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 811-2214
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Columbia Funds Trust I
------------------------------------------------------------------------------
(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: October 31, 2004
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Date of reporting period: April 30, 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 TAX-MANAGED FUNDS
SEMIANNUAL REPORT
APRIL 30, 2004
Photo of Man & Woman Smiling
[EAGLE HEAD LOGO] COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
TABLE OF CONTENTS
A Closer Look .......................................... 1
Economic Update ........................................ 2
Columbia Tax-Managed Aggressive
Growth Fund ......................................... 3
Columbia Tax-Managed Growth Fund ....................... 6
Columbia Tax-Managed Growth Fund II .................... 7
Columbia Tax-Managed Value Fund ........................ 10
Financial Statements ................................... 13
Investment Portfolio ................................ 14
Statements of Assets and Liabilities ................ 24
Statements of Operations ............................ 26
Statements of Changes in Net Assets ................. 27
Notes to Financial Statements ....................... 31
Financial Highlights ................................ 37
Shareholders Meeting Results ........................... 46
Important Information
About This Report ................................... 47
Columbia Funds ......................................... 48
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
NOT FDIC MAY LOSE VALUE
INSURED NO BANK GUARANTEE
TO OUR FELLOW SHAREHOLDERS______________________________________________________
Columbia Tax-Managed Funds
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.
COMPARING PRE-TAX AND AFTER-TAX RETURNS
The chart on this page offers a comparison between pre-tax and after-tax
returns. For those tax-managed funds with no taxable income distributions, the
returns after taxes on distributions were the same as the pre-tax returns for
the time periods shown. When a fund has distributed taxable income, the total
returns after taxes on distributions will be different from the returns before
taxes.
THERE MAY BE FUTURE DISTRIBUTIONS
In the future, any or all of these tax-managed funds may be required to
distribute taxable income and capital gains. In addition, market conditions may
limit the funds' ability to generate tax losses or to avoid dividend income.
Excessive shareholder redemptions may also require the funds to sell securities
and realize gains. The ability to use certain tax-management techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the historically highest
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and the after-tax returns shown may
not be relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
A CLOSER LOOK___________________________________________________________________
Columbia Tax-Managed Funds
AVERAGE ANNUAL TOTAL RETURN, CLASS A SHARES WITH SALES CHARGE FOR THE PERIOD
THAT ENDED 04/30/04 (%)
1-YEAR 5-YEAR LIFE
------- -------- -------
COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND (SINCE 08/01/00)
Returns before taxes 12.92 n/a -11.78
Returns after taxes on distributions 12.92 n/a -11.78
Returns after taxes on distributions and sale of fund shares 8.40 n/a -9.73
Russell MidCap Growth Index 36.14 n/a -8.80
COLUMBIA TAX-MANAGED GROWTH FUND (SINCE 12/30/96)
Returns before taxes 11.05 -4.48 3.41
Returns after taxes on distributions 11.05 -4.48 3.41
Returns after taxes on distributions and sale of fund shares 7.19 -3.75 2.95
S&P 500 Index 22.88 -2.26 6.97
COLUMBIA TAX-MANAGED GROWTH FUND II (SINCE 03/07/00)
Returns before taxes 10.84 n/a -8.79
Returns after taxes on distributions 10.84 n/a -8.79
Returns after taxes on distributions and sale of fund shares 7.05 n/a -7.30
S&P 500 Index 22.88 n/a -3.33
COLUMBIA TAX-MANAGED VALUE FUND (SINCE 06/01/99)
Returns before taxes 16.68 n/a -2.90
Returns after taxes on distributions 16.54 n/a -2.92
Returns after taxes on distributions and sale of fund shares 11.02 n/a -2.44
Russell 1000 Value Index 26.26 n/a 1.92
Indices do not reflect any deduction for fees, expenses or taxes. After-tax
returns are shown for class A shares only; after-tax returns for other share
classes will vary.
TO THE SHAREHOLDERS OF COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH, COLUMBIA
TAX-MANAGED GROWTH AND COLUMBIA TAX-MANAGED GROWTH II FUNDS
We are pleased to report that these funds did not distribute taxable income to
fund shareholders. This means that the individual pre-tax returns for these
funds are the same as the returns after taxes on distributions. Since the
inception of all of these funds to the date of this report, there has been no
payment of taxable distributions. While we want to remind you that we can't
guarantee this will always be the case, we are proud of our "non-taxing" track
record and will strive to continue it.
TO THE SHAREHOLDERS OF COLUMBIA TAX-MANAGED VALUE FUND
This is the first time, since the fund's inception in June 1999, that the fund
has reported a taxable income distribution. This means that fund's returns
before taxes are higher than the fund's returns after taxes on distributions.
Although we do our best to reduce the fund's shareholders exposure to taxes, it
is important to note that from time to time the fund may be required to
distribute taxable income and/or capital gains.
1
SUMMARY
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004
o STOCK MARKETS AROUND THE WORLD BENEFITED FROM A PICK-UP IN ECONOMIC GROWTH,
BUT MOST OF THE GAINS FOR THE PERIOD WERE REPORTED IN 2003. BOTH THE S&P 500
Index and the MSCI EAFE INDEX POSTED SOLID RETURNS DESPITE WEAKNESS NEAR THE
END OF THE PERIOD.
S&P INDEX MSCI INDEX
6.27% 12.39%
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o PERFORMANCE IN THE FIXED-INCOME UNIVERSE WAS LED BY HIGH-YIELD BONDS, WHICH
RETURNED 5.27% AS MEASURED BY THE MERRILL LYNCH US HIGH YIELD, CASH PAY
INDEX. INVESTMENT GRADE BONDS EKED OUT A 1.25% RETURN, AS MEASURED BY THE
LEHMAN BROTHERS AGGREGATE BOND INDEX. PERFORMANCE WAS HAMPERED BY THE THREAT
OF HIGHER INTEREST RATES AHEAD.
MERRILL LYNCH INDEX LEHMAN INDEX
5.27% 1.25%
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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.
ECONOMIC UPDATE_________________________________________________________________
Columbia Tax-Managed Funds
The US economy moved ahead at a steady pace during the six-month period that
began November 1, 2003 and ended April 30, 2004. Annualized GDP for the period
was slightly higher than 4.0%--comfortably above the economy's long-term average
growth rate of 3.0%. Inflation edged up, but remained relatively low.
Consumer confidence was generally strong going into the period, but a prolonged
period of sluggish job growth put a damper on confidence early in 2004. However,
consumer spending on retail goods and autos remained strong, and the housing
market continued to soar. When half a million new jobs were added to the economy
in March and April, consumer confidence moved higher again, and buoyed the
outlook for the economy in the second half of the year.
The business sector also showed signs of improvement during the period.
Industrial production registered steady gains. Business spending on technology
rose. And late in the period, spending on capital equipment also picked up.
US, FOREIGN STOCKS HEADED HIGHER
The US stock market snapped a three-year losing streak in 2003. However, returns
slowed early in 2004 in response to a mixed job outlook. When job growth was
disappointing in January and February, investors worried about the economic
recovery. Then, when job numbers soared in March and April, they grew concerned
about interest rates. Renewed fears about terrorism also weighed on investor
confidence. The S&P 500 Index returned 6.27% for this six-month period. In
general, small and mid-cap stocks performed better than large-cap stocks.
However, large-caps held up better when stocks retreated in April. Sector
leadership also rotated during the period. After an extended period of strong
performance, gold stocks and real estate investment trusts (REITs) retreated.
Gold stocks were driven downward as the price of the precious metal plummeted.
And REIT prices fell as investors took profits. Energy was the strongest
performing industry sector of the US stock market, buoyed by the rising price of
crude oil.
Foreign stock markets did even better than the US stock market. 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 12.39% for the period. European and Japanese stock markets were helped
by a declining US dollar and a rebound in economic growth.
BOND GAINS VARIED ACROSS SECTORS
As the economy strengthened, interest rates rose sharply in the final month of
the period. Investment grade bonds lost ground because bond prices and interest
rates move in opposite directions. The Lehman Brothers Aggregate Bond Index, a
broad measure of investment-grade bond performance, gained 1.25%.
A strong economy was more good news than bad for the high-yield bond sector,
which historically has been less vulnerable to the threat of higher interest
rates than other fixed-income sectors. The six-month return for the Merrill
Lynch US High Yield, Cash Pay Index was 5.27%.
Money market yields remained below 1% as the Federal Reserve Board kept
short-term interest rates at their historical lows. However, the period ended
with the expectation that these key interest rates are likely to move higher now
that the economy appears to be on solid ground.
2
PERFORMANCE OF A $10,000 INVESTMENT 08/01/00 - 04/30/04 ($)
SALES CHARGE WITHOUT WITH
------------ ------- ------
Class A 6,635 6,252
Class B 6,454 6,260
Class C 6,454 6,454
Class Z 6,661 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares may be worth
more or less than the original cost. Please visit www.columbiafunds.com for
daily and most recent month-end performance updates.
PERFORMANCE INFORMATION________________________________________________________
Columbia Tax-Managed Aggressive Growth Fund
VALUE OF A $10,000 INVESTMENT 08/01/00 - 04/30/04
[MOUNTAIN CHART]
CLASS A CLASS A
SHARES WITHOUT SHARES WITH RUSSELL MIDCAP S&P MIDCAP
SALES CHARGE SALES CHARGE GROWTH INDEX 400 INDEX
------------ ------------ ------------ ---------
$10000 $ 9425 $10000 $10000
11648 10978 11508 11117
11709 11035 10945 11041
10664 10051 10197 10667
8335 7856 7981 9862
8914 8401 8401 10616
9500 8954 8881 10853
7723 7279 7345 10233
6757 6368 6294 9473
7343 6921 7343 10518
7516 7083 7308 10763
7809 7360 7312 10720
7334 6912 6819 10560
6842 6448 6325 10215
5815 5480 5279 8944
6048 5700 5834 9339
6557 6180 6463 10034
6877 6481 6708 10553
6825 6433 6490 10498
6575 6196 6122 10511
6963 6563 6589 11262
6877 6481 6241 11209
6756 6367 6055 11020
6342 5977 5386 10213
5660 5334 4863 9222
5565 5245 4846 9270
5366 5058 4461 8522
5556 5237 4807 8891
5694 5366 5183 9406
5392 5082 4870 9020
5358 5050 4822 8756
5254 4952 4780 8548
5254 4952 4869 8620
5539 5220 5201 9245
5988 5643 5701 10012
6109 5757 5783 10139
6238 5879 5989 10499
6566 6189 6319 10976
6239 5880 6196 10808
6748 6360 6696 11625
6920 6522 6875 12029
6946 6547 6950 12233
7102 6693 7180 12498
7084 6677 7300 12798
6990 6588 7286 12852
6635 6252 7080 12430
The graph and table do not reflect a deduction of the taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
MidCap Growth Index is an unmanaged index that measures the performance of those
Russell MidCap companies with higher price-to-book ratios and higher forecasted
growth values. The S&P MidCap 400 Index tracks the performance of
mid-capitalization US stocks. This index was the fund's previous benchmark.
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 August 1, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C Z
- -----------------------------------------------------------------------------------------
INCEPTION 08/01/00 08/01/00 08/01/00 08/01/00
- -----------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------
6-month (cumulative) -1.66 -7.35 -1.97 -6.87 -1.97 -2.95 -1.40
1-year 19.78 12.92 18.92 13.92 18.92 17.92 20.25
Life -10.37 -11.78 -11.03 -11.75 -11.03 -11.03 -10.27
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C Z
- -----------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------
6-month (cumulative) 12.03 5.61 11.60 6.60 11.61 10.61 12.14
1-year 33.00 25.39 32.16 27.16 32.21 31.21 33.50
Life -9.31 -10.77 -9.96 -10.70 -9.99 -9.99 -9.22
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 will vary based on differences in sales
charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
3
SUMMARY
o FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004, THE FUND'S CLASS A SHARES
RETURNED NEGATIVE 1.66% WITHOUT SALES CHARGE.
o THE FUND'S HIGH-QUALITY FOCUS AND OVERWEIGHT IN TECHNOLOGY DEPRESSED ITS
RETURN RELATIVE TO ITS BENCHMARK AND PEER GROUP.
o WE BELIEVE THE FUND'S EMPHASIS ON QUALITY HAS THE POTENTIAL TO HELP CUSHION
THE FUND AGAINST VOLATILITY.
RUSSELL MIDCAP
CLASS A SHARES GROWTH INDEX
-1.66% 5.74%
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OBJECTIVE
Seeks long-term capital
growth while reducing
shareholder exposure to taxes
TOTAL NET ASSETS
$11.7 million
NET ASSET VALUE PER SHARE AS OF 04/30/04 ($)
Class A 7.69
Class B 7.48
Class C 7.48
Class Z 7.72
PORTFOLIO MANAGER'S REPORT______________________________________________________
Columbia Tax-Managed Aggressive Growth Fund
For the six-month period ended April 30, 2004, Columbia Tax-Managed Aggressive
Growth Fund class A shares returned negative 1.66% without sales charge. The
fund came out behind the Russell MidCap Growth Index, which returned 5.74%. The
fund also fell short of the Morningstar Mid-Cap Growth Funds Category average,
which returned 3.30%.1 The fund's high-quality bias hurt its return during the
first half of the period as low-quality stocks were the biggest beneficiaries of
an improving economy. Later, the fund's overweight position in technology
hindered performance as investors worried that the best times were over for this
sector. Our disciplined focus on mid-cap stocks (with market capitalizations of
$10 billion or less) also meant we missed out on strong returns from several
larger-cap stocks in the Russell MidCap Growth Index.
TECHNOLOGY WEIGHT AND TECHNOLOGY DISAPPOINTMENTS DEPRESSED FUND'S RETURN
During the period, the fund's single largest position was in the technology
sector, which typically does well when corporate spending picks up. However,
after a strong run in the fourth quarter of 2003, technology stocks tumbled in
the first quarter of 2004. Many were hurt by concerns that earnings growth,
while good, was slowing. Companies that reported the slightest miss on earnings
or revenues numbers, such as Amkor Technology and Foundry Networks, suffered
sharp declines in their stock prices. Amkor Technology makes packaging for
semiconductors, and Foundry Networks makes network switches. Comverse
Technology, one of the fund's largest holdings, made little headway despite
improving prospects in its voice mail software business. However, several of the
technology stocks in the portfolio were strong performers. Amdocs, which
develops billing software for telecommunications companies, and Lexmark
International, which makes printers and cartridges, benefited from strong
product demand.
ADDITIONAL DISAPPOINTMENTS FROM BIOTECHNOLOGY AND CONSUMER STOCKS
The fund also lost ground when selected biotechnology holdings declined as
investors worried about whether they would deliver on earnings expectations.
ICOS, a biotech company with a new drug called Cialis to treat erectile
dysfunction, and Barr Pharmaceuticals, a generic drug manufacturer, also came
under pressure as earnings growth slowed. In the consumer discretionary sector,
retail investments, such as Bed Bath & Beyond, declined as investors worried
that consumer spending had peaked. In addition, we lost ground by not owning
larger-cap stocks such as Starbucks, which rallied sharply.
1 (C)2004 by 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.
4
TOP 5 SECTORS AS OF 04/30/04 (%)
Information technology 36.1
Health care 25.6
Consumer discretionary 12.9
Industrials 9.6
Energy 9.3
TOP 10 HOLDINGS AS OF 04/30/04 (%)
Amphenol 2.3
Caremark Rx 2.1
DaVita 2.0
Comverse Technology 2.0
Amdocs 1.8
Medicis Pharmaceutical 1.8
Education Management 1.7
Bed Bath & Beyond 1.7
Microchip Technology 1.6
Univision Communications 1.6
Holdings and sector breakdowns are calculated as a percentage of net assets.
HOLDINGS DISCUSSED IN THIS REPORT AS OF 04/30/04 (%)
Amkor Technology 0.4
Foundry Networks 0.2
Comverse Technology 2.0
Amdocs 1.8
Lexmark International 1.1
ICOS 1.1
Barr Pharmaceuticals 1.3
Bed Bath & Beyond 1.7
National-Oilwell 1.6
XTO Energy 1.4
DaVita 2.0
Caremark Rx 2.1
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.
________________________________________________________________________________
Columbia Tax-Managed Aggressive Growth Fund
STRONG GAINS FROM ENERGY AND HEALTH CARE
The fund had an above-average stake in energy stocks, which rallied amid high
oil and natural gas commodity prices, increased demand and tight supplies.
National-Oilwell, a supplier of components for drilling rigs, and XTO Energy, a
producer of oil and natural gas, did especially well as spending on drilling
increased. Overall, health care stocks, which were the fund's second largest
sector weight, boosted performance. As investors shifted into sectors that were
less sensitive to economic growth, DaVita, which runs kidney dialysis centers
nationwide, and Caremark Rx, a leading pharmacy benefits manager, were stand-out
performers.
