UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-6529
Columbia Funds Trust VI
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
Date of fiscal year end: 07/31/05
Date of reporting period: 01/31/05
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.
Photo of: man and woman smiling
COLUMBIA
GROWTH & INCOME FUND
SEMIANNUAL REPORT
JANUARY 31, 2005
TABLE OF CONTENTS
FUND PROFILE ................................. 1
PERFORMANCE INFORMATION ...................... 2
UNDERSTANDING YOUR EXPENSES .................. 3
ECONOMIC UPDATE .............................. 4
PORTFOLIO MANAGERS' REPORT ................... 5
FINANCIAL STATEMENTS ......................... 7
INVESTMENT PORTFOLIO ...................... 8
STATEMENT OF ASSETS AND LIABILITIES ....... 13
STATEMENT OF OPERATIONS ................... 14
STATEMENT OF CHANGES IN NET ASSETS ........ 15
NOTES TO FINANCIAL STATEMENTS ............. 17
FINANCIAL HIGHLIGHTS ...................... 22
COLUMBIA FUNDS ............................... 26
IMPORTANT INFORMATION
ABOUT THIS REPORT ............................ 29
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
- ----------------------
Not FDIC Insured
May Lose Value
No Bank Guarantee
- ----------------------
PRESIDENT'S MESSAGE
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COLUMBIA GROWTH & INCOME FUND
DEAR SHAREHOLDER:
Photo of: Christopher Wilson
In 2004, Columbia Funds became part of the Bank of America family, one of the
largest, most respected financial institutions in the United States. As a direct
result of this merger, a number of changes are in the works that we believe may
offer significant benefits for our shareholders. Plans are underway to combine
various Nations Funds and Columbia Funds together to form a single fund family
that covers a wide range of markets, sectors and asset classes under the
management of talented, seasoned investment professionals. As a result, some
funds will be merged in order to eliminate redundancies and fund management
teams will be aligned to maximize performance potential. You will receive more
detailed information about these proposed mergers, and you will be asked to vote
on certain fund changes that may affect you and your account. In this matter,
your timely response will help us to implement the changes in 2005.
The increased efficiencies we expect from a more streamlined offering of funds
may help us reduce fees charged to the funds, because larger funds often benefit
from size and scale of operations. For example, significant savings for the
combined complex may result from the consolidation of certain vendor agreements.
In fact, negotiations are currently underway to consolidate the transfer agency
of all of our funds and to consolidate custodial services, each under a single
vendor. We have reduced management fees for many funds as part of our settlement
agreement (See Note 7 in the Notes to Financial Statements) with the New York
Attorney General.
As a result of these changes, we believe we will offer shareholders an even
stronger lineup of investment options, with management expenses that continue to
be competitive and fair. What will not change as we enter this next phase of
consolidation is our commitment to the highest standards of performance and our
dedication to superior service. Change for the good has another name: it's
called improvement. It helps move us forward, and we believe that it represents
progress for all our shareholders in their quest for long-term financial
success. In the pages that follow, you'll find a discussion of the economic
environment during the period followed by a detailed report from the fund's
manager or managers on key factors that influenced performance. We hope that you
will read the manager reports carefully and discuss any questions you might have
with your financial advisor. As always, we thank you for choosing Columbia
Funds. We appreciate your continued confidence. And, we look forward to helping
you keep your long-term financial goals on target in the years to come.
Sincerely,
/s/Christopher Wilson
Christopher Wilson
Head of Mutual Funds, Columbia Management
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's liaison
to the mutual fund boards of trustees. Chris joined Bank of America in August
2004.
FUND PROFILE
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COLUMBIA GROWTH & INCOME FUND
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed, and the composition of its
portfolio will change over time.
TOP 5 SECTORS AS OF 01/31/05 (%)
- --------------------------------------
FINANCIALS 31.3
- --------------------------------------
ENERGY 13.6
- --------------------------------------
INDUSTRIALS 11.9
- --------------------------------------
CONSUMER STAPLES 10.4
- --------------------------------------
CONSUMER DISCRETIONARY 8.5
- --------------------------------------
TOP 10 HOLDINGS AS OF 01/31/05 (%)
- --------------------------------------
CITIGROUP 4.4
- --------------------------------------
EXXON MOBIL 3.9
- --------------------------------------
GENERAL ELECTRIC 3.5
- --------------------------------------
CONOCOPHILLIPS 3.2
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JPMORGAN CHASE & CO. 2.8
- --------------------------------------
BP PLC 2.7
- --------------------------------------
U.S. BANCORP 2.4
- --------------------------------------
WELLS FARGO & CO. 2.4
- --------------------------------------
AMERICAN INTERNATIONAL GROUP 2.1
- --------------------------------------
SBC COMMUNICATIONS 2.0
- --------------------------------------
Sector breakdown and portfolio holdings are calculated as a percentage of net
assets.
Management style is determined by Columbia Management, and is based on the
investment strategy and process as outlined in the fund's prospectus.
[SIDEBAR INFORMATION]:
SUMMARY
o FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2005, THE FUND'S CLASS A SHARES
RETURNED 9.03% WITHOUT SALES CHARGE.
o CONTINUED ECONOMIC GROWTH, EXPANDING CORPORATE PROFITS AND A FAVORABLE
RESPONSE TO THE ELECTION PROPELLED THE MARKETS HIGHER DURING THE PERIOD.
o STRONG PERFORMANCE AMONG UTILITIES, CONSUMER STAPLES AND ENERGY COMPANIES
LED PERFORMANCE IN THE PORTFOLIO.
OBJECTIVE
Seeks long-term
growth and income
TOTAL NET ASSETS
$1,906.7 billion
[Illustration of arrow pointing up]
CLASS A SHARES
9.03%
[Illustration of arrow pointing up]
RUSSELL 1000
VALUE INDEX
11.67%
Morningstar style box
Equity Style/Value // Size/Large
1
PERFORMANCE INFORMATION
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COLUMBIA GROWTH & INCOME FUND
MOUNTAIN CHART:
RUSSELL 1000 CLASS A SHARES CLASS A SHARES
VALUE INDEX WITHOUT SALES CHARGE WITH SALES CHARGE
02/1995 10000 10000 9425
10396 10470 9868
10625 10722 10106
10960 10957 10327
11421 11410 10754
11575 11620 10951
11978 11996 11306
12147 11927 11241
12586 12338 11629
12462 12259 11554
13092 12706 11976
13421 12634 11908
13840 12976 12230
13945 13185 12427
14182 13195 12436
14236 13679 12892
14414 14021 13215
14425 13809 13015
13880 13065 12314
14277 13475 12700
14845 14067 13258
15420 14429 13600
16538 15489 14598
16326 15120 14251
17118 16157 15228
17369 16188 15257
16744 15616 14719
17447 16561 15609
18423 17547 16538
19213 18245 17196
20658 19909 18764
19922 19160 18059
21126 20231 19068
20536 19264 18157
21444 19993 18843
22070 20438 19263
21757 20649 19462
23221 22150 20876
24642 23240 21904
24807 23228 21893
24440 22631 21330
24753 23475 22126
24317 23053 21727
20699 19325 18214
21887 20181 19021
23583 21846 20590
24682 23194 21861
25521 24537 23126
25726 25187 23739
25363 24135 22747
25888 24931 23497
28306 25617 24144
27994 25261 23808
28806 26756 25217
27962 26058 24559
26925 25763 24282
25985 24784 23359
27482 25825 24340
27268 26107 24605
27398 27336 25764
26505 25874 24386
24536 24872 23442
27529 27666 26075
27210 27666 26075
27496 27480 25900
26239 27137 25576
26567 27308 25737
28044 28321 26692
28302 28598 26954
28998 30060 28331
27923 30231 28493
29322 31776 29949
29433 31661 29841
28615 31354 29551
27605 30332 28588
28957 30933 29154
29609 31499 29688
28951 30752 28984
28891 31580 29764
27732 31352 29549
25780 30252 28512
25558 30203 28467
27043 31387 29583
27681 31604 29787
27468 31092 29304
27512 30703 28938
28813 32272 30417
27825 30988 29206
27964 30969 29188
26359 27606 26019
23908 25439 23976
24089 25650 24175
21411 22074 20805
22997 24013 22632
24446 25828 24343
23385 24733 23311
22819 23850 22478
22210 22500 21206
22248 22410 21121
24205 23994 22615
25769 25957 24464
26091 26570 25042
26480 26461 24939
26893 26892 25346
26629 26386 24869
28259 27305 25735
28643 27575 25989
30408 29464 27770
30943 29900 28181
31605 30719 28953
31327 30575 28817
30563 29847 28131
30875 29865 28148
31603 30683 28919
31158 30119 28387
31600 30465 28713
32090 30919 29141
32622 31210 29415
34273 32517 30648
35421 33428 31506
01/2005 34791 32845 30956
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Russell
1000 Value Index is an unmanaged index that measures the performance of those
Russell 1000 Index companies with lower price-to-book ratios and lower
forecasted growth values. Unlike the fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. Securities in the fund may not match those in an
index.
