UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-01829
Columbia Acorn Trust
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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: 12/31/04
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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.
COLUMBIA ACORN FAMILY OF FUNDS
CLASS Z SHARES
ANNUAL REPORT
DECEMBER 31, 2004
MANAGED BY COLUMBIA WANGER ASSET MANAGEMENT, L.P. 4
COLUMBIA ACORN FUND
COLUMBIA ACORN INTERNATIONAL
COLUMBIA ACORN USA
COLUMBIA ACORN INTERNATIONAL SELECT
COLUMBIA ACORN SELECT
COLUMBIA THERMOSTAT FUND
>LETTER TO SHAREHOLDERS FROM THE
COLUMBIA ACORN TRUST BOARD OF TRUSTEES
The Trustees of the Columbia Acorn Trust are pleased to present this
annual report to shareholders of the Columbia Acorn Family of Funds ("Acorn
Funds") for 2004.
Your Trustees addressed several important shareholder issues during the
year.
Renewal of Agreements/Expense Reductions
Following an in-depth review and analysis, we unanimously approved the
renewal of agreements with our investment adviser, Columbia Wanger Asset
Management ("CWAM") and two other Columbia Management subsidiaries to manage
investments and provide administrative, distribution and transfer agent
services. We believe CWAM has consistently provided exceptional value to
shareholders and that it will continue to do so under the present agreement,
which preserves critical elements of the Firm's autonomy and commits it to
focusing on managing the assets of the Acorn Funds.
As part of the renewal process, we negotiated a minimum reduction of 25%
in transfer agent fees paid by the Acorn Funds effective September 30, 2004. We
also negotiated reductions in the advisory fee rates for Columbia Acorn Select
and in the administrative fee rates for all Acorn Funds by the establishment of
new break points. Further, the 12b-1 plan was changed to reduce annual charges
to all Class A shareholders from 35 to 25 basis points and to all Class B
shareholders from 100 to 85 basis points representing reductions of 28.6% and
15%, respectively. The administrative fee and 12b-1 plan reductions were
effective August 1, 2004.
Increase in Minimum Investment for New Shareholders
We decided to implement a plan to reduce future cash inflows into Columbia
Acorn Fund and Columbia Acorn USA. The minimum investment for new shareholders
is now $50,000. This action was taken to protect existing shareholders from the
potential impairment of the investment process and performance, which could
result if the large amounts of cash inflows experienced by these funds were to
continue.
Trustee Independence
The Securities and Exchange Commission ("SEC") issued new independence
requirements in 2004 calling for independent trustees of mutual funds to
represent at least 75% of the total number of trustees and also requiring an
independent chairperson. Your Trustees have adhered to those hallmarks of
governance for several years. We currently have seven independent trustees
(including the chairperson) who are not affiliated in any way with entities of
Bank of America Corporation ("B of A"), the parent of our investment adviser,
distributor and transfer agent. Charles McQuaid and Ralph Wanger of our
investment adviser, CWAM, are the only "interested" trustees.
New Chief Compliance Officer
We recruited and appointed Robert Scales as Chief Compliance Officer
("CCO") of the Acorn Funds in April, 2004. This is a new position reporting
directly to the Trustees through our Compliance Committee. Mr. Scales has
experience as a lawyer in the securities and financial services industries and
five years with the Enforcement Division of the SEC. He reviewed the policies
and procedures of the B of A entities serving the Acorn Funds during 2004 and
reported his findings to us. Mr. Scales is monitoring the performance of these B
of A entities in 2005 under the direction and oversight of our Compliance
Committee. He is reporting his findings to us on a regular basis.
1
Columbia Management Market Timing Charges
Throughout 2004 we monitored the regulatory proceedings related to
frequent trading brought against B of A entities by the SEC and the New York
Attorney General. As we told you in our letter to shareholders dated March 23,
2004, complaints were filed against Columbia Management Advisors ("CMA"), which
provides administrative services to the Acorn Funds and Columbia Funds
Distributors ("CFD"), the distributor for the Acorn Funds. CWAM was not a party
to these complaints. On February 9, 2005, the parties in those proceedings
finalized settlement agreements that will result in advisory fee reductions for
all of the Acorn Funds. In addition, CMA and CFD will pay a substantial amount
in penalties. The distribution of that money to the Columbia family of funds
and/or its shareholders will be determined by an independent distribution
consultant ("IDC") acceptable to the SEC. The IDC will receive recommendations
and comments from us before making the final determination regarding payments to
any Acorn fund or its shareholders. We are hopeful this will be resolved in
2005.
Certain provisions of the settlement agreements call for us to carry out
special oversight procedures if we want CMA to provide services to the Acorn
Funds in the future. These procedures, which we expect to follow voluntarily,
relate to the review, negotiation and determination of management and other fees
paid by the Acorn Funds and to the monitoring of compliance. Any incremental
cost associated with these special procedures will be paid by Columbia
Management.
We also focused on the revised practices and control procedures of CFD
directed at preventing improper trading activity. Reviews of those practices and
controls were conducted by our independent legal counsel, our independent
consultants and our CCO. Although there never can be absolute assurance that
improper trading activity can always be identified or terminated, we believe
that CFD has strengthened its internal practices and controls to identify and
discourage such activity. We will continue to monitor CFD's control environment
in 2005 through the direct involvement of our CCO and oversight of our
Compliance Committee.
As we all look forward to Acorn Funds' 35th consecutive year of serving
shareholders, your Trustees remain dedicated and focused on the goal of
providing exceptional value. We believe such value is delivered to shareholders
through a rational investment philosophy and policy consistently applied by
qualified investment management with the highest ethical standards.
The Acorn Funds have established a record of providing a distinct
investment opportunity among mutual funds. We are committed to preserving that
opportunity in the years ahead.
We thank our fellow shareholders for their continued interest and
investment in the Acorn Funds.
/s/ Robert E. Nason
Robert E. Nason
INDEPENDENT CHAIRMAN OF THE BOARD OF TRUSTEES
COLUMBIA ACORN TRUST
2
Columbia Acorn Family of Funds Annual Report 2004
Table of Contents
Columbia Acorn Family of Funds
Performance At A Glance 4
Squirrel Chatter: The Miracle Year 5
Understanding Your Expenses 8
COLUMBIA ACORN FUND
In a Nutshell 10
At a Glance 11
Major Portfolio Changes 22
Statement of Investments 24
COLUMBIA ACORN INTERNATIONAL
In a Nutshell 12
At a Glance 13
Major Portfolio Changes 36
Statement of Investments 38
Portfolio Diversification 42
COLUMBIA ACORN USA
In a Nutshell 14
At a Glance 15
Major Portfolio Changes 43
Statement of Investments 44
COLUMBIA ACORN INTERNATIONAL SELECT
In a Nutshell 16
At a Glance 17
Major Portfolio Changes 49
Statement of Investments 50
Portfolio Diversification 52
COLUMBIA ACORN SELECT
In a Nutshell 18
At a Glance 19
Major Portfolio Changes 53
Statement of Investments 54
COLUMBIA THERMOSTAT FUND
In a Nutshell 20
At a Glance 21
Statement of Investments 75
Statement of Assets and Liabilities 76
Statement of Operations 77
Statement of Changes in Net Assets 78
Financial Highlights 80
Notes to Financial Statements 81
COLUMBIA ACORN FAMILY OF FUNDS
Statements of Assets and Liabilities 58
Statements of Operations 59
Statements of Changes in Net Assets 60
Financial Highlights 64
Notes to Financial Statements 68
Report of Independent Registered
Public Accounting Firm 85
Unaudited Information 86
Change in Independent Registered
Public Accounting Firm 87
Columbia Acorn Family of Funds Information 88
Board of Trustees and Management
of Columbia Acorn Funds 90
>2004 Year-End Distributions
The following table details the funds' year-end distributions. The record date
for Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select was
December 9, 2004. The ex-dividend date was December 10, 2004, and the payable
date was December 13, 2004. For Columbia Thermostat Fund, the record date was
December 23, 2004. The ex-dividend date was December 27, 2004, and the payable
date was December 28, 2004.
LONG-TERM SHORT-TERM ORDINARY REINVESTMENT
CAPITAL GAINS CAPITAL GAINS INCOME PRICE
- -------------------------------------------------------------------------------------------------
Columbia Acorn Fund $0.8319 $0.0491 $0.0176 $25.56
- -------------------------------------------------------------------------------------------------
Columbia Acorn USA $0.1376 None None $24.43
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Columbia Acorn Select $0.4398 None None $20.62
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Columbia Thermostat Fund $0.0011 $0.0079 $0.2891 $13.05
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THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY
AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO
BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY
CHANGE AT ANY TIME WITHOUT NOTICE AND THE PORTFOLIO MANAGERS MAY ALTER A FUND'S
PORTFOLIO HOLDINGS BASED ON THESE VIEWS AND THE FUND'S CIRCUMSTANCES AT THAT
TIME.
3
Columbia Acorn Family of Funds
>Performance At A Glance
Class Z Average Annual
Total Returns through 12/31/04
4TH LIFE
QUARTER* 1 YEAR 3 YEARS 5 YEARS 10 YEARS OF FUND
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COLUMBIA ACORN
FUND (6/10/70) 12.44% 21.51% 15.34% 12.38% 16.71% 16.45%
- ------------------------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% 3.59% -2.30% 12.07% 12.09%
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Russell 2500 14.22% 18.29% 12.27% 8.35% 13.75% NA
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Lipper Small-Cap
Core Funds Index 11.44% 18.37% 10.44% 9.06% 12.98% NA
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Lipper Mid-Cap
Core Funds Index 11.79% 15.44% 9.22% 5.65% 12.63% NA
- ------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (9/23/92) 16.73% 29.47% 17.10% 0.26% 10.68% 12.47%
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Citigroup EMI
Global ex-US 16.70% 29.27% 23.11% 6.84% 6.71% 8.16%
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MSCI EAFE 15.32% 20.25% 11.89% -1.13% 5.62% 7.24%
- ------------------------------------------------------------------------------------------------------------
Lipper Int'l Small-
Cap Funds Index 16.27% 29.50% 22.74% 5.36% NA NA
- ------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(9/4/96) 14.26% 20.62% 13.09% 9.44% -- 14.77%
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Russell 2000 14.09% 18.33% 11.48% 6.61% -- 9.81%
- ------------------------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 11.44% 18.37% 10.44% 9.06% -- 10.88%
- ------------------------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% 3.59% -2.30% -- 9.33%
- ------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN INT'L
SELECT (11/23/98) 13.26% 24.14% 14.43% -1.63% -- 10.50%
- ------------------------------------------------------------------------------------------------------------
Citigroup World ex-US
Cap Range $2-10B 16.46% 25.22% 19.39% 6.21% -- 9.35%
- ------------------------------------------------------------------------------------------------------------
MSCI EAFE 15.32% 20.25% 11.89% -1.13% -- 3.70%
- ------------------------------------------------------------------------------------------------------------
Lipper International
Funds Index 14.39% 18.59% 11.60% -0.89% -- 4.99%
- ------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT (11/23/98) 13.82% 18.58% 12.60% 11.48% -- 15.29%
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S&P MidCap 400 12.16% 16.48% 10.53% 9.54% -- 12.11%
- ------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap
Growth Index 13.78% 14.03% 3.37% -6.07% -- 6.24%
- ------------------------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% 3.59% -2.30% -- 2.17%
- ------------------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND (9/25/02) 5.83% 9.17% -- -- -- 14.57%
- ------------------------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% -- -- -- 20.98%
- ------------------------------------------------------------------------------------------------------------
Lehman U.S. Credit
Intermediate Bond Index 0.77% 4.08% -- -- -- 6.23%
- ------------------------------------------------------------------------------------------------------------
Lipper Flexible
Portfolio Funds Index 7.76% 9.50% -- -- -- 16.90%
- ------------------------------------------------------------------------------------------------------------
* Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of
U.S. blue-chip company stock performance. S&P MIDCAP 400 is a broad
market-weighted index of 400 stocks that are in the next size/tier down from the
S&P 500. RUSSELL 2000 is a market-weighted index of 2000 smaller U.S. companies,
formed by taking the largest 3,000 companies and eliminating the largest 1,000.
RUSSELL 2500 is the smallest 2,500 U.S. companies from this same group.
CITIGROUP EMI GLOBAL EX-US is the bottom 20% of institutionally investable
capital of developed and emerging countries, selected by index sponsor, outside
the U.S. MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a
widely recognized international benchmark that comprises 20 major markets in
proportion to world stock market capitalization. CITIGROUP WORLD EX-US CAP RANGE
$2-$10B is a subset of the Broad Market Index, representing a mid-cap developed
market index excluding the U.S. LIPPER INDEXES include the largest funds tracked
by Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH INDEX, 30 mid-cap
growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core funds; LIPPER
INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not including non-U.S.
small-cap funds; LIPPER INTERNATIONAL SMALL-CAP FUNDS INDEX, 10 largest non-U.S.
funds investing in small-cap companies, including Columbia Acorn International;
LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small-cap core funds, including
Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar
weighted index of the 30 largest mutual funds within the Flexible Portfolio fund
classification, as defined by Lipper. The LEHMAN U.S. CREDIT INTERMEDIATE BOND
INDEX is the intermediate component of the U.S. Credit Index. The U.S. Credit
Index includes publicly issued U.S. corporate and foreign debentures and secured
notes that meet specified maturity, liquidity, and quality requirements. All
indexes are unmanaged and returns include reinvested distributions. A more
complete description of each index is included in the Funds' statement of
additional information. It is not possible to invest directly in an index.
1-800-922-6769
4
>Squirrel Chatter: THE MIRACLE YEAR
[Photo of Ralph Wanger]
.
1905 was a year of surprises. The first surprise was the victory of the Japanese
over the Russians in the Russo-Japanese War. In May 1905, the untested Japanese
Navy annihilated the Russian fleet at Tsushima. This was the first time a
non-white country had beaten the main force of a European colonial power. The
second unexpected event was in physics. 2005 will be celebrated as the
centennial of Albert Einstein's "Miracle Year."
The journal, Annalen der Physik, volume 17, published three articles in
September 1905 all written by Einstein, an obscure clerk in the Swiss patent
office in Bern. He had an undergraduate degree in physics but no Ph.D (it was
granted a year later). Each of the articles was on a different subject and each
one revolutionized its branch of physics. Einstein's papers created 20th century
physics almost single-handedly.
ATOMS
In 1905 there were different theories about the structure of matter. If
you take a glass of water and pour nine-tenths of it out, you still have a glass
with water in it. What happens if you repeat this process of throwing out 90% of
the water in the glass? After you repeat the process a few more times, you have
such a small amount of water that you can only see it under a microscope, and in
a few more steps the water drop will be too small to be seen even under the
microscope. Can you continue the boring job of splitting water forever or do you
finally get to a point where it isn't water anymore? Of course we know the
answer: Once you get down to a single molecule of water you can't split it and
still say that you have water left. Many leading scientists did not accept the
atomic theory in 1905. Einstein looked at the process called Brownian Motion in
which a grain of pollen or other small object moves around in a random way. (The
same mathematical process makes stock prices jiggle.) He deduced that this
motion was caused by billions of atoms bumping into the pollen grain in an
irregular pattern. He was even able to calculate the size of the atoms involved,
thus proving that atoms really existed.
PHOTONS
In 1905 there was still a basic debate about the nature of light. The
greatest achievement of 19th century physics was Maxwell's set of partial
differential equations governing electromagnetic fields, including light.
Maxwell's equations required that light be a wave. The great Max Planck had
introduced the idea of a quantum of energy in 1900 to get an equation that
tracked the spectrum of heat radiation, but most scientists doubted that a light
quantum was "real." Heinrich Hertz, Philip Lenard and others showed that when a
beam of ultraviolet light shines on a piece of metal you produce an electrical
current in the metal. There was no way to explain the photoelectric effect
according to the Maxwell wave theory of light. The second paper Einstein wrote
dealt with the problem of the photoelectric effect. If you cut the amount of
energy in a beam of light by 90% and keep reducing it, you still have a beam of
light. If you keep slicing the amount of light, does the beam of light keep
getting smaller and smaller forever or do you get down to an "atom" of light
that can't be split further? Einstein proved that there was a tiny amount of
light that could not be further divided. The least amount of light that exists
is a single photon (or quantum) of light.1 The photoelectric effect is explained
by photons acting as particles, not as a wave.
Einstein's discovery of the photon had a number of interesting effects.
First, it led to the development of quantum mechanics and thus to most of 20th
century physics. Second, it won Einstein his only Nobel Prize. Third, it
uncovered a paradox that still puzzles students, the duality of light. If you
run an experiment to show that light is a wave, you can prove it's a wave. If
you run an experiment to show that it's a particle, you can prove it's a
particle. This duality principle contradicts common sense but when you study
science you have to get used to it. The fourth effect was that it made Lenard a
life-long enemy of Einstein. Philip Lenard, who received the Nobel Prize in 1905
for his own work on cathode rays, was close to the solution but Einstein ended
up getting the credit. Lenard became an unrelenting foe of Einstein, and
influenced the Nobel committee's decision not to give Einstein the prize for his
theory of relativity. Later on, Lenard became an ardent Nazi.
5
RELATIVITY
In 1905, there was also a debate in scientific circles about speed. If you
were in a really powerful rocket ship in space, and you pushed the throttle
forward, you would speed up. If you kept on increasing the power, would you go
ever faster, or was there an absolute speed limit in the universe that you could
not exceed?
The third paper became the best known, Einstein's special theory of
relativity. It explained that there was a cosmic speed limit, the speed of
light. Very odd things happen when your rocket ship is moving close to the speed
of light. Time slows down and you get shorter, under the Lorentz contraction
equation, giving rise to the limerick:
A sexy young techie named Fisk,
Had a motion exceedingly brisk.
So fast was his action
The Lorentz contraction
Shortened his rod to a disk.
In a very brief paper published later in 1905, Einstein added in a note
that his theory of relativity implied the equation E=mc2. That solved the
paradox of radioactivity; Mme. Curie's radium was producing much more energy
then could be explained by 19th century physics. Einstein showed that
radioactive energy was caused by turning a small amount of mass into a lot of
energy.
So we had this technical journal containing three papers written by a man
unknown in science, a non-Ph.D, a non-academic, writing on a German-dominated
field with all the fussiness about rank and reputation that you would expect.
Would anyone care? Einstein did not receive any communication from any
physicists for the first couple months after he published, but in early 1906 Max
Planck read and understood the papers. He wrote to Einstein and sent his
assistant, another important physicist, Max von Laue, to visit Einstein in Bern.
Planck's subsequent endorsement made Einstein acceptable to the community of
physicists, and his papers became required study for all physicists, as they
remain.
The compelling human question: How the heck did Einstein do it? How could
one human being produce three revolutionary papers in one year, on three
different subjects, while carrying a full-time job at the patent office to boot?
We can admire but not explain. The "Miracle Year" commemorates one of the
greatest feats of the human mind ever.
2004 SCARLET A WINNERS
Each year we honor those outside analysts who have provided advice and insight
to our investment team on some of the top-performing stocks that we held in the
Funds. The criteria for domestic stock Scarlet A winners was an annual gain of
over 45% and a dollar gain of over $60 million across the Funds. On the
international side, the stock needed to increase more than 50% and make more
than $20 million for the Funds.
Our thanks to Kindra Devaney Tartarsky, formerly with Fulcrum Partners,
who suggested we look at teen retailer ABERCROMBIE & FITCH. In 2004, the stock
was up 89% and had a dollar gain for the Funds of $66 million. Barry Sahgal, now
with Gilford Securities, receives his second Scarlet A for natural gas producer
ULTRA PETROLEUM. The stock had an annual gain of 95% and made over $62 million
for the Funds. ESCO TECHNOLOGIES, a manufacturer of automatic electric meter
readers, increased nearly 76% in 2004 and made over $60 million for the Funds.
Richard Eastman of Robert W. Baird & Co. brought Esco to us three years ago and
has provided superior coverage on this stock and the filtration industry ever
since. PEOPLE'S BANK OF BRIDGEPORT gained 86% in 2004, earning nearly $64
million for the Funds. Our thanks to Sal DiMartino with Bear Stearns for
recommending this stock to us 10 years ago.
On the international side, ANGLO IRISH BANK made it a three-peat in 2004.
The stock first won the Scarlet A for David Smith of Davy Stockbrokers in Dublin
in 2002 and it's still going strong. For the year, the stock increased 56% and
made $63 million for the Funds. Based in the United Kingdom, oil and gas
producer TULLOW OIL had an impressive 94% gain for the year and made $36 million
for the Funds. Credit goes to Tony Alves of KBC Peel Securities in
1-800-922-6769
6
London and, making a second appearance on the 2004 Scarlet A list, Barry Sahgal.
Marc de Natris of Fortis Bank is back among the Scarlet A winners this year.
Marc received the "A" in 2000 and 2001 for different stocks. This year, we
credit him for his help on AALBERTS INDUSTRIES, a Netherlands-based, diversified
industrial company. Aalberts increased 91% and made nearly $35 million for the
Funds. French postage meter machine manufacturer NEOPOST rounds out our
international winners. The stock increased 57% in '04 and made $28 million for
the Funds. Our thanks to Caroline Cohen of Deutsche Bank for the insight she
provided on this stock.
COLUMBIA WAM NEWS
We are pleased to announce that Zach Egan has been named director of
international research for Columbia Wanger Asset Management. In this position,
Zach will provide leadership and quality control to Columbia Wanger's
international research efforts. Congratulations Zach!
/s/ Ralph Wanger
Ralph Wanger
FOUNDER, ADVISOR AND TRUSTEE
COLUMBIA WANGER ASSET MANAGEMENT, L.P.
- --------------------------------------------------------------------------------
1 Planck and Einstein had discovered the quantum jump, which was the
smallest thing that could possibly exist in the universe. Modern writers,
for reasons difficult to explain, now use the phrase quantum jump to mean
a big event. When non-scientists start throwing around scientific terms
without understanding them, funny things happen. Don't get me started on
the Heisenberg uncertainty principle.
Incidentally, Albert Einstein's father, Hermann, was born in the
Wurttemberg village of Buchau, where his family had lived for generations.
Hermann moved 20 miles from Buchau to the city of Ulm, where Albert was
born. My great-great grandfather, Joseph Kohn, was also from Buchau and he
had many Einsteins in his family tree. I am very proud of the Einstein
connection.
Sources:
"Einstein: A Celebration," seminar at the Aspen Institute, August 8-11,
2004.
Einstein, Albert, "Ideas and Opinions," Crown Publishers, 1954.
Kaku, Michio, "Einstein Cosmos: How Albert Einstein's Vision Transformed
our Understanding of Space and Time," Atlas Books, 2004.
"Discover" magazine, "Special Einstein Issue," September 2004. A special
thanks to Doug Stone of Yale University for editing this essay.
As of 12/31/04, fund positions, as a percent of net assets, in the
holdings mentioned were as follows: ABERCROMBIE & FITCH: Columbia Acorn
Fund, 0.4%; Columbia Acorn USA, 1.5%; Columbia Acorn Select, 3.6%. ULTRA
PETROLEUM: Columbia Acorn Fund, 0.6%. ESCO TECHNOLOGIES: Columbia Acorn
Fund, 0.6%; Columbia Acorn USA, 2.5%. PEOPLE'S BANK OF BRIDGEPORT:
Columbia Acorn Fund, 0.9%. ANGLO IRISH BANK: Columbia Acorn Fund, 0.6%;
Columbia Acorn International, 2.7%; Columbia Acorn International Select,
5.8%. TULLOW OIL: Columbia Acorn Fund, 0.3%; Columbia Acorn International,
1.0%. AALBERTS INDUSTRIES: Columbia Acorn Fund, 0.3%; Columbia Acorn
International, 1.3%. NEOPOST: Columbia Acorn Fund, 0.2%; Columbia Acorn
International, 1.4%; Columbia Acorn International Select, 4.1%.
7
>UNDERSTANDING YOUR EXPENSES
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 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
Analyzing your fund's expenses
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in the Class Z shares of the Columbia Acorn Funds
for the last six months. The information in the following table is based on an
initial investment of $1,000, which is invested at the beginning of the period
and held for the entire period. Expense information is calculated two ways and
each method provides you with different information. The amount listed in the
"actual" column is calculated using each fund's actual operating expenses and
total return for the period. The amount listed in the "hypothetical" column
assumes that the return each year is 5% before expenses and then applies each
fund's actual expense ratio for the period to the hypothetical return. You
should not use the hypothetical account values and expenses to estimate either
your actual account balance at the end of the period or the expenses you paid
during the reporting period. See the "Compare with other funds" information for
details on using the hypothetical data.
>July 1, 2004 - December 31, 2004
ACCOUNT VALUE AT ACCOUNT VALUE AT
THE BEGINNING OF THE END OF EXPENSES PAID FUND'S
THE PERIOD ($) THE PERIOD ($) DURING THE PERIOD ($) ANNUALIZED
--------------------------------------------------------------------------------- EXPENSE
CLASS Z SHARES ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL RATIO (%)*
- -------------------------------------------------------------------------------------------------------------------------------
Columbia Acorn Fund 1,000.00 1,000.00 1,114.82 1,020.96 4.41 4.22 0.83
- -------------------------------------------------------------------------------------------------------------------------------
Columbia Acorn
International 1,000.00 1,000.00 1,190.18 1,019.46 6.22 5.74 1.13
- -------------------------------------------------------------------------------------------------------------------------------
Columbia Acorn USA 1,000.00 1,000.00 1,097.98 1,019.46 5.96 5.74 1.13
- -------------------------------------------------------------------------------------------------------------------------------
Columbia Acorn
International Select 1,000.00 1,000.00 1,152.88 1,017.85 7.85 7.35 1.45
- -------------------------------------------------------------------------------------------------------------------------------
Columbia Acorn Select 1,000.00 1,000.00 1,103.91 1,019.30 6.13 5.89 1.16
- -------------------------------------------------------------------------------------------------------------------------------
Columbia Thermostat Fund 1,000.00 1,000.00 1,062.49 1,023.88 1.30 1.27 0.25
- -------------------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to each fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the funds' most recent fiscal half-year and divided by
366.
Had the Investment Adviser and/or Transfer Agent not waived a portion of
expenses, total return would have been reduced. It is important to note that the
expense amounts shown in the table are meant to highlight only ongoing costs of
investing in the funds 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.
Columbia Thermostat Fund's expenses do not include fees and expenses incurred by
the Fund from the underlying portfolio funds.
* For the six months ended 12/31/04.
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 funds 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.
1-800-922-6769
8
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 800.922.6769.
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 on Page 8 titled "Expenses paid during the
period," locate the amount for your fund. 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.
9
Columbia Acorn Fund
>In a Nutshell
[Photo of Charles P. McQuaid] [Photo of Robert A. Mohn]
Columbia Acorn Fund rose 21.51% in 2004. As shown on Page 4, the Fund beat all
of its small-cap benchmarks and almost doubled the 10.88% return of the
large-cap S&P 500. Solid stock picking, plus heavy weightings in energy,
industrial and foreign stocks, produced good annual results. During the fourth
quarter, Columbia Acorn Fund's 12.44% gain was slightly below the Russell 2500
small-cap benchmark. The Russell was boosted by returns from the smallest caps
and more speculative companies. Columbia Acorn Fund was modestly ahead of the
Lipper Small- and Mid-Cap Core Funds Indexes for the quarter.
Great stock picks included retailer Urban Outfitters, riverboat casino
operator Pinnacle Entertainment, and gaming equipment maker Shuffle Master. All
more than doubled during the year because their earnings exceeded expectations.
People's Bank of Bridgeport cashed out of its credit card business, enabling
shareholders to cash in on an 86% gain. Handbag maker Coach bagged a 49% profit.
Energy was our best performing group for the year. Quicksilver Resources,
Southwestern Energy and Ultra Petroleum all about doubled, while our largest
dollar winner, XTO Energy, jumped 57%. All of these stocks benefited from higher
prices and higher production. Though we continue to be bullish on the group,
during the fourth quarter we believed that oil prices were at a short-term
speculative high and subject to a correction. Consequently, we trimmed our
energy holdings, and swapped some oil producer stocks based on our valuation
judgments. Believing that oil companies will increase capital spending, we also
swapped some oil producers into oil service companies.
A number of industrial companies also manufactured big profits in 2004.
Industrial safety goods maker Mine Safety Appliances and water treatment
equipment company Pentair each jumped over 90% while automatic electronic meter
reader manufacturer Esco Technologies read nearly a 76% gain. We applaud our
industrial goods and services analyst, Rob Chalupnik, for these picks. Due to
what we believe to be reasonable valuations, a fairly good economy, and the weak
dollar, we added to our domestic industrial holdings.
The biggest loser for the year was Novell, a developer of open source
software. The stock missed earnings targets and declined nearly 36% for the
year. For the fourth quarter, drug company AtheroGenics was the biggest dollar
loser. The stock was a big winner in the third quarter but gave back much of
that gain in the fourth quarter when questions were raised about missing
disclosure in trial results it released in September. The stock was off 29% for
the three months. Educational toy manufacturer Leapfrog Enterprises missed its
earnings and declined 40% in the quarter.
Columbia Acorn's foreign stocks jumped 36.25% in the year. The UK's Tullow
Oil rose 94%, rewarded by the market for its opportunistic acquisition of Energy
Africa. Other foreign winners were driven by fine earnings gains: Dutch
industrial company Aalberts Industries surged 91%, and Austrian brick producer
Wienerberger delivered a solid 84% gain. Our largest foreign dollar winner,
Anglo Irish Bank, a lender to small businesses, returned 56%. Columbia Acorn's
foreign weighting remains at about 15%.
/s/ Charles P. McQuaid /s/ Robert A. Mohn
Charles P. McQuaid Robert A. Mohn
LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
[Sidebar]
PEOPLE'S BANK SHOWS ITS CARDS
Columbia Acorn Fund co-manager Rob Mohn discovered People's Bank of Bridgeport
back in 1994, finding an excellent credit card company inside what was then a
troubled thrift. Rob noted that People's credit card operation had fast growth
and low credit losses, and calculated that this undiscovered division accounted
for nearly half of the value of the company. Since that time the credit card
business had its ups and downs, while People's substantially improved its
savings and loan business. In 2004 the company sold its credit card business at
over a 15% premium to assets. Though additional upside is possible from cost
cuts and remaining demutualization, we trimmed Columbia Acorn's position in the
fourth quarter. The stock was up seven-fold from our initial purchase.
[End Sidebar]
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL
RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: URBAN
OUTFITTERS, 0.3%; PINNACLE ENTERTAINMENT, 0.3%; SHUFFLE MASTER, 0.2%; PEOPLE'S
BANK OF BRIDGEPORT, 0.9%; COACH, 1.2%; QUICKSILVER RESOURCES, 0.2%; SOUTHWESTERN
ENERGY, 0.2%; ULTRA PETROLEUM, 0.6%; XTO ENERGY, 1.8%; MINE SAFETY APPLIANCES,
0.3%; PENTAIR, 0.3%; ESCO TECHNOLOGIES, 0.6%; NOVELL, 0.6%; ATHEROGENICS, 0.2%;
LEAPFROG ENTERPRISES, 0.0%; TULLOW OIL, 0.3%; ENERGY AFRICA, 0.0%; AALBERTS
INDUSTRIES, 0.3%; WIENERBERGER, 0.3%; ANGLO IRISH BANK, 0.6%.
1-800-922-6769
10
Columbia Acorn Fund
>At a Glance Ticker Symbol: ACRNX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2004
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
Returns before taxes 21.51% 12.38% 16.71%
Returns after taxes 20.81 11.35 14.69
on distributions
Returns after taxes 14.73 10.33 13.88
on distributions and
sale of fund shares
S&P 500 (pretax) 10.88 -2.30 12.07
Russell 2500 (pretax) 18.29 8.35 13.75
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for class Z shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 20.7%
Industrial Goods/Services 14.6%
Other* 8.8%
Finance 13.2%
Energy/Minerals 9.3%
Health Care 8.6%
Real Estate 2.2%
Information 22.6%
Software/Services 10.2%
Computer Related Hardware 6.8%
Telecommunications 3.2%
Media 2.4%
*Other includes cash and other assets less liabilities of 7.5%. Foreign equities
within the portfolio were 15.0% diversified by country as follows: 9.0% Europe;
0.5% Asia without Japan; 2.1% Canada; 1.2% Japan; 0.5% Australia/New Zealand;
1.7% Emerging Markets.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS Z)
>June 10, 1970 through December 31, 2004
This graph compares the results of $50,000 invested in Columbia Acorn Fund at
inception on June 10, 1970 to the S&P 500 Stock Index, a broad, market-weighted
average of U.S. blue-chip company stock performance. The index is unmanaged and
returns for both the index and the Fund include reinvested dividends and capital
gains. It is not possible to invest directly in an index. The graph and table do
not reflect tax deductions that a shareholder would pay on Fund distributions or
the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
NAV ON 12/31/04: $26.45
TOTAL NET ASSETS OF THE FUND: $13,841.5 MILLION
[MOUNTAIN CHART]
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
21.51% 12.38% 16.71% 16.45%
COLUMBIA CITIGROUP
ACORN EMI GLOBAL
INTERNATIONAL EX-US
------------- -----------
6/10/1970 $50000.00 $50000.00
6/30/1970 48474.80 49099.10
52586.20 52874.90
56115.40 55405.40
9/30/1970 60114.10 57405.90
59581.00 56929.00
60847.20 59810.60
12/31/1970 67933.40 63381.00
74766.90 66123.50
79188.60 66891.90
3/31/1971 85102.50 69528.40
91152.40 72231.10
86379.70 69409.10
6/30/1971 86986.60 69641.00
86447.10 66944.90
88200.40 69541.60
9/30/1971 87857.30 69230.30
82581.80 66520.90
78388.50 66534.20
12/31/1971 89142.40 72449.70
93262.50 73940.10
98243.90 75987.00
3/31/1972 100596.00 76616.30
103364.00 77133.00
104125.00 78656.60
6/30/1972 102810.00 77126.40
97607.30 77490.70
95649.50 80352.40
9/30/1972 94810.50 80147.10
94600.70 81094.30
98726.00 85002.60
12/31/1972 96838.20 86208.30
91350.60 84923.20
84417.40 81929.00
3/31/1973 82817.50 81995.20
75274.80 76868.00
68189.20 77576.80
6/30/1973 68189.20 77265.50
76073.00 80405.40
72775.40 77663.00
9/30/1973 84125.00 80981.70
87345.90 81114.20
74385.90 72118.40
12/31/1973 73849.10 73542.70
75553.00 73019.30
75940.50 72966.40
3/31/1974 75088.10 71469.30
69121.30 68905.70
64626.90 66825.60
6/30/1974 62534.70 66063.90
58591.10 61830.90
53107.90 55882.30
9/30/1974 48486.40 49443.60
60079.30 57757.00
57181.10 54935.10
12/31/1974 53421.30 54080.60
61857.50 60956.50
64477.90 64845.00
3/31/1975 65113.10 66494.40
68210.00 69879.40
74641.90 73211.40
6/30/1975 79723.90 76709.10
75530.50 71767.40
71120.50 70502.10
9/30/1975 68234.00 68302.90
70799.80 72767.60
71120.50 74821.10
12/31/1975 69757.40 74211.70
81428.30 83247.20
89854.70 82545.10
3/31/1976 94797.10 85327.20
94716.10 84664.80
97308.90 83724.20
6/30/1976 102494.00 87433.80
98981.30 87016.40
99308.00 86857.40
9/30/1976 103636.00 89096.40
99634.70 87440.40
106086.00 87082.70
12/31/1976 115233.00 91971.40
120456.00 87619.20
116177.00 86022.80
3/31/1977 119551.00 85121.90
122430.00 85473.00
124899.00 83797.00
6/30/1977 133044.00 87937.20
132208.00 86844.20
128890.00 85353.70
9/30/1977 128144.00 85486.20
123333.00 82154.20
133701.00 84750.90
12/31/1977 135857.00 85386.90
127644.00 80484.90
128903.00 78855.30
3/31/1978 133770.00 81173.80
144596.00 88493.60
150470.00 89308.40
6/30/1978 150470.00 88082.90
160750.00 93216.80
177461.00 96018.80
9/30/1978 173728.00 95714.10
142596.00 87367.50
154133.00 89242.20
12/31/1978 158883.00 90997.60
166785.00 95031.80
162919.00 91978.00
3/31/1979 181880.00 97462.90
182525.00 98085.60
185286.00 95945.90
6/30/1979 200658.00 100119.00
207526.00 101464.00
224262.00 107320.00
9/30/1979 226493.00 107777.00
210315.00 100874.00
228074.00 105670.00
12/31/1979 238952.00 107929.00
252391.00 114640.00
253012.00 114633.00
3/31/1980 211292.00 103484.00
222783.00 108274.00
236966.00 113845.00
6/30/1980 245558.00 117448.00
260633.00 125616.00
271164.00 126888.00
9/30/1980 283485.00 130624.00
289382.00 133267.00
308969.00 147463.00
12/31/1980 312971.00 143011.00
307026.00 137030.00
305624.00 139408.00
3/31/1981 325594.00 144985.00
327229.00 142183.00
333185.00 142548.00
6/30/1981 320923.00 141653.00
308440.00 141945.00
289668.00 133751.00
9/30/1981 270658.00 127160.00
288004.00 134022.00
294777.00 139554.00
12/31/1981 290024.00 135976.00
279277.00 134201.00
271986.00 126696.00
3/31/1982 267732.00 126033.00
276239.00 131730.00
271499.00 127239.00
6/30/1982 268461.00 125331.00
263728.00 123099.00
278566.00 138043.00
9/30/1982 282931.00 139766.00
312982.00 155849.00
337796.00 162149.00
12/31/1982 341038.00 165269.00
359996.00 171416.00
377453.00 175344.00
3/31/1983 387901.00 181823.00
402317.00 196145.00
425329.00 194442.00
6/30/1983 438886.00 202007.00
428018.00 196045.00
419431.00 198993.00
9/30/1983 426944.00 201736.00
411783.00 199404.00
426273.00 203610.00
12/31/1983 426944.00 202550.00
414180.00 201418.00
398069.00 194330.00
3/31/1984 401490.00 197695.00
401063.00 199569.00
386520.00 188527.00
6/30/1984 397085.00 192621.00
391319.00 190229.00
437874.00 211241.00
9/30/1984 438595.00 211288.00
439892.00 212103.00
437009.00 209731.00
12/31/1984 445225.00 215256.00
493972.00 232028.00
502261.00 234870.00
3/31/1985 498730.00 235023.00
499191.00 234804.00
528664.00 248370.00
6/30/1985 535535.00 252259.00
543124.00 251895.00
538323.00 249742.00
9/30/1985 515712.00 241932.00
538478.00 253107.00
573942.00 270462.00
12/31/1985 585712.00 283552.00
599240.00 285135.00
632604.00 306445.00
3/31/1986 663338.00 323543.00
674679.00 319899.00
695881.00 336917.00
6/30/1986 707143.00 342614.00
673911.00 323450.00
694908.00 347436.00
9/30/1986 660022.00 318714.00
674572.00 337089.00
682508.00 345482.00
12/31/1986 684215.00 336473.00
737822.00 381783.00
789319.00 396867.00
3/31/1987 801491.00 408320.00
775274.00 404690.00
794563.00 408201.00
6/30/1987 824712.00 428816.00
854899.00 450537.00
899388.00 467349.00
9/30/1987 902593.00 457101.00
675436.00 358658.00
665445.00 329134.00
12/31/1987 714613.00 354140.00
735112.00 369038.00
794406.00 386241.00
3/31/1988 796830.00 374304.00
818212.00 378445.00
806970.00 381717.00
6/30/1988 849732.00 399238.00
855720.00 397721.00
839281.00 384221.00
9/30/1988 867716.00 400590.00
874158.00 411745.00
861718.00 405876.00
12/31/1988 891851.00 412957.00
929625.00 443197.00
948511.00 432154.00
3/31/1989 961266.00 442236.00
1004680.00 465196.00
1040490.00 484016.00
6/30/1989 1021120.00 481273.00
1079720.00 524722.00
1107110.00 534983.00
9/30/1989 1132470.00 532810.00
1066790.00 520442.00
1087840.00 531055.00
12/31/1989 1113410.00 543806.00
1041290.00 507300.00
1054260.00 513831.00
3/31/1990 1086170.00 527451.00
1054780.00 514289.00
1130010.00 564434.00
6/30/1990 1148430.00 560625.00
1131900.00 558830.00
979516.00 508320.00
9/30/1990 875407.00 483578.00
854794.00 481518.00
888714.00 512646.00
12/31/1990 918371.00 526928.00
973073.00 549874.00
1052590.00 589196.00
3/31/1991 1095170.00 603464.00
1130410.00 604895.00
1183700.00 630988.00
6/30/1991 1132670.00 602080.00
1185010.00 630147.00
1229880.00 645072.00
9/30/1991 1231020.00 634281.00
1269930.00 642806.00
1233860.00 616905.00
12/31/1991 1353200.00 687460.00
1425790.00 674649.00
1477750.00 683419.00
3/31/1992 1467300.00 670091.00
1422880.00 689772.00
1428980.00 693150.00
6/30/1992 1394140.00 682837.00
1446560.00 710731.00
1423400.00 696191.00
9/30/1992 1448620.00 704385.00
1525140.00 706803.00
1614190.00 730869.00
12/31/1992 1681050.00 739640.00
1753390.00 746025.00
1748520.00 756194.00
3/31/1993 1843050.00 772145.00
1796850.00 753484.00
1944870.00 773642.00
6/30/1993 1967050.00 775908.00
1957060.00 772781.00
2086230.00 802107.00
9/30/1993 2147140.00 795966.00
2228860.00 812421.00
2144690.00 804677.00
12/31/1993 2224440.00 814408.00
2235610.00 842091.00
2208500.00 819237.00
3/31/1994 2101660.00 783519.00
2119200.00 793568.00
2095280.00 806591.00
6/30/1994 2023530.00 786818.00
2088900.00 812659.00
2185300.00 845972.00
9/30/1994 2157940.00 825285.00
2149890.00 843826.00
2066220.00 813096.00
12/31/1994 2058750.00 825159.00
2020070.00 846555.00
2085660.00 879551.00
3/31/1995 2115940.00 905505.00
2139490.00 932167.00
2205080.00 969422.00
6/30/1995 2294230.00 991938.00
2405710.00 1024830.00
2431220.00 1027410.00
9/30/1995 2480520.00 1070770.00
2376810.00 1066940.00
2444820.00 1113780.00
12/31/1995 2487030.00 1135230.00
2527270.00 1173870.00
2626020.00 1184760.00
3/31/1996 2677220.00 1196160.00
2819860.00 1213800.00
2920440.00 1245100.00
6/30/1996 2863750.00 1249850.00
2716050.00 1194630.00
2819940.00 1219830.00
9/30/1996 2923830.00 1288490.00
2908990.00 1324030.00
2990620.00 1424110.00
12/31/1996 3047850.00 1395890.00
3155250.00 1483090.00
3114720.00 1488760.00
3/31/1997 2972870.00 1433310.00
2989080.00 1518870.00
3226180.00 1611350.00
6/30/1997 3374110.00 1683540.00
3546960.00 1817490.00
3563400.00 1715670.00
9/30/1997 3836720.00 1809630.00
3723690.00 1749200.00
3723690.00 1830170.00
12/31/1997 3809260.00 1861600.00
3742000.00 1882190.00
4015530.00 2017950.00
3/31/1998 4266640.00 2121280.00
4329420.00 2142620.00
4165750.00 2105800.00
6/30/1998 4254890.00 2191330.00
4013830.00 2168000.00
3281560.00 1854550.00
9/30/1998 3424830.00 1973360.00
3597670.00 2133880.00
3745480.00 2263200.00
12/31/1998 4038430.00 2393620.00
4036030.00 2493710.00
3853880.00 2416210.00
3/31/1999 3894620.00 2512880.00
4213380.00 2610190.00
4280490.00 2548560.00
6/30/1999 4509220.00 2690000.00
4574710.00 2606000.00
4441300.00 2593110.00
9/30/1999 4417050.00 2522020.00
4550450.00 2681620.00
4873060.00 2736130.00
12/31/1999 5386280.00 2897280.00
5255470.00 2751710.00
5644980.00 2699620.00
3/31/2000 5409530.00 2963720.00
5223500.00 2874550.00
5113040.00 2815580.00
6/30/2000 5310520.00 2884990.00
5332110.00 2839890.00
5720690.00 3016280.00
9/30/2000 5816290.00 2857040.00
5668260.00 2844960.00
5370030.00 2620670.00
12/31/2000 5928040.00 2633500.00
6038270.00 2726930.00
5886710.00 2478280.00
3/31/2001 5621480.00 2321280.00
6117490.00 2501670.00
6375830.00 2518430.00
6/30/2001 6466180.00 2457140.00
6343650.00 2432950.00
6091580.00 2280640.00
9/30/2001 5265370.00 2096470.00
5489420.00 2136450.00
5913030.00 2300330.00
12/31/2001 6291780.00 2320480.00
6231960.00 2286620.00
6154540.00 2242520.00
3/31/2002 6604960.00 2326860.00
6590890.00 2185790.00
6393830.00 2169690.00
6/30/2002 6070090.00 2015120.00
5352240.00 1858050.00
5397980.00 1870250.00
9/30/2002 5077760.00 1666990.00
5292410.00 1813710.00
5633750.00 1920470.00
12/31/2002 5454280.00 1807640.00
5327600.00 1760290.00
5243150.00 1733880.00
3/31/2003 5310010.00 1750710.00
5770980.00 1894920.00
6182690.00 1994760.00
6/30/2003 6372710.00 2020210.00
6671820.00 2055820.00
7023710.00 2095920.00
9/30/2003 6942780.00 2073660.00
7509320.00 2190970.00
7752120.00 2210240.00
12/31/2003 7945920.00 2326170.00
8234730.00 2368860.00
8393230.00 2401780.00
3/31/2004 8520020.00 2365550.00
8217120.00 2328410.00
8365050.00 2360360.00
6/30/2004 8660600.00 2406260.00
8219810.00 2326620.00
8212760.00 2336030.00
9/30/2004 8586550.00 2361330.00
8801650.00 2397410.00
9355280.00 2494410.00
12/31/2004 9654977.00 2579293.00
COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. XTO ENERGY 1.8%
Natural Gas Producer
2. INTERNATIONAL GAME TECHNOLOGY 1.7%
Slot Machines & Progressive Jackpots
3. COACH 1.2%
Designer & Retailer of Branded Leather Accessories
4. EXPEDITORS INTERNATIONAL OF WASHINGTON 1.1%
International Freight Forwarder
5. AMERICREDIT 1.0%
Auto Lending
6. PEOPLE'S BANK OF BRIDGEPORT 0.9%
Connecticut Savings & Loan
7. CHICO'S FAS 0.8%
Women's Specialty Retail
8. TCF FINANCIAL 0.8%
Great Lakes Bank
9. ITT EDUCATIONAL SERVICES 0.8%
Postsecondary Degree Programs
10. LINCARE HOLDINGS 0.8%
Home Health Care Services
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
11
Columbia Acorn International
>In a Nutshell
[Photo of P. Zachary Egan] [Photo of Louis J. Mendes III]
Columbia Acorn International rose 29.47% in 2004, the Fund's fourth best
year in absolute terms since inception. As shown on Page 4, the Fund finished
slightly ahead of the Citigroup EMI Global ex-US benchmark Index and
substantially outperformed the large-cap MSCI EAFE Index. During the fourth
quarter, Columbia Acorn International's 16.73% gain matched the EMI benchmark
and slightly outperformed the large-cap MSCI EAFE Index. A weak U.S. dollar,
particularly against the euro, aided performance, contributing 6.8 percentage
points of 2004's 29.47% return and 7.6 percentage points of the fourth quarter's
16.73% return. Columbia Acorn International did not do any currency hedging
during the past year and does not anticipate doing so in the year ahead.
As in past years, the Fund's biggest percentage winners in 2004 came from
very different industries and regions of the world. Edgars Consolidated Stores,
a South African retailer first purchased in 2004, returned 153% for the year and
83% in the fourth quarter alone, on strong earnings growth. Another new 2004
purchase, Natura Cosmeticos, a manufacturer and direct seller of Brazilian
cosmetics, rallied 139% for the year and 44% in the fourth quarter.
ComfortDelGro, a Singaporean transport company expanding into taxicab
franchises in China, was the third best annual performer, returning 107%. Within
Europe, Amplifon, an Italian manufacturer of hearing aids, surged 100%. Other
winners included Aalberts Industries, discussed separately on this page, which
rose over 90%, and Tullow Oil, an UK-based oil exploration company benefiting
from the rise in energy prices.
Technology-related stocks were among the leading detractors to portfolio
performance during the year. ASE Test, a Taiwanese tester of semiconductor
devices, was the Fund's largest percentage loser, declining 55% on weak
earnings. Ngai Lik Industrial, a Hong Kong-based manufacturer of audio
equipment, declined 37% as higher raw material costs squeezed margins. Another
loser was Kappa Create, a Japanese sushi chain operator. Rising over 50% from
January to June, the stock declined sharply in the second half when increased
competition caused reduced sales, ending the year down 31%.
International small caps have outperformed large caps for a fifth year in
a row and valuations are now close to long-term average valuations relative to
large caps, whereas two years ago they traded at a moderate discount.
Fortunately, our international small-cap universe is comprised of more than
4,400 potential investment opportunities. With a dedicated team of nine
international analysts, we feel we have the resources to sift through this
universe and find attractive investments for our shareholders.
/s/ P. Zachary Egan /s/ Louis J. Mendes III
P. Zachary Egan Louis J. Mendes III
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
[Sidebar]
AALBERTS BENEFITS FROM EXPANSION
- --------------------------------------------------------------------------------
Aalberts Industries is a Netherlands-based, diversified industrial company that
manufactures valves and fittings for water, energy and gas distribution and heat
treats specialty metal components. Aalberts has taken advantage of an industrial
slowdown in Western Europe to consolidate its markets, while developing
world-class manufacturing facilities in Central and Eastern Europe, where its
revenues have grown 30% annually. Given the continued high level of
infrastructure investments in countries like Poland and the Czech Republic, we
believe Aalberts will continue to outperform. The stock gained 91% in the year,
not your typical Dutch treat.
[End Sidebar]
INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR
ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS,
TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE
FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE
STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF
OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE,
MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: EDGARS
CONSOLIDATED STORES, 0.9%; NATURA COSMETICOS, 0.9%; COMFORTDELGRO, 0.7%;
AMPLIFON, 0.7%; AALBERTS INDUSTRIES, 1.3%; TULLOW OIL,1.0%; ASE TEST, 0.4%; NGAI
LIK INDUSTRIAL, 0.2%; KAPPA CREATE, 0.6%.
1-800-922-6769
12
Columbia Acorn International
>At a Glance Ticker Symbol: ACINX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2004
1 YEAR 5 YEARS 10 YEARS
------ ------ --------
Returns before taxes 29.47% 0.26% 10.68%
Returns after taxes 29.49 -0.60 9.78
on distributions
Returns after taxes 19.57 -0.12 9.11
on distributions and
sale of fund shares
Citigroup EMI Global 29.27 6.84 6.71
ex-US (pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for class Z shares only; after-tax returns
for other share classes will vary. The return after taxes on distributions may
be higher than the return before taxes due to qualified foreign tax credits.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 23.0%
Finance 13.8%
Information 11.4%
Other* 6.1%
Energy/Minerals 8.1%
Health Care 6.8%
Transporation 2.6%
Real Estate 1.0%
Utilities 0.8%
Industrial Goods/Services 26.4%
*Cash and other assets less liabilities
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS Z)
>September 23, 1992 through December 31, 2004
This graph compares the results of $10,000 invested in Columbia Acorn
International at inception on September 23, 1992 to the Citigroup EMI Global
ex-US, Citigroup's Index of the bottom 20% of institutionally investable capital
of developed and emerging countries, as selected by Citigroup, excluding the
U.S. The index is unmanaged and returns for both the index and Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. The graph and table do not reflect tax deductions that a shareholder
would pay on Fund distributions or the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
NAV AS OF 12/31/04: $29.03
TOTAL NET ASSETS OF THE FUND: $2,075.0 MILLION
[MOUNTAIN CHART]
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
29.47% 0.26% 10.68% 12.47%
Columbia Acorn Citigroup EMI
International Global ex-US
-------------- -------------
9/23/1992 $10000.00 $10000.00
9/30/1992 10010.00 10113.30
10380.00 9490.19
10570.00 9509.53
12/31/1992 10690.00 9646.31
10780.00 9731.97
11460.00 10078.80
3/31/1993 12000.00 11092.80
12450.00 12111.10
12910.00 12753.50
6/30/1993 12920.00 12264.40
12920.00 12641.60
13760.00 13293.70
9/30/1993 13910.00 13016.00
14560.00 12970.40
14620.00 11885.90
12/31/1993 15940.00 12649.90
16630.00 13915.50
16570.00 14012.20
3/31/1994 15850.00 13782.80
15960.00 14195.90
15870.00 13990.00
6/30/1994 15550.00 14283.00
15980.00 14451.50
16481.40 14615.90
9/30/1994 16491.50 14198.70
16521.70 14439.10
15606.00 13606.00
12/31/1994 15334.40 13688.90
14640.10 13132.10
14549.50 12906.90
3/31/1995 14811.10 13416.70
15263.90 13820.10
15505.40 13633.60
6/30/1995 15726.80 13478.90
16582.20 14236.00
16411.00 13886.40
9/30/1995 16823.80 13984.50
16300.30 13581.10
16068.70 13694.40
12/31/1995 16703.00 14223.50
17357.40 14546.80
17881.00 14726.40
3/31/1996 18203.20 15033.20
18787.10 15811.00
19340.90 15688.00
6/30/1996 19592.60 15692.20
18967.90 15074.60
19240.40 15226.60
9/30/1996 19361.50 15309.50
19553.30 15212.80
20088.40 15458.70
12/31/1996 20152.90 15201.70
20636.00 14980.70
20892.90 15284.60
3/31/1997 20584.60 15095.30
20286.50 14893.60
21170.30 15768.20
6/30/1997 21807.50 16173.00
21951.10 16016.90
20788.10 15313.60
9/30/1997 21660.30 15560.90
20487.00 14801.00
20268.90 14111.60
12/31/1997 20190.30 13816.00
20475.70 14249.80
22122.60 15327.40
3/31/1998 23857.20 16068.00
24351.30 16197.80
24768.50 16336.00
6/30/1998 24334.70 15759.90
24491.40 15660.40
21368.40 13601.80
9/30/1998 20428.20 13300.60
21111.00 14216.60
22308.70 14707.10
12/31/1998 23304.90 15019.30
23842.20 14914.30
23125.80 14635.30
3/31/1999 23573.50 15268.00
24983.90 16200.60
25140.60 15801.30
6/30/1999 27222.30 16416.10
28190.90 16946.70
29001.80 17243.70
9/30/1999 29486.10 17166.30
30758.80 17008.80
35365.30 17620.90
12/31/1999 41761.10 18820.10
41607.50 18462.30
48297.80 19172.40
3/31/2000 46808.40 19256.70
41359.20 17992.50
38286.00 17616.80
6/30/2000 40170.90 18686.10
39669.10 18067.20
40562.60 18585.20
9/30/2000 38494.10 17630.60
35630.00 16564.00
32730.10 15834.50
12/31/2000 33402.30 16452.10
34914.90 16758.80
32408.00 16108.00
3/31/2001 29284.80 14860.50
30419.20 15833.10
30223.20 15801.30
6/30/2001 28746.50 15265.30
27591.00 14817.60
27034.60 14777.60
9/30/2001 23353.90 12853.00
24466.60 13375.20
25850.50 13925.10
12/31/2001 26349.80 14039.80
25707.80 13785.60
25636.50 14016.30
3/31/2002 26977.50 14929.50
27862.00 15240.40
27747.90 15728.10
6/30/2002 26646.10 15103.60
23854.00 13822.90
23496.10 13740.00
9/30/2002 21405.60 12471.70
21491.50 12753.50
22150.20 13230.20
12/31/2002 22107.40 13072.70
21561.90 12853.00
20987.70 12623.60
3/31/2003 20686.20 12500.70
22566.80 13679.20
24433.00 14845.30
6/30/2003 25133.50 15399.30
25681.50 15947.80
26835.00 16710.40
9/30/2003 27844.40 17474.40
29978.50 18745.50
30800.50 19086.80
12/31/2003 32675.00 20265.30
33641.10 20993.40
34910.10 21717.30
3/31/2004 34924.50 22249.20
34174.70 21501.80
34290.00 21504.60
6/30/2004 35543.50 22195.40
34625.40 21412.00
34785.70 21642.70
9/30/2004 36243.00 22449.60
37554.50 23137.60
40410.80 24958.50
12/31/2004 42305.30 26197.80
COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 2.7%
Small Business & Middle Market Banking
2. Rhoen-Klinikum (Germany) 1.8%
Hospital Management
3. Neopost (France) 1.4%
Postage Meter Machines
4. Grafton Group (Ireland) 1.4%
Builders, Wholesalers & DIY Retailing
5. Billabong International (Australia) 1.3%
Surfwear Apparel Manufacturer
6. Kerry (Ireland) 1.3%
Food Ingredients
7. Aalberts Industries (Netherlands) 1.3%
Flow Control & Heat Treatment
8. SES Global (Luxembourg) 1.2%
Satellite Broadcasting Services
9. Housing Development Finance (India) 1.2%
Premier Mortgage Lender in India
10. Exel (United Kingdom) 1.2%
Global Logistics & Freight Forwarding
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
13
Columbia Acorn USA
>In a Nutshell
[Photo of Robert A. Mohn]
Columbia Acorn USA ended the fourth quarter up 14.26%. For the year, the
Fund returned 20.62%. Fund performance topped the benchmark Russell 2000 for
both time periods. See Page 4 for more performance information. There was a
great deal of pessimism about the market and the political environment going
into the quarter and many investors were hanging out on the sidelines. After the
elections, the money came back into the markets, fueling a fierce fourth quarter
rally.
Some of our biggest winners for the quarter were health care stocks.
Lincare Holdings, a provider of home health care services, increased 44% in the
quarter on news of a higher than expected government dispensing fee for
respiratory medication. For the year, Lincare had a 42% gain. Edwards
Lifesciences' heart valves were big sellers, pumping the stock up 23% in the
fourth quarter and 37% for the year.
Technology stocks also had a strong quarter. Micros Systems, a developer
of reservation systems used in hotels and restaurants, gained 56% in the quarter
and was up 80% for the year. On the telecom side, Western Wireless ended the
year up 59%, gaining 13% in the quarter (and even more so far in 2005 on news
that Alltel will be buying the company).
While slightly cooler in the fourth quarter, energy stocks were strong
2004 performers. Quicksilver Resources, a natural gas producer, was up an
impressive 128% for the year and 13% for the quarter. Chicago Bridge & Iron,
discussed separately on this page, was added to the Fund in '04 and immediately
went to work. For the year the stock was up 55%, gaining 33% in the fourth
quarter.
The laggards for the year included southeast supermarket chain Winn Dixie
Stores, down 58%. The Fund no longer holds the stock. Novell, a developer of
open source software, failed to meet earnings targets and declined 36% for the
year. Last quarter we mentioned drug company AtheroGenics' strong performance.
The stock gave back some of its third quarter gain, falling 29% in the fourth
quarter (but up nearly 3% for the year) as questions were raised about missing
disclosure in trial results it released in September.
Generally speaking, we think companies are operating in a healthy economy
that should provide growth going forward. We will continue to search for what we
believe are winning small-cap stocks selling at good prices.
/s/ Robert A. Mohn
Robert A. Mohn
Lead Portfolio Manager
[Sidebar]
WHAT'S IN A NAME
- --------------------------------------------------------------------------------
Chicago Bridge & Iron is not based in Chicago and does not make bridges. The
company is a leading designer and manufacturer of tanks used to convert
liquified natural gas (LNG) into the pipeline gas used to heat our homes and
generate electricity. The last LNG terminal built in the United States was
constructed more than 15 years ago so Chicago Bridge & Iron's conversion
expertise has not been considered particularly valuable. As a result of the
natural gas shortage that has developed in recent years, however, more than 20
new LNG terminals have been proposed. Chicago Bridge & Iron's specialized skills
are now attracting attention. The stock rose 55% in Columbia Acorn USA in 2004.
[End Sidebar]
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: LINCARE
HOLDINGS, 1.2%; EDWARDS LIFESCIENCES, 2.7%; MICROS SYSTEMS, 2.6%; WESTERN
WIRELESS, 2.5%; ALLTEL, 0.0%; QUICKSILVER RESOURCES, 2.6%; CHICAGO BRIDGE &
Iron, 1.5%; WINN DIXIE STORES, 0.0%; NOVELL, 1.0%; ATHEROGENICS, 0.7%.
1-800-922-6769
14
Columbia Acorn USA
>At a Glance Ticker Symbol: AUSAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2004
LIFE OF
1 YEAR 5 YEARS FUND
------ ------ ---------
Returns before taxes 20.62% 9.44% 14.77%
Returns after taxes 20.52 9.23 14.05
on distributions
Returns after taxes 13.53 8.10 12.83
on distributions and
sale of fund shares
Russell 2000 (pretax) 18.33 6.61 9.81
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for class Z shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 17.4%
Health Care 14.0%
Other* 8.9%
Energy/Minerals 11.7%
Finance 10.0%
Industrial Goods/Services 9.2%
Information 28.8%
Software/Services 13.2%
Telecommunications 7.6%
Computer Related Hardware 5.4%
Media 2.6%
*Other includes cash and other assets less liabilities of 8.4%.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS Z)
>September 4, 1996 through December 31, 2004
This graph compares the results of $50,000 invested in Columbia Acorn USA at
inception on September 4, 1996 to the Russell 2000 Index, a market-weighted
index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S.
companies and eliminating the largest 1,000. The index is unmanaged and returns
for both the index and the Fund include reinvested dividends and capital gains.
It is not possible to invest directly in an index. The graph and table do not
reflect tax deductions that a shareholder would pay on Fund distributions or the
sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
NAV AS OF 12/31/04: $25.20
TOTAL NET ASSETS OF THE FUND: $870.7 MILLION
[MOUNTAIN CHART]
AVERAGE ANNUAL TOTAL RETURN
----------------------------------
1 YEAR 5 YEARS LIFE OF FUND
20.62% 9.44% 14.77%
Columbia
Acorn USA Russell 2000
---------- ------------
9/4/1996 $50000.00 $50000.00
9/30/1996 53600.00 52040.30
54050.00 51238.30
56300.00 53349.30
12/31/1996 58250.00 54747.60
61050.00 55841.80
59600.00 54487.80
3/31/1997 57400.00 51916.70
57100.00 52061.40
62550.00 57853.20
6/30/1997 66600.00 60332.70
70000.00 63140.00
71750.00 64584.80
9/30/1997 76700.00 69312.00
75700.00 66267.10
75850.00 65838.40
12/31/1997 77065.50 66990.90
75383.50 65933.60
81601.80 70809.10
3/31/1998 87004.50 73729.50
89960.70 74137.20
86138.00 70144.40
6/30/1998 87625.20 70291.90
82959.40 64601.40
69679.80 52057.30
9/30/1998 70756.50 56131.20
73268.90 58420.60
77011.80 61481.20
12/31/1998 81525.30 65285.60
78881.20 66153.20
74474.40 60795.10
3/31/1999 75080.40 61744.20
80478.70 67277.10
83673.60 68259.90
6/30/1999 88251.10 71346.50
90239.20 69389.00
84109.20 66820.70
9/30/1999 84330.10 66835.30
89300.40 67106.10
94049.90 71113.00
12/31/1999 100295.00 79163.00
95265.40 77891.70
99337.10 90754.30
3/31/2000 99097.60 84770.90
87840.60 79669.80
82631.20 75026.50
6/30/2000 84170.10 81566.70
83741.30 78942.40
88825.80 84965.80
9/30/2000 88213.20 82468.60
88274.40 78787.20
83128.70 70699.60
12/31/2000 91276.10 76771.40
97034.50 80768.40
96850.70 75468.90
3/31/2001 94522.90 71777.20
105978.00 77392.30
111920.00 79294.60
6/30/2001 115045.00 82032.60
116270.00 77592.20
113084.00 75086.10
9/30/2001 96728.20 64978.60
96973.20 68781.20
102732.00 74106.00
12/31/2001 108851.00 78680.10
110156.00 77861.70
106428.00 75727.80
3/31/2002 115499.00 81814.20
117239.00 82559.80
110653.00 78895.60
6/30/2002 104005.00 74981.00
89839.40 63656.60
88534.70 63494.50
9/30/2002 81949.00 58934.70
85863.10 60824.30
93318.70 66252.40
12/31/2002 88721.10 62563.60
87416.40 60832.00
86235.90 58993.90
3/31/2003 86422.30 59753.60
94871.90 65419.20
104813.00 72439.60
6/30/2003 106490.00 73750.50
111523.00 78365.10
117674.00 81958.00
9/30/2003 114940.00 80445.20
126744.00 87200.70
129540.00 90295.30
12/31/2003 130534.00 92127.20
137306.00 96129.80
137928.00 96991.50
3/31/2004 136996.00 97895.40
133641.00 92904.30
138984.00 94383.00
6/30/2004 143395.00 98357.80
134635.00 91735.00
132709.00 91263.50
9/30/2004 137804.00 95548.00
141718.00 97428.80
151969.00 105880.00
12/31/2004 157449.00 109014.00
COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. AmeriCredit 3.1%
Auto Lending
2. Edwards Lifesciences 2.7%
Heart Valves
3. Micros Systems 2.6%
Information Systems for Restaurants & Hotels
4. Quicksilver Resources 2.6%
Natural Gas & Coal Seam Gas Producer
5. Western Wireless 2.5%
Rural Cellular Phone Services
6. Esco Technologies 2.5%
Automatic Electric Meter Readers
7. ITT Educational Services 2.2%
Postsecondary Degree Programs
8. Crown Castle International 1.9%
Communication Towers
9. Commonwealth Telephone 1.9%
Rural Phone Franchises & CLEC
10. Kronos 1.7%
Labor Management Solutions
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
15
COLUMBIA ACORN INTERNATIONAL SELECT
>IN A NUTSHELL
[Photo of Todd M. Narter] [Photo of Christopher J. Olson]
International markets continued to surge in the fourth quarter. Columbia Acorn
International Select increased 13.26% for the three months, underperforming the
16.46% increase in the benchmark Citigroup World ex-US Cap Range $2-10B Index.
The relative underperformance was due in large part to holding some cash in a
strong market. We opted to take profits in a number of positions in the Fund
during the fourth quarter to look for better values elsewhere. We believe that
the Fund is well positioned for future growth. The Fund finished 2004 up 24.14%,
a solid return but behind the 25.22% return for the Citigroup World ex-US Cap
Range $2-10B Index.
Letting our winners run was a successful strategy this past year. For the
third year in a row, Anglo Irish Bank was the Fund's largest contributor to
performance. The stock finished the year up 56% and is the Fund's largest
position. Other significant winners include large holdings with great
franchises. Neopost, a maker of franking machines in France, the Fund's second
largest position, had another strong year, up 58%. Tenaris, a maker of steel
pipes for the oil and gas industry jumped 49%. Lion Nathan, the major beer
brewer and distributor in Australia and New Zealand, rose 54% and Daito Trust
Construction (discussed separately on this page), a major apartment builder and
manager in Japan, finished the year up 62%.
Several stocks in the portfolio reduced the Fund's gains. Topping the list
of poor performers in the Fund this year was Sugi Pharmacy, a drugstore chain in
Japan. Shares were down 13% as the company reported higher costs than expected
during its expansion program. Funai Electric, a maker of consumer electronic
products in Japan, was down 11% as the retail environment in the United States
was weaker than expected. Other weak performers included Venture, an electronic
manufacturing services company in Singapore, down 15% and Compass Group, a
catering services provider in the UK, which fell 29% on an earnings downgrade
driven by a weak dollar and issues with a supplier.
Share prices have risen strongly in the past two years. While stocks are
not as cheap as they once were, we continue to find well-run companies with good
strategies and strong balance sheets that we believe will be good investments.
/s/ Todd M. Narter /s/ Christopher J. Olson
Todd M. Narter Christopher J. Olson
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
[Sidebar]
A DAITO YOU CAN TRUST
- --------------------------------------------------------------------------------
Daito Trust Construction builds and manages residential property in Japan. The
company's unique business model encompasses construction of lease apartments for
landowners, as well as tenant recruitment and property management. The real
estate market during the past year has improved in metropolitan areas, with
prices firming and vacancy rates improving. While the average Japanese consumer
remains frugal, demand for rental housing has strengthened and contributed to a
recovery in residential property. This shift has been a boon to Daito, not only
from construction, but from leasing and management of rental units as well. The
stock achieved stellar performance, appreciating 62% during the past 12-month
period.
[End Sidebar]
MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS
OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS,
INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: ANGLO IRISH
BANK, 5.8%; NEOPOST, 4.1%; TENARIS, 2.4%; LION NATHAN, 3.4%; DAITO TRUST
CONSTRUCTION, 3.1%; SUGI PHARMACY, 1.9%; FUNAI ELECTRIC, 2.1%; VENTURE, 0.8%;
COMPASS GROUP, 1.8%.
1-800-922-6769
16
COLUMBIA ACORN INTERNATIONAL SELECT
>AT A GLANCE TICKER SYMBOL: ACFFX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2004
LIFE OF
1 YEAR 5 YEARS FUND
------ ------- -------
Returns before taxes 24.14% -1.63% 10.50%
Returns after taxes 24.23 -1.68 10.44
on distributions
Returns after taxes 15.95 -1.38 9.21
on distributions and
sale of fund shares
Citigroup World 25.22 6.21 9.35
ex-US Cap Range
$2-10B (pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for class Z shares only; after-tax returns
for other share classes will vary. The return after taxes on distributions may
be higher than the return before taxes due to qualified foreign tax credits.
Indexes do not reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 19.4%
Finance 17.4%
Other* 11.7%
Information 12.3%
Energy/Minerals 6.6%
Health Care 5.0%
Transportation 1.0%
Industrial Goods/Services 26.6%
* Other includes cash and other assets less liabilities of 10.1%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT
(CLASS Z)
>November 23, 1998 through December 31, 2004
This graph compares the results of $10,000 invested in Columbia Acorn
International Select at inception on November 23, 1998 to the Citigroup World
ex-US Cap Range $2-10B Index, a subset of Citigroup's Broad Market Index,
representing a mid-cap developed market index excluding the U.S. The index and
Fund returns include reinvested dividends and capital gains. It is not possible
to invest directly in an index. The graph and table do not reflect tax
deductions that a shareholder would pay on Fund distributions or the sale of
Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
NAV ON 12/31/04: $18.02
TOTAL NET ASSETS OF THE FUND: $58.3 MILLION
[MOUNTAIN CHART]
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
24.14% -1.63% 10.50%
CITIGROUP WORLD
COLUMBIA ACORN EX-US CAP
INTERNATIONAL SELECT RANGE $2-10B
-------------------- ------------
11/23/1998 10000.00 10000.00
11/30/1998 10140.00 10045.10
12/31/1998 11000.00 10338.80
11790.00 10309.80
11590.00 10051.80
3/31/1999 11980.00 10449.20
12240.00 11032.40
12170.00 10566.60
6/30/1999 13109.80 10952.70
13510.80 11362.00
13771.40 11489.60
9/30/1999 13621.00 11529.70
14132.20 11535.10
16998.70 11864.40
12/31/1999 19975.50 12771.70
19664.80 12154.30
24245.20 12310.70
3/31/2000 23092.60 12679.70
21258.40 12171.70
18923.10 11975.80
6/30/2000 19852.50 12610.80
19469.00 12203.10
20266.30 12586.30
9/30/2000 19236.90 12168.00
18479.90 11791.00
16128.30 11439.80
12/31/2000 17309.20 11998.20
17874.30 11938.60
15825.50 11505.00
3/31/2001 13706.00 10607.50
14412.50 11390.60
14382.20 11293.20
6/30/2001 13763.20 10999.40
13062.40 10723.40
12778.00 10626.20
9/30/2001 10624.60 9391.94
11305.10 9769.16
11924.70 10118.30
12/31/2001 12280.20 10140.10
11650.50 9840.78
11508.30 9990.63
3/31/2002 11914.60 10562.20
12290.40 10755.60
12432.60 11097.30
6/30/2002 12046.60 10712.10
10746.50 9752.72
10949.60 9729.61
9/30/2002 10147.20 8859.06
10126.90 9017.25
10380.80 9476.41
12/31/2002 10451.90 9209.34
9944.05 8978.22
9527.60 8810.27
3/31/2003 9629.18 8659.79
10533.20 9425.05
11447.30 10100.90
6/30/2003 11526.70 10389.10
11709.60 10806.10
12217.90 11429.10
9/30/2003 12675.30 11900.10
13620.60 12818.90
13905.20 12926.80
12/31/2003 14820.00 13781.40
15094.50 14071.10
15745.00 14409.50
3/31/2004 15846.60 14969.90
15531.50 14460.40
15551.90 14420.30
6/30/2004 15958.10 14786.00
15590.60 14225.70
15590.60 14356.60
9/30/2004 16244.00 14817.80
16723.90 15317.00
17775.50 16527.60
12/31/2004 18398.30 17257.40
COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 5.8%
Small Business & Middle Market Banking
2. Neopost (France) 4.1%
Postage Meter Machines
3. Komercni Banka (Czech Republic) 3.7%
Leading Czech Universal Bank
4. Exel (United Kingdom) 3.7%
Global Logistics & Freight Forwarding
5. Lion Nathan (Australia) 3.4%
Beer Brewer/Distributor
6. Depfa Bank (Ireland) 3.3%
International Public Sector Finance
7. Daito Trust Construction (Japan) 3.1%
Apartment Builder
8. Hoya (Japan) 2.9%
Opto-electrical Components & Eyeglass Lenses
9. Shimano (Japan) 2.9%
Bicycle Components & Fishing Tackle
10. SES Global (Luxembourg) 2.7%
Satellite Broadcasting Services
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
17
COLUMBIA ACORN SELECT
>IN A NUTSHELL
[Photo of Ben Andrews]
It was a good quarter and year for Columbia Acorn Select. The Fund gained 13.82%
during the fourth quarter, outperforming the S&P MidCap 400's 12.16% return and
the S&P 500's 9.23% gain. For the year, Columbia Acorn Select was up 18.58% vs.
a 16.48% gain for the S&P MidCap 400 and a 10.88% return for the S&P 500.