POSITIVE ECONOMIC OUTLOOK CLOUDED BY GEOPOLITICAL UNCERTAINTIES
We expect economic growth to continue at a relatively strong pace, especially if
higher profits fuel increased corporate spending. A positive economic outlook
and rising earnings are typically good for stocks. However, geopolitical
concerns, higher interest rates, the forthcoming presidential election and high
oil and gas prices have the potential to result in further volatility. In this
environment, we plan to continue our focus on high-quality stocks and
economically-sensitive sectors. As a result, technology remains the largest
weight in the portfolio. However, if inflation becomes a concern and corporate
spending appears to peak, we would likely trim our technology stake and move a
greater portion of the fund's assets into more defensive areas, such as health
care and energy.
[Photo of Richard Johnson]
Richard Johnson, CFA, has managed Columbia Tax-Managed
Aggressive Growth Fund since March 2002 and has been with
the advisor and its predecessors since 1994.
/s/ Richard F Johnson
Investing in small- and mid-cap stocks may present special risks, including
possible illiquidity and greater price volatility than stocks of larger, more
established companies.
The fund's approach offers the potential for long-term growth, but also involves
the possibility of losses due to the sensitivity of growth stock prices to
changes in current or expected earnings.
Certain active tax-reduction techniques are used only if the fund's advisor
believes they will help the fund achieve its investment goals. The fund expects
to distribute taxable income and capital gains from time to time. Market
conditions may limit the fund's ability to generate tax losses or to avoid
dividend income. The ability to use certain tax-management techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
5
PERFORMANCE OF A $10,000 INVESTMENT 12/30/96 - 04/30/04 ($)
SALES CHARGE WITHOUT WITH
------------ ------- -------
Class A 13,571 12,791
Class B 12,847 12,847
Class C 12,837 12,837
Class E 13,502 12,894
Class F 12,857 12,857
Class Z 13,750 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares may be worth
more or less than the original cost. Please visit www.columbiafunds.com for
daily and most recent month-end performance updates.
PERFORMANCE INFORMATION_________________________________________________________
Columbia Tax-Managed Growth Fund
VALUE OF A $10,000 INVESTMENT 12/30/96 - 04/30/04
[MOUNTAIN CHART]
CLASS A CLASS A
SHARES WITHOUT SHARES WITH S&P 500
SALES CHARGE SALES CHARGE INDEX
------------ ------------ ---------
$10000 $ 9425 $10000
9960 9387 9827
10386 9789 10441
10227 9639 10523
9672 9116 10090
9959 9387 10693
10723 10107 11344
11239 10593 11852
12131 11434 12795
11595 10928 12079
12349 11639 12741
11943 11256 12315
12221 11518 12885
12389 11677 13107
12627 11901 13252
13500 12724 14208
14086 13276 14935
14076 13267 15086
13728 12939 14827
14036 13229 15429
13926 13125 15265
11674 11003 13058
12429 11714 13895
13281 12517 15025
14204 13387 15935
15048 14183 16853
15227 14351 17557
15029 14165 17011
15743 14838 17692
16080 15155 18376
15732 14828 17943
17002 16024 18939
16575 15622 18348
16456 15510 18258
16148 15220 17757
17051 16071 18882
17240 16249 19265
19275 18166 20400
18342 17287 19375
18510 17446 19009
19532 18409 20868
18720 17643 20240
17827 16802 19825
18709 17633 20315
18670 17596 19998
19900 18756 21240
18907 17820 20118
18232 17184 20034
16130 15203 18455
16319 15380 18546
17459 16456 19204
15366 14482 17453
14166 13351 16346
15187 14314 17616
15128 14258 17734
14821 13969 17303
14673 13829 17134
13681 12894 16061
12183 11482 14763
12580 11857 15045
13642 12857 16199
13691 12904 16342
13354 12586 16103
13136 12381 15793
13672 12886 16386
12829 12091 15393
12749 12016 15280
11608 10941 14192
10825 10202 13086
10913 10286 13171
9892 9323 11739
10785 10165 12773
11460 10801 13525
10666 10053 12731
10527 9922 12397
10478 9875 12211
10617 10007 12330
11520 10857 13346
11986 11297 14049
11877 11194 14229
12205 11503 14479
12522 11802 14762
12254 11550 14605
12988 12242 15432
13117 12363 15568
13673 12887 16383
13902 13102 16685
14060 13252 16917
13901 13102 16661
13571 12791 16393
The graph and table do not reflect a deduction of the taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The S&P 500
Index tracks the performance of 500 widely held, large-capitalization US stocks.
Unlike the fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in an
index. Securities in the fund may not match those in an index. Index performance
is from December 30, 1996.
AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C E F Z
- --------------------------------------------------------------------------------------------------------------------------------
INCEPTION 12/30/96 12/30/96 12/30/96 12/30/96 12/30/96 01/11/99
- --------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- --------------------------------------------------------------------------------------------------------------------------------
6-month (cumulative) 4.51 -1.50 4.18 -0.82 4.10 3.10 4.53 -0.17 4.18 -0.82 4.68
1-year 17.83 11.05 17.09 12.09 17.00 16.00 17.84 12.53 17.07 12.07 18.26
5-year -3.34 -4.48 -4.05 -4.43 -4.06 -4.06 -3.39 -4.27 -3.98 -4.37 -3.10
Life 4.25 3.41 3.48 3.48 3.47 3.47 4.18 3.53 3.49 3.49 4.44
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C E F Z
- --------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- --------------------------------------------------------------------------------------------------------------------------------
6-month (cumulative) 13.44 6.92 12.95 7.95 12.95 11.95 13.34 8.24 13.02 8.02 13.52
1-year 30.93 23.41 30.00 25.00 30.00 29.00 30.80 24.91 29.94 24.94 31.27
5-year -2.46 -3.61 -3.19 -3.58 -3.19 -3.19 -2.52 -3.42 -3.11 -3.50 -2.21
Life 4.65 3.79 3.85 3.85 3.85 3.85 4.56 3.90 3.88 3.88 4.83
All results shown assume reinvestment of distributions. The "with sales charge"
returns include the maximum 5.75% sales charge for class A shares, 4.50% for
class E shares and the appropriate class B and class F contingent deferred sales
charge for the holding period after purchase as follows: through first year -
5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth
year - 1%, thereafter - 0% and the class C contingent deferred sales charge of
1% for the first year only. Performance for different share classes will vary
based on differences in sales charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class Z share performance information includes returns for the fund's class A
shares (as its expense structure more closely resembles that of the newer class)
for periods prior to the inception of the newer class of shares. These class A
share returns were not restated to reflect any expense differential (e.g., Rule
12b-1 fees) between class A and class Z shares. Had the expense differential
been reflected, the returns for the periods prior to the inception of the class
Z shares would have been higher.
6
PERFORMANCE OF A $10,000 INVESTMENT 03/07/00 - 04/30/04 ($)
SALES CHARGE WITHOUT WITH
------------ ------- -------
Class A 7,242 6,826
Class B 7,017 6,876
Class C 7,000 7,000
Class Z 7,308 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results.The
investment return and principal value will fluctuate so that shares may be worth
more or less than the original cost. Please visit www.columbiafunds.com for
daily and most recent month-end performance updates.
PERFORMANCE INFORMATION_________________________________________________________
Columbia Tax-Managed Growth Fund II
VALUE OF A $10,000 INVESTMENT 03/07/00 - 04/30/04
[MOUNTAIN CHART]
CLASS A CLASS A
SHARES WITHOUT SHARES WITH S&P 500
SALES CHARGE SALES CHARGE INDEX
------------ ------------ ---------
$10000 $ 9425 $10000
10450 9849 10778
9859 9292 10454
9442 8899 10239
9866 9299 10492
9883 9315 10329
10492 9889 10970
10017 9441 10391
9625 9072 10347
8516 8027 9532
8666 8168 9578
9266 8733 9918
8091 7626 9014
7499 7068 8442
8075 7610 9098
8008 7547 9159
7832 7382 8937
7732 7287 8849
7207 6793 8295
6457 6086 7625
6599 6219 7771
7224 6808 8367
7307 6887 8440
7065 6659 8317
6990 6588 8157
7307 6887 8463
6865 6471 7950
6824 6431 7891
6257 5897 7330
5832 5497 6759
5849 5513 6803
5308 5002 6063
5783 5450 6597
6141 5788 6985
5700 5372 6575
5649 5325 6403
5608 5285 6307
5691 5364 6368
6158 5804 6893
6399 6031 7256
6341 5976 7349
6516 6141 7478
6691 6307 7624
6550 6173 7543
6941 6542 7970
6999 6597 8040
7300 6880 8462
7425 6998 8617
7508 7076 8737
7416 6990 8605
7242 6826 8468
The graph and table do not reflect a deduction of the taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The S&P 500
Index tracks the performance of 500 widely held, large-capitalization US stocks.
Unlike the fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in an
index. Securities in the fund may not match those in an index. Index performance
is from March 7, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C Z
- -----------------------------------------------------------------------------------
INCEPTION 03/07/00 03/07/00 03/07/00 03/07/00
- -----------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------
6-month (cumulative) 4.32 -1.70 3.95 -1.05 3.96 2.96 4.53
1-year 17.59 10.84 16.78 11.78 16.67 15.67 17.88
Life -7.49 -8.79 -8.19 -8.63 -8.24 -8.24 -7.28
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C Z
- ------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------
6-month (cumulative) 13.23 6.71 12.81 7.81 12.84 11.84 13.38
1-year 30.31 22.76 29.39 24.39 29.47 28.47 30.71
Life -7.09 -8.43 -7.79 -8.25 -7.84 -7.84 -6.88
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 will vary based on differences in sales
charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
7
SUMMARY
o FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004, THE CLASS A SHARES OF
COLUMBIA TAX-MANAGED GROWTH FUND AND COLUMBIA TAX-MANAGED GROWTH FUND II
RETURNED 4.51% AND 4.32% WITHOUT SALES CHARGE, RESPECTIVELY. GOOD STOCK
SELECTION IN HEALTH CARE AND INDUSTRIAL SECTORS AIDED PERFORMANCE.
o THE FUNDS' RETURNS WERE SLIGHTLY LOWER THAN THE RETURN OF THEIR BENCHMARK,
THE S&P 500 Index. They were higher than the average return of their peer
group, the Morningstar Large Growth Category.
o ALTHOUGH TECHNOLOGY STOCKS WERE THE MARKET'S WORST PERFORMERS, GOOD STOCK
SELECTION HELPED THE FUND'S TECHNOLOGY POSITIONS OUTPERFORM RELATIVE TO
THEIR BENCHMARK.
TAX-MANAGED GROWTH FUND
NET ASSET VALUE PER SHARE AS OF 04/30/04 ($)
Class A 13.68
Class B 12.95
Class C 12.94
Class E 13.61
Class F 12.96
Class Z 13.86
TAX-MANAGED GROWTH FUND II
NET ASSET VALUE PER SHARE AS OF 04/30/04 ($)
Class A 8.69
Class B 8.42
Class C 8.40
Class Z 8.77
TAX-MANAGED GROWTH FUND
TOP 5 SECTORS AS OF 04/30/04 (%)
Financials 20.5
Information technology 20.4
Health care 18.7
Industrials 12.3
Consumer staples 9.8
TAX-MANAGED GROWTH FUND II
TOP 5 SECTORS AS OF 04/30/04 (%)
Information technology 20.3
Financials 19.8
Health care 19.1
Industrials 13.2
Consumer staples 9.8
Sector breakdowns are calculated as a percentage of net assets.
PORTFOLIO MANAGER'S REPORT______________________________________________________
Columbia Tax-Managed Growth Funds
For the six-month period ended April 30, 2004, Columbia Tax-Managed Growth Fund
class A shares returned 4.51% without sales charge. Columbia Tax-Managed Growth
Fund II class A shares returned 4.32% without sales charge. The funds
underperformed their benchmark, the S&P 500 Index, which returned 6.27% for the
period. However, the funds' returns exceeded the average return of their peer
group, the Morningstar Large Growth Category, which was 2.66%. 1
TECHNOLOGY STOCKS FOLLOWED STOCK MARKET TRENDS
Driven by an expanding domestic economy and strong corporate profit growth,
stock prices appreciated sharply throughout most of 2003 and into early 2004.
However, as investors became concerned about inflationary pressures and the
likelihood of rising interest rates, the stock market faltered near the end of
the period.
In an environment of increasing investor caution, technology stocks were the
market's worst-performing sector. That hurt the funds' performance because
technology was a significant holding for both funds. However, favorable stock
selection in the technology sector helped the funds' relative returns. Our
investments in Symantec, Electronic Arts and Lexmark International did much
better than technology stocks overall during the period. Symantec, a leading
vendor of computer security products, benefited from strong demand due to rising
Internet usage and the increased incidence of computer viruses. Electronic Arts,
a third-party video game publisher, was helped by a growing base of game
consoles in use and by a steady stream of new and updated games. Increased
Internet usage as well as an expanding base of digital camera users have boosted
demand for Lexmark International's low cost, high quality printers.
HEALTH CARE AND INDUSTRIAL SECTORS LED THE FUNDS' PERFORMANCE
As in the prior reporting period, the funds had a significant position in health
care stocks, which were the leading contributors to relative returns. Good stock
selection within the sector aided returns, led by particularly good performances
from Express Scripts, St. Jude Medical and Zimmer Holdings. During the period,
we continued to add to health care with the purchase of Teva Pharmaceutical
Industries and Eli Lilly & Co.
The industrial sector was also a standout performer for the funds. We emphasized
machinery stocks, which benefited from stronger global economic growth. Within
the industrial sector, Eaton, Illinois Tool Works and Deere & Co. were each
solid contributors during the period.
1 (C)2004 by 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.
8
TAX-MANAGED GROWTH FUND
TOP 10 HOLDINGS AS OF 04/30/04 (%)
Wal-Mart Stores 3.3
Citigroup 3.2
Exxon Mobil 2.8
American International Group 2.7
Nabors Industries 2.6
St. Jude Medical 2.6
Microsoft 2.4
Zimmer Holdings 2.4
Bank of America 2.4
Illinois Tool Works 2.4
TAX-MANAGED GROWTH FUND II
TOP 10 HOLDINGS AS OF 04/30/04 (%)
Wal-Mart Stores 3.3
Citigroup 3.2
Exxon Mobil 2.9
American International Group 2.8
Nabors Industries 2.6
St. Jude Medical 2.6
Zimmer Holdings 2.6
Microsoft 2.5
General Electric 2.5
Pfizer 2.4
Holdings are calculated as a percentage of net assets.
COLUMBIA COLUMBIA
TAX- TAX-
HOLDINGS DISCUSSED MANAGED MANAGED
IN THIS REPORT AS GROWTH GROWTH
OF 04/30/04 (%) FUND FUND II
------------------- -------- --------
Symantec 1.2 1.2
Electronic Arts 1.1 1.1
Lexmark International 1.9 1.9
Express Scripts 2.1 2.1
St. Jude Medical 2.6 2.6
Zimmer Holdings 2.4 2.6
Teva Pharmaceutical
Industries 1.5 1.5
Eli Lilly & Co. 1.9 2.1
Eaton 2.2 2.1
Illinois Tool Works 2.4 2.3
Deere & Co. 1.9 1.8
Kohl's 1.9 1.9
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.
________________________________________________________________________________
Columbia Tax-Managed Growth Funds
RETAILING AND MEDIA STOCKS LAGGED
The funds' investments in retailing and media stocks detracted from returns,
primarily due to disappointing performances from Kohl's and Comcast. Kohl's
recent operating results have been subpar in our opinion. However, we still hold
the stock because it is attractively priced relative to our estimate of its
future earning potential. We eliminated our position in Comcast because we were
concerned about the company's acquisition strategy as well as increasing
competition.
POSITIVE OUTLOOK DESPITE HEADWINDS
In our view, investors have been alternating between "glass is half full/half
empty" scenarios. The positive view is that stocks are positioned to move higher
because corporate profits are still experiencing strong growth. The negative
view is that economic growth has been so strong that it could lead to higher
inflation and higher interest rates, which could eventually create an
environment of slower growth. We agree that current economic momentum is
unsustainably high and that interest rates are likely to move up. But we also
believe that some moderation in economic growth is healthy because it could help
limit future Federal Reserve interest rate increases, thereby creating a more
sustainable period of profit growth.
Barring a major external event--and despite the uncertainty introduced by the
forthcoming presidential election--we expect solid growth in the economy and in
corporate profits well into next year. There is ample historical precedent to
suggest that stocks could continue to appreciate even as interest rates begin to
rise. And if investors become risk-averse because of an uncertain environment,
we believe they are more likely to rotate back into the higher quality,
large-cap stocks which make up the funds' core holdings.