AVERAGE ANNUAL TOTAL RETURN AS OF 01/31/05 (%)
- -----------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C Z
- -----------------------------------------------------------------------------------------------------------------
INCEPTION 07/01/92 07/01/92 07/01/94 02/07/01
- -----------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------
6-MONTH (CUMULATIVE) 9.03 2.76 8.59 3.59 8.60 7.60 9.15
- -----------------------------------------------------------------------------------------------------------------
1-YEAR 9.83 3.51 8.95 3.95 8.95 7.95 10.08
- -----------------------------------------------------------------------------------------------------------------
5-YEAR 4.89 3.65 4.08 3.78 4.08 4.08 5.12
- -----------------------------------------------------------------------------------------------------------------
10-YEAR 12.63 11.96 11.78 11.78 11.79 11.79 12.76
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/04 (%)
- -----------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C Z
- -----------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
6-MONTH (CUMULATIVE) 8.95 2.69 8.57 3.57 8.51 7.51 9.07
- -----------------------------------------------------------------------------------------------------------------
1-YEAR 13.45 6.93 12.55 7.55 12.53 11.53 13.71
- -----------------------------------------------------------------------------------------------------------------
5-YEAR 4.11 2.88 3.33 3.03 3.32 3.32 4.34
- -----------------------------------------------------------------------------------------------------------------
10-YEAR 13.11 12.44 12.26 12.26 12.26 12.26 13.24
- -----------------------------------------------------------------------------------------------------------------
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER.
ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD
AT NET ASSET VALUE WITH NO RULE 12B-1 FEES.
PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES
CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class Z share (newer class shares) performance information includes returns of
the fund's class A shares (older class shares), as its expense structure more
closely resembles that of the newer class shares for periods prior to the
inception date of the newer class shares. Total returns are not restated to
reflect any expense differential (e.g., Rule 12b-1 fees) between the older class
shares and the newer class shares. Had the expense differential been reflected,
the returns for the periods prior to the inception of newer class shares would
have been different.
[SIDEBAR INFORMATION]:
PERFORMANCE OF A $10,000 INVESTMENT
02/01/95 - 01/31/05 ($)
- --------------------------------------
SALES CHARGE WITHOUT WITH
- --------------------------------------
CLASS A 32,845 30,956
- --------------------------------------
CLASS B 30,460 30,460
- --------------------------------------
CLASS C 30,473 30,473
- --------------------------------------
CLASS Z 33,220 N/A
- --------------------------------------
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
2
UNDERSTANDING YOUR EXPENSES
----------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also 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 BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
08/01/04 - 01/31/05
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,090.29 1,019.00 6.48 6.26 1.23
- ------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,085.90 1,015.22 10.41 10.06 1.98
- ------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,086.00 1,015.22 10.41 10.06 1.98
- ------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,091.50 1,020.27 5.17 4.99 0.98
- ------------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
[SIDEBAR INFORMATION]:
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
3
ECONOMIC UPDATE
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COLUMBIA GROWTH & INCOME FUND
During the six-month period that began August 1, 2004, and ended January 31,
2005, the US economy grew at a healthy pace, as household spending expanded and
business investment in equipment and software climbed at a double-digit pace.
Fourth quarter gross domestic product (GDP) was originally estimated at 3.1%. It
was restated at 3.8% as nearly all sectors that contribute to GDP were revised
higher.
Job growth dominated the economic news as the pace of new job creation picked up
and more than two million jobs were created in 2004. January's payrolls came in
below expectations, however we expect generally solid advances in the months
ahead.
In response to an improved labor market, consumer confidence soared in December
and rose again in January. For 2004, holiday sales were reported to be the
strongest in five years as consumer confidence continued to lift spending,
especially at high-end specialty stores and wholesale clubs.
STOCKS PICK UP MOMENTUM
After a weak start, stock market performance picked up in the second half of the
six-month reporting period as employment news improved and uncertainty
surrounding the presidential election was resolved. The S&P 500 Index returned
8.16% for the period. The majority of that return was generated in November and
December. In January, concerns over the Iraqi elections, the pace of
interest-rate hikes by the Federal Reserve Board (the Fed) and some
disappointing earnings guidance cooled the stock market's advance. Small-and
mid-cap stocks led the market and value stocks generally outperformed growth
stocks. Energy and utilities stocks were the best-performing sectors for the
six-month period.
BONDS DELIVER SOLID RETURNS
Despite a weak start, all sectors of the US bond market delivered solid returns
for the six-month period. As the Fed raised short-term interest rates, the bond
market responded favorably and the Lehman Brothers Aggregate Bond Index returned
3.81%. Yields on intermediate and long-term bonds edged lower--and prices rose
during the six-month period. The 10-year Treasury yield rose sharply in
November, but it reversed course in December and January. As a result,
Treasuries were the strongest performing sector of the bond market in January.
High-yield bonds, which can be less sensitive to changing interest rates, led
the fixed income markets for the period. The Merrill Lynch US High Yield, Cash
Pay Index gained 7.74%. A relatively strong economy helped improve credit
quality and the sector's high yields attracted investors seeking income.
However, high-yield bonds gave up some ground in January. As Treasuries
rebounded, high-yield bonds drifted into negative territory.
HIGHER SHORT-TERM
INTEREST RATES The Fed made good on its announced intentions to raise the
federal funds rate, a key short-term rate, at a measured pace. After four
one-quarter percentage point increases, the federal funds rate stood at 2.25% at
the end of the period.1 The Fed indicated that it would continue to raise
short-term interest rates in an effort to balance economic growth against
inflationary pressures.
1 On February 2, the Fed raised the federal funds rate to 2.50%.
[SIDEBAR INFORMATION]:
SUMMARY
FOR THE SIX-MONTH PERIOD ENDED
JANUARY 31, 2005
o AFTER A WEAK START, STOCK PRICES BOUNCED BACK IN NOVEMBER AND DECEMBER,
HELPING THE S&P 500 INDEX TO A 8.16% GAIN FOR THE SIX-MONTH PERIOD. VALUE
STOCKS GENERALLY OUTPERFORMED GROWTH STOCKS, AND SMALL AND MID-CAP STOCKS
OUTPERFORMED LARGE-CAP STOCKS, AS MEASURED BY THE RUSSELL INDICES.
