UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-4978
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Columbia Funds Trust XI
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
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Date of fiscal year end: 09/30/2004
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Date of reporting period: 09/30/2004
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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
EQUITY FUNDS
ANNUAL REPORT
SEPTEMBER 30, 2004
[Photo of 2 ladies, one with a pen in hand]
LOGO(R) COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
[Sidebar]
TABLE OF CONTENTS
ECONOMIC UPDATE ............................... 1
COLUMBIA ASSET ALLOCATION FUND ................ 2
COLUMBIA LARGE CAP GROWTH FUND ................ 6
COLUMBIA DISCIPLINED VALUE FUND ............... 10
COLUMBIA INTERNATIONAL EQUITY FUND ............ 14
COLUMBIA LARGE CAP CORE FUND .................. 18
COLUMBIA SMALL CAP FUND ....................... 22
COLUMBIA SMALL COMPANY EQUITY FUND ............ 26
FINANCIAL STATEMENTS .......................... 30
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ...................... 138
UNAUDITED INFORMATION ......................... 139
TRUSTEES ...................................... 140
OFFICERS ...................................... 142
IMPORTANT INFORMATION
ABOUT THIS REPORT ............................. 143
COLUMBIA FUNDS ................................ 144
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
PRESIDENT'S MESSAGE ____________________________________________________________
Columbia Equity Funds
DEAR SHAREHOLDER:
Your fund's legal and management team here at Columbia Funds have been working
hard to strengthen our mutual fund services operation and to ensure that all
operations and processes comply with legal and regulatory standards. In the
coming months, we will continue to monitor the oversight enhancements recently
put in place by your fund's Board of Trustees and make every effort to protect
the interests of all our shareholders in everything we do.
In our last report, we announced that your fund's advisor, Columbia Management
Advisors, Inc., and your fund's distributor, Columbia Funds Distributor, Inc.,
had reached an agreement with the Securities and Exchange Commission and the New
York Attorney General to settle charges involving market timing in some of our
mutual funds. We want to reassure you that the settlement and all associated
legal fees will be paid by Columbia Management, not by the affected funds or
their shareholders.
Recently the Securities and Exchange Commission has adopted new rules regarding
mutual fund governance. We think it is important for you to know that Columbia
Management complied with the majority of these rules well before they were
adopted. Your fund's Board of Trustees has taken the following important steps
to strengthen its capacity to oversee your fund and to comply with SEC rules.
o THE BOARD OF TRUSTEES APPOINTED MARY JOAN HOENE AS CHIEF COMPLIANCE OFFICER
OF COLUMBIA FUNDS. IN THIS ROLE, MS. HOENE WILL REPORT DIRECTLY TO THE BOARD
OF TRUSTEES AND WILL WORK WITH THE BOARD OF TRUSTEES AS WELL AS THE SENIOR
LEADERSHIP OF COLUMBIA MANAGEMENT, THE INVESTMENT MANAGEMENT ARM OF BANK OF
AMERICA, AND WITH BANK OF AMERICA'S PRINCIPAL COMPLIANCE EXECUTIVES. SHE
WILL FOCUS ON THE OVERALL COMPLIANCE PROGRAM OF THE FUNDS AND THE
RESPONSIBILITY AND PERFORMANCE OF THE FUND'S SERVICE PROVIDERS.
PRIOR TO HER APPOINTMENT, MS. HOENE WAS A PARTNER IN THE LAW FIRM OF CARTER,
LEDYARD & MILBURN, LLP. PREVIOUSLY SHE ALSO SERVED AS ASSOCIATE DIRECTOR AND
DEPUTY DIRECTOR FOR THE SECURITIES AND EXCHANGE COMMISSION DIVISION OF
INVESTMENT MANAGEMENT. AS AN ACTIVE ADVISOR, MS. HOENE HAS HELPED SEVERAL
FUND BOARDS DEVELOP INDEPENDENT BOARD PRACTICES. THE BOARD IS PLEASED TO
HAVE MS. HOENE, WITH HER BROAD AND EXTENSIVE EXPERIENCE, IN THIS IMPORTANT
NEW POSITION.
o THE BOARD OF TRUSTEES HAS ESTABLISHED OPERATIONAL GUIDELINES THAT RESULT IN
STRONGER, MORE VIGILANT TRUSTEESHIP ACROSS THE ENTIRE COLUMBIA MANAGEMENT
ORGANIZATION. BOARD COMMITTEES HAVE BEEN ESTABLISHED TO OVERSEE PRODUCTS BY
FUND CATEGORY, ALLOWING FOR GREATER SPECIALIZATION AMONG BOARD TRUSTEES.
SHAREHOLDERS WILL ELECT BOARD MEMBERS EVERY FIVE YEARS, BEGINNING IN 2005.
o IN ADDITION TO ENHANCEMENTS TO OVERSIGHT WITHIN COLUMBIA MANAGEMENT, OUR
PARENT COMPANY--BANK OF AMERICA--HAS ALSO INCREASED THE ROLE THAT SUCH
PROFESSIONALS PLAY WITHIN THE BROADER ORGANIZATION. A CHIEF COMPLIANCE
OFFICER HAS BEEN NAMED TO REPORT DIRECTLY TO KEN LEWIS, BANK OF AMERICA'S
CHIEF EXECUTIVE OFFICER. BANK OF AMERICA HAS ALSO ADOPTED A CORPORATE CODE
OF ETHICS COMMITTEE, AN INTERNAL COMPLIANCE CONTROLS COMMITTEE AND A
REGULATORY IMPLEMENTATION GROUP TO ENSURE FULL ALIGNMENT AND EXECUTION OF
REMEDIAL ACTIONS AND BEST PRACTICES ACROSS THE COMPANY.
In the pages that follow, you'll find a discussion of the economic environment
during the period, followed by a detailed report from the fund's manager on key
factors that influenced performance. This report is rich in information, and you
should discuss it with your financial advisor if you have questions.
We are committed to providing quality products and services to our shareholders,
strengthening your confidence in us, and working hard to help you achieve
financial success. It is a privilege to play a role in your financial future,
and we value your business. Thank you for choosing Columbia Management.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
HEAD OF MUTUAL FUNDS, COLUMBIA MANAGEMENT
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's chief
liaison to the mutual fund boards of trustees.
Chris joined Bank of America in August 2004.
[Sidebar]
SUMMARY
FOR THE 12-MONTH PERIOD
ENDED SEPTEMBER 30, 2004
o STOCK PRICES ROSE AROUND THE WORLD, AS MEASURED BY THE S&P 500 INDEX AND THE
MSCI EAFE INDEX. HOWEVER, THE US MARKET RETREATED AS SHORT-TERM INTEREST
RATES MOVED HIGHER IN THE SUMMER AND A HOST OF GLOBAL UNCERTAINTIES
UNSETTLED INVESTORS.
S&P 500 INDEX MSCI EAFE INDEX
[UP ARROW] [UP ARROW]
13.87% 22.08%
o DESPITE INTEREST RATE VOLATILITY, INVESTMENT GRADE BONDS CHALKED UP
RESPECTABLE GAINS. THE LEHMAN BROTHERS AGGREGATE BOND INDEX RETURNED 3.68%.
HIGH-YIELD BONDS, WHICH CAN BE LESS SENSITIVE TO CHANGING INTEREST RATES,
LED THE FIXED INCOME MARKETS. THE MERRILL LYNCH US HIGH YIELD, CASH PAY
INDEX RETURNED 12.23%.
LEHMAN INDEX MERRILL LYNCH INDEX
[UP ARROW] [UP ARROW]
3.68% 12.23%
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 Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks fixed-rate, publicly placed, dollar-denominated, and non-convertible
investment grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment grade corporate bonds.
ECONOMIC UPDATE ________________________________________________________________
Columbia Equity Funds
Despite uncertainty about job growth and rising energy prices, the US economy
grew at a pace of more than 4.5% during the 12-month period that began October
1, 2003 and ended September 30, 2004. Economic growth encountered a soft patch
in the second quarter of 2004, but monthly data suggested that it picked up
again in the third quarter.
Job growth dominated the economic news during this reporting period: When more
than one million jobs were created in the spring of 2004, consumer confidence
soared to its highest level in two years. However, when job growth fell below
expectations during the summer months, consumer confidence fell. According to
the Labor Department's Payroll Survey, the job market has not fully recovered
from the losses incurred during the economic downturn of 2000-2001, and that has
left consumers somewhat cautious about the months ahead.
Consumer spending held up for most of the period, as last year's tax rebates and
tax cuts worked their way into household budgets. Even when consumer spending
growth declined during the summer, housing activity remained strong. Also, the
business sector stepped into the gap created by sagging consumer spending.
Industrial production rose; factories utilized more of their capacity; and
spending on technology, capital equipment and construction picked up.
STOCKS OUTPERFORMED BONDS
Buoyed by strong gains at the beginning of the period, the S&P 500 Index
returned 13.87% during this 12-month reporting period. However, concerns about
new terror threats, continued fighting in Iraq, higher oil prices and the
presidential election helped sideline investors as the period wore on. Late in
the period, leadership passed from small-cap stocks to mid- and large-cap
stocks. Value stocks continued to lead growth stocks until the final month of
the period, when small- and mid-cap growth stocks bested their value
counterparts. Energy and real estate investment trusts were the best-performing
sectors.
Foreign stock markets did even better than U.S. markets. The MSCI EAFE Index, a
broad measure of stock market performance in developed countries outside the
United States, returned 22.08% for the 12-month period. Unlike the U.S. market,
many foreign markets continued to generate positive returns in 2004.
BONDS DELIVER RESPECTABLE GAINS
Despite periods of interest-rate volatility, the U.S. bond market delivered
respectable gains during the period. Bond prices sagged in the spring when job
growth picked up and investors began to anticipate higher short-term interest
rates. However, a shaky stock market, higher oil prices and some disappointing
economic data gave the bond market a boost in the last three months of the
period. The 10-year Treasury yield ended the period at 4.10%, very close to
where it started.
In this environment, the Lehman Brothers Aggregate Bond Index returned 3.68%.
High-yield bonds gained 12.23%, as measured by the Merrill Lynch US High Yield,
Cash Pay Index. However, most of those gains were achieved during the first half
of the reporting period. In the second half, slower economic growth and high
valuations made high-yield bonds less attractive.
After a year of the lowest short-term interest rates in recent history, The
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.00% to 1.75% in three equal steps during the period. The Fed
indicated that it would continue to raise short-term interest rates at a
"measured pace," in an attempt to balance economic growth against inflationary
pressures.
1
[Sidebar]
PERFORMANCE OF A $10,000 INVESTMENT
10/01/94 - 09/30/04 ($)
SALES CHARGE WITHOUT WITH
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Class A 21,772 20,526
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Class B 20,886 20,886
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Class C 20,878 20,878
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Class G 20,408 20,408
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Class T 21,691 20,449
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Class Z 22,179 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, when
redeemed, 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 Asset Allocation Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
LEHMAN
CLASS A CLASS A BROTHERS
SHARES WITHOUT SHARES WITH S&P 500 AGGREGATE
SALES CHARGE SALES CHARGE INDEX BOND INDEX
-------------- ------------ --------- ----------
10/1994 10,000.00 9,425.00 10,000.00 10,000.00
10,123.00 9,541.00 10,225.00 9,991.00
9,914.00 9,344.00 9,853.00 9,969.00
10,042.00 9,465.00 9,999.00 10,038.00
10,243.00 9,654.00 10,258.00 10,237.00
10,540.00 9,934.00 10,658.00 10,480.00
10,777.00 10,158.00 10,972.00 10,544.00
11,095.00 10,457.00 11,295.00 10,692.00
11,577.00 10,911.00 11,746.00 11,106.00
11,791.00 11,113.00 12,019.00 11,187.00
11,995.00 11,305.00 12,418.00 11,162.00
12,033.00 11,342.00 12,449.00 11,297.00
12,445.00 11,729.00 12,974.00 11,407.00
12,494.00 11,775.00 12,928.00 11,555.00
12,922.00 12,179.00 13,495.00 11,728.00
13,084.00 12,331.00 13,756.00 11,892.00
13,361.00 12,593.00 14,223.00 11,971.00
13,352.00 12,584.00 14,356.00 11,763.00
13,449.00 12,676.00 14,493.00 11,680.00
13,549.00 12,770.00 14,706.00 11,615.00
13,768.00 12,976.00 15,086.00 11,592.00
13,921.00 13,120.00 15,143.00 11,747.00
13,551.00 12,771.00 14,474.00 11,779.00
13,740.00 12,950.00 14,779.00 11,759.00
14,297.00 13,475.00 15,611.00 11,963.00
14,608.00 13,768.00 16,042.00 12,229.00
15,191.00 14,318.00 17,255.00 12,438.00
15,061.00 14,195.00 16,913.00 12,322.00
15,553.00 14,659.00 17,970.00 12,360.00
15,500.00 14,609.00 18,111.00 12,391.00
15,150.00 14,279.00 17,366.00 12,254.00
15,729.00 14,824.00 18,403.00 12,438.00
16,245.00 15,311.00 19,524.00 12,556.00
16,688.00 15,729.00 20,398.00 12,705.00
17,599.00 16,587.00 22,022.00 13,048.00
17,027.00 16,048.00 20,789.00 12,937.00
17,507.00 16,501.00 21,928.00 13,128.00
17,560.00 16,550.00 21,196.00 13,318.00
17,774.00 16,752.00 22,177.00 13,379.00
18,034.00 16,997.00 22,559.00 13,514.00
18,288.00 17,236.00 22,809.00 13,687.00
18,879.00 17,793.00 24,453.00 13,676.00
19,413.00 18,297.00 25,706.00 13,723.00
19,623.00 18,494.00 25,965.00 13,794.00
19,389.00 18,274.00 25,519.00 13,925.00
19,750.00 18,614.00 26,555.00 14,044.00
19,574.00 18,448.00 26,273.00 14,073.00
18,284.00 17,233.00 22,474.00 14,302.00
18,999.00 17,907.00 23,915.00 14,637.00
19,989.00 18,839.00 25,859.00 14,560.00
20,542.00 19,361.00 27,426.00 14,643.00
21,239.00 20,018.00 29,006.00 14,686.00
21,653.00 20,408.00 30,218.00 14,791.00
21,166.00 19,949.00 29,278.00 14,532.00
21,830.00 20,575.00 30,449.00 14,612.00
22,001.00 20,736.00 31,628.00 14,659.00
21,462.00 20,228.00 30,881.00 14,530.00
21,953.00 20,691.00 32,595.00 14,483.00
21,707.00 20,459.00 31,578.00 14,421.00
21,462.00 20,228.00 31,424.00 14,414.00
21,262.00 20,040.00 30,563.00 14,581.00
21,930.00 20,669.00 32,497.00 14,635.00
22,189.00 20,913.00 33,157.00 14,633.00
22,815.00 21,503.00 35,110.00 14,563.00
22,180.00 20,905.00 33,347.00 14,515.00
22,256.00 20,976.00 32,717.00 14,691.00
23,716.00 22,352.00 35,917.00 14,885.00
23,626.00 22,267.00 34,836.00 14,841.00
23,092.00 21,764.00 34,122.00 14,834.00
24,006.00 22,626.00 34,964.00 15,142.00
24,109.00 22,723.00 34,419.00 15,280.00
25,146.00 23,700.00 36,556.00 15,502.00
24,389.00 22,987.00 34,626.00 15,600.00
24,157.00 22,768.00 34,481.00 15,702.00
23,090.00 21,762.00 31,764.00 15,960.00
23,261.00 21,923.00 31,919.00 16,257.00
23,896.00 22,522.00 33,052.00 16,523.00
22,502.00 21,209.00 30,038.00 16,667.00
21,539.00 20,301.00 28,134.00 16,751.00
22,369.00 21,082.00 30,320.00 16,680.00
22,395.00 21,108.00 30,523.00 16,780.00
21,851.00 20,595.00 29,781.00 16,844.00
21,797.00 20,543.00 29,489.00 17,221.00
21,101.00 19,888.00 27,643.00 17,419.00
20,061.00 18,907.00 25,410.00 17,623.00
20,514.00 19,335.00 25,895.00 17,992.00
21,310.00 20,085.00 27,881.00 17,743.00
21,344.00 20,117.00 28,126.00 17,630.00
20,766.00 19,572.00 27,716.00 17,772.00
20,257.00 19,092.00 27,181.00 17,945.00
20,691.00 19,501.00 28,203.00 17,647.00
19,875.00 18,733.00 26,494.00 17,989.00
19,778.00 18,641.00 26,298.00 18,142.00
18,775.00 17,696.00 24,425.00 18,298.00
18,124.00 17,082.00 22,523.00 18,520.00
18,263.00 17,213.00 22,669.00 18,833.00
16,981.00 16,005.00 20,205.00 19,138.00
17,944.00 16,912.00 21,983.00 19,050.00
18,567.00 17,499.00 23,278.00 19,044.00
18,017.00 16,981.00 21,911.00 19,438.00
17,653.00 16,638.00 21,337.00 19,456.00
17,443.00 16,440.00 21,017.00 19,724.00
17,518.00 16,511.00 21,221.00 19,708.00
18,392.00 17,335.00 22,970.00 19,872.00
19,294.00 18,184.00 24,180.00 20,242.00
19,542.00 18,419.00 24,490.00 20,201.00
19,585.00 18,459.00 24,921.00 19,522.00
19,924.00 18,779.00 25,407.00 19,651.00
19,884.00 18,741.00 25,137.00 20,172.00
20,523.00 19,343.00 26,560.00 19,984.00
20,736.00 19,544.00 26,794.00 20,032.00
21,450.00 20,216.00 28,198.00 20,237.00
21,778.00 20,525.00 28,717.00 20,399.00
22,050.00 20,782.00 29,116.00 20,619.00
22,079.00 20,809.00 28,676.00 20,774.00
21,489.00 20,253.00 28,226.00 20,233.00
21,560.00 20,320.00 28,613.00 20,152.00
21,929.00 20,668.00 29,168.00 20,267.00
21,339.00 20,112.00 28,202.00 20,468.00
21,439.00 20,206.00 28,315.00 20,859.00
09/2004 21,772.00 20,526.00 28,612.00 20,918.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Standard &
Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500
widely held, large-capitalization U.S. stocks. The Lehman Brothers Aggregate
Bond Index is a market value-weighted index that tracks the daily price, coupon,
pay-downs, and total return performance of fixed-rate, publicly placed,
dollar-denominated, and non-convertible investment grade debt issues with at
least $250 million par amount outstanding and with at least one year to final
maturity. Unlike mutual funds, indices are not investments, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in an index. Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
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SHARE CLASS A B C G T Z
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INCEPTION 11/01/98 11/01/98 11/18/02 03/04/96 12/30/91 12/30/91
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-YEAR 9.46 3.20 8.68 3.68 8.67 7.67 8.72 3.72 9.47 3.21 9.75
- ------------------------------------------------------------------------------------------------------------------------
5-YEAR 0.47 -0.72 -0.23 -0.59 -0.24 -0.24 -0.25 -0.79 0.43 -0.76 0.68
- ------------------------------------------------------------------------------------------------------------------------
10-YEAR 8.09 7.46 7.64 7.64 7.64 7.64 7.39 7.39 8.05 7.42 8.29
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. 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.
The returns for class A and class B shares include the returns of Prime A shares
(for class A shares) and Prime B shares (for class B shares) of the Galaxy Asset
Allocation Fund for periods prior to November 18, 2002. The returns shown for
class A shares and class B shares also include the returns of Retail A shares of
the Galaxy Asset Allocation Fund (adjusted, as necessary, to reflect the sales
charges applicable to class A shares and class B shares, respectively), for
periods prior to the inception of Prime A shares (November 1, 1998) and Prime B
shares (November 1, 1998). Class A and class B shares generally would have had
substantially similar returns to Retail A shares because they would have been
invested in the same portfolio of securities, although returns would have been
lower to the extent that expenses for class A and class B shares exceed expenses
paid by Retail A shares. The returns shown for class C shares include the
returns of Prime B shares of the Galaxy Asset Allocation Fund (adjusted to
reflect the sales charge applicable to class C shares) for periods prior to
November 18, 2002, the date on which class C shares were initially offered by
the Fund. The returns shown for class C shares also include the returns of
Retail A shares of the Galaxy Asset Allocation Fund (adjusted to reflect the
sales charges applicable to class C shares) for periods prior to the date of
inception of Prime B shares (November 1, 1998). Class C shares generally would
have had substantially similar returns because they would have been invested in
the same portfolio of securities, although the returns would have been lower to
the extent that expenses for class C shares exceed expenses paid by Retail A and
Prime B Shares. Retail A shares of the Galaxy Asset Allocation Fund were
initially offered on December 30, 1991. Class A, B and C shares were initially
offered on November 18, 2002. The returns for class G and class T shares include
the returns of Retail A shares (for class T shares) and Retail B shares (for
class G shares) of the Galaxy Asset Allocation Fund for periods prior to
November 18, 2002, the date on which class T and class G shares were initially
offered by the Fund. The returns shown for class G shares also include the
returns of Retail A shares (adjusted to reflect sales charges applicable to
class G shares) for periods prior to the inception of Retail B shares of the
Galaxy Asset Allocation Fund (March 4, 1996). Retail A shares of the Galaxy
Asset Allocation Fund were initially offered on December 30, 1991. Class G
shares generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would have been lower to the extent that expenses for class
G shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy Asset Allocation Fund for periods
prior to November 18, 2002, the date on which class Z shares were initially
offered by the Fund. Trust shares of the Galaxy Asset Allocation Fund were
initially offered on December 30, 1991.
2
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia Asset Allocation Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 985.95 1,017.70 7.25 7.36 1.46
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 982.50 1,013.95 10.95 11.13 2.21
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 982.40 1,013.95 10.95 11.13 2.21
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 983.10 1,014.20 10.71 10.88 2.16
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 986.10 1,017.45 7.50 7.62 1.51
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 987.45 1,018.95 6.01 6.11 1.21
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Investment Advisor not waived a portion of expenses, total return would
have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
3
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 9.46% WITHOUT SALES CHARGE.
o THE FUND'S RETURN FELL BETWEEN THE RETURNS OF ITS TWO BENCHMARKS, THE S&P
500 INDEX AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX. IT WAS SLIGHTLY LESS
THAN THE MORNINGSTAR(R) MODERATE ASSET ALLOCATION CATEGORY AVERAGE OF 9.72%.
o AN EMPHASIS ON LARGE-CAP STOCKS WITHIN THE EQUITY PORTION OF THE PORTFOLIO
AIDED PERFORMANCE. HOWEVER, OUR DECISION TO LIGHTEN UP ON SMALL-CAP STOCKS
AND HIGH-YIELD ISSUES TURNED OUT TO BE PREMATURE AS BOTH SECTORS CONTINUED
TO PERFORM WELL.
LEHMAN
BROTHERS
CLASS A S&P 500 AGGREGATE
SHARES INDEX BOND INDEX
[UP ARROW] [UP ARROW] [UP ARROW]
9.46% 13.87% 3.68%
OBJECTIVE
Seeks a high total return by
providing both a current level of
income greater than that provided
by popular stock market averages, as
well as long-term growth in the
value of the Fund's assets.
TOTAL NET ASSETS
$423.2 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 15.06
- ----------------------------------------------
Class B 15.06
- ----------------------------------------------
Class C 15.06
- ----------------------------------------------
Class G 15.06
- ----------------------------------------------
Class T 15.07
- ----------------------------------------------
Class Z 15.06
DISTRIBUTIONS DECLARED PER SHARE
10/01/03 - 09/30/04 ($)
Class A 0.27
- ----------------------------------------------
Class B 0.15
- ----------------------------------------------
Class C 0.15
- ----------------------------------------------
Class G 0.16
- ----------------------------------------------
Class T 0.26
- ----------------------------------------------
Class Z 0.31
PORTFOLIO MANAGER'S REPORT _____________________________________________________
Columbia Asset Allocation Fund
For the 12-month period ended September 30, 2004, Columbia Asset Allocation
Fund class A shares returned 9.46% without sales charge. That compares with a
13.87% return for the S&P 500 Index and a 3.68% return for the Lehman Brothers
Aggregate Bond Index. We expect the fund, which is typically divided between
60% stocks and 40% bonds, to generate a return that is between these two
benchmarks. The fund's return fell slightly behind the average return of its
peer group, the Morningstar(R) Moderate Asset Allocation Category, which was
9.72%. 1 We believe this modest underperformance was the result of the fund's
lackluster performance in growth stocks as well as international stocks.
LARGE COMPANY FOCUS
Early in the period, we trimmed exposure to small-cap stocks to emphasize
large-cap stocks. This shift turned out to be premature, because small-cap
stocks continued to perform well up to the final months of the period.
The fund benefited from our strategy to diversify across value and growth
stocks. Value stocks outperformed growth, but when the market began to shift
near the end of the period, diversification helped dampen the fund's price
volatility. In fact, we put more money to work in large-cap growth stocks as
the sector became more attractively valued.
FINANCIALS, ENERGY AND CONSUMER STOCKS AIDED PERFORMANCE
The financial sector was the strongest contributor to the fund's performance.
Industrials such as General Electric also boosted the fund's return. Strong
profit margins and rising energy prices fuelled returns from ChevronTexaco and
Exxon Mobil in the energy sector. The fund also benefited from owning eBay in
the consumer discretionary sector. The online service company has successfully
harnessed technological trends and global consumer demand to fuel rapid
growth, and its stock was a stand-out performer for the period.
SHIFT FROM HIGH-YIELD BONDS WAS PREMATURE
Although the fund's bond holdings delivered respectable returns, we were
premature in scaling back on the fund's substantial position in high-yield
bonds. We became less enthusiastic about the sector as the yield advantage
between high-yield and investment grade bonds narrowed.
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
4
[Sidebar]
TOP 5 EQUITY SECTORS AS OF 09/30/04 (%)
Financials 13.7
- ----------------------------------------------
Health care 8.8
- ----------------------------------------------
Information technology 8.7
- ----------------------------------------------
Consumer discretionary 8.4
- ----------------------------------------------
Industrials 7.3
TOP 10 EQUITY HOLDINGS
AS OF 09/30/04 (%)
Microsoft Corp. 1.1
- ----------------------------------------------
Citigroup, Inc. 1.1
- ----------------------------------------------
General Electric Co. 1.0
- ----------------------------------------------
Pfizer, Inc. 0.9
- ----------------------------------------------
BP PLC 0.8
- ----------------------------------------------
Johnson & Johnson 0.8
- ----------------------------------------------
Exxon Mobil Corp. 0.8
- ----------------------------------------------
PepsiCo, Inc. 0.7
- ----------------------------------------------
Wells Fargo & Co. 0.7
- ----------------------------------------------
Procter & Gamble Co. 0.7
PORTFOLIO STRUCTURE AS OF 09/30/04 (%)
Common stocks 64.9
- ----------------------------------------------
Corporate fixed-income bonds
And notes 14.9
- ----------------------------------------------
Mortgage-backed securities 11.9
- ----------------------------------------------
Asset-backed securities 3.2
- ----------------------------------------------
Government and agency obligations 2.1
- ----------------------------------------------
Preferred stock 0.3
- ----------------------------------------------
Municipal security 0.2
- ----------------------------------------------
Cash equivalents, net other assets
And liabilities 2.5
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
General Electric Co. 1.0
- ----------------------------------------------
ChevronTexaco Corp. 0.1
- ----------------------------------------------
Exxon Mobil PLC 0.8
- ----------------------------------------------
eBay Corp. 0.3
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 Asset Allocation Fund
ECONOMIC BACKDROP CONTINUES TO FAVOR EQUITIES
Uncertainties regarding Iraq, global terrorism and the US elections, as well as
surging oil prices, have dampened stock performance in 2004. However, we believe
that the fund's emphasis on stocks should prove beneficial even if the economy
expands at 3.5% or more and corporate profits grow, albeit at a slower pace. We
have positioned the fund to take advantage of this environment by 1) allocating
65% of its assets to stocks and 35% to bonds, 2) increasing exposure to
large-cap growth stocks and international issues and 3) cutting back on exposure
to high-yield and investment grade corporate bonds.
[Photo of Harvey B Hirschhorn]
Harvey Hirschhorn, CFA, is the lead manager for Columbia Asset Allocation Fund
and has co-managed the fund since October 2002. He has been with the advisor or
its predecessors or affiliate organizations since 1973. He is responsible for
allocating the fund's assets among the various asset classes. The investment
decisions for these asset classes are made by professionals with expertise in
that class.
/s/ Harvey B Hirschhorn
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
Investing in high-yield securities offers the potential for high current income
and attractive total return, but involves certain risks. Lower-rated bond risks
include default of the issuer, rising interest rates and risk associated with
investing in securities of foreign and emerging markets, including currency
exchange rate fluctuations and economic and political change.
The fund may be subject to the same types of risks associated with direct
ownership of real estate including the decline of property value due to general,
local and regional economic conditions.
5
PERFORMANCE OF A $10,000 INVESTMENT
10/01/94 - 09/30/04 ($)
SALES CHARGE WITHOUT WITH
- ----------------------------------------------
Class A 22,987 21,670
- ----------------------------------------------
Class B 21,988 21,988
- ----------------------------------------------
Class C 22,025 22,025
- ----------------------------------------------
Class G 21,303 21,303
- ----------------------------------------------
Class T 22,805 21,499
- ----------------------------------------------
Class Z 23,757 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, when
redeemed, 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 Large Cap Growth Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
CLASS A CLASS A RUSSELL
SHARES WITHOUT SHARES WITH S&P 500 1000
SALES CHARGE SALES CHARGE INDEX GROWTH INDEX
-------------- ------------ --------- ------------
10/1994 10,000.00 9,425.00 10,000.00 10,000.00
10,260.00 9,670.00 10,225.00 10,235.00
9,978.00 9,404.00 9,853.00 9,906.00
10,014.00 9,438.00 9,999.00 10,073.00
10,227.00 9,639.00 10,258.00 10,288.00
10,513.00 9,909.00 10,658.00 10,720.00
10,817.00 10,195.00 10,972.00 11,033.00
11,142.00 10,501.00 11,295.00 11,274.00
11,562.00 10,897.00 11,746.00 11,666.00
11,927.00 11,241.00 12,019.00 12,117.00
12,296.00 11,589.00 12,418.00 12,621.00
12,237.00 11,533.00 12,449.00 12,635.00
12,711.00 11,981.00 12,974.00 13,217.00
12,778.00 12,043.00 12,928.00 13,226.00
13,301.00 12,537.00 13,495.00 13,741.00
13,384.00 12,614.00 13,756.00 13,819.00
13,828.00 13,033.00 14,223.00 14,281.00
14,009.00 13,204.00 14,356.00 14,542.00
14,106.00 13,295.00 14,493.00 14,561.00
14,378.00 13,552.00 14,706.00 14,944.00
14,703.00 13,858.00 15,086.00 15,466.00
14,714.00 13,868.00 15,143.00 15,487.00
13,921.00 13,120.00 14,474.00 14,580.00
14,238.00 13,419.00 14,779.00 14,956.00
15,038.00 14,173.00 15,611.00 16,045.00
15,401.00 14,515.00 16,042.00 16,141.00
16,437.00 15,492.00 17,255.00 17,353.00
16,126.00 15,199.00 16,913.00 17,013.00
16,923.00 15,950.00 17,970.00 18,206.00
16,569.00 15,617.00 18,111.00 18,082.00
16,094.00 15,168.00 17,366.00 17,104.00
16,971.00 15,995.00 18,403.00 18,239.00
18,138.00 17,095.00 19,524.00 19,556.00
18,692.00 17,617.00 20,398.00 20,338.00
20,320.00 19,151.00 22,022.00 22,136.00
19,651.00 18,521.00 20,789.00 20,841.00
20,675.00 19,486.00 21,928.00 21,867.00
20,272.00 19,106.00 21,196.00 21,058.00
20,740.00 19,548.00 22,177.00 21,953.00
21,035.00 19,825.00 22,559.00 22,198.00
21,224.00 20,004.00 22,809.00 22,862.00
22,620.00 21,320.00 24,453.00 24,581.00
23,785.00 22,418.00 25,706.00 25,562.00
24,233.00 22,839.00 25,965.00 25,915.00
23,377.00 22,033.00 25,519.00 25,179.00
24,132.00 22,745.00 26,555.00 26,720.00
23,770.00 22,403.00 26,273.00 26,544.00
19,836.00 18,696.00 22,474.00 22,559.00
21,310.00 20,085.00 23,915.00 24,292.00
23,258.00 21,921.00 25,859.00 26,245.00
24,511.00 23,102.00 27,426.00 28,242.00
26,406.00 24,888.00 29,006.00 30,790.00
27,563.00 25,978.00 30,218.00 32,597.00
26,447.00 24,926.00 29,278.00 31,107.00
27,951.00 26,344.00 30,449.00 32,747.00
28,482.00 26,845.00 31,628.00 32,789.00
27,693.00 26,101.00 30,881.00 31,783.00
29,862.00 28,145.00 32,595.00 34,008.00
28,921.00 27,258.00 31,578.00 32,926.00
28,522.00 26,882.00 31,424.00 33,463.00
28,245.00 26,621.00 30,563.00 32,760.00
29,627.00 27,923.00 32,497.00 35,233.00
30,752.00 28,984.00 33,157.00 37,136.00
33,274.00 31,361.00 35,110.00 40,998.00
32,036.00 30,194.00 33,347.00 39,075.00
32,927.00 31,034.00 32,717.00 40,986.00
36,236.00 34,152.00 35,917.00 43,921.00
35,660.00 33,609.00 34,836.00 41,830.00
34,337.00 32,363.00 34,122.00 39,722.00
35,391.00 33,356.00 34,964.00 42,733.00
35,012.00 32,999.00 34,419.00 40,951.00
37,596.00 35,435.00 36,556.00 44,657.00
35,686.00 33,634.00 34,626.00 40,432.00
35,069.00 33,053.00 34,481.00 38,520.00
31,706.00 29,883.00 31,764.00 32,842.00
32,803.00 30,917.00 31,919.00 31,804.00
33,593.00 31,662.00 33,052.00 34,002.00
30,170.00 28,436.00 30,038.00 28,228.00
27,672.00 26,081.00 28,134.00 25,157.00
29,676.00 27,969.00 30,320.00 28,340.00
29,812.00 28,098.00 30,523.00 27,923.00
28,527.00 26,887.00 29,781.00 27,275.00
28,057.00 26,443.00 29,489.00 26,593.00
26,166.00 24,661.00 27,643.00 24,418.00
23,633.00 22,274.00 25,410.00 21,981.00
24,398.00 22,996.00 25,895.00 23,135.00
26,228.00 24,720.00 27,881.00 25,358.00
26,637.00 25,106.00 28,126.00 25,310.00
25,687.00 24,210.00 27,716.00 24,862.00
24,847.00 23,418.00 27,181.00 23,830.00
26,491.00 24,968.00 28,203.00 24,655.00
24,860.00 23,430.00 26,494.00 22,643.00
24,278.00 22,882.00 26,298.00 22,095.00
22,127.00 20,855.00 24,425.00 20,051.00
20,496.00 19,318.00 22,523.00 18,948.00
20,644.00 19,457.00 22,669.00 19,005.00
18,356.00 17,301.00 20,205.00 17,034.00
19,852.00 18,711.00 21,983.00 18,597.00
20,914.00 19,712.00 23,278.00 19,606.00
19,478.00 18,358.00 21,911.00 18,252.00
18,969.00 17,879.00 21,337.00 17,808.00
18,772.00 17,693.00 21,017.00 17,726.00
18,971.00 17,880.00 21,221.00 18,056.00
20,407.00 19,234.00 22,970.00 19,390.00
21,509.00 20,272.00 24,180.00 20,358.00
21,595.00 20,353.00 24,490.00 20,639.00
21,794.00 20,541.00 24,921.00 21,153.00
22,352.00 21,066.00 25,407.00 21,679.00
21,782.00 20,529.00 25,137.00 21,447.00
22,971.00 21,650.00 26,560.00 22,653.00
23,256.00 21,919.00 26,794.00 22,890.00
23,800.00 22,432.00 28,198.00 23,682.00
24,209.00 22,817.00 28,717.00 24,166.00
24,357.00 22,957.00 29,116.00 24,320.00
24,072.00 22,688.00 28,676.00 23,868.00
23,403.00 22,057.00 28,226.00 23,591.00
24,035.00 22,653.00 28,613.00 24,030.00
24,419.00 23,015.00 29,168.00 24,330.00
22,835.00 21,522.00 28,202.00 22,956.00
22,538.00 21,242.00 28,315.00 22,843.00
09/2004 22,987.00 21,670.00 28,612.00 23,060.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
1000 Growth Index is an unmanaged index that measures the performance of those
Russell 1000 Index companies with higher price-to-book ratios and higher
forecasted growth values. The Standard and Poor's (S&P) 500 Index is an
unmanaged index that tracks the performance of 500 widely held,
large-capitalization US stocks. The S&P 500 Index was the fund's previous
benchmark. Unlike mutual funds, indices are not investments, do not incur fees
or expenses and are not professionally managed. It is not possible to invest
directly in an index. Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
- ------------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C G T Z
- ------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 11/18/02 03/04/96 12/14/90 12/14/90
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-Year 5.57 -0.48 4.72 -0.28 4.77 3.77 4.75 -0.25 5.49 -0.59 5.83
- ------------------------------------------------------------------------------------------------------------------------
5-Year -4.04 -5.16 -4.82 -5.14 -4.79 -4.79 -4.96 -5.43 -4.21 -5.34 -3.84
- ------------------------------------------------------------------------------------------------------------------------
10-Year 8.68 8.04 8.20 8.20 8.22 8.22 7.86 7.86 8.59 7.95 9.04
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE"RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. 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.
The returns for class A and class B shares include the returns of Prime A shares
(for class A shares) and Prime B shares (for class B shares) of the Galaxy
Equity Growth Fund for periods prior to November 18, 2002, the date on which
class A and class B shares were initially offered by the Fund. The returns shown
for class A shares and class B shares also include the returns of Retail A
shares of the Galaxy Equity Growth Fund (adjusted, as necessary, to reflect the
sales charges applicable to class A shares and class B shares, respectively) for
periods prior to the date of inception of Prime A shares and Prime B shares
(November 1, 1998). Class A and class B shares generally would have had
substantially similar returns to Retail A shares because they would have been
invested in the same portfolio of securities, although returns would have been
lower to the extent that expenses for class A and class B shares exceed expenses
paid by Retail A shares. The returns shown for class C shares include the
returns of Prime B shares of the Galaxy Equity Growth Fund (adjusted to reflect
the sales charge applicable to class C shares) for periods prior to November 18,
2002, the date on which class C shares were initially offered by the Fund. The
returns shown for class C shares also include the returns of Retail A shares of
the Galaxy Equity Growth Fund (adjusted to reflect the sales charges applicable
to class C shares) for periods prior to the date of inception of Prime B shares
(November 1, 1998). Class C shares generally would have had substantially
similar returns because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class C shares exceed expenses paid by Retail A and Prime B shares.
The returns for class G and class T shares include the returns of Retail A
shares (for class T shares) and Retail B shares (for class G shares) of the
Galaxy Equity Growth Fund for periods prior to November 18, 2002, the date on
which class T and class G shares were initially offered by the Fund. The returns
shown for class G shares also include the returns of Retail A shares (adjusted
to reflect sales charges applicable to class G shares) for periods prior to the
inception of Retail B shares of the Galaxy Equity Growth Fund (March 4, 1996).
Retail A shares were initially offered on December 14, 1990. Class G shares
generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would be lower to the extent that expenses for class G
shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy Equity Growth Fund for periods
prior to November 18, 2002, the date on which class Z shares were initially
offered by the Fund. Trust shares of the Galaxy Equity Growth Fund were
initially offered on December 14, 1990.
6
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia Large Cap Growth Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 955.90 1,018.55 6.31 6.51 1.29
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 952.10 1,014.80 9.96 10.28 2.04
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 952.05 1,014.80 9.96 10.28 2.04
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 953.80 1,015.05 9.72 10.02 1.99
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 955.60 1,018.30 6.55 6.76 1.34
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 956.35 1,019.80 5.09 5.25 1.04
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Investment Advisor not waived a portion of expenses, total return would
have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
7
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 5.57% WITHOUT SALES CHARGE.
o AS WORLDWIDE ECONOMIC GROWTH PICKED UP, THE FUND'S INDUSTRIAL STOCKS HELPED
PERFORMANCE. CONSUMER STAPLES STOCKS ALSO PERFORMED WELL.
o STOCK SELECTION AND OVERWEIGHT POSITIONS IN TECHNOLOGY AND CONSUMER
CYCLICAL SECTORS HURT PERFORMANCE RELATIVE TO THE FUND'S BENCHMARKS.
RUSSELL
CLASS A S&P 500 1000 GROWTH
SHARES INDEX INDEX
[UP ARROW] [UP ARROW] [UP ARROW]
5.57% 13.87% 7.51%
OBJECTIVE
Seeks long-term capital
appreciation.
TOTAL NET ASSETS
$908.0 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 18.57
- ----------------------------------------------
Class B 17.76
- ----------------------------------------------
Class C 17.79
- ----------------------------------------------
Class G 17.21
- ----------------------------------------------
Class T 18.46
- ----------------------------------------------
Class Z 18.87
DISTRIBUTIONS DECLARED PER SHARE
10/01/03 - 09/30/04 ($)
Class A 0.00
- ----------------------------------------------
Class B 0.00
- ----------------------------------------------
Class C 0.00
- ----------------------------------------------
Class G 0.00
- ----------------------------------------------
Class T 0.00
- ----------------------------------------------
Class Z 0.01
PORTFOLIO MANAGERS' REPORT _____________________________________________________
Columbia Large Cap Growth Fund
For the 12-month period ended September 30, 2004, class A shares of Columbia
Large Cap Growth Fund returned 5.57% without sales charge. The fund
underperformed the Russell 1000 Growth Index and the S&P 500 Index, which
returned 7.51% and 13.87%, respectively, over the same period. The fund also
trailed the average return of its peer group, the Morningstar(R) Large Growth
Category, which was 7.61%. 1
The fund's focus on large, profitable companies with strong competitive
positions, healthy balance sheets and above-average sales growth led us to
invest in what turned out to be top-performing stocks in the industrial and
consumer staples sectors. However, the fund's exposure to technology on average
was higher than its weight in the Russell 1000 Growth Index. This hurt
performance because technology was a weak performer during the period. Stock
selection in technology and financials also detracted from the fund's return.
STRONG GAINS FROM INDUSTRIALS, CONSUMER STAPLES SECTORS
An above-average stake in industrials helped the fund as world economic growth,
particularly in China, was strong. Phelps Dodge and Praxair contributed to
portfolio performance. Tyco International, an industrial conglomerate under new
management, performed particularly well. With US economic growth maturing, we
added to our holdings of high quality growth companies, buying NIKE, Carnival
and Hershey Foods. Costco Wholesale, a warehouse chain that sells consumer
goods, was a standout performer as it reduced employee related costs and
produced strong sales growth via its superior product offering.
Consumer discretionary stocks also aided performance. Top performers included XM
Satellite Radio Holdings and eBay. XM benefited from greater penetration of the
consumer market with its terrific product which has no commercials and virtually
unlimited range. By contrast, traditional media stocks such as Clear Channel and
Viacom, which the fund does not hold, were disappointing performers as they sold
less advertising than expected because advertisers are increasingly using the
internet medium and consumers are choosing to subscribe to commercial free
radio. Meanwhile, eBay rallied as its robust growth continued to exceed investor
expectations. Niche retailers Chico's FAS and Coach also delivered strong
results.
MIXED HEALTH CARE AND TECHNOLOGY RETURNS
The fund's health care returns were mixed. Medical product and device
companies, such as Alcon and St. Jude Medical, rallied nicely amid new product
introductions. However, the fund lost some ground by not owning more shares of
Johnson & Johnson when its stock price took off in the spring of 2004.
Biotechnology stocks further detracted from performance. In particular, Amgen
was hurt by concerns about Medicare reimbursement.
1 (C)2004 by Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
8
[Sidebar]
SECTORS AS OF 09/30/04 (%)
Consumer discretionary 16.1
- ----------------------------------------------
Consumer staples 10.4
- ----------------------------------------------
Energy 1.5
- ----------------------------------------------
Financials 8.8
- ----------------------------------------------
Health care 23.6
- ----------------------------------------------
Industrials 10.1
- ----------------------------------------------
Information technology 24.7
- ----------------------------------------------
Materials 4.8
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/04 (%)
Microsoft Corp. 4.9
- ----------------------------------------------
Pfizer, Inc. 3.2
- ----------------------------------------------
Johnson & Johnson 3.2
- ----------------------------------------------
Praxair, Inc. 2.5
- ----------------------------------------------
Tyco International Ltd. 2.4
- ----------------------------------------------
Cisco Systems, Inc. 2.4
- ----------------------------------------------
Teva Pharmaceutical
Industries Ltd. ADR 2.2
- ----------------------------------------------
Zimmer Holdings, Inc. 2.1
- ----------------------------------------------
Lowe's Companies 1.9
- ----------------------------------------------
Procter & GAMBLE CO. 1.8
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
Phelps Dodge Corp. 0.9
- ----------------------------------------------
Praxair, Inc. 2.5
- ----------------------------------------------
Tyco International Ltd. 2.4
- ----------------------------------------------
NIKE, Inc. 0.8
- ----------------------------------------------
Carnival Corp. 0.9
- ----------------------------------------------
Hershey Foods Corp. 0.7
- ----------------------------------------------
Costco Wholesale Corp. 1.3
- ----------------------------------------------
XM Satellite Radio Holdings, Inc. 1.0
- ----------------------------------------------
eBay Corp. 1.2
- ----------------------------------------------
Chico's FAS, Inc. 1.3
- ----------------------------------------------
Coach, Inc. 1.0
- ----------------------------------------------
Alcon, Inc. 1.1
- ----------------------------------------------
St. Jude Medical, Inc. 1.5
- ----------------------------------------------
Johnson & Johnson 3.2
- ----------------------------------------------
Amgen, Inc. 0.8
- ----------------------------------------------
Cognizant Technology Solutions Corp. 1.2
- ----------------------------------------------
QUALCOMM, Inc. 1.4
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 Large Cap Growth Fund
Within technology, the fund owned a range of companies we believed could benefit
from an improving economy, increased corporate spending and the growing
popularity of advanced communication devices. However, the technology sector had
the largest negative impact on performance. The fund's exposure to technology
was higher on average than its weight in the Russell 1000 Growth Index, and
technology lagged the broader market. Stock selection also detracted from
performance. The fund did well by overweighting Cognizant Technology Solutions
and QUALCOMM and not owning Applied Materials. However, the gains realized from
these stocks were not enough to overcome losses from Seagate Technology, down
50% in the fund, and Red Hat, which were sold before the end of the period. We
overestimated demand for information technology equipment and underestimated the
supply growth from China where manufacturers continue to access low cost labor.
OPTIMISTIC OUTLOOK FOR LARGE-CAP STOCKS
In a pattern reminiscent of the underperformance of value stocks during the
technology bubble years of the late 1990s, large-cap growth stocks have
underperformed nearly every domestic equity category. As a result, valuations of
large-cap growth stocks, in our opinion, have become attractive compared to
value stocks on a historical basis. We are optimistic about the prospects for
large-cap growth stocks. We expect high quality companies with strong growth
records and earnings prospects that are not dependent on economic performance to
do better than the low quality companies that performed well coming out of the
2002 bear market bottom. We have maintained a diversified and balanced approach
to sector exposure while picking what we believe are growth stocks with growth
potential, attractive valuations and strong balance sheets.
Alexander S. Macmillan has co-managed the Columbia Large Cap Growth Fund since
July 2003 and has been with the advisor or its predecessors or affiliate
organizations since 1989.
/s/ Alexander S. Macmillan
Paul J. Berlinguet has co-managed the fund since October 2003 and has been with
the advisor or its predecessors or affiliate organizations since October 2003.
/s/ Paul J. Berlinguet
An investment in the fund may present certain risks, including stock market
fluctuations that occur in response to economic and business developments. The
fund may invest in foreign securities, which have special risks, including
political or economic instability and higher transaction costs; different
regulations, accounting standards, trading practices and levels of information;
and currency exchange rate fluctuations.
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.
9
[Sidebar]
PERFORMANCE OF A $10,000 INVESTMENT
10/01/94 - 09/30/04 ($)
SALES CHARGE WITHOUT WITH
- ----------------------------------------------
Class A 24,974 23,539
- ----------------------------------------------
Class B 23,485 23,485
- ----------------------------------------------
Class C 23,447 23,447
- ----------------------------------------------
Class G 23,514 23,514
- ----------------------------------------------
Class T 24,931 23,499
- ----------------------------------------------
Class Z 25,906 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, when
redeemed, 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 Disciplined Value Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
CLASS A CLASS A RUSSELL
SHARES WITHOUT SHARES WITH 1000 S&P 500
SALES CHARGE SALES CHARGE GROWTH INDEX INDEX
-------------- ------------ ------------ ------------
10/1994 10000.00 9425.00 10000.00 10000.00
10137.00 9554.00 10139.00 10225.00
9939.00 9368.00 9730.00 9853.00
10031.00 9454.00 9843.00 9999.00
10166.00 9582.00 10146.00 10258.00
10496.00 9892.00 10548.00 10658.00
10722.00 10106.00 10780.00 10972.00
10850.00 10226.00 11121.00 11295.00
11341.00 10689.00 11588.00 11746.00
11634.00 10965.00 11744.00 12019.00
11881.00 11197.00 12153.00 12418.00
11940.00 11253.00 12325.00 12449.00
12307.00 11599.00 12771.00 12974.00
12246.00 11542.00 12644.00 12928.00
12887.00 12146.00 13284.00 13495.00
12816.00 12079.00 13617.00 13756.00
13232.00 12472.00 14042.00 14223.00
13473.00 12699.00 14149.00 14356.00
13504.00 12728.00 14390.00 14493.00
13746.00 12956.00 14444.00 14706.00
14099.00 13289.00 14625.00 15086.00
14056.00 13247.00 14637.00 15143.00
13507.00 12731.00 14083.00 14474.00
13972.00 13169.00 14486.00 14779.00
14654.00 13811.00 15063.00 15611.00
14878.00 14023.00 15646.00 16042.00
16025.00 15104.00 16780.00 17255.00
15520.00 14628.00 16565.00 16913.00
16247.00 15312.00 17368.00 17970.00
16183.00 15253.00 17624.00 18111.00
15453.00 14565.00 16989.00 17366.00
16317.00 15379.00 17703.00 18403.00
17561.00 16551.00 18692.00 19524.00
17864.00 16837.00 19494.00 20398.00
19533.00 18410.00 20960.00 22022.00
18953.00 17863.00 20214.00 20789.00
19880.00 18737.00 21435.00 21928.00
19265.00 18158.00 20837.00 21196.00
19699.00 18566.00 21758.00 22177.00
19813.00 18674.00 22393.00 22559.00
20083.00 18928.00 22075.00 22809.00
21697.00 20450.00 23561.00 24453.00
22795.00 21484.00 25003.00 25706.00
23000.00 21678.00 25171.00 25965.00
22115.00 20843.00 24798.00 25519.00
22761.00 21452.00 25115.00 26555.00
22003.00 20737.00 24673.00 26273.00
18399.00 17341.00 21002.00 22474.00
19284.00 18175.00 22208.00 23915.00
21169.00 19952.00 23929.00 25859.00
22708.00 21403.00 25044.00 27426.00
24518.00 23109.00 25895.00 29006.00
25526.00 24058.00 26102.00 30218.00
24357.00 22956.00 25734.00 29278.00
25114.00 23670.00 26267.00 30449.00
25845.00 24359.00 28720.00 31628.00
25473.00 24008.00 28404.00 30881.00
26961.00 25410.00 29228.00 32595.00
25885.00 24397.00 28372.00 31578.00
24663.00 23245.00 27319.00 31424.00
23642.00 22283.00 26366.00 30563.00
24266.00 22871.00 27884.00 32497.00
24400.00 22997.00 27667.00 33157.00
26157.00 24653.00 27800.00 35110.00
24530.00 23119.00 26893.00 33347.00
24007.00 22627.00 24895.00 32717.00
26965.00 25414.00 27932.00 35917.00
26520.00 24995.00 27608.00 34836.00
26321.00 24808.00 27898.00 34122.00
24923.00 23490.00 26623.00 34964.00
24495.00 23086.00 26956.00 34419.00
26765.00 25226.00 28455.00 36556.00
25738.00 24258.00 28717.00 34626.00
26167.00 24663.00 29423.00 34481.00
23804.00 22436.00 28332.00 31764.00
25321.00 23865.00 29751.00 31919.00
27914.00 26309.00 29864.00 33052.00
25884.00 24396.00 29034.00 30038.00
25077.00 23635.00 28009.00 28134.00
27183.00 25620.00 29381.00 30320.00
27730.00 26135.00 30042.00 30523.00
26809.00 25267.00 29375.00 29781.00
27203.00 25639.00 29314.00 29489.00
25794.00 24311.00 28138.00 27643.00
22428.00 21138.00 26157.00 25410.00
23480.00 22130.00 25932.00 25895.00
25586.00 24115.00 27439.00 27881.00
26538.00 25012.00 28087.00 28126.00
26055.00 24556.00 27870.00 27716.00
24877.00 23447.00 27915.00 27181.00
26671.00 25137.00 29235.00 28203.00
25302.00 23847.00 28233.00 26494.00
25302.00 23847.00 28374.00 26298.00
22661.00 21358.00 26745.00 24425.00
20442.00 19267.00 24258.00 22523.00
20289.00 19122.00 24442.00 22669.00
17820.00 16795.00 21724.00 20205.00
18476.00 17413.00 23334.00 21983.00
19575.00 18449.00 24804.00 23278.00
18649.00 17577.00 23727.00 21911.00
18399.00 17341.00 23153.00 21337.00
17705.00 16687.00 22535.00 21017.00
17783.00 16761.00 22573.00 21221.00
19268.00 18160.00 24560.00 22970.00
20523.00 19343.00 26146.00 24180.00
20851.00 19652.00 26473.00 24490.00
21101.00 19888.00 26868.00 24921.00
21525.00 20288.00 27287.00 25407.00
21256.00 20034.00 27019.00 25137.00
22453.00 21162.00 28673.00 26560.00
22704.00 21399.00 29063.00 26794.00
23919.00 22544.00 30853.00 28198.00
24386.00 22983.00 31396.00 28717.00
24773.00 23349.00 32068.00 29116.00
24578.00 23164.00 31786.00 28676.00
24052.00 22669.00 31010.00 28226.00
24246.00 22852.00 31327.00 28613.00
24938.00 23504.00 32066.00 29168.00
24466.00 23059.00 31614.00 28202.00
24779.00 23355.00 32063.00 28315.00
09/2004 24974.00 23539.00 32560.00 28612.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
1000 Value Index is an unmanaged index that measures the performance of those
Russell 1000 Index companies with lower price-to-book ratios and lower
forecasted growth values. The Standard & Poor's (S&P) 500 Index is an unmanaged
index that tracks the performance of 500 widely held, large-capitalization U.S.
stocks. The S&P 500 Index was the fund's previous benchmark. Unlike mutual
funds, indices are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
- ------------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C G T Z
- ------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/25/02 11/25/02 11/25/02 03/04/96 09/01/88 09/01/88
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-Year 17.53 10.79 16.64 11.64 16.67 15.67 16.67 11.67 17.54 10.79 17.86
- ------------------------------------------------------------------------------------------------------------------------
5-Year 1.10 -0.09 0.30 0.03 0.27 0.27 0.33 -0.09 1.07 -0.13 1.46
- ------------------------------------------------------------------------------------------------------------------------
10-Year 9.58 8.94 8.91 8.91 8.90 8.90 8.93 8.93 9.57 8.92 9.99
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE"RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON
DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class A, class B and class C are newer classes of shares. Their performance
information includes returns of the Retail A shares (for class A shares) and
Retail B shares (for class B and class C shares) of the Galaxy Equity Value Fund
for periods prior to November 25, 2002, the date on which class A, B and C
shares were initially offered by the Fund. The returns shown for class B and
class C shares also include the performance of Retail A shares of the Galaxy
Equity Value Fund for periods prior to the inception of Retail B shares (March
4, 1996). Class B and class C shares generally would have had substantially
similar returns to Retail A shares because they would have been invested in the
same portfolio of securities, although the returns would have been lower to the
extent that expenses for class B and class C shares exceed expenses paid by
Retail A shares. The returns have not been restated to reflect any differences
in expenses (such as 12b-1 fees) between any of the predecessor shares and the
newer classes of shares. The returns for class G and class T shares include the
returns of Retail A shares (for class T shares) and Retail B shares (for class G
shares) of the Galaxy Equity Value Fund for periods prior to November 25, 2002,
the date on which class T and class G shares were initially offered by the Fund.
The returns shown for class G shares also include the returns of Retail A shares
(adjusted to reflect the sales charge applicable to class G shares), for periods
prior to the inception of Retail B shares of the Galaxy Equity Value Fund (March
4, 1996). Retail A shares were initially offered on September 1, 1988. Class G
shares generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would have been lower to the extent that expenses for class
G shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy Equity Value Fund for periods
prior to November 25, 2002, the date on which class Z shares were initially
offered by the Fund.
10
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia Disciplined Value Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1,016.75 1,018.40 6.66 6.66 1.32
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1,014.65 1,014.65 10.43 10.43 2.07
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1,015.85 1,014.65 10.43 10.43 2.07
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 1,015.40 1,014.90 10.18 10.18 2.02
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 1,018.05 1,018.15 6.91 6.91 1.37
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 1,018.35 1,019.65 5.40 5.40 1.07
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
11
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 17.53% WITHOUT SALES CHARGE.
o A FAVORABLE ENVIRONMENT FOR VALUE STOCKS HELPED THE FUND, ITS BENCHMARK AND
PEER GROUP ACHIEVE DOUBLE-DIGIT RETURNS.
o GOOD STOCK SELECTION, AS WELL AS THE FUND'S EMPHASIS ON RELATIVELY STABLE,
HIGHER QUALITY COMPANIES MADE A STRONG CONTRIBUTION TO PERFORMANCE. HOWEVER,
IN A MARKET THAT FAVORED STOCKS OF SMALLER, MORE SPECULATIVE COMPANIES, OUR
FOCUS ON QUALITY CONTRIBUTED TO THE FUND'S UNDERPERFORMANCE RELATIVE TO THE
RUSSELL 1000 VALUE INDEX.
RUSSELL
CLASS A S&P 500 1000 VALUE
SHARES INDEX INDEX
[UP ARROW] [UP ARROW] [UP ARROW]
17.53% 13.87% 20.52%
OBJECTIVE
Seeks long-term capital
appreciation, with income
as a secondary goal.
TOTAL NET ASSETS
$429.2 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 12.71
- ----------------------------------------------
Class B 12.16
- ----------------------------------------------
Class C 12.14
- ----------------------------------------------
Class G 12.17
- ----------------------------------------------
Class T 12.72
- ----------------------------------------------
Class Z 12.95
DISTRIBUTIONS DECLARED PER SHARE
10/01/03 - 09/30/04 ($)
Class A 0.23
- ----------------------------------------------
Class B 0.07
- ----------------------------------------------
Class C 0.07
- ----------------------------------------------
Class G 0.08
- ----------------------------------------------
Class T 0.20
- ----------------------------------------------
Class Z 0.28
PORTFOLIO MANAGER'S REPORT _____________________________________________________
Columbia Disciplined Value Fund
For the 12-month period ended September 30, 2004, Columbia Disciplined Value
Fund class A shares returned 17.53% without sales charge. The fund trailed the
Russell 1000 Value Index, which returned 20.52% for the same period, but beat
the 13.87% return of the S&P 500 Index and the 16.86% return of the
Morningstar(R) Large Value Category. 1 Good stock selection, as well as the
fund's emphasis on relatively stable, higher quality companies made a strong
contribution to performance. However, in a market that favored stocks of
smaller, speculative companies, our focus on quality contributed to the fund's
underperformance relative to the Russell 1000 Value Index.
TOP PERFORMERS IN MANY INDUSTRIES
The fund's top performers represented a spectrum of industry groups. TXU
(formerly Texas Utilities) more than doubled as new leadership took steps to
restructure the company. TXU sold some non-core businesses and reduced debt.
Thanks to these moves, the perception of the company's growth potential
increased dramatically and investors rewarded it with a higher stock price. In
the chemical industry, Monsanto enjoyed higher revenues from global corn and
seed sales and from pesticides and herbicides outside the United States. The
fund took profits from the stock and sold its position. In the consumer sector,
Gillette reported record net sales and profits, spurred by strong sales of new
products, including a new razor for men. The company also benefited from ongoing
cost savings and increased manufacturing productivity. In the energy sector,
ChevronTexaco and Valero Energy benefited from rising oil prices. Valero Energy
was sold before the end of the period.
BIGGEST DISAPPOINTMENT FROM MERCK
The biggest detractor from performance was pharmaceutical giant Merck. The
company withdrew arthritis drug and painkiller Vioxx from all markets on
September 30, the last day of the reporting period, because of reports that the
drug increased the risk of heart attacks and strokes. As a result, the stock's
price fell more than 25% in one day. Beyond the loss of Vioxx, Merck's patent
for Zocor, its best selling cholesterol treatment, expires in 2006. The company
is also experiencing increased competition for four of its five major drugs.
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
12
[Sidebar]
SECTORS AS OF 09/30/04 (%)
Consumer discretionary 9.2
- ----------------------------------------------
Consumer staples 7.6
- ----------------------------------------------
Energy 12.7
- ----------------------------------------------
Financials 31.6
- ----------------------------------------------
Health care 4.8
- ----------------------------------------------
Industrials 8.4
- ----------------------------------------------
Information technology 8.0
- ----------------------------------------------
Materials 6.9
- ----------------------------------------------
Telecommunication services 5.5
- ----------------------------------------------
Utilities 5.3
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/04 (%)
Exxon Mobil Corp. 5.2
- ----------------------------------------------
ChevronTexaco Corp. 4.7
- ----------------------------------------------
JPMorgan Chase & CO. 4.2
- ----------------------------------------------
SBC Communications, Inc. 4.0
- ----------------------------------------------
General Electric Co. 4.0
- ----------------------------------------------
Citigroup, Inc. 4.0
- ----------------------------------------------
Wachovia Corp. 3.6
- ----------------------------------------------
International Business Machines Corp. 3.2
- ----------------------------------------------
Freddie Mac 3.1
- ----------------------------------------------
Prudential Financial, Inc. 2.9
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
TXU Corp. 0.6
- ----------------------------------------------
Gillette Co. 2.6
- ----------------------------------------------
ChevronTexaco Corp. 4.7
- ----------------------------------------------
Merck & Co., Inc. 2.3
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 Disciplined Value Fund
FAVORABLE CLIMATE FOR LARGE-CAP STOCKS
We believe that the economy has the potential to strengthen in the months ahead
and that large-cap stocks have the potential to outperform small-cap stocks
because they are more reasonably priced relative to their earnings growth.
Large-cap stocks have a long history of superior performance when the outlook
for the economy is favorable. Yet, uncertainty over higher oil prices could put
a damper on growth. If consumers are required to spend more to drive their cars
and heat their homes, there will be less to spend on other consumer goods. Given
this uncertainty, we will maintain our focus on stock selection, seeking
attractively priced stocks of companies we view as having improving business
prospects.
[Photo of Michael A. Welhoelter]
Michael A. Welhoelter has managed or co-managed the fund since January 2003 and
has been with the advisor or its predecessors or affiliate organizations since
November 2001.
/s/ Michael A. Welhoelter
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
This fund may invest in small- and mid-cap companies, which may be subject to
greater volatility and price fluctuations because they may be thinly traded and
less liquid than investments in larger companies.
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.
13
[Sidebar]
PERFORMANCE OF A $10,000 INVESTMENT 10/01/94 -
09/30/04 ($)
SALES CHARGE WITHOUT WITH
- ----------------------------------------------
Class A 14,393 13,562
- ----------------------------------------------
Class B 13,901 13,901
- ----------------------------------------------
Class C 13,810 13,810
- ----------------------------------------------
Class G 13,672 13,672
- ----------------------------------------------
Class T 14,230 13,409
- ----------------------------------------------
Class Z 15,016 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, when
redeemed, 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 International Equity Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
CLASS A CLASS A MSCI ALL
SHARES WITHOUT SHARES WITH COUNTRY WORLD MSCI EAFE
SALES CHARGE SALES CHARGE EX U.S. INDEX INDEX
-------------- ------------ ------------- -----------
10/1994 10000.00 9425.00 10000.00 10000.00
10233.00 9645.00 10269.00 10333.00
9698.00 9140.00 9774.00 9836.00
9647.00 9093.00 9752.00 9898.00
9206.00 8677.00 9309.00 9518.00
9167.00 8640.00 9259.00 9490.00
9600.00 9048.00 9782.00 10082.00
9914.00 9344.00 10163.00 10462.00
10001.00 9426.00 10117.00 10337.00
9907.00 9337.00 9978.00 10156.00
10465.00 9864.00 10544.00 10789.00
10150.00 9567.00 10178.00 10378.00
10261.00 9671.00 10352.00 10580.00
10167.00 9582.00 10075.00 10296.00
10394.00 9797.00 10312.00 10582.00
10712.00 10097.00 10720.00 11008.00
10939.00 10310.00 10867.00 11053.00
11027.00 10393.00 10867.00 11091.00
11238.00 10592.00 11071.00 11326.00
11577.00 10911.00 11406.00 11656.00
11439.00 10782.00 11235.00 11441.00
11471.00 10812.00 11292.00 11505.00
11076.00 10439.00 10917.00 11169.00
11011.00 10378.00 10982.00 11194.00
11326.00 10675.00 11254.00 11492.00
11270.00 10622.00 11142.00 11374.00
11746.00 11071.00 11572.00 11827.00
11786.00 11109.00 11437.00 11675.00
11829.00 11149.00 11227.00 11266.00
11941.00 11254.00 11432.00 11451.00
12035.00 11343.00 11408.00 11492.00
12216.00 11514.00 11505.00 11553.00
12965.00 12219.00 12215.00 12305.00
13911.00 13111.00 12889.00 12983.00
14633.00 13792.00 13150.00 13193.00
13351.00 12584.00 12115.00 12208.00
14521.00 13686.00 12770.00 12891.00
13059.00 12308.00 11682.00 11900.00
13016.00 12267.00 11536.00 11779.00
13387.00 12617.00 11669.00 11881.00
13670.00 12884.00 12018.00 12424.00
14742.00 13894.00 12819.00 13222.00
15531.00 14638.00 13263.00 13629.00
15815.00 14906.00 13359.00 13737.00
16142.00 15214.00 13115.00 13669.00
16249.00 15315.00 13067.00 13773.00
16595.00 15641.00 13191.00 13912.00
14575.00 13737.00 11331.00 12189.00
13876.00 13078.00 11092.00 11814.00
14842.00 13988.00 12254.00 13045.00
15852.00 14941.00 12912.00 13713.00
16369.00 15428.00 13357.00 14254.00
17107.00 16124.00 13342.00 14211.00
16526.00 15575.00 13043.00 13873.00
16803.00 15837.00 13673.00 14451.00
17440.00 16437.00 14357.00 15036.00
16831.00 15864.00 13682.00 14262.00
17523.00 16516.00 14311.00 14818.00
17865.00 16838.00 14646.00 15258.00
18337.00 17282.00 14698.00 15315.00
18623.00 17552.00 14796.00 15470.00
19371.00 18257.00 15346.00 16050.00
20479.00 19302.00 15960.00 16607.00
23172.00 21840.00 17483.00 18098.00
22095.00 20824.00 16534.00 16949.00
23787.00 22419.00 16980.00 17405.00
23728.00 22363.00 17618.00 18080.00
21566.00 20326.00 16635.00 17129.00
20803.00 19607.00 16209.00 16711.00
21487.00 20252.00 16900.00 17364.00
20793.00 19597.00 16232.00 16637.00
21076.00 19864.00 16434.00 16781.00
19843.00 18702.00 15522.00 15964.00
19109.00 18010.00 15028.00 15587.00
18102.00 17061.00 14355.00 15003.00
18509.00 17445.00 14844.00 15536.00
18646.00 17574.00 15067.00 15528.00
16996.00 16019.00 13874.00 14363.00
15733.00 14828.00 12893.00 13405.00
16688.00 15728.00 13769.00 14337.00
15949.00 15032.00 13389.00 13831.00
15244.00 14367.00 12877.00 13265.00
14846.00 13992.00 12589.00 13024.00
14095.00 13284.00 12277.00 12694.00
12434.00 11719.00 10975.00 11408.00
12730.00 11998.00 11282.00 11700.00
13390.00 12620.00 11798.00 12132.00
13449.00 12675.00 11950.00 12204.00
12790.00 12054.00 11438.00 11556.00
13067.00 12316.00 11521.00 11636.00
13702.00 12914.00 12132.00 12322.00
13656.00 12870.00 12226.00 12347.00
13609.00 12827.00 12359.00 12503.00
13043.00 12293.00 11825.00 12006.00
11588.00 10921.00 10672.00 10821.00
11334.00 10682.00 10673.00 10796.00
10306.00 9713.00 9542.00 9636.00
10722.00 10106.00 10053.00 10154.00
11080.00 10443.00 10537.00 10615.00
10771.00 10152.00 10198.00 10258.00
10295.00 9703.00 9840.00 9830.00
10167.00 9583.00 9640.00 9605.00
10133.00 9550.00 9453.00 9417.00
10841.00 10218.00 10364.00 10340.00
11433.00 10776.00 11024.00 10966.00
11677.00 11005.00 11330.00 11232.00
12001.00 11311.00 11631.00 11504.00
12314.00 11606.00 11978.00 11781.00
12569.00 11847.00 12313.00 12144.00
13359.00 12590.00 13111.00 12900.00
13510.00 12733.00 13397.00 13187.00
14416.00 13587.00 14419.00 14217.00
14696.00 13851.00 14651.00 14417.00
14882.00 14027.00 15023.00 14750.00
15022.00 14158.00 15116.00 14833.00
14603.00 13763.00 14646.00 14497.00
14463.00 13631.00 14693.00 14547.00
14742.00 13894.00 15012.00 14865.00
14172.00 13357.00 14575.00 14382.00
14160.00 13346.00 14692.00 14445.00
09/2004 14393.00 13562.00 15164.00 14825.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Morgan
Stanley Capital International (MSCI) All Country (AC) World ex U.S. Index is an
unmanaged index of global stock market performance that includes developed and
emerging markets but excludes the U.S. The Morgan Stanley Capital International
(MSCI) Europe, Australasia, Far East (EAFE) Index is a free float-adjusted
market capitalization index that is designed to measure developed market equity
performance, excluding the US and Canada. Unlike mutual funds, indices are not
investments, do not incur fees or expenses and are not professionally managed.
It is not possible to invest directly in an index. Securities in the fund may
not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
- ------------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C G T Z
- ------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 11/18/02 11/01/98 12/30/91 12/30/91
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-Year 14.51 7.93 13.67 8.67 13.35 12.35 13.59 8.59 14.37 7.77 14.81
- ------------------------------------------------------------------------------------------------------------------------
5-Year -5.02 -6.14 -5.55 -5.86 -5.67 -5.67 -5.80 -6.27 -5.03 -6.14 -4.56
- ------------------------------------------------------------------------------------------------------------------------
10-Year 3.71 3.09 3.35 3.35 3.28 3.28 3.18 3.18 3.59 2.98 4.15
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE"RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. 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.
The returns for class A and class B shares include the returns of Prime A shares
(for class A shares) and Prime B shares (for class B shares) of the Galaxy
International Equity Fund for periods prior to November 18, 2002, the date on
which class A and class B shares were initially offered by the Fund. The returns
shown for class A shares and class B shares also include the returns of Retail A
shares of the Galaxy International Equity Fund (adjusted, as necessary, to
reflect the sales charge applicable to class A shares and class B shares,
respectively) for periods prior to the date of inception of Prime A and Prime B
shares (November 1, 1998). Class A and class B shares generally would have had
substantially similar returns to Retail A shares because they would have been
invested in the same portfolio of securities, although returns would have been
lower to the extent that expenses for class A and class B shares exceed expenses
paid by Retail A shares. The returns shown for class C shares include the
returns of Prime B Shares of the Galaxy International Equity Fund (adjusted to
reflect the sales charge applicable to class C shares) for periods prior to
November 18, 2002, the date on which class C shares were initially offered by
the Fund. The returns shown for class C shares also include the returns of
Retail A shares of the Galaxy International Equity Fund (adjusted to reflect the
sales charges applicable to class C shares) for periods prior to the date of
inception of Prime B Shares (November 1, 1998). Class C shares generally would
have had substantially similar returns because they would have been invested in
the same portfolio of securities, although the returns would have been lower to
the extent that expenses for class C shares exceed expenses paid by Retail A and
Prime B shares. The returns for class G and class T shares include the returns
of Retail A shares (for class T shares) and Retail B Shares (for class G shares)
of the Galaxy International Equity Fund for periods prior to November 18, 2002,
the date on which class T and class G shares were initially offered by the Fund.
The returns shown for class G shares also include the returns of Retail A shares
(adjusted to reflect the sales charges applicable to class T and class G shares)
for periods prior to the inception of Retail B shares of the Galaxy
International Equity Fund (November 1, 1998). Retail A shares of the Galaxy
International Equity Fund were initially offered on December 30, 1991. Class G
shares generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would have been lower to the extent that expenses for class
G shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy International Equity Fund for
periods prior to November 18, 2002, the date on which class Z shares were
initially offered by the Fund.
14
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia International Equity Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 959.85 1,019.40 5.49 5.65 1.12
- ------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 957.40 1,015.65 9.15 9.42 1.87
- ------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 955.00 1,015.65 9.14 9.42 1.87
- ------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 957.45 1,015.90 8.91 9.17 1.82
- ------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 960.30 1,019.15 5.73 5.91 1.17
- ------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 959.80 1,020.65 4.26 4.39 0.87
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Investment Advisor and the Transfer Agent not waived a portion of
expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
15
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 14.51% WITHOUT SALES CHARGE.
o IN AN ENVIRONMENT THAT WAS FAVORABLE FOR NON-U.S. STOCKS, THE FUND, ITS
BENCHMARK AND PEER GROUP ALL EARNED DOUBLE-DIGIT RETURNS.
o AN EMPHASIS ON TECHNOLOGY AND CERTAIN TELECOMMUNICATIONS STOCKS HURT
PERFORMANCE. SOME OF THE FUND'S JAPANESE HOLDINGS WERE ALSO DISAPPOINTMENTS
DURING THE PERIOD.
MSCI ALL
COUNTRY
CLASS A WORLD EX U.S. MSCI EAFE
SHARES INDEX INDEX
[UP ARROW] [UP ARROW] [UP ARROW]
14.51% 23.14% 22.08%
OBJECTIVE
Seeks long-term capital
appreciation.
TOTAL NET ASSETS
$485.7 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 12.35
- ----------------------------------------------
Class B 12.22
- ----------------------------------------------
Class C 12.14
- ----------------------------------------------
Class G 12.12
- ----------------------------------------------
Class T 12.32
- ----------------------------------------------
Class Z 12.55
DISTRIBUTIONS DECLARED PER SHARE
10/01/03 - 09/30/04 ($)
Class A 0.05
- ----------------------------------------------
Class B 0.00
- ----------------------------------------------
Class C 0.00
- ----------------------------------------------
Class G 0.00
- ----------------------------------------------
Class T 0.01
- ----------------------------------------------
Class Z 0.09
PORTFOLIO MANAGERS' REPORT _____________________________________________________
Columbia International Equity Fund
For the 12-month period ended September 30, 2004, Columbia International Equity
Fund class A shares returned 14.51% without sales charge. The fund's return fell
short of its benchmarks. The MSCI All Country World ex U.S. Index returned
23.14% for the period and the MSCI EAFE Index returned 22.08%. The fund also
trailed the average return of the Morningstar(R) Foreign Large Growth Category,
which was 16.64%. 1 The portfolio underperformed its benchmarks mainly because
of its overweight in the technology sector at the beginning of the period and
its emphasis on certain telecommunications stocks. Also, some of the fund's
Japanese holdings were disappointments during the period.
A CHANGING INVESTMENT ENVIRONMENT
There were two distinct market environments during the 12-month reporting
period. During the first five months, low valuations, underestimated earnings
growth and a global economic recovery provided a positive backdrop. During this
period, the fund's sizable technology allocation helped performance. However, in
February the market environment began to change. Valuations began to look less
attractive, upgraded earnings estimates were reported by fewer companies and
concerns arose about slowing global growth and rising interest rates. In this
environment, the fund's relatively large technology weight detracted from its
return.
BOOSTING INVESTMENT IN JAPAN, THE UNITED KINGDOM AND AUSTRIA
The fund benefited from our regional allocation decisions. We reduced exposure
to emerging markets, which helped the fund because emerging markets
significantly underperformed developed markets. We used the proceeds from the
sale of emerging market stocks to invest in Japan and the United Kingdom, where
the prospects for long-term economic growth appeared stronger.
In Japan, the economy continued to recover from a 10-year deflationary cycle.
Companies have become more competitive on a global basis and the Japanese
government has demonstrated a willingness to be more accommodative toward
business. Yet, some of our Japanese holdings were disappointments during the
period. A long-term fund favorite, wireless communications company NTT DoCoMo
reported lower earnings as it came up against heavy competition from companies
that had better technology and offered customers more favorable pricing. The
company also suffered from government polices aimed at controlling telephone
rates. However, we recently increased the fund's position in the stock because
we believed it was attractively priced relative to its future earnings
prospects. The company appears to have stemmed its earnings decline, upgraded
its technology and improved its pricing.
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
16
[Sidebar]
SECTORS AS OF 09/30/04 (%)
Consumer discretionary 15.7
- ----------------------------------------------
Consumer staples 9.2
- ----------------------------------------------
Energy 11.6
- ----------------------------------------------
Financials 24.4
- ----------------------------------------------
Health care 11.5
- ----------------------------------------------
Industrials 9.6
- ----------------------------------------------
Information technology 3.0
- ----------------------------------------------
Materials 5.0
- ----------------------------------------------
Telecommunication services 6.7
- ----------------------------------------------
Utilities 3.3
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/04 (%)
ENI S.p.A. 2.7
- ----------------------------------------------
BP PLC 2.4
- ----------------------------------------------
Barclays PLC 1.8
- ----------------------------------------------
Nestle SA Registered shares 1.7
- ----------------------------------------------
Glaxosmithkline PLC 1.7
- ----------------------------------------------
Vodafone Group PLC 1.7
- ----------------------------------------------
ING Groep NV 1.6
- ----------------------------------------------
Smith & Nephew PLC 1.6
- ----------------------------------------------
Takeda Chemical Industries Ltd. 1.6
- ----------------------------------------------
Toyota Motor Corp. 1.5
TOP 5 COUNTRIES AS OF 09/30/04 (%)
United Kingdom 24.3
- ----------------------------------------------
Japan 18.9
- ----------------------------------------------
France 9.7
- ----------------------------------------------
Germany 8.0
- ----------------------------------------------
Switzerland 4.8
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
NTT DoCoMo 0.7
- ----------------------------------------------
BP PLC 2.4
- ----------------------------------------------
GlaxoSmithKline PLC 1.7
- ----------------------------------------------
Erste Bank der oesterrelchischen 0.5
- ----------------------------------------------
Wienerberger AG 0.5
Your fund is actively managed and the composition of its portfolio will change
over time. Sectors and holdings are calculated as a percentage of net assets and
countries are calculated as a percentage of total investments.
________________________________________________________________________________
Columbia International Equity Fund
In the United Kingdom, we were drawn to the region's consistent GDP growth,
relatively strong consumer spending and attractive housing sector. Investments
in BP, a large integrated-energy company, and in GlaxoSmithKline, a global
pharmaceutical company, were positive for performance.
We also invested in Austria where we emphasized companies with exposure to East
European countries that have entered the European Union. We added Erste Bank,
which has had a significant pick-up in loan growth, and Wienerberger AG, the
world's largest producer of bricks used in construction projects. Both companies
benefited performance.
REDUCED EXPOSURE TO THAILAND
During the period, we reduced the fund's stake in Thailand from approximately
6.5% to approximately 0.8% of net assets. Investments in Thailand aided return
for several years, as the country benefited from the global economic recovery, a
pro-business government and brisk trading activity with China, Japan and the
United States. However, in the last few months of the period, Thailand's
business policies became less expansionary, and we became concerned that the
country's export growth had the potential to decline in a cooling global
economy.
BECOMING MORE DEFENSIVE
We believe that concerns about the pace of global economic growth and rising
interest rates will continue to weigh on the market for several months. With
this expectation, we have structured the portfolio more defensively. We cut back
the fund's exposure to small companies and focused on large, established
companies with dividend-paying potential in sectors such as pharmaceuticals,
consumer staples and energy. We believe more cautious positioning may help the
fund weather this period of potential uncertainty.
[Photo of Penelope L. Burgess]
Penelope L. Burgess has co-managed the Columbia International Equity Fund since
July 2004 and has been with the advisor and its predecessors or affiliate
organizations since 1993.
/s/ Penelope L. Burgess
[Photo of Deborah F. Snee]
Deborah F. Snee has co-managed the fund since July 2004 and has been with the
advisor and its predecessors or affiliate organizations since 1999.
/s/ Deborah F. Snee
On October 13, 2004, the Board of Trustees approved a proposal to reorganize the
Columbia International Equity Fund into the Columbia International Stock Fund,
subject to shareholder approval and the satisfaction of certain other
conditions. The effective date of the reorganization is expected to be on or
around February 25, 2005 or such a date parties may agree.
There are specific risks involved when investing in foreign stocks, such as
currency exchange rate fluctuations, economic change, instability of emerging
countries and political developments.
17
[Sidebar]
PERFORMANCE OF A $10,000 INVESTMENT
10/01/94 - 09/30/04 ($)
SALES CHARGE WITHOUT WITH
- ----------------------------------------------
Class A 21,629 20,381
- ----------------------------------------------
Class B 20,694 20,694
- ----------------------------------------------
Class C 20,694 20,694
- ----------------------------------------------
Class G 20,148 20,148
- ----------------------------------------------
Class T 21,455 20,217
- ----------------------------------------------
Class Z 22,143 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, when
redeemed, 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 Large Cap Core Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
CLASS A CLASS A
SHARES WITHOUT SHARES WITH S&P 500
SALES CHARGE SALES CHARGE INDEX
-------------- ------------ -------------
10/1994 10,000.00 9,425.00 10,000.00
10,192.00 9,606.00 10,225.00
9,899.00 9,330.00 9,853.00
9,959.00 9,386.00 9,999.00
10,190.00 9,604.00 10,258.00
10,517.00 9,912.00 10,658.00
10,788.00 10,168.00 10,972.00
11,001.00 10,368.00 11,295.00
11,408.00 10,752.00 11,746.00
11,616.00 10,948.00 12,019.00
11,898.00 11,214.00 12,418.00
11,830.00 11,150.00 12,449.00
12,236.00 11,532.00 12,974.00
12,079.00 11,385.00 12,928.00
12,624.00 11,898.00 13,495.00
12,880.00 12,140.00 13,756.00
13,162.00 12,405.00 14,223.00
13,319.00 12,553.00 14,356.00
13,593.00 12,812.00 14,493.00
13,843.00 13,047.00 14,706.00
14,105.00 13,294.00 15,086.00
14,005.00 13,200.00 15,143.00
13,449.00 12,676.00 14,474.00
13,838.00 13,042.00 14,779.00
14,369.00 13,543.00 15,611.00
14,527.00 13,692.00 16,042.00
15,644.00 14,745.00 17,255.00
15,438.00 14,550.00 16,913.00
16,188.00 15,257.00 17,970.00
16,222.00 15,289.00 18,111.00
15,750.00 14,844.00 17,366.00
16,362.00 15,422.00 18,403.00
17,357.00 16,359.00 19,524.00
17,991.00 16,956.00 20,398.00
19,232.00 18,126.00 22,022.00
18,571.00 17,503.00 20,789.00
19,408.00 18,292.00 21,928.00
18,896.00 17,809.00 21,196.00
19,489.00 18,368.00 22,177.00
19,941.00 18,795.00 22,559.00
19,871.00 18,729.00 22,809.00
21,344.00 20,117.00 24,453.00
22,356.00 21,070.00 25,706.00
22,537.00 21,241.00 25,965.00
21,994.00 20,729.00 25,519.00
22,110.00 20,839.00 26,555.00
21,566.00 20,326.00 26,273.00
18,232.00 17,184.00 22,474.00
19,124.00 18,024.00 23,915.00
20,772.00 19,578.00 25,859.00
21,917.00 20,656.00 27,426.00
23,105.00 21,776.00 29,006.00
23,386.00 22,042.00 30,218.00
22,926.00 21,607.00 29,278.00
23,820.00 22,450.00 30,449.00
24,756.00 23,332.00 31,628.00
24,771.00 23,346.00 30,881.00
26,151.00 24,647.00 32,595.00
25,316.00 23,861.00 31,578.00
24,349.00 22,949.00 31,424.00
23,385.00 22,040.00 30,563.00
23,848.00 22,477.00 32,497.00
24,086.00 22,702.00 33,157.00
24,718.00 23,296.00 35,110.00
23,845.00 22,474.00 33,347.00
23,385.00 22,040.00 32,717.00
25,791.00 24,308.00 35,917.00
25,822.00 24,337.00 34,836.00
25,711.00 24,233.00 34,122.00
25,055.00 23,615.00 34,964.00
25,166.00 23,719.00 34,419.00
26,849.00 25,305.00 36,556.00
25,611.00 24,139.00 34,626.00
26,057.00 24,559.00 34,481.00
24,770.00 23,346.00 31,764.00
25,667.00 24,191.00 31,919.00
26,703.00 25,168.00 33,052.00
25,355.00 23,897.00 30,038.00
23,765.00 22,399.00 28,134.00
25,357.00 23,899.00 30,320.00
25,687.00 24,210.00 30,523.00
25,127.00 23,682.00 29,781.00
25,162.00 23,715.00 29,489.00
23,793.00 22,425.00 27,643.00
21,697.00 20,450.00 25,410.00
22,062.00 20,793.00 25,895.00
23,725.00 22,361.00 27,881.00
24,169.00 22,779.00 28,126.00
23,076.00 21,750.00 27,716.00
22,737.00 21,430.00 27,181.00
23,665.00 22,304.00 28,203.00
22,411.00 21,122.00 26,494.00
22,733.00 21,426.00 26,298.00
20,837.00 19,639.00 24,425.00
19,333.00 18,221.00 22,523.00
19,173.00 18,070.00 22,669.00
16,878.00 15,907.00 20,205.00
18,061.00 17,022.00 21,983.00
19,186.00 18,083.00 23,278.00
18,133.00 17,090.00 21,911.00
17,828.00 16,803.00 21,337.00
17,307.00 16,312.00 21,017.00
17,484.00 16,479.00 21,221.00
18,797.00 17,716.00 22,970.00
19,750.00 18,614.00 24,180.00
19,853.00 18,711.00 24,490.00
20,176.00 19,016.00 24,921.00
20,626.00 19,440.00 25,407.00
20,195.00 19,034.00 25,137.00
21,203.00 19,984.00 26,560.00
21,472.00 20,237.00 26,794.00
22,148.00 20,875.00 28,198.00
22,346.00 21,061.00 28,717.00
22,580.00 21,282.00 29,116.00
22,382.00 21,095.00 28,676.00
21,806.00 20,552.00 28,226.00
22,203.00 20,927.00 28,613.00
22,581.00 21,282.00 29,168.00
21,535.00 20,297.00 28,202.00
21,374.00 20,145.00 28,315.00
09/2004 21,629.00 20,381.00 28,612.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Standard
and Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of
500 widely held, large-capitalization US stocks. Unlike mutual funds, indices
are not investments, do not incur fees or expenses and are not professionally
managed. It is not possible to invest directly in an index. Securities in the
fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
- ------------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C G T Z
- ------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 12/09/02 03/04/96 02/12/93 12/14/92
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-YEAR 7.09 0.97 6.28 1.28 6.28 5.28 6.24 1.24 6.92 0.79 7.28
- ------------------------------------------------------------------------------------------------------------------------
5-YEAR -1.55 -2.71 -2.29 -2.62 -2.29 -2.29 -2.38 -2.87 -1.68 -2.84 -1.32
- ------------------------------------------------------------------------------------------------------------------------
10-YEAR 8.02 7.38 7.54 7.54 7.54 7.54 7.26 7.26 7.93 7.29 8.27
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE"RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. 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.
The returns for class A and class B shares include the returns of Prime A shares
(for class A shares) and Prime B shares (for class B shares) of the Galaxy
Growth & Income Fund for periods prior to December 9, 2002, the date on which
class A and class B shares were initially offered by the Fund. The returns shown
for class A shares and class B shares also include the returns of Retail A
shares of the Galaxy Growth & Income Fund (adjusted to reflect the sales charge
applicable to class A shares and class B shares, respectively) for periods prior
to the inception of Prime A and Prime B shares (November 1, 1998). Class A and
class B shares generally would have had substantially similar returns to Retail
A shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class A and class B shares exceed expenses paid by Retail A shares.
The returns shown for class C shares include the returns of Prime B shares of
the Galaxy Growth & Income Fund (adjusted to reflect the sales charge applicable
to class C shares) for periods prior to December 9, 2002, the date on which
class C shares were initially offered. The returns shown for class C shares also
include the returns of Retail A shares of the Galaxy Growth & Income Fund
(adjusted to reflect the sales charges applicable to class C shares) for periods
prior to the inception of Prime B shares (November 1, 1998). Class C shares
generally would have had substantially similar returns to Retail A and Prime B
shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class C shares exceed expenses paid by Retail A and Prime B shares.
The returns for class G and class T shares include the returns of Retail A
shares (for class T shares) and Retail B shares (for class G shares) of the
Galaxy Growth & Income Fund for periods prior to December 9, 2002, the date on
which class T and class G shares were initially offered by the Fund. The returns
shown for class G shares also include the returns of Retail A shares for periods
prior to the inception of Retail B shares of the Galaxy Growth & Income Fund
(March 4, 1996). Retail A shares were initially offered on February 12, 1993.
Class G shares generally would have had substantially similar returns to Retail
A shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class G shares exceed expenses paid by Retail A shares. The returns
for class Z shares include returns of Trust shares of the Galaxy Growth & Income
Fund for periods prior to December 9, 2002, the date on which class Z shares
were initially offered by the Fund, and returns of Trust shares of the Shawmut
Fund (whose shares were initially offered on December 14, 1992), for periods
prior to December 14, 1995.
18
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia Large Cap Core Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 967.20 1,018.40 6.49 6.66 1.32
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 962.80 1,014.65 10.16 10.43 2.07
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 962.75 1,014.65 10.16 10.43 2.07
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 962.70 1,014.90 9.91 10.18 2.02
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 965.20 1,018.15 6.73 6.91 1.37
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 966.45 1,019.65 5.26 5.40 1.07
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Transfer Agent not waived a portion of expenses, total return would have
been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
19
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 7.09% WITHOUT SALES CHARGE.
o THE FUND'S EMPHASIS ON TECHNOLOGY, WHICH SUFFERED A SHARP DECLINE DURING
THE PERIOD, HURT THE FUND'S PERFORMANCE AGAINST ITS BENCHMARK, THE S&P 500
INDEX. WE BELIEVE ITS TECHNOLOGY WEIGHT WAS ALSO A FACTOR IN ITS SHORTFALL
COMPARED TO ITS PEER GROUP, THE MORNINGSTAR(R) LARGE BLEND CATEGORY.
o BY BRINGING THE FUND'S SECTOR WEIGHTS IN LINE WITH ITS BENCHMARK, WE HOPE
TO HELP THE FUND GET A GREATER BENEFIT FROM STOCK SELECTION GOING FORWARD
AND TO REDUCE THE FUND'S VOLATILITY RELATIVE TO THE INDEX.
CLASS A SHARES S&P 500 INDEX
[UP ARROW] [UP ARROW]
7.09% 13.87%
OBJECTIVE
Seeks to provide a relatively
high total return through
long-term capital appreciation
and current income.
TOTAL NET ASSETS
$383.9 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 12.01
- ----------------------------------------------
Class B 11.68
- ----------------------------------------------
Class C 11.68
- ----------------------------------------------
Class G 11.57
- ----------------------------------------------
Class T 11.95
- ----------------------------------------------
Class Z 12.05
DISTRIBUTIONS DECLARED PER SHARE
10/01/03 - 09/30/04 ($)
Class A 0.01
- ----------------------------------------------
Class B 0.00
- ----------------------------------------------
Class C 0.00
- ----------------------------------------------
Class G 0.00
- ----------------------------------------------
Class T 0.00*
- ----------------------------------------------
Class Z 0.02
* Rounds to less than $0.01 per share.
PORTFOLIO MANAGERS' REPORT _____________________________________________________
Columbia Large Cap Core Fund
For the 12-month period ended September 30, 2004, class A shares of Columbia
Large Cap Core Fund returned 7.09% without sales charge. It underperformed the
S&P 500 Index, which returned 13.87%. It also trailed the average return of the
Morningstar(R) Large Blend Category, which was 12.22% during the same period. 1
Smaller and lower quality companies led the market higher in 2003 and early
2004. The fund did not have meaningful exposure to these companies. Also, the
fund's overweight in economically sensitive sectors like technology, penalized
results when economic growth slowed during the second quarter of 2004.
A TALE OF TWO INVESTMENT ENVIRONMENTS
There were two distinct investment environments during the fiscal year. In the
first half, the economy expanded at a robust pace, and investors favored stocks
of smaller, lower quality companies. As a result, the fund underperformed
significantly during this period as it was positioned in larger, higher quality
companies. In the second half, most companies became guarded in their earnings
forecasts as economic growth slowed. Investors became more cautious at the
prospect of slower profit growth, as well as a host of external uncertainties,
such as rising oil prices. In seeking to reduce risk, investors gravitated
toward large, higher quality companies, with solid balance sheets and consistent
earnings growth. While the fund performed better in this environment, it was not
enough to offset the first half's underperformance.
MOVED TOWARD NEUTRAL SECTOR WEIGHTS
During the period, we positioned the portfolio such that stock selection would
be the primary source of excess return by eliminating large sector under/over
weights versus the S&P 500. This move should help maximize the impact of stock
selection, which we believe represents the largest and most sustainable
opportunity for long-term outperformance. For example, we took the fund from a
small weight in telecommunications services and electric utilities to a market
weight. We sought out companies with good business prospects that had suffered
from low investor expectations.
In the industrials sector, we added PACCAR, a truck manufacturer, and Masco, a
producer of home improvement products. Both companies outperformed when they
reported better-than-expected earnings.
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
20
[Sidebar]
SECTORS AS OF 09/30/04 (%)
Consumer discretionary 10.2
- ----------------------------------------------
Consumer staples 8.9
- ----------------------------------------------
Energy 7.1
- ----------------------------------------------
Financials 19.9
- ----------------------------------------------
Health care 14.1
- ----------------------------------------------
Industrials 12.1
- ----------------------------------------------
Information technology 15.0
- ----------------------------------------------
Materials 3.9
- ----------------------------------------------
Telecommunication services 3.4
- ----------------------------------------------
Utilities 2.8
- ----------------------------------------------
Investment companies 2.6
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/04 (%)
Microsoft Corp. 3.9
- ----------------------------------------------
Pfizer, Inc. 3.6
- ----------------------------------------------
Procter & Gamble CO. 3.0
- ----------------------------------------------
Exxon Mobil PLC 2.9
- ----------------------------------------------
Pepsico, Inc. 2.7
- ----------------------------------------------
ConocoPhillips 2.6
- ----------------------------------------------
Lexmark International, Inc. 2.2
- ----------------------------------------------
Citigroup Corp. 1.9
- ----------------------------------------------
Wachovia Corp. 1.9
- ----------------------------------------------
United Technologies Corp. 1.9
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
PACCAR, Inc. 1.1
- ----------------------------------------------
Masco Corp. 1.0
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 Large Cap Core Fund
DEFENSIVELY POSITIONED IN ENERGY
During the period, we raised the fund's exposure to the energy sector so that it
was in line with the index weight. Energy was the strongest performing sector
for the year. However, the fund's energy holdings trailed the index because we
focused on integrated oil companies, which did not benefit as much from the
steep climb in the price of oil as exploration and production and oil service
companies. We believe our energy holdings offer a cushion against future
volatility in the sector because historically integrated oil companies have
tended to lose less ground than other types of energy companies when oil prices
decline.
AN EMPHASIS ON QUALITY AND STOCK SELECTION
We are optimistic that an expanding economy and relatively low interest rates
are favorable factors for the stock market going forward. Because we do not
expect any broad investment themes to emerge, we think stock selection will
continue to be the most important factor in performance. We believe that the
fund has invested in many attractive, high quality companies that have not
reached peak earnings levels and that offer good relative value. We plan to
continue to seek other such companies in the months ahead.
Sean P. Wilson, CFA, has co-managed Columbia Large Cap Core Fund since October
2003 and has been with the advisor since June 2003.
