
- --------------------------------------------------------------------------------
March 31, 2004 (unaudited) Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ ----------------------------------------------------------------------------
MARINE - 0.3% Overseas Shipholding Group. 65,700 2,398,050
Marine Total 2,398,050
-----------
INDUSTRIALS TOTAL 60,114,626
INFORMATION TECHNOLOGY - 20.3%
- ------------------------------------------ ----------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 2.0% Cisco Systems, Inc. (a) 510,400 12,004,608
Scientific-Atlanta, Inc. 146,300 4,731,342
Communications Equipment Total 16,735,950
----------------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 3.1% Dell, Inc. (a) 252,200 8,478,964
International Business Machines Corp. 70,500 6,474,720
Lexmark International, Inc., Class A (a) 114,300 10,515,600
Computers & Peripherals Total 25,469,284
----------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.6% Avnet, Inc. (a) 313,700 7,682,513
Benchmark Electronics, Inc. (a) 189,900 5,978,052
Electronic Equipment & Instruments Total 13,660,565
----------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES - 0.4% United Online, Inc. (a) 182,400 3,038,784
Internet Software & Services Total 3,038,784
----------------------------------------------------------------------------
IT SERVICES - 0.5% Accenture Ltd., Class A (a) 121,746 3,019,301
Electronic Data Systems Corp. 77,000 1,489,950
IT Services Total 4,509,251
----------------------------------------------------------------------------
OFFICE ELECTRONICS - 0.5% Xerox Corp. (a) 142,900 2,082,053
Zebra Technologies Corp., Class A (a) 28,750 1,994,388
Office Electronics Total 4,076,441
----------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.7% Altera Corp. (a) 453,100 9,265,895
Analog Devices, Inc. 136,000 6,529,360
Applied Materials, Inc. (a) 392,000 8,380,960
ASML Holding N.V., N.Y. Shares (a) 528,000 9,678,240
Intel Corp. 323,300 8,793,760
Maxim Integrated Products 65,200 3,070,268
Microchip Technology, Inc. 154,000 4,090,240
Novellus Systems, Inc. (a) 224,700 7,143,213
QLogic Corp. (a) 48,700 1,607,587
Texas Instruments, Inc. 89,400 2,612,268
Xilinx, Inc. (a) 291,000 11,058,000
Semiconductors & Semiconductor Equipment Total 72,229,791
----------------------------------------------------------------------------
SOFTWARE - 3.5% Adobe Systems, Inc. 165,700 6,533,551
Microsoft Corp. 716,500 17,891,005
SAP AG, ADR 125,700 4,941,267
Software Total 29,365,823
-----------
INFORMATION TECHNOLOGY TOTAL 169,085,889
MATERIALS - 5.5%
- ------------------------------------------ ----------------------------------------------------------------------------
CHEMICALS - 2.6% Air Products & Chemicals, Inc. 82,882 4,154,046
Monsanto Co. 217,400 7,972,058
OM Group, Inc. (a) 90,500 2,751,200
PPG Industries, Inc. 60,600 3,532,980
Sigma-Aldrich Corp. 59,000 3,265,060
Chemicals Total 21,675,344
----------------------------------------------------------------------------
See notes to investment portfolio.