[Illustration of arrow pointing up]
S&P INDEX
8.16%
[Illustration of arrow pointing up]
RUSSELL 2000 INDEX
13.88%
o INVESTMENT-GRADE BONDS DELIVERED SOLID GAINS. THE LEHMAN BROTHERS AGGREGATE
BOND INDEX RETURNED 3.81%. HIGH-YIELD BONDS, WHICH CAN BE LESS SENSITIVE TO
CHANGING INTEREST RATES, LED THE FIXED INCOME MARKETS. THE MERRILL LYNCH US
HIGH YIELD, CASH PAY INDEX RETURNED 7.74%.
[Illustration of arrow pointing up]
Lehman Index
3.81%
[Illustration of arrow pointing up]
Merrill Lynch Index
7.74%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
2000 smallest of the 3,000 largest U.S. companies based on market
capitalization.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated and
non-convertible investment grade corporate debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
1 On Feburary 2, the Fed raised the federal funds rate to 2.50%.
4
PORTFOLIO MANAGERS' REPORT
-----------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
For the six-month period ended January 31, 2005, Columbia Growth & Income Fund
class A shares returned 9.03% without sales charge. The Russell 1000 Value Index
gained 11.67%, and the average return of the Morningstar(R) Large Value Category
was 9.42%.1 The fund's emphasis on large cap, high quality names kept it out of
some of the smaller, lower quality names that led performance when the market
rallied in the fourth quarter of 2004. However, we remain committed to our large
cap, high quality strategy, which has been rewarding to our shareholders over
the long term.
UTILITIES, CONSUMER STAPLES AND ENERGY STOCKS LED PERFORMANCE
Solid economic growth, expanding corporate profits and a decisive presidential
victory helped spur a stock market rally in the final months of 2004. In this
environment, fund performance was led by the utility sector, which benefited
from continued low interest rates, restructuring and, we believe, a general
concern among investors that economically-sensitive sectors were poised for a
slowdown. TXU, which has benefited from new management and corporate
restructuring, continued its strong performance. It gained 76% for the period
and was the best performing stock in the portfolio. Entergy, a utilities holding
company, gained 22% over the period.
The fund also benefited from its investments in consumer staples companies. Good
news on the tobacco litigation front and continued strong cash flow helped
Altria Group to a 37% return for the period. The fund benefited from holding
Gillette, which agreed to be acquired at a handsome premium by Proctor & Gamble.
Several other high quality consumer staple companies, including Clorox, ConAgra
Foods and Kraft Foods, generated double-digit gains during the period.
Although energy prices were volatile during the period, the energy sector, which
accounted for 13.6% of the fund's assets, turned in a good performance for the
fund. Oil service company Halliburton led the group with a 30% return. Shares of
the company moved higher when the court approved the company's settlement of all
asbestos claims. The company also appears well positioned to benefit from a
pickup in spending by large integrated oil companies. In addition,
ConocoPhillips, Royal Dutch Petroleum and ChevronTexaco each returned more than
15% for the period.
Telecommunications services was the only sector that declined for the period,
and the fund was helped by its underweight in the sector throughout the period.
BellSouth, Verizon Communications and SBC Communications each fell modestly
during the period as cutthroat competition and new technologies cast doubt on
the continued success of their existing business models.
Investments in the financial sector were positive for the period but did not
keep up with that portion of the index. Weak performance of American
1 (C)2004 by Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be
copied or redistributed for any purpose and may only be used for
noncommercial, personal purposes. The information contained herein is not
represented or warranted to be accurate, correct, complete or timely.
Morningstar, Inc. shall not be responsible for investment decisions,
damages or other losses resulting from the use of this information. Past
performance is no guarantee of future performance. Morningstar, Inc. has
not granted consent for it to be considered or deemed an "expert" under the
Securities Act of 1933.
Morningstar Categories compare the performance of funds with similar
investment objectives and strategies.
[SIDEBAR INFORMATION]:
NET ASSET VALUE PER SHARE
AS OF 01/31/05 ($)
- ------------------------------------
CLASS A 17.85
- ------------------------------------
CLASS B 16.77
- ------------------------------------
CLASS C 16.89
- ------------------------------------
CLASS Z 17.85
- ------------------------------------
DISTRIBUTIONS DECLARED PER SHARE
AS OF 08/01/04 - 01/31/05 ($)
- ------------------------------------
CLASS A 0.22
- ------------------------------------
CLASS B 0.10
- ------------------------------------
CLASS C 0.10
- ------------------------------------
CLASS Z 0.26
- ------------------------------------
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 01/31/05 (%)
- ------------------------------------
TXU 2.0
- ------------------------------------
ENTERGY 1.0
- ------------------------------------
ALTRIA GROUP 1.3
- ------------------------------------
GILLETTE 1.2
- ------------------------------------
CLOROX 1.0
- ------------------------------------
CONAGRA FOODS 0.5
- ------------------------------------
KRAFT FOODS 1.3
- ------------------------------------
HALLIBURTON 1.3
- ------------------------------------
CONOCOPHILLIPS 3.2
- ------------------------------------
ROYAL DUTCH PETROLEUM 1.0
- ------------------------------------
CHEVRONTEXACO 0.6
- ------------------------------------
BELLSOUTH 0.8
- ------------------------------------
VERIZON COMMUNICATIONS 1.6
- ------------------------------------
SBC COMMUNICATIONS 2.0
- ------------------------------------
AMERICAN INTERNATIONAL GROUP 2.1
- ------------------------------------
Your fund is actively managed and the composition of the portfolio will change
over time. Information provide is calculated as a percentage of net assets.
5
- --------------------------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
International Group, Marsh & McLennan and St. Paul Travelers held gains to 7%
from the sector compared with 10.5% from the financial sector of the Russell
1000 Value Index. Marsh & McLennan and St. Paul Travelers were eliminated during
the period.
LOOKING AHEAD
We remain optimistic about the stock market's long-term prospects and cautiously
optimistic about the short term. We believe that valuations are reasonable but
not cheap. If interest rates move higher, which they are likely to do, it may be
difficult for stock prices to move higher relative to earnings. As a result, we
expect gains to track the growth in corporate profits more closely in the period
ahead. We believe profits are likely to slow from the 20% growth rate we saw in
2004.
In this environment, we will continue to pay careful attention to the quality of
the fund's holdings, including cash flows, capital discipline and valuation. We
remain committed to implementing our value discipline and will continue to
emphasize relatively high quality, large companies.
Brian Cunningham has co-managed Columbia Growth & Income Fund since November
2003 and has been with the advisor or its predecessors or affiliate
organizations since 1987.
/s/ Brian Cunningham
Photo of: Brian Cunningham
Gregory M. Miller has co-managed the fund since April 2003 and has been with the
advisor or its predecessors or affiliate organizations since 1985.
/s/ Gregory M. Miller
Photo of: Gregory M. Miller
Richard Dahlberg, CFA, has co-managed the fund since October 2003 and has been
with the advisor since 2003.
/s/ Richard Dahlberg
Photo of: Richard Dahlberg
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor. If the advisor's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
advisor has placed on it.
[SIDEBAR INFORMATION]:
We will continue to pay careful attention to the quality of the fund's holdings,
including cash flows, capital discipline and valuation. We remain committed to
implementing our value discipline and will continue to emphasize relatively high
quality, large companies.
6
FINANCIAL STATEMENTS
-----------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and
their market value as of the last day of the reporting period. Portfolio
holdings are organized by type of asset, industry, country or geographic region
(if applicable) to demonstrate areas of concentration and diversification.
------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price
for each share class as of the last day of the reporting period. Net assets are
calculated by subtracting all the fund's liabilities (including any unpaid
expenses) from the total of the fund's investment and non-investment assets. The
share price for each class is calculated by dividing net assets for that class
by the number of shares outstanding in that class as of the last day of the
reporting period.
