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: 811-6529
Columbia Funds Trust VI
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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
Date of fiscal year end: 06/30/05
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Date of reporting period: 12/31/04
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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. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
Columbia Small Cap
Value Fund
Semiannual Report
December 31, 2004
Table of Contents
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 ........................................ 16
Statement of Operations .................................................... 17
Statement of Changes in Net Assets ......................................... 18
Notes to Financial Statements .............................................. 20
Financial Highlights ....................................................... 25
Important Information
About This Report .......................................................... 29
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 Small Cap Value Fund
Dear Shareholder
In 2004, Columbia Funds became part of the Bank of America family, one of the
largest, most respected financial institutions in the United States. As a direct
result of this merger, a number of changes are in the works that we believe may
offer significant benefits for our shareholders. Plans are underway to combine
various Nations Funds and Columbia Funds together to form a single fund family
that covers a wide range of markets, sectors and asset classes under the
management of talented, seasoned investment professionals. As a result, some
funds will be merged in order to eliminate redundancies and fund management
teams will be aligned to maximize performance potential. You will receive more
detailed information about these proposed mergers, and you will be asked to vote
on certain fund changes that may affect you and your account. In this matter,
your timely response will help us to implement the changes in 2005.
The increased efficiencies we expect from a more streamlined offering of funds
may help us reduce fees charged to the funds, because larger funds often benefit
from size and scale of operations. For example, significant savings for the
combined complex may result from the consolidation of certain vendor agreements.
In fact, negotiations are currently underway to consolidate the transfer agency
of all of our funds and to consolidate custodial services, each under a single
vendor. We have reduced management fees for many funds as part of our settlement
agreement with the New York Attorney General.
As a result of these changes, we believe we will offer shareholders an even
stronger lineup of investment options, with management expenses that continue to
be competitive and fair. What will not change as we enter this next phase of
consolidation is our commitment to the highest standards of performance and our
dedication to superior service. Change for the good has another name: it's
called improvement. It helps move us forward, and we believe that it represents
progress for all our shareholders in their quest for long-term financial
success. 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 or managers on key factors that influenced performance. We hope that you
will read the manager reports carefully and discuss any questions you might have
with your financial advisor. As always, we thank you for choosing Columbia
Funds. We appreciate your continued confidence. And, we look forward to helping
you keep your long-term financial goals on target in the years to come.
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 liaison
to the mutual fund boards of trustees. Chris joined Bank of America in August
2004.
Summary
o For the six-month period ended December 31, 2004, the fund's class A
shares returned 12.33% without sales charge.
o The fund modestly trailed its benchmark, the Russell 2000 Value Index, but
beat its peer group, the Morningstar Small Value Category average.
o While the fund benefited from good stock selection, particularly in the
materials and telecommunications sectors, its bias toward higher quality
companies modestly hindered returns in the industrials sector.
Class A shares
[GRAPHIC]
12.33%
Russell 2000
Value Index
[GRAPHIC]
13.37%
Objective
Seeks long-term growth by
investing primarily in smaller
capitalization equity securities
Total Net Assets
$718.9 million
Management Style
Equity Style
Value Blend Growth
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Size
Large
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Med
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Small X
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FUND PROFILE
Columbia Small Cap Value 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 12/31/04 (%)
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Carpenter Technology Corp. 1.2
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Corn Products International, Inc. 0.9
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Cash America International, Inc. 0.9
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Willbros Group, Inc. 0.9
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Consolidated Graphics, Inc. 0.9
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MPS Group, Inc. 0.9
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PS Business Parks, Inc., REIT 0.8
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Harsco Corp. 0.8
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Eagle Materials, Inc. 0.8
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Greif, Inc., Class A 0.8
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Top 5 sectors as of 12/31/04 (%)
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Financials 27.4
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Industrial 19.1
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Consumer discretionary 12.8
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Information technology 11.7
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Materials 9.7
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Sector breakdown and portfolio holdings are calculated as a percentage of net
assets.
Management style is determined by Columbia Management, and is based on the
investment strategy and process as outlined in the fund's prospectus.
1
Performance of a $10,000 investment
01/01/95 - 12/31/04 ($)
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sales charge without with
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Class A 39,906 37,612
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Class B 36,997 36,997
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Class C 36,422 36,422
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Class Z 40,924 n/a
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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 Value Fund
Value of a $10,000 investment 01/01/95 - 12/31/04
[The following table was represented by a Mountain Chart in the
printed material.]
Class A Shares Class A Shares Russell 2000
Without sales charge With sales charge Value Index
10000 9425 10000
10011 9435 9951
10429 9830 10319
10766 10147 10370
10952 10322 10678
11234 10588 10906
12110 11414 11279
13509 12732 11691
13651 12866 12038
13950 13148 12218
13383 12614 11730
13873 13076 12196
13754 12963 12574
13582 12801 12657
14258 13439 12855
14735 13887 13125
15514 14622 13484
16076 15151 13825
15176 14303 13662
14138 13325 12935
14762 13914 13496
15518 14626 13865
15261 14383 14026
16172 15242 14780
16277 15341 15261
16443 15497 15496
16099 15173 15643
15363 14480 15224
15589 14693 15447
17048 16068 16677
18140 17097 17521
19219 18114 18257
19480 18360 18547
20774 19579 19780
20097 18941 19242
20103 18947 19454
20163 19003 20113
20030 18878 19749
21676 20430 20944
22925 21607 21795
23227 21892 21901
21739 20489 21126
21575 20335 21008
19569 18444 19363
15596 14700 16331
15943 15026 17253
17166 16178 17766
18496 17432 18247
18918 17830 18820
18469 17407 18393
16583 15630 17137
16287 15350 16996
17523 16515 18548
18127 17085 19117
19142 18042 19809
19060 17964 19340
17880 16852 18632
17780 16758 18259
17899 16870 17894
18447 17386 17987
19696 18563 18540
18650 17578 18054
19514 18392 19157
20062 18908 19247
20182 19022 19360
19672 18541 19064
20529 19349 19621
20687 19498 20274
22371 21085 21181
22541 21245 21060
22559 21262 20984
20863 19663 20556
23431 22084 22764
23366 22022 23392
22644 21342 23359
22159 20885 22985
23617 22259 24050
24432 23027 24668
24610 23195 25659
24603 23188 25085
24158 22768 24997
21309 20084 22237
21808 20554 22818
23324 21983 24458
25043 23603 25955
25203 23754 26300
25629 24155 26461
27492 25911 28440
28050 26437 29441
27094 25536 28466
26194 24688 27837
22998 21676 23701
23417 22070 23596
21820 20565 21912
22256 20977 22240
23979 22600 24015
23300 21961 22990
22615 21315 22341
21455 20221 21591
21496 20260 21822
23153 21822 23895
25073 23631 26334
25627 24153 26779
26982 25431 28116
28216 26593 29184
27931 26325 28849
30210 28473 31200
31409 29603 32398
32486 30618 33571
33656 31721 34732
34211 32244 35406
34892 32886 35894
33451 31528 34039
33662 31726 34451
35513 33471 36201
33879 31931 34535
33720 31781 34874
35103 33084 36255
35601 33554 36817
38827 36594 40083
39906 37612 41044
The graph and table do not reflect the deduction of taxes a shareholder would
pay on fund distributions or the redemption of fund shares. The Russell 2000
Value Index measures the performance of those Russell 2000 companies with lower
price-to-book ratios and lower forecasted growth values. Unlike the fund,
indices are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index.