10
- --------------------------------------------------------------------------------
March 31, 2004 (unaudited) Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
MATERIALS - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ ----------------------------------------------------------------------------
CONSTRUCTION MATERIALS - 0.4% Vulcan Materials Co. 67,700 3,211,688
Construction Materials Total 3,211,688
----------------------------------------------------------------------------
CONTAINERS & PACKAGING - 0.9% Temple-Inland, Inc. 120,500 7,632,470
Containers & Packaging Total 7,632,470
----------------------------------------------------------------------------
METALS & MINING - 0.6% Carpenter Technology Corp. 101,300 3,330,744
Southern Peru Copper Corp. 48,700 1,969,915
Metals & Mining Total 5,300,659
----------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 1.0% Potlatch Corp. 46,900 1,911,175
Rayonier, Inc. 155,981 6,817,930
Paper & Forest Products Total 8,729,105
-----------
MATERIALS TOTAL 46,549,266
TELECOMMUNICATION SERVICES - 2.8%
- ------------------------------------------ ----------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 2.8% BellSouth Corp. 146,800 4,064,892
CenturyTel, Inc. 213,700 5,874,613
SBC Communications, Inc. 258,800 6,350,952
Verizon Communications, Inc. 195,000 7,125,300
Diversified Telecommunication Services Total 23,415,757
-----------
TELECOMMUNICATION SERVICES TOTAL 23,415,757
UTILITIES - 1.3%
- ------------------------------------------ ----------------------------------------------------------------------------
ELECTRIC UTILITIES - 1.0% Consolidated Edison, Inc. 126,100 5,561,010
Southern Co. 93,566 2,853,763
Electric Utilities Total 8,414,773
----------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER - 0.3% Questar Corp. 74,500 2,714,780
Multi-Utilities & Unregulated Power Total 2,714,780
-----------
UTILITIES TOTAL 11,129,553
-----------
TOTAL COMMON STOCKS (cost of $701,673,789) 831,350,089
SHORT-TERM OBLIGATION - 0.6%
- ------------------------------------------ ----------------------------------------------------------------------------
PAR($)
Repurchase agreement with State Street Bank &
Trust Co., dated 03/31/04, due 04/01/04 at 0.960%,
collateralized by U.S. Treasury Bonds with maturities
to 11/15/27, market value of $5,125,232 (repurchase
proceeds $5,012,134) (cost of $5,012,000) 5,012,000 5,012,000
TOTAL INVESTMENTS - 100.4%
(COST OF $706,685,789) (b) 836,362,089
OTHER ASSETS & LIABILITIES, NET - (0.4)% (3,106,772)
NET ASSETS - 100.0% 833,255,317
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for both financial statement and federal income tax purposes is
the same.
Acronym Name
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See notes to financial statements.
11
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
March 31, 2004 (unaudited) Columbia Young Investor Fund
($)
- ------------------------------------------ -----------------------------------------------------------------------------
ASSETS Investments, at cost 706,685,789
-------------
Investments, at value 836,362,089
Receivable for:
Investments sold 19,799,509
Fund shares sold 65,995
Interest 134
Dividends 726,469
Expense reimbursement due from Investment Advisor 117,465
Deferred Trustees' compensation plan 14,167
-------------
Total Assets 857,085,828
-----------------------------------------------------------------------------
LIABILITIES Payable to custodian bank 17,624
Payable for:
Investments purchased 20,700,525
Fund shares repurchased 593,561
Investment advisory fee 409,718
Administration fee 126,490
Transfer agent fee 1,819,133
Pricing and bookkeeping fees 18,548
Distribution and service fees 35,057
Deferred Trustees' fees 14,167
Other liabilities 95,688
-------------
Total Liabilities 23,830,511
NET ASSETS 833,255,317
-----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 922,893,645
Undistributed net investment income 583,709
Accumulated net realized loss (219,898,337)
Net unrealized appreciation on investments 129,676,300
-------------
NET ASSETS 833,255,317
-----------------------------------------------------------------------------
CLASS A Net assets 102,001,617
Shares outstanding 8,631,023
Net asset value per share 11.82(a)
Maximum offering price per share ($11.82/0.9425) 12.54(b)
-----------------------------------------------------------------------------
CLASS B Net assets 7,079,983
Shares outstanding 606,069
Net asset value and offering price per share 11.68(a)
-----------------------------------------------------------------------------
CLASS C Net assets 767,859
Shares outstanding 65,705
Net asset value and offering price per share 11.69(a)
-----------------------------------------------------------------------------
CLASS Z Net assets 723,405,858
Shares outstanding 70,299,826
Net asset value, offering and redemption price per share 10.29
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
12
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 2004 (unaudited) Columbia Young Investor Fund
- --------------------------------------------------------------------------------
($)
- ------------------------------------------ -----------------------------------------------------------------------------
INVESTMENT INCOME Dividends 6,997,173
Interest 29,269
-----------------------------------------------------------------------------
Total Investment Income (net of foreign taxes withheld
of $34,820) 7,026,442
-----------------------------------------------------------------------------
EXPENSES Investment advisory fee 2,430,231
Administration fee 753,699
Distribution fee:
Class A 51,079
Class B 27,029
Class C 2,768
Service fee:
Class A 127,681
Class B 9,010
Class C 923
Transfer agent fee:
Class A 666,701
Class B 28,449
Class C 3,229
Class Z 2,781,095
Pricing and bookkeeping fees 113,963
Trustees' fees 8,098
Custody fee 10,235
Non-recurring costs (See Note 7) 5,685
Costs assumed by Investment Advisor (See Note 7) (5,685)
Other expenses 243,670
-----------
Total Expenses 7,257,860
Fees and expenses waived or reimbursed by Investment Advisor:
Class A (517,918)
Class B (17,925)
Class C (2,160)
Fees waived by Distributor-- Class A (25,543)
Custody earnings credit (738)
-----------
Net Expenses 6,693,576
-----------
Net Investment Income 332,866
-----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED Net realized gain on investments 53,062,325
GAIN (LOSS) ON INVESTMENTS Net change in unrealized appreciation/depreciation
on investments 45,073,713
-----------
Net Gain 98,136,038
-----------
Net Increase in Net Assets from Operations 98,468,904
See notes to financial statements.