/s/ Sean P. Wilson
Michael R. Pelosi, CFA, has co-managed the fund since October 2003 and has been
with the advisor or its predecessors or affiliate organizations since 1986.
/s/ Michael R. Pelosi
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments. In addition, the fund's share price will likely be
subject to more volatility than the overall stock market because it concentrates
in technology stocks.
21
[Sidebar]
PERFORMANCE OF A $10,000 INVESTMENT
10/01/94 - 09/30/04 ($)
SALES CHARGE WITHOUT WITH
- ----------------------------------------------
Class A 41,214 38,849
- ----------------------------------------------
Class B 39,332 39,332
- ----------------------------------------------
Class C 39,377 39,377
- ----------------------------------------------
Class G 39,094 39,094
- ----------------------------------------------
Class T 40,737 38,401
- ----------------------------------------------
Class Z 42,328 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, when
redeemed, 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 Small Cap Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
CLASS A CLASS A
SHARES WITHOUT SHARES WITH S&P SMALL CAP RUSSELL 2000
SALES CHARGE SALES CHARGE 600 INDEX INDEX
-------------- ------------ ------------- ------------
10/1994 10,000.00 9,425.00 10,000.00 10,000.00
10,045.00 9,467.00 9,900.00 9,961.00
9,773.00 9,211.00 9,522.00 9,559.00
9,895.00 9,326.00 9,753.00 9,816.00
9,895.00 9,326.00 9,616.00 9,692.00
10,164.00 9,580.00 10,012.00 10,095.00
10,337.00 9,743.00 10,215.00 10,269.00
10,606.00 9,996.00 10,444.00 10,497.00
10,894.00 10,268.00 10,607.00 10,677.00
11,432.00 10,775.00 11,189.00 11,232.00
11,960.00 11,273.00 12,045.00 11,878.00
12,220.00 11,517.00 12,306.00 12,124.00
12,536.00 11,816.00 12,620.00 12,341.00
12,180.00 11,480.00 11,997.00 11,790.00
12,649.00 11,922.00 12,472.00 12,285.00
13,010.00 12,262.00 12,678.00 12,609.00
12,846.00 12,107.00 12,706.00 12,595.00
13,278.00 12,514.00 13,121.00 12,988.00
13,663.00 12,877.00 13,402.00 13,253.00
14,507.00 13,673.00 14,171.00 13,962.00
15,052.00 14,187.00 14,674.00 14,512.00
14,672.00 13,828.00 14,099.00 13,916.00
13,827.00 13,032.00 13,129.00 12,701.00
14,528.00 13,692.00 13,942.00 13,439.00
15,146.00 14,276.00 14,554.00 13,964.00
15,198.00 14,324.00 14,453.00 13,749.00
15,836.00 14,926.00 15,203.00 14,316.00
16,487.00 15,539.00 15,381.00 14,691.00
16,726.00 15,764.00 15,637.00 14,985.00
16,666.00 15,708.00 15,313.00 14,622.00
16,118.00 15,191.00 14,527.00 13,932.00
15,950.00 15,033.00 14,705.00 13,971.00
17,633.00 16,619.00 16,431.00 15,525.00
18,789.00 17,709.00 17,157.00 16,191.00
20,090.00 18,935.00 18,236.00 16,943.00
20,710.00 19,520.00 18,696.00 17,331.00
22,297.00 21,015.00 19,932.00 18,600.00
21,820.00 20,565.00 19,071.00 17,784.00
21,606.00 20,364.00 18,931.00 17,668.00
21,636.00 20,392.00 19,314.00 17,977.00
21,271.00 20,047.00 18,937.00 17,693.00
22,496.00 21,202.00 20,662.00 19,001.00
23,915.00 22,540.00 21,452.00 19,784.00
24,028.00 22,646.00 21,578.00 19,892.00
22,773.00 21,464.00 20,437.00 18,820.00
22,154.00 20,880.00 20,496.00 18,860.00
20,687.00 19,498.00 18,928.00 17,332.00
17,868.00 16,840.00 15,275.00 13,966.00
18,625.00 17,554.00 16,210.00 15,060.00
19,091.00 17,993.00 16,962.00 15,674.00
20,022.00 18,871.00 17,917.00 16,495.00
20,473.00 19,296.00 19,062.00 17,517.00
20,581.00 19,398.00 18,822.00 17,749.00
19,388.00 18,273.00 17,126.00 16,312.00
18,895.00 17,809.00 17,347.00 16,566.00
20,231.00 19,068.00 18,493.00 18,051.00
20,976.00 19,770.00 18,943.00 18,314.00
22,008.00 20,742.00 20,021.00 19,142.00
22,054.00 20,786.00 19,844.00 18,617.00
21,136.00 19,921.00 18,971.00 17,929.00
21,094.00 19,881.00 19,051.00 17,932.00
20,286.00 19,120.00 19,003.00 18,006.00
21,173.00 19,955.00 19,798.00 19,081.00
22,666.00 21,362.00 21,425.00 21,241.00
22,389.00 21,102.00 20,761.00 20,899.00
22,839.00 21,526.00 23,541.00 24,349.00
23,634.00 22,275.00 22,670.00 22,744.00
23,546.00 22,192.00 22,282.00 21,375.00
23,426.00 22,079.00 21,623.00 20,129.00
23,867.00 22,494.00 22,900.00 21,884.00
23,504.00 22,152.00 22,339.00 21,180.00
24,905.00 23,473.00 24,319.00 22,796.00
25,323.00 23,867.00 23,657.00 22,125.00
24,804.00 23,378.00 23,806.00 21,139.00
24,095.00 22,709.00 21,328.00 18,968.00
26,519.00 24,994.00 23,956.00 20,597.00
27,256.00 25,689.00 24,983.00 21,670.00
27,496.00 25,915.00 23,459.00 20,248.00
27,135.00 25,575.00 22,383.00 19,258.00
28,370.00 26,739.00 24,088.00 20,764.00
29,624.00 27,921.00 24,548.00 21,275.00
30,465.00 28,714.00 25,447.00 22,009.00
30,008.00 28,283.00 25,022.00 20,818.00
29,849.00 28,133.00 24,451.00 20,146.00
27,178.00 25,615.00 21,145.00 17,434.00
27,996.00 26,386.00 22,272.00 18,454.00
29,491.00 27,795.00 23,903.00 19,883.00
31,408.00 29,602.00 25,521.00 21,109.00
31,474.00 29,664.00 25,743.00 20,890.00
32,084.00 30,239.00 25,300.00 20,317.00
34,564.00 32,577.00 27,299.00 21,949.00
35,238.00 33,212.00 28,071.00 22,149.00
34,541.00 32,555.00 26,909.00 21,165.00
33,867.00 31,920.00 25,518.00 20,115.00
29,407.00 27,716.00 21,915.00 17,078.00
29,254.00 27,572.00 22,123.00 17,035.00
27,838.00 26,237.00 20,769.00 15,812.00
27,512.00 25,930.00 21,434.00 16,320.00
29,232.00 27,551.00 22,551.00 17,776.00
28,694.00 27,044.00 21,788.00 16,785.00
27,962.00 26,354.00 21,039.00 16,320.00
27,163.00 25,601.00 20,366.00 15,828.00
27,184.00 25,621.00 20,526.00 16,032.00
29,220.00 27,540.00 22,193.00 17,552.00
31,760.00 29,933.00 23,982.00 19,435.00
32,516.00 30,646.00 24,605.00 19,787.00
34,255.00 32,285.00 25,885.00 21,025.00
35,536.00 33,493.00 27,146.00 21,988.00
35,010.00 32,997.00 26,347.00 21,581.00
37,458.00 35,304.00 28,632.00 23,394.00
38,600.00 36,381.00 29,714.00 24,225.00
39,827.00 37,537.00 30,240.00 24,717.00
40,628.00 38,292.00 31,111.00 25,789.00
41,217.00 38,847.00 31,708.00 26,021.00
41,522.00 39,135.00 32,121.00 26,263.00
40,725.00 38,383.00 31,054.00 24,924.00
40,700.00 38,360.00 31,529.00 25,320.00
42,369.00 39,933.00 33,276.00 26,386.00
40,043.00 37,741.00 31,452.00 24,610.00
39,643.00 37,363.00 31,176.00 24,485.00
09/2004 41,214.00 38,849.00 32,815.00 25,633.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
2000 Index is an unmanaged index that tracks the performance of the 2,000
smallest of the 3,000 largest U.S. companies based on market capitalization. The
Standard & Poor's (S&P) Small Cap 600 Index is an unmanaged index that tracks
the performance of 600 domestic companies traded on the New York Stock Exchange,
the American Stock Exchange and NASDAQ. The S&P Small Cap 600 Index is heavily
weighted with the stocks of companies with small market capitalizations. Unlike
mutual funds, indices are not investments, do not incur fees or expenses and are
not professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
- ------------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C G T Z
- ------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 11/18/02 11/01/98 02/12/93 12/14/92
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-Year 17.73 10.99 16.96 11.96 16.94 15.94 16.97 11.97 17.73 10.99 18.12
- ------------------------------------------------------------------------------------------------------------------------
5-Year 14.33 12.98 13.43 13.18 13.45 13.45 13.32 12.95 14.19 12.85 14.69
- ------------------------------------------------------------------------------------------------------------------------
10-Year 15.21 14.54 14.68 14.68 14.69 14.69 14.61 14.61 15.08 14.40 15.52
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE"RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. 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.
Prior to November 18, 2002, the fund was named Galaxy Small Cap Value Fund, and
offered Retail A, Retail B, Trust, Prime A and Prime B share classes. On that
day, the fund changed its name to Liberty Small Cap Fund and began offering
class A, B, C, G, T and Z shares. The returns for class A and B shares include
returns of Prime A shares and Retail A shares (for class A shares) and Prime B
shares and Retail A shares (for class B shares) of the former Galaxy Small Cap
Value fund for periods prior to the inception of class A and class B shares.
Class C share performance information includes returns of Retail B shares and
Retail A shares of the former Galaxy Small Cap Value fund for periods prior to
the inception of class C shares. The returns for class G and T shares include
the returns of Retail A shares (for class T shares) and Retail B shares (for
class G shares) of the Galaxy Small Cap Value Fund for periods prior to the date
of this prospectus. The returns shown for class G shares also include the
returns of Retail A shares (adjusted to reflect the sales charges applicable to
class G shares) for periods prior to the inception of Retail B shares of the
Galaxy Small Cap Value Fund (November 1, 1998). Retail A shares were initially
offered on February 12, 1993. Class G shares generally would have had
substantially similar returns because they would have been invested in the same
portfolio of securities, although the returns would be lower to the extent that
expenses for class G shares exceed expenses paid by Retail A shares. The returns
for class Z shares include the returns of Trust shares of the Galaxy Small Cap
Value Fund (the "Galaxy Fund"), for periods prior to the date of this
prospectus, and returns of Trust shares of the Small Cap portfolio of The
Shawmut Funds (the "Shawmut Fund"), the predecessor to the Galaxy Small Cap
Value Fund, for periods prior to December 4, 1995. Total returns are not
restated to reflect any expense differential (e.g. Rule 12b-1 fees) between any
of the share classes. Had the expense differential been reflected, the returns
for the periods prior to the inception of class A, B and C shares would have
been lower.
22
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia Small Cap Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 992.80 1,019.10 5.88 5.96 1.18
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 989.65 1,015.35 9.60 9.72 1.93
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 989.90 1,015.35 9.60 9.72 1.93
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 990.35 1,015.60 9.35 9.47 1.88
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 993.10 1,018.85 6.13 6.21 1.23
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 994.30 1,020.35 4.64 4.70 0.93
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Investment Advisor not waived a portion of expenses, total return would
have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
23
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 17.73% WITHOUT SALES CHARGE.
o A STRONG MARKET ENVIRONMENT HELPED THE FUND, ITS BENCHMARKS AND PEER GROUP
ACHIEVE DOUBLE DIGIT RETURNS FOR THE PERIOD.
o AN EMPHASIS ON ENERGY DURING A PERIOD OF RISING COMMODITY PRICES AND
FAVORABLE STOCK SELECTION IN HEALTH CARE BOOSTED THE FUND'S RETURN. HOWEVER,
IT UNDERPERFORMED THE RUSSELL 2000 INDEX, THE S&P SMALL CAP 600 INDEX AND
THE MORNINGSTAR(R) SMALL BLEND CATEGORY, PRIMARILY BECAUSE OF ITS SIZABLE
CASH POSITION EARLY IN THE PERIOD.
S&P
CLASS A RUSSELL 2000 SMALL CAP
SHARES INDEX 600 INDEX
[UP ARROW] [UP ARROW] [UP ARROW]
17.73% 18.77% 24.56%
OBJECTIVE
Seeks long-term capital
appreciation.
TOTAL NET ASSETS
$1,575.4 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 17.54
- ----------------------------------------------
Class B 16.89
- ----------------------------------------------
Class C 16.91
- ----------------------------------------------
Class G 16.75
- ----------------------------------------------
Class T 17.40
- ----------------------------------------------
Class Z 17.73
DISTRIBUTIONS DECLARED PER SHARE
10/01/03 - 09/30/04 ($)
Class A 0.44
- ----------------------------------------------
Class B 0.34
- ----------------------------------------------
Class C 0.34
- ----------------------------------------------
Class G 0.34
- ----------------------------------------------
Class T 0.42
- ----------------------------------------------
Class Z 0.49
PORTFOLIO MANAGER'S REPORT _____________________________________________________
Columbia Small Cap Fund
For the 12-month period ended September 30, 2004, Columbia Small Cap Fund class
A shares returned 17.73% without sales charge. That was less than the fund's
benchmarks, the Russell 2000 Index and the S&P Small Cap 600 Index, which
returned 18.77% and 24.56%, respectively. The fund's return also fell short of
the average return of its peer group, the Morningstar(R) Small Blend Category,
which was 20.94%. 1
Energy and health care stocks were among the top contributors to the fund's
return. However, we believe the fund lagged its benchmarks and peer group
primarily because of its large cash position. After the fund was closed to new
investors in March 2004, that performance gap began to close. Disappointing
returns from consumer-related investments and low exposure to financial stocks
also hampered the fund's competitive performance.
ROBUST RETURNS FROM ENERGY, STEEL
Limited global oil and natural gas supplies combined with increasing demand from
China and India to raise oil prices to record levels during the period.
Above-index exposure and good stock selection helped the fund make the most of
its energy holdings. Four of the fund's top ten performers were in this sector,
including Southwestern Energy, Whiting Petroleum and Atwood Oceanics, a company
that leases oil-drilling rigs. The fund also benefited by holding Steel
Dynamics, a steel mini-mill.
A BOOST FROM HEALTH CARE
Health care stocks also helped the fund's return. In health care, the fund's top
performer was Immucor, a company that sells blood-testing equipment and
chemicals to hospitals and labs. The fund held Res-Care, a company that runs
group homes for developmentally disabled people. Its earnings and cash flow
improved during the year and we believe Res-Care still continues to have strong
growth potential.
EXCESS CASH HAMPERED THE FUND'S RETURN
The bulk of the fund's relative underperformance was the result of its large
cash position in the first half of the period. Cash accumulated as new money
poured into the fund and as we trimmed holdings that had appreciated. On March
1, the fund's trustees voted to limit inflows by closing the fund to new
investors. This was an effective strategy, and competitive performance improved
in the second half of the year.
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
24
[Sidebar]
SECTORS AS OF 09/30/04 (%)
Consumer discretionary 22.1
- ----------------------------------------------
Consumer staples 2.5
- ----------------------------------------------
Energy 5.5
- ----------------------------------------------
Financials 9.7
- ----------------------------------------------
Health care 14.2
- ----------------------------------------------
Industrials 17.9
- ----------------------------------------------
Information technology 13.9
- ----------------------------------------------
Materials 7.9
- ----------------------------------------------
Telecommunication services 0.6
- ----------------------------------------------
Utilities 3.0
- ----------------------------------------------
Investment companies 2.7
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/04 (%)
iShares Russell 2000 Index 2.2
- ----------------------------------------------
Benchmark Electronics, Inc. 1.6
- ----------------------------------------------
Invacare Corp. 1.4
- ----------------------------------------------
Albany International Corp. 1.1
- ----------------------------------------------
Greif, Inc. 1.0
- ----------------------------------------------
Chicago Bridge & Iron Co. NV NY 0.9
- ----------------------------------------------
MacDermid, Inc. 0.9
- ----------------------------------------------
Unifirst Corp. 0.9
- ----------------------------------------------
West Pharmaceutical Services, Inc. 0.8
- ----------------------------------------------
Armor Holdings, Inc. 0.8
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
Southwestern Energy Co. 0.8
- ----------------------------------------------
Whiting Petroleum Corp. 0.6
- ----------------------------------------------
Atwood Oceanics, Inc. 0.4
- ----------------------------------------------
Steel Dynamics, Inc. 0.2
- ----------------------------------------------
Immucor, Inc. 0.3
- ----------------------------------------------
Res-care, Inc. 0.7
- ----------------------------------------------
The Buckle, Inc. 0.6
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
________________________________________________________________________________
Columbia Small Cap Fund
MIXED RESULTS FROM FINANCIALS AND RETAIL
The fund's relatively low exposure to financial stocks also detracted from its
return. We avoided financial stocks, particularly small banks, that were
expensively priced on a valuation basis. Although that hurt the fund's return
when the financial sector rallied during the year, we believe that our strategy
is appropriate and that it has the potential to benefit performance going
forward.
The fund's retail positions also hurt performance during the period. Investments
in American Eagle Outfitters and The Buckle, both youth-oriented retailers, were
strong performers. American Eagle's share price more than doubled during the
period and The Buckle shares gained more than 40 percent. We sold American
Eagle's shares for a profit. However, these gains were not enough to offset
disappointments from positions that we added to the portfolio in an effort to
broaden the fund's retail exposure. Looking back, our timing was less than
ideal. The outlook for the sector weakened as rising energy prices took a bite
out of consumer budgets.
LOOKING AHEAD
As value investors, we continue to seek attractively-priced stocks, which we
tend to hold until we believe that they are fairly valued. However, with
valuations generally high among small-cap stocks, we are also willing to tilt
somewhat toward growth stocks that we believe are selling at reasonable prices.
As a result, we plan to add selectively to our technology exposure, seeking
overlooked small companies with strong cash positions, earnings growth prospects
and reasonable valuations. We also believe that energy prices could continue to
have a significant impact on certain segments of the market. We will monitor
exposure to cyclical segments of the market with an eye to cutting back before
they run out of steam.
[Photo of Peter Larson]
Peter Larson has managed Columbia Small Cap Fund since 1992 and has been with
the advisor or its predecessors or affiliate organizations since 1963.
/s/ Peter Larson
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
Investing in small-cap stocks may present special risks, including possible
illiquidity and greater price volatility than stocks of larger, more established
companies.
25
[Sidebar]
PERFORMANCE OF A $10,000 INVESTMENT
10/01/94 - 09/30/04 ($)
SALES CHARGE WITHOUT WITH
- ----------------------------------------------
Class A 21,107 19,886
- ----------------------------------------------
Class B 19,880 19,880
- ----------------------------------------------
Class C 19,827 19,827
- ----------------------------------------------
Class G 19,840 19,840
- ----------------------------------------------
Class T 21,080 19,861
- ----------------------------------------------
Class Z 22,050 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, when
redeemed, 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 Small Company Equity Fund
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
[MOUNTAIN CHART]
CLASS A CLASS A
SHARES WITHOUT SHARES WITH RUSSELL 2000 RUSSELL 2000
SALES CHARGE SALES CHARGE GROWTH INDEX INDEX
-------------- ------------ ------------- ------------
10/1994 10,000.00 9,425.00 10,000.00 10,000.00
10,249.00 9,660.00 10,108.00 9,961.00
9,917.00 9,347.00 9,699.00 9,559.00
10,259.00 9,669.00 9,928.00 9,816.00
9,947.00 9,375.00 9,727.00 9,692.00
10,352.00 9,757.00 10,175.00 10,095.00
10,883.00 10,257.00 10,473.00 10,269.00
11,212.00 10,567.00 10,632.00 10,497.00
11,313.00 10,662.00 10,771.00 10,677.00
12,283.00 11,577.00 11,513.00 11,232.00
13,389.00 12,619.00 12,410.00 11,878.00
13,499.00 12,722.00 12,563.00 12,124.00
14,114.00 13,303.00 12,821.00 12,341.00
13,734.00 12,945.00 12,191.00 11,790.00
14,232.00 13,413.00 12,728.00 12,285.00
14,239.00 13,420.00 13,011.00 12,609.00
13,931.00 13,130.00 12,903.00 12,595.00
14,860.00 14,006.00 13,491.00 12,988.00
15,577.00 14,681.00 13,758.00 13,253.00
17,366.00 16,368.00 14,815.00 13,962.00
18,049.00 17,011.00 15,575.00 14,512.00
16,838.00 15,870.00 14,562.00 13,916.00
15,482.00 14,592.00 12,784.00 12,701.00
16,428.00 15,484.00 13,730.00 13,439.00
17,495.00 16,489.00 14,438.00 13,964.00
17,026.00 16,047.00 13,815.00 13,749.00
17,077.00 16,095.00 14,199.00 14,316.00
17,205.00 16,216.00 14,476.00 14,691.00
17,864.00 16,837.00 14,838.00 14,985.00
16,111.00 15,185.00 13,942.00 14,622.00
15,104.00 14,236.00 12,958.00 13,932.00
14,630.00 13,789.00 12,807.00 13,971.00
17,177.00 16,190.00 14,732.00 15,525.00
18,117.00 17,075.00 15,232.00 16,191.00
19,095.00 17,997.00 16,012.00 16,943.00
19,666.00 18,535.00 16,492.00 17,331.00
21,253.00 20,031.00 17,808.00 18,600.00
20,276.00 19,110.00 16,738.00 17,784.00
19,442.00 18,324.00 16,339.00 17,668.00
19,644.00 18,515.00 16,349.00 17,977.00
19,173.00 18,070.00 16,132.00 17,693.00
20,774.00 19,579.00 17,556.00 19,001.00
21,663.00 20,417.00 18,292.00 19,784.00
21,388.00 20,158.00 18,403.00 19,892.00
19,884.00 18,741.00 17,065.00 18,820.00
19,632.00 18,503.00 17,239.00 18,860.00
17,877.00 16,849.00 15,800.00 17,332.00
13,458.00 12,684.00 12,153.00 13,966.00
14,916.00 14,059.00 13,386.00 15,060.00
14,949.00 14,090.00 14,084.00 15,674.00
15,948.00 15,031.00 15,177.00 16,495.00
17,495.00 16,489.00 16,551.00 17,517.00
17,682.00 16,665.00 17,296.00 17,749.00
15,159.00 14,287.00 15,713.00 16,312.00
14,840.00 13,987.00 16,272.00 16,566.00
15,202.00 14,328.00 17,709.00 18,051.00
15,707.00 14,804.00 17,738.00 18,314.00
16,990.00 16,014.00 18,672.00 19,142.00
16,727.00 15,765.00 18,095.00 18,617.00
16,431.00 15,486.00 17,419.00 17,929.00
16,870.00 15,900.00 17,755.00 17,932.00
17,177.00 16,189.00 18,209.00 18,006.00
19,996.00 18,846.00 20,134.00 19,081.00
24,307.00 22,909.00 23,684.00 21,241.00
24,088.00 22,703.00 23,464.00 20,899.00
29,835.00 28,120.00 28,924.00 24,349.00
29,749.00 28,038.00 25,884.00 22,744.00
25,899.00 24,410.00 23,269.00 21,375.00
24,387.00 22,984.00 21,231.00 20,129.00
27,196.00 25,632.00 23,974.00 21,884.00
24,498.00 23,090.00 21,919.00 21,180.00
26,813.00 25,271.00 24,225.00 22,796.00
25,781.00 24,299.00 23,021.00 22,125.00
23,860.00 22,488.00 21,152.00 21,139.00
21,009.00 19,801.00 17,311.00 18,968.00
22,977.00 21,656.00 18,370.00 20,597.00
24,342.00 22,943.00 19,856.00 21,670.00
22,595.00 21,295.00 17,134.00 20,248.00
21,216.00 19,996.00 15,577.00 19,258.00
22,540.00 21,244.00 17,483.00 20,764.00
23,176.00 21,843.00 17,889.00 21,275.00
24,024.00 22,643.00 18,377.00 22,009.00
23,282.00 21,943.00 16,810.00 20,818.00
22,288.00 21,006.00 15,759.00 20,146.00
18,514.00 17,450.00 13,215.00 17,434.00
19,799.00 18,661.00 14,487.00 18,454.00
21,322.00 20,096.00 15,696.00 19,883.00
22,951.00 21,631.00 16,674.00 21,109.00
21,957.00 20,694.00 16,081.00 20,890.00
20,315.00 19,146.00 15,040.00 20,317.00
21,930.00 20,669.00 16,347.00 21,949.00
21,083.00 19,871.00 15,994.00 22,149.00
19,561.00 18,436.00 15,059.00 21,165.00
18,037.00 17,000.00 13,782.00 20,115.00
15,030.00 14,166.00 11,663.00 17,078.00
15,057.00 14,192.00 11,658.00 17,035.00
14,342.00 13,517.00 10,816.00 15,812.00
14,871.00 14,016.00 11,363.00 16,320.00
16,248.00 15,314.00 12,489.00 17,776.00
15,202.00 14,328.00 11,627.00 16,785.00
14,460.00 13,629.00 11,311.00 16,320.00
14,050.00 13,242.00 11,009.00 15,828.00
14,447.00 13,616.00 11,175.00 16,032.00
15,440.00 14,552.00 12,233.00 17,552.00
17,187.00 16,199.00 13,611.00 19,435.00
17,598.00 16,586.00 13,874.00 19,787.00
18,485.00 17,422.00 14,923.00 21,025.00
19,360.00 18,246.00 15,724.00 21,988.00
18,670.00 17,597.00 15,326.00 21,581.00
20,618.00 19,432.00 16,651.00 23,394.00
21,094.00 19,881.00 17,193.00 24,225.00
21,623.00 20,380.00 17,271.00 24,717.00
22,538.00 21,242.00 18,177.00 25,789.00
22,750.00 21,442.00 18,150.00 26,021.00
23,121.00 21,791.00 18,235.00 26,263.00
22,140.00 20,867.00 17,320.00 24,924.00
22,220.00 20,942.00 17,665.00 25,320.00
22,722.00 21,416.00 18,253.00 26,386.00
20,525.00 19,345.00 16,614.00 24,610.00
19,969.00 18,821.00 16,257.00 24,485.00
09/2004 21,107.00 19,886.00 17,158.00 25,633.00
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
2000 Growth Index is an unmanaged index that measures the performance of those
Russell 2000 Index companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 2000 Index is an unmanaged index that
tracks the performance of the 2,000 smallest of the 3,000 largest U.S. companies
based on market capitalization. Unlike mutual funds, indices are not
investments, do not incur fees or expenses and are not professionally managed.
It is not possible to invest directly in an index. Securities in the fund may
not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
- ------------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C G T Z
- ------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/18/02 11/18/02 11/18/02 03/04/96 12/30/91 12/30/91
- ------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------------
1-Year 13.05 6.55 12.22 7.22 12.25 11.25 12.16 7.16 12.99 6.49 13.40
- ------------------------------------------------------------------------------------------------------------------------
5-Year 4.58 3.35 3.75 3.41 3.69 3.69 3.71 3.19 4.56 3.32 4.98
- ------------------------------------------------------------------------------------------------------------------------
10-Year 7.76 7.12 7.11 7.11 7.08 7.08 7.09 7.09 7.74 7.10 8.23
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE"RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON
DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class A, class B, and class C are newer classes of shares. Their performance
information includes returns of Retail A shares (for class A shares) and Retail
B shares (for class B and class C shares) of the Galaxy Small Company Equity
Fund for periods prior to November 18, 2002, the date on which class A, B, and C
shares were initially offered by the Fund. The returns of class B and class C
shares also include the returns of Retail A shares for periods prior to the
inception of Retail B shares of the Galaxy Small Company Equity Small Company
Equity Fund (March 4, 1996). Class B and class C shares generally would have had
substantially similar returns to Retail A shares because they would have been
invested in the same portfolio of securities, although the returns would be
lower to the extent that expenses for class B and class C shares exceed expenses
paid by Retail A shares. The returns have not been restated to reflect any
differences in expenses between the predecessor shares and the newer class of
shares. If differences in expenses had been reflected, the returns shown for
periods prior to the inception of the newer classes of shares would have been
lower. The returns for class G and T shares include the returns of Retail A
shares (for class T shares) and Retail B shares (for class G shares) of the
Galaxy Small Company Equity Fund for periods prior to November 18, 2002, the
date on which class T and class G shares were initially offered by the Fund. The
returns shown for class G shares also include the returns of Retail A shares
(adjusted to reflect the sales charge applicable to class G shares) for periods
prior to the inception of Retail B shares of the Galaxy Small Company Equity
Fund (March 4, 1996). Retail A shares were initially offered on December 30,
1991. Class G shares generally would have had substantially similar returns to
Retail A shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class G shares exceed expenses paid by Retail A shares. The returns
for class Z shares include the returns of Trust shares of the Galaxy Small
Company Equity Fund for periods prior to November 18, 2002, the date on which
class Z shares were initially offered by the Fund.
26
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
Columbia Small Company Equity Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 917.05 1,018.30 6.42 6.76 1.34
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 913.75 1,014.55 10.00 10.53 2.09
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 915.10 1,014.55 10.01 10.53 2.09
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 914.05 1,014.80 9.76 10.28 2.04
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 915.90 1,018.05 6.66 7.01 1.39
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 916.90 1,019.55 5.22 5.50 1.09
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Transfer Agent not waived a portion of expenses, total return would have
been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
27
[Sidebar]
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED 13.05% WITHOUT SALES CHARGE.
o THE FUND OUTPERFORMED THE RUSSELL 2000 GROWTH INDEX AND ITS PEER GROUP, THE
MORNINGSTAR(R) SMALL COMPANY GROWTH CATEGORY. HOWEVER, IT TRAILED THE
RUSSELL 2000 INDEX.
o WE BELIEVE THAT SUPERIOR STOCK SELECTION HELPED THE FUND OUTPERFORM ITS
GROWTH BENCHMARK AND PEER GROUP. THE FUND'S GROWTH BIAS ACCOUNTED FOR ITS
SHORTFALL RELATIVE TO THE BROADER RUSSELL 2000 INDEX, WHICH INCLUDES BOTH
GROWTH AND VALUE STOCKS.
RUSSELL 2000
CLASS A GROWTH RUSSELL 2000
SHARES INDEX INDEX
[UP ARROW] [UP ARROW] [UP ARROW]
13.05% 11.92% 18.77%
OBJECTIVE
Seeks capital appreciation.
TOTAL NET ASSETS
$380.4 million
NET ASSET VALUE PER SHARE
AS OF 09/30/04 ($)
Class A 15.94
- ----------------------------------------------
Class B 14.88
- ----------------------------------------------
Class C 14.84
- ----------------------------------------------
Class G 14.85
- ----------------------------------------------
Class T 15.92
- ----------------------------------------------
Class Z 16.84
PORTFOLIO MANAGERS' REPORT _____________________________________________________
Columbia Small Company Equity Fund
For the 12-month period ended September 30, 2004, class A shares of Columbia
Small Company Equity Fund returned 13.05% without sales charge. The fund
outpaced the 11.92% return of its primary benchmark, the Russell 2000 Growth
Index and beat the Morningstar(R) Small Growth Category average, which returned
11.36%. 1 Strong stock selection drove performance. However, the fund fell short
of the 18.77% return of it secondary benchmark, the Russell 2000 Index, because
the fund focuses on small-cap growth stocks, and value stocks led the market for
the period. The Russell 2000 Index measures the performance of both small-cap
growth and value stocks.
STOCK PICKING FOCUSED ON QUALITY AND VALUATION
Small-cap stocks held up well even as uncertainty over the economy, war in Iraq
and the presidential election unsettled investors. In this environment, we
emphasized small-cap companies that appeared to have healthy balance sheets,
attractive business models and strong management teams. We also targeted
companies that had track records of profitability operating in well-defined
niches with strong growth prospects and attractive or reasonable stock
valuations. Among the fund's best performers were Station Casinos and Jarden.
Station benefited as business boomed, both at the casinos it operates for Las
Vegas residents and through collaborations with Native American tribes on new
projects. We sold our stake as the stock reached mid-cap size. Jarden, a
diversified consumer products company, rallied as innovative marketing and smart
acquisitions drove strong earnings growth.
STRONG CONTRIBUTIONS FROM ENERGY, INDUSTRIALS, HEALTH CARE AND FINANCIALS
Energy, industrials, health care and financials were the best performing sectors
for the fund. Energy stocks posted sharp gains, driven by high commodity prices
and concerns around supply. Maverick Tube, a company that makes metal tubing to
transport gas and oil from offshore drilling sites, was one of the fund's top
performers. Within industrials, we emphasized transportation stocks. Freight
companies, such as EGL, did especially well amid favorable supply/demand
dynamics.
In health care, we favored biotechnology and specialty pharmaceutical companies,
which helped performance. Salix Pharmaceuticals rallied sharply following FDA
approval for its new gastro-intestinal drug. The fund's financial investments
focused on banks that were well-positioned for rising interest rates. East West
Bancorp, a West Coast bank with a niche serving the Chinese-American community,
generated particularly strong returns.
DISAPPOINTMENTS FROM TECHNOLOGY AND MEDIA
Technology stocks declined as economic growth slowed during the summer months,
traditionally a slow period for technology. Netopia,
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from the use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933. Morningstar Categories
compare the performance of funds with similar investment objectives and
strategies.
28
[Sidebar]
SECTORS AS OF 09/30/04 (%)
Consumer discretionary 16.5
- ----------------------------------------------
Consumer staples 0.4
- ----------------------------------------------
Energy 3.8
- ----------------------------------------------
Financials 10.9
- ----------------------------------------------
Health care 22.8
- ----------------------------------------------
Industrials 14.4
- ----------------------------------------------
Information technology 29.0
- ----------------------------------------------
Materials 2.2
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/04 (%)
Jarden Corp. 1.5
- ----------------------------------------------
DRS Technologies, Inc. 1.3
- ----------------------------------------------
Silicon Image, Inc. 1.2
- ----------------------------------------------
Infinity Property & Casualty Corp. 1.2
- ----------------------------------------------
Cost Plus, Inc. 1.2
- ----------------------------------------------
Scientific Games Corp. 1.2
- ----------------------------------------------
Jefferies Group, Inc. 1.1
- ----------------------------------------------
Advisory Board Co. 1.1
- ----------------------------------------------
Gaylord Entertainment Co. 1.1
- ----------------------------------------------
EGL, Inc. 1.1
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/04 (%)
Jarden Corp. 1.5
- ----------------------------------------------
Maverick Tube Corp. 0.7
- ----------------------------------------------
EGL, Inc. 1.1
- ----------------------------------------------
Salix Pharmaceuticals Ltd. 0.9
- ----------------------------------------------
East West Bancorp, Inc. 1.0
- ----------------------------------------------
Netopia, Inc. 0.1
- ----------------------------------------------
Micromuse, Inc. 0.7
- ----------------------------------------------
Silicon Image, Inc. 1.2
- ----------------------------------------------
Artisan Components, Inc. 0.9
- ----------------------------------------------
Taro Pharmaceuticals Industries Ltd. 0.5
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 Small Company Equity Fund
which makes smart modems for DSL, and Micromuse, which sells network management
software, were among the biggest detractors as sales fell short of expectations.
The fund's focus on semiconductor and semiconductor equipment stocks, however,
yielded a few bright spots. Silicon Image climbed sharply after launching a new
type of digital connectivity technology called HDMI, while Artisan Components, a
semiconductor design company, rallied nicely following a generous buyout offer.
Elsewhere, the fund lost ground from its emphasis on media stocks, which came
under pressure because of weaker-than-expected advertising revenues. In
addition, Taro Pharmaceuticals Industries and At Road tumbled after failing to
meet investor expectations. Taro Pharmaceuticals Industries is a specialty
pharmaceutical company, while At Road is a mobile resource management company
that helps companies track the location of field workers. We sold At Road as
prospects deteriorated, but held on to Taro, because we believe its earnings
outlook is encouraging.
CAUTIOUS OPTIMISM FOR COMING YEAR
Although small-cap valuations have risen and investor risk tolerance has
dropped, we remain optimistic about the prospects for small-cap growth stocks.
We think their earnings outlooks remain better than those for large-cap stocks,
especially if the economy continues to improve. In the midst of economic
uncertainty and potential market volatility, we expect to maintain the fund's
bias toward higher quality, small-cap growth stocks.
Paul Berlinguet has managed Columbia Small Company Equity Fund since November
2003 and has been with the advisor since October 2003.
/s/ Paul Berlinguet
Steven Lilly has co-managed the fund since May 2004 and has been with the
advisor or its predecessors or affiliate organizations since July 1995.
/s/ Steven Lilly
Thomas Lettenberger has co-managed the fund since May 2004 and has been with the
advisor or its predecessors or affiliate organizations since August 2000.
/s/ Thomas Lettenberger
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
Investing in small-cap stocks may present special risks, including possible
illiquidity and greater price volatility than stocks of larger, more established
companies.
29
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 64.9%
CONSUMER DISCRETIONARY - 8.1%
AUTO COMPONENTS - 0.3%
Autoliv, Inc. 1,520 61,408
BorgWarner, Inc. 2,600 112,554
Continental AG 4,500 245,151
Denso Corp. 15,600 369,637
Gentex Corp. 2,100 73,773
Johnson Controls, Inc. 2,500 142,025
Lear Corp. 3,000 163,350
Modine Manufacturing Co. 1,200 36,132
Standard Motor Products, Inc. 2,600 39,286
Superior Industries International 1,800 53,910
Visteon Corp. 1 8
-------------
Auto Components Total 1,297,234
AUTOMOBILES - 0.4%
Renault SA 9,232 757,245
Toyota Motor Corp. 20,300 779,198
-------------
Automobiles Total 1,536,443
DISTRIBUTORS - 0.0%
Brightpoint, Inc. (a) 4,200 72,240
-------------
Distributors Total 72,240
HOTELS, RESTAURANTS & LEISURE - 1.4%
Alliance Gaming Corp. (a) 4,300 64,758
Applebee's International, Inc. 2,450 61,936
Bally Total Fitness Holding Corp. (a) 4,600 16,744
Bob Evans Farms, Inc. 1,624 44,108
Brinker International, Inc. (a) 4,200 130,830
Buca, Inc. (a) 6,800 28,832
Carnival Corp. 24,300 1,149,147
Cheesecake Factory, Inc. (a) 1,450 62,930
Darden Restaurants, Inc. 2,300 53,636
Dave & Buster's, Inc. (a) 3,500 66,430
Four Seasons Hotels, Inc. 520 33,332
Gaylord Entertainment Co. (a) 4,000 124,000
Harrah's Entertainment, Inc. 8,782 465,270
Hilton Hotels Corp. 16,760 315,758
Intercontinental Hotels Group PLC 19,238 219,338
Landry's Restaurants, Inc. 2,500 68,225
Lone Star Steakhouse & Saloon 3,300 85,239
Marcus Corp. 3,500 68,145
Marriott International, Inc., Class A 26,230 1,362,911
McDonald's Corp. 16,450 461,094
OPAP SA 12,620 242,930
Pinnacle Entertainment, Inc. (a) 5,700 78,660
Scientific Games Corp., Class A (a) 10,900 208,190
Six Flags, Inc. (a) 12,800 69,632
Starwood Hotels & Resorts
Worldwide, Inc. 2,970 137,867
Volume Services America Holdings, Inc. 3,200 47,040
Yum! Brands, Inc. 4,650 189,069
-------------
Hotels, Restaurants & Leisure Total 5,856,051
SHARES VALUE ($)
------- -------------
HOUSEHOLD DURABLES - 0.4%
American Greetings Corp., Class A (a) 1,900 47,728
Centex Corp. 1,340 67,616
CSS Industries, Inc. 1,500 46,410
D.R. Horton, Inc. 2,340 77,477
Funai Electric Co., Ltd. 1,900 256,814
Harman International Industries, Inc. 400 43,100
Kimball International, Inc., Class B 3,300 45,804
Koninklijke (Royal) Philips
Electronics NV (a) 16,590 381,263
Matsushita Electric Industrial Co., Ltd. 37,000 495,040
Newell Rubbermaid, Inc. 4,700 94,188
Pulte Homes, Inc. 500 30,685
Russ Berrie & Co., Inc. 1,100 22,165
-------------
Household Durables Total 1,608,290
INTERNET & CATALOG RETAIL - 0.3%
eBay, Inc. (a) 12,000 1,103,280
-------------
Internet & Catalog Retail Total 1,103,280
LEISURE EQUIPMENT & PRODUCTS - 0.1%
Action Performance Companies, Inc. 3,700 37,481
Fuji Photo Film Co., Ltd. 11,000 362,225
JAKKS Pacific, Inc. (a) 1,600 36,800
M&F Worldwide Corp. (a) 2,500 32,525
Marvel Enterprises, Inc. (a) 9,230 134,389
Mattel, Inc. 3,900 70,707
-------------
Leisure Equipment & Products Total 674,127
MEDIA - 1.7%
4Kids Entertainment, Inc. (a) 3,300 66,660
Arbitron, Inc. (a) 2,800 102,508
Clear Channel Communications, Inc. 17,254 537,807
Cumulus Media, Inc., Class A (a) 5,500 79,145
Dentsu, Inc. 78 209,298
Grupo Televisa SA, ADR 900 47,457
JC Decaux SA (a) 12,374 281,914
Journal Communications, Inc. 2,000 35,080
Knight-Ridder, Inc. 800 52,360
Lamar Advertising Co., Class A (a) 1,450 60,335
Liberty Corp. 1,400 55,636
Lin TV Corp., Class A (a) 5,800 112,984
McGraw-Hill Companies, Inc. 12,857 1,024,574
Media General, Inc., Class A 900 50,355
Mediacom Communications
Corp., Class A (a) 5,800 37,874
New York Times Co., Class A 2,400 93,840
News Corp., Ltd. 29,600 243,458
Omnicom Group 8,600 628,316
Pearson PLC 35,520 380,433
Radio One, Inc., Class D (a) 5,900 83,957
Sinclair Broadcast Group, Inc., Class A 12,700 92,710
Time Warner, Inc. (a) 64,363 1,038,819
TiVo, Inc. (a) 9,000 59,580
Univision Communications, Inc.,
Class A (a) 3,570 112,848
Viacom, Inc., Class A 10,890 370,260
See Accompanying Notes to Financial Statements.
30
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
CONSUMER DISCRETIONARY - (CONTINUED)
MEDIA - (CONTINUED)
WPP Group PLC 25,000 233,425
XM Satellite Radio Holdings, Inc.,
Class A (a) 33,455 1,037,774
-------------
Media Total 7,129,407
MULTILINE RETAIL - 0.2%
Federated Department Stores, Inc. 5,900 268,037
Fred's, Inc. 4,300 77,228
May Department Stores Co. 8,810 225,800
ShopKo Stores, Inc. (a) 2,200 38,302
Takashimaya Co., Ltd. 12,000 100,088
Wal-Mart de Mexico SA de CV, Series V 81,100 275,652
-------------
Multiline Retail Total 985,107
SPECIALTY RETAIL - 2.7%
Aoyama Trading Co., Ltd. 3,900 88,878
Bed Bath & Beyond, Inc. (a) 29,065 1,078,602
Best Buy Co., Inc. 24,900 1,350,576
Boise Cascade Corp. 2,500 83,200
Bombay Co., Inc. (a) 12,100 88,693
Borders Group, Inc. 5,600 138,880
Building Material Holding Corp. 1,500 41,280
Chico's FAS, Inc. (a) 37,270 1,274,634
Compucom Systems, Inc. (a) 8,100 37,098
Cost Plus, Inc. (a) 3,700 130,906
GameStop Corp., Class A (a) 3,600 66,636
Goody's Family Clothing, Inc. 4,200 35,364
Home Depot, Inc. 27,915 1,094,268
Jarden Corp. (a) 4,800 175,152
Limited Brands 21,793 485,766
Lowe's Companies, Inc. 31,225 1,697,079
Monro Muffler, Inc. (a) 3,300 72,105
Movie Gallery, Inc. 1,100 19,283
Nitori Co., Ltd. 3,500 201,209
Office Depot, Inc. (a) 55,633 836,164
Pacific Sunwear of California, Inc. (a) 4,100 86,305
Party City Corp. (a) 3,700 54,649
PETCO Animal Supplies, Inc. (a) 4,900 160,034
PETsMART, Inc. 3,000 85,170
Pier 1 Imports, Inc. 2,400 43,392
Rent-Way, Inc. (a) 3,600 24,660
Ross Stores, Inc. 3,400 79,696
Sharper Image Corp. (a) 4,600 98,670
Staples, Inc. 53,940 1,608,491
TBC Corp. (a) 900 20,106
TJX Companies, Inc. 8,800 193,952
Urban Outfitters, Inc. (a) 1,700 58,480
-------------
Specialty Retail Total 11,509,378
TEXTILES, APPAREL & LUXURY GOODS - 0.6%
Burberry Group PLC 56,100 379,216
Carter's, Inc. (a) 3,000 83,070
Coach, Inc. (a) 24,780 1,051,168
Culp, Inc. (a) 400 2,940
SHARES VALUE ($)
------- -------------
Delta Apparel, Inc. 1,000 23,800
Hampshire Group Ltd. (a) 1,700 53,652
Kellwood Co. 2,200 80,190
NIKE, Inc., Class B 9,300 732,840
Russell Corp. 2,500 42,100
Stride Rite Corp. 3,000 30,750
Tandy Brands Accessories, Inc. 1,600 22,800
Wolverine World Wide, Inc. 2,900 73,080
-------------
Textiles, Apparel & Luxury Goods Total 2,575,606
-------------
CONSUMER DISCRETIONARY TOTAL 34,347,163
CONSUMER STAPLES - 5.8%
BEVERAGES - 1.0%
Diageo PLC 39,400 493,057
Pepsi Bottling Group, Inc. 4,300 116,745
PepsiCo, Inc. 64,292 3,127,806
SABMiller PLC 19,840 262,486
-------------
Beverages Total 4,000,094
FOOD & STAPLES RETAILING - 0.9%
Aeon Co., Ltd., 6,300 102,086
Aeon Co., Ltd., New Shares 6,300 100,635
BJ's Wholesale Club, Inc. (a) 1,300 35,542
Costco Wholesale Corp. 60,051 2,495,719
Metro AG 8,293 370,887
Performance Food Group Co. (a) 1,800 42,660
Sysco Corp. 24,130 721,970
Whole Foods Market, Inc. 1,000 85,790
Winn-Dixie Stores, Inc. 3,400 10,506
-------------
Food & Staples Retailing Total 3,965,795
FOOD PRODUCTS - 1.3%
Ajinomoto Co., Inc. 21,000 240,683
Bunge Ltd. 9,500 379,810
Central Garden and Pet Co. (a) 600 18,372
ConAgra Foods, Inc. 34,037 875,091
Corn Products International, Inc. 2,500 115,250
Dean Foods Co. (a) 11,800 354,236
Hershey Foods Corp. 14,640 683,834
Hormel Foods Corp. 2,100 56,238
John B. Sanfilippo & Son, Inc. (a) 800 20,960
Kraft Foods, Inc., Class A 36,207 1,148,486
Nestle SA, Registered Shares 3,966 910,793
Omega Protein Corp. (a) 3,400 26,180
Unilever PLC 81,110 661,548
-------------
Food Products Total 5,491,481
HOUSEHOLD PRODUCTS - 1.5%
Clorox Co. 21,075 1,123,297
Kao Corp. 20,000 442,978
Kimberly-Clark Corp. 19,090 1,233,023
Procter & Gamble Co. 53,572 2,899,317
Reckitt Benckiser PLC 25,583 627,919
-------------
Household Products Total 6,326,534
See Accompanying Notes to Financial Statements.
31
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
CONSUMER STAPLES - (CONTINUED)
PERSONAL PRODUCTS - 0.6%
Alberto-Culver Co., Class B 26,255 1,141,567
Avon Products, Inc. 27,600 1,205,568
-------------
Personal Products Total 2,347,135
TOBACCO - 0.5%
Altria Group, Inc. 38,219 1,797,822
Imperial Tobacco Group PLC 22,997 502,314
-------------
Tobacco Total 2,300,136
-------------
CONSUMER STAPLES TOTAL 24,431,175
ENERGY - 5.3%
ENERGY EQUIPMENT & SERVICES - 0.8%
Baker Hughes, Inc. 2,970 129,849
BJ Services Co. 4,440 232,700
Cooper Cameron Corp. (a) 700 38,388
Halliburton Co. 29,831 1,005,006
Key Energy Services, Inc. (a) 7,100 78,455
Lufkin Industries, Inc. 1,900 70,718
Maverick Tube Corp. (a) 2,500 77,025
Nabors Industries Ltd. (a) 1,210 57,294
National-Oilwell, Inc. (a) 18,560 609,882
Noble Corp. (a) 2,300 103,385
Patterson-UTI Energy, Inc. 5,630 107,364
Saipem S.p.A. 11,700 131,701
Smith International, Inc. (a) 6,000 364,380
Transocean, Inc. (a) 2,800 100,184
Unit Corp. (a) 3,200 112,256
Universal Compression Holdings, Inc. (a) 1,800 61,326
Weatherford International Ltd. (a) 1,900 96,938
Willbros Group, Inc. (a) 5,200 77,532
-------------
Energy Equipment & Services Total 3,454,383
OIL & GAS - 4.5%
Amerada Hess Corp. 2,500 222,500
Apache Corp. 1,194 59,831
BG Group PLC 38,152 256,674
BP PLC, ADR 62,501 3,595,683
Carrizo Oil & Gas, Inc. (a) 5,300 50,721
ChevronTexaco Corp. 9,568 513,228
Cimarex Energy Co. (a) 1,700 59,398
ConocoPhillips 32,607 2,701,490
Edge Petroleum Corp. (a) 2,300 36,731
EnCana Corp. 16,400 758,964
Energy Partners Ltd. (a) 4,200 68,376
ENI S.p.A. 58,813 1,319,225
EOG Resources, Inc. 8,560 563,676
Exxon Mobil Corp. 69,277 3,348,157
Fortum Oyj 17,400 243,397
Harvest Natural Resources, Inc. (a) 4,200 69,720
Magnum Hunter Resources, Inc (a) 4,900 56,546
Marathon Oil Corp. 33,398 1,378,669
Mission Resources Corp. (a) 8,200 51,578
SHARES VALUE ($)
------- -------------
Murphy Oil Corp. 400 34,708
Norsk Hydro ASA 3,800 277,218
PTT Public Co., Ltd. 113,300 462,281
Range Resources Corp. 3,100 54,219
Royal Dutch Petroleum Co.,
N.Y. Registered Shares 20,509 1,058,264
Shell Transport & Trading Co., PLC 51,400 378,069
Stone Energy Corp. (a) 1,700 74,392
Total SA 3,640 742,949
Ultra Petroleum Corp. (a) 300 14,715
Western Gas Resources, Inc. 4,600 131,514
Whiting Petroleum Corp. (a) 1,300 39,520
XTO Energy, Inc. 15,020 487,850
-------------
Oil & Gas Total 19,110,263
-------------
ENERGY TOTAL 22,564,646
FINANCIALS - 13.7%
CAPITAL MARKETS - 1.4%
Bank of New York Co., Inc. 38,797 1,131,708
Bear Stearns Companies, Inc. 1,400 134,638
Deutsche Bank AG, Registered Shares 3,583 258,108
E*TRADE Financial Corp. (a) 6,010 68,634
Goldman Sachs Group, Inc. 15,590 1,453,612
Janus Capital Group, Inc. 11,200 152,432
Jefferies Group, Inc. 3,600 124,092
LaBranche & Co., Inc. (a) 2,700 22,815
Lehman Brothers Holdings, Inc. 1,600 127,552
Merrill Lynch & Co., Inc. 18,000 894,960
Morgan Stanley 15,944 786,039
State Street Corp. 13,609 581,240
-------------
Capital Markets Total 5,735,830
COMMERCIAL BANKS - 4.2%
Anglo Irish Bank Corp., PLC 15,700 288,070
Bancfirst Corp. 200 12,824
Banco Popolare di Verona E Novara 22,900 402,147
Banco Popular Espanol SA 5,470 304,433
Bancorpsouth, Inc. 2,300 52,877
BancTrust Financial Group, Inc. 2,300 43,240
Bank of Granite Corp. 2,200 42,702
Bank of Ireland 25,424 342,899
Banknorth Group, Inc. 4,200 147,000
Barclays PLC 102,120 981,997
BNP Paribas 10,019 648,794
Boston Private Financial Holdings, Inc. 3,500 87,360
Bryn Mawr Bank Corp. 2,700 54,216
Capitol Bancorp Ltd. 2,400 70,416
Chemical Financial Corp. 2,145 78,335
Chittenden Corp. 3,125 85,156
City National Corp. 2,100 136,395
Columbia Banking System, Inc. 1,800 42,822
Community Trust Bancorp, Inc. 1,270 39,472
Corus Bankshares, Inc. 2,000 86,260
Credit Agricole SA 10,640 290,926
Cullen/Frost Bankers, Inc. 1,400 65,058
Danske Bank A/S 11,000 289,446
DNB NOR ASA 32,000 253,681
See Accompanying Notes to Financial Statements.
32
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
COMMERCIAL BANKS - (CONTINUED)
East-West Bancorp, Inc. 3,400 114,206
Erste Bank der oesterreichischen
Sparkassen AG 6,534 272,371
First Citizens BancShares, Inc., Class A 300 35,400
First Financial Bankshares Inc. 1,150 46,184
Greater Bay Bancorp 1,800 51,750
Hancock Holding Co. 1,000 31,790
Hansabank Ltd. 31,965 289,650
HBOS PLC 19,860 268,786
ITLA Capital Corp. (a) 1,100 50,820
Kookmin Bank, ADR (a) 10,300 327,952
Lloyds TSB Group PLC 33,110 259,181
MASSBANK Corp. 700 25,998
Mercantile Bank Corp. 2,945 102,604
Merchants Bancshares, Inc. 1,800 51,750
Mid-State Bancshares 3,200 82,336
Mitsubishi Tokyo Financial Group, Inc. 44 367,527
Mizuho Financial Group, Inc. 68 256,051
National Bank of Greece SA 11,505 279,782
National City Corp. 23,970 925,721
North Fork Bancorporation, Inc. 13,360 593,852
Northrim BanCorp, Inc. 1,600 34,960
Prosperity Bancshares, Inc. 4,100 109,552
Riggs National Corp. 1,900 42,180
Royal Bank of Scotland Group PLC 27,887 807,398
S.Y. Bancorp, Inc. 400 9,028
Skandinaviska Enskilda Banken
AB, Class A 38,200 590,612
Sterling Bancshares, Inc. 5,500 73,975
Sumitomo Mitsui Financial Group, Inc. 41 234,933
TCF Financial Corp. 3,120 94,505
Trico Bancshares 4,400 92,048
UCBH Holdings, Inc. 1,560 60,949
UMB Financial Corp. 1,600 76,272
UnionBanCal Corp. 500 29,605
US Bancorp 73,435 2,122,272
Wachovia Corp. 24,349 1,143,186
Wells Fargo & Co. 49,992 2,981,023
Whitney Holding Corp. 1,500 63,000
Wintrust Financial Corp. 1,000 57,280
Zions Bancorporation 1,000 61,040
-------------
Commercial Banks Total 17,964,055
CONSUMER FINANCE - 0.6%
American Express Co. 23,000 1,183,580
Cash America International, Inc. 4,100 100,286
MBNA Corp. 42,688 1,075,738
-------------
Consumer Finance Total 2,359,604
DIVERSIFIED FINANCIAL SERVICES - 2.0%
ACE Cash Express, Inc. (a) 3,200 83,328
Citigroup, Inc. 102,080 4,503,770
Commercial Capital Bancorp, Inc. 4,200 95,298
Credit Saison Co., Ltd. 4,100 126,423
SHARES VALUE ($)
------- -------------
Greenhill & Co., Inc. 3,600 84,960
ING Groep NV 32,420 818,995
JPMorgan Chase & Co. 63,873 2,537,674
Metris Companies, Inc. (a) 6,600 64,548
MFC Bancorp Ltd. (a) 5,400 99,036
MTC Technologies, Inc. (a) 4,000 110,520
National Financial Partners Corp. 1,900 67,982
QC Holdings, Inc. (a) 1,600 25,488
-------------
Diversified Financial Services Total 8,618,022
INSURANCE - 3.3%
Aegon NV 11,591 125,377
Aflac, Inc. 13,798 541,020
Allianz AG, Registered Shares 3,854 388,979
Ambac Financial Group, Inc. 14,274 1,141,206
American International Group, Inc. 40,673 2,765,357
AmerUs Group Co. 900 36,900
Axa 12,400 251,660
Baldwin & Lyons, Inc., Class B 300 7,572
Chubb Corp. 13,455 945,617
Cincinnati Financial Corp. 1,365 56,265
CNA Surety Corp. (a) 3,500 37,100
Commerce Group, Inc. 1,100 53,240
Delphi Financial Group, Inc., Class A 1,950 78,332
Harleysville Group, Inc. 2,700 55,782
Hartford Financial Services Group, Inc. 11,841 733,313
Horace Mann Educators Corp. 2,700 47,466
Infinity Property & Casualty Corp. 4,400 129,932
Irish Life & Permanent PLC 19,200 310,273
Kansas City Life Insurance Co. 200 8,514
Lincoln National Corp. 24,476 1,150,372
Loews Corp. 1,300 76,050
Marsh & McLennan Companies, Inc. 10,523 481,532
Millea Holdings, Inc. 32 413,318
Mitsui Sumitomo Insurance Co., Ltd. 39,000 322,435
Nationwide Financial Services, Inc.,
Class A 2,100 73,731
Navigators Group, Inc. (a) 1,200 35,088
Old Republic International Corp. 1,050 26,282
Philadelphia Consolidated
Holding Co. (a) 2,100 115,752
Phoenix Companies, Inc. 5,500 57,310
ProCentury Corp. 4,200 41,790
Progressive Corp. 3,300 279,675
Quanta Capital Holdings Ltd. (a) 4,600 37,490
RenaissanceRe Holdings Ltd. 17,600 907,808
Riunione Adriatica di Sicurta S.p.A 9,043 174,065
RLI Corp. 1,600 60,080
St. Paul Travelers Companies, Inc. 1,900 62,814
T&D Holdings, Inc. (a) 5,500 241,753
UICI 900 29,466
United National Group Ltd., Class A (a) 2,700 39,204
Universal American Financial Corp. (a) 2,300 29,739
Willis Group Holdings Ltd. 20,758 776,349
XL Capital Ltd., Class A 12,885 953,361
-------------
Insurance Total 14,099,369
See Accompanying Notes to Financial Statements.
33
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
REAL ESTATE - 1.6%
Alexandria Real Estate Equities,
Inc., REIT 3,960 260,251
American Financial Realty Trust, REIT 2,800 39,508
Archstone-Smith Trust, REIT 19,096 604,197
AvalonBay Communities, Inc. 7,150 430,573
BioMed Realty Trust, Inc. 4,000 70,360
Boston Properties, Inc., REIT 1,120 62,037
Boykin Lodging Co., REIT (a) 4,500 37,845
Brandywine Realty Trust 1,800 51,264
Brookfield Properties Co., REIT 1,930 62,262
CenterPoint Properties Trust, REIT 2,200 95,876
Corporate Office Properties Trust 1,800 46,116
Cousins Properties, Inc., REIT 5,800 198,998
Duke Realty Corp., REIT 3,250 107,900
Eastgroup Properties, Inc., REIT 2,100 69,720
Equity Office Properties Trust, REIT 4,220 114,995
Equity One, Inc., REIT 2,600 51,012
Equity Residential, REIT 5,970 185,070
Essex Property Trust, Inc., REIT 430 30,895
First Potomac Realty Trust, REIT 2,500 51,650
General Growth Properties, Inc., REIT 5,420 168,020
Getty Realty Corp., REIT 1,800 47,196
Gladstone Commercial Corp., REIT 2,100 34,041
Host Marriott Corp. (a) 17,800 249,734
iStar Financial, Inc., REIT 5,290 218,107
Kimco Realty Corp., REIT 13,123 673,210
La Quinta Corp., REIT (a) 8,810 68,718
Liberty Property Trust, REIT 2,140 85,258
Mid-America Apartment Communities,
Inc., REIT 2,100 81,795
Mitsubishi Estate Co., Ltd. 19,000 198,733
Nationwide Health Properties, Inc., REIT 3,400 70,550
Newcastle Investment Corp., REIT 2,870 88,109
Pan Pacific Retail Properties, Inc., REIT 1,450 78,445
ProLogis, REIT 4,580 161,399
PS Business Parks, Inc., REIT 2,500 99,625
Public Storage, Inc., REIT 2,770 137,254
Regency Centers Corp., REIT 3,070 142,724
Simon Property Group, Inc., REIT 3,690 197,895
SL Green Realty Corp., REIT 1,200 62,172
St. Joe Co. 3,560 170,061
Sumitomo Realty & Development
Co., Ltd. 10,000 106,697
Sun Hung Kai Properties Ltd. 61,000 574,535
Swire Pacific Ltd., Class A 17,000 118,143
Tanger Factory Outlet Centers,
Inc., REIT 1,200 53,736
United Dominion Realty Trust,
Inc., REIT 2,400 47,592
Universal Health Realty Income
Trust, REIT 1,100 33,330
SHARES VALUE ($)
------- -------------
Urstadt Biddle Properties, Inc.,
Class A, REIT 2,600 39,624
Vornado Realty Trust, REIT 2,637 165,287
-------------
Real Estate Total 6,742,519
THRIFTS & MORTGAGE FINANCE - 0.6%
Countrywide Financial Corp. 16,884 665,061
Freddie Mac 14,032 915,447
Golden West Financial Corp. 2,900 321,755
Greenpoint Financial Corp. 3,650 168,849
PMI Group, Inc. 4,100 166,378
Radian Group, Inc. 3,000 138,690
Sovereign Bancorp, Inc. 8,400 183,288
Webster Financial Corp. 2,700 133,353
-------------
Thrifts & Mortgage Finance Total 2,692,821
-------------
FINANCIALS TOTAL 58,212,220
HEALTH CARE - 8.8%
BIOTECHNOLOGY - 0.8%
Amgen, Inc. (a) 12,830 727,204
Amylin Pharmaceuticals, Inc. (a) 4,724 96,937
Biogen Idec, Inc. (a) 7,600 464,892
BioMarin Pharmaceuticals, Inc. (a) 9,500 49,305
Cell Therapeutics, Inc. (a) 10,100 69,286
Cytogen Corp. (a) 4,600 48,484
Exact Sciences Corp. (a) 6,800 22,440
Gen-Probe, Inc. (a) 2,330 92,897
Genentech, Inc. (a) 23,000 1,205,660
Genzyme Corp. (a) 2,330 126,775
ImClone Systems, Inc. (a) 500 26,425
Martek Biosciences Corp. (a) 1,450 70,528
Neopharm, Inc. (a) 9,410 80,550
Neurocrine Biosciences, Inc. (a) 2,100 99,036
Protein Design Labs, Inc. (a) 4,500 88,110
Telik, Inc. (a) 4,600 102,580
-------------
Biotechnology Total 3,371,109
HEALTH CARE EQUIPMENT & SUPPLIES - 2.6%
Alcon, Inc. 11,860 951,172
Beckman Coulter, Inc. 1,150 64,538
Bio-Rad Laboratories, Inc., Class A (a) 2,200 112,420
Biomet, Inc. 5,160 241,901
Boston Scientific Corp. (a) 24,730 982,523
Cardiac Science, Inc. (a) 17,300 33,216
Conceptus, Inc. (a) 6,500 60,255
Cytyc Corp. (a) 2,600 62,790
Fisher Scientific International, Inc. (a) 2,850 166,240
Integra LifeSciences Holdings Corp. (a) 3,300 105,963
Kinetic Concepts, Inc. (a) 12,490 656,350
LCA-Vision, Inc. 3,700 95,423
Medical Action Industries, Inc. (a) 7,100 118,059
Millipore Corp. (a) 2,400 114,840
Nobel Biocare Holding AG 1,222 189,999
Palomar Medical Technologies, Inc. (a) 2,100 46,032
Smith & Nephew PLC 73,280 675,439
Sola International, Inc. (a) 1,600 30,480
See Accompanying Notes to Financial Statements.
34
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES - (CONTINUED)
SonoSite, Inc. (a) 4,400 114,620
St. Jude Medical, Inc. (a) 17,560 1,321,741
SurModics, Inc. (a) 3,000 71,250
Synthes, Inc. (a) 1,200 131,024
Thermo Electron Corp. (a) 35,340 954,887
Varian Medical Systems, Inc. (a) 45,290 1,565,675
Varian, Inc. (a) 2,500 94,675
Zimmer Holdings, Inc. (a) 23,000 1,817,920
-------------
Health Care Equipment & Supplies Total 10,779,432
HEALTH CARE PROVIDERS & SERVICES - 1.4%
Accredo Health, Inc. (a) 2,540 59,868
Advisory Board Co. (a) 3,700 124,320
Aetna, Inc. 21,093 2,107,823
America Service Group, Inc. (a) 2,159 88,605
Anthem, Inc. (a) 12,000 1,047,000
Capital Senior Living Corp. (a) 1,300 6,240
Caremark Rx, Inc. (a) 33,610 1,077,873
Chronimed, Inc. (a) 3,500 21,070
Community Health Systems, Inc. (a) 2,330 62,164
Cross Country Healthcare, Inc. (a) 2,500 38,750
DaVita, Inc. (a) 5,840 181,916
First Health Group Corp. (a) 6,600 106,194
Genesis HealthCare Corp. (a) 1,350 41,054
Gentiva Health Services, Inc. (a) 2,600 42,562
HCA, Inc. 2,600 99,190
Hooper Holmes, Inc. 9,000 40,320
Isolagen, Inc. (a) 6,800 64,260
Kindred Healthcare, Inc. (a) 3,000 73,200
LifePoint Hospitals, Inc. (a) 2,500 75,025
McKesson Corp. 4,680 120,042
OCA, Inc. (a) 5,200 24,648
Parexel International Corp. (a) 3,700 72,520
Pediatrix Medical Group, Inc. (a) 1,200 65,820
Province Healthcare Co. (a) 1,800 37,656
Stewart Enterprises, Inc., Class A (a) 8,300 57,685
U.S. Physical Therapy, Inc. (a) 2,800 38,052
UnitedHealth Group, Inc. 699 51,544
WellPoint Health Networks, Inc. (a) 1,300 136,617
-------------
Health Care Providers & Services Total 5,962,018
PHARMACEUTICALS - 4.0%
Advancis Pharmaceutical Corp. (a) 9,000 73,350
AstraZeneca PLC 13,900 570,867
Atrix Labs, Inc. (a) 3,000 92,070
Barr Pharmaceuticals, Inc. (a) 1,675 69,395
Bone Care International, Inc. (a) 3,900 94,770
Bristol-Myers Squibb Co. 16,864 399,171
Caraco Pharmaceutical Laboratories
Ltd. (a) 2,400 18,480
Chugai Pharmaceutical Co., Ltd. 23,600 341,106
DepoMed, Inc. (a) 16,000 83,520
DOV Pharmaceutical, Inc. (a) 6,600 113,124
Elan Corp., PLC, ADR (a) 4,610 107,874
Eli Lilly & Co. 13,700 822,685
SHARES VALUE ($)
------- -------------
Endo Pharmaceuticals Holdings, Inc. (a) 3,470 63,709
GlaxoSmithKline PLC 40,530 875,967
IVAX Corp. (a) 3,388 64,871
Johnson & Johnson 60,178 3,389,827
Medicis Pharmaceutical Corp., Class A 6,050 236,192
Merck & Co., Inc. 20,098 663,234
Nektar Therapeutics (a) 10,050 145,524
Novartis AG, Registered Shares 14,630 682,741
Noven Pharmaceuticals, Inc. (a) 5,400 112,536
Perrigo Co. 2,700 55,485
Pfizer, Inc. 129,112 3,950,827
Renovis, Inc. (a) 6,400 51,264
Salix Pharmaceuticals Ltd. (a) 4,600 98,992
Sanofi-Aventis 9,750 709,441
Takeda Chemical Industries Ltd. 17,400 791,357
Taro Pharmaceuticals Industries Ltd. (a) 2,300 53,774
Teva Pharmaceutical Industries
Ltd., ADR 91,230 2,367,419
-------------
Pharmaceuticals Total 17,099,572
-------------
HEALTH CARE TOTAL 37,212,131
INDUSTRIALS - 7.3%
AEROSPACE & DEFENSE - 1.0%
AAR Corp. (a) 3,654 45,492
Alliant Techsystems, Inc. (a) 1,300 78,650
DRS Technologies, Inc. (a) 3,600 134,784
Esterline Technologies Corp. (a) 2,600 79,534
General Dynamics Corp. 11,532 1,177,417
Herley Industries, Inc. (a) 1,900 35,511
Honeywell International, Inc. 14,012 502,471
Kaman Corp., Class A 3,500 41,790
L-3 Communications Holdings, Inc. 820 54,940
Ladish Co., Inc. (a) 4,000 36,600
Northrop Grumman Corp. 1,000 53,330
Precision Castparts Corp. 1,500 90,075
Raytheon Co. 14,307 543,380
United Defense Industries, Inc. (a) 1,670 66,783
United Technologies Corp. 14,747 1,377,075
-------------
Aerospace & Defense Total 4,317,832
AIR FREIGHT & LOGISTICS - 0.1%
C.H. Robinson Worldwide, Inc. 1,560 72,369
CNF, Inc. 2,000 81,980
EGL, Inc. (a) 4,200 127,092
Expeditors International of
Washington, Inc. 1,230 63,591
HUB Group, Inc., Class A (a) 2,165 80,646
Ryder System, Inc. 1,200 56,448
UTI Worldwide, Inc. 1,800 105,858
-------------
Air Freight & Logistics Total 587,984
AIRLINES - 0.0%
AMR Corp. (a) 6,800 49,844
FLYi, Inc. (a) 2,300 8,993
MAIR Holdings, Inc. (a) 2,100 17,220
Skywest, Inc. 2,700 40,635
-------------
Airlines Total 116,692
See Accompanying Notes to Financial Statements.
35
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
BUILDING PRODUCTS - 0.1%
Masco Corp. 1,610 55,593
NCI Building Systems, Inc. (a) 1,900 60,610
Wienerberger AG 6,657 250,046
-------------
Building Products Total 366,249
COMMERCIAL SERVICES & SUPPLIES - 1.3%
ABM Industries, Inc. 2,800 56,420
ActivCard Corp. (a) 4,300 26,402
Adesa, Inc. (a) 1,700 27,931
Angelica Corp. 2,100 52,248
Avery Dennison Corp. 1,110 73,016
Brink's Co. 6,700 202,139
Career Education Corp. (a) 1,030 29,283
Casella Waste Systems, Inc., Class A (a) 5,800 68,672
Cendant Corp. 69,275 1,496,340
Century Business Services, Inc. (a) 3,538 15,886
ChoicePoint, Inc. (a) 3,530 150,554
Cintas Corp. 1,340 56,334
Consolidated Graphics, Inc. (a) 2,600 108,940
Corporate Executive Board Co. 4,140 253,534
Danka Business Systems PLC, ADR (a) 3,800 14,440
Educate, Inc. (a) 6,500 76,635
Education Management Corp. (a) 2,710 72,194
Electro Rent Corp. (a) 1,200 13,248
First Consulting Group, Inc. (a) 431 2,043
Healthcare Services Group, Inc. 3,350 60,166
Imagistics International, Inc. (a) 2,800 94,080
Laureate Education, Inc. (a) 2,600 96,772
Lightbridge, Inc. (a) 4,100 19,762
Manpower, Inc. 6,260 278,507
MDC Partners, Inc., Class A (a) 7,500 95,100
Navigant Consulting, Inc. (a) 3,700 81,252
NCO Group, Inc. (a) 5,200 140,140
Randstad Holding NV 11,400 413,261
Republic Services, Inc. 3,100 92,256
Robert Half International, Inc. 2,270 58,498
SOURCECORP, Inc. (a) 1,800 39,852
TeleTech Holdings, Inc. (a) 4,900 46,256
Waste Management, Inc. 36,405 995,313
-------------
Commercial Services & Supplies Total 5,307,474
CONSTRUCTION & ENGINEERING - 0.4%
Chicago Bridge & Iron Co., NV, N.Y.
Registered Shares 3,700 110,963
Comfort Systems USA, Inc. (a) 5,900 38,940
Dycom Industries, Inc. (a) 2,600 73,814
EMCOR Group, Inc. (a) 900 33,858
Jacobs Engineering Group, Inc. (a) 2,190 83,855
JGC Corp. 36,000 369,499
Mastec, Inc. (a) 1,200 6,300
Quanta Services, Inc. (a) 1,800 10,890
Shimizu Corp. 63,000 251,609
SHARES VALUE ($)
------- -------------
Vinci SA 3,510 404,563
Washington Group International, Inc. (a) 1,700 58,854
-------------
Construction & Engineering Total 1,443,145
ELECTRICAL EQUIPMENT - 0.3%
Ametek, Inc. 2,500 75,800
C&D Technologies, Inc. 2,600 49,452
Genlyte Group, Inc. (a) 1,000 64,390
Hubbell, Inc., Class B 1,200 53,796
Plug Power, Inc. (a) 8,000 51,280
Powell Industries, Inc. (a) 800 13,480
Rockwell Automation, Inc. 19,100 739,170
Woodward Governor Co. 1,000 67,490
-------------
Electrical Equipment Total 1,114,858
INDUSTRIAL CONGLOMERATES - 2.3%
3M Co. 13,700 1,095,589
BioSante Pharmaceuticals, Inc. (a) 2,100 18,921
Carlisle Companies, Inc. 2,700 172,611
General Electric Co. 122,895 4,126,814
Hutchison Whampoa Ltd. 31,000 242,207
NIWS Co., Ltd. 65 165,326
Siemens AG, Registered Shares 3,787 279,123
Smiths Group PLC 19,333 260,179
Textron, Inc. 18,318 1,177,298
Tyco International Ltd. 71,140 2,181,152
-------------
Industrial Conglomerates Total 9,719,220
MACHINERY - 1.5%
AGCO Corp. (a) 3,000 67,860
Alamo Group, Inc. 1,200 22,452
Atlas Copco AB, Class B 16,900 596,538
Briggs & Stratton Corp. 900 73,080
Cuno, Inc. (a) 2,200 127,050
Deere & Co. 15,059 972,058
Dover Corp. 1,900 73,853
EnPro Industries, Inc. (a) 3,600 86,904
Harsco Corp. 1,900 85,310
Heidelberger Druckmaschinen AG (a) 8,428 251,566
Ingersoll-Rand Co., Ltd., Class A 26,660 1,812,080
ITT Industries, Inc. 19,400 1,551,806
Kadant Inc. (a) 2,600 47,736
Navistar International Corp. (a) 4,100 152,479
Parker Hannifin Corp. 1,400 82,404
RAE Systems, Inc. (a) 11,300 63,054
Robbins & Myers, Inc. 2,673 58,806
Stewart & Stevenson Services, Inc. 4,200 74,214
Tecumseh Products Co., Class A 1,100 46,057
UNOVA, Inc. (a) 400 5,620
Volvo AB, Class B 7,600 268,549
-------------
Machinery Total 6,519,476
ROAD & RAIL - 0.2%
Canadian National Railway Co. 6,290 308,401
Covenant Transport, Inc., Class A (a) 1,900 36,708
Dollar Thrifty Automotive Group, Inc. (a) 1,800 43,794
Genesee & Wyoming, Inc., Class A (a) 4,401 111,433
Heartland Express, Inc. 5,250 96,863
See Accompanying Notes to Financial Statements.
36
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
ROAD & RAIL - (CONTINUED)
Sirva, Inc. (a) 4,200 96,180
U.S. Xpress Enterprises, Inc., Class A (a) 1,100 20,394
Werner Enterprises, Inc. 3,400 65,654
-------------
Road & Rail Total 779,427
TRADING COMPANIES & DISTRIBUTORS - 0.1%
Aceto Corp. 4,300 61,920
Hughes Supply, Inc. 2,604 78,302
Mitsubishi Corp. 22,000 238,167
Watsco, Inc. 3,100 93,093
-------------
Trading Companies & Distributors Total 471,482
-------------
INDUSTRIALS TOTAL 30,743,839
INFORMATION TECHNOLOGY - 8.7%
COMMUNICATIONS EQUIPMENT - 1.5%
Anaren, Inc. (a) 3,500 47,110
Andrew Corp. (a) 11,800 144,432
Avaya, Inc. (a) 32,800 457,232
Avocent Corp. (a) 1,450 37,743
Belden CDT, Inc. 1,700 37,060
Black Box Corp. 1,100 40,645
Cisco Systems, Inc. (a) 115,265 2,086,297
Comverse Technology, Inc. (a) 5,110 96,221
F5 Networks, Inc. (a) 3,600 109,656
Finisar Corp. (a) 19,800 25,740
Foundry Networks, Inc. (a) 7,900 74,971
Harris Corp. 1,200 65,928
Inter-Tel, Inc. 3,645 78,805
Juniper Networks, Inc. (a) 4,940 116,584
Motorola, Inc. 16,800 303,072
Netopia, Inc. (a) 5,700 12,198
NMS Communications Corp. (a) 9,000 43,920
Nokia Oyj, ADR 71,191 976,741
Polycom, Inc. (a) 3,560 70,559
QUALCOMM, Inc. 33,160 1,294,566
Tollgrade Communications, Inc. (a) 2,800 24,612
-------------
Communications Equipment Total 6,144,092
COMPUTERS & PERIPHERALS - 1.5%
Advanced Digital Information Corp. (a) 800 6,960
Applied Films Corp. (a) 3,900 70,239
Cray, Inc. (a) 12,800 45,184
Dell, Inc. (a) 39,675 1,412,430
Electronics for Imaging, Inc. (a) 900 14,616
EMC Corp. (a) 34,600 399,284
Hutchinson Technology, Inc. (a) 1,600 42,768
Hypercom Corp. (a) 5,700 42,066
Imation Corp. 400 14,236
Innovex, Inc. (a) 3,400 13,838
Intergraph Corp. (a) 1,135 30,838
International Business Machines Corp. 24,685 2,116,492
Lexmark International, Inc., Class A (a) 22,154 1,861,158
SHARES VALUE ($)
------- -------------
PalmSource, Inc. (a) 6,000 124,440
Pinnacle Systems, Inc. (a) 9,300 38,781
-------------
Computers & Peripherals Total 6,233,330
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.8%
Agilysys, Inc. 2,100 36,309
Amphenol Corp., Class A (a) 5,600 191,856
Anixter International, Inc. 3,500 122,815
Arrow Electronics, Inc. (a) 4,200 94,836
AVX Corp. 6,100 72,285
Benchmark Electronics, Inc. (a) 1,450 43,210
CDW Corp. 1,000 58,030
Checkpoint Systems, Inc. (a) 2,700 42,039
Flextronics International Ltd. (a) 34,320 454,740
Flir Systems, Inc. (a) 1,000 58,500
Global Imaging Systems, Inc. (a) 3,700 114,996
Identix, Inc. (a) 5,200 34,632
Itron, Inc. (a) 4,900 85,505
Littelfuse, Inc. (a) 3,000 103,590
MTS Systems Corp. 1,900 40,375
NU Horizons Electronics Corp. (a) 4,400 27,940
OSI Systems, Inc. (a) 5,800 93,380
Planar Systems, Inc. (a) 2,000 22,420
Samsung Electronics Co., Ltd., GDR (b) 4,496 890,208
Samsung Electronics Co., Ltd.,
Registered Shares, GDR 2,076 412,614
Tandberg ASA 27,400 247,782
TDK Corp. 4,200 280,391
Vishay Intertechnology, Inc. (a) 4,100 52,890
-------------
Electronic Equipment & Instruments Total 3,581,343
INTERNET SOFTWARE & SERVICES - 0.4%
Ask Jeeves, Inc. (a) 3,110 101,728
Corillian Corp. (a) 19,400 89,434
Digital River, Inc. (a) 3,100 92,318
Digitas, Inc. (a) 11,100 85,803
Equinix, Inc. (a) 2,000 61,540
Keynote Systems, Inc. (a) 3,400 48,144
Modem Media, Inc. (a) 3,200 17,216
PEC Solutions, Inc. (a) 800 9,376
Retek, Inc. (a) 19,100 87,096
Stellent, Inc. (a) 3,100 23,901
Telecommunication Systems, Inc.,
Class A (a) 13,000 41,730
Yahoo!, Inc. (a) 30,240 1,025,439
-------------
Internet Software & Services Total 1,683,725
IT SERVICES - 0.7%
Accenture Ltd., Class A (a) 43,056 1,164,665
Acxiom Corp. 2,600 61,724
Affiliated Computer Services, Inc.,
Class A (a) 2,700 150,309
Cognizant Technology Solutions Corp.,
Class A (a) 38,380 1,170,974
Computer Horizons Corp. (a) 4,900 21,217
DST Systems, Inc. (a) 1,300 57,811
Inforte Corp. (a) 3,400 23,460
Iron Mountain, Inc. (a) 3,770 127,614
See Accompanying Notes to Financial Statements.
37
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (CONTINUED)
IT SERVICES - (CONTINUED)
Maximus, Inc. (a) 3,400 97,954
MPS Group, Inc. (a) 9,600 80,736
SunGard Data Systems, Inc. (a) 2,010 47,778
-------------
IT Services Total 3,004,242
OFFICE ELECTRONICS - 0.4%
Canon, Inc. 10,200 480,119
Xerox Corp. (a) 69,880 983,910
Zebra Technologies Corp., Class A (a) 1,995 121,715
-------------
Office Electronics Total 1,585,744
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.3%
Advanced Micro Devices, Inc. (a) 9,660 125,580
Altera Corp. (a) 24,710 483,575
Artisan Components, Inc. (a) 4,200 122,262
August Technology Corp. (a) 5,300 36,411
Broadcom Corp., Class A (a) 18,000 491,220
Brooks Automation, Inc. (a) 7,700 108,955
DSP Group, Inc. (a) 2,300 48,415
Entegris, Inc. (a) 12,600 105,084
Exar Corp. (a) 2,700 38,232
FEI Co. (a) 4,300 84,968
Integrated Circuit Systems, Inc. (a) 2,400 51,600
Intel Corp. 79,260 1,589,955
IXYS Corp. (a) 10,700 76,826
Laedis Technology, Inc. 5,400 60,912
Linear Technology Corp. 9,090 329,422
Marvell Technology Group Ltd. (a) 33,640 879,013
Microchip Technology, Inc. 12,960 347,846
Mykrolis Corp. (a) 6,300 63,441
National Semiconductor Corp. 3,040 47,090
NVIDIA Corp. (a) 6,070 88,136
Pericom Semiconductor Corp. (a) 2,700 26,082
Silicon Image, Inc. (a) 12,800 161,792
Silicon Laboratories, Inc. (a) 4,140 136,993
Silicon Storage Technology, Inc. (a) 11,500 73,255
Ultratech, Inc. (a) 5,700 89,319
Zoran Corp. (a) 2,200 34,584
-------------
Semiconductors & Semiconductor
Equipment Total 5,700,968
SOFTWARE - 2.1%
Activision, Inc. (a) 6,400 88,768
Amdocs Ltd. (a) 32,530 710,130
Ascential Software Corp. (a) 3,400 45,798
BMC Software, Inc. (a) 5,370 84,900
Business Objects SA, ADR (a) 800 18,648
Captaris, Inc. (a) 7,200 30,672
Captiva Software Corp. (a) 7,900 88,480
Check Point Software Technologies
Ltd. (a) 4,860 82,474
Citrix Systems, Inc. (a) 4,890 85,673
SHARES VALUE ($)
------- -------------
Epicor Software Corp. (a) 5,700 68,571
FileNet Corp. (a) 2,800 48,888
Hyperion Solutions Corp. (a) 2,830 96,192
Internet Security Systems, Inc. (a) 2,600 44,200
Intuit, Inc. (a) 1,400 63,560
Lawson Software, Inc. (a) 3,400 19,040
Magma Design Automation, Inc. (a) 5,800 87,464
Manhattan Associates, Inc. (a) 3,100 75,702
Mercury Interactive Corp. (a) 3,140 109,523
Micromuse, Inc. (a) 21,700 79,856
Microsoft Corp. 170,465 4,713,357
MSC.Software Corp. (a) 4,400 35,376
Novell, Inc. (a) 8,700 54,897
OpenTV Corp., Class A (a) 17,100 52,155
Oracle Corp. (a) 72,925 822,594
PLATO Learning, Inc. (a) 5,900 52,156
Reynolds & Reynolds Co., Class A 4,000 98,680
SAP AG, ADR 11,800 459,610
ScanSoft, Inc. (a) 12,300 50,184
SeaChange International, Inc. (a) 2,900 46,371
Sybase, Inc. (a) 2,000 27,580
Symantec Corp. (a) 6,300 345,744
Take-Two Interactive Software, Inc. (a) 2,100 68,985
Transaction Systems Architects, Inc.,
Class A (a) 3,300 61,330
VERITAS Software Corp. (a) 3,360 59,808
Verity, Inc. (a) 4,000 51,520
-------------
Software Total 8,928,886
-------------
INFORMATION TECHNOLOGY TOTAL 36,862,330
MATERIALS - 3.3%
CHEMICALS - 1.6%
Air Products & Chemicals, Inc. 24,167 1,314,201
BASF AG 5,600 330,650
Cytec Industries, Inc. 1,300 63,635
Eastman Chemical Co. 2,800 133,140
Engelhard Corp. 2,900 82,215
Fuller (H.B.) Co. 1,500 41,100
International Flavors & Fragrances, Inc. 5,200 198,640
L'Air Liquide SA 1,571 247,025
Landec Corp. (a) 7,700 57,750
Linde AG 7,400 427,343
Lubrizol Corp. 3,400 117,640
Minerals Technologies, Inc. 1,000 58,860
Novozymes A/S, Class B 2,850 128,607
Potash Corp. of Saskatchewan, Inc. 2,760 177,109
PPG Industries, Inc. 1,700 104,176
Praxair, Inc. 54,900 2,346,426
Schulman (A.), Inc. 1,900 41,876
Sensient Technologies Corp. 1,900 41,116
Stepan Co. 1,900 45,201
Syngenta AG (a) 7,656 731,951
-------------
Chemicals Total 6,688,661
See Accompanying Notes to Financial Statements.
38
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
MATERIALS - (CONTINUED)
CONSTRUCTION MATERIALS - 0.1%
Cemex SA de C.V., ADR 13,300 374,262
Eagle Materials, Inc. 1,200 85,560
Florida Rock Industries, Inc. 800 39,192
-------------
Construction Materials Total 499,014
CONTAINERS & PACKAGING - 0.1%
Aptargroup, Inc. 1,200 52,764
Crown Holdings, Inc. (a) 8,000 82,480
Greif, Inc., Class A 1,900 80,085
Packaging Corp. of America 5,500 134,585
Pactiv Corp. (a) 3,500 81,375
Smurfit-Stone Container Corp. (a) 4,610 89,296
Temple-Inland, Inc. 650 43,647
-------------
Containers & Packaging Total 564,232
METALS & MINING - 0.8%
Alcoa, Inc. 35,200 1,182,368
Allegheny Technologies, Inc. 2,100 38,325
AMCOL International Corp. 3,900 74,568
Carpenter Technology Corp. 2,700 128,898
Freeport-McMoRan Copper & Gold,
Inc., Class B 1,670 67,635
Inco Ltd. (a) 2,970 115,979
Metal Management, Inc. (a) 3,900 70,902
Oregon Steel Mills, Inc. (a) 5,600 93,128
Peabody Energy Corp. 3,420 203,490
Phelps Dodge Corp. 9,940 914,778
RTI International Metals, Inc. (a) 3,500 67,795
Steel Technologies, Inc. 6,800 174,196
-------------
Metals & Mining Total 3,132,062
PAPER & FOREST PRODUCTS - 0.7%
Bowater, Inc. 3,980 151,996
Georgia-Pacific Corp. 4,500 161,775
Glatfelter 4,200 52,038
International Paper Co. 3,320 134,161
MeadWestvaco Corp. 43,837 1,398,401
Mercer International, Inc. (a) 5,700 49,590
UPM-Kymmene Oyj 12,850 244,985
Weyerhaeuser Co. 12,711 845,027
-------------
Paper & Forest Products Total 3,037,973
-------------
MATERIALS TOTAL 13,921,942
TELECOMMUNICATION SERVICES - 2.0%
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.5%
Belgacom SA (a) 7,700 276,184
BellSouth Corp. 26,930 730,342
Deutsche Telekom AG, Registered
Shares (a) 16,248 302,077
France Telecom SA 15,900 397,252
Nippon Telegraph & Telephone Corp. 66 264,049
North Pittsburgh Systems, Inc. 2,000 41,420
SHARES VALUE ($)
------- -------------
Qwest Communications International,
Inc. (a) 1 3
SBC Communications, Inc. 78,050 2,025,397
TDC A/S 7,700 272,386
Telecom Italia S.p.A. 84,240 260,452
Telefonaktiebolaget LM Ericsson,
ADR (a) 10,400 324,896
Verizon Communications, Inc. 42,058 1,656,244
-------------
Diversified Telecommunication Services Total 6,550,702
WIRELESS TELECOMMUNICATION SERVICES - 0.5%
American Tower Corp., Class A (a) 2,920 44,822
Crown Castle International Corp. (a) 6,670 99,250
Hutchison Telecom International
Reserved Shares (a)(c) 413 --(d)
Millicom International Cellular SA (a) 4,810 87,542
Nextel Partners, Inc., Class A (a) 5,850 96,993
NTT DoCoMo, Inc. 187 318,803
Price Communications Corp. (a) 2,730 41,632
Telephone and Data Systems, Inc. 2,800 235,676
VimpelCom, ADR (a) 300 32,640
Vodafone Group PLC 374,600 899,055
Western Wireless Corp., Class A (a) 2,690 69,160
-------------
Wireless Telecommunication Services Total 1,925,573
-------------
TELECOMMUNICATION SERVICES TOTAL 8,476,275
UTILITIES - 1.9%
ELECTRIC UTILITIES - 1.6%
Allete, Inc. 567 18,417
American Electric Power Co., Inc. 30,716 981,683
Central Vermont Public Service Corp. 2,900 58,319
CH Energy Group, Inc. 1,900 87,020
Consolidated Edison, Inc. 35,158 1,478,042
E. ON AG 6,879 508,146
El Paso Electric Co. (a) 3,300 53,031
Entergy Corp. 14,729 892,725
Exelon Corp. 4,400 161,436
Maine & Maritimes Corp. 600 17,400
MGE Energy, Inc. 1,100 35,002
Otter Tail Corp. 1,800 45,900
PG&E Corp. (a) 11,000 334,400
PPL Corp. 1,400 66,052
Progress Energy, Inc. 3,000 127,020
Puget Energy, Inc. 2,900 65,830
Reliant Energy, Inc. (a) 4,500 41,985
Scottish Power PLC 36,291 277,965
Southern Co. 4,007 120,130
TXU Corp. 33,966 1,627,651
-------------
Electric Utilities Total 6,998,154
GAS UTILITIES - 0.1%
Cascade Natural Gas Corp. 1,200 25,476
Centrica PLC 55,400 252,291
Northwest Natural Gas Co. 1,000 31,730
WGL Holdings, Inc. 1,100 31,086
-------------
Gas Utilities Total 340,583
See Accompanying Notes to Financial Statements.
39
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
UTILITIES - (CONTINUED)
MULTI-UTILITIES & UNREGULATED POWER - 0.2%
Constellation Energy Group, Inc. 2,800 111,552
Energy East Corp. 3,600 90,648
National Grid Transco PLC 56,600 479,606
-------------
Multi-Utilities & Unregulated Power Total 681,806
-------------
UTILITIES TOTAL 8,020,543
TOTAL COMMON STOCKS
(cost of $238,239,338) 274,792,264
PAR ($)
-------
CORPORATE FIXED-INCOME BONDS & NOTES - 14.9%
BASIC MATERIALS - 0.6%
CHEMICALS - 0.2%
Acetex Corp.
10.875% 08/01/09 100,000 110,000
Airgas, Inc.
9.125% 10/01/11 250,000 281,250
Equistar Chemicals LP
10.125% 09/01/08 25,000 28,062
10.625% 05/01/11 85,000 96,900
Ethyl Corp.
8.875% 05/01/10 155,000 167,400
MacDermid, Inc.
9.125% 07/15/11 130,000 145,113
Nalco Co.
7.750% 11/15/11 115,000 122,044
-------------
Chemicals Total 950,769
FOREST PRODUCTS & PAPER - 0.4%
Westvaco Corp.
8.200% 01/15/30 1,290,000 1,534,571
-------------
Forest Products & Paper Total 1,534,571
IRON/STEEL - 0.0%
Russel Metals, Inc.
6.375% 03/01/14 130,000 130,000
-------------
Iron/Steel Total 130,000
-------------
BASIC MATERIALS TOTAL 2,615,340
COMMUNICATIONS - 2.0%
ADVERTISING - 0.2%
Lamar Media Corp.
7.250% 01/01/13 450,000 484,875
R.H. Donnelley Finance Corp.
10.875% 12/15/12 (b) 400,000 485,000
-------------
Advertising Total 969,875
PAR ($) VALUE ($)
------- -------------
MEDIA - 1.1%
Comcast Corp.
7.050% 03/15/33 950,000 1,040,877
Dex Media East LLC
12.125% 11/15/12 195,000 241,800
DirecTV Holdings LLC
8.375% 03/15/13 375,000 427,500
Echostar DBS Corp.
5.750% 10/01/08 410,000 412,050
6.625% 10/01/14 (b) 90,000 89,100
Emmis Operating Co.
6.875% 05/15/12 65,000 67,194
Gannett Co., Inc.
5.500% 04/01/07 1,000,000 1,055,290
Houghton Mifflin Co.
9.875% 02/01/13 120,000 126,000
LIN Television Corp.
6.500% 05/15/13 275,000 279,125
Rogers Cable, Inc.
6.250% 06/15/13 375,000 366,742
7.875% 05/01/12 55,000 59,925
Sinclair Broadcast Group, Inc.
8.750% 12/15/11 245,000 267,050
-------------
Media Total 4,432,653
TELECOMMUNICATIONS - 0.7%
MCI, Inc.
5.908% 05/01/07 24,000 23,790
6.688% 05/01/09 24,000 23,100
7.735% 05/01/14 20,000 18,900
Nextel Communications, Inc.
5.950% 03/15/14 20,000 19,700
7.375% 08/01/15 375,000 402,187
Sprint Capital Corp.
6.125% 11/15/08 825,000 890,984
Verizon Global Funding Corp.
7.750% 12/01/30 1,300,000 1,556,945
-------------
Telecommunications Total 2,935,606
-------------
COMMUNICATIONS TOTAL 8,338,134
CONSUMER CYCLICAL - 1.7%
AIRLINES - 0.4%
Continental Airlines, Inc.
7.461% 04/01/15 814,095 748,967
United Air Lines, Inc.
7.032% 10/01/10 (e) 588,020 493,937
United Airlines, Inc.
9.200% 03/22/08 (f) 1,014,042 405,617
-------------
Airlines Total 1,648,521
AUTO MANUFACTURERS - 0.1%
General Motors Corp.
7.125% 07/15/13 250,000 261,460
-------------
Auto Manufacturers Total 261,460
See Accompanying Notes to Financial Statements.
40
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
PAR ($) VALUE ($)
------- -------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
CONSUMER CYCLICAL - (CONTINUED)
ENTERTAINMENT - 0.2%
Cinemark USA, Inc.
9.000% 02/01/13 300,000 336,000
Speedway Motorsports, Inc.
6.750% 06/01/13 237,000 247,072
Warner Music Group
7.375% 04/15/14 (b) 125,000 129,063
-------------
Entertainment Total 712,135
HOME BUILDERS - 0.2%
KB Home
8.625% 12/15/08 325,000 366,437
Toll Corp.
8.250% 12/01/11 365,000 403,325
-------------
Home Builders Total 769,762
LEISURE TIME - 0.1%
K2, Inc.
7.375% 07/01/14 (b) 125,000 131,757
Royal Caribbean Cruises Ltd.
6.750% 03/15/08 80,000 85,200
6.875% 12/01/13 100,000 106,375
8.000% 05/15/10 40,000 45,100
8.750% 02/02/11 155,000 180,963
-------------
Leisure Time Total 549,395
LODGING - 0.5%
Harrah's Operating Co., Inc.
7.875% 12/15/05 250,000 263,125
Kerzner International
8.875% 08/15/11 155,000 170,113
MGM Grand, Inc.
9.750% 06/01/07 450,000 500,625
Park Place Entertainment Corp.