Average annual total return as of 12/31/04 (%)
Share class A B C Z
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Inception 07/25/86 11/09/92 01/15/96 07/31/95
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Sales charge without with without with without with without
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6-month (cumulative) 12.33 5.87 11.89 6.89 11.91 10.91 12.51
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1-year 22.81 15.75 21.87 16.87 21.90 20.90 23.18
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5-year 15.16 13.80 14.27 14.03 14.27 14.27 15.47
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10-year 14.84 14.16 13.98 13.98 13.80 13.80 15.13
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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 C and class Z are newer classes of shares. Class C share performance
information includes returns of the fund's class B shares for periods prior to
the inception of class C shares. Class B shares would have substantially similar
annual returns because class B and class C shares generally have similar expense
structures. Class Z share performance information includes returns of the fund's
class A shares (the oldest existing fund class) for periods prior to the
inception of the newer class shares. These returns have not been adjusted to
reflect any difference in expenses (such as 12b-1 fees) between any of the
predecessor shares and the newer classes of 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 shares were initially offered on
July 25, 1986, class B shares were initially offered on November 9, 1992, class
C shares were initially offered on January 15, 1996 and class Z shares were
initially offered on July 31, 1995.
2
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 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 continuing costs, which generally
include investment advisory fees, Rule 12b-1 fee 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
07/01/04 - 12/31/04
- ----------------------------------------------------------------------------------------------------------
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period($) end of the period ($) during the period($) expense ratio (%)
- ----------------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
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Class A 1,000.00 1,000.00 1,123.31 1,018.65 6.96 6.61 1.30
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Class B 1,000.00 1,000.00 1,118.92 1,014.87 10.95 10.41 2.05
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Class C 1,000.00 1,000.00 1,119.12 1,014.87 10.95 10.41 2.05
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Class Z 1,000.00 1,000.00 1,125.12 1,019.91 5.62 5.35 1.05
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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
365.
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
Summary
For the six-month period ended
December 31, 2004
o After a weak start, stock prices bounced back in November, helping the S&P
500 Index to a 7.19% gain for the six month period. Value stocks
outperformed growth stocks, as measured by the Russell 1000 Growth and
Value indices.
S&P 500 Index
[GRAPHIC]
7.19%
Russell 1000
Value Index
[GRAPHIC]
12.08%
o Investment-grade bonds delivered solid gains. The Lehman Brothers
Aggregate Bond Index returned 4.18%. 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 9.31%.
Lehman Index
[GRAPHIC]
4.18%
Merrill Lynch Index
[GRAPHIC]
9.31%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 1000 Value Index is an unmanaged index that tracks the performance
of those Russell 1000 Index companies with lower price-to-book ratios and lower
forecasted growth values.
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.
ECONOMIC UPDATE
Columbia Small Cap Value Fund
During the six-month period that began July 1, 2004, and ended December 31,
2004, the US economy grew at a healthy pace, despite rising energy prices and a
host of geopolitical uncertainties. The nation's gross domestic product advanced
3.5% in the second half of 2004. For the year, the economy grew 4.4%, its
strongest showing in five years.
Employment dominated the economic news. Although job growth fell below
expectations early in the period, the pace of new job creation picked up and
more than two million jobs were created in 2004. In response, consumer
confidence soared to its highest level of the year in December, and consumer
spending ended the year on a high note. Holiday sales were reported to be the
strongest in five years.
Within the business sector, industrial production rose; factories utilized more
of their capacity; and spending on technology, capital equipment and
construction picked up. However, business spending for the year fell short of
forecasts given the level of profit growth and the maturity of the economic
cycle.
Stocks picked up momentum
Stock market performance picked up as economic news improved and uncertainty
surrounding the presidential election was resolved. The S&P 500 Index returned
7.19% for the six-month period. The majority of that return was generated in
November and December. Small- and mid-cap stocks led the market and value stocks
generally outperformed growth stocks. Energy and utilities stocks were the
best-performing sectors for the six-month period. Information technology
rebounded strongly in the second half.
Bonds delivered solid returns
Despite a weak start--and a weak finish--all sectors of the US bond market
delivered solid returns for the six-month period. As the Federal Reserve Board
(the Fed) began to raise short-term interest rates, the bond market responded
favorably. Yields on intermediate and long-term bonds edged lower--and prices
rose. However, the 10-year Treasury yield rose sharply in November, before
falling again in December, and bonds gave back some of their earlier gains. In
this environment, the Lehman Brothers Aggregate Bond Index returned 4.18%.
High-yield bonds, which can be less sensitive to changing interest rates, gained
9.31%, as measured by the Merrill Lynch US High Yield, Cash Pay Index. A
relatively strong economy helped improve credit quality and the sector's high
yields attracted investors seeking income. Municipal and mortgage bonds
outperformed Treasury bonds.
Short-term rates moved higher
After a year of the lowest short-term interest rates in recent history, the Fed
raised the federal funds rate, a key short-term rate, from 1.00% to 2.25% in
five equal steps between June 30 and December 31.(1) 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. Because the
Fed's moves were widely anticipated, these rate increases have had little if any
impact on the financial markets except to boost the yields on money market
funds.
(1) On February 2, the Fed raised the federal funds rate to 2.50%.
4
Net asset value per share as of 12/31/04 ($)
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Class A 43.64
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Class B 38.59
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Class C 40.22
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Class Z 45.01
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Distributions declared per share 07/01/04 - 12/31/04 ($)
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Class A 3.62
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Class B 3.38
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Class C 3.38
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Class Z 3.72
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PORTFOLIO MANAGER'S REPORT
Columbia Small Cap Value Fund
For the six-month period ended December 31, 2004, Columbia Small-Cap Value Fund
class A shares returned 12.33% without sales charge. This was slightly lower
than the Russell 2000 Value Index, which returned 13.37%. The fund's performance
was ahead of the average return of its peer group, the Morningstar Small Value
Category, which was 11.74% over the same period.(1) As small-cap stocks
continued to rally in the second half of 2004, the fund benefited from strong
stock selection, particularly in the materials and telecommunications sectors.
Below-average returns in the industrial sector and greater exposure than the
benchmark to the weak technology sector were slight detractors from performance
relative to the Russell index.
Stock picking strategy rewarded returns in materials and telecommunications
We focused on companies that we believe have strong competitive and financial
positions, good earnings growth prospects and reasonable stock valuations. Stock
selection made the biggest difference in the materials and telecommunications
sectors. In the materials sector, the fund had an overweight in metals,
including steel and titanium, as well as coal. These stocks were big winners
over the period, benefiting as commodity prices rose amid strong global demand
and tightening supply.
Telecommunications stocks rose modestly over the six-month period, making them
one of the weaker sectors in the small-cap value universe. However, the fund
benefited from having slightly less exposure than its benchmark to this
poorly-performing sector and from owning stocks that posted exceptionally strong
gains.
Gains from financials offset by underweight in REITs
Stock selection in the financial sector was also strong. Among the fund's best
performers were consumer finance investments, including a credit card company
and pawnshop. Banks and insurers also helped returns. The fund further benefited
by largely avoiding thrifts, where returns overall were weak. Offsetting this
positive performance was the fund's below-average exposure to the financial
sector, specifically real estate investment trusts ("REITs"), where we thought
valuations seemed
(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.
5
We remain moderately positive on the US economy and expect it to continue to
grow at a measured pace.
Columbia Small Cap Value Fund
expensive and performance would deteriorate as interest rates rose. Instead,
REITs did quite well, as interest rates increased only modestly and investors
continued to reach for yield. At the end of the period, the fund still had a
below-average investment in REITs, which we believed remained vulnerable to
further interest rate hikes.
Economically sensitive bias hampered returns
The fund had an above-average stake in industrials, which posted strong gains as
the economy recovered. Our focus on higher quality industrial companies,
however, caused returns to trail the sector average because lower quality
companies gained favor with investors during the second half of the year. We
maintained our focus on higher quality industrials, believing that companies
with strong balance sheets and good competitive positioning will be the sector's
long-term winners.