William M. Hughes is a senior equity analyst at Stein Roe
Investment Counsel, sub-advisor to the funds. Mr. Hughes
is also a member of the investment management team for
Columbia Tax-Managed Growth Fund and Columbia Tax-Managed
Growth Fund II. No single individual has primary
management responsibility over the funds' portfolio
securities.
/s/ William M. Hughes
The funds' approach offers the potential for long-term growth, but also involves
the possibility of losses due to the sensitivity of growth stock prices to
changes in current or expected earnings.
Certain active tax-reduction techniques are used only if the funds' advisor
believes they will help the funds achieve their investment goals. The funds
expect to distribute taxable income and capital gains from time to time. Market
conditions may limit the funds' ability to generate tax losses or to avoid
dividend income. The ability to use certain tax-managed techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
9
PERFORMANCE OF A $10,000 INVESTMENT 06/01/99 - 04/30/04 ($)
SALES CHARGE WITHOUT WITH
------------ ------- ------
Class A 9,182 8,654
Class B 8,877 8,699
Class C 8,877 8,877
Class Z 9,305 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results.
The investment return and principal value will fluctuate so that shares may be
worth more or less than the original cost. Please visit www.columbiafunds.com
for daily and most recent month-end performance updates.
PERFORMANCE INFORMATION_________________________________________________________
Columbia Tax-Managed Value Fund
VALUE OF A $10,000 INVESTMENT 06/01/99 - 04/30/04
[MOUNTAIN CHART]
CLASS A
SHARES
WITHOUT CLASS A
SALES SHARES WITH RUSSELL 1000 S&P 500 S&P 500/BARRA
CHARGE SALES CHARGE VALUE INDEX INDEX VALUE INDEX
- --------- ------------ ----------- --------- -----------
$10000 $ 9425 $10000 $10000 $10000
10200 9614 10349 10616 10427
9733 9173 10046 10285 10107
9358 8820 9673 10234 9851
8641 8144 9335 9954 9466
8866 8356 9873 10584 10001
8799 8294 9796 10799 9942
8749 8246 9843 11435 10316
8357 7877 9522 10861 9988
7741 7295 8815 10656 9363
8624 8128 9890 11698 10340
8774 8269 9776 11346 10271
9215 8685 9878 11113 10303
8724 8222 9427 11388 9896
8607 8112 9545 11210 10094
9090 8567 10075 11906 10771
9124 8599 10168 11277 10769
9507 8960 10418 11230 10970
9440 8897 10032 10345 10408
9982 9408 10534 10396 10944
9940 9369 10574 10765 11406
9906 9337 10280 9783 10650
9565 9015 9917 9163 10229
9698 9140 10403 9875 10923
9881 9313 10637 9941 11038
9614 9061 10401 9699 10680
9864 9297 10379 9604 10495
9814 9249 9963 9003 9889
9447 8903 9262 8276 8949
9497 8951 9182 8434 8949
9863 9296 9716 9081 9517
9938 9367 9945 9161 9662
9722 9163 9868 9027 9397
9596 9044 9884 8853 9314
10088 9507 10352 9185 9791
9655 9100 9996 8629 9300
9621 9068 10046 8565 9337
8530 8039 9470 7955 8748
7822 7372 8589 7335 7802
7897 7443 8654 7383 7856
6780 6391 7692 6581 6958
7405 6979 8262 7160 7536
7997 7537 8783 7581 8066
7630 7192 8401 7136 7647
7347 6925 8198 6949 7437
6923 6525 7979 6845 7235
6898 6501 7993 6911 7226
7414 6988 8696 7481 7940
8014 7553 9258 7875 8525
8198 7726 9374 7976 8587
8156 7687 9513 8116 8778
8289 7812 9662 8275 8967
8122 7655 9567 8187 8805
8414 7930 10152 8650 9407
8497 8008 10291 8727 9492
9087 8564 10924 9184 10078
9213 8683 11117 9353 10257
9456 8913 11355 9483 10488
9415 8873 11255 9340 10416
9182 8654 10979 9189 10156
The graph and table do not reflect a deduction of the taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
1000 Value Index is an unmanaged index that measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The S&P 500 Index tracks the performance of 500 widely held,
large-capitalization US stocks. The S&P 500/Barra Value Index is constructed by
dividing the stocks in the S&P 500 Index by a single attribute: price-to-book
ratio. The value index contains firms with lower price-to-book ratios. The S&P
500 Index was the fund's previous benchmark. 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 June 1, 1999.
AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C Z
- ----------------------------------------------------------------------------------------
INCEPTION 06/01/99 06/01/99 06/01/99 06/01/99
- ----------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ----------------------------------------------------------------------------------------
6-month (cumulative) 9.09 2.82 8.69 3.69 8.69 7.69 9.25
1-year 23.80 16.68 23.00 18.00 23.00 22.00 24.20
Life -1.72 -2.90 -2.40 -2.80 -2.40 -2.40 -1.46
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C Z
- ----------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ----------------------------------------------------------------------------------------
6-month (cumulative) 15.91 9.24 15.56 10.56 15.56 14.56 16.12
1-year 36.48 28.63 35.46 30.46 35.46 34.46 36.79
Life -1.23 -2.44 -1.91 -2.32 -1.91 -1.91 -0.97
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 will vary based on differences in sales
charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
10
SUMMARY
o FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 9.09% WITHOUT SALES CHARGE.
o THE FUND'S RETURN WAS HIGHER THAN ITS BENCHMARK, THE RUSSELL 1000 VALUE
INDEX.
o FUND PERFORMANCE WAS AIDED BY HEAVY ALLOCATIONS TO TOP-PERFORMING MARKET
SECTORS AND INCREASED INTEREST IN DIVIDEND-PAYING COMPANIES.
RUSSELL 1000
CLASS A SHARES VALUE INDEX
9.09% 8.15%
arrow up arrow up
OBJECTIVE
Seeks long-term capital
growth while reducing
shareholder exposure to taxes
TOTAL NET ASSETS
$78.7 million
NET ASSET VALUE PER SHARE AS OF 04/30/04 ($)
Class A 10.93
Class B 10.65
Class C 10.65
Class Z 11.04
DISTRIBUTIONS DECLARED PER SHARE 11/01/03 - 04/30/04 ($)
Class A 0.09
Class B 0.00*
Class C 0.00*
Class Z 0.12
* Rounds to less than $0.01 per share.
PORTFOLIO MANAGERS' REPORT______________________________________________________
Columbia Tax-Managed Value Fund
For the six-month period ended April 30, 2004, Columbia Tax-Managed Value Fund
class A shares returned 9.09% without sales charge. The fund outperformed both
the Russell 1000 Value Index, which returned 8.15%, and the Morningstar Large
Value Category average, which was 7.72%. 1
A FAVORABLE INVESTMENT CLIMATE
Although the economy's strong growth created a favorable investment climate for
stocks, investors began to shift away from lower-quality companies, which had
been the market leaders in 2003. As the economy moved from the recovery stage to
solid growth, stocks of higher-quality companies, many of which pay dividends,
began to outperform. The fund's exposure to these types of stocks helped it
outperform its benchmark.
SECTOR SELECTION AIDS PERFORMANCE
The portfolio's holdings in the utilities, health care and energy sectors were
especially important to overall performance. Among utility companies, Texas
Utilities (TXU) negotiated attractive asset sales as it continued to restructure
its business. Duke Energy also posted a solid gain. We bought the stock late
last summer, when it was attractively priced, and we sold it during the period
because it had met our price objective.
In the health care sector, the fund's most important holding was Aetna. The
company had experienced significant erosion in its customer base. A new
management team came in, lowered costs and turned the business around. Aetna has
been a significant position for the fund for some time now, and while we have
trimmed the position several times to capture gains from the stock's
appreciation, we believe it may have further to go.
Within the energy sector, we maintained an overweight position in energy
service. However, we sold Baker Hughes following an impressive upward move. Our
investments in integrated oil companies also fared well as oil prices rose.
Because oil production is declining in the United States, we have gained
exposure to international oil companies such as British Petroleum (BP PLC) and
Royal Dutch Petroleum, both of which contributed to the fund's return during the
period.
FINANCIAL STOCKS WERE DISAPPOINTING
Financial stocks, which account for almost one-third of the portfolio, moved
slightly higher during the period. However, they trailed overall index
performance as increasing investor optimism about the economy translated into
fears of higher interest rates. Shares of credit card
1 (C)2004 by 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.
11
TOP 5 SECTORS AS OF 04/30/04 (%)
Financials 32.1
Energy 12.7
Industrials 10.6
Consumer staples 9.7
Consumer discretionary 8.5
TOP 10 HOLDINGS AS OF 04/30/04 (%)
Citigroup 4.9
Exxon Mobil 3.1
ConocoPhillips 2.4
BP PLC 2.4
Wells Fargo & Co. 2.2
American International Group 2.2
Halliburton 2.1
Aetna 2.1
U.S. Bancorp 2.0
Waste Management 1.9
Holdings and sector breakdowns are calculated as a percentage of net assets.
HOLDINGS DISCUSSED IN THIS REPORT AS OF 04/30/04 (%)
TXU 1.6
Aetna 2.1
BP PLC 2.4
Royal Dutch Petroleum 1.0
MBNA 1.0
Merrill Lynch & Co. 1.5
Morgan Stanley 1.2
American International Group 2.2
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.
________________________________________________________________________________
Columbia Tax-Managed Value Fund
company MBNA, a new holding for the portfolio, fell over 10% toward the end of
the period. Our holdings in leading financial institutions Merrill Lynch & Co.
and Morgan Stanley also came under pressure.
Not all financial stocks underperformed, however. International insurer American
International Group posted a strong gain, as its core business is substantially
insulated from short-term shifts in rates.
A GUARDED OUTLOOK
Our outlook for the period ahead is somewhat cautious. The marked improvement in
the job market near the end of the period points to the possibility of higher
interest rates. We also believe that profit margins may have reached a near-term
peak and that earnings growth may slow going forward.
However, we believe that dividends have the potential to become an increasingly
more important component of total return. Our emphasis on high-quality,
dividend-paying companies should perform well in such an environment. Dividend
payouts have been on the rise since Congress reduced the tax on dividends in
2003, and we expect that trend to continue.
In keeping with our cautious outlook, we have also increased the number of
holdings in the fund by about 15% in an effort to reduce risk in what has become
a highly uncertain market. However, we did not make any significant changes to
our sector allocations during the period because we continue to believe that
keeping our allocations relatively close to index weights is another way of
limiting the fund's overall volatility.
Gregory M. Miller has co-managed Richard Dahlberg has co-managed the
Columbia Tax-Managed Value Fund fund since October 2003 and has been
since April 2003 and has been with the with the advisor since September 2003.
advisor and its predecessors since 1985.
/s/ Gregory M. Miller /s/ Richard E. Dahlberg
Brian Cunningham has co-managed
the fund since November 2003 and
has been with the advisor and its
predecessors since 1987.
/s/ Brian Cunningham
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor. If the advisor's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
advisor has placed on it.
Certain active tax-reduction techniques are used only if the fund's advisor
believes they will help the fund achieve its investment goals. The fund expects
to distribute taxable income and capital gains from time to time. Market
conditions may limit the fund's ability to generate tax losses or to avoid
dividend income. The ability to use certain tax-management techniques may be
curtailed or eliminated in the future by tax legislation, regulations,
administrative interpretations or court decisions.
12
FINANCIAL STATEMENTS____________________________________________________________
April 30, 2004 Columbia Tax-Managed Funds
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 This statement details the fund's assets,
AND LIABILITIES 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 This statement demonstrates how the fund's net
IN NET ASSETS 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 These notes disclose the organizational background
STATEMENTS 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).
13
INVESTMENT PORTFOLIO____________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Aggressive Growth Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - 98.1%
CONSUMER DISCRETIONARY - 12.9%
AUTO COMPONENTS - 3.4%
Autoliv, Inc. 3,760 159,913
Dana Corp. 5,600 112,896
Gentex Corp. 3,220 126,643
-----------
Auto Components Total 399,452
HOTELS, RESTAURANTS & LEISURE - 2.3%
Harrah's Entertainment, Inc. 1,300 69,134
Hilton Hotels Corp. 3,430 59,991
International Game Technology 1,320 49,817
MGM Mirage 1,870 85,665
-----------
Hotels, Restaurants & Leisure Total 264,607
HOUSEHOLD DURABLES - 0.9%
Garmin Ltd. 3,190 102,590
-----------
Household Durables Total 102,590
LEISURE EQUIPMENT & PRODUCTS - 0.9%
Brunswick Corp. 2,430 99,897
-----------
Leisure Equipment & Products Total 99,897
MEDIA - 1.6%
Univision Communications, Inc.,
Class A (a) 5,510 186,513
-----------
Media Total 186,513
MULTILINE RETAIL - 0.6%
Dollar Tree Stores, Inc. (a) 2,790 75,190
-----------
Multiline Retail Total 75,190
SPECIALTY RETAIL - 3.2%
Bed Bath & Beyond, Inc. (a) 5,230 194,138
Staples, Inc. 3,190 82,174
Williams-Sonoma, Inc. (a) 2,970 96,466
-----------
Specialty Retail Total 372,778
-----------
CONSUMER DISCRETIONARY TOTAL 1,501,027
CONSUMER STAPLES - 0.7%
FOOD PRODUCTS - 0.7%
Dean Foods Co. (a) 2,330 78,241
-----------
Food Products Total 78,241
-----------
CONSUMER STAPLES TOTAL 78,241
ENERGY - 9.3%
ENERGY EQUIPMENT & SERVICES - 5.0%
BJ Services Co. (a) 2,620 116,590
Nabors Industries Ltd. (a) 2,120 94,043
National-Oilwell, Inc. (a) 6,680 186,506
Patterson-UTI Energy, Inc. (a) 3,570 129,198
Rowan Companies, Inc. (a) 2,700 60,210
-----------
Energy Equipment & Services Total 586,547
SHARES VALUE ($)
---------- -----------
OIL & GAS - 4.3%
Apache Corp. 2,380 99,651
Ashland, Inc. 1,700 81,430
Murphy Oil Corp. 2,230 152,755
XTO Energy, Inc. 6,200 165,540
-----------
Oil & Gas Total 499,376
-----------
ENERGY TOTAL 1,085,923
FINANCIALS - 1.1%
INSURANCE - 1.1%
Ambac Financial Group, Inc. 1,930 133,170
-----------
Insurance Total 133,170
-----------
FINANCIALS TOTAL 133,170
HEALTH CARE - 25.6%
BIOTECHNOLOGY - 3.0%
Affymetrix, Inc. (a) 1,560 47,674
Amylin Pharmaceuticals, Inc. (a) 7,600 170,240
ICOS Corp. (a) 4,020 128,600
-----------
Biotechnology Total 346,514
HEALTH CARE EQUIPMENT & SUPPLIES - 6.0%
Boston Scientific Corp. (a) 2,990 123,158
Fisher Scientific International, Inc. (a) 1,600 93,680
Kinetic Concepts, Inc. (a) 2,500 121,000
Smith & Nephew PLC 6,200 63,044
Varian Medical Systems, Inc. (a) 2,030 174,255
Zimmer Holdings, Inc. (a) 1,630 130,156
-----------
Health Care Equipment & Supplies Total 705,293
HEALTH CARE PROVIDERS & SERVICES - 9.0%
Anthem, Inc. (a) 1,050 93,009
Caremark Rx, Inc. (a) 7,180 243,043
Community Health Systems, Inc. (a) 4,920 126,887
DaVita, Inc. (a) 4,600 235,060
Manor Care, Inc. 4,180 135,599
McKesson Corp. 2,100 69,006
UnitedHealth Group, Inc. 2,510 154,315
-----------
Health Care Providers & Services Total 1,056,919
PHARMACEUTICALS - 7.6%
Barr Pharmaceuticals, Inc. (a) 3,570 147,869
Elan Corp. PLC, ADR (a) 7,600 164,160
Endo Pharmaceuticals Holdings, Inc. (a) 5,100 121,737
IVAX Corp. (a) 5,660 120,558
Medicis Pharmaceutical Corp., Class A 4,800 206,016
Teva Pharmaceutical Industries Ltd., ADR 1,990 122,504
-----------
Pharmaceuticals Total 882,844
-----------
HEALTH CARE TOTAL 2,991,570
See notes to investment portfolio.