9.375% 02/15/07 425,000 471,750
Starwood Hotels & Resorts
Worldwide, Inc.
7.875% 05/01/12 225,000 255,656
Station Casinos, Inc.
6.500% 02/01/14 500,000 512,500
-------------
Lodging Total 2,173,769
RETAIL - 0.2%
Autonation, Inc.
9.000% 08/01/08 215,000 246,712
Domino's, Inc.
8.250% 07/01/11 115,000 123,913
Finlay Fine Jewelry Corp.
8.375% 06/01/12 (b) 100,000 107,500
Group 1 Automotive, Inc.
8.250% 08/15/13 90,000 95,175
Suburban Propane Partners
6.875% 12/15/13 145,000 149,350
-------------
Retail Total 722,650
PAR ($) VALUE ($)
------- -------------
TOYS/GAMES/HOBBIES - 0.0%
Hasbro, Inc.
6.150% 07/15/08 200,000 212,500
-------------
Toys/Games/Hobbies Total 212,500
-------------
CONSUMER CYCLICAL TOTAL 7,050,192
CONSUMER NON-CYCLICAL - 1.9%
BEVERAGES - 0.2%
Constellation Brands, Inc.
8.125% 01/15/12 450,000 496,125
Cott Beverages USA, Inc.
8.000% 12/15/11 450,000 490,500
-------------
Beverages Total 986,625
COMMERCIAL SERVICES - 0.2%
Corrections Corporation of America
7.500% 05/01/11 325,000 343,281
Iron Mountain, Inc.
7.750% 01/15/15 10,000 10,725
8.625% 04/01/13 450,000 489,375
United Rentals North America, Inc.
7.000% 02/15/14 150,000 133,500
7.750% 11/15/13 105,000 98,175
-------------
Commercial Services Total 1,075,056
COSMETICS/PERSONAL CARE - 0.3%
Procter & Gamble Co.
4.750% 06/15/07 1,100,000 1,146,684
-------------
Cosmetics/Personal Care Total 1,146,684
HEALTHCARE SERVICES - 0.9%
Extendicare Health Services, Inc.
6.875% 05/01/14 65,000 65,650
9.500% 07/01/10 15,000 16,762
HCA, Inc.
6.950% 05/01/12 225,000 242,786
7.125% 06/01/06 1,450,000 1,529,300
Province Healthcare Co.
7.500% 06/01/13 225,000 253,125
Select Medical Corp.
9.500% 06/15/09 325,000 354,250
Tenet Healthcare Corp.
5.375% 11/15/06 785,000 786,963
Triad Hospitals, Inc.
7.000% 05/15/12 350,000 367,938
7.000% 11/15/13 30,000 30,375
-------------
Healthcare Services Total 3,647,149
HOUSEHOLD PRODUCTS/WARES - 0.0%
Scotts Co.
6.625% 11/15/13 150,000 157,500
-------------
Household Products/Wares Total 157,500
See Accompanying Notes to Financial Statements.
41
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
PAR ($) VALUE ($)
------- -------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
CONSUMER NON-CYCLICAL - (CONTINUED)
PHARMACEUTICALS - 0.3%
AmerisourceBergen Corp.
8.125% 09/01/08 300,000 331,500
Omnicare, Inc., Series B
8.125% 03/15/11 375,000 407,813
Wyeth
6.500% 02/01/34 425,000 433,908
-------------
Pharmaceuticals Total 1,173,221
-------------
CONSUMER NON-CYCLICAL TOTAL 8,186,235
ENERGY - 1.4%
COAL - 0.1%
Peabody Energy Corp., Series B
5.875% 04/15/16 75,000 73,781
Peabody Energy Corp.,
Series B
6.875% 03/15/13 405,000 438,413
-------------
Coal Total 512,194
OIL & GAS - 1.0%
Chesapeake Energy Corp.
7.500% 09/15/13 300,000 327,750
8.125% 04/01/11 150,000 164,250
Devon Financing Corp.
6.875% 09/30/11 1,150,000 1,299,580
Newfield Exploration Co.
6.625% 09/01/14 (b) 270,000 280,800
Nexen, Inc.
7.875% 03/15/32 750,000 927,315
Pemex Project Funding Master Trust
7.875% 02/01/09 550,000 613,800
Plains Exploration & Production Co.
7.125% 06/15/14 (b) 205,000 220,375
Pride International, Inc.
7.375% 07/15/14 (b) 220,000 240,900
Vintage Petroleum, Inc.
7.875% 05/15/11 250,000 267,500
-------------
Oil & Gas Total 4,342,270
OIL & GAS SERVICES - 0.2%
Grant Prideco, Inc., Series B
9.625% 12/01/07 410,000 460,225
Key Energy Services, Inc.
8.375% 03/01/08 50,000 52,750
Universal Compression, Inc.
7.250% 05/15/10 230,000 244,375
-------------
Oil & Gas Services Total 757,350
PIPELINES - 0.1%
Williams Companies, Inc.
7.125% 09/01/11 25,000 27,375
8.125% 03/15/12 185,000 212,750
-------------
Pipelines Total 240,125
-------------
ENERGY TOTAL 5,851,939
PAR ($) VALUE ($)
------- -------------
FINANCIALS - 4.8%
BANKS - 0.8%
Bank One Corp.
6.500% 02/01/06 700,000 734,615
HSBC Capital Funding LP
9.547% 12/31/49 (b) 800,000 995,520
Rabobank Capital Funding II
5.260% 12/31/49 (b) 1,425,000 1,436,485
-------------
Banks Total 3,166,620
DIVERSIFIED FINANCIAL SERVICES - 2.7%
Caterpillar Financial Services Corp.
1.830% 02/26/07 (g) 375,000 375,124
Citicorp
8.040% 12/15/19(b) 1,900,000 2,295,257
Couche Tard US Finance
7.500% 12/15/13 255,000 271,575
Ford Motor Credit Co.
7.375% 02/01/11 1,525,000 1,659,566
General Motors Acceptance Corp.
6.875% 08/28/12 850,000 885,258
Goldman Sachs Group, Inc.
6.600% 01/15/12 2,000,000 2,216,000
Household Finance Corp.
5.875% 02/01/09 1,100,000 1,183,545
International Lease Finance Corp.
6.375% 03/15/09 1,175,000 1,283,335
Morgan Stanley
6.750% 04/15/11 570,000 641,107
UFJ Finance Aruba AEC
6.750% 07/15/13 575,000 640,061
-------------
Diversified Financial Services Total 11,450,828
INSURANCE - 0.9%
Florida Windstorm
Underwriting Association
7.125% 02/25/19 (b) 1,400,000 1,643,782
Prudential Insurance Co. of America
7.650% 07/01/07 (b) 2,000,000 2,219,680
-------------
Insurance Total 3,863,462
INVESTMENT MANAGEMENT COMPANIES - 0.2%
Credit Suisse First Boston USA, Inc.
5.875% 08/01/06 900,000 945,594
-------------
Investment Management Companies Total 945,594
REAL ESTATE INVESTMENT TRUSTS - 0.1%
iStar Financial, Inc.
5.125% 04/01/11 25,000 24,566
7.000% 03/15/08 75,000 79,984
8.750% 08/15/08 200,000 227,858
-------------
Real Estate Investment Trusts Total 332,408
VENTURE CAPITAL - 0.1%
Arch Western Finance LLC
7.500% 07/01/13 (b) 435,000 468,713
-------------
Venture Capital Total 468,713
-------------
FINANCIALS TOTAL 20,227,625
See Accompanying Notes to Financial Statements.
42
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
PAR ($) VALUE ($)
------- -------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
INDUSTRIALS - 1.4%
AEROSPACE & DEFENSE - 0.6%
K&F Industries, Inc., Series B
9.625% 12/15/10 215,000 239,725
L-3 Communications Corp.
6.125% 07/15/13 5,000 5,062
7.625% 06/15/12 450,000 496,125
Raytheon Co.
8.300% 03/01/10 1,200,000 1,430,400
Transdigm, Inc.
8.375% 07/15/11 250,000 267,500
-------------
Aerospace & Defense Total 2,438,812
ELECTRONICS - 0.0%
Fisher Scientific International
6.750% 08/15/14 (b) 120,000 126,000
-------------
Electronics Total 126,000
ENVIRONMENTAL CONTROL - 0.1%
Allied Waste North America, Inc.
9.250% 09/01/12 375,000 417,188
Synagro Technologies, Inc.
9.500% 04/01/09 125,000 133,125
-------------
Environmental Control Total 550,313
HAND/MACHINE TOOLS - 0.1%
Kennametal, Inc.
7.200% 06/15/12 400,000 436,356
-------------
Hand/Machine Tools Total 436,356
MACHINERY DIVERSIFIED - 0.0%
Westinghouse Air Brake Technologies Corp.
6.875% 07/31/13 145,000 148,625
-------------
Machinery Diversified Total 148,625
PACKAGING & CONTAINERS - 0.3%
Ball Corp.
6.875% 12/15/12 475,000 508,250
Jefferson Smurfit Corp.
8.250% 10/01/12 200,000 220,000
Owens-Illinois, Inc.
7.350% 05/15/08 130,000 133,900
Silgan Holdings, Inc.
6.750% 11/15/13 350,000 357,000
Stone Container Corp.
8.375% 07/01/12 125,000 137,500
-------------
Packaging & Containers Total 1,356,650
TRANSPORTATION - 0.3%
FedEx Corp.
7.530% 09/23/06 368,974 393,850
Offshore Logistics, Inc.
6.125% 06/15/13 155,000 156,550
PAR ($) VALUE ($)
------- -------------
Teekay Shipping Corp.
8.875% 07/15/11 415,000 468,950
-------------
Transportation Total 1,019,350
-------------
INDUSTRIALS TOTAL 6,076,106
TECHNOLOGY - 0.1%
SEMICONDUCTORS - 0.1%
Freescale Semiconductor, Inc.
6.875% 07/15/11 (b) 275,000 284,625
-------------
Semiconductors Total 284,625
-------------
TECHNOLOGY TOTAL 284,625
UTILITIES - 1.0%
ELECTRIC - 1.0%
Dominion Resources, Inc.
6.300% 03/15/33 625,000 631,531
FirstEnergy Corp.
5.500% 11/15/06 1,850,000 1,925,554
Public Service Electric & Gas
4.000% 11/01/08 1,125,000 1,132,763
Southern Power Co.
6.250% 07/15/12 635,000 691,058
-------------
Electric Total 4,380,906
-------------
UTILITIES TOTAL 4,380,906
TOTAL CORPORATE FIXED-INCOME
BONDS & NOTES
(cost of $61,797,529) 63,011,102
MORTGAGE-BACKED SECURITIES - 11.9%
Federal Home Loan Mortgage Corp.
5.000% 09/01/34 2,000,000 1,982,716
6.500% 02/01/11-08/01/32 2,702,584 2,844,571
7.000% 07/01/28-08/01/31 645,444 685,463
7.500% 07/01/15-01/01/30 195,869 209,729
8.000% 09/01/15 92,876 99,009
Federal National Mortgage Association
4.500% 05/01/34 994,147 958,527
5.000% 12/25/15-08/01/33 12,183,461 12,313,335
5.500% 05/01/16-10/01/33 11,374,650 11,589,521
6.000% 01/01/09-06/01/14 446,306 468,799
6.120% 10/01/08 2,322,520 2,275,263
6.500% 03/01/11-10/01/32 2,596,076 2,725,409
7.000% 03/01/15-07/01/32 869,011 922,172
7.500% 06/01/15-08/01/31 478,860 511,151
8.000% 12/01/29-07/01/31 229,554 249,830
First Union Chase Commercial Mortgage
6.645% 06/15/31 450,000 495,045
See Accompanying Notes to Financial Statements.
43
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
PAR ($) VALUE ($)
------- -------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
Government National Mortgage Association
6.000% 04/15/13-01/15/29 718,997 748,167
6.500% 05/15/13-07/15/31 1,724,464 1,826,320
7.000% 11/15/13-06/15/31 863,041 921,127
7.500% 06/15/23-09/15/29 275,924 297,540
8.000% 07/15/25 44,297 48,658
8.500% 12/15/30 11,684 12,837
9.000% 12/15/17 70,356 78,975
GS Mortgage Securities Corp. II
6.620% 10/18/30 2,000,000 2,173,180
JPMorgan Commercial Mortgage
Finance Corp.
6.507% 10/15/35 1,600,000 1,741,216
LB-UBS Commercial Mortgage Trust
6.510% 12/15/26 1,000,000 1,114,670
Wachovia Bank Commercial
Mortgage Trust
3.999% 06/15/35 3,000,000 2,874,390
-------------
TOTAL MORTGAGE-BACKED SECURITIES
(cost of $49,018,146) 50,167,620
ASSET-BACKED SECURITIES - 3.2%
AUTOMOBILE - 0.3%
Chase Manhattan Auto Owner Trust
3.800% 05/15/08 947,448 955,919
Honda Auto Receivables Owner Trust
3.000% 05/18/06 388,726 389,783
-------------
Automobile Total 1,345,702
CREDIT CARD - 2.0%
Capital One Multi-Asset
Execution Trust
3.650% 07/15/11 1,360,000 1,364,216
Chemical Bank Master
Credit Card Trust I
5.980% 09/15/08 1,550,000 1,614,867
Citibank Credit Card Issuance Trust
4.950% 02/09/09 225,000 234,662
MBNA Master Credit Card Trust USA
6.600% 04/16/07 1,200,000 1,206,396
Providian Gateway Master Trust
1.000% 09/15/11 (b) 1,200,000 1,197,375
Standard Credit Card Master Trust
6.550% 10/07/07 2,595,000 2,697,087
-------------
Credit Card Total 8,314,603
MANUFACTURED HOUSING - 0.2%
Origen Manufactured Housing
3.380% 08/15/17 870,000 858,725
-------------
Manufactured Housing Total 858,725
PAR ($) VALUE ($)
------- -------------
OTHER ASSET-BACKED - 0.7%
California Infrastructure
6.420% 12/26/09 2,000,000 2,167,200
Consumer Funding LLC
5.430% 04/20/15 820,000 876,949
-------------
Other Asset-Backed Total 3,044,149
TOTAL ASSET-BACKED SECURITIES
(cost of $13,760,211) 13,563,179
GOVERNMENT AGENCIES & OBLIGATIONS - 2.1%
U.S. GOVERNMENT AGENCY - 2.1%
Federal National Mortgage Association
6.625% 09/15/09 3,900,000 4,393,779
U.S. Treasury Bond
5.375% 02/15/31 3,090,000 3,310,163
6.125% 08/15/29 425,000 495,308
6.250% 08/15/23 600,000 700,640
-------------
U.S. GOVERNMENT AGENCY TOTAL 8,899,890
TOTAL U.S.GOVERNMENT
AGENCIES & OBLIGATIONS
(cost of $7,784,761) 8,899,890
SHARES
-------
PREFERRED STOCKS - 0.3%
CONSUMER DISCRETIONARY - 0.3%
AUTOMOBILES - 0.1%
Porsche AG 800 520,880
-------------
Automobiles Total 520,880
MEDIA - 0.2%
News Corp., Ltd., ADR 27,400 858,442
-------------
Media Total 858,442
-------------
CONSUMER DISCRETIONARY TOTAL 1,379,322
TOTAL PREFERRED STOCKS
(cost of $1,415,582) 1,379,322
PAR ($)
-------
MUNICIPAL SECURITIES - 0.2%
Illinois Sate Taxable Pension
5.100% 06/01/33 650,000 615,719
-------------
TOTAL MUNICPAL SECURITIES
(cost of $577,909) 615,719
See Accompanying Notes to Financial Statements.
44
________________________________________________________________________________
September 30, 2004 Columbia Asset Allocation Fund
PAR ($) VALUE ($)
------- -------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.0%
American Mortgage Trust
8.445% 09/27/22 27,275 24,547
Rural Housing Trust
6.330% 04/01/26 123,343 124,027
-------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS
(cost of $146,798) 148,574
SHORT-TERM OBLIGATION - 2.0%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by a U.S. Treasury
Bond maturing 02/15/29, market
value $8,650,113 (repurchase
proceeds $8,457,371) 8,457,000 8,457,000
-------------
TOTAL SHORT-TERM OBLIGATION
(cost of $8,457,000) 8,457,000
TOTAL INVESTMENTS - 99.5%
(COST OF $381,197,274) (h) 421,034,670
OTHER ASSETS & LIABILITIES, NET - 0.5% 2,192,752
NET ASSETS - 100.0% 423,227,422
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
September 30, 2004, the value of these securities amounted to $13,242,140,
which represents 3.1% of net assets.
(c) Represents fair value as determined in good faith under the direction of
the Board of Trustees.
(d) Security has no value.
(e) The issuer has filed for bankruptcy protection under Chapter 11, and is in
default of certain debt covenants. Income is being accrued. As of September
30, 2004, the value of this security represents 0.1% of net assets.
(f) The issuer has filed for bankruptcy protection under Chapter 11, and is in
default of certain debt covenants. Income is not being accrued. As of
September 30, 2004, the value of this security represents 0.1% of net
assets.
(g) Variable rate security. The interest rate shown reflects the rate as of
September 30, 2004.
(h) Cost for federal income tax purposes is $385,677,811.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
GDR Global Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
45
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia Large Cap Growth Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 98.3%
CONSUMER DISCRETIONARY - 15.1%
HOTELS, RESTAURANTS & LEISURE - 2.2%
Carnival Corp. 169,500 8,015,655
Marriott International, Inc., Class A 228,800 11,888,448
-------------
Hotels, Restaurants & Leisure Total 19,904,103
INTERNET & CATALOG RETAIL - 1.2%
eBay, Inc. (a) 120,200 11,051,188
-------------
Internet & Catalog Retail Total 11,051,188
MEDIA - 1.8%
Omnicom Group 87,100 6,363,526
XM Satellite Radio Holdings, Inc.,
Class A (a) 302,300 9,377,346
-------------
Media Total 15,740,872
SPECIALTY RETAIL - 8.1%
Bed Bath & Beyond, Inc. (a) 278,500 10,335,135
Best Buy Co., Inc. 251,930 13,664,683
Chico's FAS, Inc. (a) 337,300 11,535,660
Home Depot, Inc. 159,200 6,240,640
Lowe's Companies, Inc. 311,500 16,930,025
Staples, Inc. 504,200 15,035,244
-------------
Specialty Retail Total 73,741,387
TEXTILES, APPAREL & LUXURY GOODS - 1.8%
Coach, Inc. (a) 216,900 9,200,898
NIKE, Inc., Class B 93,300 7,352,040
-------------
Textiles, Apparel & Luxury Goods Total 16,552,938
-------------
CONSUMER DISCRETIONARY TOTAL 136,990,488
CONSUMER STAPLES - 10.3%
BEVERAGES - 1.7%
PepsiCo, Inc. 319,300 15,533,945
-------------
Beverages Total 15,533,945
FOOD & STAPLES RETAILING - 2.2%
Costco Wholesale Corp. 290,600 12,077,336
Sysco Corp. 257,500 7,704,400
-------------
Food & Staples Retailing Total 19,781,736
FOOD PRODUCTS - 1.0%
Bunge Ltd. 64,700 2,586,706
Hershey Foods Corp. 138,000 6,445,980
-------------
Food Products Total 9,032,686
HOUSEHOLD PRODUCTS - 1.8%
Procter & Gamble Co. 305,200 16,517,424
-------------
Household Products Total 16,517,424
PERSONAL PRODUCTS - 2.5%
Alberto-Culver Co., Inc. 250,800 10,904,784
Avon Products, Inc. 261,800 11,435,424
-------------
Personal Products Total 22,340,208
SHARES VALUE ($)
------- -------------
TOBACCO - 1.1%
Altria Group, Inc. 213,700 10,052,448
-------------
Tobacco Total 10,052,448
-------------
CONSUMER STAPLES TOTAL 93,258,447
ENERGY - 1.5%
ENERGY EQUIPMENT & SERVICES - 0.9%
National-Oilwell, Inc. (a) 142,400 4,679,264
Smith International, Inc. (a) 60,800 3,692,384
-------------
Energy Equipment & Services Total 8,371,648
OIL & GAS - 0.6%
EOG Resources, Inc. 82,300 5,419,455
-------------
Oil & Gas Total 5,419,455
-------------
ENERGY TOTAL 13,791,103
FINANCIALS - 8.7%
CAPITAL MARKETS - 1.7%
Goldman Sachs Group, Inc. 73,100 6,815,844
Merrill Lynch & Co., Inc. 179,900 8,944,628
-------------
Capital Markets Total 15,760,472
COMMERCIAL BANKS - 1.4%
North Fork Bancorporation, Inc. 81,300 3,613,785
Wells Fargo & Co. 153,900 9,177,057
-------------
Commercial Banks Total 12,790,842
CONSUMER FINANCE - 1.8%
American Express Co. 239,600 12,329,816
MBNA Corp. 149,100 3,757,320
-------------
Consumer Finance Total 16,087,136
DIVERSIFIED FINANCIAL SERVICES - 1.0%
Citigroup, Inc. 196,300 8,660,756
-------------
Diversified Financial Services Total 8,660,756
INSURANCE - 2.8%
American International Group, Inc. 133,400 9,069,866
Chubb Corp. 70,700 4,968,796
Progressive Corp. 32,800 2,779,800
RenaissanceRe Holdings Ltd. 176,100 9,083,238
-------------
Insurance Total 25,901,700
-------------
FINANCIALS TOTAL 79,200,906
HEALTH CARE - 23.4%
BIOTECHNOLOGY - 2.7%
Amgen, Inc. (a) 134,100 7,600,788
Biogen Idec, Inc. (a) 79,100 4,838,547
Genentech, Inc. (a) 234,700 12,302,974
-------------
Biotechnology Total 24,742,309
See Accompanying Notes to Financial Statements.
46
________________________________________________________________________________
September 30, 2004 Columbia Large Cap Growth Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES - 8.9%
Alcon, Inc. 119,900 9,615,980
Boston Scientific Corp. (a) 256,100 10,174,853
Kinetic Concepts, Inc. (a) 96,500 5,071,075
St. Jude Medical, Inc. (a) 176,200 13,262,574
Thermo Electron Corp. (a) 323,700 8,746,374
Varian Medical Systems, Inc. (a) 441,400 15,259,198
Zimmer Holdings, Inc. (a) 235,900 18,645,536
-------------
Health Care Equipment & Supplies Total 80,775,590
HEALTH CARE PROVIDERS & SERVICES - 2.3%
Anthem, Inc. (a) 109,100 9,518,975
Caremark Rx, Inc. (a) 343,100 11,003,217
-------------
Health Care Providers & Services Total 20,522,192
PHARMACEUTICALS - 9.5%
Eli Lilly & Co. 139,300 8,364,965
Johnson & Johnson 512,200 28,852,226
Pfizer, Inc. 962,400 29,449,440
Teva Pharmaceutical Industries
Ltd., ADR 755,100 19,594,845
-------------
Pharmaceuticals Total 86,261,476
-------------
HEALTH CARE TOTAL 212,301,567
INDUSTRIALS - 10.0%
COMMERCIAL SERVICES & SUPPLIES - 0.9%
Cendant Corp. 394,000 8,510,400
-------------
Commercial Services & Supplies Total 8,510,400
ELECTRICAL EQUIPMENT - 0.8%
Rockwell Automation, Inc. 195,200 7,554,240
-------------
Electrical Equipment Total 7,554,240
INDUSTRIAL CONGLOMERATES - 5.4%
3M Co. 137,000 10,955,890
General Electric Co. 483,400 16,232,572
Tyco International Ltd. 712,240 21,837,279
-------------
Industrial Conglomerates Total 49,025,741
MACHINERY - 2.9%
Ingersoll-Rand Co., Class A 148,200 10,073,153
ITT Industries, Inc. 202,300 16,181,977
-------------
Machinery Total 26,255,130
-------------
INDUSTRIALS TOTAL 91,345,511
INFORMATION TECHNOLOGY - 24.5%
COMMUNICATIONS EQUIPMENT - 4.7%
Avaya, Inc. (a) 336,300 4,688,022
Cisco Systems, Inc. (a) 1,204,500 21,801,450
Motorola, Inc. 174,900 3,155,196
QUALCOMM, Inc. 332,100 12,965,184
-------------
Communications Equipment Total 42,609,852
SHARES VALUE ($)
------- -------------
COMPUTERS & PERIPHERALS - 4.5%
Dell, Inc. (a) 415,700 14,798,920
EMC Corp. (a) 361,200 4,168,248
International Business Machines Corp. 150,500 12,903,870
Lexmark International, Inc., Class A (a) 107,600 9,039,476
-------------
Computers & Peripherals Total 40,910,514
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.5%
Flextronics International Ltd. (a) 346,000 4,584,500
Samsung Electronics Co., Ltd., GDR (b) 44,700 8,850,600
-------------
Electronic Equipment & Instruments Total 13,435,100
INTERNET SOFTWARE & SERVICES - 1.2%
Yahoo!, Inc. (a) 315,700 10,705,387
-------------
Internet Software & Services Total 10,705,387
IT SERVICES - 1.2%
Cognizant Technology Solutions Corp.,
Class A (a) 358,000 10,922,580
-------------
IT Services Total 10,922,580
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.9%
Altera Corp. (a) 224,300 4,389,551
Broadcom Corp., Class A (a) 125,300 3,419,437
Intel Corp. 798,000 16,007,880
Linear Technology Corp. 59,200 2,145,408
Marvell Technology Group Ltd. (a) 274,100 7,162,233
Microchip Technology, Inc. 101,000 2,710,840
-------------
Semiconductors & Semiconductor
Equipment Total 35,835,349
SOFTWARE - 7.5%
Amdocs Ltd. (a) 297,700 6,498,791
Microsoft Corp. 1,620,000 44,793,000
Oracle Corp. (a) 733,800 8,277,264
SAP AG, ADR 118,500 4,615,575
Symantec Corp. (a) 67,400 3,698,912
-------------
Software Total 67,883,542
-------------
INFORMATION TECHNOLOGY TOTAL 222,302,324
MATERIALS - 4.8%
CHEMICALS - 2.5%
Praxair, Inc. 532,300 22,750,502
-------------
Chemicals Total 22,750,502
METALS & MINING - 2.3%
Alcoa, Inc. 366,800 12,320,812
Phelps Dodge Corp. 89,260 8,214,598
-------------
Metals & Mining Total 20,535,411
-------------
MATERIALS TOTAL 43,285,913
TOTAL COMMON STOCKS
(cost of $768,598,021) 892,476,259
See Accompanying Notes to Financial Statements.
47
________________________________________________________________________________
September 30, 2004 Columbia Large Cap Growth Fund
SHARES VALUE ($)
------- -------------
PREFERRED STOCK - 0.9%
CONSUMER DISCRETIONARY - 0.9%
MEDIA - 0.9%
News Corp., Ltd., ADR 260,400 8,158,332
-------------
Media Total 8,158,332
-------------
CONSUMER DISCRETIONARY TOTAL 8,158,332
TOTAL PREFERRED STOCK
(cost of $8,689,361) 8,158,332
PAR ($)
-------
SHORT-TERM OBLIGATION - 1.0%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by a U.S. Treasury
Bond maturing 02/15/31, market
value $9,707,958 (repurchase
proceeds $9,513,418) 9,513,000 9,513,000
-------------
TOTAL SHORT-TERM OBLIGATION
(cost of $9,513,000) 9,513,000
TOTAL INVESTMENTS - 100.2%
(COST OF $786,800,382) (c) 910,147,591
OTHER ASSETS & LIABILITIES, NET - (0.2)% (2,138,709)
NET ASSETS - 100.0% 908,008,882
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At September
30, 2004, the value of this security represents 1.0% of net assets.
(c) Cost for federal income tax purposes is $798,246,142.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
GDR Global Depositary Receipt
See Accompanying Notes to Financial Statements.
48
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia Disciplined Value Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 99.6%
CONSUMER DISCRETIONARY - 9.2%
AUTOMOBILES - 1.3%
Ford Motor Co. 407,400 5,723,970
-------------
Automobiles Total 5,723,970
HOTELS, RESTAURANTS & LEISURE - 1.1%
McDonald's Corp. 168,800 4,731,464
-------------
Hotels, Restaurants & Leisure Total 4,731,464
MEDIA - 3.4%
Comcast Corp., Class A (a) 141,600 3,998,784
Fox Entertainment Group, Inc.,
Class A (a) 132,300 3,670,002
Time Warner, Inc. (a) 428,700 6,919,218
-------------
Media Total 14,588,004
MULTILINE RETAIL - 1.4%
Saks, Inc. (a) 186,400 2,246,120
Sears Roebuck and Co. 89,500 3,566,575
-------------
Multiline Retail Total 5,812,695
SPECIALTY RETAIL - 2.0%
Barnes & Noble, Inc. (a) 144,800 5,357,600
Toys `R' US, Inc. (a) 172,700 3,063,698
-------------
Specialty Retail Total 8,421,298
-------------
CONSUMER DISCRETIONARY TOTAL 39,277,431
CONSUMER STAPLES - 7.6%
BEVERAGES - 2.1%
Coca-Cola Co. 229,200 9,179,460
-------------
Beverages Total 9,179,460
FOOD & STAPLES RETAILING - 1.6%
Costco Wholesale Corp. 160,600 6,674,536
-------------
Food & Staples Retailing Total 6,674,536
HOUSEHOLD PRODUCTS - 1.3%
Procter & Gamble Co. 106,100 5,742,132
-------------
Household Products Total 5,742,132
PERSONAL PRODUCTS - 2.6%
Gillette Co. 262,500 10,956,750
-------------
Personal Products Total 10,956,750
-------------
CONSUMER STAPLES TOTAL 32,552,878
ENERGY - 12.6%
OIL & GAS - 12.6%
Amerada Hess Corp. 32,700 2,910,300
ChevronTexaco Corp. 373,300 20,023,812
SHARES VALUE ($)
------- -------------
Devon Energy Corp. 128,100 9,096,381
Exxon Mobil Corp. 458,300 22,149,639
-------------
Oil & Gas Total 54,180,132
-------------
ENERGY TOTAL 54,180,132
FINANCIALS - 31.5%
CAPITAL MARKETS - 0.5%
State Street Corp. 48,500 2,071,435
-------------
Capital Markets Total 2,071,435
COMMERCIAL BANKS - 7.8%
City National Corp. 70,200 4,559,490
National City Corp. 207,500 8,013,650
U.S. Bancorp 82,900 2,395,810
UnionBanCal Corp. 52,400 3,102,604
Wachovia Corp. 327,900 15,394,905
-------------
Commercial Banks Total 33,466,459
DIVERSIFIED FINANCIAL SERVICES - 8.2%
Citigroup, Inc. 386,100 17,034,732
JPMorgan Chase & Co. 452,700 17,985,771
-------------
Diversified Financial Services Total 35,020,503
INSURANCE - 10.2%
American International Group, Inc. 30,400 2,066,896
Chubb Corp. 156,000 10,963,680
First American Corp. 125,400 3,866,082
Hartford Financial Services Group, Inc. 192,600 11,927,718
MetLife, Inc. 68,600 2,651,390
Prudential Financial, Inc. 261,600 12,305,664
-------------
Insurance Total 43,781,430
REAL ESTATE - 1.7%
Rayonier, Inc. 159,997 7,238,264
-------------
Real Estate Total 7,238,264
THRIFTS & MORTGAGE FINANCE - 3.1%
Freddie Mac 206,600 13,478,584
-------------
Thrifts & Mortgage Finance Total 13,478,584
-------------
FINANCIALS TOTAL 135,056,675
HEALTH CARE - 4.8%
HEALTH CARE PROVIDERS & SERVICES - 2.5%
CIGNA Corp. 57,200 3,982,836
Medco Health Solutions, Inc. (a) 224,200 6,927,780
-------------
Health Care Providers & Services Total 10,910,616
PHARMACEUTICALS - 2.3%
Merck & Co., Inc. 296,500 9,784,500
-------------
Pharmaceuticals Total 9,784,500
-------------
HEALTH CARE TOTAL 20,695,116
See Accompanying Notes to Financial Statements.
49
________________________________________________________________________________
September 30, 2004 Columbia Disciplined Value Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - 8.3%
AEROSPACE & DEFENSE - 0.6%
Northrop Grumman Corp. 52,400 2,794,492
-------------
Aerospace & Defense Total 2,794,492
COMMERCIAL SERVICES & SUPPLIES - 1.9%
Cendant Corp. 369,600 7,983,360
-------------
Commercial Services & Supplies Total 7,983,360
INDUSTRIAL CONGLOMERATES - 5.3%
General Electric Co. 508,000 17,058,640
Textron, Inc. 88,100 5,662,187
-------------
Industrial Conglomerates Total 22,720,827
TRADING COMPANIES & DISTRIBUTORS - 0.5%
W.W. Grainger, Inc. 38,400 2,213,760
-------------
Trading Companies & Distributors Total 2,213,760
-------------
INDUSTRIALS TOTAL 35,712,439
INFORMATION TECHNOLOGY - 8.0%
COMPUTERS & PERIPHERALS - 3.7%
Hewlett-Packard Co. 118,200 2,216,250
International Business Machines Corp. 159,500 13,675,530
-------------
Computers & Peripherals Total 15,891,780
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2%
Avnet Inc. (a) 199,100 3,408,592
Vishay Intertechnology, Inc. (a) 128,600 1,658,940
-------------
Electronic Equipment & Instruments Total 5,067,532
IT SERVICES - 1.0%
Computer Sciences Corp. (a) 47,600 2,241,960
Convergys Corp. (a) 152,900 2,053,447
-------------
IT Services Total 4,295,407
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT-0.5%
Intersil Corp. 135,400 2,156,922
-------------
Semiconductors & Semiconductor
Equipment Total 2,156,922
SOFTWARE - 1.6%
Microsoft Corp. 245,800 6,796,370
-------------
Software Total 6,796,370
-------------
INFORMATION TECHNOLOGY TOTAL 34,208,011
MATERIALS - 6.8%
CHEMICALS - 0.5%
Sigma-Aldrich Corp. 35,900 2,082,200
-------------
Chemicals Total 2,082,200
SHARES VALUE ($)
------- -------------
CONTAINERS & PACKAGING - 2.0%
Temple-Inland, Inc. 128,300 8,615,345
-------------
Containers & Packaging Total 8,615,345
METALS & MINING - 2.9%
Phelps Dodge Corp. (a) 57,700 5,310,131
Southern Peru Copper Corp. 142,700 7,371,882
-------------
Metals & Mining Total 12,682,013
PAPER & FOREST PRODUCTS - 1.4%
Georgia-Pacific Corp. 165,000 5,931,750
-------------
Paper & Forest Products Total 5,931,750
-------------
MATERIALS TOTAL 29,311,308
TELECOMMUNICATION SERVICES - 5.5%
DIVERSIFIED TELECOMMUNICATION SERVICES - 5.5%
BellSouth Corp. 79,300 2,150,616
SBC Communications, Inc. 657,700 17,067,315
Verizon Communications, Inc. 108,300 4,264,854
-------------
Diversified Telecommunication Services Total 23,482,785
-------------
TELECOMMUNICATION SERVICES TOTAL 23,482,785
UTILITIES - 5.3%
ELECTRIC UTILITIES - 4.5%
American Electric Power Co., Inc. 69,100 2,208,436
PG&E Corp. (a) 216,700 6,587,680
TECO Energy, Inc. 594,000 8,036,820
TXU Corp. 49,800 2,386,416
-------------
Electric Utilities Total 19,219,352
MULTI-UTILITIES & UNREGULATED POWER - 0.8%
Duke Energy Corp. 160,400 3,671,557
-------------
Multi-Utilities & Unregulated Power Total 3,671,557
-------------
UTILITIES TOTAL 22,890,909
TOTAL COMMON STOCKS
(cost of $402,009,428) 427,367,684
PAR ($)
-------
SHORT-TERM OBLIGATION - 0.5%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by a U.S. Treasury
Bond maturing 08/15/19, market
value $2,178,375 (repurchase
proceeds $2,129,093) 2,129,000 2,129,000
-------------
TOTAL SHORT-TERM OBLIGATION
(cost of $2,129,000) 2,129,000
See Accompanying Notes to Financial Statements.
50
________________________________________________________________________________
September 30, 2004 Columbia Disciplined Value Fund
VALUE ($)
-------------
TOTAL INVESTMENTS - 100.1%
(COST OF $404,138,428) (b) 429,496,684
OTHER ASSETS & LIABILITIES, NET - (0.1)% (259,146)
NET ASSETS - 100.0% 429,237,538
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $404,794,609.
See Accompanying Notes to Financial Statements.
51
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia International Equity Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 94.3%
CONSUMER DISCRETIONARY - 14.0%
AUTO COMPONENTS - 1.2%
Continental AG 44,000 2,397,035
Denso Corp. 148,100 3,509,177
-------------
Auto Components Total 5,906,212
AUTOMOBILES - 2.9%
Renault SA 86,041 7,057,423
Toyota Motor Corp. 188,600 7,239,251
-------------
Automobiles Total 14,296,674
HOTELS, RESTAURANTS & LEISURE - 1.6%
Carnival Corp. 68,400 3,234,636
InterContinental Hotels Group PLC 178,859 2,039,223
OPAP SA 120,620 2,321,888
-------------
Hotels, Restaurants & Leisure Total 7,595,747
HOUSEHOLD DURABLES - 2.2%
Funai Electric Co., Ltd. 17,000 2,297,805
Koninklijke (Royal) Philips
Electronics NV 158,121 3,633,859
Matsushita Electric Industrial Co., Ltd. 347,000 4,642,669
-------------
Household Durables Total 10,574,333
LEISURE EQUIPMENT & PRODUCTS - 0.7%
Fuji Photo Film Co., Ltd. 106,000 3,490,529
-------------
Leisure Equipment & Products Total 3,490,529
MEDIA - 2.7%
Dentsu, Inc. 692 1,856,849
JC Decaux SA (a) 164,500 3,747,767
News Corp., Ltd. 262,200 2,156,573
Pearson PLC 314,500 3,368,417
WPP Group PLC 219,000 2,044,802
-------------
Media Total 13,174,408
MULTILINE RETAIL - 1.4%
Metro AG 77,265 3,455,512
Takashimaya Co., Ltd. 117,000 975,859
Wal-Mart de Mexico SA de CV,
Series V 753,600 2,561,419
-------------
Multiline Retail Total 6,992,790
SPECIALTY RETAIL - 0.6%
Aoyama Trading Co., Ltd. 38,100 868,274
Nitori Co., Ltd. 31,750 1,825,254
-------------
Specialty Retail Total 2,693,528
TEXTILES, APPAREL & LUXURY GOODS - 0.7%
Burberry Group PLC 468,900 3,169,596
-------------
Textiles, Apparel & Luxury Goods Total 3,169,596
-------------
CONSUMER DISCRETIONARY TOTAL 67,893,817
SHARES VALUE ($)
------- -------------
CONSUMER STAPLES - 8.8%
BEVERAGES - 1.4%
Diageo PLC 354,330 4,434,135
SABMiller PLC 193,460 2,559,502
-------------
Beverages Total 6,993,637
FOOD & STAPLES RETAILING - 0.8%
Aeon Co., Ltd. 58,900 954,423
Aeon Co., Ltd., New Shares 58,900 940,857
William Morrison Supermarkets PLC 526,742 1,838,986
-------------
Food & Staples Retailing Total 3,734,266
FOOD PRODUCTS - 3.5%
Ajinomoto Co., Inc. 199,000 2,280,760
Nestle SA, Registered Shares 36,944 8,484,197
Unilever PLC 751,620 6,130,347
-------------
Food Products Total 16,895,304
HOUSEHOLD PRODUCTS - 2.1%
Kao Corp. 190,000 4,208,289
Reckitt Benckiser PLC 248,723 6,104,755
-------------
Household Products Total 10,313,044
TOBACCO - 1.0%
Imperial Tobacco Group PLC 218,092 4,763,695
-------------
Tobacco Total 4,763,695
-------------
CONSUMER STAPLES TOTAL 42,699,946
ENERGY - 11.0%
ENERGY EQUIPMENT & SERVICES - 0.2%
Saipem S.p.A. 114,000 1,283,243
-------------
Energy Equipment & Services Total 1,283,243
OIL & GAS - 10.8%
BG Group PLC 370,918 2,495,409
BP PLC 1,200,740 11,497,231
EnCana Corp. 137,600 6,367,895
ENI S.p.A. 584,681 13,114,883
Fortum Oyj 166,600 2,330,458
Norsk Hydro ASA 34,100 2,487,663
PTT Public Co., Ltd. 949,400 3,873,699
Shell Transport & Trading Co., PLC 476,500 3,504,864
Total SA 32,680 6,670,213
-------------
Oil & Gas Total 52,342,315
-------------
ENERGY TOTAL 53,625,558
FINANCIALS - 23.3%
CAPITAL MARKETS - 0.5%
Deutsche Bank AG, Registered Shares 34,961 2,518,476
-------------
Capital Markets Total 2,518,476
See Accompanying Notes to Financial Statements.
52
________________________________________________________________________________
September 30, 2004 Columbia International Equity Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
COMMERCIAL BANKS - 14.6%
Anglo Irish Bank Corp., PLC 149,600 2,767,239
Banco Popolare di Verona E Novara 164,400 2,887,030
Banco Popular Espanol SA 50,800 2,827,279
Bank of Ireland 247,767 3,341,685
Barclays PLC 905,300 8,705,458
BNP Paribas SA 98,057 6,349,815
Credit Agricole SA 103,770 2,837,351
Danske Bank A/S 101,600 2,673,426
DNB NOR ASA 311,200 2,467,052
Erste Bank der oesterreichischen
Sparkassen AG 62,520 2,606,158
Hansabank Ltd. 249,147 2,257,639
HBOS PLC 184,020 2,490,536
Kookmin Bank, ADR (a) 89,900 2,862,416
Lloyds TSB Group PLC 306,810 2,401,670
Mitsubishi Tokyo Financial Group, Inc. 405 3,382,915
Mizuho Financial Group, Inc. 629 2,368,470
National Bank of Greece SA 107,081 2,604,027
Royal Bank of Scotland Group PLC 243,545 7,051,234
Skandinaviska Enskilda Banken
AB, Class A 372,000 5,751,512
Sumitomo Mitsui Financial Group, Inc. 383 2,194,617
-------------
Commercial Banks Total 70,827,529
DIVERSIFIED FINANCIAL SERVICES - 1.9%
Credit Saison Co., Ltd. 39,500 1,217,980
ING Groep NV 309,300 7,813,548
-------------
Diversified Financial Services Total 9,031,528
INSURANCE - 4.4%
Aegon NV 110,900 1,199,582
Allianz AG, Registered Shares 36,871 3,721,337
Axa 115,300 2,340,035
Irish Life & Permanent PLC 204,800 3,309,576
Millea Holdings, Inc. 349 4,507,745
Mitsui Sumitomo Insurance Co., Ltd. 235,000 1,942,876
Riunione Adriatica di Sicurta S.p.A 87,913 1,692,197
T&D Holdings, Inc. (a) 60,500 2,659,285
-------------
Insurance Total 21,372,633
REAL ESTATE - 1.9%
Mitsubishi Estate Co., Ltd. 185,000 1,935,034
Sumitomo Realty & Development
Co., Ltd. 93,000 992,285
Sun Hung Kai Properties Ltd. 549,000 5,170,811
Swire Pacific Ltd., Class A 168,000 1,167,535
-------------
Real Estate Total 9,265,665
-------------
FINANCIALS TOTAL 113,015,831
HEALTH CARE - 10.9%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.5%
Nobel Biocare Holding AG 11,158 1,734,869
Smith & Nephew PLC 847,092 7,807,850
SHARES VALUE ($)
------- -------------
Synthes, Inc. 22,700 2,478,537
-------------
Health Care Equipment & Supplies Total 12,021,256
PHARMACEUTICALS - 8.4%
AstraZeneca PLC 126,600 5,199,410
Chugai Pharmaceutical Co., Ltd. 225,500 3,259,296
GlaxoSmithKline PLC 390,284 8,435,128
Novartis AG, Registered Shares 135,840 6,339,271
Sanofi-Aventis 90,360 6,574,882
Takeda Chemical Industries Ltd. 165,200 7,513,346
Teva Pharmaceutical Industries
Ltd., ADR 146,400 3,799,080
-------------
Pharmaceuticals Total 41,120,413
-------------
HEALTH CARE TOTAL 53,141,669
INDUSTRIALS - 9.1%
BUILDING PRODUCTS - 0.5%
Wienerberger AG 63,689 2,392,245
-------------
Building Products Total 2,392,245
COMMERCIAL SERVICES & SUPPLIES - 1.0%
Randstad Holding NV 134,400 4,872,135
-------------
Commercial Services & Supplies Total 4,872,135
CONSTRUCTION & ENGINEERING - 2.0%
JGC Corp. 341,000 3,499,974
Shimizu Corp. 551,000 2,200,586
Vinci SA 32,710 3,770,156
-------------
Construction & Engineering Total 9,470,716
ELECTRICAL EQUIPMENT - 0.5%
Siemens AG, Registered Shares 35,279 2,600,256
-------------
Electrical Equipment Total 2,600,256
INDUSTRIAL CONGLOMERATES - 1.2%
Hutchison Whampoa Ltd. 307,000 2,398,630
NIWS Co., Ltd. 420 1,068,263
Smiths Group PLC 183,351 2,467,496
-------------
Industrial Conglomerates Total 5,934,389
MACHINERY - 2.5%
Atlas Copco AB, Class B 129,400 4,567,573
Heidelberger Druckmaschinen AG (a) 78,700 2,349,103
Linde AG 48,500 2,800,826
Volvo AB, Class B 71,100 2,512,342
-------------
Machinery Total 12,229,844
ROAD & RAIL - 0.6%
Canadian National Railway Co. 58,417 2,864,210
-------------
Road & Rail Total 2,864,210
TRADING COMPANIES & DISTRIBUTORS - 0.8%
Mitsubishi Corp. 351,000 3,799,846
-------------
Trading Companies & Distributors Total 3,799,846
-------------
INDUSTRIALS TOTAL 44,163,641
See Accompanying Notes to Financial Statements.
53
________________________________________________________________________________
September 30, 2004 Columbia International Equity Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - 2.9%
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2%
Tandberg ASA 253,500 2,292,441
TDK Corp. 49,400 3,297,928
-------------
Electronic Equipment & Instruments Total 5,590,369
OFFICE ELECTRONICS - 0.9%
Canon, Inc. 96,700 4,551,715
-------------
Office Electronics Total 4,551,715
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.8%
Samsung Electronics Co., Ltd. 9,831 3,904,454
-------------
Semiconductors & Semiconductor
Equipment Total 3,904,454
-------------
INFORMATION TECHNOLOGY TOTAL 14,046,538
MATERIALS - 4.8%
CHEMICALS - 3.5%
BASF AG 98,100 5,792,287
L'Air Liquide SA 22,586 3,551,439
Novozymes A/S, Class B 27,150 1,225,150
Syngenta AG (a) 68,702 6,568,243
-------------
Chemicals Total 17,137,119
CONSTRUCTION MATERIALS - 0.7%
Cemex SA de CV, ADR 123,700 3,480,918
-------------
Construction Materials Total 3,480,918
PAPER & FOREST PRODUCTS - 0.6%
UPM-Kymmene Oyj 139,800 2,665,285
-------------
Paper & Forest Products Total 2,665,285
-------------
MATERIALS TOTAL 23,283,322
TELECOMMUNICATION SERVICES - 6.4%
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.1%
Belgacom SA (a) 73,300 2,629,124
Deutsche Telekom AG, Registered
Shares (a) 157,964 2,936,812
France Telecom SA 142,800 3,567,777
Nippon Telegraph & Telephone Corp. 633 2,532,467
TDC A/S 73,000 2,582,361
Telecom Italia S.p.A. (a) 801,154 2,476,997
Telefonaktiebolaget LM Ericsson,
ADR (a) 99,000 3,092,760
-------------
Diversified Telecommunication Services Total 19,818,298
WIRELESS TELECOMMUNICATION SERVICES - 2.3%
Hutchison Telecom International
Reserved Shares (a)(b) 4,093 --(c)
NTT DoCoMo, Inc. 1,872 3,191,438
Vodafone Group PLC 3,383,400 8,120,294
-------------
Wireless Telecommunication Services Total 11,311,732
-------------
TELECOMMUNICATION SERVICES TOTAL 31,130,030
SHARES VALUE ($)
------- -------------
UTILITIES - 3.1%
ELECTRIC UTILITIES - 2.6%
E. ON AG 67,146 4,960,022
National Grid Transco PLC 609,600 5,165,511
Scottish Power PLC 337,026 2,581,391
-------------
Electric Utilities Total 12,706,924
GAS UTILITIES - 0.5%
Centrica PLC 528,700 2,407,695
-------------
Gas Utilities Total 2,407,695
-------------
UTILITIES TOTAL 15,114,619
TOTAL COMMON STOCKS
(cost of $416,864,333) 458,114,971
PREFERRED STOCK - 1.0%
CONSUMER DISCRETIONARY - 1.0%
AUTOMOBILES - 1.0%
Porsche AG 7,300 4,753,033
-------------
Automobiles Total 4,753,033
-------------
CONSUMER DISCRETIONARY TOTAL 4,753,033
TOTAL PREFERRED STOCK
(cost of $4,666,378) 4,753,033
PAR ($)
-------
SHORT-TERM OBLIGATION - 3.9%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by a U.S. Treasury
Bond maturing 11/15/15, market
value $19,287,355 (repurchase
proceeds $18,904,830) 18,904,000 18,904,000
-------------
TOTAL SHORT-TERM OBLIGATION
(cost of $18,904,000) 18,904,000
TOTAL INVESTMENTS - 99.2%
(COST OF $440,434,711) (d) 481,772,004
OTHER ASSETS & LIABILITIES, NET - 0.8% 3,961,710
NET ASSETS - 100.0% 485,733,714
See Accompanying Notes to Financial Statements.
54
________________________________________________________________________________
September 30, 2004 Columbia International Equity Fund
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Represents fair value as determined in good faith under the direction of
the Board of Trustees.
(c) Security has no value.
(d) Cost for federal income tax purposes is $440,556,800.
SUMMARY OF SECURITIES % OF TOTAL
BY COUNTRY VALUE INVESTMENTS
-----------------------------------------------------------------------
United Kingdom $116,784,634 24.3%
Japan 91,206,065 18.9
France 46,466,857 9.7
Germany 38,284,697 8.0
Switzerland 23,126,581 4.8
Italy 21,454,351 4.5
United States* 21,382,537 4.4
Netherlands 17,519,123 3.6
Sweden 15,924,187 3.3
Ireland 9,418,500 2.0
Canada 9,232,104 1.9
Hong Kong 8,736,976 1.8
Norway 7,247,156 1.5
Korea, Republic of 6,766,870 1.4
Denmark 6,480,937 1.3
Mexico 6,042,337 1.3
Austria 4,998,404 1.0
Finland 4,995,743 1.0
Greece 4,925,915 1.0
Thailand 3,873,699 0.8
Israel 3,799,080 0.8
Panama 3,234,636 0.7
Spain 2,827,279 0.6
Belgium 2,629,124 0.5
Estonia 2,257,639 0.5
Australia 2,156,573 0.4
------------ -----------
Total $481,772,004 100.0%
============ ===========
* Includes Short-Term Obligation.
Certain securities are listed by country of underlying exposure but may trade
predominately on other exchanges.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
See Accompanying Notes to Financial Statements.
55
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia Large Cap Core Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 96.5%
CONSUMER DISCRETIONARY - 9.2%
AUTO COMPONENTS - 0.5%
Magna International, Inc., Class A 25,800 1,911,264
-------------
Auto Components Total 1,911,264
HOTELS, RESTAURANTS & LEISURE - 1.1%
Yum! Brands, Inc. 98,400 4,000,944
-------------
Hotels, Restaurants & Leisure Total 4,000,944
HOUSEHOLD DURABLES - 0.5%
Lennar Corp., Class A 41,300 1,965,880
-------------
Household Durables Total 1,965,880
MEDIA - 3.3%
Fox Entertainment Group, Inc.,
Class A (a) 69,500 1,927,930
Liberty Media Corp., Class A (a) 217,800 1,899,216
McGraw-Hill Companies, Inc. 41,000 3,267,290
Viacom, Inc., Class B 169,900 5,701,844
-------------
Media Total 12,796,280
MULTILINE RETAIL - 0.7%
J.C. Penney Co., Inc. 78,200 2,758,896
-------------
Multiline Retail Total 2,758,896
SPECIALTY RETAIL - 3.1%
Abercrombie & Fitch Co., Class A 99,400 3,131,100
Best Buy Co., Inc. 85,600 4,642,944
Staples, Inc. 131,900 3,933,258
-------------
Specialty Retail Total 11,707,302
-------------
CONSUMER DISCRETIONARY TOTAL 35,140,566
CONSUMER STAPLES - 9.0%
BEVERAGES - 4.2%
Diageo PLC, ADR 114,500 5,774,235
PepsiCo, Inc. 210,000 10,216,500
-------------
Beverages Total 15,990,735
FOOD & STAPLES RETAILING - 1.3%
Costco Wholesale Corp. 116,700 4,850,052
-------------
Food & Staples Retailing Total 4,850,052
HOUSEHOLD PRODUCTS - 3.0%
Procter & Gamble Co. 213,600 11,560,032
-------------
Household Products Total 11,560,032
TOBACCO - 0.5%
Altria Group, Inc. 42,900 2,018,016
-------------
Tobacco Total 2,018,016
-------------
CONSUMER STAPLES TOTAL 34,418,835
SHARES VALUE ($)
------- -------------
ENERGY - 7.1%
OIL & GAS - 7.1%
Apache Corp. 41,900 2,099,609
ConocoPhillips 119,000 9,859,150
EOG Resources, Inc. 63,200 4,161,720
Exxon Mobil Corp. 230,300 11,130,399
-------------
Oil & Gas Total 27,250,878
-------------
ENERGY TOTAL 27,250,878
FINANCIALS - 19.9%
CAPITAL MARKETS - 3.5%
Bank of New York Co., Inc. 101,900 2,972,423
E*TRADE Financial Corp. (a) 255,200 2,914,384
Goldman Sachs Group, Inc. 41,100 3,832,164
Merrill Lynch & Co., Inc. 76,200 3,788,664
-------------
Capital Markets Total 13,507,635
COMMERCIAL BANKS - 8.0%
M&T Bank Corp. 19,700 1,885,290
National City Corp. 76,400 2,950,568
SouthTrust Corp. 68,760 2,864,542
SunTrust Banks, Inc. 28,400 1,999,644
U.S. Bancorp 162,500 4,696,250
Wachovia Corp. 157,100 7,375,845
Wells Fargo & Co. 116,300 6,934,969
Zions Bancorp. 31,700 1,934,968
-------------
Commercial Banks Total 30,642,076
DIVERSIFIED FINANCIAL SERVICES - 3.0%
Citigroup, Inc. 169,600 7,482,752
JPMorgan Chase & Co. 97,200 3,861,756
-------------
Diversified Financial Services Total 11,344,508
INSURANCE - 4.1%
Aflac, Inc. 101,900 3,995,499
American International Group, Inc. 26,700 1,815,333
Hartford Financial Services Group, Inc. 64,400 3,988,292
MetLife, Inc. 51,100 1,975,015
XL Capital Ltd., Class A 53,900 3,988,061
-------------
Insurance Total 15,762,200
THRIFTS & MORTGAGE FINANCE - 1.3%
Fannie Mae 81,400 5,160,760
-------------
Thrifts & Mortgage Finance Total 5,160,760
-------------
FINANCIALS TOTAL 76,417,179
HEALTH CARE - 14.1%
BIOTECHNOLOGY - 0.9%
Genentech, Inc. (a) 39,800 2,086,316
Invitrogen Corp. (a) 23,100 1,270,269
-------------
Biotechnology Total 3,356,585
See Accompanying Notes to Financial Statements.
56
________________________________________________________________________________
September 30, 2004 Columbia Large Cap Core Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES - 2.4%
Alcon, Inc. 25,000 2,005,000
Boston Scientific Corp. (a) 57,700 2,292,421
Medtronic, Inc. 57,800 2,999,820
Varian Medical Systems, Inc. (a) 59,600 2,060,372
-------------
Health Care Equipment & Supplies Total 9,357,613
HEALTH CARE PROVIDERS & SERVICES - 1.9%
Anthem, Inc. (a) 47,400 4,135,650
Caremark Rx, Inc. (a) 100,500 3,223,035
-------------
Health Care Providers & Services Total 7,358,685
PHARMACEUTICALS - 8.9%
Abbott Laboratories 98,800 4,185,168
Allergan, Inc. 49,600 3,598,480
GlaxoSmithKline PLC, ADR 68,160 2,980,637
Johnson & Johnson 59,500 3,351,635
Merck & Co., Inc. 85,800 2,831,400
Pfizer, Inc. 456,700 13,975,020
Teva Pharmaceutical Industries
Ltd., ADR 117,000 3,036,150
-------------
Pharmaceuticals Total 33,958,490
-------------
HEALTH CARE TOTAL 54,031,373
INDUSTRIALS - 12.1%
AEROSPACE & DEFENSE - 2.7%
Northrop Grumman Corp. 56,600 3,018,478
United Technologies Corp. 77,000 7,190,260
-------------
Aerospace & Defense Total 10,208,738
AIR FREIGHT & LOGISTICS - 1.6%
United Parcel Service, Inc., Class B 79,200 6,012,864
-------------
Air Freight & Logistics Total 6,012,864
BUILDING PRODUCTS - 1.0%
Masco Corp. 115,900 4,002,027
-------------
Building Products Total 4,002,027
COMMERCIAL SERVICES & SUPPLIES - 1.9%
Cendant Corp. 142,500 3,078,000
Manpower, Inc. 45,300 2,015,397
Republic Services, Inc. 75,600 2,249,856
-------------
Commercial Services & Supplies Total 7,343,253
INDUSTRIAL CONGLOMERATES - 1.8%
General Electric Co. 211,404 7,098,946
-------------
Industrial Conglomerates Total 7,098,946
SHARES VALUE ($)
------- -------------
MACHINERY - 3.1%
Eaton Corp. 36,000 2,282,760
Flowserve Corp. (a) 88,000 2,127,840
Ingersoll-Rand Co., Class A 45,800 3,113,026
PACCAR, Inc. 61,300 4,237,056
-------------
Machinery Total 11,760,682
-------------
INDUSTRIALS TOTAL 46,426,510
INFORMATION TECHNOLOGY - 15.0%
COMMUNICATIONS EQUIPMENT - 1.3%
Avaya, Inc. (a) 139,900 1,950,206
Cisco Systems, Inc. (a) 177,300 3,209,130
-------------
Communications Equipment Total 5,159,336
COMPUTERS & PERIPHERALS - 2.2%
Lexmark International, Inc., Class A (a) 99,781 8,382,602
-------------
Computers & Peripherals Total 8,382,602
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.7%
Tektronix, Inc. 82,900 2,756,425
-------------
Electronic Equipment & Instruments Total 2,756,425
IT SERVICES - 1.6%
Accenture Ltd., Class A (a) 219,600 5,940,180
-------------
IT Services Total 5,940,180
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.2%
Altera Corp. (a) 104,800 2,050,936
Analog Devices, Inc. 78,900 3,059,742
ASML Holding N.V., N.Y. Registered
Shares (a) 211,500 2,722,005
Marvell Technology Group Ltd. (a) 94,800 2,477,124
Maxim Integrated Products, Inc. 58,800 2,486,652
Taiwan Semiconductor Manufacturing
Co., Ltd., ADR 485,300 3,465,042
-------------
Semiconductors & Semiconductor
Equipment Total 16,261,501
SOFTWARE - 5.0%
Microsoft Corp. 544,700 15,060,955
Symantec Corp. (a) 76,700 4,209,296
-------------
Software Total 19,270,251
-------------
INFORMATION TECHNOLOGY TOTAL 57,770,295
MATERIALS - 3.9%
CONTAINERS & PACKAGING - 0.6%
Smurfit-Stone Container Corp. (a) 124,400 2,409,628
-------------
Containers & Packaging Total 2,409,628
METALS & MINING - 2.7%
Arch Coal, Inc. 77,600 2,754,024
Companhia Vale do Rio Doce, ADR 138,900 2,673,825
Peabody Energy Corp. 45,700 2,719,150
Phelps Dodge Corp. 23,400 2,153,502
-------------
Metals & Mining Total 10,300,501
See Accompanying Notes to Financial Statements.
57
________________________________________________________________________________
September 30, 2004 Columbia Large Cap Core Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
MATERIALS - (CONTINUED)
PAPER & FOREST PRODUCTS - 0.6%
MeadWestvaco Corp. 75,500 2,408,450
-------------
Paper & Forest Products Total 2,408,450
-------------
MATERIALS TOTAL 15,118,579
TELECOMMUNICATION SERVICES - 3.4%
DIVERSIFIED TELECOMMUNICATION SERVICES - 3.4%
ALLTEL Corp. 71,100 3,904,101
BellSouth Corp. 108,300 2,937,096
Citizens Communications Co. 153,100 2,050,009
SBC Communications, Inc. 74,900 1,943,655
Verizon Communications, Inc. 53,100 2,091,078
-------------
Diversified Telecommunication Services Total 12,925,939
-------------
TELECOMMUNICATION SERVICES TOTAL 12,925,939
UTILITIES - 2.8%
ELECTRIC UTILITIES - 1.8%
American Electric Power Co., Inc. 66,500 2,125,340
Entergy Corp. 78,400 4,751,824
-------------
Electric Utilities Total 6,877,164
MULTI-UTILITIES & UNREGULATED POWER - 1.0%
Sempra Energy 110,700 4,006,233
-------------
Multi-Utilities & Unregulated Power Total 4,006,233
-------------
UTILITIES TOTAL 10,883,397
TOTAL COMMON STOCKS
(cost of $345,905,412) 370,383,551
PREFERRED STOCK - 1.0%
CONSUMER DISCRETIONARY - 1.0%
MEDIA - 1.0%
News Corp., Ltd., ADR 126,100 3,950,713
-------------
Media Total 3,950,713
-------------
CONSUMER DISCRETIONARY TOTAL 3,950,713
TOTAL PREFERRED STOCK
(cost of $4,525,173) 3,950,713
INVESTMENT COMPANIES - 2.6%
Nasdaq-100 Index Tracking Stock 77,500 2,724,125
Consumer Staples Select SPDR Fund 310,900 6,734,094
SPDR Trust Series 1 3,400 379,984
-------------
TOTAL INVESTMENT COMPANIES
(cost of $9,782,938) 9,838,203
PAR ($) VALUE ($)
------- -------------
SHORT-TERM OBLIGATION - 0.2%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by a U.S. Treasury
Note maturing 05/15/14, market
value $1,022,400 (repurchase
proceeds $1,001,044)
TOTAL SHORT-TERM OBLIGATION
(cost of $1,001,000) 1,001,000 1,001,000
TOTAL INVESTMENTS - 100.3%
(COST OF $361,214,523) (b) 385,173,467
OTHER ASSETS & LIABILITIES, NET - (0.3)% (1,246,349)
NET ASSETS - 100.0% 383,927,118
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $362,485,330.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
See Accompanying Notes to Financial Statements.
58
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia Small Cap Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 90.8%
CONSUMER DISCRETIONARY - 20.7%
AUTO COMPONENTS - 1.2%
Cooper Tire & Rubber Co. 239,870 4,838,178
Keystone Automotive Industries,
Inc. (a) 300,000 6,600,000
R&B, Inc. (a) 203,883 4,456,883
Sauer-Danfoss, Inc. 152,900 2,611,532
-------------
Auto Components Total 18,506,593
HOTELS, RESTAURANTS & LEISURE - 4.8%
Buca, Inc. (a) 484,450 2,054,068
CEC Entertainment, Inc. (a) 227,230 8,350,702
Checkers Drive-In Restaurant,
Inc. (a)(b) 607,900 7,142,825
Famous Dave's of America, Inc. (a) 500,000 3,750,000
Friendly Ice Cream Corp. (a) 230,000 2,219,500
Gaylord Entertainment Co. (a) 267,300 8,286,300
Jack in the Box, Inc. (a) 293,900 9,325,447
Navigant International, Inc. (a) 325,000 5,307,250
O'Charleys, Inc. (a) 627,005 10,220,182
Ruby Tuesday, Inc. 210,500 5,866,635
Ryan's Restaurant Group, Inc. (a) 418,650 6,212,766
Steak n Shake Co. (a) 182,000 3,108,560
Total Entertainment Restaurant
Corp. (a)(b) 501,000 4,363,710
-------------
Hotels, Restaurants & Leisure Total 76,207,945
HOUSEHOLD DURABLES - 0.8%
Bassett Furniture Industries, Inc. 138,850 2,621,488
Kimball International, Inc., Class B 127,400 1,768,312
Yankee Candle Co., Inc. (a) 304,000 8,803,840
-------------
Household Durables Total 13,193,640
INTERNET & CATALOG RETAIL - 0.7%
Alloy, Inc. (a) 1,230,200 4,662,458
Valuevision Media, Inc., Class A (a) 409,000 5,476,510
-------------
Internet & Catalog Retail Total 10,138,968
LEISURE EQUIPMENT & PRODUCTS - 1.0%
Callaway Golf Co. 252,400 2,667,868
RC2 Corp. (a) 290,900 9,570,610
Topps Co., Inc. 268,900 2,629,842
-------------
Leisure Equipment & Products Total 14,868,320
MEDIA - 3.4%
ADVO, Inc. 360,699 11,160,027
Catalina Marketing Corp. 370,400 8,548,832
Journal Communications, Inc., Class A 179,400 3,146,676
Journal Register Co. (a) 367,500 6,945,750
Paxson Communications Corp. (a) 1,275,400 1,721,790
Pulitzer, Inc. 144,200 7,123,480
Regent Communications, Inc. (a) 451,600 2,556,056
Scholastic Corp. (a) 249,600 7,710,144
Sinclair Broadcast Group, Inc., Class A 263,100 1,920,630
Young Broadcasting, Inc., Class A (a) 229,400 2,493,578
-------------
Media Total 53,326,963
SHARES VALUE ($)
------- -------------
MULTILINE RETAIL - 0.4%
Fred's, Inc. 376,800 6,767,328
-------------
Multiline Retail Total 6,767,328
SPECIALTY RETAIL - 6.1%
AC Moore Arts & Crafts, Inc. (a) 180,000 4,451,400
Buckle, Inc. 349,900 9,611,753
Dress Barn, Inc. (a) 260,700 4,549,215
Gaiam, Inc. (a) 240,000 1,432,800
Gymboree Corp. (a) 499,500 7,192,800
Hancock Fabrics, Inc. 424,300 5,083,114
Haverty Furniture Companies, Inc. 186,200 3,265,948
Hot Topic, Inc. (a) 350,000 5,964,000
Kirkland's, Inc. (a) 368,500 3,463,900
Lithia Motors, Inc., Class A 343,300 7,298,558
Men's Wearhouse, Inc. (a) 157,500 4,575,375
Monro Muffler, Inc. (a) 220,000 4,807,000
Pacific Sunwear of California, Inc. (a) 150,000 3,157,500
Party City Corp. (a) 492,700 7,277,179
Regis Corp. 100,000 4,022,000
Rent-A-Center, Inc. (a) 197,750 5,113,815
Rush Enterprises, Inc., Class A (a) 150,000 1,642,500
Rush Enterprises, Inc., Class B (a) 200,000 2,338,000
Sports Authority, Inc. (a) 249,600 5,790,720
Stage Stores, Inc. (a) 168,800 5,776,336
-------------
Specialty Retail Total 96,813,913
TEXTILES, APPAREL & LUXURY GOODS - 2.3%
Ashworth, Inc. (a) 300,000 2,460,000
Phillips-Van Heusen Corp. 311,900 6,949,132
Quiksilver, Inc. (a) 231,600 5,887,272
Rocky Shoes & Boots, Inc. (a) 167,100 2,924,250
Tommy Hilfiger Corp. (a) 400,900 3,956,883
Unifirst Corp. (b) 472,800 13,522,080
-------------
Textiles, Apparel & Luxury Goods Total 35,699,617
-------------
CONSUMER DISCRETIONARY TOTAL 325,523,287
CONSUMER STAPLES - 2.4%
FOOD & STAPLES RETAILING - 0.5%
Casey's General Stores, Inc. 316,570 5,885,036
Wild Oats Markets, Inc. (a) 193,300 1,670,112
-------------
Food & Staples Retailing Total 7,555,148
FOOD PRODUCTS - 1.4%
Central Garden & Pet Co. (a) 188,600 5,774,932
Corn Products International, Inc. 145,800 6,721,380
Delta & Pine Land Co. 318,200 8,511,850
-------------
Food Products Total 21,008,162
HOUSEHOLD PRODUCTS - 0.5%
Rayovac Corp. (a) 316,100 8,329,235
-------------
Household Products Total 8,329,235
-------------
CONSUMER STAPLES TOTAL 36,892,545
See Accompanying Notes to Financial Statements.
59
________________________________________________________________________________
September 30, 2004 Columbia Small Cap Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
ENERGY - 5.1%
ENERGY EQUIPMENT & SERVICES - 2.4%
Atwood Oceanics, Inc. (a) 145,600 6,921,824
Core Laboratories NV (a) 130,300 3,204,077
Gulfmark Offshore, Inc. (a) 541,200 8,837,796
Newpark Resources, Inc. (a) 831,000 4,986,000
Oceaneering International, Inc. (a) 201,100 7,408,524
Offshore Logistics, Inc. (a) 100,000 3,442,000
Oil States International, Inc. (a) 145,000 2,711,500
-------------
Energy Equipment & Services Total 37,511,721
OIL & GAS - 2.7%
Cimarex Energy Co. (a) 153,700 5,370,278
Houston Exploration Co. (a) 168,200 9,982,670
Plains Exploration & Production Co. (a) 84,245 2,010,086
Southwestern Energy Co. (a) 282,400 11,857,976
Vintage Petroleum, Inc. 222,500 4,465,575
Whiting Petroleum Corp. (a) 320,200 9,734,080
-------------
Oil & Gas Total 43,420,665
-------------
ENERGY TOTAL 80,932,386
FINANCIALS - 9.1%
COMMERCIAL BANKS - 2.5%
First Niagara Financial Group, Inc. 465,500 6,228,390
Matrix Bancorp, Inc. (a) 227,400 2,887,980
NewAlliance Bancshares, Inc. 498,500 7,153,475
Oriental Financial Group 360,537 9,756,131
Republic Bancorp, Inc. 215,737 3,322,350
SNB Bancshares, Inc. (a) 233,700 2,799,726
Taylor Capital Group, Inc. 129,628 3,111,072
Willow Grove Bancorp, Inc. 272,000 4,500,240
-------------
Commercial Banks Total 39,759,364
CONSUMER FINANCE - 0.3%
Rewards Network, Inc. (a) 600,100 4,002,667
-------------
Consumer Finance Total 4,002,667
DIVERSIFIED FINANCIAL SERVICES - 0.8%
Eurobancshares, Inc. (a) 184,400 3,427,996
Jefferson Bancshares, Inc. 266,400 3,505,824
Prospect Energy Corp. (a) 157,700 2,357,615
QC Holdings, Inc. (a) 225,100 3,585,843
-------------
Diversified Financial Services Total 12,877,278
INSURANCE - 2.6%
AmerUs Group Co. 173,320 7,106,120
Bristol West Holdings, Inc. 256,100 4,389,554
Direct General Corp. 198,200 5,731,944
Horace Mann Educators Corp. 271,200 4,767,696
Hub International Ltd. 83,300 1,506,064
Navigators Group, Inc. (a) 152,800 4,467,872
NYMAGIC, Inc. 105,000 2,298,450
Ohio Casualty Corp. (a) 295,600 6,186,908
SHARES VALUE ($)
------- -------------
Phoenix Companies, Inc. 199,900 2,082,958
Presidential Life Corp. 140,100 2,406,918
-------------
Insurance Total 40,944,484
REAL ESTATE - 1.8%
Acadia Realty Trust, REIT 231,100 3,408,725
Corporate Office Properties Trust,
Inc., REIT 47,600 1,219,512
First Potomac Realty Trust, REIT 400,000 8,264,000
Gramercy Capital Corp., REIT (a) 229,200 3,575,520
Innkeepers USA Trust, Inc., REIT 466,100 5,798,284
Jones Lang LaSalle, Inc. (a) 172,900 5,707,429
Kilroy Realty Corp., REIT 7,700 292,831
Medical Office Properties,
Inc., REIT (a)(c) 277,825 2,778
-------------
Real Estate Total 28,269,079
THRIFTS & MORTGAGE FINANCE - 1.1%
Anchor BanCorp Wisconsin, Inc. 169,800 4,397,820
Dime Community Bancshares 283,200 4,757,760
Webster Financial Corp. 145,900 7,206,001
-------------
Thrifts & Mortgage Finance Total 16,361,581
-------------
FINANCIALS TOTAL 142,214,453
HEALTH CARE - 13.2%
BIOTECHNOLOGY - 1.5%
BioMarin Pharmaceuticals, Inc. (a) 399,850 2,075,221
CV Therapeutics, Inc. (a) 184,200 2,302,500
Lifecell Corp. (a) 580,000 5,800,000
PRAECIS Pharmaceuticals, Inc. (a) 507,100 1,115,620
Serologicals Corp. (a) 437,100 10,197,543
Strategic Diagnostics, Inc. (a) 800,000 1,712,000
-------------
Biotechnology Total 23,202,884
HEALTH CARE EQUIPMENT & SUPPLIES - 5.4%
Analogic Corp. 158,700 6,616,203
Cytyc Corp. (a) 287,900 6,952,785
Datascope Corp. 229,150 8,547,295
Haemonetics Corp. (a) 197,000 6,469,480
Immucor, Inc. (a) 179,425 4,440,769
Invacare Corp. 463,300 21,311,800
Lifecore Biomedical, Inc. (a) 325,300 2,277,100
STAAR Surgical Co. (a) 530,600 1,750,980
SurModics, Inc. (a) 170,000 4,037,500
Thoratec Corp. (a) 749,200 7,207,304
Viasys Healthcare, Inc. (a) 174,000 2,911,020
West Pharmaceutical Services, Inc. 642,000 13,385,700
-------------
Health Care Equipment & Supplies Total 85,907,936
HEALTH CARE PROVIDERS & SERVICES - 5.4%
Beverly Enterprises, Inc. (a) 628,500 4,757,745
LabOne, Inc. (a) 182,300 5,328,629
LifePoint Hospitals, Inc. (a) 164,600 4,939,646
Magellan Health Services, Inc. (a) 176,200 6,441,872
Pediatrix Medical Group, Inc. (a) 212,200 11,639,170
Priority Healthcare Corp., Class B (a) 316,975 6,387,047
Province Healthcare Co. (a) 172,100 3,600,332
See Accompanying Notes to Financial Statements.
60
________________________________________________________________________________
September 30, 2004 Columbia Small Cap Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE PROVIDERS & SERVICES - (CONTINUED)
Proxymed, Inc. (a) 73,400 731,798
PSS World Medical, Inc. (a) 640,700 6,432,628
Psychiatric Solutions, Inc. (a) 175,700 4,453,995
Res-Care, Inc. (a) 945,925 11,209,211
Select Medical Corp. 650,600 8,737,558
Triad Hospitals, Inc. (a) 180,900 6,230,196
U.S. Physical Therapy, Inc. (a) 314,200 4,269,978
-------------
Health Care Providers & Services Total 85,159,805
PHARMACEUTICALS - 0.9%
Acusphere, Inc. (a) 369,500 2,313,070
Critical Therapeutics, Inc. (a) 229,200 1,340,820
Valeant Pharmaceuticals International 431,526 10,408,407
-------------
Pharmaceuticals Total 14,062,297
-------------
HEALTH CARE TOTAL 208,332,922
INDUSTRIALS - 16.7%
AEROSPACE & DEFENSE - 1.4%
Armor Holdings, Inc. (a) 315,365 13,122,338
Ladish Co., Inc. (a) 276,300 2,528,145
Moog, Inc., Class A (a) 156,000 5,662,800
-------------
Aerospace & Defense Total 21,313,283
AIR FREIGHT & LOGISTICS - 0.4%
AirNet Systems, Inc. (a) 17,400 74,820
Ryder System, Inc. 143,200 6,736,128
-------------
Air Freight & Logistics Total 6,810,948
BUILDING PRODUCTS - 0.9%
Jacuzzi Brands, Inc. (a) 807,500 7,509,750
NCI Building Systems, Inc. (a) 222,900 7,110,510
-------------
Building Products Total 14,620,260
COMMERCIAL SERVICES & SUPPLIES - 5.2%
Bennett Environmental, Inc. (a) 400,000 1,980,000
Cornell Companies, Inc. (a)(b) 765,600 9,493,440
Danka Business Systems PLC,
ADR (a) 1,600,000 6,080,000
FTI Consulting, Inc. (a) 620,000 11,718,000
G&K Services, Inc., Class A 155,500 6,179,570
HMS Holdings Corp. (a) 194,400 1,263,600
infoUSA, Inc. (a) 358,100 3,190,671
Kforce, Inc. (a) 1,148,004 9,620,274
Mobile Mini, Inc. (a) 66,000 1,636,800
MPW Industrial Services Group,
Inc. (a) 188,100 426,987
Nashua Corp. (a) 169,600 1,874,080
NCO Group, Inc. (a) 368,330 9,926,493
Nobel Learning Communities, Inc. (a) 14,600 102,200
RemedyTemp, Inc., Class A (a) 125,210 1,307,192
School Specialty, Inc. (a) 162,600 6,408,066
Spherion Corp. (a) 499,200 3,903,744
SHARES VALUE ($)
------- -------------
Tetra Tech, Inc. (a) 463,500 5,872,545
Westaff, Inc. (a) 113,700 354,744
Willis Lease Finance Corp. (a) 87,100 670,235
-------------
Commercial Services & Supplies Total 82,008,641
CONSTRUCTION & ENGINEERING - 1.9%
Chicago Bridge & Iron Co., NV, N.Y.
Registered Shares. 460,300 13,804,397
EMCOR Group, Inc. (a) 261,500 9,837,630
Shaw Group, Inc. (a) 548,200 6,578,400
-------------
Construction & Engineering Total 30,220,427
ELECTRICAL EQUIPMENT - 0.2%
Powell Industries, Inc. (a) 172,700 2,909,995
Wood's (T.B.) Corp. 108,207 616,780
-------------
Electrical Equipment Total 3,526,775
MACHINERY - 4.6%
AGCO Corp. (a) 226,300 5,118,906
Albany International Corp., Class A 600,005 17,886,149
CIRCOR International, Inc. 271,900 5,302,050
Key Technology, Inc. (a)(b) 259,265 2,916,731
Lydall, Inc. (a) 188,600 1,753,980
Oshkosh Truck Corp. 64,500 3,680,370
Pentair, Inc. 115,900 4,046,069
Reliance Steel & Aluminum Co. 219,500 8,714,150
Terex Corp. (a) 170,644 7,405,950
Thomas Industries, Inc. 241,585 7,585,769
Watts Water Technologies, Inc., Class A 283,400 7,609,290
-------------
Machinery Total 72,019,414
ROAD & RAIL - 2.1%
Arkansas Best Corp. 322,000 11,791,640
Kansas City Southern (a) 403,845 6,126,328
P.A.M. Transportation Services, Inc. (a) 176,400 3,379,824
RailAmerica, Inc. (a) 376,800 4,163,640
USF Corp. 106,600 3,825,874
Werner Enterprises, Inc. 185,125 3,574,764
-------------
Road & Rail Total 32,862,070
-------------
INDUSTRIALS TOTAL 263,381,818
INFORMATION TECHNOLOGY - 13.0%
COMMUNICATIONS EQUIPMENT - 0.6%
Paradyne Networks Corp. (a) 1,050,000 4,830,000
Performance Technologies, Inc. (a) 609,400 3,851,408
-------------
Communications Equipment Total 8,681,408
COMPUTERS & PERIPHERALS - 1.7%
Cray, Inc. (a) 814,500 2,875,185
Hypercom Corp. (a) 545,800 4,028,004
Imation Corp. 309,500 11,015,105
Maxtor Corp. (a) 334,600 1,739,920
Presstek, Inc. (a) 311,100 3,008,337
Rimage Corp. (a) 162,900 2,280,600
Storage Technology Corp. (a) 100,000 2,526,000
-------------
Computers & Peripherals Total 27,473,151
See Accompanying Notes to Financial Statements.
61
________________________________________________________________________________
September 30, 2004 Columbia Small Cap Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (CONTINUED)
ELECTRONIC EQUIPMENT & INSTRUMENTS - 4.4%
Agilysys, Inc. 289,600 5,007,184
Benchmark Electronics, Inc. (a) 848,950 25,298,710
Gerber Scientific, Inc. (a) 287,400 1,893,966
Itron, Inc. (a) 300,300 5,240,235
K-Tron International, Inc. (a) 41,710 922,625
Keithley Instruments, Inc. 343,640 5,996,518
LeCroy Corp. (a) 139,500 2,331,045
LSI Industries, Inc. 900,965 9,406,075
Merix Corp. (a) 403,600 4,181,296
Rogers Corp. (a) 82,200 3,492,678
Technitrol, Inc. (a) 313,010 6,103,695
-------------
Electronic Equipment & Instruments Total 69,874,027
INTERNET SOFTWARE & SERVICES - 0.4%
Allscripts Healthcare Solutions, Inc. (a)200,000 1,800,000
Selectica, Inc. (a) 682,300 2,585,917
Tumbleweed Communications
Corp. (a) 900,000 2,277,000
-------------
Internet Software & Services Total 6,662,917
IT SERVICES - 2.1%
Analysts International Corp. (a) 530,700 2,324,466
Carreker Corp. (a) 286,500 2,180,265
Computer Task Group, Inc. (a) 792,500 2,464,675
Inforte Corp. (a) 500,000 3,450,000
Integral Systems, Inc. 168,100 3,279,631
ProQuest Co. (a) 394,230 10,131,711
SI International, Inc. (a) 42,400 928,984
Startek, Inc. 265,200 8,316,672
-------------
IT Services Total 33,076,404
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.9%
Anadigics, Inc. (a) 364,300 1,227,691
Asyst Technologies, Inc. (a) 155,700 795,627
Fairchild Semiconductor International,
Inc., Class A (a) 472,100 6,689,657
Pericom Semiconductor Corp. (a) 400,460 3,868,444
STATS ChipPAC Ltd., ADR (a) 281,184 1,681,480
-------------
Semiconductors & Semiconductor
Equipment Total 14,262,899
SOFTWARE - 2.9%
BindView Development Corp. (a) 1,510,500 5,014,860
MAPICS, Inc. (a) 179,400 1,623,570
MapInfo Corp. (a) 249,000 2,689,200
Mediware Information Systems, Inc. (a) 314,600 3,696,550
Mentor Graphics Corp. (a) 289,200 3,171,078
MSC.Software Corp. (a) 460,515 3,702,540
PLATO Learning, Inc. (a) 519,200 4,589,728
Progress Software Corp. (a) 296,500 5,900,350
Sybase, Inc. (a) 640,600 8,833,874
THQ, Inc. (a) 288,000 5,604,480
-------------
Software Total 44,826,230
-------------
INFORMATION TECHNOLOGY TOTAL 204,857,036
SHARES VALUE ($)
------- -------------
MATERIALS - 7.3%
CHEMICALS - 4.1%
Airgas, Inc. 251,900 6,063,233
Albemarle Corp. 246,360 8,644,772
Cambrex Corp. 296,700 6,512,565
H.B. Fuller Co. 330,860 9,065,564
MacDermid, Inc. 475,200 13,761,792
Olin Corp. 176,900 3,538,000
Sensient Technologies Corp. 307,800 6,660,792
Spartech Corp. 412,800 10,361,280
-------------
Chemicals Total 64,607,998
CONTAINERS & PACKAGING - 1.5%
Greif, Inc., Class A 359,600 15,157,140
Jarden Corp. (a) 124,050 4,526,584
Longview Fibre Co. 204,800 3,123,200
Peak International Ltd. (a) 244,650 1,272,180
-------------
Containers & Packaging Total 24,079,104
METALS & MINING - 1.3%
Brush Engineered Materials, Inc. (a) 258,800 5,359,748
GrafTech International Ltd. (a) 369,500 5,154,525
Hecla Mining Co. (a) 298,300 2,219,352
Northwest Pipe Co. (a) 303,150 5,259,653
Steel Dynamics, Inc. 81,800 3,159,116
-------------
Metals & Mining Total 21,152,394
PAPER & FOREST PRODUCTS - 0.4%
Buckeye Technologies, Inc. (a) 144,900 1,615,635
Glatfelter 331,440 4,106,542
-------------
Paper & Forest Products Total 5,722,177
-------------
MATERIALS TOTAL 115,561,673
TELECOMMUNICATION SERVICES - 0.5%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.4%
CT Communications, Inc. 208,400 2,873,836
General Communication, Inc.,
Class A (a) 417,300 3,776,565
-------------
Diversified Telecommunication Services Total 6,650,401
WIRELESS TELECOMMUNICATION SERVICES - 0.1%
LCC International, Inc., Class A (a) 560,700 1,783,026
-------------
Wireless Telecommunication Services Total 1,783,026
-------------
TELECOMMUNICATION SERVICES TOTAL 8,433,427
UTILITIES - 2.8%
ELECTRIC UTILITIES - 0.2%
Idacorp, Inc. 102,800 2,987,368
-------------
Electric Utilities Total 2,987,368
GAS UTILITIES - 2.0%
Cascade Natural Gas Corp. 92,550 1,964,837
New Jersey Resources Corp. 158,750 6,572,250
Northwest Natural Gas Co. 154,700 4,908,631
NUI Corp. 468,100 6,244,454
See Accompanying Notes to Financial Statements.
62
________________________________________________________________________________
September 30, 2004 Columbia Small Cap Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
UTILITIES - (CONTINUED)
GAS UTILITIES - (CONTINUED)
South Jersey Industries, Inc. 105,500 5,037,625
Southwest Gas Corp. 301,500 7,220,925
-------------
Gas Utilities Total 31,948,722
WATER UTILITIES - 0.6%
American States Water Co. 135,150 3,365,235
Aqua America, Inc. 124,468 2,751,987
California Water Service Group 104,200 3,060,354
-------------
Water Utilities Total 9,177,576
-------------
UTILITIES TOTAL 44,113,666
TOTAL COMMON STOCKS
(cost of $1,258,768,324) 1,430,243,213
INVESTMENT COMPANIES - 2.5%
iShares Russell 2000 Index Fund 310,000 35,293,500
iShares Russell 2000 Value Index Fund 30,000 5,150,700
-------------
TOTAL INVESTMENT COMPANIES
(cost of $39,264,683) 40,444,200
PAR ($)
-------
SHORT-TERM OBLIGATION - 7.2%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by U.S. Treasury
Bonds with various maturities to
08/15/29, market value $115,288,413
(repurchase proceeds $113,019,960) 113,015,000 113,015,000
TOTAL SHORT-TERM OBLIGATION
(cost of $113,015,000) 113,015,000
TOTAL INVESTMENTS - 100.5%
(COST OF $1,411,048,007) (D) 1,583,702,413
OTHER ASSETS & LIABILITIES, NET - (0.5)% (8,328,706)
NET ASSETS - 100.0% 1,575,373,707
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Investments in affiliated companies at September 30, 2004:
An affiliated company is a company in which the Fund has ownership of at
least 5% of the voting shares outstanding.
Security name: Checkers Drive-In Restaurant, Inc.
Shares as of 09/30/03: 319,000
Shares purchased: 288,900
Shares as of 09/30/04: 607,900
Net realized gain (loss): $ --
Dividend income earned: $ --
Value at end of period: $ 7,142,825
Security name: Total Entertainment
Restaurant Corp.
Shares as of 09/30/03: 0
Shares purchased: 501,000
Shares as of 09/30/04: 501,000
Net realized gain (loss): $ --
Dividend income earned: $ --
Value at end of period: $ 4,363,710
Security name: Unifirst Corp.
Shares as of 09/30/03: 422,800
Shares purchased: 50,000
Shares as of 09/30/04: 472,800
Net realized gain (loss): $ --
Dividend income earned: $ 69,420
Value at end of period: $ 13,522,080
Security name: Cornell Companies, Inc.
Shares as of 09/30/03: 343,100
Shares purchased: 422,500
Shares as of 09/30/04: 765,600
Net realized loss: $ --
Dividend income earned: $ --
Value at end of period: $ 9,493,440
Security name: Key Technology, Inc.
Shares as of 09/30/03: 203,665
Shares purchased: 70,000
Shares sold: 14,400
Shares as of 09/30/04: 259,265
Net realized gain or loss: $ (54,023)
Dividend income earned: $ --
Value at end of period: $ 2,916,731
(c) Represents fair value as determined in good faith under the direction of
the Board of Trustees.
(d) Cost for federal income tax purposes is $1,411,878,088.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
63
INVESTMENT PORTFOLIO ___________________________________________________________
September 30, 2004 Columbia Small Company Equity Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - 99.9%
CONSUMER DISCRETIONARY - 16.5%
HOTELS, RESTAURANTS & LEISURE - 3.6%
Alliance Gaming Corp. (a) 151,600 2,283,096
Gaylord Entertainment Co. (a) 131,400 4,073,400
Pinnacle Entertainment, Inc. (a) 191,600 2,644,080
Scientific Games Corp., Class A (a) 234,600 4,480,860
-------------
Hotels, Restaurants & Leisure Total 13,481,436
LEISURE EQUIPMENT & PRODUCTS - 0.7%
Marvel Enterprises, Inc. (a) 192,800 2,807,168
-------------
Leisure Equipment & Products Total 2,807,168
MEDIA - 4.6%
Arbitron, Inc. (a) 98,200 3,595,102
Cumulus Media, Inc., Class A (a) 173,700 2,499,543
Journal Communications, Inc., Class A 4,700 82,438
Lin TV Corp., Class A (a) 171,000 3,331,080
Radio One, Inc., Class D (a) 209,300 2,978,339
Sinclair Broadcast Group, Inc., Class A 397,800 2,903,940
TiVo, Inc. (a) 316,600 2,095,892
-------------
Media Total 17,486,334
MULTILINE RETAIL - 0.6%
Fred's, Inc. 122,600 2,201,896
-------------
Multiline Retail Total 2,201,896
SPECIALTY RETAIL - 6.3%
Bombay Co., Inc. (a) 416,000 3,049,280
Cost Plus, Inc. (a) 128,700 4,553,406
Jarden Corp. (a) 152,000 5,546,480
Pacific Sunwear of California, Inc. (a) 131,900 2,776,495
Party City Corp. (a) 99,900 1,475,523
PETCO Animal Supplies, Inc. (a) 98,900 3,230,074
Sharper Image Corp. (a) 161,900 3,472,755
-------------
Specialty Retail Total 24,104,013
TEXTILES, APPAREL & LUXURY GOODS - 0.7%
Carter's, Inc. (a) 96,900 2,683,161
-------------
Textiles, Apparel & Luxury Goods Total 2,683,161
-------------
CONSUMER DISCRETIONARY TOTAL 62,764,008
CONSUMER STAPLES - 0.4%
FOOD & STAPLES RETAILING - 0.4%
Performance Food Group Co. (a) 58,700 1,391,190
-------------
Food & Staples Retailing Total 1,391,190
-------------
CONSUMER STAPLES TOTAL 1,391,190
ENERGY - 3.7%
ENERGY EQUIPMENT & SERVICES - 2.3%
Key Energy Services, Inc. (a) 235,000 2,596,750
Maverick Tube Corp. (a) 83,900 2,584,959
Unit Corp. (a) 105,000 3,683,400
-------------
Energy Equipment & Services Total 8,865,109
SHARES VALUE ($)
------- -------------
OIL & GAS - 1.4%
Edge Petroleum Corp. (a) 75,800 1,210,526
Energy Partners Ltd. (a) 29,000 472,120
Mission Resources Corp. (a) 265,400 1,669,366
Western Gas Resources, Inc. 70,400 2,012,736
-------------
Oil & Gas Total 5,364,748
-------------
ENERGY TOTAL 14,229,857
FINANCIALS - 10.9%
CAPITAL MARKETS - 1.1%
Jefferies Group, Inc. 128,300 4,422,501
-------------
Capital Markets Total 4,422,501
COMMERCIAL BANKS - 3.8%
Boston Private Financial Holdings, Inc. 125,800 3,139,968
East West Bancorp, Inc. 109,400 3,674,746
Mercantile Bank Corp. 102,165 3,559,428
Prosperity Bancshares, Inc. 148,000 3,954,560
-------------
Commercial Banks Total 14,328,702
DIVERSIFIED FINANCIAL SERVICES - 3.8%
ACE Cash Express, Inc. (a) 91,300 2,377,452
Commercial Capital Bancorp, Inc. 148,100 3,360,389
Greenhill & Co., Inc. 121,800 2,874,480
MTC Technologies, Inc. (a) 135,700 3,749,391
National Financial Partners Corp. 59,900 2,143,222
-------------
Diversified Financial Services Total 14,504,934
INSURANCE - 2.2%
Infinity Property & Casualty Corp. 154,200 4,553,526
Philadelphia Consolidated Holding
Co. (a) 66,900 3,687,528
-------------
Insurance Total 8,241,054
-------------
FINANCIALS TOTAL 41,497,191
HEALTH CARE - 22.8%
BIOTECHNOLOGY - 4.8%
BioMarin Pharmaceuticals, Inc. (a) 374,100 1,941,579
Cell Therapeutics, Inc. (a) 321,400 2,204,804
Cytogen Corp. (a) 161,300 1,700,102
Exact Sciences Corp. (a) 228,800 755,040
NeoPharm, Inc. (a) 303,700 2,599,672
Neurocrine Biosciences, Inc. (a) 50,100 2,362,716
Protein Design Labs, Inc. (a) 157,900 3,091,682
Telik, Inc. (a) 164,300 3,663,890
-------------
Biotechnology Total 18,319,485
HEALTH CARE EQUIPMENT & SUPPLIES - 7.0%
Bio-Rad Laboratories, Inc., Class A (a) 50,050 2,557,555
Cardiac Science, Inc. (a) 542,700 1,041,984
Conceptus, Inc. (a) 227,400 2,107,998
Cytyc Corp. (a) 86,800 2,096,220
Integra LifeSciences Holdings Corp. (a) 118,400 3,801,824
LCA-Vision, Inc. 120,000 3,094,800
Medical Action Industries, Inc. (a) 231,900 3,856,033
See Accompanying Notes to Financial Statements.
64
________________________________________________________________________________
September 30, 2004 Columbia Small Company Equity Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES - (CONTINUED)
Palomar Medical Technologies, Inc. (a) 67,900 1,488,368
SonoSite, Inc. (a) 155,600 4,053,380
SurModics, Inc. (a) 103,900 2,467,625
-------------
Health Care Equipment & Supplies Total 26,565,787
HEALTH CARE PROVIDERS & SERVICES - 3.4%
Advisory Board Co. (a) 127,300 4,277,280
America Service Group, Inc. (a) 63,700 2,614,248
Isolagen, Inc. (a) 230,000 2,173,500
LifePoint Hospitals, Inc. (a) 90,800 2,724,908
U.S. Physical Therapy, Inc. (a) 86,500 1,175,535
-------------
Health Care Providers & Services Total 12,965,471
PHARMACEUTICALS - 7.6%
Advancis Pharmaceutical Corp. (a) 253,863 2,068,984
Atrix Labs, Inc. (a) 99,800 3,062,862
Bone Care International, Inc. (a) 125,400 3,047,220
Caraco Pharmaceutical Laboratories
Ltd. (a) 88,800 683,760
DepoMed, Inc. (a) 462,500 2,414,250
DOV Pharmaceutical, Inc. (a) 208,100 3,566,834
Nektar Therapeutics (a) 207,200 3,000,256
Noven Pharmaceuticals, Inc. (a) 187,700 3,911,668
Renovis, Inc. (a) 214,400 1,717,344
Salix Pharmaceuticals Ltd. (a) 164,100 3,531,432
Taro Pharmaceuticals Industries
Ltd. (a) 78,600 1,837,668
-------------
Pharmaceuticals Total 28,842,278
-------------
HEALTH CARE TOTAL 86,693,021
INDUSTRIALS - 14.4%
AEROSPACE & DEFENSE - 1.3%
DRS Technologies, Inc. (a) 129,700 4,855,968
-------------
Aerospace & Defense Total 4,855,968
AIR FREIGHT & LOGISTICS - 2.1%
EGL, Inc. (a) 134,000 4,054,840
UTI Worldwide, Inc. 64,300 3,781,483
-------------
Air Freight & Logistics Total 7,836,323
COMMERCIAL SERVICES & SUPPLIES - 4.8%
Corporate Executive Board Co. 55,100 3,374,324
Educate, Inc. (a) 215,100 2,536,029
Laureate Education, Inc. (a) 76,500 2,847,330
MDC Partners, Inc., Class A (a) 248,300 3,148,444
Navigant Consulting, Inc. (a) 130,100 2,856,996
NCO Group, Inc. (a) 124,100 3,344,495
-------------
Commercial Services & Supplies Total 18,107,618
SHARES VALUE ($)
------- -------------
CONSTRUCTION & ENGINEERING - 0.9%
Chicago Bridge & Iron Co., NV,
N.Y. Registered Shares 119,000 3,568,810
-------------
Construction & Engineering Total 3,568,810
ELECTRICAL EQUIPMENT - 0.5%
Plug Power, Inc. (a) 320,000 2,051,200
-------------
Electrical Equipment Total 2,051,200
INDUSTRIAL CONGLOMERATES - 0.2%
BioSante Pharmaceuticals, Inc. (a) 67,900 611,779
-------------
Industrial Conglomerates Total 611,779
MACHINERY - 1.5%
Cuno, Inc. (a) 63,875 3,688,781
RAE Systems, Inc. (a) 360,500 2,011,590
-------------
Machinery Total 5,700,371
ROAD & RAIL - 2.6%
Genesee & Wyoming, Inc., Class A (a) 149,550 3,786,606
Heartland Express, Inc. 190,050 3,506,423
Sirva, Inc. (a) 122,000 2,793,800
-------------
Road & Rail Total 10,086,829
TRADING COMPANIES & DISTRIBUTORS - 0.5%
Aceto Corp. 143,000 2,059,200
-------------
Trading Companies & Distributors Total 2,059,200
-------------
INDUSTRIALS TOTAL 54,878,098
INFORMATION TECHNOLOGY - 29.0%
COMMUNICATIONS EQUIPMENT - 3.0%
F5 Networks, Inc. (a) 113,800 3,466,348
Finisar Corp. (a) 773,000 1,004,900
Foundry Networks, Inc. (a) 282,000 2,676,180
Inter-Tel, Inc. 99,200 2,144,704
Netopia, Inc. (a) 195,100 417,514
NMS Communications Corp. (a) 306,100 1,493,768
-------------
Communications Equipment Total 11,203,414
COMPUTERS & PERIPHERALS - 2.3%
Applied Films Corp. (a) 120,300 2,166,603
Cray, Inc. (a) 441,600 1,558,848
PalmSource, Inc. (a) 166,900 3,461,506
Pinnacle Systems, Inc. (a) 361,200 1,506,204
-------------
Computers & Peripherals Total 8,693,161
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.1%
Anixter International, Inc. 89,400 3,137,046
Global Imaging Systems, Inc. (a) 124,200 3,860,136
Itron, Inc. (a) 170,000 2,966,500
OSI Systems, Inc. (a) 124,000 1,996,400
-------------
Electronic Equipment & Instruments Total 11,960,082
See Accompanying Notes to Financial Statements.