13
STATEMENTS OF CHANGES IN NET ASSETS
March 31, 2004 Columbia Young Investor Fund
- --------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 ($)
- ------------------------------------------ -----------------------------------------------------------------------------
OPERATIONS Net investment income (loss) 332,866 (2,300,743)
Net realized gain (loss) on investments 53,062,325 (56,715,298)
Net change in unrealized appreciation/depreciation
on investments 45,073,713 208,670,172
Net Increase from Operations 98,468,904 149,654,131
-----------------------------------------------------------------------------
SHARE TRANSACTIONS Class A
Subscriptions 3,288,228 7,644,323
Redemptions (7,957,068) (14,032,114)
---------------------------
Net Decrease (4,668,840) (6,387,791)
Class B
Subscriptions 371,231 771,614
Redemptions (998,330) (1,742,729)
---------------------------
Net Decrease (627,099) (971,115)
Class C
Subscriptions 105,989 173,069
Redemptions (79,478) (116,948)
---------------------------
Net Increase 26,511 56,121
Class Z
Subscriptions 23,717,255 49,798,986
Redemptions (60,401,278) (78,078,650)
---------------------------
Net Decrease (36,684,023) (28,279,664)
Net Decrease from Share Transactions (41,953,451) (35,582,449)
Total Increase in Net Assets 56,515,453 114,071,682
- ------------------------------------------ -----------------------------------------------------------------------------
NET ASSETS Beginning of period 776,739,864 662,668,182
End of period (including undistributed
net investment income of $583,709 and $250,843,
respectively) 833,255,317 776,739,864
-----------------------------------------------------------------------------
CHANGES IN SHARES Class A
Subscriptions 285,028 800,725
Redemptions (688,039) (1,457,386)
---------------------------
Net Decrease (403,011) (656,661)
Class B
Subscriptions 32,449 79,511
Redemptions (87,889) (182,289)
---------------------------
Net Decrease (55,440) (102,778)
Class C
Subscriptions 9,261 18,211
Redemptions (7,062) (12,056)
---------------------------
Net Increase 2,199 6,155
Class Z
Subscriptions (a) 2,360,871 5,931,393
Redemptions (a) (5,969,675) (9,268,147)
---------------------------
Net Increase (Decrease) (3,608,804) (3,336,754)
(a) Shares purchased prior to July 25, 2003 have been adjusted to reflect
2-for-1 split.