The fund also had an above-average stake in the economically sensitive
technology sector. Technology stocks made only modest headway during the period
as the sector failed to keep up with investor expectations.
Cautiously optimistic outlook
We remain moderately positive on the US economy, the stock market and small-cap
value stocks. We expect the economy to continue to grow at a measured pace. We
also think stocks have room to climb. As long as economic expansion continues
and stock valuations remain reasonable, we plan to maintain the fund's bias
toward economically sensitive sectors. Although we believe small-cap stocks are
no longer inexpensive compared to large-cap stocks, we still expect to find
attractive investment opportunities in 2005.
[PHOTO] Stephen Barbaro has managed the Columbia Small-Cap Value
Fund since June 2002 and has been with the advisor or
its predecessors or affiliate organizations since 1976.
/s/ Stephen Barbaro
Equity investments are affected by stock market fluctuations that
occur in response to economic and business developments. Investing in small-cap
companies may present additional risks, including greater volatility and price
fluctuations because small-cap stocks are generally thinly traded and less
liquid than stocks of 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 manager's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
manager has placed on it.
6
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value 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.
---------------------------------------------------------------------
Statements of Assests 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.
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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
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - 99.1%
CONSUMER DISCRETIONARY - 12.8% Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Auto Components - 1.1% BorgWarner, Inc. 76,400 4,138,588
Modine Manufacturing Co. 58,343 1,970,243
Standard Motor Products, Inc. 133,600 2,110,880
Auto Components Total 8,219,711
- ---------------------------------------------- -----------------------------------------------------------------------------
Hotels, Restaurants & Leisure - 3.9% Bally Total Fitness Holding Corp. (a) 229,600 973,504
Bob Evans Farms, Inc. 73,350 1,917,369
Buca, Inc. (a) 311,750 2,169,780
Dave & Buster's, Inc. (a) 156,200 3,155,240
Landry's Restaurants, Inc. 128,700 3,740,022
Lone Star Steakhouse & Saloon 172,007 4,816,196
Marcus Corp. 161,000 4,047,540
Scientific Games Corp., Class A (a) 233,000 5,554,720
Total Entertainment Restaurant Corp. (a) 17,200 205,024
Vail Resorts, Inc. (a) 51,200 1,147,904
Hotels, Restaurants & Leisure Total 27,727,299
- ---------------------------------------------- -----------------------------------------------------------------------------
Household Durables - 1.2% American Greetings Corp., Class A 95,100 2,410,785
CSS Industries, Inc. 80,300 2,550,328
Kimball International, Inc., Class B 172,934 2,561,153
Russ Berrie & Co., Inc. 54,800 1,251,632
Household Durables Total 8,773,898
- ---------------------------------------------- -----------------------------------------------------------------------------
Leisure Equipment & Products - 0.3% Action Performance Companies, Inc. 194,100 2,133,159
Travis Boats & Motors, Inc. (a) 174,975 68,240
Leisure Equipment & Products Total 2,201,399
- ---------------------------------------------- -----------------------------------------------------------------------------
Media - 1.6% 4Kids Entertainment, Inc. (a) 152,400 3,203,448
Journal Communications, Inc., Class A 102,600 1,853,982
Liberty Corp. 73,600 3,235,456
Media General, Inc., Class A 43,600 2,825,716
Media Total 11,118,602
- ---------------------------------------------- -----------------------------------------------------------------------------
Multiline Retail - 0.3% ShopKo Stores, Inc. (a) 115,800 2,163,144
Multiline Retail Total 2,163,144
- ---------------------------------------------- -----------------------------------------------------------------------------
Specialty Retail - 2.5% Building Material Holding Corp. 77,143 2,953,806
GameStop Corp., Class A (a) 185,500 4,147,780
Goody's Family Clothing, Inc. 222,481 2,033,476
Monro Muffler, Inc. (a) 168,906 4,273,322
Movie Gallery, Inc. 54,678 1,042,709
Pier 1 Imports, Inc. 126,800 2,497,960
TBC Corp. (a) 46,921 1,304,404
Specialty Retail Total 18,253,457
- ---------------------------------------------- -----------------------------------------------------------------------------
Textiles, Apparel & Luxury Goods - 1.9% Culp, Inc. (a) 56,000 379,680
Delta Apparel, Inc. 48,100 1,166,425
Hampshire Group Ltd. (a) 89,400 2,816,279
Kellwood Co. 115,050 3,969,225
Russell Corp. 126,500 2,464,220
Stride Rite Corp. 158,700 1,772,679
Tandy Brands Accessories, Inc. 81,953 1,214,543
Textiles, Apparel & Luxury Goods Total 13,783,051
-----------
CONSUMER DISCRETIONARY TOTAL 92,240,561
8 See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued)
CONSUMER STAPLES - 2.3% Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Food & Staples Retailing - 0.6% BJ's Wholesale Club, Inc. (a) 69,600 2,027,448
Chronimed, Inc. (a) 184,300 1,203,479
Winn-Dixie Stores, Inc. 176,800 804,440
Food & Staples Retailing Total 4,035,367
-----------------------------------------------------------------------------
Food Products - 1.7% Central Garden & Pet Co. (a) 35,890 1,498,049
Corn Products International, Inc. 127,000 6,802,120
John B. Sanfilippo & Son, Inc. (a) 39,000 1,005,420
M&F Worldwide Corp. (a) 133,200 1,814,184
Omega Protein Corp. (a) 179,200 1,541,120
Food Products Total 12,660,893
-----------
CONSUMER STAPLES TOTAL 16,696,260
ENERGY - 6.8%
- ---------------------------------------------- -----------------------------------------------------------------------------
Energy Equipment & Services - 1.9% Gulf Island Fabrication, Inc. 19,200 419,136
Lufkin Industries, Inc. 102,639 4,096,117
Universal Compression Holdings, Inc. (a) 90,000 3,141,900
Willbros Group, Inc. (a) 274,600 6,329,530
Energy Equipment & Services Total 13,986,683
-----------------------------------------------------------------------------
Oil & Gas - 4.9% Bill Barrett Corp. (a) 31,300 1,001,287
Brigham Exploration Co. (a) 194,700 1,752,300
Carrizo Oil & Gas, Inc. (a) 283,400 3,202,420
Cimarex Energy Co. (a) 83,100 3,149,490
Energy Partners Ltd. (a) 152,000 3,081,040
Harvest Natural Resources, Inc. (a) 224,200 3,871,934
InterOil Corp. (a) 65,400 2,474,736
Magnum Hunter Resources, Inc. (a) 252,100 3,252,090
Range Resources Corp. 158,200 3,236,772
Stone Energy Corp. (a) 89,400 4,031,046
Western Gas Resources, Inc. 130,700 3,822,975
Whiting Petroleum Corp. (a) 68,700 2,078,175
Oil & Gas Total 34,954,265
-----------
ENERGY TOTAL 48,940,948
FINANCIALS - 27.4%
- ---------------------------------------------- -----------------------------------------------------------------------------
Capital Markets - 0.2% LaBranche & Co., Inc. (a) 146,300 1,310,848
Capital Markets Total 1,310,848
-----------------------------------------------------------------------------
Commercial Banks - 11.3% BancFirst Corp. 15,450 1,220,241
BancorpSouth, Inc. 119,200 2,904,904
BancTrust Financial Group, Inc. 81,600 2,008,176
Bank of Granite Corp. 114,593 2,394,994
Bryn Mawr Bank Corp. 140,710 3,094,213
Capitol Bancorp Ltd. 121,779 4,289,056
Chemical Financial Corp. 113,980 4,892,022
Chittenden Corp. 162,450 4,667,189
Columbia Banking System, Inc. 90,600 2,264,094
Community Bancorp (a) 2,600 79,560
Community Trust Bancorp, Inc. 76,945 2,489,930
Corus Bankshares, Inc. 106,400 5,108,264