65
________________________________________________________________________________
September 30, 2004 Columbia Small Company Equity Fund
SHARES VALUE ($)
------- -------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (CONTINUED)
INTERNET SOFTWARE & SERVICES - 4.1%
Corillian Corp. (a) 640,300 2,951,783
Digital River, Inc. (a) 102,300 3,046,494
Digitas, Inc. (a) 395,000 3,053,350
Equinix, Inc. (a) 68,700 2,113,899
PEC Solutions, Inc. (a) 27,300 319,956
Retek, Inc. (a) 622,800 2,839,968
Telecommunication Systems, Inc.,
Class A (a) 366,700 1,177,107
-------------
Internet Software & Services Total 15,502,557
IT SERVICES - 0.6%
MAXIMUS, Inc. (a) 81,500 2,348,015
-------------
IT Services Total 2,348,015
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.4%
Artisan Components, Inc. (a) 111,200 3,237,032
August Technology Corp. (a) 172,200 1,183,014
Brooks Automation, Inc. (a) 246,300 3,485,145
DSP Group, Inc. (a) 87,100 1,833,455
Entegris, Inc. (a) 443,800 3,701,292
FEI Co. (a) 138,000 2,726,880
Integrated Circuit Systems, Inc. (a) 78,900 1,696,350
IXYS Corp. (a) 425,300 3,053,654
Laedis Technology, Inc., (a) 151,800 1,712,304
Mykrolis Corp. (a) 221,700 2,232,519
Silicon Image, Inc. (a) 363,000 4,588,320
Silicon Storage Technology, Inc. (a) 347,300 2,212,301
Ultratech, Inc. (a) 189,200 2,964,764
Zoran Corp. (a) 80,000 1,257,600
-------------
Semiconductors & Semiconductor
Equipment Total 35,884,630
SOFTWARE - 6.5%
Activision, Inc. (a) 197,850 2,744,179
Captiva Software Corp. (a) 264,200 2,959,040
Epicor Software Corp. (a) 165,700 1,993,371
FileNET Corp. (a) 90,800 1,585,368
Magma Design Automation, Inc. (a) 197,600 2,979,808
Manhattan Associates, Inc. (a) 99,800 2,437,116
Micromuse, Inc. (a) 680,500 2,504,240
OpenTV Corp., Class A (a) 669,100 2,040,755
ScanSoft, Inc. (a) 409,600 1,671,168
Take-Two Interactive Software, Inc. (a) 58,200 1,911,870
Verity, Inc. (a) 143,600 1,849,568
-------------
Software Total 24,676,483
-------------
INFORMATION TECHNOLOGY TOTAL 110,268,342
SHARES VALUE ($)
------- -------------
MATERIALS - 2.2%
CHEMICALS - 0.5%
Landec Corp. (a) 254,500 1,908,750
-------------
Chemicals Total 1,908,750
METALS & MINING - 1.7%
AMCOL International Corp. 69,100 1,321,192
Oregon Steel Mills, Inc. (a) 176,600 2,936,858
Steel Technologies, Inc. 92,100 2,359,326
-------------
Metals & Mining Total 6,617,376
-------------
MATERIALS TOTAL 8,526,126
TOTAL COMMON STOCKS
(cost of $342,225,932) 380,247,833
PAR ($)
-------
SHORT-TERM OBLIGATION - 0.9%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/04, due 10/01/04 at 1.580%,
collateralized by a U.S. Treasury
Bond maturing 05/15/14, market
value $3,370,725 (repurchase
proceeds $3,301,145) 3,301,000 3,301,000
TOTAL SHORT-TERM OBLIGATION
(cost of $3,301,000) 3,301,000
TOTAL INVESTMENTS - 100.8%
(COST OF $345,526,932) (b) 383,548,833
OTHER ASSETS & LIABILITIES, NET - (0.8)% (3,122,097)
NET ASSETS - 100.0% 380,426,736
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $346,364,563.
See Accompanying Notes to Financial Statements.
66
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STATEMENTS OF ASSETS AND LIABILITIES ___________________________________________
September 30, 2004 Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED INTERNATIONAL
ALLOCATION GROWTH VALUE EQUITY
FUND ($) FUND ($) FUND ($) FUND ($)
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
Unaffiliated investments, at identified cost 381,197,274 786,800,382 404,138,428 440,434,711
Affiliated investments, at identified cost -- -- -- --
-------------- -------------- -------------- --------------
Total investments, at identified cost 381,197,274 786,800,382 404,138,428 440,434,711
-------------- -------------- -------------- --------------
Unaffiliated investments, at value 421,034,670 910,147,591 429,496,684 481,772,004
Affiliated investments, at value -- -- -- --
-------------- -------------- -------------- --------------
Total investments, at value 421,034,670 910,147,591 429,496,684 481,772,004
Cash 197,969 593 282 626
Foreign currency (cost of $209,664 and
$1,816,469, respectively) 210,105 -- -- 1,818,067
Receivable for:
Investments sold 6,227,032 17,058,429 -- 6,588,721
Fund shares sold 20,325 851,997 109,918 1,203,954
Interest 1,396,544 418 93 830
Dividends 284,129 510,275 526,880 798,031
Foreign tax reclaim 22,792 24,721 -- 376,693
Deferred compensation plan 25,715 49,291 20,765 22,130
-------------- -------------- -------------- --------------
Total assets 429,419,281 928,643,315 430,154,622 492,581,056
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for:
Investments purchased 4,329,988 14,867,948 -- 5,529,161
Fund shares repurchased 1,163,562 4,681,197 420,707 646,077
Investment advisory fee 263,790 545,839 262,720 249,307
Administration fee 23,692 50,415 23,469 24,541
Transfer agent fee 180,541 252,485 96,573 39,597
Pricing and bookkeeping fees 12,001 7,525 4,584 6,725
Trustees' fees 1,549 2,639 1,289 1,439
Distribution and service fees 82,448 95,062 41,879 15,062
Custody fee 15,528 2,884 1,436 24,853
Deferred compensation plan 25,715 49,291 20,765 22,130
Deferred foreign capital gains tax payable 28,954 -- -- 242,619
Other liabilities 64,091 79,148 43,662 45,831
-------------- -------------- -------------- --------------
Total liabilities 6,191,859 20,634,433 917,084 6,847,342
NET ASSETS 423,227,422 908,008,882 429,237,538 485,733,714
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital 394,916,016 925,969,281 415,268,926 747,333,619
Undistributed (overdistributed)
net investment income (577,690) -- (13,047) 2,288,505
Accumulated net investment loss -- (31,890) -- --
Accumulated net realized gain (loss) (10,918,763) (141,275,718) (11,376,597) (305,003,997)
Unrealized appreciation (depreciation) on:
Investments 39,837,396 123,347,209 25,358,256 41,337,293
Foreign currency translations (583) -- -- 20,913
Foreign capital gains tax (28,954) -- -- (242,619)
-------------- -------------- -------------- --------------
NET ASSETS 423,227,422 908,008,882 429,237,538 485,733,714
COLUMBIA
COLUMBIA COLUMBIA SMALL
LARGE CAP SMALL COMPANY
CORE CAP EQUITY
FUND ($) FUND ($) FUND ($)
- -----------------------------------------------------------------------------------------------------------
ASSETS
Unaffiliated investments, at identified cost 361,214,523 1,379,039,197 345,526,932
Affiliated investments, at identified cost -- 32,008,810 --
-------------- -------------- --------------
Total investments, at identified cost 361,214,523 1,411,048,007 345,526,932
-------------- -------------- --------------
Unaffiliated investments, at value 385,173,467 1,546,263,627 383,548,833
Affiliated investments, at value -- 37,438,786 --
-------------- -------------- --------------
Total investments, at value 385,173,467 1,583,702,413 383,548,833
Cash 534 282,053 149
Foreign currency (cost of $209,664 and
$1,816,469, respectively) -- -- --
Receivable for:
Investments sold 28,675,351 3,937,511 1,770,137
Fund shares sold 329,944 932,879 684,604
Interest 44 4,960 145
Dividends 291,766 1,239,253 41,300
Foreign tax reclaim 3,899 1,841 476
Deferred compensation plan 24,329 21,991 18,483
-------------- -------------- --------------
Total assets 414,499,334 1,590,122,901 386,064,127
- -----------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for:
Investments purchased 29,374,346 6,383,829 4,535,828
Fund shares repurchased 687,760 6,894,392 630,406
Investment advisory fee 239,536 891,848 230,241
Administration fee 22,352 83,577 20,568
Transfer agent fee 96,714 190,321 130,392
Pricing and bookkeeping fees 4,696 11,041 4,634
Trustees' fees 1,389 2,639 1,289
Distribution and service fees 63,220 171,773 23,250
Custody fee 3,682 3,493 1,797
Deferred compensation plan 24,329 21,991 18,483
Deferred foreign capital gains tax payable -- -- --
Other liabilities 54,192 94,290 40,503
-------------- -------------- --------------
Total liabilities 30,572,216 14,749,194 5,637,391
NET ASSETS 383,927,118 1,575,373,707 380,426,736
- -----------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital 350,412,564 1,312,328,884 380,167,611
Undistributed (overdistributed)
net investment income (16,638) -- --
Accumulated net investment loss -- (12,009) (11,506)
Accumulated net realized gain (loss) 9,572,248 90,402,426 (37,751,270)
Unrealized appreciation (depreciation) on:
Investments 23,958,944 172,654,406 38,021,901
Foreign currency translations -- -- --
Foreign capital gains tax -- -- --
-------------- -------------- --------------
NET ASSETS 383,927,118 1,575,373,707 380,426,736
See Accompanying Notes to Financial Statements.
68
STATEMENTS OF ASSETS AND LIABILITIES ___________________________________________
Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED INTERNATIONAL
ALLOCATION GROWTH VALUE EQUITY
FUND ($) FUND ($) FUND ($) FUND ($)
----------------------------------------------------------------------------------------------------------------------------
CLASS A
Net assets 2,900,661 3,866,530 2,511,215 871,554
Shares outstanding 192,552 208,236 197,522 70,564
Net asset value per share (a) 15.06 18.57 12.71 12.35
Maximum sales charge 5.75% 5.75% 5.75% 5.75%
Maximum offering price per share (b) 15.98 19.70 13.49 13.10
----------------------------------------------------------------------------------------------------------------------------
CLASS B
Net assets 4,926,481 3,195,171 2,370,284 931,487
Shares outstanding 327,151 179,878 194,854 76,246
Net asset value and offering price per share (a)(b) 15.06 17.76 12.16 12.22
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C
Net assets 513,816 780,155 290,936 104,189
Shares outstanding 34,113 43,857 23,960 8,581
Net asset value and offering price per share (a)(b) 15.06 17.79 12.14 12.14
- ----------------------------------------------------------------------------------------------------------------------------
CLASS G
Net assets 39,892,086 46,327,886 7,501,669 4,872,891
Shares outstanding 2,649,365 2,692,113 616,456 402,074
Net asset value and offering price per share (a)(b) 15.06 17.21 12.17 12.12
- ----------------------------------------------------------------------------------------------------------------------------
CLASS T
Net assets 183,437,976 219,128,845 133,094,180 41,359,071
Shares outstanding 12,173,067 11,870,378 10,466,559 3,357,923
Net asset value per share (a) 15.07 18.46 12.72 12.32
Maximum sales charge 5.75% 5.75% 5.75% 5.75%
Maximum offering price per share (b) 15.99 19.59 13.50 13.07
----------------------------------------------------------------------------------------------------------------------------
CLASS Z
Net assets 191,556,402 634,710,295 283,469,254 437,594,522
Shares outstanding 12,720,870 33,634,867 21,890,242 34,873,505
Net asset value and offering price per share (c) 15.06 18.87 12.95 12.55
COLUMBIA
COLUMBIA COLUMBIA SMALL
LARGE CAP SMALL COMPANY
CORE CAP EQUITY
FUND ($) FUND ($) FUND ($)
- -----------------------------------------------------------------------------------------------------------
CLASS A
Net assets 9,304,104 211,501,578 4,585,904
Shares outstanding 774,729 12,058,127 287,611
Net asset value per share (a) 12.01 17.54 15.94
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (b) 12.74 18.61 16.91
-----------------------------------------------------------------------------------------------------------
CLASS B
Net assets 3,424,661 40,169,917 1,825,934
Shares outstanding 293,289 2,377,952 122,671
Net asset value and offering price per share (a)(b) 11.68 16.89 14.88
- -----------------------------------------------------------------------------------------------------------
CLASS C
Net assets 344,713 64,686,315 982,391
Shares outstanding 29,516 3,826,115 66,181
Net asset value and offering price per share (a)(b) 11.68 16.91 14.84
- -----------------------------------------------------------------------------------------------------------
CLASS G
Net assets 16,418,967 10,952,320 4,564,655
Shares outstanding 1,419,394 653,847 307,317
Net asset value and offering price per share (a)(b) 11.57 16.75 14.85
- -----------------------------------------------------------------------------------------------------------
CLASS T
Net assets 179,310,453 146,752,072 68,358,682
Shares outstanding 15,001,630 8,435,145 4,293,137
Net asset value per share (a) 11.95 17.40 15.92
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (b) 12.68 18.46 16.89
- -----------------------------------------------------------------------------------------------------------
CLASS Z
Net assets 175,124,220 1,101,311,505 300,109,170
Shares outstanding 14,532,215 62,130,303 17,819,129
Net asset value and offering price per share (c) 12.05 17.73 16.84
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
(c) Redemption price per share is equal to net asset value less any applicable
redemption fees.
See Accompanying Notes to Financial Statements.
69
STATEMENTS OF OPERATIONS _______________________________________________________
For the Year Ended September 30, 2004 Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED INTERNATIONAL
ALLOCATION GROWTH VALUE EQUITY
FUND ($) FUND ($) FUND ($) FUND ($)
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
INCOME
Dividends 4,896,276 8,595,842 11,116,023 9,727,198
Dividends from affiliates -- -- -- --
Interest 8,407,262 73,121 35,115 143,594
Foreign withholding tax (139,631) (98,072) -- (990,348)
-------------- -------------- -------------- --------------
Total income 13,163,907 8,570,891 11,151,138 8,880,444
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee 3,448,055 7,131,628 3,108,611 4,214,630
Administration fee 308,026 657,017 277,702 316,447
Distribution fee:
Class B 29,398 17,951 10,653 5,064
Class C 3,016 5,054 1,587 683
Class G 324,721 346,467 62,491 34,284
Service fee:
Class A 5,251 8,125 4,475 1,544
Class B 9,789 5,973 3,545 1,684
Class C 1,004 1,685 528 229
Class G 149,871 159,908 28,842 15,823
Shareholder service fee-Class T 576,354 718,452 409,010 133,528
Transfer agent fee:
Class A 4,975 6,178 3,104 725
Class B 9,324 4,643 2,473 645
Class C 973 1,285 384 128
Class G 127,179 120,377 20,941 12,020
Class T 469,440 489,583 252,295 71,362
Class Z 509,596 1,301,556 463,593 301,005
Pricing and bookkeeping fees 148,514 112,216 57,257 83,461
Trustees' fees 14,973 28,288 16,796 14,278
Custody fee 234,419 42,175 16,571 261,438
Non-recurring costs (See Note 10) 21,519 46,518 20,002 23,162
Other expenses 214,394 292,721 216,963 142,055
-------------- -------------- -------------- --------------
Total expenses 6,610,791 11,497,800 4,977,823 5,634,195
Expenses waived or reimbursed
by Investment Advisor (12,117) (21,381) -- (1,180,929)
Fees waived by Transfer Agent:
Class A -- -- -- (70)
Class B -- -- -- (76)
Class C -- -- -- (10)
Class G -- -- -- (3,839)
Class T -- -- -- (16,670)
Class Z -- -- -- (42,292)
Custody earnings credit (1,348) (711) (28) (461)
-------------- -------------- -------------- --------------
Non-recurring costs assumed by
Investment Advisor (See Note 10) (21,519) (46,518) (20,002) (23,162)
-------------- -------------- -------------- --------------
Net expenses 6,575,807 11,429,190 4,957,793 4,366,686
-------------- -------------- -------------- --------------
Net Investment Income (Loss) 6,588,100 (2,858,299) 6,193,345 4,513,758
COLUMBIA
COLUMBIA COLUMBIA SMALL
LARGE CAP SMALL COMPANY
CORE CAP EQUITY
FUND ($) FUND ($) FUND ($)
- -----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
INCOME
Dividends 5,600,615 9,690,463 676,989
Dividends from affiliates -- 69,420 --
Interest 17,851 1,233,433 52,968
Foreign withholding tax (48,130) (30,015) --
-------------- -------------- --------------
Total income 5,570,336 10,963,301 729,957
- -----------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee 3,150,172 10,191,194 3,023,227
Administration fee 281,415 969,722 270,075
Distribution fee:
Class B 24,301 247,007 8,081
Class C 2,875 390,034 3,496
Class G 155,589 72,803 38,641
Service fee:
Class A 23,439 426,677 4,283
Class B 8,090 82,244 2,689
Class C 958 129,876 1,162
Class G 71,810 33,601 17,835
Shareholder service fee-Class T 575,263 453,076 221,342
Transfer agent fee:
Class A 20,258 162,894 3,500
Class B 6,577 32,075 2,164
Class C 795 50,043 905
Class G 65,869 11,888 19,177
Class T 423,519 148,245 174,342
Class Z 353,912 937,141 616,396
Pricing and bookkeeping fees 57,406 139,317 58,589
Trustees' fees 15,110 30,570 16,289
Custody fee 27,542 53,200 22,152
Non-recurring costs (See Note 10) 19,890 74,770 19,440
Other expenses 185,544 420,571 221,101
-------------- -------------- --------------
Total expenses 5,470,334 15,056,948 4,744,886
Expenses waived or reimbursed
by Investment Advisor -- (28,816) --
Fees waived by Transfer Agent:
Class A (317) -- (147)
Class B (115) -- (92)
Class C (13) -- (41)
Class G (5,058) -- (379)
Class T (6,203) -- (14,211)
Class Z (6,157) -- (21,654)
Custody earnings credit -- (7,503) (1,323)
-------------- -------------- --------------
Non-recurring costs assumed by
Investment Advisor (See Note 10) (19,890) (74,770) (19,440)
-------------- -------------- --------------
Net expenses 5,432,581 14,945,859 4,687,599
-------------- -------------- --------------
Net Investment Income (Loss) 137,755 (3,982,558) (3,957,642)
See Accompanying Notes to Financial Statements.
70
STATEMENTS OF OPERATIONS _______________________________________________________
Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED INTERNATIONAL
ALLOCATION GROWTH VALUE EQUITY
FUND ($) FUND ($) FUND ($) FUND ($)
- -----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, FOREIGN CURRENCY
AND FOREIGN CAPITAL GAINS TAX
Net realized gain (loss) on:
Unaffiliated investments 29,863,149 35,926,964 56,049,664 61,026,111
Affiliated investments -- -- -- --
Foreign currency transactions (96,615) -- -- (730,052)
Foreign capital gains tax -- -- -- (1,497,512)
Net realized loss on the disposal of
investments purchased/sold in
error (See Note 9) -- -- -- --
-------------- -------------- -------------- --------------
Net realized gain 29,766,534 35,926,964 56,049,664 58,798,547
-------------- -------------- -------------- --------------
Net change in unrealized
appreciation/depreciation on:
Investments 6,961,384 24,493,437 2,235,576 (5,323,392)
Foreign currency translations (583) -- -- (43,018)
Foreign capital gains tax (28,954) -- -- 952,516
-------------- -------------- -------------- --------------
Net change in unrealized
appreciation/depreciation 6,931,847 24,493,437 2,235,576 (4,413,894)
-------------- -------------- -------------- --------------
Net Gain 36,698,381 60,420,401 58,285,240 54,384,653
-------------- -------------- -------------- --------------
Net Increase Resulting from Operations 43,286,481 57,562,102 64,478,585 58,898,411
COLUMBIA
COLUMBIA COLUMBIA SMALL
LARGE CAP SMALL COMPANY
CORE CAP EQUITY
FUND ($) FUND ($) FUND ($)
- ------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, FOREIGN CURRENCY
AND FOREIGN CAPITAL GAINS TAX
Net realized gain (loss) on:
Unaffiliated investments 31,566,846 101,709,890 63,906,432
Affiliated investments -- -- --
Foreign currency transactions -- -- --
Foreign capital gains tax -- -- --
Net realized loss on the disposal of
investments purchased/sold in
error (See Note 9) -- -- --
-------------- -------------- --------------
Net realized gain 31,566,846 101,709,890 63,906,432
-------------- -------------- --------------
Net change in unrealized
appreciation/depreciation on:
Investments (1,396,341) 100,021,971 (10,180,101)
Foreign currency translations -- -- --
Foreign capital gains tax -- -- --
-------------- -------------- --------------
Net change in unrealized
appreciation/depreciation (1,396,341) 100,021,971 (10,180,101)
-------------- -------------- --------------
Net Gain 30,170,505 201,731,861 53,726,331
-------------- -------------- --------------
Net Increase Resulting from Operations 30,308,260 197,749,303 49,768,689
See Accompanying Notes to Financial Statements.
71
STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________
Columbia Equity Funds
COLUMBIA ASSET ALLOCATION FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 6,588,100 8,020,538 9,550,438
Net realized gain (loss) on investments, futures
contracts, foreign currency transactions
and foreign capital gains tax 29,766,534 (10,461,088) (26,364,880)
Net change in unrealized appreciation/depreciation
of investments, futures contracts, foreign currency
translations and foreign capital gains tax 6,931,847 46,417,019 (54,121,169)
-------------- -------------- --------------
Net increase (decrease) resulting from operations 43,286,481 43,976,469 (70,935,611)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (38,123) (4,595) (817)
Class B (39,489) (9,663) (3,249)
Class C (3,850) (640) --
Class G (532,662) (666,378) (903,651)
Class T (3,361,232) (3,230,558) (4,182,650)
Class Z (4,367,911) (4,391,025) (3,849,053)
From net realized gains:
Class G -- -- --
Class T -- -- --
Class Z -- -- --
-------------- -------------- --------------
Total distributions to shareholders (8,343,267) (8,302,859) (8,939,420)
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (79,551,611) (3,427,997) (111,502,479)
Redemption fees -- -- --
-------------- -------------- --------------
Net increase (decrease) in net assets (44,608,397) 32,245,613 (191,377,510)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 467,835,819 435,590,206 626,967,716
End of period 423,227,422 467,835,819 435,590,206
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period (577,690) 821,590 1,115,554
Accumulated net investment loss at end of period -- -- --
COLUMBIA LARGE CAP GROWTH FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) (2,858,299) 831,687 1,842,652
Net realized gain (loss) on investments, futures
contracts, foreign currency transactions
and foreign capital gains tax 35,926,964 (33,599,244) (95,984,198)
Net change in unrealized appreciation/depreciation
of investments, futures contracts, foreign currency
translations and foreign capital gains tax 24,493,437 118,125,297 (145,463,165)
-------------- -------------- --------------
Net increase (decrease) resulting from operations 57,562,102 85,357,740 (239,604,711)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A -- (123) --
Class B -- -- --
Class C -- -- --
Class G -- -- --
Class T -- (2,326,221) --
Class Z (344,225) -- --
From net realized gains:
Class G -- -- --
Class T -- -- --
Class Z -- -- --
-------------- -------------- --------------
Total distributions to shareholders (344,225) (2,326,344) --
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (113,980,519) (121,172,860) (42,855,520)
Redemption fees -- -- --
-------------- -------------- --------------
Net increase (decrease) in net assets (56,762,642) (38,141,464) (282,460,231)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 964,771,524 1,002,912,988 1,285,373,219
End of period 908,008,882 964,771,524 1,002,912,988
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period -- 312,712 1,807,369
Accumulated net investment loss at end of period (31,890) -- --
COLUMBIA DISCIPLINED VALUE FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 6,193,345 1,773,200 (831,035)
Net realized gain (loss) on investments, futures
contracts, foreign currency transactions
and foreign capital gains tax 56,049,664 3,691,251 (68,065,195)
Net change in unrealized appreciation/depreciation
of investments, futures contracts, foreign currency
translations and foreign capital gains tax 2,235,576 41,060,980 (16,740,050)
-------------- -------------- --------------
Net increase (decrease) resulting from operations 64,478,585 46,525,431 (85,636,280)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (34,019) -- --
Class B (10,336) -- --
Class C (1,620) -- --
Class G (60,722) -- --
Class T (2,222,608) -- --
Class Z (5,958,609) -- --
From net realized gains:
Class G -- -- (732,810)
Class T -- -- (4,986,255)
Class Z -- -- (4,800,214)
-------------- -------------- --------------
Total distributions to shareholders (8,287,914) -- (10,519,279)
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS 8,578,064 10,199,956 45,686,823
Redemption fees -- -- --
-------------- -------------- --------------
Net increase (decrease) in net assets 64,768,735 56,725,387 (50,468,736)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 364,468,803 307,743,416 358,212,152
End of period 429,237,538 364,468,803 307,743,416
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period (13,047) 1,766,812 --
Accumulated net investment loss at end of period -- -- (8,463)
COLUMBIA INTERNATIONAL EQUITY FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 4,513,758 3,710,010 2,732,183
Net realized gain (loss) on investments, futures
contracts, foreign currency transactions
and foreign capital gains tax 58,798,547 (36,657,573) (215,475,392)
Net change in unrealized appreciation/depreciation
of investments, futures contracts, foreign currency
translations and foreign capital gains tax (4,413,894) 95,365,607 143,822,027
-------------- -------------- --------------
Net increase (decrease) resulting from operations 58,898,411 62,418,044 (68,921,182)
----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (1,624) (309) (158)
Class B -- (51) (3,271)
Class C -- (1) --
Class G -- -- (46,997)
Class T (33,041) (276,228) (1,161,415)
Class Z (2,868,268) (4,085,135) (10,992,572)
From net realized gains:
Class G -- -- --
Class T -- -- --
Class Z -- -- --
-------------- -------------- --------------
Total distributions to shareholders (2,902,933) (4,361,724) (12,204,413)
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS 35,100,538 (85,661,095) (94,416,667)
Redemption fees 53,214 -- --
-------------- -------------- --------------
Net increase (decrease) in net assets 91,149,230 (27,604,775) (175,542,262)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 394,584,484 422,189,259 597,731,521
End of period 485,733,714 394,584,484 422,189,259
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period 2,288,505 2,905,261 4,356,476
Accumulated net investment loss at end of period -- -- --
(a) The Fund changed its fiscal year end from October 31 to September 30.
See Accompanying Notes to Financial Statements.
Spread 72-73
STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________
Columbia Equity Funds
COLUMBIA LARGE CAP CORE FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 137,755 2,795,356 2,673,116
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 31,566,846 (16,524,653) (2,843,956)
Net change in unrealized appreciation/depreciation
of investments, futures contracts and foreign
currency translations (1,396,341) 50,850,870 (132,810,615)
-------------- -------------- --------------
Net increase (decrease) resulting from operations 30,308,260 37,121,573 (132,981,455)
----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (3,718) (17,426) (64)
Class B -- (86) --
Class C -- (41) --
Class G -- (34,472) --
Class T (53,896) (811,898) (264,222)
Class Z (307,876) (2,057,027) (2,074,328)
From net realized gains:
Class A -- -- (2,049)
Class B -- -- (3,781)
Class C -- -- --
Class G -- -- (1,681,983)
Class T -- -- (8,851,728)
Class Z -- -- (15,146,836)
-------------- -------------- --------------
Total distributions to shareholders (365,490) (2,920,950) (28,024,991)
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (60,613,547) (171,845,720) (55,616,582)
Net increase (decrease) in net assets (30,670,777) (137,645,097) (216,623,028)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 414,597,895 552,242,992 768,866,020
End of period 383,927,118 414,597,895 552,242,992
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period (16,638) 193,079 319,232
Accumulated net investment loss at end of period -- -- --
COLUMBIA SMALL CAP FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) (3,982,558) 279,754 648,758
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 101,709,890 36,226,379 37,781,019
Net change in unrealized appreciation/depreciation
of investments, futures contracts and foreign
currency translations 100,021,971 154,698,131 (69,887,913)
-------------- -------------- --------------
Net increase (decrease) resulting from operations 197,749,303 191,204,264 (31,458,136)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A -- -- --
Class B -- -- --
Class C -- -- --
Class G -- -- --
Class T -- -- --
Class Z -- (450,747) (445,097)
From net realized gains:
Class A (2,842,592) (23,427) (12,287)
Class B (388,822) (27,700) (17,051)
Class C (673,375) (2,462) --
Class G (236,658) (479,909) (532,460)
Class T (3,762,956) (5,982,965) (9,651,542)
Class Z (26,575,680) (25,553,703) (37,414,810)
-------------- -------------- --------------
Total distributions to shareholders (34,480,083) (32,520,913) (48,073,247)
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS 396,376,350 246,841,891 158,244,656
Net increase (decrease) in net assets 559,645,570 405,525,242 78,713,273
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 1,015,728,137 610,202,895 531,489,622
End of period 1,575,373,707 1,015,728,137 610,202,895
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period -- 214,302 80,108
Accumulated net investment loss at end of period (12,009) -- --
COLUMBIA SMALL COMPANY EQUITY FUND
--------------------------------------------------
YEAR PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (a)($) 2002 ($)
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) (3,957,642) (3,035,547) (3,342,769)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 63,906,432 (200,156) (93,471,017)
Net change in unrealized appreciation/depreciation
of investments, futures contracts and foreign
currency translations (10,180,101) 77,738,196 (2,618,304)
-------------- -------------- --------------
Net increase (decrease) resulting from operations 49,768,689 74,502,493 (99,432,090)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A -- -- --
Class B -- -- --
Class C -- -- --
Class G -- -- --
Class T -- -- --
Class Z -- -- --
From net realized gains:
Class A -- -- --
Class B -- -- --
Class C -- -- --
Class G -- -- --
Class T -- -- --
Class Z -- -- --
-------------- -------------- --------------
Total distributions to shareholders -- -- --
- ----------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (37,019,466) 9,112,934 (34,442,508)
Net increase (decrease) in net assets 12,749,223 83,615,427 (133,874,598)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 367,677,513 284,062,086 417,936,684
End of period 380,426,736 367,677,513 284,062,086
-------------- -------------- --------------
Undistributed (overdistributed) net investment income
at end of period -- -- --
Accumulated net investment loss at end of period (11,506) (8,888) (7,647)
(a) The Fund changed its fiscal year end from October 31 to September 30.
See Accompanying Notes to Financial Statements.
Spread 74-75
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________
Columbia Equity Funds
COLUMBIA ASSET ALLOCATION FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 156,246 2,338,730 90,623 1,246,966 153 1,942
Distributions reinvested 2,480 37,011 313 4,381 46 643
Redemptions (52,637) (794,225) (7,781) (105,877) (877) (12,593)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 106,089 1,581,516 83,155 1,145,470 (678) (10,008)
CLASS B
Subscriptions 187,791 2,806,475 175,332 2,371,280 132 2,002
Distributions reinvested 2,375 35,373 641 8,683 226 3,147
Redemptions (44,405) (665,807) (16,090) (219,790) (4,930) (69,201)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 145,761 2,176,041 159,883 2,160,173 (4,572) (64,052)
CLASS C
Subscriptions 26,605 398,392 15,733 208,308 -- --
Distributions reinvested 225 3,354 38 520 -- --
Redemptions (6,084) (90,769) (2,404) (32,872) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 20,746 310,977 13,367 175,956 -- --
CLASS G
Subscriptions 46,210 691,443 60,925 796,644 280,333 4,078,242
Distributions reinvested 35,018 520,503 49,383 643,841 63,424 882,934
Redemptions (1,460,481) (21,741,477) (1,779,909) (23,798,027) (1,754,424) (24,005,581)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (1,379,253) (20,529,531) (1,669,601) (22,357,542) (1,410,667) (19,044,405)
CLASS T
Subscriptions 1,030,515 15,369,640 948,459 12,980,478 1,681,657 23,448,832
Distributions reinvested 218,543 3,254,741 238,021 3,138,892 287,807 4,060,095
Redemptions (2,605,902) (39,012,056) (3,052,027) (39,894,205) (5,963,835) (82,540,616)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (1,356,844) (20,387,675) (1,865,547) (23,774,835) (3,994,371) (55,031,689)
CLASS Z
Subscriptions 885,247 13,242,156 1,650,315 21,698,761 2,688,275 38,817,973
Proceeds received in connection
with merger -- -- 9,749,490 127,523,327 -- --
Distributions reinvested 240,806 3,584,314 279,463 3,688,536 246,822 3,482,666
Redemptions (3,966,326) (59,529,409) (8,860,695) (113,687,843) (5,622,405) (79,652,964)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (2,840,273) (42,702,939) 2,818,573 39,222,781 (2,687,308) (37,352,325)
COLUMBIA LARGE CAP GROWTH FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(c) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 185,141 3,529,297 127,594 2,227,933 675 14,224
Distributions reinvested -- -- 8 122 -- --
Redemptions (84,167) (1,611,464) (23,849) (418,221) (31,158) (561,125)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 100,974 1,917,833 103,753 1,809,834 (30,483) (546,901)
CLASS B
Subscriptions 173,093 3,184,607 73,152 1,201,742 76 1,377
Distributions reinvested -- -- -- -- -- --
Redemptions (52,933) (968,494) (26,733) (445,675) (2,768) (52,491)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 120,160 2,216,113 46,419 756,067 (2,692) (51,114)
CLASS C
Subscriptions 33,259 603,292 53,880 875,203 -- --
Distributions reinvested -- -- -- -- -- --
Redemptions (20,280) (369,823) (23,002) (386,398) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 12,979 233,469 30,878 488,805 -- --
CLASS G
Subscriptions 100,874 1,790,776 137,178 2,112,439 402,662 7,699,620
Distributions reinvested -- -- -- -- -- --
Redemptions (748,063) (13,235,279) (1,043,026) (16,470,137) (1,070,412) (18,399,523)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (647,189) (11,444,503) (905,848) (14,357,698) (667,750) (10,699,903)
CLASS T
Subscriptions 593,336 11,219,286 1,601,558 26,623,304 3,309,526 62,313,532
Distributions reinvested -- -- 12 186 -- --
Redemptions (2,197,901) (41,619,482) (3,101,612) (50,338,825) (5,906,627) (109,994,675)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (1,604,565) (30,400,196) (1,500,042) (23,715,335) (2,597,101) (47,681,143)
CLASS Z
Subscriptions 5,402,218 104,135,991 8,605,204 145,302,438 10,670,158 208,441,606
Proceeds received in connection
with merger -- -- -- -- -- --
Distributions reinvested 9,645 181,333 83,287 1,331,752 -- --
Redemptions (9,359,449) (180,820,559) (14,044,860) (232,788,723) (10,051,097) (192,318,065)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (3,947,586) (76,503,235) (5,356,369) (86,154,533) 619,061 16,123,541
(a) The Fund changed its fiscal year end from October 31 to September 30.
(b) Effective November 18, 2002, the Galaxy Asset Allocation Fund Prime A,
Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty
Asset Allocation Fund Class A, Class B, Class G, Class T and Class Z
shares, respectively. Subsequently, the Fund began offering Class C shares.
Effective October 13, 2003, the Liberty Asset Allocation Fund was renamed
Columbia Asset Allocation Fund.
(c) Effective November 18, 2002, the Galaxy Equity Growth Fund Prime A, Prime
B,Retail B, Retail A and Trust shares were reorganized as Liberty Equity
Growth Fund Class A, Class B, Class G, Class T and Class Z shares,
respectively. Subsequently, the Fund began offering Class C shares.
Effective October 13, 2003, the Liberty Equity Growth Fund was renamed
Columbia Large Cap Growth Fund.
See Accompanying Notes to Financial Statements.
Spread 76-77
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________
Columbia Equity Funds
COLUMBIA DISCIPLINED VALUE FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 136,953 1,686,613 245,472 2,488,497 -- --
Distributions reinvested 2,599 32,080 -- -- -- --
Redemptions (23,995) (300,932) (163,507) (1,646,171) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 115,557 1,417,761 81,965 842,326 -- --
CLASS B
Subscriptions 179,802 2,124,921 48,835 490,115 -- --
Distributions reinvested 761 9,119 -- -- -- --
Redemptions (17,928) (213,057) (16,616) (170,281) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 162,635 1,920,983 32,219 319,834 -- --
CLASS C
Subscriptions 40,005 458,582 34,288 342,474 -- --
Distributions reinvested 72 858 -- -- -- --
Redemptions (18,365) (206,697) (32,040) (326,333) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 21,712 252,743 2,248 16,141 -- --
CLASS G
Subscriptions 17,943 210,409 23,830 227,695 122,965 1,530,736
Distributions reinvested 5,027 60,020 -- -- 56,061 730,490
Redemptions (461,561) (5,407,849) (791,814) (7,910,003) (485,678) (5,357,577)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (438,591) (5,137,420) (767,984) (7,682,308) (306,652) (3,096,351)
CLASS T
Subscriptions 474,406 5,826,432 712,384 7,479,651 1,461,025 18,997,313
Distributions reinvested 176,846 2,178,280 -- -- 365,484 4,923,064
Redemptions (1,818,952) (22,446,540) (1,921,056) (19,161,516) (3,436,236) (42,048,389)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (1,167,700) (14,441,828) (1,208,672) (11,681,865) (1,609,727) (18,128,012)
CLASS Z
Subscriptions 5,864,057 73,282,626 8,245,789 85,258,557 8,229,129 103,359,201
Distributions reinvested 165,325 2,065,049 -- -- 281,992 3,849,192
Redemptions (4,080,140) (50,781,850) (5,518,932) (56,872,729) (3,316,907) (40,297,207)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 1,949,242 24,565,825 2,726,857 28,385,828 5,194,214 66,911,186
COLUMBIA INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(c) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 63,180 779,414 365,782 3,760,494 43 500
Distributions reinvested 136 1,624 9 80 14 158
Redemptions (17,453) (209,500) (341,913) (3,639,588) (79) (773)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 45,863 571,538 23,878 120,986 (22) (115)
CLASS B
Subscriptions 84,442 1,019,313 63,174 632,499 -- --
Distributions reinvested -- -- 5 47 79 904
Redemptions (31,410) (369,623) (45,848) (459,615) (19,410) (169,123)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 53,032 649,690 17,331 172,931 (19,331) (168,219)
CLASS C
Subscriptions 77,806 915,767 136,603 1,296,905 -- --
Distributions reinvested -- -- -- -- -- --
Redemptions (69,828) (830,279) (136,000) (1,299,758) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 7,978 85,488 603 (2,853) -- --
CLASS G
Subscriptions 8,197 98,874 7,418 69,394 29,664 335,436
Distributions reinvested -- -- -- -- 4,075 46,346
Redemptions (72,469) (880,823) (77,285) (731,060) (130,389) (1,400,567)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (64,272) (781,949) (69,867) (661,666) (96,650) (1,018,785)
CLASS T
Subscriptions 269,439 3,253,726 6,604,035 60,584,311 36,599,906 393,268,992
Distributions reinvested 2,717 32,174 29,476 267,640 93,635 1,067,845
Redemptions (828,956) (10,131,193) (7,380,277) (68,028,146) (37,921,896) (410,600,585)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (556,800) (6,845,293) (746,766) (7,176,195) (1,228,355) (16,263,748)
CLASS Z
Subscriptions 11,934,272 147,871,142 16,739,214 159,741,174 51,501,696 559,110,349
Distributions reinvested 34,063 410,115 125,382 1,158,531 339,109 3,916,708
Redemptions (8,594,161) (106,860,193) (25,020,075) (239,061,805) (58,357,513) (639,992,857)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 3,374,174 41,421,064 (8,155,479) (78,162,100) (6,516,708) (76,965,800)
(a) The Fund changed its fiscal year end from October 31 to September 30.
(b) Effective November 25, 2002, the Galaxy Equity Value Fund Retail B, Retail
A and Trust shares were reorganized as Liberty Equity Value Fund Class G,
Class T and Class Z shares, respectively. Subsequently, the Fund began
offering Class A, Class B and Class C shares. Effective October 13, 2003,
the Liberty Equity Value Fund was renamed Columbia Disciplined Value Fund.
(c) Effective November 18, 2002, the Galaxy International Equity Fund Prime A,
Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty
International Equity Fund Class A, Class B, Class G, Class T and Class Z
shares, respectively. Subsequently, the Fund began offering Class C shares.
Effective October 13, 2003, the Liberty International Equity Fund was
renamed Columbia International Equity Fund.
See Accompanying Notes to Financial Statements.
Spread 78-79
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________
Columbia Equity Funds
COLUMBIA LARGE CAP CORE FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 223,985 2,723,272 126,227 1,379,676 10 128
Proceeds received in connection
with merger -- -- 621,521 6,454,752 -- --
Distributions reinvested 298 3,571 1,676 16,670 35 466
Redemptions (124,083) (1,510,141) (76,403) (794,588) (3,221) (40,839)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 100,200 1,216,702 673,021 7,056,510 (3,176) (40,245)
CLASS B
Subscriptions 191,409 2,257,015 162,123 1,730,382 -- --
Distributions reinvested -- -- 9 86 237 3,106
Redemptions (57,832) (683,878) (8,016) (85,754) (3,283) (31,132)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 133,577 1,573,137 154,116 1,644,714 (3,046) (28,026)
CLASS C
Subscriptions 44,391 521,233 32,690 332,435 -- --
Distributions reinvested -- -- 4 41 -- --
Redemptions (35,218) (416,189) (12,351) (121,881) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 9,173 105,044 20,343 210,595 -- --
CLASS G
Subscriptions 30,324 358,212 44,266 449,389 162,505 1,998,005
Proceeds received in connection
with merger -- -- 1,226,272 12,420,359 -- --
Distributions reinvested -- -- 3,352 30,905 126,869 1,654,365
Redemptions (1,265,623) (14,874,554) (1,816,170) (18,640,817) (973,850) (10,728,602)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (1,235,299) (14,516,342) (542,280) (5,740,164) (684,476) (7,076,232)
CLASS T
Subscriptions 1,137,554 13,775,855 1,495,379 15,776,849 2,708,325 33,029,033
Distributions reinvested 4,431 52,863 82,213 836,757 675,947 8,936,751
Redemptions (2,774,051) (33,648,875) (2,878,020) (29,879,271) (5,908,323) (70,008,875)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (1,632,066) (19,820,157) (1,300,428) (13,265,665) (2,524,051) (28,043,091)
CLASS Z
Subscriptions 2,978,947 36,327,362 3,300,574 34,099,883 7,884,391 100,632,122
Proceeds received in connection
with merger -- -- 6,658,543 69,340,646 -- --
Distributions reinvested 7,263 87,150 86,880 913,137 1,177,076 15,587,396
Redemptions (5,362,164) (65,586,443) (26,833,257) (266,105,376) (11,419,815) (136,648,506)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (2,375,954) (29,171,931) (16,787,260) (161,751,710) (2,358,348) (20,428,988)
COLUMBIA SMALL CAP FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(c) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 9,975,214 170,177,084 4,098,552 58,433,179 11,215 157,443
Proceeds received in connection
with merger -- -- -- -- -- --
Distributions reinvested 166,652 2,743,101 1,737 21,912 683 9,710
Redemptions (1,839,971) (31,780,743) (360,646) (5,358,656) (7,291) (105,884)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 8,301,895 141,139,442 3,739,643 53,096,435 4,607 61,269
CLASS B
Subscriptions 1,835,057 30,371,535 756,403 10,430,015 9,728 132,259
Distributions reinvested 22,302 355,492 2,142 26,282 1,222 17,051
Redemptions (233,273) (3,860,617) (27,618) (373,156) (2,347) (33,156)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 1,624,086 26,866,410 730,927 10,083,141 8,603 116,154
CLASS C
Subscriptions 3,168,245 52,152,651 869,296 12,200,290 -- --
Distributions reinvested 37,782 603,008 192 2,361 -- --
Redemptions (237,693) (3,942,134) (11,707) (147,824) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 2,968,334 48,813,525 857,781 12,054,827 -- --
CLASS G
Subscriptions 15,992 262,179 28,276 350,209 429,423 6,235,998
Proceeds received in connection
with merger -- -- -- -- -- --
Distributions reinvested 14,620 230,995 38,236 465,333 38,027 526,290
Redemptions (84,274) (1,387,033) (99,176) (1,269,029) (111,919) (1,509,331)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (53,662) (893,859) (32,664) (453,487) 355,531 5,252,957
CLASS T
Subscriptions 1,032,837 17,432,562 2,163,625 28,267,215 6,479,808 92,202,077
Distributions reinvested 221,143 3,611,276 453,371 5,680,741 665,372 9,395,064
Redemptions (1,687,801) (28,719,170) (2,947,006) (38,209,114) (5,121,259) (70,792,166)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (433,821) (7,675,332) (330,010) (4,261,158) 2,023,921 30,804,975
CLASS Z
Subscriptions 23,044,663 396,797,303 23,437,396 320,832,302 19,254,421 283,345,487
Proceeds received in connection
with merger -- -- -- -- -- --
Distributions reinvested 1,091,817 18,124,145 1,461,938 18,622,287 2,024,954 28,972,951
Redemptions (13,111,013) (226,795,284) (11,858,363) (163,132,456) (13,389,656) (190,309,137)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 11,025,467 188,126,164 13,040,971 176,322,133 7,889,719 122,009,301
(a) The Fund changed its fiscal year end from October 31 to September 30.
(b) Effective December 9, 2002, the Galaxy Large Cap Value Fund Prime A, Prime
B, Retail B, Retail A and Trust shares were reorganized as Liberty Large
Cap Core Fund (formerly known as Galaxy Growth & Income Fund) Class A,
Class B, Class G, Class T and Class Z shares, respectively. Subsequently,
the Fund began offering Class C shares. Effective October 13, 2003, the
Liberty Large Cap Core Fund was renamed Columbia Large Cap Core Fund.
(c) Effective November 18, 2002, the Galaxy Small Cap Value Fund Prime A,
Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty
Small Cap Fund Class A, Class B, Class G, Class T and Class Z shares,
respectively. Subsequently, the Fund began offering Class C shares.
Effective October 13, 2003, the Liberty Small Cap Fund was renamed Columbia
Small Cap Fund.
See Accompanying Notes to Financial Statements.
Spread 80-81
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________
Columbia Equity Funds
COLUMBIA SMALL COMPANY EQUITY FUND
--------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002
---------------------------- ---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($)
---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 296,504 4,933,872 47,106 619,478 -- --
Redemptions (36,147) (662,030) (19,853) (248,570) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 260,357 4,271,842 27,253 370,908 -- --
CLASS B
Subscriptions 131,387 2,053,177 15,904 207,848 -- --
Redemptions (24,027) (359,925) (593) (5,872) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 107,360 1,693,252 15,311 201,976 -- --
CLASS C
Subscriptions 69,159 1,059,859 14,632 187,755 -- --
Redemptions (7,231) (109,723) (10,379) (127,847) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 61,928 950,136 4,253 59,908 -- --
CLASS G
Subscriptions 7,992 121,923 15,704 176,262 358,543 5,343,587
Redemptions (203,048) (3,089,126) (372,314) (4,494,902) (561,965) (7,654,692)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (195,056) (2,967,203) (356,610) (4,318,640) (203,422) (2,311,105)
CLASS T
Subscriptions 219,277 3,570,127 1,610,555 19,278,621 7,332,857 103,731,584
Redemptions (666,822) (10,915,948) (1,992,911) (23,497,418) (7,849,704) (111,618,506)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease (447,545) (7,345,821) (382,356) (4,218,797) (516,847) (7,886,922)
CLASS Z
Subscriptions 4,555,081 78,677,281 8,255,053 107,075,672 5,263,829 81,621,271
Redemptions (6,507,999) (112,298,953) (6,917,009) (90,058,093) (7,195,424) (105,865,752)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (1,952,918) (33,621,672) 1,338,044 17,017,579 (1,931,595) (24,244,481)
(a) The Fund changed its fiscal year end from October 31 to September 30.
(b) Effective November 18, 2002, the Galaxy Small Company Equity Fund Retail B,
Retail A and Trust shares were reorganized as Liberty Small Company Equity
Fund Class G, Class T and Class Z shares, respectively. Subsequently, the
Fund began offering Class A, Class B and Class C shares. Effective October
13, 2003, the Liberty Small Company Equity Fund was renamed Columbia Small
Company Equity Fund.
See Accompanying Notes to Financial Statements.
82
NOTES TO FINANCIAL STATEMENTS __________________________________________________
September 30, 2004 Columbia Equity Funds
NOTE 1. ORGANIZATION
The Columbia Fund Trust XI (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 Asset Allocation Fund
Columbia Large Cap Growth Fund
Columbia Disciplined Value Fund
Columbia International Equity Fund
Columbia Large Cap Core Fund
Columbia Small Cap Fund
Columbia Small Company Equity Fund
INVESTMENT GOALS
The Columbia Asset Allocation Fund seeks a high total return by providing both a
current level of income greater than that provided by popular stock market
averages, as well as long-term growth in the value of the Fund's assets.
Columbia Large Cap Growth Fund, Columbia International Equity Fund and Columbia
Small Cap Fund seek long term capital appreciation. Columbia Disciplined Value
Fund seeks long term capital appreciation, with income as a secondary goal.
Columbia Large Cap Core Fund seeks to provide a relatively high total return
through long-term capital appreciation and current income. Columbia Small
Company Equity Fund seeks capital appreciation.
FUND SHARES
The Funds may issue an unlimited number of shares. Each Fund offers six classes
of shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share
class has its own sales charge and expense structure. Effective March 1, 2004,
the Columbia Small Cap Fund was closed to new investors.
Class A and Class T shares are subject to a front-end sales charge based on the
amount of initial investment. Class A and Class T shares purchased without an
initial sales charge in accounts aggregating $1 million to $25 million at the
time of purchase are subject to a 1.00% contingent deferred sales charge
("CDSC") on shares sold within eighteen months of the time of purchase. Class B
and Class G 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 G shares will convert to Class T shares in eight
years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in each Fund's prospectus.
Effective October 13, 2003, the Liberty Asset Allocation Fund, Liberty Equity
Growth Fund, Liberty Equity Value Fund, Liberty International Equity Fund,
Liberty Large Cap Core Fund, Liberty Small Cap Fund, and Liberty Small Company
Equity Fund were renamed Columbia Asset Allocation Fund, Columbia Large Cap
Growth Fund, Columbia Disciplined Value Fund, Columbia International Equity
Fund, Columbia Large Cap Core Fund, Columbia Small Cap Fund and Columbia Small
Company Equity Fund, respectively. Also on this date, the Liberty-Stein Roe
Investment Trust was renamed Columbia Funds Trust XI.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the 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.
83
________________________________________________________________________________
September30, 2004 Columbia Equity Funds
Debt securities generally are valued by a pricing service approved by the Funds'
Board of Trustees, based upon market transactions for normal, institutional-size
trading units of similar securities. The services may use various pricing
techniques which take into account appropriate factors such as yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other data, as
well as broker quotes. Debt securities for which quotations are readily
available are valued at an over-the-counter or exchange bid quotation. Certain
debt securities, which tend to be more thinly traded and of lesser quality, are
priced based on fundamental analysis of the financial condition of the issuer
and the estimated value of any collateral. Valuations developed through pricing
techniques may vary from the actual amounts realized upon sale of the
securities, and the potential variation may be greater for those securities
valued using fundamental analysis.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Investments in other investment companies are valued at net asset value.
Foreign securities are generally valued at the last sale price on the foreign
exchange or market on which they trade. If any foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sale price of the local shares in the principal market in
which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange ("NYSE"). The
values of such securities used in computing the net asset value of the Funds'
shares are determined as of such times. Foreign currency exchange rates are
generally determined at 2:00 p.m. Eastern (U.S.) time. Occasionally, events
affecting the values of such foreign securities and such exchange rates may
occur between the times at which they are determined and the close of the
customary trading session of the NYSE, which would not be reflected in the
computation of the Funds' net asset value. If events materially affecting the
values of such foreign securities occur and it is determined that market
quotations are not reliable, then these foreign securities will be valued at
their fair value using procedures approved by the Board of Trustees.
Investments for which market quotations are not readily available, or quotations
which management believes are not appropriate, are valued at fair value under
procedures approved by the Board of Trustees.
The Funds may use a systematic fair valuation model provided by an independent
third party to value securities, principally traded in foreign markets, in order
to adjust for possible stale pricing that may occur between the close of the
foreign exchanges and the time for fair valuation. If a security is valued at a
"fair value," such value is likely to be different from the last quoted market
price for the security.
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 the each Fund's ability to dispose of the underlying
securities and a possible decline in the value of the underlying securities
during the period while the Funds seek to assert their rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities. Corporate actions
and dividend income are recorded on the ex-date, except for certain foreign
securities which are recorded as soon after ex-date as the Funds become aware of
such, net of non-reclaimable tax withholdings. Awards from class action
litigation are recorded as a reduction of cost if the Funds still own the
applicable securities on the payment date. If the Funds no longer own the
applicable securities, the proceeds are recorded as realized gains.
84
________________________________________________________________________________
September 30, 2004 Columbia Equity Funds
The Funds estimate components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Funds no longer own the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
Effective April 1, 2004, the Columbia Asset Allocation Fund and Columbia Small
Cap Fund adopted the policy to reduce cost of investments for financial
statement purposes by the distributions received in excess of income from REITs.
The cumulative effect of this accounting change did not impact the net assets of
the Funds, but resulted in reclassifications as follows:
COLUMBIA ASSET ALLOCATION FUND:
INCREASE IN
DECREASE OVERDISTRIBUTED NET
IN COST INVESTMENT INCOME
-------- -------------------
$ 30,134 $ 30,134
The effect of the change for the year ended September 30, 2004 is as follows:
DECREASE DECREASE IN INCREASE IN
IN COST DIVIDEND INCOME NET REALIZED GAIN
-------- ---------------- -----------------
$ 8,514 $ 15,447 $ 6,933
COLUMBIA SMALL CAP FUND:
INCREASE IN
DECREASE ACCUMULATED NET
IN COST INVESTMENT LOSS
-------- ---------------
$311,495 $ 311,495
The effect of the change for the year ended September 30, 2004 is as follows:
INCREASE DECREASE IN INCREASE IN
IN COST DIVIDEND INCOME NET REALIZED GAIN
-------- --------------- -----------------
$108,883 $ 58,723 $ 167,606
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.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations) and realized and unrealized gains (losses), are
allocated to each class of a Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
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, each Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that each Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
FOREIGN CAPITAL GAINS TAXES
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 30%. The Funds accrue for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly for each
Fund, with the exception of the Columbia International Equity Fund. The Columbia
International Equity Fund declares and pays dividends annually. Effective
October 13, 2004, the Board of Trustees approved a change in the distribution
policy for the Columbia Large Cap Growth Fund, Columbia Large Cap Core Fund,
Columbia Small Cap Fund and Columbia Small Company Equity Fund, so that these
Funds will distribute any dividends annually. Net realized capital gains, if
any, are distributed at least annually for all Funds.
85
________________________________________________________________________________
September 30, 2004 Columbia Equity Funds
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Funds' capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
For the year ended September 30, 2004, permanent differences resulting primarily
from differing treatments for amortization/accretion adjustments, redemption
based payments treated as dividend paid deduction, distribution
reclassifications, non-deductible excise tax expense, foreign capital gains tax,
passive foreign investment company adjustments, paydown reclassifications, net
operating loss reclassifications, REIT adjustments, market discount
reclassification adjustments and foreign currency transactions were identified
and reclassified among the components of the Funds' net assets as follows:
UNDISTRIBUTED
(OVERDISTRIBUTED)
OR (ACCUMULATED) ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME (LOSS) GAIN(LOSS) CAPITAL
--------------------------------------------------
Columbia Asset Allocation Fund ........................ $ 386,021 $ (385,858) $ (163)
Columbia Large Cap Growth Fund ........................ 2,857,922 -- (2,857,922)
Columbia Disciplined Value Fund ....................... 314,710 37,184 (351,894)
Columbia International Equity Fund .................... (2,227,581) 2,227,564 17
Columbia Large Cap Core Fund .......................... 18,018 (2,405,129) 2,387,111
Columbia Small Cap Fund ............................... 4,067,742 (9,365,270) 5,297,528
Columbia Small Company Equity Fund .................... 3,955,024 -- (3,955,024)
Net investment income and net realized gains (losses), as disclosed on the
Statements of Operations, and net assets were not affected by these
reclassifications.
The tax character of distributions paid during the year ended September 30,
2004, the period ended September 30, 2003 and the year ended October 31, 2002
was as follows:
SEPTEMBER 30, 2004
----------------------------
ORDINARY LONG-TERM
INCOME* CAPITAL GAINS
-----------------------------
Columbia Asset Allocation Fund ............................................. $ 8,343,267 $ --
Columbia Large Cap Growth Fund ............................................. 344,225 --
Columbia Disciplined Value Fund ............................................ 8,287,914 --
Columbia International Equity Fund ......................................... 2,902,933 --
Columbia Large Cap Core Fund ............................................... 347,473 18,017
Columbia Small Cap Fund .................................................... 9,268,588 25,211,495
SEPTEMBER 30, 2003
----------------------------
ORDINARY LONG-TERM
INCOME* CAPITAL GAINS
-----------------------------
Columbia Asset Allocation Fund ............................................. $ 8,302,859 $ --
Columbia Large Cap Growth Fund ............................................. 2,326,344 --
Columbia International Equity Fund ......................................... 4,361,724 --
Columbia Large Cap Core Fund ............................................... 2,920,950 --
Columbia Small Cap Fund .................................................... 8,797,912 23,723,001
86
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September 30, 2004 Columbia Equity Funds
OCTOBER 31, 2002
----------------------------
ORDINARY LONG-TERM
INCOME* CAPITAL GAINS
-----------------------------
Columbia Asset Allocation Fund ...............................................$ 8,939,420 $ --
Columbia Disciplined Value Fund .............................................. -- 10,519,279
Columbia International Equity Fund ........................................... 12,204,413 --
Columbia Large Cap Core Fund ................................................. 2,339,161 25,685,830
Columbia Small Cap Fund ...................................................... 8,625,684 39,447,563
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of September 30, 2004, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM NET UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
----------------------------------------------------
Columbia Asset Allocation Fund ........................ $ 98,156 $ -- $ 35,356,276
Columbia Large Cap Growth Fund ........................ -- -- 111,901,449
Columbia Disciplined Value Fund ....................... -- -- 24,702,075
Columbia International Equity Fund .................... 2,296,054 -- 41,244,251
Columbia Large Cap Core Fund .......................... -- 10,843,055 22,688,137
Columbia Small Cap Fund ............................... 23,973,257 67,259,250 171,824,325
Columbia Small Company Equity Fund .................... -- -- 37,184,270
*The differences between book-basis and tax-basis net unrealized
appreciation are primarily due to deferral of losses from wash sales.
Unrealized appreciation and depreciation at September 30, 2004, based on cost of
investments for federal income tax purposes and excluding any unrealized
appreciation and depreciation from changes in the value of assets and
liabilities resulting from changes in exchange rates, was:
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
-----------------------------------------------------
Columbia Asset Allocation Fund ........................ $ 45,964,390 $ (10,607,531) $ 35,356,859
Columbia Large Cap Growth Fund ........................ 133,241,933 (21,340,484) 111,901,449
Columbia Disciplined Value Fund ....................... 42,018,308 (17,316,233) 24,702,075
Columbia International Equity Fund .................... 54,321,998 (13,106,794) 41,215,204
Columbia Large Cap Core Fund .......................... 33,613,810 (10,925,673) 22,688,137
Columbia Small Cap Fund ............................... 290,919,269 (119,094,944) 171,824,325
Columbia Small Company Equity Fund .................... 77,329,582 (40,145,312) 37,184,270
The following capital loss carryforwards, determined as of September 30, 2004,
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:
COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED
ALLOCATION GROWTH VALUE
YEAR OF EXPIRATION FUND* FUND FUND
----------------------------------------------------------------------------------------------------------
2009 .................................................. $ -- $ 8,273,159 $ --
2010 .................................................. 1,108,836 99,339,708 10,720,416
2011 .................................................. 5,941,365 22,217,091 --
----------------- ------------- -----------
Total ................................................. $ 7,050,201 $ 129,829,958 $10,720,416
----------------- ------------- -----------
87
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September 30, 2004 Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA
INTERNATIONAL LARGE CAP COLUMBIA SMALL COMPANY
EQUITY CORE SMALL CAP EQUITY
YEAR OF EXPIRATION FUND** FUND FUND FUND
-------------------------------------------------------------------------------------------------------------------------------
2008 .................................................. $ 698,550 $ -- $ -- $ --
2009 .................................................. 48,210,646 -- -- --
2010 ................................................. 219,682,429 -- -- 36,913,639
2011 .................................................. 36,290,283 -- -- --
------------- ---------- --------- ------------
Total ................................................. $ 304,881,908 -- $ -- $ 36,913,639
------------- ---------- --------- ------------
* Of the capital loss carryforwards attributable to Columbia Asset
Allocation Fund, $1,108,836 expiring 9/30/2010 remains from the Columbia
Asset Allocation Fund's merger with Stein Roe Balanced Fund
(See Note 11).
** The availability of $698,550 of the capital loss carryforwards which were
acquired on August 20, 2001 in connection with The Pillar Funds
reorganization, may be limited in a given year.
The following capital loss carryforwards, determined as of September 30, 2004,
have been utilized as follows:
Columbia Asset Allocation Fund .................................................................................. $ 28,030,902
Columbia Large Cap Growth Fund .................................................................................. 33,254,599
Columbia Disciplined Value Fund ................................................................................. 55,001,322
Columbia International Equity Fund .............................................................................. 60,822,899
Columbia Large Cap Core Fund .................................................................................... 19,498,866
Columbia Small Company Equity Fund .............................................................................. 63,905,081
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"). Effective April 1, 2004,
FleetBoston, including the Funds' investment advisor, transfer agent and
distributor, was acquired by Bank of America Corporation ("BOA"). The
acquisition 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 average daily net
assets from each of the Funds (excluding Columbia International Equity Fund and
Columbia Small Company Equity Fund), at the following annual rates:
ANNUAL
FEE
AVERAGE DAILY NET ASSETS RATE
------------------------ ------
First $500 million 0.75%
Next $500 million 0.70%
Next $500 million 0.65%
Next $500 million 0.60%
Over $2 billion 0.55%
For the period July 1, 2003 through October 31, 2003, Columbia voluntarily
waived its investment advisory fee of the Columbia Asset Allocation Fund by
0.03% annually of the Fund's average daily net assets.
Columbia receives a monthly investment advisory fee based on average daily net
assets of the Columbia International Equity Fund at the following annual rates:
ANNUAL
FEE
AVERAGE DAILY NET ASSETS RATE
------------------------ ------
First $50 million 1.15%
Next $50 million 0.95%
Over $100 million 0.85%
Columbia has voluntarily agreed to waive a portion of its investment advisory
fee for the Columbia International Equity Fund at an annual rate of 0.25% of the
Fund's average daily net assets. Columbia, at its discretion, may revise or
discontinue this arrangement any time.
Columbia receives a monthly investment advisory fee based on average daily net
assets of the Columbia Small Company Equity Fund at the following annual rates:
ANNUAL
FEE
AVERAGE DAILY NET ASSETS RATE
------------------------ ------
First $500 million 0.75%
Next $500 million 0.70%
Over $1 billion 0.65%
88
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September 30, 2004 Columbia Equity Funds
Prior to November 1, 2003, Columbia was entitled to receive a monthly investment
advisory fee from each Fund (excluding Columbia International Equity Fund) at
the annual rate of 0.75% of each Fund's average daily net assets. In addition,
Columbia also waived a portion of its investment advisory fee so that such fees
payable by the Funds were as follows:
ANNUAL
FEE
AVERAGE DAILY NET ASSETS RATE
------------------------ ------
First $500 million 0.75%
Next $500 million 0.70%
Next $500 million 0.65%
Next $500 million 0.60%
Over $2 billion 0.55%
For the year ended September 30, 2004, the effective investment advisory fee
rates for the Funds were as follows:
Columbia Asset Allocation Fund 0.75%
Columbia Large Cap Growth Fund 0.73%
Columbia Disciplined Value Fund 0.75%
Columbia International Equity Fund 0.64%
Columbia Large Cap Core Fund 0.75%
Columbia Small Cap Fund 0.70%
Columbia Small Company Equity Fund 0.75%
ADMINISTRATION FEE
Columbia provides administrative and other services to the Funds for a monthly
administration fee at the annual rate of 0.067% of each Fund's average daily net
assets.
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"). As a result, Columbia pays the total fees
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Funds, Columbia receives an
annual fee based on the average daily net assets of each Fund at the following
annual rates:
ANNUAL
FEE
AVERAGE DAILY NET ASSETS RATE
------------------------ ---------
Under $50 million $ 25,000
Over $50 million but less than $200 million $ 35,000
Over $200 million but less than $500 million $ 50,000
Over $500 million but less than $1 billion $ 85,000
Over $1 billion $ 125,000
The annual fees for a Fund with more than 25% in non-domestic assets, as
measured on a monthly basis, will be 150% of the fees disclosed above. An
additional flat rate fee of $10,000 is charged to each Fund due to its multiple
class structure. The Funds also pay additional fees for pricing services based
on the number of securities held by each Fund.
For the year ended September 30, 2004, the effective pricing and bookkeeping fee
rates for the Funds, inclusive of out-of-pocket expenses, were as follows:
Columbia Asset Allocation Fund 0.032%
Columbia Large Cap Growth Fund 0.011%
Columbia Disciplined Value Fund 0.014%
Columbia International Equity Fund 0.018%
Columbia Large Cap Core Fund 0.014%
Columbia Small Cap Fund 0.010%
Columbia Small Company Equity Fund 0.015%
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
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.
89
________________________________________________________________________________
September 30, 2004 Columbia Equity Funds
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee, in addition to reimbursement for certain out-of-pocket
expenses, based on a per-account charge or a minimum of $5,000 annually.
The Transfer Agent has voluntarily agreed to waive a portion of its transfer
agent fee for the Columbia International Equity Fund, Columbia Large Cap Core
Fund and Columbia Small Company Equity Fund. These arrangements may be revised
discontinued by the Transfer Agent at any time.
For the period January 1, 2004 through September 30, 2004, the Transfer Agent
waived fees for the Funds as follows:
FEES
WAIVED
--------
Columbia International Equity Fund $ 47,295
Columbia Large Cap Core Fund 13,522
Columbia Small Company Equity Fund 27,315
For the period October 1, 2003 through December 31, 2003, the Transfer Agent
waived transfer agent fees as follows:
FEES WAIVED
-------------------
CLASS G CLASS T
------- -------
Columbia International
Equity Fund $ 3,326 $12,336
Columbia Large Cap
Core Fund 4,341 --
Columbia Small Company
Equity Fund -- 9,209
Effective October 13, 2003, Liberty Funds Services, Inc. was renamed Columbia
Funds Services, Inc.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Funds. For the year ended September 30,
2004, the Distributor has retained net underwriting discounts and CDSC fees as
follows:
FRONT-END SALES CHARGE CDSC
---------------------- -----------------------------------------------------
CLASS A CLASS T CLASS A CLASS B CLASS C CLASS G CLASS T
-------- ------- ------- ------- ------- --------- -------
Columbia Asset Allocation Fund ................. $ 7,818 $ 6,103 $ -- $ 9,957 $ 43 $ 123,227 $ --
Columbia Large Cap Growth Fund ................. 9,078 16,547 -- 4,622 397 126,393 --
Columbia Disciplined Value Fund ................ 4,141 5,789 -- 1,113 -- 60 21,262
Columbia International Equity Fund ............. 2,303 1,857 -- 3,106 -- 10,139 --
Columbia Large Cap Core Fund ................... 8,168 7,174 -- 6,185 201 47,212 --
Columbia Small Cap Fund ........................ 192,749 8,824 714 57,363 20,259 19,348 2
Columbia Small Company Equity Fund ............. 12,014 2,961 -- 1,995 249 13,973 --
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 FEE
----------------------------------------
CLASS A CLASS B CLASS C CLASS G
------- ------- ------- -------
Columbia Asset Allocation Fund ................................................. 0.10% 0.75% 0.75% 0.65%
Columbia Large Cap Growth Fund ................................................. 0.10% 0.75% 0.75% 0.65%
Columbia Disciplined Value Fund ................................................ 0.10% 0.75% 0.75% 0.65%
Columbia International Equity Fund ............................................. 0.10% 0.75% 0.75% 0.65%
Columbia Large Cap Core Fund ................................................... 0.10% 0.75% 0.75% 0.65%
Columbia Small Cap Fund ........................................................ 0.10% 0.75% 0.75% 0.65%
Columbia Small Company Equity Fund ............................................. 0.10% 0.75% 0.75% 0.65%
SERVICE FEE
----------------------------------------
CLASS A CLASS B CLASS C CLASS G
------- ------- ------- -------
Columbia Asset Allocation Fund ................................................. 0.25% 0.25% 0.25% 0.50%
Columbia Large Cap Growth Fund ................................................. 0.25% 0.25% 0.25% 0.50%
Columbia Disciplined Value Fund ................................................ 0.25% 0.25% 0.25% 0.50%
Columbia International Equity Fund ............................................. 0.25% 0.25% 0.25% 0.50%
Columbia Large Cap Core Fund ................................................... 0.25% 0.25% 0.25% 0.50%
Columbia Small Cap Fund ........................................................ 0.25% 0.25% 0.25% 0.50%
Columbia Small Company Equity Fund ............................................. 0.25% 0.25% 0.25% 0.50%
90
________________________________________________________________________________
September 30, 2004 Columbia Equity Funds
The Funds do not intend to pay total distribution and service fees in excess of
0.25% and 0.95% annually for Class A and Class G shares of the Funds,
respectively. Of the 0.50% service fee for Class G shares, 0.25% relates to
shareholder liaison fees and 0.25% relates to administration support fees.
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.
Effective October 13, 2003, Liberty Funds Distributor, Inc. was renamed Columbia
Funds Distributor, Inc.
SHAREHOLDER SERVICES FEES
The Funds have adopted shareholder services plans that permit them to pay for
certain services provided to Class T and Class Z shareholders by their financial
advisors. Currently, the service plan has not been implemented with respect to
the Funds' Class Z shares. The annual service fee may equal up to 0.50% for
Class T shares. The Funds do not intend to pay more than 0.30% annually for
Class T shareholder service fees.
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 DIRECTORS
The Funds pay no compensation to their officers, all of whom are employees of
Columbia or its affiliates. Effective August 23, 2004, the Board of Trustees
appointed a Chief Compliance Officer to the Funds in accordance with federal
securities regulations. Each Fund, along with other affiliated funds, will pay
its pro-rata share of the expenses associated with the Chief Compliance Officer
role. Each Fund's fee will not exceed $15,000 per year.
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. This amount is included in "Other expenses" on the Statements of
Operations. For the year ended September 30, 2004, the Funds paid fees to
Columbia for such services as follows:
Columbia Asset Allocation Fund ................ $ 2,042
Columbia Large Cap Growth Fund ................ 2,858
Columbia Disciplined Value Fund ............... 1,864
Columbia International Equity Fund ............ 1,947
Columbia Large Cap Core Fund .................. 1,972
Columbia Small Cap Fund ....................... 2,957
Columbia Small Company Equity Fund ............ 1,898
NOTE 5. PORTFOLIO INFORMATION
For the year ended September 30, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were as follows:
OTHER INVESTMENT SECURITIES
--------------------------------
PURCHASES SALES
--------------------------------
Columbia Asset Allocation Fund ............................................. $ 313,560,119 $ 386,440,074
Columbia Large Cap Growth Fund ............................................. 1,222,680,371 1,338,348,790
Columbia Disciplined Value Fund ............................................ 419,775,701 412,382,267
Columbia International Equity Fund ......................................... 470,597,439 453,336,059
Columbia Large Cap Core Fund ............................................... 478,967,318 543,498,628
Columbia Small Cap Fund .................................................... 705,827,594 338,282,499
Columbia Small Company Equity Fund ......................................... 215,814,604 247,896,201
U.S. GOVERNMENT SECURITIES
--------------------------------
PURCHASES SALES
--------------------------------
Columbia Asset Allocation Fund ............................................. $ 20,155,084 $ 27,961,389
91
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September 30, 2004 Columbia Equity Funds
NOTE 6. REDEMPTION FEES
Effective February 15, 2003, the Columbia International Equity Fund began
imposing a 2.00% redemption fee to shareholders of Class Z shares who redeem
shares held for 60 days or less. Redemption fees, which are retained by the
Fund, are accounted for as an addition to paid-in capital and are allocated to
each class proportionately for purposes of determining the net asset value of
each class. Prior to October 9, 2003, redemption fees were recorded as a
component of paid in capital on Class Z shares. For the year ended September 30,
2004, the redemption fees for the Class Z shares of the Columbia International
Equity Fund amounted to $53,214.
NOTE 7. OTHER RELATED PARTY TRANSACTIONS
During the year ended September 30, 2004, the Columbia Small Cap Fund used Bank
of America Securities, a wholly owned subsidiary of BOA, as a broker. Total
commissions paid to Bank of America Securities during the year were $12,945.
NOTE 8. 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 the Funds based on their 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 Statement of Operations. For the year ended September 30, 2004,
the Funds did not borrow under this arrangement.
NOTE 9. OTHER
During the year ended September 30, 2004, the Columbia Asset Allocation Fund
purchased shares of Compass Group PLC in error. This position was subsequently
sold at a loss of $13,429 and the Fund was reimbursed by Columbia.
During the year ended September 30, 2004, the Columbia International Equity Fund
purchased shares of Compass Group PLC and foreign currency in error. These
positions were subsequently sold at a loss of $687,106 and the Fund was
reimbursed by Columbia.
NOTE 10. DISCLOSURE OF SIGNIFICANT
RISKS AND CONTINGENCIES
FOREIGN SECURITIES
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of currency exchange or other
foreign governmental laws or restrictions. In addition, the liquidity of foreign
securities may be more limited than that of domestic securities.
Investments in emerging market countries are subject to additional risk. The
risk of foreign investments is typically increased in less developed countries.
These countries are also more likely to experience high levels of inflation,
deflation or currency devaluation which could hurt their economies and
securities markets.
HIGH-YIELD SECURITIES
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. Government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk bonds." Economic
downturns may disrupt the high yield market and impair the ability of issuers to
repay principal and interest. Also, an increase in interest rates would likely
have an adverse impact on the value of such obligations. Moreover, high-yield
securities may be less liquid due to the extent that there is no established
retail secondary market and because of a decline in the value of such
securities.
INDUSTRY FOCUS
The 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 as well as
other industry wide issues. The Columbia Group has not
92
________________________________________________________________________________
September 30, 2004 Columbia Equity Funds
uncovered any instances where Columbia or the Distributor were knowingly
involved in late trading of mutual fund shares.
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and the Distributor, alleging that they had
violated certain provisions of the federal securities laws in connection with
trading activity in mutual fund shares. Also on February 24, 2004, the New York
Attorney General ("NYAG") filed a civil complaint in New York Supreme Court,
County of New York against Columbia and the Distributor alleging that Columbia
and the Distributor had violated certain New York anti-fraud statutes. If either
Columbia or the Distributor is unsuccessful in its defense of these proceedings,
it could be barred from serving as an investment advisor or distributor for any
investment company registered under the Investment Company Act of 1940, as
amended (a "registered investment company"). Such results could prevent
Columbia, the Distributor or any company that is an affiliated person of
Columbia and the Distributor from serving as an investment advisor or
distributor for any registered investment company, including your fund. Your
fund has been informed by Columbia and the Distributor that, if these results
occur, they will seek exemptive relief from the SEC to permit them to continue
to serve as your fund's investment advisor and distributor. There is no
assurance that such exemptive relief will be granted. On March 15, 2004,
Columbia and the Distributor entered into agreements in principle with the SEC
Division of Enforcement and NYAG in settlement of the charges. Under the
agreements, Columbia and the Distributor agreed, 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 and its affiliate Banc
of America Capital Management, LLC have agreed to collectively reduce mutual
fund fees by $160 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 funds.
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). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants in several
derivative actions under various sections of the Investment Company Act of 1940,
as amended, alleging, among other things, that the fees and expenses paid by
those funds are excessive. The funds and the other defendants to these actions,
including Columbia and various of its affiliates, certain other mutual funds
advised by Columbia and its affiliates, and various directors of such funds,
have denied these allegations and are contesting the plaintiffs' claims. These
suits and certain regulatory investigations are ongoing, however, based on
currently available information, Columbia believes that these lawsuits are
without merit, that the likelihood they will have a material adverse impact on
any fund is remote, and that the lawsuits are not likely to materially affect
its ability to provide investment management services to its clients, including
the funds.
For the year ended September 30, 2004, Columbia has assumed legal, consulting
services and Trustees' fees incurred by the Funds in connection with these
matters as follows:
Columbia Asset Allocation Fund $ 21,519
Columbia Large Cap Growth Fund 46,518
Columbia Disciplined Value Fund 20,002
Columbia International Equity Fund 23,162
Columbia Large Cap Core Fund 19,890
Columbia Small Cap Fund 74,770
Columbia Small Company Equity Fund 19,440
93
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September 30, 2004 Columbia Equity Funds
NOTE 11. BUSINESS COMBINATIONS AND MERGERS
As of the end of business on November 15, 2002, the Stein Roe Balanced Fund, a
separate series of the Trust, merged into the Trust shares of Galaxy Asset
Allocation Fund. The Galaxy Asset Allocation Fund received a tax-free transfer
of assets from the Stein Roe Balanced Fund as follows:
SHARES NET ASSETS UNREALIZED
ISSUED RECEIVED APPRECIATION 1
--------------- ------------- ---------------
9,749,490 $ 127,523,327 $ 8,523,537
NET ASSETS NET ASSETS
NET ASSETS OF STEIN ROE OF ASSET
OF ASSET BALANCED FUND ALLOCATION FUND
ALLOCATION FUND IMMEDIATELY IMMEDIATELY
PRIOR TO PRIOR TO AFTER
COMBINATION COMBINATION COMBINATION
--------------- ------------- ---------------
$ 441,389,479 $ 127,523,327 $ 568,912,806
1 Unrealized appreciation is included in the Net Assets Received amount shown
above.
Also as of the end of business on November 15, 2002, subsequent to the merger
described above, the Galaxy Asset Allocation Fund, previously a fund of Galaxy,
was reorganized as the Asset Allocation Fund. Class A, Class B, Class G, Class T
and Class Z shares were issued in exchange for Prime A, Prime B, Retail B,
Retail A and Trust shares, respectively. Class C shares commenced operations on
November 18, 2002.
Differing amortization policies between the Liberty Asset Allocation Fund and
the Stein Roe Balanced Fund resulted in reclassifications as follows:
UNREALIZED
APPRECIATION PAID-IN CAPITAL
------------ ---------------
$ 64,867 $ (64,867)
Also as of the end of business on November 15, 2002, the Galaxy Equity Growth
Fund, previously a fund of Galaxy, was reorganized as the Equity Growth Fund
with Class A, Class B, Class G, Class T and Class Z shares issued in exchange
for Prime A, Prime B, Retail B, Retail A and Trust shares, respectively. Class C
shares commenced operations on November 18, 2002.
As of the end of business on November 22, 2002, the Galaxy Equity Value Fund,
previously a fund of Galaxy, was reorganized as the Equity Value Fund with Class
G, Class T and Class Z shares issued in exchange for Retail B, Retail A and
Trust shares, respectively. Class A, Class B and Class C shares commenced
operations on November 25, 2002.
As of the end of business on November 15, 2002, the Galaxy International Equity
Fund, previously a fund of Galaxy, was reorganized as the International Equity
Fund with Class A, Class B, Class G, Class T and Class Z shares issued in
exchange for Prime A, Prime B, Retail B, Retail A and Trust shares,
respectively. Class C shares commenced operations on November 18, 2002.
As of the end of business on December 6, 2002, the Galaxy Large Cap Value Fund,
Retail A, Retail B and Trust shares merged into the Galaxy Growth & Income Fund,
Prime A, Retail B and Trust shares, respectively. The Galaxy Large Cap Value
Fund and Galaxy Growth & Income Fund were both previously funds of Galaxy. The
Galaxy Growth & Income Fund received a tax-free transfer of assets from Galaxy
Large Cap Value Fund as follows:
SHARES NET ASSETS UNREALIZED
ISSUED RECEIVED APPRECIATION 1
--------------- ------------- --------------
8,506,336 $ 88,215,757 $ 3,841,144
NET ASSETS OF NET ASSETS OF
NET ASSETS OF GROWTH & LARGE CAP
LARGE CAP INCOME FUND CORE FUND
CORE FUND IMMEDIATELY IMMEDIATELY
PRIOR TO PRIOR TO AFTER
COMBINATION COMBINATION COMBINATION
--------------- ------------- ---------------
$ 560,578,780 $ 88,215,757 $ 648,794,537
1 Unrealized appreciation is included in the Net Assets Received amount shown
above.
Also as of the end of business on December 6, 2002, subsequent to the merger
described above, the Galaxy Growth & Income Fund was reorganized as the Liberty
Large Cap Core Fund. Class A, Class B, Class G, Class T and Class Z shares were
issued in exchange for Prime A, Prime B, Retail B, Retail A and Trust shares,
respectively. Class C shares commenced operations on December 9, 2002.
As of the end of business on November 15, 2002, the Galaxy Small Cap Value Fund,
previously a fund of Galaxy, was reorganized as the Small Cap Fund with Class A,
Class B, Class G, Class T and Class Z shares issued in exchange for Prime A,
Prime B, Retail B, Retail A and Trust shares, respectively. Class C shares
commenced operations on November 18, 2002.
As of the end of business on November 15, 2002, the Galaxy Small Company Equity
Fund, previously a fund of Galaxy, was reorganized as the Small Company Equity
Fund with Class G, Class T and Class Z shares issued in exchange for Retail B,
Retail A and
94
________________________________________________________________________________
September 30, 2004 Columbia Equity Funds
Trust shares, respectively. Class A, Class B and Class C shares commenced
operations on November 18, 2002.
The accompanying statements of operations, statements of changes in net assets
and financial highlights for these funds represent the historical operations of
the Galaxy Asset Allocation Fund, Galaxy Equity Growth Fund, Galaxy
International Equity Fund, Galaxy Small Cap Value Fund and Galaxy Small Company
Equity Fund for periods prior to November 15, 2002, and the Galaxy Equity Value
Fund for periods prior to November 22, 2002 and the Galaxy Growth & Income Fund
for periods prior to December 6, 2002.
NOTE 12. COMPARABILITY OF FINANCIAL STATEMENTS
The fiscal year end of the Funds was changed from October 31 to September 30.
NOTE 13. PROPOSED REORGANIZATION
On October 13, 2004, the Board of Trustees approved a proposal to reorganize the
Columbia International Equity Fund into the Columbia International Stock Fund,
subject to shareholder approval and the satisfaction of certain other
conditions. The effective date of the reorganization is expected to be on or
around February 25, 2005 or such a date parties may agree.
95
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Asset Allocation Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 12.86
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.21(e) 0.20(e)
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax 1.11 1.17
------------- -------------
Total from investment operations 1.32 1.37
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.27) (0.22)
From net realized gains -- --
------------- -------------
Total distributions declared to shareholders (0.27) (0.22)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.01
Total return (g)(h) 9.46% 10.80%(i)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.43% 1.49%(k)
Net investment income (j) 1.43% 1.55%(k)
Waiver/reimbursement --%(l) 0.01%(k)
Portfolio turnover rate 75% 122%(i)
Net assets, end of period (000's) $ 2,901 $ 1,211
- ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS A SHARES 2002 2001 2000 1999 (d)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.95 $ 18.77 $ 17.73 $ 16.95
------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.26(f) 0.34(e) 0.39(e) 0.44
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax (2.12)(f) (3.06) 1.36 1.17
------------ ------------ ------------ ------------
Total from investment operations (1.86) (2.72) 1.75 1.61
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.23) (0.36) (0.40) (0.40)
From net realized gains -- (0.74) (0.31) (0.43)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.23) (1.10) (0.71) (0.83)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.86 $ 14.95 $ 18.77 $ 17.73
Total return (g)(h) (12.53)% (15.08)% 10.15% 9.72%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.40% 1.26% 1.15% 1.16%
Net investment income (j) 1.73%(f) 2.07% 2.15% 2.27%
Waiver/reimbursement 0.13% 0.12% 0.15% 0.13%
Portfolio turnover rate 40% 65% 59% 135%
Net assets, end of period (000's) $ 43 $ 60 $ 186 $ 238
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Prime A shares were
redesignated Liberty Asset Allocation Fund, Class A shares.
(d) The Fund began offering Prime A shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the year
ended October 31, 2002 on the net investment income per share, net realized
and unrealized gain per share and the ratio of net investment income to
average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
96
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Asset Allocation Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.00 $ 12.85
- ---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.10(e) 0.12(e)
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax 1.11 1.17
------------- -------------
Total from investment operations 1.21 1.29
- ---------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.15) (0.14)
From net realized gains -- --
------------- -------------
Total distributions declared to shareholders (0.15) (0.14)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.00
Total return (g) 8.68%(h) 10.13%(h)(i)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 2.18% 2.17%(k)
Net investment income (j) 0.68% 0.95%(k)
Waiver/reimbursement --%(l) 0.01%(k)
Portfolio turnover rate 75% 122%(i)
Net assets, end of period (000's) $ 4,926 $ 2,539
- ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS B SHARES 2002 2001 2000 1999 (d)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.93 $ 18.75 $ 17.71 $ 16.95
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.14(f) 0.22(e) 0.26(e) 0.29
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax (2.08)(f) (3.06) 1.35 1.19
------------ ------------ ------------ ------------
Total from investment operations (1.94) (2.84) 1.61 1.48
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.14) (0.24) (0.26) (0.29)
From net realized gains -- (0.74) (0.31) (0.43)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.14) (0.98) (0.57) (0.72)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.85 $ 14.93 $ 18.75 $ 17.71
Total return (g) (13.06)% (15.68)%(h) 9.29%(h) 8.91%(h)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 2.06% 1.99% 1.89% 1.90%
Net investment income (j) 1.07%(f) 1.34% 1.41% 1.53%
Waiver/reimbursement -- 0.04% 0.17% 0.18%
Portfolio turnover rate 40% 65% 59% 135%
Net assets, end of period (000's) $ 276 $ 389 $ 526 $ 519
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Prime B shares were
redesignated Liberty Asset Allocation Fund, Class B shares.
(d) The Fund began offering Prime B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the year
ended October 31, 2002 on the net investment income per share, net realized
and unrealized gain per share and the ratio of net investment income to
average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
97
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Asset Allocation Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (b)(c)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.00 $ 13.08
- ---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (d) 0.10 0.10(e)
Net realized and unrealized gain on investments,
foreign currency and foreign capital gains tax 1.11 0.93
------------- -------------
Total from investment operations 1.21 1.03
- ---------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.15) (0.11)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.00
Total return (f)(g) 8.67% 7.93%(h)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.19% 2.28%(j)
Net investment income (i) 0.69% 0.85%(j)
Waiver/reimbursement --%(k) 0.01%(j)
Portfolio turnover rate 75% 122%(h)
Net assets, end of period (000's) $ 514 $ 187
- ---------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares during the period.
(e) Net investment income per share before reimbursement of certain expenses for
the period ended September 30, 2003 was $0.10.
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
98
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Asset Allocation Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (b)(c)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.00 $ 12.84
- ---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.11(d) 0.12(d)
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax 1.11 1.17
------------- -------------
Total from investment operations 1.22 1.29
- ---------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.16) (0.13)
From net realized gains -- --
------------- -------------
Total distributions declared to shareholders (0.16) (0.13)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.00
Total return (f) 8.72%(g) 10.12%(g)(h)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.15% 2.19%(j)
Net investment income (i) 0.71% 1.02%(j)
Waiver/reimbursement --%(k) 0.01%(j)
Portfolio turnover rate 75% 122%(h)
Net assets, end of period (000's) $ 39,892 $ 56,383
- ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.92 $ 18.74 $ 17.70 $ 16.92
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.14(e) 0.22(d) 0.24(d) 0.25
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax (2.08)(e) (3.06) 1.36 1.21
------------ ------------ ------------ ------------
Total from investment operations (1.94) (2.84) 1.60 1.46
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.14) (0.24) (0.25) (0.25)
From net realized gains -- (0.74) (0.31) (0.43)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.14) (0.98) (0.56) (0.68)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.84 $ 14.92 $ 18.74 $ 17.70
Total return (f) (13.08)%(g) (15.72)%(g) 9.20% 8.76%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.09% 2.01% 1.99% 2.00%
Net investment income (i) 1.04%(e) 1.33% 1.31% 1.43%
Waiver/reimbursement 0.03% 0.01% -- --
Portfolio turnover rate 40% 65% 59% 135%
Net assets, end of period (000's) $ 73,183 $ 106,074 $ 105,980 $ 91,199
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Retail B shares were
redesignated Liberty Asset Allocation Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the year
ended October 31, 2002 on the net investment income per share, net realized
and unrealized gain per share and the ratio of net investment income to
average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
99
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Asset Allocation Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (b)(c)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 12.87
- ---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.21(d) 0.21(d)
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax 1.11 1.16
------------- -------------
Total from investment operations 1.32 1.37
- ---------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.26) (0.23)
From net realized gains -- --
------------- -------------
Total distributions declared to shareholders (0.26) (0.23)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.07 $ 14.01
Total return (f) 9.47%(g) 10.75%(g)(h)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.49% 1.49%(j)
Net investment income (i) 1.37% 1.73%(j)
Waiver/reimbursement --%(k) 0.01%(j)
Portfolio turnover rate 75% 122%(h)
Net assets, end of period (000's) $ 183,438 $ 189,580
- ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.95 $ 18.79 $ 17.74 $ 16.95
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.25(e) 0.33(d) 0.37(d) 0.37
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax (2.09)(e) (3.08) 1.36 1.21
------------ ------------ ------------ ------------
Total from investment operations (1.84) (2.75) 1.73 1.58
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.24) (0.35) (0.37) (0.36)
From net realized gains -- (0.74) (0.31) (0.43)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.24) (1.09) (0.68) (0.79)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.87 $ 14.95 $ 18.79 $ 17.74
Total return (f) (12.45)%(g) (15.18)%(g) 9.98% 9.53%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.37% 1.33% 1.29% 1.32%
Net investment income (i) 1.76%(e) 2.01% 2.01% 2.11%
Waiver/reimbursement 0.01% 0.01% -- --
Portfolio turnover rate 40% 65% 59% 135%
Net assets, end of period (000's) $ 198,154 $ 289,882 $ 371,590 $ 389,077
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Retail A shares were
redesignated Liberty Asset Allocation Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the year
ended October 31, 2002 on the net investment income per share, net realized
and unrealized gain per share and the ratio of net investment income to
average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
100
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Asset Allocation Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 12.87
- -----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.25(d) 0.25(d)
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax 1.11 1.16
------------- -------------
Total from investment operations 1.36 1.41
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.31) (0.27)
From net realized gains -- --
------------- -------------
Total distributions declared to shareholders (0.31) (0.27)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.01
Total return (f) 9.75%(g) 11.07%(g)(h)
- -----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.19% 1.16%(j)
Net investment income (i) 1.67% 2.04%(j)
Waiver/reimbursement --%(k) 0.01%(j)
Portfolio turnover rate 75% 122%(h)
Net assets, end of period (000's) $ 191,556 $ 217,935
- -----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.94 $ 18.78 $ 17.73 $ 16.96
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.29(e) 0.37(d) 0.41(d) 0.40
Net realized and unrealized gain (loss)
on investments, foreign currency and
foreign capital gains tax (2.09)(e) (3.08) 1.36 1.20
------------ ------------ ------------ ------------
Total from investment operations (1.80) (2.71) 1.77 1.60
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.27) (0.39) (0.41) (0.40)
From net realized gains -- (0.74) (0.31) (0.43)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.27) (1.13) (0.72) (0.83)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.87 $ 14.94 $ 18.78 $ 17.73
Total return (f) (12.23)%(g) (14.94)% 10.21% 9.63%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.12% 1.11% 1.09% 1.12%
Net investment income (i) 2.01%(e) 2.23% 2.21% 2.31%
Waiver/reimbursement 0.03% -- -- --
Portfolio turnover rate 40% 65% 59% 135%
Net assets, end of period (000's) $ 163,934 $ 230,562 $ 290,970 $ 269,851
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Trust shares were
redesignated Liberty Asset Allocation Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the year
ended October 31, 2002 on the net investment income per share, net realized
and unrealized gain per share and the ratio of net investment income to
average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
101
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.59 $ 16.06
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.08)(e) (0.05)(e)
Net realized and unrealized gain
(loss) on investments 1.06 1.61
------------- -------------
Total from investment operations 0.98 1.56
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.03)
From net realized gains -- --
------------- -------------
Total distributions declared to shareholders -- (0.03)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.57 $ 17.59
Total return (f)(g) 5.57% 9.72%(h)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.28% 1.30%(j)
Net investment income (loss) (i) (0.40)% (0.30)%(j)
Waiver/reimbursement --%(k) 0.02%(j)
Portfolio turnover rate 126% 91%(h)
Net assets, end of period (000's) $ 3,867 $ 1,887
- ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS A SHARES 2002 2001 2000 1999 (d)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.74 $ 32.31 $ 28.95 $ 24.49
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.03(e) (0.02) (0.05)(e) (0.01)
Net realized and unrealized gain
(loss) on investments (3.71) (8.92) 5.13 6.37
------------ ------------ ------------ ------------
Total from investment operations (3.68) (8.94) 5.08 6.36
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- -- --
From net realized gains -- (3.63) (1.72) (1.90)
------------ ------------ ------------ ------------
Total distributions declared to shareholders -- (3.63) (1.72) (1.90)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.06 $ 19.74 $ 32.31 $ 28.95
Total return (f)(g) (18.64)% (30.43)% 18.36% 27.30%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.12% 1.13% 1.12% 1.14%
Net investment income (loss) (i) 0.14% (0.10)% (0.17)% (0.05)%
Waiver/reimbursement 0.05% 0.03% 0.11% 0.14%
Portfolio turnover rate 43% 48% 54% 53%
Net assets, end of period (000's) $ 56 $ 671 $ 142 $ 107
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia
Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Prime A shares were
redesignated Liberty Equity Growth Fund, Class A shares.