------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the
fund during the reporting period. The Statement of Operations also shows any net
gain or loss the fund realized on the sales of its holdings during the period,
as well as any unrealized gains or losses recognized over the period. The total
of these results represents the fund's net increase or decrease in net assets
from operations.
------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating
results, distributions to shareholders and shareholder transactions (e.g.,
subscriptions, redemptions and dividend reinvestments) during the reporting
period. The Statement of Changes in Net Assets also details changes in the
number of shares outstanding.
------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees
and compensation paid to affiliates and significant risks and contingencies.
------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was
affected by the fund's operating results. The financial highlights table also
discloses the classes' performance and certain key ratios (e.g., class expenses
and net investment income as a percentage of average net assets).
7
INVESTMENT PORTFOLIO
-----------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
COMMON STOCKS - 98.5%
CONSUMER DISCRETIONARY - 8.5% SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 1.4% Harrah's Entertainment, Inc. 101,874 6,442,512
McDonald's Corp. 601,207 19,473,095
Hotels, Restaurants & Leisure Total 25,915,607
-----------------------------------------------------------------------------
MEDIA - 3.7% Clear Channel Communications, Inc. 242,527 7,865,150
Comcast Corp., Class A (a) 288,072 9,273,038
McGraw-Hill Companies, Inc. 254,400 23,023,200
Time Warner, Inc. (a) 1,226,403 22,075,254
Viacom, Inc., Class A 231,527 8,712,361
Media Total 70,949,003
-----------------------------------------------------------------------------
MULTILINE RETAIL - 1.1% Federated Department Stores, Inc. 268,030 15,224,104
May Department Stores Co. 178,320 6,045,048
Multiline Retail Total 21,269,152
-----------------------------------------------------------------------------
SPECIALTY RETAIL - 2.3% Home Depot, Inc. 345,633 14,260,818
Limited Brands, Inc. 454,232 10,765,298
Office Depot, Inc. (a) 1,100,715 19,031,362
Specialty Retail Total 44,057,478
-----------
CONSUMER DISCRETIONARY TOTAL 162,191,240
CONSUMER STAPLES - 10.4%
- ------------------------------------------ -----------------------------------------------------------------------------
BEVERAGES - 1.9% PepsiCo, Inc. 672,423 36,109,115
Beverages Total 36,109,115
-----------------------------------------------------------------------------
FOOD PRODUCTS - 2.1% ConAgra Foods, Inc. 329,662 9,725,029
Hershey Foods Corp. 88,427 5,172,095
Kraft Foods, Inc., Class A 754,621 25,642,022
Food Products Total 40,539,146
-----------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 3.7% Clorox Co. 331,913 19,722,270
Kimberly-Clark Corp. 392,954 25,742,417
Procter & Gamble Co. 457,490 24,352,193
Household Products Total 69,816,880
-----------------------------------------------------------------------------
PERSONAL PRODUCTS - 1.2% Gillette Co. 438,189 22,224,946
Personal Products Total 22,224,946
-----------------------------------------------------------------------------
TOBACCO - 1.5% Altria Group, Inc. 379,482 24,222,336
UST, Inc. 101,164 5,124,968
Tobacco Total 29,347,304
-----------
CONSUMER STAPLES TOTAL 198,037,391
ENERGY - 13.6%
- ------------------------------------------ -----------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 1.6% Halliburton Co. 621,742 25,572,248
National-Oilwell, Inc. (a) 134,517 4,960,987
Energy Equipment & Services Total 30,533,235
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
COMMON STOCKS - (CONTINUED)
ENERGY - (CONTINUED) SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
OIL & GAS - 12.0% BP PLC, ADR 878,903 52,400,197
ChevronTexaco Corp. 193,838 10,544,787
ConocoPhillips 664,314 61,641,696
Exxon Mobil Corp. 1,427,507 73,659,361
Marathon Oil Corp. 252,305 9,771,773
Royal Dutch Petroleum Co., N.Y. Registered Shares 340,953 19,935,522
Oil & Gas Total 227,953,336
-----------
ENERGY TOTAL 258,486,571
FINANCIALS - 31.3%
- ------------------------------------------ -----------------------------------------------------------------------------
CAPITAL MARKETS - 3.9% Bank of New York Co., Inc. 809,142 24,039,609
Goldman Sachs Group, Inc. 170,293 18,366,100
Janus Capital Group, Inc. 597,429 8,859,872
Morgan Stanley 176,441 9,873,638
State Street Corp. 279,158 12,509,070
Capital Markets Total 73,648,289
-----------------------------------------------------------------------------
COMMERCIAL BANKS - 7.8% National City Corp. 499,578 17,759,998
PNC Financial Services Group, Inc. 169,923 9,153,752
U.S. Bancorp 1,527,294 45,895,185
Wachovia Corp. 550,638 30,202,494
Wells Fargo & Co. 741,956 45,481,903
Commercial Banks Total 148,493,332
-----------------------------------------------------------------------------
CONSUMER FINANCE - 0.8% MBNA Corp. 581,233 15,449,173
Consumer Finance Total 15,449,173
-----------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 7.3% Citigroup, Inc. 1,719,244 84,328,918
JPMorgan Chase & Co. 1,455,043 54,316,755
Diversified Financial Services Total 138,645,673
-----------------------------------------------------------------------------
INSURANCE - 8.0% AFLAC, Inc. 280,194 11,070,465
Ambac Financial Group, Inc. 278,330 21,398,010
American International Group, Inc. 599,472 39,738,999
Chubb Corp. 136,619 10,175,383
Hartford Financial Services Group, Inc. 242,359 16,308,337
Lincoln National Corp. 510,143 23,537,998
Willis Group Holdings Ltd. 264,676 10,237,668
XL Capital Ltd., Class A 279,559 20,905,422
Insurance Total 153,372,282
-----------------------------------------------------------------------------
REAL ESTATE - 1.8% Archstone-Smith Trust, REIT 336,937 11,556,939
AvalonBay Communities, Inc., REIT 157,700 10,553,284
Kimco Realty Corp., REIT 228,576 12,109,957
Real Estate Total 34,220,180
-----------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE - 1.7% Countrywide Financial Corp. 359,272 13,293,064
Freddie Mac 291,630 19,040,523
Thrifts & Mortgage Finance Total 32,333,587
-----------
FINANCIALS TOTAL 596,162,516
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
COMMON STOCKS - (CONTINUED)
HEALTH CARE - 4.2%
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 1.5% Aetna, Inc. 190,910 24,255,115
CIGNA Corp. 60,938 4,890,275
Health Care Providers & Services Total 29,145,390
-----------------------------------------------------------------------------
PHARMACEUTICALS - 2.7% Bristol-Myers Squibb Co. 349,046 8,181,638
Johnson & Johnson 230,933 14,941,365
Merck & Co., Inc. 418,885 11,749,724
Pfizer, Inc. 672,133 16,238,734
Pharmaceuticals Total 51,111,461
-----------
HEALTH CARE TOTAL 80,256,851
INDUSTRIALS - 11.9%
- ------------------------------------------ -----------------------------------------------------------------------------
AEROSPACE & DEFENSE - 3.2% General Dynamics Corp. 238,154 24,589,400
United Technologies Corp. 356,688 35,911,348
Aerospace & Defense Total 60,500,748
-----------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 1.9% Cendant Corp. 433,061 10,198,586
Republic Services, Inc. 168,898 5,568,567
Waste Management, Inc. 707,966 20,531,014
Commercial Services & Supplies Total 36,298,167
-----------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 5.3% General Electric Co. 1,854,414 66,999,978