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS
March 31, 2004 (unaudited) Columbia Young Investor Fund
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Columbia Young Investor Fund (the "Fund"), a series of Columbia Funds Trust XI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
INVESTMENT GOALS
The Fund seeks long-term growth of capital. The Fund also has an educational
objective to teach investors, especially young people, about basic economic
principles and personal finance through a variety of educational materials
prepared and paid for by the Fund.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
On October 13, 2003, the Liberty Young Investor Fund was renamed Columbia Young
Investor Fund. Also on this date, the Liberty-Stein Roe Funds Investment Trust
was renamed Columbia Funds Trust XI.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Equity securities are valued at the last sale price at the close of the
principal exchange on which they trade. Unlisted securities or listed securities
for which there were no sales during the day are valued at the closing bid price
on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Investments for which market quotations are not readily available, or quotations
which management believes are not appropriate, are valued at fair value under
procedures approved by the Board of Trustees as determined in good faith under
consistently approved procedures established by and under the general
supervision of the Board of Trustees.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to
15
March 31, 2004 (unaudited) Columbia Young Investor Fund
- --------------------------------------------------------------------------------
the value of the repurchase obligation including interest. A repurchase
agreement transaction involves certain risks in the event of default or
insolvency of the counterparty. These risks include possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities and
a possible decline in the value of the underlying securities during the period
while the Fund seeks to assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date, except for certain foreign securities which
are recorded as soon after ex-date as the Fund becomes aware of such, net of
non-reclaimable tax withholdings.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, by distributing in
each calendar year substantially all of its net investment income, capital gains
and certain other amounts, if any, the Fund will not be subject to federal
excise tax. Therefore, no federal income or excise tax provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
Unrealized appreciation and depreciation at March 31, 2004, based on cost of
investments for federal income tax purposes was:
Unrealized appreciation $144,179,030
Unrealized depreciation (14,502,730)
- ----------------------------------------------------------
Net unrealized appreciation $129,676,300
The following capital loss carryforwards, determined as of September 30, 2003,
may be available to reduce taxable income arising from future net realized gains
on investments, if any, to the extent permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforwards
- ----------------------------------------------------------
2007 $ 1,272,589
2008 273,885
2009 35,196,902
2010 68,425,718
2011 124,610,311
- ----------------------------------------------------------
Total $229,779,405
Of these carryforwards, $25,802,098 (expiring 9/30/2009) and $6,808,011
($1,272,586 expiring 9/30/2007, $273,885 expiring 9/30/2008, and $5,261,537
expiring 9/30/2009) were obtained upon the Fund's mergers with Liberty Young
Investor Fund and Liberty Growth Investor Fund, respectively on July 26, 2002.
Utilization of Liberty Young Investor Fund's and Liberty Growth Investor Fund's
losses could be subject to merger limitations imposed by the Internal Revenue
Code.
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
Under current tax rules, certain currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. As determined on September 30, 2003, post-October capital
losses of $43,116,286 attributed to security transactions were deferred to
October 1, 2003.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary
of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004,
FleetBoston was acquired by Bank of America Corporation ("BOA"). Columbia
receives a monthly investment advisory fee based on the Fund's average daily net
assets as follows:
16
March 31, 2004 (unaudited) Columbia Young Investor Fund
- --------------------------------------------------------------------------------
Average Daily Net Assets Annual Fee Rate
- -------------------------------------------------------------
First $500 million 0.60%
Next $500 million 0.55%
Over $1 billion 0.50%
For the six months ended March 31, 2004 the Fund's annualized effective
investment advisory fee rate was 0.58%.
ADMINISTRATION FEE
Columbia provides accounting and other services to the Fund for a monthly
administration fee based on the Fund's average daily net assets as follows:
Average Daily Net Assets Annual Fee Rate
- -------------------------------------------------------------
First $500 million 0.200%
Next $500 million 0.150%
Over $1 billion 0.125%
For the six months ended March 31, 2004, the Fund's annualized effective
administration fee rate was 0.18%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street"). Columbia pays the total fees collected to State
Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied to
the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services. For the six months ended March 31, 2004,
the Fund's annualized effective pricing and bookkeeping fee rate was 0.027%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds
Services, Inc., an indirect, wholly owned subsidiary of BOA, provides
shareholder services to the Fund. For such services, the Transfer Agent receives
a fee, paid monthly, at the annual rate of $28.00 per open account per class.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses.
Columbia has voluntarily agreed to reimburse the Fund for a portion of transfer
agency fees so that Class A, Class B and Class C transfer agent expenses
(excluding out-of-pocket expenses) will not exceed 0.10% annually. Columbia, at
its discretion, may revise or discontinue this arrangement any time.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee at the annual rate of 0.06% of the Fund's average daily net
assets plus flat-rate charges based on the number of shareholder accounts and
transactions. The Transfer Agent was also entitled to receive reimbursement for
certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), formerly Liberty Funds
Distributor, Inc., an indirect, wholly owned subsidiary of BOA, is the principal
underwriter of the Fund. For the six months ended March 31, 2004, the
Distributor has retained net underwriting discounts of $5,997 on sales of the
Fund's Class A shares and received CDSC fees of $11,861, $9,400 and $14 on Class
A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor equal to 0.25% annually of the average
daily net assets attributable to Class A, Class B and Class C shares. The Plan
also requires the payment of a monthly distribution fee to the Distributor equal
to 0.10% annually of the average daily net assets attributable to Class A shares
and 0.75% annually of the average daily net assets attributable to Class B and
Class C shares. The Distributor has voluntarily agreed to waive a portion of the
Class A share distribution fee so that it will not exceed 0.05% annually.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance
17
March 31, 2004 (unaudited) Columbia Young Investor Fund
- --------------------------------------------------------------------------------
credits. The Fund could have invested a portion of the assets utilized in
connection with the expense offset arrangement in an income-producing asset if
it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended March 31, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $293,578,985 and
$329,426,809, respectively.