(d) The Fund began issuing Prime A shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
102
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- -------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.96 $ 15.57
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.21)(e) (0.14)(e)
Net realized and unrealized gain
(loss) on investments 1.01 1.53
------------- -------------
Total from investment operations 0.80 1.39
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- --
- -------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.76 $ 16.96
Total return (f)(g) 4.72% 8.93%(h)
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.03% 2.13%(j)
Net investment loss (i) (1.15)% (0.97)%(j)
Waiver/reimbursement --%(k) 0.02%(j)
Portfolio turnover rate 126% 91%(h)
Net assets, end of period (000's) $ 3,195 $ 1,013
- -------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS B SHARES 2002 2001 2000 1999 (d)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.32 $ 31.94 $ 28.84 $ 24.49
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.14)(e) (0.19) (0.29)(e) (0.10)
Net realized and unrealized gain
(loss) on investments (3.61) (8.80) 5.11 6.35
------------ ------------ ------------ ------------
Total from investment operations (3.75) (8.99) 4.82 6.25
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- (3.63) (1.72) (1.90)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.57 $ 19.32 $ 31.94 $ 28.84
Total return (f)(g) (19.41)% (31.00)% 17.48% 26.79%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.99% 1.95% 1.87% 1.87%
Net investment loss (i) (0.73)% (0.92)% (0.92)% (0.78)%
Waiver/reimbursement 0.05% 0.03% 0.15% 0.32%
Portfolio turnover rate 43% 48% 54% 53%
Net assets, end of period (000's) $ 207 $ 309 $ 450 $ 246
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia
Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Prime B shares were
redesignated Liberty Equity Growth Fund, Class B shares.
(d) The Fund began issuing Prime B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
103
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (b)(c)
- -------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.98 $ 16.04
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.21) (0.13)
Net realized and unrealized gain on investments 1.02 1.07
------------- -------------
Total from investment operations 0.81 0.94
- -------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.79 $ 16.98
Total return (e)(f) 4.77% 5.86%(g)
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.03% 2.00%(i)
Net investment loss (h) (1.15)% (0.92)%(i)
Waiver/reimbursement --%(j) 0.02%(i)
Portfolio turnover rate 126% 91%(g)
Net assets, end of period (000's) $ 780 $ 524
- -------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia
Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming no contingent deferred sales
charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
104
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (b)(c)
- -------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.43 $ 15.11
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.20)(d) (0.15)(d)
Net realized and unrealized gain
(loss) on investments 0.98 1.47
------------- -------------
Total from investment operations 0.78 1.32
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- --
- -------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.21 $ 16.43
Total return (e)(f) 4.75% 8.66%(g)
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.02% 2.31%(i)
Net investment loss (h) (1.14)% (1.02)%(i)
Waiver/reimbursement --%(j) 0.02%(i)
Portfolio turnover rate 126% 91%(g)
Net assets, end of period (000's) $ 46,328 $ 54,850
- -------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.79 $ 31.22 $ 28.27 $ 24.07
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.17)(d) (0.21) (0.35)(d) (0.20)
Net realized and unrealized gain
(loss) on investments (3.51) (8.59) 5.02 6.30
------------ ------------ ------------ ------------
Total from investment operations (3.68) (8.80) 4.67 6.10
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- (3.63) (1.72) (1.90)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.11 $ 18.79 $ 31.22 $ 28.27
Total return (e)(f) (19.49)% (31.16)% 17.29% 26.63%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.18% 2.11% 2.07% 2.05%
Net investment loss (h) (0.92)% (1.08)% (1.11)% (0.96)%
Waiver/reimbursement 0.07% 0.02% 0.02% 0.03%
Portfolio turnover rate 43% 48% 54% 53%
Net assets, end of period (000's) $ 64,156 $ 92,292 $ 130,347 $ 71,525
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia
Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Retail B shares were
redesignated Liberty Equity Growth Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
105
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.50 $ 15.98
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.09)(d) (0.02)(d)
Net realized and unrealized gain
(loss) on investments 1.05 1.54
------------ ------------
Total from investment operations 0.96 1.52
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- --
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.46 $ 17.50
Total return (e) 5.49%(f) 9.51%(f)(g)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.35% 1.45%(i)
Net investment loss (h) (0.47)% (0.16)%(i)
Waiver/reimbursement --%(j) 0.02%(i)
Portfolio turnover rate 126% 91%(g)
Net assets, end of period (000's) $ 219,129 $ 235,849
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.70 $ 32.31 $ 28.99 $ 24.47
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02)(d) (0.07) (0.10)(d) (0.06)
Net realized and unrealized gain
(loss) on investments (3.70) (8.91) 5.14 6.48
------------ ------------ ------------ ------------
Total from investment operations (3.72) (8.98) 5.04 6.42
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- (3.63) (1.72) (1.90)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.98 $ 19.70 $ 32.31 $ 28.99
Total return (e) (18.88)%(f) (30.57)%(f) 18.18% 27.55%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.34% 1.31% 1.28% 1.34%
Net investment loss (h) (0.08)% (0.28)% (0.33)% (0.25)%
Waiver/reimbursement 0.07% 0.02% -- --
Portfolio turnover rate 43% 48% 54% 53%
Net assets, end of period (000's) $ 239,279 $ 346,214 $ 580,417 $ 443,639
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia
Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Retail A shares were
redesignated Liberty Equity Growth Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
106
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Growth Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.84 $ 16.28
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.03)(d) 0.05(d)
Net realized and unrealized gain
(loss) on investments 1.07 1.57
------------ ------------
Total from investment operations 1.04 1.62
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.01) (0.06)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.01) (0.06)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.87 $ 17.84
Total return (e) 5.83%(f) 9.93%(f)(g)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.03% 0.99%(i)
Net investment income (loss) (h) (0.15)% 0.30%(i)
Waiver/reimbursement --%(j) 0.02%(i)
Portfolio turnover rate 126% 91%(g)
Net assets, end of period (000's) $ 634,710 $ 670,649
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.99 $ 32.61 $ 29.15 $ 24.52
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07(d) 0.02 0.01(d) 0.03
Net realized and unrealized gain
(loss) on investments (3.78) (9.01) 5.18 6.50
------------ ------------ ------------ ------------
Total from investment operations (3.71) (8.99) 5.19 6.53
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- (0.01) --
From net realized gains -- (3.63) (1.72) (1.90)
------------ ------------ ------------ ------------
Total distributions declared to shareholders -- (3.63) (1.73) (1.90)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.28 $ 19.99 $ 32.61 $ 29.15
Total return (e) (18.51)%(f) (30.29)%(f) 18.63% 28.07%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 0.91% 0.93% 0.91% 0.94%
Net investment income (loss) (h) 0.35% 0.10% 0.04% 0.15%
Waiver/reimbursement 0.05% 0.01% -- --
Portfolio turnover rate 43% 48% 54% 53%
Net assets, end of period (000's) $ 699,215 $ 845,887 $ 1,258,399 $ 1,041,378
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia
Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Trust shares were
redesignated Liberty Equity Growth Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
107
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Disciplined Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.02 $ 10.06
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (d) 0.17 0.04
Net realized and unrealized gain on investments 1.75 0.92
------------ ------------
Total from investment operations 1.92 0.96
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.23) --
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.71 $ 11.02
Total return (e) 17.53% 9.54%(f)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) 1.31% 1.31%(h)
Net investment income (g) 1.34% 0.49%(h)
Portfolio turnover rate 101% 50%(f)
Net assets, end of period (000's) $ 2,511 $ 903
- ------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia
Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class A shares were initially offered on November 25, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
108
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Disciplined Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.49 $ 9.67
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (d) 0.07 (0.02)
Net realized and unrealized gain on investments 1.67 0.84
------------ ------------
Total from investment operations 1.74 0.82
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.07) --
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.16 $ 10.49
Total return (e) 16.64% 8.48%(f)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) 2.06% 2.26%(h)
Net investment income (loss) (g) 0.60% (0.27)%(h)
Portfolio turnover rate 101% 50%(f)
Net assets, end of period (000's) $ 2,370 $ 338
- ------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia
Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class B shares were initially offered on November 25, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
109
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Disciplined Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.47 $ 9.67
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (d) 0.07 (0.05)
Net realized and unrealized gain on investments 1.67 0.85
------------ ------------
Total from investment operations 1.74 0.80
- --------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.07) --
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.14 $ 10.47
Total return (e) 16.67% 8.27%(f)(g)
- --------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.07% 2.49%(i)
Net investment income (loss) (h) 0.63% (0.60)%(i)
Waiver/reimbursement -- 0.49%(i)
Portfolio turnover rate 101% 50%(f)
Net assets, end of period (000's) $ 291 $ 24
- --------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia
Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 25, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(f) Not annualized.
(g) Had the Investment Advisor or any of its affiliates not waived or reimbursed
a portion of expenses, total return would have been reduced.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
110
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Disciplined Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.50 $ 9.21
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08(d) (0.04)(d)
Net realized and unrealized gain
(loss) on investments 1.67 1.33
------------ ------------
Total from investment operations 1.75 1.29
- --------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.08) --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.08) --
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.17 $ 10.50
Total return (e) 16.67% 14.01%(f)
- --------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.06% 2.31%(i)
Net investment income (loss) (h) 0.64% (0.47)%(i)
Waiver/reimbursement -- --
Portfolio turnover rate 101% 50%(f)
Net assets, end of period (000's) $ 7,502 $ 11,074
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.10 $ 16.73 $ 18.08 $ 16.44
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.19) (0.10) (0.15) (0.15)
Net realized and unrealized gain
(loss) on investments (2.35) (1.64) 1.25 2.40
------------ ------------ ------------ ------------
Total from investment operations (2.54) (1.74) 1.10 2.25
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- -- --
From net realized gains (0.35) (2.89) (2.45) (0.61)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.35) (2.89) (2.45) (0.61)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.21 $ 12.10 $ 16.73 $ 18.08
Total return (e) (21.85)% (11.00)%(g) 7.12%(g) 13.81%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.18% 2.13% 2.09% 2.08%
Net investment income (loss) (h) (1.15)% (0.91)% (0.83)% (0.87)%
Waiver/reimbursement -- 0.02% 0.03% --
Portfolio turnover rate 99% 127% 72% 75%
Net assets, end of period (000's) $ 16,791 $ 25,776 $ 30,555 $ 30,988
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia
Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, the Galaxy Equity Value Fund, Retail B shares were
redesignated Liberty Equity Value Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(f) Not annualized.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
111
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Disciplined Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (b)(c)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.00 $ 9.58
------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.16(d) 0.03(d)
Net realized and unrealized gain
(loss) on investments 1.76 1.39
------------ ------------
Total from investment operations 1.92 1.42
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.20) --
In excess of net investment income -- --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.20) --
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.72 $ 11.00
Total return (f) 17.54% 14.82%(g)
- -----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.38% 1.50%(j)
Net investment income (loss) (i) 1.31% 0.35%(j)
Waiver/reimbursement -- --
Portfolio turnover rate 101% 50%(g)
Net assets, end of period (000's) $ 133,094 $ 127,993
- -----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.48 $ 17.05 $ 18.28 $ 16.50
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.05) (0.02) (0.02) (0.03)
Net realized and unrealized gain
(loss) on investments (2.50) (1.66) 1.25 2.42
------------ ------------ ------------ ------------
Total from investment operations (2.55) (1.68) 1.23 2.39
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- (0.01) --
In excess of net investment income -- -- --(e) --
From net realized gains (0.35) (2.89) (2.45) (0.61)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.35) (2.89) (2.46) (0.61)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.58 $ 12.48 $ 17.05 $ 18.28
Total return (f) (21.31)% (10.27)%(h) 7.83% 14.63%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.41% 1.39% 1.36% 1.37%
Net investment income (loss) (i) (0.38)% (0.17)% (0.10)% (0.16)%
Waiver/reimbursement -- 0.01% -- --
Portfolio turnover rate 99% 127% 72% 75%
Net assets, end of period (000's) $ 123,085 $ 180,435 $ 226,836 $ 258,332
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia
Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, the Galaxy Equity Value Fund, Retail A shares were
redesignated Liberty Equity Value Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Not annualized.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
112
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Disciplined Value Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.24 $ 9.75
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.20(d) 0.08(d)
Net realized and unrealized gain
(loss) on investments 1.79 1.41
------------ ------------
Total from investment operations 1.99 1.49
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.28) --
In excess of net investment income -- --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.28) --
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.95 $ 11.24
Total return (f) 17.86% 15.28%(g)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.06% 1.04%(j)
Net investment income (i) 1.62% 0.82%(j)
Waiver/reimbursement -- --
Portfolio turnover rate 101% 50%(g)
Net assets, end of period (000's) $ 283,469 $ 224,137
- ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.65 $ 17.17 $ 18.35 $ 16.51
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) 0.02 0.04 0.03
Net realized and unrealized gain
(loss) on investments (2.53) (1.65) 1.25 2.42
------------ ------------ ------------ ------------
Total from investment operations (2.55) (1.63) 1.29 2.45
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- (0.02) --
In excess of net investment income -- -- --(e) --
From net realized gains (0.35) (2.89) (2.45) (0.61)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.35) (2.89) (2.47) (0.61)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.75 $ 12.65 $ 17.17 $ 18.35
Total return (f) (20.96)% (9.91)% 8.22% 15.04%(h)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 0.98% 1.00% 1.00% 1.02%
Net investment income (i) 0.05% 0.22% 0.26% 0.19%
Waiver/reimbursement -- -- -- 0.01%
Portfolio turnover rate 99% 127% 72% 75%
Net assets, end of period (000's) $ 167,867 $ 152,002 $ 164,864 $ 281,064
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia
Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, the Galaxy Equity Value Fund, Trust shares were
redesignated Liberty Equity Value Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Not annualized.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
113
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia International Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.83 $ 9.28
- -----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.11(e) 0.06(e)
Net realized and unrealized gain
(loss) on investments, foreign currency
and foreign capital gains tax 1.46 1.53
------------ ------------
Total from investment operations 1.57 1.59
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.05) (0.04)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.05) (0.04)
- -----------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital --(e)(f) --
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.35 $ 10.83
Total return (g)(h) 14.51% 17.23%(i)
- -----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.17% 1.38%(k)
Net investment income (loss) (j) 0.87% 0.69%(k)
Waiver/reimbursement 0.26% 0.25%(k)
Portfolio turnover rate 100% 66%(i)
Net assets, end of period (000's) $ 872 $ 268
- -----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS A SHARES 2002 2001 2000 1999 (d)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.19 $ 19.53 $ 20.98 $ 16.85
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01)(e) (0.02) 0.46(e) 0.06(e)
Net realized and unrealized gain
(loss) on investments, foreign currency
and foreign capital gains tax (1.72) (5.73) (0.60) 4.79
------------ ------------ ------------ ------------
Total from investment operations (1.73) (5.75) (0.14) 4.85
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.18) (0.31) (0.12) (0.15)
From net realized gains -- (2.28) (1.19) (0.57)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.18) (2.59) (1.31) (0.72)
- ----------------------------------------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.28 $ 11.19 $ 19.53 $ 20.98
Total return (g)(h) (15.78)% (33.38)% (1.34)% 29.73%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.63% 1.44% 1.10% 1.17%
Net investment income (loss) (j) (0.11)% 0.01% 2.06% 0.34%
Waiver/reimbursement 0.56% 0.33% 0.89% 0.86%
Portfolio turnover rate 110% 60% 50% 45%
Net assets, end of period (000's) $ 8 $ 9 $ 14 $ 12
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the
Columbia International Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy International Equity Fund, Prime A shares
were redesignated Liberty International Equity Fund, Class A shares.
(d) The Fund began offering Prime A shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
114
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia International Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.75 $ 9.22
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.02(e) (0.03)(e)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax 1.45 1.57
------------ ------------
Total from investment operations 1.47 1.54
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- (0.01)
- ------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital --(e)(f) --
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.22 $ 10.75
Total return (g)(h) 13.67% 16.71%(i)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.90% 2.37%(k)
Net investment income (loss) (j) 0.14% (0.37)%(k)
Waiver/reimbursement 0.26% 0.25%(k)
Portfolio turnover rate 100% 66%(i)
Net assets, end of period (000's) $ 931 $ 250
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS B SHARES 2002 2001 2000 1999 (d)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.11 $ 19.37 $ 20.85 $ 16.85
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.05)(e) (0.08) 0.29(e) (0.08)(e)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax (1.71) (5.71) (0.58) 4.78
------------ ------------ ------------ ------------
Total from investment operations (1.76) (5.79) (0.29) 4.70
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.13) (0.19) -- (0.13)
From net realized gains -- (2.28) (1.19) (0.57)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.13) (2.47) (1.19) (0.70)
- -----------------------------------------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.22 $ 11.11 $ 19.37 $ 20.85
Total return (g)(h) (16.06)% (33.72)% (2.02)% 28.74%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.97% 1.91% 1.83% 1.89%
Net investment income (loss) (j) (0.45)% (0.46)% 1.33% (0.38)%
Waiver/reimbursement 0.25% 0.28% 0.34% 0.38%
Portfolio turnover rate 110% 60% 50% 45%
Net assets, end of period (000's) $ 54 $ 280 $ 483 $ 458
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the
Columbia International Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy International Equity Fund, Prime B shares
were redesignated Liberty International Equity Fund, Class B shares.
(d) The Fund began offering Prime B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
115
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia International Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.71 $ 9.33
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (d) (0.01) 0.04
Net realized and unrealized gain on investments,
foreign currency and foreign capital gains tax 1.44 1.35
------------ ------------
Total from Investment Operations 1.43 1.39
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
Total distributions declared to shareholders -- (0.01)
- ----------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital --(d)(e) --
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.14 $ 10.71
Total return (f)(g) 13.35% 14.90%(h)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.95% 2.07%(j)
Net investment income (loss) (i) (0.08)% 0.44%(j)
Waiver/reimbursement 0.26% 1.68%(h)
Portfolio turnover rate 100% 66%
Net assets, end of period (000's) $ 104 $ 6
- ----------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the
Columbia International Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
116
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia International Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.67 $ 9.16
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01)(e) (0.03)(e)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax 1.46 1.54
------------ ------------
Total from investment operations 1.45 1.51
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- --
- ----------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital --(e)(f) --
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.12 $ 10.67
Total return (g)(h) 13.59% 16.48%(i)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.92% 2.41%(k)
Net investment income (loss) (j) (0.07)% (0.31)%(k)
Waiver/reimbursement 0.32% 0.49%(k)
Portfolio turnover rate 100% 66%(i)
Net assets, end of period (000's) $ 4,873 $ 4,976
- ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999 (d)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.04 $ 19.28 $ 20.80 $ 16.85
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.10)(e) (0.10) 0.22(e) (0.09)(e)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax (1.70) (5.72) (0.55) 4.74
------------ ------------ ------------ ------------
Total from investment operations (1.80) (5.82) (0.33) 4.65
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.08) (0.14) -- (0.13)
From net realized gains -- (2.28) (1.19) (0.57)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.08) (2.42) (1.19) (0.70)
- -------------------------------------------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.16 $ 11.04 $ 19.28 $ 20.80
Total return (g)(h) (16.55)% (33.95)% (2.22)% 28.41%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 2.46% 2.34% 2.14% 1.96%
Net investment income (loss) (j) (0.94)% (0.89)% 1.02% (0.45)%
Waiver/reimbursement 0.51% 0.32% 0.50% 0.74%
Portfolio turnover rate 110% 60% 50% 45%
Net assets, end of period (000's) $ 4,913 $ 6,988 $ 8,297 $ 2,189
- -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the
Columbia International Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy International Equity Fund, Retail B shares
were redesignated Liberty International Equity Fund, Class G shares.
(d) The Fund began issuing Class G shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
117
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia International Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (b)(c)
- -------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.78 $ 9.24
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.07(d) 0.05(d)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax 1.48 1.55
------------ ------------
Total from investment operations 1.55 1.60
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.01) (0.06)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.01) (0.06)
- -------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital --(d)(e) --
- -------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.32 $ 10.78
Total return (f)(g) 14.37% 17.45%(h)
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.24% 1.55%(j)
Net investment income (i) 0.61% 0.54%(j)
Waiver/reimbursement 0.29% 0.36%(j)
Portfolio turnover rate 100% 66%(h)
Net assets, end of period (000's) $ 41,359 $ 42,195
- -------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.16 $ 19.44 $ 20.86 $ 16.75
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01(d) 0.03 0.41(d) 0.01(d)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax (1.73) (5.75) (0.59) 4.72
------------ ------------ ------------ ------------
Total from investment operations (1.72) (5.72) (0.18) 4.73
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.20) (0.28) (0.05) (0.05)
From net realized gains -- (2.28) (1.19) (0.57)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.20) (2.56) (1.24) (0.62)
- -------------------------------------------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.24 $ 11.16 $ 19.44 $ 20.86
Total return (f)(g) (15.75)% (33.35)% (1.49)% 29.04%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.42% 1.34% 1.32% 1.48%
Net investment income (i) 0.10% 0.11% 1.83% 0.03%
Waiver/reimbursement 0.37% 0.30% 0.25% 0.25%
Portfolio turnover rate 110% 60% 50% 45%
Net assets, end of period (000's) $ 43,095 $ 65,749 $ 120,351 $ 89,327
- -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the
Columbia International Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy International Equity Fund, Retail A shares
were redesignated Liberty International Equity Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
118
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia International Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.01 $ 9.43
- -----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.13(d) 0.10(d)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax 1.50 1.59
------------ ------------
Total from investment operations 1.63 1.69
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.09) (0.11)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.09) (0.11)
- -----------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital --(d)(e) --
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.55 $ 11.01
Total return (f)(g) 14.81% 18.08%(h)
- -----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 0.88% 0.97%(j)
Net investment income (i) 1.01% 1.11%(j)
Waiver/reimbursement 0.26% 0.25%(j)
Portfolio turnover rate 100% 66%(h)
Net assets, end of period (000's) $ 437,595 $ 346,889
- -----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.36 $ 19.74 $ 21.18 $ 17.00
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.06(d) 0.07 0.51(d) 0.10(d)
Net realized and unrealized gain (loss)
on investments, foreign currency
and foreign capital gains tax (1.74) (5.82) (0.60) 4.80
------------ ------------ ------------ ------------
Total from investment operations (1.68) (5.75) (0.09) 4.90
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.25) (0.35) (0.16) (0.15)
From net realized gains -- (2.28) (1.19) (0.57)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.25) (2.63) (1.35) (0.72)
- -------------------------------------------------------------------------------------------------------------------------
REDEMPTION FEES:
Redemption fees added to paid-in capital -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.43 $ 11.36 $ 19.74 $ 21.18
Total return (f)(g) (15.26)% (33.00)% (1.08)% 29.71%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 0.94% 0.90% 0.87% 0.97%
Net investment income (i) 0.58% 0.55% 2.28% 0.54%
Waiver/reimbursement 0.27% 0.26% 0.25% 0.25%
Portfolio turnover rate 110% 60% 50% 45%
Net assets, end of period (000's) $ 374,119 $ 524,704 $ 912,555 $ 501,776
- -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the
Columbia International Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy International Equity Fund, Trust shares
were redesignated Liberty International Equity Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
119
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Core Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.22 $ 10.08
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) --(e)(f) 0.03(e)
Net realized and unrealized gain
(loss) on investments 0.80 1.16
------------ ------------
Total from investment operations 0.80 1.19
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.01) (0.05)
In excess of net investment income -- --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.01) (0.05)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.01 $ 11.22
Total return (g) 7.09%(h) 11.82%(i)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.35% 1.48%(k)
Net investment income (loss) (j) (0.02)% 0.37%(k)
Waiver/reimbursement --%(l) --
Portfolio turnover rate 115% 55%(i)
Net assets, end of period (000's) $ 9,304 $ 7,570
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS A SHARES 2002 2001 2000 1999 (d)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.74 $ 16.41 $ 16.00 $ 14.88
- ------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.03(e) 0.02 0.04 0.11(e)
Net realized and unrealized gain
(loss) on investments (2.23) (2.38) 1.34 2.03
------------ ------------ ------------ ------------
Total from investment operations (2.20) (2.36) 1.38 2.14
- ------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.02) (0.03) (0.06) (0.11)
In excess of net investment income -- --(f) -- --
From net realized gains (0.44) (1.28) (0.91) (0.91)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.46) (1.31) (0.97) (1.02)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.08 $ 12.74 $ 16.41 $ 16.00
Total return (g) (18.14)%(h) (15.34)%(h) 9.27%(h) 14.81%(h)
- ------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.28% 1.19% 1.14% 1.15%
Net investment income (loss) (j) 0.25% 0.22% 0.30% 0.66%
Waiver/reimbursement 0.24% 0.03% 0.10% 0.15%
Portfolio turnover rate 13% 19% 42% 20%
Net assets, end of period (000's) $ 15 $ 60 $ 156 $ 150
- ------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On December 9, 2002, the Galaxy Growth & Income Fund, Prime A shares were
redesignated Liberty Large Cap Core Fund, Class A shares.
(d) The Fund began offering Prime A shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
120
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Core Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.99 $ 9.90
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.09)(e) (0.04)(e)
Net realized and unrealized gain
(loss) on investments 0.78 1.14
------------ ------------
Total from investment operations 0.69 1.10
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- (0.01)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.68 $ 10.99
Total return (f) 6.28%(g) 11.12%(h)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.09% 2.19%(j)
Net investment loss (i) (0.76)% (0.38)%(j)
Waiver/reimbursement --%(k) --
Portfolio turnover rate 115% 55%(h)
Net assets, end of period (000's) $ 3,425 $ 1,755
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS B SHARES 2002 2001 2000 1999 (d)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.59 $ 16.32 $ 15.97 $ 14.88
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.06)(e) (0.07) (0.07) (0.01)(e)
Net realized and unrealized gain
(loss) on investments (2.19) (2.38) 1.33 2.03
------------ ------------ ------------ ------------
Total from investment operations (2.25) (2.45) 1.26 2.02
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- -- (0.02)
From net realized gains (0.44) (1.28) (0.91) (0.91)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.44) (1.28) (0.91) (0.93)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.90 $ 12.59 $ 16.32 $ 15.97
Total return (f) (18.75)%(g) (15.95)%(g) 8.38%(g) 13.98%(g)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.02% 1.96% 1.89% 1.90%
Net investment loss (i) (0.49)% (0.55)% (0.45)% (0.09)%
Waiver/reimbursement 0.02% 0.04% 0.18% 0.27%
Portfolio turnover rate 13% 19% 42% 20%
Net assets, end of period (000's) $ 55 $ 109 $ 129 $ 129
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On December 9, 2002, the Galaxy Growth & Income Fund, Prime B shares were
redesignated Liberty Large Cap Core Fund, Class B shares.
(d) The Fund began offering Prime B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
121
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Core Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.99 $ 10.21
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.09) (0.04)
Net realized and unrealized gain on investments 0.78 0.83
------------ ------------
Total from investment operations 0.69 0.79
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.68 $ 10.99
Total return (e) 6.28%(f) 7.74%(g)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.09% 2.18%(i)
Net investment loss (h) (0.74)% (0.42)%(i)
Waiver/reimbursement --%(j) --
Portfolio turnover rate 115% 55%(g)
Net assets, end of period (000's) $ 345 $ 223
- ------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on December 9, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
122
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Core Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.89 $ 9.82
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.09)(d) (0.02)(d)
Net realized and unrealized gain
(loss) on investments 0.77 1.10
------------ ------------
Total from investment operations 0.68 1.08
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
In excess of net investment income -- (0.01)
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- (0.01)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.57 $ 10.89
Total return (e) 6.24%(f) 11.00%(f)(g)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.09% 2.19%(i)
Net investment loss (h) (0.77)% (0.28)%(i)
Waiver/reimbursement 0.02% 0.05%(i)
Portfolio turnover rate 115% 55%(g)
Net assets, end of period (000's) $ 16,419 $ 28,917
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 16.23 $ 15.90 $ 14.83
- --------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.06)(d) (0.09) (0.10) (0.04)(d)
Net realized and unrealized gain
(loss) on investments (2.18) (2.36) 1.34 2.02
------------ ------------ ------------ ------------
Total from investment operations (2.24) (2.45) 1.24 1.98
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
In excess of net investment income -- -- -- --
From net realized gains (0.44) (1.28) (0.91) (0.91)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.44) (1.28) (0.91) (0.91)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.82 $ 12.50 $ 16.23 $ 15.90
Total return (e) (18.80)%(f) (16.11)% 8.35% 13.72%(f)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.08% 2.05% 2.04% 2.03%
Net investment loss (h) (0.55)% (0.64)% (0.60)% (0.22)%
Waiver/reimbursement 0.02% -- -- 0.01%
Portfolio turnover rate 13% 19% 42% 20%
Net assets, end of period (000's) $ 31,407 $ 48,512 $ 61,857 $ 62,366
- --------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On December 9, 2002, the Galaxy Growth & Income Fund, Retail B shares were
redesignated Liberty Large Cap Core Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
123
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Core Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.18 $ 10.05
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01)(d) 0.04(d)
Net realized and unrealized gain
(loss) on investments 0.78 1.14
------------ ------------
Total from investment operations 0.77 1.18
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income --(e) (0.05)
In excess of net investment income -- --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- (0.05)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.95 $ 11.18
Total return (f) 6.92%(g) 11.76%(h)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.40% 1.46%(j)
Net investment income (loss) (i) (0.07)% 0.45%(j)
Waiver/reimbursement --%(k) --
Portfolio turnover rate 115% 55%(h)
Net assets, end of period (000's) $ 179,310 $ 185,938
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.70 $ 16.37 $ 15.98 $ 14.87
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.02(d) 0.02 0.02 0.08(d)
Net realized and unrealized gain
(loss) on investments (2.22) (2.39) 1.33 2.02
------------ ------------ ------------ ------------
Total from investment operations (2.20) (2.37) 1.35 2.10
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.01) (0.02) (0.05) (0.08)
In excess of net investment income -- --(e) --(e) --
From net realized gains (0.44) (1.28) (0.91) (0.91)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.45) (1.30) (0.96) (0.99)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.05 $ 12.70 $ 16.37 $ 15.98
Total return (f) (18.16)%(g) (15.46)%(g) 9.06%(g) 14.56%(g)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.35% 1.34% 1.28% 1.28%
Net investment income (loss) (i) 0.18% 0.07% 0.16% 0.53%
Waiver/reimbursement 0.01% 0.02% 0.09% 0.10%
Portfolio turnover rate 13% 19% 42% 20%
Net assets, end of period (000's) $ 180,269 $ 259,884 $ 217,423 $ 232,110
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On December 9, 2002, the Galaxy Growth & Income Fund, Retail A shares were
redesignated Liberty Large Cap Core Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
124
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Large Cap Core Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 10.11
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03(d) 0.08(d)
Net realized and unrealized gain
(loss) on investments 0.79 1.15
------------ ------------
Total from investment operations 0.82 1.23
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.02) (0.09)
In excess of net investment income -- --
From net realized gains -- --
------------ ------------
Total distributions declared to shareholders (0.02) (0.09)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.05 $ 11.25
Total return (f) 7.28%(g) 12.20%(h)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.07% 1.03%(j)
Net investment income (i) 0.26% 0.89%(j)
Waiver/reimbursement --%(k) --
Portfolio turnover rate 115% 55%(h)
Net assets, end of period (000's) $ 175,124 $ 190,195
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.77 $ 16.43 $ 16.02 $ 14.90
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.07(d) 0.06 0.08 0.13(d)
Net realized and unrealized gain
(loss) on investments (2.23) (2.39) 1.32 2.02
------------ ------------ ------------ ------------
Total from investment operations (2.16) (2.33) 1.40 2.15
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.05) (0.08) (0.12)
In excess of net investment income -- --(e) --(e) --
From net realized gains (0.44) (1.28) (0.91) (0.91)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (0.50) (1.33) (0.99) (1.03)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.11 $ 12.77 $ 16.43 $ 16.02
Total return (f) (17.85)%(g) (15.12)% 9.38% 14.85%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 0.97% 0.97% 1.00% 1.05%
Net investment income (i) 0.56% 0.44% 0.44% 0.76%
Waiver/reimbursement 0.03% -- -- --
Portfolio turnover rate 13% 19% 42% 20%
Net assets, end of period (000's) $ 340,496 $ 460,302 $ 678,398 $ 309,106
- -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On December 9, 2002, the Galaxy Growth & Income Fund, Trust shares were
redesignated Liberty Large Cap Core Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
125
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Cap Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.30 $ 12.64
- -----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.07)(e) (0.04)(e)
Net realized and unrealized gain
(loss) on investments 2.75 3.35
------------ ------------
Total from investment operations 2.68 3.31
- -----------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- --
From net realized gains (0.44) (0.65)
------------ ------------
Total distributions declared to shareholders (0.44) (0.65)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.54 $ 15.30
Total return (f)(g) 17.73% 27.25%(h)
-----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.15% 1.24%(j)
Net investment income (loss) (i) (0.40)% (0.28)%(j)
Waiver/reimbursement --%(k) 0.02%(j)
Portfolio turnover rate 26% 19%(h)
Net assets, end of period (000's) $ 211,502 $ 57,462
- -----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS A SHARES 2002 2001 2000 1999 (d)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.05 $ 14.33 $ 13.04 $ 13.59
- ------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.03)(e) 0.02(e) 0.05(e) 0.03
Net realized and unrealized gain
(loss) on investments (0.07) 1.61 2.64 0.73
------------ ------------ ------------ ------------
Total from investment operations (0.10) 1.63 2.69 0.76
- ------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.04) (0.04) (0.04)
From net realized gains (1.31) (1.87) (1.36) (1.27)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (1.31) (1.91) (1.40) (1.31)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.64 $ 14.05 $ 14.33 $ 13.04
Total return (f)(g) (1.73)% 12.87% 22.26% 5.80%
- ------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.29% 1.23% 1.16% 1.18%
Net investment income (loss) (i) (0.19)% 0.17% 0.36% 0.26%
Waiver/reimbursement 0.01% 0.04% 0.16% 0.22%
Portfolio turnover rate 23% 46% 43% 42%
Net assets, end of period (000's) $ 210 $ 168 $ 189 $ 175
- ------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Cap Value Fund, Prime A shares were
redesignated Liberty Small Cap Fund, Class A shares.
(d) The Fund began offering Prime B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
126
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Cap Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.75 $ 12.31
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.19)(e) (0.15)(e)
Net realized and unrealized gain
(loss) on investments 2.67 3.24
------------ ------------
Total from investment operations 2.48 3.09
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.34) (0.65)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.89 $ 14.75
Total Return (f)(g) 16.96% 26.14%(h)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.90% 2.10%(j)
Net investment loss (i) (1.15)% (1.14)%(j)
Waiver/reimbursement --%(k) 0.02%(j)
Portfolio turnover rate 26% 19%(h)
Net assets, end of period (000's) $ 40,170 $ 11,122
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS B SHARES 2002 2001 2000 1999 (d)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.82 $ 14.19 $ 12.98 $ 13.59
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.14)(e) (0.10)(e) (0.05)(e) (0.05)
Net realized and unrealized gain
(loss) on investments (0.06) 1.60 2.62 0.71
------------ ------------ ------------ ------------
Total from investment operations (0.20) 1.50 2.57 0.66
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (1.31) (1.87) (1.36) (1.27)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.31 $ 13.82 $ 14.19 $ 12.98
Total Return (f)(g) (2.55)% 11.91% 21.46% 4.96%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.12% 2.08% 1.93% 1.93%
Net investment loss (i) (1.02)% (0.68)% (0.41)% (0.49)%
Waiver/reimbursement 0.01% 0.07% 0.53% 0.56%
Portfolio turnover rate 23% 46% 43% 42%
Net assets, end of period (000's) $ 282 $ 198 $ 170 $ 190
- -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Cap Value Fund, Prime B shares were
redesignated Liberty Small Cap Fund, Class B shares.
(d) The Fund began offering Prime B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
127
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Cap Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (a)(c)
- ---------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.77 $ 12.55
- ---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.19) (0.14)
Net realized and unrealized gain on investments 2.67 3.01
------------ ------------
Total from investment operations 2.48 2.87
- ---------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.34) (0.65)
- ---------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.91 $ 14.77
Total return (e)(f) 16.94% 23.90%(g)
- ---------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.90% 2.03%(i)
Net investment loss (h) (1.15)% (1.10)%(i)
Waiver/reimbursement --%(j) 0.02%(i)
Portfolio turnover rate 26% 19%(g)
Net assets, end of period (000's) $ 64,686 $ 12,670
- ---------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
128
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Cap Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (a)(c)
- ---------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.63 $ 12.22
- ---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.18)(e) (0.12)(e)
Net realized and unrealized gain
(loss) on investments 2.64 3.18
------------ ------------
Total from investment operations 2.46 3.06
- ---------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.34) (0.65)
- ---------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.75 $ 14.63
Total return (f) 16.97%(g) 26.09%(g)(h)
- ---------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.87% 2.10%(j)
Net investment loss (i) (1.11)% (1.03)%(j)
Waiver/reimbursement --%(k) 0.02%(j)
Portfolio turnover rate 26% 19%(h)
Net assets, end of period (000's) $ 10,952 $ 10,353
- ---------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999(d)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.72 $ 14.13 $ 12.96 $ 13.59
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.14)(e) (0.11)(e) (0.10)(e) (0.04)
Net realized and unrealized gain
(loss) on investments (0.05) 1.57 2.63 0.68
------------ ------------ ------------ ------------
Total from investment operations (0.19) 1.46 2.53 0.64
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (1.31) (1.87) (1.36) (1.27)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.22 $ 13.72 $ 14.13 $ 12.96
Total return (f) (2.49)%(g) 11.73% 21.06%(g) 4.80%(g)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.12% 2.21% 2.23% 2.10%
Net investment loss (i) (1.02)% (0.80)% (0.71)% (0.66)%
Waiver/reimbursement 0.01% -- 0.18% 0.78%
Portfolio turnover rate 23% 46% 43% 42%
Net assets, end of period (000's) $ 9,046 $ 5,278 $ 2,838 $ 1,637
- -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Cap Value Fund, Retail B shares were
redesignated Liberty Small Cap Fund, Class G shares.
(d) The Fund began offering Retail B shares on November 1, 1998.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
129
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Cap Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (a)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.16 $ 12.55
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.08)(d) (0.03)(d)
Net realized and unrealized gain
(loss) on investments 2.74 3.29
------------ ------------
Total from investment operations 2.66 3.26
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- --
From net realized gains (0.42) (0.65)
------------ ------------
Total distributions declared to shareholders (0.42) (0.65)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.40 $ 15.16
Total return (f) 17.73%(g) 27.03%(g)(h)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.21% 1.34%(j)
Net investment income (loss) (i) (0.45)% (0.26)%(j)
Waiver/reimbursement --%(k) 0.02%(j)
Portfolio turnover rate 26% 19%(h)
Net assets, end of period (000's) $ 146,752 $ 134,455
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.96 $ 14.25 $ 12.98 $ 13.53
- --------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.03)(d) --(d)(e) 0.01(d) 0.02
Net realized and unrealized gain
(loss) on investments (0.07) 1.59 2.63 0.73
------------ ------------ ------------ ------------
Total from investment operations (0.10) 1.59 2.64 0.75
- --------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01) (0.01) (0.03)
From net realized gains (1.31) (1.87) (1.36) (1.27)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (1.31) (1.88) (1.37) (1.30)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.55 $ 13.96 $ 14.25 $ 12.98
Total return (f) (1.75)%(g) 12.66% 21.96%(g) 5.68%(g)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.33% 1.42% 1.44% 1.31%
Net investment income (loss) (i) (0.23)% (0.02)% 0.08% 0.13%
Waiver/reimbursement 0.01% -- 0.11% 0.28%
Portfolio turnover rate 23% 46% 43% 42%
Net assets, end of period (000's) $ 115,468 $ 100,159 $ 87,457 $ 80,870
- --------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Cap Value Fund, Retail A shares were
redesignated Liberty Small Cap Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
130
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Cap Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.45 $ 12.75
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.03)(d) 0.02(d)
Net realized and unrealized gain
(loss) on investments 2.80 3.34
------------ ------------
Total from investment operations 2.77 3.36
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01)
From net realized gains (0.49) (0.65)
------------ ------------
Total distributions declared to shareholders (0.49) (0.66)
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.73 $ 15.45
Total return (e) 18.12%(f) 27.44%(f)(g)
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 0.90% 0.92%(i)
Net investment income (loss) (h) (0.15)% 0.14%(i)
Waiver/reimbursement --%(j) 0.02%(i)
Portfolio turnover rate 26% 19%(g)
Net assets, end of period (000's) $ 1,101,312 $ 789,666
- ----------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
CLASS Z SHARES
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.11 $ 14.38 $ 13.07 $ 13.61
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.03(d) 0.07(d) 0.08(d) 0.05
Net realized and unrealized gain
(loss) on investments (0.07) 1.60 2.65 0.74
------------ ------------ ------------ ------------
Total from investment operations (0.04) 1.67 2.73 0.79
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.01) (0.07) (0.06) (0.06)
From net realized gains (1.31) (1.87) (1.36) (1.27)
------------ ------------ ------------ ------------
Total distributions declared to shareholders (1.32) (1.94) (1.42) (1.33)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.75 $ 14.11 $ 14.38 $ 13.07
Total return (e) (1.26)%(f) 13.20% 22.62% 6.02%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 0.90% 0.92% 0.94% 0.97%
Net investment income (loss) (h) 0.20% 0.48% 0.58% 0.47%
Waiver/reimbursement 0.01% -- -- --
Portfolio turnover rate 23% 46% 43% 42%
Net assets, end of period (000's) $ 485,197 $ 425,687 $ 332,703 $ 255,268
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Cap Value Fund, Trust shares were
redesignated Liberty Small Cap Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
131
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Company Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.10 $ 11.74
- --------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.19) (0.17)
Net realized and unrealized gain on investments 2.03 2.53
------------ ------------
Total from investment operations 1.84 2.36
- --------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.94 $ 14.10
Total return (e) 13.05%(f) 20.10%(g)
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.35% 1.62%(i)
Net investment loss (h) (1.16)% (1.42)%(i)
Waiver/reimbursement 0.01% --
Portfolio turnover rate 54% 123%(g)
Net assets, end of period (000's) $ 4,586 $ 384
- --------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class A shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(f) Had the Investment Advisor or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
132
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Company Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.26 $ 11.13
- --------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.29) (0.25)
Net realized and unrealized gain on investments 1.91 2.38
------------ ------------
Total from investment operations 1.62 2.13
- --------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.88 $ 13.26
Total return (e) 12.22%(f) 19.14%(g)
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.09% 2.47%(i)
Net investment loss (h) (1.90)% (2.24)%(i)
Waiver/reimbursement 0.01% --
Portfolio turnover rate 54% 123%(g)
Net assets, end of period (000's) $ 1,826 $ 203
- --------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class B shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming no contingent deferred sales
charge.
(f) Had the Investment Advisor or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
133
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Company Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.22 $ 11.13
- --------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.29) (0.29)
Net realized and unrealized gain on investments 1.91 2.38
------------ ------------
Total from investment operations 1.62 2.09
- --------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.84 $ 13.22
Total return (e) 12.25%(f) 18.78%(g)
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.09% 2.84%(i)
Net investment loss (h) (1.90)% (2.59)%(i)
Waiver/reimbursement 0.01% --
Portfolio turnover rate 54% 123%(g)
Net assets, end of period (000's) $ 982 $ 56
- --------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming no contingent deferred sales
charge.
(f) Had the Investment Advisor or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
134
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Company Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS G SHARES 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.24 $ 10.65
- --------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.30)(d) (0.25)(d)
Net realized and unrealized gain
(loss) on investments 1.91 2.84
------------ ------------
Total from investment operations 1.61 2.59
- --------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- --
In excess of net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- --
- --------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.85 $ 13.24
Total return (f) 12.16%(g) 24.32%(h)
- --------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.16% 2.53%(j)
Net investment loss (i) (1.98)% (2.34)%(j)
Waiver/reimbursement 0.01% --
Portfolio turnover rate 54% 123%(h)
Net assets, end of period (000's) $ 4,565 $ 6,651
- --------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS G SHARES 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.30 $ 21.10 $ 15.31 $ 13.39
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.27)(d) (0.25) (0.37) (0.34)
Net realized and unrealized gain
(loss) on investments (3.38) (3.15) 6.16 2.26
------------ ------------ ------------ ------------
Total from investment operations (3.65) (3.40) 5.79 1.92
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- (3.40) -- --
In excess of net realized gains -- --(e) -- --
------------ ------------ ------------ ------------
Total distributions declared to shareholders -- (3.40) -- --
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.65 $ 14.30 $ 21.10 $ 15.31
Total return (f) (25.52)%(g) (17.66)% 37.82%(g) 14.34%(g)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.29% 2.25% 2.24% 2.16%
Net investment loss (i) (1.97)% (1.74)% (1.79)% (2.04)%
Waiver/reimbursement 0.03% -- 0.01% 0.16%
Portfolio turnover rate 96% 75% 91% 105%
Net assets, end of period (000's) $ 9,148 $ 15,190 $ 18,936 $ 12,212
- -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Company Equity Fund, Retail B shares
were redesignated Liberty Small Company Equity Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
135
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Company Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS T SHARES 2004 (a) 2003 (b)(c)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.09 $ 11.23
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.20)(d) (0.15)(d)
Net realized and unrealized gain
(loss) on investments 2.03 3.01
------------ ------------
Total from investment operations 1.83 2.86
- ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- --
In excess of net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- --
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.92 $ 14.09
Total return (f) 12.99%(g) 25.47%(g)(h)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.41% 1.54%(j)
Net investment loss (i) (1.23)% (1.35)%(j)
Waiver/reimbursement 0.02% 0.05%(j)
Portfolio turnover rate 54% 123%(h)
Net assets, end of period (000's) $ 68,359 $ 66,780
- ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.95 $ 21.75 $ 15.66 $ 13.63
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.16)(d) (0.17) (0.22) (0.23)
Net realized and unrealized gain
(loss) on investments (3.56) (3.23) 6.31 2.26
------------ ------------ ------------ ------------
Total from investment operations (3.72) (3.40) 6.09 2.03
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- (3.40) -- --
In excess of net realized gains -- --(e) -- --
------------ ------------ ------------ ------------
Total distributions declared to shareholders -- (3.40) -- --
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.23 $ 14.95 $ 21.75 $ 15.66
Total return (f) (24.88)%(g) (17.03)% 38.89% 14.89%(g)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.46% 1.42% 1.44% 1.53%
Net investment loss (i) (1.14)% (0.91)% (0.99)% (1.41)%
Waiver/reimbursement 0.03% -- -- 0.01%
Portfolio turnover rate 96% 75% 91% 105%
Net assets, end of period (000's) $ 57,537 $ 84,332 $ 125,427 $ 87,921
- ----------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Company Equity Fund, Retail A shares
were redesignated Liberty Small Company Equity Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
136
FINANCIAL HIGHLIGHTS ___________________________________________________________
Columbia Small Company Equity Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS Z SHARES 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.85 $ 11.79
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.15)(d) (0.11)(d)
Net realized and unrealized gain
(loss) on investments 2.14 3.17
------------ ------------
Total from investment operations 1.99 3.06
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- --
In excess of net realized gains -- --
------------ ------------
Total distributions declared to shareholders -- --
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.84 $ 14.85
Total return (f) 13.40%(g) 25.95%(h)
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.08% 1.12%(j)
Net investment loss (i) (0.90)% (0.93)%(j)
Waiver/reimbursement 0.01% --
Portfolio turnover rate 54% 123%(h)
Net assets, end of period (000's) $ 300,109 $ 293,603
- ----------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.63 $ 22.48 $ 16.13 $ 13.96
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.11)(d) (0.10) (0.12) (0.16)
Net realized and unrealized gain
(loss) on investments (3.73) (3.35) 6.47 2.33
------------ ------------ ------------ ------------
Total from investment operations (3.84) (3.45) 6.35 2.17
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- (3.40) -- --
In excess of net realized gains -- --(e) -- --
------------ ------------ ------------ ------------
Total distributions declared to shareholders -- (3.40) -- --
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.79 $ 15.63 $ 22.48 $ 16.13
Total return (f) (24.62)%(g) (16.63)% 39.43% 15.54%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.04% 1.03% 1.03% 1.12%
Net investment loss (i) (0.72)% (0.52)% (0.58)% (1.00)%
Waiver/reimbursement 0.01% -- -- --
Portfolio turnover rate 96% 75% 91% 105%
Net assets, end of period (000's) $ 217,377 $ 318,414 $ 422,579 $ 233,326
- ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Company Equity Fund, Trust shares
were redesignated Liberty Small Company Equity Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
137
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ________________________
Columbia Equity Funds
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST XI AND THE SHAREHOLDERS OF:
COLUMBIA ASSET ALLOCATION FUND
COLUMBIA LARGE CAP GROWTH FUND
COLUMBIA DISCIPLINED VALUE FUND
COLUMBIA INTERNATIONAL EQUITY FUND
COLUMBIA LARGE CAP CORE FUND
COLUMBIA SMALL CAP FUND
COLUMBIA SMALL COMPANY EQUITY FUND
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the above Funds (the "Funds") at
September 30, 2004, and the results of their operations, the changes in their
net assets, and their financial highlights for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Funds' management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), which require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 2004 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
The financial statements and financial highlights of the Funds as of September
30, 2003 and for fiscal periods ending on or prior to September 30, 2003 were
audited by other independent accountants, whose report dated November 14, 2003
expressed an unqualified opinion on those statements and highlights.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 15, 2004
138
UNAUDITED INFORMATION __________________________________________________________
Columbia Equity Funds
FEDERAL INCOME TAX INFORMATION
COLUMBIA ASSET ALLOCATION FUND
For non-corporate shareholders 60.02%, of the maximum amount allowable under the
Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the
Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
43.43% of the ordinary income distributed by the Fund for the year ended
September 30, 2004, qualifies for the corporate dividends received deduction.
COLUMBIA LARGE CAP GROWTH FUND
For non-corporate shareholders 100.00%, of the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
100.00% of the ordinary income distributed by the Fund for the year ended
September 30, 2004, qualifies for the corporate dividends received deduction.
COLUMBIA DISCIPLINED VALUE FUND
For non-corporate shareholders 100.00%, of the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
100.00% of the ordinary income distributed by the Fund for the year ended
September 30, 2004, qualifies for the corporate dividends received deduction.
COLUMBIA INTERNATIONAL EQUITY FUND
Foreign taxes paid during the fiscal year ended September 30,2004, amounting to
$2,487,860 ($0.06 per share) are expected to be passed through to shareholders
as 100.00% allowable foreign tax credits on Form 1099-DIV for the year ending
December 31, 2004.
Gross income derived from sources within foreign countries amounted to
$9,510,340 ($0.25) for the fiscal year ended September 30, 2004.
For non-corporate shareholders 100.00%, of the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
COLUMBIA LARGE CAP CORE FUND
For the fiscal year ended September 30, 2004, the Fund designates long-term
capital gains of $13,248,184.
For non-corporate shareholders 100.00%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004 1099
Div Form.
100.00% of the ordinary income distributed by the Fund for the year ended
September 30, 2004, qualifies for the corporate dividends received deduction.
COLUMBIA SMALL CAP FUND
For the fiscal year ended September 30, 2004, the Fund designates long-term
capital gains of $71,905,830.
For non-corporate shareholders 49.86%, or the maximum amount allowable under the
Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the
Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
60.73% of the ordinary income distributed by the Fund for the year ended
September 30, 2004, qualifies for the corporate dividends received deduction.
139
TRUSTEES _______________________________________________________________________
Columbia Equity Funds
Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were
appointed to the Board of the Trustees of the Fund. Messrs. Simpson and
Woolworth had been directors of 15 Columbia Funds and 20 funds in the CMG Fund
Trust. Also effective October 8, 2003, the incumbent trustees of the Fund were
elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in
the CMG Fund Trust. The new combined Board of Trustees/Directors of the Fund now
oversees 118 funds in the Columbia Funds Complex (including the former Liberty
Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of these
trustees/directors also serve on the Boards of other funds in the Columbia Funds
Complex.
The Trustees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds Complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds Complex.
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
YEAR FIRST ELECTED OR APPOINTED TO OFFICE (1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
DOUGLAS A. HACKER (AGE 49) Executive Vice President - Strategy of United Airlines (airline) since December 2002
P.O. Box 66100 (formerly President of UAL Loyalty Services (airline) from September 2001 to December
Chicago, IL 60666 2002; Executive Vice President and Chief Financial Officer of United Airlines from
Trustee (since 1996) March 1999 to September 2001; Senior Vice President - Finance from March 1993 to
July 1999). Oversees 118, Orbitz, Inc. (on-line travel company)
-------------------------------------------------------------------------------------
JANET LANGFORD KELLY (AGE 46) Adjunct Professor of Law, Northwestern University, since September 2004; Private
9534 W. Gull Lake Drive Investor since March 2004 (formerly Chief Administrative Officer and Senior Vice
Richland, MI 49083-8530 President, Kmart Holding Corporation (consumer goods), from September 2003 to March
Trustee (since 1996) 2004; Executive Vice President-Corporate Development and Administration, General
Counsel and Secretary, Kellogg Company (food manufacturer), from September 1999 to
August 2003; Senior Vice President, Secretary and General Counsel, Sara Lee
Corporation (branded, packaged, consumer-products manufacturer) from January 1995 to
September 1999). Oversees 118, None
-------------------------------------------------------------------------------------
RICHARD W. LOWRY (AGE 68) Private Investor since August 1987 (formerly Chairman and Chief Executive Officer,
10701 Charleston Drive U.S. Plywood Corporation (building products manufacturer)). Oversees 120 3, None
Vero Beach, FL 32963
Trustee (since 1995)
-------------------------------------------------------------------------------------
CHARLES R. NELSON (AGE 62) Professor of Economics, University of Washington, since January 1976; Ford and Louisa
Department of Economics Van Voorhis Professor of Political Economy, University of Washington, since September
University of Washington 1993 (formerly Director, Institute for Economic Research, University of Washington
Seattle, WA 98195 from September 2001 to June 2003) Adjunct Professor of Statistics, University of
Trustee (since 1981) Washington, since September 1980; Associate Editor, Journal of Money Credit and
Banking, since September 1993; consultant on econometric and statistical matters.
Oversees 118, None
-------------------------------------------------------------------------------------
JOHN J. NEUHAUSER (AGE 61) Academic Vice President and Dean of Faculties since August 1999, Boston College
84 College Road (formerly Dean, Boston College School of Management from September 1977 to September
Chestnut Hill, MA 02467-3838 1999). Oversees 1213, 4, Saucony, Inc. (athletic footwear)
Trustee (since 1985)
-------------------------------------------------------------------------------------
PATRICK J. SIMPSON (AGE 60) Partner, Perkins Coie L.L.P. (law firm). Oversees 118, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
-------------------------------------------------------------------------------------
140
________________________________________________________________________________
Columbia Equity Funds
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
YEAR FIRST ELECTED OR APPOINTED TO OFFICE (1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
THOMAS E. STITZEL (AGE 68) Business Consultant since 1999 (formerly Professor of Finance from 1975 to 1999,
2208 Tawny Woods Place College of Business, Boise State University); Chartered Financial Analyst.
Boise, ID 83706 Oversees 118, None.
Trustee (since 1998)
-------------------------------------------------------------------------------------
THOMAS C. THEOBALD (AGE 67) Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since
303 W. Madison September 2004 (formerly Managing Director, William Blair Capital Partners
Suite 2500 (private equity investing) from September 1994 to September 2004). Oversees 118,
Chicago, IL 60606 Anixter International (network support equipment distributor); Ventas, Inc. (real
Trustee and Chairman of the Board 5 estate investment trust); Jones Lang LaSalle (real estate management services) and
(since 1996) Ambac Financial Group (financial guaranty insurance)
-------------------------------------------------------------------------------------
ANNE-LEE VERVILLE (AGE 59) Retired since 1997 (formerly General Manager, Global Education Industry, IBM
359 Stickney Hill Road Corporation (computer and technology) from 1994 to 1997). Oversees 1194, Chairman
Hopkinton, NH 03229 of the Board of Directors, Enesco Group, Inc. (designer, importer and distributor of
Trustee (since 1998) giftware and collectibles)
-------------------------------------------------------------------------------------
RICHARD L. WOOLWORTH (AGE 63) Retired since December 2003 (formerly Chairman and Chief Executive Officer, The
100 S.W. Market Street #1500 Regence Group (regional health insurer); Chairman and Chief Executive Officer,
Portland, OR 97207 BlueCross BlueShield of Oregon; Certified Public Accountant, Arthur Young & Company).
Trustee (since 1991) Oversees 118, Northwest Natural Gas Co. (natural gas service provider)
-------------------------------------------------------------------------------------
INTERESTED TRUSTEE
WILLIAM E. MAYER 2 (Age 64) Managing Partner, Park Avenue Equity Partners (private equity) since February 1999
399 Park Avenue (formerly Founding Partner, Development Capital LLC from November 1996 to February
Suite 3204 1999). Oversees 1203, Lee Enterprises (print media), WR Hambrecht + Co. (financial
New York, NY 10022 service provider); First Health (healthcare); Reader's Digest (publishing);
Trustee (since 1994) OPENFIELD Solutions (retail industry technology provider)
-------------------------------------------------------------------------------------
1 In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In October
2003, the trustees on the Liberty Board were elected to the boards of the
Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG
Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
2 Mr. Mayer is an "interested person" (as defined in the Investment Company Act
of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co.
3 Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the
Liberty All-Star Funds, currently consisting of 2 funds, which are advised by
an affiliate of the Advisor.
4 Mr. Neuhauser and Ms. Verville also serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Advisor.
5 Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
141
OFFICERS _______________________________________________________________________
Columbia Equity Funds
NAME, ADDRESS AND AGE, POSITION WITH
COLUMBIA FUNDS, YEAR FIRST ELECTED OR
APPOINTED TO OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
CHRISTOPHER L. WILSON (AGE 47) President of the Columbia Funds since October 2004 (formerly President and Chief
One Financial Center Executive Officer, CDC IXIS Asset Management Services, Inc. from September 1998 to
Boston, MA 02111 August 2004).
President (since 2004)
-------------------------------------------------------------------------------------
J. KEVIN CONNAUGHTON (AGE 40) Treasurer of the Columbia Funds and of the Liberty All-Star Funds since December
One Financial Center 2000; Vice President of the Advisor since April 2003 (formerly President of the
Boston, MA 02111 Columbia Funds from February 2004 to October 2004; Chief Accounting Officer and
Treasurer (since 2000) Controller of the Liberty Funds and of the Liberty All-Star Funds from February 1998
to October 2000); Treasurer of the Galaxy Funds since September 2002; Treasurer,
Columbia Management Multi-Strategy Hedge Fund, LLC since December 2002 (formerly Vice
President of Colonial Management Associates, Inc. from February 1998 to October
2000).
-------------------------------------------------------------------------------------
MARY JOAN HOENE (AGE 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds since August
40 West 57th Street 2004; Chief Compliance Officer of the Liberty All-Star Funds since August 2004
New York, NY 10019 (formerly Partner, Carter, Ledyard & Milburn LLP from January 2001 to August 2004;
Senior Vice President and Counsel, Carter, Ledyard & Milburn LLP from November 1999 to December 2000; Vice
Chief Compliance Officer President and Counsel, Equitable Life Assurance Society of the United States from
(since 2004) April 1998 to November 1999).
-------------------------------------------------------------------------------------
MICHAEL G. CLARKE (AGE 34) Chief Accounting Officer of the Columbia Funds and of the Liberty All-Star Funds
One Financial Center since October 2004 (formerly Controller of the Columbia Funds and of the Liberty
Boston, MA 02111 All-Star Funds from May 2004 to October 2004; Assistant Treasurer from June, 2002 to
Chief Accounting Officer May 2004; Vice President, Product Strategy & Development of the Liberty Funds Group
(since 2004) from February 2001 to June 2002; Assistant Treasurer of the Liberty Funds and of the
Liberty All-Star Funds from August 1999 to February 2001; Audit Manager, Deloitte &
Touche LLP from May 1997 to August 1999).
-------------------------------------------------------------------------------------
JEFFREY R. COLEMAN (AGE 34) Controller of the Columbia Funds and of the Liberty All-Star Funds since October 2004
One Financial Center (formerly Vice President of CDC IXIS Asset Management Services, Inc. and Deputy
Boston, MA 02111 Treasurer of the CDC Nvest Funds and Loomis Sayles Funds from February 2003 to
Controller (since 2004) September 2004; Assistant Vice President of CDC IXIS Asset Management Services, Inc.
and Assistant Treasurer of the CDC Nvest Funds from August 2000 to February 2003;
Tax Manager of PFPC, Inc. from November 1996 to August 2000).
-------------------------------------------------------------------------------------
DAVID A. ROZENSON (AGE 50) Secretary of the Columbia Funds and of the Liberty All-Star Funds since December
One Financial Center 2003; Senior Counsel, Bank of America Corporation (formerly FleetBoston Financial
Boston, MA 02111 Corporation) since January 1996; Associate General Counsel, Columbia Management
Secretary (since 2003) Group since November 2002.
-------------------------------------------------------------------------------------
142
IMPORTANT INFORMATION ABOUT THIS REPORT ________________________________________
Columbia Equity 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
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High 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 Equity 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 fund uses to determine how
to vote proxies relating to their portfolio securities and a copy of the fund's
voting record are available (i) at www.columbiamanagement.com; (ii) on the
Securities and Exchange Commission's website at www.sec.gov and (iii) without
charge, upon request, by calling 800-368-0346.
Please note that on March 1, 2004, Ernst & Young LLP ("E&Y") resigned as the
funds' independent registered public accounting firm. 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 September 30, 2004.
143
Columbia Funds _________________________________________________________________
Columbia Equity 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
----------------------------------------
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
144
________________________________________________________________________________
Columbia Equity 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
* The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the merger, which will
take effect on or about February 26, 2005, pending shareholder approval.
** The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the liquidation, which
will take effect on December 10, 2004.
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 and distributor subsidiaries of Columbia Management
Group, including Columbia Management Advisors, Inc., the registered investment
advisor, and Columbia Funds Distributor, Inc.
145
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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 Equity Funds Annual Report, September 30, 2004
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
[LOGO] COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.426.3750 WWW.COLUMBIAFUNDS.COM
G-02/980S-0904 (11/04) 04/3396
COLUMBIA DIVIDEND
INCOME FUND
Annual Report
September 30, 2004
[photo of woman reading]
[LOGO]:
COLUMBIA FUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
Table of Contents
Fund Profile.......................... 1
Performance Information............... 2
Understanding Your Expenses........... 3
Economic Update........................ 4
Portfolio Managers' Report............ 5
Investment Portfolio.................. 7
Statement of Assets and Liabilities... 11
Statement of Operations............... 12
Statement of Changes in Net Assets.... 13
Notes to Financial Statements......... 16
Financial Highlights.................. 22
Report of Independent
Registered Public Accounting Firm..... 28
Unaudited Information................. 29
Trustees.............................. 30
Officers.............................. 32
Important Information
About This Report..................... 33
President's Message
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Dear Shareholder:
Your fund's legal and management team here at Columbia Funds have been working
hard to strengthen our mutual fund services operation and to ensure that all
operations and processes comply with legal and regulatory standards. In the
coming months, we will continue to monitor the oversight enhancements recently
put in place by your fund's Board of Trustees and make every effort to protect
the interests of all our shareholders in everything we do.
In our last report, we announced that your fund's advisor, Columbia Management
Advisors, Inc., and your fund's distributor, Columbia Funds Distributor, Inc.,
had reached an agreement with the Securities and Exchange Commission and the New
York Attorney General to settle charges involving market timing in some of our
mutual funds. We want to reassure you that the settlement and all associated
legal fees will be paid by Columbia Management, not by the affected funds or
their shareholders.
Recently the Securities and Exchange Commission has adopted new rules regarding
mutual fund governance. We think it is important for you to know that Columbia
Management complied with the majority of these rules well before they were
adopted. Your fund's Board of Trustees has taken the following important steps
to strengthen its capacity to oversee your fund and to comply with SEC rules.
o The Board of Trustees appointed Mary Joan Hoene as Chief Compliance Officer
of Columbia Funds. In this role, Ms. Hoene will report directly to the
Board of Trustees and will work with the Board of Trustees as well as the
senior leadership of Columbia Management, the investment management arm of
Bank of America, and with Bank of America's principal compliance
executives. She will focus on the overall compliance program of the funds
and the responsibility and performance of the fund's service providers.
Prior to her appointment, Ms. Hoene was a partner in the law firm of
Carter, Ledyard & Milburn, LLP. Previously she also served as associate
director and deputy director for the Securities and Exchange Commission
Division of Investment Management. As an active advisor, Ms. Hoene has
helped several fund boards develop independent board practices. The Board
is pleased to have Ms. Hoene, with her broad and extensive experience, in
this important new position.
o The Board of Trustees has established operational guidelines that result in
stronger, more vigilant trusteeship across the entire Columbia Management
organization. Board committees have been established to oversee products by
fund category, allowing for greater specialization among board trustees.
Shareholders will elect board members every five years, beginning in 2005.
o In addition to enhancements to oversight within Columbia Management, our
parent company--Bank of America--has also increased the role that such
professionals play within the broader organization. A chief compliance
officer has been named to report directly to Ken Lewis, Bank of America's
chief executive officer. Bank of America has also adopted a corporate Code
of Ethics Committee, an Internal Compliance Controls Committee and a
Regulatory Implementation Group to ensure full alignment and execution of
remedial actions and best practices across the company.
In the pages that follow, you'll find a discussion of the economic environment
during the period, followed by a detailed report from the fund's manager on key
factors that influenced performance. This report is rich in information, and you
should discuss it with your financial advisor if you have questions.
We are committed to providing quality products and services to our shareholders,
strengthening your confidence in us, and working hard to help you achieve
financial success. It is a privilege to play a role in your financial future,
and we value your business. Thank you for choosing Columbia Management.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
Head of Mutual Funds, Columbia Management
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's chief
liaison to the mutual fund boards of trustees.
Chris joined Bank of America in August 2004.
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GURANTEE
Fund Profile
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed and the composition of its
portfolio will change over time.
Top 10 holdings as of 09/30/04 (%)
- -----------------------------------
Citigroup, Inc. 3.7
- -----------------------------------
Exxon Mobil Corp. 3.7
- -----------------------------------
ConocoPhillips 3.5
- -----------------------------------
BP PLC, ADR 3.3
- -----------------------------------
U.S. Bancorp 3.0
- -----------------------------------
Verizon Communications, Inc. 2.7
- -----------------------------------
National City Corp. 2.4
- -----------------------------------
SBC Communications, Inc. 2.3
- -----------------------------------
JPMorgan Chase & Co. 2.2
- -----------------------------------
Textron, Inc. 2.1
- -----------------------------------
Sectors as of 09/30/04 (%)
- -----------------------------------
Financials 28.9
- -----------------------------------
Energy 16.2
- -----------------------------------
Industrials 13.2
- -----------------------------------
Consumer staples 8.9
- -----------------------------------
Telecommunication services 7.1
- -----------------------------------
Utilities 6.1
- -----------------------------------
Materials 5.7
- -----------------------------------
Health care 5.2
- -----------------------------------
Consumer discretionary 4.9
- -----------------------------------
Information technology 3.8
- -----------------------------------
[SIDEBAR DATA]:
Summary
o For the 12-month period that ended September 30, 2004, the fund's class A
shares returned 18.60% without sales charge, in an environment that was
generally favorable for stocks, and for value stocks in particular.
o A shift in the fund's strategy toward dividend-paying stocks was rewarded
by strong performance. The fund's modest underperformance relative to its
benchmark, the Russell 1000 Value Index, occurred early in the period when
the fund's strategy was in transition.
o We believe that favorable sector allocation helped the fund outperform its
peer group, the Lipper Equity Income Funds Category.
Class A shares 18.60%
Russell 1000 Value Index 20.52%
Objective
Seeks current income and capital appreciation
Total net assets
$215.2 million
Morningstar style box
STYLE--VALUE / SIZE--LARGE
Portfolio holdings are calculated as a percentage of net assets. Sector
breakdown is calculated as a percentage of total investments excluding
short-term investments.
(C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein:
(1) is proprietary to Morningstar and/or its content providers; (2) may not be
copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past performance is
no guarantee of future results.
The Morningstar Style BoxTM reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data is gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
09/30/2004.
1
Performance Information
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
[mountain chart data]:
Value of a $10,000 investment 03/04/98 - 09/30/04
Class A shares Class A shares
without with Russell 1000 S&P 500
sales charge sales charge Value Index Index
03/1998 $10,000 $ 9,425 $10,000 $10,000
10,230 9,642 10,565 10,530
10,170 9,585 10,636 10,636
9,760 9,199 10,478 10,453
9,635 9,081 10,612 10,878
9,425 8,883 10,426 10,763
7,864 7,412 8,874 9,206
8,555 8,063 9,384 9,796
9,625 9,071 10,111 10,593
9,835 9,269 10,582 11,235
10,262 9,672 10,942 11,882
10,302 9,710 11,030 12,379
10,072 9,492 10,874 11,994
10,489 9,885 11,099 12,473
11,351 10,698 12,136 12,956
11,431 10,774 12,002 12,650
11,693 11,021 12,350 13,352
11,251 10,604 11,988 12,936
10,759 10,141 11,544 12,872
10,097 9,516 11,141 12,520
9,936 9,365 11,783 13,312
9,885 9,317 11,691 13,582
10,266 9,676 11,747 14,382
9,876 9,308 11,364 13,660
9,704 9,146 10,519 13,402
11,088 10,450 11,803 14,713
11,191 10,548 11,666 14,270
11,409 10,753 11,788 13,978
10,965 10,335 11,250 14,323
10,839 10,216 11,390 14,099
11,460 10,801 12,024 14,975
11,481 10,821 12,134 14,184
12,033 11,341 12,433 14,125
11,665 10,994 11,971 13,012
12,549 11,828 12,571 13,075
13,644 12,859 12,619 13,540
13,227 12,467 12,268 12,305
12,856 12,117 11,835 11,525
13,677 12,891 12,415 12,420
13,856 13,060 12,694 12,503
13,565 12,785 12,413 12,200
13,530 12,752 12,386 12,080
12,804 12,067 11,890 11,324
11,590 10,923 11,053 10,409
11,935 11,249 10,958 10,608
12,971 12,225 11,594 11,421
13,555 12,775 11,868 11,522
13,135 12,379 11,777 11,353
13,160 12,403 11,795 11,134
13,737 12,947 12,353 11,553
13,502 12,726 11,930 10,853
13,317 12,552 11,989 10,773
12,168 11,468 11,301 10,006
11,081 10,444 10,250 9,226
11,218 10,573 10,328 9,286
9,759 9,198 9,180 8,277
10,564 9,956 9,860 9,005
11,237 10,590 10,481 9,535
10,759 10,140 10,026 8,976
10,449 9,848 9,783 8,741
9,879 9,311 9,522 8,609
9,882 9,313 9,538 8,693
10,616 10,005 10,378 9,409
11,449 10,791 11,048 9,905
11,700 11,027 11,186 10,032
11,612 10,944 11,353 10,208
11,775 11,098 11,530 10,408
11,611 10,943 11,417 10,297
12,037 11,345 12,116 10,880
12,125 11,428 12,281 10,976
13,028 12,279 13,037 11,551
13,179 12,422 13,266 11,763
13,469 12,695 13,550 11,927
13,383 12,614 13,431 11,747
13,130 12,375 13,103 11,562
13,155 12,399 13,237 11,721
13,453 12,679 13,549 11,948
13,338 12,571 13,358 11,553
13,554 12,775 13,548 11,599
09/2004 13,767 12,975 13,756 11,721
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
1000 Value Index is an unmanaged index that measures the performance of those
Russell 1000 Index companies with lower price-to-book ratios and lower
forecasted growth values. The Standard and Poor's (S&P) 500 Index is an
unmanaged index that tracks the performance of 500 widely held,
large-capitalization US stocks. The S&P 500 Index was the fund's previous
benchmark. Unlike mutual funds, 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 4, 1998.
Performance of a $10,000 investment
03/04/98 - 09/30/04 ($)
- ------------------------------------
sales charge: without with
- ------------------------------------
Class A 13,767 12,975
- ------------------------------------
Class B 13,193 13,093
- ------------------------------------
Class C 13,181 13,181
- ------------------------------------
Class G 13,179 13,079
- ------------------------------------
Class T 13,749 12,958
- ------------------------------------
Class Z 14,169 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, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
Average annual total return as of 09/30/04 (%)
- -------------------------------------------------------------------------------------------------------------------
Share class A B C G T Z
- -------------------------------------------------------------------------------------------------------------------
Inception 11/25/02 11/25/02 11/25/02 03/04/98 03/04/98 03/04/98
- -------------------------------------------------------------------------------------------------------------------
Sales charge without with without with without with without with without with without
- -------------------------------------------------------------------------------------------------------------------
1-year 18.60 11.83 17.69 12.69 17.70 16.70 17.71 12.71 18.50 11.74 18.93
- -------------------------------------------------------------------------------------------------------------------
5-year 6.39 5.15 5.61 5.29 5.59 5.59 5.59 5.10 6.37 5.12 6.83
- -------------------------------------------------------------------------------------------------------------------
Life 4.98 4.04 4.30 4.18 4.29 4.29 4.29 4.17 4.96 4.02 5.44
- -------------------------------------------------------------------------------------------------------------------
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR
ONLY. THE "WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES
CHARGES. IF THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME
REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH
NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON
DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class A, class B and class C are newer classes of shares. Their performance
information includes returns of the fund's class T shares (for class A) and
class G shares (for class B and class C) for periods prior to their inception.
The returns shown for class T and G shares include the returns of Retail A
shares (for class T) and Retail B shares (for class G) of the Galaxy fund for
periods prior to November 25, 2002, the date on which class A, B and C shares
were initially offered by the Fund and the date the Galaxy fund merged into the
existing fund. The returns have not been restated to reflect any differences in
expenses between the predecessor shares and the newer classes of shares. If
differences in expenses had been reflected, the returns shown for periods prior
to the inception of the newer classes of shares would have been lower. The
returns for class G and class T shares include the returns of Retail A shares
(for class T shares) and Retail B shares (for class G shares) of the Galaxy fund
for periods prior to November 25, 2002, the date on which class T and class G
shares were initially offered by the fund. Retail A shares and Retail B shares
of the Galaxy fund were initially offered on March 4, 1998. The returns for
class Z shares include returns of Trust shares of the Galaxy fund for periods
prior to November 25, 2002, the date on which class Z shares were initially
offered by the fund. Trust shares were initially offered by the Galaxy fund on
March 4, 1998.
2
Understanding Your Expenses
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
April 1, 2004 - September 30, 2004
- ------------------------------------------------------------------------------------------------------------------------
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period ($) end of the period ($) during the period ($) expense ratio (%)
- ------------------------------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- ------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1,029.95 1,018.15 6.95 6.91 1.37
- ------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1,027.70 1,014.40 10.75 10.68 2.12
- ------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1,026.85 1,014.40 10.74 10.68 2.12
- ------------------------------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 1,027.55 1,014.65 10.49 10.43 2.07
- ------------------------------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 1,029.80 1,017.90 7.21 7.16 1.42
- ------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 1,030.40 1,019.40 5.69 5.65 1.12
- ------------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Investment Advisor and the transfer agent not waived a portion of
expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o For shareholders who receive their account statements from Columbia Funds
Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at 800.345.6611
o For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance
1. Divide your ending account balance by $1,000. For example, if an account
balance was $8,600 at the end of the period, the result would be 8.6
2. In the section of the table below titled "Expenses paid during the period,"
locate the amount for your share class. You will find this number is in the
column labeled "actual." Multiply this number by the result from step 1.
Your answer is an estimate of the expenses you paid on your account during
the period
3
Economic Update
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Despite uncertainty about job growth, rising energy prices and a slowdown in
consumer spending, the US economy grew at a pace of more than 4.5% during the
12-month period that began October 1, 2003 and ended September 30, 2004. Growth
encountered a soft patch in the second quarter of 2004, but monthly data
suggested that it picked up again in the third quarter.
Job growth dominated the economic news during this reporting period. When more
than 1.2 million jobs were created in the spring of 2004, consumer confidence
soared to its highest level in two years. However, when job growth fell below
expectations during the summer months, consumer confidence fell. According to
the Labor Department's Payroll Survey, the job market has not fully recovered
from the losses incurred during the economic downturn of 2000-2001, and that has
left consumers more cautious about the months ahead.
Consumer spending held up for most of the period, as last year's tax rebates and
tax cuts worked their way into household budgets. Even when consumer spending
declined during the summer, housing activity remained strong. Also, the business
sector stepped into the gap created by sagging consumer spending. Industrial
production rose; factories utilized more of their capacity; and spending on
technology, capital equipment and construction picked up.
STOCKS OUTPERFORMED BONDS
Buoyed by strong gains at the beginning of the period, the S&P 500 Index
returned 13.87% during this 12-month reporting period. However, concerns about
new terror threats and higher interest rates and energy prices helped sideline
investors as the period wore on. Late in the period, leadership passed from
small-cap stocks to mid- and large-cap stocks. Value stocks continued to lead
growth stocks until the final month of the period, when small- and mid-cap
growth bested their value counterparts. Energy stocks and real estate investment
trusts were the best-performing sectors.
BONDS DELIVER RESPECTABLE GAINS
Despite periods of interest-rate volatility, the US bond market delivered
respectable gains during the period. Bond prices sagged in the spring when job
growth picked up and investors began to anticipate higher short-term interest
rates. However, a shaky stock market, higher energy prices and some weak
economic data gave the bond market a boost in the last thee months of the
period. The 10-year Treasury yield ended the period at 4.1%, very close to where
it started.
In this environment, the Lehman Brothers Aggregate Bond Index returned 3.68%.
High-yield bonds gained 12.23%, as measured by the Merrill Lynch US High Yield,
Cash Pay Index. However, most of those gains were achieved during the first half
of the reporting period. In the second half, slower economic growth and high
valuations made high-yield bonds less attractive.
After a year of the lowest short-term interest rates in recent history, The
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.0% to 1.75% in three equal steps during the period. The Fed
indicated that it would continue to raise short-term interest rates at a
"measured pace," in an attempt to balance economic growth against inflationary
pressures.
[SIDEBAR DATA]:
Summary
For the 12-month period
ended September 30, 2004
o Stock prices rose, as measured by the S&P 500 Index and the broader Russell
3000 Index. Many sectors retreated as short-term interest rates moved
higher in the summer and a host of uncertainties unsettled investors.
S&P 500 Index 13.87%
Russell Index 14.26%
o Despite interest rate volatility, investment grade bonds chalked up
respectable gains. The Lehman Brothers Aggregate Bond Index returned 3.68%.
High-yield bonds, which can be less sensitive to changing interest rates,
led the fixed income markets. The Merrill Lynch US High Yield, Cash Pay
Index returned 12.23%.
Merrill Lynch Index 12.23%
Lehman Index 3.68%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 3000 Index is an unmanaged index that tracks the performance of the
3,000 largest US companies based on total market capitalization.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated,
non-convertible investment grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
4
Portfolio Managers' Report
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
For the 12-month period ended September 30, 2004, class A shares of Columbia
Dividend Income Fund returned 18.60% without sales charge. The fund's
performance was lower than its benchmark, the Russell 1000 Value Index, which
returned 20.52% for the same period. This slight underperformance can be
attributed primarily to the first two months of the period, as we shifted the
fund's assets toward dividend-paying stocks. However, in the months that
followed the fund's strategy shift was rewarded. Favorable sector allocation
decisions allowed the fund to outperform the 16.67% return of the Lipper Equity
Income Funds Category.1 The margin of outperformance widened after the portfolio
was restructured to reflect the change in investment objective that was approved
by shareholders on October 21, 2003.
SECTOR WEIGHTINGS AID PERFORMANCE
The fund's strong showing during the period was primarily the result of
favorable allocation decisions. The most important such decision was to
overweight energy stocks, such as integrated oil companies ChevronTexaco, Exxon
Mobil and BP. These companies experienced significant increases in their free
cash flow because of rising oil prices. A significant percentage of this inflow
of cash was transferred to shareholders in the form of higher dividend payments
and/or stock buybacks. Cash flow is the amount of net cash a company generates,
including earnings, depreciation and balance sheet changes, but after
subtracting taxes.
The fund also held less in the consumer discretionary sector than its benchmark
because we believed that consumers were unlikely to continue spending at the
same high level as in 2003, when a combination of tax cuts and mortgage
refinancing enhanced discretionary income. In fact, many retailers and
entertainment companies have produced disappointing earnings thus far in 2004,
and the fund benefited by deemphasizing these areas.
The fund was hurt slightly by its financial holdings, primarily because it did
not participate in a brief wave of major banking mergers. Neither Bank One,
which was acquired during the period by JPMorgan Chase, nor FleetBoston
Financial were in the portfolio. FleetBoston Financial, as the parent company of
the fund's advisor, was not eligible for purchase. It was bought out by Bank of
America earlier this year. Stockholders of both Bank One and FleetBoston
benefited from the acquisitions.
A NEWLY FOCUSED FUND
Overall, the fund benefited from the shareholder vote last fall, which approved
a change in the fund's focus to current income as a component of total return.
Because of this change, we shifted the fund toward companies that we believe
have the potential to sustain their own growth and eventually share their
increasing wealth with investors in the form of higher dividend payments.
1 Lipper Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as those of the fund.
[SIDEBAR DATA]:
Net asset value per share
as of 09/30/04 ($)
- ------------------------------------
Class A 10.80
- ------------------------------------
Class B 10.59
- ------------------------------------
Class C 10.58
- ------------------------------------
Class G 10.58
- ------------------------------------
Class T 10.80
- ------------------------------------
Class Z 10.80
- ------------------------------------
Distributions declared per share
as of 10/01/03 - 09/30/04 ($)
- ------------------------------------
Class A 0.17
- ------------------------------------
Class B 0.09
- ------------------------------------
Class C 0.09
- ------------------------------------
Class G 0.09
- ------------------------------------
Class T 0.17
- ------------------------------------
Class Z 0.20
- ------------------------------------
Holdings discussed in this report
as of 09/30/04 (%)
- ------------------------------------
ChevronTexaco Corp. 1.8
- ------------------------------------
Exxon Mobil Corp. 3.7
- ------------------------------------
BP PLC, ADR 3.3
- ------------------------------------
JPMorgan Chase & Co. 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.
5
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
In particular, we sold non-dividend paying companies such as Celestica and
Accenture at the beginning of the period. Because technology stocks tend not to
pay generous dividends, the fund had a below-average stake in that sector
throughout the year. This helped fund performance during the second half of the
period, when economic growth flattened out somewhat and technology stocks
retreated.
BULLISH ON DIVIDENDS
We are optimistic that dividends will continue to play an important role within
our universe of leading companies. Among our important energy holdings, for
example, we believe earnings and dividend increases are quite likely barring a
sharp reversal in oil prices. More generally, the percentage of corporate
earnings that get paid out as dividends continues to languish at about 30%, a
relatively low level. Even though many companies initiated or increased their
dividends following last year's corporate tax legislation, subsequent dividend
increases have not kept pace with earnings growth. With the economy showing
positive but not explosive growth, we will continue to steer the portfolio
toward what we judge to be higher-quality, dividend-paying companies. Finally,
the fund moved to lower its fees as of September 1, which will effectively
increase its dividend payout.
[photo of Scott Davis]
Scott Davis has co-managed Columbia Dividend Income Fund since November 2001 and
has been with the advisor and its predecessors or affiliate organizations since
1985.
/s/ Scott Davis
[photo of Richard Dahlberg]
Richard Dahlberg, CFA, has co-managed the fund since October 2003 and has been
with the advisor and its predecessors or affiliate organizations since September
2003.
/s/ Richard Dahlberg
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
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.
[PULL QUOTE:]
Going forward, we will continue to steer the portfolio toward what we judge to
be higher-quality, dividend-paying companies.
6
Investment Portfolio
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
Common Stocks - 95.1%
CONSUMER DISCRETIONARY - 4.7%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Automobiles - 1.0% General Motors Corp. 50,000 2,124,000
Automobiles Total 2,124,000
-----------------------------------------------------------------------------
Hotels, Restaurants & Leisure - 1.1% Harrah's Entertainment, Inc. 20,000 1,059,600
McDonald's Corp. 46,000 1,289,380
Hotels, Restaurants & Leisure Total 2,348,980
-----------------------------------------------------------------------------
Media - 1.0% McGraw-Hill Companies, Inc. 26,000 2,071,940
Media Total 2,071,940
-----------------------------------------------------------------------------
Multiline Retail - 1.1% J.C. Penney Co., Inc. 70,000 2,469,600
Multiline Retail Total 2,469,600
-----------------------------------------------------------------------------
Specialty Retail - 0.5% Limited Brands 48,000 1,069,920
Specialty Retail Total 1,069,920
-----------
CONSUMER DISCRETIONARY TOTAL 10,084,440
CONSUMER STAPLES - 8.5%
- ------------------------------------------ -----------------------------------------------------------------------------
Beverages - 0.8% PepsiCo, Inc. 36,000 1,751,400
Beverages Total 1,751,400
-----------------------------------------------------------------------------
Food Products - 1.8% ConAgra Foods, Inc. 148,000 3,805,080
Food Products Total 3,805,080
-----------------------------------------------------------------------------
Household Products - 3.0% Clorox Co. 60,000 3,198,000
Kimberly-Clark Corp. 52,000 3,358,680
Household Products Total 6,556,680
-----------------------------------------------------------------------------
Tobacco - 2.9% Altria Group, Inc. 82,000 3,857,280
Reynolds American, Inc. 27,000 1,837,080
UST, Inc. 14,000 563,640
Tobacco Total 6,258,000
------------
CONSUMER STAPLES TOTAL 18,371,160
ENERGY - 15.6%
- ------------------------------------------ -----------------------------------------------------------------------------
Energy Equipment & Services - 1.3% Halliburton Co. 80,000 2,695,200
Energy Equipment & Services Total 2,695,200
-----------------------------------------------------------------------------
Oil & Gas - 14.3% BP PLC, ADR 122,000 7,018,660
ChevronTexaco Corp. 72,000 3,862,080
ConocoPhillips 90,000 7,456,500
Exxon Mobil Corp. 164,000 7,926,120
Kinder Morgan, Inc. 40,000 2,512,800
Royal Dutch Petroleum Co., N.Y. Shares 40,000 2,064,000
Oil & Gas Total 30,840,160
------------
ENERGY TOTAL 33,535,360
See Accompanying Notes to Financial Statements.
7
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
Common Stocks - (continued)
FINANCIALS - 27.9%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Capital Markets - 2.0% Bank of New York Co., Inc. 78,000 2,275,260
Eaton Vance Corp. 26,000 1,050,140
Federated Investors, Inc., Class B 32,000 910,080
Capital Markets Total 4,235,480
-----------------------------------------------------------------------------
Commercial Banks - 8.3% National City Corp. 132,000 5,097,840
U.S. Bancorp 225,000 6,502,500
Wachovia Corp. 52,000 2,441,400
Wells Fargo & Co. 64,000 3,816,320
Commercial Banks Total 17,858,060
-----------------------------------------------------------------------------
Consumer Finance - 0.8% MBNA Corp. 68,000 1,713,600
Consumer Finance Total 1,713,600
-----------------------------------------------------------------------------
Diversified Financial Services - 5.9% Citigroup, Inc. 180,000 7,941,600
JPMorgan Chase & Co. 120,000 4,767,600
Diversified Financial Services Total 12,709,200
-----------------------------------------------------------------------------
Insurance - 7.3% Allstate Corp. 24,000 1,151,760
Chubb Corp. 40,000 2,811,200
Lincoln National Corp. 94,000 4,418,000
Marsh & McLennan Companies, Inc. 45,000 2,059,200
St. Paul Travelers Companies, Inc. 65,010 2,149,231
Willis Group Holdings Ltd. 30,000 1,122,000
XL Capital Ltd., Class A 26,000 1,923,740
Insurance Total 15,635,131
-----------------------------------------------------------------------------
Real Estate - 3.6% Archstone-Smith Trust, REIT 40,000 1,265,600
AvalonBay Communities, Inc., REIT 20,000 1,204,400
Equity Office Properties Trust, REIT 110,000 2,997,500
Kimco Realty Corp., REIT 22,000 1,128,600
Vornado Realty Trust, REIT 20,000 1,253,600
Real Estate Total 7,849,700
------------
FINANCIALS TOTAL 60,001,171
HEALTH CARE - 5.0%
- ------------------------------------------ -----------------------------------------------------------------------------
Health Care Providers & Services - 1.4% Aetna, Inc. 30,000 2,997,900
Health Care Providers & Services Total 2,997,900
-----------------------------------------------------------------------------
Pharmaceuticals - 3.6% Abbott Laboratories 50,000 2,118,000
Bristol-Myers Squibb Co. 84,000 1,988,280
Merck & Co., Inc. 44,000 1,452,000
Pfizer, Inc. 74,000 2,264,400
Pharmaceuticals Total 7,822,680
------------
HEALTH CARE TOTAL 10,820,580
INDUSTRIALS - 12.7%
- ------------------------------------------ -----------------------------------------------------------------------------
Aerospace & Defense - 4.5% Boeing Co. 24,000 1,238,880
Goodrich Corp. 78,000 2,446,080
Honeywell International, Inc. 88,000 3,155,680
United Technologies Corp. 30,000 2,801,400
Aerospace & Defense Total 9,642,040
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
Common Stocks - (continued)
INDUSTRIALS - (continued)
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Building Products - 1.1% Masco Corp. 70,000 2,417,100
Building Products Total 2,417,100
-----------------------------------------------------------------------------
Commercial Services & Supplies - 2.2% Cendant Corp. 44,000 950,400
Waste Management, Inc. 140,000 3,827,600
Commercial Services & Supplies Total 4,778,000
-----------------------------------------------------------------------------
Industrial Conglomerates - 4.0% General Electric Co. 120,000 4,029,600
Textron, Inc. 70,000 4,498,900
Industrial Conglomerates Total 8,528,500
-----------------------------------------------------------------------------
Machinery - 0.9% Deere & Co. 32,000 2,065,600
Machinery Total 2,065,600
------------
INDUSTRIALS TOTAL 27,431,240
INFORMATION TECHNOLOGY - 3.7%
- ------------------------------------------ -----------------------------------------------------------------------------
Communications Equipment - 1.0% Nokia Oyj, ADR 150,000 2,058,000
Communications Equipment Total 2,058,000
-----------------------------------------------------------------------------
Computers & Peripherals - 1.0% Diebold, Inc. 45,000 2,101,500
Computers & Peripherals Total 2,101,500
-----------------------------------------------------------------------------
IT Services - 1.7% Automatic Data Processing, Inc. 90,000 3,718,800
IT Services Total 3,718,800
------------
INFORMATION TECHNOLOGY TOTAL 7,878,300
MATERIALS - 4.4%
- ------------------------------------------ -----------------------------------------------------------------------------
Chemicals - 3.0% Dow Chemical Co. 65,000 2,936,700
E.I. du Pont de Nemours & Co. 56,000 2,396,800
Lyondell Chemical Co. 50,000 1,123,000
Chemicals Total 6,456,500
-----------------------------------------------------------------------------
Paper & Forest Products - 1.4% Weyerhaeuser Co. 44,000 2,925,120
Paper & Forest Products Total 2,925,120
------------
MATERIALS TOTAL 9,381,620
TELECOMMUNICATION SERVICES - 6.8%
- ------------------------------------------ -----------------------------------------------------------------------------
Diversified Telecommunication Services - 6.8% BellSouth Corp. 140,000 3,796,800
SBC Communications, Inc. 190,000 4,930,500
Verizon Communications, Inc. 150,000 5,907,000
Diversified Telecommunication Services Total 14,634,300
------------
TELECOMMUNICATION SERVICES TOTAL 14,634,300
UTILITIES - 5.8%
- ------------------------------------------ -----------------------------------------------------------------------------
Electric Utilities - 3.0% Consolidated Edison, Inc. 75,000 3,153,000
TXU Corp. 70,000 3,354,400
Electric Utilities Total 6,507,400
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
Common Stocks - (continued)
UTILITIES - (continued)
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Multi-Utilities & Unregulated Power - 2.8% Dominion Resources, Inc. 20,000 1,305,000
Public Service Enterprise Group, Inc. 80,000 3,408,000
Sempra Energy 38,000 1,375,220
Multi-Utilities & Unregulated Power Total 6,088,220
------------
UTILITIES TOTAL 12,595,620
------------
TOTAL COMMON STOCKS (cost of $182,124,555) 204,733,791
Preferred Stock - 1.1%
MATERIALS - 1.1%
- ------------------------------------------ -----------------------------------------------------------------------------
Metals & Mining - 1.1% Freeport-McMoRan Copper & Gold, Inc., 5.500% (a) 2,425 2,467,437
Metals & Mining Total 2,467,437
------------
MATERIALS TOTAL 2,467,437
------------
TOTAL PREFERRED STOCK (cost of $2,376,525) 2,467,437
Short-Term Obligation - 3.7% Par ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Repurchase agreement with State Street Bank
& Trust Co., dated 09/30/04, due 10/01/04
at 1.580%, collateralized by a U.S. Treasury Note
maturing 05/15/14, market value $8,056,725
(repurchase proceeds $7,895,347) 7,895,000 7,895,000
------------
TOTAL SHORT-TERM OBLIGATION (cost of $7,895,000) 7,895,000
Total Investments - 99.9%
(cost of $192,396,080) (b) 215,096,228
Other Assets & Liabilities, Net - 0.1% 124,268
Net Assets - 100.0% 215,220,496
NOTES TO INVESTMENT PORTFOLIO:
(a) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At September
30, 2004, the value of this security represents 1.1% of net assets.
(b) Cost for federal income tax purposes is $193,057,051.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
10
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
($)
- ------------------------------------------ -----------------------------------------------------------------------------
Assets Investments, at cost 192,396,080
------------
Investments, at value 215,096,228
Cash 373
Receivable for:
Fund shares sold 509,330
Interest 346
Dividends 429,590
Expense reimbursement due from Investment Advisor 59,264
Deferred Trustees' compensation plan 14,530
------------
Total Assets 216,109,661
-----------------------------------------------------------------------------
Liabilities Payable for:
Investments purchased 249,808
Fund shares repurchased 356,613
Investment advisory fee 131,660
Administration fee 11,345
Transfer agent fee 44,989
Pricing and bookkeeping fees 4,587
Trustees' fees 897
Distribution and service fees 39,644
Deferred Trustees' fees 14,530
Other liabilities 35,092
------------
Total Liabilities 889,165
Net Assets 215,220,496
-----------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital 227,012,370
Overdistributed net investment income (9,785)
Accumulated net realized loss (34,482,237)
Net unrealized appreciation on investments 22,700,148
Net Assets 215,220,496
-----------------------------------------------------------------------------
Class A Net assets 7,318,545
Shares outstanding 677,767
Net asset value per share 10.80(a)
Maximum offering price per share ($10.80/0.9425) 11.46(b)
-----------------------------------------------------------------------------
Class B Net assets 8,807,558
Shares outstanding 832,053
Net asset value and offering price per share 10.59(a)
-----------------------------------------------------------------------------
Class C Net assets 2,026,757
Shares outstanding 191,636
Net asset value and offering price per share 10.58(a)
-----------------------------------------------------------------------------
Class G Net assets 5,995,246
Shares outstanding 566,804
Net asset value and offering price per share 10.58(a)
-----------------------------------------------------------------------------
Class T Net assets 100,803,091
Shares outstanding 9,335,726
Net asset value per share 10.80(a)
Maximum offering price per share ($10.80/0.9425) 11.46(b)
-----------------------------------------------------------------------------
Class Z Net assets 90,269,299
Shares outstanding 8,360,976
Net asset value, offering and redemption price per share 10.80
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
11
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended September 30, 2004
Columbia Dividend Income Fund
($)
- ------------------------------------------ -----------------------------------------------------------------------------
Investment Income Dividends 6,107,977
Interest 24,140
------------
Total Investment Income (net of foreign taxes
withheld of $41,038) 6,132,117
-----------------------------------------------------------------------------
Expenses Investment advisory fee 1,488,735
Administration fee 132,994
Distribution fee:
Class B 35,938
Class C 8,347
Class G 51,512
Service fee:
Class A 10,101
Class B 11,959
Class C 2,777
Class G 23,775
Shareholder service fee - Class T 306,384
Transfer agent fee:
Class A 8,283
Class B 9,833
Class C 2,288
Class G 20,974
Class T 236,790
Class Z 151,562
Pricing and bookkeeping fees 48,484
Trustees' fees 10,625
Custody fee 8,231
Non-recurring costs (See Note 8) 9,466
Other expenses 209,569
------------
Total Expenses 2,788,627
Fees and expenses waived or reimbursed by Investment Advisor (59,264)
Fees waived by Transfer Agent:
Class A (476)
Class B (557)
Class C (133)
Class G (704)
Class T (12,291)
Class Z (11,393)
Non-recurring costs assumed by Investment Advisor (See Note 8) (9,466)
Custody earnings credit (233)
------------
Net Expenses 2,694,110
------------
Net Investment Income 3,438,007
-----------------------------------------------------------------------------
Net Realized and Unrealized Net realized loss on investments (2,366,483)
Gain (Loss) on Investments Net change in unrealized appreciation/depreciation on investments 32,219,303
------------
Net Gain 29,852,820
------------
Net Increase in Net Assets from Operations 33,290,827
See Accompanying Notes to Financial Statements.