14
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Aggressive Growth Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - 9.6%
AEROSPACE & DEFENSE - 0.3%
L-3 Communications Holdings, Inc. 600 37,044
-----------
Aerospace & Defense Total 37,044
BUILDING PRODUCTS - 0.8%
Masco Corp. 3,300 92,433
-----------
Building Products Total 92,433
COMMERCIAL SERVICES & SUPPLIES - 5.3%
Allied Waste Industries, Inc. (a) 12,170 153,220
Corporate Executive Board Co. 2,820 145,653
Education Management Corp. (a) 5,560 197,158
Manpower, Inc. 2,560 120,064
-----------
Commercial Services & Supplies Total 616,095
ELECTRICAL EQUIPMENT - 1.0%
American Power Conversion Corp. 6,170 115,132
-----------
Electrical Equipment Total 115,132
MACHINERY - 1.4%
Donaldson Co., Inc. 6,000 164,580
-----------
Machinery Total 164,580
TRADING COMPANIES & DISTRIBUTORS - 0.8%
Fastenal Co. 1,790 98,217
-----------
Trading Companies & Distributors Total 98,217
-----------
INDUSTRIALS TOTAL 1,123,501
INFORMATION TECHNOLOGY - 36.1%
COMMUNICATIONS EQUIPMENT - 5.9%
3Com Corp. (a) 15,220 93,755
Advanced Fibre Communications,
Inc. (a) 1,500 25,050
Andrew Corp. (a) 3,100 52,545
Avaya, Inc. (a) 7,400 101,232
Comverse Technology, Inc. (a) 14,100 230,676
Foundry Networks, Inc. (a) 2,330 26,329
Polycom, Inc. (a) 8,220 156,838
-----------
Communications Equipment Total 686,425
COMPUTERS & PERIPHERALS - 1.1%
Lexmark International, Inc. (a) 1,380 124,835
-----------
Computers & Peripherals Total 124,835
ELECTRONIC EQUIPMENT & INSTRUMENTS - 7.8%
Agilent Technologies, Inc. (a) 6,800 183,668
Amphenol Corp., Class A (a) 8,560 270,582
CDW Corp. 2,810 175,597
Flextronics International Ltd. (a) 6,080 97,888
Symbol Technologies, Inc. 2,430 29,160
Vishay Intertechnology, Inc. (a) 8,580 149,292
-----------
Electronic Equipment & Instruments Total 906,187
SHARES VALUE ($)
---------- -----------
INTERNET SOFTWARE & SERVICES - 1.0%
Check Point Software Technologies
Ltd. (a) 5,020 117,619
-----------
Internet Software & Services Total 117,619
IT SERVICES - 0.8%
DST Systems, Inc. (a) 2,150 94,922
-----------
IT Services Total 94,922
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.9%
Altera Corp. (a) 4,460 89,245
Amkor Technology, Inc. (a) 5,590 45,167
ARM Holdings PLC, ADR 9,530 58,705
ASML Holding NV, N.Y. Registered
Shares (a) 7,680 119,424
Fairchild Semiconductor International,
Inc. (a) 6,600 128,502
Microchip Technology, Inc. 6,720 188,294
National Semiconductor Corp. (a) 2,780 113,396
NVIDIA Corp. (a) 3,640 74,766
Teradyne, Inc. (a) 3,810 77,648
United Microelectronics Corp., ADR (a) 28,360 147,472
-----------
Semiconductors & Semiconductor
Equipment Total 1,042,619
SOFTWARE - 10.6%
Amdocs Ltd. (a) 7,990 212,134
BEA Systems, Inc. (a) 7,870 89,797
BMC Software, Inc. (a) 4,720 81,656
Fair Isaac Corp. 5,250 177,030
Hyperion Solutions Corp. (a) 1,500 57,570
Mercury Interactive Corp. (a) 3,490 148,499
Novell, Inc. (a) 10,880 104,883
Siebel Systems, Inc. (a) 9,480 97,454
Symantec Corp. (a) 2,750 123,887
Synopsys, Inc. (a) 900 24,057
VERITAS Software Corp. (a) 4,780 127,483
-----------
Software Total 1,244,450
-----------
INFORMATION TECHNOLOGY TOTAL 4,217,057
MATERIALS - 1.8%
CHEMICALS - 0.7%
Potash Corp. of Saskatchewan, Inc. 1,060 86,348
-----------
Chemicals Total 86,348
METALS & MINING - 1.1%
Peabody Energy Corp. 2,600 121,914
-----------
Metals & Mining Total 121,914
-----------
MATERIALS TOTAL 208,262
See notes to investment portfolio.
15
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Aggressive Growth Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATION SERVICES - 1.0%
WIRELESS TELECOMMUNICATION SERVICES - 1.0%
Nextel Partners, Inc., Class A (a) 8,550 114,142
-----------
Wireless Telecommunication Services Total 114,142
-----------
TELECOMMUNICATION SERVICES TOTAL 114,142
TOTAL COMMON STOCKS
(Cost of $9,698,380) 11,452,893
INVESTMENT COMPANY - 0.5%
iShares MSCI Japan Index Fund
(Cost of $55,790) 5,990 60,739
-----------
TOTAL INVESTMENTS - 98.6%
(Cost of $9,754,170) (b) 11,513,632
OTHER ASSETS & LIABILITIES, NET - 1.4% 157,080
NET ASSETS - 100.0% 11,670,712
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Cost for both financial statement and federal income tax purposes is the
same.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
See notes to financial statements.
16
INVESTMENT PORTFOLIO____________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - 98.0%
CONSUMER DISCRETIONARY - 8.1%
MEDIA - 4.3%
Univision Communications, Inc.,
Class A (a) 197,000 6,668,450
Viacom, Inc., Class B 181,872 7,029,353
-----------
Media Total 13,697,803
MULTILINE RETAIL - 1.9%
Kohl's Corp. (a) 148,000 6,184,920
-----------
Multiline Retail Total 6,184,920
SPECIALTY RETAIL - 1.9%
Lowe's Companies, Inc. 114,000 5,934,840
-----------
Specialty Retail Total 5,934,840
-----------
CONSUMER DISCRETIONARY TOTAL 25,817,563
CONSUMER STAPLES - 9.8%
FOOD & STAPLES RETAILING - 5.6%
Walgreen Co. 213,000 7,344,240
Wal-Mart Stores, Inc. 184,800 10,533,600
-----------
Food & Staples Retailing Total 17,877,840
HOUSEHOLD PRODUCTS - 4.2%
Colgate-Palmolive Co. 110,000 6,366,800
Procter & Gamble Co. 64,500 6,820,875
-----------
Household Products Total 13,187,675
-----------
CONSUMER STAPLES TOTAL 31,065,515
ENERGY - 6.4%
ENERGY EQUIPMENT & SERVICES - 3.6%
Nabors Industries Ltd. (a) 185,000 8,206,600
Noble Corp. (a) 90,000 3,344,400
-----------
Energy Equipment & Services Total 11,551,000
OIL & GAS - 2.8%
Exxon Mobil Corp. 206,000 8,765,300
-----------
Oil & Gas Total 8,765,300
-----------
ENERGY TOTAL 20,316,300
FINANCIALS - 20.5%
CAPITAL MARKETS - 3.9%
Lehman Brothers Holdings, Inc. 87,775 6,442,685
Merrill Lynch & Co., Inc. 111,030 6,021,157
-----------
Capital Markets Total 12,463,842
COMMERCIAL BANKS - 2.4%
Bank of America Corp. (b) 94,300 7,590,207
-----------
Commercial Banks Total 7,590,207
SHARES VALUE ($)
---------- -----------
DIVERSIFIED FINANCIAL SERVICES - 3.2%
Citigroup, Inc. 215,155 10,346,804
-----------
Diversified Financial Services Total 10,346,804
INSURANCE - 8.5%
American International Group, Inc. 121,854 8,730,839
Chubb Corp. 98,600 6,803,400
RenaissanceRe Holdings Ltd. 106,380 5,605,162
XL Capital Ltd., Class A 77,800 5,940,030
-----------
Insurance Total 27,079,431
THRIFTS & MORTGAGE FINANCE - 2.5%
Fannie Mae 69,200 4,755,424
New York Community Bancorp, Inc. 127,333 3,192,238
-----------
Thrifts & Mortgage Finance Total 7,947,662
-----------
FINANCIALS TOTAL 65,427,946
HEALTH CARE - 18.7%
BIOTECHNOLOGY - 1.7%
Amgen, Inc. (a) 93,800 5,278,126
-----------
Biotechnology Total 5,278,126
HEALTH CARE EQUIPMENT & SUPPLIES - 7.2%
Medtronic, Inc. 139,500 7,039,170
St. Jude Medical, Inc. (a) 107,500 8,197,950
Zimmer Holdings, Inc. (a) 96,500 7,705,525
-----------
Health Care Equipment & Supplies Total 22,942,645
HEALTH CARE PROVIDERS & SERVICES - 2.1%
Express Scripts, Inc., Class A (a) 86,500 6,689,910
-----------
Health Care Providers & Services Total 6,689,910
PHARMACEUTICALS - 7.7%
AstraZeneca PLC, ADR 130,000 6,220,500
Eli Lilly & Co. 81,000 5,978,610
Pfizer, Inc. 206,250 7,375,500
Teva Pharmaceutical Industries Ltd.,
ADR 80,000 4,924,800
-----------
Pharmaceuticals Total 24,499,410
-----------
HEALTH CARE TOTAL 59,410,091
INDUSTRIALS - 12.3%
COMMERCIAL SERVICES & SUPPLIES - 1.9%
Waste Management, Inc. 216,900 6,159,960
-----------
Commercial Services & Supplies Total 6,159,960
ELECTRICAL EQUIPMENT - 2.0%
Emerson Electric Co. 106,300 6,401,386
-----------
Electrical Equipment Total 6,401,386
INDUSTRIAL CONGLOMERATES - 2.0%
General Electric Co. 211,910 6,346,705
-----------
Industrial Conglomerates Total 6,346,705
See notes to investment portfolio.
17
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (continued)
MACHINERY - 6.4%
Deere & Co. 87,000 5,919,480
Eaton Corp. 116,000 6,888,080
Illinois Tool Works, Inc. 87,000 7,500,270
-----------
Machinery Total 20,307,830
-----------
INDUSTRIALS TOTAL 39,215,881
INFORMATION TECHNOLOGY - 20.4%
COMMUNICATIONS EQUIPMENT - 2.2%
Cisco Systems, Inc. (a) 342,700 7,152,149
-----------
Communications Equipment Total 7,152,149
COMPUTERS & PERIPHERALS - 5.3%
Dell, Inc. (a) 100,000 3,471,000
Hewlett-Packard Co. 215,000 4,235,500
Lexmark International, Inc. (a) 68,000 6,151,280
Network Appliance, Inc. (a) 165,000 3,072,300
-----------
Computers & Peripherals Total 16,930,080
IT SERVICES - 2.0%
Affiliated Computer Services, Inc.,
Class A (a) 133,000 6,450,500
-----------
IT Services Total 6,450,500
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.1%
Intel Corp. 240,000 6,175,200
National Semiconductor Corp. (a) 122,000 4,976,380
Texas Instruments, Inc. 216,975 5,446,072
Xilinx, Inc. (a) 83,000 2,791,290
-----------
Semiconductors & Semiconductor
Equipment Total 19,388,942
SOFTWARE - 4.8%
Electronic Arts, Inc. (a) 72,000 3,644,640
Microsoft Corp. 297,300 7,720,881
Symantec Corp. (a) 85,000 3,829,250
-----------
Software Total 15,194,771
-----------
INFORMATION TECHNOLOGY TOTAL 65,116,442
MATERIALS - 1.8%
PAPER & FOREST PRODUCTS - 1.8%
International Paper Co. 140,500 5,664,960
-----------
Paper & Forest Products Total 5,664,960
-----------
MATERIALS TOTAL 5,664,960
TOTAL COMMON STOCKS
(Cost of $251,062,265) 312,034,698
PAR (S) VALUE ($)
---------- -----------
SHORT-TERM OBLIGATION - 2.0%
Repurchase agreement with State
Street Bank & Trust Co., dated
04/30/04, due 05/03/04 at 0.880%,
collateralized by a U.S. Treasury
Bond maturing 02/15/26,
market value $6,656,741
(repurchase proceeds $6,521,478)
(Cost of $6,521,000) 6,521,000 6,521,000
-----------
TOTAL INVESTMENTS - 100.0%
(COST OF $257,583,265) (c) 318,555,698
OTHER ASSETS & LIABILITIES, NET - 0.0% (28,555)
NET ASSETS - 100.0% 318,527,143
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Investments in affiliates during the six months ended April 30, 2004:
Security Name: Bank of America Corp. (As a result of a merger effective
April 1, 2004, Bank of America Corp. became the parent company of the
Investment Advisor.)
Shares as of 10/31/03: 86,300
Shares bought: 41,500
Shares sold: (33,500)
Shares as of 04/30/04: 94,300
Net realized gain: $ 342,790
Dividend income earned: $ 117,280
Value at end of period: $7,590,207
(c) Cost for both financial statement and federal income tax purposes is the
same.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
See notes to financial statements.
18
INVESTMENT PORTFOLIO____________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund II
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - 98.8%
CONSUMER DISCRETIONARY - 8.3%
MEDIA - 4.5%
Univision Communications, Inc.,
Class A (a) 28,530 965,740
Viacom, Inc., Class B 26,800 1,035,820
-----------
Media Total 2,001,560
MULTILINE RETAIL - 1.9%
Kohl's Corp. (a) 20,400 852,516
-----------
Multiline Retail Total 852,516
SPECIALTY RETAIL - 1.9%
Lowe's Companies, Inc. 16,600 864,196
-----------
Specialty Retail Total 864,196
-----------
CONSUMER DISCRETIONARY TOTAL 3,718,272
CONSUMER STAPLES - 9.8%
FOOD & STAPLES RETAILING - 5.5%
Walgreen Co. 28,500 982,680
Wal-Mart Stores, Inc. 26,170 1,491,690
-----------
Food & Staples Retailing Total 2,474,370
HOUSEHOLD PRODUCTS - 4.3%
Colgate-Palmolive Co. 15,500 897,140
Procter & Gamble Co. 9,500 1,004,625
-----------
Household Products Total 1,901,765
-----------
CONSUMER STAPLES TOTAL 4,376,135
ENERGY - 6.5%
ENERGY EQUIPMENT & SERVICES - 3.6%
Nabors Industries Ltd. (a) 26,400 1,171,104
Noble Corp. (a) 12,500 464,500
-----------
Energy Equipment & Services Total 1,635,604
OIL & GAS - 2.9%
Exxon Mobil Corp. 30,000 1,276,500
-----------
Oil & Gas Total 1,276,500
-----------
ENERGY TOTAL 2,912,104
FINANCIALS - 19.8%
CAPITAL MARKETS - 4.0%
Lehman Brothers Holdings, Inc. 12,425 911,995
Merrill Lynch & Co., Inc. 16,700 905,641
-----------
Capital Markets Total 1,817,636
COMMERCIAL BANKS - 1.8%
Bank of America Corp. (b) 10,300 829,047
-----------
Commercial Banks Total 829,047
SHARES VALUE ($)
---------- -----------
DIVERSIFIED FINANCIAL SERVICES - 3.2%
Citigroup, Inc. 29,595 1,423,224
-----------
Diversified Financial Services Total 1,423,224
INSURANCE - 8.4%
American International Group, Inc. 17,463 1,251,224
Chubb Corp. 13,350 921,150
RenaissanceRe Holdings Ltd. 14,900 785,081
XL Capital Ltd., Class A 10,500 801,675
-----------
Insurance Total 3,759,130
THRIFTS & MORTGAGE FINANCE - 2.4%
Fannie Mae 9,085 624,321
New York Community Bancorp, Inc. 17,766 445,394
-----------
Thrifts & Mortgage Finance Total 1,069,715
-----------
FINANCIALS TOTAL 8,898,752
HEALTH CARE - 19.1%
BIOTECHNOLOGY - 1.8%
Amgen, Inc. (a) 14,400 810,288
-----------
Biotechnology Total 810,288
HEALTH CARE EQUIPMENT & SUPPLIES - 7.3%
Medtronic, Inc. 19,300 973,878
St. Jude Medical, Inc. (a) 15,100 1,151,526
Zimmer Holdings, Inc. (a) 14,400 1,149,840
-----------
Health Care Equipment & Supplies Total 3,275,244
HEALTH CARE PROVIDERS & SERVICES - 2.1%
Express Scripts, Inc., Class A (a) 12,000 928,080
-----------
Health Care Providers & Services Total 928,080
PHARMACEUTICALS - 7.9%
AstraZeneca PLC, ADR 18,500 885,225
Eli Lilly & Co. 12,500 922,625
Pfizer, Inc. 30,387 1,086,639
Teva Pharmaceutical Industries Ltd.,
ADR 11,000 677,160
-----------
Pharmaceuticals Total 3,571,649
-----------
HEALTH CARE TOTAL 8,585,261
INDUSTRIALS - 13.2%
COMMERCIAL SERVICES & SUPPLIES - 2.3%
Waste Management, Inc. 35,600 1,011,040
-----------
Commercial Services & Supplies Total 1,011,040
ELECTRICAL EQUIPMENT - 2.2%
Emerson Electric Co. 16,700 1,005,674
-----------
Electrical Equipment Total 1,005,674
INDUSTRIAL CONGLOMERATES - 2.5%
General Electric Co. 37,155 1,112,792
-----------
Industrial Conglomerates Total 1,112,792
See notes to investment portfolio.