First Citizens BancShares, Inc., Class A 17,600 2,609,200
First Financial Bankshares, Inc. 58,000 2,598,980
See Accompanying Notes to Financial Statements. 9
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued)
FINANCIALS - (continued) Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Commercial Banks - (continued) Greater Bay Bancorp 92,400 2,576,112
Hancock Holding Co. 53,588 1,793,054
ITLA Capital Corp. (a) 56,300 3,309,877
MASSBANK Corp. 39,100 1,464,295
Merchants Bancshares, Inc. 92,432 2,680,528
Mid-State Bancshares 163,860 4,694,589
Northrim BanCorp, Inc. 84,300 1,981,050
Riggs National Corp. 93,696 1,991,977
S.Y. Bancorp, Inc. 16,900 407,290
Sterling Bancshares, Inc. 275,400 3,929,958
TriCo Bancshares 232,830 5,448,222
UMB Financial Corp. 74,600 4,226,836
Whitney Holding Corp. 82,400 3,707,176
Wintrust Financial Corp. 50,200 2,859,392
Commercial Banks Total 81,691,179
- ---------------------------------------------- -----------------------------------------------------------------------------
Consumer Finance - 0.9% Cash America International, Inc. 213,100 6,335,463
Consumer Finance Total 6,335,463
- ---------------------------------------------- -----------------------------------------------------------------------------
Diversified Financial Services - 1.7% Advance America Cash Advance Centers, Inc. (a) 35,500 812,950
Metris Companies, Inc. (a) 349,600 4,457,400
MFC Bancorp Ltd. (a) 281,870 5,637,400
QC Holdings, Inc. (a) 81,700 1,565,372
Diversified Financial Services Total 12,473,122
- ---------------------------------------------- -----------------------------------------------------------------------------
Insurance - 5.7% AmerUs Group Co. 46,400 2,101,920
Baldwin & Lyons, Inc., Class B 60,644 1,624,653
CNA Surety Corp. (a) 181,400 2,421,690
Commerce Group, Inc. 32,000 1,953,280
Delphi Financial Group, Inc., Class A 103,002 4,753,542
Harleysville Group, Inc. 140,600 3,356,122
Horace Mann Educators Corp. 138,000 2,633,040
Kansas City Life Insurance Co. 13,100 619,630
Navigators Group, Inc. (a) 108,800 3,275,968
Phoenix Companies, Inc. 292,000 3,650,000
ProCentury Corp. 194,500 2,411,800
Quanta Capital Holdings Ltd. (a) 237,600 2,190,672
RLI Corp. 85,100 3,537,607
UICI 46,900 1,589,910
United National Group Ltd., Class A (a) 159,400 2,968,028
Universal American Financial Corp. (a) 119,494 1,848,572
Insurance Total 40,936,434
- ---------------------------------------------- -----------------------------------------------------------------------------
Real Estate - 7.6% Alexandria Real Estate Equities, Inc., REIT 61,300 4,561,946
American Financial Realty Trust, REIT 141,000 2,281,380
BioMed Realty Trust, Inc., REIT 207,000 4,597,470
Boykin Lodging Co., REIT (a) 233,400 2,137,944
Brandywine Realty Trust, REIT 91,500 2,689,185
EastGroup Properties, Inc., REIT 106,200 4,069,584
Equity One, Inc., REIT 137,200 3,255,756
First Potomac Realty Trust, REIT 123,700 2,820,360
Getty Realty Corp., REIT 91,500 2,628,795
Gladstone Commercial Corp., REIT 110,200 1,884,420
Mid-America Apartment Communities, Inc., REIT 107,400 4,427,028
10 See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued)
FINANCIALS - (continued) Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Real Estate - (continued) Nationwide Health Properties, Inc., REIT 181,900 4,320,125
PS Business Parks, Inc., REIT 129,100 5,822,410
Tanger Factory Outlet Centers, Inc., REIT 127,000 3,360,420
Universal Health Realty Income Trust, REIT 60,700 1,950,291
Urstadt Biddle Properties, Class A, REIT 134,000 2,284,700
U-Store-It Trust, REIT 82,400 1,429,640
Real Estate Total 54,521,454
-----------
FINANCIALS TOTAL 197,268,500
HEALTH CARE - 4.7%
- ---------------------------------------------- -----------------------------------------------------------------------------
Health Care Providers & Services - 4.0% Capital Senior Living Corp. (a) 62,200 352,052
Cross Country Healthcare, Inc. (a) 132,400 2,393,792
Genesis HealthCare Corp. (a) 72,250 2,530,917
Gentiva Health Services, Inc. (a) 134,200 2,243,824
Hooper Holmes, Inc. 345,800 2,047,136
Kindred Healthcare, Inc. (a) 154,400 4,624,280
OCA, Inc. (a) 271,600 1,724,660
PAREXEL International Corp. (a) 170,100 3,453,030
Pediatrix Medical Group, Inc. (a) 66,500 4,259,325
Province Healthcare Co. (a) 89,700 2,004,795
Stewart Enterprises, Inc., Class A (a) 433,696 3,031,535
Health Care Providers & Services Total 28,665,346
-----------------------------------------------------------------------------
Pharmaceuticals - 0.7% Bradley Pharmaceuticals, Inc. (a) 128,500 2,492,900
Perrigo Co. 137,500 2,374,625
Pharmaceuticals Total 4,867,525
-----------
HEALTH CARE TOTAL 33,532,871
INDUSTRIAL - 19.1%
- ---------------------------------------------- -----------------------------------------------------------------------------
Aerospace & Defense - 2.6% AAR Corp. (a) 193,802 2,639,583
Esterline Technologies Corp. (a) 133,600 4,362,040
Herley Industries, Inc. (a) 97,400 1,981,116
Kaman Corp., Class A 163,500 2,068,275
Ladish Co., Inc. (a) 205,938 2,366,228
Precision Castparts Corp. 79,400 5,214,992
Aerospace & Defense Total 18,632,234
-----------------------------------------------------------------------------
Air Freight & Logistics - 1.1% HUB Group, Inc., Class A (a) 98,571 5,147,377
Ryder System, Inc. 62,700 2,995,179
Air Freight & Logistics Total 8,142,556
-----------------------------------------------------------------------------
Airlines - 0.5% MAIR Holdings, Inc. (a) 105,324 968,981
Skywest, Inc. 144,700 2,902,682
Airlines Total 3,871,663
-----------------------------------------------------------------------------
Building Products - 0.6% NCI Building Systems, Inc. (a) 105,300 3,948,750
Building Products Total 3,948,750
-----------------------------------------------------------------------------
Commercial Services & Supplies - 4.6% ABM Industries, Inc. 144,900 2,857,428
Angelica Corp. 75,700 2,047,685
Casella Waste Systems, Inc., Class A (a) 304,690 4,460,661
Century Business Services, Inc. (a) 182,805 797,030
Consolidated Graphics, Inc. (a) 135,800 6,233,220
See Accompanying Notes to Financial Statements. 11
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued)
INDUSTRIAL - (continued) Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Commercial Services & Supplies - (continued) Danka Business Systems PLC, ADR (a) 200,280 632,885
Electro Rent Corp. 59,481 846,415
Healthcare Services Group, Inc. 173,700 3,619,908
Imagistics International, Inc. (a) 150,100 5,052,366
NCO Group, Inc. (a) 92,200 2,383,370
Sourcecorp, Inc. (a) 92,100 1,760,031
TeleTech Holdings, Inc. (a) 225,800 2,188,002
Commercial Services & Supplies Total 32,879,001
-----------------------------------------------------------------------------
Construction & Engineering - 1.9% Comfort Systems USA, Inc. (a) 308,000 2,365,440
Dycom Industries, Inc. (a) 135,700 4,141,564
EMCOR Group, Inc. (a) 44,600 2,015,028
MasTec, Inc. (a) 55,400 560,094
Quanta Services, Inc. (a) 92,000 736,000
Washington Group International, Inc. (a) 86,600 3,572,250
Construction & Engineering Total 13,390,376
-----------------------------------------------------------------------------
Electrical Equipment - 1.6% C&D Technologies, Inc. 133,000 2,266,320
Genlyte Group, Inc. (a) 51,318 4,396,926
Powell Industries, Inc. (a) 62,100 1,148,229
Woodward Governor Co. 50,600 3,623,466
Electrical Equipment Total 11,434,941
-----------------------------------------------------------------------------
Machinery - 3.4% Alamo Group, Inc. 64,700 1,757,252
Briggs & Stratton Corp. 95,000 3,950,100
EnPro Industries, Inc. (a) 146,500 4,332,005
Harsco Corp. 103,500 5,769,090
Kadant, Inc. (a) 134,600 2,759,300
Robbins & Myers, Inc. 124,635 2,970,052