McAfee, ITT Educational Services and Abercrombie & Fitch all did well for
the Fund in the quarter and in the year. McAfee was up 83% for the 12 months
while ITT Educational Services increased 66%. Together these two stocks made up
a third of the Fund's return for the year. Abercrombie & Fitch, up an impressive
90% in the year, was another big contributor to Fund performance.
On the downside, Skillsoft Publishing cost the Fund one half of a percent
of performance in the quarter as the stock slid due to continued pricing
pressure from its largest competitor, Netg. For the year, the largest detractors
to performance were Synopsys, down 42%, and Interpublic Group, down 32%. We are
evaluating whether or not Synopsys has turn around potential. Interpublic Group
was sold in the quarter.
During the fourth quarter, Oracle purchased one of the Fund's holdings,
PeopleSoft, after a lengthy and much publicized takeover battle. During the
17-month negotiation process for PeopleSoft, its board of directors received a
lot of bad press for not having the shareholders' best interests in mind. Our
Firm's due diligence refuted this and we backed the board. In the end, the
board's moves did put its customer and shareholder interests first when trying
to negotiate with a very adversarial suitor. We received the cash proceeds from
the PeopleSoft transaction two days before the end of the quarter, which
increased the Fund's cash at quarter end to an unusually high level. We feel
comfortable operating Columbia Acorn Select with a cash position of between 4%
and 10%.
We added six new names to the portfolio during the quarter while deleting
one (PeopleSoft). New ideas include an investment in the cable industry with
UnitedGlobalCom and Liberty Media International. Both stocks focus on serving
foreign markets. The Fund also purchased IAC/InterActiveCorp, one of the five
big Internet companies in the industry, as its stock price reached a two-year
low. FMC Technologies was added as we believe offshore deep-water oil drilling
will increase over the next several years. The Fund also purchased Aspect
Communications and AnswerThink.
/s/ Ben Andrews
Ben Andrews
LEAD PORTFOLIO MANAGER
[Sidebar]
TCF FINANCIAL'S INNOVATIVE APPROACH
- --------------------------------------------------------------------------------
TCF Financial was one of Columbia Acorn Select's big winners, rising 29% in
2004. TCF does banking a little bit different than other banks. More retailer
than banker, TCF stresses convenience banking, with branches open seven days a
week, coin-counting machines available in every branch, and a large presence in
local supermarket chains. Most other banks are obsessed with keeping their
expenses down. TCF focuses instead on wisely spending money to grow its highly
profitable, low-cost deposit base. Proving the adage that "you must spend money
to make money," TCF's 26% return on equity ranked #2 out of the other 50 largest
banks in the country.*
[End Sidebar]
COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS
HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE
FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND
TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: MCAFEE,
7.2%; ITT EDUCATIONAL SERVICES, 5.3%; ABERCROMBIE & FITCH, 3.6%; SKILLSOFT
PUBLISHING, 3.9%; NETG, 0.0%; SYNOPSYS, 1.3%; INTERPUBLIC GROUP, 0.0%; ORACLE,
0.0%; PEOPLESOFT, 0.0%; UNITEDGLOBALCOM, 0.8%; LIBERTY MEDIA INTERNATIONAL,
0.9%; IAC/INTERACTIVECORP, 1.6%; FMC TECHNOLOGIES, 1.0%; ASPECT COMMUNICATIONS,
0.1%; ANSWERTHINK, 0.2%; TCF FINANCIAL, 5.0%.
* SOURCE: CITIGATE FINANCIAL INTELLIGENCE. RANKING BASED ON THE 50 LARGEST BANK
HOLDING COMPANIES IN THE U.S. BASED ON ASSET SIZE AT 9/30/04.
1-800-922-6769
18
COLUMBIA ACORN SELECT
>AT A GLANCE TICKER SYMBOL: ACTWX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2004
LIFE OF
1 YEAR 5 YEARS FUND
------ ------- -------
Returns before taxes 18.58% 11.48% 15.29%
Returns after taxes 18.20 10.94 14.76
on distributions
Returns after taxes on 12.55 9.77 13.28
distributions and sale
of fund shares
S&P MidCap 400 16.48 9.54 12.11
(pretax)
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for class Z shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 30.4%
Finance 14.6%
Health Care 7.3%
Industrial Goods/Services 2.7%
Energy/Minerals 1.0%
Other* 13.4%
Information 30.6%
* Cash and other assets less liabilities.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS Z)
>November 23, 1998 through December 31, 2004
This graph compares the results of $10,000 invested in Columbia Acorn Select at
inception on November 23, 1998 to the S&P MidCap 400, a broad, market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500. The
Index is unmanaged and returns for both the index and the Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. The graph and table do not reflect tax deductions that a shareholder
would pay on Fund distributions or the sale of Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
NAV ON 12/31/04: $21.13
TOTAL NET ASSETS OF THE FUND: $1,257.1 MILLION
[MOUNTAIN CHART]
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
18.58% 11.48% 15.29%
COLUMBIA S&P
ACORN SELECT MIDCAP 400
------------ ----------
11/23/1998 $10000.00 $10000.00
11/30/1998 10030.00 9911.29
12/31/1998 10710.00 11108.90
11000.00 10676.20
10710.00 10117.20
3/31/1999 11480.00 10399.90
12710.00 11220.20
12730.00 11268.80
6/30/1999 13040.00 11872.20
13190.00 11619.90
12060.00 11221.70
9/30/1999 12110.00 10875.10
12970.00 11429.30
13250.00 12029.10
12/31/1999 13848.00 12744.10
13474.00 12385.10
13554.90 13252.00
3/31/2000 14171.50 14361.10
13463.90 13859.60
13100.00 13686.70
6/30/2000 14319.80 13887.70
13931.30 14107.10
15431.30 15682.20
9/30/2000 15798.20 15574.80
15927.70 15046.70
14381.60 13910.90
12/31/2000 15465.20 14975.10
15913.90 15308.60
14983.60 14435.00
3/31/2001 14403.50 13361.80
15454.20 14835.80
16297.00 15181.30
6/30/2001 16023.40 15120.00
15870.10 14894.80
15125.90 14407.60
9/30/2001 14206.50 12615.50
14513.00 13173.50
16023.40 14153.50
12/31/2001 16702.50 14884.70
16373.50 14807.30
16022.60 14825.60
3/31/2002 16581.90 15885.40
15682.60 15811.10
16143.20 15544.40
6/30/2002 15869.00 14406.70
14860.10 13011.20
15222.00 13076.60
9/30/2002 14520.10 12023.10
15320.70 12544.10
16088.40 13269.80
12/31/2002 15397.50 12724.50
15331.70 12352.60
15375.50 12058.50
3/31/2003 15682.60 12160.10
16581.90 13043.00
17481.20 14123.90
6/30/2003 17941.80 14303.90
18808.20 14811.50
19586.80 15483.40
9/30/2003 19159.10 15246.30
19861.00 16399.10
19718.40 16970.50
12/31/2003 20110.90 17256.80
20663.40 17630.80
21204.90 18054.20
3/31/2004 21193.80 18130.80
20586.10 17535.70
20917.60 17899.50
6/30/2004 21602.70 18306.80
20663.40 17452.60
20497.70 17406.90
9/30/2004 20950.70 17922.40
21768.40 18209.20
23105.50 19293.60
12/31/2004 23846.50 20101.40
COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. McAfee 7.2%
Security Software & Services
2. ITT Educational Services 5.3%
Postsecondary Degree Programs
3. TCF Financial 5.0%
Great Lakes Bank
4. Harley-Davidson 4.8%
Motorcycles & Related Merchandise
5. First Health Group 4.2%
Ppo Network
6. Safeway 4.0%
Retail Food & Drug Stores
7. Skillsoft Publishing 3.9%
Provider of Web-based Learning
Solutions (E-learning)
8. Abercrombie & Fitch 3.6%
Teen Apparel Retailer
9. Tellabs 3.5%
Telecommunications Equipment
10. Markel 3.5%
Specialty Insurance
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
19
COLUMBIA THERMOSTAT FUND
>IN A NUTSHELL
Columbia Thermostat Fund ended the quarter up 5.83% and the year up 9.17%. Fund
returns were between the S&P 500 and the Lehman Brothers U.S. Credit
Intermediate Bond Index, which is the expected result for Columbia Thermostat.
See Page 4 for additional data. The strong equity market in the fourth quarter
allowed the Lipper Flexible Portfolio Funds Index to beat the Fund's performance
for the quarter and the year.
The weighted average return for the equity portion of the Thermostat
portfolio was 12.05% for the year. The standout equity fund in the group was
Columbia Acorn Fund, up 21.51% for the annual period. Columbia Growth Stock Fund
was the annual laggard, down 2.17%. The weighted average annual return for the
bond portion of the Fund was 5.16% with portfolio bond fund returns ranging from
7.42% to 4.11%.
Thermostat hit three reallocation triggers in the fourth quarter. Stock
exposure was increased in October while bond exposure was increased in both
November and December as the equity market rallied following the U.S. election.
Assets in Columbia Thermostat Fund at year-end were $207 million. Thank
you for your investment in the Fund. As we move into 2005, we continue to
believe that Thermostat will provide a satisfactory, low-risk result for a
portion of your invested dollars.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF
THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG
THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING
STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS
DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY
ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL- AND MID-CAP STOCKS
MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE
VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN
INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED
BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO
THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND
PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A
FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY
AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER
TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE
SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN.
RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND
Equities
4TH QUARTER 1-YEAR
WEIGHTING TOTAL TOTAL
FUND IN FUND RETURN RETURN
- --------------------------------------------------------
Columbia 20% 12.44% 21.51%
Acorn Fund
- --------------------------------------------------------
Columbia 15% 13.82% 18.58%
Acorn Select
- --------------------------------------------------------
Columbia Growth 25% 8.14% -2.17%
Stock Fund
- --------------------------------------------------------
Columbia Growth 25% 8.17% 13.71%
& Income Fund
- --------------------------------------------------------
Columbia Mid Cap 15% 9.55% 15.58%
Value Fund
- --------------------------------------------------------
WEIGHTED AVERAGE
EQUITY RETURN 100% 10.06% 12.05%
- --------------------------------------------------------
Fixed Income
4TH QUARTER 1-YEAR
WEIGHTING TOTAL TOTAL
FUND IN FUND RETURN RETURN
- --------------------------------------------------------
Columbia Federal 30% 0.76% 4.11%
Securities Fund
- --------------------------------------------------------
Columbia Intermediate 50% 1.42% 4.88%
Bond Fund
- --------------------------------------------------------
Columbia High 20% 1.88% 7.42%
Yield Fund
- --------------------------------------------------------
WEIGHTED AVERAGE
INCOME RETURN 100% 1.32% 5.16%
- --------------------------------------------------------
COLUMBIA THERMOSTAT FUND
REBALANCING IN THE QUARTER
- --------------------------------------------------------
OCTOBER 22, 2004: 55% stock, 45% bond
NOVEMBER 24, 2004: 45% stock, 55% bond
DECEMBER 14, 2004: 40% stock, 60% bond
1-800-922-6769
20
COLUMBIA THERMOSTAT FUND
>AT A GLANCE TICKER SYMBOL: COTZX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
>through December 31, 2004
LIFE OF
1 YEAR FUND
------ -------
Returns before taxes 9.17% 14.57%
Returns after taxes 8.32 13.99
on distributions
Returns after taxes on distribu- 6.02 12.21
tions and sale of fund shares
S&P 500 (pretax) 10.88 20.98
Lehman U.S. Credit Intermediate 4.08 6.23
Bond Index (pretax)
Lipper Flexible Portfolio Funds 9.50 16.90
Index (pretax)*~
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for class Z shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* The Lipper Flexible Portfolio Funds Index is an equal dollar weighted index of
the 30 largest mutual funds within the flexible portfolio fund classification,
as defined by Lipper.
COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS
>as a % of assets in each investment category, as of December 31, 2004
[PIE CHART]
STOCK MUTUAL FUNDS
Columbia Acorn Fund 20%
Columbia Acorn Select 15%
Columbia Growth Stock Fund 25%
Columbia Growth & Income Fund 25%
Columbia Mid Cap Value Fund 15%
[PIE CHART]
BOND MUTUAL FUNDS
Columbia Federal Securities Fund 30%
Columbia Intermediate Bond Fund 50%
Columbia High Yield Fund 20%
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS Z)
>September 25, 2002 through December 31, 2004
This graph compares the results of $10,000 invested in Columbia Thermostat Fund
at inception on September 25, 2002 to two indexes. The S&P 500 is a broad,
market-weighted average of U.S. blue-chip company stock performance. The Lehman
U.S. Credit Intermediate Bond Index is the intermediate component of the U.S.
Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and
foreign debentures and secured notes that meet specified maturity, liquidity,
and quality requirements. The Indexes are unmanaged and returns for the indexes
and the Fund include reinvested dividends and capital gains. It is not possible
to invest directly in an index. The graph and table do not reflect tax
deductions that a shareholder would pay on Fund distributions or the sale of
Fund shares.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
NAV ON 12/31/04: $13.12
TOTAL NET ASSETS OF THE FUND: $207.3 MILLION
[MOUNTAIN CHART]
AVERAGE ANNUAL TOTAL RETURN
-------------------------------
1 YEAR LIFE OF FUND
9.17% 14.57%
COLUMBIA
THERMOSTAT LEHMAN U.S. CREDIT
FUND S&P 500 INTERMEDIATE BOND
----------- -------- ------------------
9/25/2002 10000.00 10000.00 10000.00
9/30/2002 9850.00 9955.60 10042.80
10220.00 10831.90 9962.09
10700.00 11469.40 10044.60
12/31/2002 10410.00 10795.60 10306.70
10260.00 10512.80 10335.10
10100.00 10355.10 10517.50
3/31/2003 10190.00 10455.60 10539.30
10710.00 11316.80 10683.90
11200.00 11913.10 10956.80
6/30/2003 11348.00 12065.10 10962.60
11418.00 12277.80 10626.40
11648.20 12517.20 10658.60
9/30/2003 11618.20 12384.30 10976.00
12018.50 13084.90 10878.00
12148.50 13200.00 10910.80
12/31/2003 12470.50 13892.30 11019.00
12642.80 14147.30 11107.70
12784.60 14343.90 11230.90
3/31/2004 12835.20 14127.50 11330.20
12571.90 13905.70 11041.00
12612.40 14096.60 10971.10
6/30/2004 12812.50 14370.70 11010.70
12619.80 13895.00 11123.00
12700.90 13951.20 11338.90
9/30/2004 12863.20 14102.40 11381.40
13076.30 14317.80 11468.40
13390.70 14897.10 11367.10
12/31/2004 13613.60 15404.00 11468.80
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Stock Mutual Funds 40.0%
Bond Mutual Funds 59.4%
Cash and other Assets less Liabilities 0.6%
21
Columbia Acorn Fund
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
ADDITIONS
- ----------------------------------------------------------------------------
INFORMATION
Advantech (Taiwan) 0 986,000
American Tower 2,250,000 2,750,000
Avnet 1,695,000 2,075,000
Avocent 945,000 1,070,000
Bearing Point 3,350,000 4,000,000
CDW 0 230,000
Ceridian 1,090,000 1,395,000
Entravision Communications 1,000,000 1,200,000
Fair Isaac 530,000 990,000
FTI Consulting 0 302,000
Gray Television 1,400,000 1,452,000
Hong Kong Exchanges &
Clearing (Hong Kong) 7,000,000 9,000,000
Liberty Media International 864,000 1,000,000
Maximus 0 300,000
McAfee 1,600,000 1,658,000
Pinnacle Systems 2,000,000 2,500,000
Rogers 445,000 660,000
Salem Communications 770,000 1,291,000
Semtech 850,000 1,425,000
SES Global (Luxembourg) 2,537,000 2,907,000
Symbol Technologies 1,235,000 1,810,000
Symmetricom 1,225,000 1,510,000
Wincor Nixdorf (Germany) 0 130,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Brookstone 600,000 819,000
Central Parking 1,140,000 1,514,000
Edgars Consolidated Stores
(South Africa) 0 350,000
Fast Retailing (Japan) 200,000 300,000
HNI 1,750,000 2,200,000
International Speedway Motors 805,000 905,000
Jurys Doyle Hotel (Ireland) 720,000 880,000
Knoll 0 650,000
Nobia (Sweden) 1,700,000 2,130,000
Oxford Industries 664,000 836,000
Park 24 (Japan) 0 700,000
Petco Animal Supplies 1,015,000 1,245,000
Princeton Review 1,750,000 1,850,000
RC2 545,000 845,000
Sports Authority 873,000 1,400,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Bilfinger Berger (Germany) 525,000 635,000
Carbone Lorraine (France) 0 93,000
Clarcor 1,400,000 1,600,000
Dominion Homes 290,000 490,000
Donaldson 1,700,000 2,000,000
Genlyte Group 430,000 700,000
Imtech (Netherlands) 0 46,000
Meitec (Japan) 280,000 447,000
M/I Homes 141,000 218,000
Oshkosh Truck 0 106,000
Quanta Services 1,450,000 1,548,000
Sika (Switzerland) 25,000 35,000
Spartech 2,550,000 2,947,000
Watsco 1,525,000 2,276,000
- ----------------------------------------------------------------------------
FINANCE
Associated Banc-Corp 2,412,000 2,712,000
Cascade Financial 188,000 358,000
CityBank Lynnwood 455,000 500,000
First Financial BankShares 82,000 111,000
Great Southern Bancorp 465,000 479,000
Intermediate Capital
(United Kingdom) 500,000 620,000
Komercni Banka (Czech Republic) 172,000 195,000
Nuveen Investments 524,000 782,000
Provident Bancorp 0 160,000
Scottish Re Group 650,000 1,174,000
Selective Insurance Group 600,000 710,000
Sterling Bancorp 0 123,000
(INCLUDES THE EFFECT OF A 6 FOR 5 STOCK SPLIT)
Washington Federal 869,000 1,059,000
West Bancorporation 251,000 493,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Atmos Energy 1,076,000 1,206,000
Ivanhoe Mines (Canada) 0 1,000,000
Pride International 0 1,500,000
Range Resources 950,000 1,000,000
Western Gas 2,900,000 3,000,000
- ----------------------------------------------------------------------------
HEALTH CARE
AtheroGenics 789,000 1,179,000
Charles River Laboratories 640,000 840,000
Neurocrine Biosciences 360,000 500,000
Pozen 2,200,000 2,400,000
United Drug (Ireland) 2,000,000 2,106,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Allied Waste Industries 1,500,000 2,500,000
Heartland Express 0 371,000
Highland Hospitality 1,240,000 1,552,000
1-800-922-6769
22
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
SALES
- ----------------------------------------------------------------------------
INFORMATION
Activision 1,125,000 1,000,000
Asyst Technologies 664,000 0
Autobytel 500,000 0
Avid Technology 1,469,000 1,300,000
Euronet Worldwide 249,000 0
Information Holdings 600,000 0
Mediacom Communications 2,500,000 1,250,000
Netegrity 973,000 0
PeopleSoft 3,450,000 0
Shuffle Master 940,000 700,000
SPSS 385,000 222,000
THQ 1,260,000 800,000
Trimble Navigation 1,350,000 1,200,000
Zebra Technologies 591,000 400,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Leapfrog Enterprises 1,275,000 0
Lion Nathan (Australia) 4,000,000 2,500,000
Monarch Casino & Resort 805,000 0
Orbitz 1,050,000 0
Otsuke Kagu (Japan) 280,000 0
Rank Group (United Kingdom) 2,500,000 0
Uni-Charm (Japan) 255,000 0
Urban Outfitters 1,026,000 826,000
Whole Foods Market 350,000 230,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
G&K Services 550,000 300,000
Givaudan (Switzerland) 37,000 20,000
Hub Group 469,000 424,000
Sembcorp Logistics
(Singapore) 7,500,000 0
SYMYX 347,000 0
Tenaris (Argentina) 700,000 600,000
- ----------------------------------------------------------------------------
FINANCE
Bank of the Ozarks 436,000 0
First Federal Capital 700,000 0
HCC Insurance Holdings 1,320,000 1,020,000
Jardine Lloyd Thompson
(United Kingdom) 1,992,000 0
People's Bank of Bridgeport 3,276,000 3,196,000
Philadelphia Consolidated
Holding 720,000 575,000
RLI 800,000 570,000
Texas Regional Bancshares 1,980,000 1,830,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Clayton Williams Energy 440,000 0
Gamesa (Spain) 670,000 0
Nexen (Canada) 925,000 0
Southwestern Energy 1,100,000 500,000
Ultra Petroleum 2,195,000 1,700,000
XTO Energy 7,275,000 7,000,000
- ----------------------------------------------------------------------------
HEALTH CARE
Bioveris 194,000 0
First Health Group 5,586,000 4,586,000
Omega Pharma (Belgium) 276,000 236,000
Protein Design Labs 608,000 0
Sangamo Biosciences 1,698,000 0
Smith & Nephew
(United Kingdom) 2,910,000 0
Yuhan (South Korea) 138,000 10,992
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Am NV (Netherlands) 687,000 106,000
The Rouse Company 825,000 0
23
Columbia Acorn Fund
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
SECURITIES: 92.5%
- ----------------------------------------------------------------------------
INFORMATION: 22.6%
SOFTWARE/SERVICES
>BUSINESS SOFTWARE: 4.6%
1,625,000 Kronos (b)(c) $ 83,086
LABOR MANAGEMENT SOLUTIONS
1,300,000 Avid Technology (b) 80,275
DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS
11,500,000 Novell (b) 77,625
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
950,000 Micros Systems (b)(c) 74,157
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
1,658,000 McAfee (b) 47,966
SECURITY SOFTWARE & SERVICES
3,448,000 Aspect Communications (b)(c) 38,411
CALL CENTER SOFTWARE
6,700,000 E.Piphany (b)(c) 32,361
CRM SOFTWARE
1,521,000 Sybase (b) 30,344
DATABASE SOFTWARE
2,200,000 JDA Software Group (b)(c) 29,964
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
2,000,000 MRO Software (b)(c) 26,040
ENTERPRISE MAINTENANCE SOFTWARE
2,200,000 MAPICS (b)(c) 23,210
MID MARKET ERP SOFTWARE
1,300,000 Witness Systems (b)(c) 22,698
CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE
3,000,000 Lawson Software (b) 20,610
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
6,000,000 Actuate (b)(c) 15,300
INFORMATION DELIVERY SOFTWARE & SOLUTIONS
5,000,000 Indus International (b)(c) 10,695
600,000 Indus International (b)(c) 1,283
ENTERPRISE ASSET MANAGEMENT SOFTWARE
1,575,000 Radiant Systems (b)(c) 10,253
POINT OF SALE SYSTEMS FOR CONVENIENCE STORES
300,000 Maximus (b) 9,336
OUTSOURCER FOR GOVERNMENT
1,250,000 ClickSoftware Technologies (b) 3,588
SERVICE CHAIN OPTIMIZATION SOFTWARE
222,000 SPSS (b) 3,472
STATISTICAL/BUSINESS ANALYSIS SOFTWARE
- ----------------------------------------------------------------------------
640,674
>-BUSINESS INFORMATION/BUSINESS SERVICES/
PUBLISHING: 1.7%
1,200,000 Getty Images (b) 82,620
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
990,000 Fair Isaac 36,313
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
1,336,000 Navigant Consulting (b) 35,538
FINANCIAL CONSULTING FIRM
2,685,000 InfoUSA (b)(c) 30,045
BUSINESS DATA FOR SALES LEADS
1,395,000 Ceridian (b) 25,501
HR SERVICES & PAYMENT PROCESSING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
350,000 Dex Media $ 8,736
YELLOW PAGES PUBLISHER
1,700,000 PRIMEDIA (b) 6,460
SPECIALTY MAGAZINES & OTHER PUBLICATIONS
302,000 FTI Consulting (b) 6,363
FINANCIAL CONSULTING FIRM
- ----------------------------------------------------------------------------
231,576
>TRANSACTION PROCESSORS: 1.0%
1,457,000 Global Payments 85,293
CREDIT CARD PROCESSOR
9,000,000 Hong Kong Exchanges & Clearing
(Hong Kong) 24,141
HONG KONG EQUITY & DERIVATIVES OPERATOR
1,250,000 Pegasus Systems (b)(c) 15,750
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
600,000 Cubic 15,102
REVENUE COLLECTION & DEFENSE SYSTEMS
- ----------------------------------------------------------------------------
140,286
>INTERNET: 1.0%
9,500,000 Skillsoft Publishing (b)(c) 53,675
PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING)
2,000,000 RSA Security (b) 40,120
ENTERPRISE SECURITY SOFTWARE
2,000,000 ValueClick (b) 26,660
INTERNET ADVERTISING
1,400,000 DoubleClick (b) 10,892
INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA
1,879,808 Vital Stream, Cl. C (b) 1,560
STREAMING SERVICES FOR THE INTERNET
- ----------------------------------------------------------------------------
132,907
>COMPUTER SERVICES: 0.8%
4,000,000 Bearing Point (b) 32,120
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
4,600,000 AnswerThink (b)(c) 21,436
IT INTEGRATOR FOR FORTUNE 2000
2,000,000 Ciber (b) 19,280
SOFTWARE SERVICES & STAFFING
4,656,000 Igate Capital (b)(c) 18,857
TECHNOLOGY STAFFING SERVICES
2,300,000 Analysts International (b)(c) 9,200
TECHNOLOGY STAFFING SERVICES
1,025,000 New Horizons Worldwide (b)(c) 5,750
COMPUTER TRAINING SERVICES
- ----------------------------------------------------------------------------
106,643
>ELECTRONICS DISTRIBUTION: 0.7%
2,075,000 Avnet (b) 37,848
ELECTRONIC COMPONENTS DISTRIBUTION
680,000 Tech Data (b) 30,872
I/T DISTRIBUTOR
230,000 CDW 15,260
TECH RETAILER
710,000 Agilysys 12,169
I/T DISTRIBUTOR
- ----------------------------------------------------------------------------
96,149
1-800-922-6769
24
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSUMER SOFTWARE: 0.4%
1,000,000 Activision (b) $ 20,180
ENTERTAINMENT SOFTWARE
800,000 THQ (b) 18,352
ENTERTAINMENT SOFTWARE
2,500,000 Pinnacle Systems (b) 15,250
VIDEO EDITING SOFTWARE & HARDWARE
- ----------------------------------------------------------------------------
53,782
COMPUTER RELATED HARDWARE
>COMPUTER HARDWARE/RELATED SYSTEMS: 2.6%
2,500,000 Seachange International (b)(c) 43,600
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
1,070,000 Avocent (b) 43,356
COMPUTER CONTROL SWITCHES
1,525,000 Unova (b) 38,567
BARCODE & WIRELESS LAN SYSTEMS
1,810,000 Symbol Technologies 31,313
MOBILE COMPUTERS & BARCODE SCANNERS
371,900 Neopost (France) 28,814
POSTAGE METER MACHINES
660,000 Rogers (b) 28,446
PCB LAMINATES & HIGH PERFORMANCE FOAMS
535,000 II VI (b) 22,732
LASER COMPONENTS
400,000 Zebra Technologies (b) 22,512
BAR CODE PRINTERS
1,500,000 CTS 19,935
ELECTRONIC COMPONENTS, SENSORS & EMS
788,000 Belden CDT 18,282
SPECIALTY CABLE
625,000 Excel Technologies (b)(c) 16,250
LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS
5,000,000 Concurrent Computer (b)(c) 14,300
VIDEO ON DEMAND SYSTEMS & SERVICES
2,900,000 3Com (b) 12,093
NETWORKING EQUIPMENT
130,000 Wincor Nixdorf (Germany) (b)(f) 10,432
RETAIL POS SYSTEMS & ATM MACHINES
6,800,000 Phoenixtec Power (Taiwan) 8,193
UNINTERRUPTABLE POWER SUPPLIES
230,000 Applied Films (b) 4,959
THIN-FILM GLASS COATING EQUIPMENT
986,000 Advantech (Tawain) 2,388
EMBEDED COMPUTERS
- ----------------------------------------------------------------------------
366,172
>GAMING EQUIPMENT: 1.9%
6,700,000 International Game Technology 230,346
SLOT MACHINES & PROGRESSIVE JACKPOTS
700,000 Shuffle Master (b) 32,970
CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES
- ----------------------------------------------------------------------------
263,316
>INSTRUMENTATION: 1.0%
1,200,000 Trimble Navigation (b) 39,648
GPS-BASED INSTRUMENTS
600,000 Mettler Toledo (b) 30,786
LABORATORY EQUIPMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
536,000 Dionex (b) $ 30,375
ION & LIQUID CHROMATOGRAPHY
428,000 Varian (b) 17,552
ANALYTICAL INSTRUMENTS
2,300,000 Spectris (United Kingdom) 16,839
ELECTRONIC INSTRUMENTATION & CONTROLS
- ----------------------------------------------------------------------------
135,200
>SEMICONDUCTORS/RELATED EQUIPMENT: 0.9%
1,425,000 Semtech (b) 31,165
ANALOG SEMICONDUCTORS
1,315,000 Integrated Circuit Systems (b) 27,510
SILICON TIMING DEVICES
685,000 Littelfuse (b) 23,400
LITTLE FUSES
1,250,000 IXYS (b) 12,900
POWER SEMICONDUCTORS
565,000 Supertex (b) 12,261
MIXED-SIGNAL SEMICONDUCTORS
1,380,000 Ase Test (Taiwan) (b) 9,329
SEMICONDUCTOR PACKAGING & TEST SERVICES
361,000 Actel (b) 6,332
FIELD PROGRAMMABLE GATE ARRAYS
604,000 Pericom Semiconductor (b) 5,696
SEMICONDUCTORS: INTERFACE INTEGRATED CIRCUITS
- ----------------------------------------------------------------------------
128,593
>CONTRACT MANUFACTURING: 0.4%
1,500,000 Jabil Circuit (b) 38,370
ELECTRONIC MANUFACTURING SERVICES
1,600,000 Plexus (b) 20,816
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
59,186
TELECOMMUNICATIONS
>MOBILE COMMUNICATIONS: 1.8%
3,000,000 Western Wireless (b) 87,900
RURAL CELLULAR PHONE SERVICES
4,000,000 Crown Castle International (b) 66,560
COMMUNICATION TOWERS
2,750,000 American Tower (b) 50,600
COMMUNICATION TOWERS IN USA & MEXICO
520,000 Telephone & Data Systems 40,014
CELLULAR & TELEPHONE SERVICES
- ----------------------------------------------------------------------------
245,074
>TELECOMMUNICATIONS EQUIPMENT: 1.1%
8,700,000 Tellabs (b) 74,733
TELECOMMUNICATIONS EQUIPMENT
830,000 Plantronics 34,420
COMMUNICATION HEADSETS
2,000,000 Andrew (b) 27,260
WIRELESS INFRASTRUCTURE EQUIPMENT
1,510,000 Symmetricom (b) 14,662
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
151,075
>-TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3%
800,000 Commonwealth Telephone (b) 39,728
RURAL PHONE FRANCHISES & CLEC
25
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
MEDIA
>TELEVISION PROGRAMMING/CATV: 1.1%
1,000,000 Liberty Media International (b) $ 46,230
CATV HOLDING COMPANY
3,000,000 UnitedGlobalCom (b) 28,980
VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA
2,605,000 Liberty Media 28,603
CATV PROGRAMMING & MEDIA COMPANY HOLDINGS
2,700,000 Insight Communications (b) 25,029
CATV FRANCHISES IN MIDWEST
1,100,000 Corus Entertainment (Canada) 22,914
TELEVISION PROGRAMMING & RADIO STATIONS
1,250,000 Mediacom Communications (b) 7,813
CABLE TELEVISION FRANCHISES
- ----------------------------------------------------------------------------
159,569
>TV/SATELLITE BROADCASTING: 0.7%
2,907,000 SES Global (Luxembourg) 37,800
SATELLITE BROADCASTING SERVICES
1,452,000 Gray Television 22,506
MID MARKET AFFILIATED TV STATIONS
450,000 Alliance Atlantis Communication
(Canada) (b) 12,265 CATV CHANNELS, TV/MOVIE
PRODUCTION/DISTRIBUTION
1,200,000 Entravision Communications (b) 10,020
SPANISH LANGUAGE TV, RADIO & OUTDOOR
270,000 Metropole TV (France) 7,643
TELEVISION BROADCASTER
200,000 Young Broadcasting (b) 2,112
TELEVISION STATIONS
- ----------------------------------------------------------------------------
92,346
>RADIO BROADCASTING: 0.6%
1,291,000 Salem Communications (b) 32,210
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
1,200,000 Cumulus Media, Cl. A (b) 18,096
RADIO STATIONS IN SMALL CITIES
992,000 Saga Communications (b) 16,715
RADIO STATIONS IN SMALL & MID-SIZED CITIES
1,200,000 Spanish Broadcasting (b) 12,672
SPANISH LANGUAGE RADIO STATIONS
- ----------------------------------------------------------------------------
79,693
------------
INFORMATION: TOTAL 3,121,969
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 20.7%
SERVICES
>RETAIL: 6.0%
2,495,000 Chico's FAS (b) 113,597
WOMEN'S SPECIALTY RETAIL
3,200,000 Michaels Stores 95,904
CRAFT & HOBBY SPECIALTY RETAILER
3,743,000 Christopher & Banks (c) 69,058
WOMEN'S APPAREL RETAILER
2,265,000 Aeropostale (b) 66,659
MALL BASED TEEN RETAILER
1,245,000 Abercrombie & Fitch 58,453
TEEN APPAREL RETAILER
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
1,245,000 Petco Animal Supplies (b) $ 49,153
PET SUPPLIES & SERVICES
1,400,000 Williams Sonoma (b) 49,056
HOME GOODS & FURNISHING RETAILER
826,000 Urban Outfitters (b) 36,674
ECLECTIC HOME & APPAREL RETAILER
1,400,000 Sports Authority (b)(c) 36,050
SPORTING GOODS STORES
1,300,000 Borders Group 33,020
BOOKSTORES
1,072,000 Zale (b) 32,021
SPECIALTY RETAILER OF JEWELRY
955,000 West Marine (b) 23,636
LARGEST RETAILER OF BOATING SUPPLIES
1,370,000 Hot Topic (b) 23,550
MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS
1,093,000 Ann Taylor (b) 23,532
WOMEN'S APPAREL RETAILER
300,000 Fast Retailing (Japan) (f) 22,755
APPAREL RETAILER
230,000 Whole Foods Market 21,931
NATURAL FOOD SUPERMARKETS
700,000 Genesco (b) 21,798
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
350,000 Edgars Consolidated Stores
(South Africa) 18,740
LEADING RETAIL CONGLOMERATE
819,000 Brookstone (b) 16,011
SPECIALTY CONSUMER PRODUCT RETAILER
2,250,000 Esprit Holdings (Hong Kong) 13,605
GLOBAL APPAREL BRAND MANAGER
1,062,000 Gaiam (b)(c) 6,531
HEALTHY LIVING CATALOG & E-COMMERCE
$ 6,000 Gadzooks 5% Convertible 10/07/08 (e)(g) 600
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
832,334
>CONSUMER SERVICES: 1.6%
2,250,000 ITT Educational Services (b) 106,988
POSTSECONDARY DEGREE PROGRAMS
1,290,000 Coinstar (b)(c) 34,611
OWNER/OPERATOR OF COIN COUNTING MACHINES
775,000 Weight Watchers (b) 31,829
WEIGHT LOSS PROGRAMS
1,514,000 Central Parking 22,937
OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES
700,000 Park 24 (Japan) (f) 12,518
PARKING LOT OPERATOR
1,850,000 Princeton Review (b)(c) 11,378
COLLEGE PREPARATION COURSES
2,350,000 Bally Total Fitness (b)(c) 9,964
NATIONAL CHAIN OF FITNESS CENTERS
- ----------------------------------------------------------------------------
230,225
>CASINOS: 1.3%
890,000 Station Casinos 48,665
CASINOS & RIVERBOATS
875,000 Argosy Gaming (b) 40,862
REGIONAL RIVERBOAT CASINOS
1-800-922-6769
26
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CASINOS--CONTINUED
1,925,000 Pinnacle Entertainment (b) $ 38,077
REGIONAL RIVERBOAT CASINOS
2,750,000 Alliance Gaming (b)(c) 37,977
DIVERSIFIED GAMING COMPANY
4,130,000 Sky City Entertainment (New Zealand) 15,959
CASINO/ENTERTAINMENT COMPLEX
226,000 Lakes Entertainment (b) 3,682
NATIVE AMERICAN CASINO DEVELOPMENT
- ----------------------------------------------------------------------------
185,222
>TRAVEL: 1.0%
2,314,500 Intrawest (Canada) 53,130
OWNER/OPERATOR OF SKI RESORTS
3,380,000 LaQuinta (b) 30,724
OWNER/FRANCHISER OF MID-PRICED HOTELS
1,115,000 Vail Resorts (b) 24,998
OWNER/OPERATOR OF SKI RESORTS
880,000 Jurys Doyle Hotel (Ireland) 14,685
OWNER/OPERATOR OF MID-PRICED HOTELS
1,045,000 Navigant International (b)(c) 12,718
CORPORATE TRAVEL AGENCY
- ----------------------------------------------------------------------------
136,255
>ENTERTAINMENT/LEISURE PRODUCTS: 0.9%
905,000 International Speedway Motors 47,784
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
845,000 RC2 (b) 27,547
COLLECTIBLES & TOYS
1,110,000 Amer Group (Finland) (f) 19,327
BRANDED SPORTING GOODS
363,000 Speedway Motorsports 14,222
MOTORSPORT RACETRACK OWNER & OPERATOR
345,000 Intralot (Greece) 8,421
LOTTERY & GAMING SYSTEMS & SERVICES
500,000 Callaway Golf 6,750
PREMIUM GOLF CLUBS & BALLS
- ----------------------------------------------------------------------------
124,051
>RESTAURANTS: 0.7%
2,000,000 AFC Enterprises (b)(c) 47,300
POPEYES CHICKEN
1,447,000 Autogrill (Italy) (b)(f) 24,078
TOLLWAY RESTAURANTS
364,000 Cheesecake Factory (b) 11,819
CASUAL DINING RESTAURANTS
388,000 Kappa Create (Japan) (f) 11,584
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
94,781
>CRUISE LINES: 0.2%
400,000 Carnival 23,052
LARGEST CRUISE LINE
- ----------------------------------------------------------------------------
GOODS
>FURNITURE/TEXTILES: 2.3%
2,200,000 HNI 94,710
OFFICE FURNITURE & FIREPLACES
740,000 Mohawk Industries (b) 67,525
CARPET & FLOORING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,900,000 Herman Miller $ 52,497
OFFICE FURNITURE
844,000 American Woodmark (c) 36,866
KITCHEN CABINET MANUFACTURER
2,130,000 Nobia (Sweden) (f) 35,171
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
550,000 Masonite International (Canada) (b) 18,918
DOOR MANUFACTURER
650,000 Knoll (b) 11,375
OFFICE FURNITURE
- ----------------------------------------------------------------------------
317,062
>APPAREL: 2.2%
2,990,000 Coach (b) 168,636
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
836,000 Oxford Industries 34,527
BRANDED & PRIVATE LABEL APPAREL
3,000,000 Billabong International (Australia) 26,843
SURFWEAR APPAREL MANUFACTURER
400,000 Columbia Sportswear (b) 23,844
ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES
469,000 Carter's (b) 15,941
CHILDREN'S BRANDED APPAREL
728,000 Steven Madden (b)(c) 13,730
WHOLESALER/RETAILER OF FASHION FOOTWEAR
5,000,000 Pacific Brands (Australia) 12,464
AUSTRALIAN BRANDED APPAREL
1,000,000 Wacoal (Japan) (f) 12,015
WOMEN'S SPECIALTY APPAREL
- ----------------------------------------------------------------------------
308,000
>LEISURE VEHICLES: 1.3%
1,745,000 Harley-Davidson 106,009
MOTORCYCLES & RELATED MERCHANDISE
550,000 Polaris Industries 37,411
MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS
1,495,000 Monaco Coach (c) 30,752
RECREATIONAL VEHICLES
2,850,000 Ducati Motor (Italy) (b)(f) 3,394
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
177,566
>DURABLE GOODS: 1.1%
1,316,000 Helen of Troy (b) 44,231
HAIRDRYERS & CURLING IRONS
465,000 Hyundai Mobis (South Korea) (b)(f) 29,344
AUTO PARTS
478,000 Hunter Douglas (Netherlands) 25,412
WINDOW SHADES & VENETIAN BLINDS
10,000,000 Techtronic Industries (Hong Kong) 21,871
MANUFACTURER OF POWER TOOLS & MOTORIZED APPLIANCES
610,000 Shimano (Japan) (f) 17,383
BICYCLE COMPONENTS & FISHING TACKLE
133,000 Funai Electric (Japan) (f) 16,499
CONSUMER ELECTRONICS
- ----------------------------------------------------------------------------
154,740
27
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>NONDURABLES: 1.1%
895,000 Scotts Company (b) $ 65,800
CONSUMER LAWN & GARDEN PRODUCTS
1,989,000 SCP Pool 63,449
DISTRIBUTOR OF SWIMMING POOL SUPPLIES
630,000 Natura Cosmeticos (Brazil) 18,383
DIRECT RETAILER OF COSMETICS
- ----------------------------------------------------------------------------
147,632
>FOOD & BEVERAGES: 1.0%
1,600,000 Kerry (Ireland) 38,251
FOOD INGREDIENTS
725,000 Orkla (Norway) (f) 23,699
FOOD & DIVERSIFIED CONSUMER GOODS
850,000 NBTY (b) 20,409
VITAMINS & SUPPLEMENTS
30,000,000 Global Bio-Chem Technology
Group (China) 19,876
1,841,250 Global Bio-Chem Technology
Group Warrants (China) (b) 88
CHINESE REFINER OF CORN-BASED COMMODITIES
2,500,000 Lion Nathan (Australia) 16,801
BEER BREWER/DISTRIBUTOR
180,000 Davide Campari (Italy) (f) 11,578
SPIRITS & WINE
- ----------------------------------------------------------------------------
130,702
------------
CONSUMER GOODS/SERVICES: TOTAL 2,861,622
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 14.6%
>LOGISTICS: 2.3%
2,750,000 Expeditors International
of Washington 153,670
INTERNATIONAL FREIGHT FORWARDER
900,000 UTI Worldwide 61,218
INTERNATIONAL FREIGHT FORWARDER
1,000,000 Forward Air (b) 44,700
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
2,600,000 Exel (United Kingdom) 36,028
GLOBAL LOGISTICS & FREIGHT FORWARDING
424,000 Hub Group (b) 22,141
TRUCK & RAIL FREIGHT FORWARDER
- ----------------------------------------------------------------------------
317,757
>INDUSTRIAL GOODS: 1.9%
1,600,000 Clarcor (c) 87,632
MOBILE & INDUSTRIAL FILTERS
2,000,000 Donaldson 65,160
INDUSTRIAL AIR FILTRATION
700,000 Genlyte Group (b)(c) 59,976
COMMERCIAL LIGHTING FIXTURES
804,000 Mine Safety Appliances 40,763
SAFETY EQUIPMENT
100,000 Bacou Dalloz (France) 7,992
SAFETY EQUIPMENT
2,500,000 Electric City (b)(c) 3,075
ELECTRICITY CONSERVATION DEVICES
- ----------------------------------------------------------------------------
264,598
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>MACHINERY: 1.8%
1,050,000 Esco Technologies (b)(c) $ 80,483
AUTOMATIC ELECTRIC METER READERS
2,250,000 Ametek 80,258
AEROSPACE/INDUSTRIAL INSTRUMENTS
840,000 Pentair 36,590
PUMPS, WATER TREATMENT & TOOLS
785,000 Gardner Denver (b) 28,488
AIR COMPRESSORS, BLOWERS & PUMPS
500,000 Cobham (United Kingdom) 11,854
AEROSPACE COMPONENTS
106,000 Oshkosh Truck 7,248
SPECIALTY TRUCK MANUFACTURER
150,000 Tennant 5,948
NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT
- ----------------------------------------------------------------------------
250,869
>INDUSTRIAL DISTRIBUTION: 1.7%
2,276,000 Watsco (c) 80,161
HVAC DISTRIBUTION
3,800,000 Grafton Group (Ireland) (b) 41,177
BUILDERS, WHOLESALERS & DIY RETAILING
1,200,000 Hughes Supply 38,820
INDUSTRIAL DISTRIBUTION
1,375,000 Airgas 36,451
INDUSTRIAL GAS DISTRIBUTOR
900,000 Nuco2 (b)(c) 19,971
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
600,000 Aviall (b) 13,782
AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR
- ----------------------------------------------------------------------------
230,362
>-SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 1.5%
2,947,000 Spartech (c) 79,834
PLASTICS DISTRIBUTION & COMPOUNDING
42,500 Geberit International (Switzerland) (f) 30,991
PLUMBING SUPPLIES
450,000 Novozymes (Denmark) (f) 22,773
INDUSTRIAL ENZYMES
1,000,000 Schulman 21,410
PLASTICS DISTRIBUTION & COMPOUNDING
35,000 Sika (Switzerland) (f) 20,910
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION
200,000 Imerys (France) 16,728
INDUSTRIAL MINERALS PRODUCER
20,000 Givaudan (Switzerland) (f) 13,150
INDUSTRIAL FRAGRANCES & FLAVORS
93,000 Carbone Lorraine (France) (b) 4,913
ADVANCED INDUSTRIAL MATERIALS
337,000 National Patent Development (b) 775
PLASTIC SHIELDS FOR RECREATIONAL USE
- ----------------------------------------------------------------------------
211,484
>CONSTRUCTION: 1.2%
738,000 Florida Rock Industries 43,933
CONCRETE & AGGREGATES
1,134,000 Simpson 39,577
WALL JOINT MAKER
1-800-922-6769
28
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSTRUCTION--CONTINUED
787,500 Wienerberger (Austria) (f) $ 37,531
BRICKS & CLAY ROOFING TILES
380,000 Daito Trust Construction (Japan) (f) 18,032
APARTMENT BUILDER
490,000 Dominion Homes (b)(c) 12,359
OHIO/KENTUCKY HOME BUILDER
218,000 M/I Homes 12,014
OHIO HOME BUILDER
3,000,000 Consorcio (Mexico) (b) 9,016
AFFORDABLE HOUSING BUILDER
- ----------------------------------------------------------------------------
172,462
>WATER: 1.1%
856,000 Cuno (b) 50,846
FILTRATION & FLUIDS CLARIFICATION
3,000,000 Tetra Tech (b)(c) 50,220
RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING
1,080,000 Pall 31,266
FILTRATION & FLUIDS CLARIFICATION
554,000 Watts Water Technologies 17,861
WATER, VALVES, REGULATORS & FILTRATION
- ----------------------------------------------------------------------------
150,193
>STEEL: 1.0%
2,850,000 Gibraltar Steel (c) 67,317
STEEL PROCESSING
600,000 Tenaris (Argentina) 29,340
STEEL PIPE FOR OIL WELLS & PIPELINES
158,000 Vallourec (France) 23,541
SEAMLESS TUBES
1,050,000 Worthington Industries 20,559
STEEL PROCESSING
- ----------------------------------------------------------------------------
140,757
>OUTSOURCING SERVICES & TRAINING: 0.8%
1,800,000 Labor Ready (b) 30,456
TEMPORARY MANUAL LABOR
635,000 Bilfinger Berger (Germany) (f) 26,019
CONSTRUCTION & RELATED SERVICES
447,000 Meitec (Japan) (f) 16,627
STAFFING COMPANY SPECIALIZING IN RD ENGINEERS
640,000 United Services Group (Netherlands) 14,910
TEMPORARY STAFFING SERVICES
1,548,000 Quanta Services (b) 12,384
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
950,000 Administaff (b) 11,979
PROFESSIONAL EMPLOYER ORGANIZATION
600,000 GP Strategies (b) 4,470
TRAINING PROGRAMS
- ----------------------------------------------------------------------------
116,845
>OTHER INDUSTRIAL SERVICES: 0.7%
825,000 Mobile Mini (b)(c) 27,258
LEASES PORTABLE STORAGE UNITS
60,000 Schindler (Switzerland) (f) 23,699
ELEVATOR MANUFACTURER & SERVICE PROVIDER
1,500,000 Clark (b)(c) 23,280
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
300,000 G&K Services $ 13,026
UNIFORM RENTAL
185,000 Jaakko Poyry (Finland) (f) 5,563
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
46,000 Imtech (Netherlands) 1,617
TECHNICAL ENGINEERING
- ----------------------------------------------------------------------------
94,443
>CONGLOMERATES: 0.4%
740,000 Aalberts Industries (Netherlands) 35,783
FLOW CONTROL & HEAT TREATMENT
5,550 Pargesa (Switzerland) (f) 19,450
INDUSTRIAL & MEDIA HOLDINGS
- ----------------------------------------------------------------------------
55,233
>ELECTRICAL COMPONENTS: 0.2%
1,125,000 Ushio (Japan) (f) 20,937
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 2,025,940
- ----------------------------------------------------------------------------
FINANCE: 13.2%
>BANKS: 5.6%
3,502,000 TCF Financial 112,554
GREAT LAKES BANK
2,712,000 Associated Banc-Corp 90,066
MIDWEST BANK
3,300,000 Anglo Irish Bank (Ireland) 80,010
SMALL BUSINESS & MIDDLE MARKET BANKING
1,638,000 BOK Financial (b) 79,869
OKLAHOMA BANK
2,187,000 Glacier Bancorp (c) 74,445
MOUNTAIN STATES BANK
1,830,000 Texas Regional Bancshares 59,804
SOUTH TEXAS BANK
1,320,000 West Coast Bancorp (c) 33,541
PORTLAND SMALL BUSINESS LENDER
1,850,000 Depfa Bank (Ireland) (f) 30,941
INTERNATIONAL PUBLIC SECTOR FINANCE
195,000 Komercni Banka (Czech Republic) (f) 28,372
LEADING CZECH UNIVERSAL BANK
1,758,000 Republic 26,862
MICHIGAN BANK
756,000 Chittenden 21,720
VERMONT & WESTERN MASSACHUSETTS BANK
2,150,000 Den Norske Bank (Norway) (f) 21,094
LARGEST NORWEGIAN BANK
500,000 CityBank Lynnwood (c) 18,075
SEATTLE REAL ESTATE LENDER
370,000 Cullen Frost Bankers 17,982
SAN ANTONIO BANK
479,000 Great Southern Bancorp 16,765
MISSOURI REAL ESTATE LENDER
400,000 CorpBanca (Chile) (b) 11,500
CHILEAN LOCAL BANK
1,000,000 Credito Emiliano (Italy) (f) 9,899
ITALIAN REGIONAL BANK
29
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BANKS--CONTINUED
493,000 West Bancorporation $ 8,682
DES MOINES SMALL BUSINESS BANK
358,000 Cascade Financial 6,730
SEATTLE COMMUNITY BANK
82,000 BankFirst 6,476
OKLAHOMA COMMUNITY BANK
111,000 First Financial BankShares 4,974
WEST TEXAS COMMUNITY BANK
169,000 First Mutual Bancshares 4,279
SEATTLE COMMUNITY BANK6
170,000 Midwest Bank 3,718
CHICAGO BANK
123,000 Sterling Bancorp 3,475
NEW YORK CITY SMALL BIZ BANK
15,000 S Y Bancorp 362
LOUISVILLE BANK
- ----------------------------------------------------------------------------
772,195
>INSURANCE: 2.5%
826,000 Leucadia National 57,390
INSURANCE HOLDING COMPANY
138,000 Markel (b) 50,232
SPECIALTY INSURANCE
995,000 Protective Life 42,477
LIFE INSURANCE
575,000 Philadelphia Consolidated
Holding (b) 38,031
SPECIALTY INSURANCE
1,020,000 HCC Insurance Holdings 33,782
SPECIALTY INSURANCE
710,000 Selective Insurance Group 31,410
COMMERCIAL & PERSONAL LINES INSURANCE
1,174,000 Scottish Re Group 30,407
LIFE REINSURANCE
570,000 RLI 23,695
SPECIALTY INSURANCE
210,000 StanCorp Financial 17,325
GROUP LIFE & DISABILITY INSURANCE
340,000 Stewart Information Services 14,161
TITLE COMPANY
700,000 United National Group (b) 13,034
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
351,944
>SAVINGS & LOANS: 1.9%
3,196,000 People's Bank of Bridgeport 124,292
CONNECTICUT SAVINGS & LOAN
1,178,000 Anchor Bancorp Wisconsin (c) 34,339
WISCONSIN THRIFT
1,700,000 Housing Development Finance (India) 30,113
PREMIER MORTGAGE LENDER IN INDIA
1,059,000 Washington Federal 28,106
MORTGAGE LENDER
487,000 Downey Financial 27,759
CALIFORNIA HOME LENDER
226,000 FirstFed Financial (b) 11,723
SANTA MONICA SAVINGS & LOAN
200,000 Bankinter (Spain) (f) 10,615
MORTGAGE LENDER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
160,000 Provident Bancorp $ 2,110
NEW YORK STATE THRIFT
- ----------------------------------------------------------------------------
269,057
>FINANCE COMPANIES: 1.6%
5,831,000 AmeriCredit (b) 142,568
AUTO LENDING
1,820,000 World Acceptance (b)(c) 50,068
PERSONAL LOANS
1,000,000 Northgate (United Kingdom) 16,368
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
620,000 Intermediate Capital
(United Kingdom) 12,952
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
- ----------------------------------------------------------------------------
221,956
>MONEY MANAGEMENT: 1.4%
2,390,000 SEI Investments 100,213
MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT
1,195,000 Eaton Vance 62,319
SPECIALTY MUTUAL FUNDS
782,000 Nuveen Investments 30,866
SPECIALTY MUTUAL FUNDS
- ----------------------------------------------------------------------------
193,398
>BROKERAGE: 0.2%
1,215,000 Investment Technology Group (b) 24,300
ELECTRONIC TRADING
- ----------------------------------------------------------------------------
------------
FINANCE: TOTAL 1,832,850
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 9.3%
>OIL/GAS PRODUCERS: 5.2%
7,000,000 XTO Energy 247,660
NATURAL GAS PRODUCER
3,000,000 Western Gas 87,750
OIL PRODUCER & COAL SEAM GAS PRODUCER
1,700,000 Ultra Petroleum (b) 81,821
NATURAL GAS PRODUCER
3,000,000 Talisman Energy (Canada) 80,865
OIL & GAS PRODUCER
15,400,000 Tullow Oil (United Kingdom) 45,011
OIL & GAS PRODUCER
930,000 Petrokazakhstan (Canada) 34,503
70,000 Petrokazakhstan (Canada) 2,597
OIL PRODUCER & REFINER IN KAZAKHSTAN
830,000 Quicksilver Resources (b) 30,527
NATURAL GAS & COAL SEAM GAS PRODUCER
500,000 Southwestern Energy (b) 25,345
NATURAL GAS PRODUCER
814,000 Denbury Resources (b) 22,344
OIL PRODUCER USING CO2 INJECTION
1,100,000 McMoran Exploration (b) 20,570
NATURAL GAS PRODUCERS & LNG DEVELOPER
1,000,000 Range Resources 20,460
OIL & GAS PRODUCER
2,265,000 Tipperary (b)(c) 11,257
COAL SEAM GAS PRODUCER
1,000,000 Fairbourne Energy (Canada) (b) 10,040
OIL & GAS PRODUCER
- ----------------------------------------------------------------------------
720,750
1-800-922-6769
30
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>OIL SERVICES: 2.4%
2,300,000 FMC Technologies (b) $ 74,060
OIL & GAS WELL HEAD MANUFACTURER
710,000 Carbo Ceramics 48,990
NATURAL GAS WELL STIMULANTS
800,000 Chicago Bridge & Iron 32,000
ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG
1,500,000 Pride International (b) 30,810
OFFSHORE DRILLING CONTRACTOR
2,400,000 Key Energy Services (b) 28,320
OIL & GAS WELL WORKOVER SERVICES
333,000 Fugro (Netherlands) 27,694
SURVEY & GPS SERVICES
1,250,000 Enerflex Systems (Canada) (c) 24,539
NATURAL GAS COMPRESSOR
4,750,000 Newpark Resources (b)(c) 24,463
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
2,000,000 Saipem (Italy) (f) 23,963
OFFSHORE CONSTRUCTION & DRILLING
1,200,000 Hanover Compressor (b) 16,956
NATURAL GAS COMPRESSOR RENTAL
- ----------------------------------------------------------------------------
331,795
>DISTRIBUTION/MARKETING/REFINING: 1.3%
1,600,000 Equitable Resources 97,056
NATURAL GAS UTILITY & PRODUCER
1,900,000 Oneok 53,998
NATURAL GAS UTILITY, MARKETING & PROCESSING
1,206,000 Atmos Energy 32,984
NATURAL GAS UTILITY
- ----------------------------------------------------------------------------
184,038
>MINING: 0.4%
1,800,000 Xstrata (United Kingdom) 32,153
DIVERSIFIED MINING HOLDING COMPANY
900,000 Noranda (Canada) 15,793
DIVERSIFIED MINING HOLDING COMPANY
1,000,000 Ivanhoe Mines (Canada) (b) 7,207
COPPER MINING IN MONGOLIA
- ----------------------------------------------------------------------------
55,153
------------
ENERGY/MINERALS: TOTAL 1,291,736
- ----------------------------------------------------------------------------
HEALTH CARE: 8.6%
>SERVICES: 3.2%
2,491,000 Lincare Holdings (b) 106,241
HOME HEALTH CARE SERVICES
4,586,000 First Health Group (b) 85,805
PPO NETWORK
3,470,000 Gambro (Sweden) (f) 49,451
PRODUCTS/SERVICES FOR RENAL CARE
2,592,000 NDCHealth Group (c) 48,185
HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES
840,000 Charles River Laboratories (b) 38,648
PHARMACEUTICAL RESEARCH
510,000 OPG Groep (Netherlands) 29,704
HEALTCARE SUPPLIES & PHARMACIES
1,333,000 Dendrite International (b) 25,860
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
700,000 Accredo Health (b) 19,404
SPECIALTY PHARMACY
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
550,000 Serologicals (b) $ 12,166
BLOOD COLLECTION & ANTIBODY PRODUCTION
236,000 Omega Pharma (Belgium) 11,268
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
440,000 Medquist (b) 6,512
MEDICAL TRANSCRIPTION SERVICES
- ----------------------------------------------------------------------------
433,244
>-MEDICAL EQUIPMENT/LABORATORY
SUPPLIES: 2.7%
1,629,000 Edwards Lifesciences (b) 67,213
HEART VALVES
1,240,000 Diagnostic Products (b) 68,262
IMMUNODIAGNOSTIC KITS
365,000 Essilor International (France) 28,502
EYEGLASS LENSES
1,000,000 Sola International (b) 27,540
SPECIALTY EYEGLASS LENSES
1,900,000 CTI Molecular Imaging (b) 26,961
MEDICAL DIAGNOSTIC DEVICES
1,000,000 VISX (b) 25,870
LASER EYE SURGERY EQUIPMENT
583,000 Orthofix International (b) 23,016
BONE FIXATION & STIMULATION DEVICES
200,000 Synthes-Stratec (Switzerland) (b)(f) 22,326
PRODUCTS FOR ORTHOPEDIC SURGERY
714,000 ICU Medical (b)(c) 19,521
INTRAVENOUS THERAPY PRODUCTS
750,000 Intermagnetics General (b) 19,058
MRI EQUIPMENT
390,000 Hogy Medical (Japan) (f) 18,325
DISPOSABLE SURGICAL PRODUCTS
875,000 Viasys Healthcare (b) 16,625
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
350,000 Haemonetics (b) 12,674
BLOOD & PLASMA COLLECTION EQUIPMENT
48,000 Diagnosticos (Brazil) 432
LARGEST PRIVATE DIAGNOSTIC SERVICES COMPANY IN BRAZIL
- ----------------------------------------------------------------------------
376,325
>BIOTECHNOLOGY/DRUG DELIVERY: 1.9%
1,179,000 AtheroGenics (b) 27,777
DRUGS FOR ATHEROSCLEROSIS
519,000 Martek Biosciences (b) 26,573
FATTY ACIDS FOR BABY FORMULA & OTHER FOODS
500,000 Neurocrine Biosciences (b) 24,650
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
1,350,000 DOV Pharmaceutical (b)(c) 24,368
DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION
2,000,000 Medarex (b) 21,560
HUMANIZED ANTIBODIES
1,055,000 Nektar Therapeutics (b) 21,353
DRUG DELIVERY TECHNOLOGIES
1,600,000 Ligand Pharmaceuticals (b) 18,624
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES
2,400,000 Pozen (b)(c) 17,448
DRUGS FOR MIGRAINES
2,000,000 Lexicon Genetics (b) 15,510
DRUG DISCOVERY
776,000 NPS Pharmaceuticals (b) 14,185
DRUGS FOR OSTEOPOROSIS & HYPERPARATHYROIDISM
31
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
460,000 Myriad Genetics (b) $ 10,355
GENE DISCOVERY & DIAGNOSTIC PRODUCTS
635,000 Maxygen (b) 8,122
MOLECULAR BREEDING
1,708,000 Ciphergen Biosystems (b)(c) 7,344
PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY
3,500,000 La Jolla Pharmaceutical (b)(c) 5,845
LUPUS TREATMENT
865,000 Arena Pharmaceuticals (b) 5,787
NOVEL DRUG TARGETING TECHNOLOGY
638,000 Diversa (b) 5,576
MOLECULAR BREEDING
1,875,000 Locus Discovery, Series D, Pfd. (b)(e)(g) 3,750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
461,000 SYRRX, Series C (b)(e)(g) 2,305
X-RAY CRYSTALLOGRAPHY
1,249,999 Perlegen Sciences (b)(e)(g) 2,237
LARGE SCALE GENE SEQUENCING
359,944 Microdose (b)(e)(g) 270
DRUG INHALERS
- ----------------------------------------------------------------------------
263,639
>MEDICAL SUPPLIES: 0.3%
686,000 Techne (b) 26,685
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES
650,000 Owens & Minor 18,310
DISTRIBUTION OF MEDICAL SUPPLIES
- ----------------------------------------------------------------------------
44,995
>PHARMACEUTICALS: 0.3%
775,000 Par Pharmaceuticals (b) 32,070
GENERICS
2,106,000 United Drug (Ireland) 9,927
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
10,992 Yuhan (South Korea) (b)(f) 924
OTC & PRESCRIPTION DRUG MANUFACTURER
- ----------------------------------------------------------------------------
42,921
>HOSPITAL MANAGEMENT: 0.2%
500,000 Rhoen-Klinikum (Germany) (f) 30,537
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
------------
HEALTH CARE: TOTAL 1,191,661
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 3.5%
>REAL ESTATE: 2.2%
1,320,000 General Growth Properties 47,731
REGIONAL SHOPPING MALLS
699,000 Forest City Enterprises, Cl. B 40,402
COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER
635,000 Macerich Company 39,878
REGIONAL SHOPPING MALLS
620,000 Mills 39,531
REGIONAL SHOPPING MALLS
650,000 SL Green Realty 39,358
MANHATTAN OFFICE BUILDINGS
575,000 Federal Realty Investment Trust 29,699
SHOPPING CENTERS
NUMBER OF SHARES
OR PRINCIPAL AMOUNT VALUE (000)
- ----------------------------------------------------------------------------
1,375,000 Crescent Real Estate Equities $ 25,108
CLASS A OFFICE BUILDINGS
1,552,000 Highland Hospitality 17,444
HOTEL REAL ESTATE INVESTMENT TRUST
1,355,000 Sponda (Finland) (f) 13,175
OFFICE & WAREHOUSE PROPERTY COMPANY
1,000,000 Diamondrock Hospitality (b)(e) 10,200
HOTEL REAL ESTATE INVESTMENT TRUST
157,420 Security Capital European
Realty (Luxembourg) (b)(e)(g) 2,692
37,407 Security Capital European
Realty (Luxembourg) (b)(e)(g) 613
SELF STORAGE PROPERTIES
106,000 Am NV (Netherlands) 1,025
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
306,856
>WASTE MANAGEMENT: 0.5%
1,275,000 Waste Connections (b) 43,669
SOLID WASTE MANAGEMENT
2,500,000 Allied Waste Industries (b) 23,200
SOLID WASTE MANAGEMENT
- ----------------------------------------------------------------------------
66,869
>TRANSPORTATION: 0.4%
620,000 Grupo Aeroportaurio
Del Sureste (Mexico) 16,957
CANCUN & COZUMEL AIRPORT OPERATOR
70,000 Kobenhavns Lufthavne (Denmark) (f) 14,824
COPENHAGEN AIRPORT AUTHORITY
15,000,000 ComfortDelGro (Singapore) 14,239
TAXI & MASS TRANSIT SERVICE
371,000 Heartland Express 8,336
TOP PERFORMING TRUCKER
- ----------------------------------------------------------------------------
54,356
>REGULATED UTILITIES: 0.4%
1,650,000 Northeast Utilities 31,103
REGULATED ELECTRIC UTILITY
799,800 Red Electrica (Spain) (f) 17,901
SPANISH POWER GRID
- ----------------------------------------------------------------------------
49,004
------------
OTHER INDUSTRIES TOTAL 477,085
- ----------------------------------------------------------------------------
TOTAL COMMON STOCKS AND OTHER ------------
EQUITY-LIKE SECURITIES: 92.5% 12,802,863
(COST: $7,276,617)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 7.5%
$ 100,000 -Bayer (h)
2.25% - 2.378% 1/20/05 - 2/14/05 99,774
82,000 -Pfizer (h)
2.20% - 2.28% 1/27/05 - 2/09/05 81,840
81,000 -Campbell Soup
2.07% - 2.10% 1/03/05 - 1/07/05 80,983
80,000 -Toyota Credit
2.30% -2.306% 2/10/05 -2/11/05 79,793
75,000 -Prudential Funding
2.12% - 2.23% 1/19/05 - 2/17/05 74,846
1-800-922-6769
32
PRINCIPAL AMOUNT VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS--CONTINUED
$ 70,000 Household Finance $ 69,904
2.12% - 2.26% 1/11/05 - 2/01/05
66,000 General Electric Capital
2.21% - 2.28% 1/21/05 - 2/16/05 65,887
65,000 SBC Communications (h)
2.26% - 2.31% 2/03/05 - 2/07/05 64,856
60,000 American Express Credit
2.00% 1/05/05 - 1/06/05 59,985
60,000 United Parcel Service
1.95% 1/13/05 - 1/14/05 59,960
58,000 John Hancock (h)
2.27% - 2.32% 1/11/05 - 2/02/05 57,884
55,000 Siemens Capital
2.14% - 2.18% 1/18/05 - 1/24/05 54,935
35,000 General Electric Capital
2.28% 2/15/05 34,900
30,000 Citicorp 2.14% 1/10/05 29,984
30,000 American General Finance
2.29% 2/04/05 29,935
27,000 Coca Cola 2.15% 1/26/05 26,960
25,000 Marshall + Ilsley
2.11% -2.33% 1/12/05 - 2/16/05 24,949
38,346 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal National Mortgage
Association Note,
maturing 1/05/05, market
value $39,115 (repurchase
proceeds: $38,352) 38,346
- ----------------------------------------------------------------------------
(AMORTIZED COST: $1,035,721) 1,035,721
------------
TOTAL INVESTMENTS: 100.0% 13,838,584
(COST: $8,312,338) (A)
------------
CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% 2,875
------------
TOTAL NET ASSETS: 100% $13,841,459
============================================================================
33
Columbia Acorn Fund
>Statement of Investments, continued
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $8,334,204 and net unrealized appreciation was $5,504,380 consisting
of gross unrealized appreciation of $5,793,358 and gross unrealized
depreciation of $288,978.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On December 31, 2004, the Fund
held five percent or more of the outstanding voting securities of the
following companies:
AnswerThink 10.60%
Christopher & Banks 10.47
New Horizons Worldwide 9.81
Indus International 9.78
Actuate 9.74
World Acceptance 9.71
Gibraltar Steel 9.61
Analysts International 9.50
Spartech 9.17
Skillsoft Publishing 8.95
Glacier Bancorp 8.92
Seachange International 8.90
West Coast Bancorp 8.88
Igate Capital 8.87
E.Piphany 8.75
MAPICS 8.54
Watsco 8.50
Pozen 8.32
Esco Technologies 8.21
Clark 8.02
Concurrent Computer 7.95
MRO Software 7.93
Nuco2 7.68
JDA Software Group 7.56
Gaiam 7.22
NDCHealth Group 7.20
AFC Enterprises 7.08
Bally Total Fitness 6.90
Navigant International 6.75
Princeton Review 6.71
DOV Pharmaceutical 6.30
Clarcor 6.26
Electric City 6.01
Dominion Homes 5.97
Ciphergen Biosystems 5.82
Aspect Communications 5.76
Pegasus Systems 5.75
La Jolla Pharmaceutical 5.70
Newpark Resources 5.66
Mobile Mini 5.65
Enerflex Systems 5.60
Steve Madden 5.58
Tipperary 5.48
Radiant Systems 5.46
Sports Authority 5.42
Alliance Gaming 5.39
Witness Systems 5.35
Tetra Tech 5.33
ICU Medical 5.26
Excel Technologies 5.19
Anchor Bancorp Wisconsin 5.13
Micros Systems 5.13
American Woodmark 5.13
Kronos 5.12
Coinstar 5.11
Genlyte Group 5.09
Monaco Coach 5.08
InfoUSA 5.02
CityBank Lynnwood 5.02
The aggregate cost and value of these companies at December 31, 2004, was
$562,929 and $1,928,260, respectively. Investments in affiliate companies
represent 13.9% of total net assets at December 31, 2004. Investment
activity and income amounts relating to affiliates during the twelve
months ended December 31, 2004 were as follows:
Dividend Income $ 7,758
Net realized gain or loss $ 36,513
Change in unrealized gain or loss $ 59,516
Purchases $ 395,993
Proceeds from sales $ 271,683
1-800-922-6769
34
(d) On December 31, 2004, the market value of foreign securities (in
thousands) represents 14.96% of total net assets. The Fund's foreign
portfolio was diversified as follows:
VALUE PERCENT
================================================================================
Canada $ 282,771 2.04%
Ireland 214,991 1.55
United Kingdom 171,205 1.24
Japan 166,675 1.20
Netherlands 136,145 0.98
Switzerland 130,526 0.94
France 118,133 0.85
Sweden 84,622 0.61
Italy 72,912 0.53
Germany 66,988 0.48
Hong Kong 59,617 0.43
Australia 56,108 0.41
Norway 44,793 0.32
Luxembourg 41,105 0.30
Finland 38,065 0.28
Denmark 37,597 0.27
VALUE PERCENT
================================================================================
Austria $ 37,531 0.27%
South Korea 30,268 0.22
India 30,113 0.22
Argentina 29,340 0.21
Spain 28,516 0.21
Czech Republic 28,372 0.21
Mexico 25,973 0.19
China 19,964 0.14
Taiwan 19,910 0.14
Brazil 18,815 0.14
South Africa 18,740 0.14
New Zealand 15,959 0.12
Singapore 14,239 0.10
Chile 11,500 0.08
Belgium 11,268 0.08
Greece 8,421 0.06
---------- -------
Total Foreign Portfolio $2,071,182 14.96%
========== =======
(e) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At December 31, 2004, these securities
were illiquid. At December 31, 2004, these securities (in thousands)
amounted to $22,667, which represents 0.16% of total net assets.
Additional information on these securities is as follows:
ACQUISITION SHARES/
SECURITY DATES PAR (000) COST (000) VALUE (000)
- ----------------------------------------------------------------------------------------------
Diamondrock Hospitality 06/29/04 1,000 $10,000 $10,200
Locus Discovery, Series D, Pfd. 09/05/01 1,875 7,500 3,750
Gadzooks 5% Convertible 10/07/08 10/08/03 $6,000 6,000 600
Microdose 11/24/00 360 2,005 270
Perlegen Sciences 03/30/01 1,250 4,500 2,237
Security Capital European Realty 08/20/98-11/12/99 195 3,897 3,305
SYRRX, Series C 01/08/01 461 2,997 2,305
-------- --------
$36,899 $22,667
======== ========
(f) Represents a security valued by an independent statistical fair value
pricing service at 12/31/04. Foreign securities which had a market holiday
on 12/31/04 were valued under this method. See Security Valuation in Note
2 for further information.
(g) Represents fair value as determined in good faith under procedures
approved by the Board of Trustees.
(h) Security exempt from registration under Section 4(2) of the Securities
Act of 1933. These securities may only be resold in exempt transactions to
qualified buyers. Private resales of these securities to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, these
securities amounted to $304,354, which represents 2.2% of net assets.