NOTE 6. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings. In
addition, the Fund has agreed to pay commitment fees on its pro-rata portion of
the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the six months ended March 31,
2004, the Fund did not borrow under this arrangement.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
Columbia, the Distributor, and certain of their affiliates (collectively, "The
Columbia Group") have received information requests and subpoenas from various
regulatory and law enforcement authorities in connection with their
investigations of late trading and market timing in mutual funds. The Columbia
Group has not uncovered any instances where Columbia or the Distributor were
knowingly involved in late trading of mutual fund shares.
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and the Distributor, alleging that they had
violated certain provisions of the federal securities laws in connection with
trading activity in mutual fund shares. Also on February 24, 2004, the New York
Attorney General ("NYAG") filed a civil complaint in New York Supreme Court,
County of New York against Columbia and the Distributor alleging that Columbia
and the Distributor had violated certain New York anti-fraud statutes. If either
Columbia or the Distributor is unsuccessful in its defense of these proceedings,
it could be barred from serving as an investment advisor or distributor for any
investment company registered under the Investment Company Act of 1940, as
amended (a "registered investment company"). Such results could prevent
Columbia, the Distributor or any company that is an affiliated person of
Columbia and the Distributor from serving as an investment advisor or
distributor for any registered investment company, including your fund. Your
fund has been informed by Columbia and the Distributor that, if these results
occur, they will seek exemptive relief from the SEC to permit them to continue
to serve as your fund's investment advisor and distributor. There is no
assurance that such exemptive relief will be granted. On March 15, 2004,
Columbia and the Distributor entered into agreements in principle with the SEC
Division of Enforcement and NYAG in settlement of the charges. Under the
agreements, Columbia and the Distributor agreed, inter alia, to the following
conditions: payment of $70 million in disgorgement; payment of $70 million in
civil penalties; an order requiring Columbia and the Distributor to cease and
desist from violations of the antifraud provisions and other provisions of the
federal securities laws; governance changes designed to maintain the
independence of the mutual fund boards of trustees and ensure compliance with
securities laws and their fiduciary duties; and retention of an independent
consultant to review Columbia's and the Distributor's compliance policies and
procedures. The agreement requires the final approval of the SEC. In a separate
agreement with the NYAG, the Columbia Group has agreed to reduce mutual fund
fees by $80 million over a five-year period.
18
March 31, 2004 (unaudited) Columbia Young Investor Fund
- --------------------------------------------------------------------------------
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of fund
shares, which could increase transaction costs or operating expenses, or have
other adverse consequences for the funds.
For the six months ended March 31, 2004, Columbia has assumed $5,685 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
NOTE 8. SUBSEQUENT EVENT
On April 1, 2004, FleetBoston, including the Fund's investment advisor and
distributor, was acquired by BOA. The merger did not change the way the Fund is
managed, the investment personnel assigned to manage the Fund or the fees paid
by the Fund.
NOTE 9. CAPITAL ACTIVITY
On July 25, 2003, there was a 2-for-1 split on Class Z shares. The accompanying
prior period financial highlights for Class Z have been restated to reflect the
2-for-1 split.