Textron, Inc. 484,748 34,892,161
Industrial Conglomerates Total 101,892,139
-----------------------------------------------------------------------------
MACHINERY - 1.5% Deere & Co. 201,987 14,023,958
Eaton Corp. 220,575 14,996,894
Machinery Total 29,020,852
-----------
INDUSTRIALS TOTAL 227,711,906
INFORMATION TECHNOLOGY - 5.6%
- ------------------------------------------ -----------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 1.1% Nokia Oyj, ADR 1,351,680 20,653,670
Communications Equipment Total 20,653,670
-----------------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 2.1% International Business Machines Corp. 216,202 20,197,591
Lexmark International, Inc., Class A (a) 231,301 19,278,938
Computers & Peripherals Total 39,476,529
-----------------------------------------------------------------------------
IT SERVICES - 1.3% Accenture Ltd., Class A (a) 914,238 23,815,900
IT Services Total 23,815,900
-----------------------------------------------------------------------------
OFFICE ELECTRONICS - 0.7% Xerox Corp. (a) 891,876 14,162,991
Office Electronics Total 14,162,991
-----------------------------------------------------------------------------
SOFTWARE - 0.4% Microsoft Corp. 319,541 8,397,538
Software Total 8,397,538
-----------
INFORMATION TECHNOLOGY TOTAL 106,506,628
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
COMMON STOCKS - (CONTINUED)
MATERIALS - 3.7%
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
CHEMICALS - 1.7% Air Products & Chemicals, Inc. 571,875 33,689,157
Chemicals Total 33,689,157
-----------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 2.0% MeadWestvaco Corp. 765,925 22,127,573
Weyerhaeuser Co. 247,640 15,452,736
Paper & Forest Products Total 37,580,309
-----------
MATERIALS TOTAL 71,269,466
TELECOMMUNICATION SERVICES - 4.4%
- ------------------------------------------ -----------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.4% BellSouth Corp. 561,796 14,741,527
SBC Communications, Inc. 1,626,720 38,650,867
Verizon Communications, Inc. 875,890 31,172,925
Diversified Telecommunication Services Total 84,565,319
-----------
TELECOMMUNICATION SERVICES TOTAL 84,565,319
UTILITIES - 4.9%
- ------------------------------------------ -----------------------------------------------------------------------------
ELECTRIC UTILITIES - 4.9% Entergy Corp. 276,552 19,225,895
Exelon Corp. 343,871 15,216,292
FPL Group, Inc. 127,204 9,748,915
PG&E Corp. (a) 312,810 10,948,350
TXU Corp. 545,921 37,777,733
Electric Utilities Total 92,917,185
-----------
UTILITIES TOTAL 92,917,185
TOTAL COMMON STOCKS
(COST OF $1,541,902,468) 1,878,105,073
INVESTMENT COMPANY - 1.2%
- ------------------------------------------ -----------------------------------------------------------------------------
iShares Russell 1000 Value Index Fund 353,901 23,077,884
TOTAL INVESTMENT COMPANY
(COST OF $21,569,789) 23,077,884
SHORT-TERM OBLIGATION - 0.4%
- ------------------------------------------ -----------------------------------------------------------------------------
PAR ($)
Repurchase agreement with State Street Bank &
Trust Co., dated 01/31/05, due 02/01/05 at 2.360%,
collateralized by a U.S. Treasury Note maturing
06/30/05, market value of $7,090,406 (repurchase
proceeds $6,947,455) 6,947,000 6,947,000
TOTAL SHORT-TERM OBLIGATION
(COST OF $6,947,000) 6,947,000
TOTAL INVESTMENTS - 100.1%
(COST OF $1,570,419,257) (b) 1,908,129,957
OTHER ASSETS & LIABILITIES, NET - (0.1)% (1,435,647)
NET ASSETS - 100.0% 1,906,694,310
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $1,570,419,257.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
At January 31, 2005, the Fund held investments in the following sectors:
SECTOR % OF NET ASSETS
------ ---------------
Financials 31.3%
Energy 13.6
Industrials 11.9
Consumer Staples 10.4
Consumer Discretionary 8.5
Information Technology 5.6
Utilities 4.9
Telecommunication Services 4.4
Health Care 4.2
Materials 3.7
Investment Company 1.2
Short-Term Obligation 0.4
Other Assets & Liabilities, Net (0.1)
-----
100.0%
=====
See Accompanying Notes to Financial Statements.
12
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
($)
- ------------------------------------------ -----------------------------------------------------------------------------
ASSETS Investments, at cost 1,570,419,257
-------------
Investments, at value 1,908,129,957
Cash 98
Receivable for:
Investments sold 173,043
Fund shares sold 1,483,681
Interest 455
Dividends 2,386,863
Deferred Trustees' compensation plan 53,138
-------------
Total Assets 1,912,227,235
-----------------------------------------------------------------------------
LIABILITIES Payable for:
Fund shares repurchased 2,698,989
Investment advisory fee 1,139,086
Transfer agent fee 739,012
Pricing and bookkeeping fees 40,530
Custody fee 13,014
Distribution and service fees 778,355
Deferred Trustees' fees 53,138
Other liabilities 70,801
-------------
Total Liabilities 5,532,925
NET ASSETS 1,906,694,310
-----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 1,791,162,364
Undistributed net investment income 686,152
Accumulated net realized loss (222,864,906)
Net unrealized appreciation on investments 337,710,700
NET ASSETS 1,906,694,310
-----------------------------------------------------------------------------
CLASS A Net assets 600,195,482
Shares outstanding 33,633,115
Net asset value per share 17.85(a)
Maximum offering price per share ($17.85/0.9425) 18.94(b)
-----------------------------------------------------------------------------
CLASS B Net assets 709,077,730
Shares outstanding 42,278,516
Net asset value and offering price per share 16.77(a)
-----------------------------------------------------------------------------
CLASS C Net assets 83,849,490
Shares outstanding 4,964,390
Net asset value and offering price per share 16.89(a)
-----------------------------------------------------------------------------
CLASS Z Net assets 513,571,608
Shares outstanding 28,771,987
Net asset value, offering and redemption price per share 17.85
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
13
STATEMENT OF OPERATIONS
--------------------------------------------------------
FOR THE SIX MONTHS ENDED JANUARY 31, 2005 (UNAUDITED)
COLUMBIA GROWTH & INCOME FUND
($)
- ------------------------------------------ -----------------------------------------------------------------------------
INVESTMENT INCOME Dividends 22,877,722
Interest 46,622
------------
Total Investment Income (net of foreign taxes
withheld of $83,114) 22,924,344
-----------------------------------------------------------------------------
EXPENSES Investment advisory fee 6,772,235
Distribution fee:
Class B 2,715,392
Class C 341,089
Service fee:
Class A 767,188
Class B 905,131
Class C 113,696
Transfer agent fee 2,119,162
Pricing and bookkeeping fees 238,334
Trustees' fees 20,396
Custody fee 30,845
Non-recurring costs (See Note 7) 14,696
Other expenses 229,008
------------
Total Expenses 14,267,172
Non-recurring costs assumed by Investment Advisor (See Note 7) (14,696)
Custody earnings credit (73)
------------
Net Expenses 14,252,403
------------
Net Investment Income 8,671,941
-----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED Net realized gain on investments 82,883,534
GAIN (LOSS) ON INVESTMENTS Net change in unrealized appreciation (depreciation) on
investments 70,382,300
------------
Net Gain 153,265,834
------------
Net Increase in Net Assets from Operations 161,937,775
See Accompanying Notes to Financial Statements.