Tecumseh Products Co., Class A 62,112 2,968,954
Machinery Total 24,506,753
-----------------------------------------------------------------------------
Road & Rail - 1.4% Covenant Transport, Inc., Class A (a) 104,300 2,171,526
Dollar Thrifty Automotive Group, Inc. (a) 91,100 2,751,220
U.S. Xpress Enterprises, Inc., Class A (a) 62,283 1,824,892
Werner Enterprises, Inc. 153,800 3,482,032
Road & Rail Total 10,229,670
-----------------------------------------------------------------------------
Trading Companies & Distributors - 1.4% Hughes Supply, Inc. 144,162 4,663,641
Watsco, Inc. 160,100 5,638,722
Trading Companies & Distributors Total 10,302,363
-----------
INDUSTRIAL TOTAL 137,338,307
INFORMATION TECHNOLOGY - 11.7%
- ---------------------------------------------- -----------------------------------------------------------------------------
Communications Equipment - 1.2% Anaren, Inc. (a) 184,900 2,396,304
Belden CDT, Inc. 88,650 2,056,680
Black Box Corp. 55,900 2,684,318
Tollgrade Communications, Inc. (a) 147,410 1,804,299
Communications Equipment Total 8,941,601
-----------------------------------------------------------------------------
Computers & Peripherals - 1.1% ActivCard Corp. (a) 223,500 1,989,150
Advanced Digital Information Corp. (a) 41,700 417,834
Electronics for Imaging, Inc. (a) 47,700 830,457
Hypercom Corp. (a) 264,400 1,565,248
12 See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued)
INFORMATION TECHNOLOGY - (continued) Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Computers & Peripherals - (continued) Imation Corp. 25,800 821,214
Innovex, Inc. (a) 175,200 954,840
Intergraph Corp. (a) 54,100 1,456,913
Computers & Peripherals Total 8,035,656
-----------------------------------------------------------------------------
Electronic Equipment & Instruments - 3.5% Agilysys, Inc. 113,479 1,945,030
Anixter International, Inc. 56,700 2,040,633
Benchmark Electronics, Inc. (a) 74,450 2,538,745
Brightpoint, Inc. (a) 213,500 4,171,790
Checkpoint Systems, Inc. (a) 140,400 2,534,220
Identix, Inc. (a) 274,600 2,026,548
MTS Systems Corp. 102,282 3,458,154
NU Horizons Electronics Corp. (a) 233,607 1,864,184
OSI Systems, Inc. (a) 92,300 2,096,133
Planar Systems, Inc. (a) 109,300 1,227,439
Vishay Intertechnology, Inc. (a) 88,300 1,326,266
Electronic Equipment & Instruments Total 25,229,142
-----------------------------------------------------------------------------
Internet Software & Services - 0.6% Digitas, Inc. (a) 116,620 1,113,721
Keynote Systems, Inc. (a) 178,200 2,480,544
Stellent, Inc. (a) 117,400 1,035,468
Internet Software & Services Total 4,629,733
-----------------------------------------------------------------------------
IT Services - 2.1% Acxiom Corp. 135,941 3,575,248
Computer Horizons Corp. (a) 257,661 981,689
Inforte Corp. (a) 176,900 1,393,972
Lightbridge, Inc. (a) 218,200 1,317,928
MAXIMUS, Inc. (a) 46,400 1,443,968
MPS Group, Inc. (a) 506,950 6,215,207
IT Services Total 14,928,012
-----------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment - Exar Corp. (a) 142,400 2,020,656
0.5% Pericom Semiconductor Corp. (a) 141,845 1,337,598
Semiconductors & Semiconductor Equipment Total 3,358,254
-----------------------------------------------------------------------------
Software - 2.7% Ascential Software Corp. (a) 172,800 2,818,368
Captaris, Inc. (a) 359,300 1,853,988
Internet Security Systems, Inc. (a) 132,200 3,073,650
Lawson Software, Inc. (a) 176,300 1,211,181
MSC.Software Corp. (a) 228,500 2,392,395
PLATO Learning, Inc. (a) 293,791 2,188,743
SeaChange International, Inc. (a) 9,500 165,680
Sybase, Inc. (a) 109,000 2,174,550
Transaction Systems Architects, Inc., Class A (a) 171,200 3,398,320
Software Total 19,276,875
-----------
INFORMATION TECHNOLOGY TOTAL 84,399,273
MATERIALS - 9.7%
- ---------------------------------------------- -----------------------------------------------------------------------------
Chemicals - 2.5% Cytec Industries, Inc. 69,200 3,558,264
H.B. Fuller Co. 80,300 2,289,353
LESCO, Inc. (a) 10,900 140,501
Lubrizol Corp. 50,100 1,846,686
Minerals Technologies, Inc. 51,800 3,455,060
Schulman (A.), Inc. 105,544 2,259,697
See Accompanying Notes to Financial Statements. 13
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued)
MATERIALS - (continued) Shares Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Chemicals - (continued) Sensient Technologies Corp. 104,100 2,497,359
Stepan Co. 87,300 2,126,628
Chemicals Total 18,173,548
-----------------------------------------------------------------------------
Construction Materials - 0.8% Eagle Materials, Inc. 66,800 5,768,180
Construction Materials Total 5,768,180
-----------------------------------------------------------------------------
Containers & Packaging - 1.3% AptarGroup, Inc. 60,400 3,187,912
Greif, Inc., Class A 102,100 5,717,600
Containers & Packaging Total 8,905,512
-----------------------------------------------------------------------------
Metals & Mining - 4.3% AMCOL International Corp. 94,400 1,896,496
Carpenter Technology Corp. 144,800 8,465,008
Coeur d'Alene Mines Corp. (a) 554,500 2,179,185
Metal Management, Inc. 201,700 5,419,679
Peabody Energy Corp. 59,900 4,846,509
RTI International Metals, Inc. (a) 182,700 3,752,658
Steel Technologies, Inc. 147,300 4,052,223
Metals & Mining Total 30,611,758
-----------------------------------------------------------------------------
Paper & Forest Products - 0.8% Glatfelter 219,900 3,360,072
Mercer International, Inc. (a) 250,600 2,668,890
Paper & Forest Products Total 6,028,962
-----------
MATERIALS TOTAL 69,487,960
TELECOMMUNICATION SERVICES - 0.7%
- ---------------------------------------------- -----------------------------------------------------------------------------
Diversified Telecommunication Services - 0.4% North Pittsburgh Systems, Inc. 107,913 2,668,689
Diversified Telecommunication Services Total 2,668,689
-----------------------------------------------------------------------------
Wireless Telecommunication Services - 0.3% Price Communications Corp. (a) 139,080 2,585,497
Wireless Telecommunication Services Total 2,585,497
-----------
TELECOMMUNICATION SERVICES TOTAL 5,254,186
UTILITIES - 3.9%
- ---------------------------------------------- -----------------------------------------------------------------------------
Electric Utilities - 3.2% ALLETE, Inc. 62,900 2,311,575
Central Vermont Public Service Corp. 152,400 3,544,824
CH Energy Group, Inc. 102,400 4,920,320
El Paso Electric Co. (a) 173,000 3,276,620
Maine & Maritimes Corp. 33,500 882,725
MGE Energy, Inc. 59,986 2,161,295
Otter Tail Corp. 87,500 2,233,875
Puget Energy, Inc. 148,600 3,670,420
Electric Utilities Total 23,001,654
-----------------------------------------------------------------------------
Gas Utilities - 0.7% Cascade Natural Gas Corp. 65,700 1,392,840
Northwest Natural Gas Co. 49,300 1,663,382
WGL Holdings, Inc. 52,600 1,622,184
Gas Utilities Total 4,678,406
-----------
UTILITIES TOTAL 27,680,060
Total Common Stocks
(Cost of $503,278,273) 712,838,926
14 See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Short-Term Obligation - 1.0% Par ($) Value ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Repurchase agreement with State Street Bank &
Trust Co., dated 12/31/04, due 01/03/05 at 1.500%,
collateralized by a U.S. Treasury Bond maturing
02/15/26, market value of $7,089,776 (repurchase
proceeds $6,950,869) 6,950,000 6,950,000
Total Short-Term Obligation
(Cost of $6,950,000) 6,950,000
Total Investments - 100.1%
(Cost of $510,228,273) (b) 719,788,926
Other Assets & Liabilities, Net - (0.1)% (860,485)
Net Assets - 100.0% 718,928,441
Notes to Investment Portfolio:
(a) Non-income producing security.