19
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund II
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (continued)
MACHINERY - 6.2%
Deere & Co. 12,000 816,480
Eaton Corp. 16,000 950,080
Illinois Tool Works, Inc. 12,000 1,034,520
-----------
Machinery Total 2,801,080
-----------
INDUSTRIALS TOTAL 5,930,586
INFORMATION TECHNOLOGY - 20.3%
COMMUNICATIONS EQUIPMENT - 2.2%
Cisco Systems, Inc. (a) 47,395 989,134
-----------
Communications Equipment Total 989,134
COMPUTERS & PERIPHERALS - 5.2%
Dell, Inc. (a) 14,000 485,940
Hewlett-Packard Co. 28,900 569,330
Lexmark International, Inc. (a) 9,300 841,278
Network Appliance, Inc. (a) 23,000 428,260
-----------
Computers & Peripherals Total 2,324,808
IT SERVICES - 1.8%
Affiliated Computer Services, Inc.,
Class A (a) 17,200 834,200
-----------
IT Services Total 834,200
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.2%
Intel Corp. 33,200 854,236
National Semiconductor Corp. (a) 18,000 734,220
Texas Instruments, Inc. 29,350 736,685
Xilinx, Inc. (a) 13,700 460,731
-----------
Semiconductors & Semiconductor
Equipment Total 2,785,872
SOFTWARE - 4.9%
Electronic Arts, Inc. (a) 10,000 506,200
Microsoft Corp. 43,900 1,140,083
Symantec Corp. (a) 12,000 540,600
-----------
Software Total 2,186,883
-----------
INFORMATION TECHNOLOGY TOTAL 9,120,897
MATERIALS - 1.8%
PAPER & FOREST PRODUCTS - 1.8%
International Paper Co. 20,100 810,432
-----------
Paper & Forest Products Total 810,432
-----------
MATERIALS TOTAL 810,432
TOTAL COMMON STOCKS
(Cost of $39,222,654) 44,352,439
PAR ($) VALUE ($)
---------- -----------
SHORT-TERM OBLIGATION - 1.6%
Repurchase agreement with State
Street Bank & Trust Co., dated
04/30/04, due 05/03/04 at 0.880%,
collateralized by a U.S. Treasury
Bond maturing 02/15/26,
market value $714,781
(repurchase proceeds $700,051)
(Cost of $700,000) 700,000 700,000
-----------
TOTAL INVESTMENTS - 100.4%
(Cost of $39,922,654) (c) 45,052,439
OTHER ASSETS & LIABILITIES, NET - (0.4)% (170,587)
NET ASSETS - 100.0% 44,881,852
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Investments in affiliates during the six months ended April 30, 2004:
Security Name: Bank of America Corp. (As a result of a merger effective
April 1, 2004, Bank of America Corp. became the parent company of the
Investment Advisor.)
Shares as of 10/31/03: 12,100
Shares bought: 2,800
Shares sold: (4,600)
Shares as of 04/30/04: 10,300
Net realized gain: $ 47,462
Dividend income earned: $ 16,480
Value at end of period: $ 829,047
(c) Cost for both financial statement and federal income tax purposes is the
same.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
See notes to financial statements.
20
INVESTMENT PORTFOLIO____________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Value Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - 98.4%
CONSUMER DISCRETIONARY - 8.5%
AUTOMOBILES - 0.9%
General Motors Corp. 14,104 668,812
-----------
Automobiles Total 668,812
HOTELS, RESTAURANTS & LEISURE - 1.9%
Harrah's Entertainment, Inc. 4,087 217,347
Wendy's International, Inc. 32,248 1,257,672
-----------
Hotels, Restaurants & Leisure Total 1,475,019
LEISURE EQUIPMENT & PRODUCTS - 0.4%
Mattel, Inc. 19,682 333,807
-----------
Leisure Equipment & Products Total 333,807
MEDIA - 4.2%
Clear Channel Communications, Inc. 15,359 637,245
Gannett Co., Inc. 4,735 410,430
McGraw-Hill Companies, Inc. 12,541 988,983
Time Warner, Inc. (a) 52,023 875,027
Viacom, Inc., Class A 9,288 363,718
-----------
Media Total 3,275,403
SPECIALTY RETAIL - 1.1%
Office Depot, Inc. (a) 50,875 890,821
-----------
Specialty Retail Total 890,821
-----------
CONSUMER DISCRETIONARY TOTAL 6,643,862
CONSUMER STAPLES - 9.7%
BEVERAGES - 1.9%
PepsiCo, Inc. 26,977 1,469,977
-----------
Beverages Total 1,469,977
FOOD & STAPLES RETAILING - 0.6%
Costco Wholesale Corp. 11,616 435,019
-----------
Food & Staples Retailing Total 435,019
FOOD PRODUCTS - 2.3%
ConAgra Foods, Inc. 33,087 955,883
Kraft Foods, Inc., Class A 25,803 849,177
-----------
Food Products Total 1,805,060
HOUSEHOLD PRODUCTS - 3.8%
Clorox Co. 17,447 903,406
Kimberly-Clark Corp. 15,607 1,021,478
Procter & Gamble Co. 10,073 1,065,220
-----------
Household Products Total 2,990,104
TOBACCO - 1.1%
Altria Group, Inc. 16,066 889,735
-----------
Tobacco Total 889,735
-----------
CONSUMER STAPLES TOTAL 7,589,895
SHARES VALUE ($)
---------- -----------
ENERGY - 12.7%
ENERGY EQUIPMENT & SERVICES - 2.1%
Halliburton Co. 56,369 1,679,796
-----------
Energy Equipment & Services Total 1,679,796
OIL & GAS - 10.6%
BP PLC, ADR 35,261 1,865,307
ConocoPhillips 26,651 1,900,216
Exxon Mobil Corp. 57,269 2,436,796
Marathon Oil Corp. 39,414 1,322,734
Royal Dutch Petroleum Co., N.Y.
Registered Shares 16,754 815,250
-----------
Oil & Gas Total 8,340,303
-----------
ENERGY TOTAL 10,020,099
FINANCIALS - 32.1%
CAPITAL MARKETS - 7.0%
Bank of New York Co., Inc. 36,265 1,056,762
Goldman Sachs Group, Inc. 6,219 600,133
J.P. Morgan Chase & Co. 31,949 1,201,282
Merrill Lynch & Co., Inc. 21,237 1,151,683
Morgan Stanley 18,006 925,328
State Street Corp. 11,200 546,560
-----------
Capital Markets Total 5,481,748
COMMERCIAL BANKS - 7.1%
Bank One Corp. 26,127 1,289,890
Fifth Third Bancorp 7,914 424,665
National City Corp. 16,847 584,085
U.S. Bancorp 61,273 1,571,040
Wells Fargo & Co. 31,214 1,762,342
-----------
Commercial Banks Total 5,632,022
CONSUMER FINANCE - 1.0%
MBNA Corp. 31,859 776,722
-----------
Consumer Finance Total 776,722
DIVERSIFIED FINANCIAL SERVICES - 4.9%
Citigroup, Inc. 80,619 3,876,968
-----------
Diversified Financial Services Total 3,876,968
INSURANCE - 9.0%
AFLAC, Inc. 11,241 474,707
Ambac Financial Group, Inc. 11,861 818,409
American International Group, Inc. 24,226 1,735,793
Berkshire Hathaway, Inc., Class A (a) 4 373,560
Lincoln National Corp. 15,798 709,014
Marsh & McLennan Companies, Inc. 8,838 398,594
St. Paul Travelers Companies, Inc. 21,177 861,269
Willis Group Holdings Ltd. 22,694 824,019
XL Capital Ltd., Class A 11,470 875,734
-----------
Insurance Total 7,071,099
See notes to investment portfolio.
21
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Value Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (continued)
REAL ESTATE - 1.5%
Archstone-Smith Trust, REIT 13,518 370,799
Kimco Realty Corp., REIT 9,678 413,638
Vornado Realty Trust, REIT 7,855 396,285
-----------
Real Estate Total 1,180,722
THRIFTS & MORTGAGE FINANCE - 1.6%
Countrywide Financial Corp. 7,260 430,518
Freddie Mac 14,203 829,455
-----------
Thrifts & Mortgage Finance Total 1,259,973
-----------
FINANCIALS TOTAL 25,279,254
HEALTH CARE - 4.8%
HEALTH CARE PROVIDERS & SERVICES - 2.1%
Aetna, Inc. 19,897 1,646,477
-----------
Health Care Providers & Services Total 1,646,477
PHARMACEUTICALS - 2.7%
Bristol-Myers Squibb Co. 14,003 351,475
Johnson & Johnson 7,424 401,119
Merck & Co., Inc. 8,883 417,501
Pfizer, Inc. 26,965 964,268
-----------
Pharmaceuticals Total 2,134,363
-----------
HEALTH CARE TOTAL 3,780,840
INDUSTRIALS - 10.6%
AEROSPACE & DEFENSE - 4.4%
General Dynamics Corp. 9,554 894,445
Honeywell International, Inc. 27,924 965,612
Raytheon Co. 20,279 654,201
United Technologies Corp. 11,018 950,413
-----------
Aerospace & Defense Total 3,464,671
COMMERCIAL SERVICES & SUPPLIES - 2.5%
Avery Dennison Corp. 7,361 472,797
Waste Management, Inc. 52,819 1,500,060
-----------
Commercial Services & Supplies Total 1,972,857
INDUSTRIAL CONGLOMERATES - 1.4%
Textron, Inc. 20,249 1,117,340
-----------
Industrial Conglomerates Total 1,117,340
MACHINERY - 2.3%
Deere & Co. 13,643 928,270
Dover Corp. 22,145 886,464
-----------
Machinery Total 1,814,734
-----------
INDUSTRIALS TOTAL 8,369,602
SHARES VALUE ($)
---------- -----------
INFORMATION TECHNOLOGY - 6.1%
COMMUNICATIONS EQUIPMENT - 1.0%
Nokia Oyj, ADR 54,227 759,720
-----------
Communications Equipment Total 759,720
COMPUTERS & PERIPHERALS - 2.0%
International Business Machines Corp. 8,673 764,698
Lexmark International, Inc., Class A (a) 9,394 849,781
-----------
Computers & Peripherals Total 1,614,479
IT SERVICES - 1.2%
Accenture Ltd., Class A (a) 38,158 907,016
-----------
IT Services Total 907,016
OFFICE ELECTRONICS - 1.5%
Xerox Corp. (a) 88,783 1,192,356
-----------
Office Electronics Total 1,192,356
SOFTWARE - 0.4%
Microsoft Corp. 12,820 332,935
-----------
Software Total 332,935
-----------
INFORMATION TECHNOLOGY TOTAL 4,806,506
MATERIALS - 3.2%
CHEMICALS - 1.4%
Air Products & Chemicals, Inc. 22,943 1,142,791
-----------
Chemicals Total 1,142,791
PAPER & FOREST PRODUCTS - 1.8%
MeadWestvaco Corp. 30,728 803,537
Weyerhaeuser Co. 9,934 588,093
-----------
Paper & Forest Products Total 1,391,630
-----------
MATERIALS TOTAL 2,534,421
TELECOMMUNICATION SERVICES - 5.0%
DIVERSIFIED TELECOMMUNICATION SERVICES - 5.0%
BellSouth Corp. 47,024 1,213,689
CenturyTel, Inc. 5,293 152,862
SBC Communications, Inc. 50,530 1,258,197
Verizon Communications, Inc. 35,139 1,326,146
-----------
Diversified Telecommunication Services Total 3,950,894
-----------
TELECOMMUNICATION SERVICES TOTAL 3,950,894
See notes to investment portfolio.
22
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Value Fund
SHARES VALUE ($)
---------- -----------
COMMON STOCKS - (CONTINUED)
UTILITIES - 5.7%
ELECTRIC UTILITIES - 5.7%
American Electric Power Co., Inc. 25,641 780,512
Consolidated Edison, Inc. 29,079 1,198,346
Entergy Corp. 11,531 629,593
Southern Co. 21,690 623,804
TXU Corp. 37,490 1,279,909
-----------
Electric Utilities Total 4,512,164
-----------
UTILITIES TOTAL 4,512,164
TOTAL COMMON STOCKS
(Cost of $65,055,715) 77,487,537
INVESTMENT COMPANY - 1.1%
iShares Russell 1000 Value Index Fund
(Cost of $838,433) 14,357 836,008
-----------
PAR ($) VALUE ($)
---------- -----------
SHORT-TERM OBLIGATION - 0.7%
Repurchase agreement with State
Street Bank & Trust Co., dated
04/30/04, due 05/03/04 at 0.880%,
collateralized by a U.S. Treasury
Bond maturing 02/15/26,
market value $572,916
(repurchase proceeds $560,041)
(Cost of $560,000) 560,000 560,000
-----------
TOTAL INVESTMENTS - 100.2%
(Cost of $66,454,148) (b) 78,883,545
OTHER ASSETS & LIABILITIES, NET - (0.2)% (175,554)
NET ASSETS - 100.0% 78,707,991
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Cost for both financial statement and federal income tax purposes is the
same.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See notes to financial statements.
23
STATEMENTS OF ASSETS AND LIABILITIES____________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
COLUMBIA
TAX-MANAGED COLUMBIA COLUMBIA COLUMBIA
AGGRESSIVE TAX-MANAGED TAX-MANAGED TAX-MANAGED
GROWTH GROWTH GROWTH VALUE
FUND ($) FUND ($) FUND II ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Unaffiliated investments, at cost (including short-term obligation) 9,754,170 252,230,462 39,406,612 66,454,148
Affiliated investment, at cost -- 5,352,803 516,042 --
----------- ----------- ----------- -----------
Unaffiliated investments, at value 11,513,632 310,965,491 44,223,392 78,883,545
Affiliated investment, at value -- 7,590,207 829,047 --
Cash 40,919 446 958 618
Receivable for:
Investments sold 327,842 -- -- --
Fund shares sold 1,340 941,624 1,659 20,314
Dividends 1,761 215,100 29,738 174,567
Interest -- 160 17 14
Expense reimbursement due from Investment Advisor/Administrator 8,019 39 9,796 --
Deferred Trustees' compensation plan 1,319 15,791 2,737 4,416
Other assets -- 30,665 7,673 10,908
----------- ----------- ----------- -----------
Total Assets 11,894,832 319,759,523 45,105,017 79,094,382
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for:
Investments purchased 115,516 -- -- --
Fund shares repurchased 44,587 552,830 113,480 202,380
Investment advisory fee 8,447 167,655 31,404 54,488
Administration fee 457 72,066 2,322 4,119
Transfer agent fee 12,427 187,485 27,030 46,465
Pricing and bookkeeping fees 831 14,140 409 4,082
Audit fee 12,509 12,905 12,509 14,918
Custody fee 501 -- 177 1,151
Legal fee 10,168 1,992 2,956 3,283
Registration fee 7,466 7,936 -- --
Distribution and service fees 7,883 199,580 30,141 51,089
Deferred Trustees' fees 1,319 15,791 2,737 4,416
Other liabilities 2,009 -- -- --
----------- ----------- ----------- -----------
Total Liabilities 224,120 1,232,380 223,165 386,391
NET ASSETS 11,670,712 318,527,143 44,881,852 78,707,991
- -------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Paid-in capital 23,571,007 433,449,567 70,535,283 90,392,288
Undistributed net investment income (accumulated net
investment loss) (120,551) (1,625,542) (252,979) 83,539
Accumulated net realized loss (13,539,206) (174,269,315) (30,530,237) (24,197,233)
Net unrealized appreciation on investments
1,759,462 60,972,433 5,129,785 12,429,397
----------- ----------- ----------- -----------
NET ASSETS 11,670,712 318,527,143 44,881,852 78,707,991
See notes to financial statements.