35
Columbia Acorn International
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
BBA Group 1,200,000 2,200,000
Business Post 1,050,000 1,070,000
IAWS (Ireland) 297,100 900,000
Intermediate Capital 500,000 701,000
Jurys Doyle Hotel (Ireland) 810,000 890,000
Northgate 600,000 700,000
United Drug (Ireland) 2,950,000 3,056,000
>NETHERLANDS
Kon Ten Cate 158,000 237,000
Unit 4 Agresso 0 178,000
>FRANCE
Camaieu 54,000 114,000
Carbone Lorraine 0 47,000
Iliad 0 250,000
Imerys 160,000 182,000
Norbert Dentressangle 0 110,000
>GERMANY
Deutsche Boerse 120,000 175,000
GFK 300,000 350,000
Grenkeleasing 0 115,000
Wincor Nixdorf 100,000 175,000
>SWITZERLAND
Kuehne & Nagel 0 70,000
>SWEDEN
Nobia 860,000 1,075,000
Sweco 0 80,000
>NORWAY
Ekornes 220,000 462,000
>CZECH REPUBLIC
Komercni Banka 118,000 141,000
>RUSSIAN FEDERATION
Mechel Steel Group 0 102,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Meitec 200,000 385,000
Park 24 170,000 750,000
>TAIWAN
Advantech 0 747,000
Chicony Electronics 4,000,000 6,464,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Ivanhoe Mines 0 850,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>BRAZIL
Diagnosticos 0 156,250
1-800-922-6769
36
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Sales
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Grafton Group (Ireland) 2,750,000 2,630,000
Jardine Lloyd Thompson 1,593,000 0
Rank Group 2,250,000 0
Smith & Nephew 1,450,000 0
Tullow Oil 7,500,000 7,245,000
>NETHERLANDS
Am NV 467,000 72,000
>FRANCE/BELGIUM
Bonduelle 15,000 0
Omega Pharma (Belgium) 224,000 184,000
>GERMANY
Beru 75,000 0
Kali & Salz 225,000 0
>ITALY
Autogrill 1,130,000 830,000
>SWEDEN
Intrum Justitia 2,280,000 0
>SPAIN
Gamesa 600,000 300,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Chiyoda Integre 411,200 205,000
Otsuka Kagu 326,900 0
Uni-Charm 172,000 0
>HONG KONG/CHINA
Jiangsu Expressway (China) 5,694,000 0
>SOUTH KOREA
Yuhan 165,000 104,940
>INDIA
Housing Development Finance 1,500,000 1,372,330
>SINGAPORE
Sembcorp Logisitics 6,000,000 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Talisman Energy 795,000 635,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>ARGENTINA
Tenaris 440,000 340,000
37
Columbia Acorn International
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 93.9%
- ----------------------------------------------------------------------------
EUROPE: 57.1%
>UNITED KINGDOM/IRELAND: 17.5%
2,350,000 Anglo Irish Bank (Ireland) $56,977
SMALL BUSINESS & MIDDLE MARKET BANKING
2,630,000 Grafton Group (Ireland) (b) 28,499
BUILDERS, WHOLESALERS & DIY RETAILING
1,100,000 Kerry (Ireland) 26,298
FOOD INGREDIENTS
1,750,000 Exel 24,250
GLOBAL LOGISTICS & FREIGHT FORWARDING
1,275,000 Depfa Bank (Ireland) (e) 21,324
INTERNATIONAL PUBLIC SECTOR FINANCE
7,245,000 Tullow Oil 21,176
OIL & GAS PRODUCER
2,600,000 Expro International 17,889
OFFSHORE OIL FIELD SERVICES
5,494,000 RPS Group 16,032
ENVIRONMENTAL CONSULTING
900,000 IAWS (Ireland) 14,872
MANUFACTURER OF BAKED GOODS
890,000 Jurys Doyle Hotel (Ireland) 14,852
OWNER/OPERATOR OF MID-PRICED HOTELS
701,000 Intermediate Capital 14,645
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
3,056,000 United Drug (Ireland) 14,405
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
600,000 Cobham 14,225
AEROSPACE COMPONENTS
750,000 Xstrata 13,397
DIVERSIFIED MINING HOLDING COMPANY
1,070,000 Business Post 12,766
PARCEL & EXPRESS MAIL SERVICE
2,200,000 BBA Group 12,049
AVIATION SUPPORT SERVICES & NON-WOVEN MATERIALS
1,300,000 Kensington 11,872
NON-CONFORMING MORTGAGE COMPANY
700,000 Northgate 11,457
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
1,200,000 Spectris 8,786
ELECTRONIC INSTRUMENTS & CONTROLS
500,000 Viridian 6,996
NORTHERN IRELAND ELECTRIC UTILITY
- ----------------------------------------------------------------------------
362,767
>NETHERLANDS: 7.5%
540,000 Aalberts Industries 26,112
FLOW CONTROL & HEAT TREATMENT
278,800 Fugro 23,187
SURVEY & GPS SERVICES
327,000 OPG Groep 19,046
HEALTHCARE SUPPLIES & PHARMACIES
237,000 Kon Ten Cate 17,399
ADVANCED TEXTILES & INDUSTRIAL FABRICS
340,000 Sligro Food Group 16,717
FOOD SERVICE & WHOLESALING
400,000 Imtech 14,060
TECHNICAL ENGINEERING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
584,000 United Services Group $13,606
TEMPORARY STAFFING SERVICES
248,000 Hunter Douglas 13,185
WINDOW SHADES & VENETIAN BLINDS
420,000 Vopak 8,915
OIL & CHEMICAL STORAGE
178,000 Unit 4 Aggresso (b) 2,749
BUSINESS & SECURITY SOFTWARE
72,000 Am NV 696
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
155,672
>FRANCE/BELGIUM: 7.4%
377,500 Neopost 29,248
POSTAGE METER MACHINES
117,000 Vallourec 17,432
SEAMLESS TUBES
182,000 Imerys 15,223
INDUSTRIAL MINERALS PRODUCER
404,000 Fininfo 12,455
DATA FEEDS FOR FRENCH BANKS & BROKERS
150,000 Bacou Dalloz 11,987
SAFETY EQUIPMENT
114,000 Camaieu 11,303
WOMEN'S APPAREL RETAILER
140,000 Essilor International 10,932
EYEGLASS LENSES
360,000 Metropole TV 10,191
TELEVISION BROADCASTER
250,000 Iliad 9,441
HIGH SPEED INTERNET SERVICE PROVIDER
184,000 Omega Pharma (Belgium) 8,785
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
60,000 Pierre & Vacances 6,863
VACATION APARTMENT LETS
110,000 Norbert Dentressangle 6,079
TRANSPORT
47,000 Carbone Lorraine (b) 2,483
ADVANCED INDUSTRIAL MATERIALS
10,000 April Group 257
INSURANCE POLICY CONSTRUCTION
- ----------------------------------------------------------------------------
152,679
>GERMANY/AUSTRIA: 7.1%
315,000 Rhoen-Klinikum Pfd. (e) 19,314
300,000 Rhoen-Klinikum (e) 18,322
HOSPITAL MANAGEMENT
375,000 Wienerberger (Austria) (e) 17,872
BRICKS & CLAY ROOFING TILES
450,000 Hugo Boss Designs (e) 14,926
FASHION APPAREL
175,000 Wincor Nixdorf (b)(e) 14,043
RETAIL POS SYSTEMS & ATM MACHINES
350,000 GFK (e) 13,576
MARKET RESEARCH SERVICES
300,000 Bilfinger Berger (e) 12,292
CONSTRUCTION & RELATED SERVICES
175,000 Deutsche Boerse (e) 10,491
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
1-800-922-6769
38
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>GERMANY/AUSTRIA--CONTINUED
200,000 Vossloh (e) $ 9,847
RAIL INFRASTRUCTURE & DIESEL LOCOMOTIVES
800,000 Takkt (e) 8,397
MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES
115,000 Grenkeleasing (e) 5,430
FINANCING FOR IT EQUIPMENT
260,000 Deutsche Beteiligungs (b)(e) 3,715
PRIVATE EQUITY INVESTMENT MANAGEMENT
- ----------------------------------------------------------------------------
148,225
>SWITZERLAND: 4.6%
25,000 Geberit International (e) 18,230
PLUMBING SUPPLIES
40,000 Schindler (e) 15,799
ELEVATOR MANUFACTURER & SERVICE PROVIDER
70,000 Kuehne & Nagel (e) 15,017
FREIGHT FORWARDING/LOGISTICS
24,000 Sika (b)(e) 14,338
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION
3,000 Pargesa (e) 10,514
INDUSTRIAL & MEDIA CONGLOMERATE
85,000 Synthes-Stratec (b)(e) 9,489
PRODUCTS FOR ORTHOPEDIC SURGERY
10,000 Givaudan (e) 6,575
INDUSTRIAL FRAGRANCES & FLAVORS
110,000 Bachem (e) 6,311
PEPTIDES
- ----------------------------------------------------------------------------
96,273
>ITALY: 2.7%
270,000 Amplifon (e) 14,924
HEARING AID RETAILER
830,000 Autogrill (b)(e) 13,811
TOLLWAY RESTAURANTS
212,000 Davide Campari (e) 13,636
SPIRITS & WINE
1,000,000 Credit Emiliano (e) 9,899
ITALIAN REGIONAL BANK
3,300,000 Ducati Motor (b)(e) 3,930
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
56,200
>SWEDEN: 2.2%
394,200 Hexagon (e) 18,725
DIVERSIFIED ENGINEERING
1,075,000 Nobia (e) 17,751
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
470,000 Gambro (e) 6,698
PRODUCTS/SERVICES FOR RENAL CARE
80,000 Sweco (b)(e) 1,525
NORDIC INFRASTRUCTURE/ENVIRONMENT CONSULTING
- ----------------------------------------------------------------------------
44,699
>SPAIN: 1.9%
2,000,000 Abengoa (e) 19,686
ENGINEERING & CONSTRUCTION
420,000 Red Electrica (e) 9,400
SPANISH POWER GRID
120,000 Bankinter (e) 6,369
MORTGAGE LENDER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
300,000 Gamesa (e) $ 4,182
WIND TURBINES
- ----------------------------------------------------------------------------
39,637
>FINLAND: 1.5%
439,000 Jaakko Poyry (e) 13,201
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
555,000 Amer Group (e) 9,663
BRANDED SPORTING GOODS
950,000 Sponda (e) 9,237
OFFICE & WAREHOUSE PROPERTY COMPANY
- ----------------------------------------------------------------------------
32,101
>NORWAY: 1.3%
462,000 Ekornes (e) 10,019
NICHE FURNITURE MANUFACTURER
910,000 Den Norske Bank (e) 8,928
LARGEST NORWEGIAN BANK
221,000 Orkla (e) 7,224
FOOD & DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
26,171
>LUXEMBOURG: 1.2%
1,880,000 SES Global 24,446
SATELLITE BROADCASTING SERVICES
- ----------------------------------------------------------------------------
>CZECH REPUBLIC: 1.0%
141,000 Komercni Banka (e) 20,515
LEADING CZECH UNIVERSAL BANK
- ----------------------------------------------------------------------------
>GREECE: 0.5%
465,000 Intralot 11,350
LOTTERY & GAMING SYSTEMS/SERVICES
- ----------------------------------------------------------------------------
>DENMARK: 0.4%
35,000 Kobenhavns Lufthavne (e) 7,412
COPENHAGEN AIRPORT AUTHORITY
- ----------------------------------------------------------------------------
>POLAND: 0.2%
167,000 Central European Distribution (b) 4,933
SPIRITS & WINE DISTRIBUTION
- ----------------------------------------------------------------------------
>RUSSIAN FEDERATION: 0.1%
102,000 Mechel Steel Group (b) 2,280
INTEGRATED STEEL & METALLURGICAL COAL PRODUCER
- ----------------------------------------------------------------------------
------------
EUROPE: TOTAL 1,185,360
- ----------------------------------------------------------------------------
ASIA: 24.2%
>JAPAN: 12.9%
480,100 Daito Trust Construction (e) 22,781
APARTMENT BUILDER
2,900,000 Bank of Yokohama (e) 18,218
REGIONAL BANK
1,500,000 Wacoal (e) 18,023
WOMEN'S SPECIALTY APPAREL
220,000 Fast Retailing (e) 16,687
APPAREL RETAILER
39
Columbia Acorn International
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>JAPAN--CONTINUED
385,000 Meitec (e) $ 14,321
STAFFING COMPANY SPECIALIZING IN RD ENGINEERS
5,200 Dentsu (e) 13,985
ADVERTISING AGENCY
818,000 NIFCO (e) 13,668
MOLDED PLASTIC COMPONENTS
110,000 Funai Electric (e) 13,646
CONSUMER ELECTRONICS
750,000 Park 24 (e) 13,413
PARKING LOT OPERATOR
358,000 Eneserve (e) 12,976
POWER GENERATORS
402,000 Kappa Create (e) 12,002
SUSHI CHAIN RESTAURANT OPERATOR
2,248,000 Hiroshima Bank (e) 11,876
REGIONAL BANK
330,000 Sugi Pharmacy (e) 11,192
DRUGSTORE OPERATOR
226,000 Hogy Medical (e) 10,619
DISPOSABLE SURGICAL PRODUCTS
906,000 Toyo Technica (e) 10,458
VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION
255,000 ARRK (e) 10,431
PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT
550,000 Ushio (e) 10,236
INDUSTRIAL LIGHT SOURCES
1,500,000 Fukuoka Bank (e) 9,858
REGIONAL BANK
1,400,000 Chiba Bank (e) 9,345
REGIONAL BANK
325,000 Olympus Optical (e) 6,925
MEDICAL EQUIPMENT & CAMERAS
205,000 Chiyoda Integre (e) 4,131
PLASTIC COMPONENTS FOR CONSUMER ELECTRONICS
155,200 Ain Pharmaciez (e) 3,095
DISPENSING PHARMACY/DRUGSTORE OPERATOR
- ----------------------------------------------------------------------------
267,886
>HONG KONG/CHINA: 3.9%
25,000,000 Global Bio-Chem Technology
Group (China) 16,564
1,875,000 Global Bio-Chem Technology
Group Warrants (China) (b) 89
CHINESE REFINER OF CORN-BASED COMMODITIES
6,000,000 Hong Kong Exchanges & Clearing 16,094
HONG KONG EQUITY & DERIVATIVES OPERATOR
6,000,000 Techtronic Industries 13,122
MANUFACTURER OF POWER TOOLS & MOTORIZED APPLIANCES
2,000,000 Esprit Holdings 12,093
GLOBAL APPAREL BRAND MANAGER
9,800,000 Hainan Meilan Airport (China) 8,258
CHINESE AIRPORT OPERATOR
17,700,000 Linmark 6,376
SOURCING OF CONSUMER GOODS
28,000,000 Lerado Group 4,179
BABY STROLLERS & INFANT CAR SEATS MANUFACTURER
14,500,000 Ngai Lik Industrial 3,656
CONSUMER ELECTRONICS MANUFACTURER
- ----------------------------------------------------------------------------
80,431
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TAIWAN: 2.9%
15,740,000 Phoenixtec Power $ 18,963
UNINTERRUPTABLE POWER SUPPLIES
1,230,000 ASE Test (b) 8,315
SEMICONDUCTOR PACKAGING & TEST SERVICES
3,683,000 Springsoft Systems 7,878
ELECTRONIC DESIGN AUTOMATION SOFTWARE
5,302,590 Wah Lee Industrial 6,922
DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT
8,470,000 Bank of Kaohsiung 6,741
COMMERICAL BANKING
6,464,000 Chicony Eletronic 6,568
PC POWER SUPPLIES & KEYBOARDS
3,010,000 Taiwan Fu Hsing 3,276
DOOR LOCK MANUFACTURER
747,000 Advantech 1,809
EMBEDDED COMPUTERS
- ----------------------------------------------------------------------------
60,472
>SOUTH KOREA: 1.7%
250,000 Hyundai Mobis (b)(e) 15,776
AUTO PARTS
104,940 Yuhan (b)(e) 8,820
OTC & PRESCRIPTION DRUG MANUFACTURER
100,000 Samsung Fire & Marine (e) 7,890
NON-LIFE INSURANCE
200,000 Samyoung Heat Exchange (e) 2,051
POWER PLANT RELATED MACHINERY
- ----------------------------------------------------------------------------
34,537
>INDIA: 1.2%
1,372,330 Housing Development Finance 24,308
PREMIER MORTGAGE LENDER IN INDIA
- ----------------------------------------------------------------------------
>SINGAPORE: 1.1%
15,000,000 ComfortDelGro 14,239
TAXI & MASS TRANSIT SERVICE
1,000,000 Venture 9,738
ELECTRONIC CONTRACT MANUFACTURER
- ----------------------------------------------------------------------------
23,977
>INDONESIA: 0.5%
55,000,000 PT Perusahaan Gas Negara (e) 11,256
GAS PIPELINE OPERATOR
- ----------------------------------------------------------------------------
------------
ASIA: TOTAL 502,867
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 8.9%
>AUSTRALIA/NEW ZEALAND: 4.1%
3,000,000 Billabong International 26,843
SURFWEAR APPAREL MANUFACTURER
350,000 Perpetual Trustees 17,204
AUSTRALIAN MUTUAL FUND MANAGER
2,500,000 Lion Nathan 16,801
BEER BREWER/DISTRIBUTOR
5,000,000 Pacific Brands 12,464
AUSTRALIAN BRANDED APPAREL
3,000,000 Sky City Entertainment (New Zealand) 11,593
CASINO/ENTERTAINMENT COMPLEX
- ----------------------------------------------------------------------------
84,905
1-800-922-6769
40
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CANADA: 3.9%
635,000 Talisman Energy $ 17,116
OIL & GAS PRODUCER
340,000 Masonite International (b) 11,694
DOOR MANUFACTURER
500,000 Corus Entertainment 10,415
TELEVISION PROGRAMMING & RADIO STATIONS
450,000 Intrawest 10,330
OWNER/OPERATOR OF SKI RESORTS
1,000,000 Fairbourne Energy (b) 10,040
OIL & GAS PRODUCER
235,000 Petrokazakhstan 8,719
OIL PRODUCER & REFINER IN KAZAKHSTAN
400,000 Noranda 7,019
DIVERSIFIED MINING HOLDING COMPANY
850,000 Ivanhoe Mines (b) 6,126
COPPER MINING IN MONGOLIA
- ----------------------------------------------------------------------------
81,459
>SOUTH AFRICA: 0.9%
350,000 Edgars Consolidated Stores 18,740
LEADING RETAIL CONGLOMERATE
- ----------------------------------------------------------------------------
------------
OTHER COUNTRIES: TOTAL 185,104
- ----------------------------------------------------------------------------
LATIN AMERICA: 3.7%
>MEXICO: 1.5%
660,000 Grupo Aeroportaurio Del Sureste 18,051
CANCUN & COZUMEL AIRPORT OPERATOR
3,000,000 Consorcio ARA (b) 9,016
AFFORDABLE HOUSING BUILDER
700,000 URBI Desarrollo (b) 3,058
AFFORDABLE HOUSING BUILDER
- ----------------------------------------------------------------------------
30,125
>BRAZIL: 1.0%
640,000 Natura Cosmeticos 18,675
DIRECT RETAILER OF COSMETICS
156,250 Diagnosticos (b) 1,406
LARGEST PRIVATE DIAGNOSTIC SERVICES COMPANY IN BRAZIL
- ----------------------------------------------------------------------------
20,081
NUMBER OF SHARES OR
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
>ARGENTINA: 0.8%
340,000 Tenaris $ 16,626
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
>CHILE: 0.4%
300,000 CorpBanca (b) 8,625
CHILEAN LOCAL BANK
- ----------------------------------------------------------------------------
------------
LATIN AMERICA: TOTAL 75,457
Total Common Stocks and Other ------------
EQUITY-LIKE SECURITIES: 93.9% 1,948,788
(COST: $1,233,203)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 5.1%
$ 35,000 Colgate Palmolive 2.17% 1/07/05 (c) 34,988
32,000 American Express Credit
2.26% 1/04/05 31,994
30,000 American General Finance
2.27% 1/03/05 29,996
9,076 Repurchase Agreement with State
Street Bank & Trust Co. dated
12/31/04, due 1/03/05 at 1.90%
collateralized by a Federal National
Mortgage Association Note,
maturing 1/05/05, market value
$9,260 (repurchase
proceeds: $9,077) 9,076
- ----------------------------------------------------------------------------
(AMORTIZED COST: $106,054) 106,054
------------
TOTAL INVESTMENTS: 99.0% 2,054,842
(COST: $1,339,257) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 1.0% 20,170
------------
TOTAL NET ASSETS: 100% $ 2,075,012
============================================================================
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $1,354,913 and net unrealized appreciation was $699,929 consisting of
gross unrealized appreciation of $721,173 and gross unrealized
depreciation of $21,244.
(b) Non-income producing security.
(c) Security exempt from registration under Section 4(2) of the Securities
Act of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resales of this security to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, the value of
this security represents 1.7% of net assets.
(d) On December 31, 2004, the Fund's total investments were denominated in
currencies as follows:
CURRENCY VALUE % OF NET ASSETS
================================================================
Euro $ 797,536 38.4%
Japanese Yen 267,886 12.9
British Pounds 185,539 8.9
US Dollar 173,602 8.4
Other currencies less than
5% of total net assets 630,279 30.4
---------- -------
$2,054,842 99.0%
========== =======
(e) Represents a security valued by an independent statistical fair value
pricing service at 12/31/04. Foreign securities which had a market holiday
on 12/31/04 were valued under this method. See Security Valuation in Note
2 for further information.
41
Columbia Acorn International
>Portfolio Diversification
At December 31, 2004, the Fund's portfolio investments as a percent of net
assets were diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $127,951 6.2%
Industrial Materials 91,176 4.4
Conglomerates 75,037 3.6
Construction 56,221 2.7
Machinery 41,146 2.0
Outsourcing & Training Services 39,976 1.9
Steel 34,058 1.6
Electrical Components 32,774 1.6
Industrial Distribution 28,499 1.4
Speciality Chemicals 20,913 1.0
- ----------------------------------------------------------------------------
547,751 26.4
>CONSUMER GOODS/SERVICES
Retail 88,034 4.2
Apparels 78,632 3.8
Food 65,111 3.1
Furniture & Textiles 52,649 2.5
Beverage 30,437 1.5
Restaurants 25,813 1.2
Travel 25,182 1.2
Other Consumer Services 24,455 1.2
Nondurables 18,675 0.9
Durables Goods 17,052 0.8
Consumer Electronics 13,646 0.7
Casinos 11,593 0.6
Gaming 11,350 0.6
Leisure Products 9,663 0.5
Consumer Goods Distribution 4,933 0.2
- ----------------------------------------------------------------------------
477,225 23.0
>FINANCE
Banks 182,306 8.8
Other Finance Companies 43,404 2.1
Savings & Loans 30,677 1.5
Money Management 20,919 1.0
Insurance 8,147 0.4
- ----------------------------------------------------------------------------
285,453 13.8
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Business Information &
Marketing Services $42,063 2.0%
Computer Hardware &
Related Equipment 41,383 2.0
Financial Processors 26,585 1.3
Satellite Broadcasting 24,446 1.2
Instrumentation 19,244 0.9
Advertising 13,985 0.7
Contract Manufacturing 13,394 0.6
Business Software 10,627 0.5
Television Programming 10,415 0.5
Television Broadcasting 10,191 0.5
Internet Related 9,441 0.5
Semiconductors &
Related Equipment 8,315 0.4
Electronics Distribution 6,922 0.3
- ----------------------------------------------------------------------------
237,011 11.4
>ENERGY/MINERALS
Oil/Gas Producers 57,051 2.8
Oil Services 41,076 2.0
Agricultural Commodities 16,653 0.8
Mining 15,425 0.7
Non-Ferrous Metals 13,397 0.7
Independent Power 12,976 0.6
Distribution/Marketing/
Refining 11,256 0.5
- ----------------------------------------------------------------------------
167,834 8.1
>HEALTH CARE
Hospital Management 37,636 1.8
Pharmaceuticals 32,010 1.6
Medical Equipment 27,346 1.3
Services 25,744 1.2
Hospital/Laboratory Supplies 12,025 0.6
Biotechnology/Drug Delivery 6,311 0.3
- ----------------------------------------------------------------------------
141,072 6.8
>OTHER INDUSTRIES
Transportation 54,039 2.6
Real Estate 22,007 1.0
Regulated Utilities 16,396 0.8
- ----------------------------------------------------------------------------
92,442 4.4
Total Common Stocks and -------------------------------
OTHER EQUITY-LIKE SECURITIES 1,948,788 93.9
SHORT-TERM OBLIGATIONS 106,054 5.1
-------------------------------
TOTAL INVESTMENTS 2,054,842 99.0
CASH AND OTHER ASSETS
LESS LIABILITIES 20,170 1.0
-------------------------------
NET ASSETS $2,075,012 100.0%
- ----------------------------------------------------------------------------
1-800-922-6769
42
Columbia Acorn USA
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
INFORMATION
Ceridian 0 90,000
Maximus 0 60,000
Symbol Technologies 450,000 520,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Central Parking 321,700 364,400
International Speedway Motors 91,300 121,300
Petco Animal Supplies 95,000 220,000
- -----------------------------------------------------------------------------
ENERGY/MINERALS
Pride International 0 120,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Florida Rock Industries 97,700 112,700
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Sales
- ----------------------------------------------------------------------------
INFORMATION
Avocent 50,000 0
Euronet Worldwide 70,500 0
Mediacom Communications 600,000 300,000
PeopleSoft 304,991 0
THQ 64,000 0
Western Wireless 927,000 742,000
Zebra Technologies 204,000 99,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Leapfrog Enterprises 50,000 0
Urban Outfitters 138,200 48,200
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Hub Group 246,000 221,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
The Rouse Company 47,000 0
43
Columbia Acorn USA
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 91.6%
- ----------------------------------------------------------------------------
INFORMATION: 28.8%
>BUSINESS/CONSUMER SOFTWARE: 8.6%
287,600 Micros Systems (b) $ 22,450
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
296,650 Kronos (b) 15,168
LABOR MANAGEMENT SOLUTIONS
974,000 JDA Software (b) 13,266
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,330,000 Novell (b) 8,977
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
473,500 MRO Software (b) 6,165
ENTERPRISE MAINTENANCE SOFTWARE
653,200 E.Piphany (b) 3,155
CRM SOFTWARE
60,000 Maximus (b) 1,867
OUTSOURCER FOR GOVERNMENT
104,200 SPSS (b) 1,630
STATISTICAL/BUSINESS ANALYSIS SOFTWARE
100,000 Aspect Communications (b) 1,114
CALL CENTER SOFTWARE
65,000 MAPICS (b) 686
MID MARKET ERP SOFTWARE
- ----------------------------------------------------------------------------
74,478
>COMPUTER HARDWARE/SEMICONDUCTORS/
RELATED EQUIPMENT: 4.9%
520,000 Symbol Technologies 8,996
MOBILE COMPUTERS & BARCODE SCANNERS
365,300 Integrated Circuit Systems (b) 7,642
SILICON TIMING DEVICES
424,100 Seachange International (b) 7,396
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
260,000 Unova (b) 6,575
BARCODE & WIRELESS LAN SYSTEMS
99,000 Zebra Technologies (b) 5,572
BAR CODE PRINTERS
70,000 Littelfuse (b) 2,391
LITTLE FUSES
100,000 Belden CDT 2,320
SPECIALTY CABLE
40,000 Rogers (b) 1,724
PCB LAMINATES & HIGH PERFORMANCE FOAMS
- ---------------------------------------------------------------------------
42,616
>MOBILE COMMUNICATIONS: 4.6%
742,000 Western Wireless (b) 21,741
RURAL CELLULAR PHONE SERVICES
1,005,000 Crown Castle International (b) 16,723
COMMUNICATION TOWERS
10,000 Telephone & Data Systems 769
CELLULAR & TELEPHONE SERVICES
40,000 American Tower (b) 736
COMMUNICATION TOWERS IN USA & MEXICO
- ----------------------------------------------------------------------------
39,969
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS/WIRELINE
COMMUNICATIONS: 2.7%
333,800 Commonwealth Telephone (b) $ 16,576
RURAL PHONE FRANCHISES & CLEC
480,000 Andrew (b) 6,542
WIRELESS INFRASTRUCTURE EQUIPMENT
- ---------------------------------------------------------------------------
23,118
>BROADCASTING: 2.4%
695,000 Spanish Broadcasting (b) 7,339
SPANISH LANGUAGE RADIO STATIONS
293,100 Salem Communications (b) 7,313
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
510,000 Entravision Communications (b) 4,258
SPANISH LANGUAGE TV, RADIO & OUTDOOR
138,500 Gray Television 2,147
MID MARKET AFFILIATED TV STATIONS
- ----------------------------------------------------------------------------
21,057
>TRANSACTION PROCESSORS: 1.6%
211,640 Global Payments 12,389
CREDIT CARD PROCESSOR
143,100 Pegasus Systems (b) 1,803
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
14,192
>COMPUTER SERVICES: 1.1%
1,005,500 AnswerThink (b) 4,685
IT INTEGRATOR FOR FORTUNE 2000
786,000 RCM Technologies (b)(c) 3,954
TECHNOLOGY ENGINEERING SERVICES
200,000 Igate Capital (b) 810
TECHNOLOGY STAFFING SERVICES
- ----------------------------------------------------------------------------
9,449
>BUSINESS INFORMATION/BUSINESS SERVICES/PUBLISHING: 1.0%
102,800 Getty Images (b) 7,078
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
90,000 Ceridian (b) 1,645
HR SERVICES & PAYMENT PROCESSING
- ---------------------------------------------------------------------------
8,723
>INTERNET: 0.9%
285,000 ValueClick (b) 3,799
INTERNET ADVERTISING
460,600 DoubleClick (b) 3,583
INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA
- ----------------------------------------------------------------------------
7,382
>INSTRUMENTATION: 0.3%
90,000 Trimble Navigation (b) 2,974
GPS-BASED INSTRUMENTS
- ----------------------------------------------------------------------------
>TELECOMMUNICATION EQUIPMENT: 0.3%
300,000 Symmetricom (b) 2,913
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
>TELEVISION PROGRAMMING: 0.2%
300,000 Mediacom Communications (b) 1,875
CABLE TELEVISION FRANCHISES
- ----------------------------------------------------------------------------
1-800-922-6769
44
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONTRACT MANUFACTURING: 0.2%
140,000 Plexus (b) $ 1,841
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
INFORMATION: TOTAL 250,587
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 17.4%
>RETAIL: 7.7%
285,000 Abercrombie & Fitch 13,381
TEEN APPAREL RETAILER
435,750 Aeropostale (b) 12,824
MALL BASED TEEN RETAILER
220,000 Petco Animal Supplies (b) 8,686
PET SUPPLIES & SERVICES
393,750 Christopher & Banks 7,264
WOMEN'S APPAREL RETAILER
115,000 Chico's FAS (b) 5,236
WOMEN'S SPECIALTY RETAIL
212,500 Ann Taylor (b) 4,575
WOMEN'S APPAREL RETAILER
100,000 Michaels Stores 2,997
CRAFT & HOBBY SPECIALTY RETAILER
95,000 Genesco (b) 2,958
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
100,000 Sports Authority (b) 2,575
SPORTING GOODS STORES
129,900 Brookstone (b) 2,539
SPECIALTY CONSUMER PRODUCT RETAILER
48,200 Urban Outfitters (b) 2,140
ECLECTIC HOME & APPAREL RETAILER
60,000 West Marine (b) 1,485
LARGEST RETAILER OF BOATING SUPPLIES
- ----------------------------------------------------------------------------
66,660
>CONSUMER SERVICES: 4.4%
396,000 ITT Educational Services (b) 18,830
POSTSECONDARY DEGREE PROGRAM
435,000 Coinstar (b) 11,671
OWNER/OPERATOR OF COIN COUNTING MACHINES
364,400 Central Parking 5,520
OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES
60,000 Weight Watchers (b) 2,464
WEIGHT LOSS PROGRAMS
- ----------------------------------------------------------------------------
38,485
>APPAREL: 1.8%
194,200 Oxford Industries 8,020
BRANDED & PRIVATE LABEL APPAREL
84,000 Coach (b) 4,737
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
134,000 Steven Madden (b) 2,527
WHOLESALER/RETAILER OF FASHION FOOTWEAR
- ----------------------------------------------------------------------------
15,284
>NONDURABLES: 1.4%
167,200 Scotts Company (b) 12,292
CONSUMER LAWN & GARDEN PRODUCTS
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>ENTERTAINMENT/LEISURE PRODUCTS: 1.0%
121,300 International Speedway Motors $ 6,404
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
195,000 Callaway Golf 2,632
PREMIUM GOLF CLUBS & BALLS
- ----------------------------------------------------------------------------
9,036
>FURNITURE: 1.0%
60,000 American Woodmark 2,621
KITCHEN CABINET MANUFACTURER
85,000 Herman Miller 2,348
OFFICE FURNITURE
20,000 Mohawk Industries (b) 1,825
CARPET & FLOORING
40,000 HNI 1,722
OFFICE FURNITURE & FIREPLACES
- ----------------------------------------------------------------------------
8,516
>FOOD & BEVERAGES: 0.1%
37,000 NBTY (b) 888
VITAMINS & SUPPLEMENTS
- ----------------------------------------------------------------------------
------------
CONSUMER GOODS/SERVICES: TOTAL 151,161
- ----------------------------------------------------------------------------
HEALTH CARE: 14.0%
>MEDICAL EQUIPMENT: 5.4%
573,000 Edwards Lifesciences (b) 23,642
HEART VALVES
141,300 Diagnostic Products 7,778
IMMUNODIAGNOSTIC KITS
170,600 VISX (b) 4,413
LASER EYE SURGERY
220,000 Viasys Healthcare (b) 4,180
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
245,000 CTI Molecular Imaging (b) 3,476
MEDICAL DIAGNOSTIC DEVICES
115,700 ICU Medical (b) 3,163
INTRAVENOUS THERAPY PRODUCTS
- ----------------------------------------------------------------------------
46,652
>SERVICES: 4.1%
744,000 First Health Group (b) 13,920
PPO NETWORK
246,800 Lincare Holdings (b) 10,526
HOME HEALTH CARE SERVICES
423,800 NDCHealth Group 7,878
HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES
100,000 Dendrite International (b) 1,940
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
40,000 Charles River Laboratories (b) 1,840
PHARMACEUTICAL RESEARCH
- ----------------------------------------------------------------------------
36,104
>BIOTECHNOLOGY/DRUG DELIVERY: 2.6%
360,000 Nektar Therapeutics (b) 7,286
DRUG DELIVERY TECHNOLOGIES
260,000 AtheroGenics (b) 6,125
DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA
45
Columbia Acorn USA
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
415,000 Ligand Pharmaceuticals (b) $ 4,831
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES
300,000 Lexicon Genetics (b) 2,326
DRUG DISCOVERY
154,000 SYRRX, Series C (b)(d)(e) 770
X-RAY CRYSTALLOGRAPHY
375,000 Locus Discovery, Series D, Pfd. (b)(d)(e) 750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
15,000 Neurocrine Biosciences (b) 739
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
363,636 Metabolex, Series F (b)(d)(e) 53
DRUGS FOR DIABETES
- ----------------------------------------------------------------------------
22,880
>MEDICAL SUPPLIES: 1.0%
222,800 Techne (b) 8,667
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES
- ----------------------------------------------------------------------------
>PHARMACEUTICALS: 0.9%
192,000 Par Pharmaceuticals (b) 7,945
GENERICS
- ----------------------------------------------------------------------------
------------
HEALTH CARE: TOTAL 122,248
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 11.7%
>OIL SERVICES: 5.4%
335,000 Chicago Bridge & Iron 13,400
ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG
401,700 FMC Technologies (b) 12,935
OIL & GAS WELL HEAD MANUFACTURER
355,000 Hanover Compressor (b) 5,016
NATURAL GAS COMPRESSOR RENTAL
941,000 Newpark Resources (b) 4,846
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
61,000 Carbo Ceramics 4,209
NATURAL GAS WELL STIMULANTS
120,000 Pride International (b) 2,465
OFFSHORE DRILLING CONTRACTOR
215,000 Pioneer Drilling (b) 2,169
OIL & GAS WELL DRILLER
135,000 Key Energy Services (b) 1,593
OIL & GAS WELL WORKOVER SERVICES
- ----------------------------------------------------------------------------
46,633
>OIL & GAS PRODUCERS: 4.1%
610,000 Quicksilver Resources (b) 22,436
NATURAL GAS & COAL SEAM GAS PRODUCER
272,000 Western Gas 7,956
OIL & COAL SEAM GAS PRODUCER
52,100 Southwestern Energy (b) 2,641
NATURAL GAS PRODUCER
75,000 Range Resources 1,534
OIL & GAS PRODUCER
70,000 McMoran Exploration (b) 1,309
NATURAL GAS PRODUCERS & LNG DEVELOPER
- ----------------------------------------------------------------------------
35,876
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>DISTRIBUTION/MARKETING/REFINING: 2.2%
115,600 Equitable Resources $ 7,012
NATURAL GAS UTILITY & PRODUCER
245,000 Oneok 6,963
NATURAL GAS UTILITY, MARKETING & PROCESSING
193,000 Atmos Energy 5,278
NATURAL GAS UTILITY
- ----------------------------------------------------------------------------
19,253
------------
ENERGY/MINERALS: TOTAL 101,762
- ----------------------------------------------------------------------------
FINANCE: 10.0%
>FINANCE COMPANIES: 4.7%
1,091,500 AmeriCredit (b) 26,687
AUTO LENDING
520,200 World Acceptance (b) 14,311
PERSONAL LOANS
- ----------------------------------------------------------------------------
40,998
>INSURANCE: 2.8%
430,000 HCC Insurance Holdings 14,241
SPECIALTY INSURANCE
16,500 Markel (b) 6,006
SPECIALTY INSURANCE
35,000 Philadelphia Consolidated Holding (b) 2,315
SPECIALTY INSURANCE
91,000 United National Group (b) 1,694
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
24,256
>BANKS: 1.7%
263,000 TCF Financial 8,453
GREAT LAKES BANK
197,656 Chittenden 5,678
VERMONT & WESTERN MASSACHUSETTS BANK
10,000 West Bancorporation 176
DES MOINES SMALL BUSINESS BANK
2,900 First Financial BankShares 130
WEST TEXAS COMMUNITY BANK
- ----------------------------------------------------------------------------
14,437
>SAVINGS & LOAN: 0.8%
69,000 Downey Financial 3,933
CALIFORNIA HOME LENDER
116,400 Anchor Bancorp Wisconsin 3,393
WISCONSIN THRIFT
- ----------------------------------------------------------------------------
7,326
------------
FINANCE: TOTAL 87,017
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 9.2%
>MACHINERY: 3.9%
282,000 Esco Technologies (b) 21,615
AUTOMATIC ELECTRIC METER READERS
194,000 Pentair 8,451
PUMPS, WATER TREATMENT & TOOLS
110,000 Ametek 3,924
AEROSPACE/INDUSTRIAL INSTRUMENTS
- ----------------------------------------------------------------------------
33,990
1-800-922-6769
46
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>LOGISTICS: 1.3%
221,000 Hub Group (b) $ 11,540
TRUCK & RAIL FREIGHT FORWARDER
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS: 1.2%
112,000 Genlyte Group (b) 9,596
COMMERCIAL LIGHTING FIXTURES
25,000 Donaldson 814
INDUSTRIAL AIR FILTRATION
- ----------------------------------------------------------------------------
10,410
>WATER: 0.9%
134,000 Cuno (b) 7,959
FILTRATION & FLUIDS CLARIFICATION
- ----------------------------------------------------------------------------
>CONSTRUCTION: 0.8%
112,700 Florida Rock Industries 6,709
CONCRETE & AGGREGATES
- ----------------------------------------------------------------------------
>SPECIALTY CHEMICALS/INDUSTRIAL
MATERIALS: 0.4%
114,400 Spartech 3,099
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
>INDUSTRIAL SERVICES: 0.3%
95,000 Clark (b) 1,474
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
41,900 Insurance Auto Auctions (b) 939
AUTO SALVAGE SERVICES
- ----------------------------------------------------------------------------
2,413
>INDUSTRIAL DISTRIBUTION: 0.2%
100,000 Nuco2 (b) 2,219
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
- ----------------------------------------------------------------------------
>OUTSOURCING SERVICES: 0.2%
269,500 Quanta Services (b) 2,156
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
- ----------------------------------------------------------------------------
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 80,495
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 0.5%
>REAL ESTATE: 0.3%
100,000 Crescent Real Estate Equities 1,826
CLASS A OFFICE BUILDINGS
35,000 Highland Hospitality 393
HOTEL REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------------------------------
2,219
>REGULATED UTILITIES: 0.2%
90,000 Northeast Utilities 1,696
REGULATED ELECTRIC UTILITY
- ----------------------------------------------------------------------------
------------
OTHER INDUSTRIES: TOTAL 3,915
------------
TOTAL COMMON STOCKS: 91.6% 797,185
(COST: $516,601)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 8.3%
$ 23,000 BellSouth 2.29% 1/07/05 (f) $ 22,991
23,000 Chevron/Texaco Funding
2.26% 1/04/05 22,996
26,603 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal National Mortgage
Association Note,
maturing 1/05/05,
market value $27,136
(repurchase proceeds: $26,607) 26,603
- ----------------------------------------------------------------------------
(AMORTIZED COST: $72,590) 72,590
------------
TOTAL INVESTMENTS: 99.9% 869,775
(COST: $589,191) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 907
------------
TOTAL NET ASSETS: 100% $ 870,682
============================================================================
47
Columbia Acorn USA
>Statement of Investments, December 31, 2004
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $589,444 and net unrealized appreciation was $280,331 consisting of
gross unrealized appreciation of $302,917 and gross unrealized
depreciation of $22,586.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On December 31, 2004, the Fund
held five percent or more of the outstanding voting securities of the
following company:
RCM Technologies 6.92%
The aggregate cost and value of this company at December 31 , 2004, was
$5,636 and $3,954, respectively. Investments in affiliate companies
represent 0.5% of total net assets at December 31, 2004. Investment
activity and income amounts relating to affiliates during the twelve
months ended December 31, 2004, were as follows:
Dividend Income $ --
Net realized gain or loss $(3,800)
Change in unrealized gain or loss $(1,838)
Purchases $ --
Proceeds from sales $ 562
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At December 31, 2004, these securities were
illiquid. At December 31, 2004, these securities (in thousands) amounted
to $1,573 which represents 0.2% of total net assets.
Additional information on these securities is as follows:
Acquisition
Security Dates Shares (000) Cost (000) Value (000)
- ---------------------------------------------------------------------------------------------
Locus Discovery, Series D, Pfd. 09/05/01 375 $1,500 $ 750
Metabolex, Series F 05/11/00 364 2,000 53
SYRRX, Series C 01/08/01 154 1,001 770
------- -------
$4,501 $1,573
======= =======
(e) Represents fair value as determined in good faith under procedures
approved by the Board of Trustees.
(f) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resales of this security to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, the value of
this security represents 2.6% of net assets.
1-800-922-6769
48
Columbia Acorn International Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
--------------------------------
09/30/04 12/31/04
Additions
- -----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Compass Group 120,000 220,000
Depfa Bank (Ireland) 98,000 114,000
Exel 135,000 155,000
>SWITZERLAND
Kuehne & Nagel 0 5,500
Synthes-Stratec 5,000 10,000
>FRANCE
Neopost 25,100 31,000
>NORWAY
Orkla 0 26,000
>CZECH REPUBLIC
Komercni Banka 12,000 15,000
>GERMANY
Deutsche Boerse 0 13,000
- -----------------------------------------------------------------------------
ASIA
>JAPAN
Hoya 12,400 15,000
Shimano 35,000 59,000
>HONG KONG/CHINA
Global Bio-Chem Technology
Group (China) 0 800,000
Hong Kong Exchanges &
Clearing 0 425,000
>SINGAPORE
ComfortDelGro 0 600,000
- -----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Kinross Gold 80,000 164,400
>AUSTRALIA
Lion Nathan 260,000 300,000
NUMBER OF SHARES
--------------------------------
09/30/04 12/31/04
SALES
- -----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM
Anglo Irish Bank (Ireland) 160,000 140,000
BG Group 240,000 0
Jardine Lloyd Thompson 100,000 0
Rank Group 200,000 0
Smith & Nephew 46,000 0
- -----------------------------------------------------------------------------
ASIA
>JAPAN
Uni-Charm 25,100 0
- -----------------------------------------------------------------------------
LATIN AMERICA
>ARGENTINA
Tenaris 39,200 29,200
49
Columbia Acorn International Select
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- -----------------------------------------------------------------------------
COMMON STOCKS: 89.9%
- -----------------------------------------------------------------------------
EUROPE: 53.5%
>UNITED KINGDOM/IRELAND: 20.3%
140,000 Anglo Irish Bank (Ireland) $ 3,394
SMALL BUSINESS & MIDDLE MARKET BANKING
155,000 Exel 2,148
GLOBAL LOGISTICS & FREIGHT FORWARDING
114,000 Depfa Bank (Ireland) (d) 1,907
INTERNATIONAL PUBLIC SECTOR FINANCE
104,000 Grafton Group (Ireland) (b) 1,127
BUILDERS, WHOLESALERS & DIY RETAILING
220,000 Compass Group 1,038
INTERNATIONAL CONCESSION & CONTRACT CATERER
40,000 Kerry (Ireland) 956
FOOD INGREDIENTS
70,000 British Sky Broadcasting 754
DIGITAL SATELLITE BROADCASTING
17,000 Cobham 403
AEROSPACE COMPONENTS
6,000 Intermediate Capital 125
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
- -----------------------------------------------------------------------------
11,852
>SWITZERLAND: 10.3%
1,900 Geberit International (d) 1,386
PLUMBING SUPPLIES
5,500 Kuehne & Nagel (d) 1,180
FREIGHT FORWARDING/LOGISTICS
10,000 Synthes-Stratec (b)(d) 1,116
PRODUCTS FOR ORTHOPEDIC SURGERY
7,000 Swatch Group (d) 1,026
WATCH & ELECTRONICS MANUFACTURER
2,300 Schindler (d) 909
ELEVATOR MANUFACTURER & SERVICE PROVIDER
600 Givaudan (d) 395
INDUSTRIAL FRAGRANCES & FLAVORS
- -----------------------------------------------------------------------------
6,012
>FRANCE/BELGIUM: 7.1%
31,000 Neopost 2,402
POSTAGE METER MACHINES
14,000 Imerys 1,171
INDUSTRIAL MINERALS PRODUCER
7,000 Essilor International 547
EYEGLASS LENSES
- -----------------------------------------------------------------------------
4,120
>NORWAY: 4.1%
157,500 Den Norske Bank (d) 1,545
LARGEST NORWEGIAN BANK
26,000 Orkla (d) 850
FOOD & DIVERSIFIED CONSUMER GOODS
- -----------------------------------------------------------------------------
2,395
>CZECH REPUBLIC: 3.7%
15,000 Komercni Banka (d) 2,183
LEADING CZECH UNIVERSAL BANK
- -----------------------------------------------------------------------------
>LUXEMBOURG: 2.7%
120,000 SES Global 1,560
SATELLITE BROADCASTING SERVICES
- -----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- -----------------------------------------------------------------------------
>GERMANY: 2.6%
13,000 Deutsche Boerse (d) $ 779
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
12,000 Rhoen-Klinikum (d) 736
HOSPITAL MANAGEMENT
- -----------------------------------------------------------------------------
1,515
>SPAIN: 1.7%
43,000 Red Electrica (d) 962
SPANISH POWER GRID
- -----------------------------------------------------------------------------
>ITALY: 1.0%
34,000 Autogrill (b)(d) 566
TOLLWAY RESTAURANTS
-----------
EUROPE: TOTAL 31,165
- -----------------------------------------------------------------------------
ASIA: 24.9%
>JAPAN: 20.3%
38,000 Daito Trust Construction (d) 1,803
APARTMENT BUILDER
15,000 Hoya (d) 1,694
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
59,000 Shimano (d) 1,681
BICYCLE COMPONENTS & FISHING TACKLE
9,700 Funai Electric (d) 1,203
CONSUMER ELECTRONICS
64,000 Ushio (d) 1,191
INDUSTRIAL LIGHT SOURCES
32,300 Sugi Pharmacy (d) 1,095
DRUGSTORE OPERATOR
181,800 Hiroshima Bank (d) 960
REGIONAL BANK
11,500 Fast Retailing (d) 872
APPAREL RETAILER
310 Dentsu (d) 834
ADVERTISING AGENCY
23,000 Olympus Optical (d) 490
MEDICAL EQUIPMENT & CAMERAS
- -----------------------------------------------------------------------------
11,823
>HONG KONG/CHINA: 2.9%
425,000 Hong Kong Exchanges & Clearing 1,140
HONG KONG EQUITY & DERIVATIVES OPERATOR
800,000 Global Bio-Chem Technology
Group (China) 530
CHINESE REFINER OF CORN-BASED COMMODITIES
- -----------------------------------------------------------------------------
1,670
>SINGAPORE: 1.7%
600,000 ComfortDelGro 570
TAXI & MASS TRANSIT SERVICE
45,000 Venture 438
ELECTRONIC CONTRACT MANUFACTURER
- -----------------------------------------------------------------------------
1,008
-----------
ASIA: TOTAL 14,501
- -----------------------------------------------------------------------------
1-800-922-6769
50
NUMBER OF SHARES VALUE (000)
- -----------------------------------------------------------------------------
OTHER COUNTRIES: 9.1%
>CANADA: 5.7%
47,000 Talisman Energy $ 1,267
OIL & GAS PRODUCER
164,400 Kinross Gold (b) 1,158
GOLD MINING
50,000 Noranda 877
DIVERSIFIED MINING HOLDING COMPANY
- -----------------------------------------------------------------------------
3,302
>AUSTRALIA: 3.4%
300,000 Lion Nathan 2,016
BEER BREWER/DISTRIBUTOR
- -----------------------------------------------------------------------------
-----------
OTHER: TOTAL 5,318
- -----------------------------------------------------------------------------
LATIN AMERICA: 2.4%
>ARGENTINA: 2.4%
29,200 Tenaris 1,428
STEEL PIPE FOR OIL WELLS & PIPELINES
- -----------------------------------------------------------------------------
-----------
LATIN AMERICA: TOTAL 1,428
-----------
TOTAL COMMON STOCKS: 89.9% 52,412
(COST: $36,884)
PRINCIPAL AMOUNT (000) VALUE (000)
- -----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 10.6%
$ 6,163 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal Home Loan Bank Note,
maturing 4/02/18, market
value $6,286 (repurchase
proceeds: $6,164) $ 6,163
- -----------------------------------------------------------------------------
(COST: $6,163) 6,163
TOTAL INVESTMENTS: 100.5% 58,575
(COST: $43,047) (A) -----------
CASH AND OTHER ASSETS LESS LIABILITIES: (0.5%) (287)
-----------
TOTAL NET ASSETS: 100% $58,288
=============================================================================
>Notes to Statement of Investments (in thousands)
(a) -At December 31, 2004, for federal income tax purpose cost of investments
was $44,012 and net unrealized appreciation was $14,563 consisting of
gross unrealized appreciation of $15,223 and gross unrealized depreciation
of $660.
(b) Non-income producing security.
(c) On December 31, 2004, the Fund's total investments were denominated in
currencies as follows:
CURRENCY VALUE % OF NET ASSETS
==================================================
Euro $16,107 27.6%
Japanese Yen 11,823 20.3
US Dollar 7,591 13.0
Swiss Franc 6,012 10.3
British Pounds 4,469 7.7
Canadian Dollar 3,302 5.7
Other currencies less
than 5% of total
net assets 9,271 15.9
------- ------
$58,575 100.5%
======= ======
(d) Represents a security valued by an independent statistical fair value
pricing service at 12/31/04. Foreign securities which had a market holiday
on 12/31/04 were valued under this method. See Security Valuation in Note
2 for further information.
51
Columbia Acorn International Select
>Portfolio Diversification
At December 31, 2004, the Fund's portfolio investments as a percent of net
assets were diversified as follows:
VALUE (000) PERCENT
- -----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 4,237 7.3%
Industrial Materials 2,557 4.4
Machinery 2,402 4.1
Construction 1,803 3.1
Electrical Components 1,594 2.7
Steel 1,428 2.4
Industrial Distribution 1,127 1.9
Speciality Chemicals 395 0.7
- -----------------------------------------------------------------------------
15,543 26.6
>CONSUMER GOODS/SERVICES
Durable Goods 2,707 4.6
Beverage 2,016 3.5
Retail 1,967 3.4
Food 1,806 3.1
Restaurants 1,604 2.7
Consumer Electronics 1,203 2.1
- -----------------------------------------------------------------------------
11,303 19.4
>FINANCE
Banks 9,989 17.2
Other Finance Companies 125 0.2
- -----------------------------------------------------------------------------
10,114 17.4
VALUE (000) PERCENT
- -----------------------------------------------------------------------------
>INFORMATION
Financial Processors $ 1,919 3.3%
Semiconductors and
Related Equipment 1,694 2.9
Satellite Broadcasting
and Services 1,560 2.7
Advertising 834 1.4
Television Broadcasting 754 1.3
Contract Manufacturing 438 0.7
- -----------------------------------------------------------------------------
7,199 12.3
>ENERGY/MINERALS
Oil/Gas Producers 1,267 2.2
Non-Ferrous Metals 1,158 2.0
Mining 877 1.5
Agricultural Commodities
(includes Forestry) 530 0.9
- -----------------------------------------------------------------------------
3,832 6.6
>HEALTH CARE
Medical Equipment 2,153 3.7
Hospital Management 736 1.3
- -----------------------------------------------------------------------------
2,889 5.0
>OTHER INDUSTRIES
Regulated Utilities 962 1.6
Transportation 570 1.0
- -----------------------------------------------------------------------------
1,532 2.6
Total Common Stocks and
--------------------------------
OTHER EQUITY-LIKE SECURITIES 52,412 89.9
SHORT-TERM OBLIGATIONS 6,163 10.6
--------------------------------
TOTAL INVESTMENTS 58,575 100.5
CASH AND OTHER ASSETS
LESS LIABILITIES (287) (0.5)
--------------------------------
NET ASSETS $ 58,288 100.0%
=============================================================================
1-800-922-6769
52
Columbia Acorn Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
--------------------------------
09/30/04 12/31/04
Additions
- -----------------------------------------------------------------------------
INFORMATION
AnswerThink 0 647,660
Aspect Communications 0 80,200
IAC/InterActiveCorp 0 720,000
Liberty Media International 0 235,000
McAfee 2,750,000 3,150,000
Skillsoft Publishing 4,188,100 8,625,900
Tellabs 4,100,000 5,100,000
UnitedGlobalCom 0 1,100,000
- -----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
ITT Educational Services 1,350,000 1,395,000
International Speedway Motors 460,000 485,000
Safeway 1,550,000 2,540,000
- -----------------------------------------------------------------------------
FINANCE
Janus Capital 360,000 1,220,000
- -----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 0 380,000
NUMBER OF SHARES
--------------------------------
09/30/04 12/31/04
Sales
- -----------------------------------------------------------------------------
INFORMATION
Fair Isaac 1,000,000 537,800
PeopleSoft 2,135,000 0
Synopsys 1,040,000 860,000
- -----------------------------------------------------------------------------
HEALTH CARE
First Health Group 3,350,000 2,836,500
53
Columbia Acorn Select
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- -----------------------------------------------------------------------------
COMMON STOCKS: 86.6%
- -----------------------------------------------------------------------------
INFORMATION: 30.6%
>BUSINESS SOFTWARE: 9.5%
3,150,000 McAfee (b) $ 91,130
SECURITY SOFTWARE & SERVICES
860,000 Synopsys (b) 16,873
SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS
1,600,000 Novell (b) 10,800
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
80,200 Aspect Communications (b) 893
CALL CENTER SOFTWARE
- -----------------------------------------------------------------------------
119,696
>INTERNET: 5.5%
8,625,900 Skillsoft Publishing (b)(c) 48,736
PROVIDER OF WEB-BASED LEARNING SOLUTIONS
(E-LEARNING)
720,000 IAC/InterActiveCorp (b) 19,886
- -----------------------------------------------------------------------------
DOMINATE INTERNET MIDDLEMAN
68,622
>BUSINESS INFORMATION: 4.8%
470,000 Moody's 40,820
CREDIT RATING SERVICE
537,800 Fair Isaac 19,727
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
- -----------------------------------------------------------------------------
60,547
>TELECOMMUNICATIONS EQUIPMENT: 3.5%
5,100,000 Tellabs (b) 43,809
- -----------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
>MOBILE COMMUNICATIONS: 3.0%
2,050,000 American Tower (b) 37,720
- -----------------------------------------------------------------------------
COMMUNICATION TOWERS IN USA & MEXICO
>INSTRUMENTATION: 2.4%
1,000,000 Tektronix 30,210
ANALYTICAL INSTRUMENTS
- -----------------------------------------------------------------------------
>TELEVISION PROGRAMMING/CATV: 1.7%
235,000 Liberty Media International (b) 10,864
CATV HOLDING COMPANY
1,100,000 UnitedGlobalCom (b) 10,626
VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA
- -----------------------------------------------------------------------------
21,490
>COMPUTER SERVICES: 0.2%
647,660 AnswerThink (b) 3,018
IT INTEGRATOR FOR FORTUNE 2000
--------------
INFORMATION: TOTAL 385,112
- -----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 30.4%
>RETAIL: 10.5%
2,540,000 Safeway (b) 50,140
RETAIL FOOD & DRUG STORES
975,000 Abercrombie & Fitch 45,776
TEEN APPAREL RETAILER
750,000 Costco 36,307
WAREHOUSE SUPERSTORES
- -----------------------------------------------------------------------------
132,223
NUMBER OF SHARES VALUE (000)
- -----------------------------------------------------------------------------
>CONSUMER SERVICES: 7.7%
1,395,000 ITT Educational Services (b) $ 66,332
POSTSECONDARY DEGREE PROGRAMS
728,000 Weight Watchers (b) 29,899
WEIGHT LOSS PROGRAM
- -----------------------------------------------------------------------------
96,231
>FURNITURE & MANUFACTURERS: 5.4%
630,000 Coach (b) 35,532
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
1,160,000 Herman Miller 32,051
OFFICE FURNITURE
- -----------------------------------------------------------------------------
67,583
>LEISURE VEHICLES: 4.8%
1,000,000 Harley-Davidson 60,750
MOTORCYCLES & RELATED MERCHANDISE
>ENTERTAINMENT: 2.0%
485,000 International Speedway Motors 25,608
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
- -----------------------------------------------------------------------------
-----------
CONSUMER GOODS/SERVICES: TOTAL 382,395
- -----------------------------------------------------------------------------
FINANCE: 14.6%
>BANKS: 7.0%
1,970,000 TCF Financial 63,316
GREAT LAKES BANK
750,000 Associated Banc-Corp 24,908
MIDWEST BANK
- -----------------------------------------------------------------------------
88,224
>MONEY MANAGEMENT: 4.1%
729,500 SEI Investments 30,588
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
1,220,000 Janus Capital 20,508
MANAGES MUTUAL FUNDS
- -----------------------------------------------------------------------------
51,096
>INSURANCE: 3.5%
120,000 Markel (b) 43,680
SPECIALTY INSURANCE
- -----------------------------------------------------------------------------
-----------
FINANCE: TOTAL 183,000
- -----------------------------------------------------------------------------
HEALTH CARE: 7.3%
>SERVICES: 7.3%
2,836,500 First Health Group (b) 53,071
PPO NETWORK
910,000 Lincare Holdings (b) 38,811
HOME HEALTH CARE SERVICES
- -----------------------------------------------------------------------------
91,882
-----------
HEALTH CARE: TOTAL 91,882
- -----------------------------------------------------------------------------
1-800-922-6769
54
NUMBER OF SHARES VALUE (000)
- -----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 2.7%
>LOGISTICS: 2.7%
620,000 Expeditors International
of Washington $ 34,646
INTERNATIONAL FREIGHT FORWARDER
- -----------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 34,646
- -----------------------------------------------------------------------------
ENERGY/MINERALS: 1.0%
>OIL SERVICES: 1.0%
380,000 FMC Technologies (b) 12,236
OIL & GAS WELL HEAD MANUFACTURER
- -----------------------------------------------------------------------------
-----------
ENERGY/MINERALS: TOTAL 12,236
-----------
TOTAL COMMON STOCKS: 86.6% 1,089,271
(COST: $845,268)
PRINCIPAL AMOUNT (000) VALUE (000)
- -----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 12.6%
$ 30,000 American General Finance
2.27% 1/03/05 $ 29,996
29,994 Toyota Credit 2.23% 1/04/05 29,994
27,000 American Express Finance
2.23% 1/03/05 26,992
27,000 BellSouth 2.29% 1/7/05 (d) 26,990
16,000 Colgate Palmolive 2.17% 1/10/05 15,991
28,072 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal National Mortgage
Association Note,
maturing 1/05/05, market
value $28,636 (repurchase
proceeds: $28,076) 28,072
- -----------------------------------------------------------------------------
(AMORTIZED COST: $158,035) 158,035
-----------
TOTAL INVESTMENTS: 99.2% 1,247,306
(COST: $1,003,303) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.8% 9,781
-----------
TOTAL NET ASSETS: 100% $ 1,257,087
=============================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $1,003,540 and net unrealized appreciation was $243,766 consisting of
gross unrealized appreciation of $271,003 and gross unrealized
depreciation of $27,237.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On December 31, 2004, the Fund
held five percent or more of the outstanding voting securities of the
following company:
Skillsoft Publishing 8.12%
The aggregate cost and value of this company at December 31, 2004, was
$55,490 and $48,736, respectively. Investments in affiliate companies
represent 3.9% of total net assets at December 31, 2004. Investment
activity and income amounts relating to affiliates during the twelve
months ended December 31, 2004, were as follows:
Dividend Income $ --
Net realized gain or loss $ --
Change in unrealized gain or loss $ (6,754)
Purchases $ 55,490
Proceeds from sales $ --
(d) Security exempt from registration under Section 4(2) of the Securities
Act of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resales of this security to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, the value of
this security represents 2.1% of net assets.
55
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1-800-922-6769
56
COLUMBIA ACORN FAMILY OF FUNDS
> STATEMENTS OF ASSETS AND LIABILITIES
> STATEMENTS OF OPERATIONS
> STATEMENTS OF CHANGES IN NET ASSETS
> FINANCIAL HIGHLIGHTS
> NOTES TO FINANCIAL STATEMENTS
57
Columbia Acorn Family of Funds
>Statements of Assets and Liabilities
COLUMBIA COLUMBIA COLUMBIA
ACORN ACORN ACORN
DECEMBER 31, 2004 FUND INTERNATIONAL USA
-------------------- -------------------- --------------------
(in thousands)
ASSETS
Unaffiliated investments (including
repurchase agreement), at cost $ 7,749,409 $ 1,339,257 $ 583,555
Affiliated investments, at cost (See Note 4) 562,929 -- 5,636
-------------------- -------------------- --------------------
Unaffiliated investments, at value $ 11,871,978 $ 2,045,766 $ 839,218
Affiliated investments, at value (See Note 4) 1,928,260 -- 3,954
Repurchase agreement, at value 38,346 9,076 26,603
Cash -- 57 1
Foreign currency (cost: Columbia Acorn
Fund $14,854; Columbia Acorn
International $16,352; Columbia Acorn
International Select $50) 15,138 16,664 --
Receivable for:
Investments sold 4,178 4,172 --
Fund shares sold 23,692 3,551 2,223
Dividends and interest 6,121 1,598 142
Foreign tax reclaims 872 826 1
Expense reimbursement due from Advisor -- -- --
Deferred Trustees' Compensation Investments 1,498 524 102
Other assets -- -- --
-------------------- -------------------- --------------------
Total Assets 13,890,083 2,082,234 872,244
LIABILITIES
Payable to custodian bank 89 -- --
Payable for:
Investments purchased 7,118 4,458 449
Fund shares redeemed 34,382 1,502 635
12b-1 Service & Distribution fees 2,594 76 109
Legal & audit fees 267 77 45
Reports to shareholders 1,759 382 171
Deferred Trustees' fees 1,498 524 102
Transfer agent fees 558 95 37
Trustees' fees 11 -- --
Custody fees 113 101 2
Other liabilities 235 7 12
-------------------- -------------------- --------------------
Total Liabilities 48,624 7,222 1,562
-------------------- -------------------- --------------------
NET ASSETS $ 13,841,459 $ 2,075,012 $ 870,682
==================== ==================== ====================
COMPOSITION OF NET ASSETS
Paid in capital $ 8,128,938 $ 1,406,584 $ 580,054
Undistributed net investment income
(Accumulated net investment loss) (20,921) 16,151 (103)
Accumulated net realized gain (loss) 206,806 (63,744) 10,147
Net unrealized appreciation on:
Investments 5,526,246 715,585 280,584
Foreign currency translations 390 436 --
-------------------- -------------------- --------------------
NET ASSETS $ 13,841,459 $ 2,075,012 $ 870,682
==================== ==================== ====================
Net asset value per share -- Class A (a) $ 25.93 $ 28.75 $ 24.77
(Net assets/shares) ($2,669,936/102,978) ($70,582/2,455) ($112,509/4,542)
Maximum offering price
per share -- Class A (b) $ 27.51 $ 30.50 $ 26.28
(Net asset value per share/
front-end sales charge) ($25.93/0.9425) ($28.75/0.9425) ($24.77/0.9425)
Net asset value and offering
price per share -- Class B (a) $ 25.19 $ 28.18 $ 24.14
(Net assets/shares) ($1,399,135/55,544) ($54,752/1,943) ($72,643/3,010)
Net asset value and offering
price per share -- Class C (a) $ 25.18 $ 28.19 $ 24.14
(Net assets/shares) ($1,083,006/43,004) ($30,547/1,084) ($39,643/1,642)
Net asset value and offering
price per share -- Class Z (c) $ 26.45 $ 29.03 $ 25.20
(Net assets/shares) ($8,689,382/328,514) ($1,919,131/66,102) ($645,887/25,635)
COLUMBIA COLUMBIA
DECEMBER 31, 2004 ACORN ACORN
INTERNATIONAL SELECT SELECT
(in thousands) -------------------- --------------------
ASSETS
Unaffiliated investments (including
repurchase agreement), at cost $ 43,047 $ 947,813
Affiliated investments, at cost (See Note 4) -- 55,490
-------------------- --------------------
Unaffiliated investments, at value $ 52,412 $ 1,170,498
Affiliated investments, at value (See Note 4) -- 48,736
Repurchase agreement, at value 6,163 28,072
Cash --* 1
Foreign currency (cost: Columbia Acorn
Fund $14,854; Columbia Acorn
International $16,352; Columbia Acorn
International Select $50) 50 --
Receivable for:
Investments sold 11 --
Fund shares sold 408 12,610
Dividends and interest 72 158
Foreign tax reclaims 13 --
Expense reimbursement due from Advisor 3 --
Deferred Trustees' Compensation Investments -- --
-------------------- --------------------
Other assets 11 16
Total Assets 59,143 1,260,091
LIABILITIES
Payable to custodian bank -- --
Payable for:
Investments purchased 674 681
Fund shares redeemed 78 1,508
12b-1 Service & Distribution fees 5 344
Legal & audit fees 24 42
Reports to shareholders 48 273
Deferred Trustees' fees 16 57
Transfer agent fees 6 97
Trustees' fees -- --*
Custody fees 4 2
Other liabilities -- --
-------------------- --------------------
Total Liabilities 855 3,004
-------------------- --------------------
NET ASSETS $ 58,288 $ 1,257,087
==================== ====================
COMPOSITION OF NET ASSETS
Paid in capital $ 73,860 $ 1,005,933
Undistributed net investment income
(Accumulated net investment loss) 49 (57)
Accumulated net realized gain (loss) (31,151) 7,208
Net unrealized appreciation on:
Investments 15,528 244,003
Foreign currency translations 2 --
-------------------- --------------------
NET ASSETS $ 58,288 $ 1,257,087
==================== ====================
Net asset value per share -- Class A (a) $ 17.85 $ 20.83
(Net assets/shares) ($4,357/244) ($515,842/24,767)
Maximum offering price
per share -- Class A (b) $ 18.94 $ 22.10
(Net asset value per share/
front-end sales charge) ($17.85/0.9425) ($20.83/0.9425)
Net asset value and offering
price per share -- Class B (a) $ 17.36 $ 20.23
(Net assets/shares) ($5,097/294) ($185,545/9,172)
Net asset value and offering
price per share -- Class C (a) $ 17.38 $ 20.23
(Net assets/shares) ($2,543/146) ($110,435/5,459)
Net asset value and offering
price per share -- Class Z (c) $ 18.02 $ 21.13
(Net assets/shares) ($46,291/2,569) ($445,265/21,073)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
(c) Redemption price per share is equal to net asset value less any applicable
redemption fee.
* Rounds to less than $500.
See accompanying notes to financial statements.
1-800-922-6769
58
Columbia Acorn Family of Funds
>Statements of Operations
For the Year Ended December 31, 2004
COLUMBIA COLUMBIA COLUMBIA
ACORN ACORN ACORN
(in thousands) FUND INTERNATIONAL USA
-------------------- -------------------- --------------------
INVESTMENT INCOME:
Dividend income $ 104,281 $ 39,926 $ 2,493
Dividend income from affiliates
(See Note 4) 7,758 -- --
Interest income 11,206 777 730
-------------------- -------------------- --------------------
123,245 40,703 3,223
Foreign taxes withheld (4,147) (3,906) (5)
-------------------- -------------------- --------------------
Total Investment Income 119,098 36,797 3,218
EXPENSES:
Management fee 79,884 14,433 6,825
Administration fee 5,759 838 356
12b-1 Service and Distribution fees:
Class A 6,960 178 306
Class B 11,958 422 637
Class C 9,641 253 373
Transfer agent fees:
Class A 3,024 102 156
Class B 3,149 154 173
Class C 1,843 60 72
Class Z 3,399 1,333 286
Custody fees 1,516 1,320 30
Trustees' fees 656 95 41
Registration & blue sky fees 593 87 111
Reports to shareholders 4,347 899 394
Legal & audit fees 1,091 145 119
Compliance fees 172 25 11
Non-recurring costs (See Note 8) 1,116 162 69
Other expenses 285 56 22
-------------------- -------------------- --------------------
Total expenses 135,393 20,562 9,981
Less custody fees paid indirectly (27) (1) (1)
Less reimbursement of expenses
by Advisor -- -- --
Less reimbursement of expenses
by Transfer Agent (2,101) (305) (122)
Non-recurring costs reimbursed (See Note 8) (1,116) (162) (69)
-------------------- -------------------- --------------------
Net Expenses 132,149 20,094 9,789
-------------------- -------------------- --------------------
Net Investment Income (Loss) (13,051) 16,703 (6,571)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Unaffiliated investments 656,773 175,318 32,045
Affiliated investments (See Note 4) 36,513 -- (3,800)
Foreign currency transactions (102) 563 --
-------------------- -------------------- --------------------
Net realized gain 693,184 175,881 28,245
==================== ==================== ====================
Net change in net unrealized appreciation/
depreciation on:
Unaffiliated investments 1,640,564 276,024 123,786
Affiliated investments (See Note 4) 59,516 -- (1,838)
Foreign currency translations 1,919 911 --
-------------------- -------------------- --------------------
Net change in unrealized appreciation/
depreciation 1,701,999 276,935 121,948
==================== ==================== ====================
Net realized and unrealized gain 2,395,183 452,816 150,193
-------------------- -------------------- --------------------
Net Increase in Net Assets resulting
from Operations $ 2,382,132 $ 469,519 $ 143,622
==================== ==================== ====================
COLUMBIA COLUMBIA
ACORN ACORN
(in thousands) INTERNATIONAL SELECT SELECT
-------------------- --------------------
INVESTMENT INCOME:
Dividend income $ 838 $ 4,481
Dividend income from affiliates
(See Note 4) -- --
Interest income 31 1,485
-------------------- --------------------
869 5,966
Foreign taxes withheld (87) --
-------------------- --------------------
Total Investment Income 782 5,966
EXPENSES:
Management fee 431 8,663
Administration fee 22 461
12b-1 Service and Distribution fees:
Class A 10 1,140
Class B 36 1,407
Class C 27 869
Transfer agent fees:
Class A 9 550
Class B 19 466
Class C 7 203
Class Z 69 401
Custody fees 51 30
Trustees' fees 2 23
Registration & blue sky fees 60 220
Reports to shareholders 92 630
Legal & audit fees 32 78
Compliance fees 1 14
Non-recurring costs (See Note 8) 4 90
Other expenses 9 28
-------------------- --------------------
Total expenses 881 15,273
Less custody fees paid indirectly --* (1)
Less reimbursement of expenses
by Advisor (131) --
Less reimbursement of expenses
by Transfer Agent (15) (222)
Non-recurring costs reimbursed (See Note 8) (4) (90)
-------------------- --------------------
Net Expenses 731 14,960
-------------------- --------------------
Net Investment Income (Loss) 51 (8,994)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Unaffiliated investments 7,210 47,420
Affiliated investments (See Note 4) -- --
Foreign currency transactions (2) --
-------------------- --------------------
Net realized gain 7,208 47,420
==================== ====================
Net change in net unrealized appreciation/
depreciation on:
Unaffiliated investments 2,774 140,545
Affiliated investments (See Note 4) -- (6,754)
Foreign currency translations (12) --
-------------------- --------------------
Net change in unrealized appreciation/
depreciation 2,762 133,791
==================== ====================
Net realized and unrealized gain 9,970 181,211
-------------------- --------------------
Net Increase in Net Assets resulting
from Operations $ 10,021 $ 172,217
==================== ====================
* Rounds to less than $500.
See accompanying notes to financial statements.
59
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
Year ended Year ended Year ended Year ended
INCREASE (DECREASE) IN NET ASSETS December 31, December 31, December 31, December 31,
------------- ------------- ------------- -------------
(in thousands) 2004 2003 2004 2003
OPERATIONS:
Net investment income (loss) $ (13,051) $ (9,911) $ 16,703 $ 15,934
Net realized gain (loss) on investments
and foreign currency transactions 693,184 90,682 175,881 (7,144)
Net change in net unrealized appreciation/
depreciation on investments and
foreign currency translations 1,701,999 2,974,675 276,935 561,990
------------- ------------- ------------- -------------
Net Increase from Operations 2,382,132 3,055,446 469,519 570,780
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (374) (106)
Net realized gain -- Class A (89,952) (1,752) -- --
Net investment income -- Class B -- -- (75) --
Net realized gain -- Class B (49,011) (1,116) -- --
Net investment income -- Class C -- -- (42) --
Net realized gain -- Class C (37,671) (813) -- --
Net investment income -- Class Z (5,620) -- (16,439) (5,829)
Net realized gain -- Class Z (290,184) (6,236) -- --
------------- ------------- ------------- -------------
Total Distribution to Shareholders (472,438) (9,917) (16,930) (5,935)
SHARE TRANSACTIONS:
Subscriptions -- Class A 703,271 1,041,782 19,736 45,279
Distributions reinvested -- Class A 81,405 1,584 306 80
Redemptions -- Class A (453,387) (259,438) (17,531) (42,948)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class A 331,289 783,928 2,511 2,411
Subscriptions -- Class B 90,732 364,144 10,422 11,463
Distributions reinvested -- Class B 44,616 1,018 66 --
Redemptions -- Class B (146,696) (88,744) (7,152) (5,639)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class B (11,348) 276,418 3,336 5,824
Subscriptions -- Class C 145,878 375,513 8,030 14,870
Distributions reinvested -- Class C 30,636 673 35 --
Redemptions -- Class C (136,434) (73,548) (6,936) (13,396)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class C 40,080 302,638 1,129 1,474
Subscriptions -- Class Z 1,596,519 1,682,204 206,434 220,802
Distributions reinvested -- Class Z 254,191 5,443 14,669 5,336
Redemptions -- Class Z (1,447,781) (667,986) (284,074) (434,204)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class Z 402,929 1,019,661 (62,971) (208,066)
------------- ------------- ------------- -------------
Net Increase (Decrease) from
Share Transactions 762,950 2,382,645 (55,995) (198,357)
------------- ------------- ------------- -------------
Redemption Fees -- -- 86 400
------------- ------------- ------------- -------------
Total Increase in Net Assets 2,672,644 5,428,174 396,680 366,888
NET ASSETS:
Beginning of period 11,168,815 5,740,641 1,678,332 1,311,444
------------- ------------- ------------- -------------
End of period $ 13,841,459 $ 11,168,815 $ 2,075,012 $ 1,678,332
============= ============= ============= =============
UNDISTRIBUTED NET INVESTMENT INCOME OR
(ACCUMULATED NET INVESTMENT LOSS) $ (20,921) $ 6,955 $ 16,151 $ 16,493
============= ============= ============= =============
See accompanying notes to financial statements.