(b) Cost for both financial statement and federal income tax purposes is
$510,228,273.
Acronym Name
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
At December 31, 2004, the Fund held investments in the following sectors:
% of
Sector (unaudited) Net Assets
-------------------------------------------
Financials 27.4%
Industrial 19.1
Consumer Discretionary 12.8
Information Technology 11.7
Materials 9.7
Energy 6.8
Health Care 4.7
Utilities 3.9
Consumer Staples 2.3
Telecommunication Services 0.7
Short-Term Obligation 1.0
Other Assets & Liabilities, Net (0.1)
-----
100.0%
-----
See Accompanying Notes to Financial Statements. 15
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Assets Investments, at cost 510,228,273
------------
Investments, at value 719,788,926
Cash 8,697
Receivable for:
Fund shares sold 2,124,757
Interest 289
Dividends 690,680
Expense reimbursement due from Investment Advisor 309
Deferred Trustees' compensation plan 26,224
------------
Total Assets 722,639,882
-----------------------------------------------------------------------------
Liabilities Payable for:
Investments purchased 1,289,262
Fund shares repurchased 1,275,823
Investment advisory fee 482,296
Transfer agent fee 225,700
Pricing and bookkeeping fees 32,080
Trustees' fees 1,068
Distribution and service fees 299,567
Deferred Trustees' fees 26,224
Other liabilities 79,421
------------
Total Liabilities 3,711,441
Net Assets 718,928,441
-----------------------------------------------------------------------------
Composition of Net Assets Paid-in capital 516,453,645
Accumulated net investment loss (233,646)
Accumulated net realized loss (6,852,211)
Net unrealized appreciation on investments 209,560,653
Net Assets 718,928,441
-----------------------------------------------------------------------------
Class A Net assets 366,797,093
Shares outstanding 8,405,919
Net asset value per share 43.64(a)
Maximum offering price per share ($43.64/0.9425) 46.30(b)
-----------------------------------------------------------------------------
Class B Net assets 215,128,702
Shares outstanding 5,574,097
Net asset value and offering price per share 38.59(a)
-----------------------------------------------------------------------------
Class C Net assets 51,507,609
Shares outstanding 1,280,695
Net asset value and offering price per share 40.22(a)
-----------------------------------------------------------------------------
Class Z Net assets 85,495,037
Shares outstanding 1,899,474
Net asset value, offering and redemption price per share 45.01
Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
On sales of $50,000 or more the offering price is reduced.
16 See Accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended December 31, 2004 (unaudited)
Columbia Small Cap Value Fund
($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Investment Income Dividends 4,714,452
Interest 34,545
------------
Total Investment Income 4,748,997
-----------------------------------------------------------------------------
Expenses Investment advisory fee 2,503,724
Distribution fee:
Class B 768,902
Class C 160,624
Service fee:
Class A 391,213
Class B 256,301
Class C 53,541
Transfer agent fee 559,574
Pricing and bookkeeping fees 84,011
Trustees' fees 7,829
Custody fee 24,601
Non-recurring costs (See Note 7) 4,180
Other expenses 146,290
------------
Total Expenses 4,960,790
Non-recurring costs assumed by Investment Advisor (See Note 7) (4,180)
Custody earnings credit (748)
------------
Net Expenses 4,955,862
------------
Net Investment Loss (206,865)
- ---------------------------------------------- -----------------------------------------------------------------------------
Net Realized and Unrealized Net realized gain (loss) on:
Gain (Loss) on Investments Investments 12,878,884
and Foreign Currency Foreign currency transactions (91)
------------
Net realized gain 12,878,793
Net change in unrealized appreciation on investments 65,529,800
------------
Net Gain 78,408,593
------------
Net Increase in Net Assets from Operations 78,201,728
See Accompanying Notes to Financial Statements. 17
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
(unaudited)
Six Months
Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets: 2004 ($) 2004 ($)
- ---------------------------------------------- -----------------------------------------------------------------------------
Operations Net investment loss (206,865) (559,272)
Net realized gain on investments
and foreign currency transactions 12,878,793 67,069,586
Net change in unrealized appreciation
on investments 65,529,800 93,910,222
-------------------------
Net Increase from Operations 78,201,728 160,420,536
-----------------------------------------------------------------------------
Distributions Declared to Shareholders: From net realized gains:
Class A (27,843,386) (7,140,239)
Class B (17,697,004) (6,385,740)
Class C (3,941,261) (920,797)
Class I -- (77)
Class Z (6,429,930) (1,339,466)
-------------------------
Total Distributions Declared to Shareholders (55,911,581) (15,786,319)
-----------------------------------------------------------------------------
Share Transactions Class A:
Subscriptions 65,687,909 101,767,098
Distributions reinvested 25,655,209 6,411,053
Redemptions (29,130,782) (63,618,296)
-------------------------
Net Increase 62,212,336 44,559,855
Class B:
Subscriptions 11,951,958 22,762,819
Distributions reinvested 15,892,386 5,644,770
Redemptions (31,226,006) (62,684,239)
-------------------------
Net Decrease (3,381,662) (34,276,650)
Class C:
Subscriptions 11,168,915 11,127,187
Distributions reinvested 3,099,402 752,490
Redemptions (3,063,728) (6,986,805)
Net Increase 11,204,589 4,892,872
Class I:
Subscriptions -- 1,050
Distributions reinvested -- 77
Redemptions -- (2,664)
-------------------------
Net Decrease -- (1,537)
Class Z:
Subscriptions 26,055,021 56,563,959
Distributions reinvested 2,278,715 693,082
Redemptions (11,577,886) (14,611,150)
-------------------------
Net Increase 16,755,850 42,645,891
Net Increase from Share Transactions 86,791,113 57,820,431
-------------------------
Total Increase in Net Assets 109,081,260 202,454,648
-----------------------------------------------------------------------------
Net Assets Beginning of period 609,847,181 407,392,533
End of period (including accumulated net
investment loss of $(233,646) and
$(26,781), respectively) 718,928,441 609,847,181
-----------------------------------------------------------------------------
18 See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
(unaudited)
Six Months
Ended Year Ended
December 31, June 30,
2004 2004
- ---------------------------------------------- -----------------------------------------------------------------------------
Changes in Shares Class A:
Subscriptions 1,561,920 2,683,022
Issued for distributions reinvested 605,218 171,190
Redemptions (694,445) (1,699,383)
-------------------------
Net Increase 1,472,693 1,154,829
Class B:
Subscriptions 320,062 661,962
Issued for distributions reinvested 423,797 168,350
Redemptions (838,833) (1,841,257)
-------------------------
Net Decrease (94,974) (1,010,945)
Class C:
Subscriptions 287,224 308,746
Issued for distributions reinvested 79,309 21,611
Redemptions (79,276) (198,317)
-------------------------
Net Increase 287,257 132,040
Class I:
Subscriptions -- 26
Issued for distributions reinvested -- 2
Redemptions -- (64)
-------------------------
Net Decrease -- (36)
Class Z:
Subscriptions 599,374 1,477,519
Issued for distributions reinvested 52,121 18,002
Redemptions (261,567) (375,458)
-------------------------
Net Increase 389,928 1,120,063
See Accompanying Notes to Financial Statements. 19
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
Note 1. Organization
Columbia Small-Cap Value Fund (the "Fund"), a series of Columbia Funds Trust VI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
Investment Goal
The Fund seeks long-term growth by investing primarily in smaller capitalization
equity securities.