12
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Year Ended Period Ended Year Ended
September 30, September 30, October 31,
Increase (Decrease) in Net Assets 2004 ($) 2003 (a)(b)($) 2002 ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Operations Net investment income 3,438,007 2,589,395 237,883
Net realized gain (loss)
on investments (2,366,483) (9,261,189) 12,886,804
Net change in unrealized appreciation/
depreciation on investments 32,219,303 14,197,391 (7,411,274)
----------------------------------------
Net Increase from Operations 33,290,827 7,525,597 5,713,413
-----------------------------------------------------------------------------
Distributions Declared to Shareholders From net investment income:
Class A (74,299) (3,464) --
Class B (40,442) (2,610) --
Class C (9,211) (235) --
Class G (73,058) (58,829) --
Class T (1,626,505) (1,134,919) (14,787)
Class Z (1,531,132) (1,326,619) (270,326)
From net realized gains:
Class G -- -- (92,957)
Class T -- -- (321,990)
Class Z -- -- (4,065,865)
----------------------------------------
Total Distributions Declared
to Shareholders (3,354,647) (2,526,676) (4,765,925)
-----------------------------------------------------------------------------
Share Transactions Class A:
Subscriptions 9,356,105 648,541 --
Distributions reinvested 66,013 3,237 --
Redemptions (2,933,744) (99,798) --
----------------------------------------
Net Increase 6,488,374 551,980 --
Class B:
Subscriptions 8,241,367 1,466,777 --
Distributions reinvested 34,605 2,480 --
Redemptions (1,056,587) (350,847) --
----------------------------------------
Net Increase 7,219,385 1,118,410 --
Class C:
Subscriptions 2,110,907 743,182 --
Distributions reinvested 6,757 111 --
Redemptions (333,548) (624,830) --
----------------------------------------
Net Increase 1,784,116 118,463 --
Class G:
Subscriptions 107,766 143,452 607,331
Proceeds received in connection
with merger -- 10,032,885 --
Distributions reinvested 71,095 56,662 92,335
Redemptions (5,168,967) (3,057,348) (449,690)
----------------------------------------
Net Increase (Decrease) (4,990,106) 7,175,651 249,976
Class T:
Subscriptions 5,028,502 2,162,435 1,956,588
Proceeds received in connection
with merger -- 101,580,964 --
Distributions reinvested 1,571,011 1,097,380 334,609
Redemptions (17,969,184) (17,083,667) (2,756,097)
----------------------------------------
Net Increase (Decrease) (11,369,671) 87,757,112 (464,900)
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Year Ended Period Ended Year Ended
September 30, September 30, October 31,
2004 ($) 2003 (a)(b)($) 2002 ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Share Transactions Class Z:
Subscriptions 32,779,209 14,764,524 9,952,015
Proceeds received in connection
with merger -- 76,942,534 --
Distributions reinvested 346,486 306,107 3,813,095
Redemption-in-kind (c) -- -- (93,827,039)
Redemptions (28,389,060) (40,885,365) (5,698,090)
----------------------------------------
Net Increase (Decrease) 4,736,635 51,127,800 (85,760,019)
Net Increase (Decrease)
from Share Transactions 3,868,733 147,849,416 (85,974,943)
Total Increase (Decrease)
in Net Assets 33,804,913 152,848,337 (85,027,455)
-----------------------------------------------------------------------------
Net Assets Beginning of period 181,415,583 28,567,246 113,594,701
End of period 215,220,496 181,415,583 28,567,246
Undistributed (overdistributed) net
investment income, at end of period (9,785) 145,092 32,838
-----------------------------------------------------------------------------
Changes in Shares Class A:
Subscriptions 891,438 72,731 --
Issued for distributions reinvested 6,319 345 --
Redemptions (280,897) (12,169) --
----------------------------------------
Net Increase 616,860 60,907 --
Class B:
Subscriptions 807,527 164,196 --
Issued for distributions reinvested 3,385 268 --
Redemptions (103,938) (39,385) --
----------------------------------------
Net Increase 706,974 125,079 --
Class C:
Subscriptions 207,466 86,238 --
Issued for distributions reinvested 660 12 --
Redemptions (33,197) (69,543) --
----------------------------------------
Net Increase 174,929 16,707 --
Class G:
Subscriptions 10,547 16,877 58,075
Issued in connection with merger -- 1,137,552 --
Issued for distributions reinvested 7,037 6,525 8,802
Redemptions (514,799) (347,287) (48,228)
----------------------------------------
Net Increase (Decrease) (497,215) 813,667 18,649
Class T:
Subscriptions 487,272 238,068 184,929
Issued in connection with merger -- 11,278,336 --
Issued for distributions reinvested 151,877 122,918 31,497
Redemptions (1,739,989) (1,972,609) (285,078)
----------------------------------------
Net Increase (Decrease) (1,100,840) 9,666,713 (68,652)
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Year Ended Period Ended Year Ended
September 30, September 30, October 31,
2004 2003 (a)(b) 2002
- ------------------------------------------ -----------------------------------------------------------------------------
Changes in Shares Class Z:
Subscriptions 3,178,656 1,688,522 985,895
Issued in connection with merger -- 8,539,200 --
Issued for distributions reinvested 33,472 34,595 356,985
Redemption-in-kind (c) -- -- (8,728,097)
Redemptions (2,764,193) (4,674,712) (552,015)
----------------------------------------
Net Increase (Decrease) 447,935 5,587,605 (7,937,232)
(a) The Fund changed its year end from October 31 to September 30.
(b) Effective November 25, 2002, the Galaxy Strategic Equity Fund, Retail B,
Retail A and Trust shares were reorganized as Liberty Strategic Equity Fund
Class G, Class T and Class Z shares, respectively. Subsequently, the Fund
began offering Class A, Class B and Class C shares. Effective October 13,
2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic
Equity Fund. Effective October 27, 2003, the Columbia Strategic Equity Fund
was renamed Columbia Dividend Income Fund.
(c) The Fund had a redemption-in-kind on January 11, 2002, which resulted in a
redemption out of the Fund of $93,827,039. The redemption is compromised of
securities and cash in the amounts of $83,530,666 and $10,296,373,
respectively.
See Accompanying Notes to Financial Statements.
15
Notes to Financial Statements
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
Note 1. Organization
Columbia Dividend Income Fund (the "Fund"), a series of Columbia Funds Trust XI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
Investment Goals
The Fund seeks current income and capital appreciation. Prior to October 27,
2003, the Fund's investment goal was to seek long-term growth of capital.
Fund Shares
The Fund may issue an unlimited number of shares and offers six classes of
shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share
class has its own sales charge and expense structure.
Class A and Class T shares are subject to a front-end sales charge based on the
amount of initial investment. Class A and Class T shares purchased without an
initial sales charge in accounts aggregating $1 million to $25 million at the
time of purchase are subject to a 1.00% contingent deferred sales charge
("CDSC") on shares sold within eighteen months of the time of purchase. Class B
and Class G 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 G shares will convert to Class T shares in eight
years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
Effective October 13, 2003, the Liberty Strategic Equity Fund was renamed
Columbia Strategic Equity Fund. Also on this date, the Liberty-Stein Roe
Investment Trust was renamed Columbia Funds Trust XI. On October 27, 2003, the
Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund.
Note 2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
Security Valuation
Equity securities are valued at the last sale price 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 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
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to
16
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
the value of the repurchase obligation including interest. A repurchase
agreement transaction involves certain risks in the event of default or
insolvency of the counterparty. These risks include possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities and
a possible decline in the value of the underlying securities during the period
while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date. Awards from class action litigation are
recorded as a reduction of cost if the Fund still owns the applicable securities
on the payment date. If the Fund no longer owns the applicable securities, the
proceeds are recorded as realized gains.
The Fund estimates components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Fund no longer owns the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
Effective April 1, 2004, the Fund adopted the policy to reduce cost of
investments for financial statement purposes by the distributions received in
excess of income from REITs. The cumulative effect of this accounting change did
not impact the net assets of the Fund, but resulted in reclassifications as
follows:
Decrease in Increase in Overdistributed
Cost Net Investment Income
- ----------------------------------------------------------------
$45,764 $45,764
The effect of the change for the year ended September 30, 2004 is as follows:
Decrease in
Increase in Decrease in Net Net Realized
Cost Investment Income Loss
- ------------------------------------------------------------------
$4,458 $806 $5,264
Determination of Class Net Asset Values
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
Distributions to Shareholders
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
For the year ended September 30, 2004, permanent differences resulting primarily
from differing treatments for distribution in excess of net investment income
and REIT adjustments were identified and reclassified among the components of
the Fund's net assets as follows:
Overdistributed Accumulated Paid-In
Net Investment Income Net Realized Loss Capital
- -------------------------------------------------------------------
$(192,473) $215,254 $(22,781)
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by this
reclassification.
The tax character of distributions paid during the year ended September 30,
2004, the period ended
17
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
September 30, 2003 and the year ended October 31, 2002 was as follows:
September 30, September 30, October 31,
2004 2003 2002
- -----------------------------------------------------------------------
Distributions paid from:
- -----------------------------------------------------------------------
Ordinary income* $3,354,647 $2,526,676 $1,124,772
- -----------------------------------------------------------------------
Long-term capital gains -- -- 3,641,153
- -----------------------------------------------------------------------
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of September 30, 2004, the components of distributable earnings on a tax
basis were as follows:
Undistributed
Undistributed Long-Term Net Unrealized
Ordinary Income Capital Gains Appreciation*
- -----------------------------------------------------------------------
$-- $-- $22,039,177
- -----------------------------------------------------------------------
* The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales.
Unrealized appreciation and depreciation at September 30, 2004, based on cost of
investments for federal income tax purposes, was:
Unrealized appreciation $ 31,870,395
Unrealized depreciation (9,831,218)
- -----------------------------------------------------------------------
Net unrealized appreciation $ 22,039,177
- -----------------------------------------------------------------------
The following capital loss carryforwards, determined as of September 30, 2004,
may be available to reduce taxable income arising from future net realized gains
on investments, if any, to the extent permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforward
- --------------------------------------------------
2009 $19,781,995
2010 2,470,255
2011 9,095,627
- --------------------------------------------------
$31,347,877
- --------------------------------------------------
Of the capital loss carryforwards attributable to the Fund, $20,102,723
($19,781,995 expiring 9/30/09 and $320,728 expiring 9/30/10) remain from the
Fund's merger with Galaxy Equity Income Fund (See Note 10).
Capital loss carryforwards of $322,161 were utilized during the year ended
September 30, 2004 for the Fund. Any capital loss carryforwards acquired as part
of a merger that are permanently lost due to provisions under Internal Revenue
Code are included as being expired. Expired capital loss carryforwards are
recorded as a reduction of paid-in capital.
Under current tax rules, certain currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. As of September 30, 2004, post-October capital losses of
$2,473,389 attributed to security transactions were deferred to October 1, 2004.
Note 4. Fees and Compensation Paid to Affiliates
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary
of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004,
FleetBoston, including the Fund's investment advisor, transfer agent and
distributor, was acquired by Bank of America Corporation ("BOA"). The
acquisition did not change the way the Fund is managed, the investment personnel
assigned to manage the Fund or the fees paid by the Fund.
Investment Advisory Fee
Columbia receives a monthly investment advisory fee based on the Fund's average
daily net assets at the following annual rates:
Average Daily Net Assets Annual Fee Rate
- --------------------------------------------------------
First $500 million 0.75%
- --------------------------------------------------------
Next $500 million 0.70%
- --------------------------------------------------------
Next $500 million 0.65%
- --------------------------------------------------------
Next $500 million 0.60%
- --------------------------------------------------------
Over $2 billion 0.55%
- --------------------------------------------------------
Prior to November 1, 2003, Columbia was entitled to receive a monthly investment
advisory fee at the annual rate of 0.75% of the Fund's average daily net assets.
For the year ended September 30, 2004, the Fund's effective investment advisory
fee rate was 0.75%.
Administration Fee
Columbia provides administrative and other services to the Fund for a monthly
administration fee at the annual rate of 0.067% of the Fund's average daily net
assets.
Pricing and Bookkeeping Fees
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia
18
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
has delegated those functions to State Street Corporation ("State Street"). As a
result, Columbia pays the total fees collected to State Street under the
Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives an
annual fee based on the average daily net assets of the Fund at the following
annual rates:
Average Daily Net Assets Annual Fee Rate
- ------------------------------------------------------------------
Under $50 million $ 25,000
- ------------------------------------------------------------------
Over $50 million but less than $200 million $ 35,000
- ------------------------------------------------------------------
Over $200 million but less than $500 million $ 50,000
- ------------------------------------------------------------------
Over $500 million but less than $1 billion $ 85,000
- ------------------------------------------------------------------
Over $1 billion $125,000
- ------------------------------------------------------------------
An additional flat rate fee of $10,000 is charged to the Fund due to its
multiple class structure. The Fund also pays additional fees for pricing
services based on the number of securities held by the Fund.
For the year ended September 30, 2004, the effective pricing and bookkeeping fee
rate for the Fund, inclusive of out-of-pocket expenses, was 0.024%.
Transfer Agent Fee
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund. For such services, the Transfer Agent
receives a fee, paid monthly, at the annual rate of $28.00 per open account. The
Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee, in addition to reimbursement for certain out-of-pocket
expenses, based on a per-account charge or a minimum of $5,000 annually.
The Transfer Agent has voluntarily agreed to waive a portion of its transfer
agent fee for the Fund. This arrangement may be revised or discontinued by the
Transfer Agent at any time. For the period January 1, 2004 through September 30,
2004, the Transfer Agent waived fees of $19,156 for the Fund. For the period
October 1, 2003 through December 31, 2003, the Transfer Agent waived transfer
agent fees of $2,518 and $3,880 for Class T and Class Z shares of the Fund,
respectively.
Effective October 13, 2003, Liberty Funds Services, Inc. was renamed Columbia
Funds Services, Inc.
Underwriting Discounts, Service and Distribution Fees
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the year ended September 30, 2004,
the Distributor has retained net underwriting discounts of $17,508 and $3,146 on
sales of the Fund's Class A and Class T shares, respectively. For the same
period, the Distributor received CDSC fees of $7,698, $428 and $18,721 on Class
B, Class C and Class G share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan"), which requires the payment of a
monthly distribution and service fee to the Distributor at an annual fee rate as
follows:
Distribution Fee
- ---------------------------------------------------------
Class A Class B Class C Class G
0.10% 0.75% 0.75% 0.65%
- ---------------------------------------------------------
Service Fee
- ---------------------------------------------------------
Class A Class B Class C Class G
0.25% 0.25% 0.25% 0.50%
- ---------------------------------------------------------
The Fund does not intend to pay total distribution and service fees in excess of
0.25% and 0.95% annually for Class A and Class G shares of the Fund,
respectively. Of the 0.50% service fee for Class G shares, 0.25% relates to
shareholder liaison fees and 0.25% relates to administration support fees.
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.
Effective October 13, 2003, Liberty Funds Distributor, Inc. was renamed Columbia
Funds Distributor, Inc.
Shareholder Services Fees
The Fund has adopted a shareholder services plan that permits it to pay for
certain services provided to Class T and Class Z shareholders by their financial
advisor. Currently, the service plan has not been implemented with respect to
the Fund's Class Z shares. The annual service fee may equal up to 0.50% for
Class T shares. The Fund does not intend to pay more than 0.30% annually for
Class T shareholder service fees.
Expense Limits and Fee Reimbursements
Effective September 1, 2004, Columbia has voluntarily agreed to waive fees and
reimburse certain expenses to the extent that total expenses (exclusive of
distribution and service fees, brokerage commissions, interest, taxes
19
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
and extraordinary expenses, if any) exceed 0.80% annually of the Fund's average
daily net assets. Effective October 1, 2004, Columbia has contractually agreed
to maintain this arrangement until December 31, 2006.
Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
Fees Paid to Officers and Trustees
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates. Effective August 23, 2004, the Board of Trustees
appointed a Chief Compliance Officer to the Fund in accordance with federal
securities regulations. The Fund, along with other affiliated funds, will pay
its pro-rata share of the expenses associated with the Chief Compliance Officer
role. The Fund's fee will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
Other
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the year ended September 30, 2004, the Fund paid $1,585 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
Note 5. Portfolio Information
For the year ended September 30, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $85,968,145 and
$89,555,071, respectively.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings. In
addition, the Fund has agreed to pay commitment fees on its pro-rata portion of
the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the year ended September 30, 2004,
the Fund did not borrow under this arrangement.
Note 7. Shares of Beneficial Interest
As of September 30, 2004, 38.0% of the outstanding shares of the Fund were held
by one shareholder. Subscription and redemption activity of this shareholder may
have a material effect on the Fund.
Note 8. Disclosure of Significant Risks
and Contingencies
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 as well as
other industry wide issues. The Columbia Group has not uncovered any instances
where Columbia or the Distributor were knowingly involved in late trading of
mutual fund shares.
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and the Distributor, alleging that they had
violated certain provisions of the federal securities laws in connection with
trading activity in mutual fund shares. Also on February 24, 2004, the New York
Attorney General ("NYAG") filed a civil complaint in New York Supreme Court,
County of New York against Columbia and the Distributor alleging that Columbia
and the Distributor had violated certain New York anti-fraud statutes. If either
Columbia or the Distributor is unsuccessful in its defense of these proceedings,
it could be barred from serving as an investment advisor or distributor for any
investment company registered under the Investment Company Act of 1940, as
amended (a "registered investment company"). Such results could prevent
Columbia, the Distributor or any company that is an affiliated person of
Columbia and the Distributor from serving as an investment advisor or
distributor for any registered investment company, including your fund. Your
fund has been informed by Columbia and the Distributor that, if these results
occur, they will seek exemptive relief
20
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Dividend Income Fund
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 and its affiliate Banc of America Capital
Management, LLC have agreed to collectively reduce mutual fund fees by $160
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 funds.
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). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants in several
derivative actions under various sections of the Investment Company Act of 1940,
as amended, alleging, among other things, that the fees and expenses paid by
those funds are excessive. The funds and the other defendants to these actions,
including Columbia and various of its affiliates, certain other mutual funds
advised by Columbia and its affiliates, and various directors of such funds,
have denied these allegations and are contesting the plaintiffs' claims. These
suits and certain regulatory investigations are ongoing, however, based on
currently available information, Columbia believes that these lawsuits are
without merit, that the likelihood they will have a material adverse impact on
any fund is remote, and that the lawsuits are not likely to materially affect
its ability to provide investment management services to its clients, including
the funds.
For the year ended September 30, 2004, Columbia has assumed $9,466 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
Note 9. Comparability of Financial Statements
The fiscal year end of the Fund was changed from October 31 to September 30.
Note 10. Business Combinations and Mergers
As of the end of business on November 22, 2002, the Galaxy Equity Income Fund,
previously a fund of the Galaxy Fund, a separate Massachusetts business trust,
merged into Liberty Strategic Equity Fund (currently known as Columbia Dividend
Income Fund).
The Liberty Strategic Equity Fund received a tax-free transfer of assets from
Galaxy Equity Income Fund as follows:
SHARES NET ASSETS UNREALIZED
ISSUED RECEIVED DEPRECIATION1
----------- ----------- -----------
20,955,088 $188,556,383 $(19,625,587)
NET ASSETS OF NET ASSETS OF
NET ASSETS OF GALAXY EQUITY LIBERTY STRATEGIC
LIBERTY STRATEGIC INCOME FUND EQUITY FUND
EQUITY FUND IMMEDIATELY IMMEDIATELY
PRIOR TO PRIOR TO AFTER
COMBINATION COMBINATION COMBINATION
----------- ----------- -----------
$30,204,471 $188,556,383 $218,760,854
1 Unrealized depreciation is included in the Net Assets Received amount shown
above.
Class G, Class T and Class Z shares of the Liberty Strategic Equity Fund were
issued in exchange for Retail B, Retail A and Trust shares of Galaxy Equity
Income Fund, respectively. Class A, Class B and Class C shares commenced
operations on November 25, 2002.
The accompanying statement of operations, statement of changes in net assets and
financial highlights represent the historical operations of the Galaxy Strategic
Equity Fund for periods prior to November 22, 2002.
21
Financial Highlights
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended Period Ended
September 30, September 30,
Class A Shares 2004 (a) 2003 (b)(c)
===================================================================================================
Net Asset Value, Beginning of Period $ 9.26 $ 9.01
- ---------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (d) 0.18 0.11
Net realized and unrealized gain on investments 1.53 0.25
-------- --------
Total from Investment Operations 1.71 0.36
- ---------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.17) (0.11)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.80 $ 9.26
Total return (e)(f) 18.60% 4.02%(g)
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.36% 1.42%(i)
Net investment income (h) 1.71% 1.38%(i)
Waiver/reimbursement 0.06% --%(i)(j)
Portfolio turnover rate 44% 33%(g)
Net assets, end of period (000's) $ 7,319 $ 564
- ---------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class A shares were initially offered on November 25, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived a
portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
22
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended Period Ended
September 30, September 30,
Class B Shares 2004 (a) 2003 (b)(c)
===================================================================================================
Net Asset Value, Beginning of Period $ 9.08 $ 8.82
- ---------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (d) 0.10 0.05
Net realized and unrealized gain on investments 1.50 0.26
-------- --------
Total from Investment Operations 1.60 0.31
- ---------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.09) (0.05)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.59 $ 9.08
Total return (e)(f) 17.69% 3.51%(g)
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 2.11% 2.34%(i)
Net investment income (h) 0.94% 0.47%(i)
Waiver/reimbursement 0.06% --%(i)(j)
Portfolio turnover rate 44% 33%(g)
Net assets, end of period (000's) $ 8,808 $ 1,136
- ---------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class B shares were initially offered on November 25, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived a
portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
23
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended Period Ended
September 30, September 30,
Class C Shares 2004 (a) 2003 (b)(c)
===================================================================================================
Net Asset Value, Beginning of Period $ 9.07 $ 8.82
- ---------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (d) 0.10 0.07
Net realized and unrealized gain on investments 1.50 0.23
-------- --------
Total from Investment Operations 1.60 0.30
- ---------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.09) (0.05)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.58 $ 9.07
Total return (e)(f) 17.70% 3.41%(g)
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 2.11% 2.18%(i)
Net investment income (h) 0.94% 0.95%(i)
Waiver/reimbursement 0.06% --%(i)(j)
Portfolio turnover rate 44% 33%(g)
Net assets, end of period (000's) $ 2,027 $ 152
- ---------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 25, 2002. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates not waived a
portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
24
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Year Period
Ended Ended
September 30, September 30, Year Ended October 31,
Class G Shares 2004 (a) 2003 (b)(c) 2002 2001 2000 1999
====================================================================================================================================
Net Asset Value, Beginning of Period $ 9.07 $ 8.36 $ 9.87 $ 10.37 $ 9.84 $ 9.61
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss) 0.10(d) 0.05(d) (0.07)(d) (0.06)(d) (0.04) (0.02)(d)
Net realized and unrealized
gain (loss) on investments 1.50 0.71 (1.05)(e) (0.11) 1.75 0.26
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 1.60 0.76 (1.12) (0.17) 1.71 0.24
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.09) (0.05) -- -- --(f) --
From net realized gains -- -- (0.39) (0.33) (1.18) (0.01)
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared
to Shareholders (0.09) (0.05) (0.39) (0.33) (1.18) (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.58 $ 9.07 $ 8.36 $ 9.87 $ 10.37 $ 9.84
Total return (g)(h) 17.71% 9.08%(i) (12.16)% (1.71)% 20.33% 2.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (j) 2.14% 2.21%(k) 2.17% 2.02% 1.95% 1.84%
Net investment income (loss) (j) 0.97% 0.71%(k) (0.72)% (0.53)% (0.35)% (0.24)%
Waiver/reimbursement 0.03% --%(k)(l) 0.25% 0.24% 0.40% 0.56%
Portfolio turnover rate 44% 33%(i) 65%(m) 81% 81% 79%
Net assets, end of period (000's) $ 5,995 $ 9,650 $ 2,093 $ 2,286 $ 1,555 $ 1,348
- ------------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, Galaxy Strategic Equity Fund, Retail B shares were
redesignated Liberty Strategic Equity Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments of the Fund.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived a
portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
(m) Portfolio turnover rate excludes securities delivered from processing a
redemption-in-kind.
25
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Year Period
Ended Ended
September 30, September 30, Year Ended October 31,
Class T Shares 2004 (a) 2003 (b)(c) 2002 2001 2000 1999
===================================================================================================================================
Net Asset Value, Beginning of Period $ 9.26 $ 8.54 $ 10.02 $ 10.46 $ 9.89 $ 9.62
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.17(d) 0.11(d) 0.01(d) 0.03(d) 0.04 0.04(d)
Net realized and unrealized
gain (loss) on investments 1.54 0.73 (1.08)(e) (0.11) 1.75 0.27
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 1.71 0.84 (1.07) (0.08) 1.79 0.31
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.17) (0.12) (0.02) (0.03) (0.04) (0.03)
From net realized gains -- -- (0.39) (0.33) (1.18) (0.01)
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared
to Shareholders (0.17) (0.12) (0.41) (0.36) (1.22) (0.04)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.80 $ 9.26 $ 8.54 $ 10.02 $ 10.46 $ 9.89
Total return (f)(g) 18.50% 9.86%(h) (11.50)% (0.83)% 21.09% 3.25%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (i) 1.45% 1.49%(j) 1.40% 1.24% 1.20% 1.19%
Net investment income (i) 1.64% 1.42%(j) 0.05% 0.25% 0.40% 0.41%
Waiver/reimbursement 0.04% 0.01%(j) 0.29% 0.26% 0.40% 0.44%
Portfolio turnover rate 44% 33%(h) 65%(k) 81% 81% 79%
Net assets, end of period (000's) $100,803 $96,638 $ 6,578 $ 8,400 $ 8,505 $ 8,229
- -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, Galaxy Strategic Equity Fund, Retail A shares were
redesignated Liberty Strategic Equity Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments of the Fund.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived a
portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Portfolio turnover rate excludes securities delivered from processing a
redemption-in-kind.
26
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Year Period
Ended Ended
September 30, September 30, Year Ended October 31,
Class Z Shares 2004 (a) 2003 (b)(c) 2002 2001 2000 1999
===================================================================================================================================
Net Asset Value, Beginning of Period $ 9.26 $ 8.56 $ 10.03 $ 10.48 $ 9.90 $ 9.63
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.21(d) 0.15(d) 0.06(d) 0.08(d) 0.08 0.09(d)
Net realized and unrealized
gain (loss) on investments 1.53 0.72 (1.07)(e) (0.12) 1.76 0.27
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 1.74 0.87 (1.01) (0.04) 1.84 0.36
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.20) (0.17) (0.07) (0.08) (0.08) (0.08)
From net realized gains -- -- (0.39) (0.33) (1.18) (0.01)
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared
to Shareholders (0.20) (0.17) (0.46) (0.41) (1.26) (0.09)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.80 $ 9.26 $ 8.56 $ 10.03 $ 10.48 $ 9.90
Total return (f)(g) 18.93% 10.22%(h) (11.07)% (0.43)% 21.69% 3.64%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (i) 1.10% 1.02%(j) 0.82% 0.75% 0.78% 0.80%
Net investment income (i) 1.98% 1.89%(j) 0.63% 0.74% 0.83% 0.80%
Waiver/reimbursement 0.05% 0.02%(j) 0.24% 0.21% 0.20% 0.20%
Portfolio turnover rate 44% 33%(h) 65%(k) 81% 81% 79%
Net assets, end of period (000's) $90,269 $73,276 $19,896 $102,909 $93,558 $71,063
- -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, Galaxy Strategic Equity Fund, Trust shares were
redesignated Liberty Strategic Equity Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments of the Fund.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived a
portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Portfolio turnover rate excludes securities delivered from processing a
redemption-in-kind.
27
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
To the Trustees of Columbia Funds Trust XI
and the Shareholders of Columbia Dividend Income Fund
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Dividend Income Fund (the
"Fund") (a series of Columbia Funds Trust XI) at September 30, 2004, and the
results of its operations, the changes in its net assets and the financial
highlights for the year then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States), which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at
September 30, 2004 by correspondence with the custodian and brokers, provides a
reasonable basis for our opinion.
The financial statements of the Fund as of September 30, 2003 and for the five
fiscal periods ending September 30, 2003 were audited by other independent
accountants whose report dated November 14, 2003 expressed an unqualified
opinion on those statements.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 15, 2004
28
UNAUDITED INFORMATION
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Federal Income Tax Information
For non-corporate shareholders, 100.00%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
100.00% of the ordinary income distributed by the Fund for the year ended
September 30, 2004, qualifies for the corporate dividends received deduction.
29
TRUSTEES
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were
appointed to the Board of the Trustees of the Fund. Messrs. Simpson and
Woolworth had been directors of 15 Columbia Funds and 20 funds in the CMG Fund
Trust. Also effective October 8, 2003, the incumbent trustees of the Fund were
elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in
the CMG Fund Trust. The new combined Board of Trustees/Directors of the Fund now
oversees 118 funds in the Columbia Funds Complex (including the former Liberty
Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of these
trustees/directors also serve on the Boards of other funds in the Columbia Funds
Complex.
The Trustrees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds Complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds Complex.
Name, address and age,
Position with funds,
Year first elected or Principal occupation(s) during past five years, Number of portfolios in Columbia Funds
appointed to office(1) Complex overseen by trustee/director, Other directorships held
DISINTERESTED TRUSTEES
DOUGLAS A. HACKER (Age 49) Executive Vice President - Strategy of United Airlines (airline) since December 2002 (formerly
P.O. Box 66100 President of UAL Loyalty Services (airline) from September 2001 to December 2002; Executive Vice
Chicago, IL 60666 President and Chief Financial Officer of United Airlines from March 1999 to September 2001; Senior
Trustee (since 1996) Vice President - Finance from March 1993 to July 1999). Oversees 118, Orbitz, Inc. (on-line travel
company)
------------------------------------------------------------------------------------------------------
JANET LANGFORD KELLY Professor of Law, Northwestern University, since September 2004; Private Investor since March
(Age 46) Adjunct 2004 (formerly Chief Administrative Officer and Senior Vice President, Kmart Holding Corporation
9534 W. Gull Lake Drive (consumer goods), from September 2003 to March 2004; Executive Vice President-Corporate
Richland, MI 49083-8530 Development and Administration, General Counsel and Secretary, Kellogg Company (food
Trustee (since 1996) manufacturer), from September 1999 to August 2003; Senior Vice President, Secretary and General
Counsel, Sara Lee Corporation (branded, packaged, consumer-products manufacturer) from January
1995 to September 1999). Oversees 118, None
------------------------------------------------------------------------------------------------------
RICHARD W. LOWRY (Age 68) Private Investor since August 1987 (formerly Chairman and Chief Executive Officer, U.S. Plywood
10701 Charleston Drive Corporation (building products manufacturer)). Oversees 1203, None
Vero Beach, FL 32963
Trustee (since 1995)
------------------------------------------------------------------------------------------------------
CHARLES R. NELSON (Age 62) Professor of Economics, University of Washington, since January 1976; Ford and Louisa Van Voorhis
Department of Economics Professor of Political Economy, University of Washington, since September 1993 (formerly Director,
University of Washington Institute for Economic Research, University of Washington from September 2001 to June 2003) Adjunct
Seattle, WA 98195 Professor of Statistics, University of Washington, since September 1980; Associate Editor, Journal of
Trustee (since 1981) Money Credit and Banking, since September 1993; consultant on econometric and statistical matters.
Oversees 118, None
------------------------------------------------------------------------------------------------------
JOHN J. NEUHAUSER (Age 61) Academic Vice President and Dean of Faculties since August 1999, Boston College (formerly Dean,
84 College Road Boston College School of Management from September 1977 to September 1999). Oversees 121(3, 4),
Chestnut Hill, MA 02467-3838 Saucony, Inc. (athletic footwear)
Trustee (since 1985)
------------------------------------------------------------------------------------------------------
PATRICK J. SIMPSON (Age 60) Partner, Perkins Coie L.L.P. (law firm). Oversees 118, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
30
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Name, address and age,
Position with funds,
Year first elected or Principal occupation(s) during past five years, Number of portfolios in Columbia Funds
appointed to office(1) Complex overseen by trustee/director, Other directorships held
DISINTERESTED TRUSTEES
THOMAS E. STITZEL (Age 68) Business Consultant since 1999 (formerly Professor of Finance from 1975 to 1999, College of Business,
2208 Tawny Woods Place Boise State University); Chartered Financial Analyst. Oversees 118, None.
Boise, ID 83706
Trustee (since 1998)
------------------------------------------------------------------------------------------------------
THOMAS C. THEOBALD (Age 67) Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September 2004
303 W. Madison (formerly Managing Director, William Blair Capital Partners (private equity investing) from September
Suite 2500 1994 to September 2004). Oversees 118, Anixter International (network support equipment distributor);
Chicago, IL 60606 Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real estate management services) and
Trustee and Chairman Ambac Financial Group (financial guaranty insurance)
of the Board5 (since 1996)
------------------------------------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 59) Retired since 1997 (formerly General Manager, Global Education Industry, IBM Corporation (computer
359 Stickney Hill Road and technology) from 1994 to 1997). Oversees 1194, Chairman of the Board of Directors, Enesco Group,
Hopkinton, NH 03229 Inc. (designer, importer and distributor of giftware and collectibles)
Trustee (since 1998)
------------------------------------------------------------------------------------------------------
RICHARD L. WOOLWORTH (Age 63) Retired since December 2003 (formerly Chairman and Chief Executive Officer, The Regence Group
100 S.W. Market Street #1500 (regional health insurer); Chairman and Chief Executive Officer, BlueCross BlueShield of Oregon;
Portland, OR 97207 Certified Public Accountant, Arthur Young & Company). Oversees 118, Northwest Natural Gas Co.
Trustee (since 1991) (natural gas service provider)
------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
WILLIAM E. MAYER2 (Age 64) Managing Partner, Park Avenue Equity Partners (private equity) since February 1999 (formerly Founding
399 Park Avenue Partner, Development Capital LLC from November 1996 to February 1999). Oversees 1203, Lee
Suite 3204 Enterprises (print media), WR Hambrecht + Co. (financial service provider); First Health (healthcare);
New York, NY 10022 Reader's Digest (publishing); OPENFIELD Solutions (retail industry technology provider)
Trustee (since 1994)
------------------------------------------------------------------------------------------------------
1 In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In October
2003, the trustees on the Liberty Board were elected to the boards of the
Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG
Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
2 Mr. Mayer is an "interested person" (as defined in the Investment Company Act
of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co.
3 Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the
Liberty All-Star Funds, currently consisting of 2 funds, which are advised by
an affiliate of the Advisor.
4 Mr. Neuhauser and Ms. Verville also serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Advisor.
5 Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
31
OFFICERS
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Name, address and age,
Position with Columbia
Funds, Year first elected
or appointed to office Principal occupation(s) during past five years
CHRISTOPHER L. WILSON (Age 47) President of the Columbia Funds since October 2004 (formerly President and Chief Executive Officer,
One Financial Center CDC IXIS Asset Management Services, Inc. from September 1998 to August 2004).
Boston, MA 02111
President (since 2004)
-----------------------------------------------------------------------------------------------------
J. KEVIN CONNAUGHTON (Age 40) Treasurer of the Columbia Funds and of the Liberty All-Star Funds since December 2000; Vice President
One Financial Center of the Advisor since April 2003 (formerly President of the Columbia Funds from February 2004 to
Boston, MA 02111 October 2004; Chief Accounting Officer and Controller of the Liberty Funds and of the Liberty
Treasurer (since 2000) All-Star Funds from February 1998 to October 2000); Treasurer of the Galaxy Funds since September
2002; Treasurer, Columbia Management Multi-Strategy Hedge Fund, LLC since December 2002 (formerly
Vice President of Colonial Management Associates, Inc. from February 1998 to October 2000).
-----------------------------------------------------------------------------------------------------
MARY JOAN HOENE (Age 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds since August 2004; Chief
40 West 57th Street Compliance Officer of the Liberty All-Star Funds since August 2004 (formerly Partner, Carter, Ledyard
New York, NY 10019 & Milburn LLP from January 2001 to August 2004; Counsel, Carter, Ledyard & Milburn LLP from
Senior Vice President and November 1999 to December 2000; Vice President and Counsel, Equitable Life Assurance Society of the
Chief Compliance Officer United States from April 1998 to November 1999,).
(since 2004)
-----------------------------------------------------------------------------------------------------
MICHAEL G. CLARKE (Age 34) Chief Accounting Officer of the Columbia Funds and of the Liberty All-Star Funds since October 2004
One Financial Center (formerly Controller of the Columbia Funds and of the Liberty All-Star Funds from May 2004 to
Boston, MA 02111 October 2004; Assistant Treasurer from June, 2002 to May 2004; Vice President, Product Strategy &
Chief Accounting Officer Development of the Liberty Funds Group from February 2001 to June 2002; Assistant Treasurer of the
(since 2004) Liberty Funds and of the Liberty All-Star Funds from August 1999 to February 2001; Audit Manager,
Deloitte & Touche LLP from May 1997 to August 1999).
-----------------------------------------------------------------------------------------------------
JEFFREY R. COLEMAN (Age 34) Controller of the Columbia Funds and of the Liberty All-Star Funds since October 2004 (formerly Vice
One Financial Center President of CDC IXIS Asset Management Services, Inc. and Deputy Treasurer of the CDC Nvest Funds
Boston, MA 02111 and Loomis Sayles Funds from February 2003 to September 2004; Assistant Vice President of CDC IXIS
Controller (since 2004) Asset Management Services, Inc. and Assistant Treasurer of the CDC Nvest
Funds from August 2000 to February 2003; Tax Manager of PFPC, Inc. from November 1996 to August
2000).
-----------------------------------------------------------------------------------------------------
DAVID A. ROZENSON (Age 50) Secretary of the Columbia Funds and of the Liberty All-Star Funds since December 2003; Senior
One Financial Center Counsel, Bank of America Corporation (formerly FleetBoston Financial Corporation) since January 1996;
Boston, MA 02111 Associate General Counsel, Columbia Management Group since November 2002.
Secretary (since 2003)
-----------------------------------------------------------------------------------------------------
32
Important Information About This Report
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Transfer Agent
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
Distributor
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
Investment Advisor
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
125 High Street
Boston MA 02110
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Dividend Income Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the fund and with the most recent copy of
the Columbia Dividend Income Fund Performance Update.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to their portfolio securities and a copy of the fund's
voting record are available (i) at www.columbiamanagement.com; (ii) on the
Securities and Exchange Commission's website at www.sec.gov and (iii) without
charge, upon request, by calling 800-368-0346.
Please note that on March 1, 2004, Ernst & Young LLP ("E&Y") resigned as the
fund's independent registered public accounting firm. 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 fund 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 fund for the fiscal year ended September 30, 2004.
33
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reports by electronic delivery. With Columbia's eDelivery program, you receive
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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 Dividend Income Fund ANNUAL REPORT, SEPTEMBER 30, 2004
PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[LOGO]:
COLUMBIA FUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C) 2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.345.6611
727-02/970S-0904 (11/04) 04/3397
[GRAPHIC]
COLUMBIA THEMATIC EQUITY FUNDS
ANNUAL REPORT
SEPTEMBER 30, 2004
[COLUMBIAFUNDS(R) LOGO]
A MEMBER OF COLUMBIA MANAGEMENT GROUP
<Page>
TABLE OF CONTENTS
<Table>
Economic Update 1
Columbia Global Thematic Equity Fund
Performance Information 2
Understanding Your Expenses 3
Portfolio Managers' Report 4
Columbia European Thematic Equity Fund
Performance Information 6
Understanding Your Expenses 7
Portfolio Managers' Report 8
Financial Statements 10
Investment Portfolios 11
Statements of Assets and Liabilities 18
Statements of Operations 19
Statements of Changes in Net Assets 20
Notes to Financial Statements 21
Financial Highlights 28
Report of Independent Registered Public Accounting Firm 30
Unaudited Information 31
Trustees 32
Officers 34
Important Information About This Report 35
Columbia Funds 36
</Table>
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
PRESIDENT'S MESSAGE
COLUMBIA THEMATIC EQUITY FUNDS
DEAR SHAREHOLDER:
Your fund's legal and management team here at Columbia Funds have been working
hard to strengthen our mutual fund services operation and to ensure that all
operations and processes comply with legal and regulatory standards. In the
coming months, we will continue to monitor the oversight enhancements recently
put in place by your fund's Board of Trustees and make every effort to protect
the interests of all our shareholders in everything we do.
In our last report, we announced that your fund's advisor, Columbia Management
Advisors, Inc., and your fund's distributor, Columbia Funds Distributor, Inc.,
had reached an agreement with the Securities and Exchange Commission and the
New York Attorney General to settle charges involving market timing in some of
our mutual funds. We want to reassure you that the settlement and all associated
legal fees will be paid by Columbia Management, not by the affected funds or
their shareholders.
Recently the Securities and Exchange Commission has adopted new rules regarding
mutual fund governance. We think it is important for you to know that Columbia
Management complied with the majority of these rules well before they were
adopted. Your fund's Board of Trustees has taken the following important steps
to strengthen its capacity to oversee your fund and to comply with SEC rules.
- - THE BOARD OF TRUSTEES APPOINTED MARY JOAN HOENE AS CHIEF COMPLIANCE OFFICER
OF COLUMBIA FUNDS. IN THIS ROLE, MS. HOENE WILL REPORT DIRECTLY TO THE BOARD
OF TRUSTEES AND WILL WORK WITH THE BOARD OF TRUSTEES AS WELL AS THE SENIOR
LEADERSHIP OF COLUMBIA MANAGEMENT, THE INVESTMENT MANAGEMENT ARM OF BANK OF
AMERICA, AND WITH BANK OF AMERICA'S PRINCIPAL COMPLIANCE EXECUTIVES. SHE WILL
FOCUS ON THE OVERALL COMPLIANCE PROGRAM OF THE FUNDS AND THE RESPONSIBILITY
AND PERFORMANCE OF THE FUND'S SERVICE PROVIDERS.
PRIOR TO HER APPOINTMENT, MS. HOENE WAS A PARTNER IN THE LAW FIRM OF CARTER,
LEDYARD & MILBURN, LLP. PREVIOUSLY SHE ALSO SERVED AS ASSOCIATE DIRECTOR AND
DEPUTY DIRECTOR FOR THE SECURITIES AND EXCHANGE COMMISSION DIVISION OF
INVESTMENT MANAGEMENT. AS AN ACTIVE ADVISOR, MS. HOENE HAS HELPED SEVERAL
FUND BOARDS DEVELOP INDEPENDENT BOARD PRACTICES. THE BOARD IS PLEASED TO HAVE
MS. HOENE, WITH HER BROAD AND EXTENSIVE EXPERIENCE, IN THIS IMPORTANT NEW
POSITION.
- - THE BOARD OF TRUSTEES HAS ESTABLISHED OPERATIONAL GUIDELINES THAT RESULT IN
STRONGER, MORE VIGILANT TRUSTEESHIP ACROSS THE ENTIRE COLUMBIA MANAGEMENT
ORGANIZATION. BOARD COMMITTEES HAVE BEEN ESTABLISHED TO OVERSEE PRODUCTS BY
FUND CATEGORY, ALLOWING FOR GREATER SPECIALIZATION AMONG BOARD TRUSTEES.
SHAREHOLDERS WILL ELECT BOARD MEMBERS EVERY FIVE YEARS, BEGINNING IN 2005.
- - IN ADDITION TO ENHANCEMENTS TO OVERSIGHT WITHIN COLUMBIA MANAGEMENT, OUR
PARENT COMPANY -- BANK OF AMERICA -- HAS ALSO INCREASED THE ROLE THAT SUCH
PROFESSIONALS PLAY WITHIN THE BROADER ORGANIZATION. A CHIEF COMPLIANCE
OFFICER HAS BEEN NAMED TO REPORT DIRECTLY TO KEN LEWIS, BANK OF AMERICA'S
CHIEF EXECUTIVE OFFICER. BANK OF AMERICA HAS ALSO ADOPTED A CORPORATE CODE OF
ETHICS COMMITTEE, AN INTERNAL COMPLIANCE CONTROLS COMMITTEE AND A REGULATORY
IMPLEMENTATION GROUP TO ENSURE FULL ALIGNMENT AND EXECUTION OF REMEDIAL
ACTIONS AND BEST PRACTICES ACROSS THE COMPANY.
In the pages that follow, you'll find a discussion of the economic environment
during the period, followed by a detailed report from the fund's manager on key
factors that influenced performance. This report is rich in information, and you
should discuss it with your financial advisor if you have questions.
We are committed to providing quality products and services to our shareholders,
strengthening your confidence in us, and working hard to help you achieve
financial success. It is a privilege to play a role in your financial future,
and we value your business. Thank you for choosing Columbia Management.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
HEAD OF MUTUAL FUNDS, COLUMBIA MANAGEMENT
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's chief
liaison to the mutual fund boards of trustees.
Chris joined Bank of America in August 2004.
<Page>
ECONOMIC UPDATE
COLUMBIA THEMATIC EQUITY FUNDS
The United States led a worldwide economic recovery that picked up steam in
2003. But it also led a slowdown in economic growth within developed markets as
the 12-month period that began October 1, 2003, and ended September 30, 2004,
wore on. The US economy hit a soft patch mid year, as GDP growth slowed to 3.3%.
Europe's economies grew at less than 2.0%, making it the weakest economic region
in the industrialized world. Growth in the United Kingdom was in line with US
growth.
JAPAN'S RECOVERY REMAINS ON TRACK
In Japan, a robust economic recovery lost some steam midway through the year.
Growth slowed from 6.5% in the first half to just under 4.0% in the second half.
However, the country's economic recovery appears to be broadening beyond the
export-driven big companies. Smaller companies that cater to domestic demand
have gained ground and helped spur a rise in employment.
EMERGING MARKETS WERE GROWTH LEADERS
In emerging markets, double-digit economic growth in the first half of the
period reflected both high demand for exports and rising domestic economic
activity. Some of these world growth leaders experienced slower growth in the
second half. And while restrictive monetary policy, especially in China, could
restrain growth in 2005, there's no evidence of a sharp fall-off in emerging
market economic growth. In fact, in Southeast Asian economies, exports have
continued to trend higher. As the manufacturing center of the global economy,
Southeast Asia is often considered a relatively reliable indicator of global
economic growth.
STOCK MARKETS RESTRAINED BY EXTERNAL EVENTS
In an environment of growth and relative stability, most of the world's stock
markets reported positive returns during this reporting period. The S&P 500
Index, a broad measure of US stock market activity, gained 13.87% for the year.
The MSCI EAFE Index did even better, returning 22.08%.
However, most of those gains were generated during the first three months of the
reporting period. As a cloud of uncertainty descended over the US stock markets,
the result of a range of external factors, markets outside the United States
were also dragged down. Soaring oil prices, hurricane activity and a
disappointing job market put a crimp on consumer spending in the United States,
Europe and Japan. Higher commodity prices are beginning to affect corporate
profitability and the number of global companies issuing profit warnings has
increased. In the United States, uncertainty about the outcome of the
forthcoming presidential election and ongoing concerns about the war in Iraq and
terrorist threats helped sideline investors.
By the end of the reporting period, stock markets in the United States and Japan
were flat to down in 2004. In Europe, most markets have eked out modest gains.
The markets of Sweden, Denmark and Norway were standouts, with double-digit
performance. Selected emerging stock markets, such as the Czech Republic, Egypt
and Hungary, continued to rise strongly through the end of the period.
LOOKING AHEAD
Strong global trading patterns suggest that the world's economies are still on
track. Even if energy prices remain high, the pace of economic expansion is more
likely to drift lower rather than descend sharply. However, until the
uncertainties plaguing the US markets begin to dissipate, investor fears--rather
than the outlook for economic prosperity--are likely to hold sway over global
stock markets.
[SIDENOTE]
SUMMARY:
FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004
- - ECONOMIC DEMAND WAS SOLID, BUT IT SLOWED BETWEEN THE FIRST AND SECOND HALF OF
THE REPORTING PERIOD.
- - BOTH THE S&P 500 INDEX AND THE MSCI EAFE INDEX DELIVERED DOUBLE-DIGIT
RETURNS, BUT MOST WERE ACCUMULATED IN THE FIRST HALF OF THE PERIOD.
[CHART]
<Table>
S&P INDEX 13.87%
MSCI INDEX 22.08%
</Table>
The S&P 500 Index is an unmanaged index that tracks the performance of the 500
widely held, large-capitalization US stocks.
The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East
(EAFE) Index is free float-adjusted market capitalization index that is designed
to measure developed market equity performance, excluding the US and Canada.
1
<Page>
PERFORMANCE INFORMATION
COLUMBIA GLOBAL THEMATIC EQUITY FUND
[CHART]
VALUE OF A $10,000 INVESTMENT 01/02/01 - 09/30/04
<Table>
<Caption>
CLASS Z SHARES MSCI WORLD INDEX
1/1/2001 $ 10,000 $ 10,000
1/31/2001 $ 10,424 $ 10,193
2/28/2001 $ 9,556 $ 9,331
3/31/2001 $ 8,737 $ 8,716
4/30/2001 $ 9,467 $ 9,358
5/31/2001 $ 9,338 $ 9,236
6/30/2001 $ 9,042 $ 8,946
7/31/2001 $ 8,766 $ 8,826
8/31/2001 $ 8,302 $ 8,401
9/30/2001 $ 7,493 $ 7,660
10/31/2001 $ 7,680 $ 7,806
11/30/2001 $ 8,174 $ 8,267
12/31/2001 $ 8,351 $ 8,318
1/31/2002 $ 7,887 $ 8,065
2/28/2002 $ 7,738 $ 7,994
3/31/2002 $ 8,064 $ 8,363
4/30/2002 $ 7,634 $ 8,064
5/31/2002 $ 7,564 $ 8,077
6/30/2002 $ 7,169 $ 7,586
7/31/2002 $ 6,547 $ 6,946
8/31/2002 $ 6,478 $ 6,958
9/30/2002 $ 5,757 $ 6,192
10/31/2002 $ 6,290 $ 6,648
11/30/2002 $ 6,566 $ 7,006
12/31/2002 $ 6,211 $ 6,665
1/31/2003 $ 5,955 $ 6,462
2/28/2003 $ 5,787 $ 6,349
3/31/2003 $ 5,728 $ 6,328
4/30/2003 $ 6,162 $ 6,889
5/31/2003 $ 6,439 $ 7,280
6/30/2003 $ 6,617 $ 7,406
7/31/2003 $ 6,844 $ 7,555
8/31/2003 $ 6,973 $ 7,718
9/30/2003 $ 6,894 $ 7,764
10/31/2003 $ 7,387 $ 8,224
11/30/2003 $ 7,397 $ 8,348
12/31/2003 $ 7,793 $ 8,871
1/31/2004 $ 7,963 $ 9,013
2/29/2004 $ 8,103 $ 9,164
3/31/2004 $ 8,033 $ 9,103
4/30/2004 $ 7,783 $ 8,917
5/31/2004 $ 7,783 $ 8,998
6/30/2004 $ 7,873 $ 9,182
7/31/2004 $ 7,503 $ 8,883
8/31/2004 $ 7,554 $ 8,922
9/30/2004 $ 7,713 $ 9,090
</Table>
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Morgan
Stanley Capital International (MSCI) World Index is an unmanaged index that
tracks the performance of global 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 January 2, 2001.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
<Table>
<Caption>
SHARE CLASS Z
- --------------------------------
INCEPTION 01/02/01
- --------------------------------
1-year 11.89
Life (01/02/01) -6.69
</Table>
All results shown assume reinvestment of distributions.
Performance results reflect any voluntary waivers or reimbursements of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class Z shares are sold only at net asset value with no Rule 12b-1 fees. Class Z
shares may be purchased by, among others: any shareholder (and family members)
of a fund distributed by Columbia Funds Distributor, Inc. (CFDI) who (i) hold
class Z shares, (ii) who holds class A shares that were obtained by exchanging
with class Z shares, or (iii) who purchased no-load shares of funds merged with
funds distributed by CFDI; clients of fee-based broker-dealers or registered
investment advisors that recommend the purchase of fund shares; any trustee or
director (and family members of a shareholder or any person listed on an account
registration for the account of any shareholder) of any fund distributed by
CFDI; insurance companies, trust companies, banks, endowments, investment
companies, and foundations; and retirement plans with assets of at least $5
million. Investment minimums vary. For further information, please consult the
fund prospectus.
[SIDENOTE]
PERFORMANCE OF A $10,000 INVESTMENT 01/02/01 - 09/30/04 ($)
<Table>
Class Z 7,713
</Table>
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, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
2
<Page>
UNDERSTANDING YOUR EXPENSES
COLUMBIA GLOBAL THEMATIC EQUITY FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also continuing costs, which generally
include investment advisory and/or Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare this cost with the continuing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
<Table>
<Caption>
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ---------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ---------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 960.50 1,017.00 7.84 8.07 1.60
</Table>
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the investment advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only continuing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided will not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other fund companies, it is important to note that hypothetical
examples are meant to highlight the continuing cost of investing in a fund and
do not reflect any transactional costs, such as sales charges or redemption or
exchange fees.
[SIDENOTE]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
www.columbiafunds.com OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR
ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE
PERIOD
3
<Page>
PORTFOLIO MANAGERS' REPORT
COLUMBIA GLOBAL THEMATIC EQUITY FUND
For the 12-month period ended September 30, 2004, class Z shares of Columbia
Global Thematic Equity Fund returned 11.89%. Fund performance was below that of
its benchmark, the MSCI World Index, which returned 17.10%. The fund benefited
from surging prices in energy and materials stocks. However, those gains were
partially offset by mixed returns from large positions in financials and
information technology, and poor performance in the consumer staples area.
ECONOMIC GROWTH MAY HAVE PEAKED
The first half of the year was characterized by broad-based global economic
growth, as demand for raw materials in China and India powered equity markets.
While the markets remained in positive territory for the rest of the period,
stocks gave back some of their earlier gains over the summer as interest rates
increased and economic data came in weaker than expected. Tight supplies of oil
and natural gas and surging demand combined to raise oil prices to record
levels. Higher prices helped energy producers, but they raised costs for
consumer-oriented companies and dampened their returns.
DIVERSIFICATION AND GLOBAL DATA TRAFFIC PAID OFF
Early in the year, we made a strategic decision to increase energy exposure as
part of the DIVERSIFICATION theme. This worked out well for the fund as US oil
driller National-Oilwell gained more than 80% and Canadian Oil company Suncor
Energy rose 72%. Suncor's profits rose as a result of higher commodity prices.
The company also made improvements in its production processes that lowered its
cost per barrel. Another Canadian company, Potash, did well for the
DIVERSIFICATION theme. Increased land cultivation in developing countries helped
the fertilizer manufacturer gain 80% during the year.
In the GLOBAL DATA TRAFFIC theme, US stock Qualcomm appreciated dramatically. We
sold it when it reached our price target. We believe the risk/reward
relationship is better in other telecom-related technology companies such as
Ericsson, which gained 112% during the period.
DISAPPOINTING RESULTS FROM BANKS, SOFTWARE AND STAPLES
Financial stocks accounted for 20% of the fund's assets, but very little in
total return. Kookmin Bank (DEREGULATION/CROSS SELLING) declined on worries that
the delayed recovery of Korea's domestic economy would result in raised
delinquency rates on loans to small and mid-size businesses. Nomura Holdings
(SAVING FOR RETIREMENT) also lost ground as investors fear that deregulation of
the Japanese securities industry would hurt their business. In the United
States, software company BEA Systems (STRATEGIC INFORMATION) lost ground when it
experienced difficulty meeting sales forecasts.
[SIDENOTE]
SUMMARY
- - FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS Z SHARES
RETURNED 11.89%.
- - A STRONG GLOBAL STOCK MARKET AND RECORD-HIGH COMMODITY PRICES HELPED THE FUND
AND ITS BENCHMARK ACHIEVE DOUBLE-DIGIT RETURNS.
- - ROBUST RETURNS FROM THE ENERGY AND MATERIALS SECTORS HELPED PERFORMANCE.
HOWEVER PERFORMANCE WAS RESTRAINED BY POOR RESULTS FROM CONSUMER STAPLES
HOLDINGS.
[CHART]
<Table>
CLASS Z SHARES 11.89%
MSCI WORLD INDEX 17.10%
</Table>
OBJECTIVE
Seeks long-term growth of capital
TOTAL NET ASSETS
$0.4 million
NET ASSET VALUE PER SHARE AS OF 09/30/04 ($)
<Table>
Class Z 7.72
</Table>
DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 09/30/04 ($)
<Table>
Class Z 0.09
</Table>
The MSCI World Index is an unmanaged index that tracks the performance of global
stocks.
4
<Page>
INCREASED GLOBAL EXPOSURE
During the period, we reshaped the fund's holdings, particularly the European
holdings, to gain greater global exposure. We eliminated our positions in
Kingfisher and Signet Group because of their exposure to a weakening European
consumer market. We added Siemens (CONVERGENCE OF COMMUNICATION AND MEDIA), one
of the largest German industrial companies, which we expect to benefit from an
improvement in the technology cycle in the United States and Asia. The stock was
trading at the lower end of its historical range, and we believe it offers
attractive return potential.
STILL ROOM FOR GROWTH
Although business spending in the United States picked up, consumer spending
slowed. Leading indicators point to lower US economic growth in 2005,
particularly if oil prices remain at record highs. We believe that the fate of
the US economy is likely to be a swing factor for the rest of the world in the
coming year because a large portion of Japanese and European economic growth
depends on exports to the United States. As a result, we plan to continue to
focus our stock selection on high quality companies with a global profile, which
we believe have the potential to do well in this environment.
/s/ [ILLEGIBLE]
Leon Pedersen is the lead manager of Columbia Global Thematic Equity Fund. The
fund is managed by a 24-member portfolio team at Nordea Investment Management
North America, Inc. No single individual at Nordea is responsible for making
investment decisions for the fund. Nordea is the subadvisor to the fund. The
fund's advisor is Columbia Management Advisors, Inc.
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
There are specific risks involved when investing in foreign stocks, such as
currency exchange rate fluctuations, economic change, instability of emerging
countries and political developments.
PLEASE NOTE: On October 13, 2004, the fund's Board of Trustees voted to
liquidate the fund. The fund was closed to new investors as of the close of
business on November 10, 2004. The fund is scheduled for liquidation on or about
December 10, 2004. The fund will continue to accept some automatic purchases and
certain retirement contributions until the fund is liquidated.
[SIDENOTE]
SECTORS AS OF 09/30/04 (%)
<Table>
Financials 20.4
Information technology 19.0
Consumer discretionary 13.6
Industrials 13.3
Health care 10.5
Energy 8.3
Materials 5.8
Telecommunication services 5.6
Consumer staples 3.5
</Table>
TOP 5 COUNTRIES AS OF 09/30/04 (%)
<Table>
United States 41.8
Japan 14.8
United Kingdom 7.6
Canada 6.9
Switzerland 4.9
</Table>
TOP 10 HOLDINGS AS OF 09/30/04 (%)
<Table>
Samsung Electronics Co., Ltd., GDR 3.8
Alltel Corp. 3.6
Applied Materials, Inc. 3.2
Microsoft Corp. 3.1
Nomura Holdings, Inc. 3.0
Pfizer, Inc. 3.0
General Electric Co. 2.9
Mitsubishi Corp. 2.6
GlaxoSmithKline PLC 2.5
Hoya Corp. 2.5
</Table>
HOLDINGS DISCUSSED IN THIS REPORT AS OF 09/30/04 (%)
<Table>
National-Oilwell, Inc. 0.4
Suncor Energy, Inc. 2.3
Potash Corp. of Saskatchewan, Inc. 1.5
Telefonaktiebolaget LM Ericsson, Class B 1.1
Kookmin Bank, ADR 0.8
Nomura Holdings, Inc. 3.0
BEA Systems, Inc. 1.0
Siemens AG, Registered Shares 0.7
</Table>
Your fund is actively managed and the composition of its portfolio will change
over time.
Sector breakdown and countries are calculated as a percentage of total
investments. Portfolio holdings are calculated as a percentage of net
assets.
5
<Page>
PERFORMANCE INFORMATION
COLUMBIA EUROPEAN THEMATIC EQUITY FUND
[CHART]
VALUE OF A $10,000 INVESTMENT 01/02/01 - 09/30/04
<Table>
<Caption>
CLASS Z SHARES MSCI EUROPE INDEX
1/1/2001 $ 10,000 $ 10,000
1/31/2001 $ 10,157 $ 10,005
2/28/2001 $ 9,234 $ 9,127
3/31/2001 $ 8,429 $ 8,446
4/30/2001 $ 8,969 $ 9,046
5/31/2001 $ 8,477 $ 8,605
6/30/2001 $ 8,133 $ 8,279
7/31/2001 $ 8,054 $ 8,300
8/31/2001 $ 7,907 $ 8,084
9/30/2001 $ 7,150 $ 7,278
10/31/2001 $ 7,327 $ 7,509
11/30/2001 $ 7,563 $ 7,810
12/31/2001 $ 7,838 $ 8,010
1/31/2002 $ 7,347 $ 8,221
2/28/2002 $ 7,347 $ 7,590
3/31/2002 $ 7,651 $ 8,002
4/30/2002 $ 7,561 $ 7,941
5/31/2002 $ 7,471 $ 7,916
6/30/2002 $ 7,281 $ 7,641
7/31/2002 $ 6,373 $ 6,791
8/31/2002 $ 6,343 $ 6,790
9/30/2002 $ 5,364 $ 5,896
10/31/2002 $ 5,893 $ 6,466
11/30/2002 $ 6,173 $ 6,784
12/31/2002 $ 5,934 $ 6,537
1/31/2003 $ 5,564 $ 6,228
2/28/2003 $ 5,334 $ 6,025
3/31/2003 $ 5,544 $ 5,935
4/30/2003 $ 6,263 $ 6,736
5/31/2003 $ 6,733 $ 7,173
6/30/2003 $ 6,783 $ 7,242
7/31/2003 $ 6,863 $ 7,389
8/31/2003 $ 6,823 $ 7,375
9/30/2003 $ 6,923 $ 7,525
10/31/2003 $ 7,362 $ 8,028
11/30/2003 $ 7,712 $ 8,370
12/31/2003 $ 8,238 $ 9,057
1/31/2004 $ 8,329 $ 9,163
2/29/2004 $ 8,472 $ 9,432
3/31/2004 $ 8,145 $ 9,138
4/30/2004 $ 7,962 $ 9,062
5/31/2004 $ 8,043 $ 9,209
6/30/2004 $ 8,247 $ 9,332
7/31/2004 $ 7,920 $ 9,075
8/31/2004 $ 7,859 $ 9,081
9/30/2004 $ 8,125 $ 9,446
</Table>
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Morgan
Stanley Capital International (MSCI) Europe Index is a broad-based, unmanaged
index that tracks the performance of European 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 January 2, 2001.
PERFORMANCE OF A $10,000 INVESTMENT 01/02/01 - 09/30/04 ($)
<Table>
Class Z 8,125
</Table>
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, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance
updates.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
<Table>
<Caption>
SHARE CLASS Z
- -----------------------------
INCEPTION 01/02/01
- -----------------------------
1-year 17.37
Life (01/02/01) -5.39
</Table>
All results shown assume reinvestment of distributions.
Performance results reflect any voluntary waivers or reimbursements of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class Z shares are sold only at net asset value with no Rule 12b-1 fees. Class Z
shares may be purchased by, among others: any shareholder (and family members)
of a fund distributed by Columbia Funds Distributor, Inc. (CFDI) who (i) hold
class Z shares, (ii) who holds class A shares that were obtained by exchanging
with class Z shares, or (iii) who purchased no-load shares of funds merged with
funds distributed by CFDI; clients of fee-based broker-dealers or registered
investment advisors that recommend the purchase of fund shares; any trustee or
director (and family members of a shareholder or any person listed on an account
registration for the account of any shareholder) of any fund distributed by
CFDI; insurance companies, trust companies, banks, endowments, investment
companies, and foundations; and retirement plans with assets of at least $5
million. Investment minimums vary. For further information, please consult the
fund prospectus.
6
<Page>
UNDERSTANDING YOUR EXPENSES
COLUMBIA EUROPEAN THEMATIC EQUITY FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also continuing costs, which generally
include investment advisory and/or Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare this cost with the continuing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
<Table>
<Caption>
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- -------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- -------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 997.50 1,017.00 7.99 8.07 1.60
</Table>
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the investment advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only continuing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided will not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other fund companies, it is important to note that hypothetical
examples are meant to highlight the continuing cost of investing in a fund and
do not reflect any transactional costs, such as sales charges or redemption or
exchange fees.
[SIDENOTE]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
www.columbiafunds.com OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR
ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE
PERIOD
7
<Page>
PORTFOLIO MANAGERS' REPORT
COLUMBIA EUROPEAN THEMATIC EQUITY FUND
For the 12-month period ended September 30, 2004, class Z shares of Columbia
European Thematic Equity Fund returned 17.37%. Surging prices in energy stocks
and strong results in the health care sector helped the fund's overall
performance. The fund did not gain as much as its benchmark, the MSCI Europe
Index, which returned 25.52%. Disappointing performance from industrial and
consumer holdings detracted from the fund's return relative to the index.
ECONOMIC GROWTH MAY BE STABILIZING
The year was characterized by broad-based global growth driven by strong demand
for raw materials in China and India. Tight oil and gas supplies and surging
demand combined to send oil prices to record levels during the period. Higher
prices favored energy producers but dampened returns in sectors that were faced
with higher costs. While European equity market performance was more volatile by
the end of the period, Europe achieved a reasonable annual GDP growth level of
2% during the period. Forecasts call for growth of approximately the same level
for the year ahead.
BETTER LIFE AND RETIREMENT THEMES KEPT PACE
The LONGER LIFE, BETTER LIFE theme provided healthy returns, led by two
pharmaceutical companies. Aventis gained more than 60% before being acquired by
its French rival Sanofi-Synthelabo to become Sanofi-Aventis. Danish drug
manufacturer Novo-Nordisk, one of the world's leading producers of insulin and
diabetes education training materials, rose 48%. The SAVING FOR RETIREMENT theme
had four financial holdings gaining 25% or more during the period. Bank Austria
Creditanstalt topped the list, rising 96%. One of the fund's largest holdings,
UBS AG, did well on surprisingly strong 2003 results. The financial services
company's fee income rose as a result of increased merger and acquisition
activity handled by its corporate finance division. It also announced high
earnings expectations for 2004, additional share buybacks and a 30% dividend
increase.
STRATEGY CHANGE IN CONSUMER COMPANIES
Lackluster returns and a strategy shift in the consumer discretionary sector
made a small contribution to performance during the period. British Sky
Broadcasting (CONVERGENCE OF COMMUNICATION AND MEDIA) lost ground when it
announced lower-than-anticipated growth in new subscribers, but we believe the
company still has good prospects. Ryanair (FULFILL YOUR DREAMS) also dropped
sharply during the year in response to keener competition from new low-fare
carriers. We sold the position as part of our strategy to reduce the fund's
exposure to weakening European consumer markets in favor of companies with a
broader global reach.
[SIDENOTE]
SUMMARY
- - FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS Z SHARES
RETURNED 17.37%.
- - RISING MARKET CONDITIONS HELPED THE FUND AND ITS BENCHMARK ACHIEVE
DOUBLE-DIGIT RETURNS.
- - STRONG RETURNS IN THE ENERGY AND HEALTH CARE SECTORS BOOSTED PERFORMANCE.
DISAPPOINTING RESULTS FROM INDUSTRIAL AND CONSUMER-RELATED STOCKS HAMPERED
THE FUND'S RETURN RELATIVE TO ITS BENCHMARK, THE MSCI EUROPE INDEX.
[CHART]
<Table>
CLASS Z SHARES 17.37%
MSCI EUROPE INDEX 25.52%
</Table>
OBJECTIVE
Seeks long-term growth of capital
TOTAL NET ASSETS
$0.2 million
NET ASSET VALUE PER SHARE AS OF 09/30/04 ($)
<Table>
Class Z 7.97
</Table>
DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 09/30/04 ($)
<Table>
Class Z 0.16
</Table>
The MSCI Europe Index is a broad-based, unmanaged index that tracks the
performance of European stocks.
8
<Page>
NEW HOLDINGS IN COMMUNICATION AND MEDIA
In keeping with our efforts to extend the fund's global exposure, we initiated a
position in EMI Group, a leading global music recording and publishing company
in the CONVERGENCE OF COMMUNICATION AND MEDIA theme. As the market for legal
online music finally takes hold, we expect it to drive growth for companies such
as EMI, which owns the rights to over one million songs worldwide. We also added
Siemens AG, one of the largest German industrial companies, which we expect to
benefit from an improvement in the technology cycle in the United States and
Asia. The stock was trading at the lower end of its historical range and offers
attractive return potential.
SLOWER GROWTH AHEAD
Although business spending in the United States has picked up, consumer spending
growth has slowed. Leading indicators point to lower US economic growth in 2005,
particularly if oil prices remain at record highs. We believe that the fate of
the US economy is likely to be a swing factor for the rest of the world in the
coming year because a large portion of European economic growth depends on
exports to the United States. The European economy continues to lag other
regions, and higher raw material costs are starting to affect company margins.
In this environment, we plan to focus our stock selection on what we believe are
high quality companies with a global profile, which have the potential to do
well in an environment of slower growth.
/S/ Leon Pedersen
Leon Pedersen is the lead manager of Columbia European Thematic Equity Fund. The
fund is managed by a 24-member portfolio team at Nordea Investment Management
North America, Inc. No single individual at Nordea is responsible for making
investment decisions for the fund. Nordea is the subadvisor to the fund. The
fund's advisor is Columbia Management Advisors, Inc.
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
There are specific risks involved when investing in foreign stocks, such as
currency exchange rate fluctuations, economic change, instability of emerging
countries and political developments. A portfolio of stocks from a limited
geographic region, such as Europe, may be subject to additional risks and
volatility.
PLEASE NOTE: On October 13, 2004, the fund's Board of Trustees voted to
liquidate the fund. The fund was closed to new investors as of the close of
business on November 10, 2004. The fund is scheduled for liquidation on or about
December 10, 2004. The fund will continue to accept some automatic purchases and
certain retirement contributions until the fund is liquidated.
[SIDENOTE]
SECTORS AS OF 09/30/04 (%)
<Table>
Financials 24.6
Consumer discretionary 15.0
Health care 11.8
Energy 11.5
Industrials 9.5
Telecommunication services 7.1
Materials 6.9
Consumer staples 6.9
Information technology 6.7
</Table>
TOP 5 COUNTRIES AS OF 09/30/04 (%)
<Table>
United Kingdom 28.6
Switzerland 16.0
France 13.2
Germany 11.1
Sweden 6.9
</Table>
TOP 10 HOLDINGS AS OF 09/30/04 (%)
<Table>
BP PLC 4.9
Total SA 4.8
Novartis AG, Registered Shares 4.1
UBS AG, Registered Shares 3.9
GlaxoSmithKline PLC 3.8
Prudential PLC 3.5
Diageo PLC 3.3
Dexia 3.0
Lafarge SA 3.0
Adecco SA 2.9
</Table>
HOLDINGS DISCUSSED IN THIS REPORT AS OF 09/30/04 (%)
<Table>
Sanofi-Aventis 1.1
Novo-Nordisk A/S, Class B 1.7
Bank Austria Creditanstalt 2.0
UBS AG, Registered Shares 3.9
British Sky Broadcasting PLC 2.5
EMI Group PLC 2.4
Siemens AG, Registered Shares 2.2
</Table>
Your fund is actively managed and the composition of its portfolio will change
over time.
Sector breakdown and countries are calculated as a percentage of total
investments. Portfolio holdings are calculated as a percentage of net assets.
9
<Page>
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 COLUMBIA THEMATIC EQUITY 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 AND LIABILITIES
This statement details the fund's assets, liabilities, net assets and share
price for each share class as of the last day of the reporting period. Net
assets are calculated by subtracting all the fund's liabilities (including any
unpaid expenses) from the total of the fund's investment and non-investment
assets. The share price for each class is calculated by dividing net assets for
that class by the number of shares outstanding in that class as of the last day
of the reporting period.
STATEMENT OF OPERATIONS
This statement details income earned by the fund and the expenses accrued by the
fund during the reporting period. The Statement of Operations also shows any net
gain or loss the fund realized on the sales of its holdings during the period,
as well as any unrealized gains or losses recognized over the period. The total
of these results represents the fund's net increase or decrease in net assets
from operations.
STATEMENT OF CHANGES IN NET ASSETS
This statement demonstrates how the fund's net assets were affected by its
operating results, distributions to shareholders and shareholder transactions
(e.g., subscriptions, redemptions and dividend reinvestments) during the
reporting period. The Statement of Changes in Net Assets also details changes in
the number of shares outstanding.
NOTES TO FINANCIAL STATEMENTS
These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees
and compensation paid to affiliates and significant risks and contingencies.
FINANCIAL HIGHLIGHTS
The financial highlights demonstrate how the fund's net asset value per share
was affected by the fund's operating results. The financial highlights table
also discloses the classes' performance and certain key ratios (e.g., class
expenses and net investment income as a percentage of average net assets).
10
<Page>
INVESTMENT PORTFOLIO
SEPTEMBER 30, 2004 COLUMBIA GLOBAL THEMATIC EQUITY FUND
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 100.1%
CONSUMER DISCRETIONARY - 13.7%
AUTOMOBILES - 1.8% Bayerische Motoren Werke (BMW) AG 70 2,883
Honda Motor Co., Ltd. 100 4,876
Automobiles Total 7,759
HOTELS, RESTAURANTS & LEISURE - 2.1% Carnival Corp. 145 6,857
Compass Group PLC 440 1,763
Hotels, Restaurants &
Leisure Total 8,620
HOUSEHOLD DURABLES - 1.3% Furniture Brands International, Inc. 150 3,762
Koninklijke (Royal) Philips
Electronics NV 80 1,838
Household Durables
Total 5,600
MEDIA - 4.8% British Sky Broadcasting PLC 480 4,173
Lamar Advertising Co., Class A (a) 100 4,161
Omnicom Group, Inc. 100 7,306
WPP Group PLC 500 4,669
Media Total 20,309
SPECIALTY RETAIL - 3.0% Home Depot, Inc. 205 8,036
Tiffany & Co. 80 2,459
Tractor Supply Co. (a) 75 2,358
Specialty Retail Total 12,853
TEXTILES, APPAREL & LUXURY GOODS - 0.7% Adidas-Salomon AG 20 2,797
Textiles, Apparel &
Luxury Goods Total 2,797
-----------
CONSUMER DISCRETIONARY
TOTAL 57,938
CONSUMER STAPLES - 3.5%
BEVERAGES - 2.0% Diageo PLC 300 3,754
PepsiCo, Inc. 95 4,622
Beverages Total 8,376
FOOD & STAPLES RETAILING - 1.0% CVS Corp. 100 4,213
Food & Staples
Retailing Total 4,213
FOOD PRODUCTS - 0.5% Nestle SA, Registered Shares 10 2,297
Food Products Total 2,297
-----------
CONSUMER STAPLES TOTAL 14,886
ENERGY - 8.3%
ENERGY EQUIPMENT & SERVICES - 4.8% Nabors Industries Ltd. (a) 150 7,102
National-Oilwell, Inc. (a) 50 1,643
Schlumberger Ltd. 150 10,097
Varco International, Inc. (a) 60 1,609
Energy Equipment &
Services Total 20,451
OIL & GAS - 3.5% Suncor Energy, Inc. 300 9,613
Total SA 25 5,103
Oil & Gas Total 14,716
-----------
ENERGY TOTAL 35,167
</Table>
See Accompanying Notes to Financial Statements.
11
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - 20.4%
CAPITAL MARKETS - 3.7% Merrill Lynch & Co., Inc. 170 8,453
UBS AG, Registered Shares 100 7,061
Capital Markets Total 15,514
COMMERCIAL BANKS - 8.1% Allied Irish Banks PLC 110 1,834
Banco Santander Central Hispano SA 550 5,377
Dexia 300 5,586
Kookmin Bank, ADR (a) 100 3,184
Mitsubishi Tokyo Financial Group 1 8,353
Wells Fargo & Co. 170 10,137
Commercial Banks Total 34,471
DIVERSIFIED FINANCIAL SERVICES - 5.3% Citigroup, Inc. 220 9,706
Nomura Holdings, Inc. 1,000 12,870
Diversified Financial
Services Total 22,576
INSURANCE - 3.3% Alleanza Assicurazioni S.p.A. 300 3,475
Axa 170 3,450
Prudential PLC 535 4,373
Swiss Re, Registered Shares 50 2,887
Insurance Total 14,185
-----------
FINANCIALS TOTAL 86,746
HEALTH CARE - 10.5%
HEALTH CARE EQUIPMENT & SUPPLIES - 0.7% Hospira, Inc. (a) 17 520
Medtronic, Inc. 45 2,336
Health Care Equipment
& Supplies Total 2,856
PHARMACEUTICALS - 9.8% Abbott Laboratories 175 7,413
Eli Lilly & Co. 90 5,405
GlaxoSmithKline PLC 500 10,806
Novartis AG, Registered Shares 110 5,133
Pfizer, Inc. 420 12,852
Pharmaceuticals Total 41,609
-----------
HEALTH CARE TOTAL 44,465
INDUSTRIALS - 13.3%
AEROSPACE & DEFENSE - 2.2% Bombardier, Inc., Class B 1,000 2,308
Honeywell International, Inc. 200 7,172
Aerospace & Defense
Total 9,480
COMMERCIAL SERVICES & SUPPLIES - 0.4% Securitas AB, Class B 120 1,599
Commercial Services &
Supplies Total 1,599
INDUSTRIAL CONGLOMERATES - 3.6% General Electric Co. 370 12,425
Siemens AG, Registered Shares 40 2,948
Industrial
Conglomerates Total 15,373
MACHINERY - 2.1% Atlas Copco AB, Class A 70 2,697
Tomra Systems ASA 500 1,892
Volvo AB, Class B 120 4,240
Machinery Total 8,829
</Table>
See Accompanying Notes to Financial Statements.
12
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS -(CONTINUED)
INDUSTRIALS - (CONTINUED)
ROAD & RAIL - 2.4% East Japan Railway Co. 2 10,366
Road & Rail Total 10,366
TRADING COMPANIES & DISTRIBUTORS - 2.6% Mitsubishi Corp. 1,000 10,826
Trading Companies &
Distributors Total 10,826
-----------
INDUSTRIALS TOTAL 56,473
INFORMATION TECHNOLOGY - 19.0%
COMMUNICATIONS EQUIPMENT - 2.4% Nokia Oyj 400 5,493
Telefonaktiebolaget LM Ericsson,
Class B (a) 1,500 4,677
Communications
Equipment Total 10,170
COMPUTERS & PERIPHERALS - 1.5% International Business Machines Corp. 75 6,430
Computers &
Peripherals Total 6,430
ELECTRONIC EQUIPMENT & INSTRUMENTS - 6.2% Hoya Corp. 100 10,506
Samsung Electronics Co., Ltd., GDR (b) 80 15,900
Electronic Equipment &
Instruments Total 26,406
INTERNET SOFTWARE & SERVICES - 0.5% T-Online International AG (a) 200 2,177
Internet Software &
Services Total 2,177
SEMICONDUCTORS & Applied Materials, Inc. (a) 809 13,340
SEMICONDUCTOR EQUIPMENT - 3.2% Semiconductors &
Semiconductor
Equipment Total 13,340
SOFTWARE - 5.2% BEA Systems, Inc. (a) 600 4,146
Dassault Systemes SA 100 4,684
Microsoft Corp. 475 13,134
Software Total 21,964
-----------
INFORMATION TECHNOLOGY
TOTAL 80,487
MATERIALS - 5.8%
CHEMICALS - 4.2% BOC Group PLC 60 963
Johnson Matthey PLC 100 1,732
Potash Corp. of Saskatchewan, Inc. 100 6,424
Praxair, Inc. 200 8,548
Chemicals Total 17,667
CONSTRUCTION MATERIALS - 0.7% Holcim Ltd., Registered Shares 60 3,172
Construction Materials
Total 3,172
METALS & MINING - 0.9% Inco Ltd. (a) 100 3,918
Metals & Mining Total 3,918
-----------
MATERIALS TOTAL 24,757
TELECOMMUNICATION SERVICES - 5.6%
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.4% ALLTEL Corp. 275 15,100
Telefonica SA 21 314
Telenor ASA 400 3,052
Diversified
Telecommunication
Services Total 18,466
</Table>
See Accompanying Notes to Financial Statements.
13
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATION SERVICES - (CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES - 1.2% NTT DoCoMo, Inc. 3 5,115
Wireless
Telecommunication
Services Total 5,115
-----------
TELECOMMUNICATION
SERVICES TOTAL 23,581
TOTAL COMMON STOCKS - 100.1%
(COST OF $407,607) (c) 424,500
OTHER ASSETS & LIABILITIES, NET - (0.1)% (518)
NET ASSETS - 100.0% 423,982
</Table>
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At September
30, 2004, the value of this security represents 3.8% of net assets.
(c) Cost for federal income tax purposes is $417,298.
<Table>
<Caption>
ACRONYM NAME
- --------------------------------------------------------
ADR American Depositary Receipt
GDR Global Depositary Receipt
</Table>
<Table>
<Caption>
SUMMARY OF SECURITIES % OF TOTAL
BY COUNTRY (UNAUDITED) VALUE INVESTMENTS
- -----------------------------------------------------
United States $ 177,286 41.8%
Japan 62,911 14.8
United Kingdom 32,233 7.6
Canada 29,365 6.9
Switzerland 20,550 4.9
South Korea 19,084 4.5
France 13,237 3.1
Sweden 13,214 3.1
Netherlands 11,935 2.8
Germany 10,806 2.6
Panama 6,857 1.6
Spain 5,691 1.3
Belgium 5,586 1.3
Finland 5,493 1.3
Norway 4,943 1.2
Italy 3,475 0.8
Ireland 1,834 0.4
---------- -----
$ 424,500 100.0%
========== =====
</Table>
Certain securities are listed by country of underlying exposure but may trade
predominately on other exchanges.
See Accompanying Notes to Financial Statements.
14
<Page>
INVESTMENT PORTFOLIO
SEPTEMBER 30, 2004 COLUMBIA EUROPEAN THEMATIC EQUITY FUND
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 106.9%
CONSUMER DISCRETIONARY - 16.3%
AUTOMOBILES - 2.9% Bayerische Motoren Werke (BMW) AG 114 4,696
Automobiles Total 4,696
HOTELS, RESTAURANTS & LEISURE - 3.2% Carnival PLC 46 2,272
Compass Group PLC 765 3,065
Hotels, Restaurants &
Leisure Total 5,337
HOUSEHOLD DURABLES - 2.7% Koninklijke (Royal) Philips
Electronics NV 190 4,366
Household Durables
Total 4,366
MEDIA - 4.9% British Sky Broadcasting PLC 475 4,130
EMI Group PLC 1,000 4,007
Media Total 8,137
TEXTILES, APPAREL & LUXURY GOODS - 2.6% Adidas-Salomon AG 31 4,336
Textiles, Apparel &
Luxury Goods Total 4,336
-----------
CONSUMER DISCRETIONARY
TOTAL 26,872
CONSUMER STAPLES - 7.6%
BEVERAGES - 3.4% Diageo PLC 440 5,506
Beverages Total 5,506
Food Products - 4.2% Nestle SA, Registered Shares 20 4,593
Royal Numico NV (a) 74 2,361
Food Products Total 6,954
-----------
CONSUMER STAPLES TOTAL 12,460
ENERGY - 12.5%
OIL & GAS - 12.5% BP PLC 850 8,139
Shell Transport & Trading Co., PLC 605 4,450
Total SA 39 7,960
Oil & Gas Total 20,549
-----------
ENERGY TOTAL 20,549
FINANCIALS - 26.9%
CAPITAL MARKETS - 3.9% UBS AG, Registered Shares 90 6,355
Capital Markets Total 6,355
COMMERCIAL BANKS - 12.3% Allied Irish Banks PLC 150 2,501
Banco Santander Central Hispano SA 435 4,252
Bank Austria Creditanstalt 46 3,268
Dexia 265 4,934
ForeningsSparbanken AB 100 2,081
Sanpaolo IMI S.p.A. 285 3,221
Commercial Banks Total 20,257
INSURANCE - 10.7% Alleanza Assicurazioni S.p.A. 400 4,633
Axa 225 4,567
Prudential PLC 700 5,722
Swiss Re, Registered Shares 47 2,714
Insurance Total 17,636
-----------
FINANCIALS TOTAL 44,248
</Table>
See Accompanying Notes to Financial Statements.
15
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - 10.6%
PHARMACEUTICALS - 10.6% GlaxoSmithKline PLC 288 6,225
Novartis AG, Registered Shares 146 6,813
Novo-Nordisk A/S, Class B 50 2,739
Sanofi-Aventis 24 1,746
Pharmaceuticals Total 17,523
-----------
HEALTH CARE TOTAL 17,523
INDUSTRIALS - 10.4%
AIR FREIGHT & LOGISTICS - 1.0% Exel PLC 130 1,612
Air Freight &
Logistics Total 1,612
COMMERCIAL SERVICES & SUPPLIES - 2.9% Adecco SA 96 4,783
Commercial Services &
Supplies Total 4,783
INDUSTRIAL CONGLOMERATES - 2.3% Siemens AG, Registered Shares 50 3,685
Industrial
Conglomerates Total 3,685
MACHINERY - 4.2% Atlas Copco AB, Class A 80 3,082
Tomra Systems ASA 185 700
Volvo AB, Class B 90 3,180
Machinery Total 6,962
-----------
INDUSTRIALS TOTAL 17,042
INFORMATION TECHNOLOGY - 7.3%
COMMUNICATIONS EQUIPMENT - 2.5% Telefonaktiebolaget LM Ericsson,
Class B (a) 1,300 4,054
Communications
Equipment Total 4,054
INTERNET SOFTWARE & SERVICES - 2.1% T-Online International AG (a) 326 3,548
Internet Software &
Services Total 3,548
SOFTWARE - 2.7% Dassault Systemes SA 95 4,450
Software Total 4,450
-----------
INFORMATION
TECHNOLOGY TOTAL 12,052
MATERIALS - 7.6%
CHEMICALS - 2.5% BOC Group PLC 170 2,726
Johnson Matthey PLC 80 1,386
Chemicals Total 4,112
CONSTRUCTION MATERIALS - 5.1% Holcim Ltd., Registered Shares 65 3,437
Lafarge SA 56 4,917
Construction Materials
Total 8,354
-----------
MATERIALS TOTAL 12,466
TELECOMMUNICATION SERVICES - 7.7%
DIVERSIFIED TELECOMMUNICATION SERVICES - 6.4% Telecom Italia S.p.A. 545 1,685
Telefonica SA 305 4,566
Telenor ASA 570 4,349
Diversified
Telecommunication
Services Total 10,600
</Table>
See Accompanying Notes to Financial Statements.
16
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATION SERVICES - (CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES - 1.3% Vodafone Group PLC 875 2,100
Wireless
Telecommunication
Services Total 2,100
-----------
TELECOMMUNICATION
SERVICES TOTAL 12,700
TOTAL COMMON STOCKS
(COST OF $165,464) 175,912
PREFERRED STOCK - 2.2%
HEALTH CARE - 2.2%
HEALTH CARE PROVIDERS & SERVICES - 2.2% Fresenius AG 45 3,685
Health Care Providers
& Services Total 3,685
-----------
HEALTH CARE TOTAL 3,685
TOTAL PREFERRED STOCK
(COST OF $1,071) 3,685
TOTAL INVESTMENTS - 109.1%
(COST OF $166,535) (B) 179,597
OTHER ASSETS & LIABILITIES, NET - (9.1)% (15,030)
NET ASSETS - 100.0% 164,567
</Table>
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $168,131.
<Table>
<Caption>
SUMMARY OF SECURITIES % OF TOTAL
BY COUNTRY (UNAUDITED) VALUE INVESTMENTS
- ----------------------------------------------------
United Kingdom $ 51,340 28.6%
Switzerland 28,695 16.0
France 23,640 13.2
Germany 19,950 11.1
Sweden 12,397 6.9
Italy 9,539 5.3
Spain 8,818 4.9
Netherlands 6,727 3.8
Norway 5,049 2.8
Belgium 4,934 2.7
Austria 3,268 1.8
Denmark 2,739 1.5
Ireland 2,501 1.4
--------- -----
$ 179,597 100.0%
========= =====
</Table>
Certain securities are listed by country of underlying exposure but may trade
predominately on other exchanges.
See Accompanying Notes to Financial Statements.
17
<Page>
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004 COLUMBIA THEMATIC EQUITY FUNDS
<Table>
<Caption>
COLUMBIA COLUMBIA
GLOBAL EUROPEAN
THEMATIC THEMATIC
EQUITY EQUITY
FUND ($) FUND ($)
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS Investments, at cost 407,607 166,535
Investments, at value 424,500 179,597
Cash 9,819 7,432
Foreign currency (cost of $9,410 and $6,481,
respectively) 9,559 6,669
Receivable for:
Investments sold 2,507 --
Dividends 673 373
Foreign tax reclaims 227 132
Expense reimbursement due from Investment Advisor 5,879 --
Deferred Trustees' compensation plan 2,046 1,814
-----------------------
Total Assets 455,210 196,017
LIABILITIES Expense reimbursement due to Investment Advisor -- 1,981
Payable for:
Investment advisory fee 324 1,407
Administration fee 21 236
Transfer agent fee 195 314
Pricing and bookkeeping fees 4,428 4,398
Trustees' fees 240 240
Audit fee 13,850 13,850
Custody fee 1,940 2,201
Reports to shareholders 7,005 3,801
Deferred Trustees' fees 2,046 1,814
Other liabilities 1,179 1,208
-----------------------
Total Liabilities 31,228 31,450
NET ASSETS 423,982 164,567
COMPOSITION OF NET ASSETS Paid-in capital 1,039,734 823,309
Undistributed (overdistributed) net investment
income (loss) (877) 2,755
Accumulated net realized loss (631,935) (674,784)
Net unrealized appreciation on:
Investments 16,893 13,062
Foreign currency translations 167 225
NET ASSETS 423,982 164,567
Class Z Net assets 423,982 164,567
Shares outstanding 54,930 20,637
Net asset value and offering price per share (a) 7.72 7.97
</Table>
(a) Redemption price per share is equal to net asset value less any applicable
redemption fee.
See Accompanying Notes to Financial Statements.
18
<Page>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004 COLUMBIA THEMATIC EQUITY FUNDS
<Table>
<Caption>
COLUMBIA COLUMBIA
GLOBAL EUROPEAN
THEMATIC THEMATIC
EQUITY EQUITY
FUND ($) FUND ($)
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Dividends 7,766 5,644
Interest 3 176
-----------------------
Total Investment Income (net of foreign taxes
withheld of $549 and $811, respectively) 7,769 5,820
EXPENSES Investment advisory fee 4,400 2,139
Administration fee 307 149
Pricing and bookkeeping fees 14,842 14,550
Transfer agent fee 707 353
Trustees' fees 6,054 8,974
Custody fee 16,064 23,284
Audit fee 18,531 18,531
Registration fee 22,605 22,106
Reports to shareholders 16,805 7,260
Non-recurring costs (See Note 8) 23 10
Other expenses 5,176 5,240
-----------------------
Total Expenses 105,514 102,596
Fees and expenses waived or reimbursed by
Investment Advisor (97,146) (98,522)
Non-recurring costs assumed by Investment
Advisor (See Note 8) (23) (10)
Custody earnings credit (64) (40)
-----------------------
Net Expenses 8,281 4,024
-----------------------
Net Investment Income (Loss) (512) 1,796
NET REALIZED AND UNREALIZED GAIN (LOSS) ON Net realized gain on:
INVESTMENTS AND FOREIGN CURRENCY Investments 55,989 47,230
Foreign currency transactions 581 1,759
-----------------------
Net realized gain 56,570 48,989
Net change in unrealized
appreciation/depreciation on:
Investments 10,898 (7,338)
Foreign currency translations (16) (128)
-----------------------
Net change in unrealized
appreciation/depreciation 10,882 (7,466)
-----------------------
Net Gain 67,452 41,523
-----------------------
Net Increase in Net Assets from Operations 66,940 43,319
</Table>
See Accompanying Notes to Financial Statements.
19
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
COLUMBIA THEMATIC EQUITY FUNDS
<Table>
<Caption>
COLUMBIA GLOBAL THEMATIC EQUITY FUND
------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
INCREASE (DECREASE) SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
IN NET ASSETS: 2004 ($) 2003(a)(b)($) 2002 (c)($)
- ---------------------------------------------------------------------------------------------------
OPERATIONS Net investment income
(loss) (512) (41) (3,888)
Net realized gain (loss)
on investments and
foreign currency
transactions 56,570 (365,620) (235,843)
Net change in unrealized
appreciation/depreciation
on investments and
foreign currency
translations 10,882 370,489 (51,477)
------------------------------------------
Net Increase (Decrease)
from Operations 66,940 4,828 (291,208)
DISTRIBUTIONS DECLARED TO Class Z:
SHAREHOLDERS From net investment
income (6,651) -- (839)
SHARE TRANSACTIONS Class Z:
Subscriptions 28,323 12,603 499,082
Distributions reinvested 6,623 -- 839
Redemptions (219,862) (717,389) (553,111)
------------------------------------------
Net Increase (Decrease)
from Share
Transactions (184,916) (704,786) (53,190)
------------------------------------------
Redemption fees 13 3 --
------------------------------------------
Total Decrease in
Net Assets (124,614) (699,955) (345,237)
NET ASSETS Beginning of period 548,596 1,248,551 1,593,788
End of period 423,982 548,596 1,248,551
Undistributed
(overdistributed) net
investment income
(loss) (877) 5,707 (540)
CHANGES IN SHARES Class Z:
Subscriptions 3,599 1,965 67,200
Issued for distributions
reinvested 879 -- 104
Redemptions (28,120) (119,485) (76,155)
------------------------------------------
Net Increase
(Decrease) (23,642) (117,520) (8,851)
<Caption>
COLUMBIA EUROPEAN THEMATIC EQUITY FUND
------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED
INCREASE (DECREASE) SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31,
IN NET ASSETS: 2004 ($) 2003(a)(b)($) 2002 (c)($)
- ---------------------------------------------------------------------------------------------------
OPERATIONS Net investment income
(loss) 1,796 2,538 857
Net realized gain (loss)
on investments and
foreign currency
transactions 48,989 (134,814) (451,975)
Net change in unrealized
appreciation/depreciation
on investments and
foreign currency
translations (7,466) 110,855 198,885
------------------------------------------
Net Increase (Decrease)
from Operations 43,319 (21,421) (252,233)
DISTRIBUTIONS DECLARED TO Class Z:
SHAREHOLDERS From net investment
income (6,287) -- (20,508)
SHARE TRANSACTIONS Class Z:
Subscriptions 26,098 179,094 990,208
Distributions reinvested 6,287 -- 20,508
Redemptions (168,032) (828,486) (979,194)
------------------------------------------
Net Increase (Decrease)
from Share
Transactions (135,647) (649,392) 31,522
------------------------------------------
Redemption fees 52 241 --
------------------------------------------
Total Decrease in
Net Assets (98,563) (670,572) (241,219)
NET ASSETS Beginning of period 263,130 933,702 1,174,921
End of period 164,567 263,130 933,702
Undistributed
(overdistributed) net
investment income
(loss) 2,755 5,488 (538)
CHANGES IN SHARES Class Z:
Subscriptions 3,187 29,213 155,828
Issued for distributions
reinvested 807 -- 2,658
Redemptions (21,322) (149,415) (157,802)
------------------------------------------
Net Increase
(Decrease) (17,328) (120,202) 684
</Table>
(a) The Fund changed its fiscal year end from October 31 to September 30.
(b) Approximately $670,000 and $655,000 of redemptions in Columbia Global
Thematic Equity Fund and Columbia European Thematic Equity Fund,
respectively, were by an affiliate of the Funds' investment advisor and were
due to certain regulatory requirements.
(c) On July 29, 2002, the Fund's outstanding shares were redesignated as Class Z
shares.
See Accompanying Notes to Financial Statements.
20
<Page>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 COLUMBIA THEMATIC EQUITY FUNDS
NOTE 1. ORGANIZATION
Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund
(collectively, the "Funds") are diversified portfolios of Columbia Funds Trust
XI (the "Trust"). The Trust is a Massachusetts business trust registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company.
INVESTMENT GOALS
Each Fund seeks long-term growth of capital.
FUND SHARES
The Funds may issue an unlimited number of shares. Effective July 29, 2002, the
outstanding shares of the Funds were redesignated Class Z shares. Class Z shares
are offered continuously at net asset value. There are certain restrictions on
the purchase of Class Z shares, as described in each Fund's prospectus.