1-800-922-6769
60
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
Year ended Year ended Year ended Year ended
INCREASE (DECREASE) IN NET ASSETS December 31, December 31, December 31, December 31,
------------- ------------- ------------- -------------
(in thousands) 2004 2003 2004 2003
OPERATIONS:
Net investment income (loss) $ (6,571) $ (4,408) $ 51 $ 136
Net realized gain (loss) on investments
and foreign currency transactions 28,245 7,301 7,208 (425)
Net change in net unrealized appreciation/
depreciation on investments and
foreign currency translations 121,948 172,313 2,762 12,936
------------- ------------- ------------- -------------
Net Increase from Operations 143,622 175,206 10,021 12,647
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (6) --
Net realized gain -- Class A (622) -- -- --
Net investment income -- Class B -- -- -- --
Net realized gain -- Class B (415) -- -- --
Net investment income -- Class C -- -- -- --
Net realized gain -- Class C (224) -- -- --
Net investment income -- Class Z -- -- (151) (19)
Net realized gain -- Class Z (3,487) -- -- --
------------- ------------- ------------- -------------
Total Distribution to Shareholders (4,748) -- (157) (19)
SHARE TRANSACTIONS:
Subscriptions -- Class A 27,362 60,457 1,860 2,350
Distributions reinvested -- Class A 572 -- 5 --
Redemptions -- Class A (22,954) (23,188) (763) (3,212)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class A 4,980 37,269 1,102 (862)
Subscriptions -- Class B 4,936 19,327 1,664 1,577
Distributions reinvested -- Class B 375 -- -- --
Redemptions -- Class B (10,452) (8,053) (586) (989)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class B (5,141) 11,274 1,078 588
Subscriptions -- Class C 5,707 13,056 786 3,211
Distributions reinvested -- Class C 187 -- -- --
Redemptions -- Class C (8,114) (4,575) (2,429) (3,564)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class C (2,220) 8,481 (1,643) (353)
Subscriptions -- Class Z 199,048 221,496 11,787 23,389
Distributions reinvested -- Class Z 3,134 -- 146 18
Redemptions -- Class Z (161,267) (83,975) (7,456) (25,393)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class Z 40,915 137,521 4,477 (1,986)
------------- ------------- ------------- -------------
Net Increase (Decrease) from
Share Transactions 38,534 194,545 5,014 (2,613)
------------- ------------- ------------- -------------
Redemption Fees -- -- 4 39
------------- ------------- ------------- -------------
Total Increase in Net Assets 177,408 369,751 14,882 10,054
NET ASSETS:
Beginning of period 693,274 323,523 43,406 33,352
------------- ------------- ------------- -------------
End of period $ 870,682 $ 693,274 $ 58,288 $ 43,406
============= ============= ============= =============
UNDISTRIBUTED NET INVESTMENT INCOME OR
(ACCUMULATED NET INVESTMENT LOSS) $ (103) $ 92 $ 49 $ 142
============= ============= ============= =============
COLUMBIA
ACORN SELECT
Year ended Year ended
INCREASE (DECREASE) IN NET ASSETS December 31, December 31,
------------- -------------
(in thousands) 2004 2003
OPERATIONS:
Net investment income (loss) $ (8,994) $ (4,419)
Net realized gain (loss) on investments
and foreign currency transactions 47,420 8,643
Net change in net unrealized appreciation/
depreciation on investments and
foreign currency translations 133,791 95,023
------------- -------------
Net Increase from Operations 172,217 99,247
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- --
Net realized gain -- Class A (10,300) (1,172)
Net investment income -- Class B -- --
Net realized gain -- Class B (3,895) (563)
Net investment income -- Class C -- --
Net realized gain -- Class C (2,321) (301)
Net investment income -- Class Z -- --
Net realized gain -- Class Z (8,700) (2,145)
------------- -------------
Total Distribution to Shareholders (25,216) (4,181)
SHARE TRANSACTIONS:
Subscriptions -- Class A 274,350 237,520
Distributions reinvested -- Class A 9,614 1,096
Redemptions -- Class A (91,343) (30,378)
------------- -------------
Net Increase (Decrease) -- Class A 192,621 208,238
Subscriptions -- Class B 61,755 78,641
Distributions reinvested -- Class B 3,496 507
Redemptions -- Class B (19,113) (9,321)
------------- -------------
Net Increase (Decrease) -- Class B 46,138 69,827
Subscriptions -- Class C 49,173 50,838
Distributions reinvested -- Class C 1,934 257
Redemptions -- Class C (17,236) (4,391)
------------- -------------
Net Increase (Decrease) -- Class C 33,871 46,704
Subscriptions -- Class Z 204,740 301,467
Distributions reinvested -- Class Z 6,716 1,920
Redemptions -- Class Z (114,619) (150,913)
------------- -------------
Net Increase (Decrease) -- Class Z 96,837 152,474
------------- -------------
Net Increase (Decrease) from
Share Transactions 369,467 477,243
------------- -------------
Redemption Fees -- --
------------- -------------
Total Increase in Net Assets 516,468 572,309
NET ASSETS:
Beginning of period 740,619 168,310
------------- -------------
End of period $ 1,257,087 $ 740,619
============= =============
UNDISTRIBUTED NET INVESTMENT INCOME OR
(ACCUMULATED NET INVESTMENT LOSS) $ (57) $ (21)
============= =============
61
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets, continued
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
Year ended Year ended Year ended Year ended
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31, December 31, December 31,
------------- ------------- ------------- -------------
(in thousands) 2004 2003 2004 2003
Subscriptions -- Class A 29,671 56,202 809 2,734
Shares issued in reinvestment and capital
gains -- Class A 3,255 73 13 5
Less shares redeemed -- Class A (19,230) (14,204) (722) (2,590)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class A 13,696 42,071 100 149
Subscriptions -- Class B 3,928 20,371 438 653
Shares issued in reinvestment and capital
gains -- Class B 1,836 48 3 --
Less shares redeemed -- Class B (6,388) (5,154) (301) (343)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class B (624) 15,265 140 310
Subscriptions -- Class C 6,282 20,690 333 911
Shares issued in reinvestment and capital
gains -- Class C 1,261 32 2 --
Less shares redeemed -- Class C (5,916) (4,207) (293) (833)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class C 1,627 16,515 42 78
Subscriptions -- Class Z 66,041 89,984 8,246 13,104
Shares issued in reinvestment and capital
gains -- Class Z 9,967 249 624 313
Less shares redeemed -- Class Z (60,621) (36,502) (11,723) (25,027)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class Z 15,387 53,731 (2,853) (11,610)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Shares of
Beneficial Interest 30,086 127,582 (2,571) (11,073)
------------- ------------- ------------- -------------
* Rounds to less than 500 shares.
See accompanying notes to financial statements.
1-800-922-6769
62
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
Year ended Year ended Year ended Year ended
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31, December 31, December 31,
------------- ------------- ------------- -------------
(in thousands) 2004 2003 2004 2003
Subscriptions -- Class A 1,239 3,345 116 216
Shares issued in reinvestment and capital
gains -- Class A 24 -- --* --
Less shares redeemed -- Class A (1,043) (1,309) (49) (294)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class A 220 2,036 67 (78)
Subscriptions -- Class B 229 1,087 108 137
Shares issued in reinvestment and capital
gains -- Class B 16 -- -- --
Less shares redeemed -- Class B (485) (512) (38) (95)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class B (240) 575 70 42
Subscriptions -- Class C 261 724 52 311
Shares issued in reinvestment and capital
gains -- Class C 8 -- -- --
Less shares redeemed -- Class C (379) (279) (167) (339)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class C (110) 445 (115) (28)
Subscriptions -- Class Z 8,912 12,184 707 2,239
Shares issued in reinvestment and capital
gains -- Class Z 128 -- 10 2
Less shares redeemed -- Class Z (7,291) (4,772) (479) (2,435)
------------- ------------- ------------- -------------
Net Increase (Decrease) -- Class Z 1,749 7,412 238 (194)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Shares of
Beneficial Interest 1,619 10,468 260 (258)
------------- ------------- ------------- -------------
COLUMBIA
ACORN SELECT
--------------------------------
Year ended Year ended
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31,
------------- -------------
(in thousands) 2004 2003
Subscriptions -- Class A 14,418 14,227
Shares issued in reinvestment and capital
gains -- Class A 473 63
Less shares redeemed -- Class A (4,824) (1,869)
------------- -------------
Net Increase (Decrease) -- Class A 10,067 12,421
Subscriptions -- Class B 3,336 4,854
Shares issued in reinvestment and capital
gains -- Class B 177 30
Less shares redeemed -- Class B (1,035) (601)
------------- -------------
Net Increase (Decrease) -- Class B 2,478 4,283
Subscriptions -- Class C 2,649 3,102
Shares issued in reinvestment and capital
gains -- Class C 98 15
Less shares redeemed -- Class C (929) (271)
------------- -------------
Net Increase (Decrease) -- Class C 1,818 2,846
Subscriptions -- Class Z 10,606 18,117
Shares issued in reinvestment and capital
gains -- Class Z 326 108
Less shares redeemed -- Class Z (5,997) (8,676)
------------- -------------
Net Increase (Decrease) -- Class Z 4,935 9,549
------------- -------------
Net Increase (Decrease) in Shares of
Beneficial Interest 19,298 29,099
------------- -------------
63
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS
COLUMBIA ACORN FUND Class Z Years ended December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.56 $ 15.50 $ 17.88 $ 17.21 $ 18.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.04 0.03 0.02 0.05 0.10
Net realized and unrealized gain (loss) 4.78 7.05 (2.40) 1.01 1.55
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.82 7.08 (2.38) 1.06 1.65
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.02) -- -- (0.04) (0.11)
From net realized gains (0.91) (0.02) -- (0.35) (2.86)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.93) (0.02) -- (0.39) (2.97)
===================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 26.45 $ 22.56 $ 15.50 $ 17.88 $ 17.21
===================================================================================================================================
Total Return (b) 21.51%(c) 45.68% (13.31)% 6.14% 10.06%
===================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 0.81% 0.80% 0.82% 0.82% 0.83%
Net investment income (d) 0.18% 0.17% 0.15% 0.28% 0.55%
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (IN MILLIONS) $ 8,689 $ 7,065 $ 4,022 $ 4,220 $ 3,983
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(d) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN INTERNATIONAL Class Z Years ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------00-----
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.66 $ 15.40 $ 18.47 $ 23.85 $ 35.33
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.25 0.21 0.14 0.12 0.01
Net realized and unrealized gain (loss) 6.37 7.13 (3.10) (5.11) (6.73)
- --------------------------------------------------------------------------------------------------------------------------00-------
Total from Investment Operations 6.62 7.34 (2.96) (4.99) (6.72)
- --------------------------------------------------------------------------------------------------------------------------00-------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.25) (0.08) (0.11) -- (0.66)
From net realized gains -- -- -- (0.39) (4.10)
- ---------------------------------------------------------------------------------------------------------------------------00------
Total Distributions Declared to Shareholders (0.25) (0.08) (0.11) (0.39) (4.76)
- --------------------------------------------------------------------------------------------------------------------------00-------
REDEMPTION FEES
Redemption fees added to paid in capital 0.00(a)(b) -- -- -- --
===================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 29.03 $ 22.66 $ 15.40 $ 18.47 $ 23.85
===================================================================================================================================
Total Return (c) 29.47%(d) 47.80% (16.10)% (21.11)% (20.02)%
===================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.08% 1.05% 1.06% 1.06% 1.05%
Net investment income (e) 1.01% 1.19% 0.80% 0.62% 0.02%
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (IN MILLIONS) $ 1,919 $ 1,563 $ 1,241 $ 1,613 $ 2,459
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN USA Class Z Years ended December 31,
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.01 $ 14.28 $ 17.52 $ 14.90 $ 16.75
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (0.15) (0.13) (0.10) (0.08) (0.05)
Net realized and unrealized gain (loss) 4.48 6.86 (3.14) 2.94 (1.48)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.33 6.73 (3.24) 2.86 (1.53)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.00)(b)
From net realized gains (0.14) -- -- (0.24) (0.32)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14) -- -- (0.24) (0.32)
NET ASSET VALUE, END OF PERIOD $ 25.20 $ 21.01 $ 14.28 $ 17.52 $ 14.90
===================================================================================================================================
Total Return (c) 20.62%(d) 47.13% (18.49)% 19.25% (8.99)%
===================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.09% 1.11% 1.17% 1.17% 1.15%
Net investment loss (e) (0.66)% (0.72)% (0.64)% (0.46)% (0.32)%
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (IN MILLIONS) $ 646 $ 502 $ 235 $ 229 $ 222
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) The benefits derived from custody fees paid indirectly had no impact.
See accompanying notes to financial statements.
1-800-922-6769
64-65 Spread
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS
COLUMBIA ACORN INTERNATIONAL SELECT Class Z Years ended December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.58 $ 10.29 $ 12.09 $ 17.15 $ 19.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) 0.04 0.06 0.03 (0.05) (0.11)
Net realized and unrealized gain (loss) 3.47 4.24 (1.83) (4.92) (2.53)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.51 4.30 (1.80) (4.97) (2.64)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.07) (0.01) -- (0.01) (0.04)
From net realized gains -- -- -- (0.08) (0.10)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.07) (0.01) -- (0.09) (0.14)
===================================================================================================================================
REDEMPTION FEES
Redemption fees added to paid in capital --(a)(b) -- -- -- --
===================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 18.02 $ 14.58 $ 10.29 $ 12.09 $ 17.15
===================================================================================================================================
Total Return (c) 24.14%(d) 41.79%(c) (14.89)%(c) (29.05)%(c) (13.35)%
===================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.45% 1.45% 1.45% 1.45% 1.33%
Net investment income (loss) (e) 0.27% 0.56% 0.26% (0.32)% (0.42)%
Reimbursement 0.29% 0.42% 0.33% 0.01% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (IN MILLIONS) $ 46 $ 34 $ 26 $ 37 $ 130
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN SELECT Class Z Years ended December 31,
- -----------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.20 $ 14.04 $ 15.23 $ 14.13 $ 13.70
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (0.10) (0.10) (0.10) (0.05) (0.07)
Net realized and unrealized gain (loss) 3.47 4.39 (1.09) 1.18 1.59
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.37 4.29 (1.19) 1.13 1.52
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.13) -- (0.03) (1.08)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.44) (0.13) -- (0.03) (1.09)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 21.13 $ 18.20 $ 14.04 $ 15.23 $ 14.13
===================================================================================================================================
Total Return (b) 18.58%(c) 30.61% (7.81)%(c) 8.00%(c) 11.68%
===================================================================================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses 1.13%(d) 1.12%(d) 1.26%(d) 1.35% 1.34%(e)
Net investment loss (0.52)%(d) (0.63)%(d) (0.67)%(d) (0.44)% (0.52)%(e)
Reimbursement 0.02% -- 0.01% 0.03% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (IN MILLIONS) $ 445 $ 294 $ 93 $ 70 $ 67
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(d) The benefits derived from custody fees paid indirectly had no impact.
(e) In accordance with a requirement of the Securities and Exchange
Commission, the ratios reflect total expenses prior to the reduction of
custody fees for cash balances it maintains with the custodian ("custody
fees paid indirectly"). The ratios of expenses to average daily net assets
and net investment loss to average daily net assets net of custody fees
paid indirectly would have been 1.32% and (0.50)%, respectively for the
year ended December 31, 2000.
See accompanying notes to financial statements.
1-800-922-6769
66-67 Spread
Columbia Acorn Family of Funds
>Notes to Financial Statements
1. Nature of Operations
Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia
Acorn International Select and Columbia Acorn Select (the "Funds") are each a
series of Columbia Acorn Trust (the "Trust"), an open-end management investment
company organized as a Massachusetts business trust. The investment objective of
each Fund is to seek long-term growth of capital. The Funds may issue an
unlimited number of shares. The Funds offer four classes of shares: Class A,
Class B, Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Effective January 3, 2005, Columbia Acorn International and Columbia Acorn
International Select imposed a 2% redemption fee on Class A, Class B and Class C
shares that are owned 60 days or less. See "Fund Policy on Trading of Fund
Shares and Redemption Fees" as disclosed within the Funds' prospectus for more
information.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares. Generally, you may
exchange your Class Z or Class A shares of the Fund for shares of another fund
at no additional charge. However, if you exchange Class Z shares of Columbia
Acorn International or Columbia Acorn International Select that you have owned
60 days or less for Class Z shares of a fund distributed by Columbia Funds
Distributor, Inc., that does not have a redemption fee (including Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a
redemption fee of 2% of the redemption proceeds. Exchanges between Columbia
Acorn International and Columbia Acorn International Select (or a fund
distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will
not be subject to the 2% redemption fee. In addition, if you redeem shares of
Columbia Acorn International or Columbia Acorn International Select that you
have owned 60 days or less, the Fund will charge you a redemption fee of 2% of
the redemption proceeds, with certain exceptions. See "Fund Policy on Trading of
Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for
more information.
The financial highlights for Class A, Class B and Class C shares are
presented in a separate annual report. The annual financial statements for the
Columbia Thermostat Fund, another Fund of the Trust, begin on page 75 of this
report.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
2. Significant Accounting Policies
>Security valuation
Securities of the Funds are valued at market value or, if a market quotation for
a security is not readily available or is deemed not to be reliable because of
events or circumstances that have occurred between the market quotation and the
time as of which the security is to be valued, the security is valued at a fair
value determined in accordance with procedures established by the Board of
Trustees. Securities traded on securities exchanges or in over-the-counter
markets in which transaction prices are reported are valued at the last sales
price at the time of valuation. If a security is traded principally on the
Nasdaq Stock Market Inc., the Nasdaq Official Closing Price will be applied.
Securities for which there are no reported sales on the valuation date are
valued at the latest bid quotation. Short-term debt obligations having a
maturity of 60 days or less from the valuation date are valued on an amortized
cost basis, which approximate fair value. Securities for which quotations are
not available are valued at a fair value as determined in good faith by the
Board of Trustees. The Trust has retained an independent statistical fair value
pricing service to assist in the fair valuation process for securities
principally traded in a foreign market in order to adjust for possible changes
in value that may occur between the close of the foreign exchange and the time
at which Fund shares are priced. If a security is valued at a "fair value", that
value may be different from the last quoted market price for the security.
1-800-922-6769
68
>Repurchase agreements
The Funds may engage in repurchase agreement transactions. The Funds, through
their custodian, receive delivery of underlying securities collateralizing
repurchase agreements. The Funds' investment advisor determines that the value
of the underlying securities is at all times at least equal to the resale price.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on short-term debt
obligations and long-term debt obligations when required for federal income tax
purposes. Realized gains and losses from security transactions are reported on
an identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Funds no longer own the applicable securities, the proceeds are
recorded as realized gains.
The Funds estimate components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Funds no longer own the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
>Restricted Securities
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Funds or
in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Board of Trustees. The Funds will not
incur any registration costs upon such resale.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" in the Statements of Operations. Additionally, each Fund,
except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio
hedging with respect to changes in foreign currency exchange rates by entering
into forward foreign currency contracts to purchase or sell foreign currencies.
The Statements of Operations reflect gains and losses as realized for closed
forward foreign currency contracts and unrealized for open contracts. The Funds
bear the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
None of the Funds entered into any futures contracts or forward foreign
currency contracts during the year ended December 31, 2004.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange ("Exchange") on each day the Exchange is open for trading.
All income, expenses (other than the Class A, Class B and Class C 12b-1 service
and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer
Agent fees) and realized and unrealized gains (losses) of a fund are allocated
to each class proportionately on a daily basis for purposes of determining the
net asset value of each class. Redemption fees are accounted for as an addition
69
Columbia Acorn Family of Funds
>Notes to Financial Statements, continued
to paid in capital and are allocated to each class proportionately for purposes
of determining the net asset value of each class.
>Custody fees/credits
Custody fees are reduced based on each Fund's cash balances maintained with the
custodian. The Funds could have invested a portion of the assets utilized in
connection with the expense offset arrangement in an income-producing asset if
they had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses in the Statements of Operations.
>Federal income taxes
The Funds have complied with the provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all their taxable income, as well as any net realized gain on sales
of investments and foreign currency transactions reportable for federal income
tax purposes. Accordingly, the Funds paid no federal income taxes and no federal
income tax provision was required.
>Foreign capital gains taxes
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 30%. The Funds accrue for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
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 accounting
principles generally accepted in the United States of America. Reclassifications
are made to the Funds' capital accounts for permanent tax differences to reflect
income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.
For the year ended December 31, 2004, permanent differences resulting
primarily from differing treatments for distribution reclassifications, foreign
currency transactions, passive foreign investment company ("PFIC") adjustments,
foreign capital gains tax adjustments, REIT adjustments, net operating loss
reclassifications and redemption based payments treated as dividend paid
deduction were identified and reclassified among the components of the Funds'
net assets as follows:
UNDISTRIBUTED OR
ACCUMULATED ACCUMULATED NET
INVESTMENT NET REALIZED PAID IN UNREALIZED
INCOME (LOSS) GAIN (LOSS) CAPITAL APPRECIATION
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ (3,401) $ (31,294) $34,695 $ --
Columbia Acorn
International (115) (1,100) -- 1,215
Columbia Acorn USA 6,612 2 (6,614) --
Columbia Acorn
International
Select 13 (13) -- --
Columbia Acorn Select 8,958 (14,760) 5,802 --
Net investment income and net realized gains (losses), as disclosed on the
Statements of Operations, and net assets were not affected by these
reclassifications.
The tax character of distributions paid during the years ended December
31, 2004 and December 31, 2003 was as follows:
LONG-
TERM
ORDINARY CAPITAL
DECEMBER 31, 2004 INCOME* GAINS
- ------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 30,840 $ 441,598
Columbia Acorn International 16,930 --
Columbia Acorn USA -- 4,748
Columbia Acorn
International Select 157 --
Columbia Acorn Select -- 25,216
LONG-
TERM
ORDINARY CAPITAL
DECEMBER 31, 2003 INCOME* GAINS
- ------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ -- $ 9,917
Columbia Acorn International 5,935 --
Columbia Acorn USA -- --
Columbia Acorn International Select 19 --
Columbia Acorn Select 736 3,445
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of December 31, 2004, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM NET UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 13,818 $ 195,429 $ 5,504,772
Columbia Acorn
International 31,140 -- 700,391
Columbia Acorn USA -- 13,435 280,331
Columbia Acorn
International
Select 1,031 -- 14,562
Columbia Acorn Select 896 6,548 243,766
* The difference between book-basis and tax-basis net unrealized
appreciation is primarily due to deferral of losses from wash sales and
PFIC adjustments.
1-800-922-6769
70
The following capital loss carryforwards 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 COLUMBIA ACORN COLUMBIA ACORN
EXPIRATION INTERNATIONAL USA
- ------------------------------------------------------------------
(IN THOUSANDS)
2009 $ -- $ 2,529*
2010 14,102 506
2011 48,477 --
- ------------------------------------------------------------------
TOTAL $ 62,579 $ 3,035
YEAR OF COLUMBIA ACORN
EXPIRATION INTERNATIONAL SELECT
- ------------------------------------------------
(IN THOUSANDS)
2009 $ 16,135
2010 12,528
2011 2,488
- ------------------------------------------------
TOTAL $ 31,151
* Of these carryforwards, $2,529 (expiring in 2009) remains from the
Columbia Acorn USA's merger with Stein Roe Small Company Growth Fund on
7/26/2002. Utilization of Stein Roe Small Company Growth Fund's losses
could be subject to limitations imposed by the Internal Revenue Code.
The following capital loss carryforwards were utilized during the year
ended December 31, 2004:
- ------------------------------------------------
(IN THOUSANDS)
Columbia Acorn International $173,711
Columbia Acorn USA 10,064
Columbia Acorn International Select 6,949
================================================
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes
continuing investment supervision to the Funds and is responsible for the
overall management of the Funds' business affairs. Prior to April 1, 2004,
Columbia Management Group, Inc. was a wholly-owned subsidiary of Fleet National
Bank, which in turn was a wholly-owned subsidiary of FleetBoston Financial
Corporation ("Fleet"). On April 1, 2004, Fleet was acquired by BOA.
Under the Funds' investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rates shown in the table below
for each fund.
COLUMBIA ACORN FUND
- ----------------------------------------------------------
Net asset value:
On the first $700 million 0.75%
Next $1.3 billion 0.70%
Net assets in excess of $2 billion 0.65%
COLUMBIA ACORN INTERNATIONAL
- ----------------------------------------------------------
Net asset value:
On the first $100 million 1.20%
Next $400 million 0.95%
Net assets in excess of $500 million 0.75%
COLUMBIA ACORN USA
- ----------------------------------------------------------
Net asset value:
On the first $200 million 0.95%
Net assets in excess of $200 million 0.90%
COLUMBIA ACORN INTERNATIONAL SELECT
- ----------------------------------------------------------
On average daily net assets: 0.95%
COLUMBIA ACORN SELECT
- ----------------------------------------------------------
Net asset value:
On the first $700 million 0.90%
Net assets in excess of $700 million 0.85%
Prior to August 1, 2004:
On average daily net assets: 0.90%
For the year ended December 31, 2004, the Funds' effective investment advisory
fee rates were as follows:
- ----------------------------------------------------------
Columbia Acorn Fund 0.66%
Columbia Acorn International 0.82
Columbia Acorn USA 0.91
Columbia Acorn International Select 0.95
Columbia Acorn Select 0.89
==========================================================
In accordance with the terms of the NYAG Settlement (as defined and
discussed further under Note 8 to these Financial Statements - "Legal
Proceedings"), Columbia WAM waived a portion of the fees payable under the
Funds' investment management agreement so that those fees are retained at the
following rates as a percent of average daily net assets: COLUMBIA ACORN FUND -
0.740% - up to $700 million; 0.690% - $700 million to $2 billion; 0.640% - $2
billion to $6 billion; 0.630% - $6 billion and over; COLUMBIA ACORN
INTERNATIONAL - 1.190% - up to $100 million; 0.940% - $100 million to $500
million; 0.740% - $500 million and over; COLUMBIA ACORN USA - 0.940% - up to
$200 million; 0.890% - $200 million and over; COLUMBIA ACORN INTERNATIONAL
SELECT - 0.940% on average daily net assets; COLUMBIA ACORN SELECT - 0.850% - up
to $700 million; 0.800% - $700 million and over. The fee waiver was
71
Columbia Acorn Family of Funds
>Notes to Financial Statements, continued
effective as of February 10, 2005 but applied as if it had gone into effect on
December 1, 2004. The financial statements, as of December 31, 2004, are not
reflective of these changes.
>Expense Limit
Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses
(exclusive of interest, taxes and extraordinary expenses, if any) exceeding
1.45% of the average annual net assets for Columbia Acorn International Select
Class Z shares and 1.35% of the average annual net assets for Columbia Acorn
Select Class Z shares.
Columbia WAM provides administrative services and receives an
administration fee from the Funds at the following annual rates:
COLUMBIA ACORN TRUST
- ----------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net assets in excess of $16 billion 0.03%
For the year ended December 31, 2004 each Fund's effective administration
fee rate was 0.048%.
Prior to August 1, 2004, Columbia WAM was paid at the annual rate of 0.05%
of each Fund's average daily net assets.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Funds' principal underwriter and receives no
compensation on the sale of Class Z shares.
Each Fund has adopted a 12b-1 plan which requires it to pay the CFDI a
service and distribution fee on the net assets attributable to Class A, Class B
and Class C shares.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Funds. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses. Effective February 1, 2004 the Transfer
Agent made the decision to waive the reimbursement for certain out-of-pocket
expenses. Prior to October 1, 2004, the Transfer Agent received a fee, paid
monthly, at the annual rate of $28.00 per open account. Prior to February 1,
2004, the Transfer Agent was entitled to receive a monthly transfer agent fee at
the annual rate of 0.07% of the average daily net assets attributable to Class
A, Class B and Class C shares plus flat-rate charges based on the number of
shareholder accounts and transactions for Class A, Class B, Class C and Class Z
shares.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Funds for
the year ended December 31, 2004, including each Fund's portion of a special
payment to the chairman of the board of $25,000 for extraordinary time and
effort spent on board matters during 2004, were as follows:
- ----------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $656
Columbia Acorn International 95
Columbia Acorn USA 41
Columbia Acorn International Select 2
Columbia Acorn Select 23
==========================================================
In April 2004, the Board of Trustees appointed a Chief Compliance Officer
to the Trust in accordance with federal securities regulations. The Funds will
pay their pro-rata share of the expenses associated with the Office of the Chief
Compliance Officer. These expenses are disclosed separately as "Compliance fees"
on the Statements of Operations.
The Trust provides a deferred compensation plan for its trustees. Under
that plan, a trustee may elect to defer all or a portion of his or her
compensation. Amounts deferred are retained by the Trust and represent an
unfunded obligation of the Trust. The value of amounts deferred is determined by
reference to the change in value of Class Z shares of one or more series of the
Trust or a money market fund as specified by the trustee. Benefits under the
deferred compensation plan are payable upon retirement.
An affiliate may include any company in which a fund owns five percent or
more of its outstanding voting securities. On December 31, 2004, Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select each held five percent or
more of the outstanding voting securities of one or more companies. Details of
investments in those affiliated companies are presented on pages 34, 48 and 55,
respectively.
During the year ended December 31, 2004, the Funds engaged in purchase and
sale transactions with funds that have a common investment advisor (or
affiliated investment advisors), common Directors/Trustees, and/or common
1-800-922-6769
72
Officers. Those transactions complied with Rule 17a-7 under the Investment
Company Act of 1940 and were as follows:
FUNDS PURCHASES SALES
- ----------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 33,441 $ 741
Columbia Acorn International 3,657 13,528
Columbia Acorn USA -- 1,963
Columbia Acorn International Select 608 4,794
Columbia Acorn Select -- 889
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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 Statements of Operations. No amounts were borrowed under this facility for
the year ended December 31, 2004.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2004 were:
COLUMBIA ACORN FUND
- ----------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 2,641,143
Proceeds from sales 2,226,641
==========================================================
COLUMBIA ACORN INTERNATIONAL
- ----------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 688,543
Proceeds from sales 800,140
==========================================================
COLUMBIA ACORN USA
- ----------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 141,569
Proceeds from sales 127,021
==========================================================
COLUMBIA ACORN INTERNATIONAL SELECT
- ----------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 33,091
Proceeds from sales 31,991
==========================================================
COLUMBIA ACORN SELECT
- ----------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 516,805
Proceeds from sales 297,997
==========================================================
7. Redemption Fees
For the year ended December 31, 2004, the redemption fees for the Class Z shares
of Columbia Acorn International and Columbia Acorn International Select amounted
to $85,858 and $3,572, respectively.
8. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG 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. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia 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 of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other
73
Columbia Acorn Family of Funds
>Notes to Financial Statements, continued
policies and procedures; and retain an independent distribution consultant (see
below). The NYAG Settlement also, among other things, requires Columbia and its
affiliates, Banc of America Capital Management, LLC and BACAP Distributors, LLC
to reduce management fees paid by the Columbia Family of Funds, Nations Funds
and other related mutual funds collectively by $32 million per year for five
years, for a projected total of $160 million in management fee reductions based
on net assets as of March 15, 2004. Pursuant to the procedures set forth in the
SEC Order, the settlement amounts 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 independent trustees of the funds. The
distribution plan must be based on a methodology developed in consultation with
Columbia and the independent trustees of the funds and not unacceptable to the
staff of the SEC. More specific information on the distribution plan will be
communicated by Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are defendants in
several derivative and class action lawsuits that allege, in summary, defendants
permitted investors to engage in improper trading of shares of various funds in
violation of certain federal and state laws. All of these lawsuits have been
consolidated with similar suits in a Multi-District Litigation proceeding in
Baltimore, Maryland, and consolidated class action and derivative complaints
have been filed.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV.
Columbia WAM and the Trustees of the Trust are also defendants in a
lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments
to brokers as an incentive for the brokers to market the Funds over other mutual
funds to investors. The complaint alleges Columbia WAM and the Trustees of the
Trust breached certain common law duties and federal laws.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. 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 Trust funds 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 complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to the
Columbia WAM and affiliated advisers.
The Trust and Columbia WAM intend to defend these suits vigorously. The
Trust does not believe that the pending actions will have a material adverse
effect on the financial statements of any Fund, and Columbia WAM does not
believe that the pending actions will have a material adverse effect on its
ability to perform under its contracts with the Funds.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Funds.
In connection with the events described in detail above, various parties
have filed suit against certain funds, their Boards and/or BOA (and affiliated
entities). These suits are ongoing. Accordingly, an estimate of the financial
impact of this litigation on any fund, if any, cannot currently be made.
For the year ended December 31, 2004, Columbia Management has assumed
consulting services and legal fees incurred by the Funds in connection with
these matters and the amounts are as follows:
- ----------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 1,116
Columbia Acorn International 162
Columbia Acorn USA 69
Columbia Acorn International Select 4
Columbia Acorn Select 90
==========================================================
1-800-922-6769
74
Columbia Thermostat Fund
>Statement of Investments, December 31, 2004
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- -----------------------------------------------------------------------------
>BOND FUNDS: 59.4%
6,761 Columbia Intermediate Bond Fund,
Class Z $ 61,593
3,451 Columbia Federal Securities Fund,
Class Z 36,995
2,795 Columbia High Yield Fund,
Class Z 24,623
- -----------------------------------------------------------------------------
TOTAL BOND FUNDS (COST: $122,197) 123,211
>STOCK FUNDS: 40.0%
2,291 Columbia Growth Stock Fund,
Class Z (b) 20,683
1,134 Columbia Growth & Income Fund,
Class Z 20,598
628 Columbia Acorn Fund,
Class Z 16,623
466 Columbia Mid Cap Value Fund,
Class Z (b) 12,465
590 Columbia Acorn Select,
Class Z 12,463
- -----------------------------------------------------------------------------
TOTAL STOCK FUNDS (COST: $66,413) 82,832
SHORT-TERM OBLIGATIONS: 0.4%
$ 740 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% Collateralized by a
Federal National Mortgage
Association Note, maturing
1/05/05, market value $760
(repurchase proceeds: $740) 740
- -----------------------------------------------------------------------------
(AMORTIZED COST: $740) 740
-----------
TOTAL INVESTMENTS: 99.8% 206,783
(COST: $189,350) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.2% 481
-----------
TOTAL NET ASSETS: 100% $ 207,264
=============================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $189,862 and net unrealized appreciation was $16,921 consisting of
gross unrealized appreciation of $17,021 and gross unrealized depreciation
of $100.
(b) Non-income producing security.
75
Columbia Thermostat Fund
>Statement of Assets and Liabilities
DECEMBER 31, 2004
- -----------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS
Unaffiliated investments, at value (cost $740) $ 740
Affiliated investments, at value (cost: $188,610) 206,043
Cash 1
Receivable for:
Fund shares sold 304
Dividends and interest 473
Expense reimbursement due from Advisor 80
---------------
Total Assets 207,641
LIABILITIES
Payable for:
Fund shares redeemed 148
Transfer agent fees 20
Custody fees 1
Legal & audit fees 18
Reports to shareholders 71
12b-1 Service & Distribution fees 105
Other liabilities 14
---------------
Total Liabilities 377
---------------
NET ASSETS $ 207,264
===============
COMPOSITION OF NET ASSETS:
Paid in capital $ 186,468
Undistributed net investment income 15
Accumulated net realized gain 3,348
Net unrealized appreciation on investments 17,433
---------------
NET ASSETS $ 207,264
===============
Net asset value per share -- Class A (a) $ 13.11
(Net assets/shares) ($77,092/5,879)
Maximum offering price per share -- Class A (b) $ 13.91
(Net asset value per share/front-end sales charge) ($13.11/0.9425)
Net asset value and offering price per share -- Class B (a) $ 13.14
(Net assets/shares) ($78,040/5,941)
Net asset value and offering price per share -- Class C (a) $ 13.13
(Net assets/shares) ($31,161/2,372)
Net asset value, offering and redemption
price per share -- Class Z $ 13.12
(Net assets/shares) ($20,971/1,598)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See accompanying notes to financial statements.
1-800-922-6769
76
Columbia Thermostat Fund
>Statement of Operations
For the Year Ended December 31, 2004
(IN THOUSANDS)
- -----------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends from affiliated investment company shares $ 4,834
Interest income 12
-----------
Total Investment Income 4,846
EXPENSES:
Management fee 177
Administration fee 84
12b-1 Service and Distribution fees:
Class A 225
Class B 631
Class C 276
Transfer agent fees:
Class A 107
Class B 154
Class C 54
Class Z 26
Trustees' fees 4
Custody fees 15
Legal & audit fees 29
Reports to shareholders 145
Registration & blue sky fees 97
Compliance fees 3
Non-recurring costs (See Note 7) 16
Other expenses 8
-----------
Total expenses 2,051
Less custody fees paid indirectly --*
Less fees waived by Distributor (65)
Less reimbursement of expenses by Advisor (403)
Less reimbursement of expenses by Transfer Agent (55)
Non-recurring costs reimbursed (See Note 7) (16)
-----------
Net Expenses 1,512
-----------
Net Investment Income 3,334
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Affiliated investments 2,200
Distributions from affiliated investment company shares 1,492
-----------
Net realized gain 3,692
-----------
Net change in unrealized appreciation on investments 8,154
-----------
Net realized and unrealized gain 11,846
-----------
Net Increase in Net Assets from Operations $ 15,180
===========
* Rounds to less than $500.
See accompanying notes to financial statements.
77
Columbia Thermostat Fund
>Statement of Changes in Net Assets
Year ended Year ended
INCREASE IN NET ASSETS December 31, December 31,
----------- -----------
(IN THOUSANDS) 2004 2003 (a)
OPERATIONS:
Net investment income $ 3,334 $ 696
Net realized gain on investments and distributions
from investment company shares 3,692 272
Net change in net unrealized appreciation
on investments 8,154 9,219
----------- -----------
Net Increase from Operations 15,180 10,187
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- Class A (1,488) (395)
Net realized gain -- Class A (141) (21)
Net investment income -- Class B (997) (108)
Net realized gain -- Class B (146) (30)
Net investment income -- Class C (383) (43)
Net realized gain -- Class C (61) (10)
Net investment income -- Class Z (450) (160)
Net realized gain -- Class Z (36) (14)
----------- -----------
Total Distributions to Shareholders (3,702) (781)
SHARE TRANSACTIONS:
Subscriptions -- Class A 42,302 40,815
Distributions reinvested -- Class A 1,425 373
Redemptions -- Class A (13,080) (1,441)
----------- -----------
Net Increase -- Class A 30,647 39,747
Subscriptions -- Class B 27,802 48,741
Distributions reinvested -- Class B 1,024 125
Redemptions -- Class B (6,671) (1,176)
----------- -----------
Net Increase -- Class B 22,155 47,690
Subscriptions -- Class C 12,939 19,668
Distributions reinvested -- Class C 378 44
Redemptions -- Class C (4,000) (1,015)
----------- -----------
Net Increase -- Class C 9,317 18,697
Subscriptions -- Class Z 8,408 9,094
Distributions reinvested -- Class Z 470 166
Redemptions -- Class Z (3,140) (1,023)
----------- -----------
Net Increase -- Class Z 5,738 8,237
----------- -----------
Net Increase from Share Transactions 67,857 114,371
----------- -----------
Total Increase in Net Assets 79,335 123,777
----------- -----------
NET ASSETS:
Beginning of period 127,929 4,152
----------- -----------
End of period $ 207,264 $ 127,929
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME $ 15 $ --
=========== ===========
(a) Class A, Class B and Class D commenced operations March 3, 2003. On
October 13, 2003, Class D was redesignated Class C.
See accompanying notes to financial statements.
1-800-922-6769
78
Columbia Thermostat Fund
>Statement of Changes in Net Assets, continued
Year ended Year ended
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31,
----------- -----------
(IN THOUSANDS) 2004 2003 (a)
Subscriptions -- Class A 3,381 3,529
Shares issued in reinvestment and
capital gains -- Class A 110 31
Less shares redeemed -- Class A (1,049) (123)
----------- -----------
Net Increase -- Class A 2,442 3,437
Subscriptions -- Class B 2,213 4,268
Shares issued in reinvestment and
capital gains -- Class B 79 10
Less shares redeemed -- Class B (530) (99)
----------- -----------
Net Increase -- Class B 1,762 4,179
Subscriptions -- Class C 1,028 1,712
Shares issued in reinvestment and
capital gains -- Class C 29 4
Less shares redeemed -- Class C (316) (85)
----------- -----------
Net Increase -- Class C 741 1,631
Subscriptions -- Class Z 669 821
Shares issued in reinvestment and
capital gains -- Class Z 36 14
Less shares redeemed -- Class Z (250) (91)
----------- -----------
Net Increase -- Class Z 455 744
----------- -----------
Net increase in Shares of Beneficial Interest 5,400 9,991
----------- -----------
(a) Class A, Class B and Class D commenced operations March 3, 2003. On
October 13, 2003, Class D was redesignated Class C.
See accompanying notes to financial statements.
79
Columbia Thermostat Fund
>Financial Highlights
Inception
September 25,
2002 through
Class Z Year ended December 31, December 31,
-------------------------- ------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.31 $ 10.41 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.31 0.19 0.04
Net realized and unrealized gain 0.82 1.87 0.37
--------- --------- ------------
Total from Investment Operations 1.13 2.06 0.41
--------- --------- ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.29) (0.16) --
From net realized gains (0.03) 0.00(b) --
--------- --------- ------------
Total Distributions Declared to Shareholders (0.32) (0.16) --
--------- --------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.12 $ 12.31 $ 10.41
========= ========= ============
Total Return (c)(d) 9.17% 19.79% 4.10%(e)
========= ========= ============
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 0.25%(g) 0.38%(g) 0.62%(h)(i)
Net investment income 2.48%(g) 1.64%(g) 1.41%(h)(i)
Reimbursement 0.21% 0.88% 19.94%(h)
Portfolio turnover rate 67% 61% 11%(e)
Net assets at end of period (IN MILLIONS) $ 21 $ 14 $ 4
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) In accordance with a requirement of the Securities and Exchange
Commission, the ratios reflect total expenses prior to the reduction of
custody fees for cash balances it maintains with the custodian ("custody
fees paid indirectly"). The ratios of expenses to average daily net assets
and net investment income to average daily net assets net of custody fees
paid indirectly would have been 0.60% and 1.43%, respectively for the
period ended December 31, 2002.
See accompanying notes to financial statements.
1-800-922-6769
80
Columbia Thermostat Fund
>Notes to Financial Statements, continued
1. Nature of Operations
Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust (the
"Trust"), an open-end management investment company organized as a Massachusetts
business trust, commenced operations September 25, 2002. The Fund may issue an
unlimited number of shares. The Fund currently offers four classes of shares:
Class A, Class B, Class C and Class Z. On October 13, 2003, Class D was
redesignated Class C.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") may be assessed to Class A shares purchased
without an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares.
The financial highlights for Class A, Class B and Class C shares are
presented in a separate annual report. The annual report for the other series of
the Trust is also included in this report.
The investment objective of the Fund is to provide long-term total return.
The Fund pursues its investment objective by investing in shares of other mutual
funds. As a `fund of funds', under normal circumstances, the Fund allocates at
least 95% of its net assets among a selected group of stock and bond mutual
funds (the "Portfolio Funds") according to the current level of the Standard &
Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's
investment adviser. As of December 31, 2004, the Fund invested in five stock
Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia
Growth & Income Fund, Columbia Mid Cap Value Fund and Columbia Growth Stock
Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia
Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest
up to 5% of its net assets plus any cash received that day in cash, repurchase
agreements, high quality short-term paper and government securities.
2. Significant Accounting Policies
>Security valuation
Investments in Portfolio Funds are valued at their net asset value as reported
by the underlying funds. Repurchase agreements, high quality short-term paper
and government securities having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis, which approximates fair
value.
>Repurchase agreements
The Fund may engage in repurchase agreement transactions. The Fund, through its
custodian, receives delivery of underlying securities collateralizing each
repurchase agreement. The Fund's investment advisor determines that the value of
the underlying securities is at all times at least equal to the resale price. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Security transactions and investment income
Portfolio Fund transactions are accounted for on the trade date (date the order
to buy or sell is executed). Dividend income and realized gain distributions
from other funds are recorded on the ex-dividend date. Interest income is
recorded on the accrual basis and includes amortization of discounts on
short-term debt obligations when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis. Awards from class action litigation may be recorded as a
reduction of cost by Portfolio Funds. If the Portfolio Fund no longer owns the
applicable securities, the proceeds are recorded as realized gains.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange ("Exchange") on each day the Exchange is open for trading.
All income, expenses (other than the Class A, Class B and Class C 12b-1 service
and distribution fees, and Class A, Class B, Class C and Class Z Transfer Agent
fees) and realized and unrealized gains (losses) of the Fund are
81
Columbia Thermostat Fund
>Notes to Financial Statements, continued
allocated to each class proportionately on a daily basis for purposes of
determining the net asset value of each class.
>Custody fees/credits
Custody fees are reduced based on the Fund's cash balance maintained with the
custodian. 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. The amount is disclosed as a
reduction of total expenses in the Statement of Operations.
>Federal income taxes
The Fund has complied with the provisions of the Internal Revenue Code available
to regulated investment companies and, in the manner provided therein,
distributes all of its taxable income, as well as any net realized gain on sales
of Portfolio Fund shares and any distributions of net realized gains received by
the Fund from its Portfolio Funds, reportable for federal income tax purposes.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. Reclassifications
are made to the Fund's capital accounts for permanent tax differences to reflect
income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.
For the year ended December 31, 2004, permanent differences resulting
primarily from differing treatments for redemption based payments treated as
dividend paid deductions were identified and reclassified among the components
of the Fund's net assets as follows:
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME GAIN PAID IN CAPITAL
- ------------------------------------------------------------------------
(IN THOUSANDS)
$(1) $(166) $167
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by these
reclassifications.
The tax character of distributions paid during the year ended December 31,
2004 and December 31, 2003 was as follows:
DECEMBER 31, DECEMBER 31,
2004 2003
- ---------------------------------------------------------------------
(IN THOUSANDS)
Distributions paid from:
Ordinary Income* $ 3,645 $ 771
Long-Term
Capital Gains 57 10
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of December 31, 2004, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM NET UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- ------------------------------------------------------------------------
(IN THOUSANDS)
$2,436 $1,446 $16,921
* The difference between book-basis and tax-basis net unrealized
appreciation is primarily due to tax deferral of losses on wash sales.
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes
continuing investment supervision to the Fund and is responsible for the overall
management of the Fund's business affairs. Prior to April 1, 2004, Columbia
Management Group, Inc. was a wholly-owned subsidiary of Fleet National Bank,
which in turn was a wholly-owned subsidiary of FleetBoston Financial Corporation
("Fleet"). On April 1, 2004, Fleet was acquired by BOA.
Under the Fund's investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's
average daily net assets.
>Expense Limit
Columbia WAM has agreed to contractually reimburse the direct operating expenses
(exclusive of interest and fees on borrowings and expenses associated with the
Fund's investment in other investment companies) exceeding 0.25% of the average
annual net assets of the Fund's Class Z shares. Prior to August 1, 2003 Columbia
WAM had agreed to voluntarily reimburse the direct operating expenses (exclusive
of interest and fees on borrowings and expenses associated with the Fund's
investment in other investment
1-800-922-6769
82
companies) exceeding 0.60% of the average annual net assets of the Fund's Class
Z shares.
Columbia WAM provides administrative services and receives an
administration fee from the Fund at the following annual rates:
COLUMBIA ACORN TRUST
- -------------------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset value in excess of $16 billion 0.03%
For the year ended December 31, 2004 the Fund's effective administration
fee rate was 0.048%.
Prior to August 1, 2004, Columbia WAM was paid at annual rate of 0.05% of
the Fund's average daily net assets.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Fund's principal indirect underwriter and receives no
compensation on the sale of Class Z shares.
The Fund has adopted a 12b-1 plan which requires it to pay CFDI a service
and distribution fee on net assets attributable to Class A, Class B and Class C
shares.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Fund. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses. Effective February 1, 2004 the Transfer
Agent made the decision to waive the reimbursement for certain out-of-pocket
expenses. Prior to October 1, 2004, the Transfer Agent received a fee, paid
monthly, at the annual rate of $28.00 per open account. Prior to February 1,
2004, the Transfer Agent was entitled to receive a monthly transfer agent fee at
the annual rate of 0.07% of the average daily net assets attributable to Class
A, Class B and Class C shares plus flat-rate charges based on the number of
shareholder accounts and transactions for Class A, Class B, Class C and Class Z
shares.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Fund for
the year ended December 31, 2004, including the Fund's portion of a special
payment to the chairman of the board of $25,000 for extraordinary time and
effort spent on board matters during 2004, were $3,722.
In April 2004, the Board of Trustees appointed a Chief Compliance Officer
to the Trust in accordance with federal securities regulations. The Fund will
pay its pro-rata share of the expenses associated with the Office of the Chief
Compliance Officer. This expense is disclosed separately as "Compliance fees" on
the Statement of Operations.
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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. No amounts were borrowed under this facility for
the year ended December 31, 2004.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2004 were:
- ----------------------------------------------------------
(IN THOUSANDS)
Purchases $187,095
Proceeds from sales 118,286
==========================================================
7. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia
Management"), the advisor to the Columbia Funds, and CFDI (collectively with
Columbia Management, "Columbia"), the distributor of the shares of the Columbia
Funds, the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG 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. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust
83
Columbia Thermostat Fund
>Notes to Financial Statements, continued
expects to comply voluntarily with certain requirements, including: the election
of an independent board chairman, which the Board had done well in advance of
the regulatory proceedings; and the appointment of one or more individuals to
monitor legal compliance and to add another level of assurance that the
management fees to be charged to the Funds are negotiated at arm's length and
are reasonable.
Under the terms of the SEC Order, Columbia 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 of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other policies and
procedures; and retain an independent distribution consultant (see below). The
NYAG Settlement also, among other things, requires Columbia and its affiliates,
Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce
management fees paid by the Columbia Family of Funds, Nations Funds and other
related mutual funds collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions based on net assets
as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the
settlement amounts 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 independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and not unacceptable to the staff of the SEC.
More specific information on the distribution plan will be communicated by
Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are defendants in
several derivative and class action lawsuits that allege, in summary, defendants
permitted investors to engage in improper trading of shares of various funds in
violation of certain federal and state laws. All of these lawsuits have been
consolidated with similar suits in a Multi-District Litigation proceeding in
Baltimore, Maryland, and consolidated class action and derivative complaints
have been filed.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV.
Columbia WAM and the Trustees of the Trust are also defendants in a
lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments
to brokers as an incentive for the brokers to market the Funds over other mutual
funds to investors. The complaint alleges Columbia WAM and the Trustees of the
Trust breached certain common law duties and federal laws.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. 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 Trust funds 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 complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to the
Columbia WAM and affiliated advisers.
The Trust and Columbia WAM intend to defend these suits vigorously. The
Trust does not believe that the pending actions will have a material adverse
effect on the financial statements of any Fund, and Columbia WAM does not
believe that the pending actions will have a material adverse effect on its
ability to perform under its contracts with the Funds.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund.
In connection with the events described in detail above, various parties
have filed suit against certain funds, their Boards and/or BOA (and affiliated
entities). These suits are ongoing. Accordingly, an estimate of the financial
impact of this litigation on any fund, if any, cannot currently be made.
For the year ended December 31, 2004, Columbia Management has assumed
$16,377 of consulting services and legal fees incurred by the Fund in connection
with these matters.
1-800-922-6769
84
Report of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
COLUMBIA ACORN TRUST:
In our opinion, the accompanying statements of assets and liabilities, including
the statements of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn International Select, Columbia
Acorn Select and Columbia Thermostat Fund (each a series of Columbia Acorn
Trust, hereinafter referred to as the "Funds") at December 31, 2004, the results
of their operations, the changes in their net assets and the financial
highlights for the year then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2004 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion. The statement
of changes for the year ended December 31, 2003 and the financial highlights of
the Funds for the periods ended December 31, 2003 and prior were audited by
other independent auditors whose reported dated February 6, 2004 expressed an
unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
Chicago, Illinois
February 14, 2005
85
Columbia Acorn Family of Funds
>Unaudited Information
FEDERAL INCOME TAX INFORMATION (IN THOUSANDS)
COLUMBIA ACORN
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $655,225.
100.00% of the ordinary income distributed by the Fund, for the year ended
December 31, 2004, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 100.00%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
COLUMBIA ACORN INTERNATIONAL
Foreign taxes paid during the fiscal year ended December 31, 2004, amounting to
$3,925 ($0.05 per share) are expected to be passed through to shareholders as
100% allowable foreign tax credits on Form 1099-DIV for the year ended December
31, 2004.
Gross income derived from sources within foreign countries amounted to
$39,927 ($0.56 per share) for the fiscal year ended December 31, 2004.
For non-corporate shareholders 100.00%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
COLUMBIA ACORN USA
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $18,183.
COLUMBIA ACORN INTERNATIONAL SELECT
Foreign taxes paid during the fiscal year ended December 31, 2004, amounting to
$87 ($0.03 per share) are expected to be passed through to shareholders as 100%
allowable foreign tax credits on Form 1099-DIV for the year ended December 31,
2004.
Gross income derived from sources within foreign countries amounted to
$838 ($0.26 per share) for the fiscal year ended December 31, 2004.
For non-corporate shareholders 100.00%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
COLUMBIA ACORN SELECT
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $36,867.
COLUMBIA THERMOSTAT FUND
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $1,530.
12.29% of the ordinary income distributed by the Fund, for the year ended
December 31, 2004, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 11.21%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
1-800-922-6769
86
Changes in Independent Registered Public Accounting Firm
Effective April 13, 2004, the audit committee of the Trust requested that Ernst
& Young LLP ("E&Y") resign as the auditors of the Funds. Also effective July 14,
2004, upon the recommendation of the audit committee, the Trust selected
PricewaterhouseCoopers LLP ("PWC") as independent registered public accounting
firm to audit the books and records of each Fund for its fiscal year ending
December 31, 2004. The cessation of the relationship with E&Y was based on the
impairment of E&Y's independence resulting from the consummation of the merger
of FleetBoston Financial Corporation and Bank of America Corporation and
accordingly, E&Y's ability to provide audit services to the Funds.
E&Y's report on the financial statements of each Fund for the past two
years did not contain an adverse opinion or disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting principles.
During the period E&Y was engaged, there were no disagreements with E&Y on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which, if not resolved to E&Y's satisfaction, would
have caused it to make reference to that matter in connection with its report.
87
Columbia Acorn Family of Funds Class Z Share Information
MINIMUM INITIAL INVESTMENT IN
COLUMBIA ACORN INTERNATIONAL,
COLUMBIA ACORN INTERNATIONAL
SELECT, COLUMBIA ACORN SELECT,
COLUMBIA THERMOSTAT FUND $1,000
$1,000 FOR AN IRA
MINIMUM INITIAL INVESTMENT
IN COLUMBIA ACORN FUND
AND COLUMBIA ACORN USA $50,000
MINIMUM SUBSEQUENT
INVESTMENT IN ALL FUNDS $50
EXCHANGE FEE NONE
COLUMBIA ACORN FUND ACRNX
Management Fee 0.66%
12b-1 Fee None
Other Expenses 0.15%
------------
Expense Ratio 0.81%
COLUMBIA ACORN INTERNATIONAL ACINX
Management Fee 0.82%
12b-1 Fee None
Other Expenses 0.26%
------------
Expense Ratio 1.08%
COLUMBIA ACORN USA AUSAX
Management Fee 0.91%
12b-1 Fee None
Other Expenses 0.18%
------------
Expense Ratio 1.09%
COLUMBIA ACORN INTERNATIONAL SELECT ACFFX
Management Fee 0.95%
12b-1 Fee None
Other Expenses 0.50%
------------
Net Expense Ratio 1.45%
COLUMBIA ACORN SELECT ACTWX
Management Fee 0.89%
12b-1 Fee None
Other Expenses 0.24%
------------
Expense Ratio 1.13%
COLUMBIA THERMOSTAT FUND COTZX
Management Fee 0.10%
12b-1 Fee None
Other Expenses 0.15%
------------
Net Expense Ratio 0.25%*
Fees and expenses are for the year ended December 31, 2004 and for Columbia
Acorn International Select and Columbia Thermostat Fund include the effect of
Columbia Wanger Asset Management's undertaking to reimburse those funds for any
ordinary operating expenses, net of custody fees paid indirectly, exceeding
1.45% and 0.25% of their average net assets, respectively. The expense
limitation for Columbia Acorn International Select is voluntary and can be
terminated by either the Fund or Columbia Wanger Asset Management, L.P. on 30
days' notice. Columbia Thermostat Fund's reimbursement arrangement is
contractual through April 30, 2005. The Fund's adviser and/or affiliates have
contractually agreed to waive a portion of "other expenses" through April 30,
2005.
* Does not include estimated fees and expenses of 0.86% incurred by the Fund
from the underlying portfolio funds.
1-800-922-6769
88
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89
Board of Trustees and Management of Columbia Acorn Funds
Each trustee serves a term of unlimited duration, provided that a majority of
trustees always has been elected by shareholders. The trustees appoint their own
successors, provided that at least two-thirds of the trustees, after such
appointment, have been elected by shareholders. Shareholders may remove a
trustee, with or without cause, upon the vote of two-thirds of Acorn's
outstanding shares at any meeting called for that purpose. A trustee may be
removed, with or without cause, upon the vote of a majority of the trustees. The
names of the trustees and officers of Acorn, the date each was first elected or
appointed to office, their principal business occupations during at least the
last five years and other directorships they hold, are shown below. Each trustee
serves in such capacity for each of the six series of Acorn. Mr. Wanger also
serves as a trustee for each of the four series of the Wanger Advisors Trust.
THE ADDRESS FOR THE TRUSTEES AND OFFICERS OF THE TRUST IS COLUMBIA WANGER ASSET
MANAGEMENT, L.P., 227 WEST MONROE STREET, SUITE 3000, CHICAGO, ILLINOIS 60606.
NUMBER OF
NAME, POSITION(S) YEAR FIRST PORTFOLIOS IN
WITH COLUMBIA ACORN ELECTED OR PRINCIPAL OCCUPATION(S) FUND COMPLEX
AND AGE AT APPOINTED DURING OVERSEEN BY OTHER
JANUARY 1, 2005 TO OFFICE* PAST FIVE YEARS TRUSTEE/OFFICER DIRECTORSHIPS
- ------------------------ ------------ --------------------------------------- --------------- ---------------------------------
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF COLUMBIA ACORN:
MARGARET EISEN, 51, 2002 Chief Investment Officer, EAM 6 Antigenics, Inc. (biotechnology
Trustee International LLC since 2003; former and drugs); Global Financial
chair, Institute for Financial Markets; Group (venture capital fund of
formerly managing director, DeGuardiola funds); Lehman Brothers/First
Advisors; formerly managing director, Trust Income Opportunity Fund
North American Equities at General (high-yield closed-end fund).
Motors Asset Management; prio thereto,
director of Worldwide Pension
Investments for DuPont Asset Management.
JEROME KAHN, JR., 70, 1987 Former president, William Harris 6 None.
Trustee Investors, Inc. (investment adviser).
STEVEN N. KAPLAN, 45, 1999 Neubauer Family Professor of 6 None.
Trustee Entrepreneurship and Finance, Graduate
School of Business, University of
Chicago.
DAVID C. KLEINMAN, 69, 1972 Adjunct professor of strategic 6 Sonic Foundry, Inc.
Trustee management, University of Chicago (software); Irex Corporation
Graduate School of Business; Business (insulation contracting).
consultant.
ALLAN B. MUCHIN, 69, 1998 Chairman emeritus, Katten Muchin Zavis 6 Alberto-Culver Company
Trustee Rosenman (law firm). (toiletries) until 1/27/05.
ROBERT E. NASON, 68, 1998 Consultant and private investor since 6 None.
Trustee and Chairman 1998; from 1990-1998, executive partner
and chief executive officer, member of
the executive committee of Grant
Thornton, LLP (public accounting firm)
and member of the policy board of Grant
Thornton International.
JOHN A. WING, 69, 2002 Frank Wakely Gunsaulus Professor of Law 6 AmerUs Life Holdings
Trustee and Finance, and chairman of the Center (life insurance); LDF, Inc.
for the Study of Law and Financial and Labe Federal Bank
Markets, Illinois Institute of (banking); Margo Caribe,
Technology; prior thereto, chairman of Inc. (farming).
the board and chief executive officer
of ABN-AMRO Incorporated, formerly The
Chicago Corporation, and chief
executive officer of Market
Liquidity Network,
TRUSTEES WHO ARE INTERESTED PERSONS OF COLUMBIA ACORN:
CHARLES P. MCQUAID, 51, 1992 President, Columbia WAM since October, 10 None.
Trustee and President (1) 2003; Chief Investment Officer,
Columbia WAM since September 2003;
Portfolio manager since 1995 and
director of research since July 1992
through December 2003, Columbia WAM;
interim director of international
research, Columbia WAM from October
2003 to December 2004; principal,
Wanger Asset Management, L.P. ("WAM")
from July 1995 to September 2000;
president, Wanger Advisors Trust.
RALPH WANGER, 70, 1970 Founder, former president, chief 10 Wanger Advisors Trust
Trustee (1) investment officer and portfolio (4 portfolios).
manager, Columbia WAM (1992-2003);
former president, Columbia Acorn from
April 1992 through September 2003;
former president, Wanger Advisors Trust
(1994 through September 2003);
principal, WAM from July 1992 until
September 2000; president, WAM Ltd.
from July 1992 to September 2000;
director, Wanger Investment Company
plc; director, Columbia WAM.
1-800-922-6769
90
NUMBER OF
NAME, POSITION(S) YEAR FIRST PORTFOLIOS IN
WITH COLUMBIA ACORN ELECTED OR PRINCIPAL OCCUPATION(S) FUND COMPLEX
AND AGE AT APPOINTED DURING OVERSEEN BY OTHER
JANUARY 1, 2005 TO OFFICE* PAST FIVE YEARS TRUSTEE/OFFICER DIRECTORSHIPS
- ------------------------ ------------ --------------------------------------- -------------- ---------------------------------
OFFICERS OF COLUMBIA ACORN:
J. KEVIN CONNAUGHTON, 40, 2001 Treasurer of the Columbia Funds and of 10 None.
Assistant Treasurer the Columbia All-Star Funds since
December 2000 (formerly controller and
chief accounting officer of the
Columbia Funds and of the Columbia
All-Star Funds from February 1998 to
October 2000); treasurer of the Stein
Roe Funds since February 2001 (formerly
chief accounting officer and controller
from May 2000 to February 2001);
treasurer of the Galaxy Funds since
September 2002; senior vice president
of Columbia Funds Group since January
2001; (prior thereto, vice president of
Colonial Management Associates from
February 1998 to October 2000).
MICHAEL G. CLARKE, 34, 2004 Chief Accounting Officer of the 10 None.
Assistant Treasurer Columbia Funds, Liberty Funds, Stein
Roe Funds and All-Star Funds since
October 2004 (formerly Controller of
the Columbia Funds, Liberty Funds,
Stein Roe Funds and All-Star Funds from
May 2004 to October 2004; Assistant
Treasurer from June 2002 to May 2004;
Vice President, Product Strategy &
Development of the Liberty Funds and
Stein Roe Funds from February 2001 to
June 2002; Assistant Treasurer of the
Liberty Funds, Stein Roe Funds and the
All-Star Funds from August 1999 to
February 2001.
P. ZACHARY EGAN, 36, 2003 Director of international research, 6 None.
Vice President Columbia WAM, since December 2004;
analyst and portfolio manager, Columbia
WAM since 1999; prior thereto, a
research fellow with the Robert Bosch
Foundation.
Kenneth A. Kalina, 45, 1995 Chief compliance officer, Columbia WAM 10 None.
Assistant Treasurer since May 2004; treasurer and chief
financial officer, Columbia WAM since
April 2000; assistant treasurer, Wanger
Advisors Trust; fund controller,
Columbia WAM since September 1995;
director, New Americas Small Cap Fund.
BRUCE H. LAUER, 47, 1995 Chief operating officer, Columbia WAM 10 None.
Vice President, since April 1995; principal, WAM from
Secretary January 2000 to September 2000; vice
and Treasurer president, treasurer and secretary,
Wanger Advisors Trust; director, Wanger
Investment Company plc and New Americas
Small Cap Fund.
ROBERT A. MOHN, 43, 1997 Director of domestic research, Columbia 10 None.
Vice President WAM, since March 2004; analyst and
portfolio manager, Columbia WAM since
August 1992; principal, WAM from 1995
to September 2000; vice president,
Wanger Advisors Trust
LOUIS J. MENDES, 40, 2003 Analyst and portfolio manager, Columbia 6 None.
Vice President WAM since 2001; prior thereto, analyst
and portfolio manager, Merrill Lynch
TODD M. NARTER, 40, 2001 Analyst and portfolio manager, Columbia 10 None.
Vice President WAM since June 1997; vice president,
Wanger Advisors Trust
CHRISTOPHER J. OLSON, 40, 2001 Analyst and portfolio manager, Columbia 10 None.
Vice President WAM since January 2001; vice president,
Wanger Advisors Trust; prior to 2001,
director and portfolio strategy analyst
with UBS Asset Management/Brinson
Partners.
BEN ANDREWS, 39, 2004 Analyst and portfolio manager of 10 None.
Vice President Columbia WAM since 1998; prior thereto
senior analyst at Rothschild Investment
Corporation
VINCENT P. PIETROPAOLO, 39, 2001 Assistant General Counsel, Bank of 10 None.
Assistant Secretary America (and its predecessors) since
December 1999.
ROBERT SCALES, 52, 2004 Deputy Counsel, Grant Thornton LLP 10 None.
Chief Compliance Officer, 2002-2004; prior thereto, Associate
Senior Vice President, and general counsel, UBS PaineWebber.
General Counsel
* Dates prior to April 1992 correspond to the date first elected or
appointed as a director or officer of Acorn Fund Inc., the Trust's
predecessor.
(1) Trustee who is an "interested person" of the Trust and of Columbia WAM, as
defined in the Investment Company Act of 1940, because he is an officer of
the Trust and/or because he is an employee or other affiliated person of
Columbia WAM.
The SAI includes additional information about Fund trustees and is available,
without charge, upon request by calling 1-800-345-6611.
91
Columbia Acorn
- --------------------------------------------------------------------------------
Family of Funds
INVESTMENT ADVISER
Columbia Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-922-6769
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston, Massachusetts 02111-2621
TRANSFER AGENT, DIVIDEND DISBURSING AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston, Massachusetts 02266-8081
1-800-345-6611
LEGAL COUNSEL
Bell, Boyd & Lloyd LLC
Chicago, Illinois
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Chicago, Illinois
THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
AN INVESTOR SHOULD CAREFULLY CONSIDER CHARGES AND EXPENSES BEFORE INVESTING. TO
OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CALL (800)
922-6769 OR VISIT OUR WEBSITE (SHOWN BELOW). PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT THE FUNDS USE TO DETERMINE HOW
TO VOTE PROXIES RELATING TO THEIR PORTFOLIO SECURITIES AND A COPY OF THE FUNDS'
VOTING RECORD ARE AVAILABLE (I) AT WWW.COLUMBIMANAGEMENT.COM; (II) ON THE
SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT WWW.SEC.GOV AND (III) WITHOUT
CHARGE, UPON REQUEST, BY CALLING 800-922-6769.
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUNDS' 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.
FIND OUT WHAT'S NEW - VISIT OUR WEB SITE AT:
www.columbiafunds.com
OUR E-MAIL ADDRESS IS:
serviceinquiries@columbiamanagement.com
SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS,
SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE
UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL.
1-800-922-6769
92
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[EAGLE HEAD LOGO] COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2005 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
ACN-02/099U-0105 (02/05) 05/4450
[LADY HOLDING FILE]
COLUMBIA ACORN FUNDS
ANNUAL REPORT
December 31, 2004
Columbia Acorn Fund
Columbia Acorn International
Columbia Acorn USA
Columbia Acorn International Select
Columbia Acorn Select
Columbia Thermostat Fund
Not FDIC May Lose Value
Insured No Bank Guarantee
The discussion in this report of portfolio companies is for illustration only
and is not a recommendation of individual stocks. The information is believed to
be accurate, but the information and the views of the portfolio managers may
change at any time without notice and the portfolio managers may alter a fund's
portfolio holdings based on these views and the fund's circumstances at that
time.
>LETTER TO SHAREHOLDERS FROM THE
COLUMBIA ACORN TRUST BOARD OF TRUSTEES
The Trustees of the Columbia Acorn Trust are pleased to present this
annual report to shareholders of the Columbia Acorn Family of Funds ("Acorn
Funds") for 2004.
Your Trustees addressed several important shareholder issues during the
year.
Renewal of Agreements/Expense Reductions
Following an in-depth review and analysis, we unanimously approved the
renewal of agreements with our investment adviser, Columbia Wanger Asset
Management ("CWAM") and two other Columbia Management subsidiaries to manage
investments and provide administrative, distribution and transfer agent
services. We believe CWAM has consistently provided exceptional value to
shareholders and that it will continue to do so under the present agreement,
which preserves critical elements of the Firm's autonomy and commits it to
focusing on managing the assets of the Acorn Funds.
As part of the renewal process, we negotiated a minimum reduction of 25%
in transfer agent fees paid by the Acorn Funds effective September 30, 2004. We
also negotiated reductions in the advisory fee rates for Columbia Acorn Select
and in the administrative fee rates for all Acorn Funds by the establishment of
new break points. Further, the 12b-1 plan was changed to reduce annual charges
to all Class A shareholders from 35 to 25 basis points and to all Class B
shareholders from 100 to 85 basis points representing reductions of 28.6% and
15%, respectively. The administrative fee and 12b-1 plan reductions were
effective August 1, 2004.
Increase in Minimum Investment for New Shareholders
We decided to implement a plan to reduce future cash inflows into Columbia
Acorn Fund and Columbia Acorn USA. The minimum investment for new shareholders
is now $50,000. This action was taken to protect existing shareholders from the
potential impairment of the investment process and performance, which could
result if the large amounts of cash inflows experienced by these funds were to
continue.
Trustee Independence
The Securities and Exchange Commission ("SEC") issued new independence
requirements in 2004 calling for independent trustees of mutual funds to
represent at least 75% of the total number of trustees and also requiring an
independent chairperson. Your Trustees have adhered to those hallmarks of
governance for several years. We currently have seven independent trustees
(including the chairperson) who are not affiliated in any way with entities of
Bank of America Corporation ("B of A"), the parent of our investment adviser,
distributor and transfer agent. Charles McQuaid and Ralph Wanger of our
investment adviser, CWAM, are the only "interested" trustees.
New Chief Compliance Officer
We recruited and appointed Robert Scales as Chief Compliance Officer
("CCO") of the Acorn Funds in April, 2004. This is a new position reporting
directly to the Trustees through our Compliance Committee. Mr. Scales has
experience as a lawyer in the securities and financial services industries and
five years with the Enforcement Division of the SEC. He reviewed the policies
and procedures of the B of A entities serving the Acorn Funds during 2004 and
reported his findings to us. Mr. Scales is monitoring the performance of these B
of A entities in 2005 under the direction and oversight of our Compliance
Committee. He is reporting his findings to us on a regular basis.
1
Columbia Management Market Timing Charges
Throughout 2004 we monitored the regulatory proceedings related to
frequent trading brought against B of A entities by the SEC and the New York
Attorney General. As we told you in our letter to shareholders dated March 23,
2004, complaints were filed against Columbia Management Advisors ("CMA"), which
provides administrative services to the Acorn Funds and Columbia Funds
Distributors ("CFD"), the distributor for the Acorn Funds. CWAM was not a party
to these complaints. On February 9, 2005, the parties in those proceedings
finalized settlement agreements that will result in advisory fee reductions for
all of the Acorn Funds. In addition, CMA and CFD will pay a substantial amount
in penalties. The distribution of that money to the Columbia family of funds
and/or its shareholders will be determined by an independent distribution
consultant ("IDC") acceptable to the SEC. The IDC will receive recommendations
and comments from us before making the final determination regarding payments to
any Acorn fund or its shareholders. We are hopeful this will be resolved in
2005.
Certain provisions of the settlement agreements call for us to carry out
special oversight procedures if we want CMA to provide services to the Acorn
Funds in the future. These procedures, which we expect to follow voluntarily,
relate to the review, negotiation and determination of management and other fees
paid by the Acorn Funds and to the monitoring of compliance. Any incremental
cost associated with these special procedures will be paid by Columbia
Management.
We also focused on the revised practices and control procedures of CFD
directed at preventing improper trading activity. Reviews of those practices and
controls were conducted by our independent legal counsel, our independent
consultants and our CCO. Although there never can be absolute assurance that
improper trading activity can always be identified or terminated, we believe
that CFD has strengthened its internal practices and controls to identify and
discourage such activity. We will continue to monitor CFD's control environment
in 2005 through the direct involvement of our CCO and oversight of our
Compliance Committee.
As we all look forward to Acorn Funds' 35th consecutive year of serving
shareholders, your Trustees remain dedicated and focused on the goal of
providing exceptional value. We believe such value is delivered to shareholders
through a rational investment philosophy and policy consistently applied by
qualified investment management with the highest ethical standards.
The Acorn Funds have established a record of providing a distinct
investment opportunity among mutual funds. We are committed to preserving that
opportunity in the years ahead.
We thank our fellow shareholders for their continued interest and
investment in the Acorn Funds.