19
Financial Highlights
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 2003 2002 (A)
=========================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.47 $ 8.52 $ 8.94
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.01 (0.03) (0.01)
Net realized and unrealized gain (loss) on investments 1.34 1.98 (0.41)
-------- -------- --------
Total from Investment Operations 1.35 1.95 (0.42)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.82 $ 10.47 $ 8.52
Total return (c)(d) 12.89%(e) 22.89% (4.70)%(e)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.44%(g) 1.54% 1.67%(g)
Net investment income (loss) (f) 0.24%(g) (0.35)% (0.49)%(g)
Waiver/reimbursement 1.06%(g) 0.56% 0.80%(g)
Portfolio turnover rate 35%(e) 128% 32%
Net assets, end of period (000's) $102,002 $ 94,617 $ 82,564
- -------------------------------------------------------------------------------------------------------------------------
(a) Class A shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Investment Advisor and/or Distributor not waived or reimbursed a
portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
20
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 2003 2002 (A)
=========================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 8.51 $ 8.94
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.03) (0.10) (0.02)
Net realized and unrealized gain (loss) on investments 1.32 1.98 (0.41)
-------- -------- --------
Total from Investment Operations 1.29 1.88 (0.43)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.68 $ 10.39 $ 8.51
Total return (c)(d) 12.42%(e) 22.09% (4.81)%(e)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.14%(g) 2.24% 2.37%(g)
Net investment loss (f) (0.46)%(g) (1.05)% (1.19)%(g)
Waiver/reimbursement 0.50%(g) 0.51% 0.75%(g)
Portfolio turnover rate 35%(e) 128% 32%
Net assets, end of period (000's) $ 7,080 $ 6,872 $ 6,505
- -------------------------------------------------------------------------------------------------------------------------
(a) Class B shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
21
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED)
SIX MONTHS ENDE YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 2003 2002 (A)
=========================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 8.51 $ 8.94
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.03) (0.10) (0.02)
Net realized and unrealized gain (loss) on investments 1.33 1.98 (0.41)
-------- -------- --------
Total from Investment Operations 1.30 1.88 (0.43)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.69 $ 10.39 $ 8.51
Total return (c)(d) 12.51%(e) 22.09% (4.81)%(e)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.14%(g) 2.24% 2.37%(g)
Net investment loss (f) (0.45)%(g) (1.05)% (1.19)%(g)
Waiver/reimbursement 0.59%(g) 0.50% 0.75%(g)
Portfolio turnover rate 35%(e) 128% 32%
Net assets, end of period (000's) $ 768 $ 660 $ 488
- -------------------------------------------------------------------------------------------------------------------------
(a) Class C shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
22
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED)
SIX MONTHS ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
CLASS Z SHARES 2004 2003 (A) 2002 (A)(B) 2001 (A) 2000 (A) 1999 (A)
===================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.13 $ 7.42 $ 9.38 $ 17.97 $ 13.71 $ 11.34
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (c) --(d) (0.03) (0.07)(e) (0.06)(e) (0.07)(e) (0.05)(e)
Net realized and unrealized gain (loss)
on investments 1.16 1.74 (1.89) (6.52) 4.49 2.72
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 1.16 1.71 (1.96) (6.58) 4.42 2.67
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- (1.56) (0.16) (0.30)
In excess of net realized gains -- -- -- (0.45) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared to Shareholders -- -- -- (2.01) (0.16) (0.30)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.29 $ 9.13 $ 7.42 $ 9.38 $ 17.97 $ 13.71
Total return (f) 12.71%(g) 23.05% (20.90)% (40.08)% 32.32% 23.89%
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.61%(i) 1.49% 1.58%(e) 1.26%(e) 1.08%(e) 1.18%(e)
Net investment income (loss) (h) 0.06%(i) (0.30)% (0.71)%(e) (0.41)%(e) (0.45)%(e) (0.37)%(e)
Portfolio turnover rate 35%(g) 128% 32% 23%(j) 72%(j) 45%(j)
Net assets, end of period (000's) $723,406 $674,590 $573,111 $746,698 $1,215,809 $880,574
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Per share data has been restated to reflect a 2-for-1 stock split effective
July 25, 2003.
(b) Class S shares were redesignated Class Z on July 29, 2002.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Rounds to less than $0.01 per share.
(e) Per share data and ratios reflect income and expenses inclusive of the
Fund's proportionate share of the income and expenses of the SR&F Growth
Investor Portfolio prior to the termination of the master feeder/fund
structure on July 26, 2002.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Portfolio turnover disclosed is for the SR&F Growth Investor Portfolio.
23
IMPORTANT INFORMATION ABOUT THIS REPORT
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Young Investor Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the fund and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to its portfolio securities is available (i) without
charge, upon request, by calling 800-345-6611 and (ii) on the Securities and
Exchange Commissionwebsite at http://www.sec.gov.