24
STATEMENTS OF ASSETS AND LIABILITIES____________________________________________
Columbia Tax-Managed Funds
COLUMBIA
TAX-MANAGED COLUMBIA COLUMBIA COLUMBIA
AGGRESSIVE TAX-MANAGED TAX-MANAGED TAX-MANAGED
GROWTH GROWTH GROWTH VALUE
FUND ($) FUND ($) FUND II ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A:
Net assets 2,763,338 68,935,414 7,044,508 15,762,645
Shares outstanding 359,210 5,037,354 810,217 1,442,083
Net asset value per share (a) 7.69 13.68 8.69 10.93
Maximum sales charge 5.75% 5.75% 5.75% 5.75%
Maximum offering price per share (b) 8.16 14.51 9.22 11.60
- -------------------------------------------------------------------------------------------------------------------------------
CLASS B:
Net assets 7,341,155 201,694,902 30,345,050 49,984,815
Shares outstanding 980,963 15,580,181 3,603,035 4,693,570
Net asset value and offering price per share (a) 7.48 12.95 8.42 10.65
- -------------------------------------------------------------------------------------------------------------------------------
CLASS C:
Net assets 1,496,162 29,500,621 6,419,941 12,915,642
Shares outstanding 199,994 2,279,209 763,949 1,212,926
Net asset value and offering price per share (a) 7.48 12.94 8.40 10.65
- -------------------------------------------------------------------------------------------------------------------------------
CLASS E:
Net assets -- 7,226,841 -- --
Shares outstanding -- 531,175 -- --
Net asset value per share (a) -- 13.61 -- --
Maximum sales charge -- 4.50% -- --
Maximum offering price per share (b) -- 14.25 -- --
- -------------------------------------------------------------------------------------------------------------------------------
CLASS F:
Net assets -- 10,706,376 -- --
Shares outstanding -- 825,967 -- --
Net asset value and offering price per share (a) -- 12.96 -- --
- -------------------------------------------------------------------------------------------------------------------------------
CLASS Z:
Net assets 70,057 462,989 1,072,353 44,889
Shares outstanding 9,072 33,395 122,259 4,066
Net asset value, offering and redemption price per share 7.72 13.86 8.77 11.04
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
25
STATEMENTS OF OPERATIONS________________________________________________________
For the Six Months Ended April 30, 2004 (unaudited) Columbia Tax-Managed Funds
COLUMBIA
TAX-MANAGED COLUMBIA COLUMBIA COLUMBIA
AGGRESSIVE TAX-MANAGED TAX-MANAGED TAX-MANAGED
GROWTH GROWTH GROWTH VALUE
FUND ($) FUND ($) FUND II ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends 17,632 1,585,959 225,115 962,470
Dividends from affiliates -- 117,280 16,480 --
Interest 1,144 34,884 4,895 6,929
Foreign withholding tax (131) (7,800) (1,110) (9,152)
----------- ----------- ----------- -----------
Total Investment Income 18,645 1,730,323 245,380 960,247
- -------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee 53,277 1,000,213 188,280 329,358
Administration fee 3,330 416,756 11,767 20,585
Service fee:
Class A 4,031 89,005 9,524 21,173
Class B 10,504 266,411 39,819 64,578
Class C 2,028 38,244 8,246 17,122
Class E -- 9,044 -- --
Class F -- 13,470 -- --
Distribution fee:
Class A 806 -- -- 4,235
Class B 31,512 799,232 119,458 193,735
Class C 6,083 114,733 24,738 51,366
Class E -- 3,617 -- --
Class F -- 40,410 -- --
Transfer agent fee 25,456 408,437 59,139 96,466
Pricing and bookkeeping fees 6,577 50,780 6,351 17,221
Trustees' fees 2,875 7,453 2,373 3,101
Custody fee 3,672 4,484 1,687 3,685
Audit fee 14,374 12,919 14,374 11,782
Registration fee 21,079 34,730 35,987 18,897
Non-recurring costs (See Note 8) 204 5,377 761 1,329
Other expenses 6,617 29,770 7,748 14,820
----------- ----------- ----------- -----------
Total Expenses 192,425 3,345,085 530,252 869,453
Fees and expenses waived or reimbursed by Investment
Advisor/Administrator (53,998) -- (33,518) --
Costs assumed by Investment Advisor (See Note 8) (204) (5,377) (761) (1,329)
Custody earnings credit (13) (1) (1) (2)
----------- ----------- ----------- -----------
Net Expenses 138,210 3,339,707 495,972 868,122
----------- ----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) (119,565) (1,609,384) (250,592) 92,125
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Unaffiliated investments 971,287 15,957,765 1,807,336 2,809,339
Affiliated investment -- 342,829 47,467 --
Foreign currency transactions (753) -- -- --
Net realized loss on the disposal of investments
in violation of restrictions (See Note 6) -- -- -- --
----------- ----------- ----------- -----------
Net realized gain 970,534 16,300,594 1,854,803 2,809,339
Net change in unrealized appreciation/depreciation on investments (997,243) (355,514) 332,831 4,173,738
----------- ----------- ----------- -----------
NET GAIN (LOSS) (26,709) 15,945,080 2,187,634 6,983,077
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS (146,274) 14,335,696 1,937,042 7,075,202
----------- ----------- ----------- -----------
See notes to financial statements.
26
STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________
Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED
AGGRESSIVE GROWTH FUND GROWTH FUND
-------------------------- -------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 ($) 2004 ($) 2003 ($)
- -------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment loss (119,565) (219,729) (1,609,384) (2,735,267)
Net realized gain (loss) on investments and foreign currency
transactions 970,534 39,575 16,300,594 (14,431,179)
Net realized loss on the disposal of investments in violation of
restrictions -- -- -- --
Net change in unrealized appreciation/depreciation on investments (997,243) 2,524,929 (355,514) 73,959,918
----------- ----------- ----------- -----------
Net Increase (Decrease) from Operations (146,274) 2,344,775 14,335,696 56,793,472
- -------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Class A:
Subscriptions 405,061 2,125,101 6,921,933 6,638,498
Redemptions (1,470,988) (1,688,965) (10,975,605) (15,690,904)
----------- ----------- ----------- -----------
Net Increase (Decrease) (1,065,927) 436,136 (4,053,672) (9,052,406)
----------- ----------- ----------- -----------
Class B:
Subscriptions 107,457 671,525 2,060,392 6,283,356
Redemptions (1,290,785) (1,759,818) (22,921,588) (46,212,326)
----------- ----------- ----------- -----------
Net Decrease (1,183,328) (1,088,293) (20,861,196) (39,928,970)
----------- ----------- ----------- -----------
Class C:
Subscriptions 46,861 81,847 1,445,699 2,908,437
Redemptions (167,653) (418,954) (3,253,978) (8,956,641)
----------- ----------- ----------- -----------
Net Decrease (120,792) (337,107) (1,808,279) (6,048,204)
----------- ----------- ----------- -----------
Class E:
Subscriptions -- -- 68,915 105,637
Redemptions -- -- (60,524) (150,292)
----------- ----------- ----------- -----------
Net Increase (Decrease) -- -- 8,391 (44,655)
----------- ----------- ----------- -----------
Class F:
Subscriptions -- -- 172,637 197,836
Redemptions -- -- (162,420) (330,673)
----------- ----------- ----------- -----------
Net Increase (Decrease) -- -- 10,217 (132,837)
----------- ----------- ----------- -----------
Class Z:
Subscriptions 54,248 11,910 2,300 482,349
Redemptions (133) -- (1,735) (154,915)
----------- ----------- ----------- -----------
Net Increase 54,115 11,910 565 327,434
----------- ----------- ----------- -----------
Net Decrease from Share Transactions (2,315,932) (977,354) (26,703,974) (54,879,638)
----------- ----------- ----------- -----------
Total Increase (Decrease) in Net Assets (2,462,206) 1,367,421 (12,368,278) 1,913,834
----------- ----------- ----------- -----------
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 14,132,918 12,765,497 330,895,421 328,981,587
----------- ----------- ----------- -----------
End of period 11,670,712 14,132,918 318,527,143 330,895,421
----------- ----------- ----------- -----------
Accumulated net investment loss (120,551) (986) (1,625,542) (16,158)
----------- ----------- ----------- -----------
See notes to financial statements.
27
STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________
Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED
GROWTH FUND II VALUE FUND
-------------------------- -------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 ($) 2004 ($) 2003 ($)
- -------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) (250,592) (417,616) 92,125 144,918
Net realized gain (loss) on investments 1,854,803 (2,632,362) 2,809,339 (11,323,355)
Net realized loss on the disposal of investments in
violation of restrictions -- -- -- --
Net change in unrealized appreciation/depreciation on investments 332,831 10,813,804 4,173,738 21,142,163
----------- ----------- ----------- -----------
Net Increase from Operations 1,937,042 7,763,826 7,075,202 9,963,726
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income:
Class A -- -- (137,968) --
Class B -- -- (9,525) --
Class C -- -- (2,579) --
Class Z -- -- (379) --
----------- ----------- ----------- -----------
Total Distributions Declared to Shareholders -- -- (150,451) --
- -------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Class A:
Subscriptions 531,579 1,444,961 804,771 3,592,454
Distributions reinvested -- -- 118,332 --
Redemptions (1,341,948) (2,899,754) (3,278,682) (8,719,434)
----------- ----------- ----------- -----------
Net Decrease (810,369) (1,454,793) (2,355,579) (5,126,980)
----------- ----------- ----------- -----------
Class B:
Subscriptions 771,196 1,882,364 1,169,818 3,240,450
Distributions reinvested -- -- 8,561 --
Redemptions (3,287,533) (6,472,623) (5,661,572) (11,898,465)
----------- ----------- ----------- -----------
Net Decrease (2,516,337) (4,590,259) (4,483,193) (8,658,015)
----------- ----------- ----------- -----------
Class C:
Subscriptions 467,645 713,546 586,850 1,542,556
Distributions reinvested -- -- 2,136 --
Redemptions (750,236) (1,816,426) (2,524,230) (7,135,678)
----------- ----------- ----------- -----------
Net Decrease (282,591) (1,102,880) (1,935,244) (5,593,122)
----------- ----------- ----------- -----------
Class Z:
Subscriptions 210,600 41,354 10,000 28,960
Distributions reinvested -- -- 379 --
Redemptions (2,998) (248,762) -- --
----------- ----------- ----------- -----------
Net Increase (Decrease) 207,602 (207,408) 10,379 28,960
----------- ----------- ----------- -----------
Net Decrease from Share Transactions (3,401,695) (7,355,340) (8,763,637) (19,349,157)
----------- ----------- ----------- -----------
Total Increase (Decrease) in Net Assets (1,464,653) 408,486 (1,838,886) (9,385,431)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 46,346,505 45,938,019 80,546,877 89,932,308
----------- ----------- ----------- -----------
End of period 44,881,852 46,346,505 78,707,991 80,546,877
----------- ----------- ----------- -----------
Undistributed net investment income (accumulated net
investment loss (252,979) (2,387) 83,539 141,865
----------- ----------- ----------- -----------
See notes to financial statements.
28
STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________
Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED
AGGRESSIVE GROWTH FUND GROWTH FUND
-------------------------- -------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS: 2004 2003 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
CHANGES IN SHARES:
Class A:
Subscriptions 50,981 306,687 502,282 560,514
Redemptions (182,873) (254,160) (794,712) (1,375,186)
----------- ----------- ----------- -----------
Net Increase (Decrease) (131,892) 52,527 (292,430) (814,672)
----------- ----------- ----------- -----------
Class B:
Subscriptions 13,709 105,120 158,219 587,037
Redemptions (164,040) (274,407) (1,755,744) (4,268,593)
----------- ----------- ----------- -----------
Net Decrease (150,331) (169,287) (1,597,525) (3,681,556)
----------- ----------- ----------- -----------
Class C:
Subscriptions 5,824 12,186 111,408 270,413
Redemptions (21,388) (64,957) (249,432) (820,762)
----------- ----------- ----------- -----------
Net Decrease (15,564) (52,771) (138,024) (550,349)
----------- ----------- ----------- -----------
Class E:
Subscriptions -- -- 5,013 8,644
Redemptions -- -- (4,455) (13,658)
----------- ----------- ----------- -----------
Net Increase (Decrease) -- -- 558 (5,014)
----------- ----------- ----------- -----------
Class F:
Subscriptions -- -- 13,372 17,598
Redemptions -- -- (12,350) (29,586)
----------- ----------- ----------- -----------
Net Increase (Decrease) -- -- 1,022 (11,988)
----------- ----------- ----------- -----------
Class Z:
Subscriptions 6,763 1,861 174 40,880
Redemptions (16) -- (121) (14,872)
----------- ----------- ----------- -----------
Net Increase 6,747 1,861 53 26,008
----------- ----------- ----------- -----------
See notes to financial statements.
29
STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________
Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED
GROWTH FUND II VALUE FUND
-------------------------- -------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS: 2004 2003 2004 2003
-------------------------------------------------------------------------------------------------------------------------------
CHANGES IN SHARES:
Class A:
Subscriptions 60,124 201,123 73,703 393,479
Issued for distributions reinvested -- -- 11,164 --
Redemptions (152,230) (407,311) (298,845) (961,953)
----------- ----------- ----------- -----------
Net Decrease (92,106) (206,188) (213,978) (568,474)
----------- ----------- ----------- -----------
Class B:
Subscriptions 91,219 266,693 112,100 359,993
Issued for distributions reinvested -- -- 827 --
Redemptions (385,730) (911,307) (534,920) (1,316,603)
----------- ----------- ----------- -----------
Net Decrease (294,511) (644,614) (421,993) (956,610)
----------- ----------- ----------- -----------
Class C:
Subscriptions 55,156 100,076 55,308 169,090
Issued for distributions reinvested -- -- 206 --
Redemptions (88,825) (258,061) (238,483) (785,239)
----------- ----------- ----------- -----------
Net Decrease (33,669) (157,985) (182,969) (616,149)
----------- ----------- ----------- -----------
Class Z:
Subscriptions 23,563 5,807 920 3,007
Issued for distributions reinvested -- -- 35 --
Redemptions (332) (34,998) -- --
----------- ----------- ----------- -----------
Net Increase (Decrease) 23,231 (29,191) 955 3,007
----------- ----------- ----------- -----------
See notes to financial statements.
30
NOTES TO FINANCIAL STATEMENTS___________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
NOTE 1. ORGANIZATION
Columbia Funds Trust I (the "Trust") is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. Information presented in these financial
statements pertains to the following diversified portfolios (individually
referred to as a "Fund", collectively referred to as the "Funds"):
Columbia Tax-Managed Aggressive Growth Fund
Columbia Tax-Managed Growth Fund
Columbia Tax-Managed Growth Fund II
Columbia Tax-Managed Value Fund
INVESTMENT GOALS
Each Fund seeks long-term capital growth while reducing shareholder exposure to
taxes. Columbia Tax-Managed Aggressive Growth Fund invests primarily in common
stocks of small capitalization and middle capitalization companies that the
Fund's investment advisor believes have long-term growth potential. Columbia
Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund II and Columbia
Tax-Managed Value Fund invest primarily in large capitalization and middle
capitalization stocks.
FUND SHARES
The Funds may issue an unlimited number of shares. Columbia Tax-Managed
Aggressive Growth Fund, Columbia Tax-Managed Growth Fund II and Columbia
Tax-Managed Value Fund each offer four classes of shares: Class A, Class B,
Class C and Class Z. Columbia Tax-Managed Growth Fund offers six classes of
shares: Class A, Class B, Class C, Class E, Class F and Class Z. Each share
class has its own sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge 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 E and Class F shares are trust shares.
Such shares are held in an irrevocable trust on behalf of the shareholder until
a trust termination date, as specified by the shareholder. At such time, the
shares pass to the shareholder's beneficiary. Class E shares are subject to a
maximum front-end sales charge of 4.50% based on the amount of initial
investment. Class E shares purchased without an initial sales charge are subject
to a 1.00% CDSC on shares sold within eighteen months on an original purchase of
$500,000 to $5 million. Class F shares are subject to a maximum CDSC of 5.00%
based upon the holding period after purchase. Class F shares will convert into
Class E shares after eight years. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in each Fund's prospectus.
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 Funds in the preparation of their financial statements.
SECURITY VALUATION
Equity securities and exchange traded funds are valued at the last sale price on
the principal exchange on which they trade, except for securities traded on the
NASDAQ, which are valued at the NASDAQ official close price. 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
31
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
believes are not appropriate, are valued at fair value as determined in good
faith under consistently applied procedures established by and under the general
supervision of the Board of Trustees.
SECURITY TRANSACTIONS
Security transactions are accounted for on the 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
Each Fund may engage in repurchase agreement transactions with institutions that
the Funds' investment advisor has determined are creditworthy. Each Fund,
through its custodian, receives delivery of underlying securities
collateralizing a repurchase agreement. Collateral is at least equal, at all
times, to 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 each Fund's ability to dispose of the underlying securities
and a possible decline in the value of the underlying securities during the
period while the Funds seek to assert their rights.
FOREIGN CURRENCY TRANSACTIONS
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Funds do not distinguish that portion of
gains (losses) on investments which is due to changes in foreign exchange rates
from that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains (losses) on
investments.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statements of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Funds on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
Each Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, 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, each Fund will not be subject to federal
excise tax. Therefore, no federal income or excise tax provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
The Funds are managed using investment strategies that are designed to reduce
(but not eliminate) the Funds' payment of taxable distributions to shareholders.