/s/ Robert E. Nason
Robert E. Nason
INDEPENDENT CHAIRMAN OF THE BOARD OF TRUSTEES
COLUMBIA ACORN TRUST
2
Columbia Acorn Family of Funds Annual Report 2004
Table of Contents
Squirrel Chatter: The Miracle Year 4
Columbia Acorn Family of Funds
Performance At A Glance 8
Understanding Your Expenses 10
COLUMBIA ACORN FUND
In a Nutshell 12
At a Glance 13
Major Portfolio Changes 24
Statement of Investments 26
COLUMBIA ACORN INTERNATIONAL
In a Nutshell 14
At a Glance 15
Major Portfolio Changes 38
Statement of Investments 40
Portfolio Diversification 44
COLUMBIA ACORN USA
In a Nutshell 16
At a Glance 17
Major Portfolio Changes 45
Statement of Investments 46
COLUMBIA ACORN INTERNATIONAL SELECT
In a Nutshell 18
At a Glance 19
Major Portfolio Changes 51
Statement of Investments 52
Portfolio Diversification 54
COLUMBIA ACORN SELECT
In a Nutshell 20
At a Glance 21
Major Portfolio Changes 55
Statement of Investments 56
COLUMBIA THERMOSTAT FUND
In a Nutshell 22
At a Glance 23
Statement of Investments 78
Statement of Assets and Liabilities 79
Statement of Operations 80
Statement of Changes in Net Assets 81
Financial Highlights 83
Notes to Financial Statements 84
COLUMBIA ACORN FAMILY OF FUNDS
Statements of Assets and Liabilities 60
Statements of Operations 61
Statements of Changes in Net Assets 62
Financial Highlights 66
Notes to Financial Statements 71
Report of Independent Registered
Public Accounting Firm 89
Unaudited Information 90
Change in Independent Registered
Public Accounting Firm 91
Columbia Acorn Family of Funds
Class A, B and C Share Information 92
Board of Trustees and Management
of Columbia Acorn Funds 94
3
>Squirrel Chatter: THE MIRACLE YEAR
[Photo of Ralph Wanger]
1905 was a year of surprises. The first surprise was the victory of the Japanese
over the Russians in the Russo-Japanese War. In May 1905, the untested Japanese
Navy annihilated the Russian fleet at Tsushima. This was the first time a
non-white country had beaten the main force of a European colonial power. The
second unexpected event was in physics. 2005 will be celebrated as the
centennial of Albert Einstein's "Miracle Year."
The journal, ANNALEN DER PHYSIK, volume 17, published three articles in
September 1905 all written by Einstein, an obscure clerk in the Swiss patent
office in Bern. He had an undergraduate degree in physics but no Ph.D (it was
granted a year later). Each of the articles was on a different subject and each
one revolutionized its branch of physics. Einstein's papers created 20th century
physics almost single-handedly.
ATOMS
In 1905 there were different theories about the structure of matter. If
you take a glass of water and pour nine-tenths of it out, you still have a glass
with water in it. What happens if you repeat this process of throwing out 90% of
the water in the glass? After you repeat the process a few more times, you have
such a small amount of water that you can only see it under a microscope, and in
a few more steps the water drop will be too small to be seen even under the
microscope. Can you continue the boring job of splitting water forever or do you
finally get to a point where it isn't water anymore? Of course we know the
answer: Once you get down to a single molecule of water you can't split it and
still say that you have water left. Many leading scientists did not accept the
atomic theory in 1905. Einstein looked at the process called Brownian Motion in
which a grain of pollen or other small object moves around in a random way. (The
same mathematical process makes stock prices jiggle.) He deduced that this
motion was caused by billions of atoms bumping into the pollen grain in an
irregular pattern. He was even able to calculate the size of the atoms involved,
thus proving that atoms really existed.
PHOTONS
In 1905 there was still a basic debate about the nature of light. The
greatest achievement of 19th century physics was Maxwell's set of partial
differential equations governing electromagnetic fields, including light.
Maxwell's equations required that light be a wave. The great Max Planck had
introduced the idea of a quantum of energy in 1900 to get an equation that
tracked the spectrum of heat radiation, but most scientists doubted that a light
quantum was "real." Heinrich Hertz, Philip Lenard and others showed that when a
beam of ultraviolet light shines on a piece of metal you produce an electrical
current in the metal. There was no way to explain the photoelectric effect
according to the Maxwell wave theory of light. The second paper Einstein wrote
dealt with the problem of the photoelectric effect. If you cut the amount of
energy in a beam of light by 90% and keep reducing it, you still have a beam of
light. If you keep slicing the amount of light, does the beam of light keep
getting smaller and smaller forever or do you get down to an "atom" of light
that can't be split further? Einstein proved that there was a tiny amount of
light that could not be further divided. The least amount of light that exists
is a single photon (or quantum) of light. 1 The photoelectric effect is
explained by photons acting as particles, not as a wave.
Einstein's discovery of the photon had a number of interesting effects.
First, it led to the development of quantum mechanics and thus to most of 20th
century physics. Second, it won Einstein his only Nobel Prize. Third, it
uncovered a paradox that still puzzles students, the duality of light. If you
run an experiment to show that light is a wave, you can prove it's a wave. If
you run an experiment to show that it's a particle, you can prove it's a
particle. This duality principle contradicts common sense but when you study
science you have to get used to it. The fourth effect was that it made Lenard a
life-long enemy of Einstein. Philip Lenard, who received the Nobel Prize in 1905
for his own work on cathode rays, was close to the solution but Einstein ended
up getting the credit. Lenard became an unrelenting foe of Einstein, and
influenced the Nobel committee's decision not to give Einstein the prize for his
theory of relativity. Later on, Lenard became an ardent Nazi.
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4
RELATIVITY
In 1905, there was also a debate in scientific circles about speed. If you
were in a really powerful rocket ship in space, and you pushed the throttle
forward, you would speed up. If you kept on increasing the power, would you go
ever faster, or was there an absolute speed limit in the universe that you could
not exceed?
The third paper became the best known, Einstein's special theory of
relativity. It explained that there was a cosmic speed limit, the speed of
light. Very odd things happen when your rocket ship is moving close to the speed
of light. Time slows down and you get shorter, under the Lorentz contraction
equation, giving rise to the limerick:
A sexy young techie named Fisk, Had a motion exceedingly brisk. So fast
was his action The Lorentz contraction Shortened his rod to a disk.
In a very brief paper published later in 1905, Einstein added in a note
that his theory of relativity implied the equation E=mc 2. That solved the
paradox of radioactivity; Mme. Curie's radium was producing much more energy
than could be explained by 19th century physics. Einstein showed that
radioactive energy was caused by turning a small amount of mass into a lot of
energy.
So we had this technical journal containing three papers written by a man
unknown in science, a non-Ph.D, a non-academic, writing on a German-dominated
field with all the fussiness about rank and reputation that you would expect.
Would anyone care? Einstein did not receive any communication from any
physicists for the first couple months after he published, but in early 1906 Max
Planck read and understood the papers. He wrote to Einstein and sent his
assistant, another important physicist, Max von Laue, to visit Einstein in Bern.
Planck's subsequent endorsement made Einstein acceptable to the community of
physicists, and his papers became required study for all physicists, as they
remain.
The compelling human question: How the heck did Einstein do it? How could
one human being produce three revolutionary papers in one year, on three
different subjects, while carrying a full-time job at the patent office to boot?
We can admire but not explain. The "Miracle Year" commemorates one of the
greatest feats of the human mind ever.
2004 SCARLET A WINNERS
Each year we honor those outside analysts who have provided advice and insight
to our investment team on some of the top-performing stocks that we held in the
Funds. The criteria for domestic stock Scarlet A winners was an annual gain of
over 45% and a dollar gain of over $60 million across the Funds. On the
international side, the stock needed to increase more than 50% and make more
than $20 million for the Funds.
Our thanks to Kindra Devaney Tartarsky, formerly with Fulcrum Partners,
who suggested we look at teen retailer ABERCROMBIE & FITCH. In 2004, the stock
was up 89% and had a dollar gain for the Funds of $66 million. Barry Sahgal, now
with Gilford Securities, receives his second Scarlet A for natural gas producer
ULTRA PETROLEUM. The stock had an annual gain of 95% and made over $62 million
for the Funds. ESCO TECHNOLOGIES, a manufacturer of automatic electric meter
readers, increased nearly 76% in 2004 and made over $60 million for the Funds.
Richard Eastman of Robert W. Baird & Co. brought Esco to us three years ago and
has provided superior coverage on this stock and the filtration industry ever
since. PEOPLE'S BANK OF BRIDGEPORT gained 86% in 2004, earning nearly $64
million for the Funds. Our thanks to Sal DiMartino with Bear Stearns for
recommending this stock to us 10 years ago.
On the international side, ANGLO IRISH BANK made it a three-peat in 2004.
The stock first won the Scarlet A for David Smith of Davy Stockbrokers in Dublin
in 2002 and it's still going strong. For the year, the stock increased 56% and
made $63 million for the Funds. Based in the United Kingdom, oil and gas
producer TULLOW OIL had an impressive 94% gain for the year and made $36 million
for the Funds. Credit goes to Tony Alves of KBC Peel Securities in
5
London and, making a second appearance on the 2004 Scarlet A list, Barry Sahgal.
Marc de Natris of Fortis Bank is back among the Scarlet A winners this year.
Marc received the "A" in 2000 and 2001 for different stocks. This year, we
credit him for his help on AALBERTS INDUSTRIES, a Netherlands-based, diversified
industrial company. Aalberts increased 91% and made nearly $35 million for the
Funds. French postage meter machine manufacturer NEOPOST rounds out our
international winners. The stock increased 57% in '04 and made $28 million for
the Funds. Our thanks to Caroline Cohen of Deutsche Bank for the insight she
provided on this stock.
COLUMBIA WAM NEWS
We are pleased to announce that Zach Egan has been named director of
international research for Columbia Wanger Asset Management. In this position,
Zach will provide leadership and quality control to Columbia Wanger's
international research efforts. Congratulations Zach!
/s/ Ralph Wanger
Ralph Wanger
FOUNDER, ADVISOR AND TRUSTEE
COLUMBIA WANGER ASSET MANAGEMENT, L.P.
________________________________________________________________________________
1 PLANCK AND EINSTEIN HAD DISCOVERED THE QUANTUM JUMP, WHICH WAS THE SMALLEST
THING THAT COULD POSSIBLY EXIST IN THE UNIVERSE. MODERN WRITERS, FOR REASONS
DIFFICULT TO EXPLAIN, NOW USE THE PHRASE QUANTUM JUMP TO MEAN A BIG EVENT. WHEN
NON-SCIENTISTS START THROWING AROUND SCIENTIFIC TERMS WITHOUT UNDERSTANDING
THEM, FUNNY THINGS HAPPEN. DON'T GET ME STARTED ON THE HEISENBERG UNCERTAINTY
PRINCIPLE.
INCIDENTALLY, ALBERT EINSTEIN'S FATHER, HERMANN, WAS BORN IN THE WURTTEMBERG
VILLAGE OF BUCHAU, WHERE HIS FAMILY HAD LIVED FOR GENERATIONS. HERMANN MOVED 20
MILES FROM BUCHAU TO THE CITY OF ULM, WHERE ALBERT WAS BORN. MY GREAT-GREAT
GRANDFATHER, JOSEPH KOHN, WAS ALSO FROM BUCHAU AND HE HAD MANY EINSTEINS IN HIS
FAMILY TREE. I AM VERY PROUD OF THE EINSTEIN CONNECTION.
SOURCES:
"EINSTEIN: A CELEBRATION," SEMINAR AT THE ASPEN INSTITUTE, AUGUST
8-11, 2004.
EINSTEIN, ALBERT, "IDEAS AND OPINIONS," CROWN PUBLISHERS, 1954.
KAKU, MICHIO, "EINSTEIN COSMOS: HOW ALBERT EINSTEIN'S VISION TRANSFORMED OUR
UNDERSTANDING OF SPACE AND TIME," ATLAS BOOKS, 2004.
"DISCOVER" MAGAZINE, "SPECIAL EINSTEIN ISSUE," SEPTEMBER 2004.
A SPECIAL THANKS TO DOUG STONE OF YALE UNIVERSITY FOR EDITING THIS ESSAY.
AS OF 12/31/04, FUND POSITIONS, AS A PERCENT OF NET ASSETS, IN THE HOLDINGS
MENTIONED WERE AS FOLLOWS: ABERCROMBIE & FITCH: COLUMBIA ACORN FUND, 0.4%;
COLUMBIA ACORN USA, 1.5%; COLUMBIA ACORN SELECT, 3.6%. ULTRA PETROLEUM: COLUMBIA
ACORN FUND, 0.6%. ESCO TECHNOLOGIES: COLUMBIA ACORN FUND, 0.6%; COLUMBIA ACORN
USA, 2.5%. PEOPLE'S BANK OF BRIDGEPORT: COLUMBIA ACORN FUND, 0.9%. ANGLO IRISH
BANK: COLUMBIA ACORN FUND, 0.6%; COLUMBIA ACORN INTERNATIONAL, 2.7%; COLUMBIA
ACORN INTERNATIONAL SELECT, 5.8%. TULLOW OIL: COLUMBIA ACORN FUND, 0.3%;
COLUMBIA ACORN INTERNATIONAL, 1.0%. AALBERTS INDUSTRIES: COLUMBIA ACORN FUND,
0.3%; COLUMBIA ACORN INTERNATIONAL, 1.3%. NEOPOST: COLUMBIA ACORN FUND, 0.2%;
COLUMBIA ACORN INTERNATIONAL, 1.4%; COLUMBIA ACORN INTERNATIONAL SELECT, 4.1%.
1-800-922-6769
6
>NET ASSET VALUE PER SHARE AS OF 12/31/04
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
COLUMBIA ACORN ACORN INTERNATIONAL COLUMBIA THERMOSTAT
ACORN FUND INTERNATIONAL USA SELECT ACORN SELECT FUND
- ----------------------------------------------------------------------------------------------------------------
Class A $ 25.93 $ 28.75 $ 24.77 $ 17.85 $ 20.83 $ 13.11
- ----------------------------------------------------------------------------------------------------------------
Class B $ 25.19 $ 28.18 $ 24.14 $ 17.36 $ 20.23 $ 13.14
- ----------------------------------------------------------------------------------------------------------------
Class C $ 25.18 $ 28.19 $ 24.14 $ 17.38 $ 20.23 $ 13.13
- ----------------------------------------------------------------------------------------------------------------
>2004 YEAR-END DISTRIBUTIONS
The following table details the funds' year-end distributions. The record date
for COLUMBIA ACORN FUND, COLUMBIA ACORN USA and COLUMBIA ACORN SELECT was
December 9, 2004. The ex-dividend date was December 10, 2004, and the payable
date was December 13, 2004. For COLUMBIA THERMOSTAT FUND, the record date was
December 23, 2004. The ex-dividend date was December 27, 2004, and the payable
date was December 28, 2004.
LONG-TERM SHORT-TERM
CAPITAL CAPITAL ORDINARY REINVESTMENT
GAINS GAINS INCOME PRICE
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn Fund Class A $ 0.8319 $ 0.0491 None $ 25.06
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn Fund Class B and C $ 0.8319 $ 0.0491 None $ 24.35
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn USA Class A $ 0.1376 None None $ 24.02
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn USA Class B $ 0.1376 None None $ 23.41
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn USA Class C $ 0.1376 None None $ 23.42
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn Select Class A $ 0.4398 None None $ 20.33
- ----------------------------------------------------------------------------------------------------------------
Columbia Acorn Select Class B and C $ 0.4398 None None $ 19.75
- ----------------------------------------------------------------------------------------------------------------
Columbia Thermostat Fund, Class A $ 0.0011 $ 0.0079 $ 0.2575 $ 13.04
- ----------------------------------------------------------------------------------------------------------------
Columbia Thermostat Fund, Class B $ 0.0011 $ 0.0079 $ 0.1703 $ 13.06
- ----------------------------------------------------------------------------------------------------------------
Columbia Thermostat Fund, Class C $ 0.0011 $ 0.0079 $ 0.1628 $ 13.06
- ----------------------------------------------------------------------------------------------------------------
7
Columbia Acorn Family of Funds
>Share Class Performance Average Annual Total Returns through 12/31/04
CLASS A CLASS B CLASS C
WITHOUT WITH WITHOUT WITH WITHOUT WITH
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
FUND (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 12.35% 5.89% 12.17% 7.17% 12.12% 11.12%
- ---------------------------------------------------------------------------------------------------------------------
1 year 21.05% 14.09% 20.15% 15.15% 20.11% 19.11%
- ---------------------------------------------------------------------------------------------------------------------
3 years 14.76% 12.51% 13.97% 13.20% 13.98% 13.98%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 13.62% 12.03% 12.87% 12.55% 12.86% 12.86%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 16.63% 9.93% 16.40% 11.40% 16.39% 15.39%
- ---------------------------------------------------------------------------------------------------------------------
1 year 28.91% 21.50% 27.91% 22.91% 28.01% 27.01%
- ---------------------------------------------------------------------------------------------------------------------
3 years 16.53% 14.26% 15.71% 14.96% 15.75% 15.75%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 4.02% 2.57% 3.32% 2.90% 3.33% 3.33%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 14.17% 7.61% 14.00% 9.00% 13.95% 12.95%
- ---------------------------------------------------------------------------------------------------------------------
1 year 20.12% 13.21% 19.26% 14.26% 19.26% 18.26%
- ---------------------------------------------------------------------------------------------------------------------
3 years 12.49% 10.29% 11.75% 10.94% 11.75% 11.75%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 15.22% 13.61% 14.49% 14.18% 14.49% 14.49%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN INT'L
SELECT (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 13.19% 6.68% 13.02% 8.02% 13.00% 12.00%
- ---------------------------------------------------------------------------------------------------------------------
1 year 23.76% 16.64% 22.95% 17.95% 22.91% 21.91%
- ---------------------------------------------------------------------------------------------------------------------
3 year 14.00% 11.77% 13.22% 12.44% 13.24% 13.24%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 0.38% -1.02% -0.32% -0.79% -0.29% -0.29%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 13.80% 7.26% 13.57% 8.57% 13.57% 12.57%
- ---------------------------------------------------------------------------------------------------------------------
1 year 18.16% 11.37% 17.24% 12.24% 17.24% 16.24%
- ---------------------------------------------------------------------------------------------------------------------
3 year 12.13% 9.94% 11.37% 10.55% 11.37% 11.37%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 12.02% 10.46% 11.26% 10.93% 11.27% 11.27%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND (3/3/2003)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 5.75% -0.33% 5.63% 0.63% 5.58% 4.58%
- ---------------------------------------------------------------------------------------------------------------------
1 year 8.92% 2.65% 8.27% 3.27% 8.13% 7.13%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 17.29% 13.57% 16.54% 14.62% 16.46% 16.46%
- ---------------------------------------------------------------------------------------------------------------------
*Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE APPROPRIATE CLASS B CONTINGENT DEFERRED SALES CHARGE FOR THE
HOLDING PERIOD AFTER PURCHASE AS FOLLOWS: THROUGH FIRST YEAR--5%, SECOND
YEAR--4%, THIRD YEAR--3%, FOURTH YEAR--3%, FIFTH YEAR--2%, SIXTH YEAR--1%,
THEREAFTER--0%; AND THE CLASS C CONTINGENT DEFERRED SALES CHARGE OF 1% FOR THE
FIRST YEAR ONLY. PERFORMANCE OF THE DIFFERENT SHARE CLASSES WILL VARY BASED ON
DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
1-800-922-6769
8
>Fund Performance vs. Benchmarks Class A Shares, without sales charge,
Average Annual Total Returns through 12/31/04
4TH 1 3 LIFE
QUARTER* YEAR YEARS OF FUND
- ------------------------------------------------------------------------------------------
COLUMBIA ACORN
FUND (10/16/2000) 12.35% 21.05% 14.76% 13.62%
- ------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% 3.59% -1.36%
- ------------------------------------------------------------------------------------------
Russell 2500 14.22% 18.29% 12.27% 9.74%
- ------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 11.44% 18.37% 10.44% 9.66%
- ------------------------------------------------------------------------------------------
Lipper Mid-Cap
Core Funds Index 11.79% 15.44% 9.22% 5.02%
- ------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (10/16/2000) 16.63% 28.91% 16.53% 4.02%
- ------------------------------------------------------------------------------------------
Citigroup EMI
Global ex-US 16.70% 29.27% 23.11% 11.47%
- ------------------------------------------------------------------------------------------
MSCI EAFE 15.32% 20.25% 11.89% 2.58%
- ------------------------------------------------------------------------------------------
Lipper Int'l Small-
Cap Funds Index 16.27% 29.50% 22.74% 9.49%
- ------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(10/16/2000) 14.17% 20.12% 12.49% 15.22%
- ------------------------------------------------------------------------------------------
Russell 2000 14.09% 18.33% 11.48% 8.93%
- ------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 11.44% 18.37% 10.44% 9.66%
- ------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% 3.59% -1.36%
COLUMBIA ACORN
INT'L SELECT (10/16/2000) 13.19% 23.76% 14.00% 0.38%
- ------------------------------------------------------------------------------------------
Citigroup World ex-US
Cap Range $2-10B 16.46% 25.22% 19.39% 9.84%
- ------------------------------------------------------------------------------------------
MSCI EAFE 15.32% 20.25% 11.89% 2.58%
- ------------------------------------------------------------------------------------------
Lipper International
Funds Index 14.39% 18.59% 11.60% 2.95%
- ------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT (10/16/2000) 13.80% 18.16% 12.13% 12.02%
- ------------------------------------------------------------------------------------------
S&P MidCap 400 12.16% 16.48% 10.53% 8.07%
- ------------------------------------------------------------------------------------------
Lipper Mid-Cap
Growth Index 13.78% 14.03% 3.37% -6.62%
- ------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% 3.59% -1.36%
- ------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND (3/3/2003) 5.75% 8.92% -- 17.29%
- ------------------------------------------------------------------------------------------
S&P 500 9.23% 10.88% -- 24.11%
- ------------------------------------------------------------------------------------------
Lehman U.S. Credit
Intermediate Bond Index 0.77% 4.08% -- 4.82%
- ------------------------------------------------------------------------------------------
Lipper Flexible
Portfolio Funds Index 7.76% 9.50% -- 19.36%
- ------------------------------------------------------------------------------------------
*Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S.
blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500.
RUSSELL 2000 is a market-weighted index of 2000 smaller U.S. companies, formed
by taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL
2500 is the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI
GLOBAL EX-US is the bottom 20% of institutionally investable capital of
developed and emerging countries, selected by index sponsor, outside the U.S.
MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely
recognized international benchmark that comprises 20 major markets in proportion
to world stock market capitalization. CITIGROUP WORLD EX-US CAP RANGE $2-$10B is
a subset of the Broad Market Index, representing a mid-cap developed market
index excluding the U.S. LIPPER INDEXES include the largest funds tracked by
Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH INDEX, 30 mid-cap
growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core funds; LIPPER
INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not including non-U.S.
small-cap funds; LIPPER INTERNATIONAL SMALL-CAP FUNDS INDEX, 10 largest non-U.S.
funds investing in small-cap companies, including Columbia Acorn International;
LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small-cap core funds, including
Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar
weighted index of the 30 largest mutual funds within the Flexible Portfolio fund
classification, as defined by Lipper. The LEHMAN U.S. CREDIT INTERMEDIATE BOND
INDEX is the intermediate component of the U.S. Credit Index. The U.S. Credit
Index includes publicly issued U.S. corporate and foreign debentures and secured
notes that meet specified maturity, liquidity, and quality requirements. All
indexes are unmanaged and returns include reinvested distributions. A more
complete description of each index is included in the Fund's statement of
additional information. It is not possible to invest directly in an index.
9
>UNDERSTANDING YOUR EXPENSES
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 fees, and other fund expenses. The
information on these pages is intended to help you understand your ongoing costs
of investing in the funds and to compare these costs with the ongoing costs of
investing in other mutual funds.
Analyzing your fund's expenses
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in the Class A, B and C shares of the Columbia
Acorn Funds for the last six months. The information in the following table is
based on an initial investment of $1,000, which is invested at the beginning of
the 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 each fund's actual operating expenses
and total return for the period. The amount listed in the "hypothetical" column
assumes that the return each year is 5% before expenses and then applies each
fund's actual expense ratio for the period to the hypothetical return. 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 the reporting period.
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 funds with other funds. To do
so, compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o For shareholders who receive their account statements from Columbia Funds
Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at 800.922.6769.
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 $8,600 at the end of the period, the result would
be 8.6.
2. In the section of the table titled "Expenses paid during the period,"
locate the amount for your fund. You will find this number is in the
column labeled "actual." Multiply this number by the result from step
1. Your answer is an estimate of the expenses you paid on your account
during the period.
1-800-922-6769
10
>July 1, 2004 - December 31, 2004
ACCOUNT VALUE AT ACCOUNT VALUE AT FUND'S
THE BEGINNING OF THE END OF EXPENSES PAID ANNUALIZED
THE PERIOD ($) THE PERIOD ($) DURING THE PERIOD ($) EXPENSE
-------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL RATIO (%)*
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN FUND
- ------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1113.32 1019.30 6.16 5.89 1.16
- ------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1108.79 1015.58 10.07 9.63 1.90
- ------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1108.39 1015.33 10.33 9.88 1.95
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1188.02 1017.75 8.08 7.46 1.47
- ------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1183.50 1013.88 12.29 11.34 2.24
- ------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1183.50 1013.72 12.46 11.49 2.27
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
- ------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1095.52 1017.70 7.80 7.51 1.48
- ------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1092.30 1014.08 11.57 11.14 2.20
- ------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1091.30 1013.83 11.83 11.39 2.25
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL SELECT
- ------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1151.62 1016.49 9.30 8.72 1.72
- ------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1148.10 1013.47 12.53 11.74 2.32
- ------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1147.20 1012.82 13.22 12.40 2.45
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN SELECT
- ------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1102.61 1017.95 7.56 7.25 1.43
- ------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1097.68 1013.98 11.71 11.24 2.22
- ------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1097.68 1013.77 11.92 11.44 2.26
- ------------------------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND
- ------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1060.88 1022.62 2.59 2.54 0.50
- ------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1058.92 1019.51 5.80 5.69 1.12
- ------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1057.41 1018.85 6.46 6.34 1.25
- ------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to each fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the funds' most recent fiscal half-year and divided by
366.
Had the Investment Adviser and/or Transfer Agent not waived a portion of
expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the funds 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.
Columbia Thermostat Fund's expenses do not include fees and expenses incurred by
the Fund from the underlying portfolio funds.
* For the six months ended 12/31/04.
11
Columbia Acorn Fund
>In a Nutshell
[Photo of Charles P. McQuaid] [Photo of Robert A. Mohn]
Columbia Acorn Fund rose 21.05% (Class A shares, without sales charge) in 2004.
As shown on Page 9, the Fund beat all of its small-cap benchmarks and almost
doubled the 10.88% return of the large-cap S&P 500. Solid stock picking, plus
heavy weightings in energy, industrial and foreign stocks, produced good annual
results. During the fourth quarter, Columbia Acorn Fund's 12.35% gain was below
the Russell 2500 small-cap benchmark. The Russell was boosted by returns from
the smallest caps and more speculative companies. Columbia Acorn Fund was
modestly ahead of the Lipper Small- and Mid-Cap Core Funds Indexes for the
quarter.
Great stock picks included retailer Urban Outfitters, riverboat casino
operator Pinnacle Entertainment, and gaming equipment maker Shuffle Master. All
more than doubled during the year because their earnings exceeded expectations.
People's Bank of Bridgeport cashed out of its credit card business, enabling
shareholders to cash in on an 86% gain. Handbag maker Coach bagged a 49% profit.
Energy was our best performing group for the year. Quicksilver Resources,
Southwestern Energy and Ultra Petroleum all about doubled, while our largest
dollar winner, XTO Energy, jumped 57%. All of these stocks benefited from higher
prices and higher production. Though we continue to be bullish on the group,
during the fourth quarter we believed that oil prices were at a short-term
speculative high and subject to a correction. Consequently, we trimmed our
energy holdings, and swapped some oil producer stocks based on our valuation
judgments. Believing that oil companies will increase capital spending, we also
swapped some oil producers into oil service companies.
A number of industrial companies also manufactured big profits in 2004.
Industrial safety goods maker Mine Safety Appliances and water treatment
equipment company Pentair each jumped over 90% while automatic electronic meter
reader manufacturer Esco Technologies read nearly a 76% gain. We applaud our
industrial goods and services analyst, Rob Chalupnik, for these picks. Due to
what we believe to be reasonable valuations, a fairly good economy, and the weak
dollar, we added to our domestic industrial holdings.
The biggest loser for the year was Novell, a developer of open source
software. The stock missed earnings targets and declined nearly 36% for the
year. For the fourth quarter, drug company AtheroGenics was the biggest dollar
loser. The stock was a big winner in the third quarter but gave back much of
that gain in the fourth quarter when questions were raised about missing
disclosure in trial results it released in September. The stock was off 29% for
the three months. Educational toy manufacturer Leapfrog Enterprises missed its
earnings and declined 40% in the quarter.
Columbia Acorn's foreign stocks jumped 36.25% in the year. The UK's Tullow
Oil rose 94%, rewarded by the market for its opportunistic acquisition of Energy
Africa. Other foreign winners were driven by fine earnings gains: Dutch
industrial company Aalberts Industries surged 91%, and Austrian brick producer
Wienerberger delivered a solid 84% gain. Our largest foreign dollar winner,
Anglo Irish Bank, a lender to small businesses, returned 56%. Columbia Acorn's
foreign weighting remains at about 15%.
/s/ Charles P. McQuaid /s/ Robert A. Mohn
Charles P. McQuaid Robert A. Mohn
LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
People's Bank Shows its Cards
- --------------------------------------------------------------------------------
Columbia Acorn Fund co-manager Rob Mohn discovered People's Bank of Bridgeport
back in 1994, finding an excellent credit card company inside what was then a
troubled thrift. Rob noted that People's credit card operation had fast growth
and low credit losses, and calculated that this undiscovered division accounted
for nearly half of the value of the company. Since that time the credit card
business had its ups and downs, while People's substantially improved its
savings and loan business. In 2004 the company sold its credit card business at
over a 15% premium to assets. Though additional upside is possible from cost
cuts and remaining demutualization, we trimmed Columbia Acorn's position in the
fourth quarter. The stock was up seven-fold from our initial purchase.
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL
RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: URBAN
OUTFITTERS, 0.3%; PINNACLE ENTERTAINMENT, 0.3%; SHUFFLE MASTER, 0.2%; PEOPLE'S
BANK OF BRIDGEPORT, 0.9%; COACH, 1.2%; QUICKSILVER RESOURCES, 0.2%; SOUTHWESTERN
ENERGY, 0.2%; ULTRA PETROLEUM, 0.6%; XTO ENERGY, 1.8%; MINE SAFETY APPLIANCES,
0.3%; PENTAIR, 0.3%; ESCO TECHNOLOGIES, 0.6%; NOVELL, 0.6%; ATHEROGENICS, 0.2%;
LEAPFROG ENTERPRISES, 0.0%; TULLOW OIL, 0.3%; ENERGY AFRICA, 0.0%; AALBERTS
INDUSTRIES, 0.3%; WIENERBERGER, 0.3%; ANGLO IRISH BANK, 0.6%.
1-800-922-6769
12
Columbia Acorn Fund
>At a Glance TICKER SYMBOL: LACAX
TOTAL NET ASSETS OF THE FUND: $13,841.5 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A
SHARE RETURNS)
>through December 31, 2004
LIFE OF
1 YEAR 3 YEARS FUND
------ ------- -------
Returns before NAV 21.05% 14.76% 13.62%
taxes POP 14.09 12.51 12.03
- ---------------------------------------------------------------------------
Returns after taxes NAV 20.37 14.53 12.74
on distributions POP 13.45 12.29 11.16
- ---------------------------------------------------------------------------
Returns after taxes NAV 14.44 12.75 11.48
on distributions and POP 9.88 10.78 10.07
sale of fund shares
- ---------------------------------------------------------------------------
S&P 500 (pretax) 10.88 3.59 -1.36
- ---------------------------------------------------------------------------
Russell 2500 (pretax) 18.29 12.27 9.74
- ---------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 20.7%
Industrial Goods/Services 14.6%
Other* 8.8%
Finance 13.2%
Energy/Minerals 9.3%
Health Care 8.6%
Real Estate 2.2%
Information 22.6%
Software/Services 10.2%
Computer Related Hardware 6.8%
Telecommunications 3.2%
Media 2.4%
* Other includes cash and other assets less liabilities of 7.5%. Foreign
equities within the portfolio were 15.0% diversified by country as follows: 9.0%
Europe; 0.5% Asia without Japan; 2.1% Canada; 1.2% Japan; 0.5% Australia/New
Zealand; 1.7% Emerging Markets.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS A)
>October 16, 2000 through December 31, 2004
Illustration is based on a hypothetical $50,000 investment from inception in
Class A shares of the Fund, which includes the 4.50% initial sales charge for
this level of investment. Performance may reflect any voluntary waiver or
reimbursement of Fund expenses by the Adviser or its affiliates. Absent these
waivers or reimbursement arrangements, performance results would have been
lower. The Russell 2500 is the smallest 2,500 U.S. companies taken from a group
of the largest 3,000 companies. The index is unmanaged and returns for the index
and the Fund include reinvested dividends and capital gains. It is not possible
to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
- --------------------------------------------------------
CLASS A CLASS B CLASS C
- --------------------------------------------------------
WITHOUT SALES CHARGE $85,657 $83,306 $83,273
- --------------------------------------------------------
WITH SALES CHARGE $81,802 $82,306 $83,273
- --------------------------------------------------------
[MOUNTAIN CHART]
Columbia Acorn Columbia Acorn
Fund - A Fund - A with
at NAV sales charge Russell 2500
10/16/2000 50000.00 47750.00 50000.00
10/31/2000 51370.00 49058.30 52159.30
48667.90 46477.90 47569.10
12/31/2000 53695.30 51279.10 51666.00
54661.80 52202.10 53363.80
53257.00 50860.50 49927.60
3/31/2001 50823.20 48536.20 47188.50
55290.60 52802.50 51355.90
57634.90 55041.30 52900.60
6/30/2001 58389.90 55762.30 53651.70
57245.40 54669.40 51733.10
54961.40 52488.10 50037.90
9/30/2001 47475.60 45339.20 43562.50
49507.60 47279.70 45815.00
53280.10 50882.40 49520.30
12/31/2001 56679.30 54128.80 52296.30
56106.90 53582.10 51647.20
55371.90 52880.10 50742.80
3/31/2002 59414.00 56740.40 54251.20
59253.60 56587.20 54113.20
57440.40 54855.60 52527.10
6/30/2002 54511.00 52058.00 49567.00
48013.30 45852.70 43651.70
48397.40 46219.50 43783.70
9/30/2002 45498.40 43450.90 40314.90
47409.30 45275.90 41628.80
50467.20 48196.20 45027.30
12/31/2002 48842.20 46644.20 42990.10
47665.10 45520.10 41847.80
46902.40 44791.80 40842.20
3/31/2003 47474.60 45338.30 41231.60
51581.20 49260.00 44906.20
55212.50 52727.90 49322.70
6/30/2003 56902.00 54341.40 50265.00
59542.20 56862.80 52966.90
62632.50 59814.00 55417.80
9/30/2003 61899.70 59114.20 54664.00
66932.10 63920.20 58983.20
69100.70 65991.20 61203.60
12/31/2003 70759.10 67575.00 62554.60
73306.50 70007.70 64836.80
74706.60 71344.80 65839.40
3/31/2004 75789.90 72379.30 66235.10
73046.30 69759.20 63053.70
74353.80 71007.90 64340.60
6/30/2004 76933.90 73471.90 66457.30
73010.30 69724.80 62590.30
72915.40 69634.20 62430.30
9/30/2004 76233.00 72802.50 64784.90
78116.00 74600.70 66262.50
82998.20 79263.30 71210.20
12/31/2004 85657.00 81802.40 73998.20
COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. XTO Energy 1.8%
NATURAL GAS PRODUCER
2. International Game Technology 1.7%
SLOT MACHINES & PROGRESSIVE JACKPOTS
3. Coach 1.2%
DESIGNER & RETAILER OF
BRANDED LEATHER ACCESSORIES
4. Expeditors International of Washington 1.1%
INTERNATIONAL FREIGHT FORWARDER
5. AmeriCredit 1.0%
AUTO LENDING
6. People's Bank of Bridgeport 0.9%
CONNECTICUT SAVINGS & LOAN
7. Chico's FAS 0.8%
WOMEN'S SPECIALTY RETAIL
8. TCF Financial 0.8%
GREAT LAKES BANK
9. ITT Educational Services 0.8%
POSTSECONDARY DEGREE PROGRAMS
10. Lincare Holdings 0.8%
HOME HEALTH CARE SERVICES
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
13
Columbia Acorn International
>In a Nutshell
[Photo of P. Zachary Egan] [Photo of Louis J. Mendes III]
Columbia Acorn International rose 28.91% (Class A shares, without sales charge)
in 2004. As shown on Page 9, the Fund finished slightly behind the Citigroup EMI
Global ex-US benchmark Index but substantially outperformed the large-cap MSCI
EAFE Index. During the fourth quarter, Columbia Acorn International's 16.63%
gain fell short of the EMI benchmark but outperformed the large-cap MSCI EAFE
Index. A weak U.S. dollar, particularly against the euro, aided performance,
contributing over six percentage points of 2004's 28.91% return and more than
seven percentage points of the fourth quarter's 16.63% return. Columbia Acorn
International did not do any currency hedging during the past year and does not
anticipate doing so in the year ahead.
As in past years, the Fund's biggest percentage winners in 2004 came from
very different industries and regions of the world. Edgars Consolidated Stores,
a South African retailer first purchased in 2004, returned 153% for the year and
83% in the fourth quarter alone, on strong earnings growth. Another new 2004
purchase, Natura Cosmeticos, a manufacturer and direct seller of Brazilian
cosmetics, rallied 139% for the year and 44% in the fourth quarter.
ComfortDelGro, a Singaporean transport company expanding into taxicab
franchises in China, was the third best annual performer, returning 107%. Within
Europe, Amplifon, an Italian manufacturer of hearing aids, surged 100%. Other
winners included Aalberts Industries, discussed separately on this page, which
rose over 90%, and Tullow Oil, an UK-based oil exploration company benefiting
from the rise in energy prices.
Technology-related stocks were among the leading detractors to portfolio
performance during the year. ASE Test, a Taiwanese tester of semiconductor
devices, was the Fund's largest percentage loser, declining 55% on weak
earnings. Ngai Lik Industrial, a Hong Kong-based manufacturer of audio
equipment, declined 37% as higher raw material costs squeezed margins. Another
loser was Kappa Create, a Japanese sushi chain operator. Rising over 50% from
January to June, the stock declined sharply in the second half when increased
competition caused reduced sales, ending the year down 31%.
International small caps have outperformed large caps for a fifth year in
a row and valuations are now close to long-term average valuations relative to
large caps, whereas two years ago they traded at a moderate discount.
Fortunately, our international small-cap universe is comprised of more than
4,400 potential investment opportunities. With a dedicated team of nine
international analysts, we feel we have the resources to sift through this
universe and find attractive investments for our shareholders.
/s/ P. Zachary Egan /s/ Louis J. Mendes III
P. Zachary Egan Louis J. Mendes III
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
Aalberts Benefits From Expansion
- --------------------------------------------------------------------------------
Aalberts Industries is a Netherlands-based, diversified industrial company that
manufactures valves and fittings for water, energy and gas distribution and heat
treats specialty metal components. Aalberts has taken advantage of an industrial
slowdown in Western Europe to consolidate its markets, while developing
world-class manufacturing facilities in Central and Eastern Europe, where its
revenues have grown 30% annually. Given the continued high level of
infrastructure investments in countries like Poland and the Czech Republic, we
believe Aalberts will continue to outperform. The stock gained 91% in the year,
not your typical Dutch treat.
INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR
ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS,
TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE
FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE
STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF
OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE,
MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: EDGARS
CONSOLIDATED STORES, 0.9%; NATURA COSMETICOS, 0.9%; COMFORTDELGRO, 0.7%;
AMPLIFON, 0.7%; AALBERTS INDUSTRIES, 1.3%; TULLOW OIL,1.0%; ASE TEST, 0.4%; NGAI
LIK INDUSTRIAL, 0.2%; KAPPA CREATE, 0.6%.
1-800-922-6769
14
Columbia Acorn International
>At a Glance TICKER SYMBOL: LAIAX
TOTAL NET ASSETS OF THE FUND: $2,075.0 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON
CLASS A SHARE RETURNS)
>through December 31, 2004
LIFE
1 YEAR 3 YEARS OF FUND
------ ------- -------
Returns before taxes NAV 28.91% 16.53% 4.02%
POP 21.50 14.26 2.57
- -------------------------------------------------------------------------
Returns after taxes NAV 29.00 16.58 3.33
on distributions POP 21.59 14.30 1.89
- -------------------------------------------------------------------------
Returns after taxes NAV 19.13 14.43 3.24
on distributions and POP 14.29 12.42 2.00
sale of fund shares
- -------------------------------------------------------------------------
Citigroup EMI Global 29.27 23.11 11.47
ex-US (pretax)
- -------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. The return after taxes on distributions may
be higher than the return before taxes due to qualified foreign tax credits.
Indexes do not reflect any deduction for fees, expenses or taxes. Investment
returns and principal value may fluctuate, resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION
> as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer 23.0%
Goods/Services
Finance 13.8%
Information 11.4%
Other* 6.1%
Energy/Minerals 8.1%
Health Care 6.8%
Transportation 2.6%
Real Estate 1.0%
Utilities 0.8%
Industrial 26.4%
Goods/Services
* Cash and other assets less liabilities.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS A)
>October 16, 2000 through December 31, 2004
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The Citigroup EMI
Global ex-US is Citigroup's index of the bottom 20% of institutionally
investable capital of developed and emerging countries, as selected by
Citigroup, excluding the U.S. The index is unmanaged and returns for both the
index and Fund include reinvested dividends and capital gains. It is not
possible to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
- --------------------------------------------------------
CLASS A CLASS B CLASS C
- --------------------------------------------------------
WITHOUT SALES CHARGE $11,806 $11,478 $11,482
- --------------------------------------------------------
WITH SALES CHARGE $11,127 $11,282 $11,482
- --------------------------------------------------------
[MOUNTAIN CHART]
Columbia Acorn Columbia Acorn
International - A International - A Citigroup EMI
at NAV with sales charge Global ex-US
10/16/2000 10000.00 9425.00 10000.00
10/31/2000 10153.00 9569.20 9992.50
9322.48 8786.44 9552.43
12/31/2000 9513.60 8966.56 9924.99
9940.76 9369.16 10110.00
9222.04 8691.77 9717.45
3/31/2001 8332.11 7853.02 8964.83
8651.23 8153.79 9551.59
8591.54 8097.53 9532.42
6/30/2001 8167.12 7697.51 9209.03
7837.98 7387.30 8938.99
7675.74 7234.38 8914.82
9/30/2001 6626.46 6245.44 7753.79
6939.23 6540.23 8068.84
7325.75 6904.52 8400.57
12/31/2001 7459.81 7030.87 8469.75
7277.04 6858.61 8316.39
7252.30 6835.29 8455.58
3/31/2002 7626.52 7187.99 9006.50
7874.38 7421.60 9194.03
7838.16 7387.47 9488.25
6/30/2002 7516.79 7084.58 9111.52
6720.01 6333.61 8338.89
6610.48 6230.38 8288.88
9/30/2002 6016.86 5670.89 7523.75
6045.14 5697.54 7693.78
6228.30 5870.18 7981.33
12/31/2002 6232.66 5874.29 7886.31
6078.09 5728.60 7753.79
5911.55 5571.64 7615.44
3/31/2003 5822.29 5487.51 7541.26
6350.95 5985.77 8252.21
6871.73 6476.61 8955.66
6/30/2003 7066.20 6659.90 9289.88
7217.42 6802.42 9620.77
7535.71 7102.40 10080.90
9/30/2003 7821.31 7371.58 10541.80
8417.29 7933.30 11308.50
8642.04 8145.12 11514.40
12/31/2003 9160.56 8633.83 12225.40
9429.88 8887.66 12664.60
9780.67 9218.28 13101.40
3/31/2004 9780.67 9218.28 13422.20
9564.52 9014.56 12971.30
9593.21 9041.60 12973.00
6/30/2004 9940.48 9368.91 13389.70
9678.06 9121.57 12917.10
9723.54 9164.44 13056.30
9/30/2004 10126.10 9543.85 13543.10
10487.60 9884.56 13958.20
11284.70 10635.80 15056.70
12/31/2004 11806.30 11127.40 15804.30
COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 2.7%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Rhoen-Klinikum (Germany) 1.8%
HOSPITAL MANAGEMENT
3. Neopost (France) 1.4%
POSTAGE METER MACHINES
4. Grafton Group (Ireland) 1.4%
BUILDERS, WHOLESALERS & DIY RETAILING
5. Billabong International (Australia) 1.3%
SURFWEAR APPAREL MANUFACTURER
6. Kerry (Ireland) 1.3%
FOOD INGREDIENTS
7. Aalberts Industries (Netherlands) 1.3%
FLOW CONTROL & HEAT TREATMENT
8. SES Global (Luxembourg) 1.2%
SATELLITE BROADCASTING SERVICES
9. Housing Development Finance (India) 1.2%
PREMIER MORTGAGE LENDER IN INDIA
10. Exel (United Kingdom) 1.2%
GLOBAL LOGISTICS & FREIGHT FORWARDING
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
15
Columbia Acorn USA
>In a Nutshell
[Photo of Robert A. Mohn]
Columbia Acorn USA ended the fourth quarter up 14.17% (Class A shares, without
sales charge). For the year, the Fund returned 20.12%. Fund performance topped
the benchmark Russell 2000 for both time periods. See Page 9 for more
performance information. There was a great deal of pessimism about the market
and the political environment going into the quarter and many investors were
hanging out on the sidelines. After the elections, the money came back into the
markets, fueling a fierce fourth quarter rally.
Some of our biggest winners for the quarter were health care stocks.
Lincare Holdings, a provider of home health care services, increased 44% in the
quarter on news of a higher than expected government dispensing fee for
respiratory medication. For the year, Lincare had a 42% gain. Edwards
Lifesciences' heart valves were big sellers, pumping the stock up 23% in the
fourth quarter and 37% for the year.
Technology stocks also had a strong quarter. Micros Systems, a developer
of reservation systems used in hotels and restaurants, gained 56% in the quarter
and was up 80% for the year. On the telecom side, Western Wireless ended the
year up 59%, gaining 13% in the quarter (and even more so far in 2005 on news
that Alltel will be buying the company).
While slightly cooler in the fourth quarter, energy stocks were strong
2004 performers. Quicksilver Resources, a natural gas producer, was up an
impressive 128% for the year and 13% for the quarter. Chicago Bridge & Iron,
discussed separately on this page, was added to the Fund in '04 and immediately
went to work. For the year the stock was up 55%, gaining 33% in the fourth
quarter.
The laggards for the year included southeast supermarket chain Winn Dixie
Stores, down 58%. The Fund no longer holds the stock. Novell, a developer of
open source software, failed to meet earnings targets and declined 36% for the
year. Last quarter we mentioned drug company AtheroGenics' strong performance.
The stock gave back some of its third quarter gain, falling 29% in the fourth
quarter (but up nearly 3% for the year) as questions were raised about missing
disclosure in trial results it released in September.
Generally speaking, we think companies are operating in a healthy economy
that should provide growth going forward. We will continue to search for what we
believe are winning small-cap stocks selling at good prices.
/s/ Robert A. Mohn
Robert A. Mohn
LEAD PORTFOLIO MANAGER
What's In A Name
- --------------------------------------------------------------------------------
Chicago Bridge & Iron is not based in Chicago and does not make bridges. The
company is a leading designer and manufacturer of tanks used to convert
liquified natural gas (LNG) into the pipeline gas used to heat our homes and
generate electricity. The last LNG terminal built in the United States was
constructed more than 15 years ago so Chicago Bridge & Iron's conversion
expertise has not been considered particularly valuable. As a result of the
natural gas shortage that has developed in recent years, however, more than 20
new LNG terminals have been proposed. Chicago Bridge & Iron's specialized skills
are now attracting attention. The stock rose 55% in Columbia Acorn USA in 2004.
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: LINCARE
HOLDINGS, 1.2%; EDWARDS LIFESCIENCES, 2.7%; MICROS SYSTEMS, 2.6%; WESTERN
WIRELESS, 2.5%; ALLTEL, 0.0%; QUICKSILVER RESOURCES, 2.6%; CHICAGO BRIDGE &
Iron, 1.5%; WINN DIXIE STORES, 0.0%; NOVELL, 1.0%; ATHEROGENICS, 0.7%.
1-800-922-6769
16
Columbia Acorn USA
>At a Glance TICKER SYMBOL: LAUAX
TOTAL NET ASSETS OF THE FUND: $870.7 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON
CLASS A SHARE RETURNS)
>through December 31, 2004
LIFE OF
1 YEAR 3 YEARS FUND
------ ------- -------
Returns before taxes NAV 20.12% 12.49% 15.22%
POP 13.21 10.29 13.61
- -------------------------------------------------------------------------
Returns after taxes NAV 20.01 12.46 15.14
on distributions POP 13.11 10.26 13.54
- -------------------------------------------------------------------------
Returns after taxes NAV 13.21 10.79 13.30
on distributions and POP 8.71 8.87 11.86
sale of fund shares
- -------------------------------------------------------------------------
Russell 2000 (pretax) 18.33 11.48 8.93
- -------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION
> as a % of net assets, as of december 31, 2004
[PIE CHART]
Consumer 17.4%
Goods/Services
Health Care 14.0%
Other* 8.9%
Energy/Minerals 11.7%
Finance 10.0%
Industrial 9.2%
Goods/Services
Information 28.8%
Software/Services 13.2%
Telecommunications 7.6%
Computer Related Hardware 5.4%
Media 2.6%
* Other includes cash and other assets less liabilities of 8.4%.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS A)
>October 16, 2000 through December 31, 2004
Illustration is based on a hypothetical $50,000 investment from inception in
Class A shares of the Fund, which includes the 4.50% initial sales charge for
this level of investment. Performance may reflect any voluntary waiver or
reimbursement of Fund expenses by the Adviser or its affiliates. Absent these
waivers or reimbursement arrangements, performance results would have been
lower. The Russell 2000 is a market-weighted index of 2,000 smaller U.S.
companies formed by taking the largest 3,000 U.S. companies and eliminating the
largest 1,000. The index is unmanaged and returns for both the index and the
Fund include reinvested dividends and capital gains. It is not possible to
invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
- --------------------------------------------------------
CLASS A CLASS B CLASS C
- --------------------------------------------------------
WITHOUT SALES CHARGE $90,865 $88,467 $88,466
- --------------------------------------------------------
WITH SALES CHARGE $86,776 $87,467 $88,466
- --------------------------------------------------------
[MOUNTAIN CHART]
Columbia Acorn USA - A Columbia Acorn USA - A
at NAV with sales charge Russell 2000
10/16/2000 50000.00 47750.00 50000.00
10/31/2000 52060.00 49717.30 51819.50
49024.90 46818.80 46500.20
12/31/2000 53795.00 51374.20 50493.70
57194.90 54621.10 53122.60
57011.80 54446.30 49637.00
3/31/2001 55672.10 53166.80 47208.90
62397.20 59589.40 50902.10
65866.50 62902.60 52153.20
6/30/2001 67671.30 64626.10 53954.10
68354.80 65278.80 51033.60
66440.80 63451.00 49385.30
9/30/2001 56826.80 54269.60 42737.40
56968.90 54405.30 45238.40
60295.90 57582.60 48740.60
12/31/2001 63823.20 60951.20 51749.00
64550.80 61646.00 51210.80
62323.80 59519.20 49807.30
3/31/2002 67608.80 64566.40 53810.40
68595.90 65509.10 54300.80
64692.80 61781.70 51890.80
6/30/2002 60791.80 58056.20 49316.10
52475.50 50114.10 41867.90
51672.70 49347.40 41761.20
9/30/2002 47807.50 45656.20 38762.20
50068.80 47815.70 40005.00
54409.80 51961.40 43575.20
12/31/2002 51711.10 49384.10 41149.00
50909.60 48618.60 40010.10
50181.50 47923.40 38801.20
3/31/2003 50291.90 48028.80 39300.80
55215.50 52730.80 43027.20
60941.40 58199.00 47644.60
6/30/2003 61892.10 59106.90 48506.80
64776.20 61861.30 51541.90
68313.00 65238.90 53905.00
9/30/2003 66707.60 63705.80 52910.00
73525.20 70216.50 57353.20
75091.30 71712.20 59388.60
12/31/2003 75639.40 72235.70 60593.40
79542.40 75963.00 63226.00
79908.30 76312.40 63792.70
3/31/2004 79325.00 75755.40 64387.30
77357.70 73876.60 61104.50
80382.40 76765.20 62077.10
6/30/2004 82938.60 79206.30 64691.40
77829.60 74327.20 60335.50
76701.00 73249.50 60025.40
9/30/2004 79585.00 76003.70 62843.30
81845.20 78162.20 64080.30
87754.40 83805.50 69638.60
12/31/2004 90865.00 86776.10 71699.80
COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. AmeriCredit 3.1%
AUTO LENDING
2. Edwards Lifesciences 2.7%
HEART VALVES
3. Micros Systems 2.6%
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
4. Quicksilver Resources 2.6%
NATURAL GAS & COAL SEAM GAS PRODUCER
5. Western Wireless 2.5%
RURAL CELLULAR PHONE SERVICES
6. Esco Technologies 2.5%
AUTOMATIC ELECTRIC METER READERS
7. ITT Educational Services 2.2%
POSTSECONDARY DEGREE PROGRAMS
8. Crown Castle International 1.9%
COMMUNICATION TOWERS
9. Commonwealth Telephone 1.9%
RURAL PHONE FRANCHISES & CLEC
10. Kronos 1.7%
LABOR MANAGEMENT SOLUTIONS
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
17
Columbia Acorn International Select
>In a Nutshell
[Photo of Todd M. Narter] [Photo of Christopher J. Olson]
International markets continued to surge in the fourth quarter. Columbia Acorn
International Select increased 13.19% (Class A shares, without sales charge) for
the three months, underperforming the 16.46% increase in the benchmark Citigroup
World ex-US Cap Range $2-10B Index. The relative underperformance was due in
large part to holding some cash in a strong market. We opted to take profits in
a number of positions in the Fund during the fourth quarter to look for better
values elsewhere. We believe that the Fund is well positioned for future growth.
The Fund finished 2004 up 23.76%, a solid return but behind the 25.22% return
for the Citigroup World ex-US Cap Range $2-10B Index.
Letting our winners run was a successful strategy this past year. For the
third year in a row, Anglo Irish Bank was the Fund's largest contributor to
performance. The stock finished the year up 56% and is the Fund's largest
position. Other significant winners include large holdings with great
franchises. Neopost, a maker of franking machines in France, the Fund's second
largest position, had another strong year, up 58%. Tenaris, a maker of steel
pipes for the oil and gas industry jumped 49%. Lion Nathan, the major beer
brewer and distributor in Australia and New Zealand, rose 54% and Daito Trust
Construction (discussed separately on this page), a major apartment builder and
manager in Japan, finished the year up 62%.
Several stocks in the portfolio reduced the Fund's gains. Topping the list
of poor performers in the Fund this year was Sugi Pharmacy, a drugstore chain in
Japan. Shares were down 13% as the company reported higher costs than expected
during its expansion program. Funai Electric, a maker of consumer electronic
products in Japan, was down 11% as the retail environment in the United States
was weaker than expected. Other weak performers included Venture, an electronic
manufacturing services company in Singapore, down 15% and Compass Group, a
catering services provider in the UK, which fell 29% on an earnings downgrade
driven by a weak dollar and issues with a supplier.
Share prices have risen strongly in the past two years. While stocks are
not as cheap as they once were, we continue to find well-run companies with good
strategies and strong balance sheets that we believe will be good investments.
/s/ Todd M. Narter /s/ Christopher J. Olson
Todd M. Narter Christopher J. Olson
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
A DAITO YOU CAN TRUST
- --------------------------------------------------------------------------------
Daito Trust Construction builds and manages residential property in Japan. The
company's unique business model encompasses construction of lease apartments for
landowners, as well as tenant recruitment and property management. The real
estate market during the past year has improved in metropolitan areas, with
prices firming and vacancy rates improving. While the average Japanese consumer
remains frugal, demand for rental housing has strengthened and contributed to a
recovery in residential property. This shift has been a boon to Daito, not only
from construction, but from leasing and management of rental units as well. The
stock achieved stellar performance, appreciating 62% during the past 12-month
period.
MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS
OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS,
INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: ANGLO IRISH
BANK, 5.8%; NEOPOST, 4.1%; TENARIS, 2.4%; LION NATHAN, 3.4%; DAITO TRUST
CONSTRUCTION, 3.1%; SUGI PHARMACY, 1.9%; FUNAI ELECTRIC, 2.1%; VENTURE, 0.8%;
COMPASS GROUP, 1.8%.
1-800-922-6769
18
Columbia Acorn International Select
TICKER SYMBOL: LAFAX
>At a Glance TOTAL NET ASSETS OF THE FUND: $58.3 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
LIFE OF
1 YEAR 3 YEARS FUND
------ ------- -------
Returns before taxes NAV 23.76% 14.00% 0.38%
POP 16.64 11.77 -1.02
- -------------------------------------------------------------------------
Returns after taxes NAV 23.89 14.09 0.41
on distributions POP 16.77 11.86 -0.99
- -------------------------------------------------------------------------
Returns after taxes NAV 15.64 12.22 0.37
on distributions and POP 11.01 10.26 -0.82
sale of fund shares
- -------------------------------------------------------------------------
Citigroup World 25.22 19.39 9.84
ex-US Cap Range
$2-10B (pretax)
- -------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. The return after taxes on distributions may
be higher than the return before taxes due to qualified foreign tax credits.
Indexes do not reflect any deduction for fees, expenses or taxes. Investment
returns and principal value may fluctuate, resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 19.4%
Finance 17.4%
Other* 11.7%
Information 12.3%
Energy/Minerals 6.6%
Health Care 5.0%
Transportation 1.0%
Industrial Goods/Services 26.6%
*Other includes cash and other assets less liabilities of 10.1%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT (CLASS
A)
>October 16, 2000 through December 31, 2004
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Citigroup World ex-US
Cap Range $2-10B Index is a subset of Citigroup's Broad Market Index,
representing a mid-cap developed market index excluding the U.S. The index and
Fund returns include reinvested dividends and capital gains. It is not possible
to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
- ------------------------------------------------------
CLASS A CLASS B CLASS C
- ------------------------------------------------------
WITHOUT SALES CHARGE $10,162 $9,865 $9,877
- ------------------------------------------------------
WITH SALES CHARGE $ 9,578 $9,669 $9,877
- ------------------------------------------------------
[MOUNTAIN CHART]
Columbia Acorn Columbia Acorn Citigroup World
International International Select - A ex-US Cap Range
Select - A at NAV with sales charge $2-$10B
10/16/2000 10000.00 9425.00 10000.00
10/31/2000 10344.00 9749.22 10149.40
9023.07 8504.24 9847.09
12/31/2000 9683.56 9126.76 10327.70
9994.40 9419.72 10276.40
8848.04 8339.28 9903.21
3/31/2001 7662.41 7221.82 9130.62
8063.15 7599.52 9804.72
8040.57 7578.24 9720.89
6/30/2001 7699.65 7256.92 9468.01
7296.19 6876.66 9230.41
7142.97 6732.25 9146.72
9/30/2001 5937.95 5596.52 8084.34
6313.23 5950.22 8409.04
6659.83 6276.89 8709.59
12/31/2001 6858.96 6464.57 8728.38
6506.41 6132.29 8470.69
6427.03 6057.47 8599.67
3/31/2002 6654.54 6271.91 9091.63
6858.84 6464.46 9258.15
6926.74 6528.45 9552.29
6/30/2002 6710.63 6324.77 9220.72
5989.23 5644.85 8394.89
6097.04 5746.46 8375.00
9/30/2002 5653.79 5328.69 7625.65
5642.48 5318.04 7761.81
5779.03 5446.73 8157.05
12/31/2002 5818.90 5484.31 7927.16
5534.94 5216.68 7728.22
5301.92 4997.06 7583.65
3/31/2003 5347.51 5040.03 7454.12
5847.51 5511.28 8112.84
6353.32 5988.00 8694.63
6/30/2003 6393.34 6025.73 8942.64
6495.64 6122.14 9301.62
6774.30 6384.78 9837.88
9/30/2003 7024.27 6620.37 10243.30
7546.88 7112.93 11034.20
7706.12 7263.01 11127.00
12/31/2003 8211.64 7739.47 11862.70
8359.45 7878.78 12112.00
8717.23 8215.99 12403.30
3/31/2004 8773.89 8269.39 12885.70
8592.27 8098.22 12447.10
8598.29 8103.89 12412.60
6/30/2004 8824.42 8317.02 12727.40
8619.70 8124.06 12245.10
8613.66 8118.38 12357.80
9/30/2004 8978.02 8461.78 12754.80
9240.18 8708.87 13184.50
9820.46 9255.78 14226.50
12/31/2004 10162.30 9577.93 14854.70
COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. Anglo Irish Bank (Ireland) 5.8%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Neopost (France) 4.1%
POSTAGE METER MACHINES
3. Komercni Banka (Czech Republic) 3.7%
LEADING CZECH UNIVERSAL BANK
4. Exel (United Kingdom) 3.7%
GLOBAL LOGISTICS & FREIGHT FORWARDING
5. Lion Nathan (Australia) 3.4%
BEER BREWER/DISTRIBUTOR
6. Depfa Bank (Ireland) 3.3%
INTERNATIONAL PUBLIC SECTOR FINANCE
7. Daito Trust Construction (Japan) 3.1%
APARTMENT BUILDER
8. Hoya (Japan) 2.9%
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
9. Shimano (Japan) 2.9%
BICYCLE COMPONENTS & FISHING TACKLE
10. SES Global (Luxembourg) 2.7%
SATELLITE BROADCASTING SERVICES
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
19
Columbia Acorn Select
>In a Nutshell
[Photo of Ben Andrews]
It was a good quarter and year for Columbia Acorn Select. The Fund gained 13.80%
(Class A shares, without sales charge) during the fourth quarter, outperforming
the S&P MidCap 400's 12.16% return and the S&P 500's 9.23% gain. For the year,
Columbia Acorn Select was up 18.16% vs. a 16.48% gain for the S&P MidCap 400 and
a 10.88% return for the S&P 500.
McAfee, ITT Educational Services and Abercrombie & Fitch all did well for
the Fund in the quarter and in the year. McAfee was up 83% for the 12 months
while ITT Educational Services increased 66%. Together these two stocks made up
a third of the Fund's return for the year. Abercrombie & Fitch, up an impressive
90% in the year, was another big contributor to Fund performance.
On the downside, Skillsoft Publishing cost the Fund one half of a percent
of performance in the quarter as the stock slid due to continued pricing
pressure from its largest competitor, Netg. For the year, the largest detractors
to performance were Synopsys, down 42%, and Interpublic Group, down 32%. We are
evaluating whether or not Synopsys has turn around potential. Interpublic Group
was sold in the quarter.
During the fourth quarter, Oracle purchased one of the Fund's holdings,
PeopleSoft, after a lengthy and much publicized takeover battle. During the
17-month negotiation process for PeopleSoft, its board of directors received a
lot of bad press for not having the shareholders' best interests in mind. Our
Firm's due diligence refuted this and we backed the board. In the end, the
board's moves did put its customer and shareholder interests first when trying
to negotiate with a very adversarial suitor. We received the cash proceeds from
the PeopleSoft transaction two days before the end of the quarter, which
increased the Fund's cash at quarter end to an unusually high level. We feel
comfortable operating Columbia Acorn Select with a cash position of between 4%
and 10%.
We added six new names to the portfolio during the quarter while deleting
one (PeopleSoft). New ideas include an investment in the cable industry with
UnitedGlobalCom and Liberty Media International. Both stocks focus on serving
foreign markets. The Fund also purchased IAC/InterActiveCorp, a large Internet
company, as its stock price reached a two-year low. FMC Technologies was added
as we believe offshore deep-water oil drilling will increase over the next
several years. The Fund also purchased Aspect Communications and AnswerThink.
/s/ Ben Andrews
Ben Andrews
LEAD PORTFOLIO MANAGER
TCF Financial's Innovative Approach
- --------------------------------------------------------------------------------
TCF Financial was one of Columbia Acorn Select's big winners, rising 29% in
2004. TCF does banking a little bit different than other banks. More retailer
than banker, TCF stresses convenience banking, with branches open seven days a
week, coin-counting machines available in every branch, and a large presence in
local supermarket chains. Most other banks are obsessed with keeping their
expenses down. TCF focuses instead on wisely spending money to grow its highly
profitable, low-cost deposit base. Proving the adage that "you must spend money
to make money," TCF's 26% return on equity ranked #2 out of the other 50 largest
banks in the country.*
COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS
HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE
FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND
TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES.
AS OF 12/31/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: MCAFEE,
7.2%; ITT EDUCATIONAL SERVICES, 5.3%; ABERCROMBIE & Fitch, 3.6%; SKILLSOFT
PUBLISHING, 3.9%; NETG, 0.0%; SYNOPSYS, 1.3%; INTERPUBLIC GROUP, 0.0%; ORACLE,
0.0%; PEOPLESOFT, 0.0%; UNITEDGLOBALCOM, 0.8%; LIBERTY MEDIA INTERNATIONAL,
0.9%; IAC/INTERACTIVECORP, 1.6%; FMC TECHNOLOGIES, 1.0%; ASPECT COMMUNICATIONS,
0.1%; ANSWERTHINK, 0.2%; TCF FINANCIAL, 5.0%.
* SOURCE: CITIGATE FINANCIAL INTELLIGENCE. RANKING BASED ON THE 50 LARGEST BANK
HOLDING COMPANIES IN THE U.S. BASED ON ASSET SIZE AT 9/30/04.
1-800-922-6769
20
Columbia Acorn Select
>At a Glance TICKER SYMBOL: LTFAX
TOTAL NET ASSETS OF THE FUND: $1,257.1 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2004
LIFE OF
1 YEAR 3 YEARS FUND
------ ------- --------
Returns before NAV 18.16% 12.13% 12.02%
taxes POP 11.37 9.94 10.46
- -------------------------------------------------------------------------
Returns after taxes NAV 17.78 11.98 11.82
on distributions POP 11.01 9.79 10.26
- -------------------------------------------------------------------------
Returns after taxes NAV 12.29 10.46 10.41
on distributions and POP 7.84 8.54 9.03
sale of fund shares
- -------------------------------------------------------------------------
S&P MidCap 16.48 10.53 8.07
400 (pretax)
- -------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Consumer Goods/Services 30.4%
Finance 14.6%
Health Care 7.3%
Industrial Goods/Services 2.7%
Energy/Minerals 1.0%
Other* 13.4%
Information 30.6%
*Cash and other assets less liabilities.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS A)
>October 16, 2000 through December 31, 2004
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The S&P MidCap 400 is a
broad, market-weighted index of 400 stocks that are in the next size/tier down
from the S&P 500. The Index is unmanaged and returns for both the index and the
Fund include reinvested dividends and capital gains. It is not possible to
invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
- ---------------------------------------------------------------
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------
WITHOUT SALES CHARGE $16,137 $15,684 $15,685
- ---------------------------------------------------------------
WITH SALES CHARGE $15,210 $15,484 $15,685
- ---------------------------------------------------------------
[MOUNTAIN CHART]
Columbia Acorn Columbia Acorn
Select - A Select - A S&P
at NAV with sales charge MidCap 400
10/16/2000 10000.00 9425.00 10000.00
10/31/2000 10958.00 10327.90 10382.20
9893.98 9325.07 9598.49
12/31/2000 10632.10 10020.70 10332.80
10940.40 10311.30 10562.90
10300.40 9708.11 9960.11
3/31/2001 9893.52 9324.64 9219.60
10608.80 9998.81 10236.70
11188.10 10544.80 10475.10
6/30/2001 11000.10 10367.60 10432.80
10894.50 10268.10 10277.40
10382.50 9785.47 9941.21
9/30/2001 9742.90 9182.69 8704.65
9946.53 9374.60 9089.70
10978.00 10346.80 9765.89
12/31/2001 11445.60 10787.50 10270.40
11219.00 10573.90 10217.00
10977.80 10346.60 10229.60
3/31/2002 11355.50 10702.50 10960.90
10736.60 10119.20 10909.60
11038.30 10403.60 10725.60
6/30/2002 10849.50 10225.70 9940.60
10162.80 9578.39 8977.69
10404.60 9806.35 9022.86
9/30/2002 9921.85 9351.34 8295.93
10465.60 9863.79 8655.40
10985.70 10354.00 9156.16
12/31/2002 10510.00 9905.69 8779.89
10464.80 9863.10 8523.31
10479.50 9876.91 8320.33
3/31/2003 10691.20 10076.40 8390.46
11302.70 10652.80 8999.64
11906.30 11221.60 9745.48
6/30/2003 12215.80 11513.40 9869.69
12797.30 12061.50 10219.90
13325.80 12559.60 10683.50
9/30/2003 13031.30 12282.00 10519.90
13507.00 12730.30 11315.40
13401.60 12631.00 11709.60
12/31/2003 13658.90 12873.50 11907.20
14030.50 13223.70 12165.20
14386.80 13559.60 12457.30
3/31/2004 14379.60 13552.80 12510.20
13955.40 13153.00 12099.60
14182.90 13367.40 12350.60
6/30/2004 14638.20 13796.50 12631.70
14001.40 13196.30 12042.30
13879.60 13081.50 12010.70
9/30/2004 14183.60 13368.00 12366.40
14736.70 13889.40 12564.30
15638.60 14739.40 13312.50
12/31/2004 16137.50 15209.60 13869.90
COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
1. McAfee 7.2%
SECURITY SOFTWARE & SERVICES
2. ITT Educational Services 5.3%
POSTSECONDARY DEGREE PROGRAMS
3. TCF Financial 5.0%
GREAT LAKES BANK
4. Harley-Davidson 4.8%
MOTORCYCLES & RELATED MERCHANDISE
5. First Health Group 4.2%
PPO NETWORK
6. Safeway 4.0%
RETAIL FOOD & DRUG STORES
7. Skillsoft Publishing 3.9%
PROVIDER OF WEB-BASED LEARNING
SOLUTIONS (E-LEARNING)
8. Abercrombie & Fitch 3.6%
TEEN APPAREL RETAILER
9. Tellabs 3.5%
TELECOMMUNICATIONS EQUIPMENT
10. Markel 3.5%
SPECIALTY INSURANCE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
21
Columbia Thermostat Fund
>In a Nutshell
[Photo of Ralph Wanger] [Photo of Charles P. McQuaid]
Columbia Thermostat Fund ended the quarter up 5.75% (Class A shares, without
sales charge) and the year up 8.92%. Fund returns were between the S&P 500 and
the Lehman Brothers U.S. Credit Intermediate Bond Index, which is the expected
result for Columbia Thermostat. See Page 9 for additional data. The strong
equity market in the fourth quarter allowed the Lipper Flexible Portfolio Funds
Index to beat the Fund's performance for the quarter and the year.
The weighted average return for the equity portion of the Thermostat
portfolio was 12.05% for the year. The standout equity fund in the group was
Columbia Acorn Fund (Class Z shares) up 21.51% for the annual period. Columbia
Growth Stock Fund was the annual laggard, down 2.17%. The weighted average
annual return for the bond portion of the Fund was 5.16% with portfolio bond
fund returns ranging from 7.42% to 4.11%.
Thermostat hit three reallocation triggers in the fourth quarter. Stock
exposure was increased in October while bond exposure was increased in both
November and December as the equity market rallied following the U.S. election.
Assets in Columbia Thermostat Fund at year-end were $207 million. Thank
you for your investment in the Fund. As we move into 2005, we continue to
believe that Thermostat will provide a satisfactory, low-risk result for a
portion of your invested dollars.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND
EQUITIES
4TH QUARTER 1-YEAR
WEIGHTING TOTAL TOTAL
FUND IN FUND RETURN RETURN
- ------------------------------------------------------------
Columbia 20% 12.44% 21.51%
Acorn Fund
- ------------------------------------------------------------
Columbia 15% 13.82% 18.58%
Acorn Select
- ------------------------------------------------------------
Columbia Growth 25% 8.14% -2.17%
Stock Fund
- ------------------------------------------------------------
Columbia Growth 25% 8.17% 13.71%
& Income Fund
- ------------------------------------------------------------
Columbia Mid Cap 15% 9.55% 15.58%
Value Fund
- ------------------------------------------------------------
WEIGHTED AVERAGE
EQUITY RETURN 100% 10.06% 12.05%
- ------------------------------------------------------------
FIXED INCOME
4TH QUARTER 1-YEAR
WEIGHTING TOTAL TOTAL
FUND IN FUND RETURN RETURN
- ------------------------------------------------------------
Columbia Federal 30% 0.76% 4.11%
Securities Fund
- ------------------------------------------------------------
Columbia Intermediate 50% 1.42% 4.88%
Bond Fund
- ------------------------------------------------------------
Columbia High 20% 1.88% 7.42%
Yield Fund
- ------------------------------------------------------------
WEIGHTED AVERAGE
INCOME RETURN 100% 1.32% 5.16%
- ------------------------------------------------------------
COLUMBIA THERMOSTAT FUND
REBALANCING IN THE QUARTER
- ------------------------------------------------------------
OCTOBER 22, 2004: 55% stock, 45% bond
NOVEMBER 24, 2004: 45% stock, 55% bond
DECEMBER 14, 2004: 40% stock, 60% bond
THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF
THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG
THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING
STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS
DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY
ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL- AND MID-CAP STOCKS
MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE
VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN
INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED
BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO
THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND
PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A
FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY
AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER
TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE
SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN.
1-800-922-6769
22
Columbia Thermostat Fund
>At a Glance TICKER SYMBOL: CTFAX
TOTAL NET ASSETS OF THE FUND: $207.3 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
>through December 31, 2004
LIFE OF
1 YEAR FUND
------ -------
Returns before NAV 8.92% 17.29%
taxes POP 2.65 13.57
- ---------------------------------------------------------------
Returns after taxes NAV 8.16 16.65
on distributions POP 1.94 12.95
- ---------------------------------------------------------------
Returns after taxes NAV 5.85 14.49
on distributions and POP 1.77 11.29
sale of fund shares
- ---------------------------------------------------------------
S&P 500 (pretax) 10.88 24.11
Lehman U.S. Credit
- ---------------------------------------------------------------
Intermediate Bond 4.08 4.82
Index (pretax)
- ---------------------------------------------------------------
Lipper Flexible Portfolio 9.50 19.36
Funds Index (pretax)*
- ---------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
*The Lipper Flexible Portfolio Funds Index is an equal dollar weighted index of
the 30 largest mutual funds within the flexible portfolio fund classification,
as defined by Lipper.
COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS
>as a % of assets in each investment category, as of December 31, 2004
STOCK MUTUAL FUNDS
[PIE CHART]
Columbia Acorn Fund 20%
Columbia Acorn Select 15%
Columbia Growth Stock Fund 25%
Columbia Growth & Income Fund 25%
Columbia Mid Cap Value Fund 15%
BOND MUTUAL FUNDS
[PIE CHART]
Columbia Federal Securities Fund 30%
Columbia Intermediate Bond Fund 50%
Columbia High Yield Fund 20%
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS A)
>March 3, 2003 through December 31, 2004
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The S&P 500 is a broad,
market-weighted average of U.S. blue-chip company stock performance. The Lehman
U.S. Credit Intermediate Bond Index is the intermediate component of the U.S.
Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and
foreign debentures and secured notes that meet specified maturity, liquidity,
and quality requirements. The Indexes are unmanaged and returns for the indexes
and the Fund include reinvested dividends and capital gains. It is not possible
to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES.
WITHOUT CLASS A CLASS B CLASS C
SALES CHARGE $13,408 $13,250 $13,233
- -------------------------------------------------------
WITH
SALES CHARGE $12,637 $12,850 $13,233
[MOUNTAIN CHART]
Columbia Columbia
Thermostat Fund - A Thermostat Fund - A Lehman U.S. Credit Intermediate
at NAV with sales charge S&P 500 Bond Index
3/3/2003 10000.00 9425.00 10000.00 10000.00
3/31/2003 10089.00 9508.88 10097.10 10020.70
10603.50 9993.84 10928.80 10158.30
11078.60 10441.60 11504.60 10417.70
6/30/2003 11224.80 10579.40 11651.40 10423.30
11284.30 10635.50 11856.80 10103.50
11512.20 10850.30 12088.00 10134.20
9/30/2003 11482.30 10822.10 11959.70 10436.00
11868.10 11185.70 12636.20 10342.80
12007.00 11316.60 12747.40 10374.00
12/31/2003 12308.40 11600.60 13416.00 10476.90
12478.20 11760.70 13662.20 10561.20
12618.00 11892.40 13852.10 10678.30
3/31/2004 12658.30 11930.50 13643.10 10772.80
12397.60 11684.70 13428.90 10497.80
12437.20 11722.10 13613.20 10431.30
6/30/2004 12635.00 11908.50 13877.90 10469.00
12444.20 11728.70 13418.60 10575.70
12513.90 11794.40 13472.90 10781.00
9/30/2004 12674.10 11945.30 13618.80 10821.40
12884.50 12143.60 13826.90 10904.10
13184.70 12426.60 14386.30 10807.80
12/31/2004 13407.50 12636.60 14875.90 10904.50
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION
>as a % of net assets, as of December 31, 2004
[PIE CHART]
Stock Mutual Funds 40.0%
Bond Mutual Funds 59.4%
Cash and other Assets less Liabilities 0.6%
23
Columbia Acorn Fund
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
INFORMATION
Advantech (Taiwan) 0 986,000
American Tower 2,250,000 2,750,000
Avnet 1,695,000 2,075,000
Avocent 945,000 1,070,000
Bearing Point 3,350,000 4,000,000
CDW 0 230,000
Ceridian 1,090,000 1,395,000
Entravision Communications 1,000,000 1,200,000
Fair Isaac 530,000 990,000
FTI Consulting 0 302,000
Gray Television 1,400,000 1,452,000
Hong Kong Exchanges &
Clearing (Hong Kong) 7,000,000 9,000,000
Liberty Media International 864,000 1,000,000
Maximus 0 300,000
McAfee 1,600,000 1,658,000
Pinnacle Systems 2,000,000 2,500,000
Rogers 445,000 660,000
Salem Communications 770,000 1,291,000
Semtech 850,000 1,425,000
SES Global (Luxembourg) 2,537,000 2,907,000
Symbol Technologies 1,235,000 1,810,000
Symmetricom 1,225,000 1,510,000
Wincor Nixdorf (Germany) 0 130,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Brookstone 600,000 819,000
Central Parking 1,140,000 1,514,000
Edgars Consolidated Stores
(South Africa) 0 350,000
Fast Retailing (Japan) 200,000 300,000
HNI 1,750,000 2,200,000
International Speedway Motors 805,000 905,000
Jurys Doyle Hotel (Ireland) 720,000 880,000
Knoll 0 650,000
Nobia (Sweden) 1,700,000 2,130,000
Oxford Industries 664,000 836,000
Park 24 (Japan) 0 700,000
Petco Animal Supplies 1,015,000 1,245,000
Princeton Review 1,750,000 1,850,000
RC 2 545,000 845,000
Sports Authority 873,000 1,400,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Bilfinger Berger (Germany) 525,000 635,000
Carbone Lorraine (France) 0 93,000
Clarcor 1,400,000 1,600,000
Dominion Homes 290,000 490,000
Donaldson 1,700,000 2,000,000
Genlyte Group 430,000 700,000
Imtech (Netherlands) 0 46,000
Meitec (Japan) 280,000 447,000
M/I Homes 141,000 218,000
Oshkosh Truck 0 106,000
Quanta Services 1,450,000 1,548,000
Sika (Switzerland) 25,000 35,000
Spartech 2,550,000 2,947,000
Watsco 1,525,000 2,276,000
- ----------------------------------------------------------------------------
FINANCE
Associated Banc-Corp 2,412,000 2,712,000
Cascade Financial 188,000 358,000
CityBank Lynnwood 455,000 500,000
First Financial BankShares 82,000 111,000
Great Southern Bancorp 465,000 479,000
Intermediate Capital
(United Kingdom) 500,000 620,000
Komercni Banka (Czech Republic) 172,000 195,000
Nuveen Investments 524,000 782,000
Provident Bancorp 0 160,000
Scottish Re Group 650,000 1,174,000
Selective Insurance Group 600,000 710,000
Sterling Bancorp 0 123,000
(INCLUDES THE EFFECT OF A 6 FOR 5 STOCK SPLIT)
Washington Federal 869,000 1,059,000
West Bancorporation 251,000 493,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Atmos Energy 1,076,000 1,206,000
Ivanhoe Mines (Canada) 0 1,000,000
Pride International 0 1,500,000
Range Resources 950,000 1,000,000
Western Gas 2,900,000 3,000,000
- ----------------------------------------------------------------------------
HEALTH CARE
AtheroGenics 789,000 1,179,000
Charles River Laboratories 640,000 840,000
Neurocrine Biosciences 360,000 500,000
Pozen 2,200,000 2,400,000
United Drug (Ireland) 2,000,000 2,106,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Allied Waste Industries 1,500,000 2,500,000
Heartland Express 0 371,000
Highland Hospitality 1,240,000 1,552,000
1-800-922-6769
24
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Sales
- ----------------------------------------------------------------------------
INFORMATION
Activision 1,125,000 1,000,000
Asyst Technologies 664,000 0
Autobytel 500,000 0
Avid Technology 1,469,000 1,300,000
Euronet Worldwide 249,000 0
Information Holdings 600,000 0
Mediacom Communications 2,500,000 1,250,000
Netegrity 973,000 0
PeopleSoft 3,450,000 0
Shuffle Master 940,000 700,000
SPSS 385,000 222,000
THQ 1,260,000 800,000
Trimble Navigation 1,350,000 1,200,000
Zebra Technologies 591,000 400,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Leapfrog Enterprises 1,275,000 0
Lion Nathan (Australia) 4,000,000 2,500,000
Monarch Casino & Resort 805,000 0
Orbitz 1,050,000 0
Otsuke Kagu (Japan) 280,000 0
Rank Group (United Kingdom) 2,500,000 0
Uni-Charm (Japan) 255,000 0
Urban Outfitters 1,026,000 826,000
Whole Foods Market 350,000 230,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
G&K Services 550,000 300,000
Givaudan (Switzerland) 37,000 20,000
Hub Group 469,000 424,000
Sembcorp Logistics
(Singapore) 7,500,000 0
SYMYX 347,000 0
Tenaris (Argentina) 700,000 600,000
- ----------------------------------------------------------------------------
FINANCE
Bank of the Ozarks 436,000 0
First Federal Capital 700,000 0
HCC Insurance Holdings 1,320,000 1,020,000
Jardine Lloyd Thompson
(United Kingdom) 1,992,000 0
People's Bank of Bridgeport 3,276,000 3,196,000
Philadelphia Consolidated
Holding 720,000 575,000
RLI 800,000 570,000
Texas Regional Bancshares 1,980,000 1,830,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Clayton Williams Energy 440,000 0
Gamesa (Spain) 670,000 0
Nexen (Canada) 925,000 0
Southwestern Energy 1,100,000 500,000
Ultra Petroleum 2,195,000 1,700,000
XTO Energy 7,275,000 7,000,000
- ----------------------------------------------------------------------------
HEALTH CARE
Bioveris 194,000 0
First Health Group 5,586,000 4,586,000
Omega Pharma (Belgium) 276,000 236,000
Protein Design Labs 608,000 0
Sangamo Biosciences 1,698,000 0
Smith & Nephew
(United Kingdom) 2,910,000 0
Yuhan (South Korea) 138,000 10,992
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Am NV (Netherlands) 687,000 106,000
The Rouse Company 825,000 0
25
Columbia Acorn Fund
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
SECURITIES: 92.5%
- ----------------------------------------------------------------------------
INFORMATION: 22.6%
SOFTWARE/SERVICES
>BUSINESS SOFTWARE: 4.6%
1,625,000 Kronos (b)(c) $ 83,086
LABOR MANAGEMENT SOLUTIONS
1,300,000 Avid Technology (b) 80,275
DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS
11,500,000 Novell (b) 77,625
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
950,000 Micros Systems (b)(c) 74,157
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
1,658,000 McAfee (b) 47,966
SECURITY SOFTWARE & SERVICES
3,448,000 Aspect Communications (b)(c) 38,411
CALL CENTER SOFTWARE
6,700,000 E.Piphany (b)(c) 32,361
CRM SOFTWARE
1,521,000 Sybase (b) 30,344
DATABASE SOFTWARE
2,200,000 JDA Software Group (b)(c) 29,964
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
2,000,000 MRO Software (b)(c) 26,040
ENTERPRISE MAINTENANCE SOFTWARE
2,200,000 MAPICS (b)(c) 23,210
MID MARKET ERP SOFTWARE
1,300,000 Witness Systems (b)(c) 22,698
CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE
3,000,000 Lawson Software (b) 20,610
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
6,000,000 Actuate (b)(c) 15,300
INFORMATION DELIVERY SOFTWARE & SOLUTIONS
5,000,000 Indus International (b)(c) 10,695
600,000 Indus International (b)(c) 1,283
ENTERPRISE ASSET MANAGEMENT SOFTWARE
1,575,000 Radiant Systems (b)(c) 10,253
POINT OF SALE SYSTEMS FOR CONVENIENCE STORES
300,000 Maximus (b) 9,336
OUTSOURCER FOR GOVERNMENT
1,250,000 ClickSoftware Technologies (b) 3,588
SERVICE CHAIN OPTIMIZATION SOFTWARE
222,000 SPSS (b) 3,472
STATISTICAL/BUSINESS ANALYSIS SOFTWARE
- ----------------------------------------------------------------------------
640,674
>BUSINESS INFORMATION/BUSINESS SERVICES/
PUBLISHING: 1.7%
1,200,000 Getty Images (b) 82,620
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
990,000 Fair Isaac 36,313
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
1,336,000 Navigant Consulting (b) 35,538
FINANCIAL CONSULTING FIRM
2,685,000 InfoUSA (b)(c) 30,045
BUSINESS DATA FOR SALES LEADS
1,395,000 Ceridian (b) 25,501
HR SERVICES & PAYMENT PROCESSING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
350,000 Dex Media $ 8,736
YELLOW PAGES PUBLISHER
1,700,000 PRIMEDIA (b) 6,460
SPECIALTY MAGAZINES & OTHER PUBLICATIONS
302,000 FTI Consulting (b) 6,363
FINANCIAL CONSULTING FIRM
- ----------------------------------------------------------------------------
231,576
>TRANSACTION PROCESSORS: 1.0%
1,457,000 Global Payments 85,293
CREDIT CARD PROCESSOR
9,000,000 Hong Kong Exchanges & Clearing
(Hong Kong) 24,141
HONG KONG EQUITY & DERIVATIVES OPERATOR
1,250,000 Pegasus Systems (b)(c) 15,750
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
600,000 Cubic 15,102
REVENUE COLLECTION & DEFENSE SYSTEMS
- ----------------------------------------------------------------------------
140,286
>INTERNET: 1.0%
9,500,000 Skillsoft Publishing (b)(c) 53,675
PROVIDER OF WEB-BASED LEARNING
SOLUTIONS (E-LEARNING)
2,000,000 RSA Security (b) 40,120
ENTERPRISE SECURITY SOFTWARE
2,000,000 ValueClick (b) 26,660
INTERNET ADVERTISING
1,400,000 DoubleClick (b) 10,892
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
1,879,808 Vital Stream, Cl. C (b) 1,560
STREAMING SERVICES FOR THE INTERNET
- ----------------------------------------------------------------------------
132,907
>COMPUTER SERVICES: 0.8%
4,000,000 Bearing Point (b) 32,120
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
4,600,000 AnswerThink (b)(c) 21,436
IT INTEGRATOR FOR FORTUNE 2000
2,000,000 Ciber (b) 19,280
SOFTWARE SERVICES & STAFFING
4,656,000 Igate Capital (b)(c) 18,857
TECHNOLOGY STAFFING SERVICES
2,300,000 Analysts International (b)(c) 9,200
TECHNOLOGY STAFFING SERVICES
1,025,000 New Horizons Worldwide (b)(c) 5,750
COMPUTER TRAINING SERVICES
- ----------------------------------------------------------------------------
106,643
>ELECTRONICS DISTRIBUTION: 0.7%
2,075,000 Avnet (b) 37,848
ELECTRONIC COMPONENTS DISTRIBUTION
680,000 Tech Data (b) 30,872
I/T DISTRIBUTOR
230,000 CDW 15,260
TECH RETAILER
710,000 Agilysys 12,169
I/T DISTRIBUTOR
- ----------------------------------------------------------------------------
96,149
1-800-922-6769
26
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSUMER SOFTWARE: 0.4%
1,000,000 Activision (b) $ 20,180
ENTERTAINMENT SOFTWARE
800,000 THQ (b) 18,352
ENTERTAINMENT SOFTWARE
2,500,000 Pinnacle Systems (b) 15,250
VIDEO EDITING SOFTWARE & HARDWARE
- ----------------------------------------------------------------------------
53,782
COMPUTER RELATED HARDWARE
>COMPUTER HARDWARE/RELATED SYSTEMS: 2.6%
2,500,000 Seachange International (b)(c) 43,600
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
1,070,000 Avocent (b) 43,356
COMPUTER CONTROL SWITCHES
1,525,000 Unova (b) 38,567
BARCODE & WIRELESS LAN SYSTEMS
1,810,000 Symbol Technologies 31,313
MOBILE COMPUTERS & BARCODE SCANNERS
371,900 Neopost (France) 28,814
POSTAGE METER MACHINES
660,000 Rogers (b) 28,446
PCB LAMINATES & HIGH PERFORMANCE FOAMS
535,000 II VI (b) 22,732
LASER COMPONENTS
400,000 Zebra Technologies (b) 22,512
BAR CODE PRINTERS
1,500,000 CTS 19,935
ELECTRONIC COMPONENTS, SENSORS & EMS
788,000 Belden CDT 18,282
SPECIALTY CABLE
625,000 Excel Technologies (b)(c) 16,250
LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS
5,000,000 Concurrent Computer (b)(c) 14,300
VIDEO ON DEMAND SYSTEMS & SERVICES
2,900,000 3Com (b) 12,093
NETWORKING EQUIPMENT
130,000 Wincor Nixdorf (Germany) (b)(f) 10,432
RETAIL POS SYSTEMS & ATM MACHINES
6,800,000 Phoenixtec Power (Taiwan) 8,193
UNINTERRUPTABLE POWER SUPPLIES
230,000 Applied Films (b) 4,959
THIN-FILM GLASS COATING EQUIPMENT
986,000 Advantech (Tawain) 2,388
EMBEDED COMPUTERS
- ----------------------------------------------------------------------------
366,172
>GAMING EQUIPMENT: 1.9%
6,700,000 International Game Technology 230,346
SLOT MACHINES & PROGRESSIVE JACKPOTS
700,000 Shuffle Master (b) 32,970
CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES
- ----------------------------------------------------------------------------
263,316
>INSTRUMENTATION: 1.0%
1,200,000 Trimble Navigation (b) 39,648
GPS-BASED INSTRUMENTS
600,000 Mettler Toledo (b) 30,786
LABORATORY EQUIPMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
536,000 Dionex (b) $ 30,375
ION & LIQUID CHROMATOGRAPHY
428,000 Varian (b) 17,552
ANALYTICAL INSTRUMENTS
2,300,000 Spectris (United Kingdom) 16,839
ELECTRONIC INSTRUMENTATION & CONTROLS
- ----------------------------------------------------------------------------
135,200
>SEMICONDUCTORS/RELATED EQUIPMENT: 0.9%
1,425,000 Semtech (b) 31,165
ANALOG SEMICONDUCTORS
1,315,000 Integrated Circuit Systems (b) 27,510
SILICON TIMING DEVICES
685,000 Littelfuse (b) 23,400
LITTLE FUSES
1,250,000 IXYS (b) 12,900
POWER SEMICONDUCTORS
565,000 Supertex (b) 12,261
MIXED-SIGNAL SEMICONDUCTORS
1,380,000 Ase Test (Taiwan) (b) 9,329
SEMICONDUCTOR PACKAGING & TEST SERVICES
361,000 Actel (b) 6,332
FIELD PROGRAMMABLE GATE ARRAYS
604,000 Pericom Semiconductor (b) 5,696
SEMICONDUCTORS: INTERFACE INTEGRATED CIRCUITS
- ----------------------------------------------------------------------------
128,593
>CONTRACT MANUFACTURING: 0.4%
1,500,000 Jabil Circuit (b) 38,370
ELECTRONIC MANUFACTURING SERVICES
1,600,000 Plexus (b) 20,816
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
59,186
TELECOMMUNICATIONS
>MOBILE COMMUNICATIONS: 1.8%
3,000,000 Western Wireless (b) 87,900
RURAL CELLULAR PHONE SERVICES
4,000,000 Crown Castle International (b) 66,560
COMMUNICATION TOWERS
2,750,000 American Tower (b) 50,600
COMMUNICATION TOWERS IN USA & MEXICO
520,000 Telephone & Data Systems 40,014
CELLULAR & TELEPHONE SERVICES
- ----------------------------------------------------------------------------
245,074
>TELECOMMUNICATIONS EQUIPMENT: 1.1%
8,700,000 Tellabs (b) 74,733
TELECOMMUNICATIONS EQUIPMENT
830,000 Plantronics 34,420
COMMUNICATION HEADSETS
2,000,000 Andrew (b) 27,260
WIRELESS INFRASTRUCTURE EQUIPMENT
1,510,000 Symmetricom (b) 14,662
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
151,075
>TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3%
800,000 Commonwealth Telephone (b) 39,728
RURAL PHONE FRANCHISES & CLEC
27
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
MEDIA
>TELEVISION PROGRAMMING/CATV: 1.1%
1,000,000 Liberty Media International (b) $ 46,230
CATV HOLDING COMPANY
3,000,000 UnitedGlobalCom (b) 28,980
VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA
2,605,000 Liberty Media 28,603
CATV PROGRAMMING & MEDIA COMPANY HOLDINGS
2,700,000 Insight Communications (b) 25,029
CATV FRANCHISES IN MIDWEST
1,100,000 Corus Entertainment (Canada) 22,914
TELEVISION PROGRAMMING & RADIO STATIONS
1,250,000 Mediacom Communications (b) 7,813
CABLE TELEVISION FRANCHISES
- ----------------------------------------------------------------------------
159,569
>TV/SATELLITE BROADCASTING: 0.7%
2,907,000 SES Global (Luxembourg) 37,800
SATELLITE BROADCASTING SERVICES
1,452,000 Gray Television 22,506
MID MARKET AFFILIATED TV STATIONS
450,000 Alliance Atlantis Communication
(Canada) (b) 12,265
CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION
1,200,000 Entravision Communications (b) 10,020
SPANISH LANGUAGE TV, RADIO & OUTDOOR
270,000 Metropole TV (France) 7,643
TELEVISION BROADCASTER
200,000 Young Broadcasting (b) 2,112
TELEVISION STATIONS
- ----------------------------------------------------------------------------
92,346
>RADIO BROADCASTING: 0.6%
1,291,000 Salem Communications (b) 32,210
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
1,200,000 Cumulus Media, Cl. A (b) 18,096
RADIO STATIONS IN SMALL CITIES
992,000 Saga Communications (b) 16,715
RADIO STATIONS IN SMALL & MID-SIZED CITIES
1,200,000 Spanish Broadcasting (b) 12,672
SPANISH LANGUAGE RADIO STATIONS
- ----------------------------------------------------------------------------
79,693
------------
INFORMATION: TOTAL 3,121,969
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 20.7%
SERVICES
>RETAIL: 6.0%
2,495,000 Chico's FAS (b) 113,597
WOMEN'S SPECIALTY RETAIL
3,200,000 Michaels Stores 95,904
CRAFT & HOBBY SPECIALTY RETAILER
3,743,000 Christopher & Banks (c) 69,058
WOMEN'S APPAREL RETAILER
2,265,000 Aeropostale (b) 66,659
MALL BASED TEEN RETAILER
1,245,000 Abercrombie & Fitch 58,453
TEEN APPAREL RETAILER
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
1,245,000 Petco Animal Supplies (b) $ 49,153
PET SUPPLIES & SERVICES
1,400,000 Williams Sonoma (b) 49,056
HOME GOODS & FURNISHING RETAILER
826,000 Urban Outfitters (b) 36,674
ECLECTIC HOME & APPAREL RETAILER
1,400,000 Sports Authority (b)(c) 36,050
SPORTING GOODS STORES
1,300,000 Borders Group 33,020
BOOKSTORES
1,072,000 Zale (b) 32,021
SPECIALTY RETAILER OF JEWELRY
955,000 West Marine (b) 23,636
LARGEST RETAILER OF BOATING SUPPLIES
1,370,000 Hot Topic (b) 23,550
MUSIC INSPIRED RETAILER OF APPAREL,
ACCESSORIES & GIFTS
1,093,000 Ann Taylor (b) 23,532
WOMEN'S APPAREL RETAILER
300,000 Fast Retailing (Japan) (f) 22,755
APPAREL RETAILER
230,000 Whole Foods Market 21,931
NATURAL FOOD SUPERMARKETS
700,000 Genesco (b) 21,798
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
350,000 Edgars Consolidated Stores
(South Africa) 18,740
LEADING RETAIL CONGLOMERATE
819,000 Brookstone (b) 16,011
SPECIALTY CONSUMER PRODUCT RETAILER
2,250,000 Esprit Holdings (Hong Kong) 13,605
GLOBAL APPAREL BRAND MANAGER
1,062,000 Gaiam (b)(c) 6,531
HEALTHY LIVING CATALOG & E-COMMERCE
$ 6,000 Gadzooks 5% Convertible 10/07/08 (e)(g) 600
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
832,334
>CONSUMER SERVICES: 1.6%
2,250,000 ITT Educational Services (b) 106,988
POSTSECONDARY DEGREE PROGRAMS
1,290,000 Coinstar (b)(c) 34,611
OWNER/OPERATOR OF COIN COUNTING MACHINES
775,000 Weight Watchers (b) 31,829
WEIGHT LOSS PROGRAMS
1,514,000 Central Parking 22,937
OWNER, OPERATOR & MANAGER OF PARKING
LOTS & GARAGES
700,000 Park 24 (Japan) (f) 12,518
PARKING LOT OPERATOR
1,850,000 Princeton Review (b)(c) 11,378
COLLEGE PREPARATION COURSES
2,350,000 Bally Total Fitness (b)(c) 9,964
NATIONAL CHAIN OF FITNESS CENTERS
- ----------------------------------------------------------------------------
230,225
>CASINOS: 1.3%
890,000 Station Casinos 48,665
CASINOS & RIVERBOATS
875,000 Argosy Gaming (b) 40,862
REGIONAL RIVERBOAT CASINOS
1-800-922-6769
28
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CASINOS--CONTINUED
1,925,000 Pinnacle Entertainment (b) $ 38,077
REGIONAL RIVERBOAT CASINOS
2,750,000 Alliance Gaming (b)(c) 37,977
DIVERSIFIED GAMING COMPANY
4,130,000 Sky City Entertainment (New Zealand) 15,959
CASINO/ENTERTAINMENT COMPLEX
226,000 Lakes Entertainment (b) 3,682
NATIVE AMERICAN CASINO DEVELOPMENT
- ----------------------------------------------------------------------------
185,222
>TRAVEL: 1.0%
2,314,500 Intrawest (Canada) 53,130
OWNER/OPERATOR OF SKI RESORTS
3,380,000 LaQuinta (b) 30,724
OWNER/FRANCHISER OF MID-PRICED HOTELS
1,115,000 Vail Resorts (b) 24,998
OWNER/OPERATOR OF SKI RESORTS
880,000 Jurys Doyle Hotel (Ireland) 14,685
OWNER/OPERATOR OF MID-PRICED HOTELS
1,045,000 Navigant International (b)(c) 12,718
CORPORATE TRAVEL AGENCY
- ----------------------------------------------------------------------------
136,255
>ENTERTAINMENT/LEISURE PRODUCTS: 0.9%
905,000 International Speedway Motors 47,784
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
845,000 RC2 (b) 27,547
COLLECTIBLES & TOYS
1,110,000 Amer Group (Finland) (f) 19,327
BRANDED SPORTING GOODS
363,000 Speedway Motorsports 14,222
MOTORSPORT RACETRACK OWNER & OPERATOR
345,000 Intralot (Greece) 8,421
LOTTERY & GAMING SYSTEMS & SERVICES
500,000 Callaway Golf 6,750
PREMIUM GOLF CLUBS & BALLS
- ----------------------------------------------------------------------------
124,051
>RESTAURANTS: 0.7%
2,000,000 AFC Enterprises (b)(c) 47,300
POPEYES CHICKEN
1,447,000 Autogrill (Italy) (b)(f) 24,078
TOLLWAY RESTAURANTS
364,000 Cheesecake Factory (b) 11,819
CASUAL DINING RESTAURANTS
388,000 Kappa Create (Japan) (f) 11,584
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
94,781
>CRUISE LINES: 0.2%
400,000 Carnival 23,052
LARGEST CRUISE LINE
- ----------------------------------------------------------------------------
GOODS
>FURNITURE/TEXTILES: 2.3%
2,200,000 HNI 94,710
OFFICE FURNITURE & FIREPLACES
740,000 Mohawk Industries (b) 67,525
CARPET & FLOORING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,900,000 Herman Miller $ 52,497
OFFICE FURNITURE
844,000 American Woodmark (c) 36,866
KITCHEN CABINET MANUFACTURER
2,130,000 Nobia (Sweden) (f) 35,171
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
550,000 Masonite International (Canada) (b) 18,918
DOOR MANUFACTURER
650,000 Knoll (b) 11,375
OFFICE FURNITURE
- ----------------------------------------------------------------------------
317,062
>APPAREL: 2.2%
2,990,000 Coach (b) 168,636
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
836,000 Oxford Industries 34,527
BRANDED & PRIVATE LABEL APPAREL
3,000,000 Billabong International (Australia) 26,843
SURFWEAR APPAREL MANUFACTURER
400,000 Columbia Sportswear (b) 23,844
ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES
469,000 Carter's (b) 15,941
CHILDREN'S BRANDED APPAREL
728,000 Steven Madden (b)(c) 13,730
WHOLESALER/RETAILER OF FASHION FOOTWEAR
5,000,000 Pacific Brands (Australia) 12,464
AUSTRALIAN BRANDED APPAREL
1,000,000 Wacoal (Japan) (f) 12,015
WOMEN'S SPECIALTY APPAREL
- ----------------------------------------------------------------------------
308,000
>LEISURE VEHICLES: 1.3%
1,745,000 Harley-Davidson 106,009
MOTORCYCLES & RELATED MERCHANDISE
550,000 Polaris Industries 37,411
MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS
1,495,000 Monaco Coach (c) 30,752
RECREATIONAL VEHICLES
2,850,000 Ducati Motor (Italy) (b)(f) 3,394
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
177,566
>DURABLE GOODS: 1.1%
1,316,000 Helen of Troy (b) 44,231
HAIRDRYERS & CURLING IRONS
465,000 Hyundai Mobis (South Korea) (b)(f) 29,344
AUTO PARTS
478,000 Hunter Douglas (Netherlands) 25,412
WINDOW SHADES & VENETIAN BLINDS
10,000,000 Techtronic Industries (Hong Kong) 21,871
MANUFACTURER OF POWER TOOLS & MOTORIZED APPLIANCES
610,000 Shimano (Japan) (f) 17,383
BICYCLE COMPONENTS & FISHING TACKLE
133,000 Funai Electric (Japan) (f) 16,499
CONSUMER ELECTRONICS
- ----------------------------------------------------------------------------
154,740
29
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>NONDURABLES: 1.1%
895,000 Scotts Company (b) $ 65,800
CONSUMER LAWN & GARDEN PRODUCTS
1,989,000 SCP Pool 63,449
DISTRIBUTOR OF SWIMMING POOL SUPPLIES
630,000 Natura Cosmeticos (Brazil) 18,383
DIRECT RETAILER OF COSMETICS
- ----------------------------------------------------------------------------
147,632
>FOOD & BEVERAGES: 1.0%
1,600,000 Kerry (Ireland) 38,251
FOOD INGREDIENTS
725,000 Orkla (Norway) (f) 23,699
FOOD & DIVERSIFIED CONSUMER GOODS
850,000 NBTY (b) 20,409
VITAMINS & SUPPLEMENTS
30,000,000 Global Bio-Chem Technology
Group (China) 19,876
1,841,250 Global Bio-Chem Technology
Group Warrants (China) (b) 88
CHINESE REFINER OF CORN-BASED COMMODITIES
2,500,000 Lion Nathan (Australia) 16,801
BEER BREWER/DISTRIBUTOR
180,000 Davide Campari (Italy) (f) 11,578
SPIRITS & WINE
- ----------------------------------------------------------------------------
130,702
------------
CONSUMER GOODS/SERVICES: TOTAL 2,861,622
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 14.6%
>LOGISTICS: 2.3%
2,750,000 Expeditors International
of Washington 153,670
INTERNATIONAL FREIGHT FORWARDER
900,000 UTI Worldwide 61,218
INTERNATIONAL FREIGHT FORWARDER
1,000,000 Forward Air (b) 44,700
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
2,600,000 Exel (United Kingdom) 36,028
GLOBAL LOGISTICS & FREIGHT FORWARDING
424,000 Hub Group (b) 22,141
TRUCK & RAIL FREIGHT FORWARDER
- ----------------------------------------------------------------------------
317,757
>INDUSTRIAL GOODS: 1.9%
1,600,000 Clarcor (c) 87,632
MOBILE & INDUSTRIAL FILTERS
2,000,000 Donaldson 65,160
INDUSTRIAL AIR FILTRATION
700,000 Genlyte Group (b)(c) 59,976
COMMERCIAL LIGHTING FIXTURES
804,000 Mine Safety Appliances 40,763
SAFETY EQUIPMENT
100,000 Bacou Dalloz (France) 7,992
SAFETY EQUIPMENT
2,500,000 Electric City (b)(c) 3,075
ELECTRICITY CONSERVATION DEVICES
- ----------------------------------------------------------------------------
264,598
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>MACHINERY: 1.8%
1,050,000 Esco Technologies (b)(c) $ 80,483
AUTOMATIC ELECTRIC METER READERS
2,250,000 Ametek 80,258
AEROSPACE/INDUSTRIAL INSTRUMENTS
840,000 Pentair 36,590
PUMPS, WATER TREATMENT & TOOLS
785,000 Gardner Denver (b) 28,488
AIR COMPRESSORS, BLOWERS & PUMPS
500,000 Cobham (United Kingdom) 11,854
AEROSPACE COMPONENTS
106,000 Oshkosh Truck 7,248
SPECIALTY TRUCK MANUFACTURER
150,000 Tennant 5,948
NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT
- ----------------------------------------------------------------------------
250,869
>INDUSTRIAL DISTRIBUTION: 1.7%
2,276,000 Watsco (c) 80,161
HVAC DISTRIBUTION
3,800,000 Grafton Group (Ireland) (b) 41,177
BUILDERS, WHOLESALERS & DIY RETAILING
1,200,000 Hughes Supply 38,820
INDUSTRIAL DISTRIBUTION
1,375,000 Airgas 36,451
INDUSTRIAL GAS DISTRIBUTOR
900,000 Nuco2 (b)(c) 19,971
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
600,000 Aviall (b) 13,782
AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR
- ----------------------------------------------------------------------------
230,362
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 1.5%
2,947,000 Spartech (c) 79,834
PLASTICS DISTRIBUTION & COMPOUNDING
42,500 Geberit International (Switzerland) (f) 30,991
PLUMBING SUPPLIES
450,000 Novozymes (Denmark) (f) 22,773
INDUSTRIAL ENZYMES
1,000,000 Schulman 21,410
PLASTICS DISTRIBUTION & COMPOUNDING
35,000 Sika (Switzerland) (f) 20,910
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL
APPLICATION
200,000 Imerys (France) 16,728
INDUSTRIAL MINERALS PRODUCER
20,000 Givaudan (Switzerland) (f) 13,150
INDUSTRIAL FRAGRANCES & FLAVORS
93,000 Carbone Lorraine (France) (b) 4,913
ADVANCED INDUSTRIAL MATERIALS
337,000 National Patent Development (b) 775
PLASTIC SHIELDS FOR RECREATIONAL USE
- ----------------------------------------------------------------------------
211,484
>CONSTRUCTION: 1.2%
738,000 Florida Rock Industries 43,933
CONCRETE & AGGREGATES
1,134,000 Simpson 39,577
WALL JOINT MAKER
1-800-922-6769
30
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSTRUCTION--CONTINUED
787,500 Wienerberger (Austria) (f) $ 37,531
BRICKS & CLAY ROOFING TILES
380,000 Daito Trust Construction (Japan) (f) 18,032
APARTMENT BUILDER
490,000 Dominion Homes (b)(c) 12,359
OHIO/KENTUCKY HOME BUILDER
218,000 M/I Homes 12,014
OHIO HOME BUILDER
3,000,000 Consorcio (Mexico) (b) 9,016
AFFORDABLE HOUSING BUILDER
- ----------------------------------------------------------------------------
172,462
>WATER: 1.1%
856,000 Cuno (b) 50,846
FILTRATION & FLUIDS CLARIFICATION
3,000,000 Tetra Tech (b)(c) 50,220
RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING
1,080,000 Pall 31,266
FILTRATION & FLUIDS CLARIFICATION
554,000 Watts Water Technologies 17,861
WATER, VALVES, REGULATORS & FILTRATION
- ----------------------------------------------------------------------------
150,193
>STEEL: 1.0%
2,850,000 Gibraltar Steel (c) 67,317
STEEL PROCESSING
600,000 Tenaris (Argentina) 29,340
STEEL PIPE FOR OIL WELLS & PIPELINES
158,000 Vallourec (France) 23,541
SEAMLESS TUBES
1,050,000 Worthington Industries 20,559
STEEL PROCESSING
- ----------------------------------------------------------------------------
140,757
>OUTSOURCING SERVICES & TRAINING: 0.8%
1,800,000 Labor Ready (b) 30,456
TEMPORARY MANUAL LABOR
635,000 Bilfinger Berger (Germany) (f) 26,019
CONSTRUCTION & RELATED SERVICES
447,000 Meitec (Japan) (f) 16,627
STAFFING COMPANY SPECIALIZING IN RD ENGINEERS
640,000 United Services Group (Netherlands) 14,910
TEMPORARY STAFFING SERVICES
1,548,000 Quanta Services (b) 12,384
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
950,000 Administaff (b) 11,979
PROFESSIONAL EMPLOYER ORGANIZATION
600,000 GP Strategies (b) 4,470
TRAINING PROGRAMS
- ----------------------------------------------------------------------------
116,845
>OTHER INDUSTRIAL SERVICES: 0.7%
825,000 Mobile Mini (b)(c) 27,258
LEASES PORTABLE STORAGE UNITS
60,000 Schindler (Switzerland) (f) 23,699
ELEVATOR MANUFACTURER & SERVICE PROVIDER
1,500,000 Clark (b)(c) 23,280
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
300,000 G&K Services $ 13,026
UNIFORM RENTAL
185,000 Jaakko Poyry (Finland) (f) 5,563
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
46,000 Imtech (Netherlands) 1,617
TECHNICAL ENGINEERING
- ----------------------------------------------------------------------------
94,443
>CONGLOMERATES: 0.4%
740,000 Aalberts Industries (Netherlands) 35,783
FLOW CONTROL & HEAT TREATMENT
5,550 Pargesa (Switzerland) (f) 19,450
INDUSTRIAL & MEDIA HOLDINGS
- ----------------------------------------------------------------------------
55,233
>ELECTRICAL COMPONENTS: 0.2%
1,125,000 Ushio (Japan) (f) 20,937
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 2,025,940
- ----------------------------------------------------------------------------
FINANCE: 13.2%
>BANKS: 5.6%
3,502,000 TCF Financial 112,554
GREAT LAKES BANK
2,712,000 Associated Banc-Corp 90,066
MIDWEST BANK
3,300,000 Anglo Irish Bank (Ireland) 80,010
SMALL BUSINESS & MIDDLE MARKET BANKING
1,638,000 BOK Financial (b) 79,869
OKLAHOMA BANK
2,187,000 Glacier Bancorp (c) 74,445
MOUNTAIN STATES BANK
1,830,000 Texas Regional Bancshares 59,804
SOUTH TEXAS BANK
1,320,000 West Coast Bancorp (c) 33,541
PORTLAND SMALL BUSINESS LENDER
1,850,000 Depfa Bank (Ireland) (f) 30,941
INTERNATIONAL PUBLIC SECTOR FINANCE
195,000 Komercni Banka (Czech Republic) (f) 28,372
LEADING CZECH UNIVERSAL BANK
1,758,000 Republic 26,862
MICHIGAN BANK
756,000 Chittenden 21,720
VERMONT & WESTERN MASSACHUSETTS BANK
2,150,000 Den Norske Bank (Norway) (f) 21,094
LARGEST NORWEGIAN BANK
500,000 CityBank Lynnwood (c) 18,075
SEATTLE REAL ESTATE LENDER
370,000 Cullen Frost Bankers 17,982
SAN ANTONIO BANK
479,000 Great Southern Bancorp 16,765
MISSOURI REAL ESTATE LENDER
400,000 CorpBanca (Chile) (b) 11,500
CHILEAN LOCAL BANK
1,000,000 Credito Emiliano (Italy) (f) 9,899
ITALIAN REGIONAL BANK
31
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BANKS--CONTINUED
493,000 West Bancorporation $ 8,682
DES MOINES SMALL BUSINESS BANK
358,000 Cascade Financial 6,730
SEATTLE COMMUNITY BANK
82,000 BankFirst 6,476
OKLAHOMA COMMUNITY BANK
111,000 First Financial BankShares 4,974
WEST TEXAS COMMUNITY BANK
169,000 First Mutual Bancshares 4,279
SEATTLE COMMUNITY BANK6
170,000 Midwest Bank 3,718
CHICAGO BANK
123,000 Sterling Bancorp 3,475
NEW YORK CITY SMALL BIZ BANK
15,000 S Y Bancorp 362
LOUISVILLE BANK
- ----------------------------------------------------------------------------
772,195
>INSURANCE: 2.5%
826,000 Leucadia National 57,390
INSURANCE HOLDING COMPANY
138,000 Markel (b) 50,232
SPECIALTY INSURANCE
995,000 Protective Life 42,477
LIFE INSURANCE
575,000 Philadelphia Consolidated
Holding (b) 38,031
SPECIALTY INSURANCE
1,020,000 HCC Insurance Holdings 33,782
SPECIALTY INSURANCE
710,000 Selective Insurance Group 31,410
COMMERCIAL & PERSONAL LINES INSURANCE
1,174,000 Scottish Re Group 30,407
LIFE REINSURANCE
570,000 RLI 23,695
SPECIALTY INSURANCE
210,000 StanCorp Financial 17,325
GROUP LIFE & DISABILITY INSURANCE
340,000 Stewart Information Services 14,161
TITLE COMPANY
700,000 United National Group (b) 13,034
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
351,944
>SAVINGS & LOANS: 1.9%
3,196,000 People's Bank of Bridgeport 124,292
CONNECTICUT SAVINGS & LOAN
1,178,000 Anchor Bancorp Wisconsin (c) 34,339
WISCONSIN THRIFT
1,700,000 Housing Development Finance (India) 30,113
PREMIER MORTGAGE LENDER IN INDIA
1,059,000 Washington Federal 28,106
MORTGAGE LENDER
487,000 Downey Financial 27,759
CALIFORNIA HOME LENDER
226,000 FirstFed Financial (b) 11,723
SANTA MONICA SAVINGS & LOAN
200,000 Bankinter (Spain) (f) 10,615
MORTGAGE LENDER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
160,000 Provident Bancorp $ 2,110
NEW YORK STATE THRIFT
- ----------------------------------------------------------------------------
269,057
>FINANCE COMPANIES: 1.6%
5,831,000 AmeriCredit (b) 142,568
AUTO LENDING
1,820,000 World Acceptance (b)(c) 50,068
PERSONAL LOANS
1,000,000 Northgate (United Kingdom) 16,368
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
620,000 Intermediate Capital
(United Kingdom) 12,952
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
- ----------------------------------------------------------------------------
221,956
>MONEY MANAGEMENT: 1.4%
2,390,000 SEI Investments 100,213
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
1,195,000 Eaton Vance 62,319
SPECIALTY MUTUAL FUNDS
782,000 Nuveen Investments 30,866
SPECIALTY MUTUAL FUNDS
- ----------------------------------------------------------------------------
193,398
>BROKERAGE: 0.2%
1,215,000 Investment Technology Group (b) 24,300
ELECTRONIC TRADING
- ----------------------------------------------------------------------------
------------
FINANCE: TOTAL 1,832,850
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 9.3%
>OIL/GAS PRODUCERS: 5.2%
7,000,000 XTO Energy 247,660
NATURAL GAS PRODUCER
3,000,000 Western Gas 87,750
OIL PRODUCER & COAL SEAM GAS PRODUCER
1,700,000 Ultra Petroleum (b) 81,821
NATURAL GAS PRODUCER
3,000,000 Talisman Energy (Canada) 80,865
OIL & GAS PRODUCER
15,400,000 Tullow Oil (United Kingdom) 45,011
OIL & GAS PRODUCER
930,000 Petrokazakhstan (Canada) 34,503
70,000 Petrokazakhstan (Canada) 2,597
OIL PRODUCER & REFINER IN KAZAKHSTAN
830,000 Quicksilver Resources (b) 30,527
NATURAL GAS & COAL SEAM GAS PRODUCER
500,000 Southwestern Energy (b) 25,345
NATURAL GAS PRODUCER
814,000 Denbury Resources (b) 22,344
OIL PRODUCER USING CO2 INJECTION
1,100,000 McMoran Exploration (b) 20,570
NATURAL GAS PRODUCERS & LNG DEVELOPER
1,000,000 Range Resources 20,460
OIL & GAS PRODUCER
2,265,000 Tipperary (b)(c) 11,257
COAL SEAM GAS PRODUCER
1,000,000 Fairbourne Energy (Canada) (b) 10,040
OIL & GAS PRODUCER
- ----------------------------------------------------------------------------
720,750
1-800-922-6769
32
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>OIL SERVICES: 2.4%
2,300,000 FMC Technologies (b) $ 74,060
OIL & GAS WELL HEAD MANUFACTURER
710,000 Carbo Ceramics 48,990
NATURAL GAS WELL STIMULANTS
800,000 Chicago Bridge & Iron 32,000
ENGINEERING & CONSTRUCTION FOR
PETROCHEMICALS & LNG
1,500,000 Pride International (b) 30,810
OFFSHORE DRILLING CONTRACTOR
2,400,000 Key Energy Services (b) 28,320
OIL & GAS WELL WORKOVER SERVICES
333,000 Fugro (Netherlands) 27,694
SURVEY & GPS SERVICES
1,250,000 Enerflex Systems (Canada) (c) 24,539
NATURAL GAS COMPRESSOR
4,750,000 Newpark Resources (b)(c) 24,463
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
2,000,000 Saipem (Italy) (f) 23,963
OFFSHORE CONSTRUCTION & DRILLING
1,200,000 Hanover Compressor (b) 16,956
NATURAL GAS COMPRESSOR RENTAL
- ----------------------------------------------------------------------------
331,795
>DISTRIBUTION/MARKETING/REFINING: 1.3%
1,600,000 Equitable Resources 97,056
NATURAL GAS UTILITY & PRODUCER
1,900,000 Oneok 53,998
NATURAL GAS UTILITY, MARKETING & PROCESSING
1,206,000 Atmos Energy 32,984
NATURAL GAS UTILITY
- ----------------------------------------------------------------------------
184,038
>MINING: 0.4%
1,800,000 Xstrata (United Kingdom) 32,153
DIVERSIFIED MINING HOLDING COMPANY
900,000 Noranda (Canada) 15,793
DIVERSIFIED MINING HOLDING COMPANY
1,000,000 Ivanhoe Mines (Canada) (b) 7,207
COPPER MINING IN MONGOLIA
- ----------------------------------------------------------------------------
55,153
------------
ENERGY/MINERALS: TOTAL 1,291,736
- ----------------------------------------------------------------------------
HEALTH CARE: 8.6%
>SERVICES: 3.2%
2,491,000 Lincare Holdings (b) 106,241
HOME HEALTH CARE SERVICES
4,586,000 First Health Group (b) 85,805
PPO NETWORK
3,470,000 Gambro (Sweden) (f) 49,451
PRODUCTS/SERVICES FOR RENAL CARE
2,592,000 NDCHealth Group (c) 48,185
HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES
840,000 Charles River Laboratories (b) 38,648
PHARMACEUTICAL RESEARCH
510,000 OPG Groep (Netherlands) 29,704
HEALTCARE SUPPLIES & PHARMACIES
1,333,000 Dendrite International (b) 25,860
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
700,000 Accredo Health (b) 19,404
SPECIALTY PHARMACY
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
550,000 Serologicals (b) $ 12,166
BLOOD COLLECTION & ANTIBODY PRODUCTION
236,000 Omega Pharma (Belgium) 11,268
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
440,000 Medquist (b) 6,512
MEDICAL TRANSCRIPTION SERVICES
- ----------------------------------------------------------------------------
433,244
>MEDICAL EQUIPMENT/LABORATORY
SUPPLIES: 2.7%
1,629,000 Edwards Lifesciences (b) 67,213
HEART VALVES
1,240,000 Diagnostic Products (b) 68,262
IMMUNODIAGNOSTIC KITS
365,000 Essilor International (France) 28,502
EYEGLASS LENSES
1,000,000 Sola International (b) 27,540
SPECIALTY EYEGLASS LENSES
1,900,000 CTI Molecular Imaging (b) 26,961
MEDICAL DIAGNOSTIC DEVICES
1,000,000 VISX (b) 25,870
LASER EYE SURGERY EQUIPMENT
583,000 Orthofix International (b) 23,016
BONE FIXATION & STIMULATION DEVICES
200,000 Synthes-Stratec (Switzerland) (b)(f) 22,326
PRODUCTS FOR ORTHOPEDIC SURGERY
714,000 ICU Medical (b)(c) 19,521
INTRAVENOUS THERAPY PRODUCTS
750,000 Intermagnetics General (b) 19,058
MRI EQUIPMENT
390,000 Hogy Medical (Japan) (f) 18,325
DISPOSABLE SURGICAL PRODUCTS
875,000 Viasys Healthcare (b) 16,625
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
350,000 Haemonetics (b) 12,674
BLOOD & PLASMA COLLECTION EQUIPMENT
48,000 Diagnosticos (Brazil) 432
LARGEST PRIVATE DIAGNOSTIC SERVICES COMPANY IN BRAZIL
- ----------------------------------------------------------------------------
376,325
>BIOTECHNOLOGY/DRUG DELIVERY: 1.9%
1,179,000 AtheroGenics (b) 27,777
DRUGS FOR ATHEROSCLEROSIS
519,000 Martek Biosciences (b) 26,573
FATTY ACIDS FOR BABY FORMULA & OTHER FOODS
500,000 Neurocrine Biosciences (b) 24,650
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
1,350,000 DOV Pharmaceutical (b)(c) 24,368
DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION
2,000,000 Medarex (b) 21,560
HUMANIZED ANTIBODIES
1,055,000 Nektar Therapeutics (b) 21,353
DRUG DELIVERY TECHNOLOGIES
1,600,000 Ligand Pharmaceuticals (b) 18,624
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES
2,400,000 Pozen (b)(c) 17,448
DRUGS FOR MIGRAINES
2,000,000 Lexicon Genetics (b) 15,510
DRUG DISCOVERY
776,000 NPS Pharmaceuticals (b) 14,185
DRUGS FOR OSTEOPOROSIS & HYPERPARATHYROIDISM
33
Columbia Acorn Fund
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
460,000 Myriad Genetics (b) $ 10,355
GENE DISCOVERY & DIAGNOSTIC PRODUCTS
635,000 Maxygen (b) 8,122
MOLECULAR BREEDING
1,708,000 Ciphergen Biosystems (b)(c) 7,344
PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY
3,500,000 La Jolla Pharmaceutical (b)(c) 5,845
LUPUS TREATMENT
865,000 Arena Pharmaceuticals (b) 5,787
NOVEL DRUG TARGETING TECHNOLOGY
638,000 Diversa (b) 5,576
MOLECULAR BREEDING
1,875,000 Locus Discovery, Series D, Pfd. (b)(e)(g) 3,750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
461,000 SYRRX, Series C (b)(e)(g) 2,305
X-RAY CRYSTALLOGRAPHY
1,249,999 Perlegen Sciences (b)(e)(g) 2,237
LARGE SCALE GENE SEQUENCING
359,944 Microdose (b)(e)(g) 270
DRUG INHALERS
- ----------------------------------------------------------------------------
263,639
>MEDICAL SUPPLIES: 0.3%
686,000 Techne (b) 26,685
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
650,000 Owens & Minor 18,310
DISTRIBUTION OF MEDICAL SUPPLIES
- ----------------------------------------------------------------------------
44,995
>PHARMACEUTICALS: 0.3%
775,000 Par Pharmaceuticals (b) 32,070
GENERICS
2,106,000 United Drug (Ireland) 9,927
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
10,992 Yuhan (South Korea) (b)(f) 924
OTC & PRESCRIPTION DRUG MANUFACTURER
- ----------------------------------------------------------------------------
42,921
>HOSPITAL MANAGEMENT: 0.2%
500,000 Rhoen-Klinikum (Germany) (f) 30,537
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
------------
HEALTH CARE: TOTAL 1,191,661
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 3.5%
>REAL ESTATE: 2.2%
1,320,000 General Growth Properties 47,731
REGIONAL SHOPPING MALLS
699,000 Forest City Enterprises, Cl. B 40,402
COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER
635,000 Macerich Company 39,878
REGIONAL SHOPPING MALLS
620,000 Mills 39,531
REGIONAL SHOPPING MALLS
650,000 SL Green Realty 39,358
MANHATTAN OFFICE BUILDINGS
575,000 Federal Realty Investment Trust 29,699
SHOPPING CENTERS
NUMBER OF SHARES
OR PRINCIPAL AMOUNT VALUE (000)
- ----------------------------------------------------------------------------
1,375,000 Crescent Real Estate Equities $ 25,108
CLASS A OFFICE BUILDINGS
1,552,000 Highland Hospitality 17,444
HOTEL REAL ESTATE INVESTMENT TRUST
1,355,000 Sponda (Finland) (f) 13,175
OFFICE & WAREHOUSE PROPERTY COMPANY
1,000,000 Diamondrock Hospitality (b)(e) 10,200
HOTEL REAL ESTATE INVESTMENT TRUST
157,420 Security Capital European
Realty (Luxembourg) (b)(e)(g) 2,692
37,407 Security Capital European
Realty (Luxembourg) (b)(e)(g) 613
SELF STORAGE PROPERTIES
106,000 Am NV (Netherlands) 1,025
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
306,856
>WASTE MANAGEMENT: 0.5%
1,275,000 Waste Connections (b) 43,669
SOLID WASTE MANAGEMENT
2,500,000 Allied Waste Industries (b) 23,200
SOLID WASTE MANAGEMENT
- ----------------------------------------------------------------------------
66,869
>TRANSPORTATION: 0.4%
620,000 Grupo Aeroportaurio
Del Sureste (Mexico) 16,957
CANCUN & COZUMEL AIRPORT OPERATOR
70,000 Kobenhavns Lufthavne (Denmark) (f) 14,824
COPENHAGEN AIRPORT AUTHORITY
15,000,000 ComfortDelGro (Singapore) 14,239
TAXI & MASS TRANSIT SERVICE
371,000 Heartland Express 8,336
TOP PERFORMING TRUCKER
- ----------------------------------------------------------------------------
54,356
>REGULATED UTILITIES: 0.4%
1,650,000 Northeast Utilities 31,103
REGULATED ELECTRIC UTILITY
799,800 Red Electrica (Spain) (f) 17,901
SPANISH POWER GRID
- ----------------------------------------------------------------------------
49,004
------------
OTHER INDUSTRIES TOTAL 477,085
TOTAL COMMON STOCKS AND OTHER
------------
EQUITY-LIKE SECURITIES: 92.5% 12,802,863
(COST: $7,276,617)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 7.5%
$ 100,000 Bayer (h)
2.25% - 2.378% 1/20/05 - 2/14/05 99,774
82,000 Pfizer (h)
2.20% - 2.28% 1/27/05 - 2/09/05 81,840
81,000 Campbell Soup
2.07% - 2.10% 1/03/05 - 1/07/05 80,983
80,000 Toyota Credit
2.30% -2.306% 2/10/05 -2/11/05 79,793
75,000 Prudential Funding
2.12% - 2.23% 1/19/05 - 2/17/05 74,846
1-800-922-6769
34
PRINCIPAL AMOUNT VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS--CONTINUED
$ 70,000 Household Finance $ 69,904
2.12% - 2.26% 1/11/05 - 2/01/05
66,000 General Electric Capital
2.21% - 2.28% 1/21/05 - 2/16/05 65,887
65,000 SBC Communications (h)
2.26% - 2.31% 2/03/05 - 2/07/05 64,856
60,000 American Express Credit
2.00% 1/05/05 - 1/06/05 59,985
60,000 United Parcel Service
1.95% 1/13/05 - 1/14/05 59,960
58,000 John Hancock (h)
2.27% - 2.32% 1/11/05 - 2/02/05 57,884
55,000 Siemens Capital
2.14% - 2.18% 1/18/05 - 1/24/05 54,935
35,000 General Electric Capital
2.28% 2/15/05 34,900
30,000 Citicorp 2.14% 1/10/05 29,984
30,000 American General Finance
2.29% 2/04/05 29,935
27,000 Coca Cola 2.15% 1/26/05 26,960
25,000 Marshall + Ilsley
2.11% -2.33% 1/12/05 - 2/16/05 24,949
38,346 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal National Mortgage
Association Note,
maturing 1/05/05, market
value $39,115 (repurchase
proceeds: $38,352) 38,346
- ----------------------------------------------------------------------------
(AMORTIZED COST: $1,035,721) 1,035,721
------------
TOTAL INVESTMENTS: 100.0% 13,838,584
(COST: $8,312,338) (A)
------------
CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% 2,875
------------
TOTAL NET ASSETS: 100% $ 13,841,459
============================================================================
35
Columbia Acorn Fund
>Statement of Investments, continued
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $8,334,204 and net unrealized appreciation was $5,504,380 consisting
of gross unrealized appreciation of $5,793,358 and gross unrealized
depreciation of $288,978.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On December 31, 2004, the Fund
held five percent or more of the outstanding voting securities of the
following companies:
AnswerThink 10.60%
Christopher & Banks 10.47
New Horizons Worldwide 9.81
Indus International 9.78
Actuate 9.74
World Acceptance 9.71
Gibraltar Steel 9.61
Analysts International 9.50
Spartech 9.17
Skillsoft Publishing 8.95
Glacier Bancorp 8.92
Seachange International 8.90
West Coast Bancorp 8.88
Igate Capital 8.87
E.Piphany 8.75
MAPICS 8.54
Watsco 8.50
Pozen 8.32
Esco Technologies 8.21
Clark 8.02
Concurrent Computer 7.95
MRO Software 7.93
Nuco2 7.68
JDA Software Group 7.56
Gaiam 7.22
NDCHealth Group 7.20
AFC Enterprises 7.08
Bally Total Fitness 6.90
Navigant International 6.75
Princeton Review 6.71
DOV Pharmaceutical 6.30%
Clarcor 6.26
Electric City 6.01
Dominion Homes 5.97
Ciphergen Biosystems 5.82
Aspect Communications 5.76
Pegasus Systems 5.75
La Jolla Pharmaceutical 5.70
Newpark Resources 5.66
Mobile Mini 5.65
Enerflex Systems 5.60
Steve Madden 5.58
Tipperary 5.48
Radiant Systems 5.46
Sports Authority 5.42
Alliance Gaming 5.39
Witness Systems 5.35
Tetra Tech 5.33
ICU Medical 5.26
Excel Technologies 5.19
Anchor Bancorp Wisconsin 5.13
Micros Systems 5.13
American Woodmark 5.13
Kronos 5.12
Coinstar 5.11
Genlyte Group 5.09
Monaco Coach 5.08
InfoUSA 5.02
CityBank Lynnwood 5.02
The aggregate cost and value of these companies at December 31, 2004, was
$562,929 and $1,928,260, respectively. Investments in affiliate companies
represent 13.9% of total net assets at December 31, 2004. Investment
activity and income amounts relating to affiliates during the twelve
months ended December 31, 2004 were as follows:
Dividend Income $ 7,758
Net realized gain or loss $ 36,513
Change in unrealized gain or loss $ 59,516
Purchases $ 395,993
Proceeds from sales $ 271,683
1-800-922-6769
36
(d) On December 31, 2004, the market value of foreign securities (in
thousands) represents 14.96% of total net assets. The Fund's foreign
portfolio was diversified as follows:
VALUE PERCENT
===========================================================
Canada $ 282,771 2.04%
Ireland 214,991 1.55
United Kingdom 171,205 1.24
Japan 166,675 1.20
Netherlands 136,145 0.98
Switzerland 130,526 0.94
France 118,133 0.85
Sweden 84,622 0.61
Italy 72,912 0.53
Germany 66,988 0.48
Hong Kong 59,617 0.43
Australia 56,108 0.41
Norway 44,793 0.32
Luxembourg 41,105 0.30
Finland 38,065 0.28
Denmark 37,597 0.27
VALUE PERCENT
===========================================================
Austria $ 37,531 0.27%
South Korea 30,268 0.22
India 30,113 0.22
Argentina 29,340 0.21
Spain 28,516 0.21
Czech Republic 28,372 0.21
Mexico 25,973 0.19
China 19,964 0.14
Taiwan 19,910 0.14
Brazil 18,815 0.14
South Africa 18,740 0.14
New Zealand 15,959 0.12
Singapore 14,239 0.10
Chile 11,500 0.08
Belgium 11,268 0.08
Greece 8,421 0.06
----------- ---------
Total Foreign Portfolio $ 2,071,182 14.96%
=========== =========
(e) Denotes a restricted security, which is subject to restrictions on
resale under federal securities laws. At December 31, 2004, these
securities were illiquid. At December 31, 2004, these securities (in
thousands) amounted to $22,667, which represents 0.16% of total net
assets.
Additional information on these securities is as follows:
ACQUISITION SHARES/
SECURITY DATES PAR (000) COST (000) VALUE (000)
- ------------------------------------------------------------------------------------------------------
Diamondrock Hospitality 06/29/04 1,000 $ 10,000 $ 10,200
Locus Discovery, Series D, Pfd. 09/05/01 1,875 7,500 3,750
Gadzooks 5% Convertible 10/07/08 10/08/03 $ 6,000 6,000 600
Microdose 11/24/00 360 2,005 270
Perlegen Sciences 03/30/01 1,250 4,500 2,237
Security Capital European Realty 08/20/98-11/12/99 195 3,897 3,305
SYRRX, Series C 01/08/01 461 2,997 2,305
--------- ---------
$ 36,899 $ 22,667
========= =========
(f) Represents a security valued by an independent statistical fair value
pricing service at 12/31/04. Foreign securities which had a market holiday
on 12/31/04 were valued under this method. See Security Valuation in Note
2 for further information.
(g) Represents fair value as determined in good faith under procedures
approved by the Board of Trustees.
(h) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. These securities may only be resold in exempt transactions to
qualified buyers. Private resales of these securities to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, these
securities amounted to $304,354, which represents 2.2% of net assets.
37
Columbia Acorn International
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
BBA Group 1,200,000 2,200,000
Business Post 1,050,000 1,070,000
IAWS (Ireland) 297,100 900,000
Intermediate Capital 500,000 701,000
Jurys Doyle Hotel (Ireland) 810,000 890,000
Northgate 600,000 700,000
United Drug (Ireland) 2,950,000 3,056,000
>NETHERLANDS
Kon Ten Cate 158,000 237,000
Unit 4 Agresso 0 178,000
>FRANCE
Camaieu 54,000 114,000
Carbone Lorraine 0 47,000
Iliad 0 250,000
Imerys 160,000 182,000
Norbert Dentressangle 0 110,000
>GERMANY
Deutsche Boerse 120,000 175,000
GFK 300,000 350,000
Grenkeleasing 0 115,000
Wincor Nixdorf 100,000 175,000
>SWITZERLAND
Kuehne & Nagel 0 70,000
>SWEDEN
Nobia 860,000 1,075,000
Sweco 0 80,000
>NORWAY
Ekornes 220,000 462,000
>CZECH REPUBLIC
Komercni Banka 118,000 141,000
>RUSSIAN FEDERATION
Mechel Steel Group 0 102,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Meitec 200,000 385,000
Park 24 170,000 750,000
>TAIWAN
Advantech 0 747,000
Chicony Electronics 4,000,000 6,464,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Ivanhoe Mines 0 850,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>BRAZIL
Diagnosticos 0 156,250
1-800-922-6769
38
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Sales
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Grafton Group (Ireland) 2,750,000 2,630,000
Jardine Lloyd Thompson 1,593,000 0
Rank Group 2,250,000 0
Smith & Nephew 1,450,000 0
Tullow Oil 7,500,000 7,245,000
>NETHERLANDS
Am NV 467,000 72,000
>FRANCE/BELGIUM
Bonduelle 15,000 0
Omega Pharma (Belgium) 224,000 184,000
>GERMANY
Beru 75,000 0
Kali & Salz 225,000 0
>ITALY
Autogrill 1,130,000 830,000
>SWEDEN
Intrum Justitia 2,280,000 0
>SPAIN
Gamesa 600,000 300,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Chiyoda Integre 411,200 205,000
Otsuka Kagu 326,900 0
Uni-Charm 172,000 0
>HONG KONG/CHINA
Jiangsu Expressway (China) 5,694,000 0
>SOUTH KOREA
Yuhan 165,000 104,940
>INDIA
Housing Development Finance 1,500,000 1,372,330
>SINGAPORE
Sembcorp Logisitics 6,000,000 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Talisman Energy 795,000 635,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>ARGENTINA
Tenaris 440,000 340,000
39
Columbia Acorn International
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 93.9%
- ----------------------------------------------------------------------------
EUROPE: 57.1%
>UNITED KINGDOM/IRELAND: 17.5%
2,350,000 Anglo Irish Bank (Ireland) $ 56,977
SMALL BUSINESS & MIDDLE MARKET BANKING
2,630,000 Grafton Group (Ireland) (b) 28,499
BUILDERS, WHOLESALERS & DIY RETAILING
1,100,000 Kerry (Ireland) 26,298
FOOD INGREDIENTS
1,750,000 Exel 24,250
GLOBAL LOGISTICS & FREIGHT FORWARDING
1,275,000 Depfa Bank (Ireland) (e) 21,324
INTERNATIONAL PUBLIC SECTOR FINANCE
7,245,000 Tullow Oil 21,176
OIL & GAS PRODUCER
2,600,000 Expro International 17,889
OFFSHORE OIL FIELD SERVICES
5,494,000 RPS Group 16,032
ENVIRONMENTAL CONSULTING
900,000 IAWS (Ireland) 14,872
MANUFACTURER OF BAKED GOODS
890,000 Jurys Doyle Hotel (Ireland) 14,852
OWNER/OPERATOR OF MID-PRICED HOTELS
701,000 Intermediate Capital 14,645
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
3,056,000 United Drug (Ireland) 14,405
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
600,000 Cobham 14,225
AEROSPACE COMPONENTS
750,000 Xstrata 13,397
DIVERSIFIED MINING HOLDING COMPANY
1,070,000 Business Post 12,766
PARCEL & EXPRESS MAIL SERVICE
2,200,000 BBA Group 12,049
AVIATION SUPPORT SERVICES & NON-WOVEN MATERIALS
1,300,000 Kensington 11,872
NON-CONFORMING MORTGAGE COMPANY
700,000 Northgate 11,457
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
1,200,000 Spectris 8,786
ELECTRONIC INSTRUMENTS & CONTROLS
500,000 Viridian 6,996
NORTHERN IRELAND ELECTRIC UTILITY
- ----------------------------------------------------------------------------
362,767
>NETHERLANDS: 7.5%
540,000 Aalberts Industries 26,112
FLOW CONTROL & HEAT TREATMENT
278,800 Fugro 23,187
SURVEY & GPS SERVICES
327,000 OPG Groep 19,046
HEALTHCARE SUPPLIES & PHARMACIES
237,000 Kon Ten Cate 17,399
ADVANCED TEXTILES & INDUSTRIAL FABRICS
340,000 Sligro Food Group 16,717
FOOD SERVICE & WHOLESALING
400,000 Imtech 14,060
TECHNICAL ENGINEERING
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
584,000 United Services Group $ 13,606
TEMPORARY STAFFING SERVICES
248,000 Hunter Douglas 13,185
WINDOW SHADES & VENETIAN BLINDS
420,000 Vopak 8,915
OIL & CHEMICAL STORAGE
178,000 Unit 4 Aggresso (b) 2,749
BUSINESS & SECURITY SOFTWARE
72,000 Am NV 696
PROPERTY DEVELOPER
- ----------------------------------------------------------------------------
155,672
>FRANCE/BELGIUM: 7.4%
377,500 Neopost 29,248
POSTAGE METER MACHINES
117,000 Vallourec 17,432
SEAMLESS TUBES
182,000 Imerys 15,223
INDUSTRIAL MINERALS PRODUCER
404,000 Fininfo 12,455
DATA FEEDS FOR FRENCH BANKS & BROKERS
150,000 Bacou Dalloz 11,987
SAFETY EQUIPMENT
114,000 Camaieu 11,303
WOMEN'S APPAREL RETAILER
140,000 Essilor International 10,932
EYEGLASS LENSES
360,000 Metropole TV 10,191
TELEVISION BROADCASTER
250,000 Iliad 9,441
HIGH SPEED INTERNET SERVICE PROVIDER
184,000 Omega Pharma (Belgium) 8,785
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
60,000 Pierre & Vacances 6,863
VACATION APARTMENT LETS
110,000 Norbert Dentressangle 6,079
TRANSPORT
47,000 Carbone Lorraine (b) 2,483
ADVANCED INDUSTRIAL MATERIALS
10,000 April Group 257
INSURANCE POLICY CONSTRUCTION
- ----------------------------------------------------------------------------
152,679
>GERMANY/AUSTRIA: 7.1%
315,000 Rhoen-Klinikum Pfd. (e) 19,314
300,000 Rhoen-Klinikum (e) 18,322
HOSPITAL MANAGEMENT
375,000 Wienerberger (Austria) (e) 17,872
BRICKS & CLAY ROOFING TILES
450,000 Hugo Boss Designs (e) 14,926
FASHION APPAREL
175,000 Wincor Nixdorf (b)(e) 14,043
RETAIL POS SYSTEMS & ATM MACHINES
350,000 GFK (e) 13,576
MARKET RESEARCH SERVICES
300,000 Bilfinger Berger (e) 12,292
CONSTRUCTION & RELATED SERVICES
175,000 Deutsche Boerse (e) 10,491
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
1-800-922-6769
40
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>GERMANY/AUSTRIA--CONTINUED
200,000 Vossloh (e) $ 9,847
RAIL INFRASTRUCTURE & DIESEL LOCOMOTIVES
800,000 Takkt (e) 8,397
MAIL ORDER RETAILER OF OFFICE & WAREHOUSE
DURABLES
115,000 Grenkeleasing (e) 5,430
FINANCING FOR IT EQUIPMENT
260,000 Deutsche Beteiligungs (b)(e) 3,715
PRIVATE EQUITY INVESTMENT MANAGEMENT
- ----------------------------------------------------------------------------
148,225
>SWITZERLAND: 4.6%
25,000 Geberit International (e) 18,230
PLUMBING SUPPLIES
40,000 Schindler (e) 15,799
ELEVATOR MANUFACTURER & SERVICE PROVIDER
70,000 Kuehne & Nagel (e) 15,017
FREIGHT FORWARDING/LOGISTICS
24,000 Sika (b)(e) 14,338
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL
APPLICATION
3,000 Pargesa (e) 10,514
INDUSTRIAL & MEDIA CONGLOMERATE
85,000 Synthes-Stratec (b)(e) 9,489
PRODUCTS FOR ORTHOPEDIC SURGERY
10,000 Givaudan (e) 6,575
INDUSTRIAL FRAGRANCES & FLAVORS
110,000 Bachem (e) 6,311
PEPTIDES
- ----------------------------------------------------------------------------
96,273
>ITALY: 2.7%
270,000 Amplifon (e) 14,924
HEARING AID RETAILER
830,000 Autogrill (b)(e) 13,811
TOLLWAY RESTAURANTS
212,000 Davide Campari (e) 13,636
SPIRITS & WINE
1,000,000 Credit Emiliano (e) 9,899
ITALIAN REGIONAL BANK
3,300,000 Ducati Motor (b)(e) 3,930
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
56,200
>SWEDEN: 2.2%
394,200 Hexagon (e) 18,725
DIVERSIFIED ENGINEERING
1,075,000 Nobia (e) 17,751
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
470,000 Gambro (e) 6,698
PRODUCTS/SERVICES FOR RENAL CARE
80,000 Sweco (b)(e) 1,525
NORDIC INFRASTRUCTURE/ENVIRONMENT CONSULTING
- ----------------------------------------------------------------------------
44,699
>SPAIN: 1.9%
2,000,000 Abengoa (e) 19,686
ENGINEERING & CONSTRUCTION
420,000 Red Electrica (e) 9,400
SPANISH POWER GRID
120,000 Bankinter (e) 6,369
MORTGAGE LENDER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
300,000 Gamesa (e) $ 4,182
WIND TURBINES
- ----------------------------------------------------------------------------
39,637
>FINLAND: 1.5%
439,000 Jaakko Poyry (e) 13,201
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
555,000 Amer Group (e) 9,663
BRANDED SPORTING GOODS
950,000 Sponda (e) 9,237
OFFICE & WAREHOUSE PROPERTY COMPANY
- ----------------------------------------------------------------------------
32,101
>NORWAY: 1.3%
462,000 Ekornes (e) 10,019
NICHE FURNITURE MANUFACTURER
910,000 Den Norske Bank (e) 8,928
LARGEST NORWEGIAN BANK
221,000 Orkla (e) 7,224
FOOD & DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
26,171
>LUXEMBOURG: 1.2%
1,880,000 SES Global 24,446
SATELLITE BROADCASTING SERVICES
- ----------------------------------------------------------------------------
>CZECH REPUBLIC: 1.0%
141,000 Komercni Banka (e) 20,515
LEADING CZECH UNIVERSAL BANK
- ----------------------------------------------------------------------------
>GREECE: 0.5%
465,000 Intralot 11,350
LOTTERY & GAMING SYSTEMS/SERVICES
- ----------------------------------------------------------------------------
>DENMARK: 0.4%
35,000 Kobenhavns Lufthavne (e) 7,412
COPENHAGEN AIRPORT AUTHORITY
- ----------------------------------------------------------------------------
>POLAND: 0.2%
167,000 Central European Distribution (b) 4,933
SPIRITS & WINE DISTRIBUTION
- ----------------------------------------------------------------------------
>RUSSIAN FEDERATION: 0.1%
102,000 Mechel Steel Group (b) 2,280
INTEGRATED STEEL & METALLURGICAL COAL PRODUCER
- ----------------------------------------------------------------------------
------------
EUROPE: TOTAL 1,185,360
- ----------------------------------------------------------------------------
ASIA: 24.2%
>JAPAN: 12.9%
480,100 Daito Trust Construction (e) 22,781
APARTMENT BUILDER
2,900,000 Bank of Yokohama (e) 18,218
REGIONAL BANK
1,500,000 Wacoal (e) 18,023
WOMEN'S SPECIALTY APPAREL
220,000 Fast Retailing (e) 16,687
APPAREL RETAILER
41
Columbia Acorn International
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>JAPAN--CONTINUED
385,000 Meitec (e) $ 14,321
STAFFING COMPANY SPECIALIZING IN RD ENGINEERS
5,200 Dentsu (e) 13,985
ADVERTISING AGENCY
818,000 NIFCO (e) 13,668
MOLDED PLASTIC COMPONENTS
110,000 Funai Electric (e) 13,646
CONSUMER ELECTRONICS
750,000 Park 24 (e) 13,413
PARKING LOT OPERATOR
358,000 Eneserve (e) 12,976
POWER GENERATORS
402,000 Kappa Create (e) 12,002
SUSHI CHAIN RESTAURANT OPERATOR
2,248,000 Hiroshima Bank (e) 11,876
REGIONAL BANK
330,000 Sugi Pharmacy (e) 11,192
DRUGSTORE OPERATOR
226,000 Hogy Medical (e) 10,619
DISPOSABLE SURGICAL PRODUCTS
906,000 Toyo Technica (e) 10,458
VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION
255,000 ARRK (e) 10,431
PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT
550,000 Ushio (e) 10,236
INDUSTRIAL LIGHT SOURCES
1,500,000 Fukuoka Bank (e) 9,858
REGIONAL BANK
1,400,000 Chiba Bank (e) 9,345
REGIONAL BANK
325,000 Olympus Optical (e) 6,925
MEDICAL EQUIPMENT & CAMERAS
205,000 Chiyoda Integre (e) 4,131
PLASTIC COMPONENTS FOR CONSUMER ELECTRONICS
155,200 Ain Pharmaciez (e) 3,095
DISPENSING PHARMACY/DRUGSTORE OPERATOR
- ----------------------------------------------------------------------------
267,886
>HONG KONG/CHINA: 3.9%
25,000,000 Global Bio-Chem Technology
Group (China) 16,564
1,875,000 Global Bio-Chem Technology
Group Warrants (China) (b) 89
CHINESE REFINER OF CORN-BASED COMMODITIES
6,000,000 Hong Kong Exchanges & Clearing 16,094
HONG KONG EQUITY & DERIVATIVES OPERATOR
6,000,000 Techtronic Industries 13,122
MANUFACTURER OF POWER TOOLS & MOTORIZED APPLIANCES
2,000,000 Esprit Holdings 12,093
GLOBAL APPAREL BRAND MANAGER
9,800,000 Hainan Meilan Airport (China) 8,258
CHINESE AIRPORT OPERATOR
17,700,000 Linmark 6,376
SOURCING OF CONSUMER GOODS
28,000,000 Lerado Group 4,179
BABY STROLLERS & INFANT CAR SEATS MANUFACTURER
14,500,000 Ngai Lik Industrial 3,656
CONSUMER ELECTRONICS MANUFACTURER
- ----------------------------------------------------------------------------
80,431
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TAIWAN: 2.9%
15,740,000 Phoenixtec Power $ 18,963
UNINTERRUPTABLE POWER SUPPLIES
1,230,000 ASE Test (b) 8,315
SEMICONDUCTOR PACKAGING & TEST SERVICES
3,683,000 Springsoft Systems 7,878
ELECTRONIC DESIGN AUTOMATION SOFTWARE
5,302,590 Wah Lee Industrial 6,922
DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT
8,470,000 Bank of Kaohsiung 6,741
COMMERICAL BANKING
6,464,000 Chicony Eletronic 6,568
PC POWER SUPPLIES & KEYBOARDS
3,010,000 Taiwan Fu Hsing 3,276
DOOR LOCK MANUFACTURER
747,000 Advantech 1,809
EMBEDDED COMPUTERS
- ----------------------------------------------------------------------------
60,472
>SOUTH KOREA: 1.7%
250,000 Hyundai Mobis (b)(e) 15,776
AUTO PARTS
104,940 Yuhan (b)(e) 8,820
OTC & PRESCRIPTION DRUG MANUFACTURER
100,000 Samsung Fire & Marine (e) 7,890
NON-LIFE INSURANCE
200,000 Samyoung Heat Exchange (e) 2,051
POWER PLANT RELATED MACHINERY
- ----------------------------------------------------------------------------
34,537
>INDIA: 1.2%
1,372,330 Housing Development Finance 24,308
PREMIER MORTGAGE LENDER IN INDIA
- ----------------------------------------------------------------------------
>SINGAPORE: 1.1%
15,000,000 ComfortDelGro 14,239
TAXI & MASS TRANSIT SERVICE
1,000,000 Venture 9,738
ELECTRONIC CONTRACT MANUFACTURER
- ----------------------------------------------------------------------------
23,977
>INDONESIA: 0.5%
55,000,000 PT Perusahaan Gas Negara (e) 11,256
GAS PIPELINE OPERATOR
- ----------------------------------------------------------------------------
------------
ASIA: TOTAL 502,867
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 8.9%
>AUSTRALIA/NEW ZEALAND: 4.1%
3,000,000 Billabong International 26,843
SURFWEAR APPAREL MANUFACTURER
350,000 Perpetual Trustees 17,204
AUSTRALIAN MUTUAL FUND MANAGER
2,500,000 Lion Nathan 16,801
BEER BREWER/DISTRIBUTOR
5,000,000 Pacific Brands 12,464
AUSTRALIAN BRANDED APPAREL
3,000,000 Sky City Entertainment (New Zealand) 11,593
CASINO/ENTERTAINMENT COMPLEX
- ----------------------------------------------------------------------------
84,905
1-800-922-6769
42
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CANADA: 3.9%
635,000 Talisman Energy $ 17,116
OIL & GAS PRODUCER
340,000 Masonite International (b) 11,694
DOOR MANUFACTURER
500,000 Corus Entertainment 10,415
TELEVISION PROGRAMMING & RADIO STATIONS
450,000 Intrawest 10,330
OWNER/OPERATOR OF SKI RESORTS
1,000,000 Fairbourne Energy (b) 10,040
OIL & GAS PRODUCER
235,000 Petrokazakhstan 8,719
OIL PRODUCER & REFINER IN KAZAKHSTAN
400,000 Noranda 7,019
DIVERSIFIED MINING HOLDING COMPANY
850,000 Ivanhoe Mines (b) 6,126
COPPER MINING IN MONGOLIA
- ----------------------------------------------------------------------------
81,459
>SOUTH AFRICA: 0.9%
350,000 Edgars Consolidated Stores 18,740
LEADING RETAIL CONGLOMERATE
- ----------------------------------------------------------------------------
------------
OTHER COUNTRIES: TOTAL 185,104
- ----------------------------------------------------------------------------
LATIN AMERICA: 3.7%
>MEXICO: 1.5%
660,000 Grupo Aeroportaurio Del Sureste 18,051
CANCUN & COZUMEL AIRPORT OPERATOR
3,000,000 Consorcio ARA (b) 9,016
AFFORDABLE HOUSING BUILDER
700,000 URBI Desarrollo (b) 3,058
AFFORDABLE HOUSING BUILDER
- ----------------------------------------------------------------------------
30,125
>BRAZIL: 1.0%
640,000 Natura Cosmeticos 18,675
DIRECT RETAILER OF COSMETICS
156,250 Diagnosticos (b) 1,406
LARGEST PRIVATE DIAGNOSTIC SERVICES COMPANY IN BRAZIL
- ----------------------------------------------------------------------------
20,081
- ----------------------------------------------------------------------------
NUMBER OF SHARES OR
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
>ARGENTINA: 0.8%
340,000 Tenaris $ 16,626
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
>CHILE: 0.4%
300,000 CorpBanca (b) 8,625
CHILEAN LOCAL BANK
- ----------------------------------------------------------------------------
------------
LATIN AMERICA: TOTAL 75,457
Total Common Stocks and Other
------------
EQUITY-LIKE SECURITIES: 93.9% 1,948,788
(COST: $1,233,203)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 5.1%
$ 35,000 Colgate Palmolive 2.17% 1/07/05 (c) 34,988
32,000 American Express Credit
2.26% 1/04/05 31,994
30,000 American General Finance
2.27% 1/03/05 29,996
9,076 Repurchase Agreement with State
Street Bank & Trust Co. dated
12/31/04, due 1/03/05 at 1.90%
collateralized by a Federal National
Mortgage Association Note,
maturing 1/05/05, market value
$9,260 (repurchase
proceeds: $9,077) 9,076
- ----------------------------------------------------------------------------
(AMORTIZED COST: $106,054) 106,054
------------
TOTAL INVESTMENTS: 99.0% 2,054,842
(COST: $1,339,257) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 1.0% 20,170
------------
TOTAL NET ASSETS: 100% $ 2,075,012
============================================================================
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $1,354,913 and net unrealized appreciation was $699,929 consisting of
gross unrealized appreciation of $721,173 and gross unrealized
depreciation of $21,244.