14
STATEMENT OF CHANGES IN NET ASSETS
---------------------------------------------
COLUMBIA GROWTH & INCOME FUND
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
INCREASE (DECREASE) IN NET ASSETS: 2005 ($) 2004 ($)
- ------------------------------------------ --------------------------------------------------------------------------------
OPERATIONS Net investment income 8,671,941 16,388,137
Net realized gain on investments 82,883,534 48,265,445
Net change in unrealized appreciation
(depreciation) on investments 70,382,300 182,278,097
------------------------------
Net Increase from Operations 161,937,775 246,931,679
--------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income:
Class A (7,394,678) (5,897,569)
Class B (4,128,268) (1,496,752)
Class C (487,830) (222,462)
Class Z (7,337,049) (4,825,957)
------------------------------
Total Distributions Declared to Shareholders (19,347,825) (12,442,740)
--------------------------------------------------------------------------------
SHARE TRANSACTIONS Class A:
Subscriptions 32,937,616 110,785,469
Distributions reinvested 6,683,251 5,352,979
Redemptions (105,380,567) (202,240,844)
------------------------------
Net Decrease (65,759,700) (86,102,396)
Class B:
Subscriptions 16,629,674 63,411,224
Distributions reinvested 3,773,230 1,357,040
Redemptions (84,307,646) (183,048,069)
------------------------------
Net Decrease (63,904,742) (118,279,805)
Class C:
Subscriptions 2,462,057 12,823,341
Distributions reinvested 436,671 202,402
Redemptions (23,239,936) (43,080,290)
------------------------------
Net Decrease (20,341,208) (30,054,547)
Class Z:
Subscriptions 57,971,834 136,454,093
Distributions reinvested 6,140,643 4,266,571
Redemptions (58,295,400) (104,262,595)
------------------------------
Net Increase 5,817,077 36,458,069
Net Decrease from Share Transactions (144,188,573) (197,978,679)
Total Increase (Decrease) in Net Assets (1,598,623) 36,510,260
--------------------------------------------------------------------------------
NET ASSETS Beginning of period 1,908,292,933 1,871,782,673
End of period (including undistributed
net investment income of $686,152 and
$11,362,036, respectively) 1,906,694,310 1,908,292,933
See Accompanying Notes to Financial Statements.
15
- --------------------------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
2005 2004
- ------------------------------------------ --------------------------------------------------------------------------------
CHANGES IN SHARES Class A:
Subscriptions 1,893,144 6,980,307
Issued for distributions reinvested 372,117 342,763
Redemptions (6,116,123) (12,621,689)
------------------------------
Net Decrease (3,850,862) (5,298,619)
Class B:
Subscriptions 1,018,410 4,264,505
Issued for distributions reinvested 223,268 92,195
Redemptions (5,182,838) (12,190,707)
------------------------------
Net Decrease (3,941,160) (7,834,007)
Class C:
Subscriptions 150,589 861,203
Issued for distributions reinvested 25,672 13,657
Redemptions (1,426,598) (2,839,364)
------------------------------
Net Decrease (1,250,337) (1,964,504)
Class Z:
Subscriptions 3,335,314 8,517,555
Issued for distributions reinvested 341,906 273,149
Redemptions (3,337,849) (6,498,126)
------------------------------
Net Increase 339,371 2,292,578
See Accompanying Notes to Financial Statements.
16
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
NOTE 1. ORGANIZATION
Columbia Growth & Income Fund (the "Fund"), a series of Columbia Funds Trust VI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
INVESTMENT GOAL
The Fund seeks long-term growth and income.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Effective February 10, 2004, the
Board of Trustees approved the commencement of Class R shares of the Fund which
had not commenced operations as of January 31, 2005. Each share class has its
own sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Equity securities and certain investment companies are valued at the last sale
price on the principal exchange on which they trade, except for securities
traded on the NASDAQ, which are valued at the NASDAQ official close price.
Unlisted securities or listed securities for which there were no sales during
the day are valued at the closing bid price on such exchanges or
over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Investments for which market quotations are not readily available, or have
quotations which management believes are not appropriate, are valued at fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to the value
of the repurchase obligation including interest. A repurchase agreement
transaction involves certain risks in the event of default or insolvency of the
counterparty. These risks include possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities and a possible decline in
the value of the underlying securities during the period while the Fund seeks to
assert its rights.
17
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on ex-date. Awards from class action litigation are recorded
as a reduction of cost if the Fund still owns the applicable securities on the
payment date. If the Fund no longer owns the applicable securities, the proceeds
are recorded as realized gains. The Fund estimates components of distributions
from real estate investment trusts (REITs). Distributions received in excess of
income are recorded as a reduction of the cost of the related investments. If
the Fund no longer owns the applicable securities, any distributions received in
excess of income are recorded as realized gains.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The tax character of distributions paid during the year ended July 31, 2004 was
as follows:
DISTRIBUTIONS PAID FROM:
- ----------------------------------------------------------------
ORDINARY INCOME $12,442,740
LONG-TERM CAPITAL GAINS --
Unrealized appreciation and depreciation at January 31, 2005, based on cost of
investments for federal income tax purposes was:
UNREALIZED APPRECIATION $373,510,001
UNREALIZED DEPRECIATION (35,799,301)
- ----------------------------------------------------------------
NET UNREALIZED APPRECIATION $337,710,700
The following capital loss carryforwards, determined as of July 31, 2004, may be
available to reduce taxable income arising from future net realized gains on
investments, if any, to the extent permitted by the Internal Revenue Code:
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
- ----------------------------------------------------------------
2010 $193,404,812
2011 112,261,432
- ----------------------------------------------------------------
$305,666,244
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, Inc. ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund and provides administrative and other services to the Fund. Columbia
receives a monthly investment advisory fee based on the Fund's average daily net
assets at the following annual rates:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
- ----------------------------------------------------------------
FIRST $500 MILLION 0.77%
- ----------------------------------------------------------------
NEXT $500 MILLION 0.72%
- ----------------------------------------------------------------
$1 BILLION TO $6 BILLION 0.60%
- ----------------------------------------------------------------
OVER $6 BILLION 0.58%
18
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
Prior to November 1, 2004, Columbia received a monthly investment advisory fee
based on the Fund's average daily net assets at the following annual rates:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
- ----------------------------------------------------------------
FIRST $1 BILLION 0.80%
- ----------------------------------------------------------------
OVER $1 BILLION 0.60%
For the six months ended January 31, 2005, the Fund's annualized effective
investment advisory fee rate was 0.70%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street"). As a result, Columbia pays the total fees received
to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied to
the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund. For the six months ended January 31, 2005, the annualized effective
pricing and bookkeeping fee rate for the Fund, inclusive of out-of-pocket
expenses, was 0.025%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund and has subcontracted with Boston
Financial Data Services ("BFDS") to serve as sub-transfer agent. For such
services, the Transfer Agent receives a fee, paid monthly, at the annual rate of
$28.00 per open account. The Transfer Agent also receives reimbursement for
certain out- of-pocket expenses.
For the six months ended January 31, 2005, the Fund's annualized effective
transfer agent fee rate, inclusive of out-of-pocket expenses, was 0.22%.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the six months ended January 31,
2005, the Distributor has retained net underwriting discounts of $32,623 on
sales of the Fund's Class A shares and received CDSC fees of $4,054, $864,713
and $20,844 on Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets of the Fund attributable to Class A, Class B and Class
C shares. The Plan also requires the payment of a monthly distribution fee to
the Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset arrangement
in an income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. Effective
August 23, 2004, the Board of Trustees appointed a Chief Compliance Officer to
the Fund in accordance with federal securities regulations. The Fund, along with
other affiliated funds, will pay its pro-rata share of the expenses associated
with the Office of the Chief Compliance Officer. The Fund's fee will not exceed
$15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
19
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the six months ended January 31, 2005, the Fund paid $1,288 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended January 31, 2005, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $337,965,523
and $489,537,244, respectively.