Effective October 13, 2003, the Liberty Global Thematic Equity Fund and Liberty
European Thematic Equity Fund were renamed Columbia Global Thematic Equity Fund
and Columbia European Thematic Equity Fund, respectively. Also on this date, the
Liberty-Stein Roe Funds Investment Trust was renamed Columbia Funds Trust XI.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of their financial statements.
SECURITY VALUATION
Equity securities 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.
Foreign securities are generally valued at the last sale price on the foreign
exchange or market on which they trade. If any foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sale price of the local shares in the principal market in
which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange ("NYSE"). The
values of such securities used in computing the net asset value of the Funds'
shares are determined as of such times. Foreign currency exchange rates are
generally determined at 2:00 p.m. Eastern (U.S.) time. Occasionally, events
affecting the values of such foreign securities and such exchange rates may
occur between the times at which they are determined and the close of the
customary trading session of the NYSE, which would not be reflected in the
computation of the Funds' net asset value. If events materially affecting the
values of such foreign securities occur and it is determined that market
quotations are not reliable, then these foreign securities will be valued at
their fair value using procedures approved by the Board of Trustees. The Funds
may use a systematic fair valuation model provided by an independent third party
to value securities principally traded in foreign markets in order to adjust for
possible stale pricing that may occur between the close of the foreign exchanges
and the time for valuation. If a security is valued at a "fair value," such
value is likely to be different from the last quoted market price for the
security.
Investments for which market quotations are not readily available, or quotations
which management believes are not appropriate, are valued at fair value under
procedures approved by the Board of Trustees.
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.
21
<Page>
REPURCHASE AGREEMENTS
The Funds may engage in repurchase agreement transactions with institutions that
the Funds' investment advisor has determined are creditworthy. The Funds,
through their custodian, 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 the Funds' ability to dispose of the underlying securities and
a possible decline in the value of the underlying securities during the period
while the Funds seek to assert their rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date, except for certain foreign securities which
are recorded as soon after ex-date as the Funds becomes aware of such, net of
non-reclaimable tax withholdings.
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.
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, each Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that each Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Funds' capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
For the year ended September 30, 2004, permanent differences resulting primarily
from differing treatments for foreign currency transactions were identified and
reclassified among the components of the Funds' net assets as follows:
<Table>
<Caption>
UNDISTRIBUTED
(OVERDISTRIBUTED) ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME (LOSS) LOSS CAPITAL
- -----------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ 579 $ (581) $ 2
Columbia European Thematic
Equity Fund 1,758 (1,758) --
</Table>
Net investment income and net realized gains (losses), as disclosed on the
Statements of Operations, and net assets were not affected by these
reclassifications.
22
<Page>
The tax character of distributions paid during the year ended September 30,
2004, the period ended September 30, 2003 and year ended October 31, 2002 was as
follows:
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, 2004
- -------------------------------------------------------------------
LONG TERM
ORDINARY INCOME* CAPITAL GAINS
- -------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ 6,651 $ --
Columbia European Thematic
Equity Fund 6,287 --
</Table>
<Table>
<Caption>
PERIOD ENDED SEPTEMBER 30, 2003
- -------------------------------------------------------------------
LONG TERM
ORDINARY INCOME* CAPITAL GAINS
- -------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ -- $ --
Columbia European Thematic
Equity Fund -- --
</Table>
<Table>
<Caption>
YEAR ENDED OCTOBER 31, 2002
- -------------------------------------------------------------------
LONG TERM
ORDINARY INCOME* CAPITAL GAINS
- -------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ 839 $ --
Columbia European Thematic
Equity Fund 20,508 --
</Table>
As of September 30, 2004, the components of distributable earnings on a tax
basis were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNDISTRIBUTED NET
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- ---------------------------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ 999 $ -- $ 7,369
Columbia European Thematic
Equity Fund 4,448 -- 11,691
</Table>
* The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales.
Unrealized appreciation and depreciation at September 30, 2004, based on cost of
investments for federal income tax purposes, excluding any unrealized
appreciation and depreciation from changes in the value of other assets and
liabilities resulting from changes in exchange rates, was:
<Table>
<Caption>
NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
- ------------------------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ 41,660 $ (34,458) $ 7,202
Columbia European Thematic
Equity Fund 18,503 (7,037) 11,466
</Table>
The following capital loss carryforwards, determined as of September 30, 2004,
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:
<Table>
<Caption>
COLUMBIA COLUMBIA
GLOBAL EUROPEAN
YEAR OF THEMATIC THEMATIC
EXPIRATION EQUITY FUND EQUITY FUND
- ---------------------------------------------------
2009 $ 43,995 $ 59,878
2010 235,325 205,264
2011 342,924 408,046
$ 622,244 $ 673,188
</Table>
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
The following capital loss carryforwards, determined as of September 30, 2004,
have been utilized, as follows:
<Table>
Columbia Global Thematic Equity Fund $ 35,392
Columbia European Thematic Equity Fund 32,829
</Table>
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"). Effective April 1, 2004,
FleetBoston, including the Funds' investment advisor and transfer agent, was
acquired by Bank of America Corporation ("BOA"). The acquisition did not change
the way the Funds are managed, the investment personnel assigned to manage the
Funds or the fees paid by the Funds.
23
<Page>
INVESTMENT ADVISORY FEE
Columbia receives a monthly investment advisory fee based on average daily net
assets of each Fund at the following annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
-----------------------------------------------
First $1 billion 0.85%
Next $500 million 0.80%
Over $1.5 billion 0.75%
</Table>
Prior to November 1, 2003, Columbia was entitled to receive a monthly investment
advisory fee at the annual rate of 0.85% of each Fund's average daily net
assets.
SUB-ADVISORY FEE
Nordea Investment Management North America, Inc. ("Nordea") has been retained by
Columbia as sub-advisor to manage the day-to-day investment operations of the
Funds. Columbia, out of the advisory fee it receives, pays Nordea a monthly
sub-advisory fee equal to 0.60% annually of the average daily net assets of each
Fund.
ADMINISTRATION FEE
Columbia provides administrative and other services to the Funds for a monthly
administration fee at the annual rate of 0.05% of each Fund's average daily net
assets.
Prior to November 1, 2003, Columbia was entitled to receive a monthly
administration fee at the annual rate of 0.15% of each Fund's average daily net
assets.
For the year ended September 30, 2004, the effective administration fee rates
for the Columbia Global Thematic Equity Fund and Columbia European Thematic
Equity Fund were 0.06% and 0.06%, respectively.
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"). As a result, 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. The Funds also pay
additional fees for pricing services based on the number of securities held by
each Fund.
For the year ended September 30, 2004, the effective pricing and bookkeeping fee
rates for the Columbia Global Thematic Equity Fund and Columbia European
Thematic Equity Fund, inclusive of out-of-pocket expenses, were 2.869% and
5.786%, respectively.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund. For such services, the Transfer Agent
receives a fee, paid monthly, at the annual rate of $28.00 per open account. The
Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee, in addition to reimbursement for certain out-of-pocket
expenses, at the annual rate of 0.06% of the Fund's average daily net assets
plus flat-rate charges based on the number of shareholder accounts and
transactions.
For the year ended September 30, 2004, the effective transfer agent fee rate,
inclusive of out-of-pocket expenses, for the Columbia Global Thematic Equity
Fund and Columbia European Thematic Equity Fund were 0.14% and 0.14%,
respectively.
Effective October 13, 2003, Liberty Funds Services, Inc. was renamed Columbia
Funds Services, Inc.
EXPENSE LIMITS AND FEE REIMBURSEMENTS
Columbia has voluntarily agreed to waive fees and reimburse certain expenses to
the extent that total expenses (exclusive of brokerage commissions, interest,
taxes and extraordinary expenses, if any) exceed 1.60% annually of each Fund's
average daily net assets. Columbia, at its discretion, may revise or discontinue
this arrangement any time.
CUSTODY CREDITS
Each Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance
24
<Page>
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. Effective August 23, 2004, the Board of Trustees
appointed a Chief Compliance Officer to the Funds in accordance with federal
securities regulations. Each Fund, along with other affiliated funds, will pay
its pro-rata share of the expenses associated with the Chief Compliance Officer
role. Each Fund's fee will not exceed $15,000 per year.
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 year ended September 30, 2004, Columbia Global Thematic
Equity Fund and Columbia European Thematic Equity Fund each paid $1,287 to
Columbia for such services. This amount is included in "Other expenses" on the
Statements of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the year ended September 30, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were as follows:
<Table>
<Caption>
PURCHASES SALES
- -------------------------------------------------------------------
Columbia Global Thematic
Equity Fund $ 234,855 $ 430,651
Columbia European Thematic
Equity Fund 175,636 294,632
</Table>
NOTE 6. REDEMPTION FEES
Effective February 10, 2003, the Funds began imposing a 2.00% redemption fee to
shareholders of Class Z shares who redeem shares held for 60 days or less.
Redemption fees, which are retained by the Fund, are accounted for as an
addition to paid-in capital. For the year ended September 30, 2004, the
redemption fees for the Columbia Global Thematic Equity Fund and Columbia
European Thematic Equity Fund amounted to $13 and $52, respectively.
NOTE 7. SHARES OF BENEFICIAL INTEREST
As of September 30, 2004, the Funds had shareholders that held greater than 5%
of the shares outstanding. Subscription and redemption activity of these
shareholders may have a material effect on the Funds. The numbers of
shareholders greater than 5% and the aggregate percentage of shares outstanding
held were as follows:
<Table>
<Caption>
NUMBER
OF % OF
SHAREHOLDER SHARES HELD
- ---------------------------------------------------------------
Columbia Global Thematic
Equity Fund 3 60.3
Columbia European Thematic
Equity Fund 2 90.6
</Table>
NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
FOREIGN SECURITIES
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of currency exchange or other
foreign governmental laws or restrictions. In addition, the liquidity of foreign
securities may be more limited than that of domestic securities.
INDUSTRY FOCUS
The Funds may focus their investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
Columbia, the Distributor, and certain of their affiliates (collectively, "The
Columbia Group") have received information requests and subpoenas from various
regulatory and law enforcement authorities in connection with their
investigations of late trading and market timing in mutual funds as well as
other industry wide issues. The Columbia Group has not
25
<Page>
uncovered any instances where Columbia or the Distributor were knowingly
involved in late trading of mutual fund shares.
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and the Distributor, alleging that they had
violated certain provisions of the federal securities laws in connection with
trading activity in mutual fund shares. Also on February 24, 2004, the New York
Attorney General ("NYAG") filed a civil complaint in New York Supreme Court,
County of New York against Columbia and the Distributor alleging that Columbia
and the Distributor had violated certain New York anti-fraud statutes. If either
Columbia or the Distributor is unsuccessful in its defense of these proceedings,
it could be barred from serving as an investment advisor or distributor for any
investment company registered under the Investment Company Act of 1940, as
amended (a "registered investment company"). Such results could prevent
Columbia, the Distributor or any company that is an affiliated person of
Columbia and the Distributor from serving as an investment advisor or
distributor for any registered investment company, including your fund. Your
fund has been informed by Columbia and the Distributor that, if these results
occur, they will seek exemptive relief from the SEC to permit them to continue
to serve as your fund's investment advisor and distributor. There is no
assurance that such exemptive relief will be granted. On March 15, 2004,
Columbia and the Distributor entered into agreements in principle with the SEC
Division of Enforcement and NYAG in settlement of the charges. Under the
agreements, Columbia and the Distributor agreed, 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 and its affiliate Banc
of America Capital Management, LLC have agreed to collectively reduce mutual
fund fees by $160 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 funds.
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). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants in several
derivative actions under various sections of the Investment Company Act of 1940,
as amended, alleging, among other things, that the fees and expenses paid by
those funds are excessive. The funds and the other defendants to these actions,
including Columbia and various of its affiliates, certain other mutual funds
advised by Columbia and its affiliates, and various directors of such funds,
have denied these allegations and are contesting the plaintiffs' claims. These
suits and certain regulatory investigations are ongoing, however, based on
currently available information, Columbia believes that these lawsuits are
without merit, that the likelihood they will have a material adverse impact on
any fund is remote, and that the lawsuits are not likely to materially affect
its ability to provide investment management services to its clients, including
the funds.
For the year ended September 30, 2004, Columbia has assumed $23 and $10 of
legal, consulting services and Trustees' fees incurred by the Columbia Global
Thematic Equity Fund and the Columbia European Thematic Equity Fund,
respectively, in connection with these matters.
NOTE 9. COMPARABILITY OF FINANCIAL STATEMENTS
The fiscal year end of the Funds was changed from October 31 to September 30.
26
<Page>
NOTE 10. SUBSEQUENT EVENT
On October 13, 2004, the Board of Trustees of the Funds voted to liquidate the
Funds. The effective date of the liquidations is expected to be on or about
December 10, 2004.
27
<Page>
FINANCIAL HIGHLIGHTS
COLUMBIA GLOBAL THEMATIC EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31, OCTOBER 31,
CLASS Z SHARES 2004(a) 2003(b) 2002(c) 2001(d)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.98 $ 6.37 $ 7.78 $ 10.13
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (e) (0.01) --(f) (0.02) (0.03)
Net realized and unrealized gain (loss)
on investments and foreign currency 0.84 0.61 (1.39) (2.32)
------------- ------------- ------------ ------------
Total from Investment Operations 0.83 0.61 (1.41) (2.35)
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.09) -- --(f) --
REDEMPTION FEES:
Redemption fees added to paid-in capital --(e)(f) --(e)(f) N/A N/A
NET ASSET VALUE, END OF PERIOD $ 7.72 $ 6.98 $ 6.37 $ 7.78
Total return (g) (h) 11.89% 9.58%(i) (18.08)% (23.20)%(i)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.60% 1.60%(k) 1.60% 1.60%(k)
Net investment loss (j) (0.10)% (0.01)%(k) (0.25)% (0.40)%(k)
Waiver/reimbursement 18.78% 10.25%(k) 5.07% 5.54%(k)
Portfolio turnover rate 47% 41%(i) 41% 15%(i)
Net assets, end of period (000's) $ 424 $ 549 $ 1,249 $ 1,594
</Table>
(a) On October 13, 2003, the Liberty Global Thematic Equity Fund was renamed
Columbia Global Thematic Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On July 29, 2002, the Stein Roe Global Thematic Equity Fund was
redesignated Liberty Global Thematic Equity Fund, Class Z shares.
(d) The Fund commenced investment operations on January 2, 2001. Per share
data, total return and portfolio turnover rate reflect activity from that
date.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(h) Total return at net asset value assuming all distributions reinvested.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%, except for
the year ended September 30, 2004 and the period ended September 30, 2003
which had an impact of 0.01%.
(k) Annualized.
28
<Page>
COLUMBIA GLOBAL THEMATIC EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, OCTOBER 31, OCTOBER 31,
CLASS Z SHARES 2004(a) 2003(b) 2002(c) 2001(d)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.93 $ 5.90 $ 7.46 $ 10.18
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (e) 0.06 0.03 0.01 0.05
Net realized and unrealized gain (loss)
on investments and foreign currency 1.14 1.00 (1.44) (2.77)
------------- ------------- ------------ --------------
Total from Investment Operations 1.20 1.03 (1.43) (2.72)
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.16) -- (0.13) --
REDEMPTION FEES:
Redemption fees added to paid-in capital --(e)(f) --(e)(f) N/A N/A
NET ASSET VALUE, END OF PERIOD $ 7.97 $ 6.93 $ 5.90 $ 7.46
Total return (g) (h) 17.37% 17.46%(i) (19.58)% (26.72)%(i)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATE:
Expenses (j) 1.60% 1.60%(k) 1.60% 1.60%(k)
Net investment income (j) 0.71% 0.52%(k) 0.07% 0.71%(k)
Waiver/reimbursement 39.18% 19.60%(k) 6.08% 5.57%(k)
Portfolio turnover rate 71% 67%(i) 71% 33%(i)
Net assets, end of period (000's) $ 165 $ 263 $ 934 $ 1,175
</Table>
(a) On October 13, 2003, the Liberty European Thematic Equity Fund was renamed
Columbia European Thematic Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On July 29, 2002, the Stein Roe European Thematic Equity Fund was
redesignated Liberty European Thematic Equity Fund, Class Z shares.
(d) The Fund commenced investment operations on January 2, 2001. Per share
data, total return and portfolio turnover rate reflect activity from that
date.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(h) Total return at net asset value assuming all distributions reinvested.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%, except for
the year ended September 30, 2004 which had an impact of 0.02% and the
period ended September 30, 2003 which had an impact of 0.01%.
(k) Annualized.
29
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
COLUMBIA THEMATIC EQUITY FUNDS
To the Trustees of Columbia Funds Trust XI and the Shareholders of Columbia
Global Thematic Equity Fund and Columbia European Thematic Equity Fund
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, and the related statements of operations and changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of the above funds (the "Funds") (each a series
of Columbia Funds Trust XI) at September 30, 2004, and the results of their
operations, the changes in their net assets, and their financial highlights for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards of
the Public Company Accounting Oversight Board (United States), which require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at September 30, 2004 by correspondence with the custodian,
provide a reasonable basis for our opinion.
The financial statements of the Funds as of September 30, 2003 and for the three
fiscal periods ending September 30, 2003 were audited by other independent
accountants whose report dated November 14, 2003 expressed an unqualified
opinion on those statements.
The Trustees of the Funds approved a plan of liquidation for the Funds as
described in Note 10.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 15, 2004
30
<Page>
UNAUDITED INFORMATION
COLUMBIA THEMATIC EQUITY FUNDS
FEDERAL INCOME TAX INFORMATION
Columbia Global Thematic Equity Fund
For non-corporate shareholders 100.00%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
Columbia European Thematic Equity Fund
For non-corporate shareholders 100.00%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2003 to September 30, 2004 may represent
qualified dividend income. Final information will be provided in your 2004
1099-Div Form.
31
<Page>
TRUSTEES
COLUMBIA THEMATIC EQUITY FUNDS
Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were
appointed to the Board of the Trustees of the Fund. Messrs. Simpson and
Woolworth had been directors of 15 Columbia Funds and 20 funds in the CMG Fund
Trust. Also effective October 8, 2003, the incumbent trustees of the Fund were
elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in
the CMG Fund Trust. The new combined Board of Trustees/Directors of the Fund now
oversees 118 funds in the Columbia Funds Complex (including the former Liberty
Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of these
trustees/directors also serve on the Boards of other funds in the Columbia Funds
Complex.
The Trustrees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds Complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds Complex.
<Table>
<Caption>
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
YEAR FIRST ELECTED OR APPOINTED TO OFFICE(1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
DOUGLAS A. HACKER (age 49) Executive Vice President-Strategy of United Airlines (airline) since
P.O. Box 66100 December 2002 (formerly President of UAL Loyalty Services (airline) from
Chicago, IL 60666 September 2001 to December 2002; Executive Vice President and Chief Financial
Trustee (since 1996) Officer of United Airlines from March 1999 to September 2001; Senior Vice
President-Finance from March 1993 to July 1999).Oversees 118, Orbitz,
Inc. (on-line travel company)
JANET LANGFORD KELLY (age 46) Adjunct Professor of Law, Northwestern University, since
9534 W. Gull Lake Drive September 2004; Private Investor since March 2004 (formerly Chief
Richland, MI 49083-8530 Administrative Officer and Senior Vice President, Kmart Holding
Trustee (since 1996) Corporation (consumer goods), from September 2003 to March 2004; Executive
Vice President-Corporate Development and Administration, General Counsel
and Secretary, Kellogg Company (food manufacturer), from September 1999 to
August 2003; Senior Vice President, Secretary and General Counsel, Sara Lee
Corporation (branded, packaged, consumer-products manufacturer) from
January 1995 to September 1999). Oversees 118, None
RICHARD W. LOWRY (age 68) Private Investor since August 1987 (formerly Chairman and Chief Executive
10701 Charleston Drive Officer, U.S. Plywood Corporation (building products
Vero Beach, FL 32963 manufacturer)). Oversees 120(3), None
Trustee (since 1995)
CHARLES R. NELSON (age 62) Professor of Economics, University of Washington, since January 1976; Ford
Department of Economics and Louisa Van Voorhis Professor of Political Economy, University of
University of Washington Washington, since September 1993 (formerly Director, Institute for Economic
Seattle, WA 98195 Research, University of Washington from September 2001 to June 2003) Adjunct
Trustee (since 1981) Professor of Statistics, University of Washington, since September 1980;
Associate Editor, Journal of Money Credit and Banking, since September 1993;
consultant on econometric and statistical matters. Oversees 118, None
</Table>
(1) In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In
October 2003, the trustees on the Liberty Board were elected to the boards
of the Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the
"CMG Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
32
<Page>
<Table>
<Caption>
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
YEAR FIRST ELECTED OR APPOINTED TO OFFICE(1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
JOHN J. NEUHAUSER (age 61) Academic Vice President and Dean of Faculties since August 1999, Boston
84 College Road College (formerly Dean, Boston College School of Management from
Chestnut Hill, MA 02467-3838 September 1977 to September1999).Oversees 121(3),(4), Saucony, Inc.(athletic
Trustee (since 1985) footwear)
PATRICK J. SIMPSON (age 60) Partner, Perkins Coie L.L.P.(law firm).Oversees 118, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
THOMAS E. STITZEL (age 68) Business Consultant since 1999 (formerly Professor of Finance from 1975 to
2208 Tawny Woods Place 1999, College of Business, Boise State University); Chartered Financial
Boise, ID 83706 Analyst. Oversees 118, None.
Trustee (since 1998)
THOMAS C. THEOBALD (age 67) Partner and Senior Advisor, Chicago Growth Partners (private equity
303 W. Madison investing) since September 2004 (formerly Managing Director, William Blair
Suite 2500 Capital Partners (private equity investing) from September 1994 to
Chicago, IL 60606 September 2004). Oversees 118, Anixter International (network support
Trustee equipment distributor); Ventas, Inc.(real estate investment trust); Jones
and Chairman of the Board(5) Lang LaSalle (real estate management services) and Ambac Financial Group
(since 1996) (financial guaranty insurance)
ANNE-LEE VERVILLE (age 59) Retired since 1997 (formerly General Manager, Global Education Industry,
359 Stickney Hill Road IBM Corporation (computer and technology) from 1994 to 1997). Oversees
Hopkinton, NH 03229 119(4), Chairman of the Board of Directors, Enesco Group, Inc. (designer,
Trustee (since 1998) importer and distributor of giftware and collectibles)
RICHARD L. WOOLWORTH (age 63) Retired since December 2003 (formerly Chairman and Chief Executive Officer,
100 S.W. Market Street The Regence Group (regional health insurer); Chairman and Chief Executive
#1500 Officer, BlueCross BlueShield of Oregon; Certified Public Accountant, Arthur
Portland, OR 97207 Young & Company). Oversees 118, Northwest Natural Gas Co.(natural gas
Trustee (since 1991) service provider)
INTERESTED TRUSTEE
WILLIAM E. MAYER(2) (age 64) Managing Partner, Park Avenue Equity Partners (private equity) since
399 Park Avenue February 1999 (formerly Founding Partner, Development Capital LLC from
Suite 3204 November 1996 to February 1999). Oversees 120(3), Lee Enterprises (print
New York, NY 10022 media), WR Hambrecht + Co. (financial service provider); First Health
Trustee (since 1994) (healthcare); Reader's Digest (publishing); OPENFIELD Solutions (retail
industry technology provider)
</Table>
(2) Mr. Mayer is an "interested person" (as defined in the Investment Company
Act of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co.
(3) Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the
Liberty All-Star Funds, currently consisting of 2 funds, which are advised
by an affiliate of the Advisor.
(4) Mr. Neuhauser and Ms. Verville also serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Advisor.
(5) Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
33
<Page>
OFFICERS
COLUMBIA THEMATIC EQUITY FUNDS
<Table>
<Caption>
NAME, ADDRESS AND AGE, POSITION WITH
COLUMBIA FUNDS, YEAR FIRST ELECTED OR
APPOINTED TO OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS,
CHRISTOPHER L. WILSON (age 47) President of the Columbia Funds since October 2004 (formerly President and
One Financial Center Chief Executive Officer, CDC IXIS Asset Management Services, Inc. from
Boston, MA 02111 September 1998 to August 2004).
President (since 2004)
J. KEVIN CONNAUGHTON (age 40) Treasurer of the Columbia Funds and of the Liberty All-Star Funds since
One Financial Center December 2000; Vice President of the Advisor since April 2003 (formerly
Boston, MA 02111 President of the Columbia Funds from February 2004 to October 2004; Chief
Treasurer (since 2000) Accounting Officer and Controller of the Liberty Funds and of the Liberty
All-Star Funds from February 1998 to October 2000); Treasurer of the Galaxy
Funds since September 2002; Treasurer, Columbia Management Multi-Strategy
Hedge Fund, LLC since December 2002 (formerly Vice President of Colonial
Management Associates, Inc. from February 1998 to October 2000).
MARY JOAN HOENE (age 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds
40 West 57th Street since August 2004; Chief Compliance Officer of the Liberty All-Star Funds
New York, NY 10019 since August 2004 (formerly Partner, Carter, Ledyard & Milburn LLP from
Senior Vice President and Chief Compliance January 2001 to August 2004; Counsel, Carter, Ledyard & Milburn LLP from
Officer (since 2004) November 1999 to December 2000; Vice President and Counsel, Equitable Life
Assurance Society of the United States from April 1998 to November 1999,).
MICHAEL G. CLARKE (age 34) Chief Accounting Officer of the Columbia Funds and of the Liberty All-Star
One Financial Center Funds since October 2004 (formerly Controller of the Columbia Funds and of
Boston, MA 02111 the Liberty All-Star Funds from May 2004 to October 2004; Assistant
Chief Accounting Officer (since 2004) Treasurer from June, 2002 to May 2004; Vice President, Product Strategy &
Development of the Liberty Funds Group from February 2001 to June
2002; Assistant Treasurer of the Liberty Funds and of the Liberty All-Star
Funds from August 1999 to February 2001; Audit Manager, Deloitte & Touche LLP
from May 1997 to August 1999).
JEFFREY R. COLEMAN (age 34) Controller of the Columbia Funds and of the Liberty All-Star Funds since
One Financial Center October 2004 (formerly Vice President of CDC IXIS Asset Management
Boston, MA 02111 Services, Inc. and Deputy Treasurer of the CDC Nvest Funds and Loomis Sayles
Controller (since 2004) Funds from February 2003 to September 2004; Assistant Vice President of CDC
IXIS Asset Management Services, Inc. and Assistant Treasurer of the CDC
Nvest Funds from August 2000 to February 2003; Tax Manager of PFPC, Inc. from
November 1996 to August 2000).
DAVID A. ROZENSON (age 50) Secretary of the Columbia Funds and of the Liberty All-Star Funds since
One Financial Center December 2003; Senior Counsel, Bank of America Corporation (formerly
Boston, MA 02111 FleetBoston Financial Corporation) since January 1996; Associate General
Secretary (since 2003) Counsel, Columbia Management Group since November 2002.
</Table>
34
<Page>
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA THEMATIC EQUITY 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
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High 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 Thematic Equity
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 Thematic Equity 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 and a copy of the funds'
voting record are available (i) at www.columbiamanagement.com; (ii) on the
Securities and Exchange Commission's website at www.sec.gov and (iii) without
charge, upon request, by calling 800-368-0346.
Please note that on March 1, 2004, Ernst & Young LLP ("E&Y") resigned as the
funds' independent registered public accounting firm. During the three 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 three 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
September 30, 2004.
35
<Page>
COLUMBIA FUNDS
COLUMBIA THEMATIC EQUITY FUNDS
<Table>
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
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
</Table>
36
<Page>
<Table>
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
</Table>
* The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the merger, which will
take effect on or about February 26, 2005, pending shareholder approval.
** The fund will be will be closed to new investments after the close of
business on November 10, 2004. The fund's trustees have approved the
liquidation, which will take effect on December 10, 2004.
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 and distributor subsidiaries of Columbia Management
Group, including Columbia Management Advisors, Inc., the registered investment
advisor, and Columbia Funds Distributor, Inc.
37
<Page>
[GRAPHIC]
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by eletronic 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 THEMATIC EQUITY FUNDS ANNUAL REPORT, SEPTEMBER 30, 2004 PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[COLUMBIAFUNDS(R) LOGO]
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
LTF-02/982S-0904 (11/04) 04/3401
[GRAPHIC]
COLUMBIA GROWTH STOCK FUND
ANNUAL REPORT
SEPTEMBER 30, 2004
[COLUMBIAFUNDS(R) LOGO]
A MEMBER OF COLUMBIA MANAGEMENT GROUP
<Page>
TABLE OF CONTENTS
<Table>
Fund Profile 1
Performance Information 2
Understanding Your Expenses 3
Economic Update 4
Portfolio Manager's Report 5
Financial Statements 7
Investment Portfolio 8
Statement of Assets and Liabilities 11
Statement of Operations 12
Statement of Changes in Net Assets 13
Notes to Financial Statements 14
Financial Highlights 19
Report of Independent Registered Public Accounting Firm 23
Trustees 24
Officers 26
Important Information About This Report 27
Columbia Funds 28
</Table>
Economic and market conditions change frequently. There is no assurance that
trends described in this report will continue or commence.
NOT FDIC MAY LOSE VALUE
INSURED -------------------
NO BANK GUARANTEE
PRESIDENT'S MESSAGE
COLUMBIA GROWTH STOCK FUND
DEAR SHAREHOLDER:
Your fund's legal and management team here at Columbia Funds have been working
hard to strengthen our mutual fund services operation and to ensure that all
operations and processes comply with legal and regulatory standards. In the
coming months, we will continue to monitor the oversight enhancements recently
put in place by your fund's Board of Trustees and make every effort to protect
the interests of all our shareholders in everything we do.
In our last report, we announced that your fund's advisor, Columbia Management
Advisors, Inc., and your fund's distributor, Columbia Funds Distributor, Inc.,
had reached an agreement with the Securities and Exchange Commission and the
New York Attorney General to settle charges involving market timing in some of
our mutual funds. We want to reassure you that the settlement and all associated
legal fees will be paid by Columbia Management, not by the affected funds or
their shareholders.
Recently the Securities and Exchange Commission has adopted new rules regarding
mutual fund governance. We think it is important for you to know that Columbia
Management complied with the majority of these rules well before they were
adopted. Your fund's Board of Trustees has taken the following important steps
to strengthen its capacity to oversee your fund and to comply with SEC rules.
- - THE BOARD OF TRUSTEES APPOINTED MARY JOAN HOENE AS CHIEF COMPLIANCE OFFICER
OF COLUMBIA FUNDS. IN THIS ROLE, MS. HOENE WILL REPORT DIRECTLY TO THE BOARD
OF TRUSTEES AND WILL WORK WITH THE BOARD OF TRUSTEES AS WELL AS THE SENIOR
LEADERSHIP OF COLUMBIA MANAGEMENT, THE INVESTMENT MANAGEMENT ARM OF BANK OF
AMERICA, AND WITH BANK OF AMERICA'S PRINCIPAL COMPLIANCE EXECUTIVES. SHE WILL
FOCUS ON THE OVERALL COMPLIANCE PROGRAM OF THE FUNDS AND THE RESPONSIBILITY
AND PERFORMANCE OF THE FUND'S SERVICE PROVIDERS.
PRIOR TO HER APPOINTMENT, MS. HOENE WAS A PARTNER IN THE LAW FIRM OF CARTER,
LEDYARD & MILBURN, LLP. PREVIOUSLY SHE ALSO SERVED AS ASSOCIATE DIRECTOR AND
DEPUTY DIRECTOR FOR THE SECURITIES AND EXCHANGE COMMISSION DIVISION OF
INVESTMENT MANAGEMENT. AS AN ACTIVE ADVISOR, MS. HOENE HAS HELPED SEVERAL
FUND BOARDS DEVELOP INDEPENDENT BOARD PRACTICES. THE BOARD IS PLEASED TO HAVE
MS. HOENE, WITH HER BROAD AND EXTENSIVE EXPERIENCE, IN THIS IMPORTANT NEW
POSITION.
- - THE BOARD OF TRUSTEES HAS ESTABLISHED OPERATIONAL GUIDELINES THAT RESULT IN
STRONGER, MORE VIGILANT TRUSTEESHIP ACROSS THE ENTIRE COLUMBIA MANAGEMENT
ORGANIZATION. BOARD COMMITTEES HAVE BEEN ESTABLISHED TO OVERSEE PRODUCTS BY
FUND CATEGORY, ALLOWING FOR GREATER SPECIALIZATION AMONG BOARD TRUSTEES.
SHAREHOLDERS WILL ELECT BOARD MEMBERS EVERY FIVE YEARS, BEGINNING IN 2005.
- - IN ADDITION TO ENHANCEMENTS TO OVERSIGHT WITHIN COLUMBIA MANAGEMENT, OUR
PARENT COMPANY -- BANK OF AMERICA -- HAS ALSO INCREASED THE ROLE THAT SUCH
PROFESSIONALS PLAY WITHIN THE BROADER ORGANIZATION. A CHIEF COMPLIANCE
OFFICER HAS BEEN NAMED TO REPORT DIRECTLY TO KEN LEWIS, BANK OF AMERICA'S
CHIEF EXECUTIVE OFFICER. BANK OF AMERICA HAS ALSO ADOPTED A CORPORATE CODE OF
ETHICS COMMITTEE, AN INTERNAL COMPLIANCE CONTROLS COMMITTEE AND A REGULATORY
IMPLEMENTATION GROUP TO ENSURE FULL ALIGNMENT AND EXECUTION OF REMEDIAL
ACTIONS AND BEST PRACTICES ACROSS THE COMPANY.
In the pages that follow, you'll find a discussion of the economic environment
during the period, followed by a detailed report from the fund's manager on key
factors that influenced performance. This report is rich in information, and you
should discuss it with your financial advisor if you have questions.
We are committed to providing quality products and services to our shareholders,
strengthening your confidence in us, and working hard to help you achieve
financial success. It is a privilege to play a role in your financial future,
and we value your business. Thank you for choosing Columbia Management.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
HEAD OF MUTUAL FUNDS, COLUMBIA MANAGEMENT
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's chief
liaison to the mutual fund boards of trustees.
Chris joined Bank of America in August 2004.
<Page>
FUND PROFILE
COLUMBIA GROWTH STOCK FUND
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed and the composition of its
portfolio will change over time.
SECTORS AS OF 09/30/04 (%)
<Table>
Information technology 35.7
Health care 21.5
Consumer staples 13.5
Consumer discretionary 12.5
Financials 8.4
Industrials 4.5
Energy 3.9
</Table>
TOP 10 HOLDINGS AS OF 09/30/04 (%)
<Table>
Microsoft Corp. 5.6
Medtronic, Inc. 4.8
General Electric Co. 4.5
Novartis AG ADR 3.9
Schlumberger Ltd. 3.9
Wal-Mart Stores, Inc. 3.8
Costco Wholesale Corp. 3.8
Pfizer, Inc. 3.7
Johnson & Johnson Co. 3.6
American International Group, Inc. 3.6
</Table>
Portfolio holdings are calculated as a percentage of net assets. Sector
breakdown is calculated as a percentage of total investments excluding
short-term investments.
(C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein:
(1) is proprietary to Morningstar and/or its content providers; (2) may not be
copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past performance is
no guarantee of future results.
The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data are gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
09/30/2004.
[SIDENOTE]
SUMMARY
- - FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A SHARES
RETURNED NEGATIVE 0.39% WITHOUT SALES CHARGE.
- - SIZABLE ALLOCATIONS IN TECHNOLOGY AND MEDIA STOCKS HURT THE FUND'S
PERFORMANCE RELATIVE TO ITS BENCHMARK, THE RUSSELL 1000 GROWTH INDEX, AND ITS
PEER GROUP, THE MORNINGSTAR(R) LARGE GROWTH CATEGORY.
- - ENERGY STOCKS HELPED PERFORMANCE AS RISING COMMODITY PRICES MADE ENERGY THE
PERIOD'S BEST PERFORMER.
[CHART]
<Table>
CLASS A SHARES -0.39%
RUSSELL 1000 GROWTH INDEX 7.51%
</Table>
OBJECTIVE
Seeks long-term
growth of capital
TOTAL NET ASSETS
$691.3 million
MORNINGSTAR STYLE BOX
[GRAPHIC]
1
<Page>
PERFORMANCE INFORMATION
COLUMBIA GROWTH STOCK FUND
[CHART]
VALUE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04
<Table>
<Caption>
CLASS A SHARES CLASS A SHARES RUSSELL 1000
WITHOUT SALES CHARGE WITH SALES CHARGE GROWTH INDEX S&P 500 INDEX
10/1/1994 $ 10,000 $ 9,425 $ 10,000 $ 10,000
10/31/1994 $ 10,119 $ 9,537 $ 10,235 $ 10,225
11/30/1994 $ 9,852 $ 9,285 $ 9,906 $ 9,853
12/31/1994 $ 9,953 $ 9,381 $ 10,073 $ 9,999
1/31/1995 $ 10,061 $ 9,482 $ 10,288 $ 10,258
2/28/1995 $ 10,395 $ 9,797 $ 10,720 $ 10,658
3/31/1995 $ 10,674 $ 10,061 $ 11,033 $ 10,972
4/30/1995 $ 10,964 $ 10,333 $ 11,274 $ 11,295
5/31/1995 $ 11,190 $ 10,546 $ 11,666 $ 11,746
6/30/1995 $ 11,641 $ 10,971 $ 12,117 $ 12,019
7/31/1995 $ 12,068 $ 11,374 $ 12,621 $ 12,418
8/31/1995 $ 12,196 $ 11,494 $ 12,635 $ 12,449
9/30/1995 $ 12,819 $ 12,082 $ 13,217 $ 12,974
10/31/1995 $ 12,746 $ 12,013 $ 13,226 $ 12,928
11/30/1995 $ 13,359 $ 12,591 $ 13,741 $ 13,495
12/31/1995 $ 13,500 $ 12,724 $ 13,819 $ 13,756
1/31/1996 $ 13,787 $ 12,994 $ 14,281 $ 14,223
2/29/1996 $ 13,970 $ 13,167 $ 14,542 $ 14,356
3/31/1996 $ 14,138 $ 13,325 $ 14,561 $ 14,493
4/30/1996 $ 14,305 $ 13,482 $ 14,944 $ 14,706
5/31/1996 $ 14,920 $ 14,062 $ 15,466 $ 15,086
6/30/1996 $ 15,081 $ 14,214 $ 15,487 $ 15,143
7/31/1996 $ 14,159 $ 13,345 $ 14,580 $ 14,474
8/31/1996 $ 14,515 $ 13,680 $ 14,956 $ 14,779
9/30/1996 $ 15,518 $ 14,625 $ 16,045 $ 15,611
10/31/1996 $ 15,840 $ 14,930 $ 16,141 $ 16,042
11/30/1996 $ 16,713 $ 15,752 $ 17,353 $ 17,255
12/31/1996 $ 16,329 $ 15,390 $ 17,013 $ 16,913
1/31/1997 $ 17,758 $ 16,737 $ 18,206 $ 17,970
2/28/1997 $ 17,401 $ 16,400 $ 18,082 $ 18,111
3/31/1997 $ 16,289 $ 15,352 $ 17,104 $ 17,366
4/30/1997 $ 17,571 $ 16,560 $ 18,239 $ 18,403
5/31/1997 $ 18,706 $ 17,630 $ 19,556 $ 19,524
6/30/1997 $ 19,566 $ 18,441 $ 20,338 $ 20,398
7/31/1997 $ 21,077 $ 19,865 $ 22,136 $ 22,022
8/31/1997 $ 19,673 $ 18,542 $ 20,841 $ 20,789
9/30/1997 $ 20,657 $ 19,469 $ 21,867 $ 21,928
10/31/1997 $ 20,206 $ 19,045 $ 21,058 $ 21,196
11/30/1997 $ 20,675 $ 19,486 $ 21,953 $ 22,177
12/31/1997 $ 21,496 $ 20,260 $ 22,198 $ 22,559
1/31/1998 $ 21,421 $ 20,189 $ 22,862 $ 22,809
2/28/1998 $ 22,959 $ 21,639 $ 24,581 $ 24,453
3/31/1998 $ 23,962 $ 22,584 $ 25,562 $ 25,706
4/30/1998 $ 24,286 $ 22,889 $ 25,915 $ 25,965
5/31/1998 $ 24,018 $ 22,637 $ 25,179 $ 25,519
6/30/1998 $ 25,464 $ 24,000 $ 26,720 $ 26,555
7/31/1998 $ 25,115 $ 23,671 $ 26,544 $ 26,273
8/31/1998 $ 20,773 $ 19,579 $ 22,559 $ 22,474
9/30/1998 $ 21,627 $ 20,383 $ 24,292 $ 23,915
10/31/1998 $ 23,322 $ 21,981 $ 26,245 $ 25,859
11/30/1998 $ 25,048 $ 23,608 $ 28,242 $ 27,426
12/31/1998 $ 26,987 $ 25,435 $ 30,790 $ 29,006
1/31/1999 $ 29,267 $ 27,584 $ 32,597 $ 30,218
2/28/1999 $ 28,439 $ 26,804 $ 31,107 $ 29,278
3/31/1999 $ 30,239 $ 28,500 $ 32,747 $ 30,449
4/30/1999 $ 29,734 $ 28,024 $ 32,789 $ 31,628
5/31/1999 $ 28,937 $ 27,273 $ 31,783 $ 30,881
6/30/1999 $ 31,082 $ 29,294 $ 34,008 $ 32,595
7/31/1999 $ 30,090 $ 28,360 $ 32,926 $ 31,578
8/31/1999 $ 29,705 $ 27,997 $ 33,463 $ 31,424
9/30/1999 $ 29,411 $ 27,720 $ 32,760 $ 30,563
10/31/1999 $ 31,225 $ 29,430 $ 35,233 $ 32,497
11/30/1999 $ 32,652 $ 30,775 $ 37,136 $ 33,157
12/31/1999 $ 36,868 $ 34,748 $ 40,998 $ 35,110
1/31/2000 $ 36,934 $ 34,811 $ 39,075 $ 33,347
2/29/2000 $ 40,602 $ 38,267 $ 40,986 $ 32,717
3/31/2000 $ 42,685 $ 40,230 $ 43,921 $ 35,917
4/30/2000 $ 40,563 $ 38,231 $ 41,830 $ 34,836
5/31/2000 $ 37,440 $ 35,287 $ 39,722 $ 34,122
6/30/2000 $ 40,776 $ 38,431 $ 42,733 $ 34,964
7/31/2000 $ 39,398 $ 37,132 $ 40,951 $ 34,419
8/31/2000 $ 43,211 $ 40,727 $ 44,657 $ 36,556
9/30/2000 $ 39,715 $ 37,432 $ 40,432 $ 34,626
10/31/2000 $ 36,622 $ 34,516 $ 38,520 $ 34,481
11/30/2000 $ 31,608 $ 29,791 $ 32,842 $ 31,764
12/31/2000 $ 32,686 $ 30,807 $ 31,804 $ 31,919
1/31/2001 $ 33,771 $ 31,829 $ 34,002 $ 33,052
2/28/2001 $ 29,651 $ 27,946 $ 28,228 $ 30,038
3/31/2001 $ 27,442 $ 25,864 $ 25,157 $ 28,134
4/30/2001 $ 30,063 $ 28,334 $ 28,340 $ 30,320
5/31/2001 $ 29,254 $ 27,572 $ 27,923 $ 30,523
6/30/2001 $ 28,075 $ 26,461 $ 27,275 $ 29,781
7/31/2001 $ 26,705 $ 25,170 $ 26,593 $ 29,489
8/31/2001 $ 24,630 $ 23,214 $ 24,418 $ 27,643
9/30/2001 $ 22,445 $ 21,155 $ 21,981 $ 25,410
10/31/2001 $ 23,119 $ 21,789 $ 23,135 $ 25,895
11/30/2001 $ 25,003 $ 23,565 $ 25,358 $ 27,881
12/31/2001 $ 24,860 $ 23,431 $ 25,310 $ 28,126
1/31/2002 $ 24,117 $ 22,730 $ 24,862 $ 27,716
2/28/2002 $ 22,938 $ 21,619 $ 23,830 $ 27,181
3/31/2002 $ 23,975 $ 22,596 $ 24,655 $ 28,203
4/30/2002 $ 22,613 $ 21,313 $ 22,643 $ 26,494
5/31/2002 $ 22,185 $ 20,910 $ 22,095 $ 26,298
6/30/2002 $ 20,404 $ 19,231 $ 20,051 $ 24,425
7/31/2002 $ 18,627 $ 17,556 $ 18,948 $ 22,523
8/31/2002 $ 18,550 $ 17,484 $ 19,005 $ 22,669
9/30/2002 $ 16,714 $ 15,753 $ 17,034 $ 20,205
10/31/2002 $ 17,585 $ 16,574 $ 18,597 $ 21,983
11/30/2002 $ 18,606 $ 17,537 $ 19,606 $ 23,278
12/31/2002 $ 17,432 $ 16,430 $ 18,252 $ 21,911
1/31/2003 $ 17,129 $ 16,144 $ 17,808 $ 21,337
2/28/2003 $ 16,656 $ 15,698 $ 17,726 $ 21,017
3/31/2003 $ 17,016 $ 16,038 $ 18,056 $ 21,221
4/30/2003 $ 18,323 $ 17,269 $ 19,390 $ 22,970
5/31/2003 $ 19,193 $ 18,090 $ 20,358 $ 24,180
6/30/2003 $ 19,268 $ 18,160 $ 20,639 $ 24,490
7/31/2003 $ 19,912 $ 18,767 $ 21,153 $ 24,921
8/31/2003 $ 20,272 $ 19,106 $ 21,679 $ 25,407
9/30/2003 $ 19,609 $ 18,482 $ 21,447 $ 25,137
10/31/2003 $ 20,650 $ 19,463 $ 22,653 $ 26,560
11/30/2003 $ 21,105 $ 19,891 $ 22,890 $ 26,794
12/31/2003 $ 21,729 $ 20,480 $ 23,682 $ 28,198
1/31/2004 $ 21,786 $ 20,533 $ 24,166 $ 28,717
2/29/2004 $ 21,540 $ 20,301 $ 24,320 $ 29,116
3/31/2004 $ 21,010 $ 19,802 $ 23,868 $ 28,676
4/30/2004 $ 20,632 $ 19,445 $ 23,591 $ 28,226
5/31/2004 $ 21,180 $ 19,963 $ 24,030 $ 28,613
6/30/2004 $ 21,161 $ 19,945 $ 24,330 $ 29,168
7/31/2004 $ 19,951 $ 18,804 $ 22,956 $ 28,202
8/31/2004 $ 19,572 $ 18,446 $ 22,843 $ 28,315
9/30/2004 $ 19,525 $ 18,402 $ 23,060 $ 28,612
</Table>
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
1000 Growth Index is an unmanaged index that measures the performance of those
Russell 1000 Index companies with higher price-to-book ratios and higher
forecasted growth values. The Standard & Poor's (S&P) 500 Index is an unmanaged
index that tracks the performance of 500 widely held, large-capitalization U.S.
stocks. The S&P 500 Index was the fund's previous benchmark. Unlike mutual
funds, indices are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/04 (%)
<Table>
<Caption>
SHARE CLASS A B C Z
- ---------------------------------------------------------------------------------------------------
INCEPTION 07/15/02 07/15/02 07/15/02 07/01/58
- ---------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ---------------------------------------------------------------------------------------------------
1-year -0.39 -6.10 -1.11 -6.05 -1.01 -2.00 0.36
5-year -7.86 -8.94 -8.15 -8.44 -8.13 -8.13 -7.57
10-year 6.92 6.29 6.75 6.75 6.76 6.76 7.09
</Table>
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER.
ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD
AT NET ASSET VALUE WITH NO RULE 12b-1 FEES. 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 reimbursements of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
The performance information for class A, B, and C shares (newer class shares)
includes returns for the fund's class Z shares (the oldest existing fund class)
for periods prior to the inception date of the newer class shares. The newer
class shares returns are not restated to reflect any expense differential (e.g.
Rule 12b-1 fees and transfer agent fees) between class Z shares and the newer
class shares. Had the expense differential been reflected, the returns for the
periods prior to the inception of the newer class shares would have been
different. Class A, B, and C shares were initially offered July 15, 2002 and
Class Z shares were initially offered July 1, 1958.
[SIDENOTE]
PERFORMANCE OF A $10,000 INVESTMENT 10/01/94 - 09/30/04 ($)
<Table>
<Caption>
SALES CHARGE: WITHOUT WITH
- ----------------------------------------
Class A 19,525 18,402
Class B 19,214 19,214
Class C 19,234 19,234
Class Z 19,831 n/a
</Table>
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, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
2
<Page>
UNDERSTANDING YOUR EXPENSES
COLUMBIA GROWTH STOCK FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also continuing costs, which generally
include investment advisory and/or Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare this cost with the continuing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
<Table>
<Caption>
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
--------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
--------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 931.45 1,017.35 7.39 7.72 1.53
Class B 1,000.00 1,000.00 927.75 1,013.70 10.89 11.38 2.26
Class C 1,000.00 1,000.00 928.75 1,013.90 10.70 11.18 2.22
Class Z 1,000.00 1,000.00 936.50 1,020.75 4.12 4.29 0.85
</Table>
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Transfer Agent not waived or reimbursed a portion of Class Z shares'
expenses, Class Z shares' total return would have been reduced.
Had the Distributor not waived a portion of Class A shares' expenses, Class A
shares' total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only continuing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided will not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other fund companies, it is important to note that hypothetical
examples are meant to highlight the continuing cost of investing in a fund and
do not reflect any transactional costs, such as sales charges or redemption or
exchange fees.
[SIDENOTE]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
www.columbiafunds.com OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR
ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE
PERIOD
3
<Page>
ECONOMIC UPDATE
COLUMBIA GROWTH STOCK FUND
Despite uncertainty about job growth, rising energy prices and a slowdown in
consumer spending, the US economy grew at a pace of more than 4.5% during the
12-month period that began October 1, 2003, and ended September 30, 2004. Growth
encountered a soft patch in the second quarter of 2004, but monthly data
suggested that it picked up again in the third quarter.
Job growth dominated the economic news during this reporting period: When more
than one million jobs were created in the spring of 2004, consumer confidence
soared to its highest level in two years. However, when job growth fell below
expectations during the summer months, consumer confidence fell. According to
the Labor Department's payroll survey, the job market has not fully recovered
from the losses incurred during the economic downturn of 2000-2001, and that has
left consumers more cautious about the months ahead.
Consumer spending held up for most of the period, as last year's tax rebates and
tax cuts worked their way into household budgets. Even when consumer spending
declined during the summer, housing activity remained strong. Also, the business
sector stepped into the gap created by sagging consumer spending. Industrial
production rose; factories utilized more of their capacity; and spending on
technology, capital equipment and construction picked up.
STOCKS OUTPERFORMED BONDS
Buoyed by strong gains at the beginning of the period, the S&P 500 Index
returned 13.87% during this 12-month reporting period. However, concerns about
new terror threats and higher interest rates and energy prices helped sideline
investors as the period wore on. Late in the period, leadership passed from
small-cap stocks to mid- and large-cap stocks. Value stocks continued to lead
growth stocks until the final month of the period, when small- and mid-cap
growth stocks bested their value counterparts. Energy and real estate investment
trusts were the best-performing sectors.
BONDS DELIVER RESPECTABLE GAINS
Despite periods of interest-rate volatility, the US bond market delivered
respectable gains during the period. Bond prices sagged in the spring when job
growth picked up and investors began to anticipate higher short term interest
rates. However, a shaky stock market, higher energy prices and some mixed
economic data gave the bond market a boost in the last three months of the
period. The 10-year Treasury yield ended the period at 4.1%, very close to where
it started.
In this environment, the Lehman Brothers Aggregate Bond Index returned 3.68%.
High-yield bonds gained 12.23%, as measured by the Merrill Lynch US High Yield,
Cash Pay Index. However, most of those gains were achieved during the first half
of the reporting period. In the second half, slower economic growth and high
valuations made high-yield bonds less attractive.
After a year of the lowest short-term interest rates in recent history, the
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.0% to 1.75% in three equal steps during the period. The Fed
indicated that it would continue to raise short-term interest rates at a
"measured pace," in an attempt to balance economic growth against inflationary
pressures.
[SIDENOTE]
SUMMARY:
FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2004
- - STOCK PRICES ROSE, AS MEASURED BY THE S&P 500 INDEX AND THE BROADER RUSSELL
3000 INDEX. MANY SECTORS RETREATED AS SHORT-TERM INTEREST RATES MOVED HIGHER
IN THE SUMMER AND A HOST OF UNCERTAINTIES UNSETTLED INVESTORS.
[CHART]
<Table>
S&P 500 INDEX 13.87%
RUSSELL 3000 INDEX 14.26%
</Table>
- - DESPITE INTEREST RATE VOLATILITY, INVESTMENT-GRADE BONDS CHALKED UP
RESPECTABLE GAINS. THE LEHMAN BROTHERS AGGREGATE BOND INDEX RETURNED 3.68%.
HIGH-YIELD BONDS, WHICH CAN BE LESS SENSITIVE TO CHANGING INTEREST RATES, LED
THE FIXED-INCOME MARKETS. THE MERRILL LYNCH US HIGH YIELD, CASH PAY INDEX
RETURNED 12.23%
[CHART]
<Table>
MERRILL LYNCH INDEX 12.23%
LEHMAN INDEX 3.68%
</Table>
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 3000 Index is an unmanaged index that tracks the performance of the
3,000 largest US companies based on total market capitalization.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated,
non-convertible investment-grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
4
<Page>
PORTFOLIO MANAGER'S REPORT
COLUMBIA GROWTH STOCK FUND
For the 12-month period ended September 30, 2004, Columbia Growth Stock Fund
class A shares returned negative 0.39% without sales charge. Performance fell
short of the Russell 1000 Growth Index, which returned 7.51% during the same
period. The fund also came out behind the Morningstar(R) Large Growth Category
average, which returned 7.61%.(1)
The fund's strategy is to buy and hold concentrated positions in stocks that we
believe will be superior performers over the long term. This approach hampered
the fund's return during the period because the areas in which assets were
concentrated--technology and media--both experienced declines. Many of the
companies owned by the fund continued to experience revenue and earnings growth,
but these gains were not reflected in their stock prices during the period as
investors focused on external market factors.
DECLINE IN TECHNOLOGY AMID GROWING ECONOMIC CONCERNS
About one-third of the fund's assets were in the technology sector where we
found attractive, long-term investment opportunities among businesses with
proprietary products, strong pricing, high gross margins and high profits. We
expected technology stocks to benefit from positive economic growth domestically
and internationally. Instead, technology stocks fell in 2004, as investors
worried about the sustainability of the sector's strong performance and buildups
in inventory. Our focus was on semiconductor ("chip") and semiconductor capital
equipment companies, which were especially weak performers. Detractors included
semiconductor capital equipment companies Novellus Systems and ASML Holding, and
Xilinx, which makes programmable logic chips.
FURTHER DISAPPOINTMENTS FROM MEDIA
We also had an above-average stake in media companies, where we believe that
proprietary entertainment products have the potential to create their own
demand. We expected the sector to benefit from a boost in advertising revenues,
given strong corporate profit growth. Profits were strong, but advertising
spending fell short of our expectations. This hurt Viacom, which owns Infinity
Broadcasting (a chain of radio stations), CBS, Paramount Pictures, MTV and
Nickelodeon. In addition, the fund owned Comcast, which lost ground after making
an unaccepted bid to acquire Walt Disney Company.
(1) (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be
copied or redistributed for any purpose and may only be used for
noncommercial, personal purposes. The information contained herein is not
represented or warranted to be accurate, correct, complete or timely.
Morningstar, Inc. shall not be responsible for investment decisions,
damages or other losses resulting from the use of this information. Past
performance is no guarantee of future performance. Morningstar, Inc. has
not granted consent for it to be considered or deemed an "expert" under the
Securities Act of 1933.
Morningstar Categories compare the performance of funds with similar
investment objectives and strategies.
[SIDENOTE]
NET ASSET VALUE PER SHARE AS OF 09/30/04 ($)
<Table>
Class A 10.32
Class B 9.82
Class C 9.82
Class Z 8.35
</Table>
HOLDINGS DISCUSSED IN THIS REPORT AS OF 09/30/04 (%)
<Table>
Novellus Systems, Inc. 2.1
ASML Holding N.V., N.Y.
Registered shares 2.4
Xilinx, Inc. 2.7
Viacom, Inc., Class B 2.7
Comcast Corp., Class A 2.7
Novartis AG, ADR 3.9
Medtronic, Inc. 4.8
Cardinal Health, Inc. 2.4
Schlumberger Ltd. 3.9
General Electric Co. 4.5
American International Group, Inc. 3.6
Costco Wholesale Corp. 3.8
</Table>
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.
5
<Page>
MIXED RESULTS FROM HEALTH CARE STOCKS
Health care stocks came under pressure as investors worried about upcoming
patent expirations and a lack of new blockbuster drugs on the horizon. Despite
this negative environment, Novartis and Medtronic generated strong returns.
Novartis is a Swiss pharmaceuticals company, while Medtronic is a medical device
company. Both companies benefited from new product pipelines that we did not
think had been fully appreciated by investors. By contrast, the fund lost ground
on Cardinal Health, a leading wholesale distributor of drugs, medical supplies
and equipment that was hard hit by news of accounting irregularities.
BRIGHT SPOTS INCLUDED ENERGY, INDUSTRIALS, FINANCIALS AND CONSUMER STOCKS
Some of the fund's biggest stock price gains came from energy, as record high
commodity prices sent energy stock prices skyrocketing. Schlumberger, an
exploration and production company that uses technology to find new fields and
get more out of existing deposits, provided one of the biggest price gains in
the fund. Industrials and financials also bolstered performance. General
Electric posted above-average gains, while American International Group rallied
as insurance pricing improved and the company expanded operations in Asia.
Winners elsewhere included Costco Wholesale, a warehouse club that operates a
low cost business model and passes the savings to its customers.
OUTLOOK FAVORS LARGE-CAP GROWTH DISCIPLINE
We remain optimistic about the prospects for large-cap growth stocks, which are
the focus of the fund. Valuations appear to us to be attractive, and the
economic outlook remains favorable. Our expectation is that the economy will
continue to grow, but growth rates for corporate profits will slow. Typically,
large-cap stocks with a history of consistent earnings growth do well in the
later stages of an economic expansion as growth becomes harder to generate. We
also believe that investments that have been volatile on the downside may have
some of the strongest potential for gains on the upside.
[PHOTO OF PAUL BLAUSTEIN]
Paul Blaustein, CFA, has managed Columbia Growth Stock Fund since November 2003
and has been with the advisor since 2003.
/s/ Paul Blaustein
An investment in the fund offers the potential for long-term growth, but also
involves certain risks, including stock market fluctuations due to economic and
business developments.
In addition, the fund's share price will likely be subject to more volatility
than the overall stock market because it concentrates in technology
stocks.
[SIDENOTE]
WE REMAIN OPTIMISTIC ABOUT THE PROSPECTS FOR LARGE-CAP GROWTH STOCKS. VALUATIONS
APPEAR TO US TO BE ATTRACTIVE, AND THE ECONOMIC OUTLOOK REMAINS FAVORABLE.
6
<Page>
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 COLUMBIA GROWTH STOCK FUND
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
INVESTMENT PORTFOLIO
The investment portfolio details all of the fund's holdings and their market
value as of the last day of the reporting period. Portfolio holdings are
organized by type of asset, industry, country or geographic region (if
applicable) to demonstrate areas of concentration and diversification.
STATEMENT OF ASSETS AND LIABILITIES
This statement details the fund's assets, liabilities, net assets and share
price for each share class as of the last day of the reporting period. Net
assets are calculated by subtracting all the fund's liabilities (including any
unpaid expenses) from the total of the fund's investment and non-investment
assets. The share price for each class is calculated by dividing net assets for
that class by the number of shares outstanding in that class as of the last day
of the reporting period.
STATEMENT OF OPERATIONS
This statement details income earned by the fund and the expenses accrued by the
fund during the reporting period. The Statement of Operations also shows any net
gain or loss the fund realized on the sales of its holdings during the period,
as well as any unrealized gains or losses recognized over the period. The total
of these results represents the fund's net increase or decrease in net assets
from operations.
STATEMENT OF CHANGES IN NET ASSETS
This statement demonstrates how the fund's net assets were affected by its
operating results, distributions to shareholders and shareholder transactions
(e.g., subscriptions, redemptions and dividend reinvestments) during the
reporting period. The Statement of Changes in Net Assets also details changes in
the number of shares outstanding.
NOTES TO FINANCIAL STATEMENTS
These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees
and compensation paid to affiliates and significant risks and contingencies.
FINANCIAL HIGHLIGHTS
The financial highlights demonstrate how the fund's net asset value per share
was affected by the fund's operating results. The financial highlights table
also discloses the classes' performance and certain key ratios (e.g., class
expenses and net investment income as a percentage of average net assets).
7
<Page>
INVESTMENT PORTFOLIO
SEPTEMBER 30, 2004 COLUMBIA GROWTH STOCK FUND
<Table>
<Caption>
SHARES VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 99.3%
CONSUMER DISCRETIONARY - 12.4%
MEDIA - 10.7% Comcast Corp., Class A (a) 660,000 18,638,400
Liberty Media Corp., Class A (a) 1,054,500 9,195,240
Liberty Media International, Inc.,
Class A (a) 65,110 2,172,200
News Corp. Ltd., ADR 308,700 10,146,969
Time Warner, Inc. (a) 953,500 15,389,490
Viacom, Inc., Class B 555,800 18,652,648
Media Total 74,194,947
SPECIALTY RETAIL - 1.7% Home Depot, Inc. 297,200 11,650,240
Specialty Retail Total 11,650,240
--------------
CONSUMER DISCRETIONARY TOTAL 85,845,187
CONSUMER STAPLES - 13.4%
FOOD & STAPLES RETAILING - 7.7% Costco Wholesale Corp. 631,000 26,224,360
Wal-Mart Stores, Inc. 499,600 26,578,720
Food & Staples Retailing
Total 52,803,080
HOUSEHOLD PRODUCTS - 5.7% Colgate-Palmolive Co. 427,100 19,296,378
Procter & Gamble Co. 375,000 20,295,000
Household Products Total 39,591,378
--------------
CONSUMER STAPLES TOTAL 92,394,458
ENERGY - 3.9%
ENERGY EQUIPMENT & SERVICES - 3.9% Schlumberger Ltd. 397,000 26,722,070
Energy Equipment & Services
Total 26,722,070
--------------
ENERGY TOTAL 26,722,070
FINANCIALS - 8.3%
CAPITAL MARKETS - 1.3% Merrill Lynch & Co., Inc. 187,300 9,312,556
Capital Markets Total 9,312,556
COMMERCIAL BANKS - 3.4% Wells Fargo & Co. 397,900 23,726,777
Commercial Banks Total 23,726,777
INSURANCE - 3.6% American International Group, Inc. 363,700 24,727,963
Insurance Total 24,727,963
--------------
FINANCIALS TOTAL 57,767,296
HEALTH CARE - 21.4%
BIOTECHNOLOGY - 3.0% Amgen, Inc. (a) 361,800 20,506,824
Biotechnology Total 20,506,824
HEALTH CARE EQUIPMENT & SUPPLIES - 4.8% Medtronic, Inc. 644,300 33,439,170
Health Care Equipment &
Supplies Total 33,439,170
HEALTH CARE PROVIDERS & SERVICES - 2.4% Cardinal Health, Inc. 372,000 16,282,440
Health Care Providers &
Services Total 16,282,440
</Table>
See Accompanying Notes to Financial Statements.
8
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
PHARMACEUTICALS - 11.2% Johnson & Johnson Co. 445,400 25,089,382
Novartis AG, ADR 579,100 27,026,597
Pfizer, Inc. 832,600 25,477,560
Pharmaceuticals Total 77,593,539
--------------
HEALTH CARE TOTAL 147,821,973
INDUSTRIALS - 4.5%
Industrial Conglomerates - 4.5% General Electric Co. 929,700 31,219,326
Industrial Conglomerates Total 31,219,326
--------------
INDUSTRIALS TOTAL 31,219,326
INFORMATION TECHNOLOGY - 35.4%
COMMUNICATIONS EQUIPMENT - 3.2% Cisco Systems, Inc. (a) 1,232,600 22,310,060
Communications Equipment Total 22,310,060
COMPUTERS & PERIPHERALS - 3.1% Dell, Inc. (a) 609,100 21,683,960
Computers & Peripherals Total 21,683,960
IT SERVICES - 1.7% Paychex, Inc. 384,000 11,577,600
IT Services Total 11,577,600
SEMICONDUCTORS & Altera Corp. (a) 1,094,200 21,413,494
SEMICONDUCTOR EQUIPMENT - 120.0% Analog Devices, Inc. 328,200 12,727,596
Applied Materials, Inc. (a) 946,300 15,604,487
ASML Holding N.V., N.Y. Registered Shares (a) 1,274,500 16,402,815
Intel Corp. 70,200 1,408,212
Marvell Technology Group Ltd. (a) 270,700 7,073,391
Maxim Integrated Products, Inc. 482,900 20,421,841
Microchip Technology, Inc. 372,600 10,000,584
Novellus Systems, Inc. (a) 543,000 14,438,370
Xilinx, Inc. 702,600 18,970,200
Semiconductors & Semiconductor Equipment Total 138,460,990
SOFTWARE - 7.4% Microsoft Corp. 1,406,900 38,900,785
SAP AG, ADR 303,800 11,833,010
Software Total 50,733,795
--------------
INFORMATION TECHNOLOGY TOTAL 244,766,405
--------------
TOTAL COMMON STOCKS (cost of $598,068,855) 686,536,715
</Table>
See Accompanying Notes to Financial Statements.
9
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 0.1%
Repurchase agreement with State Street Bank &
Trust Co., dated 09/30/04, due 10/01/04 at 1.580%,
collateralized by U.S. Treasury Bonds with various
maturities to 08/15/22, market value $672,579
(repurchase proceeds $654,029) 654,000 654,000
TOTAL SHORT-TERM OBLIGATION (cost of $654,000) 654,000
TOTAL INVESTMENTS - 99.4%
(COST OF $598,722,855) (b) 687,190,715
OTHER ASSETS & LIABILITIES, NET - 0.6% 4,079,231
NET ASSETS - 100.0% 691,269,946
</Table>
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $602,390,416.
<Table>
<Caption>
ACRONYM NAME
------------------------------------------------------------
ADR American Depositary Receipt
</Table>
See Accompanying Notes to Financial Statements.
10
<Page>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004 COLUMBIA GROWTH STOCK FUND
<Table>
<Caption>
($)
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS Investments, at cost 598,722,855
--------------
Investments, at value 687,190,715
Cash 731
Receivable for:
Investments sold 5,291,775
Fund shares sold 446,166
Interest 29
Dividends 373,823
Expense reimbursement due from Investment Advisor 16,571
Deferred Trustees' compensation plan 20,133
--------------
Total Assets 693,339,943
LIABILITIES Payable for:
Fund shares repurchased 1,029,653
Investment advisory fee 346,743
Administration fee 77,833
Transfer agent fee 263,099
Pricing and bookkeeping fees 16,910
Trustees' fees 1,740
Distribution and service fees 229,034
Deferred Trustees' fees 20,133
Other liabilities 84,852
--------------
Total Liabilities 2,069,997
NET ASSETS 691,269,946
COMPOSITION OF NET ASSETS Paid-in capital 1,091,154,970
Accumulated net investment loss (18,665)
Accumulated net realized loss (488,334,219)
Net unrealized appreciation on investments 88,467,860
NET ASSETS 691,269,946
CLASS A Net assets 66,142,318
Shares outstanding 6,407,639
Net asset value per share 10.32(a)
Maximum offering price per share ($10.32/0.9425) 10.95(b)
CLASS B Net assets 245,136,689
Shares outstanding 24,963,569
Net asset value and offering price per share 9.82(a)
CLASS C Net assets 20,100,005
Shares outstanding 2,047,793
Net asset value and offering price per share 9.82(a)
CLASS Z Net assets 359,890,934
Shares outstanding 43,122,286
Net asset value, offering and redemption price per share 8.35
</Table>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
11
<Page>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004 COLUMBIA GROWTH STOCK FUND
<Table>
<Caption>
($)
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Dividends 6,871,435
Interest 68,659
--------------
Total Investment Income (net of foreign taxes withheld of
$90,475) 6,940,094
EXPENSES Investment advisory fee 4,647,331
Administration fee 1,124,393
Distribution fee:
Class A 80,000
Class B 2,224,912
Class C 193,643
Service fee:
Class A 200,002
Class B 741,637
Class C 64,548
Transfer agent fee:
Class A 360,774
Class B 1,487,460
Class C 117,419
Class Z 529,193
Pricing and bookkeeping fees 174,740
Trustees' fees 24,775
Custody fee 22,915
Non-recurring costs (See Note 7) 37,665
Other expenses 397,643
--------------
Total Expenses 12,429,050
Fees and expenses waived or reimbursed by
Transfer Agent - Class Z (193,198)
Fees waived by Distributor - Class A (40,000)
Non-recurring costs assumed by
Investment Advisor (See Note 7) (37,665)
Custody earnings credit (500)
--------------
Net Expenses 12,157,687
--------------
Net Investment Loss (5,217,593)
NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain on investments 62,741,007
ON INVESTMENTS Net change in unrealized appreciation/depreciation on investments (53,726,795)
--------------
Net Gain 9,014,212
--------------
Net Increase in Net Assets from Operations 3,796,619
</Table>
See Accompanying Notes to Financial Statements.
12
<Page>
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA GROWTH STOCK FUND
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30,
--------------------------------
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 ($)
- --------------------------------------- -------------------------------------------------------------------------------------
OPERATIONS Net investment loss (5,217,593) (4,504,325)
Net realized gain (loss) on investments 62,741,007 (82,513,256)
Net change in unrealized appreciation/depreciation
on investments (53,726,795) 213,477,987
--------------------------------
Net Increase from Operations 3,796,619 126,460,406
SHARE TRANSACTIONS Class A:
Subscriptions 14,653,162 52,887,088
Redemptions (31,034,051) (67,933,556)
--------------------------------
Net Decrease (16,380,889) (15,046,468)
Class B:
Subscriptions 15,919,825 23,561,376
Redemptions (74,892,692) (72,246,627)
--------------------------------
Net Decrease (58,972,867) (48,685,251)
Class C:
Subscriptions 2,549,820 5,839,044
Redemptions (10,634,792) (10,240,886)
--------------------------------
Net Decrease (8,084,972) (4,401,842)
Class Z:
Subscriptions 70,908,194 36,268,004
Redemptions (98,706,026) (72,221,109)
--------------------------------
Net Decrease (27,797,832) (35,953,105)
Net Decrease from Share Transactions (111,236,560) (104,086,666)
--------------------------------
Total Increase (Decrease) in Net Assets (107,439,941) 22,373,740
NET ASSETS Beginning of period 798,709,887 776,336,147
End of period (including accumulated net investment
loss of $(18,665) and $(14,274), respectively) 691,269,946 798,709,887
CHANGES IN SHARES Class A:
Subscriptions 1,324,748 5,514,819
Redemptions (2,828,087) (6,824,132)
--------------------------------
Net Decrease (1,503,339) (1,309,313)
Class B:
Subscriptions 1,497,689 2,524,637
Redemptions (7,140,520) (7,881,240)
--------------------------------
Net Decrease (5,642,831) (5,356,603)
Class C:
Subscriptions 240,936 629,913
Redemptions (1,008,828) (1,111,906)
--------------------------------
Net Decrease (767,892) (481,993)
Class Z:
Subscriptions 7,969,960 4,591,242(a)
Redemptions (11,099,886) (9,410,280)(a)
--------------------------------
Net Decrease (3,129,926) (4,819,038)
</Table>
(a) Capital share activity prior to July 25, 2003 has been restated to reflect
a 3-for-1 share split.
See Accompanying Notes to Financial Statements.
13
<Page>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 COLUMBIA GROWTH STOCK FUND
NOTE 1. ORGANIZATION
Columbia Growth Stock Fund (the "Fund"), a series of Columbia Funds Trust XI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
INVESTMENT GOALS
The Fund seeks long-term growth of capital.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
Effective October 13, 2003, the Liberty Growth Stock Fund was renamed Columbia
Growth Stock Fund. Also on this date, the Liberty-Stein Roe Funds Investment
Trust was renamed Columbia Funds Trust XI.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Equity securities are valued at the last sale price 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 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
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to the value
of the repurchase obligation including interest. A repurchase agreement
transaction involves certain risks in the event of default or insolvency of the
counterparty. These risks include possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities and a possible decline in
the value of the underlying securities during the period while the Fund seeks to
assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on
14
<Page>
the ex-date, except for certain foreign securities which are recorded as soon
after ex-date as the Fund becomes aware of such, net of non-reclaimable tax
withholdings.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
For the year ended September 30, 2004, permanent differences resulting primarily
from differing treatments for net operating losses were identified and
reclassified among the components of the Fund's net assets as follows:
<Table>
<Caption>
ACCUMULATED ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
LOSS LOSS CAPITAL
- --------------------------------------------------------------
$ 5,213,202 $ -- $ (5,213,202)
</Table>
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by this
reclassification.
As of September 30, 2004, the components of distributable earnings on a tax
basis were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM NET UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- --------------------------------------------------------------
$ -- $ -- $ 84,800,299
</Table>
*The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales.
Unrealized appreciation and depreciation at September 30, 2004, based on cost of
investments for federal income tax purposes was:
<Table>
Unrealized appreciation $ 133,341,227
Unrealized depreciation (48,540,928)
--------------
Net unrealized appreciation $ 84,800,299
</Table>
The following capital loss carryforwards, determined as of September 30, 2004,
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:
<Table>
<Caption>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
-------------------------------------------------
2008 $ 22,583,899
2009 201,991,560
2011 253,937,044
2012 5,529,590
--------------
$ 484,042,093
</Table>
Of these capital loss carryforwards, $219,806,550 ($22,583,899 expiring 09/30/08
and $197,222,651 expiring 09/30/09) and $4,768,909 (expiring 09/30/09) were
obtained upon the Fund's mergers with Liberty Growth Stock Fund and Stein Roe
Focus Fund, respectively.
Utilization of Liberty Growth Stock Fund's and Stein Roe Focus Fund's losses
could be subject to limitations imposed by the Internal Revenue Code.
Under current tax rules, certain currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. As of September 30, 2004, post-October capital losses of
$624,565 attributed to security transactions were deferred to October 1, 2004.
15
<Page>
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary
of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004,
FleetBoston, including the Fund's investment advisor, transfer agent and
distributor, was acquired by Bank of America Corporation ("BOA"). The
acquisition did not change the way the Fund is managed, the investment personnel
assigned to manage the Fund or the fees paid by the Fund.
INVESTMENT ADVISORY FEE
Columbia provides administrative and other services to the Fund in addition to
investment advisory services. Columbia receives a monthly investment advisory
fee based on the Fund's average daily net assets at the following annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
-----------------------------------------------
First $500 million 0.60%
Next $500 million 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</Table>
For the year ended September 30, 2004, the Fund's effective investment advisory
fee rate was 0.58%.
ADMINISTRATION FEE
Columbia provides administrative and other services to the Fund for a monthly
administration fee based on the Fund's average daily net assets at the following
annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
-----------------------------------------------
First $500 million 0.150%
Next $500 million 0.125%
Next $500 million 0.100%
Next $500 million 0.075%
Over $2 billion 0.050%
</Table>
Prior to November 1, 2003, Columbia was entitled to receive a monthly
administration fee based on the Fund's average daily net assets at the following
annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
-----------------------------------------------
First $500 million 0.150%
Next $500 million 0.125%
Next $1 billion 0.100%
Over $2 billion 0.075%
</Table>
For the year ended September 30, 2004, the Fund's effective administration fee
rate was 0.14%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street"). As a result, Columbia pays the total fees
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied to
the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund.
For the year ended September 30, 2004, the effective pricing and bookkeeping fee
rate for the Fund, inclusive of out-of-pocket expenses, was 0.022%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund. For such services, the Transfer Agent
receives a fee, paid monthly, at the annual rate of $28.00 per open account per
class. The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses.
The Transfer Agent has voluntarily agreed to waive a portion of the Class Z
transfer agent fee so that such fee (exclusive of out-of-pocket expenses) will
not exceed 0.05% annually of the Class Z average daily net assets. The Transfer
Agent, at its discretion, may revise or discontinue this arrangement any time.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee, in addition to reimbursement for certain out-of-pocket
expenses, at the annual rate of 0.06% of the Fund's average daily net assets
plus flat-rate charges based on the number of shareholder accounts and
transactions.
16
<Page>
Effective October 13, 2003, Liberty Funds Services, Inc. was renamed Columbia
Funds Services, Inc.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the year ended September 30, 2004,
the Distributor has retained net underwriting discounts of $18,870 on sales of
the Fund's Class A shares and received CDSC fees of $4,536, $915,732 and $4,459
on Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets attributable to Class A, Class B and Class C shares of
the Fund. The Plan also requires the payment of a monthly distribution fee to
the Distributor at the annual rates of 0.10%, 0.75% and 0.75% of the average
daily net assets attributable to Class A, Class B and Class C shares of the
Fund, respectively. The Distributor has voluntarily agreed to waive a portion of
the Class A share distribution fee so that it will not exceed 0.05% annually of
Class A average daily net assets.
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.
Effective October 13, 2003, Liberty Funds Distributor, Inc. was renamed Columbia
Funds Distributor, Inc.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates. Effective August 23, 2004, the Board of Trustees
appointed a Chief Compliance Officer to the Fund in accordance with federal
securities regulations. The Fund, along with other affiliated funds, will pay
its pro-rata share of the expenses associated with the Chief Compliance Officer
role. The Fund's fee will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the year ended September 30, 2004, the Fund paid $2,623 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the year ended September 30, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $404,570,451 and
$512,301,644, respectively.
NOTE 6. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings. In
addition, the Fund has agreed to pay commitment fees on its pro-rata portion of
the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the year ended September 30, 2004,
the Fund did not borrow under this arrangement.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
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 as well as
other industry wide issues. The Columbia Group has not uncovered any instances
where Columbia or the
17
<Page>
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 and its affiliate Banc
of America Capital Management, LLC have agreed to collectively reduce mutual
fund fees by $160 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 funds.
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). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants in several
derivative actions under various sections of the Investment Company Act of 1940,
as amended, alleging, among other things, that the fees and expenses paid by
those funds are excessive. The funds and the other defendants to these actions,
including Columbia and various of its affiliates, certain other mutual funds
advised by Columbia and its affiliates, and various directors of such funds,
have denied these allegations and are contesting the plaintiffs' claims. These
suits and certain regulatory investigations are ongoing, however, based on
currently available information, Columbia believes that these lawsuits are
without merit, that the likelihood they will have a material adverse impact on
any fund is remote, and that the lawsuits are not likely to materially affect
its ability to provide investment management services to its clients, including
the funds.
For the year ended September 30, 2004, Columbia has assumed $37,665 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
NOTE 8. COMPARABILITY OF FINANCIAL STATEMENTS
CAPITAL ACTIVITY
Effective July 25, 2003, there was a 3-for-1 split on Class Z shares. The
accompanying prior period financial highlights for Class Z have been adjusted to
reflect the 3-for-1 split.
18
<Page>
FINANCIAL HIGHLIGHTS
COLUMBIA GROWTH STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, PERIOD ENDED
--------------------------------- SEPTEMBER 30,
CLASS A SHARES 2004 2003 2002(a)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.36 $ 8.83 $ 9.98
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08) (0.05) (0.01)
Net realized and unrealized gain (loss) on investments 0.04 1.58 (1.14)
-------------- -------------- --------------
Total from Investment Operations (0.04) 1.53 (1.15)
NET ASSET VALUE, END OF PERIOD $ 10.32 $ 10.36 $ 8.83
Total return (c)(d) (0.39)% 17.33% (11.52)%(e)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (f) 1.55% 1.54% 1.63%(h)
Interest expense -- --%(g) --
Net expenses (f) 1.55% 1.54% 1.63%(h)
Net investment loss (f) (0.68)% (0.53)% (0.41)%(h)
Waiver/reimbursement 0.05% 0.05% 0.05%(h)
NPortfolio turnover rate 51% 108% 71%
Net assets, end of period (000's) $ 66,142 $ 81,967 $ 81,442
</Table>
(a) Class A shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Distributor not waived a portion of expenses, total return would
have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Rounds to less than 0.01%.
(h) Annualized.
19
<Page>
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, PERIOD ENDED
--------------------------------- SEPTEMBER 30,
CLASS B SHARES 2004 2003 2002(a)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.93 $ 8.52 $ 9.65
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.15) (0.11) (0.02)
Net realized and unrealized gain (loss) on investments 0.04 1.52 (1.11)
-------------- -------------- --------------
Total from Investment Operations (0.11) 1.41 (1.13)
NET ASSET VALUE, END OF PERIOD $ 9.82 $ 9.93 $ 8.52
Total return (c) (1.11)% 16.55% (11.71)%(d)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (e) 2.30% 2.24% 2.33%(g)
Interest expense -- --%(f) --
Net expenses (e) 2.30% 2.24% 2.33%(g)
Net investment loss (e) (1.43)% (1.23)% (1.11)%(g)
Portfolio turnover rate 51% 108% 71%
Net assets, end of period (000's) $ 245,137 $ 303,943 $ 306,561
</Table>
(a) Class B shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming 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) Rounds to less than 0.01%.
(g) Annualized.
20
<Page>
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, PERIOD ENDED
--------------------------------- SEPTEMBER 30,
CLASS C SHARES 2004 2003 2002(a)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.92 $ 8.52 $ 9.64
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.15) (0.11) (0.02)
Net realized and unrealized gain (loss) on investments 0.05 1.51 (1.10)
-------------- -------------- --------------
Total from Investment Operations (0.10) 1.40 (1.12)
NET ASSET VALUE, END OF PERIOD $ 9.82 $ 9.92 $ 8.52
Total return (c) (1.01)% 16.43% (11.62)%(d)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (e) 2.25% 2.24% 2.33%(g)
Interest expense -- --%(f) --
Net expenses (e) 2.25% 2.24% 2.33%(g)
Net investment loss (e) (1.39)% (1.23)% (1.11)%(g)
Portfolio turnover rate 51% 108% 71%
Net assets, end of period (000's) $ 20,100 $ 27,938 $ 28,093
</Table>
(a) Class C shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming 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) Rounds to less than 0.01%.
(g) Annualized.
21
<Page>
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------
CLASS Z SHARES 2004 2003(a) 2002(a)(b) 2001(a) 2000(a)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.32 $ 7.05 $ 9.45 $ 19.89 $ 15.73
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (c) --(d) --(d) 0.01(e) (0.01)(e) (0.08)(e)
Net realized and unrealized gain (loss)
on investments 0.03 1.27 (2.41) (7.77) 5.39
---------- ---------- ---------- ---------- -----------
Total from Investment Operations 0.03 1.27 (2.40) (7.78) 5.31
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- (2.66) (1.15)
NET ASSET VALUE, END OF PERIOD $ 8.35 $ 8.32 $ 7.05 $ 9.45 $ 19.89
Total return (f) 0.36%(g) 17.96%(g) (25.34)%(g) (43.48)% 35.04%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (h) 0.89% 1.00% 0.88%(e) 0.95%(e) 0.95%(e)
Interest expense -- --%(i) -- -- --
Net expenses (h) 0.89% 1.00% 0.88%(e) 0.95%(e) 0.95%(e)
Net investment income (loss) (h) (0.02)% 0.01% 0.08%(e) (0.05)%(e) (0.44)%(e)
Waiver/reimbursement 0.05% 0.06% 0.01% -- --
Portfolio turnover rate 51% 108% 71% 73%(j) 74%(j)
Net assets, end of period (000's) $ 359,891 $ 384,861 $ 360,240 $ 551,474 $ 1,083,271
</Table>
(a) Per share data has been restated to reflect a 3-for-1 share split effective
July 25, 2003.
(b) On July 15, 2002, the Stein Roe Growth Stock Fund was redesignated Liberty
Growth Stock Fund, Class Z shares.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Rounds to less than $0.01 per share.
(e) Per share amounts and ratios reflect income and expenses inclusive of the
Fund's proportionate share of the income and expenses of the SR&F Growth
Stock Portfolio prior to the termination of their master/feeder fund
structure on July 12, 2002.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor/Transfer Agent not waived a portion of expenses,
total return would have been reduced.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Round to less than 0.01%.
(j) Portfolio turnover rate disclosed is for the SR&F Growth Stock Portfolio.
22
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
COLUMBIA GROWTH STOCK FUND
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST XI AND THE SHAREHOLDERS OF COLUMBIA
GROWTH STOCK FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Growth Stock Fund (the
"Fund") (a series of Columbia Funds Trust XI), at September 30, 2004 and the
results of its operations, the changes in its net assets, and its financial
highlights for the periods indicated, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audit of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States), which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of portfolio positions at September 30, 2004 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 15, 2004
23
<Page>
TRUSTEES
COLUMBIA GROWTH STOCK FUND
Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were
appointed to the Board of the Trustees of the Fund. Messrs. Simpson and
Woolworth had been directors of 15 Columbia Funds and 20 funds in the CMG Fund
Trust. Also effective October 8, 2003, the incumbent trustees of the Fund were
elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in
the CMG Fund Trust. The new combined Board of Trustees/Directors of the Fund now
oversees 118 funds in the Columbia Funds Complex (including the former Liberty
Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of these
trustees/directors also serve on the Boards of other funds in the Columbia Funds
Complex.
The Trustrees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds Complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds Complex.
<Table>
<Caption>
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
YEAR FIRST ELECTED OR APPOINTED TO OFFICE(1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
DOUGLAS A. HACKER (age 49) Executive Vice President-Strategy of United Airlines (airline) since December
P.O. Box 66100 2002 (formerly President of UAL Loyalty Services (airline) from September 2001
Chicago, IL 60666 to December 2002; Executive Vice President and Chief Financial Officer of United
Trustee (since 1996) Airlines from March 1999 to September 2001; Senior Vice President-Finance from
March 1993 to July 1999). Oversees 118, Orbitz, Inc. (on-line travel company)
JANET LANGFORD KELLY (age 46) Adjunct Professor of Law, Northwestern University, since September 2004; Private
9534 W. Gull Lake Drive Investor since March 2004 (formerly Chief Administrative Officer and Senior Vice
Richland, MI 49083-8530 President, Kmart Holding Corporation (consumer goods), from September 2003 to
Trustee (since 1996) March 2004; Executive Vice President-Corporate Development and Administration,
General Counsel and Secretary, Kellogg Company (food manufacturer), from
September 1999 to August 2003; Senior Vice President, Secretary and General
Counsel, Sara Lee Corporation (branded, packaged, consumer-products
manufacturer) from January 1995 to September 1999). Oversees 118, None
RICHARD W. LOWRY (age 68) Private Investor since August 1987 (formerly Chairman and Chief Executive
10701 Charleston Drive Officer, U.S. Plywood Corporation (building products manufacturer)). Oversees
Vero Beach, FL 32963 120(3), None
Trustee (since 1995)
CHARLES R. NELSON (age 62) Professor of Economics, University of Washington, since January 1976; Ford and
Department of Economics Louisa Van Voorhis Professor of Political Economy, University of Washington,
University of Washington since September 1993 (formerly Director, Institute for Economic Research,
Seattle, WA 98195 University of Washington from September 2001 to June 2003) Adjunct Professor of
Trustee (since 1981) Statistics, University of Washington, since September 1980; Associate Editor,
Journal of Money Credit and Banking, since September 1993; consultant on
econometric and statistical matters. Oversees 118, None
</Table>
(1) In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In
October 2003, the trustees on the Liberty Board were elected to the boards
of the Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the
"CMG Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
24
<Page>
<Table>
<Caption>
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
YEAR FIRST ELECTED OR APPOINTED TO OFFICE(1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
JOHN J. NEUHAUSER (age 61) Academic Vice President and Dean of Faculties since August 1999, Boston College
84 College Road (formerly Dean, Boston College School of Management from September 1977 to
Chestnut Hill, MA 02467-3838 September 1999). Oversees 121(3),(4), Saucony, Inc. (athletic footwear)
Trustee (since 1985)
PATRICK J. SIMPSON (age 60) Partner, Perkins Coie L.L.P. (law firm). Oversees 118, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
THOMAS E. STITZEL (age 68) Business Consultant since 1999 (formerly Professor of Finance from 1975 to 1999,
2208 Tawny Woods Place College of Business, Boise State University); Chartered Financial Analyst.
Boise, ID 83706 Oversees 118, None.
Trustee (since 1998)
THOMAS C. THEOBALD (age 67) Partner and Senior Advisor, Chicago Growth Partners (private equity investing)
303 W. Madison since September 2004 (formerly Managing Director, William Blair Capital Partners
Suite 2500 (private equity investing) from September 1994 to September 2004). Oversees 118,
Chicago, IL 60606 Anixter International (network support equipment distributor); Ventas, Inc.
Trustee and Chairman of the Board(5) (real estate investment trust); Jones Lang LaSalle (real estate management
(since 1996) services) and Ambac Financial Group (financial guaranty insurance)
ANNE-LEE VERVILLE (age 59) Retired since 1997 (formerly General Manager, Global Education Industry, IBM
359 Stickney Hill Road Corporation (computer and technology) from 1994 to 1997). Oversees 119(4),
Hopkinton, NH 03229 Chairman of the Board of Directors, Enesco Group, Inc. (designer, importer and
Trustee (since 1998) distributor of giftware and collectibles)
RICHARD L. WOOLWORTH (age 63) Retired since December 2003 (formerly Chairman and Chief Executive Officer, The
100 S.W. Market Street Regence Group (regional health insurer); Chairman and Chief Executive Officer,
#1500 BlueCross BlueShield of Oregon; Certified Public Accountant, Arthur Young &
Portland, OR 97207 Company). Oversees 118, Northwest Natural Gas Co. (natural gas service provider)
Trustee (since 1991)
INTERESTED TRUSTEE
WILLIAM E. MAYER(2) (age 64) Managing Partner, Park Avenue Equity Partners (private equity) since February
399 Park Avenue 1999 (formerly Founding Partner, Development Capital LLC from November 1996 to
Suite 3204 February 1999). Oversees 120(3), Lee Enterprises (print media), WR Hambrecht + Co.
New York, NY 10022 (financial service provider); First Health (healthcare); Reader's Digest
Trustee (since 1994) (publishing); OPENFIELD Solutions (retail industry technology provider)
</Table>
(2) Mr. Mayer is an "interested person" (as defined in the Investment Company
Act of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co.
(3) Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the
Liberty All-Star Funds, currently consisting of 2 funds, which are advised
by an affiliate of the Advisor.
(4) Mr. Neuhauser and Ms. Verville also serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Advisor.
(5) Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
25
<Page>
OFFICERS
COLUMBIA GROWTH STOCK FUND
<Table>
<Caption>
NAME, ADDRESS AND AGE, POSITION WITH COLUMBIA
FUNDS, YEAR FIRST ELECTED OR APPOINTED TO OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
CHRISTOPHER L. WILSON (age 47) President of the Columbia Funds since October 2004 (formerly President and
One Financial Center Chief Executive Officer, CDC IXIS Asset Management Services, Inc. from
Boston, MA 02111 September 1998 to August 2004).
President (since 2004)
J. KEVIN CONNAUGHTON (age 40) Treasurer of the Columbia Funds and of the Liberty All-Star Funds since
One Financial Center December 2000; Vice President of the Advisor since April 2003 (formerly
Boston, MA 02111 President of the Columbia Funds from February 2004 to October 2004; Chief
Treasurer (since 2000) Accounting Officer and Controller of the Liberty Funds and of the Liberty
All-Star Funds from February 1998 to October 2000); Treasurer of the
Galaxy Funds since September 2002; Treasurer, Columbia Management
Multi-Strategy Hedge Fund, LLC since December 2002 (formerly Vice
President of Colonial Management Associates, Inc. from February 1998 to
October 2000).
MARY JOAN HOENE (age 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds
40 West 57th Street since August 2004; Chief Compliance Officer of the Liberty All-Star Funds
New York, NY 10019 since August 2004 (formerly Partner, Carter, Ledyard & Milburn LLP from
Senior Vice President and Chief Compliance January 2001 to August 2004; Counsel, Carter, Ledyard & Milburn LLP from
Officer (since 2004) November 1999 to December 2000; Vice President and Counsel, Equitable Life
Assurance Society of the United States from April 1998 to November 1999,).
MICHAEL G. CLARKE (age 34) Chief Accounting Officer of the Columbia Funds and of the Liberty All-Star
One Financial Center Funds since October 2004 (formerly Controller of the Columbia Funds and of
Boston, MA 02111 the Liberty All-Star Funds from May 2004 to October 2004; Assistant
Chief Accounting Officer (since 2004) Treasurer from June, 2002 to May 2004; Vice President, Product Strategy &
Development of the Liberty Funds Group from February 2001 to June 2002;
Assistant Treasurer of the Liberty Funds and of the Liberty All-Star Funds
from August 1999 to February 2001; Audit Manager, Deloitte & Touche LLP
from May 1997 to August 1999).
JEFFREY R. COLEMAN (age 34) Controller of the Columbia Funds and of the Liberty All-Star Funds since
One Financial Center October 2004 (formerly Vice President of CDC IXIS Asset Management
Boston, MA 02111 Services, Inc. and Deputy Treasurer of the CDC Nvest Funds and Loomis
Controller (since 2004) Sayles Funds from February 2003 to September 2004; Assistant Vice
President of CDC IXIS Asset Management Services, Inc. and Assistant
Treasurer of the CDC Nvest Funds from August 2000 to February 2003; Tax
Manager of PFPC, Inc. from November 1996 to August 2000).
DAVID A. ROZENSON (age 50) Secretary of the Columbia Funds and of the Liberty All-Star Funds since
One Financial Center December 2003; Senior Counsel, Bank of America Corporation (formerly
Boston, MA 02111 FleetBoston Financial Corporation) since January 1996; Associate General
Secretary (since 2003) Counsel, Columbia Management Group since November 2002.
</Table>
26
<Page>
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA GROWTH STOCK FUND
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Growth Stock Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the fund and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to their portfolio securities and a copy of the fund's
voting record are available (i) at www.columbiamanagement.com; (ii) on the
Securities and Exchange Commission's website at www.sec.gov and (iii) without
charge, upon request, by calling 800-368-0346.
27
<Page>
COLUMBIA FUNDS
COLUMBIA GROWTH STOCK FUND
<Table>
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
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
</Table>
28
<Page>
<Table>
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
</Table>
* The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the merger, which will
take effect on or about February 26, 2005, pending shareholder approval.
** The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the liquidation, which
will take effect on December 10, 2004.
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 and distributor subsidiaries of Columbia Management
Group, including Columbia Management Advisors, Inc., the registered investment
advisor, and Columbia Funds Distributor, Inc.
29
<Page>
[GRAPHIC]
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 GROWTH STOCK FUND ANNUAL REPORT, SEPTEMBER 30, 2004 PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[COLUMBIAFUNDS(R) LOGO]
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
755-02/974S-0904 (11/04) 04/3398
COLUMBIA
YOUNG INVESTOR
FUND
Annual Report
September 30, 2004
[photo of children playing]
[LOGO]:
COLUMBIA FUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
[Sidebar]
Table of Contents
Fund Profile.............................. 1
Performance Information................... 2
Understanding Your Expenses............... 3
Economic Update........................... 4
Portfolio Managers' Report................ 5
Financial Statements...................... 7
Investment Portfolio................... 8
Statement of Assets and Liabilities.... 13
Statement of Operations................ 14
Statements of Changes in Net Assets.... 15
Notes to Financial Statements.......... 16
Financial Highlights................... 22
Report of Independent Registered
Public Accounting Firm.................... 26
Trustees.................................. 27
Officers.................................. 29
Important Information
About This Report......................... 30
Activity Pages............................ I
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
DEAR SHAREHOLDER:
Your fund's legal and management team here at Columbia Funds have been working
hard to strengthen our mutual fund services operation and to ensure that all
operations and processes comply with legal and regulatory standards. In the
coming months, we will continue to monitor the oversight enhancements recently
put in place by your fund's Board of Trustees and make every effort to protect
the interests of all our shareholders in everything we do.
In our last report, we announced that your fund's advisor, Columbia Management
Advisors, Inc., and your fund's distributor, Columbia Funds Distributor, Inc.,
had reached an agreement with the Securities and Exchange Commission and the New
York Attorney General to settle charges involving market timing in some of our
mutual funds. We want to reassure you that the settlement and all associated
legal fees will be paid by Columbia Management, not by the affected funds or
their shareholders.
Recently the Securities and Exchange Commission has adopted new rules regarding
mutual fund governance. We think it is important for you to know that Columbia
Management complied with the majority of these rules well before they were
adopted. Your fund's Board of Trustees has taken the following important steps
to strengthen its capacity to oversee your fund and to comply with SEC rules.