(b) Non-income producing security.
(c) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resales of this security to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, the value of
this security represents 1.7% of net assets.
(d) On December 31, 2004, the Fund's total investments were denominated in
currencies as follows:
CURRENCY VALUE % OF NET ASSETS
-------------------------- ---------- ---------------
Euro $ 797,536 38.4%
Japanese Yen 267,886 12.9
British Pounds 185,539 8.9
US Dollar 173,602 8.4
Other currencies less than
5% of total net assets 630,279 30.4
---------- ---------------
$2,054,842 99.0%
========== ===============
(e) Represents a security valued by an independent statistical fair value
pricing service at 12/31/04. Foreign securities which had a market
holiday on 12/31/04 were valued under this method. See Security Valuation
in Note 2 for further information.
43
Columbia Acorn International
>Portfolio Diversi1/2cation
At December 31, 2004, the Fund's portfolio investments as a percent of net
assets were diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 127,951 6.2%
Industrial Materials 91,176 4.4
Conglomerates 75,037 3.6
Construction 56,221 2.7
Machinery 41,146 2.0
Outsourcing & Training Services 39,976 1.9
Steel 34,058 1.6
Electrical Components 32,774 1.6
Industrial Distribution 28,499 1.4
Speciality Chemicals 20,913 1.0
- ----------------------------------------------------------------------------
547,751 26.4
>CONSUMER GOODS/SERVICES
Retail 88,034 4.2
Apparels 78,632 3.8
Food 65,111 3.1
Furniture & Textiles 52,649 2.5
Beverage 30,437 1.5
Restaurants 25,813 1.2
Travel 25,182 1.2
Other Consumer Services 24,455 1.2
Nondurables 18,675 0.9
Durables Goods 17,052 0.8
Consumer Electronics 13,646 0.7
Casinos 11,593 0.6
Gaming 11,350 0.6
Leisure Products 9,663 0.5
Consumer Goods Distribution 4,933 0.2
- ----------------------------------------------------------------------------
477,225 23.0
>FINANCE
Banks 182,306 8.8
Other Finance Companies 43,404 2.1
Savings & Loans 30,677 1.5
Money Management 20,919 1.0
Insurance 8,147 0.4
- ----------------------------------------------------------------------------
285,453 13.8
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Business Information &
Marketing Services $ 42,063 2.0%
Computer Hardware &
Related Equipment 41,383 2.0
Financial Processors 26,585 1.3
Satellite Broadcasting 24,446 1.2
Instrumentation 19,244 0.9
Advertising 13,985 0.7
Contract Manufacturing 13,394 0.6
Business Software 10,627 0.5
Television Programming 10,415 0.5
Television Broadcasting 10,191 0.5
Internet Related 9,441 0.5
Semiconductors &
Related Equipment 8,315 0.4
Electronics Distribution 6,922 0.3
- ----------------------------------------------------------------------------
237,011 11.4
>ENERGY/MINERALS
Oil/Gas Producers 57,051 2.8
Oil Services 41,076 2.0
Agricultural Commodities 16,653 0.8
Mining 15,425 0.7
Non-Ferrous Metals 13,397 0.7
Independent Power 12,976 0.6
Distribution/Marketing/
Refining 11,256 0.5
- ----------------------------------------------------------------------------
167,834 8.1
>HEALTH CARE
Hospital Management 37,636 1.8
Pharmaceuticals 32,010 1.6
Medical Equipment 27,346 1.3
Services 25,744 1.2
Hospital/Laboratory Supplies 12,025 0.6
Biotechnology/Drug Delivery 6,311 0.3
- ----------------------------------------------------------------------------
141,072 6.8
>OTHER INDUSTRIES
Transportation 54,039 2.6
Real Estate 22,007 1.0
Regulated Utilities 16,396 0.8
- ----------------------------------------------------------------------------
92,442 4.4
TOTAL COMMON STOCKS AND
-------------------------------
OTHER EQUITY-LIKE SECURITIES 1,948,788 93.9
SHORT-TERM OBLIGATIONS 106,054 5.1
-------------------------------
TOTAL INVESTMENTS 2,054,842 99.0
CASH AND OTHER ASSETS
LESS LIABILITIES 20,170 1.0
-------------------------------
NET ASSETS $ 2,075,012 100.0%
============================================================================
1-800-922-6769
44
Columbia Acorn USA
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
INFORMATION
Ceridian 0 90,000
Maximus 0 60,000
Symbol Technologies 450,000 520,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Central Parking 321,700 364,400
International Speedway Motors 91,300 121,300
Petco Animal Supplies 95,000 220,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Pride International 0 120,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Florida Rock Industries 97,700 112,700
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Sales
- ----------------------------------------------------------------------------
INFORMATION
Avocent 50,000 0
Euronet Worldwide 70,500 0
Mediacom Communications 600,000 300,000
PeopleSoft 304,991 0
THQ 64,000 0
Western Wireless 927,000 742,000
Zebra Technologies 204,000 99,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Leapfrog Enterprises 50,000 0
Urban Outfitters 138,200 48,200
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Hub Group 246,000 221,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
The Rouse Company 47,000 0
45
Columbia Acorn USA
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 91.6%
- ----------------------------------------------------------------------------
INFORMATION: 28.8%
>BUSINESS/CONSUMER SOFTWARE: 8.6%
287,600 Micros Systems (b) $ 22,450
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
296,650 Kronos (b) 15,168
LABOR MANAGEMENT SOLUTIONS
974,000 JDA Software (b) 13,266
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,330,000 Novell (b) 8,977
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
473,500 MRO Software (b) 6,165
ENTERPRISE MAINTENANCE SOFTWARE
653,200 E.Piphany (b) 3,155
CRM SOFTWARE
60,000 Maximus (b) 1,867
OUTSOURCER FOR GOVERNMENT
104,200 SPSS (b) 1,630
STATISTICAL/BUSINESS ANALYSIS SOFTWARE
100,000 Aspect Communications (b) 1,114
CALL CENTER SOFTWARE
65,000 MAPICS (b) 686
MID MARKET ERP SOFTWARE
- ----------------------------------------------------------------------------
74,478
>COMPUTER HARDWARE/SEMICONDUCTORS/
RELATED EQUIPMENT: 4.9%
520,000 Symbol Technologies 8,996
MOBILE COMPUTERS & BARCODE SCANNERS
365,300 Integrated Circuit Systems (b) 7,642
SILICON TIMING DEVICES
424,100 Seachange International (b) 7,396
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
260,000 Unova (b) 6,575
BARCODE & WIRELESS LAN SYSTEMS
99,000 Zebra Technologies (b) 5,572
BAR CODE PRINTERS
70,000 Littelfuse (b) 2,391
LITTLE FUSES
100,000 Belden CDT 2,320
SPECIALTY CABLE
40,000 Rogers (b) 1,724
PCB LAMINATES & HIGH PERFORMANCE FOAMS
- ----------------------------------------------------------------------------
42,616
>MOBILE COMMUNICATIONS: 4.6%
742,000 Western Wireless (b) 21,741
RURAL CELLULAR PHONE SERVICES
1,005,000 Crown Castle International (b) 16,723
COMMUNICATION TOWERS
10,000 Telephone & Data Systems 769
CELLULAR & TELEPHONE SERVICES
40,000 American Tower (b) 736
COMMUNICATION TOWERS IN USA & MEXICO
- ----------------------------------------------------------------------------
39,969
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS/WIRELINE
COMMUNICATIONS: 2.7%
333,800 Commonwealth Telephone (b) $ 16,576
RURAL PHONE FRANCHISES & CLEC
480,000 Andrew (b) 6,542
WIRELESS INFRASTRUCTURE EQUIPMENT
- ----------------------------------------------------------------------------
23,118
>BROADCASTING: 2.4%
695,000 Spanish Broadcasting (b) 7,339
SPANISH LANGUAGE RADIO STATIONS
293,100 Salem Communications (b) 7,313
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
510,000 Entravision Communications (b) 4,258
SPANISH LANGUAGE TV, RADIO & OUTDOOR
138,500 Gray Television 2,147
MID MARKET AFFILIATED TV STATIONS
- ----------------------------------------------------------------------------
21,057
>TRANSACTION PROCESSORS: 1.6%
211,640 Global Payments 12,389
CREDIT CARD PROCESSOR
143,100 Pegasus Systems (b) 1,803
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
14,192
>COMPUTER SERVICES: 1.1%
1,005,500 AnswerThink (b) 4,685
IT INTEGRATOR FOR FORTUNE 2000
786,000 RCM Technologies (b)(c) 3,954
TECHNOLOGY ENGINEERING SERVICES
200,000 Igate Capital (b) 810
TECHNOLOGY STAFFING SERVICES
- ----------------------------------------------------------------------------
9,449
>BUSINESS INFORMATION/BUSINESS
SERVICES/PUBLISHING: 1.0%
102,800 Getty Images (b) 7,078
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
90,000 Ceridian (b) 1,645
HR SERVICES & PAYMENT PROCESSING
- ----------------------------------------------------------------------------
8,723
>INTERNET: 0.9%
285,000 ValueClick (b) 3,799
INTERNET ADVERTISING
460,600 DoubleClick (b) 3,583
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
- ----------------------------------------------------------------------------
7,382
>INSTRUMENTATION: 0.3%
90,000 Trimble Navigation (b) 2,974
GPS-BASED INSTRUMENTS
- ----------------------------------------------------------------------------
>TELECOMMUNICATION EQUIPMENT: 0.3%
300,000 Symmetricom (b) 2,913
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
>TELEVISION PROGRAMMING: 0.2%
300,000 Mediacom Communications (b) 1,875
CABLE TELEVISION FRANCHISES
- ----------------------------------------------------------------------------
1-800-922-6769
46
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONTRACT MANUFACTURING: 0.2%
140,000 Plexus (b) $ 1,841
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
------------
INFORMATION: TOTAL 250,587
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 17.4%
>RETAIL: 7.7%
285,000 Abercrombie & Fitch 13,381
TEEN APPAREL RETAILER
435,750 Aeropostale (b) 12,824
MALL BASED TEEN RETAILER
220,000 Petco Animal Supplies (b) 8,686
PET SUPPLIES & SERVICES
393,750 Christopher & Banks 7,264
WOMEN'S APPAREL RETAILER
115,000 Chico's FAS (b) 5,236
WOMEN'S SPECIALTY RETAIL
212,500 Ann Taylor (b) 4,575
WOMEN'S APPAREL RETAILER
100,000 Michaels Stores 2,997
CRAFT & HOBBY SPECIALTY RETAILER
95,000 Genesco (b) 2,958
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
100,000 Sports Authority (b) 2,575
SPORTING GOODS STORES
129,900 Brookstone (b) 2,539
SPECIALTY CONSUMER PRODUCT RETAILER
48,200 Urban Outfitters (b) 2,140
ECLECTIC HOME & APPAREL RETAILER
60,000 West Marine (b) 1,485
LARGEST RETAILER OF BOATING SUPPLIES
- ----------------------------------------------------------------------------
66,660
>CONSUMER SERVICES: 4.4%
396,000 ITT Educational Services (b) 18,830
POSTSECONDARY DEGREE PROGRAM
435,000 Coinstar (b) 11,671
OWNER/OPERATOR OF COIN COUNTING MACHINES
364,400 Central Parking 5,520
OWNER, OPERATOR & MANAGER OF PARKING
LOTS & GARAGES
60,000 Weight Watchers (b) 2,464
WEIGHT LOSS PROGRAMS
- ----------------------------------------------------------------------------
38,485
>APPAREL: 1.8%
194,200 Oxford Industries 8,020
BRANDED & PRIVATE LABEL APPAREL
84,000 Coach (b) 4,737
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
134,000 Steven Madden (b) 2,527
WHOLESALER/RETAILER OF FASHION FOOTWEAR
- ----------------------------------------------------------------------------
15,284
>NONDURABLES: 1.4%
167,200 Scotts Company (b) 12,292
CONSUMER LAWN & GARDEN PRODUCTS
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>ENTERTAINMENT/LEISURE PRODUCTS: 1.0%
121,300 International Speedway Motors $ 6,404
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
195,000 Callaway Golf 2,632
PREMIUM GOLF CLUBS & BALLS
- ----------------------------------------------------------------------------
9,036
>FURNITURE: 1.0%
60,000 American Woodmark 2,621
KITCHEN CABINET MANUFACTURER
85,000 Herman Miller 2,348
OFFICE FURNITURE
20,000 Mohawk Industries (b) 1,825
CARPET & FLOORING
40,000 HNI 1,722
OFFICE FURNITURE & FIREPLACES
- ----------------------------------------------------------------------------
8,516
>FOOD & BEVERAGES: 0.1%
37,000 NBTY (b) 888
VITAMINS & SUPPLEMENTS
- ----------------------------------------------------------------------------
------------
CONSUMER GOODS/SERVICES: TOTAL 151,161
- ----------------------------------------------------------------------------
HEALTH CARE: 14.0%
>MEDICAL EQUIPMENT: 5.4%
573,000 Edwards Lifesciences (b) 23,642
HEART VALVES
141,300 Diagnostic Products 7,778
IMMUNODIAGNOSTIC KITS
170,600 VISX (b) 4,413
LASER EYE SURGERY
220,000 Viasys Healthcare (b) 4,180
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
245,000 CTI Molecular Imaging (b) 3,476
MEDICAL DIAGNOSTIC DEVICES
115,700 ICU Medical (b) 3,163
INTRAVENOUS THERAPY PRODUCTS
- ----------------------------------------------------------------------------
46,652
>SERVICES: 4.1%
744,000 First Health Group (b) 13,920
PPO NETWORK
246,800 Lincare Holdings (b) 10,526
HOME HEALTH CARE SERVICES
423,800 NDCHealth Group 7,878
HEALTH CLAIMS PROCESSING & DRUG MARKETING
SERVICES
100,000 Dendrite International (b) 1,940
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
40,000 Charles River Laboratories (b) 1,840
PHARMACEUTICAL RESEARCH
- ----------------------------------------------------------------------------
36,104
>BIOTECHNOLOGY/DRUG DELIVERY: 2.6%
360,000 Nektar Therapeutics (b) 7,286
DRUG DELIVERY TECHNOLOGIES
260,000 AtheroGenics (b) 6,125
DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID
ARTHRITIS, ASTHMA
47
Columbia Acorn USA
>Statement of Investments, continued
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
415,000 Ligand Pharmaceuticals (b) $ 4,831
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, &
DIABETES
300,000 Lexicon Genetics (b) 2,326
DRUG DISCOVERY
154,000 SYRRX, Series C (b)(d)(e) 770
X-RAY CRYSTALLOGRAPHY
375,000 Locus Discovery, Series D, Pfd. (b)(d)(e) 750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
15,000 Neurocrine Biosciences (b) 739
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
363,636 Metabolex, Series F (b)(d)(e) 53
DRUGS FOR DIABETES
- ----------------------------------------------------------------------------
22,880
>MEDICAL SUPPLIES: 1.0%
222,800 Techne (b) 8,667
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE
SCIENCES
- ----------------------------------------------------------------------------
>PHARMACEUTICALS: 0.9%
192,000 Par Pharmaceuticals (b) 7,945
GENERICS
- ----------------------------------------------------------------------------
------------
HEALTH CARE: TOTAL 122,248
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 11.7%
>OIL SERVICES: 5.4%
335,000 Chicago Bridge & Iron 13,400
ENGINEERING & CONSTRUCTION FOR
PETROCHEMICALS & LNG
401,700 FMC Technologies (b) 12,935
OIL & GAS WELL HEAD MANUFACTURER
355,000 Hanover Compressor (b) 5,016
NATURAL GAS COMPRESSOR RENTAL
941,000 Newpark Resources (b) 4,846
DRILLING FLUID SERVICES TO OIL & GAS
INDUSTRY
61,000 Carbo Ceramics 4,209
NATURAL GAS WELL STIMULANTS
120,000 Pride International (b) 2,465
OFFSHORE DRILLING CONTRACTOR
215,000 Pioneer Drilling (b) 2,169
OIL & GAS WELL DRILLER
135,000 Key Energy Services (b) 1,593
OIL & GAS WELL WORKOVER SERVICES
- ----------------------------------------------------------------------------
46,633
>OIL & GAS PRODUCERS: 4.1%
610,000 Quicksilver Resources (b) 22,436
NATURAL GAS & COAL SEAM GAS PRODUCER
272,000 Western Gas 7,956
OIL & COAL SEAM GAS PRODUCER
52,100 Southwestern Energy (b) 2,641
NATURAL GAS PRODUCER
75,000 Range Resources 1,534
OIL & GAS PRODUCER
70,000 McMoran Exploration (b) 1,309
NATURAL GAS PRODUCERS & LNG DEVELOPER
- ----------------------------------------------------------------------------
35,876
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>DISTRIBUTION/MARKETING/REFINING: 2.2%
115,600 Equitable Resources $ 7,012
NATURAL GAS UTILITY & PRODUCER
245,000 Oneok 6,963
NATURAL GAS UTILITY, MARKETING & PROCESSING
193,000 Atmos Energy 5,278
NATURAL GAS UTILITY
- ----------------------------------------------------------------------------
19,253
------------
ENERGY/MINERALS: TOTAL 101,762
- ----------------------------------------------------------------------------
FINANCE: 10.0%
>FINANCE COMPANIES: 4.7%
1,091,500 AmeriCredit (b) 26,687
AUTO LENDING
520,200 World Acceptance (b) 14,311
PERSONAL LOANS
- ----------------------------------------------------------------------------
40,998
>INSURANCE: 2.8%
430,000 HCC Insurance Holdings 14,241
SPECIALTY INSURANCE
16,500 Markel (b) 6,006
SPECIALTY INSURANCE
35,000 Philadelphia Consolidated Holding (b) 2,315
SPECIALTY INSURANCE
91,000 United National Group (b) 1,694
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
24,256
>BANKS: 1.7%
263,000 TCF Financial 8,453
GREAT LAKES BANK
197,656 Chittenden 5,678
VERMONT & WESTERN MASSACHUSETTS BANK
10,000 West Bancorporation 176
DES MOINES SMALL BUSINESS BANK
2,900 First Financial BankShares 130
WEST TEXAS COMMUNITY BANK
- ----------------------------------------------------------------------------
14,437
>SAVINGS & LOAN: 0.8%
69,000 Downey Financial 3,933
CALIFORNIA HOME LENDER
116,400 Anchor Bancorp Wisconsin 3,393
WISCONSIN THRIFT
- ----------------------------------------------------------------------------
7,326
------------
FINANCE: TOTAL 87,017
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 9.2%
>MACHINERY: 3.9%
282,000 Esco Technologies (b) 21,615
AUTOMATIC ELECTRIC METER READERS
194,000 Pentair 8,451
PUMPS, WATER TREATMENT & TOOLS
110,000 Ametek 3,924
AEROSPACE/INDUSTRIAL INSTRUMENTS
- ----------------------------------------------------------------------------
33,990
1-800-922-6769
48
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>LOGISTICS: 1.3%
221,000 Hub Group (b) $ 11,540
TRUCK & RAIL FREIGHT FORWARDER
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS: 1.2%
112,000 Genlyte Group (b) 9,596
COMMERCIAL LIGHTING FIXTURES
25,000 Donaldson 814
INDUSTRIAL AIR FILTRATION
- ----------------------------------------------------------------------------
10,410
>WATER: 0.9%
134,000 Cuno (b) 7,959
FILTRATION & FLUIDS CLARIFICATION
- ----------------------------------------------------------------------------
>CONSTRUCTION: 0.8%
112,700 Florida Rock Industries 6,709
CONCRETE & AGGREGATES
- ----------------------------------------------------------------------------
>SPECIALTY CHEMICALS/INDUSTRIAL
MATERIALS: 0.4%
114,400 Spartech 3,099
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
>INDUSTRIAL SERVICES: 0.3%
95,000 Clark (b) 1,474
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
41,900 Insurance Auto Auctions (b) 939
AUTO SALVAGE SERVICES
- ----------------------------------------------------------------------------
2,413
>INDUSTRIAL DISTRIBUTION: 0.2%
100,000 Nuco2 (b) 2,219
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
- ----------------------------------------------------------------------------
>OUTSOURCING SERVICES: 0.2%
269,500 Quanta Services (b) 2,156
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
- ----------------------------------------------------------------------------
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 80,495
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 0.5%
>REAL ESTATE: 0.3%
100,000 Crescent Real Estate Equities 1,826
CLASS A OFFICE BUILDINGS
35,000 Highland Hospitality 393
HOTEL REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------------------------------
2,219
>REGULATED UTILITIES: 0.2%
90,000 Northeast Utilities 1,696
REGULATED ELECTRIC UTILITY
- ----------------------------------------------------------------------------
------------
OTHER INDUSTRIES: TOTAL 3,915
------------
TOTAL COMMON STOCKS: 91.6% 797,185
(COST: $516,601)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 8.3%
$ 23,000 BellSouth 2.29% 1/07/05 (f) $ 22,991
23,000 Chevron/Texaco Funding
2.26% 1/04/05 22,996
26,603 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal National Mortgage
Association Note,
maturing 1/05/05,
market value $27,136
(repurchase proceeds: $26,607) 26,603
- ----------------------------------------------------------------------------
(AMORTIZED COST: $72,590) 72,590
------------
TOTAL INVESTMENTS: 99.9% 869,775
(COST: $589,191) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 907
------------
TOTAL NET ASSETS: 100% $ 870,682
============================================================================
49
Columbia Acorn USA
>Statement of Investments, December 31, 2004
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $589,444 and net unrealized appreciation was $280,331 consisting of
gross unrealized appreciation of $302,917 and gross unrealized
depreciation of $22,586.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On December 31, 2004, the Fund
held five percent or more of the outstanding voting securities of the
following company:
RCM Technologies 6.92%
The aggregate cost and value of this company at December 31 , 2004, was
$5,636 and $3,954, respectively. Investments in affiliate companies
represent 0.5% of total net assets at December 31, 2004. Investment
activity and income amounts relating to affiliates during the twelve
months ended December 31, 2004, were as follows:
Dividend Income $ --
Net realized gain or loss $ (3,800)
Change in unrealized gain or loss $ (1,838)
Purchases $ --
Proceeds from sales $ 562
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At December 31, 2004, these securities were
illiquid. At December 31, 2004, these securities (in thousands) amounted
to $1,573 which represents 0.2% of total net assets.
Additional information on these securities is as follows:
ACQUISITION
SECURITY DATES SHARES (000) COST (000) VALUE (000)
- --------------------------------------------------------------------------------------
Locus Discovery, Series D, Pfd. 09/05/01 375 $ 1,500 $ 750
Metabolex, Series F 05/11/00 364 2,000 53
SYRRX, Series C 01/08/01 154 1,001 770
------- -------
$ 4,501 $ 1,573
======= =======
(e) Represents fair value as determined in good faith under procedures
approved by the Board of Trustees.
(f) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resales of this security to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, the value of
this security represents 2.6% of net assets.
1-800-922-6769
50
Columbia Acorn International Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Compass Group 120,000 220,000
Depfa Bank (Ireland) 98,000 114,000
Exel 135,000 155,000
>SWITZERLAND
Kuehne & Nagel 0 5,500
Synthes-Stratec 5,000 10,000
>FRANCE
Neopost 25,100 31,000
>NORWAY
Orkla 0 26,000
>CZECH REPUBLIC
Komercni Banka 12,000 15,000
>GERMANY
Deutsche Boerse 0 13,000
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Hoya 12,400 15,000
Shimano 35,000 59,000
>HONG KONG/CHINA
Global Bio-Chem Technology
Group (China) 0 800,000
Hong Kong Exchanges &
Clearing 0 425,000
>SINGAPORE
ComfortDelGro 0 600,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Kinross Gold 80,000 164,400
>AUSTRALIA
Lion Nathan 260,000 300,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
SALES
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM
Anglo Irish Bank (Ireland) 160,000 140,000
BG Group 240,000 0
Jardine Lloyd Thompson 100,000 0
Rank Group 200,000 0
Smith & Nephew 46,000 0
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Uni-Charm 25,100 0
- ----------------------------------------------------------------------------
LATIN AMERICA
>ARGENTINA
Tenaris 39,200 29,200
51
Columbia Acorn International Select
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 89.9%
- ----------------------------------------------------------------------------
EUROPE: 53.5%
>UNITED KINGDOM/IRELAND: 20.3%
140,000 Anglo Irish Bank (Ireland) $ 3,394
SMALL BUSINESS & MIDDLE MARKET BANKING
155,000 Exel 2,148
GLOBAL LOGISTICS & FREIGHT FORWARDING
114,000 Depfa Bank (Ireland) (d) 1,907
INTERNATIONAL PUBLIC SECTOR FINANCE
104,000 Grafton Group (Ireland) (b) 1,127
BUILDERS, WHOLESALERS & DIY RETAILING
220,000 Compass Group 1,038
INTERNATIONAL CONCESSION & CONTRACT CATERER
40,000 Kerry (Ireland) 956
FOOD INGREDIENTS
70,000 British Sky Broadcasting 754
DIGITAL SATELLITE BROADCASTING
17,000 Cobham 403
AEROSPACE COMPONENTS
6,000 Intermediate Capital 125
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
- ----------------------------------------------------------------------------
11,852
>SWITZERLAND: 10.3%
1,900 Geberit International (d) 1,386
PLUMBING SUPPLIES
5,500 Kuehne & Nagel (d) 1,180
FREIGHT FORWARDING/LOGISTICS
10,000 Synthes-Stratec (b)(d) 1,116
PRODUCTS FOR ORTHOPEDIC SURGERY
7,000 Swatch Group (d) 1,026
WATCH & ELECTRONICS MANUFACTURER
2,300 Schindler (d) 909
ELEVATOR MANUFACTURER & SERVICE PROVIDER
600 Givaudan (d) 395
INDUSTRIAL FRAGRANCES & FLAVORS
- ----------------------------------------------------------------------------
6,012
>FRANCE/BELGIUM: 7.1%
31,000 Neopost 2,402
POSTAGE METER MACHINES
14,000 Imerys 1,171
INDUSTRIAL MINERALS PRODUCER
7,000 Essilor International 547
EYEGLASS LENSES
- ----------------------------------------------------------------------------
4,120
>NORWAY: 4.1%
157,500 Den Norske Bank (d) 1,545
LARGEST NORWEGIAN BANK
26,000 Orkla (d) 850
FOOD & DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
2,395
>CZECH REPUBLIC: 3.7%
15,000 Komercni Banka (d) 2,183
LEADING CZECH UNIVERSAL BANK
- ----------------------------------------------------------------------------
>LUXEMBOURG: 2.7%
120,000 SES Global 1,560
SATELLITE BROADCASTING SERVICES
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>GERMANY: 2.6%
13,000 Deutsche Boerse (d) $ 779
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
12,000 Rhoen-Klinikum (d) 736
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
1,515
>SPAIN: 1.7%
43,000 Red Electrica (d) 962
SPANISH POWER GRID
- ----------------------------------------------------------------------------
>ITALY: 1.0%
34,000 Autogrill (b)(d) 566
TOLLWAY RESTAURANTS
- ----------------------------------------------------------------------------
------------
EUROPE: TOTAL 31,165
- ----------------------------------------------------------------------------
ASIA: 24.9%
>JAPAN: 20.3%
38,000 Daito Trust Construction (d) 1,803
APARTMENT BUILDER
15,000 Hoya (d) 1,694
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
59,000 Shimano (d) 1,681
BICYCLE COMPONENTS & FISHING TACKLE
9,700 Funai Electric (d) 1,203
CONSUMER ELECTRONICS
64,000 Ushio (d) 1,191
INDUSTRIAL LIGHT SOURCES
32,300 Sugi Pharmacy (d) 1,095
DRUGSTORE OPERATOR
181,800 Hiroshima Bank (d) 960
REGIONAL BANK
11,500 Fast Retailing (d) 872
APPAREL RETAILER
310 Dentsu (d) 834
ADVERTISING AGENCY
23,000 Olympus Optical (d) 490
MEDICAL EQUIPMENT & CAMERAS
- ----------------------------------------------------------------------------
11,823
>HONG KONG/CHINA: 2.9%
425,000 Hong Kong Exchanges & Clearing 1,140
HONG KONG EQUITY & DERIVATIVES OPERATOR
800,000 Global Bio-Chem Technology
Group (China) 530
CHINESE REFINER OF CORN-BASED COMMODITIES
- ----------------------------------------------------------------------------
1,670
>SINGAPORE: 1.7%
600,000 ComfortDelGro 570
TAXI & MASS TRANSIT SERVICE
45,000 Venture 438
ELECTRONIC CONTRACT MANUFACTURER
- ----------------------------------------------------------------------------
1,008
------------
ASIA: TOTAL 14,501
- ----------------------------------------------------------------------------
1-800-922-6769
52
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 9.1%
>CANADA: 5.7%
47,000 Talisman Energy $ 1,267
OIL & GAS PRODUCER
164,400 Kinross Gold (b) 1,158
GOLD MINING
50,000 Noranda 877
DIVERSIFIED MINING HOLDING COMPANY
- ----------------------------------------------------------------------------
3,302
>AUSTRALIA: 3.4%
300,000 Lion Nathan 2,016
BEER BREWER/DISTRIBUTOR
- ----------------------------------------------------------------------------
------------
OTHER: TOTAL 5,318
- ----------------------------------------------------------------------------
LATIN AMERICA: 2.4%
>ARGENTINA: 2.4%
29,200 Tenaris 1,428
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
------------
LATIN AMERICA: TOTAL 1,428
------------
TOTAL COMMON STOCKS: 89.9% 52,412
(COST: $36,884)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 10.6%
$ 6,163 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal Home Loan Bank Note,
maturing 4/02/18, market
value $6,286 (repurchase
proceeds: $6,164) $ 6,163
- ----------------------------------------------------------------------------
(COST: $6,163) 6,163
------------
TOTAL INVESTMENTS: 100.5% 58,575
(COST: $43,047) (a)
CASH AND OTHER ASSETS LESS LIABILITIES: (0.5%) (287)
------------
TOTAL NET ASSETS: 100% $ 58,288
============================================================================
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purpose cost of investments
was $44,012 and net unrealized appreciation was $14,563 consisting of
gross unrealized appreciation of $15,223 and gross unrealized depreciation
of $660.
(b) Non-income producing security.
(c) On December 31, 2004, the Fund's total investments were denominated in
currencies as follows:
CURRENCY VALUE %OF NET ASSETS
------------------ ------- --------------
Euro $16,107 27.6%
Japanese Yen 11,823 20.3
US Dollar 7,591 13.0
Swiss Franc 6,012 10.3
British Pounds 4,469 7.7
Canadian Dollar 3,302 5.7
Other currencies less
than 5% of total
net assets 9,271 15.9
------- ------
$58,575 100.5%
======= ======
(d) Represents a security valued by an independent statistical fair value
pricing service at 12/31/04. Foreign securities which had a market holiday
on 12/31/04 were valued under this method. See Security Valuation in Note
2 for further information.
53
Columbia Acorn International Select
>Portfolio Diversi1/2cation
At December 31, 2004, the Fund's portfolio investments as a percent of net
assets were diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 4,237 7.3%
Industrial Materials 2,557 4.4
Machinery 2,402 4.1
Construction 1,803 3.1
Electrical Components 1,594 2.7
Steel 1,428 2.4
Industrial Distribution 1,127 1.9
Speciality Chemicals 395 0.7
- ----------------------------------------------------------------------------
15,543 26.6
>CONSUMER GOODS/SERVICES
Durable Goods 2,707 4.6
Beverage 2,016 3.5
Retail 1,967 3.4
Food 1,806 3.1
Restaurants 1,604 2.7
Consumer Electronics 1,203 2.1
- ----------------------------------------------------------------------------
11,303 19.4
>FINANCE
Banks 9,989 17.2
Other Finance Companies 125 0.2
- ----------------------------------------------------------------------------
10,114 17.4
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Financial Processors $ 1,919 3.3%
Semiconductors and
Related Equipment 1,694 2.9
Satellite Broadcasting
and Services 1,560 2.7
Advertising 834 1.4
Television Broadcasting 754 1.3
Contract Manufacturing 438 0.7
- ----------------------------------------------------------------------------
7,199 12.3
>ENERGY/MINERALS
Oil/Gas Producers 1,267 2.2
Non-Ferrous Metals 1,158 2.0
Mining 877 1.5
Agricultural Commodities
(includes Forestry) 530 0.9
- ----------------------------------------------------------------------------
3,832 6.6
>HEALTH CARE
Medical Equipment 2,153 3.7
Hospital Management 736 1.3
- ----------------------------------------------------------------------------
2,889 5.0
>OTHER INDUSTRIES
Regulated Utilities 962 1.6
Transportation 570 1.0
- ----------------------------------------------------------------------------
1,532 2.6
TOTAL COMMON STOCKS AND
-------------------------------
OTHER EQUITY-LIKE SECURITIES 52,412 89.9
SHORT-TERM OBLIGATIONS 6,163 10.6
-------------------------------
TOTAL INVESTMENTS 58,575 100.5
CASH AND OTHER ASSETS
LESS LIABILITIES (287) (0.5)
-------------------------------
NET ASSETS $ 58,288 100.0%
============================================================================
1-800-922-6769
54
Columbia Acorn Select
>Major Portfolio Changes in the Fourth Quarter (Unaudited)
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Additions
- ----------------------------------------------------------------------------
INFORMATION
AnswerThink 0 647,660
Aspect Communications 0 80,200
IAC/InterActiveCorp 0 720,000
Liberty Media International 0 235,000
McAfee 2,750,000 3,150,000
Skillsoft Publishing 4,188,100 8,625,900
Tellabs 4,100,000 5,100,000
UnitedGlobalCom 0 1,100,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
ITT Educational Services 1,350,000 1,395,000
International Speedway Motors 460,000 485,000
Safeway 1,550,000 2,540,000
- ----------------------------------------------------------------------------
FINANCE
Janus Capital 360,000 1,220,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 0 380,000
NUMBER OF SHARES
-------------------------------
09/30/04 12/31/04
Sales
- ----------------------------------------------------------------------------
INFORMATION
Fair Isaac 1,000,000 537,800
PeopleSoft 2,135,000 0
Synopsys 1,040,000 860,000
- ----------------------------------------------------------------------------
HEALTH CARE
First Health Group 3,350,000 2,836,500
55
Columbia Acorn Select
>Statement of Investments, December 31, 2004
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 86.6%
- ----------------------------------------------------------------------------
INFORMATION: 30.6%
>BUSINESS SOFTWARE: 9.5%
3,150,000 McAfee (b) $ 91,130
SECURITY SOFTWARE & SERVICES
860,000 Synopsys (b) 16,873
SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS
1,600,000 Novell (b) 10,800
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
80,200 Aspect Communications (b) 893
CALL CENTER SOFTWARE
- ----------------------------------------------------------------------------
119,696
>INTERNET: 5.5%
8,625,900 Skillsoft Publishing (b)(c) 48,736
PROVIDER OF WEB-BASED LEARNING
SOLUTIONS (E-LEARNING)
720,000 IAC/InterActiveCorp (b) 19,886
DOMINATE INTERNET MIDDLEMAN
- ----------------------------------------------------------------------------
68,622
>BUSINESS INFORMATION: 4.8%
470,000 Moody's 40,820
CREDIT RATING SERVICE
537,800 Fair Isaac 19,727
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
- ----------------------------------------------------------------------------
60,547
>TELECOMMUNICATIONS EQUIPMENT: 3.5%
5,100,000 Tellabs (b) 43,809
TELECOMMUNICATIONS EQUIPMENT
- ----------------------------------------------------------------------------
>MOBILE COMMUNICATIONS: 3.0%
2,050,000 American Tower (b) 37,720
COMMUNICATION TOWERS IN USA & MEXICO
- ----------------------------------------------------------------------------
>INSTRUMENTATION: 2.4%
1,000,000 Tektronix 30,210
ANALYTICAL INSTRUMENTS
- ----------------------------------------------------------------------------
>TELEVISION PROGRAMMING/CATV: 1.7%
235,000 Liberty Media International (b) 10,864
CATV HOLDING COMPANY
1,100,000 UnitedGlobalCom (b) 10,626
VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA
- ----------------------------------------------------------------------------
21,490
>COMPUTER SERVICES: 0.2%
647,660 AnswerThink (b) 3,018
IT INTEGRATOR FOR FORTUNE 2000
- ----------------------------------------------------------------------------
------------
INFORMATION: TOTAL 385,112
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 30.4%
>RETAIL: 10.5%
2,540,000 Safeway (b) 50,140
RETAIL FOOD & DRUG STORES
975,000 Abercrombie & Fitch 45,776
TEEN APPAREL RETAILER
750,000 Costco 36,307
WAREHOUSE SUPERSTORES
- ----------------------------------------------------------------------------
132,223
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSUMER SERVICES: 7.7%
1,395,000 ITT Educational Services (b) $ 66,332
POSTSECONDARY DEGREE PROGRAMS
728,000 Weight Watchers (b) 29,899
WEIGHT LOSS PROGRAM
- ----------------------------------------------------------------------------
96,231
>FURNITURE & MANUFACTURERS: 5.4%
630,000 Coach (b) 35,532
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
1,160,000 Herman Miller 32,051
OFFICE FURNITURE
- ----------------------------------------------------------------------------
67,583
>LEISURE VEHICLES: 4.8%
1,000,000 Harley-Davidson 60,750
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
>ENTERTAINMENT: 2.0%
485,000 International Speedway Motors 25,608
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
- ----------------------------------------------------------------------------
------------
CONSUMER GOODS/SERVICES: TOTAL 382,395
- ----------------------------------------------------------------------------
FINANCE: 14.6%
>BANKS: 7.0%
1,970,000 TCF Financial 63,316
GREAT LAKES BANK
750,000 Associated Banc-Corp 24,908
MIDWEST BANK
- ----------------------------------------------------------------------------
88,224
>MONEY MANAGEMENT: 4.1%
729,500 SEI Investments 30,588
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
1,220,000 Janus Capital 20,508
MANAGES MUTUAL FUNDS
- ----------------------------------------------------------------------------
51,096
>INSURANCE: 3.5%
120,000 Markel (b) 43,680
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
------------
FINANCE: TOTAL 183,000
- ----------------------------------------------------------------------------
HEALTH CARE: 7.3%
>SERVICES: 7.3%
2,836,500 First Health Group (b) 53,071
PPO NETWORK
910,000 Lincare Holdings (b) 38,811
HOME HEALTH CARE SERVICES
- ----------------------------------------------------------------------------
91,882
------------
HEALTH CARE: TOTAL 91,882
- ----------------------------------------------------------------------------
1-800-922-6769
56
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 2.7%
>LOGISTICS: 2.7%
620,000 Expeditors International
of Washington $ 34,646
INTERNATIONAL FREIGHT FORWARDER
- ----------------------------------------------------------------------------
------------
INDUSTRIAL GOODS/SERVICES: TOTAL 34,646
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 1.0%
>OIL SERVICES: 1.0%
380,000 FMC Technologies (b) 12,236
OIL & GAS WELL HEAD MANUFACTURER
- ----------------------------------------------------------------------------
------------
ENERGY/MINERALS: TOTAL 12,236
------------
TOTAL COMMON STOCKS: 86.6% 1,089,271
(COST: $845,268)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 12.6%
$ 30,000 American General Finance
2.27% 1/03/05 $ 29,996
29,994 Toyota Credit 2.23% 1/04/05 29,994
27,000 American Express Finance
2.23% 1/03/05 26,992
27,000 BellSouth 2.29% 1/7/05 (d) 26,990
16,000 Colgate Palmolive 2.17% 1/10/05 15,991
28,072 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% collateralized by a
Federal National Mortgage
Association Note,
maturing 1/05/05, market
value $28,636 (repurchase
proceeds: $28,076) 28,072
- ----------------------------------------------------------------------------
(AMORTIZED COST: $158,035) 158,035
------------
TOTAL INVESTMENTS: 99.2% 1,247,306
(COST: $1,003,303) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.8% 9,781
------------
TOTAL NET ASSETS: 100% $ 1,257,087
============================================================================
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $1,003,540 and net unrealized appreciation was $243,766 consisting of
gross unrealized appreciation of $271,003 and gross unrealized
depreciation of $27,237.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On December 31, 2004, the Fund
held five percent or more of the outstanding voting securities of the
following company:
Skillsoft Publishing 8.12%
The aggregate cost and value of this company at December 31, 2004, was
$55,490 and $48,736, respectively. Investments in affiliate companies
represent 3.9% of total net assets at December 31, 2004. Investment
activity and income amounts relating to affiliates during the twelve
months ended December 31, 2004, were as follows:
Dividend Income $ --
Net realized gain or loss $ --
Change in unrealized gain or loss $ (6,754)
Purchases $ 55,490
Proceeds from sales $ --
(d) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resales of this security to qualified
institutional buyers are also exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At December 31, 2004, the value of
this security represents 2.1% of net assets.
57
This page intentionally left blank.
58
COLUMBIA ACORN FAMILY OF FUNDS
> STATEMENTS OF ASSETS AND LIABILITIES
> STATEMENTS OF OPERATIONS
> STATEMENTS OF CHANGES IN NET ASSETS
> FINANCIAL HIGHLIGHTS
> NOTES TO FINANCIAL STATEMENTS
59
Columbia Acorn Family of Funds
>Statements of Assets and Liabilities
COLUMBIA COLUMBIA COLUMBIA
ACORN ACORN ACORN
DECEMBER 31, 2004 FUND INTERNATIONAL USA
-------------------- -------------------- --------------------
(IN THOUSANDS)
ASSETS
Unaffiliated investments (including
repurchase agreement), at cost $ 7,749,409 $ 1,339,257 $ 583,555
Affiliated investments, at cost (See Note 4) 562,929 -- 5,636
-------------------- -------------------- --------------------
Unaffiliated investments, at value $ 11,871,978 $ 2,045,766 $ 839,218
Affiliated investments, at value (See Note 4) 1,928,260 -- 3,954
Repurchase agreement, at value 38,346 9,076 26,603
Cash -- 57 1
Foreign currency (cost: Columbia Acorn
Fund $14,854; Columbia Acorn
International $16,352; Columbia Acorn
International Select $50) 15,138 16,664 --
Receivable for:
Investments sold 4,178 4,172 --
Fund shares sold 23,692 3,551 2,223
Dividends and interest 6,121 1,598 142
Foreign tax reclaims 872 826 1
Expense reimbursement due from Advisor -- -- --
Deferred Trustees' Compensation Investments 1,498 524 102
Other assets -- -- --
-------------------- -------------------- --------------------
Total Assets 13,890,083 2,082,234 872,244
LIABILITIES
Payable to custodian bank 89 -- --
Payable for:
Investments purchased 7,118 4,458 449
Fund shares redeemed 34,382 1,502 635
12b-1 Service & Distribution fees 2,594 76 109
Legal & audit fees 267 77 45
Reports to shareholders 1,759 382 171
Deferred Trustees' fees 1,498 524 102
Transfer agent fees 558 95 37
Trustees' fees 11 -- --
Custody fees 113 101 2
Other liabilities 235 7 12
-------------------- -------------------- --------------------
Total Liabilities 48,624 7,222 1,562
-------------------- -------------------- --------------------
NET ASSETS $ 13,841,459 $ 2,075,012 $ 870,682
==================== ==================== ====================
COMPOSITION OF NET ASSETS
Paid in capital $ 8,128,938 $ 1,406,584 $ 580,054
Undistributed net investment income
(Accumulated net investment loss) (20,921) 16,151 (103)
Accumulated net realized gain (loss) 206,806 (63,744) 10,147
Net unrealized appreciation on:
Investments 5,526,246 715,585 280,584
Foreign currency translations 390 436 --
-------------------- -------------------- --------------------
NET ASSETS $ 13,841,459 $ 2,075,012 $ 870,682
==================== ==================== ====================
Net asset value per share -- Class A (a) $ 25.93 $ 28.75 $ 24.77
(Net assets/shares) ($2,669,936/102,978) ($70,582/2,455) ($112,509/4,542)
Maximum offering price
per share -- Class A (b) $ 27.51 $ 30.50 $ 26.28
(Net asset value per share/
front-end sales charge) ($25.93/0.9425) ($28.75/0.9425) ($24.77/0.9425)
Net asset value and offering
price per share -- Class B (a) $ 25.19 $ 28.18 $ 24.14
(Net assets/shares) ($1,399,135/55,544) ($54,752/1,943) ($72,643/3,010)
Net asset value and offering
price per share -- Class C (a) $ 25.18 $ 28.19 $ 24.14
(Net assets/shares) ($1,083,006/43,004) ($30,547/1,084) ($39,643/1,642)
Net asset value and offering
price per share -- Class Z (c) $ 26.45 $ 29.03 $ 25.20
(Net assets/shares) ($8,689,382/328,514) ($1,919,131/66,102) ($645,887/25,635)
COLUMBIA COLUMBIA
ACORN ACORN
DECEMBER 31, 2004 INTERNATIONAL SELECT SELECT
-------------------- --------------------
(IN THOUSANDS)
ASSETS
Unaffiliated investments (including
repurchase agreement), at cost $ 43,047 $ 947,813
Affiliated investments, at cost (See Note 4) -- 55,490
-------------------- --------------------
Unaffiliated investments, at value $ 52,412 $ 1,170,498
Affiliated investments, at value (See Note 4) -- 48,736
Repurchase agreement, at value 6,163 28,072
Cash --* 1
Foreign currency (cost: Columbia Acorn
Fund $14,854; Columbia Acorn
International $16,352; Columbia Acorn
International Select $50) 50 --
Receivable for:
Investments sold 11 --
Fund shares sold 408 12,610
Dividends and interest 72 158
Foreign tax reclaims 13 --
Expense reimbursement due from Advisor 3 --
Deferred Trustees' Compensation Investments -- --
Other assets 11 16
-------------------- --------------------
Total Assets 59,143 1,260,091
LIABILITIES
Payable to custodian bank -- --
Payable for:
Investments purchased 674 681
Fund shares redeemed 78 1,508
12b-1 Service & Distribution fees 5 344
Legal & audit fees 24 42
Reports to shareholders 48 273
Deferred Trustees' fees 16 57
Transfer agent fees 6 97
Trustees' fees -- --*
Custody fees 4 2
Other liabilities -- --
-------------------- --------------------
Total Liabilities 855 3,004
-------------------- --------------------
NET ASSETS $ 58,288 $ 1,257,087
==================== ====================
COMPOSITION OF NET ASSETS
Paid in capital $ 73,860 $ 1,005,933
Undistributed net investment income
(Accumulated net investment loss) 49 (57)
Accumulated net realized gain (loss) (31,151) 7,208
Net unrealized appreciation on:
Investments 15,528 244,003
Foreign currency translations 2 --
-------------------- --------------------
NET ASSETS $ 58,288 $ 1,257,087
==================== ====================
Net asset value per share -- Class A (a) $ 17.85 $ 20.83
(Net assets/shares) ($4,357/244) ($515,842/24,767)
Maximum offering price
per share -- Class A (b) $ 18.94 $ 22.10
(Net asset value per share/
front-end sales charge) ($17.85/0.9425) ($20.83/0.9425)
Net asset value and offering
price per share -- Class B (a) $ 17.36 $ 20.23
(Net assets/shares) ($5,097/294) ($185,545/9,172)
Net asset value and offering
price per share -- Class C (a) $ 17.38 $ 20.23
(Net assets/shares) ($2,543/146) ($110,435/5,459)
Net asset value and offering
price per share -- Class Z (c) $ 18.02 $ 21.13
(Net assets/shares) ($46,291/2,569) ($445,265/21,073)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
(c) Redemption price per share is equal to net asset value less any applicable
redemption fee.
* Rounds to less than $500.
See accompanying notes to financial statements.
1-800-922-6769
60
Columbia Acorn Family of Funds
>Statements of Operations
For the Year Ended December 31, 2004
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN ACORN ACORN INTERNATIONAL ACORN
(IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT
----------- ------------- --------- ------------ ---------
INVESTMENT INCOME:
Dividend income $ 104,281 $ 39,926 $ 2,493 $ 838 $ 4,481
Dividend income from affiliates (See Note 4) 7,758 -- -- -- --
Interest income 11,206 777 730 31 1,485
----------- ------------- --------- ------------ ---------
123,245 40,703 3,223 869 5,966
Foreign taxes withheld (4,147) (3,906) (5) (87) --
----------- ------------- --------- ------------ ---------
Total Investment Income 119,098 36,797 3,218 782 5,966
EXPENSES:
Management fee 79,884 14,433 6,825 431 8,663
Administration fee 5,759 838 356 22 461
12b-1 Service and Distribution fees:
Class A 6,960 178 306 10 1,140
Class B 11,958 422 637 36 1,407
Class C 9,641 253 373 27 869
Transfer agent fees:
Class A 3,024 102 156 9 550
Class B 3,149 154 173 19 466
Class C 1,843 60 72 7 203
Class Z 3,399 1,333 286 69 401
Custody fees 1,516 1,320 30 51 30
Trustees' fees 656 95 41 2 23
Registration & blue sky fees 593 87 111 60 220
Reports to shareholders 4,347 899 394 92 630
Legal & audit fees 1,091 145 119 32 78
Compliance fees 172 25 11 1 14
Non-recurring costs (See Note 8) 1,116 162 69 4 90
Other expenses 285 56 22 9 28
----------- ------------- --------- ------------ ---------
Total expenses 135,393 20,562 9,981 881 15,273
Less custody fees paid indirectly (27) (1) (1) --* (1)
Less reimbursement of expenses
by Advisor -- -- -- (131) --
Less reimbursement of expenses
by Transfer Agent (2,101) (305) (122) (15) (222)
Non-recurring costs reimbursed (See Note 8) (1,116) (162) (69) (4) (90)
----------- ------------- --------- ------------ ---------
Net Expenses 132,149 20,094 9,789 731 14,960
----------- ------------- --------- ------------ ---------
Net Investment Income (Loss) (13,051) 16,703 (6,571) 51 (8,994)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Unaffiliated investments 656,773 175,318 32,045 7,210 47,420
Affiliated investments (See Note 4) 36,513 -- (3,800) -- --
Foreign currency transactions (102) 563 -- (2) --
----------- ------------- --------- ------------ ---------
Net realized gain 693,184 175,881 28,245 7,208 47,420
=========== ============= ========= ============ =========
Net change in net unrealized appreciation/
depreciation on:
Unaffiliated investments 1,640,564 276,024 123,786 2,774 140,545
Affiliated investments (See Note 4) 59,516 -- (1,838) -- (6,754)
Foreign currency translations 1,919 911 -- (12) --
----------- ------------- --------- ------------ ---------
Net change in unrealized appreciation/
depreciation 1,701,999 276,935 121,948 2,762 133,791
=========== ============= ========= ============ =========
Net realized and unrealized gain 2,395,183 452,816 150,193 9,970 181,211
----------- ------------- --------- ------------ ---------
Net Increase in Net Assets resulting
from Operations $ 2,382,132 $ 469,519 $ 143,622 $ 10,021 $ 172,217
=========== ============= ========= ============ =========
* Rounds to less than $500.
See accompanying notes to financial statements.
61
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
Year Ended Year Ended Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS December 31, December 31, December 31, December 31,
------------ ------------ ------------- -------------
(IN THOUSANDS) 2004 2003 2004 2003
OPERATIONS:
Net investment income (loss) $ (13,051) $ (9,911) $ 16,703 $ 15,934
Net realized gain (loss) on investments
and foreign currency transactions 693,184 90,682 175,881 (7,144)
Net change in net unrealized appreciation/
depreciation on investments and
foreign currency translations 1,701,999 2,974,675 276,935 561,990
------------ ------------ ------------- -------------
Net Increase from Operations 2,382,132 3,055,446 469,519 570,780
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (374) (106)
Net realized gain -- Class A (89,952) (1,752) -- --
Net investment income -- Class B -- -- (75) --
Net realized gain -- Class B (49,011) (1,116) -- --
Net investment income -- Class C -- -- (42) --
Net realized gain -- Class C (37,671) (813) -- --
Net investment income -- Class Z (5,620) -- (16,439) (5,829)
Net realized gain -- Class Z (290,184) (6,236) -- --
------------ ------------ ------------- -------------
Total Distribution to Shareholders (472,438) (9,917) (16,930) (5,935)
SHARE TRANSACTIONS:
Subscriptions -- Class A 703,271 1,041,782 19,736 45,279
Distributions reinvested -- Class A 81,405 1,584 306 80
Redemptions -- Class A (453,387) (259,438) (17,531) (42,948)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class A 331,289 783,928 2,511 2,411
Subscriptions -- Class B 90,732 364,144 10,422 11,463
Distributions reinvested -- Class B 44,616 1,018 66 --
Redemptions -- Class B (146,696) (88,744) (7,152) (5,639)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class B (11,348) 276,418 3,336 5,824
Subscriptions -- Class C 145,878 375,513 8,030 14,870
Distributions reinvested -- Class C 30,636 673 35 --
Redemptions -- Class C (136,434) (73,548) (6,936) (13,396)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class C 40,080 302,638 1,129 1,474
Subscriptions -- Class Z 1,596,519 1,682,204 206,434 220,802
Distributions reinvested -- Class Z 254,191 5,443 14,669 5,336
Redemptions -- Class Z (1,447,781) (667,986) (284,074) (434,204)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class Z 402,929 1,019,661 (62,971) (208,066)
------------ ------------ ------------- -------------
Net Increase (Decrease) from
Share Transactions 762,950 2,382,645 (55,995) (198,357)
------------ ------------ ------------- -------------
Redemption Fees -- -- 86 400
------------ ------------ ------------- -------------
Total Increase in Net Assets 2,672,644 5,428,174 396,680 366,888
NET ASSETS:
Beginning of period 11,168,815 5,740,641 1,678,332 1,311,444
------------ ------------ ------------- -------------
End of period $ 13,841,459 $ 11,168,815 $ 2,075,012 $ 1,678,332
============ ============ ============= =============
UNDISTRIBUTED NET INVESTMENT INCOME OR
(ACCUMULATED NET INVESTMENT LOSS) $ (20,921) $ 6,955 $ 16,151 $ 16,493
============ ============ ============= =============
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
Year Ended Year Ended Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS December 31, December 31, December 31, December 31,
------------ ------------ ------------- -------------
(IN THOUSANDS) 2004 2003 2004 2003
OPERATIONS:
Net investment income (loss) $ (6,571) $ (4,408) $ 51 $ 136
Net realized gain (loss) on investments
and foreign currency transactions 28,245 7,301 7,208 (425)
Net change in net unrealized appreciation/
depreciation on investments and
foreign currency translations 121,948 172,313 2,762 12,936
------------ ------------ ------------- -------------
Net Increase from Operations 143,622 175,206 10,021 12,647
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (6) --
Net realized gain -- Class A (622) -- -- --
Net investment income -- Class B -- -- -- --
Net realized gain -- Class B (415) -- -- --
Net investment income -- Class C -- -- -- --
Net realized gain -- Class C (224) -- -- --
Net investment income -- Class Z -- -- (151) (19)
Net realized gain -- Class Z (3,487) -- -- --
------------ ------------ ------------- -------------
Total Distribution to Shareholders (4,748) -- (157) (19)
SHARE TRANSACTIONS:
Subscriptions -- Class A 27,362 60,457 1,860 2,350
Distributions reinvested -- Class A 572 -- 5 --
Redemptions -- Class A (22,954) (23,188) (763) (3,212)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class A 4,980 37,269 1,102 (862)
Subscriptions -- Class B 4,936 19,327 1,664 1,577
Distributions reinvested -- Class B 375 -- -- --
Redemptions -- Class B (10,452) (8,053) (586) (989)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class B (5,141) 11,274 1,078 588
Subscriptions -- Class C 5,707 13,056 786 3,211
Distributions reinvested -- Class C 187 -- -- --
Redemptions -- Class C (8,114) (4,575) (2,429) (3,564)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class C (2,220) 8,481 (1,643) (353)
Subscriptions -- Class Z 199,048 221,496 11,787 23,389
Distributions reinvested -- Class Z 3,134 -- 146 18
Redemptions -- Class Z (161,267) (83,975) (7,456) (25,393)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class Z 40,915 137,521 4,477 (1,986)
------------ ------------ ------------- -------------
Net Increase (Decrease) from
Share Transactions 38,534 194,545 5,014 (2,613)
------------ ------------ ------------- -------------
Redemption Fees -- -- 4 39
------------ ------------ ------------- -------------
Total Increase in Net Assets 177,408 369,751 14,882 10,054
NET ASSETS:
Beginning of period 693,274 323,523 43,406 33,352
------------ ------------ ------------- -------------
End of period $ 870,682 $ 693,274 $ 58,288 $ 43,406
============ ============ ============= =============
UNDISTRIBUTED NET INVESTMENT INCOME OR
(ACCUMULATED NET INVESTMENT LOSS) $ (103) $ 92 $ 49 $ 142
============ ============ ============= =============
COLUMBIA
ACORN SELECT
Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS December 31, December 31,
------------ ------------
(IN THOUSANDS) 2004 2003
OPERATIONS:
Net investment income (loss) $ (8,994) $ (4,419)
Net realized gain (loss) on investments
and foreign currency transactions 47,420 8,643
Net change in net unrealized appreciation/
depreciation on investments and
foreign currency translations 133,791 95,023
------------ ------------
Net Increase from Operations 172,217 99,247
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- --
Net realized gain -- Class A (10,300) (1,172)
Net investment income -- Class B -- --
Net realized gain -- Class B (3,895) (563)
Net investment income -- Class C -- --
Net realized gain -- Class C (2,321) (301)
Net investment income -- Class Z -- --
Net realized gain -- Class Z (8,700) (2,145)
------------ ------------
Total Distribution to Shareholders (25,216) (4,181)
SHARE TRANSACTIONS:
Subscriptions -- Class A 274,350 237,520
Distributions reinvested -- Class A 9,614 1,096
Redemptions -- Class A (91,343) (30,378)
------------ ------------
Net Increase (Decrease) -- Class A 192,621 208,238
Subscriptions -- Class B 61,755 78,641
Distributions reinvested -- Class B 3,496 507
Redemptions -- Class B (19,113) (9,321)
------------ ------------
Net Increase (Decrease) -- Class B 46,138 69,827
Subscriptions -- Class C 49,173 50,838
Distributions reinvested -- Class C 1,934 257
Redemptions -- Class C (17,236) (4,391)
------------ ------------
Net Increase (Decrease) -- Class C 33,871 46,704
Subscriptions -- Class Z 204,740 301,467
Distributions reinvested -- Class Z 6,716 1,920
Redemptions -- Class Z (114,619) (150,913)
------------ ------------
Net Increase (Decrease) -- Class Z 96,837 152,474
------------ ------------
Net Increase (Decrease) from
Share Transactions 369,467 477,243
------------ ------------
Redemption Fees -- --
------------ ------------
Total Increase in Net Assets 516,468 572,309
NET ASSETS:
Beginning of period 740,619 168,310
------------ ------------
End of period $ 1,257,087 $ 740,619
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME OR
(ACCUMULATED NET INVESTMENT LOSS) $ (57) $ (21)
============ ============
See accompanying notes to financial statements.
1-800-922-6769
62-63 Spread
Columbia Acorn Family of Funds
>Statements of Changes in Net Assets, continued
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
Year Ended Year Ended Year Ended Year Ended
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31, December 31, December 31,
------------ ------------ ------------- -------------
(IN THOUSANDS) 2004 2003 2004 2003
Subscriptions -- Class A 29,671 56,202 809 2,734
Shares issued in reinvestment and capital
gains -- Class A 3,255 73 13 5
Less shares redeemed -- Class A (19,230) (14,204) (722) (2,590)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class A 13,696 42,071 100 149
Subscriptions -- Class B 3,928 20,371 438 653
Shares issued in reinvestment and capital
gains -- Class B 1,836 48 3 --
Less shares redeemed -- Class B (6,388) (5,154) (301) (343)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class B (624) 15,265 140 310
Subscriptions -- Class C 6,282 20,690 333 911
Shares issued in reinvestment and capital
gains -- Class C 1,261 32 2 --
Less shares redeemed -- Class C (5,916) (4,207) (293) (833)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class C 1,627 16,515 42 78
Subscriptions -- Class Z 66,041 89,984 8,246 13,104
Shares issued in reinvestment and capital
gains -- Class Z 9,967 249 624 313
Less shares redeemed -- Class Z (60,621) (36,502) (11,723) (25,027)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class Z 15,387 53,731 (2,853) (11,610)
------------ ------------ ------------- -------------
Net Increase (Decrease) in Shares of
Beneficial Interest 30,086 127,582 (2,571) (11,073)
------------ ------------ ------------- -------------
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
Year Ended Year Ended Year Ended Year Ended
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31, December 31, December 31,
------------ ------------ ------------- -------------
(IN THOUSANDS) 2004 2003 2004 2003
Subscriptions -- Class A 1,239 3,345 116 216
Shares issued in reinvestment and capital
gains -- Class A 24 -- --* --
Less shares redeemed -- Class A (1,043) (1,309) (49) (294)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class A 220 2,036 67 (78)
Subscriptions -- Class B 229 1,087 108 137
Shares issued in reinvestment and capital
gains -- Class B 16 -- -- --
Less shares redeemed -- Class B (485) (512) (38) (95)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class B (240) 575 70 42
Subscriptions -- Class C 261 724 52 311
Shares issued in reinvestment and capital
gains -- Class C 8 -- -- --
Less shares redeemed -- Class C (379) (279) (167) (339)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class C (110) 445 (115) (28)
Subscriptions -- Class Z 8,912 12,184 707 2,239
Shares issued in reinvestment and capital
gains -- Class Z 128 -- 10 2
Less shares redeemed -- Class Z (7,291) (4,772) (479) (2,435)
------------ ------------ ------------- -------------
Net Increase (Decrease) -- Class Z 1,749 7,412 238 (194)
------------ ------------ ------------- -------------
Net Increase (Decrease) in Shares of
Beneficial Interest 1,619 10,468 260 (258)
------------ ------------ ------------- -------------
COLUMBIA
ACORN SELECT
YEAR ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31,
------------ ------------
(IN THOUSANDS) 2004 2003
Subscriptions -- Class A 14,418 14,227
Shares issued in reinvestment and capital
gains -- Class A 473 63
Less shares redeemed -- Class A (4,824) (1,869)
------------ ------------
Net Increase (Decrease) -- Class A 10,067 12,421
Subscriptions -- Class B 3,336 4,854
Shares issued in reinvestment and capital
gains -- Class B 177 30
Less shares redeemed -- Class B (1,035) (601)
------------ ------------
Net Increase (Decrease) -- Class B 2,478 4,283
Subscriptions -- Class C 2,649 3,102
Shares issued in reinvestment and capital
gains -- Class C 98 15
Less shares redeemed -- Class C (929) (271)
------------ ------------
Net Increase (Decrease) -- Class C 1,818 2,846
Subscriptions -- Class Z 10,606 18,117
Shares issued in reinvestment and capital
gains -- Class Z 326 108
Less shares redeemed -- Class Z (5,997) (8,676)
------------ ------------
Net Increase (Decrease) -- Class Z 4,935 9,549
------------ ------------
Net Increase (Decrease) in Shares of
Beneficial Interest 19,298 29,099
------------ ------------
* Rounds to less than 500 shares.
See accompanying notes to financial statements.
1-800-922-6769
64-65 Spread
Columbia Acorn Family of Funds
>Financial Highlights
COLUMBIA ACORN FUND
Class A Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.20 $ 15.34 $ 17.80 $ 17.19 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.05) (0.07) (0.07) (0.05) 0.01
Net realized and unrealized gain (loss) 4.69 6.95 (2.39) 1.01 1.22
----------- ----------- --------- --------- ---------
Total from Investment Operations 4.64 6.88 (2.46) 0.96 1.23
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.06)
From net realized gains (0.91) (0.02) -- (0.35) (1.86)
----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92)
----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 25.93 $ 22.20 $ 15.34 $ 17.80 $ 17.19
=========== =========== ========= ========= =========
Total Return (c) 21.05%(d) 44.85% (13.82)% 5.56% 7.40%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 1.20% 1.33% 1.42% 1.42% 1.25%(g)(h)
Net investment income (loss) (f) (0.21)% (0.36)% (0.45)% (0.33)% 0.17%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (000'S) $ 2,669,936 $ 1,982,260 $ 724,121 $ 306,405 $ 18,252
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.03% and 0.39% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.75 $ 15.13 $ 17.67 $ 17.17 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.22) (0.18) (0.17) (0.16) (0.01)
Net realized and unrealized gain (loss) 4.57 6.82 (2.37) 1.01 1.22
----------- ----------- --------- --------- ---------
Total from Investment Operations 4.35 6.64 (2.54) 0.85 1.21
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.06)
From net realized gains (0.91) (0.02) -- (0.35) (1.86)
----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92)
----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 25.19 $ 21.75 $ 15.13 $ 17.67 $ 17.17
=========== =========== ========= ========= =========
Total Return (c) 20.15%(d) 43.89% (14.37)% 4.92% 7.27%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 1.95% 1.98% 2.07% 2.07% 1.90%(g)(h)
Net investment loss (f) (0.96)% (1.01)% (1.10)% (0.98)% (0.48)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (000'S) $ 1,399,135 $ 1,221,931 $ 618,727 $ 286,422 $ 15,951
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.68% and (0.26)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.75 $ 15.12 $ 17.66 $ 17.17 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.22) (0.18) (0.17) (0.17) (0.01)
Net realized and unrealized gain (loss) 4.56 6.83 (2.37) 1.01 1.22
----------- ----------- --------- --------- ---------
Total from Investment Operations 4.34 6.65 (2.54) 0.84 1.21
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.06)
From net realized gains (0.91) (0.02) -- (0.35) (1.86)
----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92)
----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 25.18 $ 21.75 $ 15.12 $ 17.66 $ 17.17
=========== =========== ========= ========= =========
Total Return (c) 20.11%(d) 43.99% (14.38)% 4.86% 7.27%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 1.95% 1.98% 2.07% 2.07% 1.90%(g)(h)
Net investment loss (f) (0.96)% (1.01)% (1.10)% (0.98)% (0.48)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (000'S) $ 1,083,006 $ 900,016 $ 376,024 $ 150,727 $ 8,510
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.68% and (0.26)% respectively, were revised to
reflect all class specific expenses in this period.
See accompanying notes to financial statements.