NOTE 6. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 committed
unsecured revolving line of credit provided by State Street Bank and Trust
Company. Borrowings are used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to each participating fund based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.10% per annum is accrued and apportioned among
the participating funds based on their pro-rata portion of the unutilized line
of credit. The commitment fee is included in "Other expenses" on the Statement
of Operations.
For the six months ended January 31, 2005, the Fund did not borrow under this
arrangement.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
On February 9, 2005, Columbia and the Distributor (collectively the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to collectively
as the "Settlements". The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle which Columbia Group
entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed, among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution consultant
(see below). The Columbia Funds have also voluntarily undertaken to implement
certain governance measures designed to maintain the independence of their
boards of trustees. The NYAG Settlement also, among other things, requires
Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP
Distributors, Columbia High Yield Municipal Fund LLC to reduce certain Columbia
Funds, Nations Funds and other mutual fund management fees collectively by $32
million per year for five years, for a projected total of $160 million in
management fee reductions.
Pursuant to the procedures set forth in the SEC Order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant, who
is acceptable to the SEC staff and the Columbia Funds' independent trustees. The
distribution plan must be based on a methodology developed in consultation with
the Columbia Group and the Fund's independent trustees and not unacceptable to
the staff of the SEC.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of fund
shares, which could increase transaction costs or operating expenses, or have
other adverse consequences for the funds.
A copy of the SEC Order is available on the SEC website at http://www.sec.gov. A
copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.
In connection with the events described in detail above, various parties have
filed suit against certain
20
- --------------------------------------------------------------------------------
JANUARY 31, 2005 (UNAUDITED) COLUMBIA GROWTH & INCOME FUND
funds, their Boards and/or Bank of America (and affiliated entities). More than
300 cases (including those filed against entities unaffiliated with the funds,
their Boards and/or FleetBoston and its affiliated entities) have been
consolidated in a multi-district proceeding and transferred to the Federal
District Court in Maryland. Recently, certain Columbia funds and affiliated
entities have been named as defendants in several direct and derivative actions
under various sections of the Investment Company Act of 1940, as amended,
alleging, among other things, that the fees and expenses paid by those funds are
excessive.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Fund
and Columbia. The lawsuit alleges that defendants violated common law duties to
fund shareholders as well as sections of the Investment Company Act of 1940, by
failing to ensure that the Fund and other affiliated funds participated in
securities class action settlements for which the funds were eligible.
Specifically, plaintiffs allege that defendants failed to submit proof of claims
in connection with settlements of securities class action lawsuits filed against
companies in which the funds held positions.
The funds and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings are
ongoing, however, based on currently available information, Columbia believes
that these lawsuits are without merit, that the likelihood they will have a
material adverse impact on any fund is remote, and that the lawsuits are not
likely to materially affect its ability to provide investment management
services to its clients, including the funds.
For the year ended January 31, 2005, Columbia has assumed $14,696 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
21
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED JUNE 30,
JANUARY 31, JULY 31, JULY 31, --------------------------------------------------------
CLASS A SHARES 2005 2004 2003 (a) 2003 2002 2001 2000
====================================================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $ 16.57 $ 14.69 $ 14.75 $ 15.67 $ 18.98 $ 20.60 $ 21.84
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (b) 0.10 0.18 0.02 0.11 0.11 0.12 0.01
Net realized and unrealized
gain (loss) on investments 1.40 1.84 (0.08) (0.72) (1.89) 2.59 0.25
------------ ------------ ---------------- ------------- ------------ ------------ ------------
Total from Investment
Operations 1.50 2.02 (0.06) (0.61) (1.78) 2.71 0.26
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income (0.22) (0.14) -- (0.06) (0.10) -- --
From net realized gains -- -- -- (0.25) (1.43) (4.33) (1.50)
------------ ------------ ---------------- ------------- ------------ ------------ ------------
Total Distributions
Declared to Shareholders (0.22) (0.14) -- (0.31) (1.53) (4.33) (1.50)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.85 $ 16.57 $ 14.69 $ 14.75 $ 15.67 $ 18.98 $ 20.60
Total return (c) 9.03%(d) 13.83%(e) (0.41)%(d)(e) (3.75)%(e) (10.24)%(e) 13.34%(e) 1.43%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.23%(g) 1.21% 1.36%(g) 1.40% 1.31% 1.32% 1.35%
Net investment income (f) 1.15%(g) 1.11% 1.93%(g) 0.83% 0.60% 0.62% 0.06%
Waiver/reimbursement -- 0.01% 0.05%(g) 0.04% 0.05% 0.03% 0.10%
Portfolio turnover rate 18%(d) 52% 6%(d) 63% 47% 104% 81%
Net assets, end
of period (000's) $600,195 $621,243 $628,680 $635,415 $761,122 $503,647 $309,129
- ------------------------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from June 30 to July 31.
(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) Not annualized.
(e) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
22
- --------------------------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED JUNE 30,
JANUARY 31, JULY 31, JULY 31, -------------------------------------------------------
CLASS B SHARES 2005 2004 2003 (a) 2003 2002 2001 2000
====================================================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $ 15.53 $ 13.78 $ 13.84 $ 14.77 $ 18.01 $ 19.88 $ 21.29
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income (loss) (b) 0.03 0.05 0.01 0.01 (0.03) (0.03) (0.14)
Net realized and unrealized
gain (loss) on investments 1.31 1.73 (0.07) (0.69) (1.77) 2.49 0.23
------------ ------------ ---------------- ------------- ------------ ------------ ------------
Total from Investment
Operations 1.34 1.78 (0.06) (0.68) (1.80) 2.46 0.09
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income (0.10) (0.03) -- -- (0.01) -- --
From net realized gains -- -- -- (0.25) (1.43) (4.33) (1.50)
------------ ------------ ---------------- ------------- ------------ ------------ ------------
Total Distributions
Declared to Shareholders (0.10) (0.03) -- (0.25) (1.44) (4.33) (1.50)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.77 $ 15.53 $ 13.78 $ 13.84 $ 14.77 $ 18.01 $ 19.88
Total return (c) 8.59%(d) 12.92%(e) (0.43)%(d)(e) (4.50)%(e) (10.89)%(e) 12.46%(e) 0.64%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.98%(g) 1.96% 2.11%(g) 2.15% 2.06% 2.07% 2.10%
Net investment
income (loss) (f) 0.40%(g) 0.36% 1.18%(g) 0.07% (0.15)% (0.13)% (0.69)%
Waiver/reimbursement -- 0.01% 0.05%(g) 0.04% 0.05% 0.03% 0.10%
Portfolio turnover rate 18%(d) 52% 6%(d) 63% 47% 104% 81%
Net assets, end
of period (000's) $709,078 $718,022 $745,122 $752,605 $895,904 $883,754 $822,017
- ------------------------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from June 30 to July 31.
(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 contingent deferred sales charge.
(d) Not annualized.