From time to time, the Funds expect to distribute taxable income and capital
gains. Distributions to shareholders are recorded on ex-date. Net realized
capital gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
Unrealized appreciation and depreciation at April 30, 2004, based on cost of
investments for federal income tax purposes, was:
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ --------------
Columbia Tax-Managed
Aggressive Growth Fund $ 2,151,361 $ (391,899) $ 1,759,462
Columbia Tax-Managed
Growth Fund 67,159,802 (6,187,369) 60,972,433
Columbia Tax-Managed
Growth Fund II 7,216,903 (2,087,118) 5,129,785
Columbia Tax-Managed
Value Fund 13,520,348 (1,090,951) 12,429,397
The following capital loss carryforwards, determined as of October 31, 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:
32
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
COLUMBIA COLUMBIA COLUMBIA
TAX-MANAGED TAX-MANAGED TAX-MANAGED COLUMBIA
AGGRESSIVE GROWTH GROWTH TAX-MANAGED
EXPIRING IN: GROWTH FUND FUND FUND II VALUE FUND
- ----------- ------------ ------------- ------------ ------------
2005 $ -- $ 559,490 $ -- $ --
2006 -- 9,583,819 -- --
2007 -- 1,695,876 -- --
2008 599,602 16,678,334 1,602,453 96,769
2009 11,034,417 90,676,212 18,063,082 --
2010 2,819,769 55,723,137 9,577,005 15,493,033
2011 -- 12,700,626 2,648,834 11,272,748
- ----------------------------------------------------------------------------
Total $ 14,453,788 $ 187,617,494 $ 31,891,374 $ 26,862,550
Capital loss carryforwards of $49,141 were utilized and/or expired during the
year ended October 31, 2003 for the Columbia Tax-Managed Aggressive Growth Fund.
For the Columbia Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund II
and Columbia Tax-Managed Value Fund, no capital loss carryforwards were utilized
and/or expired for the year ended October 31, 2003. Expired capital loss
carryforwards are recorded as a reduction of paid-in capital.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Funds. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary
of FleetBoston Financial Corporation ("FleetBoston"). On April 1, 2004,
FleetBoston, including the Funds' investment advisor and distributor, was
acquired by Bank of America Corporation ("BOA"). The merger did not change the
way the Funds are managed, the investment personnel assigned to manage the Funds
or the fees paid by the Funds.
INVESTMENT ADVISORY FEE
Columbia receives a monthly investment advisory fee based on each Fund's average
daily net assets at the following annual rates:
FEES ON FEES ON FEES ON
AVERAGE DAILY AVERAGE DAILY AVERAGE DAILY
NET ASSETS NET ASSETS NET ASSETS
FIRST NEXT OVER
$500 MILLION $500 MILLION $1 BILLION
------------- ------------- -------------
Columbia Tax-Managed
Aggressive Growth Fund 0.80% 0.75% 0.70%
Columbia Tax-Managed Growth
Fund 0.60% 0.55% 0.50%
Columbia Tax-Managed Growth
Fund II 0.80% 0.75% 0.70%
Columbia Tax-Managed Value
Fund 0.80% 0.75% 0.70%
SUB-ADVISORY FEE
Stein Roe Investment Counsel ("SRIC") has been retained by Columbia as
sub-advisor to Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth
Fund II. As sub-advisor, SRIC is responsible for the daily investment operations
of the two funds. Columbia, out of the investment advisory fee it receives, pays
SRIC a monthly sub-advisory fee equal to a base rate of 0.20% annually of the
average daily net assets for each of the two funds. This base fee of 0.20% can
be adjusted quarterly to an annual rate as high as 0.25% or to an annual rate as
low as 0.15% depending on the investment performance, as determined by
Morningstar, Inc.'s Large Blend category, of each Fund over a specified period
of time. In addition, Columbia's contract with SRIC provides that SRIC shall not
receive a fee less than $350,000 per annum in the aggregate for managing both
Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II.
ADMINISTRATION FEE
Columbia provides administrative and other services to the Funds for a monthly
administration fee based on each Fund's average daily net assets at the
following annual rates:
Columbia Tax-Managed Aggressive Growth Fund 0.05%
Columbia Tax-Managed Growth Fund 0.25%
Columbia Tax-Managed Growth Fund II 0.05%
Columbia Tax-Managed Value Fund 0.05%
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Funds 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 Funds, Columbia receives
from each Fund an annual flat fee of $10,000 paid monthly, and in any month that
a Fund's average daily net assets exceed $50 million, an additional monthly fee.
The additional fee rate is calculated by taking into account the fees payable to
State Street under the Outsourcing Agreement. This rate is applied to the
average daily net assets of the Fund for that month. Each Fund also pays
additional
33
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
fees for pricing services. For the six months ended April 30, 2004, the
annualized effective pricing and bookkeeping fee rates for the Funds were as
follows:
Columbia Tax-Managed Aggressive Growth Fund 0.099%
Columbia Tax-Managed Growth Fund 0.030%
Columbia Tax-Managed Growth Fund II 0.027%
Columbia Tax-Managed Value Fund 0.042%
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly owned
subsidiary of BOA, provides shareholder services to the Funds. For such
services, the Transfer Agent receives a fee, paid monthly, at the annual rate of
$28.00 per open account. The Transfer Agent also receives reimbursement for
certain out-of-pocket expenses.
For the six months ended April 30, 2004, the Funds' annualized effective
transfer agent fee rates, inclusive of out-of-pocket fees, were as follows:
Columbia Tax-Managed Aggressive Growth Fund 0.38%
Columbia Tax-Managed Growth Fund 0.25%
Columbia Tax-Managed Growth Fund II 0.25%
Columbia Tax-Managed Value Fund 0.23%
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an indirect, wholly owned
subsidiary of BOA, is the principal underwriter of the Funds. For the six months
ended April 30, 2004, the Distributor has retained net underwriting discounts
and CDSC fees as follows:
FRONT-END
SALES CHARGE
------------------
CLASS A CLASS E
------- -------
Columbia Tax-Managed
Aggressive Growth Fund $ 834 $ --
Columbia Tax-Managed
Growth Fund 7,943 --
Columbia Tax-Managed
Growth Fund II 2,627 --
Columbia Tax-Managed
Value Fund 1,711 --
CDSC
------------------------------------------
CLASS A CLASS B CLASS C CLASS F
------- -------- ------- --------
Columbia Tax-Managed
Aggressive Growth Fund $ 50 $ 19,146 $ 27 $ --
Columbia Tax-Managed
Growth Fund -- 304,958 373 --
Columbia Tax-Managed
Growth Fund II -- 66,723 108 --
Columbia Tax-Managed
Value Fund -- 79,991 1,100 --
The Funds have adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service and distribution fee to the Distributor based on the average
daily net assets of each Fund at the following annual rates:
DISTRIBUTION FEES: CLASS A CLASS B CLASS C CLASS E CLASS F
- ------------------------- ------- ------- ------- ------- -------
Columbia Tax-Managed
Aggressive Growth Fund 0.05% 0.75% 0.75% N/A N/A
Columbia Tax-Managed
Growth Fund N/A 0.75% 0.75% 0.10% 0.75%
Columbia Tax-Managed
Growth Fund II N/A 0.75% 0.75% N/A N/A
Columbia Tax-Managed
Value Fund 0.05% 0.75% 0.75% N/A N/A
SERVICE FEES: CLASS A CLASS B CLASS C CLASS E CLASS F
- ------------------------- ------- ------- ------- ------- -------
Columbia Tax-Managed
Aggressive Growth Fund 0.25% 0.25% 0.25% N/A N/A
Columbia Tax-Managed
Growth Fund 0.25% 0.25% 0.25% 0.25% 0.25%
Columbia Tax-Managed
Growth Fund II 0.25% 0.25% 0.25% N/A N/A
Columbia Tax-Managed
Value Fund 0.25% 0.25% 0.25% N/A N/A
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
FEE WAIVERS
Columbia has voluntarily agreed to waive fees and reimburse the Funds for
certain expenses so that total expenses (exclusive of service fees, distribution
fees, brokerage commissions, interest, taxes and extraordinary expenses, if any)
would not exceed certain expense limitations. Columbia, at its discretion, may
revise or discontinue this arrangement any time. For the six months ended April
30, 2004, total expenses
34
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
were limited to the following percentages annually of the Funds'
average daily net assets:
AVERAGE DAILY AVERAGE DAILY
NET ASSETS NET ASSETS
FIRST OVER
$100 MILLION $100 MILLION
------------- -------------
Columbia Tax-Managed
Aggressive Growth Fund 1.25% 1.25%
Columbia Tax-Managed Growth Fund II 1.25% 1.50%
CUSTODY CREDITS
Each Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Funds could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if they had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Funds pay no compensation to their officers, all of whom are employees of
Columbia or its affiliates.
The Funds' Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Funds' assets.
OTHER
Columbia provides certain services to the Funds related to Sarbanes-Oxley
compliance. For the six months ended April 30, 2004, the Columbia Tax-Managed
Aggressive Growth Fund, Columbia Tax-Managed Growth Fund, Columbia Tax-Managed
Growth Fund II and Columbia Tax-Managed Value Fund paid $654, $904, $680 and
$708, respectively, to Columbia for such services. These amounts are included in
"Other expenses" on the Statements of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended April 30, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were as follows:
PURCHASES SALES
------------- ------------
Columbia Tax-Managed
Aggressive Growth Fund $ 6,282,278 $ 8,413,112
Columbia Tax-Managed
Growth Fund 67,277,381 91,664,008
Columbia Tax-Managed
Growth Fund II 9,318,250 12,179,325
Columbia Tax-Managed
Value Fund 16,869,378 22,979,190
NOTE 6. OTHER
During the six months ended April 30, 2004, Columbia Tax-Managed Growth Fund and
Columbia Tax-Managed Growth Fund II purchased shares of Bank of America Corp. in
violation of investment restrictions. The shares that caused the violation were
sold at a loss of $39 and $5 for Columbia Tax-Managed Growth Fund and Columbia
Tax-Managed Growth Fund II, respectively, and SRIC is in the process of
reimbursing the Funds.
NOTE 7. LINE OF CREDIT
The Funds and other affiliated funds participate in a
$350,000,000 credit facility, which is used for temporary or emergency purposes
to facilitate portfolio liquidity. Interest is charged to each Fund based on its
borrowings. In addition, each Fund has agreed to pay commitment fees on its
pro-rata portion of the unutilized line of credit. The commitment fee is
included in "Other expenses" on the Statements of Operations. For the six months
ended April 30, 2004, the Funds did not borrow under this arrangement.
NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
INDUSTRY FOCUS
The Funds may focus their investments in certain industries, subjecting them 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
35
________________________________________________________________________________
April 30, 2004 (unaudited) Columbia Tax-Managed Funds
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, among other things, 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.
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 fund.
In connection with the events described in detail above, various parties have
filed suit against certain funds, their Boards and/or FleetBoston (and
affiliated entities). These suits and certain regulatory investigations are
ongoing. Accordingly, an estimate of the financial impact of this litigation on
any fund, if any, cannot currently be made.
For the six months ended April 30, 2004, Columbia has assumed legal, consulting
services and Trustees' fees incurred by the Funds in connection with these
matters as follows:
Columbia Tax-Managed Aggressive Growth Fund $ 204
Columbia Tax-Managed Growth Fund 5,377
Columbia Tax-Managed Growth Fund II 761
Columbia Tax-Managed Value Fund 1,329
36
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Aggressive Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS A SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.82 $ 6.44 $ 7.01 $ 12.36 $ 11.59
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.05) (0.08) (0.09) (0.09) (0.04)
Net realized and unrealized gain (loss)
on investments and foreign currency (0.08) 1.46 (0.48) (5.26) 0.81
----------- --------- --------- --------- ---------
Total from investment operations (0.13) 1.38 (0.57) (5.35) 0.77
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 7.69 $ 7.82 $ 6.44 $ 7.01 $ 12.36
Total return (c)(d) (1.66)%(e) 21.43% (8.13)% (43.28)% 6.64%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.55%(g) 1.55% 1.55% 1.55% 1.55%(g)
Net investment loss (f) (1.26)%(g) (1.25)% (1.27)% (1.05)% (1.19)%(g)
Waiver/reimbursement 0.81%(g) 1.02% 0.69% 0.85% 1.82%(g)
Portfolio turnover rate 48%(e) 116% 121% 188% 47%(e)
Net assets, end of period (000's) $ 2,763 $ 3,838 $ 2,825 $ 4,043 $ 5,227
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS B SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34 $ 11.59
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08) (0.13) (0.14) (0.15) (0.06)
Net realized and unrealized gain (loss)
on investments and foreign currency (0.07) 1.43 (0.48) (5.24) 0.81
----------- --------- --------- --------- ---------
Total from investment operations (0.15) 1.30 (0.62) (5.39) 0.75
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 7.48 $ 7.63 $ 6.33 $ 6.95 $ 12.34
Total return (c)(d) (1.97)%(e) 20.54% (8.92)% (43.68)% 6.47%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.97)%(g) (1.95)% (1.97)% (1.75)% (1.89)%(g)
Waiver/reimbursement 0.81%(g) 1.02% 0.69% 0.85% 1.82%(g)
Portfolio turnover rate 48%(e) 116% 121% 188% 47%(e)
Net assets, end of period (000's) $ 7,341 $ 8,632 $ 8,238 $ 10,979 $ 18,080
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
37
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Aggressive Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS C SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34 $ 11.59
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08) (0.13) (0.14) (0.15) (0.06)
Net realized and unrealized gain (loss)
on investments and foreign currency (0.07) 1.43 (0.48) (5.24) 0.81
----------- --------- --------- --------- ---------
Total from investment operations (0.15) 1.30 (0.62) (5.39) 0.75
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 7.48 $ 7.63 $ 6.33 $ 6.95 $ 12.34
Total return (c)(d) (1.97)%(e) 20.54% (8.92)% (43.68)% 6.47%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.97)%(g) (1.95)% (1.97)% (1.75)% (1.89)%(g)
Waiver/reimbursement 0.81%(g) 1.02% 0.69% 0.85% 1.82%(g)
Portfolio turnover rate 48%(e) 116% 121% 188% 47%(e)
Net assets, end of period (000's) $ 1,496 $ 1,644 $ 1,699 $ 2,508 $ 1,567
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS Z SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.83 $ 6.43 $ 7.03 $ 12.37 $ 11.59
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.04) (0.07) (0.07) (0.07) (0.03)
Net realized and unrealized gain (loss)
on investments and foreign currency (0.07) 1.47 (0.53) (5.27) 0.81
----------- --------- --------- --------- ---------
Total from investment operations (0.11) 1.40 (0.60) (5.34) 0.78
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 7.72 $ 7.83 $ 6.43 $ 7.03 $ 12.37
Total return (c) (1.40)%(d) 21.77% (8.53)% (43.17)% 6.73%(d)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (e) 1.25%(f) 1.25% 1.25% 1.25% 1.25%(f)
Net investment loss (e) (1.00)%(f) (0.95)% (0.97)% (0.75)% (0.89)%(f)
Waiver/reimbursement 0.81%(f) 1.02% 0.69% 0.85% 1.82%(f)
Portfolio turnover rate 48%(d) 116% 121% 188% 47%(d)
Net assets, end of period (000's) $ 70 $ 18 $ 3 $ 61 $ 128
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity
shown is from the effective date of registration (August 1, 2000) with the
Securities and Exchange Commission.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
38
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------------
CLASS A SHARES 2004 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.09 $ 10.87 $ 12.68 $ 18.38 $ 17.19 $ 13.39
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (a) (0.03) (0.03) (0.02) (0.06) (0.12) (0.03)
Net realized and unrealized gain
(loss) on investments 0.62 2.25 (1.79) (5.64) 1.31 3.83
----------- --------- --------- --------- --------- ---------
Total from investment operations 0.59 2.22 (1.81) (5.70) 1.19 3.80
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.68 $ 13.09 $ 10.87 $ 12.68 $ 18.38 $ 17.19
Total return (b) 4.51%(c) 20.42% (14.27)% (31.01)% 6.92% 28.38%
- -----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (d) 1.43%(e) 1.42% 1.41% 1.39% 1.44% 1.64%
Net investment loss (d) (0.39)%(e) (0.28)% (0.18)% (0.38)% (0.67)% (0.21)%
Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 68,935 $ 69,764 $ 66,760 $ 102,403 $ 163,502 $ 97,531
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------------
CLASS B SHARES 2004 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.43 $ 10.39 $ 12.22 $ 17.85 $ 16.82 $ 13.20
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (a) (0.07) (0.11) (0.11) (0.17) (0.26) (0.15)
Net realized and unrealized gain
(loss) on investments 0.59 2.15 (1.72) (5.46) 1.29 3.77
----------- ---------- --------- --------- --------- ---------
Total from investment operations 0.52 2.04 (1.83) (5.63) 1.03 3.62
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.95 $ 12.43 $ 10.39 $ 12.22 $ 17.85 $ 16.82
Total return (b) 4.18%(c) 19.63% (14.98)% (31.54)% 6.12% 27.42%
- -----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (d) 2.18%(e) 2.17% 2.16% 2.14% 2.19% 2.39%
Net investment loss (d) (1.14)%(e) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)%
Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 201,695 $ 213,481 $ 216,801 $ 327,645 $ 532,082 $ 303,726
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming no contingent deferred sales
charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e) Annualized.