1-800-922-6769
66
COLUMBIA ACORN INTERNATIONAL
Class A Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.45 $ 15.32 $ 18.35 $ 23.84 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) 0.14 0.10 0.05 0.01 0.02
Net realized and unrealized gain (loss) 6.31 7.08 (3.07) (5.11) (1.26)
----------- ----------- --------- --------- ---------
Total from Investment Operations 6.45 7.18 (3.02) (5.10) (1.24)
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.15) (0.05) (0.01) -- --
From net realized gains -- -- -- (0.39) (3.59)
----------- ----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.15) (0.05) (0.01) (0.39) (3.59)
----------- ----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 28.75 $ 22.45 $ 15.32 $ 18.35 $ 23.84
=========== =========== ========= ========= =========
Total Return (c) 28.91%(d) 46.94% (16.46)% (21.59)% (4.85)%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 1.48% 1.59% 1.56% 1.65% 1.26%(g)(h)
Net investment income (f) 0.61% 0.57% 0.30% 0.03% 0.73%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (000'S) $ 70,582 $ 52,872 $ 33,806 $ 25,587 $ 10,323
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.59% and 0.40% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.07 $ 15.11 $ 18.22 $ 23.81 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.04) (0.02) (0.06) (0.12) 0.01
Net realized and unrealized gain (loss) 6.19 6.98 (3.05) (5.08) (1.28)
----------- ----------- --------- --------- ---------
Total from Investment Operations 6.15 6.96 (3.11) (5.20) (1.27)
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.04) -- -- -- --
----------- ----------- --------- --------- ---------
From net realized gains -- -- -- (0.39) (3.59)
----------- ----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.04) -- -- (0.39) (3.59)
----------- ----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 28.18 $ 22.07 $ 15.11 $ 18.22 $ 23.81
=========== =========== ========= ========= =========
Total Return (c) 27.91%(d) 46.06% (17.07)% (22.04)% (4.97)%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.27% 2.24% 2.21% 2.30% 1.91%(g)(h)
Net investment income (loss) (f) (0.18)% (0.10)% (0.35)% (0.62)% 0.08%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (000'S) $ 54,752 $ 39,800 $ 22,560 $ 17,235 $ 5,675
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 2.24% and (0.25)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.06 $ 15.11 $ 18.21 $ 23.81 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.03) (0.01) (0.06) (0.13) 0.01
Net realized and unrealized gain (loss) 6.20 6.96 (3.04) (5.08) (1.28)
----------- ----------- --------- --------- ---------
Total from Investment Operations 6.17 6.95 (3.10) (5.21) (1.27)
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.04) -- -- -- --
From net realized gains -- -- -- (0.39) (3.59)
----------- ----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.04) -- -- (0.39) (3.59)
----------- ----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 28.19 $ 22.06 $ 15.11 $ 18.21 $ 23.81
=========== =========== ========= ========= =========
Total Return (c) 28.01%(d) 46.00% (17.02)% (22.08)% (4.97)%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.24% 2.24% 2.21% 2.30% 1.91%(g)(h)
Net investment income (loss) (f) (0.15)% (0.06)% (0.35)% (0.62)% 0.08%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (000'S) $ 30,547 $ 22,990 $ 14,575 $ 14,327 $ 3,965
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 2.24% and (0.25)% respectively, were revised to
reflect all class specific expenses in this period.
67
Columbia Acorn Family of Funds
>Financial Highlights continued
COLUMBIA ACORN USA
Class A Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.74 $ 14.18 $ 17.50 $ 14.88 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.24) (0.22) (0.19) (0.19) (0.01)
Net realized and unrealized gain (loss) 4.41 6.78 (3.13) 2.96 1.06
----------- ----------- --------- --------- ---------
Total from Investment Operations 4.17 6.56 (3.32) 2.77 1.05
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.14) -- -- (0.15) --
----------- ----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.14) -- -- (0.15) --
----------- ----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 24.77 $ 20.74 $ 14.18 $ 17.50 $ 14.88
=========== =========== ========= ========= =========
Total Return (c) 20.12%(d) 46.26% (18.97)% 18.65% 7.59%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 1.51% 1.65% 1.74% 1.84% 1.41%(g)(h)
Net investment loss (f) (1.08)% (1.26)% (1.21)% (1.13)% (0.73)%(g)(h)
Reimbursement 0.02% -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (000'S) $ 112,509 $ 89,650 $ 32,422 $ 20,455 $ 798
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.17% and (0.49)% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.39) (0.32) (0.29) (0.30) (0.03)
Net realized and unrealized gain (loss) 4.31 6.67 (3.10) 2.96 1.07
----------- ----------- --------- --------- ---------
Total from Investment Operations 3.92 6.35 (3.39) 2.66 1.04
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.14) -- -- (0.13) --
----------- ----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.14) -- -- (0.13) --
----------- ----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD 24.14 $ 20.36 $ 14.01 $ 17.40 $ 14.87
=========== =========== ========= ========= =========
Total Return (c) 19.26%(d) 45.32% (19.48)% 17.92% 7.52%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.23% 2.30% 2.39% 2.49% 2.06%(g)(h)
Net investment loss (f) (1.80)% (1.91)% (1.86)% (1.78)% (1.38)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (000'S) $ 72,643 $ 66,175 $ 37,478 $ 27,722 $ 685
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.82% and (1.14)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares Year ended December 31,
-------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.39) (0.32) (0.29) (0.30) (0.03)
Net realized and unrealized gain (loss) 4.31 6.67 (3.10) 2.96 1.07
----------- ----------- --------- --------- ---------
Total from Investment Operations 3.92 6.35 (3.39) 2.66 1.04
----------- ----------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.14) -- -- (0.13) --
----------- ----------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.14) -- -- (0.13) --
----------- ----------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 24.14 $ 20.36 $ 14.01 $ 17.40 $ 14.87
=========== =========== ========= ========= =========
Total Return (c) 19.26%(d) 45.32% (19.48)% 17.92% 7.52%(e)
----------- ----------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.23% 2.30% 2.39% 2.49% 2.06%(g)(h)
Net investment loss (f) (1.80)% (1.91)% (1.86)% (1.78)% (1.38)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (000'S) $ 39,643 $ 35,662 $ 18,313 $ 13,049 $ 347
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Transfer Agent not reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.82% and (1.14)% respectively, were revised to
reflect all class specific expenses in this period.
See accompanying notes to financial statements.
1-800-922-6769
68
COLUMBIA ACORN INTERNATIONAL SELECT
Class A Shares Year ended December 31,
---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.45 $ 10.24 $ 12.07 $ 17.15 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.00(c) 0.03 (0.01) (0.09) (0.03)
Net realized and unrealized gain (loss) 3.43 4.18 (1.82) (4.90) (0.53)
--------- --------- --------- --------- ---------
Total from Investment Operations 3.43 4.21 (1.83) (4.99) (0.56)
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.03) -- -- (0.01) --
From net realized gains -- -- -- (0.08) --
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.03) -- -- (0.09) --
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 17.85 $ 14.45 $ 10.24 $ 12.07 $ 17.15
========= ========= ========= ========= =========
Total Return (d) 23.76%(e) 41.11%(e) (15.16)%(e) (29.17)%(e) (3.16)%(f)
--------- --------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (g) 1.75% 1.80% 1.80% 1.80% 1.68%(h)(i)
Net investment income (loss) (g) (0.03)% 0.24% (0.09)% (0.67)% (1.18)%(h)(i)
Reimbursement 0.37% 0.44% 0.33% 0.23% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (000'S) $ 4,357 $ 2,557 $ 2,612 $ 2,861 $ 3,172
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.29% and (0.79)% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares Year ended December 31,
---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.12 $ 10.08 $ 11.96 $ 17.13 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.10) (0.06) (0.08) (0.18) (0.05)
Net realized and unrealized gain (loss) 3.34 4.10 (1.80) (4.90) (0.53)
--------- --------- --------- --------- ---------
Total from Investment Operations 3.24 4.04 (1.88) (5.08) (0.58)
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01) --
From net realized gains -- -- -- (0.08) --
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders -- -- -- (0.09) --
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 17.36 $ 14.12 $ 10.08 $ 11.96 $ 17.13
========= ========= ========= ========= =========
Total Return (c) 22.95%(d) 40.08%(d) (15.72)%(d) (29.73)%(d) (3.27)%(e)
--------- --------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.38% 2.45% 2.45% 2.45% 2.33%(g)(h)
Net investment loss (f) (0.66)% (0.52)% (0.74)% (1.32)% (1.83)%(g)(h)
Reimbursement 0.58% 0.44% 0.33% 0.23% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (000'S) $ 5,097 $ 3,162 $ 1,835 $ 2,069 $ 1,551
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.94% and (1.44)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares Year ended December 31,
---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.14 $ 10.09 $ 11.97 $ 17.14 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.11) (0.05) (0.08) (0.18) (0.05)
Net realized and unrealized gain (loss) 3.35 4.10 (1.80) (4.90) (0.52)
--------- --------- --------- --------- ---------
Total from Investment Operations 3.24 4.05 (1.88) (5.08) (0.57)
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01) --
From net realized gains -- -- -- (0.08) --
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders -- -- -- (0.09) --
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 17.38 $ 14.14 $ 10.09 $ 11.97 $ 17.14
========= ========= ========= ========= =========
Total Return (c) 22.91%(d) 40.14%(d) (15.71)%(d) (29.71)%(d) (3.22)%(e)
--------- --------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.45% 2.45% 2.45% 2.45% 2.33%(g)(h)
Net investment loss (f) (0.73)% (0.41)% (0.74)% (1.32)% (1.83)%(g)(h)
Reimbursement 0.35% 0.44% 0.33% 0.23% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (000'S) $ 2,543 $ 3,691 $ 2,915 $ 3,885 $ 3,399
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.94% and (1.44)% respectively, were revised to
reflect all class specific expenses in this period.
69
Columbia Acorn Family of Funds
>Financial Highlights continued
COLUMBIA ACORN SELECT
Class A Shares Year ended December 31,
---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.01 $ 13.93 $ 15.17 $ 14.12 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.16) (0.20) (0.16) (0.10) (0.01)
Net realized and unrealized gain (loss) 3.42 4.37 (1.08) 1.18 0.86
--------- --------- --------- --------- ---------
Total from Investment Operations 3.26 4.17 (1.24) 1.08 0.85
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.09) -- (0.03) (0.19)
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 20.83 $ 18.01 $ 13.93 $ 15.17 $ 14.12
========= ========= ========= ========= =========
Total Return (c) 18.16%(d) 29.95% (8.17)%(d) 7.65%(d) 6.32%(e)
--------- --------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.47%(f) 1.63%(f) 1.70%(f) 1.70% 1.61%(f)(g)(h)
Net investment loss (0.86)%(f) (1.15)%(f) (1.11)%(f) (0.79)% (0.62)%(f)(g)(h)
Reimbursement 0.02% -- 0.10% 0.18% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (000'S) $ 515,842 $ 264,679 $ 31,742 $ 11,900 $ 3,267
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 0.76% and 0.23% respectively, were revised to
reflect all class specific expenses in this period.
Class B Shares Year ended December 31,
---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.31) (0.29) (0.25) (0.20) (0.01)
Net realized and unrealized gain (loss) 3.34 4.29 (1.07) 1.18 0.84
--------- --------- --------- --------- ---------
Total from Investment Operations 3.03 4.00 (1.32) 0.98 0.83
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.09) -- (0.03) (0.19)
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 20.23 $ 17.64 $ 13.73 $ 15.05 $ 14.10
========= ========= ========= ========= =========
Total Return (c) 17.24%(d) 29.14% (8.77)%(d) 6.95%(d) 6.17%(e)
--------- --------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses 2.26%(f) 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h)
Net investment loss (1.65)%(f) (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h)
Reimbursement 0.02% -- 0.10% 0.18% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (000'S) $ 185,545 $ 118,064 $ 33,106 $ 13,358 $ 4,249
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.41% and (0.42)% respectively, were revised to
reflect all class specific expenses in this period.
Class C Shares Year ended December 31,
---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.30) (0.30) (0.25) (0.20) (0.01)
Net realized and unrealized gain (loss) 3.33 4.30 (1.07) 1.18 0.84
--------- --------- --------- --------- ---------
Total from Investment Operations 3.03 4.00 (1.32) 0.98 0.83
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.09) -- (0.03) (0.19)
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 20.23 $ 17.64 $ 13.73 $ 15.05 $ 14.10
========= ========= ========= ========= =========
Total Return (c) 17.24%(d) 29.14% (8.77)%(d) 6.95%(d) 6.17%(e)
--------- --------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses 2.25%(f) 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h)
Net investment loss (1.64)%(f) (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h)
Reimbursement 0.02% -- 0.10% 0.18% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (000'S) $ 110,435 $ 64,212 $ 10,919 $ 4,945 $ 1,070
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.41% and (0.42)% respectively, were revised to
reflect all class specific expenses in this period.
See accompanying notes to financial statements.
1-800-922-6769
70
Columbia Acorn Family of Funds
>Notes to Financial Statements
1. Nature of Operations
Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia
Acorn International Select and Columbia Acorn Select (the "Funds") are each a
series of Columbia Acorn Trust (the "Trust"), an open-end management investment
company organized as a Massachusetts business trust. The investment objective of
each Fund is to seek long-term growth of capital. The Funds may issue an
unlimited number of shares. The Funds offer four classes of shares: Class A,
Class B, Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Effective January 3, 2005, Columbia Acorn International and Columbia Acorn
International Select imposed a 2% redemption fee on Class A, Class B and Class C
shares that are owned 60 days or less. See "Fund Policy on Trading of Fund
Shares and Redemption Fees" as disclosed within the Funds' prospectus for more
information.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares. Generally, you may
exchange your Class Z or Class A shares of the Fund for shares of another fund
at no additional charge. However, if you exchange Class Z shares of Columbia
Acorn International or Columbia Acorn International Select that you have owned
60 days or less for Class Z shares of a fund distributed by Columbia Funds
Distributor, Inc., that does not have a redemption fee (including Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a
redemption fee of 2% of the redemption proceeds. Exchanges between Columbia
Acorn International and Columbia Acorn International Select (or a fund
distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will
not be subject to the 2% redemption fee. In addition, if you redeem shares of
Columbia Acorn International or Columbia Acorn International Select that you
have owned 60 days or less, the Fund will charge you a redemption fee of 2% of
the redemption proceeds, with certain exceptions. See "Fund Policy on Trading of
Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for
more information.
The financial highlights for Class Z shares are presented in a separate
annual report. The annual financial statements for the Columbia Thermostat Fund,
another Fund of the Trust, begins on page 78 of this report.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
2. Significant Accounting Policies
>Security valuation
Securities of the Funds are valued at marked value or, if a market quotation for
a security is not readily available or is deemed not to be reliable because of
events or circumstances that have occurred between the market quotation and the
time as of which the security is to be valued, the security is valued at a fair
value determined in accordance with procedures established by the Board of
Trustees. Securities traded on securities exchanges or in over-the-counter
markets in which transaction prices are reported are valued at the last sales
price at the time of valuation. If a security is traded principally on the
Nasdaq Stock Market Inc., the Nasdaq Official Closing Price will be applied.
Securities for which there are no reported sales on the valuation date are
valued at the latest bid quotation. Short-term debt obligations having a
maturity of 60 days or less from the valuation date are valued on an amortized
cost basis, which approximate fair value. Securities for which quotations are
not available are valued at a fair value as determined in good faith by the
Board of Trustees. The Trust has retained an independent statistical fair value
pricing service to assist in the fair valuation process for securities
principally traded in a foreign market in order to adjust for possible changes
in value that may occur between the close of the foreign exchange and the time
at which Fund shares are priced. If a security is valued at a "fair value", that
value may be different from the last quoted market price for the security.
>Repurchase agreements
The Funds may engage in repurchase agreement transactions. The Funds, through
their custodian, receive delivery of underlying securities collateralizing
repurchase agreements. The Funds' investment advisor determines that the value
of
71
Columbia Acorn Family of Funds
>Notes to Financial Statements, continued
the underlying securities is at all times at least equal to the resale price. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on short-term debt
obligations and long-term debt obligations when required for federal income tax
purposes. Realized gains and losses from security transactions are reported on
an identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Funds no longer own the applicable securities, the proceeds are
recorded as realized gains.
The Funds estimate components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Funds no longer own the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
>Restricted Securities
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Funds or
in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Board of Trustees. The Funds will not
incur any registration costs upon such resale.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" in the Statements of Operations. Additionally, each Fund,
except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio
hedging with respect to changes in foreign currency exchange rates by entering
into forward foreign currency contracts to purchase or sell foreign currencies.
The Statements of Operations reflect gains and losses as realized for closed
forward foreign currency contracts and unrealized for open contracts. The Funds
bear the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
None of the Funds entered into any futures contracts or forward foreign
currency contracts during the year ended December 31, 2004.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange ("Exchange") on each day the Exchange is open for trading.
All income, expenses (other than the Class A, Class B and Class C 12b-1 service
and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer
Agent fees) and realized and unrealized gains (losses) of a fund are allocated
to each class proportionately on a daily basis for purposes of determining the
net asset value of each class. Redemption fees are accounted for as an addition
to paid in capital and are allocated to each class proportionately for purposes
of determining the net asset value of each class.
1-800-922-6769
72
>Custody fees/credits
Custody fees are reduced based on each Fund's cash balances maintained with the
custodian. The Funds could have invested a portion of the assets utilized in
connection with the expense offset arrangement in an income-producing asset if
they had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses in the Statements of Operations.
>Federal income taxes
The Funds have complied with the provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all their taxable income, as well as any net realized gain on sales
of investments and foreign currency transactions reportable for federal income
tax purposes. Accordingly, the Funds paid no federal income taxes and no federal
income tax provision was required.
>Foreign capital gains taxes
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 30%. The Funds accrue for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
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 accounting
principles generally accepted in the United States of America. Reclassifications
are made to the Funds' capital accounts for permanent tax differences to reflect
income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.
For the year ended December 31, 2004, permanent differences resulting
primarily from differing treatments for distribution reclassifications, foreign
currency transactions, passive foreign investment company ("PFIC") adjustments,
foreign capital gains tax adjustments, REIT adjustments, net operating loss
reclassifications and redemption based payments treated as dividend paid
deduction were identified and reclassified among the components of the Funds'
net assets as follows:
UNDISTRIBUTED OR
ACCUMULATED ACCUMULATED NET
NET INVESTMENT NET REALIZED PAID IN UNREALIZED
INCOME (LOSS) GAIN (LOSS) CAPITAL APPRECIATION
- ----------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $(3,401) $(31,294) $34,695 $ --
Columbia Acorn
International (115) (1,100) -- 1,215
Columbia Acorn USA 6,612 2 (6,614) --
Columbia Acorn
International
Select 13 (13) -- --
Columbia Acorn Select 8,958 (14,760) 5,802 --
Net investment income and net realized gains (losses), as disclosed on the
Statements of Operations, and net assets were not affected by these
reclassifications.
The tax character of distributions paid during the years ended December
31, 2004 and December 31, 2003 was as follows:
LONG-
TERM
ORDINARY CAPITAL
DECEMBER 31, 2004 INCOME* GAINS
- -----------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $30,840 $441,598
Columbia Acorn International 16,930 --
Columbia Acorn USA -- 4,748
Columbia Acorn International Select 157 --
Columbia Acorn Select -- 25,216
LONG-
TERM
ORDINARY CAPITAL
DECEMBER 31, 2003 INCOME* GAINS
- -----------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ -- $9,917
Columbia Acorn International 5,935 --
Columbia Acorn USA -- --
Columbia Acorn International Select 19 --
Columbia Acorn Select 736 3,445
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of December 31, 2004, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM NET UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- ----------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $13,818 $195,429 $5,504,772
Columbia Acorn
International 31,140 -- 700,391
Columbia Acorn USA -- 13,435 280,331
Columbia Acorn
International
Select 1,031 -- 14,562
Columbia Acorn Select 896 6,548 243,766
* The difference between book-basis and tax-basis net unrealized
appreciation is primarily due to deferral of losses from wash sales and
PFIC adjustments.
73
Columbia Acorn Family of Funds
>Notes to Financial Statements, continued
The following capital loss carryforwards 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 COLUMBIA ACORN COLUMBIA ACORN
EXPIRATION INTERNATIONAL USA
- --------------------------------------------------------
(IN THOUSANDS)
2009 $ -- $2,529*
2010 14,102 506
2011 48,477 --
========================================================
TOTAL $62,579 $3,035
YEAR OF COLUMBIA ACORN
EXPIRATION INTERNATIONAL SELECT
- --------------------------------------------------------
(IN THOUSANDS)
2009 $16,135
2010 12,528
2011 2,488
========================================================
TOTAL $31,151
* Of these carryforwards, $2,529 (expiring in 2009) remains from the
Columbia Acorn USA's merger with Stein Roe Small Company Growth Fund on
7/26/2002. Utilization of Stein Roe Small Company Growth Fund's losses
could be subject to limitations imposed by the Internal Revenue Code.
The following capital loss carryforwards were utilized during the year
ended December 31, 2004:
- --------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn International $173,711
Columbia Acorn USA 10,064
Columbia Acorn International Select 6,949
========================================================
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA") furnishes
continuing investment supervision to the Funds and is responsible for the
overall management of the Funds' business affairs. Prior to April 1, 2004,
Columbia Management Group, Inc. was a wholly-owned subsidiary of Fleet National
Bank, which in turn was a wholly-owned subsidiary of FleetBoston Financial
Corporation ("Fleet"). On April 1, 2004, Fleet was acquired by BOA.
Under the Funds' investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rates shown in the table below
for each fund.
COLUMBIA ACORN FUND
- --------------------------------------------------------
Net asset value:
On the first $700 million 0.75%
Next $1.3 billion 0.70%
Net assets in excess of $2 billion 0.65%
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------
Net asset value:
On the first $100 million 1.20%
Next $400 million 0.95%
Net assets in excess of $500 million 0.75%
COLUMBIA ACORN USA
- --------------------------------------------------------
Net asset value:
On the first $200 million 0.95%
Net assets in excess of $200 million 0.90%
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------
On average daily net assets: 0.95%
COLUMBIA ACORN SELECT
- --------------------------------------------------------
Net asset value:
On the first $700 million 0.90%
Net assets in excess of $700 million 0.85%
Prior to August 1, 2004:
On average daily net assets: 0.90%
For the year ended December 31, 2004, the Funds' effective investment advisory
fee rates were as follows:
- --------------------------------------------------------
Columbia Acorn Fund 0.66%
Columbia Acorn International 0.82
Columbia Acorn USA 0.91
Columbia Acorn International Select 0.95
Columbia Acorn Select 0.89
========================================================
In accordance with the terms of the NYAG Settlement (as defined and
discussed further under Note 8 to these Financial Statements - "Legal
Proceedings"), Columbia WAM waived a portion of the fees payable under the
Funds' investment management agreement so that those fees are retained at the
following rates as a percent of average daily net assets: COLUMBIA ACORN FUND -
0.740% - up to $700 million; 0.690% - $700 million to $2 billion; 0.640% - $2
billion to $6 billion; 0.630% - $6 billion and over; COLUMBIA ACORN
INTERNATIONAL - 1.190% - up to $100 million; 0.940% - $100 million to $500
million; 0.740% - $500 million and over; COLUMBIA ACORN USA - 0.940% - up to
$200 million; 0.890% - $200 million and over; COLUMBIA ACORN INTERNATIONAL
SELECT - 0.940% on average daily net assets; COLUMBIA ACORN SELECT - 0.850% - up
to $700 million; 0.800% - $700 million and over. The fee waiver was effective as
of February 10, 2005 but applied as if it had gone into effect on December 1,
2004. The financial statements, as of December 31, 2004, are not reflective of
these changes.
1-800-922-6769
74
>Expense Limit
Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses
(exclusive of 12b-1 service and distribution fees, interest, taxes and
extraordinary expenses, if any) exceeding 1.45% of the average annual net assets
for Columbia Acorn International Class A, Class B and Class C shares and 1.35%
of the average annual net assets for Columbia Acorn Select Class A, Class B and
Class C shares.
Columbia WAM provides administrative services and receives an
administration fee from the Funds at the following rates:
COLUMBIA ACORN TRUST
- -----------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset in excess of $16 billion 0.03%
For the year ended December 31, 2004 each Fund's effective administration
fee rate was 0.048%.
Prior to August 1, 2004, Columbia WAM was paid at the annual rate of 0.05%
of each Funds' average daily net assets.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Funds' principal underwriter and receives no
compensation on the sale of Class Z shares.
For the year ended December 31, 2004, Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn International Select and
Columbia Acorn Select have been advised that CFDI retained $1,170,055 in
underwriting discounts on the sale of Class A shares and received CDSCs of
$32,159, $2,713,414, $185,003, respectively, on Class A, Class B and Class C
share redemptions.
Each Fund has adopted a 12b-1 plan which requires it to pay CFDI a monthly
service fee equal to 0.25% annually of the average daily net assets attributable
to Class A, Class B and Class C shares. The 12b-1 plan also requires each Fund
to pay CFDI a monthly distribution fee equal to 0.60% and 0.75%, annually, of
the average daily net assets attributable to Class B and Class C shares,
respectively. Prior to August 1, 2004, each Fund paid CFDI a monthly
distribution fee equal to 0.10%, 0.75% and 0.75% annually of the average daily
net assets attributable to Class A, Class B shares and Class C, respectively.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Funds. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses. Effective February 1, 2004 the Transfer
Agent made the decision to waive the reimbursement for certain out-of-pocket
expenses. Prior to October 1, 2004, the Transfer Agent received a fee, paid
monthly, at the annual rate of $28.00 per account. Prior to February 1, 2004,
the Transfer Agent was entitled to receive a monthly transfer agent fee at the
annual rate of 0.07% of the average daily net assets attributable to Class A,
Class B and Class C shares plus flat-rate charges based on the number of
shareholder accounts and transactions for Class A, Class B, Class C and Class Z
shares.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Funds for
the year ended December 31, 2004, including each Fund's portion of a special
payment to the chairman of the board of $25,000 for extraordinary time and
effort spent on board matters during 2004, were as follows:
- --------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $656
Columbia Acorn International 95
Columbia Acorn USA 41
Columbia Acorn International Select 2
Columbia Acorn Select 23
========================================================
In April 2004, the Board of Trustees appointed a Chief Compliance Officer
to the Trust in accordance with federal securities regulations. The Funds will
pay their pro-rata share of the expenses associated with the Office of the Chief
Compliance Officer. These expenses are disclosed separately as "Compliance fees"
on the Statements of Operations.
The Trust provides a deferred compensation plan for its trustees. Under
that plan, a trustee may elect to defer all or a portion of his or her
compensation. Amounts deferred are retained by the Trust and represent an
unfunded obligation of the Trust. The value of amounts deferred is determined by
reference to the change in value of Class Z shares of one or more series of the
Trust or a money market fund as specified by the trustee. Benefits under the
deferred compensation plan are payable upon retirement.
An affiliate may include any company in which a fund owns five percent or
more of its outstanding voting securities. On December 31, 2004, Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select each held five percent or
more of the outstanding voting securities of one or more companies. Details of
investments in those affiliated companies are presented on pages 36, 50 and 57,
respectively.
75
Columbia Acorn Family of Funds
>Notes to Financial Statements, continued
During the year ended December 31, 2004, the Funds engaged in purchase and
sale transactions with funds that have a common investment advisor (or
affiliated investment advisors), common Directors/Trustees, and/or common
Officers. Those transactions complied with Rule 17a-7 under the Investment
Company Act of 1940 and were as follows:
FUNDS PURCHASES SALES
- ---------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $33,441 $ 741
Columbia Acorn International 3,657 13,528
Columbia Acorn USA -- 1,963
Columbia Acorn International Select 608 4,794
Columbia Acorn Select -- 889
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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 Statements of Operations. No amounts were borrowed under this facility for
the year ended December 31, 2004.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2004 were:
COLUMBIA ACORN FUND
- --------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 2,641,143
Proceeds from sales 2,226,641
========================================================
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 688,543
Proceeds from sales 800,140
========================================================
COLUMBIA ACORN USA
- --------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 141,569
Proceeds from sales 127,021
========================================================
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 33,091
Proceeds from sales 31,991
========================================================
COLUMBIA ACORN SELECT
- --------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 516,805
Proceeds from sales 297,997
========================================================
7. Redemption Fees
For the year ended December 31, 2004, the redemption fees for the Class Z shares
of Columbia Acorn International and Columbia Acorn International Select amounted
to $85,858 and $3,572, respectively.
8. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG 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. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia has agreed, among other things,
to: pay $70 million in disgorgement and $70 million in civil money penalties;
cease and
1-800-922-6769
76
desist from violations of the antifraud provisions and certain other provisions
of the federal securities laws; maintain certain compliance and ethics oversight
structures; retain an independent consultant to review Columbia's applicable
supervisory, compliance, control and other policies and procedures; and retain
an independent distribution consultant (see below). The NYAG Settlement also,
among other things, requires Columbia and its affiliates, Banc of America
Capital Management, LLC and BACAP Distributors, LLC to reduce management fees
paid by the Columbia Family of Funds, Nations Funds and other related mutual
funds collectively by $32 million per year for five years, for a projected total
of $160 million in management fee reductions based on net assets as of March 15,
2004. Pursuant to the procedures set forth in the SEC Order, the settlement
amounts 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 independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and not unacceptable to the staff of the SEC.
More specific information on the distribution plan will be communicated by
Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are defendants in
several derivative and class action lawsuits that allege, in summary, defendants
permitted investors to engage in improper trading of shares of various funds in
violation of certain federal and state laws. All of these lawsuits have been
consolidated with similar suits in a Multi-District Litigation proceeding in
Baltimore, Maryland, and consolidated class action and derivative complaints
have been filed.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly:
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV.
Columbia WAM and the Trustees of the Trust are also defendants in a
lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments
to brokers as an incentive for the brokers to market the Funds over other mutual
funds to investors. The complaint alleges Columbia WAM and the Trustees of the
Trust breached certain common law duties and federal laws.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. 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 Trust funds 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 complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to the
Columbia WAM and affiliated advisers.
The Trust and Columbia WAM intend to defend these suits vigorously. The
Trust does not believe that the pending actions will have a material adverse
effect on the financial statements of any Fund, and Columbia WAM does not
believe that the pending actions will have a material adverse effect on its
ability to perform under its contracts with the Funds.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund.
In connection with the events described in detail above, various parties
have filed suit against certain funds, their Boards and/or BOA (and affiliated
entities). These suits are ongoing. Accordingly, an estimate of the financial
impact of this litigation on any fund, if any, cannot currently be made.
For the year ended December 31, 2004, Columbia Management has assumed
consulting services and legal fees incurred by the Funds in connection with
these matters and the amounts are as follows:
- --------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $1,116
Columbia Acorn International 162
Columbia Acorn USA 69
Columbia Acorn International Select 4
Columbia Acorn Select 90
========================================================
77
Columbia Thermostat Fund
>Statement of Investments, December 31, 2004
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------
>BOND FUNDS: 59.4%
6,761 Columbia Intermediate Bond Fund,
Class Z $ 61,593
3,451 Columbia Federal Securities Fund,
Class Z 36,995
2,795 Columbia High Yield Fund,
Class Z 24,623
- ------------------------------------------------------------------
TOTAL BOND FUNDS (COST: $122,197) 123,211
>STOCK FUNDS: 40.0%
2,291 Columbia Growth Stock Fund,
Class Z (b) 20,683
1,134 Columbia Growth & Income Fund,
Class Z 20,598
628 Columbia Acorn Fund,
Class Z 16,623
466 Columbia Mid Cap Value Fund,
Class Z (b) 12,465
590 Columbia Acorn Select,
Class Z 12,463
- ------------------------------------------------------------------
TOTAL STOCK FUNDS (COST: $66,413) 82,832
SHORT-TERM OBLIGATIONS: 0.4%
$ 740 Repurchase Agreement with
State Street Bank & Trust Co.
dated 12/31/04, due 1/03/05
at 1.90% Collateralized by a
Federal National Mortgage
Association Note, maturing
1/05/05, market value $760
(repurchase proceeds: $740) 740
- ------------------------------------------------------------------
(AMORTIZED COST: $740) 740
---------
TOTAL INVESTMENTS: 99.8% 206,783
(COST: $189,350) (A)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.2% 481
---------
TOTAL NET ASSETS: 100% $207,264
==================================================================
>Notes to Statement of Investments (in thousands)
(a) At December 31, 2004, for federal income tax purposes cost of investments
was $189,862 and net unrealized appreciation was $16,921 consisting of
gross unrealized appreciation of $17,021 and gross unrealized depreciation
of $100.
(b) Non-income producing security.
1-800-922-6769
78
Columbia Thermostat Fund
>Statement of Assets and Liabilities
DECEMBER 31, 2004
- --------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS
Unaffiliated investments, at value (cost $740) $ 740
Affiliated investments, at value (cost: $188,610) 206,043
Cash 1
Receivable for:
Fund shares sold 304
Dividends and interest 473
Expense reimbursement due from Advisor 80
- --------------------------------------------------------------------------------------------------
Total Assets 207,641
LIABILITIES
Payable for:
Fund shares redeemed 148
Transfer agent fees 20
Custody fees 1
Legal & audit fees 18
Reports to shareholders 71
12b-1 Service & Distribution fees 105
Other liabilities 14
- --------------------------------------------------------------------------------------------------
Total Liabilities 377
- --------------------------------------------------------------------------------------------------
NET ASSETS $ 207,264
==================================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 186,468
Undistributed net investment income 15
Accumulated net realized gain 3,348
Net unrealized appreciation on investments 17,433
- --------------------------------------------------------------------------------------------------
NET ASSETS $ 207,264
==================================================================================================
Net asset value per share -- Class A (a) $ 13.11
(Net assets/shares) ($77,092/5,879)
Maximum offering price per share -- Class A (b) $ 13.91
(Net asset value per share/front-end sales charge) ($13.11/0.9425)
Net asset value and offering price per share -- Class B (a) $ 13.14
(Net assets/shares) ($78,040/5,941)
Net asset value and offering price per share -- Class C (a) $ 13.13
(Net assets/shares) ($31,161/2,372)
Net asset value, offering and redemption price per share -- Class Z $ 13.12
(Net assets/shares) ($20,971/1,598)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See accompanying notes to financial statements.
79
Columbia Thermostat Fund
>Statement of Operations
For the Year Ended December 31, 2004
(IN THOUSANDS)
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends from affiliated investment company shares $ 4,834
Interest income 12
- -------------------------------------------------------------------------------------------------
Total Investment Income 4,846
EXPENSES:
Management fee 177
Administration fee 84
12b-1 Service and Distribution fees:
Class A 225
Class B 631
Class C 276
Transfer agent fees:
Class A 107
Class B 154
Class C 54
Class Z 26
Trustees' fees 4
Custody fees 15
Legal & audit fees 29
Reports to shareholders 145
Registration & blue sky fees 97
Compliance fees 3
Non-recurring costs (See Note 7) 16
Other expenses 8
- -------------------------------------------------------------------------------------------------
Total expenses 2,051
Less custody fees paid indirectly --*
Less fees waived by Distributor (65)
Less reimbursement of expenses by Advisor (403)
Less reimbursement of expenses by Transfer Agent (55)
Non-recurring costs reimbursed (See Note 7) (16)
- -------------------------------------------------------------------------------------------------
Net Expenses 1,512
- -------------------------------------------------------------------------------------------------
Net Investment Income 3,334
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Affiliated investments 2,200
Distributions from affiliated investment company shares 1,492
- -------------------------------------------------------------------------------------------------
Net realized gain 3,692
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 8,154
- -------------------------------------------------------------------------------------------------
Net realized and unrealized gain 11,846
- -------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 15,180
=================================================================================================
* Rounds to less than $500.
See accompanying notes to financial statements.
1-800-922-6769
80
Columbia Thermostat Fund
>Statement of Changes in Net Assets
INCREASE IN NET ASSETS Year ended Year ended
December 31, December 31,
- ------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2004 2003 (a)
OPERATIONS:
Net investment income $ 3,334 $ 696
Net realized gain on investments and distributions from investment company shares 3,692 272
Net change in net unrealized appreciation on investments 8,154 9,219
- ------------------------------------------------------------------------------------------------------------------
Net Increase from Operations 15,180 10,187
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- Class A (1,488) (395)
Net realized gain -- Class A (141) (21)
Net investment income -- Class B (997) (108)
Net realized gain -- Class B (146) (30)
Net investment income -- Class C (383) (43)
Net realized gain -- Class C (61) (10)
Net investment income -- Class Z (450) (160)
Net realized gain -- Class Z (36) (14)
- ------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (3,702) (781)
SHARE TRANSACTIONS:
Subscriptions -- Class A 42,302 40,815
Distributions reinvested -- Class A 1,425 373
Redemptions -- Class A (13,080) (1,441)
- ------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 30,647 39,747
Subscriptions -- Class B 27,802 48,741
Distributions reinvested -- Class B 1,024 125
Redemptions -- Class B (6,671) (1,176)
- ------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 22,155 47,690
Subscriptions -- Class C 12,939 19,668
Distributions reinvested -- Class C 378 44
Redemptions -- Class C (4,000) (1,015)
- ------------------------------------------------------------------------------------------------------------------
Net Increase -- Class C 9,317 18,697
Subscriptions -- Class Z 8,408 9,094
Distributions reinvested -- Class Z 470 166
Redemptions -- Class Z (3,140) (1,023)
- ------------------------------------------------------------------------------------------------------------------
Net Increase -- Class Z 5,738 8,237
- ------------------------------------------------------------------------------------------------------------------
Net Increase from Share Transactions 67,857 114,371
- ------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 79,335 123,777
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 127,929 4,152
- ------------------------------------------------------------------------------------------------------------------
End of period $ 207,264 $ 127,929
==================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME $ 15 $ --
==================================================================================================================
(a) Class A, Class B and Class D commenced operations March 3, 2003. On
October 13, 2003, Class D was redesignated Class C.
See accompanying notes to financial statements.
81
Columbia Thermostat Fund
>Statement of Changes in Net Assets, continued
CHANGES IN SHARES OF BENEFICIAL INTEREST: December 31, December 31,
- -----------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2004 2003 (a)
Subscriptions -- Class A 3,381 3,529
Shares issued in reinvestment and capital gains -- Class A 110 31
Less shares redeemed -- Class A (1,049) (123)
- -----------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 2,442 3,437
Subscriptions -- Class B 2,213 4,268
Shares issued in reinvestment and capital gains -- Class B 79 10
Less shares redeemed -- Class B (530) (99)
- -----------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 1,762 4,179
Subscriptions -- Class C 1,028 1,712
Shares issued in reinvestment and capital gains -- Class C 29 4
Less shares redeemed -- Class C (316) (85)
- -----------------------------------------------------------------------------------------------------------------
Net Increase -- Class C 741 1,631
Subscriptions -- Class Z 669 821
Shares issued in reinvestment and capital gains -- Class Z 36 14
Less shares redeemed -- Class Z (250) (91)
- -----------------------------------------------------------------------------------------------------------------
Net Increase -- Class Z 455 744
- -----------------------------------------------------------------------------------------------------------------
Net increase in Shares of Beneficial Interest 5,400 9,991
- -----------------------------------------------------------------------------------------------------------------
(a) Class A, Class B and Class D commenced operations March 3, 2003. On
October 13, 2003, Class D was redesignated Class C.
See accompanying notes to financial statements
1-800-922-6769
82
Columbia Thermostat Fund
>Financial Highlights
Inception
March 3, 2003
Year Ended Through
Class A December 31, December 31,
------------ ------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.30 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.28 0.18
Net realized and unrealized gain 0.81 2.15
------------ ------------
Total from Investment Operations 1.09 2.33
------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.25) (0.13)
From net realized gains (0.03) (0.00)(b)
------------ ------------
Total Distributions Declared to Shareholders (0.28) (0.13)
------------ ------------
NET ASSET VALUE, END OF PERIOD $ 13.11 $ 12.30
============ ============
Total Return (c)(d) 8.92% 23.10%(e)
------------ ------------
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 0.50% 0.57%(h)
Net investment income (g) 2.23% 1.86%(h)
Reimbursement 0.33% 0.66%(h)
Portfolio turnover rate 67% 61%
Net assets at end of period (000'S) $ 77,092 $ 42,271
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
Inception
March 3, 2003
Year Ended Through
Class B December 31, December 31,
------------ ------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.32 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.19 0.10
Net realized and unrealized gain 0.83 2.16
------------ ------------
Total from Investment Operations 1.02 2.26
------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.17) (0.04)
From net realized gains (0.03) (0.00)(b)
------------ ------------
Total Distributions Declared to Shareholders (0.20) (0.04)
------------ ------------
NET ASSET VALUE, END OF PERIOD $ 13.14 $ 12.32
============ ============
Total Return (c)(d) 8.27% 22.38%(e)
------------ ------------
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 1.18% 1.32%(h)
Net investment income (g) 1.55% 1.06%(h)
Reimbursement 0.29% 0.66%(h)
Portfolio turnover rate 67% 61%
Net assets at end of period (000'S) $ 78,040 $ 51,501
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
Inception
March 3, 2003
Year Ended Through
Class C December 31, December 31,
------------ ------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.32 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.19 0.11
Net realized and unrealized gain 0.81 2.15
------------ ------------
Total from Investment Operations 1.00 2.26
------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.16) (0.04)
From net realized gains (0.03) (0.00)(b)
------------ ------------
Total Distributions Declared to Shareholders (0.19) (0.04)
------------ ------------
NET ASSET VALUE, END OF PERIOD $ 13.13 $ 12.32
============ ============
Total Return (c)(d) 8.13% 22.38%(e)
------------ ------------
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 1.25% 1.32%(h)
Net investment income (g) 1.48% 1.10%(h)
Reimbursement 0.26% 0.66%(h)
Portfolio turnover rate 67% 61%
Net assets at end of period (000'S) $ 31,161 $ 20,087
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Had the Advisor and/or Transfer Agent not reimbursed a portion of
expenses, total return would have been reduced.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
See accompanying notes to financial statements
83
Columbia Thermostat Fund
>Notes to Financial Statements
1. Nature of Operations
Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust (the
"Trust"), an open-end management investment company organized as a Massachusetts
business trust, commenced operations September 25, 2002. The Fund may issue an
unlimited number of shares. The Fund currently offers four classes of shares:
Class A, Class B, Class C and Class Z. On October 13, 2003, Class D was
redesignated Class C.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") may be assessed to Class A shares purchased
without an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares.
The financial highlights for Class Z shares are presented in a separate
annual report. The annual report for the other series of the Trust is also
included in this report.
The investment objective of the Fund is to provide long-term total return.
The Fund pursues its investment objective by investing in shares of other mutual
funds. As a `fund of funds', under normal circumstances, the Fund allocates at
least 95% of its net assets among a selected group of stock and bond mutual
funds (the "Portfolio Funds") according to the current level of the Standard &
Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's
investment advisor. As of December 31, 2004, the Fund invested in five stock
Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia
Growth & Income Fund, Columbia Mid Cap Value Fund and Columbia Growth Stock
Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia
Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest
up to 5% of its net assets plus any cash received that day in cash, repurchase
agreements, high quality short-term paper and government securities.
2. Significant Accounting Policies
>Security valuation
Investments in Portfolio Funds are valued at their net asset value as reported
by the underlying funds. Repurchase agreements, high quality short-term paper
and government securities having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis, which approximates fair
value.
>Repurchase agreements
The Fund may engage in repurchase agreement transactions. The Fund, through its
custodian, receives delivery of underlying securities collateralizing each
repurchase agreement. The Fund's investment advisor determines that the value of
the underlying securities is at all times at least equal to the resale price. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Security transactions and investment income
Portfolio Fund transactions are accounted for on the trade date (date the order
to buy or sell is executed). Dividend income and realized gain distributions
from other funds are recorded on the ex-dividend date. Interest income is
recorded on the accrual basis and includes amortization of discounts on
short-term debt obligations when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis. Awards from class action litigation may be recorded as a
reduction of cost by Portfolio Funds. If the Portfolio Fund no longer owns the
applicable securities, the proceeds are recorded as realized gains.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange ("Exchange") on each day the Exchange is open for trading.
All income, expenses (other than Class A, Class B and Class C 12b-1 service and
distribution fees, and Class A, Class B, Class C and Class Z Transfer Agent
fees) and realized and unrealized gains (losses) of the Fund are allocated to
each class proportionately on a daily basis for purposes of determining the net
asset value of each class.
1-800-922-6769
84
>Custody fees/credits
Custody fees are reduced based on the Fund's cash balance maintained with the
custodian. The Fund could have invested a portion of assets utilized in
connection with the expense offset arrangement in an income-producing asset if
it had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses in the Statement of Operations.
>Federal income taxes
The Fund has complied with the provisions of the Internal Revenue Code available
to regulated investment companies and, in the manner provided therein,
distributes all of its taxable income, as well as any net realized gain on sales
of Portfolio Fund shares and any distributions of net realized gains received by
the Fund from its Portfolio Funds, reportable for federal income tax purposes.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. Reclassifications
are made to the Fund's capital accounts for permanent tax differences to reflect
income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.
For the year ended December 31, 2004, permanent differences resulting
primarily from differing treatments for redemption based payments treated as
dividend paid deductions were identified and reclassified among the components
of the Fund's net assets as follows:
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME GAIN PAID IN CAPITAL
- --------------------------------------------------------------
(IN THOUSANDS)
$(1) $(166) $167
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by these
reclassifications.
The tax character of distributions paid during the year ended December 31,
2004 and December 31, 2003 was as follows:
DECEMBER 31, DECEMBER 31,
2004 2003
- ------------------------------------------------------------
(IN THOUSANDS)
Distributions paid from:
Ordinary Income* $3,645 $771
Long-Term
Capital Gains 57 10
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of December 31, 2004, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM NET UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
- --------------------------------------------------------------
(IN THOUSANDS)
$2,436 $1,446 $16,921
* The difference between book-basis and tax-basis net unrealized
appreciation is primarily due to deferral of losses from wash sales.
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA") furnishes
continuing investment supervision to the Fund and is responsible for the overall
management of the Fund's business affairs. Prior to April 1, 2004, Columbia
Management Group, Inc. was a wholly-owned subsidiary of Fleet National Bank,
which in turn was a wholly-owned subsidiary of FleetBoston Financial Corporation
("Fleet"). On April 1, 2004, Fleet was acquired by BOA.
Under the Fund's investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's
average daily net assets.
>Expense Limit
Columbia WAM has agreed to contractually reimburse the direct operating expenses
(exclusive of distribution and service fees, interest and fees on borrowings and
expenses associated with the Fund's investment in other investment companies)
exceeding 0.25% of the average annual net assets of the Fund's Class A, Class B
and Class C shares. Columbia WAM has the right to recoup expense reimbursement
payments made to the Fund through December 31, 2005. This will be accomplished
by the payment of an expense reimbursement fee by the Fund to Columbia WAM
85
Columbia Thermostat Fund
>Notes to Financial Statements, continued
computed and paid monthly, with a limitation that immediately after such payment
the Fund's ordinary operating expenses (excluding any distribution and service
fees, interest and fees on borrowings and expenses associated with the Fund's
investment in other investment companies) will not exceed 0.25% annually. Prior
to August 1, 2003, Columbia WAM had agreed to voluntarily reimburse the direct
operating expenses (exclusive of distribution and service fees, interest and
fees on borrowings and expenses associated with the Fund's investment in other
investment companies) exceeding 0.60% of the average annual net assets of the
Fund's Class A, Class B and Class C shares.
Columbia WAM provides administrative services and receives an
administration fee from the Fund at the following annual rates:
COLUMBIA ACORN TRUST
- -------------------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset value in excess of $16 billion 0.03%
For the year ended December 31, 2004 the Fund's effective administration
fee rate was 0.048%.
Prior to August 1, 2004, Columbia WAM was paid at an annual rate of 0.05%
of the Fund's average daily net assets.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Fund's principal indirect underwriter and receives no
compensation on the sale of Class Z shares.
For the year ended December 31, 2004, the Fund has been advised that CFDI
retained $166,684 in underwriting discounts on the sale of Class A shares and
received CDSCs of $43, $164,282 and $14,900 on Class A, Class B and Class C
share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay CFDI a monthly
service fee equal to 0.25% annually of the average daily net assets attributable
to Class A, Class B and Class C shares. The 12b-1 plan also requires the Fund
pay CFDI a monthly distribution fee equal to 0.60% and 0.75%, annually, of the
average daily net assets attributable to Class B and Class C shares,
respectively. Prior to August 1, 2004, the Fund paid CFDI a monthly distribution
fee equal to 0.10%, 0.75% and 0.75% annually of the average daily net assets
attributable to Class A, Class B and Class C shares, respectively.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Fund. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses. Effective February 1, 2004 the Transfer
Agent made the decision to waive the reimbursement for certain out-of-pocket
expenses. Prior to October 1, 2004, the Transfer Agent received a fee, paid
monthly, at the annual rate of $28.00 per open account. Prior to February 1,
2004, the Transfer Agent was entitled to receive a monthly transfer agent fee at
the annual rate of 0.07% of the average daily net assets attributable to Class
A, Class B and Class C shares plus flat-rate charges based on the number of
shareholder accounts and transactions for Class A, Class B, Class C and Class Z
shares.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Fund for
the year ended December 31, 2004, including the Fund's portion of a special
payment to the chairman of the board of $25,000 for extraordinary time and
effort spent on board matters during 2004, were $3,722.
In April 2004, the Board of Trustees appointed a Chief Compliance Officer
to the Trust in accordance with federal securities regulations. The Fund will
pay its pro-rata share of the expenses associated with the Office of the Chief
Compliance Officer. This expense is disclosed separately as "Compliance fees" on
the Statement of Operations.
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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. No amounts were borrowed under this facility for
the year ended December 31, 2004.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the year ended December 31, 2004 were:
- -----------------------------------------------------------------
(IN THOUSANDS
Purchases $187,095
Proceeds from sales 118,286
=================================================================
1-800-922-6769
86
7. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG 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. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia 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 of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other policies and
procedures; and retain an independent distribution consultant (see below). The
NYAG Settlement also, among other things, requires Columbia and its affiliates,
Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce
management fees paid by the Columbia Family of Funds, Nations Funds and other
related mutual funds collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions based on net assets
as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the
settlement amounts 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 independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and not unacceptable to the staff of the SEC.
More specific information on the distribution plan will be communicated by
Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are defendants in
several derivative and class action lawsuits that allege, in summary, defendants
permitted investors to engage in improper trading of shares of various funds in
violation of certain federal and state laws. All of these lawsuits have been
consolidated with similar suits in a Multi-District Litigation proceeding in
Baltimore, Maryland, and consolidated class action and derivative complaints
have been filed.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly:
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV.
Columbia WAM and the Trustees of the Trust are also defendants in a
lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments
to brokers as an incentive for the brokers to market the Funds over other mutual
funds to investors. The complaint alleges Columbia WAM and the Trustees or the
Trust breached certain common law duties and federal laws.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. 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
87
Columbia Thermostat Fund
>Notes to Financial Statements, continued
the Trust funds 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 complaint seeks compensatory and punitive damages,
and the disgorgement of all fees paid to the Columbia WAM and affiliated
advisers.The Trust and Columbia WAM intend to defend these suits vigorously. The
Trust does not believe that the pending actions will have a material adverse
effect on the financial statements of any Fund, and Columbia WAM does not
believe that the pending actions will have a material adverse effect on its
ability to perform under its contracts with the Funds.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund. In connection with
the events described in detail above, various parties have filed suit against
certain funds, their Boards and/or BOA (and affiliated entities). These suits
are ongoing. Accordingly, an estimate of the financial impact of this litigation
on any fund, if any, cannot currently be made.
For the year ended December 31, 2004, Columbia Management has assumed
$16,377 of consulting services and legal fees incurred by the Fund in connection
with these matters.
1-800-922-6769
88
Report of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
COLUMBIA ACORN TRUST:
In our opinion, the accompanying statements of assets and liabilities, including
the statements of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn International Select, Columbia
Acorn Select and Columbia Thermostat Fund (each a series of Columbia Acorn
Trust, hereinafter referred to as the "Funds") at December 31, 2004, the results
of their operations, the changes in their net assets and the financial
highlights for the year then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2004 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion. The statement
of changes for the year ended December 31, 2003 and the financial highlights of
the Funds for the periods ended December 31, 2003 and prior were audited by
other independent auditors whose reported dated February 6, 2004 expressed an
unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
Chicago, Illinois
February 14, 2005
89
Columbia Acorn Family of Funds
>Unaudited Information
FEDERAL INCOME TAX INFORMATION (IN THOUSANDS)
COLUMBIA ACORN
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $655,225.
100.00% of the ordinary income distributed by the Fund, for the year ended
December 31, 2004, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 100.00%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
COLUMBIA ACORN INTERNATIONAL
Foreign taxes paid during the fiscal year ended December 31, 2004, amounting to
$3,925 ($0.05 per share) are expected to be passed through to shareholders as
100% allowable foreign tax credits on Form 1099-DIV for the year ended December
31, 2004.
Gross income derived from sources within foreign countries amounted to
$39,927 ($0.56 per share) for the fiscal year ended December 31, 2004.
For non-corporate shareholders 100.00%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
COLUMBIA ACORN USA
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $18,183.
COLUMBIA ACORN INTERNATIONAL SELECT
Foreign taxes paid during the fiscal year ended December 31, 2004, amounting to
$87 ($0.03 per share) are expected to be passed through to shareholders as 100%
allowable foreign tax credits on Form 1099-DIV for the year ended December 31,
2004.
Gross income derived from sources within foreign countries amounted to
$838 ($0.26 per share) for the fiscal year ended December 31, 2004.
For non-corporate shareholders 100.00%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
COLUMBIA ACORN SELECT
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $36,867.
COLUMBIA THERMOSTAT FUND
For the fiscal year ended December 31, 2004, the Fund designates long-term
capital gains of $1,530.
12.29% of the ordinary income distributed by the Fund, for the year ended
December 31, 2004, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 11.21%, or the maximum amount allowable
under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income
earned by the Fund for the period January 1, 2004 to December 31, 2004 may
represent qualified dividend income. Final information will be provided in your
2004 1099-Div Form.
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90
Change in Independent Registered
Public Accounting Firm
Effective April 13, 2004, the audit committee of the Trust requested that Ernst
& Young LLP ("E&Y") resign as the auditors of the Funds. Also effective July 14,
2004, upon the recommendation of the audit committee, the Trust selected
PricewaterhouseCoopers LLP ("PWC") as independent registered public accounting
firm to audit the books and records of each Fund for its fiscal year ending
December 31, 2004. The cessation of the relationship with E&Y was based on the
impairment of E&Y's independence resulting from the consummation of the merger
of FleetBoston Financial Corporation and Bank of America Corporation and
accordingly, E&Y's ability to provide audit services to the Funds.
E&Y's report on the financial statements of each Fund for the past two
years did not contain an adverse opinion or disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting principles.
During the period E&Y was engaged, there were no disagreements with E&Y on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which, if not resolved to E&Y's satisfaction, would
have caused it to make reference to that matter in connection with its report.
91
Columbia Acorn Family of Funds Class A, B and C Share Information
MINIMUM INITIAL INVESTMENT IN
COLUMBIA ACORN INTERNATIONAL,
COLUMBIA ACORN INTERNATIONAL
SELECT, COLUMBIA ACORN SELECT,
COLUMBIA THERMOSTAT FUND $1,000
$1,000 FOR AN IRA
MINIMUM INITIAL INVESTMENT IN
COLUMBIA ACORN FUND,
COLUMBIA ACORN USA $50,000
MINIMUM SUBSEQUENT
INVESTMENT IN ALL FUNDS $50
EXCHANGE FEE NONE
COLUMBIA ACORN FUND CLASS A CLASS B CLASS C
Management Fees 0.66% 0.66% 0.66%
Distribution and Service (12b-1) Fees 0.31% 0.94% 1.00%
Other Expenses 0.23% 0.35% 0.29%
--------------------------------
Expense Ratio 1.20% 1.95% 1.95%
COLUMBIA ACORN INTERNATIONAL CLASS A CLASS B CLASS C
Management Fees 0.82% 0.82% 0.82%
Distribution and Service (12b-1) Fees 0.31% 0.93% 1.00%
Other Expenses 0.35% 0.52% 0.42%
--------------------------------
Expense Ratio 1.48% 2.27% 2.24%
COLUMBIA ACORN USA CLASS A CLASS B CLASS C
Management Fees 0.91% 0.91% 0.91%
Distribution and Service (12b-1) Fees 0.31% 0.94% 1.00%
Other Expenses 0.29% 0.38% 0.32%
--------------------------------
Expense Ratio 1.51% 2.23% 2.23%
COLUMBIA ACORN INTERNATIONAL SELECT CLASS A CLASS B CLASS C
Management Fees 0.95% 0.95% 0.95%
Distribution and Service (12b-1) Fees 0.30% 0.93% 1.00%
Other Expenses 0.50% 0.50% 0.50%
--------------------------------
Expense Ratio 1.75% 2.38% 2.45%
COLUMBIA ACORN SELECT CLASS A CLASS B CLASS C
Management Fees 0.89% 0.89% 0.89%
Distribution and Service (12b-1) Fees 0.30% 0.93% 1.00%
Other Expenses 0.28% 0.44% 0.36%
--------------------------------
Expense Ratio 1.47% 2.26% 2.25%
COLUMBIA THERMOSTAT* CLASS A CLASS B CLASS C
Management Fees 0.10% 0.10% 0.10%
Distribution and Service (12b-1) Fees 0.35% 0.93% 1.00%
Other Expenses 0.05% 0.15% 0.15%
--------------------------------
Expense Ratio 0.50% 1.18% 1.25%
Fees and expenses are for the year ended December 31, 2004 and for Columbia
Acorn International Select and Columbia Thermostat Fund include the effect of
Columbia Wanger Asset Management's undertaking to reimburse those funds for any
ordinary operating expenses, exclusive of 12b-1 service and distribution fees,
interest, taxes and extraordinary expenses, if any, exceeding 1.45% and 0.25% of
their average net assets, respectively. The expense limitation for Columbia
Acorn International Select is voluntary and can be terminated by either the Fund
or Columbia Wanger Asset Management, L.P. on 30 days' notice. Columbia
Thermostat Fund's reimbursement arrangement is contractual through April 30,
2005. The Fund's adviser and/or affiliates have contractually agreed to waive a
portion of "other expenses" through April 30, 2005. EFFECTIVE AUGUST 1, 2004,
EACH FUND'S CLASS A SHARE 12B-1 FEE WAS REDUCED TO 25 BASIS POINTS, RESULTING IN
THE ELIMINATION OF THE 10 BASIS POINT DISTRIBUTION FEE ON CLASS A SHARES. IN
ADDITION, EACH FUND'S 12B-1 FEE FOR CLASS B SHARES WAS REDUCED FROM 100 BASIS
POINTS TO 85 BASIS POINTS, DECREASING THE DISTRIBUTION PORTION OF THE 12B-1 FEE
TO 60 BASIS POINTS.
* Does not include estimated fees and expenses of 0.86% incurred by the Fund
from the underlying portfolio funds.
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92
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93
Board of Trustees and Management of Columbia Acorn Funds
Each trustee serves a term of unlimited duration, provided that a majority of
trustees always has been elected by shareholders. The trustees appoint their own
successors, provided that at least two-thirds of the trustees, after such
appointment, have been elected by shareholders. Shareholders may remove a
trustee, with or without cause, upon the vote of two-thirds of Acorn's
outstanding shares at any meeting called for that purpose. A trustee may be
removed, with or without cause, upon the vote of a majority of the trustees. The
names of the trustees and officers of Acorn, the date each was first elected or
appointed to office, their principal business occupations during at least the
last five years and other directorships they hold, are shown below. Each trustee
serves in such capacity for each of the six series of Acorn. Mr. Wanger also
serves as a trustee for each of the four series of the Wanger Advisors Trust.
THE ADDRESS FOR THE TRUSTEES AND OFFICERS OF THE TRUST IS COLUMBIA WANGER ASSET
MANAGEMENT, L.P., 227 WEST MONROE STREET, SUITE 3000, CHICAGO, ILLINOIS 60606.
NUMBER OF
NAME, POSITION(S) YEAR FIRST PORTFOLIOS IN
WITH COLUMBIA ACORN ELECTED OR PRINCIPAL OCCUPATION(S) FUND COMPLEX
AND AGE AT APPOINTED DURING OVERSEEN BY OTHER
JANUARY 1, 2005 TO OFFICE* PAST FIVE YEARS TRUSTEE/OFFICER DIRECTORSHIPS
- ------------------------ ----------- ----------------------------------------- --------------- --------------------------------
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF COLUMBIA ACORN:
MARGARET EISEN, 51, 2002 Chief Investment Officer, EAM International 6 Antigenics, Inc.
Trustee LLC since 2003; former chair, Institute for (biotechnology and drugs);
Financial Markets; formerly managing Global Financial Group
director, DeGuardiola Advisors; formerly (venture capital fund of
managing director, North American Equities at funds); Lehman Brothers/First
General Motors Asset Management; prior Trust Income Opportunity Fund
thereto, director of Worldwide Pension (high-yield closed-end fund).
Investments for DuPont Asset Management.
JEROME KAHN, JR., 70, 1987 Former president, William Harris Investors, 6 None.
Trustee Inc. (investment adviser).
STEVEN N. KAPLAN, 45, 1999 Neubauer Family Professor of Entrepreneurship 6 Morningstar, Inc.
Trustee and Finance, Graduate School of Business, (provider of independent
University of Chicago. investment research).
DAVID C. KLEINMAN, 69, 1972 Adjunct professor of strategic management, 6 Sonic Foundry, Inc.(software);
Trustee University of Chicago Graduate School of Irex Corporation
Business; Business consultant. (insulation contracting).
ALLAN B. MUCHIN, 69, 1998 Chairman emeritus, Katten Muchin Zavis 6 Alberto-Culver Company
Trustee Rosenman (law firm). (toiletries) until 1/27/05.
ROBERT E. NASON, 68, 1998 Consultant and private investor since 1998; 6 None.
Trustee and Chairman from 1990-1998, executive partner and chief
executive officer, member of the executive
committee of Grant Thornton, LLP (public
accounting firm) and member of the policy
board of Grant Thornton International.
JOHN A. WING, 69, 2002 Frank Wakely Gunsaulus Professor of Law and 6 AmerUs Life Holdings (life
Trustee Finance, and chairman of the Center for the insurance); LDF, Inc. and Labe
Study of Law and Financial Markets, Illinois Federal Bank (banking); Margo
Institute of Technology; prior thereto, Caribe, Inc. (farming).
chairman of the board and chief executive
officer of ABN-AMRO Incorporated, formerly
The Chicago Corporation, and chief executive
officer of Market Liquidity Network, LLC.
TRUSTEES WHO ARE INTERESTED PERSONS OF COLUMBIA ACORN:
CHARLES P. MCQUAID, 51, 1992 President, Columbia WAM since October, 2003; 10 None.
Trustee and President(1) Chief Investment Officer, Columbia WAM since
September 2003; Portfolio manager since 1995
and director of research since July 1992
through December 2003, Columbia WAM; interim
director of international research, Columbia
WAM from October 2003 to December 2004;
principal, Wanger Asset Management, L.P.
("WAM") from July 1995 to September 2000;
president, Wanger Advisors Trust.
RALPH WANGER, 70, 1970 Founder, former president, chief investment 10 Wanger Advisors Trust
Trustee (1) officer and portfolio manager, Columbia WAM (4 portfolios).
(1992-2003); former president, Columbia Acorn
from April 1992 through September 2003;
former president Wanger Advisors Trust (1994
through September 2003); principal, WAM from
July 1992 until September 2000; president,
WAM Ltd. from July 1992 to September 2000;
director, Wanger Investment Company plc;
director, Columbia WAM.
1-800-922-6769
94
NUMBER OF
NAME, POSITION(S) YEAR FIRST PORTFOLIOS IN
WITH COLUMBIA ACORN ELECTED OR PRINCIPAL OCCUPATION(S) FUND COMPLEX
AND AGE AT APPOINTED DURING OVERSEEN BY OTHER
JANUARY 1, 2005 TO OFFICE* PAST FIVE YEARS TRUSTEE/OFFICER DIRECTORSHIPS
- ------------------------ ----------- ------------------------------------------ --------------- -------------------------------
OFFICERS OF COLUMBIA ACORN:
J. KEVIN CONNAUGHTON, 40, 2001 Treasurer of the Columbia Funds and of the 10 None.
Assistant Treasurer Columbia All-Star Funds since December 2000
(formerly controller and chief accounting
officer of the Columbia Funds and of the
Columbia All-Star Funds from February 1998 to
October 2000); treasurer of the Stein Roe
Funds since February 2001 (formerly chief
accounting officer and controller from May
2000 to February 2001); treasurer of the
Galaxy Funds since September 2002; senior
vice president of Columbia Funds Group since
January 2001; (prior thereto, vice president
of Colonial Management Associates from
February 1998 to October 2000).
MICHAEL G. CLARKE, 34, 2004 Chief Accounting Officer of the Columbia 10 None.
Assistant Treasurer Funds, Liberty Funds, Stein Roe Funds and
All-Star Funds since October 2004 (formerly
Controller of the Columbia Funds, Liberty
Funds, Stein Roe Funds and All-Star Funds
from May 2004 to October 2004; Assistant
Treasurer from June 2002 to May 2004; Vice
President, Product Strategy & Development of
the Liberty Funds and Stein Roe Funds from
February 2001 to June 2002; Assistant
Treasurer of the Liberty Funds, Stein Roe
Funds and the All-Star Funds from August 1999
to February 2001.
P. ZACHARY EGAN, 36, 2003 Director of international research, Columbia 6 None.
Vice President WAM, since December 2004; analyst and
portfolio manager, Columbia WAM since 1999;
prior thereto, a research fellow with the
Robert Bosch Foundation.
Kenneth A. Kalina, 45, 1995 Chief compliance officer, Columbia WAM since 10 None.
Assistant Treasurer May 2004; treasurer and chief financial
officer, Columbia WAM since April 2000;
assistant treasurer, Wanger Advisors Trust;
fund controller, Columbia WAM since September
1995; director, New Americas Small Cap Fund.
BRUCE H. LAUER, 47, 1995 Chief operating officer, Columbia WAM since 10 None.
Vice President, April 1995; principal, WAM from January 2000
Secretary to September 2000; vice president, treasurer
and Treasurer and secretary, Wanger Advisors Trust;
director, Wanger Investment Company plc and
New Americas Small Cap Fund.
ROBERT A. MOHN, 43, 1997 Director of domestic research, Columbia WAM, 10 None.
Vice President since March 2004: analyst and portfolio
manager, Columbia WAM since August 1992;
principal, WAM from 1995 to September 2000;
vice president, Wanger Advisors Trust
LOUIS J. MENDES, 40, 2003 Analyst and portfolio manager, Columbia WAM 6 None.
Vice President since 2001; prior thereto, analyst and
portfolio manager, Merrill Lynch
TODD M. NARTER, 40, 2001 Analyst and portfolio manager, Columbia WAM 10 None.
Vice President since June 1997; vice president, Wanger
Advisors Trust
CHRISTOPHER J. OLSON, 40, 2001 Analyst and portfolio manager, Columbia WAM 10 None.
Vice President since January 2001; vice president, Wanger
Advisors Trust; prior to 2001, director and
portfolio strategy analyst with UBS Asset
Management/Brinson Partners.
BEN ANDREWS, 39, 2004 Analyst and portfolio manager of Columbia WAM 10 None.
Vice President since 1998; prior thereto senior analyst at
Rothschild Investment Corporation
VINCENT P. PIETROPAOLO, 39, 2001 Assistant General Counsel, Bank of America 10 None.
Assistant Secretary (and its predecessors) since December 1999.
ROBERT SCALES, 52, 2004 Deputy Counsel, Grant Thornton LLP 2002-2004; 10 None.
Chief Compliance Officer, prior thereto, Associate general counsel, UBS
Senior Vice President, PaineWebber.
and General Counsel
* Dates prior to April 1992 correspond to the date first elected or
appointed as a director or officer of Acorn Fund Inc., the Trust's
predecessor.
(1) Trustee who is an "interested person" of the Trust and of Columbia WAM, as
defined in the Investment Company Act of 1940, because he is an officer of
the Trust and/or because he is an employee or other affiliated person of
Columbia WAM.
The SAI includes additional information about Fund trustees and is available,
without charge, upon request by calling 1-800-345-6611.
95
Columbia Acorn
- --------------------------------------------------------------------------------
Family of Funds
INVESTMENT ADVISER
Columbia Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-922-6769
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston, Massachusetts 02111-2621
TRANSFER AGENT, DIVIDEND DISBURSING AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston, Massachusetts 02266-8081
1-800-345-6611
LEGAL COUNSEL
Bell, Boyd & Lloyd LLC
Chicago, Illinois
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Chicago, Illinois
THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
AN INVESTOR SHOULD CAREFULLY CONSIDER CHARGES AND EXPENSES BEFORE INVESTING. TO
OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CALL (800)
922-6769 OR VISIT OUR WEBSITE (SHOWN BELOW). PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT THE FUNDS USE TO DETERMINE HOW
TO VOTE PROXIES RELATING TO THEIR PORTFOLIO SECURITIES AND A COPY OF THE FUNDS'
VOTING RECORD ARE AVAILABLE (I) AT WWW.COLUMBIMANAGEMENT.COM; (II) ON THE
SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT WWW.SEC.GOV AND (III) WITHOUT
CHARGE, UPON REQUEST, BY CALLING 800-922-6769.
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUNDS' 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._
Find out what's new - visit our web site at:
www.columbiafunds.com
Our e-mail address is:
ServiceInquiries@ColumbiaManagement.com
SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS,
SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE
UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL.
1-800-922-6769
96
Columbia Acorn Funds Annual Report, December 31, 2004 PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[EAGLE HEAD LOGO] COLUMBIAFUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2005 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.345.6611 www.columbiafunds.com
ACN-02/100U-0105 (02/05) 05/4610
ITEM 2. CODE OF ETHICS.
(a) The registrant has, as of the end of the period covered by this report,
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(b) During the period covered by this report, there were not any amendments to
a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were not any waivers or
implicit waivers to a provision of the code of ethics adopted in 2(a)
above.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that David C. Kleinman, Robert
E. Nason and John A. Wing, each of whom are members of the registrant's Board of
Trustees and Audit Committee, each qualify as an audit committee financial
expert. Mr. Kleinman, Mr. Nason and Mr. Wing are each independent trustees, as
defined in paragraph (a)(2) of this item's instructions.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Effective July 14, 2004, the registrant engaged new independent accountants.
Unless otherwise noted, fees disclosed below represent fees paid or accrued to
the current and predecessor principal accountants while each was engaged by the
registrant.
(a) Aggregate Audit Fees billed by the principal accountant for professional
services rendered during the fiscal years ended December 31, 2004 and December
31, 2003 are approximately as follows:
2004 2003
$188,000 $238,400
Audit Fees include amounts related to the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Aggregate Audit-Related Fees billed by the principal accountant for
professional services rendered during the fiscal years ended December 31, 2004
and December 31, 2003 are approximately as follows:
2004 2003
$24,000 $24,000
Audit-Related Fees include amounts for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported in Audit Fees
above. In both fiscal years 2004 and 2003, Audit-Related Fees include certain
agreed-upon procedures performed for semi-annual shareholder reports.
The percentage of Audit-Related services billed to the registrant that were
approved under the "de minimis" exception under paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X during the fiscal years ended December 31, 2004 and
December 31, 2003 are as follows:
2004 2003
0% 0%
(c) Aggregate Tax Fees billed by the principal accountant for professional
services rendered during the fiscal years ended December 31, 2004 and December
31, 2003 are approximately as follows:
2004 2003
$29,000 $35,300
Tax Fees in both fiscal years 2004 and 2003 consist primarily of the review of
annual tax returns and include amounts for professional services by the
predecessor principal accountant for tax compliance, tax advice and tax
planning.
The percentage of Tax Fees billed to the registrant that were approved under the
"de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation
S-X during the fiscal years ended December 31, 2004 and December 31, 2003 are as
follows:
2004 2003
0% 4%
(d) Aggregate All Other Fees billed by the principal accountant for professional
services rendered during the fiscal years ended December 31, 2004 and December
31, 2003 are as follows:
2004 2003
$0 $0
All Other Fees include amounts for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) above.
The percentage of All Other Fees billed to the registrant that were approved
under the "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X during the fiscal years ended December 31, 2004 and December 31,
2003 are as follows:
2004 2003
0% 0%
(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The policy of the registrant's Audit Committee is to specifically pre-approve
(i) all audit and non-audit (including audit related, tax and all other)
services provided by the registrant's independent auditor to the registrant and
individual funds (collectively "Fund Services") and (ii) all non-audit services
provided by the registrant's independent auditor to the funds' adviser or a
control affiliate of the adviser, that relate directly to the funds' operations
and financial reporting (collectively "Fund-related Adviser Services"). A
"control affiliate" is an entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the funds, and the
term "adviser" is deemed to exclude any unaffiliated sub-adviser whose role is
primarily portfolio management and is sub-contracted or overseen by another
investment adviser.
If such Fund Services or Fund-related Adviser Services are required during the
period between the Audit Committee's regularly scheduled meetings, the Chairman
of the Audit Committee has the authority to pre-approve the service, with
reporting to the full Audit Committee at the next regularly scheduled meeting.
The Audit Committee will waive pre-approval of Fund Services or Fund-related
Adviser Services provided that the requirements under paragraph (c)(7)(i)(C) of
Rule 2-01 of Regulation S-X are met.
(f) Not applicable.
(g) All non-audit fees billed by the registrant's accountant for services
rendered to the registrant for the fiscal years ended December 31, 2004 and
December 31, 2003 are disclosed in (b) through (d) of this Item.
During the fiscal years ended December 31, 2004 and December 31, 2003, there
were no Audit-Related Fees or Tax Fees that were approved for services to the
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser) and any entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X. During the fiscal years ended
December 31, 2004 and December 31, 2003, All Other Fees that were approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were
approximately $93,500 and $95,000, respectively. For both fiscal years, All
Other Fees relate to internal controls reviews of the registrant's transfer
agent performed by the current principal accountant.
The percentage of Audit-Related Fees, Tax Fees and All Other Fees required to be
approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were
approved under the "de minimis" exception during both fiscal years ended
December 31, 2004 and December 31, 2003 was zero.
(h) The registrant's Audit Committee of the Board of Directors has considered
whether the provision of non-audit services that were rendered to the
registrant's adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X, is compatible with maintaining the principal accountant's
independence. The Audit Committee determined that the provision of such services
is compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. 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.
On September 28, 2004, the registrant adopted procedures for consideration of
Trustee candidates submitted by shareholders. The Trust's Governance Committee
(the "Committee") is responsible for identifying and nominating candidates for
appointment as Trustees. Although the registrant's investment adviser, Trustees,
or shareholders may submit suggested candidates for Independent Trustees to the
Committee, neither the Committee nor the Independent Trustees as a group shall
consider those candidates on a preferential basis as opposed to other possible
candidates. Any shareholders may submit the name of a candidate for
consideration by the Committee by submitting the recommendation to the Trust's
Secretary in accordance with the procedures. A copy of these procedures, which
include the information required to be submitted in a shareholder nomination,
may be obtained by contacting the Secretary of the Trust, at the address of the
principal executive offices of the Trust. The Secretary will forward any such
recommendation to the Chairman of the Committee promptly upon receipt.
Recommendations for candidates for Trustees will be evaluated, among other
things, in light of whether the number of Trustees is expected to change and
whether the Trustees expect any vacancies. Shareholder recommendations will be
kept on file until active recruitment is underway.
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
attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Acorn Trust
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By (Signature and Title) /S/ Charles P. McQuaid
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Charles P. McQuaid, President
Date February 28, 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/ Charles P. McQuaid
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Charles P. McQuaid, President
Date February 28, 2005
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By (Signature and Title) /S/ Bruce H. Lauer
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Bruce H. Lauer, Treasurer
Date February 28, 2005
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