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. Effective January 30, 2004, the Class I
shares of the Fund were liquidated.
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 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 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.
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
20
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
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 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.
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 Fund does 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 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.
The tax character of distributions paid during the year ended June 30, 2004 and
June 30, 2003 was as follows:
- ----------------------------------------------------------
June 30, 2004 June 30, 2003
- ----------------------------------------------------------
Distributions Paid From:
- ----------------------------------------------------------
Ordinary Income* $ 9,100,819 $ --
- ----------------------------------------------------------
Long-Term Capital Gains 6,685,500 49,176,784
- ----------------------------------------------------------
Tax Return of Capital -- 1,256,820
- ----------------------------------------------------------
$ 15,786,319 $ 50,433,604
- ----------------------------------------------------------
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
Unrealized appreciation and depreciation at December 31, 2004, based on cost of
investments for federal income tax purposes was:
- ----------------------------------------------------------
Unrealized appreciation $222,050,810
- ----------------------------------------------------------
Unrealized depreciation (12,490,157)
- ----------------------------------------------------------
Net unrealized appreciation $209,560,653
- ----------------------------------------------------------
21
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
The following capital loss carryforwards determined as of June 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
- ------------------------------------------
2005 $1,233,446
- ------------------------------------------
2006 1,233,446
- ------------------------------------------
2007 1,233,446
- ------------------------------------------
2009 2,466,892
- ------------------------------------------
2012 3,700,337
- ------------------------------------------
$9,867,567
- ------------------------------------------
Utilization of these amounts is subject to limitations.
Note 4. Fees and Compensation Paid to Affiliates
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Fund. Columbia, the transfer agent and the distributor, are each indirect wholly
owned subsidiaries of Bank of America Corporation ("BOA").
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 as follows:
- ------------------------------------------
Average Daily Net Assets Annual Fee Rate
- ------------------------------------------
First $500 million 0.80%
- ------------------------------------------
Next $500 million 0.75%
- ------------------------------------------
Over $1 billion 0.70%
- ------------------------------------------
For the six months ended December 31, 2004, the Fund's annualized effective
investment advisory fee rate was 0.79%.
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 received
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 six months ended December 31, 2004, the annualized 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 and has subcontracted with Boston
Financial Data Services ("BFDS") to serve as sub-transfer agent. For such
services, the Transfer Agent receives an annual fee by class of $28.00 per open
account. The Transfer Agent also receives reimbursement for certain
out-of-pocket expenses.
For the six months ended December 31, 2004, the Fund's annualized effective
transfer agent fee rate, inclusive of out-of-pocket expenses, was 0.18%.
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 six months ended December 31,
2004, the Distributor has retained net underwriting discounts of $82,891 on
sales of the Fund's Class A shares and received CDSC fees of $605, $128,151 and
$3,022 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 of the Fund attributable to Class A, Class B and Class
C shares. The Plan also requires the payment of a monthly distribution fee to
the Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only.
22
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
Fee Waivers
Columbia has voluntarily agreed to reimburse the Fund for certain expenses so
that total expenses (exclusive of distribution and service fees, brokerage
commissions, interest, taxes and extraordinary expenses, if any) will not exceed
1.25% annually of the Fund's average daily net assets. Columbia, at its
discretion, may revise or discontinue this arrangement any time.
Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. 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
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. 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 Office of the Chief Compliance Officer. 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 six months ended December 31, 2004, the Fund paid $729 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
Note 5. Purchases and Sales of Securities
For the six months ended December 31, 2004, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $97,245,283 and
$67,034,489, respectively.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $350,000,000 committed
unsecured revolving line of credit provided by State Street Bank and Trust
Company. Borrowings are used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to each participating fund based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.10% per annum is accrued and apportioned among
the participating funds based on their pro-rata portion of the unutilized line
of credit. The commitment fee is included in "Other expenses" on the Statement
of Operations. For the six months ended December 31, 2004, the Fund did not
borrow under these arrangements.
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
On February 9, 2005, Columbia and the Distributor (collectively the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the SEC (the "SEC Order" and together, the
"Settlements"). The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle which Columbia Group
entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed, among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions
23
- --------------------------------------------------------------------------------
December 31, 2004 (unaudited) Columbia Small Cap Value Fund
of the federal securities laws; maintain certain compliance and ethics oversight
structures; retain an independent consultant to review the Columbia Group's
applicable supervisory, compliance, control and other policies and procedures;
and retain an independent distribution consultant (see below). The Columbia
Funds have also voluntarily undertaken to implement certain governance measures
designed to maintain the independence of their boards of trustees. The NYAG
Settlement also, among other things, requires Columbia and its affiliates, Banc
of America Capital Management, LLC and BACAP Distributors, LLC to reduce certain
Columbia Funds, Nations Funds and other mutual fund management fees collectively
by $32 million per year for five years, for a projected total of $160 million in
management fee reductions.
Pursuant to the procedures set forth in the SEC Order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant, who
is acceptable to the SEC staff and the Columbia Funds' independent trustees. The
distribution plan must be based on a methodology developed in consultation with
the Columbia Group and the Fund's independent trustees and not unacceptable to
the staff of the SEC.
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.
A copy of the SEC Order will be available on the SEC website at
http://www.sec.gov. A copy of the NYAG Settlement is available as part of the
Bank of America Corporation Form 8-K filing on February 10, 2005.
In connection with the events described in detail above, various parties have
filed suit against certain funds, their Boards and/or Bank of America (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
direct and 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.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Fund
and Columbia. The lawsuit alleges that defendants violated common law duties to
fund shareholders as well as sections of the Investment Company Act of 1940, by
failing to ensure that the Fund and other affiliated funds participated in
securities class action settlements for which the funds were eligible.
Specifically, plaintiffs allege that defendants failed to submit proof of claims
in connection with settlements of securities class action lawsuits filed against
companies in which the funds held positions.