24
COLUMBIA FUNDS
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
---------------------------------------------------
LARGE GROWTH Columbia Common Stock
Columbia Growth
Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II
Columbia Young Investor
---------------------------------------------------
LARGE VALUE Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value
---------------------------------------------------
MIDCAP GROWTH Columbia Acorn Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive Growth
---------------------------------------------------
MIDCAP VALUE Columbia Dividend Income
Columbia Mid Cap
Columbia Strategic Investor
---------------------------------------------------
SMALL GROWTH Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
---------------------------------------------------
SMALL VALUE Columbia Small Cap
Columbia Small Cap Value
---------------------------------------------------
BALANCED Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
---------------------------------------------------
SPECIALTY Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
---------------------------------------------------
TAXABLE FIXED-INCOME Columbia Contrarian Income
Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income
Columbia Intermediate Bond
Columbia Intermediate Government Income
Columbia Quality Plus Bond
Columbia Short Term Bond
Columbia Strategic Income
---------------------------------------------------
FLOATING RATE Columbia Floating Rate
Columbia Floating Rate Advantage
---------------------------------------------------
TAX EXEMPT Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals
Columbia National Municipal Bond
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
25
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
---------------------------------------------------
SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt
Columbia Connecticut Intermediate
Municipal Bond Columbia Connecticut
Tax-Exempt Columbia Florida
Intermediate Municipal Bond Columbia
Massachusetts Intermediate Municipal
Bond Columbia Massachusetts
Tax-Exempt Columbia New Jersey
Intermediate Municipal Bond Columbia
New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate
Municipal Bond Columbia Rhode Island
Intermediate Municipal Bond
---------------------------------------------------
MONEY MARKET Columbia Money Market
Columbia Municipal Money Market
---------------------------------------------------
INTERNATIONAL/GLOBAL Columbia Acorn International
Columbia Acorn International Select
Columbia Europe
Columbia Global Equity
Columbia International Stock
Columbia Newport Asia Pacific
Columbia Newport Greater China
Columbia Newport Tiger
---------------------------------------------------
INDEX Columbia Large Company Index
Columbia Small Company Index
Columbia U.S. Treasury Index
Please consider the investment objectives, risks, charges
and expenses of a mutual fund carefully before investing.
Contact us at 800-345-6611 for a prospectus which contains
this and other important information about the fund. Read it
carefully before you invest.
For complete product information on any Columbia fund, visit
our website at www.columbiafunds.com.
Columbia Management Group and Columbia Management refer
collectively to the various investment advisory subsidiaries
of Columbia Management Group, including Columbia Management
Advisors, Inc., the registered investment advisor, and
Columbia Funds Distributor, Inc.
26
artwork: hands on typewriter; text "eDelivery"
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Young Investor Fund Semiannual Report, March 31, 2004
artwork: Columbia Funds logo
COLUMBIA FUNDS
A Member of Columbia Management Group
(c) 2004 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
756-03/635R-0304 (05/04) 04/1103
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable at this time.
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.
The registrant has not filed Schedule 14A subsequent to the effective date of
that Schedule's Item 7(d)(2)(ii)(G). However, it is the registrant's policy to
consider candidates for the Board of Trustees/Directors who are recommend by
shareholders. A Fund shareholder who wishes to nominate a candidate to the Board
may send information regarding prospective candidates to the Fund's Governance
Committee, care of the
Fund's Secretary. The information should include evidence of the shareholder's
Fund ownership, a full listing of the proposed candidate's education,
experience, current employment, date of birth, names and addresses of at least
three professional references, information as to whether the candidate is not an
"interested person" under the 1940 Act and "independent" under NYSE Listing
Standards in relation to the Fund, and such other information as may be helpful
to the independent trustees/directors in evaluating the candidate. All
satisfactorily completed information packages regarding a candidate will be
forwarded to an independent trustee/director for consideration.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer, based on his evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, has concluded that such controls and procedures are
adequately designed to ensure that information required to be disclosed
by the registrant in Form N-CSR is accumulated and communicated to the
registrant's management, including the principal executive officer and
principal financial officer, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust XI
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By (Signature and Title) /s/ J. Kevin Connaughton
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J. Kevin Connaughton, President and Treasurer
Date June 7, 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/ J. Kevin Connaughton
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J. Kevin Connaughton, President and Treasurer
Date June 7, 2004
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