O THE BOARD OF TRUSTEES APPOINTED MARY JOAN HOENE AS CHIEF COMPLIANCE OFFICER
OF COLUMBIA FUNDS. IN THIS ROLE, MS. HOENE WILL REPORT DIRECTLY TO THE
BOARD OF TRUSTEES AND WILL WORK WITH THE BOARD OF TRUSTEES AS WELL AS THE
SENIOR LEADERSHIP OF COLUMBIA MANAGEMENT, THE INVESTMENT MANAGEMENT ARM OF
BANK OF AMERICA, AND WITH BANK OF AMERICA'S PRINCIPAL COMPLIANCE
EXECUTIVES. SHE WILL FOCUS ON THE OVERALL COMPLIANCE PROGRAM OF THE FUNDS
AND THE RESPONSIBILITY AND PERFORMANCE OF THE FUND'S SERVICE PROVIDERS.
PRIOR TO HER APPOINTMENT, MS. HOENE WAS A PARTNER IN THE LAW FIRM OF
CARTER,LEDYARD & MILBURN, LLP. PREVIOUSLY SHE ALSO SERVED AS ASSOCIATE
DIRECTOR AND DEPUTY DIRECTOR FOR THE SECURITIES AND EXCHANGE COMMISSION
DIVISION OF INVESTMENT MANAGEMENT. AS AN ACTIVE ADVISOR, MS. HOENE HAS
HELPED SEVERAL FUND BOARDS DEVELOP INDEPENDENT BOARD PRACTICES. THE BOARD
IS PLEASED TO HAVE MS. HOENE, WITH HER BROAD AND EXTENSIVE EXPERIENCE, IN
THIS IMPORTANT NEW POSITION.
o THE BOARD OF TRUSTEES HAS ESTABLISHED OPERATIONAL GUIDELINES THAT RESULT IN
STRONGER, MORE VIGILANT TRUSTEESHIP ACROSS THE ENTIRE COLUMBIA MANAGEMENT
ORGANIZATION. BOARD COMMITTEES HAVE BEEN ESTABLISHED TO OVERSEE PRODUCTS BY
FUND CATEGORY, ALLOWING FOR GREATER SPECIALIZATION AMONG BOARD TRUSTEES.
SHAREHOLDERS WILL ELECT BOARD MEMBERS EVERY FIVE YEARS, BEGINNING IN 2005.
o IN ADDITION TOENHANCEMENTS TO OVERSIGHT WITHIN COLUMBIA MANAGEMENT, OUR
PARENT COMPANY--BANK OF AMERICA--HAS ALSO INCREASED THE ROLE THAT SUCH
PROFESSIONALS PLAY WITHIN THE BROADER ORGANIZATION. A CHIEF COMPLIANCE
OFFICER HAS BEEN NAMED TO REPORT DIRECTLY TO KEN LEWIS, BANK OF AMERICA'S
CHIEF EXECUTIVE OFFICER. BANK OF AMERICA HAS ALSO ADOPTED A CORPORATE CODE
OF ETHICS COMMITTEE, AN INTERNAL COMPLIANCE CONTROLS COMMITTEE AND A
REGULATORY IMPLEMENTATION GROUP TO ENSURE FULL ALIGNMENT AND EXECUTION OF
REMEDIAL ACTIONS AND BEST PRACTICES ACROSS THE COMPANY.
In the pages that follow, you'll find a discussion of the economic environment
during the period, followed by a detailed report from the fund's manager on key
factors that influenced performance. This report is rich in information, and you
should discuss it with your financial advisor if you have questions.
We are committed to providing quality products and services to our shareholders,
strengthening your confidence in us, and working hard to help you achieve
financial success. It is a privilege to play a role in your financial future,
and we value your business. Thank you for choosing Columbia Management.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
Head of Mutual Funds, Columbia Management
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's chief
liaison to the mutual fund boards of trustees.
Chris joined Bank of America in August 2004.
FUND PROFILE
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed and the composition of its
portfolio will change over time.
Sectors as of 09/30/04 (%)
- -------------------------------------
Financials 19.5
- -------------------------------------
Information technology 19.3
- -------------------------------------
Consumer discretionary 13.9
- -------------------------------------
Health care 13.0
- -------------------------------------
Energy 9.6
- -------------------------------------
Consumer staples 6.7
- -------------------------------------
Industrials 6.5
- -------------------------------------
Materials 5.8
- -------------------------------------
Telecommunication services 3.4
- -------------------------------------
Utilities 1.8
- -------------------------------------
Investment management company 0.5
- -------------------------------------
Top 10 holdings as of 09/30/04 (%)
- -------------------------------------------
Exxon Mobil Corp. 2.8
- -------------------------------------------
General Electric Co. 2.7
- -------------------------------------------
Microsoft Corp. 2.2
- -------------------------------------------
Wells Fargo & Co. 2.2
- -------------------------------------------
Citigroup, Inc. 1.9
- -------------------------------------------
American International Group, Inc. 1.9
- -------------------------------------------
Costco Wholesale Corp. 1.8
- -------------------------------------------
Medtronic, Inc. 1.6
- -------------------------------------------
Pfizer, Inc. 1.5
- -------------------------------------------
Procter & Gamble Co. 1.5
- -------------------------------------------
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments. Portfolio holdings are calculated as a percentage of net
assets.
(C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein:
(1) is proprietary to Morningstar and/or its content providers; (2) may not be
copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past performance is
no guarantee of future results.
The Morningstar Style BoxTM reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data are gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
09/30/2004.
[Sidebar]
Summary
o For the 12-month period ended September 30, 2004, the fund's class A shares
returned 11.56% without sales charge.
o A favorable environment for stocks early in the reporting period helped the
fund, its benchmark and its peer group achieve double-digit returns. The
fund's return, however, was behind both the Russell 3000 Index and the
Morningstar Large Blend Category.
o Strong gains from large-company value stocks as well as small- and mid-size
stocks helped performance. Investments in large-cap technology stocks hurt
performance.
[Illustration of two arrows pointing up]
Class A shares Russell 3000 Index
11.56% 14.26%
OBJECTIVE
Seeks long-term
growth of capital
TOTAL NET ASSETS
$779.4 million
Morningstar style box
Style-Growth // Size-Large
1
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
[mountain chart data]:
Value of a $10,000 investment 10/01/94 - 09/30/04
Class A Class A
S&P 500 Russell 3000 shares without shares with
Index Index sales charge sales charge
10/1994 $10,000 $10,000 $10,000 $ 9,425
10,225 10,165 10,410 9,811
9,853 9,794 10,205 9,618
9,999 9,947 10,487 9,884
10,258 10,165 10,526 9,921
10,658 10,579 10,773 10,153
10,972 10,843 11,147 10,506
11,295 11,126 11,275 10,626
11,746 11,530 11,462 10,803
12,019 11,863 12,426 11,711
12,418 12,340 13,174 12,416
12,449 12,450 13,341 12,574
12,974 12,931 14,059 13,251
12,928 12,820 13,774 12,982
13,495 13,389 14,560 13,723
13,756 13,608 14,659 13,816
14,223 14,002 15,232 14,356
14,356 14,209 15,436 14,549
14,493 14,353 16,080 15,155
14,706 14,626 17,164 16,177
15,086 15,000 17,991 16,957
15,143 14,952 18,338 17,284
14,474 14,170 17,122 16,138
14,779 14,599 17,890 16,861
15,611 15,394 19,054 17,959
16,042 15,675 19,319 18,208
17,255 16,780 20,076 18,922
16,913 16,579 19,803 18,665
17,970 17,496 20,724 19,533
18,111 17,515 20,185 19,025
17,366 16,723 18,841 17,758
18,403 17,548 19,687 18,555
19,524 18,746 21,211 19,991
20,398 19,526 22,227 20,949
22,022 21,057 23,771 22,405
20,789 20,202 22,956 21,636
21,928 21,348 24,079 22,694
21,196 20,630 23,380 22,036
22,177 21,421 23,963 22,585
22,559 21,849 25,007 23,569
22,809 21,963 25,157 23,711
24,453 23,533 27,175 25,612
25,706 24,700 28,227 26,604
25,965 24,942 28,548 26,907
25,519 24,326 27,572 25,987
26,555 25,148 29,149 27,473
26,273 24,691 28,193 26,572
22,474 20,908 22,963 21,643
23,915 22,334 24,348 22,948
25,859 24,029 26,023 24,527
27,426 25,500 27,558 25,974
29,006 27,121 29,419 27,727
30,218 28,044 30,784 29,014
29,278 27,051 29,694 27,987
30,449 28,044 32,016 30,175
31,628 29,308 32,829 30,942
30,881 28,752 31,697 29,874
32,595 30,203 33,247 31,335
31,578 29,288 31,488 29,677
31,424 28,954 30,849 29,075
30,563 28,213 30,167 28,432
32,497 29,982 32,653 30,775
33,157 30,822 34,720 32,723
35,110 32,788 38,737 36,509
33,347 31,503 37,838 35,662
32,717 31,796 41,304 38,929
35,917 34,285 42,526 40,081
34,836 33,079 39,018 36,775
34,122 32,149 35,417 33,380
34,964 33,101 38,693 36,468
34,419 32,515 38,058 35,870
36,556 34,927 41,868 39,460
34,626 33,345 39,913 37,618
34,481 32,872 38,591 36,372
31,764 29,841 33,748 31,808
31,919 30,342 34,845 32,841
33,052 31,380 36,566 34,464
30,038 28,512 32,804 30,917
28,134 26,653 30,268 28,528
30,320 28,790 33,137 31,232
30,523 29,021 32,932 31,038
29,781 28,487 31,720 29,896
29,489 28,017 29,642 27,938
27,643 26,364 27,642 26,052
25,410 24,038 23,918 22,543
25,895 24,599 24,734 23,312
27,881 26,493 26,940 25,391
28,126 26,866 27,183 25,620
27,716 26,530 26,443 24,923
27,181 25,989 25,742 24,262
28,203 27,127 27,272 25,703
26,494 25,703 25,613 24,141
26,298 25,405 25,104 23,660
24,425 23,576 23,306 21,966
22,523 21,702 21,265 20,042
22,669 21,804 21,154 19,938
20,205 19,512 18,933 17,844
21,983 21,065 20,466 19,290
23,278 22,340 21,999 20,734
21,911 21,077 20,510 19,331
21,337 20,561 20,088 18,933
21,017 20,222 19,776 18,639
21,221 20,434 19,954 18,807
22,970 22,104 21,487 20,251
24,180 23,439 22,619 21,318
24,490 23,755 22,685 21,380
24,921 24,299 23,172 21,840
25,407 24,839 23,884 22,510
25,137 24,568 23,263 21,925
26,560 26,054 24,707 23,287
26,794 26,414 25,063 23,622
28,198 27,621 26,108 24,607
28,717 28,198 26,398 24,880
29,116 28,579 26,575 25,047
28,676 28,239 26,264 24,754
28,226 27,654 25,707 24,229
28,613 28,055 26,196 24,689
29,168 28,613 26,662 25,129
28,202 27,532 25,707 24,229
28,315 27,645 25,574 24,103
09/2004 28,612 28,073 25,960 24,478
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
3000 Index is an unmanaged index that tracks the performance of 3,000 of the
largest US companies, based on market capitalization. The Standard & Poor's
(S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely
held, large-capitalization US stocks. The S&P 500 Index was the fund's previous
benchmark. Unlike mutual funds, 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.
[Sidebar]
Performance of a $10,000 investment
10/01/94 - 09/30/04 ($)
- ---------------------------------------
sales charge: without with
- ---------------------------------------
Class A 25,960 24,478
- ---------------------------------------
Class B 25,560 25,560
- ---------------------------------------
Class C 25,582 25,582
- ---------------------------------------
Class Z 25,915 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, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
WHAT DOES AVERAGE ANNUAL TOTAL RETURN MEAN?
The average annual total return is given for periods greater than one year.
Calculated as a percentage, this figure represents the average yearly return for
the time period specified. The chart below includes average annual returns for
the following periods: one year, five years and ten years. Returns for periods
less than one year are known as cumulative returns. A cumulative return is the
percentage that the fund has grown or shrunk in the number of months indicated.
Average annual total return as of 09/30/04 (%)
- ------------------------------------------------------------------------------------------
Share class A B C Z
- ------------------------------------------------------------------------------------------
Inception 07/29/02 07/29/02 07/29/02 04/29/94
- ------------------------------------------------------------------------------------------
Sales charge without with without with without with without
- ------------------------------------------------------------------------------------------
1-year 11.56 5.13 10.68 5.68 10.78 9.78 11.28
- ------------------------------------------------------------------------------------------
5-year -2.96 -4.10 -3.26 -3.60 -3.25 -3.25 -3.00
- ------------------------------------------------------------------------------------------
10-year 10.01 9.36 9.84 9.84 9.85 9.85 9.99
- ------------------------------------------------------------------------------------------
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME REINVESTMENT OF
DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1
FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN
SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class A, B, and C shares (newer class shares) performance information includes
returns for the fund's class Z shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. The newer class shares
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between class Z shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of the newer class shares would have been lower. Classes A, B, and C shares were
initially offered July 29, 2002 and class Z shares were initially offered April
29, 1994.
2
UNDERSTANDING YOUR EXPENSES
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, and/or Rule 12b-1 fees, and other fund
expenses. The information on this page is intended to help you understand your
ongoing costs of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
[Sidebar]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o For shareholders who receive their account statements from Columbia Funds
Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at 800.345.6611
o For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance
1. Divide your ending account balance by $1,000. For example, if an account
balance was $8,600 at the end of the period, the result would be 8.6
2. In the section of the table below titled "Expenses paid during the period,"
locate the amount for your share class. You will find this number is in the
column labeled "actual." Multiply this number by the result from step 1.
Your answer is an estimate of the expenses you paid on your account during
the period
April 1, 2004 - September 30, 2004
- ----------------------------------------------------------------------------------------------------------------------------
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period ($) end of the period ($) during the period ($) expense ratio (%)
- ----------------------------------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- ----------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 989.75 1,018.95 6.02 6.11 1.21
- ----------------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 986.15 1,015.45 9.48 9.62 1.91
- ----------------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 986.15 1,015.45 9.48 9.62 1.91
- ----------------------------------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 988.30 1,018.55 6.41 6.51 1.29
- ----------------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
366.
Had the Investment Advisor not waived or reimbursed a portion of Class A, B,
and C shares transfer agent expenses, total return would have been reduced for
Class A, B, and C shares.
Had the Distributor not waived a portion of Class A share distribution fee,
total return would have been reduced for Class A shares.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
3
ECONOMIC UPDATE
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
Despite uncertainty about job growth, rising energy prices and a slowdown in
consumer spending, the US economy grew at a pace of more than 4.5% during the
12-month period that began October 1, 2003, and ended September 30, 2004. Growth
encountered a soft patch in the second quarter of 2004, but monthly data
suggested that it picked up again in the third quarter.
Job growth dominated the economic news during this reporting period. When more
than one million jobs were created in the spring of 2004, consumer confidence
soared to its highest level in two years. However, when job growth fell below
expectations during the summer months, consumer confidence also fell. According
to the Labor Department's payroll survey, the job market has not fully recovered
from the losses incurred during the economic downturn of 2000-2001, and that has
left consumers more cautious about the months ahead.
Consumer spending held up for most of the period, as last year's tax rebates and
tax cuts worked their way into household budgets. Even when spending declined
during the summer, housing activity remained strong. Also, the business sector
stepped into the gap created by sagging consumer spending. Industrial production
rose; factories utilized more of their capacity; and spending on technology,
capital equipment and construction picked up.
STOCKS OUTPERFORMED BONDS
Buoyed by strong gains at the beginning of the period, the S&P 500
Index returned 13.87% during this 12-month reporting period. However, concerns
about new terror threats and higher interest rates and energy prices helped
sideline investors as the period wore on. Late in the period, leadership passed
from small-cap stocks to mid- and large-cap stocks. Value stocks continued to
lead growth stocks until the final month of the period, when small- and mid-cap
growth stocks bested their value counterparts. Energy and real estate investment
trusts were the best-performing sectors.
BONDS DELIVER RESPECTABLE GAINS
Despite periods of interest-rate volatility, the US bond market delivered
respectable gains during the period. Bond prices sagged in the spring when job
growth picked up and investors began to anticipate higher short-term interest
rates. However, a shaky stock market, higher energy prices and some mixed
economic data gave the bond market a boost in the last three months of the
period. The 10-year Treasury yield ended the period at 4.1%, very close to where
it started.
In this environment, the Lehman Brothers Aggregate Bond Index returned 3.68%.
High-yield bonds gained 12.23%, as measured by the Merrill Lynch US High Yield,
Cash Pay Index. However, most of those gains were achieved during the first half
of the reporting period. In the second half, slower economic growth and high
valuations made high-yield bonds less attractive.
After a year of the lowest short-term interest rates in recent history, the
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.0% to 1.75% in three equal steps during the period. The Fed
indicated that it would continue to raise short-term interest rates at a
"measured pace," in an attempt to balance economic growth against inflationary
pressures.
[SIDEBAR DATA]:
Summary
For the 12-month period
ended September 30, 2004
o Stock prices rose, as measured by the S&P 500 Index and the broader Russell
3000 Index. Many sectors retreated as short-term interest rates moved
higher in the summer and a host of uncertainties unsettled investors.
[Illustration of two arrows pointing up]
S&P 500 Index Russell 3000 Index
13.87% 14.26%
o Despite interest rate volatility, investment grade bonds chalked up
respectable gains. The Lehman Brothers Aggregate Bond Index returned 3.68%.
High-yield bonds, which can be less sensitive to changing interest rates,
led the fixed income markets. The Merrill Lynch US High Yield, Cash Pay
Index returned 12.23%.
[Illustration of two arrows pointing up]
Merrill Lynch Index Lehman Index
12.23% 3.68%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 3000 Index is an unmanaged index that tracks the performance of the
3,000 largest US companies based on total market capitalization.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated,
non-convertible investment grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
4
PORTFOLIO MANAGERS' REPORT
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
[SIDE BAR DATA]:
Net asset value per share
as of 09/30/04 ($)
- ------------------------------------
Class A 11.68
- ------------------------------------
Class B 11.50
- ------------------------------------
Class C 11.51
- ------------------------------------
Class Z 10.16
- ------------------------------------
Holdings discussed in this report
as of 09/30/04 (%)
- ---------------------------------------------------
Novellus Systems, Inc. 0.7
- ---------------------------------------------------
ASML Holding N.V., N.Y. Registered Shares 0.8
- ---------------------------------------------------
Intel Corp. 0.1
- ---------------------------------------------------
Exxon Mobil Corp. 2.8
- ---------------------------------------------------
ConocoPhillips 1.3
- ---------------------------------------------------
Schlumberger Ltd. 1.3
- ---------------------------------------------------
Amerada Hess Corp. 0.9
- ---------------------------------------------------
Carpenter Technology Corp. 0.7
- ---------------------------------------------------
Monsanto Co. 0.4
- ---------------------------------------------------
General Electric Co. 2.7
- ---------------------------------------------------
American International Group, Inc. 1.9
- ---------------------------------------------------
Aetna, Inc. 0.7
- ---------------------------------------------------
Cigna Corp. 0.7
- ---------------------------------------------------
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
DID YOU KNOW?
Three different managers run your fund, and each one follows a different
investment discipline. The idea is that over time a blend of these three
approaches may result in superior investment performance. Of course, there are
no guarantees about performance, but that is our goal.
About one-third of the fund's assets are invested in large-company growth
stocks, one-third in large-company value stocks and one-third in the stocks of
small- and medium-sized companies. Paul Blaustein manages the large-company
growth portfolio. He invests in companies with superior earnings growth and
profit potential and plans to hold onto them for the long term. Greg Miller
manages the large-cap value portfolio. Mr. Miller is a bargain hunter. He
targets stocks that are priced below what he thinks theyreally worth. Finally,
Mike Welhoelter manages the small and medium-sized stock portfolio. He uses
computer models to target companies with high quality financial characteristics,
reasonable stock prices and improving business trends.
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
During the 12-month period ended September 30, 2004, the fund's class A shares
returned 11.56%. This return was calculated before the sales charge was
deducted. The fund's return was lower than the 14.26% return of the Russell 3000
Index. The index measures the performance of small-, medium- and large-company
stocks. The fund also fell short of the 12.22% average return of its peer group,
the Morningstar(R) Large Blend Category.1
The fund's investments in large-cap value stocks, as well as in small- and
mid-size stocks, helped performance. Returns from the growth portion of the
fund, however, were disappointing. The biggest losers were technology stocks.
WHAT KIND OF STOCKS DID THE BEST DURING THE PERIOD?
Large-company value stocks and small- and mid-size company stocks posted big
gains in the last few months of 2003. Many of these stocks had fallen sharply
between 2000 and 2002, but their prospects improved when the economy got
stronger. In the early stages of an economic recovery, value stocks tend to do
better than growth stocks. And small-cap stocks often beat large-cap stocks. In
the later stages of an economic recovery, when many companies find it harder to
maintain a high level of profit growth, growth stocks tend to have the
advantage.
WHICH SECTORS DID YOU FAVOR?
The fund's largest investment positions were in the financial, technology,
consumer discretionary and health care sectors. We found attractive, long-term
growth opportunities in tech companies with unique products that could command
the prices they wanted. We liked these stocks because of their overall
qualities, but also because we expected technology stocks to benefit from a
growing economy at home as well as in other parts of the world. Unfortunately,
we were disappointed. Investors got nervous about sales and profits and tech
stocks fell in 2004. Some of the weakest performers were companies such as
Novellus Systems, ASML Holding and Intel that make the "chips" (or brains) for
personal computers, cellular phones and many other products.
WHERE DID THE BIGGEST GAINS COME FROM?
Energy stocks soared as prices for crude oil and natural gas skyrocketed. Among
the fund's strongest performers were Exxon Mobil, ConocoPhillips, Schlumberger,
and Amerada Hess. An improving economy also helped industrial and materials
stocks, such as Carpenter Technology. This small materials company produces
metal products for planes, cars, medical devices and golf clubs. Its stock price
climbed sharply because the company cut costs and improved productivity and
manufacturing efficiency. These steps led to higher sales and profits.
An investment in Monsanto, a mid-sized chemical products company, also did quite
well. Monsanto is known for its agricultural chemicals, including the weed
killer Round-Up. Demand for Monsanto's products was strong. It
1 (C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be
copied or redistributed for any purpose and may only be used for
noncommercial, personal purposes. The information contained herein is not
represented or warranted to be accurate, correct, complete or timely.
Morningstar, Inc. shall not be responsible for investment decisions,
damages or other losses resulting from the use of this information. Past
performance is no guarantee of future performance. Morningstar, Inc. has
not granted consent for it to be considered or deemed an "expert" under the
Securities Act of 1933. Morningstar categories compare the performance of
funds with similar investment objectives and strategies.
5
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
also has attractive prospects for a promising new business: The company is
working on engineering genetically altered seeds that can help growers get a
higher yield from their plantings.
In the industrial sector, General Electric (GE) was a top holding. The company
was helped by strength in its military aircraft engines business and an expected
recovery in the power generation business. In addition, GE refocused its
business portfolio onto markets that are experiencing faster growth. The company
also benefited from a pickup in the global economy.
HOW DID A STRONGER ECONOMY AFFECT THE FUND?
It helped the fund's investment in financial stocks, which represented a large
percentage of the portfolio. An improving economy helped households and
businesses pay their bills on time, and that translated into higher profits for
lenders. Some people were worried that bank stocks wouldn't do well if interest
rates rose. Rates did rise during the period, but not as fast, as early or as
high as many people expected, and that was a plus for bank stocks. Insurance
stocks also fared well within the financial sector. American International
Group, a global insurer, was one of the fund's strongest performers. However,
companies that trade securities or handle mergers and acquisitions didn't do
nearly as well as banks, lenders and insurance companies.
A stronger economy also made it possible for large health insurers to attract
new subscribers, because more than one million new jobs were added to the
economy over the past year. Large health insurers, such as Aetna and CIGNA,
benefited from this trend. By contrast, large drug companies remained under
pressure. Many of them are facing patent expirations and a shortage of new
blockbuster drugs.
WHAT IS YOUR OUTLOOK FOR STOCKS GOING FORWARD?
We're optimistic that stocks will benefit from continued economic growth. Yet we
recognize that higher interest rates, high energy prices, the war in Iraq and
terrorist threats could unsettle the markets. Regardless of what happens, our
plan is to own the best stocks in each of our three investment disciplines. We
are encouraged by prospects in each area. Large-cap growth stocks appear
reasonably priced with strong potential for gains in the later stages of the
economic recovery. Large-cap value stocks also stand to benefit from an extended
economic recovery. Many value stocks also pay dividends, which offer a measure
of protection in the event of a market downturn. Finally, we continue to find
opportunities among small- and mid-sized stocks.
[photo of Greg Miller]
/s/ Greg Miller
[photo of Michael A. Welhoelter]
/s/ Michael A. Welhoelter
[photo of Paul A. Blaustein]
/s/ Paul A. Blaustein
Greg Miller, Michael A. Welhoelter, CFA, and Paul A. Blaustein, CFA lead the
team of portfolio managers who manage the portfolio of Columbia Young Investor
Fund. Mr. Miller and Mr. Welhoelter have been co-managing the fund since June
2003. Mr. Blaustein has been co-managing the fund since November 2003.
[sidebar]
DID YOU KNOW?
Growth investors look toward the future and try to estimate how fast a company's
earnings and revenues will grow. They expect a company with rapid earnings and
revenue growth to produce a better stock return than a company with slower
growth. For us, the best growth stocks also have strong competitive positions
(often because they have unique or cutting edge products), a high level of
profits and the ability to sustain their growth rates over the long term. We
often find companies meeting these criteria in the technology sector. Although
many technology stocks have not performed well recently, we still believe they
offer good long-term prospects for growth. We expect reduced prices for
bandwidth, which measures how fast electronic data can travel, and innovative
products to continue to fuel strong gains for the sector. Many of the fund's
growth stocks from other sectors rely heavily on technology to run and improve
their business.
An investment in the fund offers the potential for long-term growth but also
involves certain risks. The fund may be affected by stock market fluctuations
that occur in response to economic and business developments. Since the fund is
actively managed, there can be no guarantee that the fund will continue to
maintain the holdings described in this report.
The prices of small- and medium-sized companies may be more volatile than those
of larger, more established firms.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special 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.
A concentration of investments in a specific sector, such as technology, may
cause a fund to experience increased volatility.
6
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market value
as of the last day of the reporting period. Portfolio holdings are organized by type
of asset, industry, country or geographic region (if applicable) to demonstrate
areas of concentration and diversification.
------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price
for each share class as of the last day of the reporting period. Net assets are
calculated by subtracting all the fund's liabilities (including any unpaid expenses)
from the total of the fund's investment and non-investment assets. The share price
for each class is calculated by dividing net assets for that class by the number of
shares outstanding in that class as of the last day of the reporting period.
------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the
fund during the reporting period. The Statement of Operations also shows any net
gain or loss the fund realized on the sales of its holdings during the period, as
well as any unrealized gains or losses recognized over the period. The total of
these results represents the fund's net increase or decrease in net assets from
operations.
------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating
results, distributions to shareholders and shareholder transactions (e.g.,
subscriptions, redemptions and dividend reinvestments) during the reporting period.
The Statement of Changes in Net Assets also details changes in the number of shares
outstanding.
------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees and
compensation paid to affiliates and significant risks and contingencies.
------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was
affected by the fund's operating results. The financial highlights table also
discloses the classes' performance and certain key ratios (e.g., class expenses and
net investment income as a percentage of average net assets).
7
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
COMMON STOCKS - 98.4%
CONSUMER DISCRETIONARY - 13.7%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
AUTO COMPONENTS - 0.3% Autoliv, Inc. 59,300 2,395,720
Auto Components Total 2,395,720
-----------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 0.8% Choice Hotels International, Inc. 46,600 2,683,694
McDonald's Corp. 45,883 1,286,100
Wendy's International, Inc. 75,270 2,529,072
Hotels, Restaurants & Leisure Total 6,498,866
-----------------------------------------------------------------------------
HOUSEHOLD DURABLES - 0.7% Applica, Inc. 166,900 674,276
Stanley Works 104,300 4,435,879
Household Durables Total 5,110,155
-----------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS - 0.4% Marvel Enterprises, Inc. (a) 206,700 3,009,552
Leisure Equipment & Products Total 3,009,552
-----------------------------------------------------------------------------
MEDIA - 7.5% Clear Channel Communications, Inc. 71,982 2,243,679
Comcast Corp., Class A (a) 248,200 7,009,168
Getty Images, Inc. (a) 126,600 7,000,980
Lee Enterprises, Inc. 64,200 2,975,028
Liberty Media Corp., Class A (a) 396,400 3,456,608
Liberty Media International, Inc., Class A (a) 24,810 827,711
McClatchy Co., Class A 113,600 8,046,288
McGraw-Hill Companies, Inc. 34,282 2,731,933
News Corp. Ltd., ADR 115,900 3,809,633
R.H. Donnelley Corp. (a) 66,600 3,287,376
Time Warner Inc. (a) 358,200 5,781,348
Viacom Inc. 332,600 11,162,056
Media Total 58,331,808
-----------------------------------------------------------------------------
MULTILINE RETAIL - 0.7% Sears, Roebuck and Co. 141,600 5,642,760
Multiline Retail Total 5,642,760
-----------------------------------------------------------------------------
SPECIALTY RETAIL - 2.8% Abercrombie & Fitch Co., Class A 161,100 5,074,650
Barnes & Noble, Inc. (a) 148,600 5,498,200
Home Depot, Inc. 143,677 5,632,138
Limited Brands 90,200 2,010,558
Lowe's Companies, Inc. 65,500 3,559,925
Specialty Retail Total 21,775,471
-----------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS - 0.5% Kellwood Co. 112,100 4,086,045
Textiles, Apparel & Luxury Goods Total 4,086,045
------------
CONSUMER DISCRETIONARY TOTAL 106,850,377
CONSUMER STAPLES - 6.6%
- ------------------------------------------ -----------------------------------------------------------------------------
BEVERAGES - 0.4% PepsiCo, Inc. 72,196 3,512,335
Beverages Total 3,512,335
-----------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 3.0% Costco Wholesale Corp. 331,103 13,760,641
Wal-Mart Stores, Inc. 187,700 9,985,640
Food & Staples Retailing Total 23,746,281
-----------------------------------------------------------------------------
FOOD PRODUCTS - 0.4% Chiquita Brands International, Inc. (a) 158,900 2,766,449
Food Products Total 2,766,449
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
CONSUMER STAPLES - (continued)
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 2.8% Clorox Co. 50,772 2,706,148
Colgate-Palmolive Co. 160,400 7,246,872
Procter & Gamble Co. 213,786 11,570,098
Household Products Total 21,523,118
------------
CONSUMER STAPLES TOTAL 51,548,183
ENERGY - 9.4%
- ------------------------------------------ -----------------------------------------------------------------------------
ENERGY EQUIPMENT & Services - 1.7% Halliburton Co. 90,208 3,039,108
Schlumberger Ltd. 149,300 10,049,383
Energy Equipment & Services Total 13,088,491
-----------------------------------------------------------------------------
OIL & GAS - 7.7% Amerada Hess Corp. 77,600 6,906,400
BP PLC, ADR 110,896 6,379,847
ChevronTexaco Corp. 25,966 1,392,816
ConocoPhillips 120,800 10,008,280
Exxon Mobil Corp. 458,534 22,160,948
Newfield Exploration Co. (a) 130,600 7,997,944
Stone Energy Corp. (a) 82,900 3,627,704
Todco, Class A (a) 117,100 2,031,685
Oil & Gas Total 60,505,624
------------
ENERGY TOTAL 73,594,115
FINANCIALS - 19.3%
- ------------------------------------------ -----------------------------------------------------------------------------
CAPITAL MARKETS - 1.5% Bank of New York Co. Inc. 108,435 3,163,049
Merrill Lynch & Co., Inc. 70,300 3,495,316
Morgan Stanley 96,800 4,772,240
Capital Markets Total 11,430,605
-----------------------------------------------------------------------------
COMMERCIAL BANKS - 4.9% City National Corp. 66,000 4,286,700
Texas Regional Bancshares, Inc., Class A 91,050 2,830,744
UnionBanCal Corp. 88,200 5,222,322
US Bancorp 203,700 5,886,930
Wachovia Corp. 58,270 2,735,777
Wells Fargo & Co. 286,200 17,066,106
Commercial Banks Total 38,028,579
-----------------------------------------------------------------------------
CONSUMER FINANCE - 0.3% MBNA Corp. 108,927 2,744,960
Consumer Finance Total 2,744,960
-----------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 3.2% Citigroup, Inc. 339,010 14,957,121
JPMorgan Chase & Co. 190,970 7,587,238
NTL, Inc. (a) 35,100 2,178,657
Diversified Financial Services Total 24,723,016
-----------------------------------------------------------------------------
INSURANCE - 6.8% AFLAC, Inc. 82,034 3,216,553
American International Group, Inc. 218,475 14,854,115
CNA Financial Corp. (a) 75,900 1,822,359
Hartford Financial Services Group, Inc. 32,556 2,016,193
Lincoln National Corp. 145,300 6,829,100
Marsh & McLennan Companies, Inc. 29,733 1,360,582
SAFECO Corp. 165,300 7,545,945
UICI 222,800 7,294,472
Willis Group Holdings Ltd. 138,450 5,178,030
XL Capital Ltd., Class A 36,653 2,711,956
Insurance Total 52,829,305
-----------------------------------------------------------------------------
REAL ESTATE - 2.2% AvalonBay Communities, Inc., REIT 112,400 6,768,728
Kimco Realty Corp., REIT 73,600 3,775,680
Rayonier, Inc., REIT 155,981 7,056,581
Real Estate Total 17,600,989
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
FINANCIALS - (continued)
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE - 0.4% Federal Home Loan Mortgage Corp. 48,891 3,189,649
Thrifts & Mortgage Finance Total 3,189,649
------------
FINANCIALS TOTAL 150,547,103
HEALTH CARE - 12.9%
- ------------------------------------------ -----------------------------------------------------------------------------
BIOTECHNOLOGY - 1.0% Amgen, Inc. (a) 136,100 7,714,148
Biotechnology Total 7,714,148
-----------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.6% Medtronic, Inc. 242,200 12,570,180
Health Care Equipment & Supplies Total 12,570,180
-----------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 5.5% Aetna, Inc. 56,223 5,618,364
Cardinal Health, Inc. 139,800 6,119,046
CIGNA Corp. 82,000 5,709,660
Coventry Health Care, Inc. (a) 154,350 8,237,660
IMS Health, Inc. 303,400 7,257,328
Lincare Holdings, Inc. (a) 61,500 1,827,165
Medco Health Solutions, Inc. (a) 252,300 7,796,070
Health Care Providers & Services Total 42,565,293
-----------------------------------------------------------------------------
PHARMACEUTICALS - 4.8% Bristol-Myers Squibb Co. 50,295 1,190,483
Eon Labs, Inc. (a) 44,900 974,330
Johnson & Johnson 167,400 9,429,642
Merck & Co., Inc. 54,983 1,814,439
Novartis AG, ADR 217,800 10,164,726
Pfizer, Inc. 385,313 11,790,578
Pharmion Corp. (a) 36,400 1,881,734
Pharmaceuticals Total 37,245,932
------------
HEALTH CARE TOTAL 100,095,553
INDUSTRIALS - 6.4%
- ------------------------------------------ -----------------------------------------------------------------------------
AEROSPACE & DEFENSE - 1.5% Honeywell International, Inc. 109,570 3,929,180
United Technologies Corp. 79,972 7,467,786
Aerospace & Defense Total 11,396,966
-----------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 1.2% Cendant Corp. 58,010 1,253,016
Pitney Bowes, Inc. 116,200 5,124,420
Waste Management, Inc. 100,919 2,759,125
Commercial Services & Supplies Total 9,136,561
-----------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 3.2% 3M Co. 54,100 4,326,377
General Electric Co. 622,455 20,902,039
Industrial Conglomerates Total 25,228,416
-----------------------------------------------------------------------------
MACHINERY - 0.5% Ingersoll-Rand Co., Ltd., Class A 58,387 3,968,564
Machinery Total 3,968,564
------------
INDUSTRIALS TOTAL 49,730,507
INFORMATION TECHNOLOGY - 19.1%
- ------------------------------------------ -----------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 1.7% Cisco Systems, Inc. (a) 463,200 8,383,920
Scientific-Atlanta, Inc. 197,000 5,106,240
Communications Equipment Total 13,490,160
-----------------------------------------------------------------------------
COMPUTERS & Peripherals - 1.9% Dell, Inc. (a) 228,800 8,145,280
International Business Machines Corp. 44,784 3,839,780
Lexmark International, Inc., Class A (a) 35,181 2,955,556
Computers & Peripherals Total 14,940,616
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (continued)
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & Instruments - 0.7% Avnet, Inc. (a) 332,300 5,688,976
Electronic Equipment & Instruments Total 5,688,976
-----------------------------------------------------------------------------
INTERNET SOFTWARE & Services - 0.7% InfoSpace, Inc. (a) 85,400 4,047,106
United Online, Inc. (a) 182,400 1,754,688
Internet Software & Services Total 5,801,794
-----------------------------------------------------------------------------
IT SERVICES - 2.4% Accenture Ltd., Class A (a) 135,987 3,678,449
Computer Sciences Corp. (a) 164,400 7,743,240
Convergys Corp. (a) 96,000 1,289,280
Electronic Data Systems Corp. 77,000 1,493,030
Paychex, Inc. 144,600 4,359,690
IT Services Total 18,563,689
-----------------------------------------------------------------------------
OFFICE ELECTRONICS - 0.3% Xerox Corp. (a) 142,900 2,012,032
Office Electronics Total 2,012,032
-----------------------------------------------------------------------------
SEMICONDUCTORS & Semiconductor Equipment - 6.7% Altera Corp. (a) 411,300 8,049,141
Analog Devices, Inc. 121,300 4,704,014
Applied Materials, Inc. (a) 355,900 5,868,791
ASML Holding N.V., N.Y. Registered Shares (a) 479,300 6,168,591
Intel Corp. 26,500 531,590
Marvell Technology Group Ltd. (a) 101,600 2,654,808
Maxim Integrated Products, Inc. 181,200 7,662,948
Microchip Technology, Inc. 139,700 3,749,548
Novellus Systems, Inc. (a) 204,000 5,424,360
Xilinx, Inc. 264,200 7,133,400
Semiconductors & Semiconductor Equipment Total 51,947,191
-----------------------------------------------------------------------------
SOFTWARE - 4.7% Adobe Systems, Inc. 158,500 7,840,995
Autodesk, Inc. 90,200 4,386,426
Electronic Arts, Inc. (a) 51,967 2,389,962
Microsoft Corp. 629,049 17,393,205
SAP AG 114,100 4,444,195
Software Total 36,454,783
------------
INFORMATION TECHNOLOGY TOTAL 148,899,241
MATERIALS - 5.8%
- ------------------------------------------ -----------------------------------------------------------------------------
CHEMICALS - 2.7% Air Products & Chemicals, Inc. 82,882 4,507,123
Monsanto Co. 95,400 3,474,468
OM Group, Inc. (a) 209,700 7,666,632
PPG Industries, Inc. 60,600 3,713,568
Sigma-Aldrich Corp. 34,500 2,001,000
Chemicals Total 21,362,791
-----------------------------------------------------------------------------
CONSTRUCTION MATERIALS - 0.7% Vulcan Materials Co., Inc. 98,800 5,033,860
Construction Materials Total 5,033,860
-----------------------------------------------------------------------------
CONTAINERS & Packaging - 1.0% Temple-Inland, Inc. 114,000 7,655,100
Containers & Packaging Total 7,655,100
-----------------------------------------------------------------------------
METALS & Mining - 0.7% Carpenter Technology Corp. 117,600 5,614,224
Metals & Mining Total 5,614,224
-----------------------------------------------------------------------------
PAPER & Forest Products - 0.7% Georgia-Pacific Corp. 86,100 3,095,295
Potlatch Corp. 45,800 2,143,898
Paper & Forest Products Total 5,239,193
------------
MATERIALS TOTAL 44,905,168
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
Common Stocks - (continued)
TELECOMMUNICATION SERVICES - 3.4%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 3.1% BellSouth Corp. 146,800 3,981,216
CenturyTel, Inc. 207,200 7,094,528
SBC Communications, Inc. 236,022 6,124,771
Verizon Communications, Inc. 178,817 7,041,813
Diversified Telecommunication Services Total 24,242,328
WIRELESS TELECOMMUNICATION SERVICES - 0.3% Telephone and Data Systems, Inc. 24,400 2,053,748
Wireless Telecommunication Services Total 2,053,748
------------
TELECOMMUNICATION SERVICES TOTAL 26,296,076
UTILITIES - 1.8%
- ------------------------------------------ -----------------------------------------------------------------------------
ELECTRIC UTILITIES - 1.5% Consolidated Edison, Inc. 126,100 5,301,244
Entergy Corp. 50,207 3,043,046
PG&E Corp. (a) 30,500 927,200
Southern Co. 18,712 560,986
TXU Corp. 42,600 2,041,392
Electric Utilities Total 11,873,868
-----------------------------------------------------------------------------
MULTI-UTILITIES & Unregulated Power - 0.3% Questar Corp. 46,500 2,130,631
Multi-Utilities & Unregulated Power Total 2,130,631
------------
UTILITIES TOTAL 14,004,499
------------
TOTAL COMMON STOCKS (cost of $674,097,873) 766,470,822
INVESTMENT MANAGEMENT COMPANY - 0.5%
- ------------------------------------------ -----------------------------------------------------------------------------
iShares Russell 1000 Value Index Fund 63,877 3,868,391
------------
TOTAL INVESTMENT MANAGEMENT COMPANY (cost of $3,654,218) 3,868,391
SHORT-TERM OBLIGATION - 0.5% Par ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Repurchase agreement with State Street Bank &
Trust Co., dated 09/30/04 due 10/01/04 at 1.580%
collateralized by U.S. Treasury Bonds and Notes
with various maturities to 02/15/31, market value
$4,151,882 (repurchase proceeds $4,065,178) 4,065,000 4,065,000
------------
TOTAL SHORT-TERM OBLIGATION (cost of $4,065,000) 4,065,000
TOTAL INVESTMENTS - 99.4%
(COST OF $681,817,091) (B) 774,404,213
OTHER ASSETS & Liabilities, Net - 0.6% 5,008,582
NET ASSETS - 100.0% 779,412,795
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $682,157,398.
ACRONYM NAME
- ------------- ------------------------
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
12
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
($)
- ------------------------------------------ ------------------------------------------------------------------------------
ASSETS Investments, at cost 681,817,091
Investments, at value 774,404,213
Cash 2,151
Receivable for:
Investments sold 10,387,505
Fund shares sold 54,596
Interest 178
Dividends 572,718
Expense reimbursement due from Investment Advisor 95,058
Deferred Trustees' compensation plan 15,855
------------
Total Assets 785,532,274
------------------------------------------------------------------------------
LIABILITIES Payable for:
Investments purchased 4,395,729
Fund shares repurchased 374,289
Investment advisory fee 374,127
Administration fee 116,287
Transfer agent fee 586,923
Pricing and bookkeeping fees 16,993
Trustees' fees 2,001
Custody fee 3,933
Reports to shareholders 165,734
Distribution and service fees 31,624
Deferred Trustees' fees 15,855
Other liabilities 35,984
------------
Total Liabilities 6,119,479
NET ASSETS 779,412,795
------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 869,713,326
Undistributed net investment income 1,488,435
Accumulated net realized loss (184,376,088)
Net unrealized appreciation on investments 92,587,122
------------
NET ASSETS 779,412,795
------------------------------------------------------------------------------
CLASS A Net assets 94,386,103
Shares outstanding 8,081,956
Net asset value per share 11.68(a)
Maximum offering price per share ($11.68/0.9425) 12.39(b)
------------------------------------------------------------------------------
CLASS B Net assets 6,081,903
Shares outstanding 528,697
Net asset value and offering price per share 11.50(a)
------------------------------------------------------------------------------
CLASS C Net assets 798,400
Shares outstanding 69,375
Net asset value and offering price per share 11.51(a)
------------------------------------------------------------------------------
CLASS Z Net assets 678,146,389
Shares outstanding 66,715,367
Net asset value, offering and redemption price per share 10.16
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
13
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year Ended September 30, 2004
Columbia Young Investor Fund
($)
- ------------------------------------------ ------------------------------------------------------------------------------
INVESTMENT INCOME Dividends 12,913,604
Interest 50,626
------------
Total Investment Income
(net of foreign taxes withheld of $50,018) 12,964,230
----------------------------------------------------------------------------
EXPENSES Investment advisory fee 4,756,239
Administration fee 1,478,974
Distribution fee:
Class A 99,933
Class B 50,972
Class C 5,680
Service fee:
Class A 249,887
Class B 16,991
Class C 1,893
Transfer agent fee:
Class A 1,207,638
Class B 42,191
Class C 6,508
Class Z 4,167,188
Pricing and bookkeeping fees 221,918
Trustees' fees 20,808
Custody fee 45,071
Non-recurring costs (See Note 7) 38,858
Other expenses 587,773
------------
Total Expenses 12,998,522
Fees and expenses waived or reimbursed by Investment Advisor:
Class A (1,049,650)
Class B (30,950)
Class C (5,381)
Fees waived by Distributor - Class A (49,956)
Non-recurring costs assumed by Investment Advisor (See Note 7) (38,858)
Custody earnings credit (2,282)
------------
Net Expenses 11,821,445
------------
Net Investment Income 1,142,785
----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED Net realized gain on investments 79,300,117
GAIN (LOSS) ON INVESTMENTS Net change in unrealized appreciation/depreciation on investments 7,949,049
------------
Net Gain 87,249,166
------------
Net Increase in Net Assets from Operations 88,391,951
See Accompanying Notes to Financial Statements.
14
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Columbia Young Investor Fund
YEAR ENDED
SEPTEMBER 30,
-------------------------
INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 ($)
- ------------------------------------------ ------------------------------------------------------------------------------
OPERATIONS Net investment income (loss) 1,142,785 (2,300,743)
Net realized gain (loss) on investments 79,300,117 (56,715,298)
Net change in unrealized appreciation/depreciation
on investments 7,949,049 208,670,172
-------------------------
Net Increase from Operations 88,391,951 149,654,131
----------------------------------------------------------------------------
SHARE TRANSACTIONS Class A
Subscriptions 5,875,316 7,644,323
Redemptions (16,955,769) (14,032,114)
-------------------------
Net Decrease (11,080,453) (6,387,791)
Class B
Subscriptions 628,365 771,614
Redemptions (2,147,700) (1,742,729)
-------------------------
Net Decrease (1,519,335) (971,115)
Class C
Subscriptions 182,250 173,069
Redemptions (113,350) (116,948)
-------------------------
Net Increase 68,900 56,121
Class Z
Subscriptions 42,087,456 49,798,986
Redemptions (115,275,588) (78,078,650)
-------------------------
Net Decrease (73,188,132) (28,279,664)
Net Decrease from Share Transactions (85,719,020) (35,582,449)
Total Increase in Net Assets 2,672,931 114,071,682
----------------------------------------------------------------------------
NET ASSETS Beginning of period 776,739,864 662,668,182
End of period (including undistributed net investment
income of $1,488,435 and $250,843, respectively) $779,412,795 $776,739,864
----------------------------------------------------------------------------
CHANGES IN SHARES Class A
Subscriptions 506,593 800,725
Redemptions (1,458,671) (1,457,386)
-------------------------
Net Decrease (952,078) (656,661)
Class B
Subscriptions 54,732 79,511
Redemptions (187,544) (182,289)
-------------------------
Net Decrease (132,812) (102,778)
Class C
Subscriptions 15,881 18,211
Redemptions (10,012) (12,056)
-------------------------
Net Increase 5,869 6,155
Class Z
Subscriptions (a) 4,164,659 5,931,393
Redemptions (a) (11,357,922) (9,268,147)
-------------------------
Net Decrease (7,193,263) (3,336,754)
(a) Shares purchased prior to July 25, 2003 have been adjusted to reflect a
2-for-1 share split.
See Accompanying Notes to Financial Statements.
15
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
NOTE 1. ORGANIZATION
Columbia Young Investor Fund (the "Fund"), a series of Columbia Funds Trust XI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
INVESTMENT GOALS
The Fund seeks long-term growth of capital. The Fund also has an educational
objective to teach investors, especially young people, about basic economic
principles and personal finance through a variety of educational materials
prepared and paid for by the Fund.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
Effective October 13, 2003, the Liberty Young Investor Fund was renamed Columbia
Young Investor Fund. Also on this date, the Liberty-Stein Roe Funds Investment
Trust was renamed Columbia Funds Trust XI.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Equity securities 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 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
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to the value
of the repurchase obligation including interest. A repurchase agreement
transaction involves certain risks in the event of default or insolvency of the
counterparty. These risks include possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities and a possible decline in
the
16
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
value of the underlying securities during the period while the Fund seeks to
assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date, except for certain foreign securities which
are recorded as soon after ex-date as the Fund becomes aware of such, net of
non-reclaimable tax withholdings. Awards from class action litigation are
recorded as a reduction of cost if the fund still owns the applicable securities
on payment date. If the Fund no longer owns the applicable securities, the
proceeds are recorded as realized gains.
The Fund estimates components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Fund no longer owns the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
Effective April 1, 2004, the Fund adopted the policy to reduce cost of
investments for financial statement purposes by the distributions received in
excess of income from REITs. The cumulative effect of this accounting change did
not impact the net assets of the Fund, but resulted in reclassifications as
follows:
Decrease in Undistributed
Decrease in Cost Net Investment Income
- ----------------------------------------------------------------
$35,486 $35,486
- ----------------------------------------------------------------
The effect of the change for the year ended September 30, 2004 is as follows:
Decrease in Increase to
Decrease in Cost Dividend Income Realized Gain
- ----------------------------------------------------------------
$10,701 $20,313 $9,612
- ----------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
For the year ended September 30, 2004, permanent differences resulting primarily
from differing treatments for REIT adjustments, non-deductible excise tax paid,
partnership adjustments and permanently lost capital loss carryforwards due to
limitations were identified and reclassified among the components of the Fund's
net assets as follows:
Undistributed Accumulated Paid-In
Net Investment Income Net Realized Loss Capital
- ----------------------------------------------------------------
$130,293 $9,284,457 $(9,414,750)
- ----------------------------------------------------------------
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by this
reclassification.
17
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
As of September 30, 2004, the components of distributable earnings on a tax
basis were as follows:
Undistributed
Undistributed Long-Term Net Unrealized
Ordinary Income Capital Gains Appreciation*
- ----------------------------------------------------------------
$1,503,343 $-- $92,246,815
* The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales.
Unrealized appreciation and depreciation at September 30, 2004, based on cost of
investments for federal income tax purposes was:
Unrealized appreciation $125,994,296
Unrealized depreciation (33,747,481)
- ----------------------------------------------------------------
Net unrealized appreciation $ 92,246,815
- ----------------------------------------------------------------
The following capital loss carryforwards, determined as of September 30, 2004,
may be available to reduce taxable income arising from future net realized gains
on investments, if any, to the extent permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforwards
- ----------------------------------------------------------------
2007 $ 1,167,536
- ----------------------------------------------------------------
2008 273,885
- ----------------------------------------------------------------
2009 25,009,742
- ----------------------------------------------------------------
2010 38,352,415
- ----------------------------------------------------------------
2011 119,232,204
- ----------------------------------------------------------------
Total $184,035,782
- ----------------------------------------------------------------
Of these carryforwards, $21,710,750 (expiring 09/30/09) and $4,740,410
($1,167,533 expiring 09/30/07, $273,885 expiring 09/30/08 and $3,298,992
expiring 09/30/09) remain from the Fund's merger with Liberty Young Investor
Fund and Liberty Growth Investor Fund, respectively.
Utilization of Liberty Young Investor Fund's and Liberty Growth Investor Fund's
losses could be subject to limitations imposed by the Internal Revenue Code.
Expired capital loss carryforwards, if any, 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
Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary
of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004,
FleetBoston, including the Fund's investment advisor, transfer agent and
distributor, was acquired by Bank of America Corporation ("BOA"). The
acquisition did not change the way the Fund is managed, the investment personnel
assigned to manage the Fund or the fees paid by the Fund.
INVESTMENT ADVISORY FEE
Columbia receives a monthly investment advisory fee based on the Fund's average
daily net assets at the following annual rates:
Average Daily Net Assets Annual Fee Rate
- ----------------------------------------------------------------
First $500 million 0.60%
- ----------------------------------------------------------------
Next $500 million 0.55%
- ----------------------------------------------------------------
Over $1 billion 0.50%
- ----------------------------------------------------------------
For the year ended September 30, 2004, the Fund's effective investment advisory
fee rate was 0.58%.
ADMINISTRATION FEE
Columbia provides administrative and other services to the Fund for a monthly
administration fee based on the Fund's average daily net assets at the following
annual rates:
Average Daily Net Assets Annual Fee Rate
- ----------------------------------------------------------------
First $500 million 0.200%
- ----------------------------------------------------------------
Next $500 million 0.150%
- ----------------------------------------------------------------
Over $1 billion 0.125%
- ----------------------------------------------------------------
For the year ended September 30, 2004, the Fund's effective administration fee
rate was 0.18%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street"). As a result, Columbia pays the total fees
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million,
18
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
an additional monthly fee. The additional fee rate is calculated by taking into
account the fees payable to State Street under the Outsourcing Agreement. This
rate is applied to the average daily net assets of the Fund for that month. The
Fund also pays additional fees for pricing services based on the number of
securities held by the Fund.
For the year ended September 30, 2004, the effective pricing and bookkeeping fee
rate for the Fund, inclusive of out-of-pocket expenses, was 0.027%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund. For such services, the Transfer Agent
receives a fee, paid monthly, at the annual rate of $28.00 per open account per
class. The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses.
Columbia has voluntarily agreed to reimburse the Fund for a portion of transfer
agency fees so that Class A, Class B and Class C transfer agent expenses
(exclusive of out-of-pocket expenses) will not exceed 0.10% annually. Columbia,
at its discretion, may revise or discontinue this arrangement any time.
Effective November 1, 2004, Columbia will voluntarily reimburse the Fund so that
the transfer agent expenses for Class Z shares (exclusive of out-of-pocket
expenses) will not exceed 0.10% annually.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee, in addition to reimbursement for certain out-of-pocket
expenses, at the annual rate of 0.06% of the Fund's average daily net assets
plus flat-rate charges based on the number of shareholder accounts and
transactions.
Effective October 13, 2003, Liberty Funds Services, Inc. was renamed Columbia
Funds Services, Inc.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the year ended September 30, 2004,
the Distributor has retained net underwriting discounts of $9,013 on sales of
the Fund's Class A shares and received CDSC fees of $21,893, $21,402 and $29 on
Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan"), which requires the payment of a
monthly service fee to the Distributor equal to 0.25% annually of the average
daily net assets attributable to Class A, Class B and Class C shares. The Plan
also requires the payment of a monthly distribution fee to the Distributor equal
to 0.10% annually of the average daily net assets attributable to Class A shares
and 0.75% annually of the average daily net assets attributable to Class B and
Class C shares. The Distributor has voluntarily agreed to waive a portion of the
Class A share distribution fee so that it will not exceed 0.05% annually.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
Effective October 13, 2003, Liberty Funds Distributor, Inc. was renamed Columbia
Funds Distributor, Inc.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates. Effective August 23, 2004, the Board of Trustees
appointed a Chief Compliance Officer to the Fund in accordance with federal
securities regulations. The Fund, along with other affiliated funds, will pay
its pro-rata share of the expenses associated with the Chief Compliance Officer
role. The Fund's fee will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the year ended September 30, 2004, the Fund paid $2,570 to
19
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor Fund
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. PURCHASES INFORMATION
For the year ended September 30, 2004, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $468,213,067 and
$554,035,766, respectively.
NOTE 6. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings. In
addition, the Fund has agreed to pay commitment fees on its pro-rata portion of
the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the year ended September 30, 2004,
the Fund did not borrow under this arrangement.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS
AND CONTINGENCIES
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
Columbia, the Distributor, and certain of their affiliates (collectively, "The
Columbia Group") have received information requests and subpoenas from various
regulatory and law enforcement authorities in connection with their
investigations of late trading and market timing in mutual funds as well as
other industry wide issues. The Columbia Group has not uncovered any instances
where Columbia or the Distributor were knowingly involved in late trading of
mutual fund shares.
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and the Distributor, alleging that they had
violated certain provisions of the federal securities laws in connection with
trading activity in mutual fund shares. Also on February 24, 2004, the New York
Attorney General ("NYAG") filed a civil complaint in New York Supreme Court,
County of New York against Columbia and the Distributor alleging that Columbia
and the Distributor had violated certain New York anti-fraud statutes. If either
Columbia or the Distributor is unsuccessful in its defense of these proceedings,
it could be barred from serving as an investment advisor or distributor for any
investment company registered under the Investment Company Act of 1940, as
amended (a "registered investment company"). Such results could prevent
Columbia, the Distributor or any company that is an affiliated person of
Columbia and the Distributor from serving as an investment advisor or
distributor for any registered investment company, including your fund. Your
fund has been informed by Columbia and the Distributor that, if these results
occur, they will seek exemptive relief from the SEC to permit them to continue
to serve as your fund's investment advisor and distributor. There is no
assurance that such exemptive relief will be granted. On March 15, 2004,
Columbia and the Distributor entered into agreements in principle with the SEC
Division of Enforcement and NYAG in settlement of the charges. Under the
agreements, Columbia and the Distributor agreed, 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 and its affiliate Banc
of America Capital Management, LLC have agreed to collectively reduce mutual
fund fees by $160 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 funds.
20
- --------------------------------------------------------------------------------
September 30, 2004
Columbia Young Investor 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). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants in several
derivative actions under various sections of the Investment Company Act of 1940,
as amended, alleging, among other things, that the fees and expenses paid by
those funds are excessive. The funds and the other defendants to these actions,
including Columbia and various of its affiliates, certain other mutual funds
advised by Columbia and its affiliates, and various directors of such funds,
have denied these allegations and are contesting the plaintiffs' claims. These
suits and certain regulatory investigations are ongoing, however, based on
currently available information, Columbia believes that these lawsuits are
without merit, that the likelihood they will have a material adverse impact on
any fund is remote, and that the lawsuits are not likely to materially affect
its ability to provide investment management services to its clients, including
the funds.
For the year ended September 30, 2004, Columbia has assumed $38,858 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
NOTE 8. CAPITAL ACTIVITY
Effective July 25, 2003, there was a 2-for-1 split on Class Z shares. The
accompanying prior period financial highlights for Class Z have been adjusted to
reflect the 2-for-1 split.
21
Financial Highlights
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
CLASS A SHARES 2004 2003 2002 (a)
===================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.47 $ 8.52 $ 8.94
- -------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.03 (0.03) (0.01)
Net realized and unrealized gain (loss) on investments 1.18 1.98 (0.41)
-------- -------- --------
Total from Investment Operations 1.21 1.95 (0.42)
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.68 $ 10.47 $ 8.52
Total return (c)(d) 11.56% 22.89% (4.70)%(e)
- -------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.33% 1.54% 1.67%(g)
Net investment income (loss) (f) 0.26% (0.35)% (0.49)%(g)
Waiver/reimbursement 1.10% 0.56% 0.80%(g)
Portfolio turnover rate 58% 128% 32%
Net assets, end of period (000's) $94,386 $94,617 $82,564
- -------------------------------------------------------------------------------------------------------------------
(a) Class A shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(d) Had the Investment Advisor and/or Distributor not waived or reimbursed a
portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
22
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
CLASS B SHARES 2004 2003 2002 (a)
=================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 8.51 $ 8.94
- -----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.05) (0.10) (0.02)
Net realized and unrealized gain (loss) on investments 1.16 1.98 (0.41)
-------- -------- --------
Total from Investment Operations 1.11 1.88 (0.43)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.50 $ 10.39 $ 8.51
Total return (c)(d) 10.68% 22.09% (4.81)%(e)
- -----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.03% 2.24% 2.37%(g)
Net investment loss (f) (0.45)% (1.05)% (1.19)%(g)
Waiver/reimbursement 0.46% 0.51% 0.75%(g)
Portfolio turnover rate 58% 128% 32%
Net assets, end of period (000's) $ 6,082 $ 6,872 $ 6,505
- -----------------------------------------------------------------------------------------------------------------
(a) Class B shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
23
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
CLASS C SHARES 2004 2003 2002 (a)
=================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 8.51 $ 8.94
- -----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.05) (0.10) (0.02)
Net realized and unrealized gain (loss) on investments 1.17 1.98 (0.41)
-------- -------- --------
Total from Investment Operations 1.12 1.88 (0.43)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.51 $ 10.39 $ 8.51
Total return (c)(d) 10.78% 22.09% (4.81)%(e)
- -----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 2.03% 2.24% 2.37%(g)
Net investment loss (f) (0.43)% (1.05)% (1.19)%(g)
Waiver/reimbursement 0.71% 0.50% 0.75%(g)
Portfolio turnover rate 58% 128% 32%
Net assets, end of period (000's) $ 798 $ 660 $ 488
- -----------------------------------------------------------------------------------------------------------------
(a) Class C shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming no contingent deferred sales
charge.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
24
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
CLASS Z SHARES 2004 2003 (a) 2002 (a)(b) 2001 (a) 2000 (a)
=================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.13 $ 7.42 $ 9.38 $ 17.97 $ 13.71
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (c) 0.01 (0.03) (0.07)(d) (0.06)(d) (0.07)(d)
Net realized and unrealized gain (loss)
on investments 1.02 1.74 (1.89) (6.52) 4.49
------------ ------------ ------------ ------------ ------------
Total from Investment Operations 1.03 1.71 (1.96) (6.58) 4.42
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- (1.56) (0.16)
In excess of net realized gains -- -- -- (0.45) --
------------ ------------ ------------ ------------ ------------
Total Distributions Declared to Shareholders -- -- -- (2.01) (0.16)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.16 $ 9.13 $ 7.42 $ 9.38 $ 17.97
Total return (e) 11.28% 23.05% (20.90)% (40.08)% 32.32%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.46% 1.49% 1.58%(d) 1.26%(d) 1.08%(d)
Net investment income (loss) (f) 0.13% (0.30)% (0.71)%(d) (0.41)%(d) (0.45)%(d)
Portfolio turnover rate 58% 128% 32% 23%(g) 72%(g)
Net assets, end of period (000's) $678,146 $674,590 $573,111 $746,698 $1,215,809
- ---------------------------------------------------------------------------------------------------------------------------------
(a) Per share data has been restated to reflect a 2-for-1 share split effective
July 25, 2003.
(b) Class S shares were redesignated Class Z shares on July 29, 2002.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Per share data and ratios reflect income and expenses inclusive of the
Fund's proportionate share of the income and expenses of the SR&F Growth
Investor Portfolio prior to the termination of the master feeder/fund
structure on July 26, 2002.
(e) Total return at net asset value assuming all distributions reinvested.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Portfolio turnover disclosed is for the SR&F Growth Investor Portfolio.
25
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST XI
AND THE SHAREHOLDERS OF COLUMBIA YOUNG INVESTOR FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Young Investor Fund (the
"Fund") (a series of Columbia Funds Trust XI) at September 30, 2004 and the
results of its operations, the changes in its net assets, and its financial
highlights for the periods indicated, in conformity with accounting principles
generally accepted the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States), which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of portfolio positions at September 30, 2004 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 15, 2004
26
TRUSTEES
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were
appointed to the Board of the Trustees of the Fund. Messrs. Simpson and
Woolworth had been directors of 15 Columbia Funds and 20 funds in the CMG Fund
Trust. Also effective October 8, 2003, the incumbent trustees of the Fund were
elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in
the CMG Fund Trust. The new combined Board of Trustees/Directors of the Fund now
oversees 118 funds in the Columbia Funds Complex (including the former Liberty
Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of these
trustees/directors also serve on the Boards of other funds in the Columbia Funds
Complex.
The Trustrees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds Complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds Complex.
NAME, ADDRESS AND AGE,
POSITION WITH FUNDS,
YEAR FIRST ELECTED OR PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA FUNDS
APPOINTED TO OFFICE(1) COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
DOUGLAS A. HACKER (Age 49) Executive Vice President - Strategy of United Airlines (airline) since December 2002 (formerly President
P.O. Box 66100 of UAL Loyalty Services (airline) from September 2001 to December 2002; Executive Vice President and
Chicago, IL 60666 Chief Financial Officer of United Airlines from March 1999 to September 2001; Senior Vice President -
Trustee (since 1996) Finance from March 1993 to July 1999). Oversees 118, Orbitz, Inc. (on-line travel company)
--------------------------------------------------------------------------------------------------------
JANET LANGFORD KELLY
(Age 46) Adjunct Professor of Law, Northwestern University, since September 2004; Private Investor since March
9534 W. Gull Lake Drive 2004 (formerly Chief Administrative Officer and Senior Vice President, Kmart Holding Corporation
Richland, MI 49083-8530 (consumer goods), from September 2003 to March 2004; Executive Vice President-Corporate
Trustee (since 1996) Development and Administration, General Counsel and Secretary, Kellogg Company (food
manufacturer), from September 1999 to August 2003; Senior Vice President, Secretary and General
Counsel, Sara Lee Corporation (branded, packaged, consumer-products manufacturer) from January
1995 to September 1999). Oversees 118, None
--------------------------------------------------------------------------------------------------------
RICHARD W. LOWRY (Age 68) Private Investor since August 1987 (formerly Chairman and Chief Executive Officer, U.S. Plywood
10701 Charleston Drive Corporation (building products manufacturer)). Oversees 120(3), None
Vero Beach, FL 32963
Trustee (since 1995)
--------------------------------------------------------------------------------------------------------
CHARLES R. NELSON (Age 62) Professor of Economics, University of Washington, since January 1976; Ford and Louisa Van Voorhis
Department of Economics Professor of Political Economy, University of Washington, since September 1993 (formerly Director,
University of Washington Institute for Economic Research, University of Washington from September 2001 to June 2003) Adjunct
Seattle, WA 98195 Professor of Statistics, University of Washington, since September 1980; Associate Editor, Journal of
Trustee (since 1981) Money Credit and Banking, since September 1993; consultant on econometric and statistical matters.
Oversees 118, None
--------------------------------------------------------------------------------------------------------
JOHN J. NEUHAUSER (Age 61) Academic Vice President and Dean of Faculties since August 1999, Boston College (formerly Dean,
84 College Road Boston College School of Management from September 1977 to September 1999). Oversees 121(3),(4),
Chestnut Hill, MA 02467-3838Saucony, Inc. (athletic footwear)
Trustee (since 1985)
--------------------------------------------------------------------------------------------------------
PATRICK J. SIMPSON (Age 60) Partner, Perkins Coie L.L.P. (law firm). Oversees 118, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
--------------------------------------------------------------------------------------------------------
27
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
NAME, ADDRESS AND AGE,
POSITION WITH FUNDS,
YEAR FIRST ELECTED OR PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA FUNDS
APPOINTED TO OFFICE(1) COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
THOMAS E. STITZEL (Age 68) Business Consultant since 1999 (formerly Professor of Finance from 1975 to 1999, College of Business,
2208 Tawny Woods Place Boise State University); Chartered Financial Analyst. Oversees 118, None.
Boise, ID 83706
Trustee (since 1998)
--------------------------------------------------------------------------------------------------------
THOMAS C. THEOBALD (Age 67) Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September 2004
303 W. Madison (formerly Managing Director, William Blair Capital Partners (private equity investing) from September
Suite 2500 1994 to September 2004). Oversees 118, Anixter International (network support equipment distributor);
Chicago, IL 60606 Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real estate management services) and
Trustee and Chairman Ambac Financial Group (financial guaranty insurance)
of the Board5 (since 1996)
--------------------------------------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 59) Retired since 1997 (formerly General Manager, Global Education Industry, IBM Corporation (computer
359 Stickney Hill Road and technology) from 1994 to 1997). Oversees 119(4), Chairman of the Board of Directors, Enesco Group,
Hopkinton, NH 03229 Inc. (designer, importer and distributor of giftware and collectibles)
Trustee (since 1998)
------------------------------------------------------------------------------------------------------
RICHARD L. WOOLWORTH (Age 63) Retired since December 2003 (formerly Chairman and Chief Executive Officer, The Regence Group
100 S.W. Market Street #1500 (regional health insurer); Chairman and Chief Executive Officer, BlueCross BlueShield of Oregon;
Portland, OR 97207 Certified Public Accountant, Arthur Young & Company). Oversees 118, Northwest Natural Gas Co.
Trustee (since 1991) (natural gas service provider)
------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
WILLIAM E. MAYER2 (Age 64) Managing Partner, Park Avenue Equity Partners (private equity) since February 1999 (formerly Founding
399 Park Avenue Partner, Development Capital LLC from November 1996 to February 1999). Oversees 120(3), Lee
Suite 3204 Enterprises (print media), WR Hambrecht + Co. (financial service provider); First Health (healthcare);
New York, NY 10022 Reader's Digest (publishing); OPENFIELD Solutions (retail industry technology provider)
Trustee (since 1994)
--------------------------------------------------------------------------------------------------------
1 In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In October
2003, the trustees on the Liberty Board were elected to the boards of the
Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG
Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
2 Mr. Mayer is an "interested person" (as defined in the Investment Company Act
of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co.
3 Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the
Liberty All-Star Funds, currently consisting of 2 funds, which are advised by
an affiliate of the Advisor.
4 Mr. Neuhauser and Ms. Verville also serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Advisor.
5 Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
28
OFFICERS
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
NAME, ADDRESS AND AGE,
POSITION WITH COLUMBIA
FUNDS, YEAR FIRST ELECTED
OR APPOINTED TO OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
CHRISTOPHER L. WILSON (Age 47) President of the Columbia Funds since October 2004 (formerly President and Chief Executive Officer,
One Financial Center CDC IXIS Asset Management Services, Inc. from September 1998 to August 2004).
Boston, MA 02111
President (since 2004)
-----------------------------------------------------------------------------------------------------
J. KEVIN CONNAUGHTON (Age 40) Treasurer of the Columbia Funds and of the Liberty All-Star Funds since December 2000; Vice President
One Financial Center of the Advisor since April 2003 (formerly President of the Columbia Funds from February 2004 to
Boston, MA 02111 October 2004; Chief Accounting Officer and Controller of the Liberty Funds and of the Liberty
Treasurer (since 2000) All-Star Funds from February 1998 to October 2000); Treasurer of the Galaxy Funds since September
2002; Treasurer, Columbia Management Multi-Strategy Hedge Fund, LLC since December 2002 (formerly
Vice President of Colonial Management Associates, Inc. from February 1998 to October 2000).
-----------------------------------------------------------------------------------------------------
MARY JOAN HOENE (Age 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds since August 2004; Chief
40 West 57th Street Compliance Officer of the Liberty All-Star Funds since August 2004 (formerly Partner, Carter, Ledyard
New York, NY 10019 & Milburn LLP from January 2001 to August 2004; Counsel, Carter, Ledyard & Milburn LLP from
Senior Vice President and November 1999 to December 2000; Vice President and Counsel, Equitable Life Assurance Society of the
Chief Compliance Officer United States from April 1998 to November 1999).
(since 2004)
-----------------------------------------------------------------------------------------------------
MICHAEL G. CLARKE (Age 34) Chief Accounting Officer of the Columbia Funds and of the Liberty All-Star Funds since October 2004
One Financial Center (formerly Controller of the Columbia Funds and of the Liberty All-Star Funds from May 2004 to
Boston, MA 02111 October 2004; Assistant Treasurer from June, 2002 to May 2004; Vice President, Product Strategy &
Chief Accounting Officer Development of the Liberty Funds Group from February 2001 to June 2002; Assistant Treasurer of the
(since 2004) Liberty Funds and of the Liberty All-Star Funds from August 1999 to February 2001; Audit Manager,
Deloitte & Touche LLP from May 1997 to August 1999).
-----------------------------------------------------------------------------------------------------
JEFFREY R. COLEMAN (Age 34) Controller of the Columbia Funds and of the Liberty All-Star Funds since October 2004 (formerly Vice
One Financial Center President of CDC IXIS Asset Management Services, Inc. and Deputy Treasurer of the CDC Nvest Funds
Boston, MA 02111 and Loomis Sayles Funds from February 2003 to September 2004; Assistant Vice President of CDC IXIS
Controller (since 2004) Asset Management Services, Inc. and Assistant Treasurer of the CDC Nvest Funds from August 2000 to
February 2003; Tax Manager of PFPC, Inc. from November 1996 to August 2000).
-----------------------------------------------------------------------------------------------------
DAVID A. ROZENSON (Age 50) Secretary of the Columbia Funds and of the Liberty All-Star Funds since December 2003; Senior
One Financial Center Counsel, Bank of America Corporation (formerly FleetBoston Financial Corporation) since January 1996;
Boston, MA 02111 Associate General Counsel, Columbia Management Group since November 2002.
Secretary (since 2003)
-----------------------------------------------------------------------------------------------------
29
Important Information About This Report
- --------------------------------------------------------------------------------
Columbia Young Investor Fund
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High 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 Young Investor Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the funds and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to their portfolio securities and a copy of the fund's
voting record are available (i) at www.columbiamanagement.com; (ii) on the
Securities and Exchange Commission's website at www.sec.gov and (iii) without
charge, upon request, by calling 800-368-0346.
30
ACTIVITY PAGES
TRICKY TAXES
Taxes are a way for the government to collect money to pay for the public goods
and services you and your family benefit from - like roads and highways and law
enforcement. You might know about sales tax, which you sometimes pay when you
buy things. But did you also know that one day you will have to pay an income
tax on money that you earn from a job or your investments?
If you have a job, the money you earn from working is called wages. You will
eventually earn enough wages to owe taxes on that income. And if you are
invested in a fund, like the Young Investor Fund, and that fund pays you
dividends or capital gains during the year, you may have to pay taxes on that
income too. Earnings from your investments are called unearned income because
you didn't actually earn that money. Whether you owe taxes on your income from
your job or on your unearned income from your investments depends mostly on your
age and your total taxable income for any given year.
[WORD FIND PUZZLE]
INCOME CAPITAL WAGES JOB
UNEARNED DIVIDENDS TAXABLE MONEY
FEDERAL INVESTMENTS GOVERNMENT GAINS
I
BUDGETING FOR THE HOLIDAYS
Are you gearing up for holiday shopping and wondering how you'll be able to buy
great gifts for all the people on your list? Especially during the holiday
season, retailers do everything they can to promote items and get you to spend
more. Stores know that you have a deadline and that your first priority is that
each gift you buy is PERFECT for each recipient. It's no wonder that it's easy
to go over budget when buying gifts for your family and friends. There are ways,
though, to guard against overspending - and still come home with great gifts.
1. Make a list and check it twice. Carefully choose the recipients. Do you
usually exchange gifts with that person? Would a card, small present or gift
of time mean just as much? Many people go overboard during the holidays,
buying for casual friends who really don't expect anything.
[Illustration of a gift box]
2. Create a budget. The total budget divided by the number of people on your
list is logically the amount you have to spend per person, but you may want
to spend more on your parents than on your friends.
3. Get creative. Brainstorm gifts without going over your budget. Ideas can
come from all over, including:
o hints they've dropped
o gifts of time and effort
o things you can make
o food
o window-shopping
o research on the Internet
You've got the list of whom you'll buy for, what you'll purchase and how much
you'll spend. Now you'll need to get in and out of the store without buying
extras. Just having this goal helps, but for reinforcement:
1. Estimate prices online. Browse stores' websites to estimate the cost of each
item before you hit the mall.
2. Make your first trip to the mall without money in your pocket. Even with
solid ideas in your head, it always helps to go to the stores, armed with a
notebook and a calculator, for one last brainstorm. Leave your spending
money at home on this trip so you won't feel pressured to buy anything too
soon.
3. Carry cash. Once you're ready to shop, bring only the money you've budgeted
and don't use credit.
4. Enter, buy and leave. Move fast and you won't see other potential purchases
- and what you don't see, you won't want.
5. Shop with a like-minded buddy. Two sets of willpower are stronger than one.
6. Go away and think it over. If you still want an unplanned item, you can go
back and buy it - but things often lose their appeal once you leave the
store.
7. Remember the secret retailers won't tell you: In most holiday traditions,
it's the love that counts.
Plan the presents! Below make a list of the people you are shopping for this
holiday season. Next to each person's name, write the amount you can afford to
spend on him or her. (Remember to stick to an overall budget so you don't spend
too much on your friends and have nothing left for your sister or brother!) Your
last step is to brainstorm gift ideas that fit into your budget for each
recipient. Take this page with you when you go shopping!
RECIPIENTS BUDGET IDEAS
__________________ ______________________ __________________
__________________ ______________________ __________________
__________________ ______________________ __________________
__________________ ______________________ __________________
II
WHAT YOU SHOULD KNOW ABOUT THE EURO
Just as the dollar and cent represent the national currency of the United
States, the euro is the single currency of twelve European Union countries -
Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
the Netherlands, Portugal and Spain.
And just as the dollar comes in various denominations ($1, $5, $10, $20, $50 and
so on) and different American coins hold specific cent values (1(cent), 5(cent),
10(cent), 25(cent), etc.), each with its own unique design, the euro comes in
seven banknote (paper) denominations and eight coin denominations. Each banknote
has a unique design, ranging from well-known gates to famous bridges. The front
of each euro coin shows one of three European designs, while the reverse side of
each coin shows an individual design relating to the specific country where the
coin was minted.
Euro banknotes and coins were first introduced on January 1, 2002. They replaced
the participating countries' national currencies and made buying, selling and
investing much easier throughout Europe. Having a single currency made it easier
for people to travel throughout Europe, eliminated the problem of exchange rate
fluctuations, simplified the banking and investing process in Europe, made
trading with other countries less tricky, and made Europe a strong trade partner
world-wide. Because of all the benefits of the euro, many other European
countries besides the twelve original euro countries have adopted the euro as
their national currency.
SKETCH IT! EURO VS. DOLLAR
The different images featured on three denominations of the euro appear below.
On a separate piece of paper, draw the images featured on the front and back of
each corresponding American dollar. (For example, next to the euro 5 banknote,
draw the five dollar bill.) If you really want to test yourself, try it from
memory! Then think about how the euro and the dollar are similar. How are they
different?
[IMAGES OF THE EURO]
III
TAX TIME FOR TEENS
With tax season right around the corner, you might be thinking about that summer
job, the money you made, and whether you might need to pay taxes on your
earnings. The IRS has three basic questions you need to ask yourself to
determine whether you have to file a tax return and maybe even give up some of
your summer wages to the government:
1. WHAT IS YOUR FILING STATUS?
Since you are still in school, we'll assume that you are single. But
if you were older, you might either file as:
a. married filing a joint return with your spouse c.head of household
b. married but filing separately from your spouse d.widow or widower
2. HOW OLD ARE YOU?
Sometimes kids aged 14 or younger and people aged 65 or older don't
have to file as long as they don't earn over a certain amount in any
given tax year. If your parents claim you as their dependent on their
tax return, chances are you don't have to pay taxes on your wages.
3. HOW MUCH DID YOU EARN THIS CALENDAR YEAR?
If you're not exempt from filing a tax return based on your filing
status and/or your age, whether you need to file may come down to how
much money you actually earned. Your parents can help you figure out
your gross income, which is what this question is really all about.
(Gross income is your total personal income before any deductions,
including tax deductions.)
To learn more about taxes, go to www.irs.gov. Under the "information for"
heading, click on "Individuals." Then, under "information for," click on
"Students." Click on "Understanding Taxes," then "Student Site." In this
section, you'll find lessons, activities, tutorials and simulations to help you
understand all there is to know about taxes and tax returns.
See if you can answer these questions about taxes. (Hint: The answers can be
found by doing some research on the website mentioned above!)
QUESTIONS:
1. What is Form W-2? _____________________________________________________
2. What was the standard deduction for a single person filing a tax return
for the 2003 tax year? ________________________________________________
3. Can a person receive a refund from the government after filing his tax
return? Why? __________________________________________________________
4. Name three national programs that federal taxes are used to fund.
_______________________________________________________________________
5. What is interest income? ______________________________________________
6. How many options does a married person have when choosing her filing
status? What are they? ________________________________________________
7. Do self-employed people have to pay taxes? ____________________________
8. Can people file their tax returns on the internet?
_______________________________________________________________________
IV
YOUR ALLOWANCE: A BALANCING ACT
CALLED A BUDGET
Have you ever wanted something - a new bike, tickets to a concert, a CD player -
that your parents wouldn't buy for you and that you didn't have the money to buy
for yourself? It can be tough to be in this situation because most kids don't
have much money of their own. But with a savings plan and a budget, you'd be
surprised at how quickly your buying power can grow.
In order to budget your money, you first need to have some. One way kids often
earn money is through an allowance. If you have an allowance, start by writing
down the amount you receive and how often you receive it - for example:
allowance = $7, once a week.
Next, separate your allowance income into savings and spending money. Many
experts recommend dividing your allowance into thirds:
o One third is for spending now on anything you want.
o Another third is for short-term saving, for bigger items that you
can't afford to pay for all at once.
o The last third is for long-term saving, for things like college.
However you divide your money amongst these three categories, this is your
budget. Sticking to it will allow you to make major progress toward your goals,
buy big items you really want, and still have spending money each week. Try
budgeting your allowance to see how long it will take you to save for what you
want.
How many words can you find in ALLOWANCE? (Hint: there are at least 45.)
WORD GAME
ALLOWANCE
V
COMPANY PROFILE
YOUR FUND OWNS A PART OF . . .
COSTCO WHOLESALE
Looking for a new pair of jeans? Want to load up on your favorite candy bar? The
latest CDs? Chances are you'll find them at a nearby Costco Wholesale warehouse.
Costco is a shopping club that sells a wide variety of merchandise at bargain
prices. At Costco, you can buy many of the same items and brands that you'll
find in your local grocery store. However, in order to buy your favorite
breakfast cereal at Costco, you'll probably have to buy a jumbo-sized box. In
addition to food, you can buy clothes, toys, candy, CDs, DVDs, cameras,
television sets, computers-and more. Some Costco warehouses even have
pharmacies, gas stations, one-hour photo developing, copy centers and food
courts. You have to be a member to shop at Costco. But if you shop wisely you
could save far more than the $45 your family will spend to become a member.
[Illustration of a computer, cd, cereal box and shirt]
Shopping at Costco is like going on a treasure hunt-you'll find something
different on the shelves every time you go. And since your parents can get
almost everything they need at Costco, running errands can take a lot less time.
Costco opened its first warehouse more than 20 years ago in Seattle, Washington.
Today, the company has 441 outlets in the United States and Puerto Rico and
seven foreign countries, including Canada, Japan, Mexico, South Korea, Taiwan,
England and Scotland. Worldwide, more than 23 million families are members of
Costco. The company employs over 100,000 people in its offices and warehouses.
o As of September 30, 2004, Columbia Young Investor Fund held 331,103
shares of Costco Wholesale, which represented 1.8% of the portfolio's
net assets. Columbia Young Investor Fund's managers bought the stock
at an average price of $32.68 per share. Since then, the stock's price
has risen about 26%. The fund's managers invested in Costco Wholesale
because they think the company is a strong retailer with the potential
to grow faster than its competition. Customers get more of a product
at Costco than at other stores for the same amount of money. If Costco
can continue to increase sales and profits, the fund's managers think
the company's stock price could rise even higher.
VI
LET'S GO SHOPPING!
Running low on school supplies? Your parents gave you $100 to stock up. Where
can you shop to get the most for your money? How about a visit to Costco? On the
left is a list of items you might typically find at Costco. You can use the
table on the right to keep track of your purchases. If you live in a state with
sales tax, don't forget to add it in. Be sure to stay within your budget!
COSTCO PRICE LIST
Ski jacket 27.99 Gym socks - 6-pack 9.99
- ----------------------------------------------------------------------------------------------------------------------
One-time use camera 13.49 Running shoes 24.99
- ----------------------------------------------------------------------------------------------------------------------
Diskman 44.99 Crayons - tin of 120 9.99
- ----------------------------------------------------------------------------------------------------------------------
Jeans 22.49 Basketball 19.49
- ----------------------------------------------------------------------------------------------------------------------
Scientific calculator 13.99 Sports drink - 24 bottles 9.99
- ----------------------------------------------------------------------------------------------------------------------
CD 12.99 Breakfast cereal - 3-lb box 6.79
- ----------------------------------------------------------------------------------------------------------------------
Granola bars - box of 48 7.39 Gel pens - 56-pack assorted colors 9.49
- ----------------------------------------------------------------------------------------------------------------------
Microwave popcorn - 36 bags 7.59 Photo album 10.79
- ----------------------------------------------------------------------------------------------------------------------
Shampoo - 40-oz bottle 5.79 Fleece pullover 17.99
- ----------------------------------------------------------------------------------------------------------------------
Football 14.00 Unabridged dictionary 24.99
- ----------------------------------------------------------------------------------------------------------------------
COSTCO SHOPPING SPREE
Item Cost Sales Tax Balance
(if any) $100.00
1.
- -------------------------------------------------------------------------------------------------------
2.
- -------------------------------------------------------------------------------------------------------
3.
- -------------------------------------------------------------------------------------------------------
4.
- -------------------------------------------------------------------------------------------------------
5.
- -------------------------------------------------------------------------------------------------------
6.
- -------------------------------------------------------------------------------------------------------
7.
- -------------------------------------------------------------------------------------------------------
8.
- -------------------------------------------------------------------------------------------------------
9.
- -------------------------------------------------------------------------------------------------------
10.
- -------------------------------------------------------------------------------------------------------
VII
[eDelivery logo]
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Young Investor Fund ANNUAL REPORT, SEPTEMBER 30, 2004
PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[LOGO]:
COLUMBIA FUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
[C] 2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.345.6611
756-02/975S-0904 (11/04) 04/3402
ITEM 2. CODE OF ETHICS.
(a) The registrant has, as of the end of the period covered by this report,
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(b) During the period covered by this report, there were not any amendments to
a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were not any waivers or
implicit waivers to a provision of the code of ethics adopted in 2(a)
above.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that Douglas A. Hacker, Thomas
E. Stitzel, Anne-Lee Verville and Richard L. Woolworth, each of whom are members
of the registrant's Board of Trustees and Audit Committee, each qualify as an
audit committee financial expert. Mr. Hacker, Mr. Stitzel, Ms. Verville and Mr.
Woolworth are each independent trustees, as defined in paragraph (a)(2) of this
item's instructions and collectively constitute the entire Audit Committee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fee information below is disclosed in aggregate for the twelve series of the
registrant whose reports to stockholders are included in this annual filing.
Effective March 1, 2004, ten of the series of the registrant included in this
filing engaged new independent accountants. Unless otherwise noted, fees
disclosed below represent fees paid or accrued to the current and predecessor
principal accountants while each was engaged by the registrant.
(a) Aggregate Audit Fees billed by the principal accountant for professional
services rendered during the fiscal years ended September 30, 2004 and September
30, 2003 are approximately as follows:
2004 2003
$253,430 $273,720
Audit Fees include amounts related to the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Aggregate Audit-Related Fees billed by the principal accountant for
professional services rendered during the fiscal years ended September 30, 2004
and September 30, 2003 are approximately as follows:
2004 2003
$42,000 $48,000
Audit-Related Fees include amounts for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported in Audit Fees
above. In both fiscal years 2004 and 2003, Audit-Related Fees include certain
agreed-upon procedures performed for semi-annual shareholder reports.
The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X became effective on May 6, 2003. For the registrant, the
percentage of Audit-Related services that were approved under the "de minimis"
exception during the fiscal years ended September 30, 2004 and September 30,
2003 was zero.
The pre-approval requirements for services to the investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal years
ended September 30, 2004 and September 30, 2003, there were no Audit-Related
Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X.
The percentage of Audit-Related fees required to be approved under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de
minimis" exception during the fiscal years ended September 30, 2004 and
September 30, 2003 was zero.
(c) Aggregate Tax Fees billed by the principal accountant for professional
services rendered during the fiscal years ended September 30, 2004 and September
30, 2003 are approximately as follows:
2004 2003
$32,253 $34,801
Tax Fees in both fiscal years 2004 and 2003 consist primarily of the review of
annual tax returns and the review of calculations of required shareholder
distributions. Tax Fees include amounts for professional services by the
principal accountant for tax compliance, tax advice and tax planning.
The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X became effective on May 6, 2003. For the registrant, the
percentage of Tax Fees that were approved under the "de minimis" exception
during the fiscal years ended September 30, 2004 and September 30, 2003 was
zero.
The pre-approval requirements for services to the investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal years
ended September 30, 2004 and September 30, 2003, there were no Tax Fees that
were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
The percentage of Tax fees required to be approved under paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception
during the fiscal years ended September 30, 2004 and September 30, 2003 was
zero.
(d) Aggregate All Other Fees billed by the principal accountant for professional
services rendered during the fiscal years ended September 30, 2004 and September
30, 2003 are as follows:
2004 2003
$0 $0
All Other Fees include amounts for products and services provided by the
principal accountant, other than the services reported in (a)-(c) above.
The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X became effective on May 6, 2003. For the registrant, the
percentage of All Other Fees that were approved under the "de minimis" exception
during the fiscal years ended September 30, 2004 and September 30, 2003 was
zero.
The pre-approval requirements for services to the investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year
ended September 30, 2004, All Other Fees that were approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were approximately $95,000
(note that fees were paid to the current principal accountant). During the
fiscal year ended September 30, 2003, All Other Fees that would have been
subject to pre-approval had paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X
been applicable at the time the services were provided, were approximately
$95,000 (note that fees were paid to the current principal accountant). For both
fiscal years, All Other Fees relate to internal controls reviews of the
registrant's transfer agent.
The percentage of All Other Fees required to be approved under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de
minimis" exception during the fiscal years ended September 30, 2004 and
September 30, 2003 was zero.
(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
I. GENERAL OVERVIEW
The Audit Committee of the registrant has adopted a formal policy (the "Policy")
which sets forth the procedures and the conditions pursuant to which the Audit
Committee will pre-approve (i) all audit and non-audit (including audit related,
tax and all other) services provided by the registrant's independent auditor to
the registrant and individual funds (collectively "Fund Services"), and (ii) all
non-audit services provided by the registrant's independent auditor to the
funds' adviser or a control affiliate of the adviser, that relate directly to
the funds' operations and financial reporting (collectively "Fund-related
Adviser Services"). A "control affiliate" is an entity controlling, controlled
by, or under common control with the adviser that provides ongoing services to
the funds, and the term "adviser" is deemed to exclude any unaffiliated
sub-adviser whose role is primarily portfolio management and is sub-contracted
or overseen by another investment adviser. The adviser and control affiliates
are collectively referred to as "Adviser Entities."
The Audit Committee uses a combination of specific (on a case-by-case basis as
potential services are contemplated) and general (pre-determined list of
permitted services) pre-approvals. Unless a type of service has received general
pre-approval, it will require specific pre-approval by the Audit Committee if it
is to be provided by the independent auditor.
The Policy does not delegate the Audit Committee's responsibilities to
pre-approve services performed by the independent auditor to management.
II. GENERAL PROCEDURES
On an annual basis, the Fund Treasurer and/or Director of Trustee Administration
shall submit to the Audit Committee a schedule of the types of Fund Services and
Fund-related Adviser Services that are subject to general pre-approval.
These schedules will provide a description of each type of service that is
subject to general pre-approval and, where possible, will provide estimated fees
for each instance of providing each service. This general pre-approval and
related fees (where provided) will generally cover a one-year period (for
example, from July 1 through August 31 of the following year). The Audit
Committee will review and approve the types of services and review the projected
fees for the next one-year period and may add to, or subtract from, the list of
general pre-approved services from time to time, based on subsequent
determinations. This approval acknowledges that the Audit Committee is in
agreement with the specific types of services that the independent auditor will
be permitted to perform. The fee amounts will be updated to the extent necessary
at other regularly scheduled meetings of the Audit Committee.
In addition to the fees for each individual service, the Audit Committee has the
authority to implement a fee cap on the aggregate amount of non-audit services
provided to an individual fund.
If, subsequent to general pre-approval, a fund, its investment adviser or a
control affiliate determines that it would like to engage the independent
auditor to perform a service that requires pre-approval and that is not included
in the general pre-approval list, the specific pre-approval procedure shall be
as follows:
o A brief written request shall be prepared by management detailing the
proposed engagement with explanation as to why the work is proposed to
be performed by the independent auditor;
o The request should be addressed to the Audit Committee with copies to
the Fund Treasurer and/or Director of Trustee Administration;
o The Fund Treasurer and/or Director of Trustee Administration will
arrange for a discussion of the service to be included on the agenda
for the next regularly scheduled Audit Committee meeting, when the
Committee will discuss the proposed engagement and approve or deny the
request.
o If the timing of the project is critical and the project needs to
commence before the next regularly scheduled meeting, the Chairperson
of the Audit Committee may approve or deny the request on behalf of
the Audit Committee, or, in the Chairperson's discretion, determine to
call a special meeting of the Audit Committee for the purpose of
considering the proposal. Should the Chairperson of the Audit
Committee be unavailable, any other member of the Audit Committee may
serve as an alternate for the purpose of approving or denying the
request. Discussion with the Chairperson (or alternate, if necessary)
will be arranged by the Fund Treasurer and/or Director of Trustee
Administration. The independent auditor will not commence any such
project unless and until specific approval has been given.
III. CERTAIN OTHER SERVICES PROVIDED TO ADVISER ENTITIES
The Audit Committee recognizes that there are cases where services proposed to
be provided by the independent auditor to the adviser or control affiliates are
not Fund-related Adviser Services within the meaning of the Policy, but
nonetheless may be relevant to the Audit Committee's ongoing evaluation of the
auditor's independence and objectivity with respect to its audit services to the
funds. As a result, in all cases where an Adviser Entity engages the independent
auditor to provide audit or non-audit services that are not Fund Services or
Fund-related Adviser Services, were not subject to pre-approval by the Audit
Committee, and the projected fees for any such engagement (or the aggregate of
all such engagements during the period covered by the Policy) exceeds a
pre-determined threshold established by the Audit Committee; the independent
auditor, Fund Treasurer and/or Director of Trustee Administration will notify
the Audit Committee not later than its next meeting. Such notification shall
include a general description of the services provided, the entity that is to be
the recipient of such services, the timing of the engagement, the entity's
reasons for selecting the independent auditor, and the projected fees. Such
information will allow the Audit Committee to consider whether non-audit
services
provided to the adviser and Adviser Entities, which were not subject to Audit
Committee pre-approval, are compatible with maintaining the auditor's
independence with respect to the Funds.
IV. REPORTING TO THE AUDIT COMMITTEE
The Fund Treasurer or Director of Trustee Administration shall report to the
Audit Committee at each of its regular meetings regarding all Fund Services or
Fund-related Adviser Services initiated since the last such report was rendered,
including:
o A general description of the services, and
o Actual billed and projected fees, and
o The means by which such Fund Services or Fund-related Adviser Services
were pre-approved by the Audit Committee.
In addition, the independent auditor shall report to the Audit Committee
annually, and no more than 90 days prior to the filing of audit reports with the
SEC, all non-audit services provided to entities in the funds' "investment
company complex," as defined by SEC rules, that did not require pre-approval
under the Policy.
V. AMENDMENTS; ANNUAL APPROVAL BY AUDIT COMMITTEE
The Policy may be amended from time to time by the Audit Committee. Prompt
notice of any amendments will be provided to the independent auditor, Fund
Treasurer and Director of Trustee Administration. The Policy shall be reviewed
and approved at least annually by the Audit Committee.
*****
(e)(2) This information has been included in items (b)-(d) above.
(f) Not applicable.
(g) All non-audit fees billed by the registrant's accountant for services
rendered to the registrant for the fiscal years ended September 30, 2004 and
September 30, 2003 are disclosed in (b)-(d) above.
All non-audit fees billed by the registrant's accountant for services rendered
to the registrant's investment adviser (not including any sub-adviser whose role
is primarily portfolio management and is subcontracted with or overseen by
another investment adviser) and any entity controlling, controlled by, or under
common control with the adviser that provides ongoing services to the registrant
for the fiscal years ended September 30, 2004 and September 30, 2003 are also
disclosed in (b)-(d) above. Such fees were approximately $95,000 and $95,000,
respectively.
(h) The registrant's Audit Committee of the Board of Directors has considered
whether the provision of non-audit services that were rendered to the
registrant's adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled by, or
under common control with the investment adviser that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X, is compatible with maintaining the principal
accountant's independence. The Audit Committee determined that the provision of
such services is compatible with maintaining the principal accountant's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
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.
There have not been any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, since those
procedures were last disclosed in response to the requirements of Item
7(d)(2)(ii)(G) of Schedule 14A or this Item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officers, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, have concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-
year in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR
attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust XI
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By (Signature and Title) /s/ Christopher L. Wilson
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Christopher L. Wilson, President
Date November 24, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Christopher L. Wilson
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Christopher L. Wilson, President
Date November 24, 2004
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By (Signature and Title) /s/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date November 24, 2004
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