39
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------------
CLASS C SHARES 2004 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.43 $ 10.39 $ 12.21 $ 17.85 $ 16.82 $ 13.20
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (a) (0.07) (0.11) (0.11) (0.17) (0.26) (0.15)
Net realized and unrealized gain
(loss) on investments 0.58 2.15 (1.71) (5.47) 1.29 3.77
----------- ---------- --------- --------- --------- ---------
Total from investment operations 0.51 2.04 (1.82) (5.64) 1.03 3.62
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.94 $ 12.43 $ 10.39 $ 12.21 $ 17.85 $ 16.82
Total return (b) 4.10%(c) 19.63% (14.91)% (31.60)% 6.12% 27.42%
- -----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (d) 2.18%(e) 2.17% 2.16% 2.14% 2.19% 2.39%
Net investment loss (d) (1.14)%(e) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)%
Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 29,501 $ 30,035 $ 30,837 $ 47,069 $ 80,232 $ 46,869
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming no contingent deferred sales
charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------------
CLASS E SHARES 2004 2003 2002 2001 2000 (a) 1999
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.02 $ 10.82 $ 12.63 $ 18.34 $ 17.17 $ 13.36
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.03) (0.04) (0.03) (0.07) (0.14) (0.05)
Net realized and unrealized gain
(loss) on investments 0.62 2.24 (1.78) (5.64) 1.31 3.83
----------- ---------- --------- --------- --------- ---------
Total from investment operations 0.59 2.20 (1.81) (5.71) 1.17 3.78
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.61 $ 13.02 $ 10.82 $ 12.63 $ 18.34 $ 17.14
Total return (c) 4.53%(d) 20.33% (14.33)% (31.13)% 6.81% 28.29%
- -----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (e) 1.53%(f) 1.52% 1.51% 1.49% 1.54% 1.74%
Net investment loss (e) (0.49)%(f) (0.38)% (0.28)% (0.48)% (0.77)% (0.31)%
Portfolio turnover rate 21%(d) 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 7,227 $ 6,908 $ 5,794 $ 6,820 $ 9,171 $ 1,089
- -----------------------------------------------------------------------------------------------------------------------------
(a) Class E shares were collapsed into Class G shares on February 28, 2000,
which were then redesignated Class E shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
40
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------------
CLASS F SHARES 2004 2003 2002 2001 2000 (a) 1999
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.44 $ 10.41 $ 12.23 $ 17.87 $ 16.83 $ 13.21
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.07) (0.11) (0.11) (0.17) (0.26) (0.15)
Net realized and unrealized gain
(loss) on investments 0.59 2.14 (1.71) (5.47) 1.30 3.71
----------- ---------- --------- --------- --------- ---------
Total from investment operations 0.52 2.03 (1.82) (5.64) 1.04 3.56
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.96 $ 12.44 $ 10.41 $ 12.23 $ 17.87 $ 16.77
Total return (c) 4.18%(d) 19.50% (14.88)% (31.56)% 6.18% 26.95%
- -----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (e) 2.18%(f) 2.17% 2.16% 2.14% 2.19% 2.39%
Net investment loss (e) (1.14)%(f) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)%
Portfolio turnover rate 21%(d) 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 10,706 $ 10,265 $ 8,709 $ 10,101 $ 13,368 $ 2,025
- -----------------------------------------------------------------------------------------------------------------------------
(a) Class F shares were collapsed into Class H shares on February 28, 2000,
which were then redesignated Class F shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------------
CLASS Z SHARES 2004 2003 2002 2001 2000 1999 (a)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.24 $ 10.96 $ 12.76 $ 18.46 $ 17.23 $ 15.56
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) (0.01) (0.01) 0.01 (0.02) (0.08) (0.02)
Net realized and unrealized gain
(loss) on investments 0.63 2.29 (1.80) (5.68) 1.31 1.69
----------- ---------- --------- --------- --------- ---------
Total from investment operations 0.62 2.28 (1.80) (5.70) 1.23 1.67
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.86 $ 13.24 $ 10.96 $ 12.76 $ 18.46 $ 17.23
Total return 4.68%(c) 20.80% (14.11)% (30.88)% 7.14% 10.73%(c)
- -----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (d) 1.18%(e) 1.17% 1.16% 1.14% 1.19% 0.79%(e)
Net investment income (loss) (d) (0.14)%(e) (0.03)% 0.07% (0.13)% (0.42)% (0.13)%(e)
Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80%
Net assets, end of period (000's) $ 463 $ 442 $ 80 $ 915 $ 1,941 $ 1
- -----------------------------------------------------------------------------------------------------------------------------
(a) Class Z shares were initially offered on January 11, 1999. 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) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e) Annualized.
41
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Growth Fund II
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS A SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.33 $ 6.94 $ 7.92 $ 11.55 $ 12.00
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.02) (0.02) (0.02) (0.04) (0.07)
Net realized and unrealized
gain (loss) on investments 0.38 1.41 (0.96) (3.59) (0.38)
----------- --------- --------- --------- ---------
Total from investment operations 0.36 1.39 (0.98) (3.63) (0.45)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.69 $ 8.33 $ 6.94 $ 7.92 $ 11.55
Total return (c)(d) 4.32%(e) 20.03% (12.37)% (31.43)% (3.75)%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.50%(g) 1.50% 1.50% 1.50% 1.50%(g)
Net investment loss (f) (0.45)%(g) (0.33)% (0.29)% (0.42)% (0.84)%(g)
Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 7,045 $ 7,515 $ 7,692 $ 9,486 $ 6,769
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS B SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.10 $ 6.80 $ 7.82 $ 11.51 $ 12.00
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.05) (0.08) (0.08) (0.11) (0.12)
Net realized and unrealized
gain (loss) on investments 0.37 1.38 (0.94) (3.58) (0.37)
----------- --------- --------- --------- ---------
Total from investment operations 0.32 1.30 (1.02) (3.69) (0.49)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.42 $ 8.10 $ 6.80 $ 7.82 $ 11.51
Total return (c)(d) 3.95%(e) 19.12% (13.04)% (32.06)% (4.08)%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.20)%(g) (1.08)% (1.04)% (1.17)% (1.59)%(g)
Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 30,345 $ 31,557 $ 30,871 $ 42,391 $ 50,859
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred
sales charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
42
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Growth Fund II
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS C SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.08 $ 6.78 $ 7.80 $ 11.50 $ 12.00
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.05) (0.08) (0.08) (0.11) (0.12)
Net realized and unrealized gain
(loss) on investments 0.37 1.38 (0.94) (3.59) (0.38)
----------- --------- --------- --------- ---------
Total from investment operations 0.32 1.30 (1.02) (3.70) (0.50)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.40 $ 8.08 $ 6.78 $ 7.80 $ 11.50
Total return (c)(d) 3.96%(e) 19.17% (13.08)% (32.17)% (4.17)%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g)
Net investment loss (f) (1.20)%(g) (1.08)% (1.04)% (1.17)% (1.59)%(g)
Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 6,420 $ 6,444 $ 6,481 $ 8,994 $ 5,801
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred
sales charge.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
CLASS Z SHARES 2004 2003 2002 2001 2000 (a)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.39 $ 6.97 $ 7.95 $ 11.58 $ 12.00
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.01) (0.01) --(c) (0.02) (0.05)
Net realized and unrealized
gain (loss) on investments 0.39 1.43 (0.98) (3.61) (0.37)
----------- --------- --------- --------- ---------
Total from investment operations 0.38 1.42 (0.98) (3.63) (0.42)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.77 $ 8.39 $ 6.97 $ 7.95 $ 11.58
Total return (d) 4.53%(e) 20.37% (12.33)% (31.35)% (3.50)%(e)
- --------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.25%(g) 1.25% 1.25% 1.25% 1.25%(g)
Net investment loss (f) (0.20)%(g) (0.08)% (0.04)% (0.17)% (0.59)%(g)
Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g)
Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e)
Net assets, end of period (000's) $ 1,072 $ 831 $ 894 $ 1,211 $ 4,740
- --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
43
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------------------------
CLASS A SHARES 2004 2003 2002 2001 2000 1999 (a)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10 $ 8.89 $ 11.40 $ 11.41 $ 10.64 $ 12.00
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.04 0.07 0.04 0.04 0.04 --(c)
Net realized and unrealized gain
(loss) on investments 0.88 1.14 (2.55) (0.05) 0.73 (1.36)
----------- ---------- ---------- ---------- --------- ---------
Total from investment operations 0.92 1.21 (2.51) (0.01) 0.77 (1.36)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income (0.09) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.93 $ 10.10 $ 8.89 $ 11.40 $ 11.41 $ 10.64
Total return (d) 9.09%(e) 13.61% (22.02)% (0.09)% 7.24% (11.33)%(e)
- ----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.55%(g) 1.70% 1.61% 1.71% 1.80% 1.77%(g)
Net investment income (f) 0.78%(g) 0.72% 0.34% 0.32% 0.39% --%(g)(h)
Portfolio turnover rate 21%(e) 68% 72% 47% 76% 19%(e)
Net assets, end of period (000's) $ 15,763 $ 16,725 $ 19,767 $ 25,694 $ 14,017 $ 7,528
- ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(h) Rounds to less than 0.01%.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------------------------
CLASS B SHARES 2004 2003 2002 2001 2000 1999 (a)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) --(c) --(c) (0.04) (0.04) (0.03) (0.04)
Net realized and unrealized gain
(loss) on investments 0.85 1.12 (2.50) (0.04) 0.72 (1.35)
----------- ---------- ---------- ---------- --------- ---------
Total from investment operations 0.85 1.12 (2.54) (0.08) 0.69 (1.39)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income --(c) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.65 $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61
Total return (d) 8.69%(e) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e)
- ----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.25%(g) 2.40% 2.31% 2.41% 2.50% 2.60%(g)
Net investment income (loss) (f) 0.08%(g) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g)
Portfolio turnover rate 21%(e) 68% 72% 47% 76% 19%(e)
Net assets, end of period (000's) $ 49,985 $ 50,117 $ 52,701 $ 69,720 $ 49,112 $ 14,622
- ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
44
FINANCIAL HIGHLIGHTS____________________________________________________________
Columbia Tax-Managed Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------------------------
CLASS C SHARES 2004 2003 2002 2001 2000 1999 (a)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) --(c) --(c) (0.04) (0.04) (0.03) (0.04)
Net realized and unrealized gain
(loss) on investments 0.85 1.12 (2.50) (0.04) 0.72 (1.35)
----------- ---------- ---------- ---------- --------- ---------
Total from investment operations 0.85 1.12 (2.54) (0.08) 0.69 (1.39)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income --(c) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.65 $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61
Total return (d) 8.69%(e) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e)
- ----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.25%(g) 2.40% 2.31% 2.41% 2.50% 2.60%(g)
Net investment income (loss) (f) 0.08%(g) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g)
Portfolio turnover rate 21%(e) 68% 72% 47% 76% 19%(e)
Net assets, end of period (000's) $ 12,916 $ 13,674 $ 17,463 $ 21,367 $ 10,331 $ 4,137
- ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------------------------
CLASS Z SHARES 2004 2003 2002 2001 2000 1999 (a)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.22 $ 8.96 $ 11.46 $ 11.43 $ 10.65 $ 12.00
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.06 0.10 0.07 0.07 0.07 0.01
Net realized and unrealized gain
(loss) on investments 0.88 1.16 (2.57) (0.04) 0.71 (1.36)
----------- ---------- ---------- ---------- --------- ---------
Total from investment operations 0.94 1.26 (2.50) 0.03 0.78 (1.35)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.12) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.04 $ 10.22 $ 8.96 $ 11.46 $ 11.43 $ 10.65
Total return (c) 9.25%(d) 14.06% (21.82)% 0.26% 7.32% (11.25)%(d)
- ----------------------------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE
NET ASSETS/SUPPLEMENTAL DATA:
Expenses (e) 1.25%(f) 1.40% 1.31% 1.41% 1.50% 1.50%(f)
Net investment income (e) 1.08%(f) 1.02% 0.64% 0.62% 0.69% 0.27%(f)
Portfolio turnover rate 21%(d) 68% 72% 47% 76% 19%(d)
Net assets, end of period (000's) $ 45 $ 32 $ 1 $ 1 $ 1 $ 2,396
- ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
45
SHAREHOLDER MEETING RESULTS_____________________________________________________
Columbia Tax-Managed Funds
On June 7, 2004, a Special Meeting of Shareholders of the Columbia
Tax-Managed Growth Fund was held to conduct a vote for or against the approval
of the following Item listed on the Fund's Proxy Statement for said Meeting. On
March 31, 2004, the record date for the Meeting, the Columbia Tax-Managed Growth
Fund had 24,660,366.70 shares outstanding. The votes cast were as follows:
PROPOSAL 1:
Approval of a new Sub-Advisory Agreement between Columbia Management
Advisors, Inc. and Stein Roe Investment Counsel, Inc. with regard to the
Columbia Tax-Managed Growth Fund.
FOR: AGAINST: ABSTAIN:
------------- ---------- ----------
16,535,187.95 167,395.79 364,920.39
The new Sub-Advisory Agreement between Columbia Management Advisors, Inc.
and Stein Roe Investment Counsel, Inc. with regard to Columbia Tax-Managed
Growth Fund was approved.
On June 7, 2004, a Special Meeting of Shareholders of the Columbia
Tax-Managed Growth Fund II was held to conduct a vote for or against the
approval of the following Item listed on the Fund's Proxy Statement for said
Meeting. On March 31, 2004, the record date for the Meeting, the Columbia
Tax-Managed Growth Fund II had 5,384,171.69 shares outstanding. The votes cast
were as follows:
PROPOSAL 1:
Approval of a new Sub-Advisory Agreement between Columbia Management
Advisors, Inc. and Stein Roe Investment Counsel, Inc. with regard to the
Columbia Tax-Managed Growth Fund II.
FOR: AGAINST: ABSTAIN:
------------ --------- ----------
4,033,129.71 31,244.48 105,047.15
The new Sub-Advisory Agreement between Columbia Management Advisors, Inc.
and Stein Roe Investment Counsel, Inc. with regard to Columbia Tax-Managed
Growth Fund II was approved.
46
IMPORTANT INFORMATION ABOUT THIS REPORT_________________________________________
Columbia Tax-Managed Funds
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 funds mail one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Tax-Managed Funds.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the funds and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the funds use to determine how
to vote proxies relating to their portfolio securities is available (i) without
charge, upon request, by calling 800-345-6611 and (ii) on the Securities and
Exchange Commission's website at http://www.sec.gov.
Please note that on March 1, 2004, Ernst & Young LLP ("E&Y") resigned as the
independent registered public accounting firm for Columbia Tax-Managed
Aggressive Growth Fund and Columbia Tax-Managed Growth Fund II. During the two
most recent fiscal years, E&Y's audit reports contained no adverse opinion or
disclaimer of opinion; nor were its reports qualified or modified as to
uncertainty, audit scope, or accounting principle. Further, in connection with
its audits for the two most recent fiscal years and through March 1, 2004, there
were no disagreements between the funds and E&Y on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which if not resolved to the satisfaction of E&Y would have caused it
to make reference to the disagreement in its report on the financial statements
for such years. Effective March 1, 2004, PricewaterhouseCoopers LLP was
appointed by the audit committee of the Board of Trustees as the independent
registered public accounting firm of the funds for the fiscal year ended October
31, 2004.
47
COLUMBIA FUNDS__________________________________________________________________
Columbia Tax-Managed Funds
--------------------------------------------------
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
48
________________________________________________________________________________
Columbia Tax-Managed Funds
--------------------------------------------------
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 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.
49
[PHOTO OF 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 TAX-MANAGED FUNDS SEMIANNUAL REPORT, APRIL 30, 2004
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO.20
[EAGLE HEAD LOGO] COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.345.6611 WWW.COLUMBIAFUNDS.COM
TM-03/827R-0404 (06/04)04/1360
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 I
------------------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date June 30, 2004
--------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date June 30, 2004
--------------------------------------------------------------------------