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 proceedings 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 December 31, 2004, Columbia has assumed $4,180 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
24
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months
Ended Year Ended June 30,
December 31, --------------------------------------------------------------------
Class A Shares 2004 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 42.17 $ 31.39 $ 37.54 $ 37.49 $ 32.56 $ 30.36
- -----------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss)(a) 0.04 0.08 0.02 (0.20) 0.06 0.10
Net realized and unrealized gain (loss)
on investments and foreign currency 5.05 11.88 (1.54) 2.42 6.38 2.30
-------- --------- --------- -------- --------- -----------
Total from Investment Operations 5.09 11.96 (1.52) 2.22 6.32 2.20
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to
Shareholders:
From net realized gains (3.62) (1.18) (4.51) (2.17) (1.39) --
Return of capital -- -- (0.12) -- -- --
-------- --------- --------- -------- --------- -----------
Total Distributions Declared
to Shareholders (3.62) (1.18) (4.63) (2.17) (1.39) --
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 43.64 $ 42.17 $ 31.39 $ 37.54 $ 37.49 $ 32.56
Total return (b) 12.33%(c) 38.58%(d) 2.16%(d) 6.43% 19.86% 7.25%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Operating Expenses (e) 1.30%(f) 1.42% 1.54% 1.57% 1.58% 1.49%
Interest expense -- -- --%(g) -- -- --
Net investment income loss(e) 0.20%(f) 0.22% 0.07% (0.55)% 0.18% 0.33%
Waiver/reimbursment -- 0.01% 0.12% -- -- --
Portfolio turnover rate 11%(c) 46% 118% 77% 29% 77%
Net assets, end of period (000's) $366,797 $ 292,365 $ 181,377 $142,551 $ 137,042 $ 138,969
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Not annualized.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
(g) Rounds to less than 0.01%.
25
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months
Ended Year Ended June 30,
December 31, --------------------------------------------------------------------
Class B Shares 2004 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 37.60 $ 28.18 $ 34.50 $ 34.88 $ 30.64 $ 28.78
- -----------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment loss (a) (0.10) (0.18) (0.19) (0.44) (0.31) (0.31)
Net realized and unrealized gain (loss)
on investments and foreign currency 4.47 10.64 (1.50) 2.23 5.94 2.17
-------- --------- --------- -------- --------- -----------
Total from Investment Operations 4.37 10.46 (1.69) 1.79 5.63 1.86
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to
Shareholders:
From net realized gains (3.38) (1.04) (4.51) (2.17) (1.39) --
Return of capital -- -- (0.12) -- -- --
-------- --------- --------- -------- --------- -----------
Total Distributions Declared
to Shareholders (3.38) (1.04) (4.63) (2.17) (1.39) --
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 38.59 $ 37.60 $ 28.18 $ 34.50 $ 34.88 $ 30.64
Total return (b) 11.89%(c) 37.58%(d) (2.93)%(d) 5.65% 18.83% 6.46%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Operating expenses (e) 2.05%(f) 2.17% 2.30% 2.32% 2.33% 2.24%
Interest expense -- -- --%(g) -- -- --
Net investment loss (e) (0.55)%(f) (0.53)% (0.71)% (1.30)% (0.93)% (1.08)%
Waiver/reimbursement -- 0.01% 0.09% -- -- --
Portfolio turnover rate 11%(c) 46% 118% 77% 29% 77%
Net assets, end of period (000's) $215,129 $ 213,159 $ 188,270 $231,602 $ 240,252 $ 238,607
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(c) Not annualized.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
(g) Rounds to less than 0.01%.
26
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months
Ended Year Ended June 30,
December 31, --------------------------------------------------------------------
Class C Shares 2004 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 39.05 $ 29.24 $ 35.59 $ 35.91 $ 31.50 $ 29.59
- -----------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment loss (a) (0.11) (0.19) (0.19) (0.45) (0.31) (0.32)
Net realized and unrealized gain (loss)
on investments and foreign currency 4.66 11.04 (1.53) 2.30 6.11 2.23
-------- --------- --------- -------- --------- -----------
Total from Investment Operations 4.55 10.85 (1.72) 1.85 5.80 1.91
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to
Shareholders:
From net realized gains (3.38) (1.04) (4.51) (2.17) (1.39) --
Return of capital -- -- (0.12) -- -- --
-------- --------- --------- -------- --------- -----------
Total Distributions Declared
to Shareholders (3.38) (1.04) (4.63) (2.17) (1.39) --
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 40.22 $ 39.05 $ 29.24 $ 35.59 $ 35.91 $ 31.50
Total return (b) 11.91%(c) 37.56%(d) (2.92)%(d) 5.66% 18.85% 6.45%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Operating expenses (e) 2.05%(f) 2.17% 2.30% 2.32% 2.33% 2.24%
Interest expense -- -- --%(g) -- -- --
Net investment loss (e) (0.55)%(f) (0.53)% (0.71)% (1.30)% (0.93)% (1.08)%
Waiver/reimbursement -- 0.01% 0.10% -- -- --
Portfolio turnover rate 11%(c) 46% 118% 77% 29% 77%
Net assets, end of period (000's) $ 51,508 $ 38,798 $ 25,186 $ 26,726 $ 27,886 $ 27,400
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(c) Not annualized.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
(g) Rounds to less than 0.01%.
27
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months
Ended Year Ended June 30,
December 31, --------------------------------------------------------------------
Class Z Shares 2004 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 43.41 $ 32.24 $ 38.28 $ 38.09 $ 33.01 $ 30.70
- -----------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss) (a) 0.10 0.21 0.24 (0.12) 0.02 (0.02)
Net realized and unrealized gain (loss)
on investments and foreign currency 5.22 12.19 (1.65) 2.48 6.45 2.33
-------- --------- --------- -------- --------- -----------
Total from Investment Operations 5.32 12.40 (1.41) 2.36 6.47 2.31
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to
Shareholders:
From net realized gains (3.72) (1.23) (4.51) (2.17) (1.39) --
Return of capital -- -- (0.12) -- -- --
-------- --------- --------- -------- --------- -----------
Total Distributions Declared
to Shareholders (3.72) (1.23) (4.63) (2.17) (1.39) --
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 45.01 $ 43.41 $ 32.24 $ 38.28 $ 38.09 $ 33.01
Total return (b) 12.51%(c) 38.94%(d) (1.79)%(d) 6.71% 20.05% 7.52%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Operating expenses (e) 1.05%(f) 1.17% 1.25% 1.32% 1.33% 1.24%
Interest expense -- -- --%(g) -- -- --
Net investment income (loss) (e) 0.45%(f) 0.52% 0.82% (0.30)% 0.07% (0.08)%
Waiver/reimbursement -- 0.01% 0.38% -- -- --
Portfolio turnover rate 11%(c) 46% 118% 77% 29% 77%
Net assets, end of period (000's) $ 85,495 $ 65,526 $ 12,558 $ 278 $ 21 $ 11,431
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Not annualized.
(d) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(f) Annualized.
(g) Rounds to less than 0.01%.
28
IMPORTANT INFORMATION ABOUT THIS REPORT
- --------------------------------------------------------------------------------
Columbia Small Cap Value 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 ColumbiaSmall Cap Value 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 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. Information regarding how the fund voted proxies relating to
portfolio securities during the 12-month period ended June 30, 2004 is available
from the SEC's website. Information regarding how the fund voted proxies
relating to portfolio securities is also available from the fund's website.
The fund files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is
available on the SEC's website at www.sec.gov and may be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Columbia Management is the primary investment management division of Bank of
America Corporation. Columbia Management entities furnish investment management
services and advise institutional and mutual fund portfolios.
29
[GRAPHIC]
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Small Cap Value Fund Semiannual Report, December 31, 2004
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
Columbia Management(R)
(C)2005 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
769-03/092U-0105 (02/05) 05/4356
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. 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 11. 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 second fiscal quarter of
the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust VI
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By (Signature and Title) /S/ Christopher L. Wilson
------------------------------------------------------
Christopher L. Wilson, President
Date March 1, 2005
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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
------------------------------------------------------
Christopher L. Wilson, President
Date March 1, 2005
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By (Signature and Title) /S/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, Treasurer
Date March 1, 2005
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