(e) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
23
- --------------------------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED JUNE 30,
JANUARY 31, JULY 31, JULY 31, -------------------------------------------------------
CLASS C SHARES 2005 2004 2003 (a) 2003 2002 2001 2000
====================================================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $ 15.64 $ 13.88 $ 13.94 $ 14.87 $ 18.12 $ 19.99 $ 21.39
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income (loss) (b) 0.03 0.05 0.01 0.01 (0.03) (0.02) (0.14)
Net realized and unrealized
gain (loss) on investments 1.32 1.74 (0.07) (0.69) (1.78) 2.48 0.24
------------ ------------ ---------------- ------------- ------------ ------------ ------------
Total from Investment
Operations 1.35 1.79 (0.06) (0.68) (1.81) 2.46 0.10
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income (0.10) (0.03) -- -- (0.01) -- --
From net realized gains -- -- -- (0.25) (1.43) (4.33) (1.50)
------------ ------------ ---------------- ------------- ------------ ------------ ------------
Total Distributions
Declared to Shareholders (0.10) (0.03) -- (0.25) (1.44) (4.33) (1.50)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.89 $ 15.64 $ 13.88 $ 13.94 $ 14.87 $ 18.12 $ 19.99
Total return (c) 8.60%(d) 12.90%(e) (0.43)%(d)(e) (4.47)%(e) (10.88)%(e) 12.38%(e) 0.68%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.98%(g) 1.96% 2.11%(g) 2.15% 2.06% 2.06% 2.10%
Net investment
income (loss) (f) 0.40%(g) 0.36% 1.19%(g) 0.08% (0.15)% (0.13)% (0.69)%
Waiver/reimbursement -- 0.01% 0.05%(g) 0.04% 0.05% 0.03% 0.10%
Portfolio turnover rate 18%(d) 52% 6%(d) 63% 47% 104% 81%
Net assets, end
of period (000's) $83,849 $97,226 $113,542 $115,314 $129,661 $77,565 $29,303
- ------------------------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from June 30 to July 31.
(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 contingent deferred sales charge.
(d) Not annualized.
(e) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g) Annualized.
24
- --------------------------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED)
SIX MONTHS YEAR PERIOD PERIOD
ENDED ENDED ENDED YEAR ENDED JUNE 30, ENDED
JANUARY 31, JULY 31, JULY 31, ----------------------------- JUNE 30,
CLASS Z SHARES 2005 2004 2003 (a) 2003 (b) 2002 2001 (c)
====================================================================================================================================
NET ASSET VALUE, BEGINNING
OF PERIOD $ 16.59 $ 14.71 $ 14.76 $ 15.68 $ 19.00 $ 19.64
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (d) 0.12 0.22 0.03 0.16 0.16 0.06
Net realized and unrealized
gain (loss) on investments 1.40 1.84 (0.08) (0.74) (1.88) (0.70)
------------ ------------ ---------------- ------------- ------------- ----------------
Total from Investment Operations 1.52 2.06 (0.05) (0.58) (1.72) (0.64)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income (0.26) (0.18) -- (0.09) (0.17) --
From net realized gains -- -- -- (0.25) (1.43) --
------------ ------------ ---------------- ------------- ------------- ----------------
Total Distributions Declared
to Shareholders (0.26) (0.18) -- (0.34) (1.60) --
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.85 $ 16.59 $ 14.71 $ 14.76 $ 15.68 $ 19.00
Total return (e) 9.15%(f) 14.08%(g) (0.34)%(f)(g) (3.52)%(g) (9.94)%(g) (3.26)%(f)(g)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 0.98%(i) 0.96% 1.11%(i) 1.15% 1.06% 1.08%(i)
Net investment income (h) 1.40%(i) 1.38% 2.18%(i) 1.13% 0.85% 0.86%(i)
Waiver/reimbursement -- 0.01% 0.05%(i) 0.04% 0.05% 0.03%(i)
Portfolio turnover rate 18%(f) 52% 6%(f) 63% 47% 104%
Net assets, end of period (000's) $513,572 $471,803 $384,438 $383,150 $200,908 $264,425
- ------------------------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from June 30 to July 31.
(b) On July 29, 2002, the Fund's existing Class Z shares were combined into the
Fund's Class S shares, which were subsequently redesignated as Class Z
shares.
(c) Class Z shares were initially offered on February 7, 2001. Per share data
and total return reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Not annualized.
(g) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced. (h)The benefits derived from custody
credits and directed brokerage arrangements, if applicable, had an impact
of less than 0.01%.
(i) Annualized.
25
COLUMBIA FUNDS
-----------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
--------------------------------------------------
LARGE GROWTH Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II*
Columbia Young Investor
--------------------------------------------------
LARGE VALUE Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value*
--------------------------------------------------
MIDCAP GROWTH Columbia Acorn Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive Growth
--------------------------------------------------
MIDCAP VALUE Columbia Dividend Income
Columbia Mid Cap Value*
Columbia Strategic Investor
--------------------------------------------------
SMALL GROWTH Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
--------------------------------------------------
SMALL VALUE Columbia Small Cap
Columbia Small Cap Value
--------------------------------------------------
BALANCED Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
--------------------------------------------------
SPECIALTY Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
--------------------------------------------------
TAXABLE FIXED-INCOME Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income*
Columbia Intermediate Bond
Columbia Intermediate Government Income*
Columbia Quality Plus Bond
Columbia Short Term Bond*
Columbia Strategic Income
--------------------------------------------------
FLOATING RATE Columbia Floating Rate
Columbia Floating Rate Advantage
--------------------------------------------------
TAX EXEMPT Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals*
Columbia National Municipal Bond**
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
26
- --------------------------------------------------------------------------------
COLUMBIA GROWTH & INCOME FUND
--------------------------------------------------
SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt
Columbia Connecticut Intermediate Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate Municipal Bond*
Columbia Massachusetts Intermediate Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate Municipal Bond
Columbia New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate Municipal Bond*
Columbia Rhode Island Intermediate Municipal Bond
--------------------------------------------------
MONEY MARKET Columbia Money Market
Columbia Municipal Money Market
--------------------------------------------------
INTERNATIONAL/GLOBAL Columbia Acorn International
Columbia Acorn International Select
Columbia Global Equity
Columbia International Stock
Columbia Newport Greater China
Columbia Newport Tiger*
--------------------------------------------------
INDEX Columbia Large Company Index*
Columbia Small Company Index*
Columbia U.S. Treasury Index*
* The fund will be closed to new investments after
the close of business on April 29, 2005. The
fund's trustees have approved the merger, which is
scheduled to occur during September and October,
pending shareholder approval
** The fund will be closed to new investments after
the close of business on April 29, 2005. The
fund's trustees have approved the liquidation,
which is scheduled to occur during September,
pending shareholder approval
Please consider the investment objectives,
risks, charges and expenses of a mutual fund
carefully before investing. Contact us at
800-345-6611 for a prospectus which contains
this and other important information about
the fund. Read it carefully before you invest.
For complete product information on any Columbia
fund, visit our website at www.columbiafunds.com.
Columbia Management Group and Columbia Management
refer collectively to the various investment
advisory subsidiaries of Columbia Management
Group, including Columbia Management Advisors,
Inc., the registered investment advisor, and
Columbia Funds Distributor, Inc.
27
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28
IMPORTANT INFORMATION ABOUT THIS REPORT
----------------------------------------
COLUMBIA GROWTH & INCOME FUND
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston MA 02110
The funds mail one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Growth & Income Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the funds and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the fund uses to determine how
to vote proxies and a copy of the fund's voting record are available (i) at
www.columbiamanagement.com; (ii) on the Securities and Exchange Commission's
website at www.sec.gov, and (iii) without charge, upon request, by calling
800-368-0346. Information regarding how the fund voted proxies relating to
portfolio securities during the 12-month period ended June 30, 2004 is available
from the SEC's website. Information regarding how the fund voted proxies
relating to portfolio securities is also available from the fund's website.
The fund files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is
available on the SEC's website at www.sec.gov and may be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
29
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Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Growth & Income Fund SEMIANNUAL REPORT, JANUARY 31, 2005
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PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
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COLUMBIA MANAGEMENT(R)
(C)2005 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
779-03/437U-0205 (03/05) 4639
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have not been any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, since those
procedures were last disclosed in response to the requirements of Item
7(d)(2)(ii)(G) of Schedule 14A or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officers, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, have concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust VI
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By (Signature and Title) /S/ Christopher L. Wilson
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Christopher L. Wilson, President
Date March 30, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /S/ Christopher L. Wilson
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Christopher L. Wilson, President
Date March 30, 2005
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By (Signature and Title) /S/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date March 30, 2005
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